Document:

exv10w1

 

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is dated as of October 3, 2006 and
is made by and among ARCH COAL, INC., a Delaware corporation (the “Borrower”), the BANKS party to
the Credit Agreement (as hereinafter defined), CITICORP USA, INC., JPMORGAN CHASE BANK, N.A. and
WACHOVIA BANK, NATIONAL ASSOCIATION, each in its capacity as co-syndication agent, and BANK OF
AMERICA, N.A. (successor by merger to FLEET NATIONAL BANK), as documentation agent, and PNC BANK,
NATIONAL ASSOCIATION, in its capacity as administrative agent for the Banks.

     WHEREAS, the parties hereto are parties to that certain Credit Agreement dated as of December
22, 2004, as amended by that certain First Amendment to Credit Agreement dated as of June 23, 2006
(as so amended, the “Credit Agreement”), pursuant to which the Banks provided a $800,000,000
revolving credit facility to the Borrower; and

     WHEREAS, the Borrower, the Banks and the Administrative Agent desire to amend the Credit
Agreement as hereinafter provided.

     NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements
hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows:

     1. Definitions.

     Capitalized terms used herein unless otherwise defined herein shall have the meanings ascribed
to them in the Credit Agreement, as amended by this Amendment.

     2. Amendments to Credit Agreement. 

     (a) Section 1.1 [Certain Definitions] of the Credit Agreement is hereby amended to insert
therein, between the definition of “SEC” and the definition of “Section 20 Subsidiary”, the
following new definition of “Second Amendment Effective Date”:

“Second Amendment Effective Date shall mean October 3, 2006, which date is
the effective date of the Second Amendment to the Credit Agreement.”

     (b) Section 7.2.9 [Restricted Payments] of the Credit Agreement is hereby amended and restated
in its entirely to read as follows:

“7.2.9 Restricted Payments.

The Borrower shall not, and shall not permit any of its Subsidiaries to, declare or
pay, directly or indirectly, any dividend or make any other distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, with respect to any shares of capital stock or other equity
interests of the Borrower or any Subsidiary of the Borrower or directly or
indirectly redeem, purchase, retire or otherwise acquire for value any shares of any
class of the capital stock or other equity interests of the Borrower or any
Subsidiary of the Borrower or set aside any amount for any such purposes, except
that:

     (i) so long as on the date of the declaration thereof (each such date a
“Dividend Declaration Date”) and after giving effect thereto the Borrower is in
compliance with the Restricted Payment Covenants (as set forth below) and no
Potential Default or Event of Default has occurred, the Borrower may pay cash
dividends on its common stock;

     (ii) so long as on the date of payment thereof (each such date a “Redemption
Date”) and after giving effect thereto the Borrower is in compliance with the
Restricted Payment Covenants

 

 

(as set forth below) and no Potential Default or Event of Default has occurred,
the Borrower may purchase, redeem, retire or otherwise acquire for value any shares
of any class of the capital stock of the Borrower;

     (iii) any Subsidiary of the Borrower may declare and pay dividends to, or
repurchase its equity interests from, the Borrower or any other Subsidiary of the
Borrower; and

     (iv) Arch Western may make distributions to the ARCO Member (as defined in the
Arch Western LLC Agreement) in an amount equal to the Hypothetical Income Tax Amount
(as defined in the Arch Western LLC Agreement) pursuant to Section 4.3 of the Arch
Western LLC Agreement.

Solely for purposes of clause (i) and clause (ii) of this Section 7.2.9, the
covenants specified in clauses (a), (b) and (c) below are collectively, the
“Restricted Payment Covenants” and on each Dividend Declaration Date (after giving
effect to the dividends declared on such date in accordance with clause (i) above)
and on each Redemption Date (after giving effect to the purchase, redemption,
retirement or other acquisition for value of capital stock of the Borrower on such
date in accordance with clause (ii) above):

          (a) The Leverage Ratio shall not exceed: (i) if such Dividend Declaration Date
or Redemption Date occurs during the period commencing on the Second Amendment
Effective Date through and including December 31, 2006, then 3.75 to 1.00, (ii) if
such Dividend Declaration Date or Redemption Date occurs during the period
commencing on January 1, 2007 through and including December 31, 2008, then 3.50 to
1.00, and (iii) if such Dividend Declaration Date or Redemption Date occurs on or
after January 1, 2009, then 3.25 to 1.00;

          (b) The Senior Secured Leverage Ratio shall not exceed: (i) if such Dividend
Declaration Date or Redemption Date occurs during the period commencing on the
Second Amendment Effective Date through and including December 31, 2006, then 2.25
to 1.00, and (ii) if such Dividend Declaration Date or Redemption Date occurs on or
after January 1, 2007, then 2.00 to 1.00; and

          (c) The Interest Coverage Ratio shall not be less than 3.00 to 1.00.”

     3. Conditions of Effectiveness of Amendment.

     The effectiveness of this Amendment is expressly conditioned upon satisfaction of each of the
following conditions precedent:

     (a) Borrower’s Certification.

     The Borrower by executing this Amendment, hereby certifies that (i) this Amendment has been
duly authorized and executed, (ii) the representations and warranties of the Borrower contained in
Section 5 of the Credit Agreement and of each Loan Party in each of the other Loan Documents are
true and accurate on and as of the date hereof with the same effect as though such representations
and warranties had been made on and as of such date (except representations and warranties which
relate solely to an earlier date or time, which representations and warranties were true and
correct on and as of the specific dates or times referred to therein), (iii) each of the Loan
Parties has performed and complied with all covenants and conditions hereof and thereof, and (iv)
no Event of Default or Potential Default has occurred and is continuing or exists.

     (b) Payment of Fees.

     The Borrower shall pay or cause to be paid to the Administrative Agent for itself and for the
account of the Banks all fees, costs and expenses payable to the Administrative Agent or any Bank
or for which the Administrative Agent or any Bank is entitled to be reimbursed, including but not
limited to the fees and expenses of the Administrative Agent’s legal counsel.

3

 

     (c) Confirmation of Guaranty.

     Each of the Guarantors shall have executed and delivered to the Administrative Agent the
Confirmation of Guaranty in substantially the form attached hereto as Exhibit A.

     (d) Legal Details.

     All legal details and proceedings in connection with the transactions contemplated by this
Amendment and the other Loan Documents shall be in form and substance satisfactory to the
Administrative Agent and counsel for the Administrative Agent, and the Administrative Agent shall
have received all such other counterpart originals or certified or other copies of such documents
and proceedings in connection with such transactions, in form and substance satisfactory to the
Administrative Agent and its counsel, as the Administrative Agent or its counsel may reasonably
request.

     4. Force and Effect.

     Except as otherwise expressly modified by this Amendment, the Credit Agreement and the other
Loan Documents are hereby ratified and confirmed and shall remain in full force and effect after
the date hereof.

     5. Governing Law. 

     This Amendment shall be deemed to be a contract under the Laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and construed and enforced in accordance
with the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.

     6. Effective Date. 

     This Amendment shall be dated as of and shall be binding, effective and enforceable upon the
date of (i) satisfaction of all conditions set forth in Section 3 hereof and (ii) receipt by the
Administrative Agent of duly executed original counterparts of this Amendment from the Borrower and
the Required Banks, and from and after such date this Amendment shall be binding upon the Borrower,
each Bank and the Agents, and their respective successors and assigns permitted by the Credit
Agreement.

     7. No Novation. 

     This Amendment amends the Credit Agreement, but is not intended to constitute, and does not
constitute, a novation of the Obligations of the Loan Parties under the Credit Agreement or any
other Loan Document.

[Intentionally Blank]

4

 

[SIGNATURE PAGE 1 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

     IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have
executed this Second Amendment to Credit Agreement as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ARCH COAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak
 

	 	 
	 	 	Name: James E. Florczak	 	 
	 	 	Title: Treasurer	 	 

 

 

[SIGNATURE PAGE 2 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	BANK LEUMI USA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Joung Hee Hong
 

	 	 
	 	 	Name: Joung Hee Hong	 	 
	 	 	Title: First Vice President	 	 

 

 

[SIGNATURE PAGE 3 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.

(as successor by merger to Fleet National Bank),

individually and as Documentation Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Adam H. Frey
 

	 	 
	 	 	Name: Adam H. Frey	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 4 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	BANK OF MONTREAL	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

[SIGNATURE PAGE 5 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	CALYON NEW YORK BRANCH	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lee E. Greve
 

	 	 
	 	 	Name: Lee E. Greve	 	 
	 	 	Title: Managing Director, Deputy Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Joseph A. Philbin
 

	 	 
	 	 	Name: Joseph A. Philbin	 	 
	 	 	Title: Director	 	 

 

 

[SIGNATURE PAGE 6 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	CITICORP USA, INC., individually and as
Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

[SIGNATURE PAGE 7 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	COMMERCE BANK N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Douglas P. Best
 

	 	 
	 	 	Name: Douglas P. Best	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 8 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., individually and as
Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stacey Haimes
 

	 	 
	 	 	Name: Stacey Haimes	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 9 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Margaret C. Dierkes
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Margaret C. Dierkes	 	 
	 	 	Title: First Vice President	 	 

 

 

[SIGNATURE PAGE 10 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	MIZUHO CORPORATE BANK, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

[SIGNATURE PAGE 11 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	MORGAN STANLEY BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jaap L. Tonckens
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Jaap L. Tonckens	 	 
	 	 	Title: Authorized Signatory	 	 

 

 

[SIGNATURE PAGE 12 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	NATEXIS BANQUES POPULAIRES	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Timothy L. Polvado
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Timothy L. Polvado	 	 
	 	 	Title: Vice President and Group Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel Payer
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Daniel Payer	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 13 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	NATIONAL CITY BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Eric Hartman
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Eric Hartman	 	 
	 	 	Title: Senior Vice President	 	 

 

 

[SIGNATURE PAGE 14 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dorothy G.W. Brailer
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Dorothy G.W. Brailer	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 15 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	REGIONS BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel R. Kraus
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Daniel R. Kraus	 	 

 

 

[SIGNATURE PAGE 16 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	SOVEREIGN BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert D. Lanigan
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert D. Lanigan	 	 
	 	 	Title: Senior Vice President	 	 

 

 

[SIGNATURE PAGE 17 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	SOUTHWEST BANK OF ST. LOUIS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roy C. Postel
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Roy C. Postel	 	 
	 	 	Title: Senior Vice President	 	 

 

 

[SIGNATURE PAGE 18 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Craig J. Anderson
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Craig J. Anderson	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 19 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian J. Smith
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Brian J. Smith	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 20 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	UBS LOAN FINANCE LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Irja R. Otsa
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Irja R. Otsa	 	 
	 	 	Title: Associate Director, Banking Products Services, US	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Marie A. Haddad
	 	  
	 

	 	 	 	 	 	 
	 	 	Name: Marie A. Haddad	 	 
	 	 	Title: Associate Director, Banking Products Services, US	 	 

 

 

[SIGNATURE PAGE 21 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	UMB BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cecil G. Wood
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Cecil G. Wood	 	 
	 	 	Title: Executive Vice President	 	 

 

 

[SIGNATURE PAGE 22 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bryan P. Read
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Bryan P. Read	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 23 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	US BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karen Meyer
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Karen Meyer	 	 
	 	 	Title: Vice President	 	 

 

 

[SIGNATURE PAGE 24 OF 24 TO SECOND AMENDMENT TO CREDIT AGREEMENT]

	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

individually and as Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Shannan Townsend
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Shannan Townsend	 	 
	 	 	Title: DirectorEX-10.1 CREDIT AGREEMENT

 

Exhibit 10.1

Execution Version

	 	 	 

 

$750,000,000

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of October 2, 2006,

by and among

BELK, INC.,

and the Subsidiaries of Belk, Inc. party hereto,

as Borrowers,

the Lenders referred to herein,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

WACHOVIA CAPITAL MARKETS, LLC and BANC OF AMERICA

SECURITIES LLC, as Joint Lead Arrangers

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Article I DEFINITIONS
	 	 	1	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 General
	 	 	17	 
	Section 1.3 Other Definitions and Provisions
	 	 	17	 
	 
	 	 	 	 
	Article II REVOLVING CREDIT FACILITY
	 	 	17	 
	Section 2.1 Revolving Credit Loans
	 	 	17	 
	Section 2.2 Swingline Loans
	 	 	18	 
	Section 2.3 Procedure for Advances of Revolving Credit and Swingline Loans
	 	 	19	 
	Section 2.4 Repayment of Loans
	 	 	20	 
	Section 2.5 Notes
	 	 	21	 
	Section 2.6 Permanent Reduction of the Revolving Credit Commitment
	 	 	21	 
	Section 2.7 Increase of Revolving Credit Commitment
	 	 	22	 
	Section 2.8 Joint and Several Liability of Borrowers
	 	 	23	 
	Section 2.9 Appointment of the Company
	 	 	25	 
	 
	 	 	 	 
	Article III LETTER OF CREDIT FACILITY
	 	 	25	 
	Section 3.1 L/C Commitments
	 	 	25	 
	Section 3.2 Procedure for Issuance of Letters of Credit
	 	 	26	 
	Section 3.3 Fees and Other Charges
	 	 	26	 
	Section 3.4 L/C Participations
	 	 	27	 
	Section 3.5 Reimbursement Obligation of the Borrowers
	 	 	28	 
	Section 3.6 Obligations Absolute
	 	 	28	 
	Section 3.7 Effect of Application
	 	 	29	 
	 
	 	 	 	 
	Article IV TERM LOAN FACILITY
	 	 	29	 
	Section 4.1 Term Loan
	 	 	29	 
	Section 4.2 Procedure for Advance of Term Loan
	 	 	29	 
	Section 4.3 Repayment of Term Loan
	 	 	29	 
	Section 4.4 Optional Prepayments of Term Loan
	 	 	30	 
	Section 4.5 Term Notes
	 	 	30	 
	 
	 	 	 	 
	Article V GENERAL LOAN PROVISIONS
	 	 	30	 
	Section 5.1 Interest
	 	 	30	 
	Section 5.2 Notice and Manner of Conversion or Continuation of Loans
	 	 	33	 
	Section 5.3 Fees
	 	 	33	 
	Section 5.4 Manner of Payment
	 	 	34	 
	Section 5.5 Crediting of Payments and Proceeds
	 	 	34	 
	Section 5.6 Adjustments
	 	 	35	 
	Section 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption
by the Administrative Agent
	 	 	35	 
	Section 5.8 Changed Circumstances
	 	 	36	 
	Section 5.9 Indemnity
	 	 	38	 
	Section 5.10 Capital Requirements
	 	 	38	 
	Section 5.11 Taxes
	 	 	38	 

i

 

	 	 	 	 	 
	Article VI CLOSING; CONDITIONS OF CLOSING AND BORROWING
	 	 	40	 
	Section 6.1 Closing
	 	 	40	 
	Section 6.2 Conditions to Closing and Initial Extensions of Credit
	 	 	40	 
	Section 6.3 Conditions to All Extensions of Credit
	 	 	44	 
	 
	 	 	 	 
	Article VII REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
	 	 	44	 
	Section 7.1 Representations and Warranties
	 	 	44	 
	Section 7.2 Survival of Representations and Warranties, Etc.
	 	 	51	 
	 
	 	 	 	 
	Article VIII FINANCIAL INFORMATION AND NOTICES
	 	 	52	 
	Section 8.1 Financial Statements and Projections
	 	 	52	 
	Section 8.2 Officer’s Compliance Certificate
	 	 	53	 
	Section 8.3 Accountants’ Certificate
	 	 	53	 
	Section 8.4 Other Reports
	 	 	53	 
	Section 8.5 Notice of Litigation and Other Matters
	 	 	53	 
	Section 8.6 Accuracy of Information
	 	 	54	 
	 
	 	 	 	 
	Article IX AFFIRMATIVE COVENANTS
	 	 	54	 
	Section 9.1 Preservation of Corporate Existence and Related Matters
	 	 	54	 
	Section 9.2 Maintenance of Property
	 	 	54	 
	Section 9.3 Insurance
	 	 	55	 
	Section 9.4 Accounting Methods and Financial Records
	 	 	55	 
	Section 9.5 Payment and Performance of Obligations
	 	 	55	 
	Section 9.6 Compliance With Laws and Approvals
	 	 	55	 
	Section 9.7 Environmental Laws
	 	 	55	 
	Section 9.8 Compliance with ERISA
	 	 	56	 
	Section 9.9 Compliance With Agreements
	 	 	56	 
	Section 9.10 Visits and Inspections
	 	 	56	 
	Section 9.11 Additional Subsidiaries
	 	 	56	 
	Section 9.12 Use of Proceeds
	 	 	56	 
	Section 9.13 Additional Borrowers
	 	 	56	 
	Section 9.14 Further Assurances
	 	 	57	 
	 
	 	 	 	 
	Article X FINANCIAL COVENANTS
	 	 	57	 
	Section 10.1 Leverage Ratio
	 	 	57	 
	Section 10.2 Fixed Charge Coverage Ratio
	 	 	57	 
	 
	 	 	 	 
	Article XI NEGATIVE COVENANTS
	 	 	57	 
	Section 11.1 Limitations on Debt
	 	 	57	 
	Section 11.2 Limitations on Liens
	 	 	58	 
	Section 11.3 Limitations on Loans, Advances, Investments and Acquisitions
	 	 	59	 
	Section 11.4 Limitations on Mergers and Liquidation
	 	 	61	 
	Section 11.5 Limitations on Sale of Assets
	 	 	61	 
	Section 11.6 Limitations on Dividends and Distributions
	 	 	62	 
	Section 11.7 Limitations on Exchange and Issuance of Capital Stock
	 	 	63	 
	Section 11.8 Transactions with Affiliates
	 	 	63	 
	Section 11.9 Certain Accounting Changes; Organizational Documents
	 	 	63	 
	Section 11.10 Amendments; Payments and Prepayments of Debt
	 	 	63	 
	Section 11.11 Restrictive Agreements
	 	 	63	 

ii

 

	 	 	 	 	 
	Section 11.12 Nature of Business
	 	 	64	 
	 
	 	 	 	 
	Article XII DEFAULT AND REMEDIES
	 	 	64	 
	Section 12.1 Events of Default
	 	 	64	 
	Section 12.2 Remedies
	 	 	66	 
	Section 12.3 Rights and Remedies Cumulative; Non-Waiver; etc.
	 	 	67	 
	 
	 	 	 	 
	Article XIII THE ADMINISTRATIVE AGENT
	 	 	67	 
	Section 13.1 Appointment
	 	 	67	 
	Section 13.2 Delegation of Duties
	 	 	68	 
	Section 13.3 Exculpatory Provisions
	 	 	68	 
	Section 13.4 Reliance by the Administrative Agent
	 	 	68	 
	Section 13.5 Notice of Default
	 	 	69	 
	Section 13.6 Non-Reliance on the Administrative Agent and Other Lenders
	 	 	69	 
	Section 13.7 Indemnification
	 	 	70	 
	Section 13.8 The Administrative Agent in Its Individual Capacity
	 	 	70	 
	Section 13.9 Resignation of the Administrative Agent; Successor Administrative Agent
	 	 	70	 
	Section 13.10 Other Agents
	 	 	71	 
	 
	 	 	 	 
	Article XIV MISCELLANEOUS
	 	 	71	 
	Section 14.1 Notices
	 	 	71	 
	Section 14.2 Expenses; Indemnity
	 	 	72	 
	Section 14.3 Set-off
	 	 	73	 
	Section 14.4 Governing Law
	 	 	74	 
	Section 14.5 Jurisdiction and Venue
	 	 	74	 
	Section 14.6 Reversal of Payments
	 	 	74	 
	Section 14.7 Injunctive Relief; Punitive Damages
	 	 	74	 
	Section 14.8 Accounting Matters
	 	 	75	 
	Section 14.9 Successors and Assigns; Participations
	 	 	75	 
	Section 14.10 Amendments, Waivers and Consents
	 	 	78	 
	Section 14.11 Performance of Duties
	 	 	79	 
	Section 14.12 All Powers Coupled with Interest
	 	 	79	 
	Section 14.13 Survival of Indemnities
	 	 	79	 
	Section 14.14 Titles and Captions
	 	 	79	 
	Section 14.15 Severability of Provisions
	 	 	79	 
	Section 14.16 Counterparts
	 	 	80	 
	Section 14.17 Term of Agreement
	 	 	80	 
	Section 14.18 Advice of Counsel
	 	 	80	 
	Section 14.19 No Strict Construction
	 	 	80	 
	Section 14.20 Inconsistencies with Other Documents; Independent Effect of Covenants
	 	 	80	 
	Section 14.21 Effect of Agreement
	 	 	80	 
	Section 14.22 USA Patriot Act
	 	 	80	 

iii

 

EXHIBITS

	 	 	 	 	 
	Exhibit A-1

	 	-
	 	Form of Revolving Credit Note
	Exhibit A-2

	 	-
	 	Form of Swingline Note
	Exhibit A-3

	 	-
	 	Form of Term Note
	Exhibit B

	 	-
	 	Form of Notice of Borrowing
	Exhibit C

	 	-
	 	Form of Notice of Account Designation
	Exhibit D

	 	-
	 	Form of Notice of Repayment
	Exhibit E

	 	-
	 	Form of Notice of Conversion/Continuation
	Exhibit F

	 	-
	 	Form of Officer’s Compliance Certificate
	Exhibit G

	 	-
	 	Form of Assignment and Assumption

SCHEDULES

	 	 	 	 	 
	Schedule 1.1

	 	-
	 	Existing Letters of Credit
	Schedule 7.1(a)

	 	-
	 	Jurisdictions of Organization and Qualification
	Schedule 7.1(b)

	 	-
	 	Subsidiaries and Capitalization
	Schedule 7.1(f)

	 	-
	 	Ongoing Tax Audits
	Schedule 7.1(i)

	 	-
	 	ERISA Plans
	Schedule 7.1(l)

	 	-
	 	Material Contracts
	Schedule 7.1(m)

	 	-
	 	Labor and Collective Bargaining Agreements
	Schedule 7.1(t)

	 	-
	 	Debt and Guaranty Obligations
	Schedule 7.1(u)

	 	-
	 	Litigation
	Schedule 9.3

	 	-
	 	Insurance
	Schedule 11.2

	 	-
	 	Existing Liens
	Schedule 11.3

	 	-
	 	Existing Investments
	Schedule 11.8

	 	-
	 	Transactions with Affiliates

iv

 

     SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 2nd day of October,
2006, by and among BELK, INC., a Delaware corporation (the “Company”), the Subsidiaries of
the Company listed on the signature pages hereto and each additional Subsidiary of the Company
which hereafter becomes a Borrower pursuant to Section 9.11 (collectively, the “Subsidiary
Borrowers” and together with the Company, the “Borrowers”), the lenders who are or may
become a party to this Agreement, as Lenders, WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, as Administrative Agent for the Lenders, and BANK OF AMERICA, N.A., a national
banking association, as Syndication Agent and BRANCH BANKING AND TRUST COMPANY, SUNTRUST BANK and
REGIONS BANK as Documentation Agents.

STATEMENT OF PURPOSE

     Certain of the Borrowers, certain financial institutions, and the Administrative Agent
executed and delivered that certain Amended and Restated Credit Agreement dated as of July 5, 2005
(as amended, restated or otherwise modified prior to the date hereof, the “Existing Credit
Agreement”).

     The Borrowers have requested, and, subject to the terms and conditions hereof, the
Administrative Agent and the Lenders have agreed to amend and restate the Existing Credit Agreement
on the terms and conditions of this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, such parties hereby agree that the Existing Credit
Agreement is hereby amended and restated as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1 Definitions. The following terms when used in this Agreement shall have
the meanings assigned to them below:

     “Additional Debt” means, with respect to any Borrower or any Subsidiary and to the
extent not included as a liability on the consolidated balance sheet of such Borrower or
Subsidiary, in accordance with GAAP, any monetary obligation (including, without limitation, all
outstanding payment, recourse, repurchase, hold harmless, indemnity or similar obligations) with
respect to any Synthetic Lease transaction, tax retention or off-balance sheet lease transaction,
asset securitization transaction (including any accounts receivable purchase facility) or any other
monetary obligation arising with respect to any other transaction which does not appear on the
balance sheet of such Borrower or Subsidiary, but which (i) upon the insolvency or bankruptcy of
such Borrower or Subsidiary would be characterized as debt of such Borrower or Subsidiary or (ii)
is the functional equivalent of or takes the place of borrowing.

 

 

     “Adjusted Debt” means the sum of (i) Funded Debt and (ii) the product of (x) Rental
Expense and (y) eight (8).

     “Administrative Agent” means Wachovia in its capacity as Administrative Agent
hereunder, and any successor thereto appointed pursuant to Section 13.9.

     “Administrative Agent’s Office” means the office of the Administrative Agent specified
in or determined in accordance with the provisions of Section 14.1(c).

     “Affiliate” means, with respect to any Person, any other Person (other than a Borrower
or a Subsidiary of a Borrower) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first Person or any of its
Subsidiaries. The term “control” means (a) the power to vote five percent (5%) or more of the
securities or other equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting securities, by contract or
otherwise.

     “Aggregate Commitment” means the aggregate amount of the Lenders’ Commitments
hereunder, as such amount may be reduced, increased or otherwise modified at any time or from time
to time pursuant to the terms hereof. On the Closing Date, the Aggregate Commitment shall be Seven
Hundred Fifty Million and No/100 Dollars ($750,000,000).

     “Agreement” means this Second Amended and Restated Credit Agreement, as amended,
restated, supplemented or otherwise modified from time to time.

     “Applicable Law” means all applicable provisions of constitutions, laws, statutes,
ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

     “Applicable Margin” shall have the meaning assigned thereto in Section 5.1(c).

     “Application” means an application, in the form specified by the Issuing Lender from
time to time, requesting the Issuing Lender to issue a Letter of Credit.

     “Approved Fund” means any Person (other than a natural Person), including, without limitation,
any special purpose entity, 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; provided, that such Approved Fund must be administered, managed or
underwritten 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.

     “Assignment and Assumption” shall have the meaning assigned thereto in Section 14.9.

     “Available Revolving Credit Commitment” means, as to any Lender at any time, an amount
equal to (a) such Lender’s Revolving Credit Commitment less (b) such Lender’s Extensions of Credit.

2

 

     “Base Rate” means, at any time, the higher of (a) the Prime Rate and (b) the Federal
Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take effect simultaneously
with the corresponding change or changes in the Prime Rate or the Federal Funds Rate.

     “Base Rate Loan” means any Loan bearing interest at a rate based upon the Base Rate as
provided in Section 5.1(a).

     “Benefited Lender” shall have the meaning assigned thereto in Section 5.6.

     “Borrowers” shall have the meaning assigned thereto in the preamble hereof.

     “Business Day” means (a) for all purposes other than as set forth in clause (b) below,
any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina
and New York, New York, are open for the conduct of their commercial banking business, and (b) with
respect to all notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and that
is also a day for trading by and between banks in Dollar deposits in the London interbank market.

     “Calculation Date” shall have the meaning assigned thereto in Section 5.1(c).

     “Capital Asset” means, with respect to the Borrowers and their Subsidiaries, any asset
that should, in accordance with GAAP, be classified and accounted for as a capital asset on a
Consolidated balance sheet of the Borrowers and their Subsidiaries.

     “Capital Lease” means any lease of any property by any of the Borrowers or any of
their Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and accounted
for as a capital lease on a Consolidated balance sheet of the Borrowers and their Subsidiaries.

     “Cash Collateral Account” means an account established by the Borrowers with Wachovia
for the benefit of Wachovia in its capacity as Issuing Lender and the L/C Participants.

     “Change in Control” shall have the meaning assigned thereto in Section 12.1(i).

     “Closing Date” means the date of this Agreement or such later Business Day upon which
each condition described in Section 6.2 shall be satisfied or waived in all respects in a manner
acceptable to the Administrative Agent, in its sole discretion.

     “Code” means the United States Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.

     “Commitment” means, as to any Lender, such Lender’s Revolving Credit Commitment and
Term Loan Commitment, as applicable.

     “Commitment Percentage” means, as to any Lender, such Lender’s Revolving Credit
Commitment Percentage or Term Loan Commitment Percentage, as applicable.

     “Company” shall have the meaning assigned thereto in the preamble hereof.

3

 

     “Consolidated” means, when used with reference to financial statements or financial
statement items of the Borrowers and their Subsidiaries, such statements or items on a consolidated
basis in accordance with applicable principles of consolidation under GAAP.

     “Credit Facility” means, collectively, the Term Loan Facility, the Revolving Credit
Facility, the Swingline Facility and the L/C Facility.

     “Debt” means, with respect to the Borrowers and their Subsidiaries at any date and
without duplication, the sum of the following calculated in accordance with GAAP: (a) all Funded
Debt, (b) all Additional Debt, (c) all obligations to pay the deferred purchase price of property
or services of any such Person (including, without limitation, all obligations under
non-competition agreements), except trade payables arising in the ordinary course of business not
more than ninety (90) days past due, (d) all Debt of any other Person secured by a Lien on any
asset of any such Person, (e) all Guaranty Obligations of any such Person, (f) all obligations,
contingent or otherwise, of any such Person relative to the face amount of letters of credit,
whether or not drawn, including, without limitation, any Reimbursement Obligation, and banker’s
acceptances issued for the account of any such Person, (g) all obligations of any such Person to
redeem, repurchase, exchange, defease or otherwise make payments in respect of capital stock or
other securities or partnership interests of such Person and (h) all net payment obligations
incurred by any such Person pursuant to Hedging Agreements.

     “Default” means any of the events specified in Section 12.1 which with the passage of
time, the giving of notice or any other condition, would constitute an Event of Default.

     “Documentation Agent” means each of Branch Banking and Trust Company, SunTrust Bank
and Regions Bank in their capacity as a Documentation Agent hereunder.

     “Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency
of the United States.

     “EBITDA” means, for any period, the sum of the following determined on a Consolidated
basis, without duplication, for the Borrowers and their Subsidiaries in accordance with GAAP: (a)
Net Income for such period plus (b) the sum of the following to the extent deducted in
determining Net Income: (i) income and franchise taxes, (ii) Interest Expense, and (iii)
amortization, depreciation, and other non-cash charges, including those related to the closing of
store locations less (c) interest income and any extraordinary gains; provided that
for any period during which the Parisian Acquisition or any other acquisition permitted pursuant to
the terms of Section 11.3(c) are consummated, EBITDA shall be adjusted to give effect to the
consummation of Parisian Acquisition or any other such permitted acquisition on a pro
forma basis in accordance with GAAP, as if such acquisitions occurred on the first day of
such period, including, without limitation, adjustments reflecting any non-recurring costs,
extraordinary expenses and expense savings calculated in a manner reasonably satisfactory to the
Administrative Agent.

     “EBITDAR” means, for any period, the sum of the following determined on a Consolidated
basis, without duplication, for the Borrowers and their Subsidiaries in accordance with GAAP: (a)
EBITDA for such period plus (b) Rental Expense.

4

 

     “Eligible Assignee” means, with respect to any assignment of the rights, interest and
obligations of a Lender hereunder, a Person that is at the time of such assignment (a) a commercial
bank organized under the laws of the United States or any state thereof, having combined capital
and surplus in excess of $500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and Development, or a
political subdivision of any such country, having combined capital and surplus in excess of
$500,000,000, (c) a finance company, insurance company or other financial institution which in the
ordinary course of business extends credit of the type extended hereunder and that has total assets
in excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original party to this
Agreement or as the assignee of another Lender), (e) the successor (whether by transfer of assets,
merger or otherwise) to all or substantially all of the commercial lending business of the
assigning Lender, (f) any Affiliate of assigning Lender, (g) an Approved Fund, or (h) any other
Person that has been approved in writing as an Eligible Assignee by the Company (other than upon
the occurrence and during the continuance of any Default or Event of Default) and the
Administrative Agent; provided that notwithstanding the foregoing, “Eligible Assignee”
shall not include any of the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries.

     “Employee Benefit Plan” means any employee benefit plan within the meaning of Section
3(3) of ERISA which (a) is maintained for employees of any Borrower or any ERISA Affiliate or (b)
has at any time within the preceding six (6) years been maintained for the employees of any
Borrower or any current or former ERISA Affiliate.

     “Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of
noncompliance or violation, investigations (other than internal reports prepared by any Person in
the ordinary course of business and not in response to any third party action or request of any
kind) or proceedings relating in any way to any actual or alleged violation of or liability under
any Environmental Law or relating to any permit issued, or any approval given, under any such
Environmental Law, including, without limitation, any and all claims by Governmental Authorities
for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution,
indemnification cost recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to human health or the environment.

     “Environmental Laws” means any and all federal, foreign, state, provincial and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations and
orders of courts or Governmental Authorities, relating to the protection of human health or the
environment, including, but not limited to, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.

     “ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and
regulations thereunder, each as amended, or modified from time to time.

5

 

     “ERISA Affiliate” means any Person who together with any Borrower is treated as a
single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section
4001(b) of ERISA.

     “Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as a
decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for
such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the
Federal Reserve System in New York City.

     “Event of Default” means any of the events specified in Section 12.1, provided that
any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

     “Existing Credit Agreement” shall have the meaning assigned thereto in the Statement
of Purpose.

     “Existing Letters of Credit” means, collectively, the Revenue Bond Letter of Credit
and all letters of credit identified on Schedule 1.1.

     “Existing Revolving Credit Loans” has the meaning assigned thereto in Section
6.2(j)(ii).

     “Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the
sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then
outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then
outstanding and (iv) the aggregate principal amount of the Term Loan made by such Lender then
outstanding, or (b) the making of any Loan or participation in any Letters of Credit by such
Lender, as the context requires.

     “FDIC” means the Federal Deposit Insurance Corporation, or any successor thereto.

     “Federal Funds Rate” means, the rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) representing the daily effective federal funds rate as quoted by the
Administrative Agent and confirmed in Federal Reserve Board Statistical Release H.15 (519) or any
successor or substitute publication selected by the Administrative Agent. If, for any reason, such
rate is not available, then “Federal Funds Rate” shall mean a daily rate which is determined, in
the opinion of the Administrative Agent, to be the rate at which federal funds are being offered
for sale in the national federal funds market at 9:00 a.m. (Eastern time). Rates for weekends or
holidays shall be the same as the rate for the most immediately preceding Business Day.

     “Fiscal Year” means the fiscal year of the Borrowers and their Subsidiaries ending on
the Saturday closest to January 31 (whether such Saturday occurs in January or February).

     “Fixed Charges” means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrowers and their Subsidiaries in accordance
with GAAP: (a) Interest Expense, (b) Rental Expense and (c) cash dividends and distributions
(excluding repurchases of the Company’s stock permitted pursuant to Section 11.6(d)).

6

 

     “Fixed Charge Coverage Ratio” means, as of the end of any fiscal quarter of the
Borrowers, the ratio of (a) EBITDAR for the period of four (4) consecutive fiscal quarters ending
on or immediately prior to such date to (b) Fixed Charges for the period of four (4) consecutive
fiscal quarters ending on or immediately prior to such date.

     “Funded Debt” means all liabilities, obligations and indebtedness of the Borrowers for
borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or
other similar instruments and all obligations under Capital Leases.

     “GAAP” means generally accepted accounting principles, as recognized by the American
Institute of Certified Public Accountants and the Financial Accounting Standards Board,
consistently applied and maintained on a consistent basis for the Borrowers and their Subsidiaries
throughout the period indicated and (subject to Section 14.8) consistent with the prior financial
practice of the Borrowers and their Subsidiaries.

     “Governmental Approvals” means all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

     “Governmental Authority” means any nation, province, state or political subdivision
thereof, and any government or any Person exercising executive, legislative, regulatory or
administrative functions of or pertaining to government, and any corporation or other entity owned
or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

     “Guaranty Obligation” means, with respect to the Borrowers and their Subsidiaries,
without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which
such Person has directly or indirectly guaranteed any Debt or other obligation of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided, that the term Guaranty Obligation shall not include endorsements for collection
or deposit in the ordinary course of business.

     “Hazardous Materials” means any substances or materials (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or
mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to
human health or the environment and are or become regulated by any Governmental Authority, (c) the
presence of which require investigation or remediation under any Environmental Law or common law,
(d) the discharge or emission or release of which requires a permit or license under any
Environmental Law or other Governmental Approval, (e) which are deemed to constitute a nuisance or
a trespass which pose a health or safety hazard to Persons or neighboring properties, (f) which
consist of underground or aboveground storage tanks, whether empty, filled or partially filled with
any substance, or (g) which contain, without limitation,

7

 

asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude
oil, nuclear fuel, natural gas or synthetic gas.

     “Headquarters Property” means the real property and all buildings, structures and
appurtenances thereto located at 2801 West Tyvola Road, Charlotte, North Carolina.

     “Headquarters Property Tax Deferred Exchange” means a series of transactions effected
as part of the previous acquisition by the Borrowers of certain of the assets of Saks, Incorporated
used in the operation of the retail department stores operating under the nameplates “McRae’s” and
“Proffit’s”, pursuant to which the Headquarters Property was exchanged for such assets by means of
a qualified tax deferred exchange transaction pursuant to and in accordance with Section 1031 of
the Code (“Section 1031”).

     “Hedging Agreement” means any agreement with respect to any Interest Rate Contract,
agreement, commodity swap, forward foreign exchange agreement, currency swap agreement,
cross-currency rate swap agreement, currency option agreement or other agreement or arrangement
designed to alter the risks of any Person arising from fluctuations in rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified from time to time.

     “Interest Expense” means, with respect to the Borrowers and their Subsidiaries for any
period, the gross interest expense (including, without limitation, interest expense attributable to
Capital Leases and all net payment obligations pursuant to Hedging Agreements) of the Borrowers and
their Subsidiaries, all determined for such period on a Consolidated basis, without duplication, in
accordance with GAAP.

     “Interest Period” shall have the meaning assigned thereto in Section 5.1(b).

     “Interest Rate Contract” means any interest rate swap agreement, interest rate cap
agreement, interest rate floor agreement, interest rate collar agreement, interest rate option or
any other agreement regarding the hedging of interest rate risk exposure executed in connection
with hedging the interest rate exposure of any Person and any confirming letter executed pursuant
to such agreement, all as amended, restated, supplemented or otherwise modified from time to time.

     “ISP 98” means the International Standby Practices (1998 Revision, effective January
1, 1999), International Chamber of Commerce Publication No. 590, as amended.

     “Issuing Lender” means Wachovia in its capacity as an issuer of any Letter of Credit,
or any successor thereto.

     “Joinder Agreement” means, collectively, each joinder agreement in form and substance
acceptable to the Administrative Agent executed in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders.

     “Joint Lead Arrangers” means Wachovia Capital Markets, LLC and Banc of America
Securities LLC and their respective successors.

8

 

     “L/C Commitment” means the lesser of (a) Two Hundred Fifty Million Dollars
($250,000,000) and (b) the Revolving Credit Commitment.

     “L/C Facility” means the letter of credit facility established pursuant to Article
III.

     “L/C Obligations” means at any time, an amount equal to the sum of (a) the aggregate
undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.5.

     “L/C Participant” means the collective reference to all the Lenders other than the
applicable Issuing Lender.

     “Lender” means each Person executing this Agreement as a Lender (including, without
limitation, the Issuing Lender and the Swingline Lender unless the context otherwise requires) set
forth on the signature pages hereto, each Person that hereafter becomes a party to this Agreement
as a Lender pursuant to Section 14.9, and each New Lender.

     “Lending Office” means, with respect to any Lender, the office of such Lender
maintaining such Lender’s Extensions of Credit.

     “Letters of Credit” shall mean the collective reference to the Existing Letters of
Credit and any letter of credit issued by an Issuing Lender pursuant to the terms of this
Agreement, as such Letters of Credit may be amended, modified, extended, renewed or replaced from
time to time.

     “Leverage Ratio” shall have the meaning assigned thereto in Section 10.1.

     “LIBOR” means the rate of interest per annum determined on the basis of the rate for
deposits in Dollars in minimum amounts of at least $5,000,000 for a period equal to the applicable
Interest Period which appears on the Telerate Page 3750 at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of the applicable Interest Period (rounded upward, if
necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not appear
on Telerate Page 3750, then “LIBOR” shall be determined by the Administrative Agent to be the
arithmetic average of the rate per annum at which deposits in Dollars in minimum amounts of at
least $5,000,000 would be offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of the applicable Interest Period for a period equal to such Interest Period. Each
calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes,
absent manifest error.

     “LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

	 	 	 	 	 
	LIBOR Rate =

	 	LIBOR	 	 
	 

	 	 	 	 
	 

	 	1.00-Eurodollar Reserve Percentage
	 	 

9

 

     “LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR Rate
as provided in Section 5.1(a).

     “Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien,
pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement relating to such
asset.

     “Loan Documents” means, collectively, this Agreement, the Notes, the Swingline Side
Letter, the Applications, the Revenue Bond Letter of Credit, each Joinder Agreement and each other
document, instrument, certificate and agreement executed and delivered by the Borrowers or any of
their Subsidiaries in connection with any of the foregoing or otherwise referred to herein or
contemplated hereby (excluding any Hedging Agreement), all as may be amended, restated,
supplemented or otherwise modified from time to time.

     “Loans” means the collective reference to the Revolving Credit Loans, the Term Loan
and the Swingline Loans, and “Loan” means any of such Loans.

     “Material Adverse Effect” means, with respect to the Borrowers or any of their
Subsidiaries, a material adverse effect on the properties, business, prospects, operations or
condition (financial or otherwise) of any such Person or the ability of any such Person to perform
its obligations under the Loan Documents or Material Contracts, in each case to which it is a
party.

     “Material Contract” means (a) any contract or other agreement, written or oral, of any
Borrower or any of its Subsidiaries involving monetary liability of or to any such Person in an
amount in excess of $10,000,000 per annum, or (b) any other contract or agreement, written or oral,
of any Borrower or any of its Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.

     “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which any Borrower or any ERISA Affiliate is making, or is accruing an obligation to make,
or has accrued an obligation to make contributions within the preceding six (6) years.

     “Net Income” means, with respect to the Borrowers and their Subsidiaries, for any
period of determination, the net income (or loss) of the Borrowers and their Subsidiaries for such
period, determined on a Consolidated basis in accordance with GAAP; provided that there
shall be excluded from Net Income (a) the net income (or loss) of any Person (other than a
Subsidiary which shall be subject to clause (c) below), in which any Borrower or any of its
Subsidiaries has a joint interest with a third party, except to the extent such net income is
actually paid to such Borrower or any of its Subsidiaries by dividend or other distribution during
such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of such Person or is merged into or consolidated with such Person or any of its
Subsidiaries or that Person’s assets are acquired by such Person or any of its Subsidiaries except
to the extent included pursuant to the foregoing clause (a), and (c) the net income (if positive)
of any Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by

10

 

such Subsidiary to any Borrower or any of its Subsidiaries of such net income (i)
is not at the time permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute rule or governmental regulation applicable to such Subsidiary or
(ii) would be subject to any taxes payable on such dividends or distributions.

     “Net Worth” means the amount of assets shown on the Consolidated balance sheet of the
Borrowers and their Subsidiaries (including any items which would be treated as intangibles under
GAAP, including, but not limited to capitalized interest, debt discount and expense, goodwill,
patents, trademarks, copyrights, licenses and franchises), less all liabilities of the
Borrowers and their Subsidiaries, all computed in accordance with GAAP, applied on a consistent
basis (such calculation shall exclude any non-cash increase or decrease to the Prepaid Pension
Asset account, as required by GAAP).

     “New Lender” shall have the meaning assigned thereto in Section 2.7(b).

     “Notes” means the collective reference to, the Revolving Credit Notes, the Swingline
Notes and the Term Notes and “Note” means any of such Notes.

     “Notice of Account Designation” shall have the meaning assigned thereto in Section
2.3(b).

     “Notice of Borrowing” shall have the meaning assigned thereto in Section 2.3(a).

     “Notice of Conversion/Continuation” shall have the meaning assigned thereto in Section
4.2.

     “Notice of Repayment” shall have the meaning assigned thereto in Section 2.4(c).

     “Obligations” means, in each case, whether now in existence or hereafter arising: (a)
the principal of and interest on (including interest accruing after the filing of any bankruptcy or
similar petition) the Loans, (b) the L/C Obligations, (c) all existing or future payment and other
obligations owing by any Borrower under any Hedging Agreement (which such Hedging Agreement is
permitted hereunder) with any Person that is a Lender hereunder at the time such Hedging Agreement
is executed (all such obligations with respect to any such Hedging Agreement, “Hedging
Obligations”) and (d) all other fees and commissions (including attorneys’ fees), charges,
indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing
by any Borrower or any of its Subsidiaries to the Lenders or the Administrative Agent, in each case
under or in respect of this Agreement, any Note, any Letter of Credit or any of the other Loan
Documents of every kind, nature and description, direct or indirect, absolute or contingent, due or
to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by
any note.

     “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

     “Officer’s Compliance Certificate” shall have the meaning assigned thereto in Section
8.2.

11

 

     “Operating Lease” shall mean, as to any Person as determined in accordance with GAAP,
any lease of property (whether real, personal or mixed) by such Person as lessee which is not a
Capital Lease.

     “Other Taxes” shall have the meaning assigned thereto in Section 5.11(b).

     “Parisian Acquisition” means the acquisition by the Company of all of the capital
stock of the Parisian Entities for a total purchase price of approximately $285,000,000, pursuant
to the terms of the Parisian Stock Purchase Agreement.

     “Parisian Entities” means, collectively, Parisian Stores, Inc., an Alabama
corporation, Parisian Wholesalers, Inc., an Alabama corporation, and Parisian, Inc., a Delaware
corporation.

     “Parisian Stock Purchase Agreement” means that certain Stock Purchase Agreement dated
as of August 1, 2006 between the Company, as buyer, and the Seller, as such agreement may be
amended from time to time in accordance with its terms and the terms of this Agreement.

     “PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

     “Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which
is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is
maintained for the employees of any Borrower or any ERISA Affiliates or (b) has at any time within
the preceding six (6) years been maintained for the employees of any Borrower or any of its current
or former ERISA Affiliates.

     “Person” means an individual, corporation, limited liability company, partnership,
association, trust, business trust, joint venture, joint stock company, pool, syndicate, sole
proprietorship, unincorporated organization, Governmental Authority or any other form of entity or
group thereof.

     “Prepaid Pension Asset” as of any date of determination, means the fair value of the
Pension Plans’ assets plus unrecognized gains/losses, prior service costs, and any unrecognized net
obligation or asset from transitions in excess of the projected benefit obligations, all determined
in accordance with Financial Accounting Standard No. 87-Employer’s Accounting for Pensions.

     “Prime Rate” means, at any time, the rate of interest per annum publicly announced
from time to time by Wachovia as its prime rate. Each change in the Prime Rate shall be effective
as of the opening of business on the day such change in such prime rate occurs. The parties hereto
acknowledge that the rate announced publicly by Wachovia as its prime rate is an index or base rate
and shall not necessarily be its lowest or best rate charged to its customers or other banks.

     “Qualified Intermediary” means an entity which qualifies as a “qualified intermediary”
under U.S. Treasury Regulation Section 1.1031(k)-1(g)(4).

     “Register” shall have the meaning assigned thereto in Section 14.9(d).

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     “Reimbursement Obligation” means the obligation of the Borrowers to reimburse the
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.

     “Required Lenders” means at any date, any combination of Lenders whose Commitments
constitute more than fifty percent (50%) of the Aggregate Commitment (or, if the Credit Facility
has been terminated pursuant to Section 12.2, any combination of Lenders holding more than fifty
percent (50%) of the aggregate outstanding Extensions of Credit.

     “Rental Expense” means payments made pursuant to all obligations of the Borrowers and
their Subsidiaries under leases (other than Capital Leases) of real property or personal property,
whether now existing or hereafter entered into; provided that for any period during which
the Parisian Acquisition or any other acquisition permitted pursuant to the terms of Section
11.3(c) is consummated, Rental Expense shall be adjusted to give effect to the consummation of the
Parisian Acquisition and/or such other permitted acquisition on a pro forma basis
in accordance with GAAP, as if such acquisition occurred on the first day of such period,
including, without limitation, adjustments reflecting any non-recurring costs, extraordinary
expenses and expense savings calculated in a manner reasonably satisfactory to the Administrative
Agent.

     “Responsible Officer” means any of the following: the chief executive officer or
chief financial officer of a Borrower or any other officer of a Borrower reasonably acceptable to
the Administrative Agent.

     “Revenue Bond Letter of Credit” means the standby letter of credit, dated July 1, 1998
in a face amount of $126,849,316 issued by First Union National Bank (now Wachovia) to support the
obligations of the Company to the trustee under the Trust Indenture dated as of July 1, 1998
between the Company, as borrower, and First Union National Bank, as trustee, as amended, restated,
supplemented or otherwise modified from time to time.

     “Revolving Credit Commitment” means, (a) as to any Revolving Credit Lender, the
obligation of such Revolving Credit Lender to make Loans to and issue or participate in Letters of
Credit issued for the account of the Borrowers hereunder in an aggregate principal or face amount
at any time outstanding not to exceed the amount set forth in the Register, as the same may be
reduced or modified at any time or from time to time pursuant to the terms hereof, and (b) as to
all Revolving Credit Lenders, the aggregate commitment of all Revolving Credit Lenders to make
Revolving Credit Loans, as such amount may be reduced at any time or from time to time pursuant to
the terms hereof. The Revolving Credit Commitment of all Revolving Credit Lenders on the Closing
Date shall be $400,000,000.

     “Revolving Credit Commitment Percentage” means, as to any Lender at any time, the
ratio of (a) the amount of the Revolving Credit Commitment of such Revolving Credit Lender to (b)
the Revolving Credit Commitment of all Revolving Credit Lenders.

     “Revolving Credit Facility” means the revolving credit facility established pursuant
to Article II.

     “Revolving Credit Lenders” means Lenders with a Revolving Credit Commitment.

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     “Revolving Credit Loans” means any revolving loan made to the Borrowers pursuant to
Section 2.1 and Section 2.7, and all such revolving loans collectively as the context requires.

     “Revolving Credit Notes” means the collective reference to the Revolving Credit Notes
made by the Borrowers in favor of a Revolving Credit Lender evidencing the Revolving Credit Loans
made by such Revolving Credit Lender, substantially in the form of Exhibit A-1 hereto,
evidencing the Revolving Credit Facility, and any amendments, supplements and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals or extension
thereof, in whole or in part; “Revolving Credit Note” means any of such Revolving Credit
Notes.

     “Revolving Credit Termination Date” means the earliest of (a) October 2, 2011, (b) the
date of termination by the Borrowers pursuant to Section 2.6 or (c) the date of termination
pursuant to Section 12.2(a).

     “Sanctioned Entity” shall mean (i) an agency of the government of, (ii) an
organization directly or indirectly controlled by, or (iii) a person resident in, a country that is
subject to a sanctions program identified on the list maintained by OFAC and available at
http://treas.gov/offices/enforcement/ofac/sanctions/index.html, or as otherwise published
from time to time as such program may be applicable to such agency, organization or person.

     “Sanctioned Person” shall mean a person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published
from time to time.

     “Seller” means Saks, Incorporated, a Tennessee corporation.

     “Senior Notes” means the $20,000,000 5.05% Senior Notes, Series A, due July 12, 2012,
the $100,000,000 5.31% Senior Notes, Series B, due July 12, 2015 and the $80,000,000 Floating Rate
Senior Notes, Series C, due July 12, 2012 issued by the Borrowers in favor of certain purchasers
pursuant to the Note Purchase Agreement dated July 12, 2005 by and among the Borrowers and such
purchasers.

     “Series 1998 Revenue Bonds” means the Belk, Inc. Taxable Variable Rate Demand Revenue
Bonds, Series 1998, issued by Belk, Inc.

     “Solvent” means, as to any Borrower and its Subsidiaries on a particular date, that
any such Person (a) has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage and is able to pay its debts as they
mature, (b) owns property having a value, both at fair valuation and at present fair saleable
value, greater than the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its ability to pay such
debts or liabilities as they mature.

     “Subordinated Debt” means the collective reference to any Debt of any Borrower or any
Subsidiary subordinated in right and time of payment to the Obligations and containing such other
terms and conditions, in each case as are satisfactory to the Required Lenders.

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     “Subsidiary” means as to any Person, any corporation, partnership, limited liability
company or other entity of which more than fifty percent (50%) of the outstanding capital stock or
other ownership interests having ordinary voting power to elect a majority of the board of
directors or other managers of such corporation, partnership, limited liability company or other
entity is at the time owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership interests of any other
class or classes of such corporation, partnership, limited liability company or other entity shall
have or might have voting power by reason of the happening of any contingency). Unless otherwise
qualified references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the
Borrowers.

     “Subsidiary Borrowers” shall have the meaning assigned thereto in the preamble hereof.

     “Swingline Facility” means the swingline facility established pursuant to Section 2.2.

     “Swingline Lender” means Wachovia in its capacity as swingline lender hereunder.

     “Swingline Loan” means any swingline loan made by the Swingline Lender to the
Borrowers pursuant to Section 2.2, and all such swingline loans collectively as the context
requires.

     “Swingline Note” means the Swingline Note made by the Borrowers payable to the order
of the Swingline Lender, substantially in the form of Exhibit A-2 hereto, evidencing the
Swingline Loans, and any amendments, supplements and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extensions thereof, in whole or in part.

     “Swingline Side Letter” means the side letter dated as of the date hereof executed by
the Borrowers and the Administrative Agent detailing the availability of Swingline Loans in
connection with the Administrative Agent’s Financial Management Account program.

     “Swingline Sublimit Amount” means Thirty-five Million Dollars ($35,000,000).

     “Swingline Termination Date” means the first to occur of (a) the resignation of
Wachovia as Administrative Agent in accordance with Section 13.9 and (b) the Revolving Credit
Termination Date.

     “Syndication Agent” means Bank of America, N.A. in its capacity as Syndication Agent
hereunder.

     “Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in
accordance with GAAP.

     “Taxes” shall have the meaning assigned thereto in Section 5.11(a).

     “Term Loan” means the term loan to be made to the Borrowers by the Lenders pursuant to
Section 4.1.

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     “Term Loan Commitment” means (a) as to any Lender, the obligation of such Lender to
make a portion of the Term Loan to the account of the Borrowers hereunder on the Closing Date in an
aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on the
Register, as such amount may be reduced or otherwise modified at any time or from time to time
pursuant to the terms hereof and (b) as to all Term Loan Lenders, the aggregate commitment of all
Term Loan Lenders to make the Term Loan hereunder on the Closing Date. The Term Loan Commitment of
all Lenders on the Closing Date shall be $350,000,000.

     “Term Loan Commitment Percentage” means, as to any Lender, (a) prior to making the
Term Loan, the ratio of (i) the Term Loan Commitment of such Lender to (ii) the Term Loan
Commitments of all Lenders and (b) after the Term Loan is made, the ratio of (i) the outstanding
principal balance of the Term Loan held by such Lender to (ii) the aggregate outstanding principal
balance of the Term Loan held by all Lenders.

     “Term Loan Facility” means the term loan facility established pursuant to Article IV.

     “Term Loan Termination Date” means the first to occur of (a) October 2, 2011, or (b)
the date of termination by the Administrative Agent on behalf of the Lenders pursuant to Section
12.2(a).

     “Term Note” means a promissory note made by the Borrowers in favor of a Lender
evidencing the portion of the Term Loan made by such Lender, substantially in the form of
Exhibit A-3, and any amendments, supplements and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

     “Termination Event” means except for any such event or condition that could not
reasonably be expected to have a Material Adverse Effect: (a) a “Reportable Event”
described in Section 4043 of ERISA for which the notice requirement has not been waived by the
PBGC, or (b) the withdrawal of any Borrower or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, or
(c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan
or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the
plan assets are not sufficient to pay all plan liabilities or (d) the institution of proceedings to
terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e)
any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA, or (g) the
partial or complete withdrawal of any Borrower of any ERISA Affiliate from a Multiemployer Plan if
withdrawal liability is asserted by such Plan, or (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i)
any event or condition which results in the termination of a Multiemployer Plan under Section 4041A
of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section
4042 of ERISA.

     “Uniform Customs” means the Uniform Customs and Practice for Documentary Credits (1993
Revision), effective January 1994 International Chamber of Commerce Publication No. 500, as
amended.

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     “United States” means the United States of America.

     “Wachovia” means Wachovia Bank, National Association, a national banking association,
and its successors.

     “Wholly Owned” means, with respect to a Subsidiary, that all of the shares of capital
stock or other ownership interests of such Subsidiary are, directly or indirectly, owned or
controlled by any Borrower and/or one or more of its Wholly Owned Subsidiaries (except for
directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person
other than such Borrower).

     SECTION 1.2 General. Unless otherwise specified, a reference in this Agreement to a
particular article, section, subsection, Schedule or Exhibit is a reference to that article,
section, subsection, Schedule or Exhibit of this Agreement. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to “Eastern time” shall refer to the
applicable time of day in Charlotte, North Carolina.

     SECTION 1.3 Other Definitions and Provisions.

     (a) Use of Capitalized Terms. Unless otherwise defined therein, all capitalized terms
defined in this Agreement shall have the defined meanings when used in this Agreement, the Notes
and the other Loan Documents or any certificate, report or other document made or delivered
pursuant to this Agreement.

     (b) Miscellaneous. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

ARTICLE II

REVOLVING CREDIT FACILITY

     SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations and warranties set forth herein, each Revolving
Credit Lender severally agrees to make Revolving Credit Loans to the Borrowers from time to time
from the Closing Date through, but not including, the Revolving Credit Termination Date as
requested by the Borrowers in accordance with the terms of Section 2.3; provided, that (a)
the aggregate principal amount of all outstanding Revolving Credit Loans (after giving effect to
any amount requested) shall not exceed the Revolving Credit Commitment less (i) the
Swingline Sublimit Amount and (ii) the sum of all outstanding L/C Obligations and (b) the aggregate
principal amount of all outstanding Revolving Credit Loans from any Lender
to the Borrowers shall
not at any time exceed such Lender’s Revolving Credit Commitment less (i) such Lender’s
Revolving Credit Commitment Percentage of outstanding L/C Obligations with respect to Letters of
Credit and (ii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Sublimit
Amount. Each Revolving Credit Loan by a Revolving Credit Lender

17

 

shall be in a principal amount
equal to such Lender’s Revolving Credit Commitment Percentage of the aggregate principal amount of
Revolving Credit Loans requested on such occasion. Subject to the terms and conditions hereof, the
Borrowers may borrow, repay and reborrow Revolving Credit Loans hereunder until the Revolving
Credit Termination Date.

     SECTION 2.2 Swingline Loans.

     (a) Availability. Subject to the terms and conditions of this Agreement and the
Swingline Side Letter, the Swingline Lender agrees to make Swingline Loans to the Borrowers from
time to time from the Closing Date through, but not including, the Swingline Termination Date;
provided, that the aggregate principal amount of all outstanding Swingline Loans (after
giving effect to any amount requested), shall not exceed the lesser of (a) the Revolving Credit
Commitment less the sum of all outstanding Revolving Credit Loans and L/C Obligations and (b) the
Swingline Sublimit Amount.

     (b) Payment of Principal and Interest. Principal and interest on Swingline Loans
deemed requested pursuant to the Swingline Side Letter shall be paid pursuant to the terms and
conditions of the Swingline Side Letter without any deduction, setoff or counterclaim whatsoever.
Principal and interest on Swingline Loans requested pursuant to Section 2.3 hereof shall be paid
pursuant to the terms of this Agreement. Unless sooner paid pursuant to the provisions hereof or
the provisions of the Swingline Side Letter, the principal of the Swingline Loans shall be paid in
full, together with accrued interest thereon, on the earlier to occur of (i) demand for payment by
the Swingline Lender or (ii) the Swingline Termination Date.

     (c) Refunding.

          (i) Upon the occurrence and during the continuance of an Event of Default, Swingline Loans
shall be refunded by the Revolving Credit Lenders on demand by the Swingline Lender. Such
refundings shall be made by the Revolving Credit Lenders in accordance with their respective
Revolving Credit Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans
of the Revolving Credit Lenders on the books and records of the Administrative Agent. Each
Revolving Credit Lender shall fund its respective Revolving Credit Commitment Percentage of
Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender
upon demand by the Swingline Lender upon the occurrence and during the continuance of an Event of
Default but in no event later than 2:00 p.m. (Eastern time) on the next succeeding Business Day
after such demand is made. No Revolving Credit Lender’s obligation to fund its respective
Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by any other Revolving
Credit Lender’s failure to fund its Revolving Credit Commitment Percentage of a Swingline Loan, nor
shall any Revolving Credit Lender’s Revolving Credit Commitment Percentage be increased as a result
of any such failure of any other Revolving Credit Lender to fund its Revolving Credit Commitment
Percentage of a Swingline Loan.

          (ii) The Borrowers shall pay to the Swingline Lender on demand the amount of such Swingline
Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay
in full the outstanding Swingline Loans requested or required to be refunded. In addition, the
Borrowers hereby authorize the Administrative Agent to charge any

18

 

account maintained by the
Borrowers with the Swingline Lender (up to the amount available therein) in order to immediately
pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the
Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. If any portion of any such amount paid to the Swingline
Lender shall be recovered by or on behalf of the Borrowers from the Swingline Lender in bankruptcy
or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving
Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages (unless
the amounts so recovered by or on behalf of the Borrowers pertain to a Swingline Loan extended
after the occurrence and during the continuance of an Event of Default of which the Administrative
Agent has received notice in the manner required pursuant to Section 13.5 and which such Event of
Default has not been waived by the Required Lenders or the Lenders, as applicable).

          (iii) Each Revolving Credit Lender acknowledges and agrees that its obligation to refund
Swingline Loans in accordance with the terms of this Section 2.2 is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without limitation,
non-satisfaction of the conditions set forth in Article V. Further, each Revolving Credit Lender
agrees and acknowledges that if prior to the refunding of any outstanding Swingline Loans pursuant
to this Section 2.2, one of the events described in Section 12.1(j) or (k) shall have occurred,
each Revolving Credit Lender will, on the date the applicable Revolving Credit Loan would have been
made, purchase an undivided participating interest in the Swingline Loan to be refunded in an
amount equal to its Revolving Credit Commitment Percentage (as in effect immediately prior to any
such event) of the aggregate amount of such Swingline Loan. Each Revolving Credit Lender will
immediately transfer to the Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such Revolving Credit
Lender a certificate evidencing such participation dated the date of receipt of such funds and for
such amount. Whenever, at any time after the Swingline Lender has received from any Revolving
Credit Lender such Revolving Credit Lender’s participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to
such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such Revolving Credit
Lender’s participating interest was outstanding and funded).

     SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans.

     (a) Requests for Borrowing. With the exception of Swingline Loans deemed requested
pursuant to the Swingline Side Letter, the Borrowers shall give the Administrative Agent
irrevocable prior written notice substantially in the form attached hereto as Exhibit B (a
“Notice of Borrowing”) not later than 11:00 a.m. (Eastern time) (i) on the same Business
Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before
each LIBOR Rate Loan, of its intention to borrow, specifying (A) the date of such borrowing, which
shall be a Business Day, (B) the amount of such borrowing, which shall be, (x) with respect to Base
Rate Loans (other than Swingline Loans) in an aggregate principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof, (y) with respect to LIBOR Rate Loans in an aggregate
principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and (z) with
respect to Swingline Loans (other than Swingline Loans deemed requested

19

 

pursuant to the Swingline
Side Letter) in an aggregate principal amount of $100,000 or a whole multiple of $100,000 in excess
thereof, (C) whether such Loan is to be a Revolving Credit Loan or Swingline Loan, (D) in the case
of a Revolving Credit Loan whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E)
in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto. A Notice
of Borrowing received after 11:00 a.m. (Eastern time) shall be deemed received on the next Business
Day. The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing.

     (b) Disbursement of Revolving Credit and Swingline Loans. Not later than 2:00 p.m.
(Eastern time) on the proposed borrowing date, (i) each Revolving Credit Lender will make available
to the Administrative Agent, for the account of the Borrowers, at the office of the Administrative
Agent in funds immediately available to the Administrative Agent, such Lender’s Revolving Credit
Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the account of the Borrowers,
at the office of the Administrative Agent in funds immediately available to the Administrative
Agent, the Swingline Loans (other than Swingline Loans deemed requested pursuant to the Swingline
Side Letter) to be made on such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section
2.3 in immediately available funds by crediting or wiring such proceeds to the deposit account of
the Company identified in the most recent notice substantially in the form of Exhibit C
hereto (a “Notice of Account Designation”) delivered by the Borrowers to the Administrative
Agent or as may be otherwise agreed upon by the Borrowers and the Administrative Agent from time to
time. Subject to Section 5.7 hereof, the Administrative Agent shall not be obligated to disburse
the portion of the proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3 to
the extent that any Revolving Credit Lender has not made available to the Administrative Agent its
Revolving Credit Commitment Percentage of such Loan. Revolving Credit Loans to be made for the
purpose of refunding Swingline Loans shall be made by the Revolving Credit Lenders as provided in
Section 2.2(c).

     SECTION 2.4 Repayment of Loans.

     (a) Repayment on Revolving Credit Termination Date. The Borrowers hereby agree to
repay the outstanding principal amount of (i) all Revolving Credit Loans in full on the Revolving
Credit Termination Date, and (ii) all Swingline Loans in accordance with Section 2.2, together, in
each case, with all accrued but unpaid interest thereon.

     (b) Mandatory Repayments. If at any time the outstanding principal amount of all
Revolving Credit Loans plus the sum of all outstanding Swingline Loans and L/C Obligations
exceeds the Revolving Credit Commitment, the Borrowers agree to repay immediately upon notice from
the Administrative Agent, by payment to the Administrative Agent for the account of the Lenders an
amount equal to such excess with each such repayment applied first to the outstanding
principal amount of outstanding Swingline Loans, second to the principal amount of
outstanding Revolving Credit Loans and third, with respect to any Letters of Credit then
outstanding, a payment of cash collateral into the Cash Collateral Account for the benefit of the
L/C Participants in an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit (all such cash collateral to be applied in accordance with Section 12.2(b)).

20

 

     (c) Optional Repayments. The Borrowers may at any time and from time to time repay
the Loans, in whole or in part, upon at least three (3) Business Days’ irrevocable notice to the
Administrative Agent with respect to LIBOR Rate Loans and one (1) Business Day irrevocable notice
with respect to Base Rate Loans and Swingline Loans, substantially in the form attached hereto as
Exhibit D (a “Notice of Repayment”) specifying the date and amount of repayment and
whether the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender, except with respect to any
repayment of Swingline Loans. If any such notice is given, the amount specified in such notice
shall be due and payable on the date set forth in such notice. Partial repayments shall be in an
aggregate amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to
Base Rate Loans (other than Swingline Loans), $5,000,000 or a whole multiple of $1,000,000 in
excess thereof with respect to LIBOR Rate Loans and $100,000 or a whole multiple of $100,000 in
excess thereof with respect to Swingline Loans. Each such repayment shall be accompanied by any
amount required to be paid pursuant to Section 5.9 hereof. A Notice of Prepayment received after
11:00 a.m. shall be deemed received on the next Business Day.

     (d) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may not repay any
LIBOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto
unless such repayment is accompanied by any amount required to be paid pursuant to Section 5.9
hereof.

     (e) Hedging Agreements. No repayment or prepayment pursuant to this Section 2.4 shall
affect any Borrower’s obligations under any Hedging Agreement.

     SECTION 2.5 Notes.

     (a) Revolving Credit Notes. Except as otherwise provided in Section 14.9 (a)-(e), at
the request of a Revolving Credit Lender, such Lender’s Revolving Credit Loans and the obligation
of the Borrowers to repay such Revolving Credit Loans shall be evidenced by a separate Revolving
Credit Note executed by the Borrowers payable to the order of such Revolving Credit Lender.

     (b) Swingline Notes. The Swingline Loans and the obligation of the Borrowers to repay
such Swingline Loans shall be evidenced by a Swingline Note executed by the Borrowers payable to
the order of the Swingline Lender.

     SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment.

     (a) Voluntary Reduction. The Borrowers shall have the right at any time and from time
to time, upon at least five (5) Business Days prior written notice to the Administrative Agent, to
permanently reduce, without premium or penalty, (i) the entire aggregate Revolving Credit
Commitment or (ii) portions of the Revolving Credit Commitment, in an aggregate principal amount of
not less than $3,000,000 or any whole multiple of $1,000,000 in excess thereof. The amount of each
partial permanent reduction shall
be applied pro rata to reduce the remaining
mandatory reduction amounts required under Section 2.6(b), and such reduction shall

21

 

permanently
reduce the Lenders’ Revolving Credit Commitments to make Loans and issue or participate in Letters
of Credit pro rata in accordance with their respective Revolving Credit Commitment
Percentages.

     (b) Corresponding Payment. Each permanent reduction permitted pursuant to this
Section 2.6 shall be accompanied by a payment of principal sufficient to reduce the aggregate
outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as applicable, after such
reduction to the aggregate Revolving Credit Commitment as so reduced and if the aggregate Revolving
Credit Commitment as so reduced is less than the aggregate amount of all outstanding Letters of
Credit, the Borrowers shall be required to deposit cash collateral in the Cash Collateral Account
in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Such cash collateral shall be applied in accordance with Section 12.2(b). Any reduction of the
aggregate Revolving Credit Commitment to zero shall be accompanied by payment of all outstanding
Revolving Credit Loans and Swingline Loans (and furnishing of cash collateral satisfactory to the
Administrative Agent for all L/C Obligations) and shall result in the termination of the Revolving
Credit Commitments and the Revolving Credit Facility. Such cash collateral shall be applied in
accordance with Section 12.2(b). If the reduction of the aggregate Revolving Credit Commitment
requires the repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.

     SECTION 2.7 Increase of Revolving Credit Commitment. So long as no Default or Event
of Default shall have occurred and be continuing, at any time prior to the third (3rd) anniversary
of the Closing Date, the Borrowers shall have the right from time to time upon not less than thirty
(30) days prior written notice to the Administrative Agent to increase the aggregate Revolving
Credit Commitment; provided that in no event shall the aggregate Revolving Credit
Commitment be increased to an amount greater than $500,000,000; provided further
that:

     (a) Each existing Revolving Credit Lender shall have the right, but not the obligation, to
commit to all or a portion of the proposed increase. Any increase in the aggregate Revolving
Credit Commitment which is accomplished by increasing the Revolving Credit Commitment of any
Revolving Credit Lender or Revolving Credit Lenders who are at the time of such increase party to
this Agreement (which Lender or Lenders shall consent to such increase in their sole and absolute
discretion) shall be accomplished as follows: (i) this Agreement will be amended by the Borrowers,
the Administrative Agent and those Lender(s) whose Revolving Credit Commitment(s) is or are being
increased (but without any requirement that the consent of the Required Lenders be obtained) to
reflect the revised Revolving Credit Commitment amounts of each of the Revolving Credit Lenders,
(ii) the Administrative Agent will update the Register to reflect the revised Revolving Credit
Commitment amount and Revolving Credit Commitment Percentage of each of the Revolving Credit
Lenders, (iii) the Extensions of Credit of each Revolving Credit Lender will be reallocated on the
effective date of such increase among the Revolving Credit Lenders in accordance with their revised
Revolving Credit Commitment Percentages (and the Revolving Credit Lenders agree to make all
payments and adjustments necessary to effect the reallocation and the Borrowers shall pay any and
all costs required pursuant to Section 5.9 in connection with such reallocation as if such
reallocation were a repayment) and (iv) if requested by such Lender or Lenders, the Borrowers will
deliver new

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Revolving Credit Note(s) to the Lender or Lenders whose Commitment(s) is or are being
increased reflecting the revised Revolving Credit Commitment amount of such Revolving Credit
Lender(s).

     (b) If the Administrative Agent does not receive sufficient commitments from the existing
Revolving Credit Lenders to fund the entire amount of the proposed increase, Borrower may then
solicit commitments from other banks, financial institutions or investment funds. The failure by
any existing Lender to respond to a request for such increase shall be deemed to be a refusal of
such request by such existing Lender. Any increase in the aggregate Revolving Credit Commitment
which is accomplished by addition of a new Revolving Credit Lender under the Agreement (each such
new Lender, a “New Lender”) shall be accomplished as follows: (i) such New Lender shall be
an Eligible Assignee and shall be subject to the consent of the Administrative Agent, which consent
shall not be unreasonably withheld, (ii) this Agreement will be amended by the Borrowers, the
Administrative Agent and by the party becoming a New Lender hereunder (but without any requirement
that the consent of the Required Lenders be obtained) solely to reflect the addition of such party
as a Revolving Credit Lender hereunder, (iii) the Administrative Agent will update the Register to
reflect the revised Revolving Credit Commitment and Revolving Credit Commitment Percentage of each
of the Revolving Credit Lenders, (iv) the Extensions of Credit of each of the Revolving Credit
Lenders will be reallocated on the effective date of such increase among the Revolving Credit
Lenders in accordance with their revised Revolving Credit Commitment Percentages (and the Revolving
Credit Lenders agree to make all payments and adjustments necessary to effect the reallocation and
the Borrowers shall pay any and all costs required pursuant to Section 5.9 in connection with such
reallocation as if such reallocation were a repayment) and (v) at the request of any Revolving
Credit Lender, the Borrowers will deliver a Revolving Credit Note to such Lender.

     SECTION 2.8 Joint and Several Liability of Borrowers.

     (a) Each of the Borrowers is accepting joint and several liability hereunder in consideration
of the financial accommodation to be provided by the Lenders under this Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings
of each of the Borrowers to accept joint and several liability for the obligations of each of them.

     (b) Each of the Borrowers jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the Obligations arising under this
Agreement and the other Loan Documents, it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the Borrowers without preferences
or distinction among them.

     (c) If and to the extent that any of the Borrowers shall fail to make any payment with respect
to any of the Obligations as and when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event, the other Borrowers will make such payment with respect
to, or perform, such Obligation.

23

 

     (d) The obligations of each Borrower under the provisions of this Section 2.8 constitute full
recourse obligations of such Borrower, enforceable against it to the full extent of its properties
and assets.

     (e) Except as otherwise expressly provided herein, to the extent permitted by Applicable Law,
each Borrower (in its capacity as a joint and several obligor in respect of the obligations of the
other Borrowers) hereby waives notice of acceptance of its joint and several liability, notice of
occurrence of any Default or Event of Default (except to the extent notice is expressly required to
be given pursuant to the terms of this Agreement), or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by the Administrative Agent or the
Lenders under or in respect of any of the obligations hereunder, any requirement of diligence and,
generally, all demands, notices and other formalities of every kind in connection with this
Agreement. Each Borrower hereby assents to, and waives notice of, any extension or postponement of
the time for the payment of any of the Obligations, the acceptance of any partial payment thereon,
any waiver, consent or other action or acquiescence by the Administrative Agent or the Lenders at
any time or times in respect of any default by the other Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Administrative Agent or the Lenders in respect of any of the
obligations hereunder, and the taking, addition, substitution or release, in whole or in part, at
any time or times, of any security for any of such obligations or the addition, substitution or
release, in whole or in part, of the other Borrowers. Without limiting the generality of the
foregoing, each Borrower (in its capacity as a joint and several obligor in respect of the
obligations of the other Borrowers) assents to any other action or delay in acting or any failure
to act on the part of the Administrative Agent or the Lenders, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder which might, but for the provisions of this Section 2.8,
afford grounds for terminating, discharging or relieving such Borrower, in whole or in part, from
any of its obligations under this Section 2.8, it being the intention of each Borrower that, so
long as any of the Obligations hereunder remain unsatisfied, the obligations of such Borrower under
this Section 2.8 shall not be discharged except by performance and then only to the extent of such
performance. The obligations of each Borrower under this Section 2.8 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction
or similar proceeding with respect to any Borrower or a Lender. The joint and several liability of
the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name, membership, constitution or place
of formation of any Borrower or any of the Lenders.

     (f) The provisions of this Section 2.8 are made for the benefit of the Lenders and their
successors and assigns, and may be enforced by them from time to time against any of the Borrowers
as often as occasion therefor may arise and without requirement on the part of the Lenders first to
marshal any of its claims or to exercise any of its rights against the other Borrowers or to
exhaust any remedies available to it against the other Borrowers or to resort to any other source
or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.
The provisions of this Section 2.8 shall remain in effect until all the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made
in respect of any of the Obligations is rescinded or must otherwise be

24

 

restored or returned by the
Lenders upon the insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise,
the provisions of this Section 2.8 will forthwith be reinstated and in effect as though such
payment had not been made.

     (g) Notwithstanding any provision to the contrary contained herein or in any of the other Loan
Documents, to the extent the obligations of any Borrower shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the obligations of such Borrower
hereunder shall be limited to the maximum amount that is permissible under applicable law (whether
federal or state and including, without limitation, the Bankruptcy Code of the United States).

     SECTION 2.9 Appointment of the Company. Each of the Borrowers hereby appoints the
Company to act as its agent for all purposes under this Agreement (including, without limitation,
with respect to all matters related to the borrowing and repayment of Loans) and agrees that (a)
the Company may execute such documents on behalf of the other Borrowers as the Company deems
appropriate in its sole discretion and the Borrowers shall be obligated by all of the terms of any
such document executed on its behalf, (b) any notice or communication delivered by the
Administrative Agent or the Lender to the Company shall be deemed delivered to the Borrowers and
(c) the Administrative Agent or the Lenders may accept, and be permitted to rely on, any document,
instrument or agreement executed by the Company on behalf of the Borrowers.

ARTICLE III

LETTER OF CREDIT FACILITY

     SECTION 3.1 L/C Commitments.

     (a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the
agreements of the other Lenders set forth in Section 3.4(a), agrees to issue standby and trade
Letters of Credit for the account of the Borrowers on any Business Day from the Closing Date
through but not including the tenth (10th) Business Day prior to the Revolving Credit Termination
Date in such form as may be approved from time to time by the Issuing Lender; provided,
that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
Available Revolving Credit Commitment of any Lender would be zero or less than zero. Each Letter
of Credit (other than the Revenue Bond Letter of Credit) shall (A) be denominated in Dollars in a
minimum amount of $5,000, (B) be a standby letter of credit or trade letter of credit issued to
support obligations of the Borrowers or any of their Subsidiaries, contingent or otherwise,
incurred in the ordinary course of business, (C) expire on a date satisfactory to the Issuing
Lender, which date shall be no later than the earlier of (1) one (1) year after its date of
issuance and (2) the tenth (10th) Business Day prior to the Revolving Credit Termination Date and
(iii) be subject to the Uniform Customs and/or ISP 98, as set forth in the Application or as
determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the
State of North Carolina.

25

 

     (b) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the
agreements of the other Lenders, if any, set forth in Section 3.4 (b), agrees to maintain the
Revenue Bond Letter of Credit for the account of the Company from the Closing Date through and
including July 31, 2007; provided, that, so long as (i) no default or event of default
shall have occurred under the Revenue Bond Letter of Credit or the related reimbursement documents
and (ii) no Default or Event of Default has occurred under this Agreement, the Issuing Lender, may
in its sole discretion, annually renew the Revenue Bond Letter of Credit for a period ending July
31, 2008. The Existing Letters of Credit shall be deemed to be Letters of Credit issued under and
pursuant to the terms of this Agreement.

     (c) The Issuing Lender shall not at any time be obligated to issue or maintain any Letter of
Credit hereunder if such issuance or maintenance would conflict with, or cause the Issuing Lender
or any L/C Participant to exceed any limits imposed by, any Applicable Law. References herein to
“issue”, “maintain” and derivations thereof with respect to the Letters of Credit shall also
include extensions or modifications of any existing Letters of Credit, unless the context otherwise
requires.

     SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrowers may from time
to time request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing
Lender at the Administrative Agent’s Office an Application therefor, completed to the satisfaction
of the Issuing Lender, and such other certificates, documents and other papers and information as
the Issuing Lender may request. Upon receipt of any Application, the Issuing Lender shall process
such Application and the certificates, documents and other papers and information delivered to it
in connection therewith in accordance with its customary procedures and shall, subject to Section
3.1(a) and Article VI hereof, promptly issue the Letter of Credit requested thereby (but in no
event shall the Issuing Lender be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the
Borrowers. The Issuing Lender shall, contemporaneously with the issuance of each Letter of Credit,
deliver a copy thereof to the Administrative Agent. The Issuing Lender shall promptly furnish to
the Company a copy of such Letter of Credit and promptly notify each Revolving Credit Lender of the
issuance and upon request by any Lender, furnish to such Lender a copy of such Letter of Credit and
the amount of such Lender’s participation therein.

     SECTION 3.3 Fees and Other Charges.

     (a) The Borrowers shall pay to the Administrative Agent, for the account of the Issuing Lender
and the L/C Participants, a letter of credit fee with respect to each Letter of Credit in an amount
equal to the average outstanding amount of such Letter of Credit during the calendar quarter for
which such fee applies multiplied by the Applicable Margin with respect to
Revolving Credit Loans which are LIBOR Rate Loans (determined on a per annum basis). Such fee
shall be payable quarterly in arrears on the last Business Day of each calendar quarter and on the
Revolving Credit Termination Date. The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees received

26

 

pursuant to
this Section 3.3(a) in accordance with their respective Revolving Credit Commitment Percentages.

     (b) In addition to the foregoing letter of credit fee, the Borrowers shall pay to the
Administrative Agent, for the account of the Issuing Lender, an issuance fee with respect to each
Letter of Credit (other than the Revenue Bond Letter of Credit) in an amount equal to the face
amount of such Letter of Credit multiplied by one-eighth of one percent (.125%) per annum. Such
issuance fee shall be payable quarterly in arrears on the last Business Day of each calendar
quarter and on the Revolving Credit Termination Date.

     (c) In addition to the foregoing fees, the Borrowers shall pay or reimburse the Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender
in issuing, effecting payment under, amending or otherwise administering any Letter of Credit.

     SECTION 3.4 L/C Participations.

     (a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant,
and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender,
on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an
undivided interest equal to such L/C Participant’s Revolving Credit Commitment Percentage in the
Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrowers through a
Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices
specified herein an amount equal to such L/C Participant’s Revolving Credit Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed.

     (b) Upon becoming aware of any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment
made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify the
Administrative Agent and each L/C Participant of the amount and due date of such required payment
and such L/C Participant shall pay to the Issuing Lender the amount specified on the applicable due
date. If any such amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such amount, the product
of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the
Administrative Agent during the period from and including the date such payment is due to the date
on which such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to any amounts owing
under this Section 3.4(b) shall be conclusive in the absence of manifest error. With respect to
payment to the Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if the
L/C Participants receive notice that any such payment is

27

 

due (A) prior to 1:00 p.m. (Eastern time)
on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. (Eastern
time) on any Business Day, such payment shall be due on the following Business Day.

     (c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit
and has received from any L/C Participant its Revolving Credit Commitment Percentage of such
payment in accordance with this Section 3.4, the Issuing Lender receives any payment related to
such Letter of Credit (whether directly from a Borrower or otherwise, or any payment of interest on
account thereof), the Issuing Lender will distribute to such L/C Participant its pro-rata share
thereof; provided, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the
Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

     SECTION 3.5 Reimbursement Obligation of the Borrowers. In the event of any drawing
under any Letter of Credit, the Borrowers agree to reimburse the Issuing Lender in same day funds
(either with the proceeds of a Revolving Credit Loan as provided for in this Section 3.5 or with
funds from other sources) on each date on which the Issuing Lender notifies the Company of the date
and amount of a draft paid under any Letter of Credit. The amount of the Reimbursement Obligation
shall equal the amount of (a) such draft so paid and (b) any amounts referred to in Section 3.3(c)
incurred by the Issuing Lender in connection with such payment. Unless the Borrowers shall
immediately notify the Issuing Lender that the Borrowers intend to reimburse the Issuing Lender for
such drawing from other sources or funds, the Borrowers shall be deemed to have timely given a
Notice of Borrowing to the Administrative Agent requesting that the Lenders make a Revolving Credit
Loan bearing interest at the Base Rate on such date in the amount of (a) such draft so paid and (b)
any amounts referred to in Section 3.3(c) incurred by the Issuing Lender in connection with such
payment, and the Lenders shall make a Revolving Credit Loan bearing interest at the Base Rate in
such amount, the proceeds of which shall be applied to reimburse the Issuing Lender for the amount
of the related drawing and costs and expenses. Each Lender acknowledges and agrees that its
obligation to fund a Revolving Credit Loan in accordance with this Section 3.5 to reimburse the
Issuing Lender for any draft paid under a Letter of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of
the conditions set forth in this Agreement. If the Borrowers elect to pay the amount of such
drawing with funds from other sources and fail to reimburse the Issuing Lender as provided above,
the unreimbursed amount of such drawing shall bear interest at the rate which would be payable on
any outstanding Base Rate Loans which were then overdue from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full.

     SECTION 3.6 Obligations Absolute. The Borrowers’ obligations under this Article III
(including without limitation the Reimbursement Obligation) shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment
which the Borrowers may have or have had against the Issuing Lender or any beneficiary of a Letter
of Credit or any other Person. The Borrowers also agree that the Issuing Lender and the L/C
Participants shall not be responsible for, and the Borrowers’ Reimbursement Obligation under
Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even though such documents shall in

28

 

fact prove to be invalid,
fraudulent or forged, or any dispute between or among any Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims
whatsoever of any Borrower against any beneficiary of such Letter of Credit or any such transferee.
The Issuing Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however transmitted, in connection
with any Letter of Credit, except for errors or omissions caused by the Issuing Lender’s gross
negligence or willful misconduct. The Borrowers agree that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct, shall be binding on each Borrower
and shall not result in any liability of the Issuing Lender or any L/C Participant to any Borrower.
The responsibility of the Issuing Lender to the Borrowers in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment are in conformity
with such Letter of Credit.

     SECTION 3.7 Effect of Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions of this Article
III, the provisions of this Article III shall apply.

ARTICLE IV

TERM LOAN FACILITY

     SECTION 4.1 Term Loan. Subject to the terms and conditions of this Agreement, each
Term Loan Lender severally agrees to make a Term Loan to the Borrowers on the Closing Date in a
single advance in a principal amount equal to such Lender’s Term Loan Commitment as of the Closing
Date.

     SECTION 4.2 Procedure for Advance of Term Loan. The Borrowers shall give the
Administrative Agent an irrevocable Notice of Borrowing prior to 11:00 a.m. on the Closing Date
requesting that the Term Loan Lenders make the Term Loan as a Base Rate Loan on such date (provided
that the Borrowers may request, on or prior to the Closing Date, that the Lenders make the Term
Loan as LIBOR Rate Loan if the Borrowers have delivered to the Administrative Agent a letter in
form and substance satisfactory to the Administrative Agent indemnifying the Lenders in the manner
set forth in Section 5.9 of this Agreement). Upon receipt of such Notice of Borrowing from the
Borrowers, the Administrative Agent shall promptly notify each Term Loan Lender thereof. Not later
than 1:00 p.m. on the Closing Date, each Term Loan Lender will make available to the Administrative
Agent for the account of the Borrowers, at the Administrative Agent’s Office in immediately
available funds, the amount of such Term Loan to be made by such Lender on such borrowing date.
The Borrowers hereby irrevocably authorize the Administrative Agent to disburse the proceeds of the
Term Loan in immediately available funds by wire transfer to such Person or Persons as may be
designated by the Borrowers in writing.

     SECTION 4.3 Repayment of Term Loan. The Borrowers shall repay the aggregate
outstanding principal amount of the Term Loan on the Term Loan Termination Date.

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     SECTION 4.4 Optional Prepayments of Term Loan. The Borrowers shall have the right at
any time and from time to time, without premium or penalty, to prepay the Term Loan, in whole or in
part, upon delivery to the Administrative Agent of a Notice of Repayment not later than 11:00 a.m.
(i) on at least one (i) Business Day notice before each Base Rate Loan and (ii) at least three (3)
Business Days before each LIBOR Rate Loan, specifying the date and amount of repayment and whether
the repayment is of LIBOR Rate Loans or Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Each optional prepayment of the Term Loan
hereunder shall be in an aggregate principal amount of at least $3,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to Base Rate Loans and $5,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to LIBOR Rate Loans and shall be applied to the
outstanding balance of the Term Loan. Each repayment shall be accompanied by any amount required
to be paid pursuant to Section 5.9 hereof. A Notice of Repayment received after 11:00 a.m. shall
be deemed received on the next Business Day. The Administrative Agent shall promptly notify the
Term Loan Lenders of each Notice of Prepayment.

     SECTION 4.5 Term Notes. Except as otherwise provided in Section 14.9 (a)-(e), at the
request of a Term Loan Lender, such Lender’s Term Loans and the obligation of the Borrowers to
repay such Term Loans shall be evidenced by a separate Term Note executed by the Borrowers payable
to the order of such Term Loan Lender.

ARTICLE V

GENERAL LOAN PROVISIONS

     SECTION 5.1 Interest.

     (a) Interest Rate Options. Subject to the provisions of this Section 5.1, at the
election of the Borrowers, (i) Revolving Credit Loans and Term Loans shall bear interest at (A) the
Base Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable
Margin (provided that the LIBOR Rate shall not be available until three (3) Business Days
after the Closing Date unless the Borrowers have delivered to the Administrative Agent a letter in
form and substance satisfactory to the Administrative Agent indemnifying the Lenders in the manner
set forth in Section 5.9 of this Agreement) and (ii) any Swingline Loan shall bear interest at the
rate mutually agreed upon by the Swingline Lender and the Borrowers. The Borrowers shall select
the rate of interest and Interest Period, if any, applicable to any Loan at the time a Notice of
Borrowing is given or at the time a Notice of Conversion/Continuation is given pursuant to Section
5.2. Any Loan or any portion thereof as to which the Borrowers have not duly specified an interest
rate as provided herein shall be deemed a Base Rate Loan.

     (b) Interest Periods. In connection with each LIBOR Rate Loan, the Borrowers, by
giving notice at the times described in Section 2.3(a) or Section 5.1(a), shall elect an interest
period (each, an “Interest Period”) to be applicable to such Loan, which Interest Period
shall be a period of one (1), two (2), three (3) or six (6) months with respect to each LIBOR Rate
Loan; provided that:

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          (i) the Interest Period shall commence on the date of advance of or conversion to any LIBOR
Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the immediately preceding Interest Period expires;

          (ii) if any Interest Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day; provided, that if any
Interest Period with respect to a LIBOR Rate Loan would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the immediately preceding Business Day;

          (iii) any Interest Period with respect to a LIBOR Rate Loan 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
relevant calendar month at the end of such Interest Period;

          (iv) no Interest Period shall extend beyond the Revolving Credit Termination Date or the Term
Loan Termination Date, as applicable; and

          (v) there shall be no more than ten (10) Interest Periods in effect at any time.

     (c) Applicable Margin. The Applicable Margin provided for in Section 5.1(a) with
respect to any Loan (the “Applicable Margin”) shall be based upon the table set forth below
and shall be determined and adjusted quarterly on the date (each a “Calculation Date”) ten
(10) Business Days after the date by which the Borrowers are required to provide an Officer’s
Compliance Certificate for the most recently ended fiscal quarter of the Borrowers;
provided, however, that (a) the initial Applicable Margin shall be based on Pricing
Level III (as shown below) and shall remain at Pricing Level III until the first Calculation Date
occurring after the Closing Date and, thereafter the Pricing Level shall be determined by reference
to the Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Borrowers
preceding the applicable Calculation Date, and (b) if the Borrowers fail to provide the Officer’s
Compliance Certificate as required by Section 8.2 for the most recently ended fiscal quarter of the
Borrowers preceding the applicable Calculation Date, the Applicable Margin from such Calculation
Date shall be based on Pricing Level I (as shown below) until such time as an appropriate Officer’s
Compliance Certificate is provided, at which time the Pricing Level shall be determined by
reference to the Leverage Ratio as of the last day of the most recently ended fiscal quarter of the
Borrowers preceding such Calculation Date. The Applicable Margin shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the Applicable Margin shall be
applicable to all Extensions of Credit then existing or subsequently made or issued.

	 	 	 	 	 	 	 	 	 	 	 
	Pricing Level	 	Leverage Ratio	 	LIBOR	 	Base Rate
	I

	 	Greater than or equal to 3.25 to
1.00
	 	 	1.125	%	 	 	0	%
	II

	 	Greater than or equal to 2.75 to
1.00, but less than 3.25 to 1.00
	 	 	0.875	%	 	 	0	%
	III

	 	Greater than or equal to 2.25 to
1.00, but less than 2.75 to 1.00
	 	 	0.625	%	 	 	0	%

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	Pricing Level	 	Leverage Ratio	 	LIBOR	 	Base Rate
	IV

	 	Greater than or equal to 1.75 to
1.00, but less than 2.25 to 1.00
	 	 	0.500	%	 	 	0	%
	V

	 	Greater than or equal to 1.25 to
1.00 but less than 1.75 to 1.00
	 	 	0.400	%	 	 	0	%
	VI

	 	Less than 1.25 to 1.00
	 	 	0.350	%	 	 	0	%

     (d) Default Rate. Subject to Section 12.3, at the discretion of the Administrative
Agent or as directed by the Required Lenders, upon the occurrence and during the continuance of an
Event of Default, (i) the Borrowers shall no longer have the option to request LIBOR Rate Loans or
Swingline Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of
two percent (2%) in excess of the rate then applicable to LIBOR Rate Loans until the end of the
applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate
then applicable to Base Rate Loans, and (iii) all outstanding Base Rate Loans and other Obligations
arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to
two percent (2%) in excess of the rate then applicable to Base Rate Loans or such other Obligations
arising hereunder or under any other Loan Document. Interest shall continue to accrue on the Notes
after the filing by or against any Borrower of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief, whether state, federal or foreign.

     (e) Interest Payment and Computation. Interest on each Base Rate Loan shall be
payable in arrears on the last Business Day of each calendar quarter commencing December 31, 2006;
and interest on each LIBOR Rate Loan shall be payable on the last day of each Interest Period
applicable thereto or, in the case of any LIBOR Rate Loan having an Interest Period of six (6)
months, every three (3) months. Interest on LIBOR Rate Loans and all fees payable hereunder shall
be computed on the basis of a 360-day year and assessed for the actual number of days elapsed and
interest on Base Rate Loans shall be computed on the basis of a 365/366-day year and assessed for
the actual number of days elapsed.

     (f) Maximum Rate. In no contingency or event whatsoever shall the aggregate of all
amounts deemed interest hereunder or under any of the Notes charged or collected pursuant to the
terms of this Agreement or pursuant to any of the Notes exceed the highest rate permissible under
any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders have charged or
received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder
shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders
shall at the Administrative Agent’s option (i) promptly refund to the Borrowers any interest
received by the Lenders in excess of the maximum lawful rate or (ii) apply such excess to the
principal balance of the Obligations on a pro rata basis. It is the intent hereof
that the Borrowers not pay or contract to pay, and that neither the Administrative Agent nor any
Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may be paid by the Borrowers under Applicable Law.

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     SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans. Provided that
no Default or Event of Default has occurred and is then continuing, the Borrowers shall have the
option to (a) convert at any time following the third Business Day after the Closing Date all or
any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount
equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or more LIBOR
Rate Loans and (b) upon the expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $3,000,000 or a whole multiple of
$1,000,000 in excess thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue
such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrowers desire to convert or continue
Loans as provided above, the Borrowers shall give the Administrative Agent irrevocable prior
written notice in the form attached as Exhibit E (a “Notice of
Conversion/Continuation”) not later than 11:00 a.m. (Eastern time) three (3) Business Days
before the day on which a proposed conversion or continuation of such Loan is to be effective
specifying (A) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B) the effective date of
such conversion or continuation (which shall be a Business Day), (C) the principal amount of such
Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted
or continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the Lenders of such
Notice of Conversion/Continuation.

     SECTION 5.3 Fees.

     (a) Commitment Fee. Commencing on the Closing Date, the Borrowers shall pay to the
Administrative Agent, for the account of the Revolving Credit Lenders, a non-refundable commitment
fee at a rate per annum equal to the applicable rate set forth below on the average daily unused
portion of the Revolving Credit Commitment. The applicable commitment fee rate shall be based upon
the table set forth below and shall be determined and adjusted quarterly on each Calculation Date;
provided, however, that (a) the initial commitment fee rate shall be based on
Pricing Level III (as shown below) and shall remain at Pricing Level III until the first
Calculation Date occurring after the Closing Date and, thereafter the Pricing Level shall be
determined by reference to the Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrowers preceding the applicable Calculation Date, and (b) if the Borrowers fail
to provide the Officer’s Compliance Certificate as required by Section 8.2 for the most recently
ended fiscal quarter of the Borrowers preceding the applicable Calculation Date, the commitment fee
from such Calculation Date shall be based on Pricing Level I (as shown below) until such time as an
appropriate Officer’s Compliance Certificate is provided, at which time the Pricing Level shall be
determined by reference to the Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrowers preceding such Calculation Date. The commitment fee rate shall be
effective from one Calculation Date until the next Calculation Date. Any adjustment in the
commitment fee rate shall be applicable to all Extensions of Credit then existing or subsequently
made or issued. The commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement commencing December 31, 2006, and on the
Revolving Credit Termination Date. Notwithstanding anything to the contrary contained herein, for
purposes of calculating the commitment fee payable at any time to any Revolving Credit Lender other
than the Swingline Lender, amounts outstanding under the Swingline Facility shall not be included
in the calculation of the unused portion of the Revolving Credit Commitment.

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	Pricing Level	 	Leverage Ratio	 	Commitment Fee
	I

	 	Greater than or equal to 3.25 to 1.00
	 	 	0.200	%
	II

	 	Greater than or equal to 2.75 to 1.00,
but less than 3.25 to 1.00
	 	 	0.175	%
	III

	 	Greater than or equal to 2.25 to 1.00,
but less than 2.75 to 1.00
	 	 	0.125	%
	IV

	 	Greater than or equal to 1.75 to 1.00
but less than 2.25 to 1.00
	 	 	0.100	%
	V

	 	Greater than or equal to 1.25 to 1.00
but less than 1.75 to 1.00
	 	 	0.080	%
	VI

	 	Less than 1.25 to 1.00
	 	 	0.070	%

     (b) Administrative Agent’s and Other Fees. To compensate the Administrative Agent for
structuring and syndicating the Loans and for its obligations hereunder, the Borrowers agree to pay
to the Administrative Agent, for its account, the fees set forth in the separate fee letter
agreement executed by the Borrowers and the Administrative Agent dated August 25, 2006.

     SECTION 5.4 Manner of Payment. Each payment by the Borrowers on account of the
principal of or interest on the Loans or of any fee, commission or other amounts (including the
Reimbursement Obligation) payable to the Lenders under this Agreement or any Note shall be made not
later than 1:00 p.m. (Eastern time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent’s Office for the account of the Lenders
pro rata in accordance with their respective Commitment Percentages, in Dollars, in
immediately available funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Any payment received after such time but before 2:00 p.m. (Eastern time) on such day
shall be deemed a payment on such date for the purposes of Section 12.1, but for all other purposes
shall be deemed to have been made on the next succeeding Business Day. Any payment received after
2:00 p.m. (Eastern time) shall be deemed to have been made on the next succeeding Business Day for
all purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative
Agent shall distribute to each Lender at its address for notices set forth herein its pro
rata share of such payment in accordance with such Lender’s Commitment Percentage, with
respect to Extensions of Credit and shall wire advice of the amount of such credit to each Lender.
Each payment to the Administrative Agent of the Issuing Lender’s fees or L/C Participants’
commissions shall be made in like manner, but for the account of the Issuing Lender or the L/C
Participants, as the case may be. Each payment to the Administrative Agent of Administrative
Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount
payable to any Lender under Sections 5.8, 5.9, 5.10, 5.11 or 14.2 shall be paid to the
Administrative Agent for the account of the applicable Lender. Subject to Section 5.1(b)(ii), if
any payment under this Agreement or any Note shall be specified to be made upon a day which is not
a Business Day, it shall be made on the next succeeding day which is a Business Day and such
extension of time shall in such case be included in computing any interest if payable along with
such payment.

     SECTION 5.5 Crediting of Payments and Proceeds. In the event that the Borrowers shall
fail to pay any of the Obligations when due and the Obligations have been accelerated pursuant to
Section 12.2, all payments received by the Lenders upon the Notes and the other Obligations

34

 

and all
net proceeds from the enforcement of the Obligations shall be applied: (a) first to all expenses
then due and payable by the Borrowers hereunder and under the other Loan Documents, (b) then to all
indemnity obligations then due and payable by the Borrowers hereunder and under the other Loan
Documents, (c) then to all Administrative Agent’s and Issuing Lender’s fees then due and payable,
(d) then to all commitment and other fees and commissions then due and payable, (e) then to accrued
and unpaid interest on the Swingline Note to the Swingline Lender, (f) then to the principal amount
outstanding under the Swingline Note to the Swingline Lender, (g) then to accrued and unpaid
interest on the Term Notes, accrued and unpaid interest on the Revolving Credit Notes and accrued
and unpaid interest on the Reimbursement Obligation (pro rata in accordance with
all such amounts due), (h) then to the principal amount of the Term Notes, the Revolving Credit
Notes and Reimbursement Obligations and any Hedging Obligations (including any termination payments
and any accrued and unpaid interest thereon) pro rata in accordance with all such
amounts due, (i) then to the Cash Collateral Account described in Section 12.2(b) and Section
12.2(c) hereof to the extent of any L/C Obligations then outstanding, in that order.

     SECTION 5.6 Adjustments. If any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of the Obligations owing to it, or interest thereon, or if
any Lender shall at any time receive any collateral in respect to the Obligations owing to it
(whether voluntarily or involuntarily, by set-off or otherwise) (other than pursuant to Sections
5.8, 5.9, 5.10, 5.11 or 14.2 hereof) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of the similar Obligations owing to
such other Lender, or interest thereon, such Benefited Lender shall purchase for cash from the
other Lenders such portion of each such other Lender’s Extensions of Credit, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned to the extent of such recovery, but
without interest. The Borrowers agree that each Lender so purchasing a portion of another Lender’s
Extensions of Credit may exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were the direct holder of such
portion.

     SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent. The obligations of the Lenders under this Agreement to make the
Loans and issue or participate in Letters of Credit are several and are not joint or joint and
several. Unless the Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the Administrative Agent such
Lender’s ratable portion of the amount to be borrowed on such date (which notice shall not release
such Lender of its obligations hereunder), the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the proposed borrowing date in
accordance with Sections 2.3(b) or Section 4.2 and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrowers on such date a corresponding amount. If such
amount is made available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid, equal to the product
of (a) the amount not made available by such

35

 

Lender in accordance with the terms hereof, times (b) the daily
average Federal Funds Rate during such period as determined by the Administrative Agent,
times (c) a fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made available by such Lender in
accordance with the terms hereof shall have become immediately available to the Administrative
Agent and the denominator of which is 360. A certificate of the Administrative Agent with respect
to any amounts owing under this Section 5.7 shall be conclusive, absent manifest error. If such
Lender’s Commitment Percentage of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days after such borrowing date, the Administrative Agent
shall be entitled to recover such amount made available by the Administrative Agent with interest
thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers. The failure of any Lender to make available its Commitment Percentage of any Loan
requested by the Borrowers shall not relieve it or any other Lender of its obligation, if any,
hereunder to make its Commitment Percentage of such Loan available on the borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its Percentage of such Loan
available on the borrowing date. Notwithstanding anything set forth herein to the contrary, any
Lender that fails to make available its Commitment Percentage of any Loan shall not (a) have any
voting or consent rights under or with respect to any Loan Document or (b) constitute a “Lender”
(or be included in the calculation of Required Lenders hereunder) for any voting or consent rights
under or with respect to any Loan Document.

     SECTION 5.8 Changed Circumstances.

     (a) Circumstances Affecting LIBOR Rate Availability. If with respect to any Interest
Period the Administrative Agent or any Lender (after consultation with the Administrative Agent)
shall determine that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable amounts are not being quoted via the
Telerate Page 3750 or offered to the Administrative Agent or such Lender for such Interest Period,
then the Administrative Agent shall forthwith give notice thereof to the Company. Thereafter,
until the Administrative Agent notifies the Company that such circumstances no longer exist, the
obligation of the Lenders to make LIBOR Rate Loans and the right of the Borrowers to convert any
Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers shall repay
in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR
Rate Loan together with accrued interest thereon, on the last day of the then current Interest
Period applicable to such LIBOR Rate Loan
or convert the then outstanding principal amount of each such LIBOR Rate Loan to a Base Rate
Loan as of the last day of such Interest Period.

     (b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the Lenders (or any of
their respective Lending Offices) with any request or directive (whether or not having the force of
law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its
obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly give
notice thereof to the Administrative Agent and the Administrative

36

 

Agent shall promptly give notice
to the Company and the other Lenders. Thereafter, until the Administrative Agent notifies the
Company that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR
Rate Loans and the right of the Borrowers to convert any Loan or continue any Loan as a LIBOR Rate
Loan shall be suspended and thereafter the Borrowers may select only Base Rate Loans hereunder, and
(ii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of
the then current Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate
Loan shall immediately be converted to a Base Rate Loan for the remainder of such Interest Period.

     (c) Increased Costs. If, after the date hereof, the introduction of, or any change
in, any Applicable Law, or in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any
request or directive (whether or not having the force of law) of such Governmental Authority,
central bank or comparable agency:

          (i) shall (except as provided in Section 5.11(e)) subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to any Note, Letter of
Credit or Application or shall change the basis of taxation of payments to any of the Lenders (or
any of their respective Lending Offices) of the principal of or interest on any Note, Letter of
Credit or Application or any other amounts due under this Agreement in respect thereof (except for
changes in the rate of franchise tax or tax on the overall net income of any of the Lenders or any
of their respective Lending Offices imposed by the jurisdiction in which such Lender is organized
or is or should be qualified to do business or such Lending Office is located); provided
that the Borrowers shall not be obligated to pay any amounts pursuant to this Section 5.8(c)(i) to
the extent that such amounts are duplicative of any amounts paid by the Borrowers pursuant to
Section 5.11; or

          (ii) shall impose, modify or deem applicable any reserve (including, without limitation, any
reserve imposed by the Board of Governors of the Federal Reserve System), special deposit,
insurance or capital or similar requirement against assets of, deposits with or for the account of,
or credit extended by any of the Lenders (or any of their respective Lending Offices) or shall
impose on any of the Lenders (or any of their respective Lending Offices) or the foreign exchange
and interbank markets any other condition affecting any Note; and the result of any of the
foregoing events described in clause (i) or (ii) above is to increase the costs to any of
the Lenders of maintaining any LIBOR Rate Loan or issuing or participating in Letters of
Credit or to reduce the yield or amount of any sum received or receivable by any of the Lenders
under this Agreement or under the Notes in respect of a LIBOR Rate Loan or Letter of Credit or
Application, then such Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify the Company of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative Agent, the Borrowers
shall pay to such Lender such additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction. The Administrative Agent will promptly notify the
Company of any event of which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 5.8(c); provided, that the Administrative Agent shall incur no
liability whatsoever to the Lenders or the Borrowers in the event it fails to do so. The amount of
such compensation shall be determined, in the applicable Lender’s sole discretion, based upon

37

 

the assumption that such Lender funded its Commitment Percentage of the LIBOR Rate Loans in the London
interbank market and using any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to the Company
through the Administrative Agent and shall be conclusively presumed to be correct save for manifest
error.

     SECTION 5.9 Indemnity. The Borrowers hereby indemnify each of the Lenders against any
loss or expense which may arise or be attributable to each Lender’s obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or maintain any LIBOR Rate Loan (a) as a
consequence of any failure by the Borrowers to make any payment when due of any amount due
hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to borrow,
continue or convert on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan
on a date other than the last day of the Interest Period therefor. The amount of such loss or
expense shall be determined, in the applicable Lender’s sole discretion, based upon the assumption
that such Lender funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to the Company
through the Administrative Agent and shall be conclusively presumed to be correct save for manifest
error.

     SECTION 5.10 Capital Requirements. If either (a) the introduction of, or any change
in, or in the interpretation of, any Applicable Law or (b) compliance with any guideline or request
from any central bank or comparable agency or other Governmental Authority (whether or not having
the force of law), has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained by, any Lender or
any corporation controlling such Lender as a consequence of, or with reference to the Commitments
and other commitments of this type, below the rate which such Lender or such other corporation
could have achieved but for such introduction, change or compliance, then within five (5) Business
Days after written demand by any such Lender, the Borrowers shall pay to such Lender from time
to time as specified by such Lender additional amounts sufficient to compensate such Lender or
other corporation for such reduction. A certificate as to such amounts submitted to the Company
and the Administrative Agent by such Lender, shall, in the absence of manifest error, be presumed
to be correct and binding for all purposes.

     SECTION 5.11 Taxes.

     (a) Payments Free and Clear. Except as otherwise provided in Section 5.11(e), any and
all payments by any Borrower hereunder or under the Notes or the Letters of Credit shall be made
free and clear of and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto excluding, (i) in the
case of each Lender and the Administrative Agent, income and franchise taxes imposed by the
jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be)
is organized or is or should be qualified to do business or any political subdivision

38

 

thereof and
(ii) in the case of each Lender, income and franchise taxes imposed by the jurisdiction of such
Lender’s Lending Office or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as
“Taxes”). If the Borrowers shall be required by law to deduct or withhold any Taxes from
or in respect of any sum payable hereunder or under any Note or in respect of any Letter of Credit
to any Lender or the Administrative Agent, (A) except as otherwise provided in Section 5.11(e), the
sum payable shall be increased as may be necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional sums payable under this
Section 5.11) such Lender or the Administrative Agent (as the case may be) receives an amount equal
to the amount such party would have received had no such deductions or withholdings been made, (B)
the Borrowers shall make such deductions or withholdings, (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in accordance with Applicable
Law, and (D) the Borrowers shall deliver to the Administrative Agent and such Lender evidence of
such payment to the relevant taxing authority or other Governmental Authority in the manner
provided in Section 5.11(d).

     (b) Stamp and Other Taxes. In addition, the Borrowers shall pay any present or future
stamp, registration, recordation or documentary taxes or any other similar fees or charges or
excise or property taxes, levies of the United States or any state or political subdivision thereof
or any applicable foreign jurisdiction which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement, the Loans,
the Letters of Credit, or the other Loan Documents, or the perfection of any rights or security
interest in respect thereof (hereinafter referred to as “Other Taxes”).

     (c) Indemnity. Except as otherwise provided in Section 5.11(e), the Borrowers shall
indemnify each Lender and the Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5.11) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be made within thirty (30) days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.

     (d) Evidence of Payment. Within thirty (30) days after the date of any payment of
Taxes or Other Taxes, the Borrowers shall furnish to the Administrative Agent and the applicable
Lender, at its address referred to in Section 14.1, the original or a certified copy of a receipt
evidencing payment thereof or other evidence of payment satisfactory to the Administrative Agent.

     (e) Delivery of Tax Forms. To the extent required by Applicable Law to reduce or
eliminate withholding or payment of taxes, each Lender and the Administrative Agent shall deliver
to the Company, with a copy to the Administrative Agent, on the Closing Date or concurrently with
the delivery of the relevant Assignment and Assumption, as applicable, (i) two United States
Internal Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable (or successor
forms) properly completed and certifying in each case that such Lender is entitled to a complete
exemption from withholding or deduction for or on account of any

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United States federal income
taxes, and (ii) an Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as
the case may be, to establish an exemption from United States backup withholding taxes. Each such
Lender further agrees to deliver to the Company, with a copy to the Administrative Agent, as
applicable, two Form W-9, Form W-8BEN or W-8ECI, or successor applicable forms or manner of
certification, as the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most recent form previously
delivered by it to the Company, certifying in the case of a Form W-9, Form W-8BEN or W-8ECI (or
successor forms) that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes (unless in any such case an
event (including without limitation any change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be required which renders such forms
inapplicable or the exemption to which such forms relate unavailable and such Lender notifies the
Company and the Administrative Agent that it is not entitled to receive payments without deduction
or withholding of United States federal income taxes) and, in the case of a Form W-9, Form W-8BEN
or W-8ECI, establishing an exemption from United States backup withholding tax. Notwithstanding
anything in any Loan Document to the contrary, the Borrowers shall not be required to pay
additional amounts to any Lender or the Administrative Agent under Section 5.11 or Section 5.8(c),
(i) if such Lender or the Administrative Agent fails to comply with the requirements of this
Section 5.11(e), other than to the extent that such failure is due to a change in law occurring
after the date on which such Lender or the Administrative Agent became a party to this Agreement or
(ii) that are the result of such Lender’s or the Administrative Agent’s gross negligence or willful
misconduct, as applicable.

     (f) Survival. Without prejudice to the survival of any other agreement of any
Borrower hereunder, the agreements and obligations of the Borrowers contained in this Section 5.11
shall survive the payment in full of the Obligations and the termination of the Commitments.

ARTICLE VI

CLOSING; CONDITIONS OF CLOSING AND BORROWING

     SECTION 6.1 Closing. The closing shall take place at the offices of Kennedy,
Covington, Lobdell & Hickman, L.L.P. at 10:00 a.m. on October 2, 2006, or on such other place, date
and time as the parties hereto shall mutually agree.

     SECTION 6.2 Conditions to Closing and Initial Extensions of Credit. The obligation of
the Lenders to close this Agreement and to make the initial Loan or issue or participate in any
Letter of Credit is subject to the satisfaction of each of the following conditions:

     (a) Executed Loan Documents. This Agreement, the Term Notes, the Revolving Credit
Notes, the Swingline Note, together with any other applicable Loan Documents, shall have been duly
authorized, executed and delivered to the Administrative Agent by the parties thereto, shall be in
full force and effect and no Default or Event of Default shall exist thereunder, and the Borrowers
shall have delivered original counterparts thereof to the Administrative Agent.

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     (b) Closing Certificates; etc.

          (i) Officer’s Certificate of the Borrowers. The Administrative Agent shall have
received a certificate from a Responsible Officer, in form and substance satisfactory to the
Administrative Agent, to the effect that all representations and warranties of the Borrowers
contained in this Agreement and the other Loan Documents are true, correct and complete; that the
Borrowers are not in violation of any of the covenants contained in this Agreement and the other
Loan Documents; that, after giving effect to the transactions contemplated by this Agreement and
the Parisian Acquisition, no Default or Event of Default has occurred and is continuing; and that
the Borrowers have satisfied each of the closing conditions.

          (ii) Certificate of Secretary of the Borrowers. The Administrative Agent shall have
received a certificate of the secretary or assistant secretary of each Borrower certifying as to
the incumbency and genuineness of the signature of each officer of each Borrower executing Loan
Documents to which it is a party, certifying that the articles of incorporation or formation and
bylaws, operating agreement or other governing document of such Borrower delivered pursuant to the
Existing Credit Agreement continue unchanged (or, if applicable, specifying the nature of any
changes thereto) and remain in full force and effect as of the date hereof, and certifying that
attached thereto is a true, correct and complete copy of (A) with respect to the Parisian Entities,
the articles of incorporation of each of the Parisian Entities and all amendments thereto,
certified as of a recent date by the appropriate Governmental authority in its jurisdiction of
incorporation, (B) with respect to the Parisian Entities, the bylaws of each of the Parisian
Entities as in effect on the date of such certifications, (C) resolutions duly adopted by the board
of directors or other governing body of each Borrower authorizing the transactions contemplated
hereunder and the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, and (D) each certificate required to be delivered pursuant
to Section 6.2(b)(iii).

          (iii) Certificates of Good Standing. The Administrative Agent shall have received
certificates as of a recent date of the good standing of each Borrower under the laws of its
jurisdiction of organization and, to the extent requested by the Administrative Agent, each other
jurisdiction where such Borrower is qualified to do business and a certificate of the relevant
taxing authorities of such jurisdictions certifying that such Person has filed required tax returns
and owes no delinquent taxes.

          (iv) Opinions of Counsel. The Administrative Agent shall have received favorable
opinions of counsel to the Borrowers addressed to the Administrative Agent and the Lenders with
respect to the Borrowers, the Loan Documents and such other matters as the Lenders shall request.

          (v) Tax Forms. The Administrative Agent shall have received copies of the United
States Internal Revenue Service forms required by Section 5.11(e) hereof.

     (c) Consents; Defaults.

          (i) Governmental and Third Party Approvals. The Borrowers shall have obtained all
necessary approvals, authorizations and consents of any Person and of all

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Governmental Authorities
and courts having jurisdiction with respect to the Parisian Acquisition and the transactions
contemplated by this Agreement and the other Loan Documents.

          (ii) No Injunction, Etc. No action, proceeding (including, without limitation, a
bankruptcy or insolvency proceeding), investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Authority to enjoin, restrain, or
prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of
the , this Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent’s sole discretion, would make
it inadvisable to consummate the transactions contemplated by this Agreement and such other Loan
Documents.

          (iii) No Event of Default. No Default or Event of Default shall have occurred and be
continuing.

     (d) Financial Matters.

          (i) Financial Statements. The Administrative Agent shall have received (A) the
audited Consolidated financial statements of the Borrowers and their Subsidiaries as of January
28, 2006 and (B) the unaudited Consolidated financial statements of the Borrowers and their
Subsidiaries as of July 28, 2006.

          (ii) Financial Condition Certificate. The Borrowers shall have delivered to the
Administrative Agent a certificate, in form and substance satisfactory to the Administrative
Agent, and certified as accurate by a Responsible Officer, that (A) after giving effect to the
Parisian Acquisition and the incurrence of all other Debt used to finance the Parisian Acquisition
and all other transactions contemplated hereby, (1) each of (x) the Company, individually, and (y)
the other Borrowers and their Subsidiaries, considered with the Company as a whole, are Solvent,
(2) attached thereto are calculations evidencing compliance on a pro forma basis
with the covenants contained in Article X hereof, (3) the financial projections previously
delivered to the Administrative Agent represent the good faith estimates (utilizing reasonable
assumptions) of the financial condition and operations of the Borrowers and their Subsidiaries and
(4) attached thereto is a calculation of the Applicable Margin pursuant to Section 5.1(c); and (B)
after giving effect to (1) the Parisian Acquisition and (2) the incurrence of all other Debt used
to finance the Parisian Acquisition, the Leverage Ratio shall not exceed 3.25 to 1.00.

          (iii) Payment at Closing; Fee Letters. The Borrowers shall have paid to the
Administrative Agent and the Lenders the fees set forth or referenced in Section 5.3 and any other
accrued and unpaid fees or commissions due hereunder (including, without limitation, legal fees and
expenses) and to any other Person such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and other charges in connection with
the execution, delivery, recording, filing and registration of any of the Loan Documents.

     (e) Parisian Acquisition.

          (i) Parisian Acquisition. The Parisian Acquisition shall have been consummated in all
material respects in accordance with the terms and conditions of the Parisian

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Stock Purchase
Agreement and no material provision of the Parisian Stock Purchase Agreement shall have been
amended or waived by any party thereto without the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld.

          (ii) Parisian Financial Statements. The Borrowers shall have provided to the
Administrative Agent copies of (A) audited financial statements of the Parisian Entities and their
Subsidiaries for the annual period ending January 28, 2006 which shall include, in comparative
form, audited income statements and cash flow statements for the two (2) immediately preceding
fiscal years and an audited balance sheet for the immediately preceding fiscal year and (B)
unaudited financial statements of the Parisian Entities and their Subsidiaries for any interim
quarterly periods ended at least forty-five (45) days prior to the Closing Date.

          (iii) Other Documents. The Borrowers shall have provided to the Administrative Agent
copies of such additional documents and information relating to the Parisian Acquisition and the
Parisian Stock Purchase Agreement as the Administrative Agent shall reasonably request.

     (f) Miscellaneous.

          (i) Notice of Borrowing. The Administrative Agent shall have received a Notice of
Borrowing, as applicable, from the Borrowers in accordance with Section 2.3(a), and a Notice of
Account Designation specifying the account or accounts to which the proceeds of any Loans made
after the Closing Date are to be disbursed.

          (ii) Continuation of the Existing Loans. (A) All outstanding Revolving Credit Loans
under the Existing Credit Agreement (the “Existing Revolving Credit Loans”) made by any
Lender thereunder who is not a Lender hereunder shall be repaid in full and the commitments and
other obligations and rights (except as expressly set forth in the Existing Credit Agreement) of
such Lender shall be terminated, (B) all Existing Revolving Credit Loans not being repaid under
item (A) above, shall be, from and after the Closing Date, Revolving Credit Loans hereunder and the
Administrative Agent shall make such transfers of funds as are necessary in order that the
outstanding balance of such Revolving Credit Loans, together with any Revolving Credit Loans funded
hereunder on the Closing Date, reflect the Revolving Credit Commitments of the Lenders hereunder,
(C) all of the Existing Letters of Credit shall be, from and after the Closing Date, Letters of
Credit hereunder, (D) all accrued but unpaid interest due on the Existing Revolving Credit Loans to
the Closing Date shall be paid in cash in full on the Closing Date, (E) all accrued but unpaid fees
under the Existing Credit Agreement owing to the Administrative Agent and the Lenders under the
Existing Credit Agreement to the Closing Date shall be paid in cash in full on the Closing Date,
(F) all reasonable fees, expenses and disbursements of counsel to Administrative Agent shall be
paid in cash in full on the Closing Date and (G) all outstanding promissory notes issued by the
Borrowers to the Lenders under the Existing Credit Agreement shall be amended and restated pursuant
to the terms and conditions hereunder and in the Loan Documents.

          (iii) Existing Letters of Credit. The Administrative Agent shall have received
evidence to its satisfaction that there are no outstanding unpaid draws or any existing default or

43

 

event of default under the Existing Letters of Credit or under any of the Loan Documents related
thereto.

          (iv) Due Diligence. The Administrative Agent and the Joint Lead Arrangers shall have
completed, to their satisfaction, all legal, tax, business and other due diligence with respect to
the business, assets, liabilities, operations, condition (financial or otherwise) and prospects of
the Borrowers and their Subsidiaries and the Parisian Acquisition in scope and determination
satisfactory to the Administrative Agent and the Joint Lead Arrangers.

          (v) Other Documents. All opinions, certificates and other instruments and all
proceedings in connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Administrative Agent. The Administrative Agent shall
have received copies of all other documents, certificates and instruments reasonably requested
thereby, with respect to the transactions contemplated by this Agreement.

     SECTION 6.3 Conditions to All Extensions of Credit. The obligations of the Lenders to
make any Extensions of Credit (including the initial Extension of Credit), participate in any
Letter of Credit, convert or continue any Loan and/or the Issuing Lender to issue or extend any
Letter of Credit are subject to the satisfaction of the following conditions precedent on the
relevant borrowing, continuation, conversion, issuance or extension date:

     (a) Continuation of Representations and Warranties. The representations and
warranties contained in Article VII shall be true and correct on and as of such borrowing,
continuation, conversion, issuance or extension date with the same effect as if made on and as
of such date; except for any representation and warranty made as of an earlier date, which
representation and warranty shall remain true and correct as of such earlier date.

     (b) No Existing Default. No Default or Event of Default shall have occurred and be
continuing (i) on the borrowing, continuation or conversion date with respect to such Loan or after
giving effect to the Loans to be made, continued or converted on such date or (ii) on the issuance
or extension date with respect to such Letter of Credit or after giving effect to the issuance or
extension of such Letter of Credit on such date.

     (c) Notices. The Administrative Agent shall have received a Notice of Borrowing or
Notice of Conversion/Continuation, as applicable, from the Borrowers in accordance with Section
2.3(a).

     (d) Additional Documents. The Administrative Agent shall have received each
additional document, instrument, legal opinion or other item reasonably requested by it.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF THE BORROWERS

     SECTION 7.1 Representations and Warranties. To induce the Administrative Agent and
Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit and/or
participate in the Existing Letters of Credit, the Borrowers hereby represent and warrant

44

 

to the
Administrative Agent and Lenders both before and after giving effect to the transactions
contemplated hereunder that:

     (a) Organization; Power; Qualification. Each of the Borrowers and their Subsidiaries
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has the power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted and is duly qualified and authorized
to do business in each jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization. The jurisdictions in which the Borrowers
and their Subsidiaries are organized and qualified to do business as of the Closing Date are
described on Schedule 7.1(a).

     (b) Ownership. Each Subsidiary of any Borrower as of the Closing Date is listed on
Schedule 7.1(b). As of the Closing Date, the capitalization of the Borrowers and their
Subsidiaries consists of the number of shares, authorized, issued and outstanding, of such classes
and series, with or without par value, described on Schedule 7.1(b). All outstanding
shares have been duly authorized and validly issued and are fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and not subject to any preemptive or similar
rights. The shareholders of the Subsidiaries of each Borrower and the number of shares owned by
each as of the Closing Date are described on Schedule 7.1(b). As of the Closing Date,
there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments
or other rights of any type or nature, which are convertible into Debt or which are exchangeable
for or otherwise provide for or permit the issuance of capital stock of the Borrowers or their
Subsidiaries in an amount which in the aggregate for any Borrower or Subsidiary exceeds twenty
(20%) percent of the issued and outstanding capital stock of such Borrower or Subsidiary.

     (c) Authorization of Agreement, Loan Documents and Borrowing. Each of the Borrowers
and their Subsidiaries has the right, power and authority and has taken all necessary corporate and
other action to authorize the execution, delivery and performance of the Parisian Acquisition, this
Agreement and each of the other Loan Documents to which it is a party in accordance with their
respective terms. This Agreement and each of the other Loan Documents have been duly executed and
delivered by the duly authorized officers of each Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding obligation of each
Borrower or its Subsidiary party thereto, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which affect the enforcement of
creditors’ rights in general and the availability of equitable remedies.

     (d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The
execution, delivery and performance by the Borrowers and their Subsidiaries of the Loan Documents
to which each such Person is a party, in accordance with their respective terms, the Extensions of
Credit hereunder and the transactions contemplated hereby and the Parisian Acquisition do not and
will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any Applicable Law relating to the Borrowers or any of their Subsidiaries, (ii)
conflict with, result in a breach of or constitute a default under the articles of incorporation,
bylaws or other organizational documents of any Borrower or any of its

45

 

Subsidiaries or any
indenture, agreement or other instrument to which such Person is a party or by which any of its
properties may be bound or any Governmental Approval relating to such Person, (iii) result in or
require the creation or imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by such Person other than Liens arising under the Loan Documents or (iv) require
any consent or authorization of, filing with, or other act in respect of, an arbitrator or
Governmental Authority and no consent of any other Person is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement.

     (e) Compliance with Law; Governmental Approvals. Except in each case where the
failure to so comply could not reasonably be expected to have a Material Adverse Effect, each of
the Borrowers and its Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect, is final and not
subject to review on appeal and is not the subject of any pending or, to the best of its knowledge,
threatened attack by direct or collateral proceeding, (ii) is in compliance with each Governmental
Approval applicable to it and in compliance with all other Applicable Laws relating to it or any of
its respective properties and (iii) has timely filed all material reports, documents and other
materials required to be filed by it under all Applicable Laws with any Governmental Authority and
has retained all material records and documents required to be retained by it under Applicable Law.

     (f) Tax Returns and Payments. Each of the Borrowers and its Subsidiaries has duly
filed or caused to be filed all federal, state, local and other tax returns required by Applicable
Law to be filed, and has paid, or made adequate provision for the payment of, all federal, state,
local and other taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable. Such returns accurately reflect in all
material respects all liability for taxes of the Borrowers and their Subsidiaries for the periods
covered thereby. Except as set forth on Schedule 7.1(f), there is no ongoing audit or
examination or, to the knowledge of any Borrower, other investigation by any Governmental Authority
of the tax liability of any Borrower and its Subsidiaries. No Governmental Authority has asserted
any Lien or other claim against any Borrower or any Subsidiary thereof with respect to unpaid taxes
which has not been discharged or resolved. The charges, accruals and reserves on the books of the
Borrowers and any of their Subsidiaries in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof since the organization of each Borrower and any of its
Subsidiaries are in the judgment of the Borrowers adequate, and such Borrower does not anticipate
any additional taxes or assessments for any of such years.

     (g) Intellectual Property Matters. Each of the Borrowers and its Subsidiaries owns or
possesses rights to use all franchises, licenses, copyrights, copyright applications, patents,
patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service
mark rights, trade names, trade name rights, copyrights and rights with respect to the foregoing
which are required to conduct its business. No event has occurred which permits, or after notice
or lapse of time or both would permit, the revocation or termination of any such rights, and
neither the Borrowers nor any Subsidiaries thereof are liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business operations.

46

 

     (h) Environmental Matters.

          (i) To the best of each Borrower’s knowledge, the properties owned, leased or operated by any
Borrower and its Subsidiaries now or in the past do not contain, and have not previously contained,
any Hazardous Materials in amounts or concentrations which (A) constitute or constituted a
violation of applicable Environmental Laws or (B) could give rise to liability under applicable
Environmental Laws;

          (ii) To the best of each Borrower’s knowledge, each Borrower, each Subsidiary and such
properties and all operations conducted in connection therewith are in compliance, and have been in
compliance, with all applicable Environmental Laws, and there is no contamination at, under or
about such properties or such operations which could interfere with the continued operation of such
properties or impair the fair saleable value thereof;

          (iii) No Borrower or any Subsidiary thereof has received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding environmental matters,
Hazardous Materials, or compliance with Environmental Laws, nor does any Borrower or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be received or is being
threatened;

          (iv) To the best of each Borrower’s knowledge, Hazardous Materials have not been transported
or disposed of to or from the properties owned, leased or operated by any
Borrower and its Subsidiaries in violation of, or in a manner or to a location which could
give rise to liability under, Environmental Laws, nor have any Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of such properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental Laws;

          (v) No judicial proceedings or governmental or administrative action is pending, or, to the
knowledge of any Borrower, threatened, under any Environmental Law to which any Borrower or any
Subsidiary thereof is or will be named as a potentially responsible party with respect to such
properties or operations conducted in connection therewith, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to any Borrower, any
Subsidiary or such properties or such operations; and

          (vi) To the best of each Borrower’s knowledge, there has been no release or threat of release
of Hazardous Materials at or from properties owned, leased or operated by any Borrower or any
Subsidiary, now or in the past, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws.

     (i) ERISA.

          (i) As of the Closing Date, no Borrower or any ERISA Affiliate maintains or contributes to, or
has any obligation under, any Employee Benefit Plans other than those identified on Schedule
7.1(i);

          (ii) Each Borrower and each ERISA Affiliate is in material compliance with all applicable
provisions of ERISA and the regulations and published interpretations thereunder

47

 

with respect to
all Employee Benefit Plans except for any required amendments for which the remedial amendment
period as defined in Section 401(b) of the Code has not yet expired and except where a failure to
so comply could not reasonably be expected to have a Material Adverse Effect. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to such plan has been
determined to be exempt under Section 501(a) of the Code except for such plans that have not yet
received determination letters but for which the remedial amendment period for submitting a
determination letter has not yet expired. No liability has been incurred by any Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan except for a liability that could not reasonably be expected
to have a Material Adverse Effect;

          (iii) As of the Closing Date, no Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred (without regard to any
waiver granted under Section 412 of the Code), nor has any funding waiver from the Internal Revenue
Service been received or requested with respect to any Pension Plan, nor has any Borrower or any
ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by
Section 412 of the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the due
dates of such contributions under Section 412 of the Code or Section 302 of ERISA, nor has there
been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Pension Plan;

          (iv) Except where the failure of any of the following representations to be correct in all
material respects could not reasonably be expected to have a Material Adverse Effect, no Borrower
or any ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction described in Section
406 of the ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium payments which are due and
unpaid, (C) failed to make a required contribution or payment to a Multiemployer Plan, or (D)
failed to make a required installment or other required payment under Section 412 of the Code;

          (v) No Termination Event has occurred or is reasonably expected to occur; and

          (vi) Except where the failure of any of the following representations to be correct in all
material respects could not reasonably be expected to have a Material Adverse Effect, no
proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit and/or
investigation is existing or, to the best knowledge of any Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in Section 3(1) of ERISA)
currently maintained or contributed to by any Borrower or any ERISA Affiliate, (B) Pension Plan or
(C) Multiemployer Plan.

     (j) Margin Stock. No Borrower or any Subsidiary thereof is engaged principally or as
one of its activities in the business of extending credit for the purpose of “purchasing” or
“carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in
Regulation U of the Board of Governors of the Federal Reserve System). No part of the proceeds of
any of the Loans or Letters of Credit will be used for purchasing or carrying margin

48

 

stock or for
any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U
or X of such Board of Governors.

     (k) Government Regulation. No Borrower or any Subsidiary thereof is an “investment
company” or a company “controlled” by an “investment company” (as each such term is defined or used
in the Investment Company Act of 1940, as amended) and no Borrower or any Subsidiary thereof is, or
after giving effect to the transactions contemplated by this Agreement will be, subject to
regulation under the Public Utility Holding Company Act of 1935 or the Interstate Commerce Act,
each as amended, or any other Applicable Law which limits its ability to incur or consummate the
transactions contemplated hereby.

     (l) Material Contracts. Schedule 7.1(l) sets forth a complete and accurate
list of all Material Contracts of any Borrower and its Subsidiaries in effect as of the Closing
Date not listed on any other Schedule hereto; other than as set forth in Schedule 7.1(l),
each such Material Contract is, and after giving effect to the consummation of the transactions
contemplated by the Loan Documents will be, in full force and effect in accordance with the terms
thereof. No Borrower or any Subsidiary (nor, to the knowledge of any Borrower, any other party
thereto) is in breach of or in default under any Material Contract in any material respect.

     (m) Employee Relations. Each Borrower and its Subsidiaries has a stable work force in
place and is not, as of the Closing Date, party to any collective bargaining agreement nor has any
labor union been recognized as the representative of its employees except as set forth on
Schedule 7.1(m). No Borrower knows of any pending, threatened or contemplated
strikes, work stoppage or other collective labor disputes involving its employees or those of its
Subsidiaries.

     (n) Burdensome Provisions. No Borrower or any Subsidiary thereof is a party to any
indenture, agreement, lease or other instrument, or subject to any corporate or partnership
restriction, Governmental Approval or Applicable Law which is so unusual or burdensome as in the
foreseeable future could be reasonably expected to have a Material Adverse Effect. The Borrowers
and their Subsidiaries do not presently anticipate that future expenditures needed to meet the
provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so
burdensome as to have a Material Adverse Effect. No Subsidiary is party to any agreement or
instrument or otherwise subject to any restriction or encumbrance that restricts or limits its
ability to make dividend payments or other distributions in respect of its capital stock to its
parent Borrower or any Subsidiary or to transfer any of its assets or properties to its parent
Borrower or any other Subsidiary in each case other than existing under or by reason of the Loan
Documents or Applicable Law.

     (o) Financial Statements. The audited and unaudited financial statements delivered
pursuant to Section 6.2(d)(i), are complete and correct and fairly present on a Consolidated basis
the assets, liabilities and financial position of the Borrowers and their Subsidiaries as at such
dates, and the results of the operations and changes of financial position for the periods then
ended (other than customary year-end adjustments for unaudited financial statements). All such
financial statements, including the related schedules and notes thereto, have been prepared in
accordance with GAAP. The Borrowers and their Subsidiaries have no Debt, obligation or other
unusual forward or long-term commitment which is not fairly reflected in the foregoing financial
statements or in the notes thereto.

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     (p) No Material Adverse Change. Since January 28, 2006, there has been no material
adverse change in the properties, business, operations, prospects, or condition (financial or
otherwise) of the Borrowers and their Subsidiaries and no event has occurred or condition arisen
that could reasonably be expected to have a Material Adverse Effect.

     (q) Solvency. As of the Closing Date and after giving effect to each Extension of
Credit made hereunder, each of (i) the Company, individually, and (ii) the other Borrowers and
their Subsidiaries, considered with the Company as a whole, will be Solvent.

     (r) Titles to Properties. Each Borrower and its Subsidiaries has such title to the
real property owned or leased by it as is necessary or desirable to the conduct of its business and
valid and legal title to all of its personal property and assets, including, but not limited to,
those reflected on the balance sheets of the Borrowers and their Subsidiaries delivered pursuant to
Section 7.1(o), except those which have been disposed of by such Borrower or its Subsidiaries
subsequent to such date which dispositions have been in the ordinary course of business or as part
of the Headquarters Property Tax Deferred Exchange, or as otherwise expressly permitted hereunder.

     (s) Liens. None of the properties and assets of any Borrower or any Subsidiary
thereof is subject to any Lien, except Liens permitted pursuant to Section 11.2. No financing
statement under the Uniform Commercial Code of any state which names any Borrower or any
Subsidiary thereof or any of their respective trade names or divisions as debtor and which has
not been terminated, has been filed in any state or other jurisdiction and no Borrower or any
Subsidiary thereof has signed any such financing statement or any security agreement authorizing
any secured party thereunder to file any such financing statement, except to perfect those Liens
permitted by Section 11.2 hereof.

     (t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete and correct
listing of all Debt and Guaranty Obligations of each Borrower and its Subsidiaries as of the
Closing Date in excess of $1,000,000. Each Borrower and its Subsidiaries have performed and are in
compliance with all of the terms of such Debt and Guaranty Obligations and all instruments and
agreements relating thereto, and no default or event of default, or event or condition which with
notice or lapse of time or both would constitute such a default or event of default on the part of
any Borrower or any of its Subsidiaries exists with respect to any such Debt or Guaranty
Obligation.

     (u) Litigation. Except for matters existing on the Closing Date and set forth on
Schedule 7.1(u), there are no actions, suits or proceedings pending nor, to the knowledge
of any Borrower, threatened against or in any other way relating adversely to or affecting any
Borrower or any Subsidiary thereof or any of their respective properties in any court or before any
arbitrator of any kind or before or by any Governmental Authority except for any such actions,
suits or proceedings which individually and in the aggregate could not reasonably be expected to
have a Material Adverse Effect.

     (v) Absence of Defaults. No event has occurred or is continuing which constitutes a
Default or an Event of Default, or which constitutes, or which with the passage of time or giving
of notice or both would constitute, a default or event of default by any Borrower or any

50

 

Subsidiary
thereof under any Material Contract or judgment, decree or order to which such Borrower or its
Subsidiaries is a party or by which such Borrower or its Subsidiaries or any of their respective
properties may be bound or which would require such Borrower or its Subsidiaries to make any
payment thereunder prior to the scheduled maturity date therefor.

     (w) Senior Debt Status. The Obligations of the Borrowers and each of their
Subsidiaries under this Agreement and each of the other Loan Documents ranks and shall continue to
rank at least senior in priority of payment to all Subordinated Debt of each such Person and is
designated as “Senior Indebtedness” under all instruments and documents, now or in the future,
relating to all Subordinated Debt and all senior unsecured Debt of such Person.

     (x) Parisian Acquisition. To the extent consummated, each of the transactions
contemplated by the Parisian Stock Purchase Agreement have been consummated in all material
respects pursuant to the provisions of the documents related thereto, true and complete copies of
which have been delivered to the Administrative Agent, and in compliance in all material respects
with all applicable provisions of law.

     (y) Accuracy and Completeness of Information. All written information, reports and
other papers and data produced by or on behalf of each Borrower or any Subsidiary thereof (other
than financial projections, which shall be subject to the standard set forth in Section 8.1(c)) and
furnished to the Lenders were, at the time the same were so furnished, complete and
correct in all material respects to the extent necessary to give the recipient a true and
accurate knowledge of the subject matter. No document furnished or written statement made to the
Administrative Agent or the Lenders by any Borrower or any Subsidiary thereof in connection with
the negotiation, preparation or execution of this Agreement or any of the Loan Documents contains
or will contain any untrue statement of a fact material to the creditworthiness of each Borrower or
its Subsidiaries or omits or will omit to state a fact necessary in order to make the statements
contained therein not misleading. No Borrower is aware of any facts which it has not disclosed in
writing to the Administrative Agent having a Material Adverse Effect, or insofar as such Borrower
can now foresee, which could reasonably be expected to have a Material Adverse Effect.

     (z) OFAC. None of the Borrowers, any Subsidiary of any Borrower or, to our knowledge,
any Affiliate of any Borrower: (i) is a Sanctioned Person, (ii) has more than 10% of its assets in
Sanctioned Entities, or (iii) derives more than 10% of its operating income from investments in, or
transactions with Sanctioned Persons or Sanctioned Countries. The proceeds of any Loan will not be
used and have not been used by any of the Borrowers or their Subsidiaries or, to our knowledge any
other Person, to fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity.

     SECTION 7.2 Survival of Representations and Warranties, Etc. All representations and
warranties set forth in this Article VII and all representations and warranties contained in any
certificate, or any of the Loan Documents (including, but not limited to, any such representation
or warranty made in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties made under this
Agreement shall be made or deemed to be made at and as of the Closing Date

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(except those that are
expressly made as of a specific date), shall survive the Closing Date and shall not be waived by
the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders
or any borrowing hereunder.

ARTICLE VIII

FINANCIAL INFORMATION AND NOTICES

     Until all the Obligations have been paid and satisfied in full and the Commitments terminated,
unless consent has been obtained in the manner set forth in Section 14.10 hereof, the Company will
furnish or cause to be furnished to the Administrative Agent at the Administrative Agent’s Office
at the address set forth in Section 14.1 and to the Lenders at their respective addresses as set
forth in the Register and/or provided to the Administrative Agent from time to time, or such other
office as may be designated by the Administrative Agent and Lenders from time to time:

     SECTION 8.1 Financial Statements and Projections.

     (a) Quarterly Financial Statements. As soon as practicable, and in any event within
sixty (60) days after the end of each of the first three (3) fiscal quarters of each Fiscal Year,
an unaudited Consolidated balance sheet of the Borrowers and their Subsidiaries as of the close of
such fiscal quarter and an unaudited Consolidated statement of income for the fiscal quarter then
ended, together with statements of retained earnings and cash flows for the portion of the Fiscal
Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative
form the corresponding figures as of the end of and for the corresponding period in the preceding
Fiscal Year and prepared by the Company in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operations of any change in the
application of accounting principles and practices during the period, and certified by the chief
financial officer of the Company to present fairly in all material respects the financial condition
of the Borrowers and their Subsidiaries on a Consolidated basis as of their respective dates and
the results of operations of the Borrowers and their Subsidiaries for the respective periods then
ended, subject to normal year end adjustments.

     (b) Annual Financial Statements. As soon as practicable, and in any event within
ninety (90) days after the end of each Fiscal Year, an audited Consolidated balance sheet of the
Borrowers and their Subsidiaries as of the close of such Fiscal Year and audited Consolidated
statements of income, retained earnings and cash flows for the Fiscal Year then ended, including
the notes thereto, all in reasonable detail setting forth in comparative form the corresponding
figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and practices during the year,
to be accompanied by a report thereon by an independent certified public accounting firm,
reasonably acceptable to the Administrative Agent, that is not qualified with respect to scope
limitations imposed by any Borrower or any of its Subsidiaries or with respect to accounting
principles followed by any Borrower or any of its Subsidiaries not in accordance with GAAP.

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     (c) Annual Business Plan and Financial Projections. As soon as practicable, and in
any event prior to the end of the first fiscal quarter of each Fiscal Year, a business plan of the
Borrowers and their Subsidiaries for such Fiscal Year, such plan to be prepared in accordance with
GAAP and to include, on a quarterly basis, the following: a quarterly operating and capital
budget, a projected income statement, statement of cash flows and balance sheet and a report
containing management’s discussion and analysis of such projections, accompanied by a certificate
from the chief financial officer of the Company to the effect that, to the best of such officer’s
knowledge, such projections are good faith estimates (utilizing reasonable assumptions) of the
financial condition and operations of the Borrowers and their Subsidiaries for such four (4)
quarter period.

     SECTION 8.2 Officer’s Compliance Certificate. At each time financial statements are
delivered pursuant to Sections 8.1 (a) or (b) and at such other times as the Administrative Agent
shall reasonably request, a certificate of the chief
financial officer or the treasurer of the Company in the form of Exhibit F attached
hereto (an “Officer’s Compliance Certificate”).

     SECTION 8.3 Accountants’ Certificate. At each time financial statements are delivered
pursuant to Section 8.1(b), a certificate of the independent public accountants certifying such
financial statements addressed to the Administrative Agent for the benefit of the Lenders stating
that in making the examination necessary for the certification of such financial statements, they
obtained no knowledge of any Default or Event of Default or, if such is not the case, specifying
such Default or Event of Default and its nature and period of existence.

     SECTION 8.4 Other Reports. Such information regarding the operations, business
affairs and financial condition of any Borrower or any of its Subsidiaries as the Administrative
Agent or any Lender may reasonably request.

     SECTION 8.5 Notice of Litigation and Other Matters. Prompt (but in no event later
than ten (10) days after an officer of any Borrower obtains knowledge thereof) telephonic and
written notice of:

     (a) the commencement of all proceedings and investigations by or before any Governmental
Authority and all actions and proceedings in any court or before any arbitrator against or
involving any Borrower or any Subsidiary thereof or any of their respective properties, assets or
businesses which involves an amount in excess of $5,000,000 individually or $20,000,000 in the
aggregate;

     (b) any notice of any violation received by any Borrower or any Subsidiary thereof from any
Governmental Authority including, without limitation, any notice of violation of Environmental Laws
involving an amount in excess of $5,000,000 individually or in the aggregate;

     (c) any labor controversy that has resulted in, or threatens to result in, a strike or other
work action against any Borrower or any Subsidiary thereof at any material business location of any
Borrower or any Subsidiary;

     (d) any attachment, judgment, lien, levy or order exceeding $1,000,000 that may be assessed
against any Borrower or any Subsidiary thereof;

53

 

     (e) (i) any Default or Event of Default, (ii) the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of Default or (iii) any event which
constitutes or which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which any Borrower or any of its
Subsidiaries is a party or by which any Borrower or any Subsidiary thereof or any of their
respective properties may be bound if such default or event of default shall have a Material
Adverse Effect on any Borrower or any Subsidiary;

     (f) (i) any unfavorable determination letter from the Internal Revenue Service regarding the
qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy
thereof), (ii) all notices received by any Borrower or any ERISA Affiliate of the PBGC’s intent to
terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by any Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor
concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA and
(iv) any Borrower obtaining knowledge or reason to know that any Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and

     (g) any event which makes any of the representations set forth in Section 7.1 inaccurate in
any material respect.

     SECTION 8.6 Accuracy of Information. All written information, reports, statements and
other papers and data furnished by or on behalf of any Borrower to the Administrative Agent or any
Lender whether pursuant to this Article VIII or any other provision of this Agreement shall be, at
the time the same is so furnished, in compliance with the representations and warranties set forth
in Section 7.1(x).

ARTICLE IX

AFFIRMATIVE COVENANTS

     Until all of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner provided for in Section 14.10, each
Borrower will, and will cause each of its Subsidiaries to:

     SECTION 9.1 Preservation of Corporate Existence and Related Matters. Except as
permitted by Section 11.4, preserve and maintain its separate corporate existence and all rights,
franchises, licenses and privileges necessary to the conduct of its business, and qualify and
remain qualified as a foreign corporation and authorized to do business in each jurisdiction where
the nature and scope of its activities require it to so qualify under Applicable Law.

     SECTION 9.2 Maintenance of Property. Protect and preserve all properties useful in
and material to its business, including copyrights, patents, trade names, service marks and
trademarks; maintain in good working order and condition all buildings, equipment and other
tangible real and personal property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its business,

54

 

so that the
business carried on in connection therewith may be conducted in a commercially reasonable matter.

     SECTION 9.3 Insurance. Maintain insurance with financially sound and reputable insurance companies against such
risks and in such amounts as are customarily maintained by similar businesses and as may be
required by Applicable Law, and on the Closing Date and from time to time thereafter deliver to the
Administrative Agent upon its request a detailed list of the insurance then in effect, stating the
names of the insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby. As of the Closing Date, the
Borrowers maintain the insurance described on Schedule 9.3.

     SECTION 9.4 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and complete in all
material respects) as may be required or as may be necessary to permit the preparation of financial
statements in accordance with GAAP and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.

     SECTION 9.5 Payment and Performance of Obligations. Pay and perform all Obligations
under this Agreement and the other Loan Documents, and pay or perform (a) all taxes, assessments
and other governmental charges that may be levied or assessed upon it or any of its property, and
(b) all other indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that any Borrower or such Subsidiary may contest any item described in
clauses (a) or (b) of this Section 9.5 in good faith so long as adequate reserves are maintained
with respect thereto in accordance with GAAP.

     SECTION 9.6 Compliance With Laws and Approvals. Observe and remain in compliance in
all material respects with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business.

     SECTION 9.7 Environmental Laws. In addition to and without limiting the generality of
Section 9.6, (a) comply with, and ensure such compliance in all material respects by all tenants
and subtenants with all applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all tenants and subtenants, if any, obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by applicable Environmental
Laws, (b) conduct and complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws, and promptly comply with all lawful
orders and directives of any Governmental Authority regarding Environmental Laws, unless such
lawful orders and directives are being contested in good faith and by appropriate proceedings and
for which adequate reserves are maintained to the extent required by GAAP, and (c) defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the
presence of Hazardous Materials, or the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of any Borrower or any such
Subsidiary, or any orders, requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorney’s

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and consultant’s fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.

     SECTION 9.8 Compliance with ERISA. In addition to and without limiting the generality
of Section 9.6, (a) except where the failure to so comply could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with all material
applicable provisions of ERISA and the regulations and published interpretations thereunder with
respect to all Employee Benefit Plans, (ii) not take any action or fail to take action the result
of which could be a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any
prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and
(iv) operate each Employee Benefit Plan in such a manner that will not incur any tax liability
under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (b) furnish to the Administrative Agent upon the Administrative Agent’s
request such additional information about any Employee Benefit Plan as may be reasonably requested
by the Administrative Agent.

     SECTION 9.9 Compliance With Agreements. Comply in all material respects with each
term, condition and provision of all material leases, agreements and other instruments entered into
in the conduct of its business including, without limitation, any Material Contract.

     SECTION 9.10 Visits and Inspections. Permit representatives of the Administrative
Agent or any Lender, from time to time, during normal business hours, to visit and inspect its
properties; inspect, audit and make extracts from its books, records and files, including, but not
limited to, management letters prepared by independent accountants; and discuss with its principal
officers, and its independent accountants, its business, assets, liabilities, financial condition,
results of operations and business prospects.

     SECTION 9.11 Additional Subsidiaries. Notify the Administrative Agent within ten (10)
days of the creation or acquisition of any Subsidiary of any Borrower, which is created or acquired
after the Closing Date and which engages in any business operations or owns assets with a fair
market value in excess of $5,000,000, and promptly thereafter (and in any event within thirty (30)
days following the creation or acquisition of such Subsidiary) cause to be executed and delivered
to the Administrative Agent (a) a duly executed Joinder Agreement and (b) favorable legal opinions
addressed to the Administrative Agent and Lenders in form and substance satisfactory thereto with
respect to such Joinder Agreement and such other documents and closing certificates as may be
requested by the Administrative Agent.

     SECTION 9.12 Use of Proceeds. Use the proceeds of (a) the Term Loans to (i) refinance the Existing Credit Agreement, (ii)
to pay a portion of the purchase price of the Parisian Acquisition, and (iii) for working capital
and general corporate requirements of the Borrowers and their Subsidiaries, including the payment
of certain fees and expenses incurred in connection with this Agreement, working capital, capital
expenditures in the ordinary course of business, and permitted acquisitions and (b) the Revolving
Credit Loans (i) to refinance the Existing Credit Agreement and (ii) for working capital and
general corporate requirements of the Borrowers and their Subsidiaries, including the payment of
certain fees and expenses incurred in

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connection with this Agreement, capital expenditures in the
ordinary course of business, and permitted acquisitions.

     Section 9.13 Additional Borrowers. Notwithstanding the provisions of Section
9.11 to the contrary, cause any Subsidiary which becomes an obligor or guarantor with respect to
the Debt under the Senior Notes to become a Borrower under this Agreement and to deliver to the
Administrative Agent the items described in clauses (a) and (b) of Section 9.11.

     Section 9.14 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative Agent or the
Required Lenders (through the Administrative Agent) may reasonably require to document and
consummate the transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this Agreement, the Notes, the
Letters of Credit and the other Loan Documents.

ARTICLE X

FINANCIAL COVENANTS

     Until all of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section 14.10 hereof, the
Borrowers and their Subsidiaries on a Consolidated basis will not:

     SECTION 10.1 Leverage Ratio. As of any fiscal quarter end, permit the ratio of (a)
Adjusted Debt on such date to (b) EBITDAR for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date (the “Leverage Ratio”) to be greater than 4.00
to 1.0.

     SECTION 10.2 Fixed Charge Coverage Ratio. As of the end of any fiscal quarter, permit
the Fixed Charge Coverage Ratio to be less than 2.00 to 1.0.

ARTICLE XI

NEGATIVE COVENANTS

     Until all of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section 14.10, each of the
Borrowers has not and will not and will not permit any of its Subsidiaries to:

     SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer to exist any Debt
or Additional Debt except:

     (a) the Obligations (excluding Hedging Obligations permitted pursuant to Section 11.1(b));

     (b) Debt incurred in connection with a Hedging Agreement which is non-speculative and entered
into in the ordinary course of a Borrower’s business;

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     (c) Debt existing on the Closing Date and not otherwise permitted under this Section 11.1, as
set forth on Schedule 7.1(t), and the renewal, refinancing, extension and replacement
thereof (but not the increase in the aggregate principal amount); provided that with respect to the
Senior Notes, (i) the aggregate principal amount thereof shall not be increased (ii) the maturity
date of any such renewal, refinancing, extension or replacement thereof shall not be prior to or
shorter than the existing maturity date of the Senior Notes and (iii) any such renewal,
refinancing, extension or replacement thereof shall be on terms no more restrictive to the
Borrowers and their Subsidiaries than the terms of the Senior Notes.

     (d) Debt of the Borrowers and their Subsidiaries incurred in connection with Capitalized
Leases in an aggregate amount not to exceed $85,000,000 on any date of determination;

     (e) purchase money Debt of the Borrowers and their Subsidiaries in an aggregate amount not to
exceed $75,000,000 on any date of determination;

     (f) Guaranty Obligations in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;

     (g) Guaranty Obligations with respect to Debt permitted pursuant to subsections (a) through
(e) of this Section 11.1;

     (h) Guaranty Obligations of the Company consisting of guarantees of operating leases for store
locations entered into by any other Borrower in the ordinary course of its business;

     (i) Debt with respect to trade letter of credit facilities in an aggregate amount not to
exceed $150,000,000 on any date of determination (which amount shall be inclusive of the amount set
forth on Item 7 of Schedule 7.1(t);

     (j) Guaranty Obligations with respect to Debt permitted pursuant to subsection (i) of this
Section 11.1;

     (k) Guaranty Obligations arising from agreements entered into by any of the Borrowers in the
ordinary course of business providing for indemnification or similar obligations in the event of
the non-performance by the respective Borrower of any obligation under any such agreement; and

     (l) Additional Debt in an aggregate amount not to exceed $100,000,000 on any date of
determination.

provided, that no agreement or instrument with respect to Debt permitted to be incurred by
this Section shall restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of any Borrower to make any payment to such Borrower or any of its Subsidiaries (in
the form of dividends, intercompany advances or otherwise) for the purpose of enabling such
Borrower to pay the Obligations.

     SECTION 11.2 Limitations on Liens. Create, incur, assume or suffer to exist, any Lien
on or with respect to any of its assets or properties (including, without limitation, shares of

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capital stock or other ownership interests), real or personal, whether now owned or hereafter
acquired, except:

     (a) Liens for taxes, assessments and other governmental charges or levies (excluding any Lien
imposed pursuant to any of the provisions of ERISA or Environmental Laws) not yet due or as to
which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired
or which are being contested in good faith and by appropriate proceedings and for which adequate
reserves are maintained to the extent required by GAAP;

     (b) the claims of materialmen, contractors, mechanics, carriers, warehousemen, processors or
landlords for labor, materials, supplies or rentals incurred in the ordinary course of business,
(i) which are not overdue for a period of more than thirty (30) days or (ii) which are being
contested in good faith and by appropriate proceedings;

     (c) Liens consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers’ compensation, unemployment
insurance or similar legislation;

     (d) Liens constituting encumbrances in the nature of zoning restrictions, easements and rights
or restrictions of record on the use of real property, which in the aggregate are not substantial
in amount and which do not, in any case, detract from the value of such property or impair the use
thereof in the ordinary conduct of business;

     (e) Liens of the Administrative Agent for the benefit of the Administrative Agent and the
Lenders;

     (f) Liens not otherwise permitted by this Section 11.2 and in existence on the Closing Date
and described on Schedule 11.2; and

     (g) Liens securing Debt permitted under Sections 11.1(d) and (e); provided that (i)
such Liens shall be created substantially simultaneously with the acquisition or lease of the
related asset, (ii) such Liens do not at any time encumber any property other than the property
financed by such Debt, (iii) the amount of Debt secured thereby is not increased and (iv) the
principal amount of Debt secured by any such Lien shall at no time exceed one hundred percent
(100%) of the original purchase price or lease payment amount of such property at the time it was
acquired.

     SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions. Purchase,
own, invest in or otherwise acquire, directly or indirectly, any capital stock, interests in any
partnership or joint venture (including, without limitation, the creation or capitalization of any
Subsidiary), evidence of Debt or other obligation or security, substantially all or a portion of
the business or assets of any other Person or any other investment or interest whatsoever in any
other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions
of credit to, or any investment in cash or by delivery of property in, any Person except:

     (a) investments in (i) Subsidiaries existing on the Closing Date, (ii) in Subsidiaries formed
or acquired after the Closing Date so long as the Borrowers and their Subsidiaries comply with the
applicable provisions of Section 9.11 and the other terms and provisions of this

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Agreement and
(iii) the other loans, advances and investments described on Schedule 11.3 existing on the
Closing Date;

     (b) investments in (i) marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency or instrumentality thereof or by the Federal Home Loan
Mortgage Corporation, Government National Mortgage Association, Federal Farm Credit Bank, Federal
Home Loan Mortgage Corp., Federal Housing Administration, Student Loan Marketing Association or the
Tennessee Valley Authority, maturing within ten (10) years from the date of acquisition thereof,
(ii) obligations of state and local governments or agencies thereof (including variable rate demand
notes and auction rate securities), maturing or resetting within three (3) years from the date of
acquisition thereof, (iii) commercial paper maturing no more than two hundred seventy (270) days
from the date of creation thereof and currently having a rating of “A-2” or better from Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or a rating of “P2” or
better from Moody’s Investors Service, Inc., (iv) certificates of deposit maturing no more than
one year from the date of creation thereof issued by commercial banks incorporated under the laws
of the United States of America, each having combined capital, surplus and undivided profits of not
less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating
agency; provided, that the aggregate amount invested in such certificates of deposit shall
not at any time exceed $10,000,000 for any one such certificate of deposit and $25,000,000 for any
one such bank, (v) money market mutual funds, maturing within one year from the date of acquisition
thereof, provided that the asset value of the issue shall exceed $1,000,000,000, (vi) corporate
notes (including variable rate demand notes, auction rate securities and Eurodollar notes) issued
by a corporation (except an Affiliate of Borrowers) organized under the laws of any State of the
United States of America or the District of Columbia and rated at least A-2 by Standard & Poor’s
Ratings Services or at least A by Moody’s Investors Service, Inc., (vii)
repurchase obligations with a term of not more than thirty (30) days for underlying securities
of the types described in clause (i) above entered into with any financial institution having
combined capital and surplus and undivided profits of not less than $500,000,000, (viii) repurchase
agreements and reverse repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States of America or issued by any governmental agency
thereof and backed by the full faith and credit of the United States of America, in each case
maturing within one year or less from the date of acquisition (provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency on
October 31, 1985), (ix) time deposits maturing no more than thirty (30) days from the date of
creation thereof with commercial banks or savings banks or savings and loan associations each
having membership either in the FDIC or the deposits of which are insured by the FDIC and in
amounts not exceeding the maximum amounts of insurance thereunder, and (x) investments in money
market funds and mutual funds which invest substantially all of their assets in securities of the
types described in clauses (i) through (ix) above;

     (c) investments in the form of the acquisition of all or substantially all of the business or
a line of business (whether by the acquisition of capital stock, assets or any combination thereof)
of any other Person, if (i) no Default or Event of Default then exists or would be created thereby,
(ii) the Borrowers have delivered to the Administrative Agent a certificate of a

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Responsible
Officer (on behalf of the Borrowers) demonstrating pro forma compliance with the
covenants contained in Article X both before and after giving effect to such acquisition, and (iii)
the aggregate consideration (including cash and non-cash consideration, whether in the form of
earned-out payments or other deferred payments) and any assumption of liabilities does not exceed
(A) $75,000,000 for any single acquisition or an aggregate of $250,000,000 for all acquisitions
from the date hereof through the later of (x) the Revolving Credit Termination Date or (y) the Term
Loan Termination Date so long as the Leverage Ratio is less than 3.25 to 1.00 before and
immediately after giving effect to such acquisition or (B) $25,000,000 for any single acquisition
or an aggregate of $100,000,000 for all acquisitions from the date hereof through the later of (x)
the Revolving Credit Termination Date or (y) the Term Loan Termination Date so long as the Leverage
Ratio is greater than or equal to 3.25 to 1.00 before or immediately after giving effect to such
acquisition, without the prior written consent of the Required Lenders;

     (d) Hedging Agreements permitted pursuant to Section 11.1;

     (e) purchases of assets in the ordinary course of business;

     (f) investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course of business, and
investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary to prevent loss;

     (g) the Parisian Acquisition, so long as the Leverage Ratio before and immediately after
giving effect to such acquisition does not exceed 3.25 to 1.00; and

     (h) other investments not exceeding $50,000,000 in the aggregate in any Fiscal Year of the
Borrowers.

     SECTION 11.4 Limitations on Mergers and Liquidation. Merge, consolidate or enter into
any similar combination with any other Person or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution) except:

     (a) any Subsidiary of any Borrower may merge with the Company, such Borrower or any other
Subsidiary of such Borrower; provided that in any merger involving the Company or a
Borrower, the Company or such Borrower shall be the surviving entity;

     (b) any Wholly Owned Subsidiary of any Borrower may merge into the Person such Wholly Owned
Subsidiary was formed to acquire in connection with an acquisition permitted by Section 11.3(c);
and

     (c) any Wholly Owned Subsidiary of any Borrower may wind-up into such Borrower or any other
Wholly Owned Subsidiary of such Borrower.

     SECTION 11.5 Limitations on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without limitation, the
sale of any receivables and leasehold interests and any sale-leaseback or similar transaction),
whether now owned or hereafter acquired except:

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     (a) the sale of inventory in the ordinary course of business;

     (b) the sale of obsolete assets no longer used or usable in the business of any Borrower or
any of its Subsidiaries;

     (c) the transfer of assets to any Borrower or any Wholly Owned Subsidiary of any Borrower
pursuant to Section 11.4(c);

     (d) the sale or discount without recourse of accounts receivable arising in the ordinary
course of business in connection with the compromise or collection thereof;

     (e) the disposition of any Hedging Agreement;

     (f) sale and leaseback transactions with respect to (i) retail store locations, distribution
centers and other fixed assets acquired or constructed by the Borrowers in the ordinary course of
the Borrowers’ business on or before the date of this Agreement, provided that the
aggregate amount of such sale and lease back transactions do not exceed $50,000,000 during the term
of this Agreement, (ii) retail store locations, distribution centers and other fixed assets
acquired or constructed by the Borrowers after the Closing Date in the ordinary course of the
Borrowers’ business, and (iii) the Headquarters Property.

     (g) sale of (i) retail store locations acquired in connection with the Parisian Acquisition (a
“Parisian Store Location”) or sale of the Borrowers’ existing retail store locations
in the immediate geographic area of a Parisian Store Location in lieu of the sale of such
Parisian Store Location and (ii) certain distribution centers and headquarters locations of the
Parisian Entities; provided that the aggregate amount of all such sales permitted by this
paragraph (g) does not exceed $150,000,000 at any time; and

     (h) any other sale of any asset not otherwise permitted by this Section 11.5; provided
that the aggregate amount of all sales permitted by this paragraph (h) does not exceed five percent
(5%) of such Borrower’s Net Worth in any Fiscal Year.

     SECTION 11.6 Limitations on Dividends and Distributions. Declare or pay any dividends
upon any of its capital stock or any other ownership interests; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership
interests, or make any distribution of cash, property or assets among the holders of shares of its
capital stock or other ownership interests, or make any change in its capital structure;
provided that:

     (a) any Borrower or any Subsidiary may pay dividends in shares of its own capital stock;

     (b) any Subsidiary may pay cash dividends to a Borrower;

     (c) any Borrower or any Subsidiary may pay any other dividends or distributions not otherwise
permitted by this Section 11.6; provided that the aggregate of all dividends and
distributions permitted by this paragraph (c) during any Fiscal Year shall not exceed five percent
(5%) of the Net Worth of such Borrower or such Subsidiary for such Fiscal Year; and

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     (d) the Company may purchase, redeem, retire or otherwise acquire, directly or indirectly
shares of its capital stock in an amount not to exceed (i) $75,000,000 in the aggregate during any
consecutive twelve (12) month period and (ii) $250,000,000 in the aggregate during the term of this
Agreement (provided that no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to such purchase, redemption, retirement or
acquisition).

     SECTION 11.7 Limitations on Exchange and Issuance of Capital Stock. Issue, sell or
otherwise dispose of any class or series of capital stock that, by its terms or by the terms of any
security into which it is convertible or exchangeable, is, or upon the happening of an event or
passage of time would be, (a) convertible or exchangeable into Debt or (b) required to be redeemed
or repurchased, including at the option of the holder, in whole or in part, or has, or upon the
happening of an event or passage of time would have, a redemption or similar payment due.

     SECTION 11.8 Transactions with Affiliates. Except for transactions permitted by 11.3,
11.6, 11.7, and loans and advances not exceeding $10,000,000 in the aggregate at any one time
outstanding to officers and employees of Borrowers for the purchase of a residence in connection
with the relocation of such officers and
employees and those transactions existing on the Closing Date and identified on Schedule
11.8 directly or indirectly (a) make any loan or advance to, or purchase or assume any note or
other obligation to or from, any of its officers, directors, shareholders or other Affiliates, or
to or from any member of the immediate family of any of its officers, directors, shareholders or
other Affiliates, or subcontract any operations to any of its Affiliates or (b) enter into, or be a
party to, any other transaction not described in clause (a) above with any of its Affiliates,
except pursuant to the reasonable requirements of its business and upon fair and reasonable terms
that are fully disclosed to and approved in writing by the Required Lenders prior to the
consummation thereof and are no less favorable to it than it would obtain in a comparable arm’s
length transaction with a Person not its Affiliate.

     SECTION 11.9 Certain Accounting Changes; Organizational Documents. (a) Change their
Fiscal Year end, or make any change in their accounting treatment and reporting practices except as
required or permitted by GAAP or (b) amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational documents) or amend, modify or change its bylaws
(or other similar documents) in any manner adverse in any respect to the rights or interests of the
Lenders.

     SECTION 11.10 Amendments; Payments and Prepayments of Debt . Amend or modify (or
permit the modification or amendment of) any of the terms or provisions of any Subordinated Debt,
or cancel or forgive, make (or give any notice with respect thereto) any voluntary, optional or
other non-scheduled payment, prepayment, redemption, acquisition for value (including without
limitation, by way of depositing money or securities with the trustee with respect thereto before
due for the purpose of paying when due) any Subordinated Debt.

     SECTION 11.11 Restrictive Agreements.

     (a) Enter into any Debt which contains (i) any covenants more restrictive than the provisions
of Articles IX, X and XI hereof, or (ii) any negative pledge or other restriction,

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limitation or
otherwise encumbers its ability to incur Liens on or with respect to any of its assets or
properties other than the assets or properties securing such Debt; except, with respect to this
clause (ii), the Senior Notes.

     (b) Enter into or permit to exist any agreement which impairs or limits the ability of any
Subsidiary of a Borrower to pay dividends to such Borrower.

     SECTION 11.12 Nature of Business. Substantively alter the character or conduct of the
business conducted by any Borrower and its Subsidiaries as of the Closing Date.

ARTICLE XII

DEFAULT AND REMEDIES

     SECTION 12.1 Events of Default. Each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court or any order, rule
or regulation of any Governmental Authority or otherwise:

     (a) Default in Payment of Principal of Loans and Reimbursement Obligations. The
Borrowers shall default in any payment of principal of any Loan, Note or Reimbursement Obligation
when and as due (whether at maturity, by reason of acceleration or otherwise).

     (b) Other Payment Default. The Borrowers shall default in the payment when and as due
(whether at maturity, by reason of acceleration or otherwise) of interest on any Loan, Note or
Reimbursement Obligation or the payment of any other Obligation.

     (c) Misrepresentation. Any representation or warranty made or deemed to be made by
the Borrowers or any of their Subsidiaries under this Agreement, any other Loan Document or any
amendment hereto or thereto, shall at any time prove to have been incorrect or misleading in any
material respect when made or deemed made.

     (d) Default in Performance of Certain Covenants. The Borrowers shall default in the
performance or observance of any covenant or agreement contained in Sections 8.1, 8.2 or 8.5(e)(i)
or Articles X or XI of this Agreement.

     (e) Default in Performance of Other Covenants and Conditions. The Borrowers or any of
their Subsidiaries shall default in the performance or observance of any term, covenant, condition
or agreement contained in this Agreement (other than as specifically provided for otherwise in this
Section 12.1) or any other Loan Document (other than as specifically provided for otherwise in this
Section 12.1) and such default shall continue for a period of thirty (30) days after written notice
thereof has been given to the Company by the Administrative Agent.

     (f) Hedging Agreement. The Borrowers shall default in the performance or observance
of any terms, covenant, condition or agreement (after giving effect to any applicable grace or cure
period) under any Hedging Agreement representing an aggregate liability to the Borrowers in excess
of $1,000,000 and such default causes the termination of such Hedging

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Agreement or permits any
counterparty to such Hedging Agreement to terminate any such Hedging Agreement.

     (g) Debt Cross-Default. The Borrowers or any of their Subsidiaries shall (i) default
in the payment of any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $10,000,000 beyond the period of grace if any,
provided in the instrument or agreement under which such Debt was created, or (ii) default in the
observance or performance of any other agreement or condition relating to any Debt (other than the
Notes or any Reimbursement Obligation) the aggregate outstanding amount
of which Debt is in excess of $10,000,000 or contained in any instrument or agreement
evidencing, securing or relating thereto or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit the holder or holders
of such Debt (or a trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity (any applicable
grace period having expired).

     (h) Other Cross-Defaults. The occurrence of any default or event of default under any
of the instruments and documents executed in connection with (i) the Revenue Bond Letter of Credit
or (ii) the Senior Notes.

     (i) Change in Control. Any person or group of persons (within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as amended) other than John Belk and/or members of
the Belk family (and any trusts of which he and/or any of such family members are beneficiaries and
any other Persons of which he or any of such family members is the beneficial equityholder) shall
obtain ownership or control in one or more series of transactions of more than fifty-one percent
(51%) of the common stock or fifty-one percent (51%) of the voting power of the Company entitled to
vote in the election of members of the board of directors of the Company or there shall have
occurred under any indenture or other instrument evidencing any Debt in excess of $1,000,000 any
“change in control” (as defined in such indenture or other evidence of Debt) obligating any
Borrower to repurchase, redeem or repay all or any part of the Debt or capital stock provided for
therein (any such event, a “Change in Control”).

     (j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary thereof shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or hereafter in effect), (ii)
file a petition seeking to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for adjustment of debts, (iii)
consent to or fail to contest in a timely and appropriate manner any petition filed against it in
an involuntary case under such bankruptcy laws or other laws, (iv) apply for or consent to, or fail
to contest in a timely and appropriate manner, the appointment of, or the taking of possession by,
a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi)
make a general assignment for the benefit of creditors, or (vii) take any corporate action for the
purpose of authorizing any of the foregoing.

     (k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be commenced
against any Borrower or any Subsidiary thereof in any court of competent jurisdiction seeking (i)
relief under the federal bankruptcy laws (as now or hereafter in effect) or

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under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment
of debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for any
Borrower or any Subsidiary thereof or for all or any substantial part of their respective assets,
domestic or foreign, and such case or proceeding shall continue without dismissal or stay for a
period of ninety (90) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.

     (l) Failure of Agreements. Any provision of this Agreement or any provision of any
other Loan Document shall for any reason cease to be valid and binding on any Borrower or
Subsidiary party thereto or any such Person shall so state in writing, other than in accordance
with the express terms hereof or thereof.

     (m) Termination Event. The occurrence of any of the following events: (i) any
Borrower or any ERISA Affiliate fails to make full payment when due of all amounts which, under the
provisions of any Pension Plan or Section 412 of the Code, any Borrower or any ERISA Affiliate is
required to pay as contributions thereto, (ii) an accumulated funding deficiency in excess of
$2,000,000 occurs or exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) any Borrower or any ERISA Affiliate as employers under one or more
Multiemployer Plans makes a complete or partial withdrawal from any such Multiemployer Plan and the
plan sponsor of such Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding $2,000,000.

     (n) Judgment. A judgment or order for the payment of money which causes the aggregate
amount of all such judgments to exceed $10,000,000 in any Fiscal Year shall be entered against any
Borrower or any of its Subsidiaries by any court and such judgment or order shall continue without
discharge or stay for a period of thirty (30) days.

     (o) Environmental. Any one or more Environmental Claims shall have been asserted
against any Borrower or any of its Subsidiaries; the Borrowers or any Subsidiaries would be
reasonable likely to incur liability as a result thereof; and such liability would be reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect.

     SECTION 12.2 Remedies. Upon the occurrence of an Event of Default, with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent shall, by notice to the Company:

     (a) Acceleration; Termination of Facilities. Declare the principal of and interest on
the Loans, the Notes and the Reimbursement Obligations at the time outstanding, and all other
amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the
other Loan Documents (including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented or shall be entitled
to present the documents required thereunder) and all other Obligations (other than Hedging
Obligations), to be forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the contrary

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notwithstanding, and terminate the Credit Facility and any right of the Borrowers to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence of an Event
of Default specified in Section 12.1(j) or (k), the Credit Facility shall be automatically
terminated and all Obligations (other than Hedging Obligations) shall automatically become due and
payable without presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or in any other Loan Document to the contrary
notwithstanding.

     (b) Letters of Credit. With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration pursuant to Section
12.2(a), the Borrowers shall at such time deposit in the Cash Collateral Account an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in the
Cash Collateral Account shall be applied by the Administrative Agent to the payment of drafts drawn
under the Letters of Credit and the unused portion thereof after all such Letters of Credit shall
have expired or shall have been fully drawn upon, if any, shall be applied to repay the other
Obligations on a pro rata basis. After all such Letters of Credit shall expire or
shall have been fully drawn upon, the Reimbursement Obligation shall have been satisfied with
respect to all Letters of Credit and all other Obligations shall have been paid in full, the
balance, if any, in the Cash Collateral Account shall be returned to the Company.

     (c) Rights of Collection. Exercise on behalf of the Lenders all of its other rights
and remedies under this Agreement, the other Loan Documents and Applicable Law, in order to satisfy
all of the Borrowers’ Obligations.

     SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration of the
rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not
intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right
or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given hereunder or under the
other Loan Documents or that may now or hereafter exist at law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege or shall be construed to be
a waiver of any Event of Default. No course of dealing between any Borrower, the Administrative
Agent and the Lenders or their respective agents or employees shall be effective to change, modify
or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a
waiver of any Event of Default.

ARTICLE XIII

THE ADMINISTRATIVE AGENT

     SECTION 13.1 Appointment. Each of the Lenders hereby irrevocably designates and
appoints Wachovia as Administrative Agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes Wachovia as
Administrative Agent for such Lender, to take such action on its behalf under the

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provisions of
this Agreement and the other Loan Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement or such other Loan Documents, the
Administrative Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement
or the other Loan Documents or otherwise exist against the Administrative Agent. Any reference to
the Administrative Agent in this Article XIII shall be deemed to refer to the Administrative Agent
solely in its capacity as Administrative Agent and not in its capacity as a Lender.

     SECTION 13.2 Delegation of Duties. The Administrative Agent may execute any of its
respective duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by the Administrative Agent with reasonable care.

     SECTION 13.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner
to any of the Lenders for any recitals, statements, representations or warranties made by any
Borrower or any of its Subsidiaries or any officer thereof contained in this Agreement or the other
Loan Documents or in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for any failure of any Borrower or any
of its Subsidiaries to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect
the properties, books or records of the Borrowers or any of their Subsidiaries.

     SECTION 13.4 Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by the Administrative Agent. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes unless such Note shall
have been transferred in accordance
with Section 14.9. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement and the other Loan Documents unless it shall first receive
such advice or concurrence of the Required Lenders (or, when expressly required hereby or by the
relevant other Loan

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Documents, all the Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action except for its own
gross negligence or willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the Notes in accordance
with a request of the Required Lenders (or, when expressly required hereby, all the Lenders), and
such request and any action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.

     SECTION 13.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless it has received
notice from a Lender or any Borrower referring to this Agreement, describing such Default or Event
of Default and stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, it shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, when expressly required hereby, all the
Lenders); provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders, except to the extent that other provisions
of this Agreement expressly require that any such action be taken or not be taken only with the
consent and authorization or the request of the Lenders or Required Lenders, as applicable.

     SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Borrowers or any of their Subsidiaries, shall be deemed
to constitute any representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Borrowers and their
Subsidiaries and made its own decision to make its Loans and issue or participate in Letters of
Credit hereunder and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary to inform itself as
to the business, operations, property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries.
Except for notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or by the other Loan Documents, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrowers or any of their Subsidiaries which may come into the

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possession
of the Administrative Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates.

     SECTION 13.7 Indemnification. The Lenders agree to indemnify the Administrative Agent
in its capacity as such and (to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers to do so), ratably according to the respective amounts of their
Revolving Credit Commitment Percentages and Term Loan Commitment Percentages, as applicable, from
and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Notes or any Reimbursement Obligation)
be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in
any way relating to or arising out of this Agreement or the other Loan Documents, or any documents,
reports or other information provided to the Administrative Agent or any Lender or contemplated by
or referred to herein or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Administrative Agent’s bad faith, gross negligence or
willful misconduct. The agreements in this Section 13.7 shall survive the payment of the Notes,
any Reimbursement Obligation and all other amounts payable hereunder and the termination of this
Agreement.

     SECTION 13.8 The Administrative Agent in Its Individual Capacity. The Administrative
Agent and its respective Subsidiaries and Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrowers as though the Administrative Agent were
not the Administrative Agent hereunder. With respect to any Loans made or renewed by it and any
Note issued to it and with respect to any Letter of Credit issued by it or participated in by it,
the Administrative Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative Agent
in its individual capacity.

     SECTION 13.9 Resignation of the Administrative Agent; Successor Administrative Agent.
Subject to the appointment and acceptance of a successor as provided below, the Administrative
Agent may resign at any time by giving notice thereof to the Lenders and the Company. Upon any
such resignation, the Required Lenders shall have the right to appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at
least $500,000,000. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30) days after the
Administrative Agent’s giving of notice of resignation, then the Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which successor shall have minimum
capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of

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this Section 13.9 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.

     SECTION 13.10 Other Agents. None of the Lenders identified on the facing page, in the
introductory paragraph or on the signature pages to this Agreement as a Syndication Agent or
Documentation Agent shall have any right, power, obligation, liability, responsibility or duty
under this Agreement other than those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely,
on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not
taking action hereunder.

ARTICLE XIV

MISCELLANEOUS

     SECTION 14.1 Notices.

     (a) Method of Communication. Except as otherwise provided in this Agreement, all
notices and communications hereunder shall be in writing (for purposes hereof, the term “writing”
shall include information in electronic format such as electronic mail and internet web pages), or
by telephone subsequently confirmed in writing. Any notice shall be effective if: (i) delivered by
hand delivery (ii) sent via electronic mail, provided that the party sending such
electronic mail does not receive notice that such electronic mail has failed to reach the Person or
Persons to whom such notice is to be given, (iii) posting on an internet web page accessible by the
Person or Persons to whom the notice is to be given, immediately following notice of such posting
by electronic mail, (iv) telecopy, (v) recognized overnight courier service or (vi) certified mail,
return receipt requested, and shall be presumed to be received by a party hereto (a) on the date of
delivery if delivered by hand or sent by electronic mail as provided in (ii) above, posting on an
internet web page as provided in (iii) above, telecopy, (b) on the next Business Day if sent by
recognized overnight courier service and (c) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the Administrative Agent as
understood by the Administrative Agent will be deemed to be the controlling and proper notice in
the event of a discrepancy with or failure to receive a confirming written notice.

     (b) Addresses for Notices. Notices to any party shall be sent to it at the following
addresses, or any other address as to which all the other parties are notified in writing.

	 	 	 
	If to the Borrowers:

	 	Belk, Inc.
	 

	 	2801 West Tyvola Road
	 

	 	Charlotte, North Carolina 28217-4500
	 

	 	Attention: Brian Marley
	 

	 	Chief Financial Officer
	 

	 	Telephone No.: (704) 426-8250
	 

	 	Telecopy No.: (704) 357-8052

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	With copies to:

	 	Belk Stores Services, Inc.
	 

	 	Legal Department
	 

	 	2801 West Tyvola Road
	 

	 	Charlotte, North Carolina 28217-4500
	 

	 	Attention: General Counsel
	 

	 	Telephone No.: (704) 426-8403
	 

	 	Telecopy No.: (704) 357-1883
	 
	 	 
	If to Wachovia as

	 	Wachovia Bank, National Association
	 

	 	Administrative Agent: Charlotte Plaza, CP-8
	 

	 	201 South College Street
	 

	 	Charlotte, North Carolina 28288-0680
	 

	 	Attention: Syndication Agency Services
	 

	 	Telephone No.: (704) 374-2698
	 

	 	Telecopy No.: (704) 383-0288
	 
	 	 
	With copies to:

	 	Wachovia Bank, National Association
	 

	 	One Wachovia Center, NC5562
	 

	 	301 South College Street
	 

	 	Charlotte, North Carolina 28288-0680
	 

	 	Attention: Trey Anglin
	 

	 	Telephone No.: (704) 383-3776
	 

	 	Telecopy No.: (704) 383-6647
	 
	 	 
	 

	 	Kennedy Covington Lobdell & Hickman, L.L.P.
	 

	 	Hearst Tower, 47th Floor
	 

	 	214 North Tryon Street
	 

	 	Charlotte, North Carolina 28202
	 

	 	Attention: Richard K. Brown
	 

	 	Telephone No.: (704) 331-7403
	 

	 	Telecopy No.: (704) 353-3103
	 
	 	 
	If to any Lender:

	 	To the address set forth in the Register.

     (c) Administrative Agent’s Office. The Administrative Agent hereby designates its
office located at the address set forth above, or any subsequent office which shall have been
specified for such purpose by written notice to the Company and Lenders, as the Administrative
Agent’s Office referred to herein, to which payments due are to be made and at which Loans will be
disbursed and Letters of Credit issued.

     SECTION 14.2 Expenses; Indemnity. The Borrowers will (a) pay all reasonable
out-of-pocket expenses (including, without limitation, all costs of electronic or internet
distribution of any information hereunder) of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan Document, whenever the
same shall be executed and delivered, including without limitation all out-of-pocket syndication
and due diligence expenses and reasonable fees and disbursements of counsel for the Administrative
Agent and (ii) the preparation, execution and delivery of any waiver, amendment

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or consent by the
Administrative Agent or the Lenders relating to this Agreement or any other Loan Document,
including without limitation reasonable fees and disbursements of counsel for the Administrative
Agent, (b) pay all reasonable out-of-pocket expenses of the Administrative Agent and each Lender
actually incurred in connection with the administration and enforcement of any rights and remedies
of the Administrative Agent and Lenders under the Credit Facility, including, without limitation,
in connection with any workout, restructuring, bankruptcy or other similar proceeding, enforcing
any Obligations of, or collecting any payments due from, any Borrower or by reason of an Event of
Default; consulting with appraisers, accountants, engineers, attorneys and other Persons concerning
the nature, scope or value of any right or remedy of the Administrative Agent or any Lender
hereunder or under any other Loan Document or any factual matters in connection therewith, which
expenses shall include without limitation the reasonable fees and disbursements of such Persons,
and (c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim (including, without limitation, any
Environmental Claims or civil penalties or fines assessed by OFAC), investigation, litigation or
other proceeding (whether or not the Administrative Agent or any Lender is a party thereto, and
whether or not any such claim, investigation, litigation or other proceeding is brought or
otherwise instituted by any Borrower or any third party) and the prosecution and defense thereof,
arising out of or in any way connected with the Loans, this Agreement, any other Loan Document or
any documents, reports or other information provided to the Administrative Agent or any Lender or
contemplated by or referred herein or therein or the transactions contemplated hereby or thereby,
including, without limitation, reasonable attorney’s and consultant’s fees, except to the extent
that any of the foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefore as determined in a final and non-appealable judgment by a
court of competent jurisdiction.

     SECTION 14.3 Set-off. In addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, upon and after the occurrence of
any Event of Default and during the continuance thereof, the Lenders and any assignee or
participant of a Lender in accordance with Section 14.9 are hereby authorized by the Borrowers at
any time or from time to time, without notice to the Borrowers or to any other Person, any such
notice being hereby
expressly waived, to set off and to appropriate and to apply any and all deposits (general or
special, time or demand, including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant to or for the credit or the account of any Borrower
against and on account of the Obligations irrespective of whether or not (a) the Lenders shall have
made any demand under this Agreement or any of the other Loan Documents or (b) the Administrative
Agent shall have declared any or all of the Obligations to be due and payable as permitted by
Section 12.2 and although such Obligations shall be contingent or unmatured. Notwithstanding the
preceding sentence, each Lender agrees to notify the Company and the Administrative Agent after any
such set-off and application, provided that the failure to give such notice shall not affect the
validity of such set-off and application.

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     SECTION 14.4 Governing Law. This Agreement, the Notes and the other Loan Documents,
unless otherwise expressly set forth therein, shall be governed by, construed and enforced in
accordance with the laws of the State of North Carolina, without reference to the conflicts or
choice of law principles thereof.

     SECTION 14.5 Jurisdiction and Venue.

     (a) Jurisdiction. The Borrowers hereby irrevocably consent to the personal
jurisdiction of the state and federal courts located in Mecklenburg County, North Carolina (and any
courts from which an appeal from any of such courts must or may be taken), in any action, claim or
other proceeding arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the performance of such
rights and obligations. The Borrowers hereby irrevocably consent to the service of a summons and
complaint and other process in any action, claim or proceeding brought by the Administrative Agent
or any Lender in connection with this Agreement, the Notes or the other Loan Documents, any rights
or obligations hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 14.1. Nothing in this Section
14.5 shall affect the right of the Administrative Agent or any Lender to serve legal process in any
other manner permitted by Applicable Law or affect the right of the Administrative Agent or any
Lender to bring any action or proceeding against any Borrower or its properties in the courts of
any other jurisdictions.

     (b) Venue. The Borrowers hereby irrevocably waive any objection they may have now or
in the future to the laying of venue in the aforesaid jurisdiction in any action, claim or other
proceeding arising out of or in connection with this Agreement, any other Loan Document or the
rights and obligations of the parties hereunder or thereunder. The Borrowers irrevocably waive, in
connection with such action, claim or proceeding, any plea or claim that the action, claim or other
proceeding has been brought in an inconvenient forum.

     SECTION 14.6 Reversal of Payments. To the extent any Borrower makes a payment or
payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative
Agent receives any payment or
proceeds of the collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by the Administrative Agent.

     SECTION 14.7 Injunctive Relief; Punitive Damages.

     (a) The Borrowers recognize that, in the event a Borrower fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement, any remedy of law may prove
to be inadequate relief to the Lenders. Therefore, the Borrowers agree that the Lenders, at the
Lenders’ option, shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.

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     (b) The Administrative Agent, the Lenders and the Company (on behalf of itself and its
Subsidiaries) hereby agree that no such Person shall have a remedy of punitive or exemplary damages
against any other party to a Loan Document and each such Person hereby waives any right or claim to
punitive or exemplary damages that they may now have or may arise in the future in connection with
any dispute, whether such dispute is resolved through arbitration or judicially.

     SECTION 14.8 Accounting Matters. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect
from time to time, provided that, if the Borrowers notify the Administrative Agent that the
Borrowers request an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Company that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any such notice is given
before or after such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before such change shall have
become effective until such notice shall have been withdrawn or such provision amended in
accordance therewith.

     SECTION 14.9 Successors and Assigns; Participations.

     (a) Benefit of Agreement. This Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Administrative Agent and the Lenders, all future holders of the
Notes, and their respective successors and assigns, except that the Borrowers shall not assign or
transfer any of their rights or obligations under this Agreement without the prior written consent
of each Lender.

     (b) Assignment by Lenders. Each Lender may, in the ordinary course of its business
and in accordance with Applicable Law, sell or assign to any Lender or any Affiliate of a Lender
and with the consent of the Company (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents shall not be unreasonably
withheld or delayed, assign to one or more other Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of the Extensions of Credit at the time owing to it and the
Notes held by it or participating interest in the Existing Letters of Credit); provided
that:

          (i) each such assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement;

          (ii) if less than all of the assigning Lender’s Commitment is to be assigned, the Commitment
so assigned shall not be less than $5,000,000;

          (iii) the assignee shall have delivered to the Administrative Agent all United States Internal
Revenue Service Forms required pursuant to Section 5.11(e) and all of the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Assumption substantially in the form of

75

 

Exhibit G
attached hereto (an “Assignment and Assumption”), together with any Note or Notes
subject to such assignment;

          (iv) where consent of the Borrowers to an assignment to a assignee is required hereunder, the
Borrowers shall be deemed to have given its consent five (5) Business Days after the date written
notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless
such consent is expressly refused by the Borrowers prior to such fifth (5th) Business Day;

          (v) such assignment shall not, without the consent of the Company, require any Borrower to
file a registration statement with the Securities and Exchange Commission or apply to or qualify
the Loans or the Notes under the blue sky laws of any state; and

          (vi) the assigning Lender shall pay to the Administrative Agent an assignment fee of $3,500
upon the execution by such Lender of the Assignment and Assumption; provided that no such
fee shall be payable upon any assignment by a Lender to an Affiliate thereof.

Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Assumption, which effective date shall be at least five (5)
Business Days after the execution thereof (unless otherwise agreed to by the Administrative Agent),
(A) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment
and Assumption, have the rights and obligations of a Lender hereby and (B) the Lender thereunder
shall, to the extent provided in such assignment, be released from its obligations under this
Agreement.

     (c) Rights and Duties Upon Assignment. By executing and delivering an Assignment and
Assumption, the assigning Lender thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as set forth in such Assignment and Assumption.

     (d) Register. The Administrative Agent shall maintain a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the name and address of each
Lender, the amount of the Commitment with respect to each Lender from time to time and the amount
of Extensions of Credit with respect to each Lender from time to time (the “Register”).
The entries in the Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat each person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable time and from time to time
upon reasonable prior notice.

     (e) Issuance of New Notes. Upon its receipt of an Assignment and Assumption executed
by an assigning Lender and an Eligible Assignee together with any Note or Notes (if applicable)
subject to such assignment and (if applicable) the written consent to such assignment, the
Administrative Agent shall, if such Assignment and Assumption has been completed and is
substantially in the form of Exhibit G:

          (i) accept such Assignment and Assumption;

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          (ii) record the information contained therein in the Register;

          (iii) give prompt notice thereof to the Lenders and the Company; and

          (iv) promptly deliver a copy of such Assignment and Assumption to the Company.

Within five (5) Business Days after receipt of notice, the Borrowers shall execute and deliver to
the Administrative Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to the
order of such Eligible Assignee (to the extent requested thereby) in amounts equal to the
Commitment assumed by it pursuant to such Assignment and Assumption and a new Note or Notes to the
order of the assigning Lender (to the extent requested thereby) in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated
the effective date of such Assignment and Assumption and shall otherwise be in substantially the
form of the assigned Notes delivered to the assigning Lender. Each surrendered Note or Notes shall
be canceled and returned to the Company.

     (f) Participations. Each Lender may, without notice to and without the consent of the
Borrowers (except that the Borrowers’ consent may be required in accordance with the last paragraph
of this clause (f)) or the Administrative Agent, in the ordinary course of its commercial banking
business and in accordance with Applicable Law, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Extensions of Credit and the Notes held by it);
provided that:

          (i) each such participation shall be in an amount not less than $5,000,000;

          (ii) such Lender’s obligations under this Agreement (including, without limitation, its
Commitment) shall remain unchanged;

          (iii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations;

          (iv) such Lender shall remain the holder of the Notes held by it for all purposes of this
Agreement;

          (v) the Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and obligations under
this Agreement;

          (vi) such Lender shall not permit such participant the right to approve any waivers,
amendments or other modifications to this Agreement or any other Loan Document other than waivers,
amendments or modifications which would reduce the principal of or the interest rate on any Loan or
Reimbursement Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled or extend any scheduled payment date for
principal of any Loan; and

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          (vii) any such disposition shall not, without the consent of the Company, require any Borrower
to file a registration statement with the Securities and Exchange Commission to apply to qualify
the Loans or the Notes under the blue sky law of any state.

     The Borrowers agree that each participant shall be entitled to the benefits of Sections 5.7,
5.8, 5.9, 5.10, 5.11 and 14.2 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 14.9; provided that a
participant shall not be entitled to receive any greater payment under Sections 5.7, 5.8, 5.9,
5.10, and 5.11 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 Borrowers’ prior written consent and such participant shall have delivered to the
Administrative Agent all United States Internal Revenue Service Forms required pursuant to Section
5.11(e).

     (g) Disclosure of Information; Confidentiality. The Administrative Agent and the
Lenders shall hold all non-public information with respect to the Borrowers obtained pursuant to
the Loan Documents (or any Hedging Agreement with a Lender or the Administrative Agent) in
accordance with their customary procedures for handling confidential information; provided,
that the Administrative Agent and each of the institutions identified on the cover page hereof as
“Joint Lead Arrangers” may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of deal terms and
other information customarily found in such publications and provided further, that
the Administrative Agent or any Lender may disclose any such information to the extent such
disclosure is (i) required by law or requested or required pursuant to any legal process, (ii)
requested by, or required to be disclosed to, any rating agency, or regulatory or similar authority
(including, without limitation, the National Association of Insurance Commissioners), (iii) used in
any suit, action or proceeding for the purpose of defending itself, reducing its liability or
protecting any of its claims, rights, remedies or interests under or in connection with the Loan
Documents (or any Hedging Agreement with a Lender or the Administrative Agent) or (iv) otherwise
consented to by the Company. The Administrative Agent or any Lender may, in connection with any
sale, proposed sale, assignment, proposed assignment, participation or proposed participation
pursuant to Section 2.7 or this Section 14.9, disclose to the assignee, participant, proposed assignee,
proposed participant or to any direct or indirect contractual counterparty in swap agreements or
such contractual counterparty’s professional advisor, any information relating to the Borrowers
furnished to such Lender by or on behalf of the Borrowers; provided, that prior to any such
disclosure, each such New Lender or proposed New Lender, assignee, proposed assignee, participant,
proposed participant or professional advisor shall agree to be bound by the provisions of this
Section 14.9(g).

     (h) Certain Pledges or Assignments. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement or any other Loan
Document to secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment of a security interest shall release a Lender form any of its obligations hereunder or
substitute such pledgee or assignee for such Lender as a party hereto.

     SECTION 14.10 Amendments, Waivers and Consents. Except as set forth below or as
specifically provided in any Loan Document, including, without limitation, Section 2.7 hereof,

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any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be
amended or waived by the Lenders, and any consent given by the Lenders, if, but only if, such
amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative
Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in
the case of an amendment, signed by the Borrowers; provided, that no amendment, waiver or
consent shall (a) increase the Aggregate Commitment or increase the amount of the Loans, (b) reduce
the rate of interest or fees payable on any Loan or Reimbursement Obligation, (c) reduce or forgive
the principal amount of any Loan or Reimbursement Obligation, (d) extend the originally scheduled
time or times of payment of the principal of any Loan or Reimbursement Obligation or the time or
times of payment of interest on any Loan or Reimbursement Obligation or any fee or commission with
respect thereto, (e) permit any subordination of the principal or interest on any Loan or
Reimbursement Obligation, (f) release any Borrower from the Obligations (other than Hedging
Obligations) hereunder, (g) permit any assignment (other than as specifically permitted or
contemplated in this Agreement) of any of a Borrower’s rights and obligations hereunder, (h) amend
the provisions of this Section 14.10 or the definition of Required Lenders, in each case, without
the prior written consent of each Lender or (i) extend the time of the obligation of the Lenders
holding Commitments to make or issue or participate in Letters of Credit, in each case, without the
prior written consent of each Lender. In addition, no amendment, waiver or consent to the
provisions of (a) Article XIII shall be made without the written consent of the Administrative
Agent and (b) Article III without the written consent of the Issuing Lender.

     SECTION 14.11 Performance of Duties. The Borrowers’ obligations under this Agreement
and each of the other Loan Documents shall be performed by the Borrowers at their sole cost and
expense.

     SECTION 14.12 All Powers Coupled with Interest. All powers of attorney and other authorizations granted
to the Lenders, the Administrative
Agent and any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied,
any of the Commitments remain in effect or the Credit Facility has not been terminated.

     SECTION 14.13 Survival of Indemnities. Notwithstanding any termination of this
Agreement, the indemnities to which the Administrative Agent and the Lenders are entitled under the
provisions of this Article XIV and any other provision of this Agreement and the other Loan
Documents shall continue in full force and effect and shall protect the Administrative Agent and
the Lenders against events arising after such termination as well as before.

     SECTION 14.14 Titles and Captions. Titles and captions of Articles, Sections and
subsections in, and the table of contents of, this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.

     SECTION 14.15 Severability of Provisions. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without

79

 

invalidating the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other jurisdiction.

     SECTION 14.16 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all parties, their successors
and assigns, and all of which taken together shall constitute one and the same agreement.

     SECTION 14.17 Term of Agreement. This Agreement shall remain in effect from the
Closing Date through and including the date upon which all Obligations arising hereunder or under
any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full and
all Commitments have been terminated. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination or in respect of any provision
of this Agreement which survives such termination.

     SECTION 14.18 Advice of Counsel. Each of the parties represents to each other party hereto that it has discussed this
Agreement with its counsel.

     SECTION 14.19 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.

     SECTION 14.20 Inconsistencies with Other Documents; Independent Effect of Covenants.

     (a) In the event there is a conflict or inconsistency between this Agreement and any other
Loan Document, the terms of this Agreement shall control.

     (b) The Borrowers expressly acknowledge and agree that each covenant contained in Articles IX,
X or XI hereof shall be given independent effect. Accordingly, the Borrowers shall not engage in
any transaction or other act otherwise prohibited under any covenant contained in Articles IX, X or
XI if, before or after giving effect to such transaction or act, the Borrowers shall or would be in
breach of any other covenant contained in Articles IX, X or XI.

     SECTION 14.21 Effect of Agreement. The parties hereto agree that this Agreement is
intended as a continuation, amendment and restatement of the Existing Credit Agreement and shall
not constitute a novation of the Existing Credit Agreement.

     SECTION 14.22 USA Patriot Act. The Administrative Agent and each Lender hereby
notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub.
L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies the Borrowers, which information includes the name and
address of each Borrower and other information that will allow such Lender to identify such
Borrower in accordance with the Act.

80

 

[Signature pages to follow]

81

 

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

	 	 	 	 	 	 	 	 	 
	[CORPORATE SEAL]	 	BELK, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ADMINISTRATION COMPANY, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK INTERNATIONAL, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK-SIMPSON COMPANY,
GREENVILLE, SOUTH CAROLINA, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

[Signature Pages Continue]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	THE BELK CENTER, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	UNITED ELECTRONIC SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ACCOUNTS RECEIVABLE LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES OF VIRGINIA LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK GIFT CARD COMPANY LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

[Signature Pages Continue]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BELK MERCHANDISING, LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK TEXAS HOLDINGS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK DEPARTMENT STORES LP, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	Belk, Inc., its General Partner
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK HEADQUARTERS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

[Signature Pages Continue]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent and Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as Syndication Agent and Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT A-1

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF REVOLVING CREDIT NOTE

 

 

This Revolving Credit Note amends and restates, but does not extinguish, all Obligations under
the Revolving Credit Notes executed by the Borrowers in favor of the Lender in connection with the
Existing Credit Agreement and as such replaces any such Revolving Credit Notes.

REVOLVING CREDIT NOTE

			
	 	 	 
	$                    
	 	                     ___, ___

     FOR VALUE RECEIVED, the undersigned, BELK, INC., a corporation organized under the laws of
Delaware (the “Company”), and the Subsidiaries of the Company listed on the signature pages
hereto (each a “Borrower” and together, the “Borrowers”) hereby jointly and
severally promise to pay to the order of                                         , (the “Lender”),
at the place and times provided in the Credit Agreement referred to below, the principal sum of
                     DOLLARS ($                    ) or, if less, the principal amount of all Revolving Credit
Loans made by the Lender from time to time pursuant to that certain Second Amended and Restated
Credit Agreement, dated as of October ___, 2006 (as amended, restated or otherwise modified, the
“Credit Agreement”) by and among the Borrowers, the Lenders who are or may become a party
thereto (collectively, the “Lenders”) and Wachovia Bank, National Association, as
Administrative Agent. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.

     The unpaid principal amount of this Revolving Credit Note from time to time outstanding is
subject to mandatory repayment from time to time as provided in the Credit Agreement and shall bear
interest as provided in Section 5.1 of the Credit Agreement. All payments of principal and
interest on this Revolving Credit Note shall be payable in lawful currency of the United States of
America in immediately available funds to the account designated in the Credit Agreement.

     This Revolving Credit Note is entitled to the benefits of, and evidences Obligations incurred
under, the Credit Agreement, to which reference is made for a statement of the terms and conditions
on which the Borrowers are permitted and required to make prepayments and repayments of principal
of the Obligations evidenced by this Revolving Credit Note and on which such Obligations may be
declared to be immediately due and payable.

     THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

     The Debt evidenced by this Revolving Credit Note is senior in right of payment to all
Subordinated Debt referred to in the Credit Agreement.

     The Borrowers hereby waive all requirements as to diligence, presentment, demand of payment,
protest and (except as required by the Credit Agreement) notice of any kind with respect to this
Revolving Credit Note.

[Signature Pages Follow]

 

 

     IN WITNESS WHEREOF, the undersigned have executed this Revolving Credit Note under seal as of
the day and year first above written.

	 	 	 	 	 	 	 	 	 
	[CORPORATE SEAL]	 	BELK, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ADMINISTRATION COMPANY, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK INTERNATIONAL, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK-SIMPSON COMPANY,
GREENVILLE, SOUTH CAROLINA, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	THE BELK CENTER, INC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	UNITED ELECTRONIC SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ACCOUNTS RECEIVABLE LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES OF VIRGINIA LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK GIFT CARD COMPANY LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BELK MERCHANDISING, LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK TEXAS HOLDINGS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK DEPARTMENT STORES LP, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By: Belk, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK HEADQUARTERS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT A-2

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF SWINGLINE NOTE

 

 

This Swingline Note amends and restates, but does not extinguish, all Obligations under the
Swingline Note executed by the Borrowers in favor of the Lender in connection with the Existing
Credit Agreement and as such replaces any such Swingline Note.

SWINGLINE NOTE

			
	 	 	 
	$                    
	 	                     ___, ___

     FOR VALUE RECEIVED, the undersigned, BELK, INC., a corporation organized under the laws of
Delaware (the “Company”), and the Subsidiaries of the Company listed on the signature pages
hereto (each a “Borrower” and together, the “Borrowers”) hereby jointly and
severally promise to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION (the
“Lender”), at the place and times provided in the Credit Agreement referred to below, the
principal sum of                                         DOLLARS ($                    ) or, if less, the principal
amount of all Swingline Loans made by the Lender from time to time pursuant to that certain Second
Amended and Restated Credit Agreement, dated as of October ___, 2006 (as amended, restated or
otherwise modified, the “Credit Agreement”) by and among the Borrowers, the Lenders who
are or may become a party thereto (collectively, the “Lenders”) and Wachovia Bank, National
Association, as Administrative Agent. Capitalized terms used herein and not defined herein shall
have the meanings assigned thereto in the Credit Agreement.

     The unpaid principal amount of this Swingline Note from time to time outstanding is subject to
mandatory repayment from time to time as provided in the Credit Agreement and shall bear interest
as provided in Section 5.1 of the Credit Agreement. Swingline Loans refunded as Revolving Credit
Loans in accordance with Section 2.2(c) of the Credit Agreement shall be payable by the Borrowers
as Revolving Credit Loans pursuant to the Revolving Credit Notes, and shall not be payable under
this Swingline Note as Swingline Loans. All payments of principal and interest on this Swingline
Note shall be payable in lawful currency of the United States of America in immediately available
funds to the account designated in the Credit Agreement.

     This Swingline Note is entitled to the benefits of, and evidences Obligations incurred under,
the Credit Agreement, to which reference is made for a statement of the terms and conditions on
which the Borrowers are permitted and required to make prepayments and repayments of principal of
the Obligations evidenced by this Swingline Note and on which such Obligations may be declared to
be immediately due and payable.

     THIS SWINGLINE NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

     The Debt evidenced by this Swingline Note is senior in right of payment to all Subordinated
Debt referred to in the Credit Agreement.

     The Borrowers hereby waive all requirements as to diligence, presentment, demand of payment,
protest and (except as required by the Credit Agreement) notice of any kind with respect to this
Swingline Note.

[Signature Pages Follow]

 

 

     IN WITNESS WHEREOF, the undersigned have executed this Swingline Note under seal as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 
	[CORPORATE SEAL]	 	BELK, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ADMINISTRATION COMPANY, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK INTERNATIONAL, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK-SIMPSON COMPANY,
GREENVILLE, SOUTH CAROLINA, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	THE BELK CENTER, INC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	UNITED ELECTRONIC SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ACCOUNTS RECEIVABLE LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES OF VIRGINIA LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK GIFT CARD COMPANY LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BELK MERCHANDISING, LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK TEXAS HOLDINGS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK DEPARTMENT STORES LP, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Belk, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK HEADQUARTERS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT A-3

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF TERM NOTE

 

 

TERM NOTE

			
	 	 	 
	$                    
	 	                          ,           

     FOR VALUE RECEIVED, the undersigned, BELK, INC., a corporation organized under the laws of
Delaware (the “Company”), and the Subsidiaries of the Company listed on the signature pages
hereto (each a “Borrower” and together, the “Borrowers”) hereby jointly and
severally promise to pay to the order of                                                             , (the “Lender”), at the
place and times provided in the Credit Agreement referred to below, the principal sum of
                                         DOLLARS ($                    ) or, if less, the
principal amount of the Term Loan made by the Lender from time to time pursuant to that certain Second Amended and Restated Credit Agreement,
dated as of October      , 2006 (as amended, restated or otherwise modified, the “Credit
Agreement”) by and among the Borrowers, the Lenders who are or may become a party thereto
(collectively, the “Lenders”) and Wachovia Bank, National Association, as Administrative
Agent. Capitalized terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

     The unpaid principal amount of this Term Note shall bear interest as provided in Section 5.1
of this Credit Agreement. All payments of principal and interest on this Term Note shall be payable
in lawful currency of the United States of America in immediately available funds to the account
designated in the Credit Agreement.

     This Term Note is entitled to the benefits of, and evidences Obligations incurred under, the
Credit Agreement, to which reference is made for a statement of the terms and conditions on which
the Borrowers are permitted and required to make prepayments and repayments of principal of the
Obligations evidenced by this Term Note and on which such Obligations may be declared to be
immediately due and payable.

     THIS TERM NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NORTH
CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

     The Debt evidenced by this Term Note is senior in right of payment to all Subordinated Debt
referred to in the Credit Agreement.

     The Borrowers hereby waive all requirements as to diligence, presentment, demand of payment,
protest and (except as required by the Credit Agreement) notice of any kind with respect to this
Term Note.

[Signature Pages Follow]

 

 

     IN WITNESS WHEREOF, the undersigned have executed this Term Note under seal as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 
	[CORPORATE SEAL]	 	BELK, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ADMINISTRATION COMPANY, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK INTERNATIONAL, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK-SIMPSON COMPANY, GREENVILLE, SOUTH CAROLINA, as
a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	THE BELK CENTER, INC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	UNITED ELECTRONIC SERVICES, INC., as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK ACCOUNTS RECEIVABLE LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK STORES OF VIRGINIA LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK GIFT CARD COMPANY LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BELK MERCHANDISING, LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK TEXAS HOLDINGS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK DEPARTMENT STORES LP, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Belk, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BELK HEADQUARTERS LLC, as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT B

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF NOTICE OF BORROWING

 

 

NOTICE OF BORROWING

Dated as of:                     

Wachovia Bank, National Association,

as Administrative Agent

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

Ladies and Gentlemen:

     This irrevocable Notice of Borrowing is delivered to you pursuant to the
Second Amended and Restated Credit Agreement dated as of October ___, 2006 (as amended, restated or
otherwise modified, the “Credit Agreement”), by and among Belk, Inc., a Delaware
corporation (the “Company”), the Subsidiaries of the Company listed on the signature pages
thereto (each a “Borrower” and together, the “Borrowers”), the lenders party
thereto (the “Lenders”) and Wachovia Bank, National Association, as Administrative Agent.

     1. The Borrowers hereby request that the Lenders make a [Revolving Credit Loan] [Swingline
Loan] [Term Loan] to the Borrowers in the aggregate principal amount of $                     .
(Complete with an amount in accordance with Section 2.3(a) or Section 4.2 of the Credit
Agreement.)

     2. The Borrowers hereby request that such Loan be made on the following Business Day:
                                        . (Complete with a Business Day in accordance with Section 2.3(a) or
Section 4.2 of the Credit Agreement).

     3. The Borrowers hereby request that the Revolving Credit Loan bear interest at the
following interest rate, plus the Applicable Margin, as set forth below:

	 	 	 	 	 	 	 
	 	 	 	 	Interest Period	 	Termination Date
	Component	 	 	 	(LIBOR	 	for Interest Period
	of Loan	 	Interest Rate	 	Rate only)	 	(if applicable)
	 

	 	[Base Rate or LIBOR Rate]	 	 	 	 

     4. The principal amount of all Loans and L/C Obligations outstanding as of the date hereof
(including the requested Loan) does not exceed the maximum amount permitted to be outstanding
pursuant to the terms of the Credit Agreement.

 

 

     5. All of the conditions applicable to the Loan requested herein as set forth in the Credit
Agreement have been satisfied as of the date hereof and will remain satisfied to the date of such
Loan.

     6. Capitalized terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the undersigned has executed this Notice of Borrowing as of the ___day
of                     , ___.

	 	 	 	 	 	 	 	 	 
	 	 	BELK, INC., on behalf of itself and the other Borrowers	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	  

 

 

EXHIBIT C

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF NOTICE OF ACCOUNT DESIGNATION

 

 

NOTICE OF ACCOUNT DESIGNATION

Dated as of: ___

Wachovia Bank, National Association,
 as
Administrative Agent

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

Ladies and Gentlemen:

     This Notice of Account Designation is delivered to you under Section 2.3(b) of the Second
Amended and Restated Credit Agreement dated as of October ___, 2006 (as amended, restated or
otherwise modified, the “Credit Agreement”), by and among Belk, Inc., a Delaware
corporation (the “Company”), the Subsidiaries of the Company listed on the signature pages
thereto (each a “Borrower” and together, the “Borrowers”), the lenders party
thereto and Wachovia Bank, National Association, as Administrative Agent.

     1. The Administrative Agent is hereby authorized to disburse all Loan proceeds into the
following account(s):

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	ABA Routing Number:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Account Number:	 	 	 	 	 	 
	 	 	 	 	 	 	 

     2. This authorization shall remain in effect until revoked or until a subsequent Notice of
Account Designation is provided to the Administrative Agent.

     3. Capitalized terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

     IN WITNESS WHEREOF, the undersigned has executed this Notice of Account Designation as of the
___day of ___, ___.

	 	 	 	 	 	 	 	 	 
	 	 	BELK, INC., on behalf of itself and the other
Borrowers	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT D

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF NOTICE OF REPAYMENT

 

 

NOTICE OF REPAYMENT

Dated as of:                     

Wachovia Bank, National Association,
 as
Administrative Agent

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

Ladies and Gentlemen:

     This irrevocable Notice of Repayment is delivered to you under Section [2.4(c)] / [4.4] of the
Second Amended and Restated Credit Agreement dated as of October ___, 2006 (as amended, restated or
otherwise modified, the “Credit Agreement”), by and among Belk, Inc., a Delaware
corporation (the “Company”), the Subsidiaries of the Company listed on the signature pages
thereto (each a “Borrower” and together, the “Borrowers”), the lenders party
thereto and Wachovia Bank, National Association, as Administrative Agent.

     1. The Borrowers hereby provide notice to the Administrative Agent that they shall repay the
following [Base Rate Loans] and/or [LIBOR Rate Loans]:                                         . (Complete with an
amount in accordance with Section 2.4 or Section 4.4 of the Credit Agreement.)

     2. The Loan to be prepaid is a [check each applicable box]

	 	0	 	Swingline Loan
	 
	 	0	 	Revolving Credit Loan
	 
	 	0	 	Term Loan

     3. The Borrowers shall repay the above-referenced Loans on the following Business Day:
                    . (Complete with a Business Day at least one (1) Business Day subsequent to the
date of this Notice of Repayment with respect to any Swingline Loan or any Base Rate Loan and three
(3) Business Days subsequent to date of this Notice of Prepayment with respect to any LIBOR Rate
Loan. )

     4. Capitalized terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

 

 

     IN WITNESS WHEREOF, the undersigned has executed this Notice of Repayment as of the ___day
of ___, 200___.

	 	 	 	 	 	 	 	 	 
	 	 	BELK, INC., on behalf of itself and the other
Borrowers	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT E

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

 

NOTICE OF CONVERSION/CONTINUATION

Dated as of:                     

Wachovia Bank, National Association,
 as
Administrative Agent

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

Ladies and Gentlemen:

     This irrevocable Notice of Conversion/Continuation (the “Notice”) is delivered to you
under Section 5.2 of the Second Amended and Restated Credit Agreement dated as of October ___, 2006
(as amended, restated or otherwise modified, the “Credit Agreement”), by and among Belk,
Inc., a Delaware corporation (the “Company”), the Subsidiaries of the Company listed on the
signature pages thereto (each a “Borrower” and together, the “Borrowers”), the
lenders party thereto and Wachovia Bank, National Association, as Administrative Agent.

     1. The Loan to which this Notice relates is a [Revolving Credit Loan] [Term Loan].

     2. This Notice is submitted for the purpose of: (Check one and complete applicable
information in accordance with the Credit Agreement.)

	 	0	 	Converting all or a portion of a Base Rate Loan into a LIBOR Rate
Loan
	 
	 	(a)	 	The aggregate outstanding principal balance of such Loan is
$                    .
	 
	 	(b)	 	The principal amount of such Loan to be converted is
$                    .
	 
	 	(c)	 	The requested effective date of the conversion of such Loan is
                    .
	 
	 	(d)	 	The requested Interest Period applicable to the converted Loan
is                     .
	 
	 	0	 	Converting all or a portion of a LIBOR Rate Loan into a Base Rate Loan
	 
	 	(a)	 	The aggregate outstanding principal balance of such Loan is
$                    .
	 
	 	(b)	 	The last day of the current Interest Period for such Loan is
                    .

 

 

	 	(c)	 	The principal amount of such Loan to be converted is
$                    .
	 
	 	(d)	 	The requested effective date of the conversion of such Loan is
                    .
	 
	 	0	 	Continuing all or a portion of a LIBOR Rate Loan as a LIBOR Rate Loan
	 
	 	(a)	 	The aggregate outstanding principal balance of such Loan is
$                    .
	 
	 	(b)	 	The last day of the current Interest Period for such Loan is
                    .
	 
	 	(c)	 	The principal amount of such Loan to be continued is
$                    .
	 
	 	(d)	 	The requested effective date of the continuation of such Loan
is                     .
	 
	 	(e)	 	The requested Interest Period applicable to the continued Loan
is                     .

     3. The principal amount of all Loans and L/C Obligations outstanding as of the date hereof
does not exceed the maximum amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.

     4. All of the conditions applicable to the conversion or continuation of the Loan requested
herein as set forth in the Credit Agreement have been satisfied or waived as of the date hereof and
will remain satisfied or waived to the date of such Loan.

     5. Capitalized terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the undersigned has executed this Notice of Conversion/Continuation as of
the ___day of ___, 200___.

	 	 	 	 	 	 	 	 	 
	 	 	BELK, INC., on behalf of itself and the other
Borrowers	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

EXHIBIT F

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF OFFICER’S COMPLIANCE CERTIFICATE

 

 

OFFICER’S COMPLIANCE CERTIFICATE

     The undersigned, on behalf of Belk, Inc. (the “Company”), and on behalf of the
Subsidiaries of the Company listed on the signature pages to the Credit Agreement referred to below
(each a “Borrower” and together, the “Borrowers”), hereby certifies to the
Administrative Agent and the Lenders, each as defined in the Credit Agreement referred to below, as
follows:

     1. This Certificate is delivered to you pursuant to Section 8.2 of the Second Amended and
Restated Credit Agreement dated as of October ___, 2006 (as amended, restated or otherwise modified,
the “Credit Agreement”), by and among the Borrowers, the lenders party thereto (the
“Lenders”) and Wachovia Bank, National Association, as Administrative Agent (the
“Administrative Agent”). Capitalized terms used herein and not defined herein shall have
the meanings assigned thereto in the Credit Agreement.

     2. I have reviewed the financial statements of the Borrowers and their Subsidiaries dated as
of                      and for the                      period[s] then ended and such statements fairly
present in all material respects the financial condition of the Borrowers and their Subsidiaries as
of the dates indicated and the results of their operations and cash flows for the period[s]
indicated.

     3. I have reviewed the terms of the Credit Agreement, and the related Loan Documents and have
made, or caused to be made under my supervision, a review in reasonable detail of the transactions
and the condition of the Borrowers and their Subsidiaries during the accounting period covered by
the financial statements referred to in Paragraph 2 above. Such review has not disclosed the
existence during or at the end of such accounting period (both before and after giving effect to
the Related Transactions) of any condition or event that constitutes a Default or an Event of
Default, nor do I have any knowledge of the existence of any such condition or event as at the date
of this Certificate [except, if such condition or event existed or exists, describe the nature and
period of existence thereof and what action the Borrowers have taken, are taking and propose to
take with respect thereto].

     4. The Applicable Margin and calculations determining such figure are set forth on the
attached Schedule 1 and the Borrowers and their Subsidiaries are in compliance with the
financial covenants contained in Article X of the Credit Agreement as shown on such Schedule
1 and the Borrowers and their Subsidiaries are in compliance with the other covenants and
restrictions contained in the Credit Agreement.

[Signature Page Follows]

 

 

     WITNESS the following signature as of the ___day of ___, 200___.

	 	 	 	 	 	 	 	 	 
	 	 	BELK, INC., on behalf of itself and the other
Borrowers	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

Schedule 1

to

Officer’s Compliance Certificate

[To be provided by Borrowers in form acceptable to Administrative Agent]

 

 

EXHIBIT G

to the

Second Amended and Restated

Credit Agreement

dated as of October 2, 2006

by and among

BELK, INC.,

the Subsidiaries of Belk, Inc. party thereto,

as Borrowers,

the Lenders party thereto,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Sole Book Manager,

BANK OF AMERICA, N.A.,

as Syndication Agent,

BRANCH BANKING AND TRUST COMPANY,

SUNTRUST BANK and REGIONS BANK,

as Documentation Agents

and

Wachovia Capital Markets, LLC and Banc of America Securities LLC,

as Joint Lead Arrangers

FORM OF ASSIGNMENT AND ASSUMPTION

 

 

ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [the][each]1 Assignor
identified on the Schedule hereto as “Assignor” or “Assignors” (collectively, the
“Assignors” and each an “Assignor”) and [the][each]2 Assignee identified
on the Schedule hereto as “Assignee” or “Assignees” (collectively, the “Assignees” and each
an “Assignee”). [It is understood and agreed that the rights and obligations of [the
Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to them in the Credit
Agreement identified below, receipt of a copy of which is hereby acknowledged by [the][each]
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

     For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the
Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and
assumes from [the Assignor][the respective Assignors], subject to and in accordance with the
Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’]
rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under
the Credit Agreement and any other documents or instruments delivered pursuant thereto to the
extent related to the amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the respective facilities
identified below (including without limitation any letters of credit, guarantees, and swingline
loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in
any way based on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights
and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).
Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty by [the][any]
Assignor.

	 	 	 	 	 
	1.

	 	Assignor(s):
	 	See Schedule attached hereto

 

			
	1	 	For bracketed language here and elsewhere in
this form relating to the Assignor(s), if the assignment is from a single
Assignor, choose the first bracketed language. If the assignment is from
multiple Assignors, choose the second bracketed language.
	 
	2	 	For bracketed language here and elsewhere in
this form relating to the Assignee(s), if the assignment is to a single
Assignee, choose the first bracketed language. If the assignment is to
multiple Assignees, choose the second bracketed language.
	 
	3	 	Select as appropriate.
	 
	4	 	Include bracketed language if there are either
multiple Assignors or multiple Assignees.

 

 

	 	 	 	 	 
	2.

	 	Assignee(s):
	 	See Schedule attached hereto
	 
	 	 	 	 
	3.

	 	Borrowers:
	 	Belk, Inc. and Subsidiaries of Belk, Inc.
party to the Credit Agreement
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	 	Wachovia Bank, National Association, as the

administrative agent under the Credit

Agreement
	 
	 	 	 	 
	5.

	 	Credit Agreement:
	 	The Second Amended and Restated Credit
Agreement dated as of October ___, 2006 (as
amended, restated, supplemented or
otherwise modified, the “Credit Agreement”)
by and among Belk, Inc. and the
Subsidiaries of Belk, Inc. party thereto,
as Borrowers, the Lenders parties thereto,
as Lenders, and Wachovia Bank, National
Association, as Administrative Agent (as
amended, restated, supplemented or
otherwise modified)
	 
	 	 	 	 
	6.

	 	Assigned Interest:
	 	See Schedule attached hereto
	 
	 	 	 	 
	[7.

	 	Trade Date:
	 	                    ]5

[Remainder of Page Intentionally Left Blank]

 

			
	5	 	To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as
of the Trade Date.

 

 

			
	Effective Date:          	 	                    , 20____ [TO BE INSERTED BY THE
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR(S)

See Schedule attached hereto

ASSIGNEE(S)

See Schedule attached hereto

 

 

SCHEDULE

To Assignment and Assumption

By its execution of this Schedule, each Assignor and each Assignee agrees to the terms set forth in
the attached Assignment and Assumption.

Assigned Interests:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Amount of	 	Amount of	 	Percentage	 	 
	 	 	 	 	 	 	 	 	 	 	Commitment/	 	Commitment/	 	Assigned of	 	 
	 	 	 	 	 	 	Facility	 	Loans for all	 	Loans	 	Commitment/	 	CUSIP
	Assignor(s)6	 	Assignee(s)7	 	Assigned8	 	Lenders9	 	Assigned9	 	Loans10	 	Number
	 
	 	 	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	 	 	 	$	 	 	 	 	%	 	 	 	 	 

	 	 	 	 	 
	 	ASSIGNEE(S)

[INSERT NAME OF ASSIGNEE]

[and is an Affiliate/Approved Fund of [identify

Lender]11]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	ASSIGNOR(S)

[INSERT NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

			
	6	 	List each Assignor, as appropriate.
	 
	7	 	List each Assignee, as appropriate.
	 
	8	 	Fill in the appropriate terminology for the
types of facilities under the Credit Agreement that are being assigned under
this Assignment (e.g. “Revolving Credit Commitment,” “Term
Loan Commitment,” etc.)
	 
	9	 	Amount to be adjusted by the counterparties to
take into account any payments or prepayments made between the Trade Date and
the Effective Date.
	 
	10	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.
	 
	11	 	Select as applicable.

 

 

[Consented to and]12 Accepted:

	 	 	 	 	 
	WACHOVIA BANK, NATIONAL ASSOCIATION,	 	 
	as Administrative Agent	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	WACHOVIA BANK, NATIONAL ASSOCIATION,	 	 
	as Swingline Lender and Issuing Lender	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	[Consented to:]13	 	 
	 
	 	 	 	 
	BELK, INC. on behalf of itself and the other Borrowers	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:
	 	 

 

			
	12	 	To be added only if the consent of the
Administrative Agent and/or the Swingline Lender and Issuing Lender is required
by the terms of the Credit Agreement. May also use a Master Consent.
	 
	13	 	To be added only if the consent of the
Borrowers is required by the terms of the Credit Agreement. May also use a
Master Consent.

 

 

ANNEX 1

to Assignment and Assumption

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

          1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations made in or in
connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrowers, any of their Subsidiaries or Affiliates
or any other Person obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrowers, any of their Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

          1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby and to become a
Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under
Section 14.9(b) of the Credit Agreement (subject to such consents, if any, as may be
required therein), (iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect
to decisions to acquire assets of the type represented by the Assigned Interest and either it, or
the person exercising discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement,
and has received or has been accorded the opportunity to receive copies of the most recent
financial statements delivered pursuant to Sections 6.2 or 8.1 thereof, as
applicable, and such other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to purchase [the][such]
Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, [the][any] Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under the Loan Documents,
and (ii) it will perform in accordance with their terms all of the

 

 

obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.

     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of [the][each] Assigned Interest (including payments of principal,
interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to
but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued
from and after the Effective Date.

     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of North Carolina.

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