Document:

NEAH
POWER SYSTEMS, INC.

     

    LONG
TERM INCENTIVE COMPENSATION PLAN

     

    Amended
and Restated Effective as of June 25th,
2009

     

    
      	
              1.

            	
              PURPOSES

            

    

     

    The
purposes of this Long Term Incentive Compensation Plan are to promote the
long-term success of Neah Power Systems, Inc. (the “Company”) and its
subsidiaries and to provide financial incentives to employees, members of the
Board and advisers and consultants of the Company and its subsidiaries to strive
for long-term creation of stockholder value.  The Plan provides
long-term incentives to employees, members of the Board and advisers and
advisors of the Company and its subsidiaries who are able to contribute towards
the creation of or have created stockholder value by providing them stock
options and other stock and cash incentives.

     

    
      	
              2.

            	
              DEFINITIONS

            

    

     

    The
following definitions shall be applicable throughout the Plan:

     

    
      	
               
      

            	
              (a)

            	
              “Award”
      means an incentive award as described in Section
  5(a).

            

    

     

    
      	
               
      

            	
              (b)

            	
              “Board”
      means the Board of Directors of the
Company.

            

    

     

    
      	
               
      

            	
              (c)

            	
              “Change
      in Control” means the occurrence of one or more of the change in control
      events set forth in Treasury Regulation Section
      1.409A-3(i)(5).

            

    

     

    
      	
               
      

            	
              (d)

            	
              “Chief
      Executive Officer” or “CEO” means the Chief Executive Officer of the
      Company.

            

    

     

    
      	
               
      

            	
              (e)

            	
              “Chief
      Financial Officer” or “CFO” means the Chief Financial Officer of the
      Company.

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

            	
              “Committee”
      means the Compensation Committee of the Board unless another committee
      comprised of members of the Board is designated by the Board to oversee
      and administer the Plan, provided, that the
      Committee shall consist of two or more members of the Board as the Board
      may designate from time to time, each of whom shall satisfy such
      requirements as:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Securities and Exchange Commission may establish for administrators acting
      under plans intended to qualify for exemption under Rule 16b-3 or its
      successor under the Exchange Act;

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)

            	
              the
      rules of a stock exchange on which the securities of the Company are
      traded as may be established pursuant to its rule-making authority of such
      stock exchange; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Internal Revenue Service may establish for outside directors acting under
      plans intended to qualify for exemption under Code Section
      162(m).

            

    

     

    
      	
               
      

            	
              (h)

            	
              “Company”
      means Neah Power Systems, Inc., a Nevada
  corporation.

            

    

     

    
      	
               
      

            	
              (i)

            	
              “Covered
      Employee” shall have the meaning given that term by Code Section 162(m)
      and income tax regulations promulgated
  thereunder.

            

    

     

    
      	
               
      

            	
              (j)

            	
              “Disability”
      means a physical or mental medical condition that prevents the Participant
      from performing the duties of his or her position with the Company and is
      likely to last at least twelve months or result in death, as determined by
      the Committee in its sole
discretion.

            

    

     

    
      	
               
      

            	
              (k)

            	
              “EVA
      Award” means the award described in Section
11.

            

    

     

    
      	
               
      

            	
              (l)

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

            

    

     

    
      	
               
      

            	
              (m)

            	
              “Fair
      Market Value” means, with respect to the common stock of the Company, the
      closing sale price of such common stock at four o’clock p.m. (Eastern
      Time), on the principal United States national stock exchange on which the
      common stock of the Company is traded, as determined by the Committee, or,
      if the common stock shall not have been traded on such date, the closing
      sale price on such stock exchange on the first day prior thereto on which
      the common stock was so traded, or, if the common stock is not traded on a
      United States national stock exchange, such other amount as may be
      determined by the Committee by any fair and reasonable
      means.  Fair Market Value determined by the Committee in good
      faith shall be final, binding and conclusive on all
    parties.

            

    

     

    
      	
               
      

            	
              (n)

            	
              “Incentive
      Stock Option” means an option to purchase the stock of the Company as
      described in Code Section 422.

            

    

     

    
      	
               
      

            	
              (o)

            	
              “LTIPA”
      means an agreement establishing the terms and conditions for an Award
      granted under the Plan, including any applicable performance
      goals.

            

    

     

    
      	
               
      

            	
              (p)

            	
              “Nonstatutory
      Stock Option” means an option to purchase the stock of the Company which
      is designated not to be an Incentive Stock
  Option.

            

    

     

    
      	
               
      

            	
              (q)

            	
              “Participant”
      means, subject to the provisions of Section 11 with respect to EVA Awards,
      a full-time employee of the Company, or a non-employee member of the
      Board, or a member of the scientific advisory committee of the operating
      company who meets the requirements of Section
  4(b).

            

    

     

    
      	
               
      

            	
              (r)

            	
              “Performance
      Stock” means the award described in Section
9.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (s)

            	
              “Performance
      Unit” means the award described in Section
10.

            

    

     

    
      	
               
      

            	
              (t)

            	
              “Plan”
      means this Neah Power Systems, Inc. Long Term Incentive Compensation
      Plan.

            

    

     

    
      	
               
      

            	
              (u)

            	
              “Restricted
      Stock” means the award described in Section
8.

            

    

     

    
      	
               
      

            	
              (v)

            	
              “Restricted
      Stock Unit” means the award described in Section 8, denominated in units,
      providing a Participant the right to receive payment at a future date
      after the lapse of restrictions or achievement of performance criteria or
      other conditions determined by the
Committee.

            

    

     

    
      	
               
      

            	
              (w)

            	
              “Service”
      means that the Participant’s service with the Company or an affiliated
      entity, whether as an employee, adviser, consultant or member of the
      Board, is not interrupted or terminated.  The Participant’s
      Service shall not be deemed to have been interrupted or terminated merely
      because of a change in the capacity in which the Participant renders
      service to the Company or an affiliated entity as an employee, adviser,
      consultant or member of the Board or a change in the entity for which the
      Participant renders such service, provided, that there otherwise is no
      interruption or termination of the Participant’s Service.  For
      example, a change in status from an employee of the Company to a
      consultant of an affiliate or a member of the Board will not constitute an
      interruption of Service.  The Committee, in its sole discretion,
      may determine whether Service shall be considered interrupted in the case
      of any leave of absence approved by the Company, including sick leave,
      military leave or any other personal
leave.

            

    

     

    
      	
               
      

            	
              (x)

            	
              “Stock
      Appreciation Right” or “SAR” means the award described in Section
      7.

            

    

     

    
      	
               
      

            	
              (y)

            	
              “Stock
      Option” means the award described in Section 6, which may be either an
      Incentive Stock Option or a Nonstatutory Stock Option, as determined by
      the Committee.

            

    

     

    
      	
               
      

            	
              (z)

            	
              “Ten
      Percent Shareholder” means a person who owns (or is deemed to own pursuant
      to Code Section 424(d)) stock possessing more than ten percent (10%) of
      the total combined voting power of all classes of stock of the Company or
      of any of its Affiliates (as defined in Code Section
  424).

            

    

     

    
      	
              3.

            	
              POWERS
      AND ADMINISTRATION

            

    

     

    The Plan
shall be administered by the Committee.  The Committee shall have the
authority to construe and interpret the Plan and any Awards granted thereunder,
to establish and amend rules for Plan administration, to change the terms and
conditions of options and other Awards at or after grant, and to make all other
determinations which it deems necessary or advisable for the administration of
the Plan.  The determinations of the Committee shall be made in
accordance with its judgment as to the best interests of the Company and its
stockholders and in accordance with the purposes of the Plan.  The
Committee may take action by a meeting in which a quorum of the Committee is
present.  The meeting may be in person, by telephone or in such other
manner in which the members of the Committee participating in the meeting may
communicate directly with each other.  A majority of the members of
the Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members.  Any determination of the
Committee under the Plan may be made without notice or meeting of the Committee,
in a writing signed by all the Committee members.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    The
Committee shall have the authority to reduce (but not increase) the payouts on
such Awards and the Committee shall have the authority to limit (but not waive)
the actual performance-based vesting of such Awards, in both cases in its sole
discretion.  The Committee may prescribe rules and procedures for the
administration of the Plan and shall have the authority to delegate ministerial
duties to agents for the Committee (and allocate responsibilities among the
agents appointed by the Committee for the performance of the ministerial duties)
in the administration of the Plan.

     

    
      	
              4.

            	
              ELIGIBILITY
      AND PARTICIPATION

            

    

     

    
      	
               
      

            	
              (a)

            	
              Eligibility.  Only
      employees of the Company and its subsidiaries, non-employee members of the
      Board, and members of the scientific advisory committee of the Company and
      its subsidiaries or consultants thereto, who are designated by the Plan or
      selected by the Committee to participate in the Plan shall be eligible to
      participate in the Plan.  Any corporation or other entity in
      which a 50% or greater interest is at the time directly or indirectly
      owned by the Company shall be a subsidiary for purposes of the
      Plan.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Participation.  The
      CEO and the CFO shall participate in the Plan and their Awards and rights
      under the Plan shall be determined by the Committee.  In
      addition, each year, the CEO shall present to the Committee a list of
      employees of the Company or its subsidiaries that the CEO recommends be
      designated as Participants for an upcoming Performance Period (or a
      concurrent Performance Period with respect to a newly hired employee of
      the Company or a subsidiary of the Company), proposed Awards to such
      employees, and proposed terms for the LTIPAs for the proposed Awards to
      such employees.  In addition, the CEO may  present
      recommended amendments to any existing LTIPAs, and the proposed Phase
      Level advancement for existing LTIPAs with respect to EVA
      Awards.  The Committee shall consider the CEO’s recommendations
      and shall determine the Awards, if any, to be granted and the terms of the
      LTIPAs for such Awards, any amendments to existing LTIPAs (subject to the
      restrictions on the authority granted to the Committee in Section 3), and
      Phase Level advancements.

            

    

     

    Designation
of an employee as a Participant for any Performance Period shall not require the
Committee to designate that person to be a Participant or to receive an Award in
any Performance Period or to receive the same type or amount of Award as granted
to the Participant in such year.  Grants of Awards to Participants
need not be of the same type or amount and may have different
terms.  Employment with the Company or its subsidiary prior to
completion of or during a Performance Period, or service on the Board or as a
member of the scientific advisory committee of the Company and its subsidiaries
or consultants thereto, does not entitle the employee, director, consultant or
adviser to participate in the Plan or vest in any interest in any Award under
the Plan.  The Committee shall consider all factors that it deems
relevant in selecting Participants and in determining the type and amount of
their respective Awards.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              AWARDS
      AVAILABLE

            

    

     

    
      	
               
      

            	
              (a)

            	
              Types
      of Awards.  The Awards available under the Plan shall
      consist of Stock Options, Stock Appreciation Rights, Restricted Stock,
      Restricted Stock Units, Performance Stock, Performance Units, EVA Awards,
      and other stock or cash awards, as described
  below.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Shares
      Available under the Plan.  There is
      hereby reserved for issuance under the Plan an aggregate of Twenty Five
      Million shares of the Company
      common stock. All shares issued under the Plan may be either authorized
      and unissued shares or issued shares reacquired by the
      Company.  Shares covered by an Award granted under the Plan
      shall not be counted as used unless and until they are actually issued and
      delivered to a Participant.  Any shares covered by an SAR shall
      be counted as used only to the extent shares are actually issued to the
      Participant upon exercise of the right.  In addition, any shares
      of common stock exchanged by an optionee as full or partial payment to the
      Company of the exercise price under any Stock Option exercised under the
      Plan, any shares retained by the Company pursuant to a Participant’s tax
      withholding election, and any shares covered by a Award which is settled
      in cash shall be added to the shares available for Awards under the
      Plan.  All of the available shares may, but need not, be issued
      pursuant to the exercise of Incentive Stock
      Options.  Notwithstanding anything else contained in this
      Section 5 the total number of shares of the common stock of the Company
      that may be issued under the Plan for Awards other than cash Awards shall
      not exceed a total of twenty five million shares (subject to adjustment in
      accordance with Sections 16 and
17).

            

    

     

    
      	
               
      

            	
              (c)

            	
              Annual
      Limit on Total Grants of Restricted Stock, Restricted Stock Units and
      Performance Stock.  Notwithstanding anything else in this
      Section 5, the Restricted Stock, Restricted Stock Units and Performance
      Shares granted under the Plan in any one calendar year shall have annual
      limits to be determined by the
Committee.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Reversion
      of Shares.  If there is a lapse, expiration, termination
      or cancellation of any Stock Option issued under the Plan prior to the
      issuance of shares thereunder or if shares of common stock are issued
      under the Plan and thereafter are reacquired by the Company, the shares
      subject to those options and the reacquired shares shall be added to the
      shares available for Awards under the
Plan.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Limits
      on Individual Grants.  Under the Plan, no Participant may
      receive in any calendar year (i) Stock Options relating to more than
      six million shares, (ii) Restricted Stock or Restricted Stock Units
      that are subject to the attainment of Performance Goals below hereof
      relating to more than one million five hundred thousand shares, (iii)
      Stock Appreciation Rights relating to more than one million five hundred
      thousand shares, or (iv) Performance Stock relating to more than one
      million five hundred thousand shares.  Under the Plan, the
      maximum cash payment that may be made to an individual Participant in any
      calendar year under a single Performance Unit Award, a single EVA Award or
      other cash bonus Award shall not exceed
  $1,000,000.

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (f)

            	
              Adjustments.  The
      shares reserved for issuance and the limitations set forth above shall be
      subject to adjustment in accordance with Sections 16 and 17
      hereof.

            

    

     

    
      	
              6.

            	
              STOCK
      OPTIONS

            

    

     

    
      	
               
      

            	
              (a)

            	
              Grant
      of Stock Options.  Stock Options may be granted to
      Participants by the Committee, at any time as determined by the
      Committee.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Terms
      of Stock Options.  The Committee shall determine the
      terms and conditions of each Stock Option, the number of shares subject to
      the Stock Option, and whether the Stock Option is an Incentive Stock
      Option or a Nonstatutory Stock Option.  The option price for
      each Stock Option shall be determined by the Committee but shall not be
      less than 100% of the Fair Market Value of the Company’s common stock on
      the date the Stock Option is granted.  Notwithstanding the
      foregoing, a Stock Option may be granted with an exercise price lower than
      that set forth in the preceding sentence if such Option is granted
      pursuant to an assumption or substitution for another option in a manner
      satisfying the provisions of Code Section
  424(a).

            

    

     

    
      	
               
      

            	
              (c)

            	
              Term
      of Stock Options. Each Stock Option shall expire at such time as
      the Committee shall determine at the time of
  grant.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Exercisability
      of Stock Options.  Each Stock Option shall be exercisable
      at such time and subject to such terms and conditions as the Committee
      shall determine; provided, however, that no Stock Option shall be
      exercisable later than the tenth anniversary of its grant.  The
      option price, upon exercise of any Stock Option, shall be payable to the
      Company in full by (i) cash payment or its equivalent, (ii) tendering
      previously acquired shares (held for at least six months to the extent
      necessary to avoid any variable accounting on such option) or purchased on
      the open market and having a Fair Market Value at the time of exercise
      equal to the option price, or certification of ownership of such
      previously-acquired shares, (iii) delivery of a properly executed exercise
      notice, together with irrevocable instructions to a broker to promptly
      deliver to the Company the amount of sale proceeds from the option shares
      or loan proceeds to pay the exercise price and any withholding taxes due
      to the Company, and (iv) such other methods of payment as the Committee,
      at its discretion, deems appropriate, provided, that payment of the common
      stock’s “par value,” as defined in the Nevada General Corporation Law,
      shall not be made by deferred
payment.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Except as
otherwise provided in a LTIPA, in the event the Service of a Participant holding
a Stock Option terminates (other than upon the Participant’s death or
Disability), the Participant may exercise his or her Stock Option (to the extent
that the Participant was entitled to exercise such Stock Option as of the date
of termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Participant’s Service
(or such longer or shorter period specified in the LTIPA for such Stock Option),
or (ii) the expiration of the term of the Stock Option as set forth in the
LTIPA.  If, after termination, the Participant does not exercise his
or her Option within the time specified in the LTIPA, the Stock Option shall
thereafter terminate.

     

    
      	
               
      

            	
              (e)

            	
              Vesting.  Subject
      to the provisions of Sections 5(f), 16 and 24, the total number of shares
      of Common Stock subject to a Stock Option shall be subject to the
      following vesting provisions of this Subsection
  6(e):

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      total number of shares of Common Stock subject to a Stock Option may, but
      need not, vest and therefore become exercisable in periodic installments
      that may, but need not, be equal.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Stock Option may be subject to such other terms and conditions on the time
      or times when it may be exercised (which may be based on performance or
      other criteria) as the Committee may deem
  appropriate.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      vesting provisions of individual Stock Options may
  vary.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              The
      provisions of this Subsection 6(e) are subject to any Stock Option
      provisions governing the minimum number of shares of Common Stock as to
      which a Stock Option may be
exercised.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Incentive
      Stock Option Requirements.  Stock Options granted under
      the Plan as Incentive Stock Options shall have such terms as required by
      Code Sections 422 for an Incentive Stock Option, including, but not
      limited to, the following terms in this Section
  6(f).

            

    

     

    
      	
               
      

            	
              (i)

            	
              Incentive
      Stock Options shall be granted only to employees of the Company or its
      subsidiary.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      exercise price of each Incentive Stock Option shall be not less than one
      hundred percent (100%) of the Fair Market Value of the Common Stock
      subject to the Option on the date the Option is granted or one hundred ten
      percent (110%) in the case of a grant of an Incentive Stock Option to a
      Ten Percent Shareholder.  Notwithstanding the foregoing, an
      Incentive Stock Option may be granted with an exercise price lower than
      that set forth in the preceding sentence if such Option is granted
      pursuant to an assumption or substitution for another option in a manner
      satisfying the provisions of Code Section
  424(a).

            

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      maximum term of an Incentive Stock Option shall be ten years from the date
      of grant provided that the maximum term of an Incentive Stock Option
      granted to a Ten Percent Shareholder shall be five years from the date of
      grant of the Incentive Stock
Option.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iv)

            	
              To
      the extent that the aggregate Fair Market Value (determined at the time of
      grant) of Common Stock with respect to which Incentive Stock Options are
      exercisable for the first time by any Participant during any calendar year
      (under all plans of the Company and its affiliated corporations) exceeds
      one hundred thousand dollars ($100,000), the Stock Options or portions
      thereof which exceed such limit (according to the order in which they were
      granted) shall be treated as Nonstatutory Stock
  Options.

            

    

     

    
      	
               
      

            	
              (v)

            	
              If
      any Participant shall make any disposition of shares issued pursuant to
      the exercise of an Incentive Stock Option under the circumstances
      described in Code Section 421(b) (relating to certain disqualifying
      dispositions), such Participant shall notify the Company of such
      disposition within ten (10) calendar days
  thereof.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Reduction
      in Price or Reissuance.  In no event
      shall the Committee, without first receiving shareholder approval, (a)
      cancel any outstanding Stock Option for the purpose of reissuing the Stock
      Option to the Participant at a lower exercise price or (b) reduce the
      exercise price of a previously issued Stock
  Option.

            

    

     

    
      	
              7.

            	
              STOCK
      APPRECIATION RIGHTS

            

    

     

    
      	
               
      

            	
              (a)

            	
              Stock
      Appreciation Rights may be granted to Participants at any time as
      determined by the Committee.  An SAR may be granted in tandem
      with a Stock Option granted under the Plan or on a free-standing
      basis.  The Committee also may, in its discretion, substitute
      SARs which can be settled only in stock for outstanding Stock Options, at
      any time when the Company is subject to fair value
    accounting.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      grant price of a tandem or substitute SAR shall be equal to the option
      price of the related option.  The grant price of a free-standing
      SAR shall be equal to the Fair Market Value of the Company’s common stock
      on the date of its grant.  An SAR may be exercised upon such
      terms and conditions and for the term as the Committee in its sole
      discretion determines to apply to the SAR; provided, however, that
      the term of the SAR shall not exceed the option term in the case of a
      tandem or substitute SAR or ten years in the case of a free-standing SAR,
      and the terms and conditions applicable to a substitute SAR shall be
      substantially the same as those applicable to the Stock Option which it
      replaces.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Upon
      exercise of an SAR, the Participant shall be entitled to receive payment
      from the Company in an amount determined by multiplying the excess of the
      Fair Market Value of a share of common stock of the Company on the date of
      exercise over the grant price of the SAR by the number of shares with
      respect to which the SAR is exercised.  The payment may be made
      in cash or stock, at the discretion of the Committee, except in the case
      of a substitute SAR which may be made only in
  stock.

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (d)

            	
              In
      no event shall the Committee, without first receiving shareholder
      approval, (1) cancel any outstanding SAR for the purpose of reissuing
      the SAR to the Participant at a lower exercise price or (2) reduce the
      exercise price of a previously issued
SAR.

            

    

     

    
      	
              8.

            	
              RESTRICTED
      STOCK AND RESTRICTED STOCK
UNITS

            

    

     

    Restricted
Stock and Restricted Stock Units may be awarded or sold to Participants under
such terms and conditions as shall be established by the Committee. Restricted
Stock and Restricted Stock Units shall be subject to such restrictions as the
Committee determines, including, without limitation, any of the
following:

     

    
      	
               
      

            	
              (a)

            	
              a
      prohibition against sale, assignment, transfer, pledge, hypothecation or
      other encumbrance for a specified
period;

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      requirement that the holder forfeit (or in the case of shares or units
      sold to the Participant resell to the Company at cost) such shares or
      units in the event of termination of employment or other service during
      the period of restriction; or

            

    

     

    
      	
               
      

            	
              (c)

            	
              with
      respect to Restricted Stock, the Award may be conditioned upon the
      Participant making or no making an election under Code Section
      83(b).  If the Participant makes an election pursuant to Code
      Section 83(b), the Participant shall be required to file a copy of the
      election with the Company within ten (10) calendar
  days.

            

    

     

    All
restrictions shall expire at such times as the Committee shall
specify.

     

    Except
for the restrictions set forth here and unless otherwise determined by the
Committee, the Participant shall have all the rights of a shareholder with
respect to shares of Restricted Stock, including but not limited to the right to
vote and the right to receive dividends, provided that the Committee, in its
sole discretion, may require that any dividends paid on shares of Restricted
Stock be held in escrow until all restrictions on the shares have lapsed]. With
respect to Restricted Stock Units, a Participant shall have no rights of a
shareholder until restrictions lapse and underlying shares, if any, are
delivered; however, the Committee may provide for the payment of dividend
equivalents if so specified in the LTIPA.

     

    Payment
of Restricted Stock Units may be made in cash, stock, or a combination of cash
and stock, in the Committee’s sole discretion.

     

    To the
extent a Restricted Stock Unit Award constitutes “deferred
compensation”  within the meaning of Code Section 409A, the Committee
shall establish LTIPA terms and provisions that comply with Code Section 409A
and regulations thereunder.

     

    
      	
              9.

            	
              PERFORMANCE
      STOCK

            

    

     

    The
Committee shall designate the Participants to whom long-term performance stock
"Performance Stock") is to be awarded and determine the number of shares, the
length of the performance period and the other terms and conditions of each such
award; provided the stated performance period will not be less than 12
months.  Each award of Performance Stock shall entitle the Participant
to a payment in the form of shares of common stock of the Company upon the
attainment of performance goals and other terms and conditions specified by the
Committee.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Notwithstanding
satisfaction of any performance goals, the number of shares issued under a
Performance Stock Award may be adjusted by the Committee on the basis of such
further consideration as the Committee in its sole discretion shall
determine.  However, the Committee may not, in any event, increase the
number of shares earned upon satisfaction of any performance goal by any
Participant who is a Covered Employee.  The Committee may, in its
discretion, make a cash payment equal to the Fair Market Value of shares of
common stock otherwise required to be issued to a Participant pursuant to a
Performance Stock award.

     

    To the
extent a Performance Stock Award constitutes “deferred
compensation”  within the meaning of Code Section 409A, the Committee
shall establish LTIPA terms and provisions that comply with Code Section 409A
and regulations thereunder.

     

    
      	
              10.

            	
              PERFORMANCE
      UNITS

            

    

     

    The
Committee shall designate the Participants to whom long-term performance units
("Performance Units") are to be awarded and determine the number of units and
the terms and conditions of each such award; provided the stated performance
period will not be less than 12 months.  Each Performance Unit award
shall entitle the Participant to a payment in cash upon the attainment of
performance goals and other terms and conditions specified by the
Committee.

     

    Notwithstanding
the satisfaction of any performance goals, the amount to be paid under a
Performance Unit Award may be adjusted by the Committee on the basis of such
further consideration as the Committee in its sole discretion shall
determine.  However, the Committee may not, in any event, increase the
amount earned under Performance Unit Awards upon satisfaction of any performance
goal by any Participant who is a Covered Employee and the maximum amount earned
by a Covered Employee in any calendar year may not exceed
$250,000.  The Committee may, in its discretion, substitute actual
shares of common stock for the cash payment otherwise required to be made to a
Participant pursuant to a Performance Unit award.

     

    To the
extent a Performance Unit Award constitutes “deferred compensation” within the
meaning of Code Section 409A, the Committee shall establish LTIPA terms and
provisions that comply with Code Section 409A and regulations
thereunder.

     

    
      	
              11.

            	
              EVA
      AWARDS

            

    

     

    
      	
               
      

            	
              (a)

            	
              Definitions.  The
      following terms shall have the meanings given them below in this Section
      11 for purposes of the EVA Awards granted under the
  Plan.

            

    

     

    
      	
               
      

            	
              (i)

            	
              “Adjusted
      Basic Award” means the Basic Award adjusted by the percentage completion
      of a Target Goal.

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ii)

            	
              “Annual
      Review” means the annual review by the Committee of each LTIPA entered
      into under the Plan.  The review will determine the Phase Level
      attainment by the Participant, any proposed changes to the LTIPA, evaluate
      the Participant’s performance during the Performance Period and provides
      the basis for the Committee’s determination of an individual
      Award.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              “Basic
      Award” means that monetary value set forth in the LTIPA that could form
      the basis of the Award that may be achieved upon full attainment of the
      Target Goal.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              “EVA”
      means the net operating profit after taxes, as adjusted to eliminate the
      effect of non-economic elements of generally accepted accounting
      principles, (“NOPAT”), less the weighted average cost of capital employed
      during the year (“Employed Capital”).  The Committee shall have
      the discretion to adjust NOPAT to include or exclude:  (i)
      extraordinary, unusual and/or non-recurring items of gain or loss, (ii)
      gains or losses on the disposition of a business, (iii) changes in tax or
      accounting regulations or laws, or (iv) the effect of a merger or
      acquisition, as identified in the Company’s quarterly and annual earnings
      releases.  In all other respects, Performance Criteria shall be
      calculated in accordance with the Company’s financial statements,
      generally accepted accounting principles, or under a methodology
      established by the Committee prior to the issuance of an Award that is
      consistently applied and identified in the audited financial statements,
      including footnotes, or the Management Discussion and Analysis section of
      the Company’s annual report.

            

    

     

    
      	
               
      

            	
              (v)

            	
              “EVA
      Unit” means the designated unit of EVA identified in the
      LTIPA.

            

    

     

    
      	
               
      

            	
              (vi)

            	
              “Payment
      Cycle” shall mean that period of time over which an Award, if earned, may
      be paid.

            

    

     

    
      	
               
      

            	
              (vii)

            	
              “Phase
      Level” means the level of attainment achieved during a Performance Period
      towards accomplishment of a Target Goal.  The Phase Level shall
      be determined annually by the Committee based on recommendations from the
      CEO and is a factor in determining the
Award.

            

    

     

    
      	
               
      

            	
              (viii)

            	
              “Performance
      Period” means a period of time designated in the LTIPA during which
      performance under the Plan will be measured and may be a period of at
      least one year and up to ten years in length and which may overlap,
      provided that no two Performance Periods under the Plan of equal length
      shall coincide.

            

    

     

    
      	
               
      

            	
              (ix)

            	
              “Target
      Goal” means the EVA objective set forth in the
  LTIPA.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Eligibility
      and Participation.  Only the following employees of the
      Company or its subsidiary shall be eligible for an EVA
      Award.  Employees employed by the Company or its subsidiary on
      the last day of the Performance Period,
who:

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              are
      specifically designated as Participants in the Plan by the
      Committee;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              have
      been designated to be eligible to receive an EVA Award by the
      Committee;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              have
      executed an LTIPA which is executed by the CEO (or, with respect to the
      LTIPA of the CEO, a non-employee member of the
  Committee);

            

    

     

    
      	
               
      

            	
              (iv)

            	
              have
      achieved relevant LTIPA performance criteria;
  and

            

    

     

    
      	
               
      

            	
              (v)

            	
              have
      participated in Annual Reviews of the LTIPA during the Performance
      Period.

            

    

     

    
      	
               
      

            	
              (c)

            	
              EVA
      Award.  The EVA Award is the Adjusted Basic Award
      multiplied by the Phase Level attained by the Participant and a factor the
      numerator of which is the average of the closing price of the common stock
      of the Company (on the principal stock exchange on which the Company’s
      common stock is traded, as determined by the Company) for the six months
      preceding the last day of a Performance Period and the denominator is the
      average closing price of the common stock of the Company (on the principal
      stock exchange on which the Company’s common stock is traded, as
      determined by the Committee) for the six months preceding the execution of
      a Participant’s LTIPA (“Beginning Stock Price”).  The factor so
      determined shall not be less than
one.

            

    

     

    The
Adjusted Basic Award shall be determined based on the EVA Unit’s and the
Participant’s achievement of the Target Goal.  At an achievement level
of 49.99%, the Adjusted Basic Award is 0% of the Basic Award.  The
Adjusted Basic Award is the percent of the Target Goal achieved (at 50% or
higher) multiplied by the Basic Award, not to exceed 100% of the Basic
Award.

     

    
      	
               
      

            	
              (i)

            	
              A
      Participant’s potential Award shall be earned after the last day of a
      Performance Period and upon the final approval of the Compensation
      Committee of the Award.  Portions of the Award are subject to
      forfeiture during the Payment Cycle as provided in Section
      11(d).  The Participant shall have no interest in the Award
      until the final approval of the Compensation Committee of the
      Award.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      actual Award granted to a Participant hereunder shall be based upon the
      Company’s overall performance, the EVA Unit’s overall performance and the
      Participant’s individual performance and shall be determined by the
      Committee, in its sole discretion.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              No
      Award will be granted if a Participant’s individual performance is
      unsatisfactory, as determined by the Committee in its sole discretion,
      upon the advice of the Chief Executive
Officer.

            

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (d)

            	
              Form
      and Time of Payment of EVA Award.  The form of payment
      shall be in stock or cash at the sole discretion of the
      Committee.  The amounts paid under an Award shall be paid to the
      Participant less applicable federal, state, local income and employment
      taxes, during the Payment Cycle after the date on which the Award has been
      approved by Committee (but in no event later than March 15th of the year
      following the year in which the Award is earned).  If the Award
      is paid in stock, then sufficient shares shall be withheld to meet
      withholding obligations unless other arrangements have been made by the
      Participant.  The shares to be delivered in payment (including
      any Deferred Award Payments as provided below) shall be valued at the
      average price for the five trading days prior to the date of payment to
      the Participant.

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Committee shall have the authority to approve, reduce or eliminate an
      potential EVA Award and portions thereof.  The Payment Cycle
      shall commence on the date that an EVA Award is approved by the Committee
      and shall extend for 24 months after the end of the Performance
      Period.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              As
      provided in the LTIPA for the EVA Award, the Committee shall determine in
      its discretion what portion, if any, of one-half of the potential EVA
      Award shall be paid initially to a Participant (“Initial Award
      Payment”).  The amount of the Initial Award Payment to be paid
      shall be paid as soon as administratively practicable after approval by
      the Committee of the EVA Award (but in no event later than March 15th of
      the year following the year in which the EVA Award is
    earned).

            

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      Committee shall determine in its discretion what portion of the remaining
      half of the potential EVA Award shall be paid to a Participant (“Deferred
      Award Payment”).  Except as otherwise provided in the LTIPA for
      the EVA Award (as determined by the Committee in its sole discretion),
      Deferred Award Payments shall not be vested or earned until the conditions
      for payment set forth below or in the LTIPA for the EVA Award under which
      the Deferred Award Payment would be paid.  The amount of the
      Deferred Award Payment that may be paid to the Participant shall be
      subject to the following forfeiture provisions in this Section
      11(d)(iii):

            

    

     

    
      	
               
      

            	
              (1)

            	
              One-half
      of the approved Deferred Award Payment shall be paid 12 months after
      the end of the Performance Period and one-half of the approved Deferred
      Award Payment shall be paid 24 months after the end of the Performance
      Period subject to the following forfeiture
  provisions.

            

    

     

    
      	
               
      

            	
              (2)

            	
              As
      provided in the Participant’s LTIPA for the EVA Award, (A) failure of
      the EVA Unit to achieve the same level of the Target Goal as was obtained
      during the Performance Period in the 12 months following the Performance
      Period will result in forfeiture of one-half of the Deferred Award
      Payment, and (B) failure of the EVA Unit to achieve the Target Goal in the
      12 months beginning 12 months after the ending of the Performance Period
      and ending 24 months after the end of the Performance Period will result
      in the forfeiture of one-half of the Deferred Award
      Payment.  Payment of a portion of the Deferred Award Payment, if
      applicable, shall be made as soon as administratively practicable
      following the end of the applicable 12-month period (but in no event later
      than March 15th of the year following the year in which the applicable
      12-month period ends).

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (3)

            	
              Among
      other conditions to be included in a Participant’s LTIPA, the Committee
      may require a Participant who is eligible to receive a Deferred Award
      Payment to remain in employment with the Company or its subsidiary through
      the payment date as a condition for such payment.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Disability,
      Death and Other Terminations

            

    

     

    
      	
               
      

            	
              (i)

            	
              In
      the event of the termination of a Participant’s employment due to his or
      her Disability or death, such Participant (or the Participant’s probate
      estate, in the event of his or her death) may receive payment of an EVA
      Award, consistent with the terms of the Plan, subject to the terms of the
      LTIPA for the EVA Award and at the sole discretion of the
      Committee.  Any such Award shall be determined and paid in
      accordance with the regular procedures of the
  Plan.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              In
      the event of the Participant’s death, should an EVA Award be approved
      under Section 11(e)(i), such EVA Award shall be paid in cash or stock,
      less applicable federal, state, and local income and employment taxes, on
      the normal EVA Award payout date and subject to the terms of forfeiture,
      to the Participant’s estate, or to the person or persons who have
      acquired, by will or by the laws of descent and distribution or by other
      legal proceedings, the right to such Award, in the determination and
      discretion of the Committee.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              In
      the event of the termination of a Participant’s employment for reasons
      other than his or her Disability or death, such Participant’s right to
      receive an EVA Award, if any, shall be determined by the following terms
      in this Section 11(e)(iii):

            

    

     

    
      	
               
      

            	
              (1)

            	
              If
      the Participant’s employment is terminated during the Performance Period
      for the EVA Award, then the Participant shall not be eligible to any
      payment under the EVA Award.

            

    

     

    
      	
               
      

            	
              (2)

            	
              If
      the Participant’s employment is terminated following the Performance
      Period for the EVA Award and the Committee has approved the payment of the
      EVA Award to the Participant, then the EVA Award shall be paid to the
      Participant subject to the conditions for the payment of the EVA Award
      (including the achievement of the Company’s Target Goals during the two
      12-month periods following the Performance Period required for the payment
      of the Deferred Award Payments set forth in Section 11(d)).  Any
      payment made pursuant to this Subsection shall be made no later than March
      15th of the year following the year in which the EVA Award or Deferred
      Award Payment is no longer subject to a substantial risk of
      forfeiture.

            

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (f)

            	
              No
      Reallocation of EVA Awards.  In no event
      may the portion of the potential EVA Award allocated to a Participant be
      increased in any way, including as a result of the reduction of any other
      Participant’s allocated portion.

            

    

     

    
      	
              12.

            	
              CASH
      BONUS AWARDS

            

    

     

    The
Committee may designate the employees of the Company who are eligible to receive
a cash bonus payment in any calendar year based on an incentive pool to be
determined by the Committee.  The Committee shall allocate an
incentive pool percentage to each designated Participant for each calendar
year.

     

    As soon
as possible after the determination of the incentive pool for a calendar year,
the Committee shall calculate the Participant’s allocated portion of the
incentive pool based upon the percentage established at the beginning of the
calendar year.  The Participant’s incentive award then shall be
determined by the Committee based on the Participant’s allocated portion of the
incentive pool subject to adjustment in the sole discretion of the
Committee.  Unless otherwise specified by the Committee in writing in
compliance with Code Section 409A, Incentive awards shall be paid no later than
March 15th of the year following the year in which the incentive award is
earned.  In no event may the portion of the incentive pool allocated
to a Participant be increased in any way, including as a result of the reduction
of any other Participant’s allocated portion.

     

    
      	
              13.

            	
              OTHER
      STOCK OR CASH AWARDS

            

    

     

    In
addition to the incentives described in Sections 6 through 12 above, the
Committee may grant other incentives payable in cash or in common stock under
the Plan as it determines to be in the best interests of the Company and subject
to such other terms and conditions as it deems appropriate.

     

    
      	
              14.

            	
              PERFORMANCE
      GOALS

            

    

     

    Except as
provided with respect to EVA Awards, cash bonus Awards and awards of Restricted
Stock, Restricted Stock Units, Performance Stock, Performance Units and other
incentives under the Plan may be made subject to the attainment of performance
goals relating to any one or more business criteria within the meaning of Code
Section 162(m), including, but not limited to, cash flow; cost; ratio of debt to
debt plus equity; profit before tax; economic profit; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
earnings per share; operating earnings; economic value added; ratio of operating
earnings to capital spending; free cash flow; net profit; net sales; sales
growth; price of the Company common stock; return on net assets, equity or
stockholders’ equity; market share; or total return to stockholders
("Performance Criteria"). Any one or more Performance Criteria may be used to
measure the performance of the Company as a whole or any business unit of the
Company and may be measured relative to a peer group or index.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    Any
Performance Criteria may include or exclude Special Items.  Special
Items shall include (i) extraordinary, unusual and/or non-recurring items of
gain or loss, (ii) gains or losses on the disposition of a business, (iii)
changes in tax or accounting regulations or laws, or (iv) the effect of a
merger or acquisition, as identified in the Company’s quarterly and annual
earnings releases.  In all other respects, Performance Criteria shall
be calculated in accordance with the Company’s financial statements, generally
accepted accounting principles, or under a methodology established by the
Committee prior to the issuance of an award that is consistently applied and
identified in the audited financial statements, including footnotes, or the
Management Discussion and Analysis section of the Company’s annual
report.

     

    With
respect to Awards subject to Performance Criteria, the Committee shall have the
authority to reduce the payouts on such Awards and shall have the authority to
limit or waive the actual performance-based vesting of such Awards in its sole
discretion.

     

    
      	
              15.

            	
              DEFERRAL
      OF PAYMENT ON AWARDS

            

    

     

    Subject
to the provisions of Code Section 409A and any regulatory guidance promulgated
thereunder, a Participant and the Company may enter into an agreement under
which the payment of amounts payable under a vested Award shall be deferred on
terms and conditions to be established by the Participant and the
Company.

     

    
      	
              16.

            	
              ADJUSTMENT
      PROVISIONS

            

    

     

    
      	
               
      

            	
              (a)

            	
              If
      the Company shall at any time change the number of issued shares of common
      stock by stock dividend, stock split, spin-off, split-off, spin-out,
      recapitalization, merger, consolidation, reorganization, combination, or
      exchange of shares, the total number of shares reserved for issuance under
      the Plan, the maximum number of shares that may be made subject to an
      Award or all Awards in any calendar year, and the number of shares covered
      by each outstanding Award and the price therefor, if any, shall be
      equitably adjusted by the Committee, in its sole
    discretion.

            

    

     

    
      	
               
      

            	
              (b)

            	
              In
      the event of any merger, consolidation or reorganization of the Company
      with or into another corporation that results in the outstanding common
      stock of the Company being converted into or exchanged for different
      securities, cash or other property, or any combination thereof, the
      Company shall have the authority to provide in the controlling agreement
      for such transaction (i) that there shall be substituted, as determined by
      the Committee in its discretion, for each share of common stock then
      subject to an Award granted under the Plan, the number and kind of shares
      of stock, other securities, cash or other property to which holders of
      common stock of the Company will be entitled pursuant to the transaction,
      (ii) that the acquiring or surviving corporation in the transaction shall
      assume the outstanding Awards under the Plan (which may be exercisable
      into the securities of the acquiring or surviving corporation), (iii) that
      all unexercised Awards shall terminate immediately prior to such
      transaction unless exercised prior to the closing of the transaction, or
      (iv) a combination of the
foregoing.

            

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
      	
              17.

            	
              SUBSTITUTION
      AND ASSUMPTION OF AWARDS

            

    

     

    Without
affecting the number of shares reserved or available hereunder, the Board or the
Committee may authorize the issuance of Awards under the Plan in connection with
the assumption of, or substitution for, outstanding Awards previously granted to
individuals who become employees of the Company or any subsidiary as a result of
any merger, consolidation, acquisition of property or stock, or reorganization
other than a Change in Control, upon such terms and conditions as the Committee
may deem appropriate.

     

    
      	
              18.

            	
              TRANSFERABILITY

            

    

     

    Each
Award granted under the Plan shall not be transferable otherwise than by will or
the laws of descent and distribution and each Stock Option and SAR shall be
exercisable during the Participant’s lifetime only by the Participant or, in the
event of Disability, by the Participant’s personal representative.  In
the event of the death of a Participant, exercise of any Award or payment with
respect to any Award shall be made only by or to the executor or administrator
of the estate of the deceased Participant or the person or persons to whom the
deceased Participant’s rights under the Award shall pass by will or the laws of
descent and distribution.

     

    
      	
              19.

            	
              TAXES

            

    

     

    The
Company shall be entitled to withhold the amount of any tax attributable to any
amounts payable or shares deliverable under the Plan, after giving the person
entitled to receive such payment or delivery notice and the Company may defer
making payment or delivery as to any award, if any such tax is payable until
indemnified to its satisfaction.  A Participant may pay all or a
portion of any required withholding taxes arising in connection with the
exercise of a Stock Option or SAR or the receipt or vesting of shares hereunder
by electing to have the Company withhold shares of common stock, having a fair
market value equal to the amount required to be withheld.

     

    
      	
              20.

            	
              OTHER
      PROVISIONS

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      grant of any Award under the Plan may also be subject to other provisions
      (whether or not applicable to the Award awarded to any other Participant)
      as the Committee determines appropriate, including provisions intended to
      comply with federal or state securities laws and stock exchange
      requirements, understandings or conditions as to the Participant’s
      employment or other service, requirements or inducements for continued
      ownership of common stock after exercise or vesting of Awards, forfeiture
      of awards in the event of termination of employment or other service
      shortly after exercise or vesting, or breach of non-solicitation,
      non-disparagement, non-competition or confidentiality agreements following
      termination of employment or other service, or provisions permitting the
      deferral of the receipt of a Award for such period and upon such terms as
      the Committee shall determine.

            

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              In
      the event any Award under the Plan is granted to an employee, member of
      the Board, or adviser who is employed or providing services outside the
      United States and who is not compensated from a payroll maintained in the
      United States, the Committee may, in its sole discretion, modify the
      provisions of the Plan or adopt appendices and/or sub-plans as they
      pertain to such individuals as may be necessary or desirable to comply
      with applicable law, regulation or accounting rules to assure the
      viability of the benefits from Awards granted to such individuals and to
      meet the objective of the Plan.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Committee, in its sole discretion, may permit or require a Participant to
      have amounts or shares of common stock that otherwise would be paid or
      delivered to the Participant as a result of the exercise or settlement of
      an award under the Plan credited to a deferred compensation or stock unit
      account established for the Participant by the Committee on the Company’s
      books of account.

            

    

     

    
      	
               
      

            	
              (d)

            	
              As
      a condition for the receipt of stock Awards under the Plan, a Participant
      shall agree to be bound by the employment policies of the Company (or
      other applicable policies) pertaining to the securities of the Company,
      including, but not limited to, the insider trading restrictions of the
      Company.

            

    

     

    
      	
              21.

            	
              NO
      RESERVE OR TRUST

            

    

     

    Nothing
contained in the Plan shall require the Company to segregate any monies from its
general funds, or to create any trust or make any special deposit in respect of
any amounts payable under the Plan to or for any Participant or group of
Participants. All amounts payable under the Plan shall be paid out of the
general funds of the Company.

     

    
      	
              22.

            	
              NO
      RIGHT TO ASSIGN

            

    

     

    No right
or interest of any Participant in the Plan or in any unpaid Award shall be
assignable or transferable in whole or in part, either voluntarily or by
operation of law or otherwise, or be subject to payment of debts of any
Participant by execution, levy, garnishment, attachment, pledge, bankruptcy or
in any other manner.

     

    
      	
              23.

            	
              NO
      EMPLOYMENT OR SIMILAR RIGHTS
CONFERRED

            

    

     

    Nothing
contained in the Plan or any Award shall confer upon any employee, director or
adviser any right with respect to continuation of employment or other service
with the Company in any capacity or interfere in any way with the right of the
Company to terminate an employee’s employment or a director’s or adviser’s
service at any time or guarantee any right of participation in any other
employee benefit or compensation plan of the Company.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
              24.

            	
              SUCCESSORS
      AND MERGERS, CONSOLIDATIONS OR CHANGE IN
  CONTROL

            

    

     

    The terms
and conditions of the Plan shall inure to the benefit of and bind the Company,
the Participants, their successors, assignees, and personal
representatives.  If a Change of Control occurs, then the Plan shall
immediately terminate.

     

    Except as
otherwise provided in an LTIPA, upon a Change in Control of the Company, the
Committee, in its sole discretion, may (but shall not be required to) make all
outstanding Stock Options and SARs fully vested and exercisable, all
restrictions on Restricted Stock and Restricted Stock Units terminated, all
performance goals deemed achieved at target levels and all other terms and
conditions met, and deliver all Performance Stock, and pay out all Performance
Units and Restricted Stock Units.

     

    The
Committee shall in its sole discretion determine the status of achievement of a
particular Target Goal and shall specify an Adjusted Basic Award based upon its
determination of achievement of the performance goals under the Awards as of the
Change in Control (“Change in Control Award”).  A Change in Control
Award shall be modified as outlined below and shall be paid 30 days after the
consummation of the Change in Control.  Any Deferred Award payments
outstanding upon a Change in Control shall be paid within 30 days after the
Change in Control.

     

    In the
event of a Change in Control, all EVA Awards or cash Awards shall be paid on a
pro-rated basis (as determined by the Committee) based on the portion of the
Performance Goals achieved under the EVA Awards or cash Awards as of the date of
the Change in Control, subject to the discretion of the Committee to reduce the
EVA Awards.  Pro-rated EVA Awards or cash Awards shall be paid within
30 days after the Change in Control.

     

    
      	
              25.

            	
              GOVERNING
      STATE LAW AND COMPLIANCE WITH SECURITIES
  LAWS

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Plan and any actions taken in connection herewith shall be governed by and
      construed in accordance with the laws of the state of Nevada (without
      regard to applicable Nevada principles of conflict of
    laws).

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company shall seek to obtain from each regulatory commission or agency
      having jurisdiction over the Plan such authority as may be required to
      grant Stock Awards and to issue and sell shares of Common Stock upon
      exercise of the Stock Awards; provided, however, that this undertaking
      shall not require the Company to register under the Securities Act the
      Plan, any stock Award or any common stock issued or issuable pursuant to
      any such stock Award.  If, after reasonable efforts, the Company
      is unable to obtain from any such regulatory commission or agency the
      authority that counsel for the Company deems necessary for the lawful
      issuance and sale of common stock under the Plan, the Company shall be
      relieved from any liability for failure to issue and sell common stock
      upon exercise of such stock Awards unless and until such authority is
      obtained.

            

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
      	
              26.

            	
              DURATION,
      AMENDMENT AND TERMINATION

            

    

     

    The Board
or the Committee may amend, suspend, terminate or reinstate the Plan from time
to time or terminate the Plan at any time.  However, no such action
shall reduce the amount of any existing Award (subject to the reservation of the
authority of the Committee to reduce payments on Awards) or change the terms and
conditions thereof without the Participant’s consent.  No amendment of
the Plan shall be made without stockholder approval to the extent stockholder
approval is expressly required under applicable rules and regulations of the
Securities and Exchange Commission, the applicable rules of a stock exchange on
which the securities of the Company are traded as may be established pursuant to
its rule-making authority of such stock exchange, and the rules and regulations
of the Internal Revenue Service for plans intended to qualify for the
performance-based exemption under Code Section 162(m).

     

    Neither
the Board nor the Committee may cancel an Award once the Award has been granted
by the Committee, including any Deferred Award Payments.  Each year on
the anniversary of the LTIPAs, the CEO shall present to the Committee any
recommendations for changes in the Plan or in the LTIPAs previously approved by
the Committee (subject to the restrictions on the grant of authority to the
Committee in Section 3).

     

    
      	
              27.

            	
              SHORT-TERM
      DEFERRAL; DEFERRED
COMPENSATION

            

    

     

    
      	
               
      

            	
              (a)

            	
              Short-Term
      Deferral.  To the
      extent an Award constitutes nonqualified deferred compensation subject to
      Code Section 409A and it has not been designed to comply with Code Section
      409A, in order to be exempt from Code Section 409A pursuant to Treasury
      Regulation Section 1.409A-1(b)(4), payment of the Award shall be made no
      later than the later of (i) the date that is 2 1⁄2 months from the end
      of the Participant’s first taxable year in which the amount is no longer
      subject to a substantial risk of forfeiture, or (ii) the date that is 2 1⁄2
      months from the end of the Company’s first taxable year in which the
      amount is no longer subject to a substantial risk of
      forfeiture.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Deferred
      Compensation.  Notwithstanding
      any provision in the Plan or any LTIPA to the contrary, to the extent an
      Award (i) constitutes “deferred compensation” within the meaning of Code
      Section 409A, (ii) is not exempt from the application of Code Section 409A
      and (iii) is payable to a specified employee (as determined in accordance
      with Code Section 409A(a)(2)(B) and applicable regulations) due to
      separation from service (as such term is defined under Code Section 409A),
      payment shall be delayed for a minimum of six (6) months from the date of
      such separation from service.

            

    

     

    If any
Award granted under the Plan is considered deferred compensation as defined
under Code Section 409A, and if the Plan or the terms of an Award fail to meet
the requirements of Code Section 409A with respect to such Award, then such
Award shall remain in effect and be subject to taxation in accordance with Code
Section 409A.  In this circumstance, the Committee may accelerate
distribution or settlement of an Award in accordance with Code Section
409A.  The Company shall have no liability for any tax imposed on a
Participant under Code Section 409A, and if any tax is imposed on a Participant,
the Participant shall have no recourse against the Company for payment of any
such tax.  Notwithstanding the foregoing, if any modification of an
Award causes the Award to be deferred compensation under Code Section 409A,
the Committee may rescind such modification in accordance with Code
Section 409A.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
              28.

            	
              SECTION
      162(m)

            

    

     

    The Plan
is designed and intended, and all provisions shall be construed in a manner, to
comply, to the extent applicable, with Code Section 162(m) and the
regulations thereunder.  To the extent permitted by Code Section
162(m), the Committee shall have sole discretion to reduce, eliminate or defer
payment of the amount of any Award which might otherwise become payable upon
meeting Performance Criteria.

     

    
      	
              29.

            	
              SEVERABILITY

            

    

     

    If any
provision of the Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected.

     

    
      	
              30.

            	
              EFFECTIVE
      DATE AND TERM OF THE PLAN

            

    

     

    The Plan
was adopted by the Board of Directors on March 14, 2006, to be effective on
March 14, 2006, subject to stockholder approval, which approval was obtained on
that date.  The Plan shall continue for a term of ten years from the
date of its adoption.  The Plan and any Awards granted thereunder
shall be null and void if stockholder approval is not obtained at the next
annual meeting of stockholders. The Plan was amended on August 15, 2008, and
further amended on June 16, 2009.

     

    
      
         

      

      
        21a5999698ex10-1.htm

    
      
        
          

        

      

      
        
          

        

      

      

      

 

      
      

       

      

    

    SECOND
AMENDED AND RESTATED

    CREDIT
AGREEMENT

    Dated as
of July 1, 2009

    among

    iParty
Retail Stores Corp.,

    as the
Lead Borrower

    and

    THE OTHER
BORROWERS FROM TIME TO TIME PARTY HERETO

    and

    THE
GUARANTORS FROM TIME TO TIME PARTY HERETO

    and

    WELLS
FARGO RETAIL FINANCE, LLC,

    as
Administrative Agent, Collateral Agent and Swing Line Lender

    and

    THE OTHER
LENDERS PARTY HERETO

    

    

    
      
        
          

        

      

      
        
          

      

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                            
                                                                                                                                                              
                                                                                                                                                                
                                                                                                                                                                  
                                                                                                                                                                    
                                                                                                                                                                      
                                                                                                                                                                        
                                                                                                                                                                          
                                                                                                                                                                            
                                                                                                                                                                              
                                                                                                                                                                                
                                                                                                                                                                                  
                                                                                                                                                                                    
                                                                                                                                                                                      
                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                            
                                                                                                                                                                                              
                                                                                                                                                                                                
                                                                                                                                                                                                  
                                                                                                                                                                                                    
                                                                                                                                                                                                      
                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                            
                                                                                                                                                                                                              
                                                                                                                                                                                                                
                                                                                                                                                                                                                  
                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                        
                                                                                                                                                                                                                          
                                                                                                                                                                                                                            
                                                                                                                                                                                                                              
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              	 
      	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE I

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                        DEFINITIONS AND ACCOUNTING
    TERMS

                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                    	1
	
                                                                                                                                                                                                                                                                                                                                                                      1.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Defined Terms

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      1

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      1.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Other Interpretive Provisions

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      32

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      1.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Accounting Terms

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      33

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      1.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Rounding

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      33

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      1.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Times of Day

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      33

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      1.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Letter of Credit Amounts

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      33

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      1.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Currency Equivalents Generally

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      34

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE II

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                        THE COMMITMENTS AND CREDIT
    EXTENSIONS

                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                    	34
	
                                                                                                                                                                                                                                                                                                                                                                      2.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Committed Loans; Reserves

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      34

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Borrowings, Conversions and Continuations of Committed
      Loans.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      35

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Letters of Credit.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      37

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Swing Line Loans.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      45

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Prepayments.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      48

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Termination or Reduction of Commitments.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      50

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Repayment of Loans

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      50

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Interest.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      50

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.09

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Fees

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      51

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.10

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Computation of Interest and Fees

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      51

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.11

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Evidence of Debt.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      52

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.12

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Payments Generally; Administrative Agent’s
      Clawback.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      54

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.13

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Sharing of Payments by Lenders

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      54

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      2.14

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Settlement Amongst Lenders.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                        54

                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE III

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                        TAXES, YIELD PROTECTION AND ILLEGALITY; APPOINTMENT OF LEAD
      BORROWER

                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                    	55
	
                                                                                                                                                                                                                                                                                                                                                                      3.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Taxes.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      55

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Illegality

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      57

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Inability to Determine Rates

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      57

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Increased Costs; Reserves on LIBO Rate
    Loans.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      57

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Compensation for Losses

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      59

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Mitigation Obligations; Replacement of
      Lenders.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      59

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Survival

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      60

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      3.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Designation of Lead Borrower as Borrowers’
      Agent.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      60

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE IV

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                        CONDITIONS PRECEDENT TO CREDIT
      EXTENSIONS

                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                    	60
	
                                                                                                                                                                                                                                                                                                                                                                      4.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Conditions of Initial Credit Extension

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      60

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      4.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Conditions to all Credit Extensions

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      63

                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                i

                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE V

                                                                                                                                                                                                                                                                                                                                                                    	 
      	64
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      REPRESENTATIONS AND
    WARRANTIES

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      64

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Existence, Qualification and Power

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      65

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Authorization; No Contravention

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      65

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Governmental Authorization; Other
Consents

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      65

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Binding Effect

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      65

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Financial Statements; No Material Adverse
      Effect.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      66

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Litigation

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      66

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      No Default

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      66

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Ownership of Property; Liens.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      67

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.09

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Environmental Compliance.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      68

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.10

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Insurance

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      68

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.11

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Taxes

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      68

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.12

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      ERISA Compliance.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      69

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.13

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Subsidiaries; Equity Interests

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      69

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.14

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Margin Regulations; Investment Company Act; Public Utility
      Holding Company Act.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      69

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.15

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Disclosure

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      70

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.16

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Compliance with Laws

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      70

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.17

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Intellectual Property; Licenses, Etc

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      70

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.18

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Labor Matters.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      71

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.19

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Security Documents.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      72

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.20

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Solvency.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      72

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.21

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Deposit Accounts; Credit Card
    Arrangements.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      73

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.22

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Brokers

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      73

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.23

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Customer and Trade Relations

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      73

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.24

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Material Contracts

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      73

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.25

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Casualty

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      73

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      5.26

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Anti-Terrorism Laws.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      73

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE VI

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      AFFIRMATIVE COVENANTS

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      74

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Financial Statements

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      74

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Certificates; Other Information

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      75

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Notices

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      77

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Payment of Obligations

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      78

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Preservation of Existence, Etc

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      79

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Maintenance of Properties.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      79

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Maintenance of Insurance.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      80

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Compliance with Laws

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      81

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.09

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Books and Records; Accountants.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      82

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.10

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Inspection Rights.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      82

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.11

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Use of Proceeds

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      82

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.12

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Additional Loan Parties

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      83

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.13

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Cash Management.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      83

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.14

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Information Regarding the Collateral.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      84

                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                ii

                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              	
                                                                                                                                                                                                                                                                                                                                                                      6.15

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Physical Inventories.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      85

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.16

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Environmental Laws.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      86

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.17

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Further Assurances.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      86

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.18

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Compliance with Terms of Leaseholds.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      87

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.19

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Material Contracts

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      87

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      6.20

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      ERISA.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      87

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE VII

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      NEGATIVE COVENANTS

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      88

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Liens

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      88

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Investments

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      88

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Indebtedness; Disqualified Stock.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      88

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Fundamental Changes

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      89

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Dispositions

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      89

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Restricted Payments

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      89

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Prepayments of Indebtedness

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      89

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Change in Nature of Business.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      89

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.09

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Transactions with Affiliates

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      90

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.10

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Burdensome Agreements

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      90

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.11

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Use of Proceeds

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      90

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.12

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Amendment of Material Documents.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      90

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.13

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Corporate Name; Fiscal Year.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      90

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.14

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Deposit Accounts; Blocked Accounts; Credit Card
      Processors.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.15

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Consignments

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.16

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      [Reserved]

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.17

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Minimum Availability

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.18

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Capital Expenditures

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.19

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Locations.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      7.20

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Subordinated Debt Payments

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      91

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE VIII

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      EVENTS OF DEFAULT AND REMEDIES

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      92

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      8.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Events of Default

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      92

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      8.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Remedies Upon Event of Default

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      95

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      8.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Application of Funds

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      96

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE IX

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      ADMINISTRATIVE AGENT

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      97

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Appointment and Authority.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      97

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Rights as a Lender

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      98

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Exculpatory Provisions

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      98

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Reliance by Agents.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      99

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Delegation of Duties

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      99

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Resignation of Agents

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      99

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Non-Reliance on Administrative Agent and Other
      Lenders

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      100

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Administrative Agent May File Proofs of
    Claim

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      101

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.09

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Collateral and Guaranty Matters

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      101

                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                iii

                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              	
                                                                                                                                                                                                                                                                                                                                                                      9.10

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Notice of Transfer.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      102

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.11

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Reports and Financial Statements.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      102

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.12

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Agency for Perfection.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      103

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.13

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Indemnification of Agents

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      103

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.14

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Relation among Lenders

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      103

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      9.15

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Defaulting Lender.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      103

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      ARTICLE X

                                                                                                                                                                                                                                                                                                                                                                    	 
      	 
	
                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      MISCELLANEOUS

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      104

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.01

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Amendments, Etc

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      104

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.02

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Notices, Financial Statements and Other Documents;
      Effectiveness; Electronic Communications.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      106

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.03

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      No Waiver; Cumulative Remedies

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      107

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.04

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Expenses; Indemnity; Damage Waiver.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      107

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.05

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Payments Set Aside

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      109

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.06

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Successors and Assigns.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      109

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.07

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Treatment of Certain Information;
      Confidentiality

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      113

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.08

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Right of Setoff

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      114

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.09

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Interest Rate Limitation

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      114

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.10

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Counterparts; Integration; Effectiveness

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      114

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.11

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Survival

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      115

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.12

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Severability

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      115

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.13

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Replacement of Lenders

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      115

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.14

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Governing Law; Jurisdiction; Etc.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      116

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.15

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Waiver of Jury Trial

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      117

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.16

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      No Advisory or Fiduciary Responsibility

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      117

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.17

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      USA PATRIOT Act Notice

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      118

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.18

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Foreign Asset Control Regulations

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      118

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.19

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Time of the Essence

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      118

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.20

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Press Releases.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      118

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.21

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Additional Waivers.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      119

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.22

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Amendment and Restatement.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      120

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.23

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      No Strict Construction.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      121

                                                                                                                                                                                                                                                                                                                                                                    
	
                                                                                                                                                                                                                                                                                                                                                                      10.24

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      Attachments.

                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                      121

                                                                                                                                                                                                                                                                                                                                                                    
	 	 	 
	SIGNATURES 	 	S-1 

                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                

                                                                                                                                                                                                                              

                                                                                                                                                                                                                            

                                                                                                                                                                                                                          

                                                                                                                                                                                                                        

                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                  

                                                                                                                                                                                                                

                                                                                                                                                                                                              

                                                                                                                                                                                                            

                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                      

                                                                                                                                                                                                    

                                                                                                                                                                                                  

                                                                                                                                                                                                

                                                                                                                                                                                              

                                                                                                                                                                                            

                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                      

                                                                                                                                                                                    

                                                                                                                                                                                  

                                                                                                                                                                                

                                                                                                                                                                              

                                                                                                                                                                            

                                                                                                                                                                          

                                                                                                                                                                        

                                                                                                                                                                      

                                                                                                                                                                    

                                                                                                                                                                  

                                                                                                                                                                

                                                                                                                                                              

                                                                                                                                                            

                                                                                                                                                          

                                                                                                                                                        

                                                                                                                                                      

                                                                                                                                                    

                                                                                                                                                  

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

    
      
        
          iv

          
            

          

        

        
          
          

        

      

       

      SCHEDULES

      1.01(a)        Borrowers

      1.01(b)        Guarantors

      2.01    Commitments
and Applicable Percentages

      2.03    Existing
Letters of Credit

      5.01            Loan
Parties Organizational Information

      5.05    Material
Indebtedness

      5.06            Litigation

      5.08(b)        Leased
Real Estate

      5.09    Environmental
Matters

      5.10            Insurance

      5.13    Subsidiaries;
Other Equity Investments; Equity Interests in the
Borrower

      5.17            Intellectual
Property Matters

      5.18            Labor
Matters

      5.21(a)        DDAs

      5.21(b)        Credit
Card Arrangements

      5.24            Material
Contracts

      6.02            Financial
and Collateral Reporting

      7.01    Existing
Liens

      7.02            Existing
Investments

      7.03    Existing
Indebtedness
10.02         
Administrative Agent's Office; Certain Addresses for
Notices

      

       

      EXHIBITS

      Form
of

        
          
            	
                    A

                  	
                    Committed
      Loan Notice

                  
	
                    B

                  	
                    Swing
      Line Loan Notice

                  
	
                    C-1

                  	
                    Committed
      Loan Note

                  
	
                    C-2

                  	
                    Swing
      Line Loan Note

                  
	
                    D

                  	
                    Compliance
      Certificate

                  
	
                    E

                  	
                    Borrowing
      Base Certificate

                  
	
                    F

                  	
                    Assignment
      and Assumption

                  
	
                    G

                  	
                    Credit
      Card Notification

                  
	
                    H

                  	
                    DDA
      Notification

                  
	
                    I

                  	
                    Joinder
      Agreement

                  
	
                    J

                  	
                    Business
      Plan

                  

          

        

      

    

     

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

     

    
      CREDIT
AGREEMENT

       

      This
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is
entered into as of July 1, 2009, among

       

      (i)    iPARTY RETAIL
STORES CORP., a Delaware corporation (the “Lead Borrower”), as
agent for the Borrowers now or hereafter party hereto,

       

      (ii)           the
BORROWERS now or hereafter party hereto,

       

      (iv)          the
GUARANTORS now or hereafter party hereto,

       

      (v)           each
lender from time to time party hereto (each individually, a “Lender” and
collectively, the “Lenders”),
and

       

      (vi)          WELLS
FARGO RETAIL FINANCE, LLC, as Administrative Agent, Collateral Agent and Swing
Line Lender.

       

      WHEREAS,
Wells Fargo Retail Finance, LLC (as successor in interest to Wells Fargo Retail
Finance II, LLC), as Lender and the Borrowers are parties to the Existing Credit
Agreement; and

       

      WHEREAS,
the Lenders, the Borrowers and the Agent are willing to amend and restate the
Existing Credit Agreement on the terms and subject to the conditions set forth
herein; provided, that as of
the Closing Date the terms and conditions related to the grant of security
interests pursuant to Article 2 of the Existing Credit Agreement shall be
ratified pursuant to the Security Agreement.

       

      NOW,
THEREFORE, in consideration of the premises and the covenants and agreements
herein contained, the receipt and adequacy of which are hereby acknowledged, the
Borrowers, the Lenders and the Agent hereby agree as follows:

       

      ARTICLE
I

      DEFINITIONS AND ACCOUNTING TERMS

       

      1.01    Defined
Terms. As
used in this Agreement, the following terms shall have the meanings set forth
below:

       

      “ACH” means automated
clearing house transfers.

       

      “Accommodation
Payment” as defined in Section
10.21(d).

       

      “Account” means
“accounts” as defined in the UCC, and also means a right to payment of a
monetary obligation, whether or not earned by performance, (a) for property that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of,
(b) for services rendered or to be rendered, (c) for a policy of insurance
issued or to be issued, (d) for a secondary obligation incurred or to be
incurred, (e) for energy provided or to be provided, (f) for the use or hire of
a vessel under a charter or other contract, (g) arising out of the use of a
credit or charge card or information contained on or for use with the card, or
(h) as winnings in a lottery or other game of chance operated or sponsored by a
state, governmental unit of a state, or person licensed or authorized to operate
the game by a state or governmental unit of a state.  The term
“Account” includes health-care-insurance receivables.

       

      “Acquisition” means,
with respect to any Person (a) an Investment in, or a purchase of a Controlling
interest in, the Equity Interests of any other Person, (b) a purchase or other
acquisition of all or substantially all of the assets or properties of, another
Person or of any business unit of another Person, (c) any merger or
consolidation of such Person with any other Person or other transaction or
series of transactions resulting in the acquisition of all or substantially all
of the assets, or a Controlling interest in the Equity Interests, of any Person,
or (d) any acquisition of any Store locations of any other Person, in each case
in any transaction or group of transactions which are part of a common
plan.

       

      “Act” shall have the
meaning provided in Section
10.17.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      “Adjusted LIBO Rate”
means:

       

      (a)    for any
Interest Period with respect to any LIBO Borrowing, an interest rate per annum
(rounded upwards, if necessary, to the next 1/100 of one percent) equal to (i)
the LIBO Rate for such Interest Period multiplied by (ii)
the Statutory Reserve Rate; and

       

      (b)    for any
interest rate calculation with respect to any Base Rate Loan, an interest rate
per annum (rounded upwards, if necessary, to the next 1/100 of one percent)
equal to (i) the LIBO Rate for an Interest Period commencing on the date of such
calculation and ending on the date that is thirty (30) days thereafter multiplied by (ii)
the Statutory Reserve Rate.

       

      The
Adjusted LIBO Rate will be adjusted automatically as of the effective date of
any change in the Statutory Reserve Rate.

       

      “Adjustment Date”
means the first day of each Fiscal Quarter, commencing October 1,
2009.

       

      “Administrative Agent”
means Wells Fargo Retail Finance, LLC, in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative
agent.

       

      “Administrative
Agent’s Office” means the
Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 10.02,
or such other address or account as the Administrative Agent may from time to
time notify the Lead Borrower and the Lenders.

       

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

       

      “Affiliate” means,
with respect to any Person, (i) another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified, (ii) any director, officer, managing
member, partner, trustee, or beneficiary of that Person, (iii) any other Person
directly or indirectly holding 10% or more of any class of the Equity Interests
of that Person, and (iv) any other Person 10% or more of any class of whose
Equity Interests is held directly or indirectly by that
Person.  Notwithstanding anything herein to the contrary, in no event
shall the Agent or any Lender be considered an “Affiliate” of any Loan
Party.

       

      “Agent(s)” means,
individually, the Administrative Agent or the Collateral Agent, and collectively
means both of them.

       

      “Aggregate
Commitments” means the Commitments of all the Lenders.

       

      “Agreement” means this
Credit Agreement.

       

      “Allocable Amount” has
the meaning specified in Section
10.21(d).

       

      “Applicable Margin”
means:

       

      (a)          From
and after the Closing Date until the first Adjustment Date, the percentages set
forth in Level II of the pricing grid below; and

       

      (b)          On
the first Adjustment Date, and on each Adjustment Date thereafter, the
Applicable Margin shall be determined from the following pricing grid based upon
the average daily Excess Availability during the Fiscal Quarter ended
immediately preceding such Adjustment Date as determined by Lender based upon
the Borrowing Base Certificate(s) delivered pursuant to Section 6.01; provided, however, that
notwithstanding anything to the contrary set forth herein, upon the occurrence
and during the continuation of an Event of Default, the Administrative Agent
may, and at the direction of the Required Lenders shall, immediately increase
the Applicable Margin to that set forth in Level III (even if the Excess
Availability requirements for a different Level have been met) and interest
shall accrue at the Default Rate; provided, further if any of the
financial statements delivered pursuant to Section 6.01 of this
Agreement or any Borrowing Base Certificate is at any time restated or otherwise
revised (including as a result of an audit) or if the information set forth in
any such financial statements or Borrowing Base Certificate otherwise proves to
be false or incorrect such that the Applicable Margin would have been higher
than was otherwise in effect during any period, without constituting a waiver of
any Default or Event of Default arising as a result thereof, interest due under
this Agreement shall be immediately recalculated at such higher rate for any
applicable periods and shall be due and payable on demand.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      
        
          
            
              
                
                  
                    	 	
                            Level

                          	
                            Excess
      Availability

                          	
                            LIBOR
      Margin

                          	
                            Base
      Rate Margin

                          
	 	
                            I

                          	
                            Greater
      than $6,000,000

                          	
                            3.00%

                          	
                            3.00%

                          
	 	
                            II

                          	
                            Less
      than or equal to $6,000,000 but greater than $3,000,000

                          	
                            3.25%

                          	
                            3.25%

                          
	 	
                            III

                          	
                            Less
      than or equal to $3,000,000

                          	
                            3.50%

                          	
                            3.50%

                          

                  

                

              

            

          

        

      

       

      “Applicable
Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time.  If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section
8.02 or
if the Aggregate Commitments have expired, then the Applicable Percentage of
each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent
assignments.  The initial Applicable Percentage of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable.

       

      “Applicable Rate”
means, at any time of calculation, with respect to Commercial Letters of Credit
and Standby Letters of Credit, a per annum rate equal to the Applicable Margin
for Loans which are LIBO Rate Loans.

       

      “Approved Fund” means
any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

       

      “Assignee Group” means
two or more Eligible Assignees that are Affiliates of one another or two or more
Approved Funds managed by the same investment advisor.

       

      “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section
10.06(b)), and accepted by the Administrative Agent, in substantially the
form of Exhibit
F or any other form approved by the Administrative Agent.

       

      “Attributable
Indebtedness” means, on any date, in respect of any Capital Lease
Obligation of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with
GAAP.

       

      “Audited Financial
Statements” means the audited Consolidated balance sheet of the Parent
and its Subsidiaries for the Fiscal Year ended on or about December 27, 2008,
and the related consolidated statements of income or operations, Shareholders’
Equity and cash flows for such Fiscal Year of the Parent and its Subsidiaries,
including the notes thereto.

       

      “Auto-Extension Letter of
Credit” shall have the meaning specified in Section
2.03(b)(iii).

       

      “Availability” means,
as of any date of determination thereof by the Administrative Agent, the result,
if a positive number, of:

       

      (a)   the Loan
Cap

      minus

      (b)   the aggregate
Outstanding Amount of all Credit Extensions to, or for the account of, the
Borrowers.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      In
calculating Availability at any time and for any purpose under this Agreement,
the Lead Borrower shall certify to the Administrative Agent that all accounts
payable and Taxes are being paid on a timely basis and consistent with past
practices (absent which the Administrative Agent may establish a Reserve
therefor).

       

      “Availability Period”
means the period from and including the Closing Date to the earliest of (a) the
Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant
to Section
2.06, and (c) the date of termination of the commitment of each Lender to
make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section
8.02.

       

      “Availability
Reserves” means, without duplication of any other Reserves or items that
are otherwise addressed or excluded through eligibility criteria, such reserves
as the Administrative Agent from time to time determines in its reasonable
discretion as being appropriate (a) to reflect the impediments to the Agents’
ability to realize upon the Collateral, (b) to reflect claims and liabilities
that the Administrative Agent determines will need to be satisfied in connection
with the realization upon the Collateral, (c) to reflect criteria, events,
conditions, contingencies or risks which adversely affect any component of the
Borrowing Base, or the assets, business, financial performance or financial
condition of any Loan Party, or (d) to reflect that a Default or an Event of
Default then has occurred and is continuing. Without limiting the generality of
the foregoing, Availability Reserves may include (but are not limited to), in
the Administrative Agent’s reasonable discretion, reserves based on: (i) rent
(based upon past due rent and/or whether or not a Collateral Access Agreement,
reasonably acceptable to the Collateral Agent, has been received by the
Collateral Agent); (ii) customs duties, and other costs to release Inventory
which is being imported into the United States; (iii) outstanding Taxes and
other governmental charges, including, without limitation, ad valorem, real
estate, personal property, sales, and other Taxes which may have priority over
the interests of the Collateral Agent in the Collateral; (iv) Customer Credit
Liabilities, (v) warehousemen’s or bailee’s charges and other Permitted
Encumbrances which may have priority over the interests of the Collateral Agent
in the Collateral, (vi) amounts due to vendors on account of consigned goods,
(vii) Cash Management Reserves, (viii) Bank Products Reserves, (ix) payables
(based upon payables which are past due normal trade terms) to the extent
failure to make such payments would have a Material Adverse Effect on the
Borrowers, (x) held or post-dated checks and (xi) the Minimum Availability
Block.

       

      “Bank Products” means
any services or facilities provided to any Loan Party by a Lender or any of its
Affiliates, including, without limitation, on account of (a) credit cards, (b)
purchase cards, and (c) leasing, but excluding Cash Management
Services.

       

      “Bank Products
Reserves” means such reserves as the Administrative Agent from time to
time determines in its discretion as being appropriate to reflect the
liabilities and obligations of the Loan Parties with respect to Bank Products
then provided or outstanding.

       

      “Bankruptcy Code”
means Title 11 of the United States Code, as amended and in effect.

       

      “Base Rate” 
means, for any day, a fluctuating rate per annum equal to the highest of (a) the
Federal Funds Rate, as in effect from time to time, plus one and one-half of one
percent (1.50%), (b) except during any period of time during which a notice
delivered to the Lead Borrower in accordance with Section 3.03 shall
remain in full force and effect, the Adjusted LIBO Rate plus one percent
(1.00%), or (c) the rate of interest in effect for such day as publicly
announced from time to time by Wells Fargo Bank as its “prime
rate.”  The “prime rate” is a rate set by Wells Fargo Bank based upon
various factors including Wells Fargo Bank’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by Wells Fargo Bank shall
take effect at the opening of business on the day specified in the public
announcement of such change.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      “Base Rate Loan” means
a Loan that bears interest based on the Base Rate.

       

      “Blocked Account” has
the meaning provided in Section
6.13(a)(iii).

       

      “Blocked Account
Agreement” means with respect to a Blocked Account established by a Loan
Party, an agreement, in form and substance reasonably satisfactory to the
Collateral Agent, establishing Control (as defined in the Security Agreement) of
such account by the Collateral Agent.

       

      “Blocked Account Bank”
means each bank with whom deposit accounts are maintained in which any funds of
any of the Loan Parties from one or more DDAs are concentrated and with whom a
Blocked Account Agreement has been, or is required to be, executed in accordance
with the terms hereof.

       

      “Borrowers” means,
collectively, the Lead Borrower, each Person listed on Schedule 1.01(a)
annexed hereto, and each other Person who shall from time to time execute and
deliver a Joinder Agreement as a Borrower or such other document as the
Administrative Agent deems appropriate in accordance with Section
6.12.

       

      “Borrowing” means a
Committed Borrowing or a Swing Line Borrowing, as the context may
require.

       

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

       

      (a)    (i) for the
period between October 1st and June 30th, the lesser of (x) the Cost of Eligible
Inventory (net of Inventory Reserves), multiplied by 70%, and (y) 85% of the Net
Retail Liquidation Value of Eligible Inventory (net of Inventory Reserves) and
(ii) for the period between July 1st and September 30th, the lesser of (x) the
Cost of Eligible Inventory (net of Inventory Reserves), multiplied by 75%, and
(y) 90% of the Net Retail Liquidation Value of Eligible Inventory (net of
Inventory Reserves);

      plus

      (b)    the lesser of
(i) the amount of Eligible Credit Card Receivables multiplied by the Credit Card
Advance Rate and (ii) $2,000,000;

      plus

      (c)    the then
amount of all Availability Reserves..

       

      “Borrowing Base
Certificate” means a certificate substantially in the form of Exhibit E hereto
(with such changes therein as may be required by the Administrative Agent to
reflect the components of and Reserves against the Borrowing Base as provided
for hereunder from time to time), executed and certified as accurate and
complete by a Responsible Officer of the Lead Borrower which shall include
appropriate exhibits, schedules, supporting documentation, and additional
reports as reasonably requested by the Administrative Agent.

       

      “Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks are
authorized to close under the Laws of, or are in fact closed in, the state where
the Administrative Agent’s Office is located and, if such day relates to any
LIBO Rate Loan, means any such day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank market.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      “Business Plan” means
the Borrowers’ business plan annexed hereto as Exhibit J and any
revision, amendment or update of such business plan to which the Administrative
Agent has approved.

       

      “Capital Expenditures”
means, with respect to any Person for any period, (a) all expenditures made
(whether made in the form of cash or other property) or costs incurred for the
acquisition or improvement of fixed or capital assets of such Person (excluding
normal replacements and maintenance which are properly charged to current
operations), in each case that are (or should be) set forth as capital
expenditures in a Consolidated statement of cash flows of such Person for such
period, in each case prepared in accordance with GAAP, and (b) Capital Lease
Obligations incurred by a Person during such period.

       

      “Capital Leases” shall
mean any and all lease obligations that, in accordance with GAAP, are required
to be capitalized on the books of a lessee.

       

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

       

      “Cash Collateral
Account” means a non-interest bearing account established by one or more
of the Loan Parties with Wells Fargo Bank, and in the name of, the Collateral
Agent (as the Collateral Agent shall otherwise direct) and under the sole and
exclusive dominion and control of the Collateral Agent, in which deposits are
required to be made in accordance with Section
2.03(g).

       

      “Cash Collateralize”
has the meaning specified in Section
2.03(g).

       

      “Cash Management
Reserves” means such reserves as the Administrative Agent, from time to
time, determines in its discretion as being appropriate to reflect the
reasonably anticipated liabilities and obligations of the Loan Parties with
respect to Cash Management Services then provided or outstanding.

       

      “Cash Management
Services” means any one or more of the following types or services or
facilities provided to any Loan Party by the Administrative Agent or any of its
Affiliates: (a) ACH transactions, (b) cash management services, including,
without limitation, controlled disbursement services, treasury, depository,
overdraft, and electronic funds transfer services, (c) foreign exchange
facilities, (d) credit or debit cards, and (e) merchant services not
constituting a Bank Product.

       

      “CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
§ 9601 et seq.

       

      “CERCLIS” means the
Comprehensive Environmental Response, Compensation, and Liability Information
System maintained by the United States Environmental Protection
Agency.

       

      “CFC” means a Person
that is a controlled foreign corporation under Section 957 of the
Code.

       

      “Change in Law” means
the occurrence, after the date of this Agreement, of any of the following: (a)
the adoption or taking effect of any Law, rule, regulation or treaty, (b) any
change in any Law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority.

       

      “Change of Control”
means (a) Salvatore Perisano (unless replaced by an individual or individuals
reasonably satisfactory to the Administrative Agent) fails to remain as Chief
Executive Officer of the Parent; (b) the acquisition, directly or indirectly, by
any person or group (within the meaning of Section 13(d) and 14(d) of the
Exchange Act), other than the existing shareholders of the Parent or a “person”
or “group” “controlled” by one or more of such existing shareholders, of
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more
than 30% of the Equity Interests of the Parent having the right to vote for the
election of members of the board of directors of the Parent on a fully diluted
basis, (c) any “change in control” or “sale” or “disposition” or similar event
as defined in any Organizational Document of any Loan Party, or any other
document governing Material Indebtedness of any Loan Party; or (d) the Parent
fails at any time to own, directly or indirectly 100% of the Equity Interests of
the Lead Borrower or any of its Subsidiaries.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      “Closing Date” means
the first date all the conditions precedent in Section4.01 are
satisfied or waived in accordance with Section
10.01.

       

      “Closing Fee” has the
meaning set forth in Section
2.09(d).

       

      “Code” means the
Internal Revenue Code of 1986, and the regulations promulgated thereunder, as
amended and in effect.

       

      “Collateral” means any
and all “Collateral” as defined in any Security Document and all other property
that is or is intended under the terms of the Security Documents to be subject
to Liens in favor of the Collateral Agent.

       

      “Collateral Access
Agreement” means an agreement reasonably satisfactory in form and
substance to the Collateral Agent executed by (a) a bailee or other Person in
possession of Collateral, and (b) a landlord of Real Estate leased by any Loan
Party, pursuant to which such Person (i) acknowledges the Collateral Agent’s
Lien on the Collateral, (ii) releases or subordinates such Person’s Liens in the
Collateral held by such Person or located on such Real Estate, (iii) as to any
landlord, provides the Collateral Agent with access to the Collateral located in
or on such Real Estate and a reasonable time to sell and dispose of the
Collateral from such Real Estate, and (iv) makes such other agreements with the
Collateral Agent as the Collateral Agent may reasonably require.

       

      “Collateral Agent”
means Wells Fargo Retail Finance, LLC, acting in such capacity for its own
benefit and the ratable benefit of the other Credit Parties, or any successor
collateral agent.

       

      “Collateral Monitoring
Fee” has the meaning set forth in Section
2.09(c).

       

      “Commercial Letter of
Credit” means any Letter of Credit issued for the purpose of providing
the primary payment mechanism in connection with the purchase of any materials,
goods or services by a Borrower in the ordinary course of business of such
Borrower.

       

      “Commitment” means, as
to each Lender, its obligation to (a) make Committed Loans to the Borrowers
pursuant to Section
2.01, (b) purchase participations in L/C Obligations, and (c) purchase
participations in Swing Line Loans, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender’s name
on Schedule
2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.

       

      “Committed Borrowing”
means a borrowing consisting of simultaneous Committed Loans of the same Type
and, in the case of LIBO Rate Loans, having the same Interest Period made by
each of the Lenders pursuant to Section
2.01.

       

      “Committed Loan” has
the meaning specified in Section
2.01.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      “Committed Loan Note”
means (a) the Second Amended and Restated Master Note, dated as of the Closing
Date and (b) any other promissory note made by the Borrowers in favor of a
Lender evidencing Committed Loans made by such Lender, substantially in the form
of Exhibit
C.

       

      “Committed Loan
Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of
Committed Loans from one Type to the other, or (c) a continuation of LIBO Rate
Loans, pursuant to Section 2.02, which,
if in writing, shall be substantially in the form of Exhibit
A.

       

      “Compliance
Certificate” means a certificate substantially in the form of Exhibit
D.

       

      “Concentration
Account” has the meaning provided in Section
6.13(c).

       

      “Consent” means actual
consent given by a Lender from whom such consent is sought; or the passage of
seven (7) Business Days from receipt of written notice to a Lender from the
Administrative Agent of a proposed course of action to be followed by the
Administrative Agent without such Lender’s giving the Administrative Agent
written notice of that Lender’s objection to such course of action.

       

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

       

      “Contractual
Obligation” means, as to any Person, any provision of any agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.

       

      “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  Included among
such powers, with respect to a corporation, are power to cause any of the
following:  (a) the election of a majority of its board of directors;
(b) the authorization of the issuance of additional shares of its common stock;
(c) the authorization of the issuance and designation of rights and shares of
its preferred stock (if any); (d) the distribution and timing of dividends; (e)
the award of performance bonuses to its executive officers; (f) the termination
or severance of its executive officers; and (g) all or any similar
matters.  “Controlling” and “Controlled” have meanings correlative
thereto.

       

      “Cost” means the lower
of cost or market value of Inventory, based upon, and in accordance with, the
Borrowers’ historical accounting practices, known to the Administrative Agent,
which practices are in effect on the Closing Date as such calculated cost is
determined from invoices received by the Borrowers, the Borrowers’ purchase
journals or the Borrowers’ stock ledger.  “Cost” does not include
inventory capitalization costs or other non-purchase price charges (such as
freight and warehouse markups) used in the Borrowers’ calculation of cost of
goods sold.

       

      “Credit Card Advance
Rate” means 85%.

       

      “Credit Card
Notifications” has the meaning provided in Section
6.13(a)(ii).

       

      “Credit Card
Receivables” means each “Account” (as defined in the UCC) together with
all income, payments and proceeds thereof, owed by a major credit or debit card
issuer (including, but not limited to, Visa, Mastercard, Discover and American
Express and such other
issuers approved by the Administrative Agent) to a Loan Party resulting from
charges by a customer of a Loan Party on credit or debit cards issued by such
issuer in connection with the sale of goods by a Loan Party, or services
performed by a Loan Party, in each case in the ordinary course of its
business.

       

      “Credit Extensions”
mean each of the following: (a) a Borrowing and (b) an L/C Credit
Extension.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      “Credit Party” or
“Credit
Parties” means (a) individually, (i) each Lender and its Affiliates, (ii)
each Agent, (iii) each L/C Issuer, (iv) each beneficiary of each indemnification
obligation undertaken by any Loan Party under any Loan Document, (v) any other
Person to whom Obligations under this Agreement and other Loan Documents are
owing, and (vi) the successors and assigns of each of the foregoing, and (b)
collectively, all of the foregoing.

       

      “Credit Party
Expenses” means, without limitation, (a) all reasonable out-of-pocket
expenses incurred by the Agents and their respective Affiliates, in connection
with this Agreement and the other Loan Documents, including without limitation
(i) the reasonable fees, charges and disbursements of (A) counsel for the
Agents, (B) outside consultants for the Agents, (C) appraisers, (D) commercial
finance examiners, and (E) all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Obligations, (ii) in
connection with (A) the syndication of the credit facilities provided for
herein, (B) the preparation, negotiation, administration, management, execution
and delivery of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (C) the
enforcement or protection of their rights in connection with this Agreement or
the Loan Documents or efforts to preserve, protect, collect, or enforce the
Collateral or in connection with any proceeding under any Debtor Relief Laws, or
(D) any workout, restructuring or negotiations in respect of any Obligations,
(b) with respect to the L/C Issuer, and its Affiliates, all reasonable
out-of-pocket expenses incurred in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, and (c) all reasonable out-of-pocket expenses incurred by the Credit
Parties who are not the Agents, the L/C Issuer or any Affiliate of any of them,
after the occurrence and during the continuance of an Event of
Default.

       

      “Customer Credit
Liabilities” means at any time, the aggregate remaining value at such
time of (a) outstanding Gift Cards, (b) outstanding Customer Deposits and (c)
frequent shopper programs of the Borrowers.

       

      “Customer Deposits”
means all customer deposits, including, without limitation, all framing
deposits.

       

      “Customs Broker
Agreement” means an agreement, in form and substance reasonably
satisfactory to the Collateral Agent, among a Borrower, a customs broker,
freight forward or other carrier, and the Collateral Agent, in which the customs
broker, freight forward or other carrier acknowledges that it has control over
and holds the documents evidencing ownership of the subject Inventory for the
benefit of the Collateral Agent and agrees, upon notice from the Collateral
Agent, to hold and dispose of the subject Inventory solely as directed by the
Collateral Agent.

       

      “DDA” means each
checking, savings or other demand deposit account maintained by any of the Loan
Parties.  All funds in each DDA shall be conclusively presumed to be
Collateral and proceeds of Collateral and the Agents and the Lenders shall have
no duty to inquire as to the source of the amounts on deposit in any
DDA.

       

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

       

      “Debtor Relief Laws”
means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      “Default” means any
event or condition that constitutes an Event of Default or that, with the giving
of any notice, the passage of time, or both, would be an Event of
Default.

       

      “Default Rate” means
(a) when used with respect to Obligations other than Letter of Credit Fees, an
interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if
any, applicable to Base Rate Loans, plus (iii) 2% per annum; provided, however, that with
respect to a LIBO Rate Loan, the Default Rate shall be an interest rate equal to
the interest rate (including any Applicable Margin) otherwise applicable to such
LIBO Rate Loan plus 2% per annum, and (b) when used with respect to Letter of
Credit Fees, a rate equal to the Applicable Rate for Standby Letters of Credit
or Commercial Letters of Credit, as applicable, plus 2% per annum.

       

      “Defaulting Lender”
means any Lender that (a) has failed to fund any portion of the Committed Loans,
participations in L/C Obligations or participations in Swing Line Loans required
to be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.

       

      “Deteriorating Lender”
means any Defaulting Lender or any Lender as to which (a) the Administrative
Agent or L/C Issuer believes in good faith that such Lender has defaulted in
fulfilling its obligations under one or more other syndicated credit facilities,
or (b) a Person that Controls such Lender has been deemed insolvent by the
Administrative Agent or become the subject of any proceeding under any Debtor
Relief Law.

       

      “Disposition” or
“Dispose” means
the sale, transfer, license, lease or other disposition (including, without
limitation, any sale-leaseback transaction and any sale, transfer, license or
other disposition of (whether in one transaction or in a series of transactions)
of any property (including, without limitation, any Equity Interests) by any
Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

       

      “Disqualified Stock”
means any Equity Interest that, by its terms (or by the terms of any security
into which it is convertible, or for which it is exchangeable, in each case at
the option of the holder thereof), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is ninety one (91) days after the date on
which the Loans mature; provided, however, that (i)
only the portion of such Equity Interests which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such date shall be deemed to be Disqualified
Stock and (ii) with respect to any Equity Interests issued to any employee or to
any plan for the benefit of employees of the Parent, Lead Borrower or their
Subsidiaries or by any such plan to such employees, such Equity Interest shall
not constitute Disqualified Stock solely because it may be required to be
repurchased by Parent, the Lead Borrower or one of their Subsidiaries in order
to satisfy applicable statutory or regulatory obligations or as a result of such
employee’s termination, resignation, death or disability and if any class of
Equity Interest of such Person that by its terms authorizes such Person to
satisfy its obligations thereunder by delivery of an Equity Interest that is not
Disqualified Stock, such Equity Interests shall not be deemed to be Disqualified
Stock. Notwithstanding the preceding sentence, any Equity Interest that would
constitute Disqualified Stock solely because the holders thereof have the right
to require a Loan Party to repurchase such Equity Interest upon the occurrence
of a change of control or an asset sale shall not constitute Disqualified
Stock.  The amount of Disqualified Stock deemed to be outstanding at
any time for purposes of this Agreement will be the maximum amount that the Lead
Borrower and its Subsidiaries may become obligated to pay upon maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock or
portion thereof, plus accrued dividends.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      “Dollars” and “$” mean lawful money
of the United States.

       

      “Domestic Subsidiary”
means any Subsidiary that is organized under the laws of any political
subdivision of the United States.

       

      “Early Termination
Fee” has the meaning set forth in Section
2.09(b).

       

      “Eligible Assignee”
means (a) a Credit Party or any of its Affiliates; (b) a bank, insurance
company, or company engaged in the business of making commercial loans, which
Person, together with its Affiliates, has a combined capital and surplus in
excess of $250,000,000; (c) an Approved Fund; (d) any Person to whom a Credit
Party assigns its rights and obligations under this Agreement as part of an
assignment and transfer of such Credit Party’s rights in and to a material
portion of such Credit Party’s portfolio of asset based credit facilities, and
(e) any other Person (other than a natural person) approved by (i) the
Administrative Agent and the L/C Issuer and the Swing Line Lender, and (ii)
unless an Event of Default has occurred and is continuing, the Lead Borrower
(each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan
Party or any of the Loan Parties’ Affiliates or Subsidiaries, and unless an
Event of Default has occurred and is continuing, the Administrative Agent shall
consult with the Lead Borrower prior to assigning its rights and obligations to
any direct competitor or supplier of a Loan Party as an “Eligible Assignee”
hereunder.

       

      “Eligible Credit Card
Receivables” means at the time of any determination thereof, each Credit
Card Receivable that satisfies the following criteria at the time of creation
and continues to meet the same at the time of such determination: such Credit
Card Receivable (i) has been earned by performance and represents the bona fide
amounts due to a Borrower from a credit card payment processor and/or credit
card issuer, and in each case originated in the ordinary course of business of
such Borrower, and (ii) in each case is reasonably acceptable to the
Administrative Agent in its discretion, and is not ineligible for inclusion in
the calculation of the Borrowing Base pursuant to any of clauses (a)
through (l) below.  Without
limiting the foregoing, to qualify as an Eligible Credit Card Receivable, an
Account shall indicate no Person other than a Borrower as payee or remittance
party.  In determining the amount to be so included, the face amount
of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that a Borrower may be obligated to rebate to a customer, a credit card payment
processor, or credit card issuer pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the Loan Parties to
reduce the amount of such Credit Card Receivable.  Any Credit Card
Receivables meeting the foregoing criteria shall be deemed Eligible Credit Card
Receivables but only as long as such Credit Card Receivable is not included
within any of the following categories, in which case such Credit Card
Receivable shall not constitute an Eligible Credit Card Receivable:

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (a)           Credit
Card Receivable which do not constitute an “Account” (as defined in the
UCC);

       

      (b)           Credit
Card Receivables that have been outstanding for more than four (4) Business Days
from the date of sale;

       

      (c)           Credit
Card Receivables with respect to which a Loan Party does not have good, valid
and marketable title, free and clear of any Lien (other than Liens granted to
the Collateral Agent);

       

      (d)           Credit
Card Receivables that are not subject to a first priority security interest in
favor of the Collateral Agent (it being the intent that chargebacks in the
ordinary course by the credit card processors shall not be deemed violative of
this clause);

       

      (e)           Credit
Card Receivables which are disputed, are with recourse, or with respect to which
a claim, counterclaim, offset or chargeback has been asserted (to the extent of
such claim, counterclaim, offset or chargeback);

       

      (f)           Credit
Card Receivables as to which the credit card processor has the right under
certain circumstances to require a Loan Party to repurchase the Accounts from
such credit card processor;

       

      (g)           Credit
Card Receivables due from an issuer or payment processor of the applicable
credit card which is the subject of any bankruptcy or insolvency
proceedings;

       

      (h)           Credit
Card Receivables which are not a valid, legally enforceable obligation of the
applicable issuer with respect thereto;

       

      (i)    Credit Card
Receivables which do not conform to all representations, warranties or other
provisions in the Loan Documents relating to Credit Card
Receivables;

       

      (j)    Credit Card
Receivables which are evidenced by “chattel paper” or an “instrument” of any
kind unless such “chattel paper” or “instrument” is in the possession of the
Collateral Agent, and to the extent necessary or appropriate, endorsed to the
Collateral
Agent; or

       

      (k)           Credit
Card Receivables which the Administrative Agent determines in its discretion to
be uncertain of collection or to exceed any credit limit established by the
Administrative Agent.

       

      (l)    Credit Card
Receivables which are payable in any currency other than Dollars.

       

      “Eligible Inventory”
means, as of the date of determination thereof, without duplication, items of
Inventory of a Borrower that are finished goods, merchantable and readily
saleable to the public in the ordinary course and deemed by the Administrative
Agent in its discretion to be eligible for inclusion in the calculation of the
Borrowing Base, in each case that, except as otherwise agreed by the
Administrative Agent, complies with each of the representations and warranties
respecting Inventory made by the Borrowers in the Loan Documents, and that is
not excluded as ineligible by virtue of one or more of the criteria set forth
below.  Except as otherwise agreed by the Administrative Agent,
without duplication to any Inventory Reserves, the following items of Inventory
shall not be included in Eligible Inventory:

       

      (a)           Inventory
that is not solely owned by a Borrower or a Borrower does not have good and
valid title thereto;

       

      (b)           Inventory
that is leased by or is on consignment to a Borrower or which is consigned by a
Borrower to a Person which is not a Loan Party;

       

      (c)           Inventory
that is not located in the United States of America (excluding territories or
possessions of the United States) at a location that is owned or leased by a
Borrower, except to the extent that the Borrowers have furnished the
Administrative Agent with (i) any UCC financing statements or other documents
that the Administrative Agent may determine to be necessary to perfect its
security interest in such Inventory at such location, and (ii) a Collateral
Access Agreement executed by the Person owning any such location on terms
reasonably acceptable to the Administrative Agent;

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (d)           Except
as otherwise incorporated in any applicable appraisal, as provided in form and
substance reasonably satisfactory to the Administrative Agent, Inventory that is
comprised of goods which (i) are damaged, defective, “seconds,” or otherwise
unmerchantable, (ii) are to be returned to the vendor, (iii) are obsolete or
slow moving, or are special order or custom items, work-in-process, raw
materials, or that constitute spare parts, promotional, marketing, packaging and
shipping materials or supplies used or consumed in a Borrower’s business, (iv)
are seasonal in nature and which have been packed away for sale in the
subsequent season, (v) not in compliance with all standards imposed by any
Governmental Authority having regulatory authority over such Inventory, its use
or sale, or (vi) are bill and hold goods;

       

      (e)           Inventory
that is not subject to a perfected first-priority security interest in favor of
the Collateral Agent;

       

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

       

      (g)           Inventory
that is not insured in compliance with the provisions of Section 5.10
hereof;

       

      (h)           Inventory
that has been sold but not yet delivered or as to which a Borrower has accepted
a deposit; or

       

      (j)           Inventory
that is subject to any licensing, patent, royalty, trademark, trade name or
copyright agreement with any third party from which any Borrower or any of its
Subsidiaries has received notice of a dispute in respect of any such
agreement.

       

      “Environmental Laws”
means (a) any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems and (b) the common law relating to damage to Persons or property from
Hazardous Materials.

       

      “Environmental
Liability” means any liability, obligation, damage, loss, claim, action,
suit, judgment, order, fine, penalty, fee, expense, or cost, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment, disposal or presence of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

       

      “Equipment” has the
meaning provided in the UCC.

       

      “Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on the date of
determination.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended and in
effect.

       

      “ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control
with the Lead Borrower within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).

       

      “ERISA Event” means
(a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the
Lead Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Lead Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Lead Borrower or any ERISA
Affiliate.

       

      “Event of Default” has
the meaning specified in Section 8.01.  An
Event of Default shall be deemed to be continuing unless and until that Event of
Default has been duly waived as provided in Section 10.03
hereof.

       

      “Excess Availability”
means, as of any date of determination thereof by the Administrative Agent, the
result, if a positive number, of (i) the Borrowing Base at such time, minus (ii) the
aggregate Outstanding Amount of all Credit Extensions to, or for the account of,
the Borrowers.

       

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

       

      “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the L/C Issuer or
any other recipient of any payment to be made by or on account of any obligation
of the Borrowers hereunder, (a) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable Lending Office
is located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which any Borrower is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Lead Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender’s failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Borrowers with respect to such withholding tax
pursuant to Section
3.01(a).

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      “Executive Order” has
the meaning set forth in Section
10.18.

       

      “Existing Credit
Agreement” means that certain Amended and Restated Loan and Security
Agreement, dated as of December 21, 2006, between the Borrowers and Wells Fargo
Retail Finance, LLC (as successor in interest to Wells Fargo Retail Finance II,
LLC), as Lender, as amended from time to time.

       

      “Existing Letters of
Credit” means, collectively, each of the letters of credit issued under
the Existing Credit Agreement and outstanding on the Closing Date, as listed on
Schedule
2.03.

       

      “Existing Loan
Documents” means the “Loan Documents”, as defined in the Existing Credit
Agreement.

       

      “Extraordinary
Receipt” means any cash received by or paid to or for the account of any
Person not in the ordinary course of business, including tax refunds, pension
plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustments.

       

      “Facility Guaranty”
means the Guaranty made by the Guarantors in favor of the Agents and the
Lenders, in form and substance reasonably satisfactory to the Administrative
Agent.

       

      “Federal Funds
Rate” means,
for any day, the rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Wells Fargo Bank on such day on such transactions as
determined by the Administrative Agent.

       

      “Fiscal Month” means
any fiscal month of any Fiscal Year, which month shall generally end on the last
day of each calendar month in accordance with the fiscal accounting calendar of
the Loan Parties, except with respect to a Fiscal Month that is the last month
of a Fiscal Quarter or Fiscal Year.

       

      “Fiscal Quarter” means
any fiscal quarter of any Fiscal Year, which quarters shall generally be
thirteen weeks and end on the last Saturday of each March, June, September and
December of such Fiscal Year in accordance with the fiscal accounting calendar
of the Loan Parties.

       

      “Fiscal Year” means
the fiscal year of the Lead Borrower and its Subsidiaries ending on the Saturday
closest to each December 31st of any calendar year.

       

      “Foreign Asset Control
Regulations” has the meaning set forth in Section
10.18.

       

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

       

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

       

      “Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      “GAAP” means generally
accepted accounting principles in the United States set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or such other principles as may be approved
by a significant segment of the accounting profession in the United States, that
are applicable to the circumstances as of the date of determination,
consistently applied.

       

      “Gift Cards” means all
merchandise credits, gift certificates and gift cards of the Borrowers entitling
the holder thereof to use all or a portion of the credit, certificate or gift
card to pay all or a portion of the purchase price for any
Inventory.

       

      “Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central
Bank).

       

      “Guarantee” means, as
to any Person, (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or advance or supply funds for the purchase of)
any security for the payment of such Indebtedness or obligation, (ii) to
purchase or lease property, securities or services for the purpose of assuring
the obligee in respect of such Indebtedness or other obligation of the payment
or performance of such Indebtedness or other obligation, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor so as to enable
the primary obligor to pay such Indebtedness or other obligation, or (iv)
entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), (b) any Lien on any assets of such Person securing any Indebtedness or
other obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien), or (c) as an account
party in respect of any letter of credit or letter of credit guaranty issued to
support such Indebtedness or obligation.  The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of
the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

       

      “Guarantor” means,
collectively, the Persons listed on Schedule 1.01(b)
hereto, and each other Person who shall from time to time execute and deliver a
Joinder Agreement as a Guarantor or such other document as the Administrative
Agent deems appropriate in accordance with Section 6.12.

       

      “Hazardous Materials”
means (a) all explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature which (as to any of the foregoing) are defined as a
hazardous material in or regulated pursuant to any Environmental Law and (b) oil
in any physical state.

       

      
        
          
          

        

        
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      “Highbridge Note”
means that certain Senior Subordinated Note dated September 15, 2006 in the face
amount of $2,500,000 executed by iParty Corp. in favor of Highbridge
International LLC.

       

      “Honor Date” has the
meaning specified in Section
2.03(c)(i).

       

      “Indebtedness” means,
as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

       

      (a)    all
obligations of such Person for borrowed money (including any indebtedness which
is nonrecourse to the credit of such Person, but which is secured by any Lien on
any asset of such Person) and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments;

       

      (b)    the maximum
amount of all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

       

      (c)    all
obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business
and, in each case, not past due for more than thirty (30) days after the date on
which such trade account payable was due);

       

      (d)    indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;

       

      (e)    all
Attributable Indebtedness of such Person;

       

      (f)    all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other
Person, or any warrant, right or option to acquire such Equity Interest, valued,
in the case of a redeemable preferred interest, at the greater of its voluntary
or involuntary liquidation preference plus accrued and
unpaid dividends; and

       

      (g)    all
Guarantees of such Person in respect of any of the foregoing or any other
obligation of any third party.

       

      For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.

       

      “Indemnified Taxes”
means Taxes other than Excluded Taxes.

       

      “Indemnitees” has the
meaning specified in Section 10.04(b).

       

      “Information” has the
meaning specified in Section 10.07.

       

      “Intellectual
Property” means all present and future:  trade secrets,
know-how and other proprietary information; trademarks, trademark applications,
internet domain names, service marks, trade dress, trade names, business names,
designs, logos, slogans (and all translations, adaptations, derivations and
combinations of the foregoing) indicia and other source and/or business
identifiers, and all registrations or applications for registrations which have
heretofore been or may hereafter be issued thereon throughout the world;
copyrights and copyright applications; (including copyrights for computer
programs) and all tangible and intangible property embodying the copyrights,
unpatented inventions (whether or not patentable); patents and patent
applications; industrial design applications and registered industrial designs;
license agreements related to any of the foregoing and income therefrom; books,
records, writings, computer tapes or disks, flow diagrams, specification sheets,
computer software, source codes, object codes, executable code, data, databases
and other physical manifestations, embodiments or incorporations of any of the
foregoing; all other intellectual property; and all common law and other rights
throughout the world in and to all of the foregoing.

       

      
        
          
          

        

        
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      “Intellectual Property
Security Agreement” means the Intellectual Property Security Agreement
dated as of the Closing Date among the Loan Parties and the Collateral Agent,
granting a Lien in the Intellectual Property and certain other assets of the
Loan Parties, as amended and in effect from time to time.

       

      “Interest Expense”
shall mean, for any period, the sum, for the Loan Parties (determined on a
Consolidated basis without duplication in accordance with GAAP), of the
following all interest, fees, charges and related expenses payable during such
period to any Person in connection with Indebtedness or the deferred purchase
price of assets that is treated as interest in accordance with
GAAP.

       

      “Interest Payment
Date” means (a) as to each Base Rate Loan (including a Swing Line Loan),
the first calendar day of each month and the Maturity Date, and (b) as to each
LIBO Rate Loan, the last day of each Interest Period applicable to such LIBO
Rate Loan, and if such LIBO Rate Loan has an Interest Period of greater than
ninety (90) days, on the last day of the third month of such Interest Period,
and the Maturity Date.

       

      “Interest Period”
means, as to each LIBO Rate Loan, the period commencing on the date such LIBO
Rate Loan is disbursed or converted to or continued as a LIBO Rate Loan and
ending on the date one, two or three months thereafter, as selected by the Lead
Borrower in its Committed Loan Notice; provided that:

       

      (i)    any Interest
Period that would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day;

       

      (ii)   any Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period;

       

      (iii)   no Interest Period
shall extend beyond the Maturity Date; and

       

      (iv)   notwithstanding the
provisions of clause
(iii) no Interest Period shall have a duration of less than one (1)
month, and if any Interest Period applicable to a LIBO Borrowing would be for a
shorter period, such Interest Period shall not be available
hereunder.

       

      For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

       

      “Internal Control
Event” means a material weakness in, or fraud that involves management or
other employees who have a significant role in, the Borrowers’ and/or their
Subsidiaries’ internal controls over financial and/or collateral reporting, in
each case as described in the Securities Laws.

       

      “Inventory” has the
meaning given that term in the UCC, and shall also include,
without limitation, all: (a) goods which (i) are leased by a Person as lessor,
(ii) are held by a Person for sale or lease or to be furnished under a contract
of service, (iii) are furnished by a Person under a contract of service, or (iv)
consist of raw materials, work in process, or materials used or consumed in a
business; (b) goods of said description in transit; (c) goods of said
description which are returned, repossessed or rejected; and (d) packaging,
advertising, and shipping materials related to any of the
foregoing.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      “Inventory Reserves”
means such reserves as may be established from time to time by the
Administrative Agent in the Administrative Agent’s discretion with respect to
the determination of the saleability, at retail, of the Eligible Inventory or
which reflect such other factors as affect the market  value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may, in the Administrative Agent’s discretion, include (but are not
limited to) reserves based on:

       

      (a)           obsolescence;

       

      (b)           seasonality;

       

      (c)           Shrink;

       

      (d)           imbalance;

       

      (e)           change
in Inventory character;

       

      (f)           change
in Inventory composition;

       

      (g)           change
in Inventory mix;

       

      (h)           out-of-date
and/or expired Inventory; and

       

      (i)           damaged,
defective or returned to vendor Inventory.

       

      “Investment” means, as
to any Person, any direct or indirect acquisition or investment by such Person,
whether by means of (a) the purchase or other acquisition of Equity Interests of
another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or
interest in, another Person, or (c) any Acquisition, or (d) any other investment
of money or capital in order to obtain a profitable return.  For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

       

      “IRS” means the United
States Internal Revenue Service.

       

      “ISP” means, with
respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance).

       

      “Issuer Documents”
means with respect to any Letter of Credit, the Letter Credit Application, and
any other document, agreement and instrument entered into by the L/C Issuer and
any Borrower (or any Subsidiary thereof) or in favor of the L/C Issuer and
relating to any such Letter of Credit.

       

      “Joinder Agreement”
means an agreement, in the form attached hereto as Exhibit I pursuant to
which, among other things, a Person becomes a party to, and bound by the terms
of, this Agreement and/or the other Loan Documents in the same capacity and to
the same extent as either a Borrower or a Guarantor, as the Administrative Agent
may determine.

       

      “Landlord Lien State”
means such state(s) in which a landlord’s claim for rent may have priority over
the lien of the Collateral Agent in any of the Collateral.

       

      “Laws” means each
international, foreign, Federal, state and local statute, treaty, rule,
guideline, regulation, ordinance, code and administrative or judicial precedent
or authority, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and each applicable administrative order, directed duty,
request, license, authorization and permit of, and agreement with, any
Governmental Authority, in each case whether or not having the force of
law.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      “L/C Advance” means,
with respect to each Lender, such Lender’s funding of its participation in any
L/C Borrowing in accordance with its Applicable Percentage.

       

      “L/C Borrowing” means
an extension of credit resulting from a drawing under any Letter of Credit which
has not been reimbursed on the date when made or refinanced as a Committed
Borrowing.

       

      “L/C Credit Extension”
means, with respect to any Letter of Credit, the issuance thereof or extension
of the expiry date thereof, or the increase of the amount thereof.

       

      “L/C Issuer” means (a)
Wells Fargo Bank in its capacity as issuer of Letters of Credit hereunder, or
any successor issuer of Letters of Credit (including Existing Letters of Credit)
hereunder (which successor may only be a Lender selected by the Administrative
Agent in its discretion), and (b) any other Lender selected by the
Administrative Agent in its discretion that is reasonably satisfactory to Lead
Borrower.  The L/C Issuer may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the L/C Issuer, in which
case the term “L/C Issuer” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

       

      “L/C Obligations”
means, as at any date of determination, the aggregate undrawn amount available
to be drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.  For purposes of
computing the amounts available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For
all purposes of this Agreement, if on any date of determination a Letter of
Credit has expired by its terms but any amount may still be drawn thereunder,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

       

      “Lease” means any
agreement, whether written or oral, no matter how styled or structured, pursuant
to which a Loan Party is entitled to the use or occupancy of any real property
for any period of time.

       

      “Lender” has the
meaning specified in the introductory paragraph hereto and, as the context
requires, includes the Swing Line Lender, and collectively means all of
them.

       

      “Lending Office”
means, as to any Lender, the office or offices of such Lender described as such
in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify the Lead Borrower and the
Administrative Agent.

       

      “Letter of Credit”
means each Standby Letter of Credit and each Commercial Letter of Credit issued
in accordance herewith and shall include the Existing Letters of Credit. Without
limiting the foregoing, all Existing Letters of Credit shall be deemed to have
been issued hereunder and shall for all purposes be deemed to be “Letters of
Credit” hereunder.

       

      “Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.

       

      “Letter of Credit Expiration
Date” means the day that is thirty (30) days prior to the Maturity Date
then in effect (or, if such day is not a Business Day, the next preceding
Business Day).

       

      “Letter of Credit Fee”
has the meaning specified in Section 2.03(i).

       

      “Letter of Credit
Sublimit” means an amount equal to $2,000,000.  The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.  A permanent reduction of the Aggregate Commitments shall
require a corresponding pro rata reduction in the Letter of Credit Sublimit to
an amount equal to (or, at Lead Borrower’s option, less than) the Aggregate
Commitments.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      “LIBO Borrowing” means
a Borrowing comprised of LIBO Rate Loans.

       

      “LIBO Rate” means for
any Interest Period with respect to a LIBO Rate Loan, the rate per annum equal
to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00
a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period, for Dollar deposits (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period.  If
such rate is not available at such time for any reason, then the “LIBO Rate” for
such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the LIBO Rate Loan being made, continued or converted by Wells Fargo
Bank and with a term equivalent to such Interest Period would be offered to
Wells Fargo Bank by major banks in the London interbank eurodollar market in
which Wells Fargo Bank participates at their request at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the commencement of such Interest
Period.

       

      “LIBO Rate Loan” means
a Committed Loan that bears interest at a rate based on the Adjusted LIBO
Rate.

       

      “Lien” means (a) any
mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other
security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale,
Capital Lease Obligation or other title retention agreement, any easement, right
of way or other encumbrance on title to real property, and any financing lease
having substantially the same economic effect as any of the foregoing) and (b)
in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.

       

      “Liquidation” means
the exercise by the Administrative Agent or Collateral Agent of those rights and
remedies accorded to such Agents under the Loan Documents and applicable Law as
a creditor of the Loan Parties with respect to the realization on the
Collateral, including (after the occurrence and continuation of an Event of
Default) the conduct by the Loan Parties acting with the consent of the
Administrative Agent, of any public, private or “going-out-of-business”, “store
closing” or other similar sale or any other disposition of the Collateral for
the purpose of liquidating the Collateral.  Derivations of the word
“Liquidation” (such as “Liquidate”) are used with like meaning in this
Agreement.

       

      “Loan” means an
extension of credit by a Lender to any Borrower under Article II in the form of a
Committed Loan or a Swing Line Loan.

       

      “Loan Account” has the
meaning assigned to such term in Section 2.11(a).

       

      “Loan Cap” means, at
any time of determination, the lesser of (a) the Aggregate Commitments at such
time, or (b) the Borrowing Base at such time.

       

      “Loan Documents” means
this Agreement, each Note, each Issuer Document, all Borrowing Base
Certificates, the Security Documents, the Ratification and Reaffirmation
Agreement and any other instrument or agreement now or hereafter executed and
delivered in connection herewith, or in connection with any transaction arising
out of any Cash Management Services and Bank Products provided by the
Administrative Agent or any of its Affiliates, each as amended and in effect
from time to time.

       

      “Loan Parties” means,
collectively, the Borrowers and any Guarantors.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      “Material Adverse
Effect” means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or
contingent), condition (financial or otherwise) or prospects of the Loan Parties
and their Subsidiaries taken as a whole;
(b) a material impairment of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party; (c) a material
impairment of the rights and remedies of, or benefit to, the Agent or the
Lenders under any Loan Document or a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party; (d) a material adverse change in, or a material
adverse effect upon, the value of the Collateral; or (e) a material impairment
of the priority of the Collateral Agent’s Lien with respect to a material amount
of the Collateral.  In determining whether any individual event would
result in a Material Adverse Effect, notwithstanding that such event in and of
itself does not have such effect, a Material Adverse Effect shall be deemed to
have occurred if the cumulative effect of such event and all other then existing
events would result in a Material Adverse Effect.

       

      “Material Contract”
means, with respect to any Person, each agreement to which such Person is a
party involving aggregate consideration payable to or by such Person of $150,000
or more in any Fiscal Year or otherwise material to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
such Person, other than purchase orders entered into in the ordinary course of
business.

       

      “Material
Indebtedness” means Indebtedness (other than the Obligations) of the Loan
Parties in an aggregate principal amount exceeding $50,000.

       

      “Maturity Date” means
July 2, 2012.

       

      “Maximum Rate” has the
meaning provided therefor in Section 10.09.

       

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

       

      “Minimum Availability
Block” has the meaning provided therefor in Section 7.17.

       

      “Multiemployer Plan”
means any employee benefit plan of the type described in Section 4001(a)(3)
of ERISA, to which any Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

       

      “Net Income” shall
mean with respect to any fiscal period, the net income of the Loan Parties
determined in accordance with GAAP, consistently applied.

       

      “Net Proceeds” means
(a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any Extraordinary Receipt received or paid to the account of
any Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum of
cash and cash equivalents received in connection with such transaction
(including any cash or cash equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by the applicable asset by a Lien permitted
hereunder which is senior to the Collateral Agent’s Lien on such asset and that
is required to be repaid (or to establish an escrow for the future repayment
thereof) in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary out-of-pocket expenses
incurred by such Loan Party or such Subsidiary in connection with such
transaction (including, without limitation, appraisals, and brokerage, legal,
title and recording or transfer tax expenses and commissions) paid by any Loan
Party to third parties (other than Affiliates); and

       

      (b)           with
respect to the sale or issuance of any Equity Interest by any Loan Party or any
of its Subsidiaries, or the incurrence or issuance of any Indebtedness by any
Loan Party or any of its Subsidiaries, the excess of (i) the sum of the cash and
cash equivalents received in connection with such transaction over (ii) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by such Loan Party or such Subsidiary in
connection therewith.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      “Net Retail Liquidation
Value” means with respect to the Borrowers’ Eligible Inventory, the
appraised orderly liquidation value, net of costs and expenses to be incurred in
connection with any such liquidation, which value is expressed as a percentage
of Cost of the Borrowers’ Eligible Inventory as set forth in the Borrowers’
inventory stock ledger, which value shall be determined from time to time by the
most recent appraisal undertaken by an independent appraiser engaged by the
Administrative Agent.

       

      “Non-Consenting
Lender” has the meaning provided therefor in Section 10.01.

       

      “Non-Extension Notice
Date” has the meaning specified in Section
2.03(b)(iii).

       

      “Note” means each (i)
Committed Loan Note, and (ii) Swing Line Loan Note, as each may be amended,
supplemented or modified from time to time.

       

      “NPL” means the
National Priorities List under CERCLA.

       

      “Obligations” means
(a) all advances to, and debts (including principal, interest, fees, costs, and
expenses), liabilities, obligations, covenants, indemnities, and duties of, any
Loan Party arising under any Loan Document or otherwise with respect to any Loan
or Letter of Credit (including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral
therefor), whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest, fees and expenses that accrue after the commencement by
or against any Loan Party or any Affiliate thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding, and (b) any Other Liabilities.

       

      “Operating Leases”
shall mean any lease of property (whether real, personal or mixed) for a period
of longer than one year by a Person under which such Person is lessee, other
than a Capital Lease.

       

      “Organization
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity, and (d) in each case, all shareholder or other
equity holder agreements, voting trusts and similar arrangements to which such
Person is a party or which is applicable to its Equity Interests and all other
arrangements relating to the Control or management of such Person.

       

      “Other Liabilities”
means any obligation on account of (a) any Cash Management Services furnished to
any of the Loan Parties or any of their Subsidiaries and/or (b) any transaction
with any Agent, any Lender or any of their respective Affiliates, which arises
out of any Bank Products entered into with any Loan Party and any such Person,
as each may be amended from time to time

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

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

       

      “Outstanding Amount”
means (i) with respect to Committed Loans and Swing Line Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Committed Loans and Swing Line Loans
occurring on such date; and (ii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements by the Borrowers of Unreimbursed Amounts.

       

      “Overadvance” means a
Credit Extension to the extent that, immediately after its having been made,
Availability is less than zero.

       

      “Parent” means iParty
Corp., a Delaware corporation.

       

      “Participant” has the
meaning specified in Section 10.06(d).

       

      “PBGC” means the
Pension Benefit Guaranty Corporation.

       

      “PCAOB” means the
Public Company Accounting Oversight Board.

       

      “Pension Plan” means
any “employee pension benefit plan” (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by any Borrower or any ERISA Affiliate or to
which any Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

       

      “Permitted
Disposition” means any of the following:

       

      (a)           Dispositions
of Inventory in the ordinary course of business;

       

      (b)           Dispositions
of the Inventory of a Loan Party not in the ordinary course of business in
connection with Store closings, at arm’s length, provided, that such Store
closures and related Inventory Dispositions shall not exceed the number of the
Loan Parties’ Stores closures and related Inventory Dispositions as provided in
the Business Plan, provided, further, that all sales of
Inventory in connection with Store closings shall be in accordance with
liquidation agreements and with professional liquidators reasonably acceptable
to the Agents; provided, further, that as long as any
Default or Event of Default shall have occurred and be continuing, all Net
Proceeds received in connection therewith are applied to the Obligations in
accordance with Section 2.05
hereof;

       

      (c)           non-exclusive
licenses of Intellectual Property of a Loan Party or any of its Subsidiaries in
the ordinary course of business;

       

      (d)           licenses
for the conduct of licensed departments within the Loan Parties’ Stores in the
ordinary course of business; provided that, if requested by
the Agents, the Agents shall have entered into an intercreditor agreement with
the Person operating such licensed department on terms and conditions reasonably
satisfactory to the Agents;

       

      (e)           Dispositions
of Equipment in the ordinary course of business that is substantially worn,
damaged, obsolete or, in the judgment of a Loan Party, no longer useful or
necessary in its business or that of any Subsidiary and is not replaced with
similar property having at least equivalent value;

       

      
        
          
          

        

        
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      (f)           sales,
transfers and Dispositions among the Loan Parties or by any Subsidiary to a Loan
Party; and

       

      (g)           sales,
transfers and Dispositions of or by any Subsidiary which is not a Loan Party to
another Subsidiary that is not a Loan Party.

       

      “Permitted
Encumbrances” means:

       

      (a)           Liens
imposed by law for Taxes that are not yet due or are being contested in
compliance with Section 6.04;

       

      (b)           carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by applicable Law, arising in the ordinary course of business and
securing obligations that are not overdue by more than thirty (30) days or are
being contested in compliance with Section 6.04;

       

      (c)           pledges
and deposits made (i) in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or
regulations, other than any Lien imposed by ERISA and (ii) in connection with a
Permitted Disposition otherwise permitted hereunder, whether as an earnest money
deposit or an escrow arrangement;

       

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

       

      (e)           Liens
in respect of judgments that would not constitute an Event of Default
hereunder;

       

      (f)           easements,
covenants, conditions, restrictions, building code laws, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property or materially interfere with the ordinary conduct of business of a Loan
Party and such other minor title defects or survey matters that, in each case,
do not materially interfere with the current use of the real
property;

       

      (g)           Liens
existing on the date hereof and listed on Schedule 7.01 and any renewals
or extensions thereof, provided that (i) the
property covered thereby is not changed, (ii) except as permitted pursuant to
clause (a) of the definition of Permitted Indebtedness the amount secured or
benefited thereby is not increased, (iii) the direct or any contingent obligor
with respect thereto is not changed, and (iv) any renewal or extension of the
obligations secured or benefited thereby is otherwise permitted
hereunder);

       

      (h)           Liens
on fixed or capital assets acquired by any Loan Party which are permitted under
clause (c) of
the definition of Permitted Indebtedness so long as (i) such Liens and the
Indebtedness secured thereby are incurred prior to or within ninety (90) days
after such acquisition, (ii) the Indebtedness secured thereby does not exceed
the cost of acquisition of such fixed or capital assets, (iii) such Liens
shall not extend to any other property or assets of the Loan Parties, and (iv)
such Liens and the Indebtedness secured thereby are less than
$150,000;

       

      (i)           Liens
in favor the Collateral Agent;

       

      (j)           Landlords’
and lessors’ Liens in respect of rent not in default; and

       

      (k)           Liens
arising solely by virtue of any statutory or common law provisions relating to
banker’s liens, liens in favor of securities intermediaries, rights of setoff or
similar rights and remedies as to deposit accounts or securities accounts or
other funds maintained with depository institutions or securities
intermediaries;

       

      
        
          
          

        

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

       

      “Permitted
Indebtedness” means each of the following as long as no Default or Event
of Default has occurred and is continuing or would arise from the incurrence
thereof:

       

      (a)           Indebtedness
outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder, and the direct or contingent obligor
with respect thereto is not changed as a result of or in connection with such
refinancing, refunding, renewal or extension, (ii) the result of such extension,
renewal or replacement shall not be an earlier maturity date or decreased
weighted average life of such Indebtedness, and (iii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate;

       

      (b)           Indebtedness
of any Borrower to any other Borrower; provided that such
Indebtedness shall (i) be evidenced by such documentation as the Administrative
Agent may reasonably require, (ii) constitute “Collateral” under this Agreement
and the Security Documents, (iii) be on terms (including subordination terms)
reasonably acceptable to the Administrative Agent, and (iv) be otherwise
permitted pursuant to Section
7.03;

       

      (c)           purchase
money Indebtedness of any Loan Party to finance the acquisition of any fixed or
capital assets, including Capital Lease Obligations, and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity date or
decreased weighted average life thereof provided that the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate, provided, however, that the
aggregate principal amount of Indebtedness permitted by this clause (c) shall not
exceed $150,000 at any time outstanding per Fiscal Year, and provided, further, that, if
requested by the Collateral Agent, the Loan Parties shall cause the holders of
any such Indebtedness to enter into a Collateral Access Agreement on terms
reasonably satisfactory to the Collateral Agent;

       

      
        
          
          

        

        
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      (d)           contingent
liabilities under surety bonds or similar instruments incurred in the ordinary
course of business in connection with the construction or improvement of
Stores;

       

      (e)           the
Obligations;

       

      (f)           Subordinated
Indebtedness;

       

      (g)           Guarantees
of any Loan Party or other Subsidiary in respect of obligations of another Loan
Party that are otherwise permitted to be incurred under this Agreement and the
other Loan Documents; and

       

      (h)           All
Indebtedness referred to in clause (g) of the definition of Indebtedness, other
than any such Indebtedness which constitutes Disqualified Stock.

       

      “Permitted
Investments” means each of the following as long as no Default or Event
of Default exists or would arise from the making of such
Investment:

       

      (a)           Investments
existing on the Closing Date, and set forth on Schedule 7.02, but
not any increase in the amount thereof or any other modification of the terms
thereof;

       

      (b)           Guarantees
constituting Permitted Indebtedness;

       

      (c)           Capital
contributions made by any Borrower to another Borrower; and

       

      (d)           Purchase
of fractional shares of the capital stock of iParty Corp. pursuant to the
Reverse Stock Split.

       

      provided, however, that
notwithstanding the foregoing, after the occurrence and during the continuance
of a Default or an Event of Default, no such Investments specified in clauses (a) through
(c) shall be
permitted unless (i) either (A) no Loans are then outstanding, or (B) the
Investment is a temporary Investment pending expiration of an Interest Period
for a LIBO Rate Loan, the proceeds of which Investment will be applied to the
Obligations after the expiration of such Interest Period, and (ii) such
Investments are pledged to the Collateral Agent as additional Collateral for the
Obligations pursuant to such agreements as may be reasonably required by the
Collateral Agent.

       

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

       

      “Plan” means any
“employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by a Borrower or, with respect to any such plan that is subject to
Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

       

      “Pledge Agreement”
means that certain Stock Pledge Agreement, dated as of December 21, 2006, by and
between iParty Corp. and the Collateral Agent (as successor in interest to Wells
Fargo Retail Finance II, LLC), as amended and in effect from time to
time.

       

      “Prepayment Event”
means:

       

      (a)           any
Disposition (including, without limitation, pursuant to any sale-leaseback
transaction) of any property or asset of a Loan Party;

       

      (b)           any
casualty or other insured damage to, or any taking under power of eminent domain
or by condemnation or similar proceeding of, any property or asset of a Loan
Party, unless (i) the proceeds therefrom are required to be paid to the holder
of a Lien on such property or asset having priority over the Lien of the
Collateral Agent or (ii) prior to the occurrence of a Default or an Event of
Default, the proceeds therefrom are utilized for purposes of replacing or
repairing the assets in respect of which such proceeds, awards or payments were
received within one hundred eighty (180) days of the occurrence of the damage to
or loss of the assets being repaired or replaced;

       

      
        
          
          

        

        
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      (c)           the
issuance by a Loan Party of any Equity Interests, other than any such issuance
of Equity Interests (i) to a Loan Party, or (ii) as a compensatory issuance to
any employee, director, or consultant (including under any option plan or stock
incentive plan);

       

      (d)           the
incurrence by a Loan Party of any Indebtedness for borrowed money other than
Permitted Indebtedness; or

       

      (e)           the
receipt by any Loan Party of any Extraordinary Receipts.

       

      “Public Lender” has
the meaning specified in Section
6.02.

       

      “Ratification and
Reaffirmation Agreement” means the Ratification and Reaffirmation
Agreement, dated as of the date even herewith, by the Borrowers and in favor of
the Agent, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

       

      “Real Estate” means
all Leases and all land, together with the buildings, structures, parking areas,
and other improvements thereon, now or hereafter owned by any Loan Party,
including all easements, rights-of-way, and similar rights relating thereto and
all leases, tenancies, and occupancies thereof.

       

      “Register” has the
meaning specified in Section 10.06(c).

       

      “Registered Public Accounting
Firm” has the meaning specified by the Securities Laws and shall be
independent of the Parent and its Subsidiaries as prescribed by the Securities
Laws.

       

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

       

      “Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA, other than events
for which the 30 day notice period has been waived.

       

      “Reports” has the
meaning provided in Section
9.11.

       

      “Request for Credit
Extension” means (a) with respect to a Committed Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an
L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a
Swing Line Loan, a Swing Line Loan Notice.

       

      “Required Lenders”
means, as of any date of determination, (a) the Agent and (b) the Lenders
holding more than 50% of the Aggregate Commitments or, if the Commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, the Lenders
holding in the aggregate more than 50% of the Total Outstandings (with the
aggregate amount of each Lender’s risk participation and funded participation in
L/C Obligations and Swing Line Loans being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment
of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.

       

      “Reserves” means all
(if any) Inventory Reserves, Availability Reserves and Receivables
Reserves.

       

      “Responsible Officer”
means the chief executive officer, president, chief financial officer of a Loan
Party, any other Person who presents themselves to the Administrative Agent as,
and in the Administrative Agent’s reasonable discretion is, a Responsible
Officer of a Loan Party or any of the other individuals designated in writing to
the Administrative Agent by an existing Responsible Officer of a Loan Party as
an authorized signatory of any certificate or other document to be delivered
hereunder.  Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

       

      
        
          
          

        

        
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      “Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any capital stock or other Equity Interest of any
Person or any of its Subsidiaries, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to such Person’s stockholders, partners or members (or the
equivalent of any thereof), or any option, warrant or other right to acquire any
such dividend or other distribution or payment.  Without limiting the
foregoing, “Restricted Payments” with respect to any Person shall also include
all payments made by such Person with any proceeds of a dissolution or
liquidation of such Person.

       

      “Reverse Stock Split”
means that certain reverse stock split of the existing shares of iParty Corp.’s
common stock pursuant to that certain amendment to iParty Corp.’s restated
certificate of incorporation authorized by stockholders at the 2009 annual
meeting of stockholders held on May 27, 2009, pursuant to such reverse stock
split the existing shares of iParty Corp.’s common stock shall be combined into
new shares of iParty Corp. common stock at an exchange ratio ranging between
one-for-five and one-for-thirty.

       

      “S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc. and any successor thereto.

       

      “Sarbanes-Oxley” means
the Sarbanes-Oxley Act of 2002.

       

      “SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

       

      “Securities Laws”
means the Securities Act of 1933, the Securities Exchange Act of 1934,
Sarbanes-Oxley, and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
PCAOB, each as amended and in effect.

       

      “Security Agreement”
means that certain Security Agreement, dated as of the date hereof, by and
between the Collateral Agent and the Borrowers, as further amended and in
effect.

       

      “Security Documents”
means the Security Agreement, the Pledge Agreement, the Trademark Security
Agreement, the Blocked Account Agreements, the DDA Notifications, the Credit
Card Notifications, and each other security agreement or other instrument or
document executed and delivered to the Collateral Agent pursuant to this
Agreement or any other Loan Document granting a Lien to secure any of the
Obligations.

       

      “Seller Note” means
that certain Senior Subordinated Note dated August 7, 2006 in the face amount of
$600,000 executed by iParty Retail Stores Corp. in favor of Party City
Corporation.

       

      “Settlement Date” has
the meaning provided in Section 2.14(a).

       

      “Shareholders’ Equity”
means, as of any date of determination, consolidated shareholders’ equity of the
Parent and its Subsidiaries as of that date determined in accordance with
GAAP.

       

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

       

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

       

      
        
          
          

        

        
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       “Standby Letter of
Credit” means any Letter of Credit that is not a Commercial Letter of
Credit and that (a) is used in lieu or in support of performance guaranties or
performance, surety or similar bonds (excluding appeal bonds) arising in the
ordinary course of business, (b) is used in lieu or in support of stay or appeal
bonds, (c) supports the payment of insurance premiums for reasonably necessary
casualty insurance carried by any of the Loan Parties, or (d) supports payment
or performance for identified purchases or exchanges of products or services in
the ordinary course of business.

       

      “Stated Amount” means
at any time the maximum amount for which a Letter of Credit may be
honored.

       

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

       

      “Store” means any
retail store (which may include any real property, fixtures, Equipment,
Inventory and other property related thereto) operated, or to be operated, by
any Loan Party.

       

      “Swing Line” means the
revolving credit facility made available by the Swing Line Lender pursuant to
Section 2.04.

       

      “Swing Line Borrowing”
means a borrowing of a Swing Line Loan pursuant to Section 2.04.

       

      “Swing Line Lender”
means Wells Fargo Retail Finance, LLC, its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

       

      “Swing Line Loan” has
the meaning specified in Section 2.04(a).

       

      “Swing Line Loan
Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in
writing, shall be substantially in the form of Exhibit
B.

       

      “Swing Line Loan Note”
means the promissory note of the Borrowers substantially in the form of Exhibit C-2, payable
to the order of the Swing Line Lender, evidencing the Swing Line Loans made by
the Swing Line Lender.

       

      
        
          
          

        

        
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      “Swing Line Sublimit”
means an amount equal to the lesser of (a) $10,000,000, and (b) the Aggregate
Commitments.  The Swing Line Sublimit is part of, and not in addition
to, the Aggregate Commitments.

       

      “Subordinated
Indebtedness” means Indebtedness which is expressly subordinated in right
of payment to the prior payment in full of the Obligations and which is in form
and on terms approved in writing by the Administrative Agent, including, but not
limited to the obligations of the Borrowers under the Seller Note, the
Highbridge Note or the Trade Note.

       

      “Subordination
Agreement” means a subordination agreement, in form and substance
acceptable to the Administrative Agent in its sole discretion, pursuant to which
a creditor of any Loan Party acknowledges and agrees that the obligations of
such Loan Party to such creditor are subordinate to the obligations of such Loan
Party to the Obligations owed to the Lender hereunder or under any other Loan
Document.

       

      “Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the Equity Interests
having ordinary voting power for the election of directors or other governing
body are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.  Unless otherwise specified, all references herein to
a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries
of a Loan Party.

       

      “Supply Agreement”
means that certain Supply Agreement, dated as of August 7, 2006, by and between
Amscam, Inc and iParty Corp. pursuant to which iParty Corp. has agreed to
purchase party goods from Amscan, Inc. and will receive certain favorable
pricing terms and rebates (or any amendment, restatement, or replacement thereof
(by one or more agreements or on customary trade terms with one or more supplier
acceptable at all times to the Administrative Agent) entered into by the
Borrowers with the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld or delayed).

       

      “Taxes” means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable
thereto.

       

      “Temporary Halloween
Stores” means stores operated by the Borrowers on a seasonal or temporary
basis to sell Halloween costumes and other related items.

       

      “Termination Date”
means the earliest to occur of (i) the Maturity Date, (ii) the date on which the
maturity of the Obligations is accelerated (or deemed accelerated) and the
Commitments are irrevocably terminated (or deemed terminated) in accordance with
Article
VIII.

       

      “Total Funded Debt”
shall mean all Indebtedness of the Loan Parties on a Consolidated
basis.

       

      “Total Outstandings”
means the aggregate Outstanding Amount of all Loans and all L/C
Obligations.

       

      “Trademark Security
Agreement” means that certain Trademark and Trademark Applications
Security Agreement, dated as of December 21, 2006, by and among iParty Corp. and
the Collateral Agent (as successor in interest to Wells Fargo Retail Finance II,
LLC), granting a Lien in trademarks, trademark applications, service marks,
registered service marks and service mark applications together with any
goodwill connected with and symbolized by any such trademarks, trademark
applications, service marks, registered service marks, and service mark
applications and certain other assets of iParty Corp. in connection therewith,
as amended and in effect from time to time.

       

      
        
          
          

        

        
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      “Trade Note” means
that certain Senior Subordinated Note dated October 24, 2006 in the face amount
of $1,819,373.11 executed by iParty Retail Stores Corp. in favor of Amscan,
Inc.

       

      “Trading with the Enemy
Act” has the meaning set forth in Section
10.18.

       

      “Type” means, with
respect to a Committed Loan, its character as a Base Rate Loan or a LIBO Rate
Loan.

       

      “UCC” or “Uniform Commercial
Code” means the Uniform Commercial Code as in effect from time to time in
The Commonwealth of Massachusetts; provided, however, that if a
term is defined in Article 9 of the Uniform Commercial Code differently than in
another Article thereof, the term shall have the meaning set forth in Article 9;
provided further that, if by
reason of mandatory provisions of law, perfection, or the effect of perfection
or non-perfection, of a security interest in any Collateral or the availability
of any remedy hereunder is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than Massachusetts, “Uniform Commercial Code” means the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection or availability of such remedy, as the case may be.

       

      “UCP” means the
Uniform Customs and Practice guidelines as in effect from time to time which
govern the issuance of documentary and standby letters of credit.

       

      “UFCA ” has the
meaning specified in Section
10.21(d).

       

      “UFTA” has the meaning
specified in Section
10.21(d).

       

      “Unfunded Pension
Liability” means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

       

      “United States” and
“U.S.” mean the
United States of America.

       

      “Unreimbursed Amount”
has the meaning specified in Section 2.03(c)(i).

       

      “Unused Line Fee” has
the meaning provided in Section 2.09(a).

       

      “Wells Fargo Bank”
means Wells Fargo Bank, N.A., a national banking association.

       

      1.02    Other Interpretive
Provisions.  With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

       

      (a)          The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms.  The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.”  The word
“will” shall be
construed to have the same meaning and effect as the word “shall.”  Unless
the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document (including any Organization Document)
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,”
“hereof” and
“hereunder,”
and words of similar import when used in any Loan Document, shall be construed
to refer to such Loan Document in its entirety and not to any particular
provision thereof, (iv) all references in a Loan Document to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, the Loan Document in which such references
appear, (v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

       

      
        
          
          

        

        
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      (b)          In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;”
the words “to”
and “until”
each mean “to but
excluding;” and the word “through” means “to and
including.”

       

      (c)          Section
headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.

       

      1.03    Accounting
Terms

       

      (a)          Generally.  All
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.

       

      (b)          Changes in
GAAP.  If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Lead Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Lead Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders in their reasonable discretion); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Lead
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in
GAAP.

       

      1.04    Rounding.  Any
financial ratios required to be maintained by the Borrowers pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).

       

      1.05    Times of
Day.  Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

       

      1.06    Letter of Credit Amounts.  Unless otherwise
specified, all references herein to the amount of a Letter of Credit at any time
shall be deemed to be the Stated Amount of such Letter of Credit in effect at
such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Documents related thereto, provides for one or more automatic increases in the
Stated Amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum Stated Amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum Stated Amount is in effect at such
time.

       

      
        
          
          

        

        
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      1.07    Currency
Equivalents Generally.  Any
amount specified in this Agreement (other than in Articles II, IX and X) or any
of the other Loan Documents to be in Dollars shall also include the equivalent
of such amount in any currency other than Dollars, such equivalent amount
thereof in the applicable currency to be determined by the Administrative Agent
at such time on the basis of the Spot Rate (as defined below) for the purchase
of such currency with Dollars.  For purposes of this Section 1.07, the
“Spot Rate” for a currency means the rate determined by the Administrative Agent
to be the rate quoted by the Person acting in such capacity as the spot rate for
the purchase by such Person of such currency with another currency through its
principal foreign exchange trading office at approximately 11:00 a.m. on the
date two (2) Business Days prior to the date of such determination; provided
that the Administrative Agent may obtain such spot rate from another financial
institution designated by the Administrative Agent if the Person acting in such
capacity does not have as of the date of determination a spot buying rate for
any such currency.

       

      ARTICLE II

      THE
COMMITMENTS AND CREDIT EXTENSIONS

       

      2.01    Committed Loans; Reserves.  (a) Subject to the terms and
conditions set forth herein, each Lender severally agrees to make loans (each
such loan, a “Committed Loan”) to
the Borrowers from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the lesser
of (x) the amount of such Lender’s Commitment, or (y) such Lender’s Applicable
Percentage of the Borrowing Base; subject in each case to the following
limitations:

       

      (i)    after giving
effect to any Committed Borrowing, the Total Outstandings shall not exceed the
Loan Cap;

       

      (ii)           after
giving effect to any Committed Borrowing, the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment;

       

      (iii)          the
Outstanding Amount of all L/C Obligations shall not at any time exceed the
Letter of Credit Sublimit; and

       

      (iv)          after
giving effect to all Credit Extensions, no Overadvance shall exist.

       

      Within the
limits of each Lender’s Commitment, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this Section 2.01, prepay under
Section 2.05, and reborrow
under this Section
2.01.  Committed
Loans may be Base Rate Loans or LIBO Rate Loans, as further provided
herein.

       

      (b)    The
Lead Borrower may request, no later than one (1) year prior to the Maturity
Date, that the Aggregate Commitment (initially, $12,500,000) be increased (and
that each Lender’s Revolving Credit Commitment be increased ratably) at any time
on, or subsequent to, the date hereof (the “Commitment Increase
Date”), by up to $2,500,000, in multiples of $500,000 (each, a “Commitment
Increase”), to a maximum Aggregate Commitment of $15,000,000, subject to
the terms and conditions in this clause (b).  The Commitment Increase
shall become effective upon the Commitment Increase Date so long as (i) (A) the
representations and warranties contained in Article V hereof and
in each other Loan Document, certificate or other writing delivered to the
Administrative Agent, the Lenders or the L/C Issuer pursuant hereto or thereto
on or prior to the Commitment Increase Date that are subject to materiality or
Material Adverse Effect qualifications shall be true and correct in all respects
and the representations and warranties contained in Article V hereof
and in each other Loan Document, certificate or other writing delivered to the
Administrative Agent, the Lenders or the L/C Issuer pursuant hereto or thereto
that are not subject to materiality or Material Adverse Effect qualifications
shall be true and correct in all material respects, in each case, as of the
Commitment Increase Date as though made on and as of such date (except to the
extent that such representations and warranties relate solely to an earlier
date), (B) no Default or Event of Default shall have occurred and be continuing
on the Commitment Increase Date or would result from the Commitment Increase
under this Agreement or the other Loan Documents and (C) no default or other
violation would result from the Commitment Increase under any Material Contract
or any financing agreement or other documents with respect to indebtedness for
borrowed money of any Borrower, and (ii) the Administrative Agent shall have
received, no more than ten (10) Business Days and no less than three (3)
Business Days prior to the Commitment Increase Date, the following: (A) a
certificate of an Responsible Officer of the Lead Borrower, certifying as to
clauses (A), (B) and (C) of subsection (i) above, and (B) any and all
agreements, instruments and other documents reasonably requested by the
Administrative Agent in connection with the Commitment Increase, each in form
and substance reasonably satisfactory to the Administrative Agent; (iii) the
Commitment Increase has been approved by the Administrative Agent, at the sole
discretion of the Required Lenders and (iv) on or prior to the Commitment
Increase Date, the Borrowers shall have paid the Administrative Agent, for the
ratable benefit of the Lenders, a fee equal to one half of one percent (0.50%)
of the amount of such Commitment Increase.  The Agent shall be
authorized to charge the Loan Account with such fee on or at any time after the
Commitment Increase Date.

       

      
        
          
          

        

        
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      (c)    The
following are the Reserves which may be established as of the Closing
Date:

       

      (i)           100%
of Customer Credit Liabilities (an Availability Reserve);

       

      (ii)           100%
of Shrink (an Inventory Reserve);

       

      (iii)           100%
of damaged, defective or otherwise unsaleable Inventory (an Inventory
Reserve);

       

      (iv)           100%
of charitable donations (an Availability Reserve); and

       

      (v)           100%
of Florida sales tax (an Availability Reserve).

       

      (d)    The
Administrative Agent shall have the right, at any time and from time to time on
or after the Closing Date in its discretion to establish new, or modify or
eliminate any existing, eligibility criteria or Reserves.

       

      2.02    Borrowings, Conversions and
Continuations of Committed Loans.

       

      (a)    Committed
Loans (other than Swing Line Loans) shall be either Base Rate Loans or LIBO
Loans as the Lead Borrower may request subject to and in accordance with this
Section 2.02.  All
Swing Line Loans shall be only Base Rate Loans.  Subject to the other
provisions of this Section 2.02, Committed
Borrowings of more than one Type may be incurred at the same time.

       

      (b)    Each
Committed Borrowing, each conversion of Committed Loans from one Type to the
other, and each continuation of LIBO Rate Loans shall be made upon the Lead
Borrower’s irrevocable notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be received by the Administrative
Agent not later than (i) 11:00 a.m. three (3) Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of LIBO Rate
Loans or of any conversion of LIBO Rate Loans to Base Rate Loans, and (ii) 11:30
a.m. the requested date of any Borrowing of Base Rate Loans.  Each
telephonic notice by the Lead Borrower pursuant to this Section 2.02(b) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Lead Borrower.  Each Borrowing of, conversion to or
continuation of LIBO Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof.  Except as provided in
Section 2.03(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount of
$100,000 or a whole multiple of $50,000 in excess thereof.  Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether
the Lead Borrower is requesting a Committed Borrowing, a conversion of Committed
Loans from one Type to the other, or a continuation of LIBO Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Committed Loans
to be borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect
thereto.  If the Lead Borrower fails to specify a Type of Committed
Loan in a Committed Loan Notice or if the Lead Borrower fails to give a timely
notice requesting a conversion or continuation, then the applicable Committed
Loans shall be made as, or converted to, Base Rate Loans.  Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable LIBO Rate
Loans.  If the Lead Borrower requests a Borrowing of, conversion to,
or continuation of LIBO Rate Loans in any such Committed Loan Notice, but fails
to specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.  Notwithstanding anything to the contrary herein,
a Swing Line Loan may not be converted to a LIBO Rate Loan.

       

      
        
          
          

        

        
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      (c)    Following
receipt of a Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Committed Loans, and if no timely notice of a conversion or continuation is
provided by the Lead Borrower, the Administrative Agent shall notify each Lender
of the details of any automatic conversion to Base Rate Loans described in Section 2.02(b).  In
the case of a Committed Borrowing, each Lender shall make the amount of its
Committed Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 1:00 p.m. on the
Business Day specified in the applicable Committed Loan Notice.  Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if such
Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall use reasonable efforts to make all funds so received
available to the Borrowers in like funds by no later than 4:00 p.m. on the day
of receipt by the Administrative Agent either by (i) crediting the account of
the Lead Borrower on the books of the Administrative Agent with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Lead Borrower; provided, however, that if, on
the date the Committed Loan Notice with respect to such Borrowing is given by
the Lead Borrower, there are L/C Borrowings outstanding, then the proceeds of
such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings, and second, shall be made
available to the Borrowers as provided above.

       

      (d)    The
Administrative Agent, without the request of the Lead Borrower, may advance any
interest, fee, expenses, service charge, Credit Party Expenses, or other payment
to which any Credit Party is entitled from the Loan Parties pursuant hereto or
any other Loan Document, as and when due and payable, and may charge the same to
the Loan Account notwithstanding that an Overadvance may result
thereby.  The Administrative Agent shall advise the Lead Borrower of
any such advance or charge promptly after the making thereof.  Such
action on the part of the Administrative Agent shall not constitute a waiver of
the Administrative Agent’s rights and the Borrowers’ obligations under Section
2.05.  Any amount which is added to the principal balance of
the Loan Account as provided in this Section 2.02(d) shall bear
interest at the interest rate then and thereafter applicable to Base Rate
Loans.

       

      
        
          
          

        

        
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      (e)    Except
as otherwise provided herein, a LIBO Rate Loan may be continued or converted
only on the last day of an Interest Period for such LIBO Rate
Loan.  Upon the occurrence and during the continuation of a Default,
the Administrative Agent may, and at the direction of the Required Lenders
shall, prohibit Loans from being requested as, converted to, or continued as,
LIBO Rate Loans.

       

      (f)    The
Administrative Agent shall promptly notify the Lead Borrower and the Lenders of
the interest rate applicable to any Interest Period for LIBO Rate Loans upon
determination of such interest rate.  At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Lead Borrower and the
Lenders of any change in Wells Fargo Bank’s prime rate used in determining the
Base Rate promptly following the public announcement of such
change.

       

      (g)    After
giving effect to all Committed Borrowings, all conversions of Committed Loans
from one Type to the other, and all continuations of Committed Loans as the same
Type, there shall not be more than three (3) Interest Periods in effect with
respect to Committed Loans.

       

      (h)    The
Administrative Agent, the Lenders, the Swing Line Lender and the L/C Issuer
shall have no obligation to make any Loan, or to endeavor to cause the issuance
of or provide any Letter of Credit, if an Overadvance would
result.  The Administrative Agent shall have no liability for, and no
Loan Party or Credit Party shall have the right to, or shall, bring any claim of
any kind whatsoever against the Administrative Agent with respect to
“inadvertent Overadvances” (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)) regardless of the amount of any such
Overadvance(s).

       

      2.03    Letters of
Credit.

       

      (a)    The Letter of Credit
Commitment.

       

      (i)           Subject
to the terms and conditions set forth herein, (A) the Administrative Agent, in
reliance upon the agreements of the Lenders set forth in this Section 2.03, shall endeavor
to cause the L/C Issuer from time to time on any Business Day during the period
from the Closing Date until the Letter of Credit Expiration Date, to issue
Letters of Credit for the account of the Borrowers, and to amend or extend
Letters of Credit previously issued by the L/C Issuer, in accordance with Section 2.03(b) below; and
(B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrowers and any drawings thereunder; provided that after
giving effect to any L/C Credit Extension with respect to any Letter of Credit,
(x) the Total Outstandings shall not exceed the Loan Cap, (y) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C
Obligations shall not exceed the Letter of Credit Sublimit.  Each
request by the Lead Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by the Borrowers that the L/C Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.  Any L/C
Issuer (other than Wells Fargo Bank or any of its Affiliates) shall notify the
Administrative Agent in writing on each Business Day of all Letters of Credit
issued on the prior Business Day by such L/C Issuer.  All Existing
Letters of Credit shall be deemed to have been issued pursuant hereto, and from
and after the Closing Date shall be subject to and governed by the terms and
conditions hereof.

       

      
        
          
          

        

        
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      (ii)           No
Letter of Credit shall be issued if:

       

      (A)           subject
to Section
2.03(b)(iii), the
expiry date of such requested Standby Letter of Credit would occur more than
twelve months after the date of issuance or last extension, unless the Required
Lenders have approved such expiry date; or

       

      (B)           subject
to Section
2.03(b)(iii), the
expiry date of such requested Commercial Letter of Credit would occur more than
forty five (45) days after the date of issuance or last extension, unless the
Required Lenders have approved such expiry date; or

       

      (C)           the
expiry date of such requested Letter of Credit would occur after the Letter of
Credit Expiration Date, unless either such Letter of Credit is Cash
Collateralized on or prior to the Letter of Credit Expiration Date or all the
Lenders have approved such expiry date.

       

      (iii)           No
Letter of Credit shall be issued, without the prior consent of the
Administrative Agent, if:

       

      (A)           any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter
of Credit, or any Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which the
L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the L/C Issuer in good
faith deems material to it;

       

      (B)           the
issuance of such Letter of Credit would violate one or more policies of the L/C
Issuer applicable to letters of credit generally;

       

      (C)           except
as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter
of Credit is in an initial Stated Amount less than $10,000, in the case of a
Commercial Letter of Credit, or $20,000, in the case of a Standby Letter of
Credit;

       

      (D)           such
Letter of Credit is to be denominated in a currency other than
Dollars;

       

      (E)           such
Letter of Credit contains any provisions for automatic reinstatement of the
Stated Amount after any drawing thereunder; or

       

      
        
          
          

        

        
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      (F)           a
default of any Lender’s obligations to fund under Section 2.03(c) exists or any
Lender is at such time a Defaulting Lender or Deteriorating Lender hereunder,
unless the Administrative Agent or the L/C Issuer has entered into satisfactory
arrangements with the Borrowers or such Lender to eliminate the L/C Issuer’s
risk with respect to such Lender.

       

      (iv)           The
Borrowers shall not permit any Letter of Credit to be amended if (A) the L/C
Issuer would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof or (B) if the beneficiary of such Letter of
Credit does not accept the proposed amendment to such Letter of
Credit.

       

      (v)           The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer
shall have all of the benefits and immunities (A) provided to the Administrative
Agent in Article
IX with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and Issuer
Documents pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in Article IX included the L/C
Issuer with respect to such acts or omissions, and (B) as additionally provided
herein with respect to the L/C Issuer.

       

      (b)    Procedures for Issuance and
Amendment of Letters of Credit; Auto-Extension Letters of
Credit.

       

      (i)           Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Lead Borrower delivered to the Administrative Agent in the form
of a Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Lead Borrower.  Any Letter of Credit
Application or other document delivered hereunder that is signed by a
Responsible Person shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action, and such Responsible
Officer shall be conclusively presumed to have acted on behalf of the
Borrowers.  Such Letter of Credit Application must be received by the
Administrative Agent not later than 11:00 a.m. at least two (2) Business Days
(or such other date and time as the Administrative Agent may agree in a
particular instance in its sole discretion) prior to the proposed issuance date
or date of amendment, as the case may be.  Promptly after receipt of
any Letter of Credit Application, the Administrative Agent will provide the L/C
Issuer (other than Wells Fargo Bank or any of its Affiliates) with a copy of
such Letter of Credit Application.  In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the Administrative Agent: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the Administrative Agent may
reasonably require.  In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the Administrative Agent (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which shall be
a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the Administrative Agent may require.  Additionally, the
Lead Borrower shall furnish to the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit issuance
or amendment, including any Issuer Documents, as the Administrative Agent may
require.

       

      
        
          
          

        

        
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      (ii)           Unless
the L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
applicable Borrower or enter into the applicable amendment, as the case may be,
in each case in accordance with the L/C Issuer's usual and customary business
practices.  Immediately upon the issuance or amendment of each Letter
of Credit, each Lender shall be deemed to (without any further action), and
hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer,
without recourse or warranty, a risk participation in such Letter of Credit in
an amount equal to the product of such Lender’s Applicable Percentage times the amount of
such Letter of Credit.  Upon any change in the Commitments under this
Agreement, it is hereby agreed that with respect to all L/C Obligations, there
shall be an automatic adjustment to the participations hereby created to reflect
the new Applicable Percentages of the assigning and assignee
Lenders.

       

      (iii)           If
the Lead Borrower so requests in any applicable Letter of Credit Application,
the Administrative Agent may, in its sole and absolute discretion, endeavor to
cause the L/C Issuer to issue a Standby Letter of Credit that has automatic
extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any
such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any
such extension at least once in each twelve-month period (commencing with the
date of issuance of such Standby Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the “Non-Extension Notice
Date”) in each such twelve-month period to be agreed upon at the time
such Standby Letter of Credit is issued.  Unless otherwise directed by
the Administrative Agent or the L/C Issuer, the Lead Borrower shall not be
required to make a specific request to the Administrative Agent or the L/C
Issuer for any such extension.  Once an Auto-Extension Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the L/C Issuer to permit the extension of such Standby Letter of
Credit at any time to an expiry date not later than the Letter of Credit
Expiration Date; provided, however, that the
Administrative Agent shall instruct the L/C Issuer not to permit any such
extension if (A) the Administrative Agent has determined that it would not be
permitted, or would have no obligation, at such time to endeavor to cause or
have the L/C Issuer issue such Standby Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) the L/C Issuer has received notice (which may be by telephone
or in writing) on or before the day that is no less than five (5) Business Days
before the Non-Extension Notice Date (1) from the Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the Lead Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.

       

      (iv)           Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the L/C Issuer will also deliver to the Lead Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or
amendment.

       

      (c)    Drawings and Reimbursements;
Funding of Participations.

       

      (i)           Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Administrative Agent shall notify the Lead
Borrower thereof; provided, however, that any
failure to give or delay in giving such notice shall not relieve the Borrowers
of their obligation to reimburse the L/C Issuer and the Lenders with respect to
any such payment.  Not later than 11:00 a.m. on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the
Borrowers shall reimburse the L/C Issuer through the Administrative Agent on the
same day in an amount equal to the amount of such drawing. If the Borrowers fail
to so reimburse the L/C Issuer by such time, the Administrative Agent shall
promptly notify each Lender of the Honor Date, the amount of the unreimbursed
drawing (the “Unreimbursed
Amount”), and the amount of such Lender’s Applicable Percentage
thereof.  In such event, the Borrowers shall be deemed to have
requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Committed Loan Notice).  Any notice given by the L/C
Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be
given by telephone or electronic means.

       

      
        
          
          

        

        
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      (ii)           Each
Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Applicable Percentage of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section
2.03(c)(iii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrowers in such amount.  The Administrative Agent shall
remit the funds so received to the L/C Issuer.

       

      (iii)           With
respect to any Unreimbursed Amount that is not fully refinanced by a Committed
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be
satisfied or for any other reason, the Borrowers shall be deemed to have
incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the Default
Rate.  In such event, each Lender’s payment to the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.

       

      (iv)           Until
each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse
the L/C Issuer for any amount drawn under any Letter of Credit, interest in
respect of such Lender’s Applicable Percentage of such amount shall be solely
for the account of the L/C Issuer.

       

      (v)           Each
Lender’s obligation to make Committed Loans or L/C Advances to reimburse the L/C
Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the L/C Issuer, any Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each
Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to
the conditions set forth in Section 4.02 (other than
delivery by the Lead Borrower of a Committed Loan Notice).  No such
making of an L/C Advance shall relieve or otherwise impair the obligation of the
Borrowers to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.

       

      
        
          
          

        

        
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      (vi)           If
any Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time
specified in Section
2.03(c)(ii), the L/C
Issuer shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the L/C Issuer in
accordance with banking industry rules on interbank compensation plus any
administrative, processing or similar fees customarily charged by the L/C Issuer
in connection with the foregoing.  If such Lender pays such amount
(with interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Committed Loan included in the relevant Committed Borrowing or L/C
Advance in respect of the relevant L/C Borrowing, as the case may
be.  A certificate of the L/C Issuer submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.

       

      (d)    Repayment of
Participations.

       

      (i)           At
any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrowers or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will distribute
to such Lender its Applicable Percentage thereof (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Lender’s L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.

       

      (ii)           If
any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Applicable Percentage thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.  The obligations of the Lenders under
this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

      (e)    Obligations
Absolute.  The obligation of the Borrowers to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

       

      (i)           any
lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;

       

      (ii)          the
existence of any claim, counterclaim, setoff, defense or other right that the
Borrowers or any Subsidiary may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the L/C Issuer or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by such Letter of Credit or any agreement or instrument relating thereto, or
any unrelated transaction;

       

      
        
          
          

        

        
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      (iii)          any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;

       

      (iv)          any
payment by the L/C Issuer under such Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such Letter
of Credit; or any payment made by the L/C Issuer under such Letter of Credit to
any Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of such
Letter of Credit, including any arising in connection with any proceeding under
any Debtor Relief Laws;

       

      (v)           any
other circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrowers or any of their
Subsidiaries; or

       

      (vi)          the
fact that any Event of Default shall have occurred and be
continuing.

       

      The Lead
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Lead Borrower’s instructions or other irregularity, the
Lead Borrower will immediately notify the Administrative Agent and the L/C
Issuer.  The Borrowers shall be conclusively deemed to have waived any
such claim against the L/C Issuer and its correspondents unless such notice is
given as aforesaid.

       

      (f)    Role of L/C
Issuer.  Each Lender and the Borrowers agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C
Issuer, the Administrative Agent, any of their respective Related Parties nor
any correspondent, participant or assignee of the L/C Issuer shall be liable to
any Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; (iii) any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit or any error in interpretation of technical
terms; or (iv) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Issuer
Document.  The Borrowers hereby assume all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter
of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Borrowers’ pursuing
such rights and remedies as it may have against the beneficiary or transferee at
law or under any other agreement.  None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable or
responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrowers may have
a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrowers, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrowers which the
Borrowers prove were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in limitation of the foregoing, the
L/C Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary (or the L/C Issuer may refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit), and the L/C Issuer shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

       

      
        
          
          

        

        
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      (g)    Cash
Collateral.  Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any L/C Obligation for any reason
remains outstanding, the Borrowers shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C
Obligations.  Sections 2.05  and
8.02(c) set
forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes of this Section 2.03, Section 2.05 and Section 8.02(c) “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances in an amount equal to 105% of the
Outstanding Amount of all L/C Obligations, pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby Consented to by the Lenders).  Derivatives
of such term have corresponding meanings.  The Borrowers hereby grant
to the Collateral Agent a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing.  Cash
Collateral shall be maintained in the Cash Collateral Account.  If at
any time the Administrative Agent determines that any funds held as Cash
Collateral are subject to any right or claim of any Person other than the
Administrative Agent or that the total amount of such funds is less than the
aggregate Outstanding Amount of all L/C Obligations, the Borrowers will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited as Cash Collateral, an amount equal
to the excess of (x) such aggregate Outstanding Amount over (y) the
total amount of funds, if any, then held as Cash Collateral that the
Administrative Agent determines to be free and clear of any such right and
claim.  Upon the drawing of any Letter of Credit for which funds are
on deposit as Cash Collateral, such funds shall be applied, to the extent
permitted under applicable Laws, to reimburse the L/C Issuer and, to the extent
not so applied, shall thereafter be applied to satisfy other
Obligations.

       

      (h)    Applicability of ISP and
UCP.  Unless otherwise expressly agreed by the L/C Issuer and
the Lead Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP
or UCP shall apply to each Standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each Commercial Letter of Credit.

       

      
        
          
          

        

        
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      (i)    Letter of Credit
Fees.  The Borrowers shall pay to the Administrative Agent, for
the account of each Lender in accordance with its Applicable Percentage, a
Letter of Credit fee (the “Letter of Credit
Fee”) for each Letter of Credit equal to the Applicable Rate times the daily
Stated Amount under each such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit.  For purposes of
computing the daily Stated Amount available to be drawn under any Letter of
Credit, the Stated Amount of the Letter of Credit shall be determined in
accordance with Section
1.06.   Letter of Credit Fees shall be (i) due and payable
on the first calendar day of each month, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand, and (ii) computed on a monthly basis
in arrears.  If there is any change in the Applicable Rate during any
month, the daily amount available to be drawn under of each Letter of Credit
shall be computed and multiplied by the Applicable Rate separately for each
period during such month that such Applicable Rate was in
effect.  Notwithstanding anything to the contrary contained herein,
while any Event of Default has occurred and is continuing, the Administrative
Agent may, and upon the request of the Required Lenders shall, notify the Lead
Borrower that all Letter of Credit Fees shall accrue at the Default Rate and
thereafter such Letter of Credit Fees shall accrue at the Default Rate to the
fullest extent permitted by applicable Laws.

       

      (j)    [Reserved].

       

      (k)   Consignment of Bill of
Lading.  The Borrowers shall, upon the request of the
Administrative Agent, consign to the L/C Issuer any bill of lading for Inventory
which is supported by a Commercial Letter of Credit issued by the L/C
Issuer.

       

      (l)    Conflict with Issuer
Documents.  In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall
control.

       

      2.04    Swing Line Loans.

       

      (a)    The Swing
Line.  Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.04, to make loans
(each such loan, a “Swing Line Loan”) to
the Borrowers from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Applicable Percentage of the Outstanding Amount of
Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the lesser of (A) the Aggregate Commitments, or (B) the Borrowing Base,
and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender
at such time, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations at such
time, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans
at such time shall not exceed such Lender’s Commitment, and provided, further, that the
Borrowers shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan.  Within the foregoing limits, and subject
to the other terms and conditions hereof, the Borrowers may borrow under this
Section 2.04, prepay under
Section 2.05, and reborrow
under this Section
2.04.  Each
Swing Line Loan shall bear interest only at a rate based on the Base
Rate.  Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times the amount of
such Swing Line Loan.

       

      
        
          
          

        

        
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      (b)    Borrowing
Procedures.  Each Swing Line Borrowing shall be made upon the
Lead Borrower’s irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day.  Each such telephonic
notice must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Lead
Borrower.  Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof.  Unless the Swing Line Lender has received notice
(by telephone or in writing) from the Administrative Agent at the request of the
Required Lenders prior to 2:00 p.m. on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan
as a result of the limitations set forth in the proviso to the first sentence of
Section 2.04(a), or (B) that
one or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender may, not later than 3:00 p.m. on the borrowing date specified in such
Swing Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrowers at its office by crediting the account of the Lead Borrower on the
books of the Swing Line Lender in immediately available funds.

       

      (c)    Refinancing of Swing Line
Loans.

       

      (i)           The
Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrowers (which hereby irrevocably authorize the Swing Line
Lender to so request on their behalf), that each Lender make a Base Rate Loan in
an amount equal to such Lender's Applicable Percentage of the amount of Swing
Line Loans then outstanding.  Such request shall be made in writing
(which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02, without regard
to the minimum and multiples specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the Aggregate Commitments
and the conditions set forth in Section 4.02.  The
Swing Line Lender shall furnish the Lead Borrower with a copy of the applicable
Committed Loan Notice promptly after delivering such notice to the
Administrative Agent.  Each Lender shall make an amount equal to its
Applicable Percentage of the amount specified in such Committed Loan Notice
available to the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent’s Office not later
than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section
2.04(c)(ii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrowers in such amount.  The Administrative Agent shall
remit the funds so received to the Swing Line Lender.

       

      (ii)           If
for any reason any Swing Line Loan cannot be refinanced by such a Committed
Borrowing in accordance with Section 2.04(c)(i), the
request for Base Rate Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and each
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.04(c)(i) shall be
deemed payment in respect of such participation.

       

      
        
          
          

        

        
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      (iii)           If
any Lender fails to make available to the Administrative Agent for the account
of the Swing Line Lender any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.04(c) by the time
specified in Section
2.04(c)(i), the Swing
Line Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank compensation plus
any administrative, processing or similar fees customarily charged by the Swing
Line Lender in connection with the foregoing.  If such Lender pays
such amount (with interest and fees as aforesaid), the principal amount so paid
shall constitute such Lender’s Committed Loan included in the relevant Committed
Borrowing or funded participation in the relevant Swing Line Loan, as the case
may be.   A certificate of the Swing Line Lender submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause
(iii) shall be conclusive absent manifest error.

       

      (iv)           Each
Lender’s obligation to make Committed Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.04(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, the Borrowers or any other
Person for any reason whatsoever, (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each
Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to
the conditions set forth in Section 4.02.  No
such funding of risk participations shall relieve or otherwise impair the
obligation of the Borrowers to repay Swing Line Loans, together with interest as
provided herein.

       

      (d)    Repayment of
Participations.

       

      (i)           At
any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Lender its
Applicable Percentage of such payment (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s risk
participation was funded) in the same funds as those received by the Swing Line
Lender.

       

      (ii)           If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate.  The Administrative Agent will
make such demand upon the request of the Swing Line Lender.  The
obligations of the Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.

       

      (e)    Interest for Account of
Swing Line Lender.  The Swing Line Lender shall be responsible
for invoicing the Borrowers for interest on the Swing Line
Loans.  Until each Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance
such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect
of such Applicable Percentage shall be solely for the account of the Swing Line
Lender.

       

      
        
          
          

        

        
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      (f)    Payments Directly to Swing
Line Lender.  The Borrowers shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing
Line Lender.

       

      2.05       
Prepayments.

       

      (a)    The
Borrowers may, upon irrevocable notice from the Lead Borrower to the
Administrative Agent, at any time or from time to time voluntarily prepay
Committed Loans in whole or in part without premium or penalty; provided that (i)
such notice must be received by the Administrative Agent not later than 11:00
a.m. (A) three (3) Business Days prior to any date of prepayment of LIBO Rate
Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment
of LIBO Rate Loans shall be in a principal amount of $100,000 or a whole
multiple of $50,000 in excess thereof; and (iii) any prepayment of Base Rate
Loans shall be in a principal amount of $50,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding.  Each such notice shall specify the date and amount
of such prepayment and the Type(s) of Committed Loans to be prepaid and, if LIBO
Rate Loans, the Interest Period(s) of such Committed Loans.  The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s Applicable Percentage of such
prepayment.  If such notice is given by the Lead Borrower, the
Borrowers shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any
prepayment of a LIBO Rate Loan shall be accompanied by all accrued interest on
the amount prepaid, together with any additional amounts required pursuant to
Section 3.05.  Each
such prepayment shall be applied to the Committed Loans of the Lenders in
accordance with their respective Applicable Percentages.

       

      (b)    The
Borrowers may, upon irrevocable notice from the Lead Borrower to the Swing Line
Lender (with a copy to the Administrative Agent), at any time or from time to
time, voluntarily prepay Swing Line Loans in whole or in part without premium or
penalty; provided that (i)
such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000.  Each
such notice shall specify the date and amount of such prepayment.  If
such notice is given by the Lead Borrower, the Borrowers shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

       

      (c)    If for
any reason the Total Outstandings at any time exceed the Loan Cap, as then in
effect, the Borrowers shall immediately prepay Committed Loans and L/C
Borrowings and/or Cash Collateralize the L/C Obligations (other than L/C
Borrowings) in an aggregate amount equal to such excess; provided, however, that the
Borrowers shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.05(c) unless after
the prepayment in full of the Loans the Total Outstandings exceed the Loan
Cap.

       

      (d)    Notwithstanding
the provisions of Section 2.05(a) or 2.05(b), so long as the cash management
procedures set forth in Section 6.13 are in effect, any proceeds deposited to
the Concentration Account in accordance with the provisions of Section 6.13,
including, without limitation, any Net Proceeds received by a Loan Party upon
the occurrence of a Prepayment Event and upon the direction of the Lead Borrower
shall, (i) if deposited in the Concentration Account not later than 2:00 p.m. in
immediately available funds, be utilized to prepay the Loans on the date such
funds were deposited into the Concentration Account, or (ii) if deposited in the
Concentration Account after 2:00 p.m. in immediately available funds, be
utilized to prepay the Loans on the next Business Day following the date such
funds were deposited into the in the Concentration Account, in either case in
the order of priority set forth in Section 2.05(e).  The application
of all such proceeds to the Loans shall not reduce the
Commitments.  If all Obligations then due pursuant to Section 2.05(e)
are paid in full, then any proceeds deposited to the Concentration Account shall
be remitted without any deduction other than customary fees to the operating
account of the Borrowers designated by the Lead Borrower on (i) if received in
the Concentration Account not later than 2:00 p.m. in immediately available
funds, the date such funds were deposited into the in the Concentration Account,
or (ii) if received in the Concentration Account after 2:00 p.m. in immediately
available funds, the next Business Day following the date such funds were
deposited into the in the Concentration Account.

       

      
        
          
          

        

        
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      (e)    Prepayments
made pursuant to this Section 2.05, first, shall be
applied ratably to the L/C Borrowings and the Swing Line Loans, second, shall be
applied ratably to the outstanding Committed Loans that are Base Rate Loans,
third, shall be
applied ratably to the outstanding Committed Loans that are LIBO Rate Loans,
fourth, shall
be used to Cash Collateralize the remaining L/C Obligations in accordance with
Section 2.03(g)
(after and during the continuation of an Event of Default); and, fifth, the amount
remaining, if any, may be retained by and shall be released to the Borrowers for
use in the ordinary course of their  business; provided however, that
so long as no Event of Default has occurred and is continuing,  in the
event of any payments pursuant to Section 2.05(d), at the Lead Borrower’s
election, in lieu of prepaying, any then outstanding LIBO Rate Loans such funds
may be retained by the Agent in an interest bearing account for the benefit of
the Borrowers in an amount sufficient to Cash Collateralize any such LIBO Rate
Loans until same may be paid without any prepayment or other
charges.  Upon the drawing of any Letter of Credit that has been Cash
Collateralized, the funds held as Cash Collateral shall be applied (without any
further action by or notice to or from the Borrowers or any other Loan Party) to
reimburse the L/C Issuer or the Lenders, as applicable.

       

      2.06       
Termination or Reduction of Commitments.

       

      (a)           The
Borrowers may, upon irrevocable notice from the Lead Borrower to the
Administrative Agent, terminate the Aggregate Commitments, the Letter of Credit
Sublimit or from time to time permanently reduce the Aggregate Commitments, or
the Letter of Credit Sublimit; provided that
(i) any such notice shall be received by the Administrative Agent not later
than 11:00 a.m. three Business Days prior to the date of any such
termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $500,000 or any whole multiple of $100,000 in excess
thereof, (iii) the Borrowers shall not terminate or reduce (A) the
Aggregate Commitments if, after giving effect thereto and to any concurrent
prepayments hereunder, the Total Outstanding would exceed the Aggregate
Commitments,  and (B) the Letter of Credit Sublimit if, after
giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash
Collateralized hereunder would exceed the Letter of Credit Sublimit.

       

      (b)           If,
after giving effect to any reduction of the Aggregate Commitments, the Letter of
Credit Sublimit exceeds the amount of the Aggregate Commitments, such Letter of
Credit Sublimit shall be automatically reduced by the amount of such excess.

      (c)           The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of the Letter of Credit Sublimit or the Aggregate Commitments under
this Section 2.06.  Upon any reduction of the Aggregate Commitments,
the Commitment of each Lender shall be reduced by such Lender’s Applicable
Percentage of such reduction amount.  All fees (including, without
limitation, Commitment Fees, Early Termination Fees, and Letter of Credit Fees)
and interest in respect of the Aggregate Commitments accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination.

       

      
        
          
          

        

        
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      2.07       
Repayment of
Loans. The
Borrowers shall repay to the Lenders on the Termination Date the aggregate
principal amount of Committed Loans outstanding on such date. 

       

      2.08       
Interest.

       

      (a)    Subject to the
provisions of Section
2.08(a)(i) below, (i)
each LIBO Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Adjusted LIBO
Rate for such Interest Period plus the Applicable
Margin; and (ii) each Base Rate Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable
Margin.

       

      (i)           If
any Event of Default has occurred and is continuing, then all outstanding
Obligations shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate and thereafter, until termination
of the Aggregate Commitments and repayment of all other Obligations
hereunder.

       

      (ii)           Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

       

      (b)    Interest on
each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified
herein.  Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Laws.

       

      2.09       
Fees.  In
addition to certain fees described in subsections (i) and (j) of Section
2.03:

       

      (a)    Unused Line
Fee.  The Borrowers shall pay to the Administrative Agent, for
the account of each Lender, in accordance with its Applicable Percentage, an
unused line fee (the “Unused Line Fee”)
equal to one half of one percent (0.50%) times the average
daily amount by which the Aggregate Commitments exceed the sum of (i) the
Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C
Obligations.  The Unused Line Fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Article
IV is
not met, and shall be due and payable monthly in arrears on the first calendar
day of each month, commencing with the first such date to occur after the
Closing Date, and on the last day of the Availability Period.  The
Unused Line Fee shall be calculated monthly in arrears, and if there is any
change in the Applicable Margin during any month, the average daily amount shall
be computed and multiplied by the Applicable Margin separately for each period
during such month that such Applicable Margin was in effect.

       

      (b)    Early Termination
Fee.  In the event that (i) the Termination Date occurs, for
any reason, or (ii) the Lead Borrower elects to permanently reduce in full or in
part the Commitments pursuant to Section 2.06 hereof,
then in each case the Borrowers shall pay to the Administrative Agent, for the
ratable benefit of the Lenders, a fee (the “Early Termination
Fee”) in respect of amounts which are or become payable by reason thereof
equal to (x) one and one-half percent (1.50%) if such event shall occur on or
before July 1, 2010, (y) one percent (1.00%) if such event shall occur after
July 1, 2010, but on or before July 1, 2011 or (z) one half of one percent
(0.50%) if such event shall occur after July 1, 2011, as the case may be, of the
Aggregate Commitments then in effect.  Notwithstanding anything to the
contrary contained herein, no Early Termination Fee shall be due if the
Commitments are irrevocably terminated and the Obligations repaid in full in
cash at any time as a result of the loan arrangement evidenced by this Agreement
and the other Loan Documents being refinanced in its entirety by an Affiliate
(under clause (i) of the definition thereof) of the Administrative
Agent.  All parties to this Agreement agree and acknowledge that the
Lenders will have suffered damages on account of the early termination of this
Agreement and that, in view of the difficulty in ascertaining the amount of such
damages, the Early Termination Fee constitutes reasonable compensation and
liquidated damages to compensate the Lenders on account thereof.

       

      
        
          
          

        

        
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      (c)    Collateral Monitoring
Fee.  On the Closing Date, and on the first day of each month
thereafter during the term hereof, the Borrowers shall pay to the Collateral
Agent a collateral monitoring fee (the “Collateral Monitoring
Fee”) in the amount of $2,000.  Such Collateral Monitoring Fee
shall be fully earned when paid and shall not be refundable for any reason
whatsoever.

       

      (d)    Closing
Fee.  On the Closing Date, the Borrowers shall pay to the
Administrative Agent a closing fee (the “Closing Fee”) in the
amount of $125,000.  Such Closing Fee shall be fully earned when paid
and shall not be refundable for any reason whatsoever.

       

      (e)    Other
Fees.  The Borrowers shall pay to the Administrative Agent, for
its own account, fees in such amounts and at such times as mutually agreed upon
by the parties in writing.  Such fees shall be fully earned when paid
and shall not be refundable for any reason whatsoever.

       

      2.10       
Computation of Interest
and Fees.  All
computations of interest and fees shall be made on the basis of a 360-day year
and actual days elapsed.  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that any
Loan that is repaid on the same day on which it is made shall, subject to Section 2.12, bear
interest for one day.  Each determination by the Administrative Agent
of an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.

       

      2.11       
Evidence of
Debt.

       

      (a)    The
Credit Extensions made by each Lender shall be evidenced by one or more accounts
or records maintained by the Administrative Agent (the “Loan Account”) in the
ordinary course of business.  In addition, each Lender may record in
such Lender’s internal records, an appropriate notation evidencing the date and
amount of each Loan from such Lender, each payment and prepayment of principal
of any such Loan, and each payment of interest, fees and other amounts due in
connection with the Obligations due to such Lender.  The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrowers and the interest and payments
thereon.  Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrowers hereunder to
pay any amount owing with respect to the Obligations.  In the event of
any conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.  Upon the request of any Lender made through the
Administrative Agent, the Borrowers shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.  Upon
receipt of an affidavit of a Lender as to the loss, theft, destruction or
mutilation of such Lender’s Note and upon cancellation of such Note, the
Borrowers will issue, in lieu thereof, a replacement Note in favor of such
Lender, in the same principal amount thereof and otherwise of like
tenor.

       

      
        
          
          

        

        
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      (b)    In
addition to the accounts and records referred to in Section 2.11(a), each Lender
and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans.  In the
event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.

       

      2.12       
Payments Generally;
Administrative Agent’s Clawback.

       

      (a)    General.  All
payments to be made by the Borrowers shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff.  Except
as otherwise expressly provided herein, all payments by the Borrowers hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein.  The Administrative Agent will promptly distribute
to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.  If
any payment to be made by the Borrowers shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.  From and after the Closing Date, the Administrative Agent
shall be entitled to charge the Borrowers for one (1) Business Day of
‘clearance’ at the rate then applicable under Section 2.08 to any Borrowings on
all payments of Borrowers and their Subsidiaries.  This
across-the-board one (1) Business Day clearance charge on all payments of
Borrowers and their Subsidiaries is acknowledged by the parties to constitute an
integral aspect of the pricing of the financing of Borrowers and shall apply
irrespective of whether or not there are any outstanding monetary Obligations;
the effect of such clearance charge being the equivalent of charging interest on
such payments through the completion of a period ending one (1) Business Day
after the receipt thereof.  The parties acknowledge and agree that the
economic benefit of the foregoing provisions of this Section 2.12 shall be for
the exclusive benefit of the Administrative Agent.

       

      (b)    (i)    Funding by Lenders;
Presumption by Administrative Agent.  Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing of LIBO Rate Loans (or in the case of any Borrowing of Base Rate
Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will
not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 (or in the case
of a Borrowing of Base Rate Loans, that such Lender has made such share
available in accordance with and at the time required by Section 2.02) and may, in
reliance upon such assumption, make available to the Borrowers a corresponding
amount.  In such event, if a Lender has not in fact made its share of
the applicable Committed Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrowers severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation plus any administrative processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrowers, the
interest rate applicable to Base Rate Loans.  If the Borrowers and
such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such
period.  If such Lender pays its share of the applicable Committed
Borrowing to the Administrative Agent, then the principal amount so paid shall
constitute such Lender’s Committed Loan included in such Committed
Borrowing.  Any payment by the Borrowers shall be without prejudice to
any claim the Borrowers may have against a Lender that shall have failed to make
such payment to the Administrative Agent.

       

      
        
          
          

        

        
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      (ii)           Payments by Borrowers;
Presumptions by Administrative Agent.  Unless the
Administrative Agent shall have received notice from the Lead Borrower prior to
the time at which any payment is due to the Administrative Agent for the account
of the Lenders or the L/C Issuer hereunder that the Borrowers will not make such
payment, the Administrative Agent may assume that the Borrowers have made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the
amount due.  In such event, if the Borrowers have not in fact made
such payment, then each of the Lenders or the L/C Issuer, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the L/C Issuer, in immediately available
funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation. A notice
of the Administrative Agent to any Lender or the Lead Borrower with respect to
any amount owing under this subsection (b) shall be
conclusive, absent manifest error.

       

      (c)    Failure to Satisfy
Conditions Precedent.  If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided in
the foregoing provisions of this Article II, and such funds
are not made available to the Borrowers by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not satisfied
or waived in accordance with the terms hereof (subject to the provisions of the
last paragraph of Section 4.02 hereof),
the Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

       

      (d)    Obligations of Lenders
Several.  The obligations of the Lenders hereunder to make
Committed Loans, to fund participations in Letters of Credit and Swing Line
Loans and to make payments pursuant to Section 10.04(c) are
several and not joint.  The failure of any Lender to make any
Committed Loan, to fund any such participation or to make any payment under
Section
10.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its
Committed Loan, to purchase its participation or to make its payment under Section
10.04(c).

       

      
        
          
          

        

        
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      (e)    Funding
Source.  Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

       

      2.13       
Sharing of Payments by
Lenders.  If any Credit Party shall, by exercising any right of
setoff or counterclaim or otherwise, obtain payment in respect of any principal
of, interest on, or other amounts with respect to, any of the Obligations
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Obligations greater than its pro rata share thereof as
provided herein (including as in contravention of the priorities of payment set
forth in Section
8.03), then the Credit Party receiving such greater proportion shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Obligations of the other Credit Parties, or make
such other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Credit Parties ratably and in the priorities set
forth in Section
8.03, provided
that:

       

      (i)           if
any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

       

      (ii)           the
provisions of this Section shall not be construed to apply to (x) any payment
made by the Loan Parties pursuant to and in accordance with the express terms of
this Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Committed Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than to the Borrowers or any Subsidiary thereof (as to which
the provisions of this Section shall apply).

       

      Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively do
so under applicable Law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such
participation.

       

      2.14    Settlement
Amongst Lenders.

       

      (a)          The
amount of each Lender’s Applicable Percentage of outstanding Loans (including
outstanding Swing Line Loans) shall be computed weekly (or more frequently in
the Administrative Agent’s discretion) and shall be adjusted upward or downward
based on all Loans (including Swing Line Loans) and repayments of Loans
(including Swing Line Loans) received by the Administrative Agent as of 3:00
p.m. on the first Business Day (such date, the “Settlement Date”)
following the end of the period specified by the Administrative
Agent.

       

      (b)          The
Administrative Agent shall deliver to each of the Lenders promptly after a
Settlement Date a summary statement of the amount of outstanding Committed Loans
for the period and the amount of repayments received for the
period.  As reflected on the summary statement, (i) the Administrative
Agent shall transfer to each Lender its Applicable Percentage of repayments, and
(ii) each Lender shall transfer to the Administrative Agent (as provided below)
or the Administrative Agent shall transfer to each Lender, such amounts as are
necessary to insure that, after giving effect to all such transfers, the amount
of Committed Loans made by each Lender shall be equal to such Lender’s
Applicable Percentage of all Committed Loans outstanding as of such Settlement
Date.  If the summary statement requires transfers to be made to the
Administrative Agent by the Lenders and is received prior to 1:00 p.m. on a
Business Day, such transfers shall be made in immediately available funds no
later than 3:00 p.m. that day; and, if received after 1:00 p.m., then no later
than 3:00 p.m. on the next Business Day. The obligation of each Lender to
transfer such funds is irrevocable, unconditional and without recourse to or
warranty by the Administrative Agent.  If and to the extent any Lender
shall not have so made its transfer to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent, equal to the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation plus any administrative,
processing, or similar fees customarily charged by the Administrative Agent in
connection with the foregoing.

       

      
        
          
          

        

        
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      ARTICLE III

      TAXES,
YIELD PROTECTION AND ILLEGALITY;

      APPOINTMENT
OF LEAD BORROWER

       

      3.01       
Taxes.

       

      (a)    Payments Free of
Taxes.  Any and all payments by or on account of any obligation
of the Borrowers hereunder or under any other Loan Document shall be made free
and clear of and without reduction or withholding for any Indemnified Taxes or
Other Taxes, provided that if the
Borrowers shall be required by applicable Laws to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions and (iii) the Borrowers shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable Laws.

       

      (b)    Payment of Other Taxes by
the Borrowers.  Without limiting the provisions of subsection (a) above, the
Borrowers shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable Laws.

       

      (c)    Indemnification by the Loan
Parties.  The Loan Parties shall indemnify the Administrative
Agent, each Lender and the L/C Issuer, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and any penalties, interest, fees,
and reasonable costs and expenses, arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to the Lead
Borrower by a Lender or the L/C Issuer (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Lender or the L/C Issuer, shall be conclusive absent manifest
error.

       

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

       

      
        
          
          

        

        
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      (e)    Status of
Lenders.  Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
any Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Lead Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Lead Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if requested by the Lead
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Lead Borrower or the
Administrative Agent as will enable the Lead Borrower or the Administrative
Agent to determine whether or not such Lender is subject to backup withholding
or information reporting requirements.

       

      Without
limiting the generality of the foregoing, in the event that any Borrower is
resident for tax purposes in the United States, any Foreign Lender shall deliver
to the Lead Borrower and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Lead Borrower or the Administrative Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

       

      (i)           duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a
party,

       

      (ii)          duly
completed copies of Internal Revenue Service Form W-8ECI,

       

      (iii)         in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
Borrowers within the meaning of section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
and (y) duly completed copies of  Internal Revenue Service Form
W-8BEN, or

       

      (iv)         any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Lead Borrower to determine the withholding or deduction required to
be made.

       

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

       

      
        
          
          

        

        
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      3.02       
Illegality.  If
any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund LIBO Rate Loans, or to
determine or charge interest rates based upon the LIBO Rate, or any Governmental
Authority has imposed material restrictions on the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the London interbank
market, then, on notice thereof by such Lender to the Lead Borrower through the
Administrative Agent, any obligation of such Lender to make or continue LIBO
Rate Loans or to convert Base Rate Loans to LIBO Rate Loans shall be suspended
until such Lender notifies the Administrative Agent and the Lead Borrower that
the circumstances giving rise to such determination no longer
exist.  Upon receipt of such notice, the Borrowers shall, upon demand
from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all LIBO Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such LIBO Rate Loans to such day, or immediately,
if such Lender may not lawfully continue to maintain such LIBO Rate
Loans.  Upon any such prepayment or conversion, the Borrowers shall
also pay accrued interest on the amount so prepaid or converted.

       

      3.03       
Inability to Determine
Rates.  If
the Required Lenders determine that for any reason in connection with any
request for a LIBO Rate Loan or a conversion to or continuation thereof that
(a) Dollar deposits are not being offered to banks in the London interbank
market for the applicable amount and Interest Period of such LIBO Rate Loan,
(b) adequate and reasonable means do not exist for determining the LIBO
Rate for any requested Interest Period with respect to a proposed LIBO Rate Loan
, or (c) the LIBO Rate for any requested Interest Period with respect to a
proposed LIBO Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Lead Borrower and each Lender.  Thereafter, the obligation of the
Lenders to make or maintain LIBO Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice.  Upon receipt of such notice, the Lead Borrower may revoke any
pending request for a Borrowing of, conversion to or continuation of LIBO Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Committed Borrowing of Base Rate Loans in the amount specified
therein.

       

      3.04       
Increased Costs;
Reserves on LIBO Rate Loans.

       

      (a)    Increased Costs
Generally.  If any Change in Law shall:

       

      (i)           impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except any
reserve requirement reflected in the LIBO Rate) or the L/C Issuer;

       

      
        
          
          

        

        
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      (ii)           subject
any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any participation in a Letter of Credit or
any LIBO Rate Loan made by it, or change the basis of taxation of payments to
such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes
or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the L/C Issuer); or

       

      (iii)           impose
on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or LIBO Rate Loans made by
such Lender or any Letter of Credit or participation therein;

       

      and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any LIBO Rate Loan (or of maintaining its obligation to
make any such Loan), or to increase the cost to such Lender or the L/C Issuer of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or the L/C Issuer
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or the L/C Issuer, the Borrowers will pay to such Lender
or the L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

       

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

       

      (c)    Certificates for
Reimbursement.  A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section
and delivered to the Lead Borrower shall be conclusive absent manifest
error.  The Borrowers shall pay such Lender or the L/C Issuer, as the
case may be, the amount shown as due on any such certificate within ten (10)
days after receipt thereof.

       

      (d)    Delay in
Requests.  Failure or delay on the part of any Lender or the
L/C Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the
Borrowers shall not be required to compensate a Lender or the L/C Issuer
pursuant to the foregoing provisions of this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that
such Lender or the L/C Issuer, as the case may be, notifies the Lead Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

       

      
        
          
          

        

        
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      (e)    Reserves on LIBO Rate
Loans.  The Borrowers shall pay to each Lender, as long as such
Lender shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities"), additional interest on the unpaid
principal amount of each LIBO Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan, provided the Lead
Borrower shall have received at least ten (10) days’ prior notice (with a copy
to the Administrative Agent) of such additional interest from such
Lender.  If a Lender fails to give notice ten (10) days prior to the
relevant Interest Payment Date, such additional interest shall be due and
payable ten (10) days from receipt of such notice.

       

      3.05       
Compensation for
Losses.  Upon
demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Borrowers shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result
of:

       

      (a)          any
continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

       

      (b)          any
failure by the Borrowers (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than a Base
Rate Loan on the date or in the amount notified by the Lead Borrower;
or

       

      (c)          any
assignment of a LIBO Rate Loan on a day other than the last day of the Interest
Period therefor as a result of a request by the Lead Borrower pursuant to Section 10.13;
including
any loss of anticipated profits and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were
obtained.  The Borrowers shall also pay any customary administrative
fees charged by such Lender in connection with the foregoing.

       

      For
purposes of calculating amounts payable by the Borrowers to the Lenders under
this Section
3.05, each Lender shall be deemed to have funded each LIBO Rate Loan made
by it at the LIBO Rate for such Loan by a matching deposit or other borrowing in
the London interbank market for a comparable amount and for a comparable period,
whether or not such LIBO Rate Loan was in fact so funded.

       

      3.06       
Mitigation Obligations;
Replacement of Lenders.

       

      (a)    Designation of a Different
Lending Office.  If any Lender requests compensation under
Section 3.04,
or the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, or if
any Lender gives a notice pursuant to Section 3.02, then
such Lender shall use reasonable efforts to designate a different Lending Office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may
be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

       

      
        
          
          

        

        
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      (b)    Replacement of
Lenders.  If any Lender requests compensation under Section 3.04, or if
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, the
Borrowers may replace such Lender in accordance with Section
10.13.

       

      3.07       
Survival.  All
of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

       

      3.08       
Designation of Lead Borrower as Borrowers’ Agent.

       

      (a)    Each
Borrower hereby irrevocably designates and appoints the Lead  Borrower
as such Borrower’s agent to obtain Credit Extensions, the proceeds of which
shall be available to each Borrower for such uses as are permitted under this
Agreement.  As the disclosed principal for its agent, each Borrower
shall be obligated to each Credit Party on account of Credit Extensions so made
as if made directly by the applicable Credit Party to such Borrower,
notwithstanding the manner by which such Credit Extensions are recorded on the
books and records of the Lead Borrower and of any other Borrower.  In
addition, each Loan Party other than the Borrowers hereby irrevocably designates
and appoints the Lead  Borrower as such Loan Party’s agent to
represent such Loan Party in all respects under this Agreement and the other
Loan Documents.

       

      (b)    Each
Borrower recognizes that credit available to it hereunder is in excess of and on
better terms than it otherwise could obtain on and for its own account and that
one of the reasons therefor is its joining in the credit facility contemplated
herein with all other Borrowers.  Consequently, each Borrower hereby
assumes and agrees to discharge all Obligations of each of the other
Borrowers.

       

      (c)    The
Lead  Borrower shall act as a conduit for each Borrower (including
itself, as a “Borrower”) on whose behalf the Lead Borrower has requested a
Credit Extension.  Neither the Administrative Agent nor any other
Credit Party shall have any obligation to see to the application of such
proceeds therefrom.

       

      ARTICLE IV

      CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

       

      4.01       
Conditions of Initial
Credit Extension.  The
obligation of the L/C Issuer and each Lender to make its initial Credit
Extension hereunder is subject to satisfaction (or waiver in accordance with
Section 10.01)
of the following conditions precedent:

       

      (a)          The
Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent:

       

      (i)           executed
counterparts of this Agreement sufficient in number for distribution to the
Administrative Agent, each Lender and the Lead Borrower;

       

      (ii)          (A)
a Committed Loan Note executed by the Borrowers in favor of each Lender
requesting a Committed Loan Note, and (B) a Swing Line Loan Note executed by the
Borrowers in favor of Wells Fargo Retail Finance, LLC;

       

      
        
          
          

        

        
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      (iii)          such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing (A) the authority of each Loan Party
to enter into this Agreement and the other Loan Documents to which such Loan
Party is a party or is to be a party and (B) the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party or is to be a party;

       

      (iv)          copies
of each Loan Party’s Organization Documents and such other documents and
certifications as the Administrative Agent may reasonably require to evidence
that each Loan Party is duly organized or formed, and that each Loan Party is
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, and in each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;

       

      (v)           a
favorable opinion of Posternak Blankstein & Lund LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to such
matters concerning the Loan Parties and the Loan Documents as the Administrative
Agent may reasonably request;

       

      (vi)          a
certificate signed by a Responsible Officer of the Lead Borrower certifying (A)
that the conditions specified in Sections 4.01 and
4.02 have been
satisfied, (B) that there has been no event or circumstance since the date of
the Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, (C)
either that (1) no consents, licenses or approvals are required in connection
with the execution, delivery and performance by such Loan Party and the validity
against such Loan Party of the Loan Documents to which it is a party, or (2)
that all such consents, licenses and approvals have been obtained and are in
full force and effect, and (D) to the Solvency of the Loan Parties on a
Consolidated basis as of the Closing Date after giving effect to the
transactions contemplated hereby;

       

      (vii)         a
duly completed Compliance Certificate as of the last day of the Fiscal Month of
the Parent and its Subsidiaries most recently ended prior to the Closing Date,
signed by a Responsible Officer of the Lead Borrower;

       

      (viii)        evidence
that all insurance required to be maintained pursuant to the Loan Documents and
all endorsements in favor of the Agents required under the Loan Documents have
been obtained and are in effect;

       

      (ix)          certain
Security Documents and certificates evidencing any stock being pledge
thereunder, together with undated stock powers executed in blank, each duly
executed by the applicable Loan Parties;

       

      (x)           all
other Loan Documents, each duly executed by the applicable Loan
Parties;

       

      (xi)          (A)
appraisals (based on net liquidation value) by a third party appraiser
acceptable to the Collateral Agent of all Inventory of the Borrowers, the
results of which are satisfactory to the Collateral Agent and (B) a written
report regarding the results of a commercial finance examination of the Loan
Parties, which shall be satisfactory to the Collateral Agent;

       

      
        
          
          

        

        
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      (xii)         results
of searches or other evidence reasonably satisfactory to the Collateral Agent
(in each case dated as of a date reasonably satisfactory to the Collateral
Agent) indicating the absence of Liens on the assets of the Loan Parties, except
for Permitted Encumbrances and Liens for which termination statements and
releases, satisfactions and discharges of any mortgages, and
releases  or subordination agreements satisfactory to the Collateral
Agent are being tendered concurrently with such extension of credit or other
arrangements satisfactory to the Collateral Agent for the delivery of such
termination statements and releases, satisfactions and discharges have been
made;

       

      (xiii)        (A)           all
documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Collateral Agent to
be filed, registered or recorded to create or perfect the first priority Liens
intended to be created under the Loan Documents and all such documents and
instruments shall have been so filed, registered or recorded to the satisfaction
of the Collateral Agent, (B) the DDA Notifications, Credit Card Notifications,
and Blocked Account Agreements required pursuant to Section 6.13 hereof,
and (C) control agreements with respect to the Loan Parties’ securities and
investment accounts;

       

      (xiv)        Collateral
Access Agreement, as required by the Collateral Agent;

       

      (xv)         Freight
forwarder agreements, as required by, and in form and substance satisfactory to,
the Collateral Agent; and

       

      (xvi)        such
other assurances, certificates, documents, consents or opinions as the Agents
reasonably may require.

       

      (b)          The
Administrative Agent shall have received a Borrowing Base Certificate dated the
Closing Date for the then most recently ended fiscal week, and executed by a
Responsible Officer of the Lead Borrower.

       

      (c)          The
Administrative Agent shall be reasonably satisfied that any financial statements
delivered to it fairly present the business and financial condition of the Loan
Parties and that there has been no Material Adverse Effect since the date of the
most recent financial information delivered to the Administrative
Agent.

       

      (d)          The
Administrative Agent shall have received and be satisfied with (i) a detailed
Business Plan and forecast for the period commencing on the Closing Date and
ending with the end of such Fiscal Year, which shall include an Availability
model, Consolidated income statement, balance sheet, and statement of cash flow,
by month, each prepared in conformity with GAAP and consistent with the Loan
Parties’ then current practices and (b) such other information (financial or
otherwise) reasonably requested by the Administrative Agent.

       

      (e)          There
shall not be pending any litigation or other proceeding, the result of which,
either individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.

       

      (f)          There
shall not have occurred any default of any Material Contract or adverse change
in the business, assets, operations, trade support, condition (financial or
otherwise) or prospects of any Loan Party, which would reasonably be expected to
have a Material Adverse Effect.

       

      
        
          
          

        

        
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      (g)          The
consummation of the transactions contemplated hereby shall not violate any
applicable Law or any Organization Document.

       

      (h)          All
fees and expenses required to be paid to the Agents pursuant to Sections 2.03, 2.09 and 10.04 and on or
before the Closing Date shall have been paid in full, and all fees required to
be paid to the Lenders on or before the Closing Date shall have been paid in
full.

       

      (i)          The
Borrowers shall have paid all fees, charges and disbursements of counsel to the
Administrative Agent, plus such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges
and disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Borrowers and the Administrative
Agent).

       

      (j)          No
material changes in governmental regulations or policies affecting any Loan
Party or any Credit Party shall have occurred prior to the Closing
Date.

       

      (k)         There
shall not have occurred any disruption or material adverse change in the United
States financial or capital markets in general that has had, in the reasonable
opinion of the Administrative Agent, a material adverse effect on the market for
loan syndications or adversely affecting the syndication of the
Loans.

       

      (l)          Each
Lender shall have received final credit approval to enter into the Agreement and
the other Loan Documents (to which it is a party) and for its applicable
Commitment, and to perform its obligations thereunder.

       

      (m)        The
Agents shall have completed, and be satisfied with, its corporate and legal
due-diligence of each Loan Party (including, but not limited to solvency), its
examination of the Collateral, the Stores and distribution centers of the Loan
Parties, and the capital structure of the Loan Parties.

       

      Without
limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section 4.01, each
Lender that has signed this Agreement shall be deemed to have Consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be Consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

       

      4.02       
Conditions to all Credit
Extensions.  The
obligation of each Lender to honor any Request for Credit Extension (other than
a Committed Loan Notice requesting only a conversion of Committed Loans to the
other Type, or a continuation of LIBO Rate Loans) is subject to the following
conditions precedent:

       

      (a)          The
representations and warranties of each other Loan Party contained in Article V or any
other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct in
material respects (except to the extent such representation or warranty is
already qualified by materiality or subject to a “Material Adverse Effect”
qualifier) on and as of the date of such Credit Extension, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date, and except
that for purposes of this Section 4.02, the
representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a) and (c), respectively, of
Section
6.01.

       

      
        
          
          

        

        
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      (b)          No
Default shall exist, or would result from such proposed Credit Extension or from
the application of the proceeds thereof.

       

      (c)          The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender
shall have received a Request for Credit Extension in accordance with the
requirements hereof.

       

      (d)          The
Administrative Agent shall have received an updated Borrowing Base Certificate
reflecting the outstanding Credit Extensions after giving effect to such request
(it being agreed that except for Borrowing Base Certificates furnished pursuant
to Section
6.01(c), the values for eligible assets will not be required to be
updated).

       

      (e)          No
injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the extending of such credit shall have been issued and
remain in force by any Governmental Authority against any Borrower, any Agent,
any Lender or any of their Affiliate.

       

      (f)          
The aggregate amount of all requested Loans and/or Letters of Credit shall not
exceed Availability at such time.

       

      (g)          No
event or circumstance which could reasonably be expected to result in a Material
Adverse Effect shall have occurred.

       

      (h)          No
Loan Party has entered into any transaction, or made any payment, of the type
specified in Section
7.06, within three (3) Fiscal Months of the date of the proposed Credit
Extension, provided, however, this
condition shall not apply in connection with the issuance of any Letter of
Credit, any L/C Borrowing, or any other Loan for which 100% of the proceeds
shall be used to repay any outstanding fees, cost or expense (including, without
limitation, the Unused Line Fees, Early Termination Fees, and Letter of Credit
Fees), owed to any Credit Party under, or in connection with, this Agreement or
any other Loan Document.

       

      Each
Request for Credit Extension (other than a Committed Loan Notice requesting only
a conversion of Committed Loans to the other Type or a continuation of LIBO Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty by the Borrowers that the conditions specified in this Section 4.02 have
been satisfied on and as of the date of the applicable Credit
Extension.  The conditions set forth in this Section 4.02 are for
the sole benefit of the Credit Parties but until the Required Lenders otherwise
direct the Administrative Agent to cease making Committed Loans, the Lenders
will fund their Applicable Percentage of all Committed Loans and L/C Advances
and participate in all Swing Line Loans and Letters of Credit whenever made or
issued, which are requested by the Lead Borrower and which, notwithstanding the
failure of the Loan Parties  to comply with the provisions of this
Article IV, are
agreed to by the Administrative Agent, provided, however, the making of any such
Loans or the issuance of any Letters of Credit shall not be deemed a
modification or waiver by any Credit Party of the provisions of this Article IV on any
future occasion or a waiver of any rights or the Credit Parties as a result of
any such failure to comply.

       

      ARTICLE V

      REPRESENTATIONS
AND WARRANTIES

       

      To induce
the Credit Parties to enter into this Agreement and to make Loans and to issue
Letters of Credit hereunder, each Loan Party represents and warrants to the
Administrative Agent and the other Credit Parties that:

       

      5.01    Existence, Qualification and
Power.  Each
Loan Party and each Subsidiary thereof (a) is a corporation, limited liability
company, partnership or limited partnership, duly organized or formed, validly
existing and, where applicable, in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, permits, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
as currently conducted, and (ii) execute, deliver and perform its obligations
under the Loan Documents to which it is a party, and (c) is duly qualified and
is licensed and, where applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or
(c), to the
extent that failure to do so would not reasonably be expected to have a Material
Adverse Effect.  Schedule 5.01 annexed
hereto sets forth, as of the Closing Date, each Loan Party’s name as it appears
in official filings in its state of incorporation or organization and the name
under which each Loan Party currently conducts its business (if different), its
state of incorporation or organization, organization type, organization number,
if any, issued by its state of incorporation or organization, its federal
employer identification number, and the address of its chief executive office
and principal place of business.

       

      
        
          
          

        

        
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      5.02    Authorization; No
Contravention.  The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is or is to be a party, has been duly authorized by all
necessary corporate or other organizational action, and does not and will not
(a) contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach, termination, or contravention of, or
constitute a default under, or require any payment to be made under (i) any
Material Contract or any Material Indebtedness to which such Person is a party
or affecting such Person or the properties of such Person or any of its
Subsidiaries (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
except, in each case referred to in this clause (b), to the extent that any such
conflict, breach, termination, contravention or default would not reasonably be
expected to have a Material Adverse Effect  or (iii) any governmental
licenses, permits, authorizations, consents and approvals; (c) result in or
require the creation of any Lien upon any asset of any Loan Party (other than
Liens in favor of the Collateral Agent under the Security Documents); or (d)
violate any Law.

       

      5.03    Governmental Authorization; Other
Consents.  No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document, except for (a) the perfection or maintenance of the Liens created
under the Security Documents (including the first priority nature thereof), (b)
such as have been obtained or made and are in full force and effect, or (c)
filings with the SEC in connection with the entry into a material
agreement.

       

      5.04    Binding Effect.  This
Agreement has been, and each other Loan Document, when delivered, will have
been, duly executed and delivered by each Loan Party that is party
thereto.  This Agreement constitutes, and each other Loan Document
when so delivered will constitute, a legal, valid and binding obligation of such
Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

       

      5.05    Financial Statements; No Material
Adverse Effect.

       

      
        
          
          

        

        
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      (a)    The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the
financial condition of the Parent and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all Material Indebtedness and
other liabilities, direct or contingent, of the Parent and its Subsidiaries on a
Consolidated basis as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.

       

      (b)    The
unaudited Consolidated balance sheet of the Parent and its Subsidiaries dated
March 28, 2009, and the related Consolidated and consolidating statements of
income or operations, Shareholders’ Equity and cash flows for the Fiscal Quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and
(ii), to the
absence of footnotes and to normal year-end audit adjustments.  Schedule 5.05 sets
forth all Material Indebtedness and other liabilities, direct or contingent, of
the Loan Parties and their Subsidiaries as of the date of such financial
statements, including liabilities for taxes, material commitments and Material
Indebtedness.

       

      (c)    Since
the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or would
reasonably be expected to have a Material Adverse Effect.

       

      (d)    No
Internal Control Event exists or has occurred that has resulted in or would
reasonably be expected to result in a misstatement in any material respect, in
any financial information delivered or to be delivered to the Administrative
Agent or the Lenders, of (i) covenant compliance calculations provided hereunder
or (ii) the assets, liabilities, financial condition or results of operations of
the Parent and its Subsidiaries on a Consolidated basis.

       

      (e)    The
Consolidated forecasted balance sheet and statements of income and cash flows of
the Parent and its Subsidiaries delivered pursuant to Section 6.01(e) were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were fair in light of the conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery, the Loan
Parties’ best estimate of its future financial performance.

       

      5.06       
Litigation.  There
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Loan Parties, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against any Loan Party
or any of its Subsidiaries or against any of its properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby, or (b) except as specifically
disclosed on Schedule
5.06, either individually or in the aggregate, if determined adversely,
would reasonably be expected to have a Material Adverse Effect, and there has
been no adverse change in the status, or financial effect on any Loan Party or
Subsidiary thereof, of the matters described on Schedule
5.06.

       

      5.07       
No Default.  No
Loan Party or any Subsidiary is in default under or with respect to any Material
Indebtedness.  No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.

       

      5.08       
Ownership of Property; Liens.

       

      
        
          
          

        

        
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      (a)    Each
of the Loan Parties and each Subsidiary thereof has good record and marketable
title in fee simple to or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of its business, in each case free and
clear of all Liens, other than Permitted Encumbrances, except for such defects
in title and leasehold interest as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  Each of the
Loan Parties and each Subsidiary has good and marketable title to, valid
leasehold interests in, or valid licenses to use all personal property
(including Intellectual Property) and assets material to the ordinary conduct of
its business as currently conducted, free and clear of all Liens, other than
Permitted Encumbrances.

       

      (b)    The
Loan Parties own no Real Estate.  Schedule 5.08(b) sets
forth the address (including street address, county and state) of all Leases and
Capital Leases of the Loan Parties, together with a list of the lessor and its
contact information with respect to each such Lease as of the Closing
Date.  Each of such Leases is in full force and effect and the Loan
Parties are not in default of the terms thereof.

       

      (c)    Schedule 7.01 sets
forth a complete and accurate list of all Liens on the property or assets of
each Loan Party and each of its Subsidiaries, showing as of the date hereof the
lienholder thereof, the principal amount of the obligations secured thereby and
the property or assets of such Loan Party or such Subsidiary subject
thereto.  The property of each Loan Party and each of its Subsidiaries
is subject to no Liens, other than Liens set forth on Schedule 7.01, and
Permitted Encumbrances.

       

      (d)    Schedule 7.02 sets
forth a complete and accurate list of all Investments held by any Loan Party or
any Subsidiary of a Loan Party on the date hereof, showing as of the date hereof
the amount, obligor or issuer and maturity, if any, thereof.

       

      (e)    Schedule 7.03 sets
forth a complete and accurate list of all Indebtedness of each Loan Party and
any Subsidiary of each Loan Party as of the Closing Date, showing as of the
Closing Date the amount, obligor or issuer and maturity thereof.

       

      5.09       
Environmental Compliance.

       

            
(a)          Except as
specifically disclosed in Schedule 5.09, no
Loan Party or any Subsidiary thereof (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability, except, in each case, as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

       

            
(b)          Except as
otherwise set forth in Schedule 5.09, none
of the properties currently or formerly owned or operated by any Loan Party or
any Subsidiary thereof is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to any such
property; there are no and never have been any underground or above-ground
storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
in which Hazardous Materials are being or have been treated, stored or disposed
on any property currently owned or operated by any Loan Party or any Subsidiary
thereof or, to the best of the knowledge of the Loan Parties, on any property
formerly owned or operated by any Loan Party or Subsidiary thereof; except as
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, there is no asbestos or asbestos-containing material on
any property currently owned or operated by any Loan Party or Subsidiary
thereof; and except as individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect, Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly owned
or operated by any Loan Party or any Subsidiary thereof.

       

      
        
          
          

        

        
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      (c)          Except
as otherwise set forth in Schedule 5.09, no
Loan Party or any Subsidiary thereof is undertaking, and no Loan Party or any
Subsidiary thereof has completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any Subsidiary
thereof have been disposed of in a manner not reasonably expected to result in
material liability to any Loan Party or any Subsidiary thereof.

       

      5.10    Insurance.  The
properties of the Loan Parties and their Subsidiaries are insured with
financially sound and reputable insurance companies which are not Affiliates of
the Loan Parties, in such amounts, with such deductibles and covering such risks
(including, without limitation, workmen’s compensation, public liability,
business interruption and property damage insurance) as are customarily carried
by companies engaged in similar businesses and owning similar properties in
localities where the Loan Parties or the applicable Subsidiary
operates.  Schedule 5.10 sets
forth a description of all insurance maintained by or on behalf of the Loan
Parties as of the Closing Date. Each insurance policy listed on Schedule 5.10 is in
full force and effect and all premiums in respect thereof that are due and
payable have been paid.

       

      5.11    Taxes.  The
Loan Parties and their Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings being diligently conducted, for which adequate
reserves have been provided in accordance with GAAP, as to which Taxes no Lien
has been filed and which contest effectively suspends the collection of the
contested obligation and the enforcement of any Lien securing such
obligation.  There is no proposed tax assessment against any Loan
Party or any Subsidiary that would, if made, have a Material Adverse
Effect.  No Loan Party or any Subsidiary thereof is a party to any tax
sharing agreement.

       

      5.12    ERISA Compliance.

       

      (a)    Each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Lead Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification.  The Loan Parties and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.  No Lien imposed under the Code or ERISA
exists or is likely to arise on account of any Plan.

       

      
        
          
          

        

        
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      (b)    There
are no pending or, to the best knowledge of the Lead Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that would reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
would reasonably be expected to result in a Material Adverse
Effect.

       

      (c)    (i)    Except as
would not reasonably be expected to have a Material Adverse Effect, (i) no ERISA
Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has
any Unfunded Pension Liability; (iii) neither any Loan Party nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither any Loan Party nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither any Loan Party nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA.

       

      5.13    Subsidiaries; Equity
Interests.  The
Loan Parties have no Subsidiaries other than those specifically disclosed in
Part (a) of Schedule
5.13, which Schedule sets forth the legal name, jurisdiction of
incorporation or formation and authorized Equity Interests of each such
Subsidiary, listed by class, and setting forth the number and percentage of the
outstanding Equity Interests of each such class owned directly or indirectly by
the applicable Loan Party.  All of the outstanding Equity Interests of
such Subsidiaries have been validly issued, are fully paid and non-assessable
and are owned by a Loan Party (or a Subsidiary of a Loan Party) in the amounts
specified on Part (a) of Schedule 5.13, free
and clear of all Liens except for those created under the Security
Documents.  Except as specifically disclosed in Schedule 5.13, no
Loan Party or any of its respective Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of any Loan Party’s Subsidiaries’ Equity Interests or any security
convertible into or exchangeable for any such Equity Interests.  The
Loan Parties have no equity investments in any other corporation or entity other
than those specifically disclosed in Part (b) of Schedule
5.13.  Part (c) of Schedule 5.13 is a
complete and accurate description of the authorized Equity Interests of each
Loan Party, by class, and a description of the number of shares of each such
class that are issued and outstanding.  Except as set forth on Part
(c) of Schedule 5.13, all of the outstanding Equity Interests in the Loan
Parties have been validly issued, and are fully paid and non-assessable and,
other than with respect to the Parent, are owned in the amounts specified on
Part (c) of Schedule
5.13, free and clear of all Liens except for those created under the
Security Documents.  Except as set forth in Schedule 5.13, there
are no subscriptions, options, warrants, or calls relating to any shares of any
Loan Party’s Equity Interests, including any right of conversion or exchange
under any outstanding security or other instrument.  The copies of the
Organization Documents of each Loan Party and each amendment thereto provided
pursuant to Section
4.01 are true and correct copies of each such document, each of which is
valid and in full force and effect.

       

      5.14    Margin Regulations; Investment
Company Act; Public Utility Holding Company Act.

       

      (a)    No
Loan Party is engaged or will be engaged, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose
of purchasing or carrying margin stock.  None of the proceeds of the
Credit Extensions shall be used directly or indirectly for the purpose of
purchasing or carrying any margin stock, for the purpose of reducing or retiring
any Indebtedness that was originally incurred to purchase or carry any margin
stock or for any other purpose that might cause any of the Credit Extensions to
be considered a “purpose credit” within the meaning of Regulations T, U, or X
issued by the FRB.

       

      
        
          
          

        

        
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      (b)    None
of the Loan Parties, any Person Controlling any Loan Party, or any Subsidiary is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940.  None of the Loan Parties, any Person Controlling
any Loan Party, or any Subsidiary is a “holding company” or an “affiliate” of a
“holding company” or a “subsidiary company” of a “holding company”, as each term
is defined and used in the Public Utility Holding Company Act of
2005

       

      5.15    Disclosure.  Each
Loan Party has disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Loan Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading; provided that, with
respect to projected financial information, the Loan Parties represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

       

      5.16    Compliance with Laws.  Each
of the Loan Parties and each Subsidiary is in compliance in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

       

      5.17    Intellectual Property; Licenses,
Etc. Each
Loan Party owns, or holds licenses in, all Intellectual Property, trade names,
patent rights and other authorizations that are necessary to the conduct of its
business as currently conducted and as proposed to be conducted, and attached
hereto as Schedule
5.17 is a true, correct, and complete listing of all material patents,
patent applications, trademarks, trademark applications, copyrights, and
copyright registrations as to which a Loan Party is the owner or is an exclusive
licensee.  There is no action, proceeding, claim or complaint pending
or, threatened in writing to be brought against any Loan Party which might
jeopardize any of such Person’s interest in any of the foregoing licenses,
patents, copyrights, trademarks, trade names, designs or applications, except
those which, either individually or in the aggregate, would reasonably be
expected not to have a Material Adverse Effect, and no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Loan Party or any
Subsidiary infringes upon any rights held by any other
Person.  

       

      5.18    Labor Matters.

       

      
        
          
            
            

          

          
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      There are
no strikes, lockouts, slowdowns or other material labor disputes against any
Loan Party or any Subsidiary thereof pending or, to the knowledge of any Loan
Party, threatened. The hours worked by and payments made to employees of the
Loan Parties comply with the Fair Labor Standards Act and any other applicable
federal, state, local or foreign Law dealing with such matters, except where the
failure to comply would not reasonably be expected to have a Material Adverse
Effect. No Loan Party or any of its Subsidiaries has incurred any liability or
obligation under the Worker Adjustment and Retraining Act or similar state
Law.  All payments due from any Loan Party and its Subsidiaries, or
for which any claim may be made against any Loan Party, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
properly accrued in accordance with GAAP as a liability on the books of such
Loan Party, except as would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 5.18 no Loan
Party or any Subsidiary is a party to or bound by any collective bargaining
agreement, management agreement, employment agreement, bonus, restricted stock,
stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement. There are no representation proceedings pending or, to
any Loan Party’s knowledge, threatened to be filed with the National Labor
Relations Board, and no labor organization or group of employees of any Loan
Party or any Subsidiary has made a pending demand for recognition. There are no
complaints, unfair labor practice charges, grievances, arbitrations, unfair
employment practices charges or any other claims or complaints against any Loan
Party or any Subsidiary pending or, to the knowledge of any Loan Party,
threatened to be filed with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment of any employee of any Loan Party or any of its
Subsidiaries. The consummation of the transactions contemplated by the Loan
Documents will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which any Loan Party or any of its Subsidiaries is bound.  Each
Loan Party and its Subsidiaries are in material compliance with all requirements
pursuant to employment standards, labor relations, health and safety, workers
compensation, immigration laws and other applicable employment legislation,
except where the failure to be in compliance would not reasonably be expected to
have a Material Adverse Effect.  To the knowledge of the Loan Parties,
no officer or director of any Loan Party who is party to an employment agreement
with such Loan Party is in violation of any term of any employment contract or
proprietary information agreement with such Loan Party which would reasonably be
expected to have a Material Adverse Effect; and to the knowledge of the Loan
Parties, the execution of the employment agreements and the continued employment
by the Loan Parties of the such persons, will not result in any such violation,
which would reasonably be expected to have a Material Adverse
Effect.

       

      5.19    Security
Documents.

       

      (a)          The
Pledge Agreement creates in favor of the Collateral Agent, for the benefit of
the Secured Parties referred to therein, a legal, valid, continuing and
enforceable security interest in the Collateral (as defined in the Pledge
Agreement), the enforceability of which is subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law, and the Pledged Securities (as
defined in the Pledge Agreement) have been delivered to the Collateral Agent
(together with stock powers or other appropriate instruments of transfer
executed in blank form).  The Collateral Agent has a fully perfected
first priority Lien on, and security interest in, to and under all right, title
and interest of each pledgor thereunder in such Collateral, and such security
interest is in each case prior and superior in right and interest to any other
Person.

       

      
        
          
          

        

        
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      (b)          The
Security Agreement creates in favor of the Collateral Agent, for the benefit of
the Secured Parties referred to therein, a legal, valid, continuing and
enforceable security interest in the Collateral (as defined in the Security
Agreement), the enforceability of which is subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.  The financing
statements, releases and other filings are in appropriate form and have been or
will be filed in the office of the Secretary of State of
Delaware.  The Collateral Agent has a perfected Lien on, and security
interest in, to and under all right, title and interest of the grantors
thereunder in all Collateral that may be perfected by filing, recording or
registering a financing statement or analogous document (including without
limitation the proceeds of such Collateral subject to the limitations relating
to such proceeds in the UCC) or by obtaining control, under the UCC (in effect
on the date this representation is made) in each case prior and superior in
right to any other Person, subject only to Permitted Encumbrances.

       

      (c)          When
the Intellectual Property Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office and when
financing statements, releases and other filings referenced in 5.19(c) in
appropriate form are filed with such offices, the Intellectual Property Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the applicable Loan Parties in the Intellectual
Property (as defined in the Intellectual Property Security Agreement) in which a
security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person,
subject only to Permitted Encumbrances (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof).

       

      5.20    Solvency.

       

      After
giving effect to the transactions contemplated by this Agreement, and before and
after giving effect to each Credit Extension, the Loan Parties, on a
Consolidated basis, are Solvent. No transfer of property has been or will be
made by any Loan Party and no obligation has been or will be incurred by any
Loan Party in connection with the transactions contemplated by this Agreement or
the other Loan Documents with the intent to hinder, delay, or defraud either
present or future creditors of any Loan Party.

       

      5.21    Deposit Accounts; Credit Card
Arrangements.

       

      (a)    Annexed hereto
as Schedule
5.21(a) is a list of all DDAs maintained by the Loan Parties as of the
Closing Date, which Schedule includes, with respect to each DDA (i) the name and
address of the depository; (ii) the account number(s) maintained with such
depository; (iii) a contact person at such depository, and (iv) the
identification of each Blocked Account Bank.

       

      
        
          
          

        

        
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      (b)    Annexed hereto
as Schedule
5.21(b) is a list describing all arrangements as of the Closing Date to
which any Loan Party is a party with respect to the processing and/or payment to
such Loan Party of the proceeds of any credit card charges and debit card
charges for sales made by such Loan Party.

       

      5.22    Brokers.  No
broker or finder brought about the obtaining, making or closing of the Loans or
transactions contemplated by the Loan Documents, and no Loan  Party or
Affiliate thereof has any obligation to any Person in respect of any finder’s or
brokerage fees in connection therewith.  Each Loan Party hereby
jointly and severally indemnifies each Credit Party against, and agrees that
such Person will hold each such Credit Party harmless from, any claim, demand or
liability, including reasonable attorneys’ fees, for any broker’s, finder’s or
placement fee or commission incurred by such indemnifying party or the Lead
Borrower or its Affiliates or a representative of such Person.

       

      5.23    Customer
and Trade Relations.  Except for matters which, either
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, there exists no actual or, to the knowledge of any
Loan Party, threatened, termination or cancellation of, or any material adverse
modification or change in the business relationship of any Loan Party with any
supplier material to its operations.

       

      5.24    Material
Contracts.  Schedule 5.24 sets
forth all Material Contracts to which any Loan Party is a party or is bound as
of the Closing Date.  The Loan Parties have delivered true, correct
and complete copies of such Material Contracts to the Administrative Agent on or
before the date hereof.  The Loan Parties are in compliance with the
obligations specified in Section 6.19 in respect of their Material Contracts and
have not received any notice of the intention of any other party thereto to
terminate any Material Contract.

       

      5.25    Casualty.  Neither
the businesses nor the properties of any Loan Party or any of its Subsidiaries
are affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance) that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

       

      5.26    Anti-Terrorism
Laws.

       

      (a)    General.  To
the knowledge of the Loan Parties, after reasonable inquiry, none of the Loan
Parties nor any direct or indirect investor in any Loan Party (other than the
Lenders or any direct or indirect investors in the Lenders), is in violation of
any Anti-Terrorism Law or engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

       

      (b)    Executive Order No.
13224.  To the knowledge of the Loan Parties, after reasonable
inquiry, none of the Loan Parties nor any direct or indirect investor in any
Loan Party (other than the Lenders or any direct or indirect investors in the
Lenders), or their respective agents acting or benefiting in any capacity in
connection with the transactions hereunder, is any of the following (each a
“Blocked
Person”):

       

      (i)     a
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;

       

      (ii)    a
Person owned or controlled  by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;

       

      
        
          
          

        

        
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      (iii)   a
Person or entity with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

       

      (iv)   a
Person or entity that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No. 13224;

       

      (v)    a
Person or entity that is named as a “specially designated national” on the most
current list published by the U.S. Treasury Department Office of Foreign Asset
Control at its official website or any replacement website or other replacement
official publication of such list; or

       

      (vi)   a
Person or entity who is affiliated or associated with a person or entity listed
above.

       

      (c)    To the
best knowledge of the Loan Parties, after reasonable inquiry, none of the Loan
Parties nor, to the knowledge of the Loan Parties, any of its or their agents
acting in any capacity in connection with the transactions hereunder (A)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or (B)
deals in, or otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No.
13224.

       

      ARTICLE VI

      AFFIRMATIVE
COVENANTS

       

      So long as
any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, the Loan Parties shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Subsidiary to:

       

      6.01    Financial Statements.  Deliver
to the Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent:

       

      (a)          as
soon as available, but in any event within ninety (90) days after the end of
each Fiscal Year of the Borrowers (commencing with the Fiscal Year ended on or
about December 27, 2008), a Consolidated  balance sheet of the
Borrowers and their Subsidiaries as at the end of such Fiscal Year, and the
related Consolidated statement of income or operations, Shareholders’ Equity and
cash flows for such Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all in reasonable detail and prepared
in accordance with GAAP, such Consolidated statements to be audited and
accompanied by (i) a report and unqualified opinion of a Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit, (ii) if requested or required by the
Securities Exchange Commission, an opinion of such Registered Public Accounting
Firm independently assessing the Loan Parties’ internal controls over financial
reporting in accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing
Standard No. 5, and Section 404 of Sarbanes-Oxley expressing a conclusion that
contains no statement that there is a material weakness in such internal
controls, except for such material weaknesses as to which the Required Lenders
do not object, and (iii) interim draft (subject to year end audit and similar
adjustments) annual financial statements (inclusive of subsequent periods, until
year end statements are delivered) within forty five (45) days of each Fiscal
Year end;

       

      
        
          
          

        

        
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      (b)          as
soon as available, but in any event within thirty (30) days after the end of
each of the Fiscal Months of each fiscal year of the Parent (commencing with the
Fiscal Month ended on or about June 30, 2009), a Consolidated balance sheet of
the Parent and its Subsidiaries as at the end of such Fiscal Month, and the
related Consolidated statement of income or operations, Shareholders’ Equity and
cash flows for such Fiscal Month, and for the portion of the Parent’s Fiscal
Year then ended, setting forth in each case in comparative form the figures for
(A) such period set forth in the projections delivered pursuant to Section 6.01(d) hereof, (B) the
corresponding Fiscal Month of the previous Fiscal Year and (C) the corresponding
portion of the previous fiscal year, all in reasonable detail, such Consolidated
statements to be certified by a Responsible Officer of the Lead Borrower as
fairly presenting in all material respects the financial condition, results of
operations, Shareholders’ Equity and cash flows of the Parent and its
Subsidiaries as of the end of such Fiscal Month in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of
footnotes;

       

      (c)          daily,
a Borrowing Base Certificate; such Certificate may be sent to the Administrative
Agent by facsimile transmission, provided that the original thereof is forwarded
to the Administrative Agent on the date of such transmission at its
request.  No adjustments to the Borrowing Base Certificate may be made
without support documentation and such other documentation as may be reasonably
requested by the Administrative Agent or the Lenders from time to
time;

       

      (d)          if
requested by the Administrative Agent, weekly, no later than Wednesday for the
immediately preceding fiscal week, cash flow reports in form and content
reasonably satisfactory to the Administrative Agent;

       

      (e)          as
soon as available, but in any event at least (i) thirty (30) days before the end
of each Fiscal Year of the Parent, a Business Plan in draft form (including
projected new Store openings) prepared by management of the Lead Borrower, and
(ii) fifteen (15) days before the end of each Fiscal Year of the Parent, a
Business Plan (including projected new Store openings) prepared by management of
the Lead Borrower, each in form satisfactory to the Administrative Agent, of
Consolidated balance sheets and statements of income or operations and cash
flows of the Parent and its Subsidiaries on a monthly basis for the immediately
following Fiscal Year (including the fiscal year in which the Maturity Date
occurs), and as soon as available, but in any event no more than thirty (30)
days after any significant revisions to or reforecastings of such Business Plan
with respect to such Fiscal Year.

       

      6.02    Certificates; Other
Information.  Deliver
to the Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Lenders:

       

      (a)           [reserved];

       

      (b)          concurrently
with the delivery of the financial statements referred to in Sections 6.01(a) and (b) (commencing with
the delivery of the financial statements for the Fiscal Month ended on or around
June 30, 2009), (i) a duly completed Compliance Certificate signed by a
Responsible Officer of the Lead Borrower, which shall include (A) a
certification as to the amount, if any, of rent under any Leases, and any
obligations and liabilities with respect to Taxes, that have not been timely
paid, (B) a certification as to the receipt of notice, if any, as to any
obligations or liabilities with respect to utilities and/or insurance premiums
that have not been timely paid, and (C) a certification as to the acquisition,
if any, of any additional Intellectual Property acquired since the date of the
last similar certification, and (ii) in the case of annual financial statements,
a copy of management’s discussion and analysis with respect to such financial
statements.  In the event of any change in generally accepted
accounting principles used in the preparation of such financial statements, the
Lead Borrower shall also provide a statement of reconciliation conforming such
financial statements to GAAP;

       

      
        
          
          

        

        
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      (c)          upon
the request of the Administrative Agent or its auditors, appraisers,
accountants, consultants or other representatives, copies of each Loan Party’s
most recent federal income tax returns, and any amendments thereto;

       

      (d)          promptly
following the submission to the board of directors or the audit committee
thereof, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of any Loan Party by its Registered Public Accounting
Firm in connection with the accounts or books of the Loan Parties or any
Subsidiary, or any audit of any of them, including, without limitation,
specifying any Internal Control Event;

       

      (e)          promptly
after the same are available, copies of each annual report, proxy or financial
statement or other documents, report or communication sent to the stockholders
of the Loan Parties, and copies of all annual, regular, periodic and special
reports and registration statements which any Loan Party may file or be required
to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of
1934 or with any national securities exchange, and in any case not otherwise
required to be delivered to the Administrative Agent pursuant
hereto;

       

      (f)          the
financial and collateral reports described on Schedule 6.02 hereto,
at the times set forth in such Schedule;

       

      (g)          promptly
after the furnishing thereof, copies of any notice, statement, report or other
communication furnished to any holder of debt securities of any Loan Party or
any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or
similar agreement, in each case not otherwise required to be furnished to the
Lenders pursuant to Section 6.01 or any
other clause of this Section
6.02;

       

      (h)          as
soon as available, but in any event within thirty (30) days after the end of
each Fiscal Year of any Loan Party (or upon the request of the Administrative
Agent or its auditors, appraisers, accountants, consultants or other
representatives), (i) a certificate executed by an authorized officer of the
Lead Borrower certifying the existence and adequacy of the property and casualty
insurance program carried by the Loan Parties and their Subsidiaries, and (ii) a
written summary of said program identifying the name of each insurer, the number
of each policy and expiration date of each policy, the amounts and types of each
coverage, and a list of exclusions and deductibles for each policy, and
containing such additional information as the Administrative Agent, or any
Lender through the Administrative Agent, may reasonably specify

       

      (i)          promptly,
and in any event within five (5) Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence
received from any Governmental Authority (including, without limitation, the SEC
(or comparable agency in any applicable non-U.S. jurisdiction)) concerning any
proceeding with, or investigation or possible investigation or other inquiry by
such Governmental Authority regarding financial or other operational results of
any Loan Party or any Subsidiary thereof or any other matter which, if adversely
determined, could reasonably expected to have a Material Adverse Effect;
and

       

      
        
          
          

        

        
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      (j)          at
their discretion, from time to time hereafter, with updated Business Plans;
provided in all
events, the Borrowers, not later than thirty (30) days prior to the end of each
of each Borrowers’ Fiscal Year, shall furnish the Administrative Agent with an
updated and extended Business Plan which shall go out at least through the end
of the then next Fiscal Year; provided further, in each
event, such updated and extended Business Plans shall be prepared pursuant to a
methodology and shall include such assumptions as are satisfactory to the
Administrative Agent and routinely throughout the year, the Administrative
Agent, following the receipt of any of such revised forecast which reflects
material adverse business performance, may, but shall not be under any
obligation to, revise the financial performance covenants included in Sections 7.17 and
7.18;

       

      (k)          promptly,
such additional information regarding the business affairs, financial condition
or operations of any Loan Party or any Subsidiary, or compliance with the terms
of the Loan Documents, as the Administrative Agent or any Lender may from time
to time reasonably request, including, without limitation, the income level for
each individual Store.

       

      Financial
statements and other documents required to be delivered pursuant to Sections 6.01 and
Section 6.02
shall be delivered in accordance with Section 10.02(a).  The
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Loan Parties with any such
request for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

       

      The Loan
Parties hereby acknowledge that the Administrative Agent will make available to
the Lenders and the L/C Issuer materials and/or information provided by or on
behalf of the Loan Parties hereunder.

       

      6.03    Notices.  Promptly
notify the Administrative Agent:

       

      (a)          of
the occurrence of any Default or Event of Default;

       

      (b)          of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, any default
under, or termination of, a Material Contract or with respect to Material
Indebtedness of any Loan Party or any Subsidiary thereof; (ii) any dispute,
litigation, investigation, proceeding or suspension between any Loan Party or
any Subsidiary thereof and any Governmental Authority; or (iii) the commencement
of, or any material development in, any litigation or any administrative or
arbitration proceeding affecting any Loan Party or any Subsidiary thereof,
including pursuant to any applicable Environmental Laws;

       

      (c)          of
any undischarged or unpaid judgments or decrees;

       

      (d)          of
the occurrence of any ERISA Event;

       

      (e)          of
any material change in accounting policies or financial reporting practices by
any Loan Party or any Subsidiary thereof;

       

      (f)          of
any change in any Loan Party’s chief executive officer, chief financial officer,
or chairman of the board of directors;

       

      (g)          of
the discharge by any Loan Party of its present Registered Public Accounting Firm
or any withdrawal or resignation by such Registered Public Accounting
Firm;

       

      
        
          
          

        

        
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      (h)          of
any collective bargaining agreement or other labor contract to which a Loan
Party becomes a party, or the application for the certification of a collective
bargaining agent, or any strike, lockout, slowdown or other material labor
dispute against any Loan Party or any Subsidiary pending or, to the knowledge of
any Loan Party, threatened;

       

      (i)          of
the filing of any Lien for unpaid Taxes against any Loan Party;

       

      (j)          of
any casualty or other insured damage to any material portion of the Collateral
or the commencement of any action or proceeding for the taking of any interest
in a material portion of the Collateral under power of eminent domain or by
condemnation or similar proceeding or if any material portion of the Collateral
is damaged or destroyed;

       

      (k)          of
any new Store openings and closings of any Store;

       

      (l)          of
any failure by any Loan Party to pay rent at (i) any one or more of such Loan
Party’s locations or (ii) any of such Loan Party’s locations if such failure
continues for more than three (3) days following the day on which such rent
first came due;

       

      (m)          of
the formation or acquisition of any Subsidiary;

       

      (n)          within
five (5) days of the completion of any physical count of the Borrowers’
Inventory (together with a copy of the certified or such other results as may
then be available thereof);

       

      (o)          
of the failure by Borrowers to pay trade liabilities or other expense
liabilities in accordance with their past business practices;

       

      (p)          within
five (5) days of the Borrowers becoming aware of any litigation which, if
determined adversely to the Borrowers, might have a Material Adverse Effect on
the financial condition of the Borrowers;

       

      (q)          within
five (5) days of the reduction by any of the Borrowers’ material vendors in the
amount of trade credit or terms provided by such vendor to the Borrowers on the
Closing Date;

       

      (r)          of
the engagement or employment by the Borrowers of any bankruptcy, restructuring
or “turn-around” professionals;

       

      (s)          if
any goods are at any time in the possession of a bailee;

       

      (t)          if
the Borrowers are at any time a beneficiary under a letter of credit now or
hereafter issued in favor of the Borrowers; and

       

      (u)          if
Borrowers shall at any time hold or acquire a commercial tort claim (together
with brief details thereof).

       

      Each
notice pursuant to this Section 6.03 shall be
accompanied by a statement of a Responsible Officer of the Lead Borrower setting
forth details of the occurrence referred to therein and stating what action the
Lead Borrower has taken and proposes to take with respect
thereto.  Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

       

      6.04    Payment of Obligations.  Pay
and discharge in full as the same shall become due and payable (subject to any
applicable grace period, and ordinary and customary trade terms), all its
obligations and liabilities, including (a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, (b) all
lawful claims (including, without limitation, claims for labor, materials,
supplies and claims of landlords, warehousemen, customs brokers, and carriers)
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness, except, in each case, where (i) the validity or amount thereof
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien) is being contested in good faith by appropriate proceedings
diligently conducted, (ii) such Loan Party has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (iii) such contest
effectively suspends collection of the contested obligation and enforcement of
any Lien securing such obligation, and (iv) no Lien has been filed with respect
thereto (other than any Lien being contested in good faith with respect to
labor, materials or supplies associated with any Real Estate of the Loan
Parties), and (v) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.  The
Lead Borrower will, upon request, furnish the Collateral Agent with proof
satisfactory to the Collateral Agent indicating that the Loan Parties and their
Subsidiaries have made the payments described in clause (a)
above.  Each Loan Party shall, and shall cause each of its
Subsidiaries to, pay in full as the same shall become due and payable (subject
to any applicable grace period, and ordinary and customary trade terms) all
accounts payable incident to the operations of such Person not referred to in
this Section
6.04, above.  Nothing contained herein shall be deemed to limit
the rights of the Agents with respect to determining Reserves pursuant to this
Agreement.

       

      
        
          
          

        

        
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      6.05    Preservation of Existence,
Etc. (a)
Preserve, renew and maintain in full force and effect its legal existence and
good standing under the Laws of the jurisdiction of its organization or
formation except in a transaction permitted by Section 7.04 or 7.05; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so would not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its Intellectual
Property, except to the extent such Intellectual Property is no longer used or
useful in the conduct of the business of the Loan Parties.

       

      6.06    Maintenance of
Properties.  

       

      (a)    Keep
its properties (including, but not limited to the Collateral) in such repair,
working order and condition, and shall from time to time make such repairs,
replacements, additions and improvements thereto, as are reasonably necessary
for the efficient operation of its business and shall comply at all times in all
material respects with all material franchises, licenses and leases to which it
is party so as to prevent any loss or forfeiture thereof or thereunder, except
where (i) compliance is at the time being contested in good faith by appropriate
proceedings and (ii) failure to comply with the provisions being contested has
not resulted, and which, in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.

       

      (b)    Take
all reasonable actions to possess and maintain all Intellectual Property
material to the conduct of their respective businesses and own all right, title
and interest in and to, or have a valid license for, all such Intellectual
Property.  No Loan Party nor any of its Subsidiaries shall take any
action, or fail to take any action, that could reasonably be expected to (i)
result in the invalidity, abandonment, misuse, lapse, or unenforceability of
Intellectual Property which is material to the conduct of the business of the
Loan Parties or (ii) knowingly infringe upon or misappropriate any rights of
other Persons.  Except (i) upon not less than twenty-one (21) days
prior written notice given to the Administrative Agent, and (ii) in compliance
with all other provisions of this Agreement, the Borrowers will not undertake or
commit to undertake any action such that the results of that action, if
undertaken prior to the date of this Agreement, would have been reflected on
Schedule
5.17.

       

      
        
          
          

        

        
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      (c)    Do all
things reasonably necessary in order to comply with all Environmental Laws at
any Real Property or otherwise in connection with their operations noncompliance
with which would reasonably be expected to cause a Material Adverse Effect, and
obtain all permits and other governmental authorizations for their operations
under applicable Environmental Laws other than such permits and other
authorizations the failure of which to obtain would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.

       

      6.07    Maintenance of
Insurance.  

       

      (a)    Maintain with
financially sound and reputable insurance companies reasonably acceptable to the
Administrative Agent and not Affiliates of the Loan Parties, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business
and operating in the same or similar locations or as is required by applicable
Law, of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and as are reasonably acceptable to the
Administrative Agent.

       

      (b)    Fire
and extended coverage policies maintained with respect to any Collateral shall
be endorsed or otherwise amended to include (i) a non-contributing mortgage
clause (regarding improvements to real property) and lenders’ loss payable
clause (regarding personal property), in form and substance reasonably
satisfactory to the Collateral Agent, which endorsements or amendments shall
provide that the insurer shall pay all proceeds otherwise payable to the Loan
Parties under the policies directly to the Collateral Agent, (ii) a provision to
the effect that none of the Loan Parties, Credit Parties or any other Person
shall be a co-insurer and (iii) such other provisions as the Collateral Agent
may reasonably require from time to time to protect the interests of the Credit
Parties. Commercial general liability policies shall be endorsed to name the
Collateral Agent as an additional insured. Business interruption policies shall
name the Collateral Agent as a loss payee and shall be endorsed or amended to
include (i) a provision that, from and after the Closing Date, the insurer shall
pay all proceeds otherwise payable to the Loan Parties under the policies
directly to the Collateral Agent, (ii) a provision to the effect that none of
the Loan Parties, the Administrative Agent, the Collateral Agent or any other
party shall be a co-insurer and (iii) such other provisions as the Collateral
Agent may reasonably require from time to time to protect the interests of the
Credit Parties. Each such policy referred to in this Section 6.07(b) shall
also provide that it shall not be canceled, modified or not renewed (i) by
reason of nonpayment of premium except upon not less than twenty (20) days’
prior written notice thereof by the insurer to the Collateral Agent (giving the
Collateral Agent the right to cure defaults in the payment of premiums) or (ii)
for any other reason except upon not less than twenty (20) days’ prior written
notice thereof by the insurer to the Collateral Agent. The Lead Borrower shall
deliver to the Collateral Agent, prior to the cancellation, modification or
non-renewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Collateral Agent, including an insurance binder) together with evidence
satisfactory to the Collateral Agent of payment of the premium
therefor.

       

      (c)    None
of the Credit Parties, or their agents or employees shall be liable for any loss
or damage insured by the insurance policies required to be maintained under this
Section 6.07.  Each
Loan Party shall look solely to its insurance companies or any other parties
other than the Credit Parties for the recovery of such loss or damage and such
insurance companies shall have no rights of subrogation against any Credit Party
or its agents or employees.  If, however, the insurance policies do
not provide waiver of subrogation rights against such parties, as required
above, then the Loan Parties hereby agree, to the extent permitted by law, to
waive their right of recovery, if any, against the Credit Parties and their
agents and employees.  The designation of any form, type or amount of
insurance coverage by the any Credit Party under this Section 6.07 shall in no
event be deemed a representation, warranty or advice by such Credit Party that
such insurance is adequate for the purposes of the business of the Loan Parties
or the protection of their properties.

       

      
        
          
          

        

        
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      (d)    The
Lead Borrower shall deliver to the Collateral Agent, notice of each claim in
excess of $50,000 made by the Borrowers under any policy of insurance which
covers the Collateral and will permit the Administrative Agent following the
occurrence and during the continuance of any Default or Event of Default, at the
Administrative Agent’s option in each instance (but not its obligation), to the
exclusion of the Borrowers, to conduct the adjustment of each such
claim.  The Borrowers hereby appoint the Collateral Agent as the
Borrowers’ attorney in fact to obtain, adjust, settle and cancel any insurance
described in this section and to endorse in favor of the Credit Parties any and
all drafts and other instruments with respect to such insurance.  This
appointment, being coupled with an interest, is irrevocable until this Agreement
is terminated by a written instrument executed by a duly authorized Officer of
each Credit Party.  The Credit Parties shall not be liable on account
of any exercise pursuant to said power except for any exercise in gross
negligence or willful misconduct.  The Credit Parties may apply any
proceeds of such insurance against the Obligations, otherwise such proceeds
shall be applied in the same manner as specified in Section 2.05(e).

       

      (e)    Maintain for
themselves and their Subsidiaries, a Directors and Officers insurance policy,
and a “Blanket Crime” policy including employee dishonesty, forgery or
alteration, theft, disappearance and destruction, robbery and safe burglary,
property, and computer fraud coverage with responsible companies in such amounts
as are customarily carried by business entities engaged in similar businesses
similarly situated, and will upon request by the Administrative Agent furnish
the Administrative Agent certificates evidencing renewal of each such
policy.

       

      (f)    Permit
any representatives that are designated by the Collateral Agent to inspect the
insurance policies maintained by or on behalf of the Loan Parties and to inspect
books and records related thereto and any properties covered
thereby.  The Loan Parties shall pay the reasonable fees and expenses
of any representatives retained by the Collateral Agent to conduct any such
inspection.

       

      6.08    Compliance with Laws.  Comply
in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been set
aside and maintained by the Loan Parties in accordance with GAAP; (b) such
contest effectively suspends enforcement of the contested Laws, and (c) the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect.

       

      6.09    Books and
Records; Accountants.  

       

      (a)           Maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Loan Parties
or such Subsidiary, as the case may be; and (ii) maintain such books of record
and account in material conformity with all applicable requirements of any
Governmental Authority having regulatory jurisdiction over the Loan Parties or
such Subsidiary, as the case may be.

       

      
        
          
          

        

        
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      (b)           At
all times retain a Registered Public Accounting Firm which is reasonably
satisfactory to the Administrative Agent and shall instruct such Registered
Public Accounting Firm to cooperate with, and be available to, the
Administrative Agent or its representatives to discuss the Loan Parties’
financial performance, financial condition, operating results, controls, and
such other matters, within the scope of the retention of such Registered Public
Accounting Firm, as may be raised by the Administrative Agent.  The
Lead Borrower hereby irrevocably authorizes and directs all auditors,
accountants, or other third parties to deliver to the Administrative Agent, at
the Borrowers’ expense, copies of the Borrowers’ financial statements, papers
related thereto, and other accounting records of any nature in their possession,
and to disclose to the Administrative Agent any information they may have
regarding the Collateral or the financial condition of the
Borrowers.

       

      6.10    Inspection
Rights.

       

      (a)           Permit
representatives and independent contractors of the Administrative Agent to visit
and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
Registered Public Accounting Firm, all at the expense of the Loan Parties as
often as may be reasonably desired, upon reasonable advance notice to the Lead
Borrower and in a manner which does not unreasonably interfere with the use and
conduct of the Borrowers’ business; provided, however, that when an
Event of Default has occurred and is continuing the Administrative Agent (or any
of its representatives or independent contractors) may do any of the foregoing
at the expense of the Loan Parties at any time and without advance
notice.

       

      (b)           Upon
the request of the Administrative Agent after reasonable prior notice, permit
the Administrative Agent or professionals (including investment bankers,
consultants, accountants, lawyers and appraisers) retained by the Administrative
Agent to conduct appraisals, commercial finance examinations and other
evaluations, including, without limitation, of (i) the Lead Borrower’s practices
in the computation of the Borrowing Base and (ii) the assets included in the
Borrowing Base and related financial information such as, but not limited to,
sales, gross margins, payables, accruals and reserves.  Subject to the
following sentences, the Loan Parties shall pay the fees and expenses of the
Administrative Agent or such professionals with respect to such evaluations and
appraisals.  Without limiting the foregoing, the Loan Parties
acknowledge that the Administrative Agent may, in its discretion, undertake
inventory appraisals or commercial finance examinations at the Loan Parties’
expense, as provided in Sections 6.15(c) and (d).  Notwithstanding
anything to the contrary contained herein or in Section 6.15(c) or (d), the
Administrative Agent may cause additional inventory appraisals and commercial
finance examinations to be undertaken (x) as it in its discretion deems
necessary or appropriate, at its own expense, or (y) at the expense of the Loan
Parties upon the occurrence and during the continuance of an Event of Default,
and (z) at any time required by applicable Law.

       

      6.11    Use of Proceeds.  Use
the proceeds of the Credit Extensions shall be used solely in accordance with
the Business Plan, including, (a) to finance the working capital needs of the
Borrowers, including the purchase of Inventory, in the ordinary course of
business, (b) to finance Letters of Credit needs of the Borrowers in the
ordinary course of business, (c) to finance Capital Expenditures of the
Borrowers, and (d) for general corporate purposes of the Loan Parties, in each
case to the extent expressly permitted under applicable Law and the Loan
Documents.

       

      
        
          
          

        

        
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      6.12    Additional Loan Parties.  Notify
the Administrative Agent at least ten (10) Business Days prior to the time that
any Person becomes a Subsidiary, and promptly on the date of formation, cause
any such Person (a) which is not a CFC, to (i) become a Loan Party by executing
and delivering to the Administrative Agent a Joinder Agreement or such other
document as the Administrative Agent shall deem appropriate for such purpose,
(ii) grant a Lien to the Collateral Agent on such Person’s assets to secure the
Obligations, and (iii) deliver to the Administrative Agent documents of the
types referred to in clauses (iii) and (iv) of Section 4.01(a) and, if
requested by the Administrative Agent, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to in clause (a)), and (b) if any
Equity Interests or Indebtedness of such Person are owned by or on behalf of any
Loan Party, to pledge such Equity Interests and promissory notes evidencing such
Indebtedness (except that, if such Subsidiary is a CFC, the Equity Interests of
such Subsidiary to be pledged may be limited to 65% of the outstanding voting
Equity Interests of such Subsidiary and 100% of the non-voting Equity Interests
of such Subsidiary and such time period may be extended based on local law or
practice), in each case in form, content and scope reasonably satisfactory to
the Administrative Agent.  In no event shall compliance with this
Section 6.12 waive or be
deemed a waiver or Consent to any transaction giving rise to the need to comply
with this Section
6.12 if
such transaction was not otherwise expressly permitted by this Agreement or
constitute or be deemed to constitute, with respect to any Subsidiary, an
approval of such Person as a Borrower or permit the inclusion of any acquired
assets in the computation of the Borrowing Base.

       

      6.13    Cash Management.

       

      (a)    On or
prior to the Closing Date:

       

      (i)           deliver
to the Administrative Agent copies of notifications (each, a “DDA Notification”)
substantially in the form attached hereto as Exhibit H which have
been executed on behalf of such Loan Party and delivered to each depository
institution listed on Schedule
5.21(a);

       

      (ii)           deliver
to the Administrative Agent copies of notifications (each, a “Credit Card
Notification”), substantially in the form attached hereto as Exhibit G which have
been executed on behalf of such Loan Party and delivered to such Loan Party’s
credit card clearinghouses and processors listed on Schedule 5.21(b);
and

       

      (iii)           enter
into a Blocked Account Agreement satisfactory in form and substance to the
Agents with each Blocked Account Bank (collectively, the “Blocked
Accounts”).

       

      (b)    (i)     Each Credit
Card Notification and DDA Notification shall require the ACH or wire transfer no
less frequently than daily (and whether or not there are then any outstanding
Obligations) to a Blocked Account of all payments due from credit card
processors, and (ii) the Borrowers shall cause each depository institution
listed on Schedule
5.21(a) to cause the ACH or wire transfer no less frequently than daily
(and whether or not there are then any outstanding Obligations) to a Blocked
Account of all amounts on deposit in each DDA in excess of the minimum balance
permitted in accordance with Section
6.13(c).

       

      (c)    Each
Blocked Account Agreement shall require the ACH or wire transfer no less
frequently than daily (and whether or not there are then any outstanding
Obligations) to the concentration account maintained by the Collateral Agent at
Wells Fargo Bank (the “Concentration
Account”), of all cash receipts and collections, including, without
limitation, the following:

       

      
        
          
          

        

        
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      (i)    all available
cash receipts from the sale of Inventory and other assets;

       

      (ii)           all
proceeds of collections of Accounts;

       

      (iii)          all
Net Proceeds, and all other cash payments received by a Loan Party from any
Person or from any source or on account of any sale or other transaction or
event, including, without limitation, any Prepayment Event;

       

      (iv)          the
then contents of each DDA (net of any minimum balance, not to exceed $1,500.00,
as may be required to be kept in the subject DDA by the depository institution
at which such DDA is maintained);

       

      (v)           the
then entire ledger balance of each Blocked Account (net of any minimum balance,
not to exceed $1,500.00, as may be required to be kept in the subject Blocked
Account by the Blocked Account Bank); and

       

      (vi)          the
proceeds of all credit card charges.

       

      (d)    The
Loan Parties shall provide the Collateral Agent (i) with written notice of any
Restricted Payment, in each case as otherwise permitted pursuant to Section 7.06 of this
Agreement, no less than five (5) days prior to the receipt thereof and (ii) with
written confirmation (which shall include a fed reference number, if applicable)
on the date of the receipt of any such Restricted Payment.

       

      (e)    The
Concentration Account shall at all times be under the sole dominion and control
of the Collateral Agent.  The Loan Parties hereby acknowledge and
agree that (i) without limiting the provisions of Section 2.05(d), the Loan
Parties have no right of withdrawal from the Concentration Account, (ii) the
funds on deposit in the Concentration Account shall at all times be collateral
security for all of the Obligations and (iii) the funds on deposit in the
Concentration Account shall be applied as provided in this
Agreement.  In the event that, notwithstanding the provisions of this
Section 6.13, any Loan Party
receives or otherwise has dominion and control of any such proceeds or
collections, such proceeds and collections shall be held in trust by such Loan
Party for the Collateral Agent, shall not be commingled with any of such Loan
Party’s other funds or deposited in any account of such Loan Party and shall,
not later than the Business Day after receipt thereof, be deposited into the
Concentration Account or dealt with in such other fashion as such Loan Party may
be instructed by the Collateral Agent.

       

      (f)    Upon
the request of the Administrative Agent, the Loan Parties shall cause bank
statements and/or other reports to be delivered to the Administrative Agent not
less often than monthly, accurately setting forth all amounts deposited in each
Blocked Account to ensure the proper transfer of funds as set forth
above.

       

      6.14    Information Regarding the
Collateral.

       

      (a)    Furnish to the
Administrative Agent at least thirty (30) days prior written notice of any
change in: (i) any Loan Party’s name or in any trade name used to identify
it in the conduct of its business or in the ownership of its properties;
(ii) the location of any Loan Party’s chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility);
(iii) any Loan Party’s organizational structure or jurisdiction of incorporation
or formation; or (iv) any Loan Party’s Federal Taxpayer Identification
Number or organizational identification number assigned to it by its state of
organization. The Loan Parties agree not to effect or permit any change referred
to in the preceding sentence unless all filings have been made under the UCC or
otherwise that are required in order for the Collateral Agent to continue at all
times following such change to have a valid, legal and perfected first priority
security interest in all the Collateral for its own benefit and the benefit of
the other Credit Parties.

       

      
        
          
          

        

        
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      (b)     Should any of
the information on any of the Schedules hereto become inaccurate or misleading
in any material respect as a result of changes after the Closing Date, the Lead
Borrower shall advise the Administrative Agent in writing of such revisions or
updates as may be necessary or appropriate to update or correct the
same.  From time to time as may be reasonably requested by the
Administrative Agent, and not less than one time per Fiscal Year, the Lead
Borrower shall supplement each Schedule hereto, or any representation herein or
in any other Loan Document, with respect to any matter arising after the Closing
Date that, if existing or occurring on the Closing Date, would have been
required to be set forth or described in such Schedule or as an exception to
such representation or that is necessary to correct any information in such
Schedule or representation which has been rendered inaccurate thereby (and, in
the case of any supplements to any Schedule, such Schedule shall be
appropriately marked to show the changes made
therein).  Notwithstanding the foregoing, no supplement or revision to
any Schedule or representation shall be deemed the Credit Parties’ consent to
the matters reflected in such updated Schedules or revised representations nor
permit the Loan Parties to undertake any actions otherwise prohibited hereunder
or fail to undertake any action required hereunder from the restrictions and
requirements in existence prior to the delivery of such updated Schedules or
such revision of a representation; nor shall any such supplement or revision to
any Schedule or representation be deemed the Credit Parties’ waiver of any
Default resulting from the matters disclosed therein.

       

      6.15    Physical
Inventories.

       

      (a)    Cause
not less than one (1) physical inventory of the Stores and the distribution
centers, each to be undertaken, at the expense of the Loan Parties, in each
twelve (12) month period and periodic cycle counts, in each case consistent with
past practices, conducted by such inventory takers as are satisfactory to the
Collateral Agent and following such methodology as is consistent with the
methodology used in the immediately preceding inventory or as otherwise may be
satisfactory to the Collateral Agent. The Collateral Agent, at the expense of
the Loan Parties, may participate in and/or observe each scheduled physical
count of Inventory which is undertaken on behalf of any Loan
Party.   The Lead Borrower, within fifteen (15) days following
the completion of each such inventory, shall provide the Collateral Agent with a
reconciliation of the results of such inventory (as well as of any other
physical inventory or cycle counts undertaken by a Loan Party) and shall post
such results to the Loan Parties’ stock ledgers and general ledgers, as
applicable.

       

      (b)    The
Collateral Agent, in its discretion, if any Default or Event of Default shall
have occurred and be continuing, may cause additional such inventories to be
taken as the Collateral Agent determines (each, at the expense of the Loan
Parties).

       

      (c)    Upon
the Administrative Agent’s request from time to time, the Borrowers shall permit
the Administrative Agent to obtain appraisals (in all events, at the Borrowers’
expense) conducted by such appraisers up to three (3) times per Fiscal
Year.  In its discretion, the Lender may obtain additional appraisals
at the Borrowers’ expense, as provided in Section 6.10 (b).

       

      (d)    The
Administrative Agent contemplates conducting commercial finance audits (in each
event, at the Borrowers’ expense) of the Borrowers’ books and records up to
three (3) times per Fiscal Year.  In its discretion the Lender may
undertake additional audits at the Borrowers’ expense,  as provided in
Section 6.10 (b).

       

      
        
          
          

        

        
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      (e)    In the
event that the Borrowers do not undertake “mystery shopping” (so-called) and
share the results of the same with the Administrative Agent, the Administrative
Agent from time to time (in all events, at the Borrowers’ expense) may undertake
“mystery shopping” (so-called) visits to all or any of the Borrowers’ business
premises. The Administrative Agent shall provide the Borrowers with a copy of
any non-company confidential results of such mystery shopping upon Borrowers’
written request.

       

      6.16    Environmental
Laws.

       

      (a)    Except
as would not reasonably be expected to have a Material Adverse Effect, (a)
conduct its operations and keep and maintain its Real Estate in material
compliance with all Environmental Laws; (b) obtain and renew all environmental
permits appropriate or necessary for its operations and properties; and (c)
implement any and all investigation, remediation, removal and response actions
that are appropriate or necessary to maintain the value and marketability of the
Real Estate or to otherwise comply with Environmental Laws pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
release of any Hazardous Materials on, at, in, under, above, to, from or about
any of its Real Estate, provided, however, that neither
a Loan Party nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and adequate
reserves have been set aside and are being maintained by the Loan Parties with
respect to such circumstances in accordance with GAAP or handled by its
lessors.

       

      6.17    Further
Assurances.

       

      (a)    Execute any
and all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements and other documents), that may be required under any applicable Law,
or which any Agent may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
The Loan Parties also agree to provide to the Agents, from time to time upon
request, evidence satisfactory to the Agents as to the perfection and priority
of the Liens created or intended to be created by the Security
Documents.

       

      (b)    If any
material assets are acquired by any Loan Party after the Closing Date (other
than assets constituting Collateral under the Security Documents that become
subject to the Lien of the Security Documents upon acquisition thereof), notify
the Agents thereof, and the Loan Parties will cause such assets to be subjected
to a Lien securing the Obligations and will take such actions as shall be
necessary or shall be reasonably requested by any Agent to grant and perfect
such Liens, including actions described in paragraph (a) of this Section 6.17, all at
the expense of the Loan Parties. In no event shall compliance with this Section 6.17(b) waive
or be deemed a waiver or consent to any transaction giving rise to the need to
comply with this Section 6.17(b) if
such transaction was not otherwise expressly permitted by this Agreement or
constitute or be deemed to constitute consent to the inclusion of any acquired
assets in the computation of the Borrowing Base.

       

      (c)    Use,
and cause each of the Subsidiaries to use, their commercially reasonable efforts
to obtain lease terms in any lease entered into by any Loan Party after the date
hereof not expressly prohibiting the recording in the relevant real estate
filing office of an appropriate memorandum of lease and the encumbrancing of the
leasehold interest of such Loan Party in the property that is the subject of
such lease.

       

      
        
          
          

        

        
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      (d)    Upon
the request of the Collateral Agent, cause each of its customs brokers, freight
forwarders and other carriers to deliver an agreement (including, without
limitation, a Customs Broker Agreement) to the Collateral Agent covering such
matters and in such form as the Collateral Agent may reasonably
require.

       

      (e)    Upon
the request of the Collateral Agent, use commercially reasonable efforts to
cause any of its landlords to deliver a Collateral Access Agreement to the
Collateral Agent in such form as the Collateral Agent may reasonably
require.

       

      6.18    Compliance
with Terms of Leaseholds.

       

      Except as
otherwise expressly permitted hereunder (including, without limitation, in
connection with Store closings permitted pursuant to clause (b) of the
definition of Permitted Dispositions), make all payments and otherwise perform
all obligations in respect of all Leases of real property to which any Loan
Party or any of its Subsidiaries is a party, keep such Leases in full force and
effect and not allow such Leases to lapse or be terminated or any rights to
renew such Leases to be forfeited or cancelled, notify the Administrative Agent
of any default by any party with respect to such Leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause each of
its Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, would not be reasonably likely to have
a Material Adverse Effect.  In the event that the Borrowers become
delinquent in their rent payments, the Administrative Agent may establish
additional Reserves against the Borrowing Base for the amount of any landlord
liens arising from such delinquency.

       

      6.19    Material Contracts.  Subject
to Section 7.20, perform and observe all of the terms and provisions of each
Material Contract to be performed or observed by any Loan Party or any of its
Subsidiaries, take all such action required on the part of any Loan Party or any
of its Subsidiaries to maintain each such Material Contract in full force and
effect, enforce each such Material Contract in accordance with its terms, take
all such action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent, make to each
other party to each such Material Contract such demands and requests for
information and reports or for action as any Loan Party or any of its
Subsidiaries is entitled to make under such Material Contract, and cause each of
its Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.  In addition, the Supply Agreement is
shall at all times remain, in full force and effect.

       

      6.20    ERISA.  

       

      (a)    Comply
in all material respects with the applicable provisions of ERISA or any other
applicable federal, state, provincial, local or foreign law dealing with such
matters, except where the failure to comply would reasonably be expected to
result in a claim or
liability against any Loan Party or its Affiliates of $150,000 or
less.

       

      (b)    Pay
and discharge promptly any liability imposed upon it pursuant to the provisions
of Title IV of ERISA; provided, however, that neither
any Loan Party nor any ERISA Affiliate or any other Subsidiary of the Loan
Parties shall be required to pay any such liability if (i) the amount,
applicability or validity thereof shall be diligently contested in good faith by
appropriate proceedings, and (ii) such Person shall have set aside on its books
reserves, in the opinion of the independent certified public accountants of such
Person, adequate with respect thereto.

       

      
        
          
          

        

        
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      (c)    Deliver to the
Collateral Agent, promptly, and in any event within twenty (20) days, after (i)
the occurrence of any Reportable Event in respect of a Plan, a copy of the
materials that are filed with the PBGC, (ii) any Loan Party or
any  ERISA Affiliate or an administrator of any Plan files with
participants, beneficiaries or the PBGC a notice of intent to terminate any such
Plan, a copy of any such notice, (iii) the receipt of notice by any Loan Party
or any ERISA Affiliate or an administrator of any Plan from the PBGC of the
PBGC’s intention to terminate any Plan or to appoint a trustee to administer any
such Plan, a copy of such notice, (iv) the request by any Lender of copies of
each annual report that is filed on Treasury Form 5500 with respect to any Plan,
together with certified financial statements (if any) for the Plan and any
actuarial statements on Schedule B to such Form 5500, (v) any Loan Party or
any ERISA Affiliate knows or has reason to know of any event or condition which
would reasonably be expected to constitute grounds under the provisions of
Section 4042 of ERISA for the termination of (or the appointment of a
trustee to administer) any Plan, an explanation of such event or condition, (vi)
the receipt by any Loan Party or any ERISA Affiliate of an assessment of
withdrawal liability under Section 4201 of ERISA from a Multiemployer Plan,
a copy of such assessment, (vii) any Loan Party or any ERISA Affiliate knows or
has reason to know of any event or condition which would reasonably be expected
to cause any one of them to incur a liability under Section 4062, 4063,
4064 or 4069 of ERISA or Section 412(n) or 4971 of the Code, an explanation
of such event or condition, or (viii) any Loan Party or any ERISA Affiliate
knows or has reason to know that an application is to be, or has been, made to
the Secretary of the Treasury for a waiver of the minimum funding standard under
the provisions of Section 412 of the Code, a copy of such application, and
in each case described in clauses (i) through
(iii) and (v) through (vii) together with a
statement signed by an officer setting forth details as to such Reportable
Event, notice, event or condition and the action which such Loan Party and any
ERISA Affiliate proposes to take with respect thereto.».

       

      ARTICLE VII

      NEGATIVE
COVENANTS

       

      So long as
any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, no Loan Party shall, nor shall it permit any Subsidiary to,
directly or indirectly:

       

      7.01    Liens.  Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired or sign or file or suffer to
exist under the UCC or any similar Law or statute of any jurisdiction a
financing statement that names any Loan Party or any Subsidiary thereof as
debtor; sign or suffer to exist any security agreement authorizing any Person
thereunder to file such financing statement; sell any of its property or assets
subject to an understanding or agreement (contingent or otherwise) to repurchase
such property or assets with recourse to it or any of its Subsidiaries; or
assign or otherwise transfer any accounts or other rights to receive income,
other than, as to all of the above, Permitted Encumbrances.

       

      7.02    Investments.  Have
outstanding, make, acquire or hold any Investment (or become contractually
committed to do so), directly or indirectly, or incur any liabilities (including
contingent obligations) for or in connection with any Investment, except
Permitted Investments.

       

      7.03    Indebtedness;
Disqualified Stock.

       

      
        
          
          

        

        
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      Create,
incur, assume, guarantee, suffer to exist or otherwise become or remain liable
with respect to, any Indebtedness (except Permitted Indebtedness) or issue
Disqualified Stock.

       

      7.04    Fundamental Changes.  Merge,
dissolve, liquidate, wind up, consolidate with or into another Person,
reorganize, enter into a plan of reorganization, recapitalization or reclassify
its Equity Interests (or agree to do any of the foregoing), except that, so long
as no Default or Event of Default shall have occurred and be continuing prior to
or immediately after giving effect to any action described below or would result
therefrom:

       

      (a)    any Subsidiary
may merge with any other Subsidiary or its direct Parent, provided that a Loan
Party shall be the continuing or surviving Person and if a Borrower is party to
such merger, such Borrower shall be the continuing or surviving
Person;

       

      (b)    any CFC that
is not a Loan Party may merge into any CFC that is not a Loan Party;
and

       

      (c)    effect the
Reverse Stock Split.

       

      7.05    Dispositions.  Make
any Disposition or enter into any agreement to make any Disposition, except
Permitted Dispositions.

       

      7.06    Restricted Payments.  Declare
or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, or issue or sell any Equity Interests or
accept any capital contribution, except that, so long as no Default or Event of
Default shall have occurred and be continuing prior to or immediately after
giving effect to any action described below or would result therefrom each
Subsidiary of a Loan Party may make Restricted Payments to any Borrower except
that, so long as no Default or Event of Default shall have occurred and be
continuing prior to or immediately after giving effect to any action described
below or would result therefrom: (a) each (i) Loan Party may make Restricted
Payments to any other Loan Party, and (ii) Subsidiary of a Loan Party may make
Restricted Payments to any other Loan Party; (b) the Loan Parties and each
Subsidiary may declare and make dividend payments or other distributions payable
solely in the common stock or other common Equity Interests of such Person; (c)
the Parent may declare and make dividend payments or other Distributions in
preferred Equity Interests (other than Disqualified Stock) in connection with an
exercise of the “poison pill” contained in its Organizational Documents and (d)
in connection with any stock split transaction consummated by the Parent, the
Parent may make cash payments for the retirement of any fractional Equity
Interests resulting therefrom; provided, however that such cash payments shall
not exceed $25,000 in the aggregate following the Closing Date.

       

      7.07    Prepayments
of Indebtedness.  Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness, or make any payment in violation of any subordination terms of any
Subordinated Indebtedness, except (a) as long as no Event of Default then exists
or would result therefrom, regularly scheduled or mandatory repayments,
repurchases, redemptions or defeasances of Permitted Indebtedness (but excluding
on account of any Subordinated Indebtedness) or (b) voluntary prepayments,
repurchases, redemptions or defeasances of Permitted Indebtedness (but excluding
on account of any Subordinated Indebtedness) and (c) refinancings and refundings
of such Indebtedness in compliance with Section 7.03.

       

      7.08    Change in
Nature of Business.  

       

      Engage in
any line of business different from the business conducted by the Loan Parties
and their Subsidiaries on the date hereof or any business substantially related
or incidental thereto.

       

      
        
          
          

        

        
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      7.09    Transactions with
Affiliates.  Enter
into, renew, extend or be a party to any transaction of any kind with any
Affiliate of any Loan Party, whether or not in the ordinary course of business,
other than on fair and reasonable terms that are fully disclosed to the
Administrative Agent, and that are no less favorable to the Loan Parties or such
Subsidiary than would be obtainable by the Loan Parties or such Subsidiary at
the time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that the
foregoing shall not apply to (i) Restricted Payments permitted pursuant to
Section 7.06, and (ii) the payment of director and officer compensation
(including bonuses) and other benefits (including retirement, health, stock
option and other benefit plans) and indemnification arrangements, in each case
under this clause (ii), made in the ordinary course of business, (iii)
reimbursements for executive personnel and any other such shared personnel as
provided in the Business Plan, and (iv) any transaction between or among the
Loan Parties.

       

      7.10    Burdensome Agreements.  Enter
into or permit to exist any Contractual Obligation (other than this Agreement or
any other Loan Document) that (a) limits the ability (i) of any Subsidiary to
make Restricted Payments or other distributions to any Loan Party or to
otherwise transfer property to or invest in a Loan Party, (ii) of any Subsidiary
to Guarantee the Obligations, (iii) of any Subsidiary to make or repay loans to
a Loan Party, or (iv) of the Loan Parties or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person in favor of the
Collateral Agent; provided, however, that this
clause (iv)
shall not prohibit (I) any negative pledge incurred or provided in favor of any
holder of Indebtedness permitted under clauses (c) and (d) of the definition
of Permitted Indebtedness solely to the extent any such negative pledge relates
to the property financed by or the subject of such Indebtedness; or (II) the
existence of or entry into of licenses, leases or other contracts entered into
in the ordinary course of business containing customary restrictions on the
assignment of such license, lease or contract, or (b) requires the grant of a
Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person.

       

      7.11    Use of Proceeds.  Use
the proceeds of any Credit Extension, whether directly or indirectly, and
whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
Indebtedness originally incurred for such purpose.

       

      7.12    Amendment of Material
Documents.

       

      Amend,
modify or waive any of a Loan Party’s rights under (a) its Organization
Documents, except with respect to the Reverse Stock Split or (b) any Material
Contract or Material Indebtedness (other than on account of any refinancing
thereof otherwise permitted hereunder), in each case to the extent that such
amendment, modification or waiver would be reasonably likely to have a Material
Adverse Effect.

       

      7.13    Corporate Name; Fiscal
Year.

       

      (a)          Change
the Fiscal Year of any Loan Party, or the accounting policies or reporting
practices of the Loan Parties, except as required by GAAP.

       

      (b)          (i)
Change its name as it appears in official filings in the state of its
incorporation or other organization (ii) change its chief executive office,
principal place of business, corporate offices or warehouses or locations at
which Collateral is held or stored, or the location of its records concerning
the Collateral, (iii) change the type of entity that it is, (iv) change its
organization identification number, if any, issued by its state of incorporation
or other organization, or (e) change its state of incorporation or organization,
in each case without at least thirty (30) days prior written notice to the
Collateral Agent and after the Collateral Agent’s written acknowledgment, which
acknowledgment shall not be unreasonably withheld or delayed, that any
reasonable action requested by the Collateral Agent in connection therewith,
including to continue the perfection of any Liens in favor of the Collateral
Agent, in any Collateral, has been completed or taken, and provided that any
such new location shall be in the continental United States.

       

      
        
          
          

        

        
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      7.14    Deposit Accounts; Blocked Accounts;
Credit Card Processors.

       

      (a)           Open
new DDAs or Blocked Accounts unless the Loan Parties shall have delivered to the
Collateral Agent appropriate DDA Notifications or Blocked Account Agreements
consistent with the provisions of Section 6.13 and otherwise
satisfactory to the Collateral Agent.

       

      (b)           Enter
into new agreements with credit card processors other than the ones expressly
contemplated herein or in Section 6.13 hereof unless
the Loan Parties shall have delivered to the Collateral Agent appropriate Credit
Card Notifications consistent with the provisions of Section 6.13 and otherwise
satisfactory to the Collateral Agent.

       

      7.15    Consignments.  Consign
any Inventory or sell any Inventory on bill and hold, sale or return, sale on
approval, or other conditional terms of sale (it being understood that customer
return and exchange policies relating to the sale of Inventory in the ordinary
course of business shall not be prohibited by this Section 7.15).

       

      7.16    [Reserved]

       

      7.17    Minimum Availability.  Permit
Excess Availability at any time to be less than an amount equal to 7.5% of the
then applicable Loan Cap (the “Minimum Availability
Block”).

       

      7.18    Capital
Expenditures.  Make Capital Expenditures in excess of (a) the
amount set forth on Schedule 7.18  for the Fiscal Year ending on or
about December 31, 2009; (b) 110% of the amount set forth for Capital
Expenditures in the Business Plan for the Fiscal Year ending on or about
December 31, 2010; (c) 110% of the amount set forth for Capital Expenditures in
the Business Plan for the Fiscal Year ending on or about December 31, 2011; and
(d) 110% of the amount set forth for Capital Expenditures in the Business Plan,
pro-rated through the Maturity Date, for the Fiscal Year ending on or about
December 31, 2012.

       

      7.19    Locations.

       

      (a)           Except
(i) to accomplish sales of Inventory in the ordinary course of business or (ii)
the sale of obsolete equipment or fixtures (replaced by equipment or fixtures of
equal or greater value) or (iii) to utilize such of the Collateral as is removed
from such locations in the ordinary course of business (such as motor vehicles),
remove any Collateral from the chief executive office, the Stores listed on
Schedule
5.08(b), any Temporary Halloween Stores and temporary off site
storage.

       

      (b)           Commit
to, or open any location at which the Borrowers maintain, offers for sale, or
stores any of the Collateral, except those set forth in, or contemplated by, the
Business Plan, or any Temporary Halloween Stores.

       

      7.20    Subordinated
Debt Payments.  Make payments of principal or interest on the
Highbridge Note except as permitted by the Subordinated Provisions relating
thereto; provided that
notwithstanding such Subordinated Provisions, no payment of principal at the
scheduled maturity date of the Highbridge Note shall be made unless (x) such
payments are made entirely, on a dollar for dollar basis, with proceeds from (1)
new Subordinated Indebtedness on terms and conditions acceptable to the
Administrative Agent and subordinated on terms acceptable to the Administrative
Agent, (2) the issuance by the Parent of additional shares of common stock or
(3) the issuance by Parent of other Equity Interests (including Disqualified
Stock) so long as such Equity Interests are on terms and conditions acceptable
to the Administrative Agent, and if requested and applicable, subordinated on
terms acceptable to Administrative Agent or (y) beginning sixty (60) days prior
to the date of such payment and ending on the date of such payment (but prior to
giving effect thereto), the Loan Parties (1) shall have an average daily Excess
Availability greater than or equal to $4,500,000, and (2) shall not at any time
have Excess Availability less than $4,500,000 for any three (3) consecutive
Business Days during such period and at all times beginning on the date of such
payment (after giving effect thereto) and ending sixty (60) days following the
date of such payment the Loan Parties shall have Excess Availability greater
than or equal to $3,000,000 (and at least five (5) Business Days prior to such
date, Borrower shall provide the Administrative Agent with a written
certification that provides for projected Excess Availability during the
following sixty (60) days); provided further,
that in either subclause (x) or (y) of this Section 7.20, no
Event of Default shall have occurred and be continuing or could be caused by
such respective payment.

       

      
        
          
          

        

        
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      ARTICLE VIII

      EVENTS
OF DEFAULT AND REMEDIES

       

      8.01    Events of Default.  Any
of the following shall constitute an Event of Default:

       

      (a)          Non-Payment.  The
Borrowers or any other Loan Party fails to pay when and as required to be paid
herein:

       

      (i)           any
amount of principal of or any interest on any Loan; or

       

      (ii)           any
L/C Obligation, deposit any funds as Cash Collateral in respect of L/C
Obligations, any interest on any L/C Obligation, any fee due hereunder, or any
other amount payable hereunder or under any other Loan Document; or

       

      (b)          Specific
Covenants.  (i) Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Sections 5.01, 6.01, 6.02(b), 6.02(f), 6.02(i), 6.03, 6.04, 6.05, 6.06, 6.07, 6.10, 6.11, 6.12, 6.13, or 6.14(a) or
Article VII of this
Agreement; or (ii) any of the Loan Parties fails to perform or observe any term,
covenant or agreement contained in Sections 4.04, 4.10 and 5.01 of the Security
Agreement to which it is a party; or

       

      (c)          Other
Defaults.  Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for ten (10) consecutive calendar days after the occurrence thereof;
or

       

      (d)          Material
Impairment.  Any material impairment of the value or priority
of the Credit Parties’ security interests in the Collateral; or

       

      (e)          Material Adverse
Effect.   The occurrence of any event or series of events
individually or in the aggregate which, causes a Material Adverse Effect;
or

       

      (f)          Representations and
Warranties.  Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of any Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith (including, without limitation,
any Borrowing Base Certificate) shall be incorrect or misleading in any material
respect when made or deemed made; or

       

      (g)          Cross-Default.  Any
Loan Party or any Subsidiary thereof (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any (x) Material Indebtedness, or (y) other
Indebtedness, to the extent that such failure would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect (other than
Indebtedness hereunder), including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement, or (B) fails to observe or perform any other agreement or condition
relating to any such Material Indebtedness (other than Indebtedness hereunder)
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Material Indebtedness or
the beneficiary or beneficiaries of any Guarantee thereof (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded;
or

       

      
        
          
          

        

        
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      (h)          Default Under Other
Agreements.  The occurrence of any breach or default under any
agreement between the Credit Parties and Loan Party or instrument or paper given
to the Credit Parties by such Loan Party, whether such agreement, instrument, or
paper now exists or hereafter arises, continuing beyond any applicable cure or
grace period thereunder, (notwithstanding that the Credit Parties may not have
exercised its rights upon default under any such other agreement, instrument or
paper).

       

      (i)          Insolvency Proceedings,
Etc.   Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Laws, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or a proceeding shall be commenced or a petition filed,
without the application or consent of such Person, seeking or requesting the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed and the appointment continues
undischarged, undismissed or unstayed for forty-five (45) calendar days (provided, however, that, during
the pendency of such period, the Credit Parties shall be relieved of their
obligation to extend credit hereunder) or an order or decree approving or
ordering any of the foregoing shall be entered; or any proceeding under any
Debtor Relief Laws relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for forty-five (45) calendar days (provided, however, that, during
the pendency of such period, the Credit Parties shall be relieved of their
obligation to extend credit hereunder), or an order for relief is entered in any
such proceeding; or

       

      (j)          Inability to Pay Debts;
Attachment.  (i) Any Loan Party or any Subsidiary thereof
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due in the ordinary course of business, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and not
dismissed or bonded over within thirty (30) days; or

       

      (k)          Judgments; Restraint of
Business.  There is entered against any Loan Party or any
Subsidiary thereof (i) one or more judgments or orders for the payment of money
in an aggregate amount (as to all such judgments and orders) exceeding $250,000
(to the extent not covered by independent third-party insurance as to which the
insurer is rated at least “A” by A.M. Best Company, has been notified of the
potential claim and does not dispute coverage), or (ii) any one or more
non-monetary judgments that have, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of ten (10) consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, is not in effect; or

       

      
        
          
          

        

        
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      (l)          Liens.  (i)
A notice of Lien, levy, or assessment is filed of record with respect to any of
any Borrower’s properties or assets by the United States Government, or any
department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, or any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien, whether choate or
otherwise, upon any of any Borrower’s properties or assets and the same is not
paid on the payment date thereof; or (ii) any Lien (other than a Permitted
Encumbrance) is placed on any of the Collateral by any Person and such lien
continues unreleased for a period of thirty (30) consecutive days;
or

       

      (m)          ERISA.  (i)
An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or would reasonably be expected to result in liability of any Loan
Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or
the PBGC in an aggregate amount in excess of $250,000 or which would reasonably
likely result in a Material Adverse Effect, or (ii) a Loan Party or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $50,000 or which would reasonably likely result in a Material Adverse
Effect; or

       

      (n)          Invalidity of Loan
Documents.  (i)  Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any provision of any Loan Document, or
purports to revoke, terminate or rescind any provision of any Loan Document or
seeks to avoid, limit or otherwise adversely affect any Lien purported to be
created under any Security Document; or (ii) any Lien purported to be created
under any Security Document shall cease to be, or shall be asserted by any Loan
Party or any other Person not to be, a valid and perfected Lien on any
Collateral, with the priority required by the applicable Security Document;
or

       

      (o)          Change of
Control.  There occurs any Change of Control; or

       

      (p)          Cessation of
Business.  Except as otherwise expressly permitted hereunder,
any Loan Party shall take any action to suspend the operation of its business in
the ordinary course, liquidate all or a material portion of its assets or Store
locations, or employ an agent or other third party to conduct a program of
closings, liquidations or “Going-Out-Of-Business” sales of any material portion
of its business; or

       

      (q)          Loss of
Collateral.  There occurs any (i) uninsured loss, theft, damage
or destruction of or to any material portion of the Collateral, or (i) sale
(other than sales in the ordinary course of business or otherwise permitted
hereunder) of any material portion of the Collateral; or

       

      
        
          
          

        

        
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      (r)          Breach of Contractual
Obligation.  Any Loan Party or any Subsidiary thereof fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Material Contract or fails
to observe or perform any other material agreement or condition relating to any
such Material Contract or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause the counterparty to such Material Contract to
terminate such Material Contract in accordance with its terms; or

       

      (s)          Indictment.  The
indictment or institution of any legal process or proceeding against, any Loan
Party, under any federal, state, municipal, and other civil or criminal statute,
rule, regulation, order, or other requirement having the force of law where the
relief, penalties, or remedies sought or available include the forfeiture of any
property of such Loan Party and/or the imposition of any stay or other order,
the effect of which could be to restrain in any material way the conduct by such
Loan Party of its business in the ordinary course; or

       

      (t)          Guaranty.  The
termination or attempted termination of any Facility Guaranty; or

       

      (u)          Subordination; Subordinated
Indebtedness.  (i)  The subordination provisions of
the documents evidencing or governing any Subordinated Indebtedness (the “Subordinated
Provisions”) shall, in whole or in part, terminate, cease to be effective
or cease to be legally valid, binding and enforceable against any holder of the
applicable Subordinated Indebtedness; (ii) any Borrower or any other Loan Party
shall, directly or indirectly, (A) make any payment on account of any
Subordinated Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent that such
payment is permitted by each of the (x) terms of the Subordinated Provisions
applicable to such Subordinated Indebtedness and (y) as applicable, Section 7.20, or (B) disavow
or contest in any manner (x) the effectiveness, validity or enforceability of
any of the Subordination Provisions, (y) that the Subordination Provisions exist
for the benefit of the Credit Parties, or (z) that all payments of principal of
or premium and interest on the applicable Subordinated Indebtedness, or realized
from the liquidation of any property of any Loan Party, shall be subject to any
of the Subordination Provisions; (iii) the occurrence and continuance of any
default or event of default in respect of any of the Seller Note, the Term Note,
the Highbridge Note or any additional Subordinated Indebtedness; or (iv) the
occurrence of any breach of any Subordination Agreement.

       

      8.02    Remedies Upon Event of
Default.  If
any Event of Default occurs and is continuing, the Administrative Agent may, or,
at the request of the Required Lenders shall, take any or all of the following
actions:

       

      (a)          declare
the Commitments of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such
Commitments and obligation shall be terminated;

       

      (b)          declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Loan Parties;

       

      
        
          
          

        

        
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      (c)   require that the Loan
Parties Cash Collateralize the L/C Obligations; and

       

      (d)          whether
or not the maturity of the Obligations shall have been accelerated pursuant
hereto, proceed to protect, enforce and exercise all rights and remedies of the
Credit Parties under this Agreement, any of the other Loan Documents or
applicable Law,
including, but not limited to, by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations are evidenced, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Credit
Parties;

       

      provided, however, that upon
the entry of an order for relief with respect to any Loan Party or any
Subsidiary thereof under the Bankruptcy Code, the obligation of each Lender to
make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions
shall automatically terminate, the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, and the obligation of the Loan Parties to Cash Collateralize
the L/C Obligations as aforesaid shall automatically become effective, in each
case without further act of the Administrative Agent or any Lender.

       

      No remedy
herein is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of Law.

       

      8.03    Application of Funds.  After
the exercise of remedies provided for in Section 8.02 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

       

      First, to payment of
that portion of the Obligations (excluding the Other Liabilities) constituting
fees, indemnities, Credit Party Expenses and other amounts (including fees,
charges and disbursements of counsel to the Administrative Agent and the
Collateral Agent and amounts payable under Article III) due and payable
to the Administrative Agent and the Collateral Agent, each in its capacity as
such;

       

      Second, to payment of
that portion of the Obligations (excluding the Other Liabilities) constituting
indemnities, Credit Party Expenses, and other amounts (other than principal,
interest and fees) payable to the Lenders and the L/C Issuer (including fees,
charges and disbursements of counsel to the respective Lenders and the L/C
Issuer and amounts payable under Article III), ratably among
them in proportion to the amounts described in this clause Second payable to
them;

       

      Third, to the extent
that Swing Line Loans have not been refinanced by a Committed Loan, payment to
the Swing Line Lender of that portion of the Obligations constituting accrued
and unpaid interest on the Swing Line Loans;

       

      Fourth, to payment of
that portion of the Obligations constituting accrued and unpaid interest on the
Committed Loans, L/C Borrowings and other Obligations, and fees (including
Letter of Credit Fees but excluding any Early Termination Fees), ratably among
the Lenders and the L/C Issuer in proportion to the respective amounts described
in this clause Fourth payable to
them;

       

      
        
          
          

        

        
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      Fifth, to the extent
that Swing Line Loans have not been refinanced by a Committed Loan, to payment
to the Swing Line Lender of that portion of the Obligations constituting unpaid
principal of the Swing Line Loans;

       

      Sixth, to payment of
that portion of the Obligations constituting unpaid principal of the Committed
Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuer in
proportion to the respective amounts described in this clause Sixth held by
them;

       

      Seventh, to the
Administrative Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit in proportion to the respective amounts described in this
clause 

       

      Seventh held by
them;

       

      Eighth, to payment of
all other Obligations (including without limitation the cash collateralization
of unliquidated indemnification obligations as provided in Section 10.04, but excluding
any Other Liabilities), ratably among the Credit Parties in proportion to the
respective amounts described in this clause Eighth held by
them;

       

      Ninth, to payment of
that portion of the Obligations arising from Cash Management Services to the
extent secured under the Security Documents, ratably among the Credit Parties in
proportion to the respective amounts described in this clause Ninth held by
them;

       

      Tenth, to payment of
all other Obligations arising from Bank Products to the extent secured under the
Security Documents, ratably among the Credit Parties in proportion to the
respective amounts described in this clause Tenth held by them;
and

       

      Last, the balance, if
any, after all of the Obligations have been indefeasibly paid in full, to the
Loan Parties or as otherwise required by Law.

       

      Subject to
Section 2.03(c), amounts used
to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant
to clause Seventh above shall
be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit as Cash Collateral after all
Letters of Credit have either been fully drawn or expired, such remaining amount
shall be applied to the other Obligations, if any, in the order set forth
above.

       

      ARTICLE IX

      ADMINISTRATIVE
AGENT

       

      9.01    Appointment and
Authority.

       

      (a)          Each
of the Lenders and the L/C Issuer hereby irrevocably appoints Wells Fargo Retail
Finance, LLC to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.  Except as provided
in Section 9.06, the provisions of this Article are solely for the benefit of
the Administrative Agent, the Lenders and the L/C Issuer, and no Loan Party or
any Subsidiary thereof shall have rights as a third party beneficiary of any of
such provisions.

       

      (b)          Each
of the Lenders (in its capacities as a Lender), Swing Line Lender and the L/C
Issuer hereby irrevocably appoints Wells Fargo Retail Finance, LLC as Collateral
Agent and authorizes the Collateral Agent to act as the agent of such Lender and
the L/C Issuer for purposes of acquiring, holding and enforcing any and all
Liens on Collateral granted by any of the Loan Parties to secure any of the
Obligations, together with such powers and discretion as are reasonably
incidental thereto.  In this connection, the Collateral Agent, as
“collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed
by the Collateral Agent pursuant to Section 9.05 for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof) granted
under the Collateral Documents, or for exercising any rights and remedies
thereunder at the direction of the Collateral Agent), shall be entitled to the
benefits of all provisions of this Article IX and Article X (including Section 10.04(c)), as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents, as if set forth in full herein with respect
thereto.

       

      
        
          
          

        

        
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      9.02    Rights as a Lender.  The
Persons serving as the Agents hereunder shall have the same rights and powers in
their capacity as a Lender as any other Lender and may exercise the same as
though they were not the Administrative Agent or the Collateral Agent and the
term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the Person serving as the Administrative
Agent or the Collateral Agent hereunder in its individual
capacity.  Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Loan Parties or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent or the Collateral Agent hereunder and without any duty to
account therefor to the Lenders.

       

      9.03    Exculpatory Provisions.  The
Agents shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents.  Without limiting the
generality of the foregoing, the Agents:

       

      (a)          shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

       

      (b)          shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent or the Collateral
Agent, as applicable, is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that no
Agent shall be required to take any action that, in its respective opinion or
the opinion of its counsel, may expose such Agent to liability or that is
contrary to any Loan Document or applicable Law; and

       

      (c)          shall
not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Loan Parties or any of its Affiliates that is
communicated to or obtained by the Person serving as the Administrative Agent,
the Collateral Agent or any of its Affiliates in any capacity.

       

      No Agent
shall be liable for any action taken or not taken by it (i) with the Consent or
at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary, or as such Agent shall believe in good faith
shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the
absence of its own gross negligence or willful misconduct as determined by a
final and non-appealable judgment of a court of competent
jurisdiction.

      The Agents
shall not be deemed to have knowledge of any Default unless and until notice
describing such Default is given to such Agent by the Loan Parties, a Lender or
the L/C Issuer.  In the event that the Agents obtains such actual
knowledge or receives such a notice, the Agents shall give prompt notice thereof
to each of the other Credit Parties.  Upon the occurrence and during
the continuance of an Event of Default, the Agents shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders.  Unless and until the Agents shall have received
such direction, the Agents may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to any such Default or Event of
Default as it shall deem advisable in the best interest of the Credit
Parties.  In no event shall the Agents be required to comply with any
such directions to the extent that any Agent believes that its compliance with
such directions would be unlawful.

      The Agents
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or the creation, perfection or priority
of any Lien purported to be created by the Security Documents, (v) the value or
the sufficiency of any Collateral, or (vi) the satisfaction of any condition set
forth in Article
IV or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Agents.

       

      
        
          
          

        

        
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      9.04    Reliance by
Agents.

       

      Each Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including, but not limited to, any electronic message,
Internet or intranet website posting or other distribution) believed by it to be
genuine and to have been signed, sent or otherwise authenticated by the proper
Person.  Each Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and
shall not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received written notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit.  Each Agent may consult with legal counsel
(who may be counsel for any Loan Party), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

       

      9.05    Delegation of Duties.  Each
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by such Agent.  Each Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties.  The exculpatory provisions
of this Article shall apply to any such sub-agent and to the Related Parties of
the Agents and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as such Agent.

       

      9.06    Resignation of Agents.  Either
Agent may at any time give written notice of its resignation to the Lenders, the
L/C Issuer and the Lead Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Lead Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United
States.  If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent gives notice of its resignation, then the retiring
Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent or Collateral Agent, as applicable, meeting the
qualifications set forth above; provided that if the
Administrative Agent or the Collateral Agent shall notify the Lead Borrower and
the Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any Collateral held by the Collateral Agent on behalf of the Lenders or
the L/C Issuer under any of the Loan Documents, the retiring Collateral Agent
shall continue to hold such collateral security until such time as a successor
Collateral Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and the L/C Issuer directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this Section.  Upon the acceptance of a
successor’s appointment as Administrative Agent or Collateral Agent, as
applicable, hereunder, such successor shall succeed to and become vested with
all of the rights, powers, privileges and duties of the retiring (or retired)
Agent, and the retiring Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section).  The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the Lead
Borrower and such successor.  After the retiring Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as Administrative Agent
or Collateral Agent hereunder.

       

      
        
          
          

        

        
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      Any
resignation by Wells Fargo Retail Finance, LLC as Administrative Agent pursuant
to this Section shall also constitute the resignation of Wells Fargo Retail
Finance LLC, as Swing Line Lender and Wells Fargo Bank as L/C
Issuer.  Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring L/C
Issuer or Swing Line Lender, (b) the retiring L/C Issuer shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents, and (c) the successor L/C Issuer or Swing Line Lender shall issue
letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letters of Credit.

       

      9.07    Non-Reliance on Administrative Agent
and Other Lenders.  Each
Lender and the L/C Issuer acknowledges that it has, independently and without
reliance upon the Agents or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each
Lender and the L/C Issuer also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or
thereunder.  Except as provided in Section 9.12, the
Agents shall not have any duty or responsibility to provide any Credit Party
with any other credit or other information concerning the affairs, financial
condition or business of any Loan Party that may come into the possession of the
Agents.

       

      
        
          
          

        

        
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      9.08    Administrative Agent May File Proofs
of Claim.  In
case of the pendency of any proceeding under any Debtor Relief Laws or any other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Loan Parties) shall be entitled and empowered, by intervention in such
proceeding or otherwise

       

      (a)          to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders, the L/C Issuer, the
Administrative Agent and the other Credit Parties (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuer, the Administrative Agent, such Credit Parties and their
respective agents and counsel and all other amounts due the Lenders, the L/C
Issuer the Administrative Agent and such Credit Parties under Sections 2.03(i), 2.03(j), 2.09 and 10.04) allowed in
such judicial proceeding; and

       

      (b)          to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

       

      and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender and the L/C Issuer to make such payments to the Administrative Agent and,
if the Administrative Agent shall consent to the making of such payments
directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other
amounts due the Administrative Agent under Sections 2.09 and 10.04.

       

      Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the L/C Issuer or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the L/C Issuer in any such proceeding.

       

      9.09    Collateral and Guaranty
Matters.  The
Credit Parties irrevocably authorize the Agents, at their option and in their
discretion,

       

      (a)    to release any
Lien on any property granted to or held by the Collateral Agent under any Loan
Document (i) upon termination of the Aggregate Commitments and payment in full
of all Obligations (other than contingent indemnification obligations for which
no claim has been asserted) and the expiration or termination of all Letters of
Credit (or upon the Cash Collateralization of all Letters of Credit in the
manner set forth in Section 2.03(g)), (ii) that is sold or to be sold as part of
or in connection with any sale permitted hereunder or under any other Loan
Document, or (iii) if approved, authorized or ratified in writing by the
Required Lenders in accordance with Section 10.01;

       

      
        
          
          

        

        
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      (b)          to
subordinate any Lien on any property granted to or held by the Collateral Agent
under any Loan Document to the holder of any Lien on such property that is
permitted by the definition of Permitted Encumbrances; and

       

      (c)          to
release any Guarantor from its obligations under the Facility Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

       

      Upon
request by any Agent at any time, the Required Lenders will confirm in writing
such Agent’s authority to release or subordinate its interest in particular
types or items of property, or to release any Guarantor from its obligations
under the Facility Guaranty pursuant to this Section
9.09.  In each case as specified in this Section 9.09, the
Agents will, at the Loan Parties’ expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Security Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Facility
Guaranty, in each case in accordance with the terms of the Loan Documents and
this Section
9.09.

       

      9.10    Notice of
Transfer.

       

      The Agents
may deem and treat a Lender party to this Agreement as the owner of such
Lender’s portion of the Obligations for all purposes, unless and until, and
except to the extent, an Assignment and Acceptance shall have become effective
as set forth in Section 10.06.

       

      9.11    Reports and Financial
Statements.

       

      By signing
this Agreement, each Lender:

       

      (a)          agrees
to furnish the Administrative Agent on the first day of each month with a
summary of all Other Liabilities due or to become due to such Lender. In
connection with any distributions to be made hereunder, the Administrative Agent
shall be entitled to assume that no amounts are due to any Lender on account of
Other Liabilities unless the Administrative Agent has received written notice
thereof from such Lender;

       

      (b)          is
deemed to have requested that the Administrative Agent furnish such Lender,
promptly after they become available, copies of all financial statements
required to be delivered by the Lead Borrower hereunder and all commercial
finance examinations and appraisals of the Collateral received by the Agents
(collectively, the “Reports”);

       

      (c)          expressly
agrees and acknowledges that the Administrative Agent makes no representation or
warranty as to the accuracy of the Reports, and shall not be liable for any
information contained in any Report;

       

      (d)          expressly
agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the Agents or any other party performing any audit or
examination will inspect only specific information regarding the Loan Parties
and will rely significantly upon the Loan Parties' books and records, as well as
on representations of the Loan Parties' personnel;

       

      (e)          agrees
to keep all Reports confidential in accordance with the provisions of Section 10.07 hereof;
and

       

      (f)          without
limiting the generality of any other indemnification provision contained in this
Agreement, agrees: (i) to hold the Agents and any such other Lender preparing a
Report harmless from any action the indemnifying Lender may take or conclusion
the indemnifying Lender may reach or draw from any Report in connection with any
Credit Extensions that the indemnifying Lender has made or may make to the
Borrowers, or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, a Loan or Loans; and (ii) to pay and protect, and
indemnify, defend, and hold the Agents and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including attorney costs) incurred by the
Agents and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.

       

      
        
          
          

        

        
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      9.12    Agency for
Perfection.

       

      Each
Lender hereby appoints each other Lender as agent for the purpose of perfecting
Liens for the benefit of the Agents and the Lenders, in assets which, in
accordance with Article 9 of the UCC or any other applicable Law of the United
States can be perfected only by possession.  Should any Lender (other
than the Agents) obtain possession of any such Collateral, such Lender shall
notify the Agents thereof, and, promptly upon the Collateral Agent's request
therefor shall deliver such Collateral to the Collateral Agent or otherwise deal
with such Collateral in accordance with the Collateral Agent's
instructions.

       

      9.13    Indemnification of Agents.  The
Lenders agree to indemnify the Agents (to the extent not reimbursed by the Loan
Parties and without limiting the obligations of Loan Parties hereunder), ratably
according to their Applicable Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted to be taken by any Agent in connection therewith; provided, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent’s gross negligence or willful misconduct as determined
by a final and nonappealable judgment of a court of competent
jurisdiction.

       

      9.14    Relation
among Lenders.  The Lenders are not partners or co-venturers,
and no Lender shall be liable for the acts or omissions of, or (except as
otherwise set forth herein in case of the Agents) authorized to act for, any
other Lender.

       

      9.15    Defaulting
Lender.  

       

      (a)          If
for any reason any Lender shall fail or refuse to abide by its obligations under
this Agreement, including without limitation its obligation to make available to
Administrative Agent its Applicable Percentage of any Loans, expenses or setoff
or purchase its Applicable Percentage of a participation interest in the Swing
Line Loans or L/C Borrowings and such failure is not cured within two (2) days
of receipt from the Administrative Agent of written notice thereof, then, in
addition to the rights and remedies that may be available to the other Credit
Parties, the Loan Parties or any other party at law or in equity, and not at
limitation thereof, (i) such Defaulting Lender’s right to participate in the
administration of, or decision-making rights related to, the Obligations, this
Agreement or the other Loan Documents shall be suspended during the pendency of
such failure or refusal, and (ii) a Defaulting Lender shall be deemed to have
assigned any and all payments due to it from the Loan Parties, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining
non-Defaulting Lenders for application to, and reduction of, their proportionate
shares of all outstanding Obligations until, as a result of application of such
assigned payments the Lenders’ respective Applicable Percentages of all
outstanding Obligations shall have returned to those in effect immediately prior
to such delinquency and without giving effect to the nonpayment causing such
delinquency.  The Defaulting Lender’s decision-making and
participation rights and rights to payments as set forth in clauses (i) and (ii) hereinabove
shall be restored only upon the payment by the Defaulting Lender of its
Applicable Percentage of any Obligations, any participation obligation, or
expenses as to which it is delinquent, together with interest thereon at the
Default Rate from the date when originally due until the date upon which any
such amounts are actually paid.

       

      
        
          
          

        

        
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      (b)          The
non-Defaulting Lenders shall also have the right, but not the obligation, in
their respective, sole and absolute discretion, to cause the termination and
assignment, without any further action by the Defaulting Lender for no cash
consideration (pro rata, based on the
respective Commitments of those Lenders electing to exercise such right), of the
Defaulting Lender’s Commitment to fund future Loans.  Upon any such
purchase of the Applicable Percentage of any Defaulting Lender, the Defaulting
Lender’s share in future Credit Extensions and its rights under the Loan
Documents with respect thereto shall terminate on the date of purchase, and the
Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest, including, if so requested, an Assignment
and Acceptance.

       

      (c)          Each
Defaulting Lender shall indemnify the Administrative Agent and each
non-Defaulting Lender from and against any and all loss, damage or expenses,
including but not limited to reasonable attorneys’ fees and funds advanced by
the Administrative Agent or by any non-Defaulting Lender, on account of a
Defaulting Lender’s failure to timely fund its Applicable Percentage of a Loan
or to otherwise perform its obligations under the Loan Documents.

       

      ARTICLE X

      MISCELLANEOUS

       

      10.01    Amendments, Etc.  No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no Consent to any departure by any Loan Party therefrom, shall be
effective unless in writing signed by the Administrative Agent, with the Consent
of the Required Lenders, and the Lead Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or Consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

       

      (a)          extend
or, increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the
written Consent of such Lender;

       

      (b)          postpone
any date fixed by this Agreement or any other Loan Document for (i) any payment
or mandatory prepayment of principal, interest, fees or other amounts due to the
Lenders (or any of them) hereunder or under any of the other Loan Documents
without the written Consent of each Lender entitled to such payment, or (ii) any
scheduled or mandatory reduction of the Aggregate Commitments hereunder or under
any other Loan Document without the written Consent of each Lender;

       

      (c)          reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iv) of the
second proviso to this Section 10.01) any fees or
other amounts payable hereunder or under any other Loan Document, without the
written Consent of each Lender entitled to such amount; provided, however, that only
the Consent of the Required Lenders shall be necessary (i) to amend the
definition of “Default Rate” or to waive any obligation of the Borrowers to pay
interest or Letter of Credit Fees at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein);

       

      
        
          
          

        

        
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      (d)          change
Section 2.13 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without the
written Consent of each Lender;

       

      (e)          change
any provision of this Section or the definition of “Required Lenders”, or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written Consent of
each Lender;

       

      (f)          except
as expressly permitted hereunder or under any other Loan Document, release, or
limit the liability of, any Loan Party without the written Consent of each
Lender;

       

      (g)          except
for Permitted Dispositions, release all or substantially all of the Collateral
from the Liens of the Security Documents without the written Consent of each
Lender;

       

      (h)          increase
the Aggregate Commitments without the written Consent of each
Lender;

       

      (i)          change
the definition of the term “Borrowing Base” or any component definition thereof
if as a result thereof the amounts available to be borrowed by the Borrowers
would be increased without the written Consent of each Lender; provided that the foregoing
shall not limit the discretion of the Administrative Agent to change, establish
or eliminate any Reserves; and

       

      (j)          except
as expressly permitted herein or in any other Loan Document, subordinate the
Obligations hereunder or the Liens granted hereunder or under the other Loan
Documents, to any other Indebtedness or Lien, as the case may be without the
written Consent of each Lender;

       

      and, provided further, that (i) no
amendment, waiver or Consent shall, unless in writing and signed by the L/C
Issuer in addition to the Lenders required above, affect the rights or duties of
the L/C Issuer under this Agreement or any Issuer Document relating to any
Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or
Consent shall, unless in writing and signed by the Swing Line Lender in addition
to the Lenders required above, affect the rights or duties of the Swing Line
Lender under this Agreement; (iii) no amendment, waiver or Consent shall, unless
in writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (iv) no amendment, waiver or
Consent shall, unless in writing and signed by the Collateral Agent in addition
to the Lenders required above, affect the rights or duties of the Collateral
Agent under this Agreement or any other Loan
Document.  Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or Consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

       

      If any
Lender does not Consent (a “Non-Consenting
Lender”) to a proposed amendment, waiver, consent or release with respect
to any Loan Document that requires the Consent of each Lender and that has been
approved by the Required Lenders, the Lead Borrower may replace such
Non-Consenting Lender in accordance with Section 10.13; provided that such
amendment, waiver, consent or release can be effected as a result of the
assignment contemplated by such Section (together with all other such
assignments required by the Lead Borrower to be made pursuant to this
paragraph).

       

      
        
          
          

        

        
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      10.02    Notices, Financial Statements and
Other Documents; Effectiveness; Electronic Communications.

       

      (a)          Notices, Financial
Statements and Other Documents Generally.  Except in the case
of notices and other communications expressly permitted to be given by telephone
(and except as provided in subsection (b) below), all
notices, financial statements and other documents and communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

       

      (i)           if
to the Loan Parties, the Agents or the L/C Issuer or the Swing Line Lender, to
the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.02;
and

       

      (ii)           if
to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.

      Notices,
financial statements
and other documents sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices, financial statements and other documents sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the
recipient).  Notices, financial statements and other documents
delivered through electronic communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).

       

      (b)          Electronic
Communications.  Notices, financial statements and other
documents  and communications to the Lenders and the L/C Issuer
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to
Article II if such Lender or
the L/C Issuer, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic
communication.  The Administrative Agent or the Lead Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

       

      Unless the
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.

       

      
        
          
          

        

        
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      (c)          Change of Address,
Etc.  Each of the Loan Parties, the Agents and the L/C Issuer
and the Swing Line Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto.  Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Lead Borrower, the Agents and the L/C Issuer and the Swing Line
Lender.  In addition, each Lender agrees to notify the Administrative
Agent from time to time to ensure that the Administrative Agent has on record
(i) an effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

       

      (d)          Reliance by Agents, L/C
Issuer and Lenders.  The Agents, the L/C Issuer and the Lenders
shall be entitled to rely and act upon any notices (including telephonic
Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on
behalf of the Loan Parties even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Loan Parties
shall indemnify the Agents, the L/C Issuer, each Lender and the Related Parties
of each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Loan Parties.  All telephonic notices to and other telephonic
communications with the Agents may be recorded by the Agents, and each of the
parties hereto hereby consents to such recording.

       

      10.03    No Waiver; Cumulative
Remedies.  No
failure by any Credit Party to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder or under any other Loan Document preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges provided
herein and in the other Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.  Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether any Credit Party may have had notice or knowledge of such Default at
the time.

       

      10.04    Expenses; Indemnity; Damage
Waiver.

       

      (a)          Costs and
Expenses.  The Borrowers shall pay on demand all Credit Party
Expenses.

       

      (b)          Indemnification by the Loan
Parties.  The Loan Parties shall indemnify the Agents (and any
sub-agent thereof), each other Credit Party, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless (on an after tax basis) from, any and all losses,
claims, causes of action, damages, liabilities, settlement payments, costs, and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by any Borrower or any other Loan Party arising
out of, in connection with, or as a result of (i) the execution or delivery
of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, or, in the case of the Agents (and
any sub-agents thereof) and their Related Parties only, the administration of
this Agreement and the other Loan Documents, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by any Loan Party or any of its Subsidiaries, or any Environmental
Liability related in any way to any Loan Party or any of its Subsidiaries, (iv)
any claims of, or amounts paid by any Credit Party to, a Blocked Account Bank or
other Person which has entered into a control agreement with any Credit Party
hereunder, or (v) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party or by any Borrower or any
other Loan Party or any of the Loan Parties’ directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto, in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.

       

      
        
          
          

        

        
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      (c)          Reimbursement by
Lenders.  Without limiting their obligations under Section 9.13 hereof,
to the extent that the Loan Parties for any reason fail to indefeasibly pay any
amount required under subsection (a) or (b) of this Section
to be paid by it, each Lender severally agrees to pay to the Agents (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Agents (or any such sub-agent) or the L/C Issuer in its capacity as such, or
against any Related Party of any of the foregoing acting for the Agents (or any
such sub-agent) or L/C Issuer in connection with such capacity.  The
obligations of the Lenders under this subsection (c) are subject to
the provisions of Section 2.12(d).

       

      (d)          Waiver of Consequential
Damages, Etc.  To the fullest extent permitted by applicable
Law, the Loan Parties shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof.  No Indemnitee shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby other than for direct or actual damages resulting
from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent
jurisdiction.

       

      
        
          
          

        

        
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      (e)          Payments.  All
amounts due under this Section shall be payable on demand therefor.

       

      (f)          Survival.  The
agreements in this Section shall survive the resignation of any Agent and the
L/C Issuer, the assignment of any Commitment or Loan by any Lender, the
replacement of any Lender, the termination of the Aggregate Commitments and the
repayment, satisfaction or discharge of all the other Obligations.

       

      10.05    Payments Set Aside.  To
the extent that any payment by or on behalf of the Loan Parties is made to any
Credit Party, or any Credit Party exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by such Credit Party in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Laws or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b)
each Lender and the L/C Issuer severally agrees to pay to the Agents upon demand
its Applicable Percentage (without duplication) of any amount so recovered from
or repaid by the Agents, plus interest thereon from the date of such demand to
the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.  The obligations of the Lenders and
the L/C Issuer under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

       

      10.06    Successors and
Assigns.

       

      (a)    Successors and Assigns
Generally.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder or under any other
Loan Document without the prior written Consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section
10.06(b), (ii) by way
of participation in accordance with the provisions of Section 10.06(d), or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of Section
10.06(f)
(and any other attempted assignment or transfer by any party hereto shall be
null and void).  Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Credit Parties) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

       

      (b)    Assignments by
Lenders.  Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment(s) and the Loans
(including for purposes of this Section 10.06(b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to
it); provided
that any such assignment shall be subject to the following
conditions:

       

      (i)           Minimum
Amounts.

       

      
        
          
          

        

        
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      (A)           in
the case of an assignment of the entire remaining amount of the assigning
Lender's Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, no minimum amount need be assigned; and

       

      (B)           in
any case not described in subsection (b)(i)(A)of this Section,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
the “Effective Date” is specified in the Assignment and Assumption, as of the
“Effective Date”, shall not be less than $500,000 unless each of the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Lead Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met;

       

      (ii)           Proportionate
Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not
apply to the Swing Line Lender’s rights and obligations in respect of Swing Line
Loans;

       

      (iii)           Required
Consents.  No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section
and, in addition:

       

      (A)           the
consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Commitment if such assignment is to a Person that is not a Lender, an Affiliate
of such Lender or an Approved Fund with respect to such Lender;

       

      (B)           the
consent of the L/C Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and

       

      (C)           the
consent of the Swing Line Lender (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment in respect of the assignment of
any Commitment.

       

      (iv)           Assignment and
Assumption.  The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, provided, however, that the
Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment. The assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

       

      Subject to
acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to
facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Borrowers (at their expense) shall
execute and deliver a Note to the assignee Lender.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Section 10.06(d).

       

      
        
          
          

        

        
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      (c)    Register.  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive, absent manifest error, and the Loan
Parties, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Lead
Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.  

       

      (d)    Participations.  Any
Lender may at any time, without the consent of, or notice to, the Loan Parties
or the Administrative Agent, sell participations to any Person (other than a
natural person or the Loan Parties or any of the Loan Parties’ Affiliates or
Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided
that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Loan
Parties, the Agents, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.  Any Participant shall agree in
writing to comply with all confidentiality obligations set forth in Section 10.07 as if such
Participant was a Lender hereunder.

       

      
        
          
          

        

        
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      Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of
any  provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 10.01 that affects
such Participant.  Subject to subsection (e) of this Section,
the Loan Parties agree that each Participant shall be entitled to the benefits
of Sections
3.01,
3.04 and 3.05 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
Section 10.06(b).  To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section
10.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.13 as though it
were a Lender.

       

      (e)    Limitations upon Participant
Rights.  A Participant shall not be entitled to receive any
greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Lead Borrower's prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Lead
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Loan Parties, to comply with Section 3.01(e) as though it
were a Lender.

       

      (f)    Certain
Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

       

      (g)    Electronic Execution of
Assignments.  The words “execution,” “signed,” “signature,” and
words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable Law,
including the Federal Electronic Signatures in Global and National Commerce Act
or any other similar state laws based on the Uniform Electronic Transactions
Act.

       

      (h)    Resignation as L/C Issuer or
Swing Line Lender after Assignment.  Notwithstanding anything
to the contrary contained herein, if at any time Wells Fargo Retail Finance, LLC
assigns all of its Commitment and Loans pursuant to subsection (b) above, (i) Wells
Fargo Bank may upon thirty (30) days’ notice to the Lead Borrower and the
Lenders, resign as L/C Issuer and/or (ii) Wells Fargo Retail Finance,
LLC  upon 30 days’ notice to the Lead Borrower, resign as Swing Line
Lender.  In the event of any such resignation as L/C Issuer or Swing
Line Lender, the Lead Borrower shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender  hereunder; provided, however, that no
failure by the Lead Borrower to appoint any such successor shall affect the
resignation of Wells Fargo Bank as L/C Issuer or Wells Fargo Retail Finance, LLC
as Swing Line Lender, as the case may be.  If Wells Fargo Bank resigns
as L/C Issuer, it shall retain all the rights, powers, privileges and duties of
the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of
the effective date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Lenders to make Base Rate
Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Wells
Fargo Retail Finance, LLC resigns as Swing Line Lender, it shall retain all the
rights of the Swing Line Lender provided for hereunder with respect to Swing
Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate Loans
or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).  Upon
the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to Wells Fargo Bank to
effectively assume the obligations of Wells Fargo Bank with respect to such
Letters of Credit.

       

      
        
          
          

        

        
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      10.07    Treatment of Certain Information;
Confidentiality.  Each
of the parties hereto agree to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, funding sources, attorneys, advisors and
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential on the same terms as provided
herein), (b) to the extent requested by any regulatory authority purporting to
have jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) by each of the Credit Parties subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) by
each of the Credit Parties with the consent of the Lead Borrower, (h) by the
Loan Parties with the prior written consent of the Administrative Agent (except
in the case of disclosure to any bank, finance company or other lender) or (i)
to the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to any Credit Party
or any of their respective Affiliates on a non-confidential basis from a source
other than the Loan Parties; provided, however, that in the case of any
disclosure pursuant to clause (c) above, the applicable party which is required
to disclose confidential Information agrees to give the other party, to the
extent practicable and not otherwise prohibited by any such Law, regulation,
subpoena, order or decree of a court or similar legal process, prior notice of
such disclosure (provided, however, no disclosing party shall incur any
liability to any other party or other Person for failing to provide such other
party or Person with any such prior notice); provided, further, however, that
the disclosing party shall disclose only that portion of the confidential
Information as is required to be disclosed, in its sole judgment, pursuant to
any such Law, regulation, subpoena, order or decree of a court or similar legal
process.  Any such required disclosure shall not, in and of itself,
change the status of the disclosed information as Information under the terms of
this Agreement.

      For
purposes of this Section, “Information” means (i) with respect to the Credit
Parties, all information received from the Loan Parties or any Subsidiary
thereof relating to the Loan Parties or any Subsidiary thereof or their
respective businesses, other than any such information that is available to any
Credit Party on a non-confidential basis prior to disclosure by the Loan Parties
or any Subsidiary thereof and (ii) with respect to the Loan Parties, all
information received from the Credit Parties or an Subsidiary thereof relating
to the Credit Parties or any Subsidiary thereof or their respective businesses,
other than any such information that is available to any Loan Party on a
non-confidential basis prior to disclosure by the Credit Parties or any
Subsidiary thereof.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

       

      Each of
the parties hereof acknowledge that (a) the Information may include material
non-public information concerning the Loan Parties or a Subsidiary, or the
Credit Parties or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with
applicable Law, including Federal and state securities Laws.

       

      
        
          
          

        

        
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      10.08    Right of Setoff.  If
an Event of Default shall have occurred and be continuing or if any Lender shall
have been served with a trustee process or similar attachment relating to
property of a Loan Party, each Lender, the L/C Issuer and each of their
respective Affiliates is hereby authorized at any time and from time to time,
after obtaining the prior written consent of the Administrative Agent or the
Required Lenders, to the fullest extent permitted by applicable Law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender, the L/C Issuer or any such
Affiliate to or for the credit or the account of the Borrowers or any other Loan
Party against any and all of the Obligations now or hereafter existing under
this Agreement or any other Loan Document to such Lender or the L/C Issuer,
regardless of the adequacy of the Collateral, and irrespective of whether or not
such Lender or the L/C Issuer shall have made any demand under this Agreement or
any other Loan Document and although such obligations of the Borrowers or such
Loan Party may be contingent or unmatured or are owed to a branch or office of
such Lender or the L/C Issuer different from the branch or office holding such
deposit or obligated on such indebtedness.  The rights of each Lender,
the L/C Issuer and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, the L/C Issuer or their respective Affiliates may
have.  Each Lender and the L/C Issuer (through the Administrative
Agent) agrees to notify the Lead Borrower and the Administrative Agent promptly
after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

       

      10.09    Interest Rate Limitation.  Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum
Rate”).  If the Administrative Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrowers.  In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

       

      10.10    Counterparts; Integration;
Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.  Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto.  Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be as effective as delivery of a manually
executed counterpart of this Agreement.

       

      
        
          
          

        

        
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      10.11    Survival.  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and
thereof.  Such representations and warranties have been or will be
relied upon by the Credit Parties, regardless of any investigation made by any
Credit Party or on their behalf and notwithstanding that any Credit Party may
have had notice or knowledge of any Default at the time of any Credit Extension,
and shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.  Further, the provisions of Sections 3.01, 3.04, 3.05 and 10.04 and Article IX shall survive and
remain in full force and effect regardless of the repayment of the Obligations,
the expiration or termination of the Letters of Credit and the Commitments or
the termination of this Agreement or any provision hereof.  In
connection with the termination of this Agreement and the release and
termination of the security interests in the Collateral, the Agents may require
such indemnities and collateral security as they shall reasonably deem necessary
or appropriate to protect the Credit Parties against (x) loss on account of
credits previously applied to the Obligations that may subsequently be reversed
or revoked, and (y) any obligations that may thereafter arise with respect to
the Other Liabilities.

       

      10.12    Severability.  If
any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

       

      10.13    Replacement of Lenders.  If
any Lender requests compensation under Section 3.04, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided
that:

       

      (a)          the
Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section
10.06(b);

       

      (b)          such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and L/C Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts);

       

      (c)          in
the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments
required to be made pursuant to Section 3.01, such assignment
will result in a reduction in such compensation or payments thereafter;
and

       

      
        
          
          

        

        
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      (d)          such
assignment does not conflict with applicable Laws.

       

      A Lender
shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrowers to require such assignment and delegation cease to
apply.

       

      10.14    Governing Law; Jurisdiction;
Etc.

       

      (a)    GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

       

      (b)    SUBMISSION TO
JURISDICTION.  EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
SUPERIOR COURT OF NORFOLK COUNTY, MASSACHUSETTS AND OF THE UNITED STATES FEDERAL
COURTS LOCATED IN THE DISTRICT OF MASSACHUSETTS, BOSTON, MASSACHUSETTS, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE LOAN PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT.  EACH OF THE LOAN PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN
DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY CREDIT PARTY MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

       

      (c)    WAIVER OF
VENUE.  EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE LOAN
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

       

      (d)    SERVICE OF
PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

       

      
        
          
          

        

        
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      (e)    ACTIONS COMMENCED BY LOAN
PARTIES. EACH LOAN PARTY AGREES THAT ANY ACTION COMMENCED BY ANY LOAN
PARTY ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT SOLELY IN A COURT OF
THE COMMONWEALTH OF MASSACHUSETTS SITTING IN THE COMMONWEALTH OF MASSACHUSETTS
OR ANY FEDERAL COURT SITTING THEREIN AS THE ADMINISTRATIVE AGENT MAY ELECT IN
ITS SOLE DISCRETION AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS
WITH RESPECT TO ANY SUCH ACTION.

       

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

       

      10.16    No Advisory or Fiduciary
Responsibility.  In
connection with all aspects of each transaction contemplated hereby, the Loan
Parties each acknowledge and agree that: (i) the credit facility provided for
hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document) are an arm’s-length commercial transaction
between the Loan Parties, on the one hand, and the Credit Parties, on the other
hand, and each of the Loan Parties is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, each Credit Party is and has been acting
solely as a principal and is not the financial advisor, agent or fiduciary, for
the Loan Parties or any of their respective Affiliates, stockholders, creditors
or employees or any other Person; (iii) none of the Credit Parties has assumed
or will assume an advisory, agency or fiduciary responsibility in favor of the
Loan Parties with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of whether
any of the Credit Parties has advised or is currently advising any Loan Party or
any of its Affiliates on other matters) and none of the Credit Parties has any
obligation to any Loan Party or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; (iv) the Credit Parties and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Loan Parties and their
respective Affiliates, and none of the Credit Parties has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Credit Parties have not provided and will not provide
any legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and each of the Loan Parties
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate.  Each of the Loan Parties hereby
waives and releases, to the fullest extent permitted by law, any claims that it
may have against each of the Credit Parties with respect to any breach or
alleged breach of agency or fiduciary duty.

       

      
        
          
          

        

        
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      10.17    USA
PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Loan Parties that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (as amended, the “Act”), it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the
Act.  Each Loan Party is in compliance, in all material respects, with
the Patriot Act.  No part of the proceeds of the Loans will be used by
the Loan Parties, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as
amended.

       

      10.18    Foreign
Asset Control Regulations.  Neither
of the advance of the Loans nor the use of the proceeds of any thereof will
violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the
"Trading With the
Enemy Act") or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
(the "Foreign Assets
Control Regulations") or any enabling legislation or executive order
relating thereto (which for the avoidance of doubt shall include, but shall not
be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) (the "Executive Order") and
(b) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56)).  Furthermore, none of the Borrowers or their Affiliates (a)
is or will become a "blocked person" as described in the Executive Order, the
Trading With the Enemy Act or the Foreign Assets Control Regulations or (b)
engages or will engage in any dealings or transactions, or be otherwise
associated, with any such "blocked person" or in any manner violative of any
such order.

       

      10.19    Time of the Essence.  Time
is of the essence of the Loan Documents.

       

      10.20    Press Releases.

       

      (a)           Each
Credit Party executing this Agreement agrees that neither it nor its Affiliates
will in the future issue any press releases or other public disclosure using the
name of Administrative Agent or its Affiliates or referring to this Agreement or
the other Loan Documents without at least two (2) Business Days’ prior notice to
Administrative Agent and without the prior written consent of Administrative
Agent unless (and only to the extent that) such Credit Party or Affiliate is
required to do so under applicable Law and then, in any event, such Credit Party
or Affiliate will consult with Administrative Agent before issuing such press
release or other public disclosure.

       

      
        
          
          

        

        
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      (b)           Each
Loan Party consents to the publication by Administrative Agent or any Lender of
advertising material relating to the financing transactions contemplated by this
Agreement using any Loan Party’s name, product photographs, logo or
trademark.  Administrative Agent or such Lender shall provide a draft
reasonably in advance of any advertising material to the Lead Borrower for
review and comment prior to the publication thereof.  Administrative
Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.

       

      10.21    Additional
Waivers.

       

      (a)    The
Obligations are the joint and several obligation of each Loan Party. To the
fullest extent permitted by applicable Law, the obligations of each Loan Party
shall not be affected by (i) the failure of any Credit Party to assert any
claim or demand or to enforce or exercise any right or remedy against any other
Loan Party under the provisions of this Agreement, any other Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, this Agreement or any other
Loan Document, or (iii) the failure to perfect any security interest in, or
the release of, any of the Collateral or other security held by or on behalf of
the Collateral Agent or any other Credit Party.

       

      (b)    The
obligations of each Loan Party  shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations after the termination of
the Commitments), including any claim of waiver, release, surrender, alteration
or compromise of any of the Obligations, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Loan Party hereunder shall not be discharged or impaired or otherwise
affected by the failure of any Agent or any other Credit Party to assert any
claim or demand or to enforce any remedy under this Agreement, any other Loan
Document or any other agreement, by any waiver or modification of any provision
of any thereof, any default, failure or delay, willful or otherwise, in the
performance of any of the Obligations, or by any other act or omission that may
or might in any manner or to any extent vary the risk of any Loan Party or that
would otherwise operate as a discharge of any Loan Party as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations after the termination of the Commitments).

       

      (c)    To the
fullest extent permitted by applicable Law, each Loan Party waives any defense
based on or arising out of any defense of any other Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other Loan Party, other than
the indefeasible payment in full in cash of all the Obligations and the
termination of the Commitments. The Collateral Agent and the other Credit
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or non-judicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with any other Loan Party, or exercise
any other right or remedy available to them against any other Loan Party,
without affecting or impairing in any way the liability of any Loan Party
hereunder except to the extent that all the Obligations have been indefeasibly
paid in full in cash and the Commitments have been terminated.  Each
Loan Party waives any defense arising out of any such election even though such
election operates, pursuant to applicable Law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Loan
Party against any other Loan Party, as the case may be, or any
security.

       

      
        
          
          

        

        
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      (d)    Each
Borrower is obligated to repay the Obligations as joint and several obligors
under this Agreement.  Upon payment by any Loan Party of any
Obligations, all rights of such Loan Party against any other Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Obligations and the termination of the Commitments. In addition, any
indebtedness of any Loan Party now or hereafter held by any other Loan Party is
hereby subordinated in right of payment to the prior indefeasible payment in
full of the Obligations and no Loan Party will demand, sue for or otherwise
attempt to collect any such indebtedness.  If any amount shall
erroneously be paid to any Loan Party on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Credit Parties and shall forthwith be paid to the Administrative
Agent to be credited against the payment of the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement and the other Loan
Documents.  Subject to the foregoing, to the extent that any Borrower
shall, under this Agreement as a joint and several obligor, repay any of the
Obligations constituting Revolving Loans made to another Borrower hereunder or
other Obligations incurred directly and primarily by any other Borrower (an
"Accommodation
Payment"), then the Borrower making such Accommodation Payment shall be
entitled to contribution and indemnification from, and be reimbursed by, each of
the other Borrowers in an amount, for each of such other Borrowers, equal to a
fraction of such Accommodation Payment, the numerator of which fraction is such
other Borrower's Allocable Amount and the denominator of which is the sum of the
Allocable Amounts of all of the Borrowers.  As of any date of
determination, the "Allocable Amount" of
each Borrower shall be equal to the maximum amount of liability for
Accommodation Payments which could be asserted against such Borrower hereunder
without (a) rendering such Borrower "insolvent" within the meaning of
Section 101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent
Transfer Act ("UFTA") or Section 2
of the Uniform Fraudulent Conveyance Act ("UFCA"),
(b) leaving such Borrower with unreasonably small capital or assets, within
the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or
Section 5 of the UFCA, or (c) leaving such Borrower unable to pay its debts
as they become due within the meaning of Section 548 of the Bankruptcy Code or
Section 4 of the UFTA, or Section 5 of the UFCA.

       

      10.22    Amendment and
Restatement.

       

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

       

      
        
          
          

        

        
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      10.23    No
Strict Construction.

       

      The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

       

      10.24    Attachments.

       

      The
exhibits, schedules and annexes attached to this Agreement are incorporated
herein and shall be considered a part of this Agreement for the purposes stated
herein, except that in the event of any conflict between any of the provisions
of such exhibits and the provisions of this Agreement, the provisions of this
Agreement shall prevail.

       

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blank]

      
        
          
          

        

        
          121

          
            

          

        

        
          
          

        

      

       

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

       

      Borrowers:

       

      iPARTY
RETAIL STORES CORP.

      as Lead
Borrower and a Borrower

      

      

      By: /s/ SAL
PERISANO                                                                           

      Name: Sal
Perisano

      Title:
Chief Executive Officer

      

      iPARTY
CORP.

      as a
Borrower

      

      

      By: /s/ SAL
PERISANO                                                                           

      Name: Sal
Perisano

      Title:
Chairman and Chief Executive Officer

      

       

      
        Signature
Page of Second Amended and Restated Credit Agreement

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      Agents:

       

      WELLS
FARGO RETAIL FINANCE, LLC,

       

      as
Administrative Agent and Collateral Agent

       

      By:  /s/ MICHELE
AYOU                                                                           

      Name:   Michele
Ayou

      Title:     Vice
President

      

       

      
        Signature
Page of Second Amended and Restated Credit Agreement

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      Lenders:

       

      WELLS
FARGO RETAIL FINANCE, LLC,

      as Lender
and Swing Line Lender

      

      By:  /s/ MICHELE
AYOU                                                                           

      Name:   Michele
Ayou

      Title:     Vice
President

      
 

       

      
        Signature
Page of Second Amended and Restated Credit Agreement

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