Document:

exv10w2

Exhibit 10.2

NATIONAL DENTEX CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

     NON-QUALIFIED STOCK OPTION AGREEMENT dated as of         
                        
         by and between, NATIONAL
DENTEX CORPORATION, a Massachusetts corporation (the “Company”), and                                                             , an
employee of the Company (“Employee”).

     WHEREAS, the Company desires to provide Employee with an incentive to promote the business of
the Company and its subsidiaries and to encourage Employee to continue his employment; and

     WHEREAS, to effectuate that desire the Company has determined to grant Employee an option to
purchase shares of the Company’s common stock under and pursuant to the terms and provisions of the
Company’s Amended and Restated 2001 Stock Plan (the “Plan”).

     NOW, THEREFORE, the Company and Employee agree as follows:

1. Grant of Option.

     The Company hereby
grants to Employee the option to purchase            
                 
                 
               
shares of the Company’s Common Stock, $.01 par value, at a price per share equal
to $_________, in
the manner and subject to the conditions hereinafter provided. This option is not intended to
qualify as an “incentive stock option” under the Internal Revenue Code of 1986, as amended. This
option is granted pursuant to and subject to all of the terms and conditions of the Plan and,
unless the context otherwise requires, terms used herein shall have the same meaning as in the
Plan. Determinations made in connection with this option shall be governed by the Plan, and in the
event of any inconsistency or conflict between this Agreement and the Plan, the terms of the Plan
shall govern. In particular, without affecting the generality of the foregoing, it is understood
that employment by the Company includes employment by a Related Corporation as defined in the Plan.

2. Time of Exercise.

     Employee may exercise this option from                      to and including                     , the
end of ten years from the date this Option is granted. Employee may exercise this option as to the
following number of shares on or after the following dates:

     
               
shares on or after              
                    
       ,

an additional ________ shares on or
after              
                 
          , and

               an additional ________ shares on
or after              
                
           ; provided, however,
that in the
event of a Change of Control, as defined in the Plan, this option shall thereupon become fully
exercisable and vested.

1

 

3. Method of Exercise.

     Each exercise of this option shall be effected by giving written notice, in a form similar to
Exhibit A provided herein, of intent to exercise this option, specifying the number of
shares of stock as to which the option is being exercised, and accompanied by full payment of the
option price for the number of shares then being acquired. The optionee shall make full payment of
the exercise price of the option shares being purchased either (a) in United Stated dollars in cash
or check, (b) at the discretion of the Committee, through delivery or withholding of shares of
Common Stock, which have already been owned by you for more than six months, having a fair market
value equal as of the date of the exercise to the cash exercise price of the option, (c) at the
discretion of the Committee and consistent with applicable law, through the delivery to the Company
of a portion of the proceeds from the sale of the Common Stock acquired upon exercise of the option
equal to the cash exercise price of the option, along with an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the Employee’s discretion
at the time of exercise, or (d) at the discretion of the Committee, by any combination of (a), (b)
and (c) above. The determination of fair market value shall be made by the Committee, whose
determination in this regard shall be final and binding on the Company and on Employee. The
optionee shall not have the rights of a shareholder with respect to the shares covered by such
option until the date of issuance of a stock certificate of such holder for such shares. Except as
expressly provided in paragraph 14 of the Plan with respect to changes in capitalization and stock
dividends, no adjustment shall be made for dividends or similar rights for which the record date is
before the date such stock certificate is issued.

     Receipt by the Company of such notice and payment shall constitute exercise of this option or
a part hereof. The Company shall promptly deliver or cause to be delivered to Employee a
certificate or certificates for the number of shares of the Company’s Common Stock being acquired
pursuant to such exercise. Such shares shall be fully paid and nonassessable. Notwithstanding the
foregoing, the Company shall not be required to issue such shares unless a registration statement
under the Securities Act of 1933, as amended (the “Securities Act”) is in effect with respect to
such shares or the Company has received evidence satisfactory to the Company that Employee may
acquire such shares pursuant to an exemption from registration under the Securities Act. In
addition, as to any jurisdiction (other than the United States) that expressly imposes the
requirement that this option shall not be exercisable unless and until the shares of stock covered
by this option are registered or are subject to an available exemption from registration, the
exercise of this option shall, notwithstanding anything to the contrary contained herein, be deemed
conditioned upon the effectiveness of such registration or the availability of such an exemption.
Any determination in that regard by the Company shall be final and conclusive. The Company shall
not be obligated to take any affirmative action in order to cause the exercise of this option or
the issuance of shares of stock pursuant hereto to comply with any law or regulation of any
governmental authority.

2

 

4. Termination of Employment.

     This option shall, to the extent not previously exercised, expire immediately upon the
termination (voluntary or involuntary) of Employee’s employment with the Company or with a Related
Corporation; except that:

     (a) If Employee is on military, sick leave or other bona fide leave of absence (such
as temporary employment by the federal government), Employee’s employment relationship will be
treated as continuing intact if the period of such leave does not exceed 90 days, or, if longer, so
long as Employee’s right to reemployment is guaranteed by statute; otherwise, Employee’s employment
will be deemed to have terminated on the 91st day of such leave. A bona fide leave of absence with
the written approval of the Committee shall not be considered an interruption of employment under
this Section 4(a) or paragraph 10 of the Plan.

     (b) If Employee’s employment is terminated by reason of Employee’s retirement, this option,
to the extent exercisable at retirement, may be exercised by Employee within three (3) years after
retirement, unless terminated earlier by its terms; provided, however, that if Employee dies within
such three (3) year period, this option shall thereafter be exercisable, to the extent it was
exercisable at the time of death, for a period of twelve (12) months from the date of death or
until the stated term of this option, whichever period is shorter. For purposes hereof,
“retirement” shall mean separation from service, other than for Cause as defined in the Plan, on or
after the first day of the calendar month coincident with or next following the Participant’s
attainment of age 65.

     (c) If Employee’s employment is terminated by reason of Employee’s death, this option, to the
extent exercisable at Employee’s date of death, may be exercised at any time within one year after
that date (unless terminated earlier by its terms) by the estate or personal representative, or a
beneficiary who has acquired the option by will or by the applicable laws of descent and
distribution.

     (d) If Employee ceases to be employed by the Company and all Related Corporations by reason
of his or her disability, this option, to the extent exercisable upon his or her date of
termination of employment, may be exercised by Employee within three months after such date unless
terminated earlier by its terms; provided, however, that if Employee dies within such three month
period, this option shall thereafter be exercisable, to the extent it was exercisable at the time
of death, for a period of twelve (12) months from the date of death or until the stated term of
this option, whichever period is shorter. For purposes hereof, the term “disability” shall mean
“permanent and total disability” as defined in Section 22(e)(3) of the Code or any successor
statute. Any determination of permanent and total disability shall be made in good faith by the
Company.

5. Non-Transferability.

     This option shall not be transferable by Employee other than by will or the laws of descent
and distribution, and shall be exercisable, during Employee’s lifetime, only by Employee. From and

3

 

after Employee’s death, this option, to the extent exercisable at Employee’s death, may be exercised
prior to its termination by the estate or personal representative, or a beneficiary who has
acquired the option by will or by the applicable laws of descent and distribution. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of this option in contravention of
the terms hereof, and the levy of any execution, attachment or similar process upon this option,
shall be null and void.

6. Adjustment for Capital Changes.

     (a) Stock Dividends and Stock Splits. In the event of any stock dividend payable in
shares of the Company’s Common Stock or any split-up or contraction in the number of shares of the
Company’s Common Stock occurring after the date of this Agreement and prior to the exercise in full
of this option, the number of shares subject hereto and the option price to be paid for each such
share shall each be proportionately adjusted.

     (b) Recapitalization, Reorganization, Consolidation or Mergers. In the event of a
recapitalization or reorganization of the Company or a consolidation or a merger involving the
Company (other than a transaction described in the next paragraph) pursuant to which securities of
the Company or of another corporation are issued with respect to the outstanding shares of Common
Stock, the Employee upon exercising this option shall be entitled to receive for the purchase
price paid upon such exercise the securities he or she would have received if he or she had
exercised such option, prior to such recapitalization or reorganization.

     (c) Certain Consolidations and Mergers. If the Company is to be consolidated with or
acquired by another entity in a merger or other reorganization or in the event of a sale or other
disposition of assets which constitutes a Change of Control (each, a “Sale”), the Committee or the
board of directors of any entity assuming the obligations of the Company hereunder (the “Successor
Board”), shall, as to the option, either (i) make appropriate provision for the continuation of
such option by substituting on an equitable basis for the shares then subject to such option either
(a) the consideration payable with respect to the outstanding shares of Common Stock in connection
with the Sale, (b) shares of stock of the surviving or successor corporation or other entity or (c)
such other securities as the Successor Board deems appropriate, the fair market value of which
shall not materially exceed the fair market value of the shares of Common Stock subject to such
option immediately preceding the Sale; or (ii) upon written notice to the Employee, provide that
the option must be exercised, to the extent then exercisable or to be exercisable as a result of
the Sale, within a specified number of days of the date of such notice, at the end of which period
the option shall terminate; or (iii) terminate the option in exchange for a cash payment equal to
the excess of the fair market value of the shares subject to such option (to the extent then
exercisable or to be exercisable as a result of the Sale) over the exercise price thereof.

     (d) Fractional Shares. No fraction of a share shall be purchasable or deliverable upon
any exercise of this option, but, in the event any adjustment hereunder of the number of shares

4

 

covered by this option shall cause such number to include a fraction of a share, such fraction
shall be adjusted to the nearest smaller whole number or shares.

7. Miscellaneous.

     (a) Rights as a Stockholder. Employee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any shares subject to this option except to the extent
that this option shall have been exercised with respect thereto and, in addition, a certificate
shall have been issued therefor and delivered to Employee. No adjustment shall be made for
dividends (ordinary or extraordinary, and whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 6.

     (b) Employment Rights. This option shall not confer upon Employee any right with
respect to the continuance of Employee’s employment by the Company or by a Related Corporation, nor
shall it interfere in any way with the right of any of such corporations to terminate such
employment at any time.

     (c) Notices. Any communication or notice required or permitted to be given under
this Agreement shall be in writing and mailed by registered or certified mail or delivered in hand,
if to the Company, to its Treasurer at 2 Vision Drive, Natick, MA 01760, and, if to Employee, to
such address as shall be set forth on the signature page hereto.

     (d) Successors and Assigns. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the respective parties hereto.

     (e) Taxes. As a condition to the issuance of the shares underlying this option, the
Company shall have the right to require the Employee to remit to the Company an amount sufficient
to satisfy any federal, state or local withholding tax requirements or make other arrangements
satisfactory to the Company with regard to such taxes, as provided in the Plan.

     (f) Amendments and Waivers. The provisions of the Agreement may not waived, amended,
modified or terminated except with written consent of the parties hereto.

     (g) Governing Law. The validity and construction of the Agreement shall be governed by
the laws of the Commonwealth of Massachusetts (without regard to choice of law provisions).

     (h) Severability. If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.

     (i) Captions. Captions are for convenience only and are not deemed to be part of this
Agreement.

5

 

     (j) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

[Remainder of Page Intentionally Left Blank]

6

 

     IN WITNESS WHEREOF, NATIONAL DENTEX CORPORATION has caused this option to be executed in its
name and its corporate seal to be hereto affixed by its proper officer thereunto duly authorized
and the said has hereunto set his hand and seal all as of the date first above written.

	 	 	 	 	 
	 	NATIONAL DENTEX CORPORATION

 	 
	 	By:	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EMPLOYEE

 	 
	 	Name: 	
 	 
	 	 	(Signature) 	 
	 
	 	Address:	
 	 
	 
	 	
 	 

7

 

	 	 	 	 	 

Exhibit A

Form of Exercise

To Be Completed When Exercising Options

Employee Non Qualified Stock Option

Mr. Richard Becker

Executive Vice President and Treasurer

National Dentex Corporation

2 Vision Drive

Natick, MA 01760

Dear Mr. Becker:

I hereby exercise my right with respect to the Non Qualified Stock Option dated __________, to
purchase _________ shares of National Dentex Corporation Common Stock effective as of this
________ day of ____________, _________.

(Month)           (Year)

In connection with my purchase of such shares I hereby certify that it is my present intent to
acquire the said shares for investment purposes only not with the intent of resale or distribution
thereof.

Also, if I sell any of this stock before one year from this date or two years from the date the
option was granted, whichever is later, I will immediately notify the Company of the date of sale
and the sale price.

Very Truly Yours,

     

 

Name

Please Register stock as follows:

     Name(s): 

     Address :  

      

     Social Security No.
 

8exv10w1

Exhibit 10.1

SHORT TERM LOAN AGREEMENT

     THIS SHORT TERM LOAN AGREEMENT, dated as of April 17, 2009 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Loan Agreement”), by and between
THE TALBOTS, INC., a corporation duly organized and validly existing under the laws of the State of
Delaware (the “Borrower”), and THE NORINCHUKIN BANK, a Japanese banking institution, acting
through its New York Branch (the “Lender”).

     WHEREAS, the Borrower has asked the Lender to extend credit to the Borrower, and the Lender
then agreed to extend such credit, consisting of the Term Loan (as defined below) in the principal
amount of $28,000,000, subject to the terms and conditions set forth herein;

     WHEREAS, the proceeds of the Term Loan shall be used for general corporate and other working
capital purposes of the Borrower and to pay fees and expenses related to this Loan Agreement; and

     WHEREAS, the Lender is willing to extend such credit to the Borrower, subject to the terms and
conditions hereinafter set forth.

     NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:

          1. Definitions. (a) As used in this Loan Agreement, unless otherwise defined herein,
the following terms shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

     “Aeon Secured Loan Agreement” means the Secured Revolving Loan Agreement, dated as of
April 10, 2009, among the Borrower and Aeon Co., Ltd., pursuant to which (i) certain of the
Borrower’s subsidiaries (collectively, the “Guarantors”) will grant a guarantee for the
benefit of Aeon Co., Ltd. and (ii) the obligations of the Borrower and the Guarantors thereunder
will be secured by liens on certain of their now owned or hereafter acquired accounts receivables
(together with rights in any merchandise or goods which any of the same may represent and rights,
security, instruments, chattel paper and guaranties with respect thereto), real property and
fixtures, and assets related thereto (including without limitation related deposit accounts,
insurance, general intangibles and investment property, books, documents and records) and proceeds
thereof, in each case as may be determined by the Borrower and Aeon Co., Ltd. (collectively, the
“Collateral”)

     “Affiliate” shall mean, as to any Person, any corporation or other entity that,
directly or indirectly, controls, is controlled by or is under common control with such Person. For
purposes of this definition, the term “control” (including “controlling,” “controlled by” and
“under common control with”) of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the voting stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting stock, by contract
or otherwise.

     “Base Rate” shall mean the rate, as determined solely by the Lender, equal to the cost
of funds of the Lender on a monthly basis from time to time.

1

 

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

     “Borrower” is defined in the preamble of this Loan Agreement.

     “Borrowing Date” shall mean the date on which the Lender makes the Term Loan to the
Borrower.

     “Business Day” shall mean any day other than a Saturday, Sunday or other day on which
commercial banks are required or authorized to be closed in New York, New York.

     “Capital Stock” shall mean (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however designated and whether or
not voting) of corporate stock, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership or other equity interests of such Person, in each case including
any warrants, options or other rights entitling the holder thereof to purchase or acquire any of
the foregoing.

     “Capitalized Lease Obligations” shall mean obligations for the payment of rent for any
real or personal property under leases or agreements to lease that, in accordance with GAAP, have
been or should be capitalized on the books of the lessee and, for purposes hereof, the amount of
any such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “Closing Date” shall mean April 17, 2009 or such other date on which the conditions
precedent set forth in Section 5 hereof have been satisfied in full or waived in accordance with
the terms hereof; provided, however, in no event shall the Lender have any
obligation to make the Term Loan after April 20, 2009.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and
the regulations and published interpretations thereof.

     “Collateral” is defined in the definition of “Aeon Secured Loan Agreement”.

     “Default” shall mean any event or circumstance that with the giving of notice, the
lapse of time or both would constitute an Event of Default.

     “Default Rate” is defined in Section 2.5 hereof.

     “Disposition” shall mean any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of
any property or assets (whether now owned or hereafter acquired) to any other Person, in each case,
whether or not the consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, excluding any sales of Inventory in the ordinary course of business on
ordinary business terms.

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

     “Environmental Action” shall mean any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or
other communication from any governmental agency, department, bureau, office or other authority, or
any third party involving violations of Environmental Laws or releases of Hazardous Materials (i)
from any assets, properties or businesses of the Borrower or any of its Subsidiaries or any
predecessor in interest; (ii) from adjoining properties or businesses; or (iii) from or onto any

2

 

facilities which received Hazardous Materials generated by the Borrower or any of its
Subsidiaries or any predecessor in interest,

     “Environmental Law” shall mean any present or future statute, ordinance, rule,
regulation, order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct for protection of
the environment as the same may be amended or supplemented from time to time.

     “Environmental Liabilities and Costs” shall mean all liabilities, monetary
obligations, remedial actions, losses, damages, punitive damages, consequential damages, treble
damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel,
experts and consultants and costs of investigation and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of (i) any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or a release of
Hazardous Materials or (ii) any breach by the Borrower or any of its Subsidiaries of any
Environmental Law.

     “Environmental Lien” shall mean any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

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

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

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

     “Event of Default” is defined in Section 6 hereof.

     “Excluded Taxes” means, (i) any Taxes imposed on the recipient’s overall net income,
or franchise or other taxes imposed in lieu of Taxes on overall net income (however denominated),
by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient
is organized or in which its principal office is located (or, in the case of the Lender, in which
its

3

 

applicable lending office is located) or otherwise as a result of a present or former
connection between the recipient and the jurisdiction imposing such Tax, other than a connection
arising from such recipient having executed, received a payment under or enforced this agreement
and (ii) any branch profits taxes imposed by the United States; it being understood, for the
avoidance of doubt, that Excluded Taxes shall not include any withholding tax, including, without
limitation, a withholding tax imposed by the United States on payments to a non-US, person who is
not otherwise subject to tax in the United States on a net income basis.

     “Fair Market Value” shall mean, with respect to any asset or property, the price which
could be negotiated in an arm’s length, free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value will be determined in good faith by the Borrower, and, upon the
Lender’s request, shall be evidenced by a certificate (together with supporting calculation) of the
Borrower to the Lender.

     “FAX” is defined in Section 8.6 hereof.

     “GAAP” shall mean generally accepted accounting principles in effect from time to time
in the United States, applied on a consistent basis.

     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any department, commission, board, bureau, instrumentality,
agency or other entity exercising legislative, judicial regulatory or administrative functions of
or pertaining to government.

     “Hazardous Materials” shall mean (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls
and radon gas and (b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminate under any Environmental Law.

     “Hedging Agreements” shall mean any interest rate, commodity or equity swap, cap,
floor or forward rate agreement or collar arrangements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts and other similar agreements or
arrangements designed to protect against fluctuations in interest rates or currency, commodity or
equity values, and any confirmation executed in connection with any such agreement or arrangement.

     “Indebtedness” shall mean with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all obligations of such Person for the
deferred purchase price of assets or services acquired by such Person which, in accordance with
GAAP, would be shown on the liability side of the balance sheet of such Person, (iii) all
obligations of such Person under or evidenced by bonds, debentures, notes or other similar
instruments or upon which interest payments are customarily made, (iv) all obligations and
liabilities, contingent or otherwise, of such Person in respect of letters of credit, acceptances
and similar facilities, including, without duplication, all drafts drawn thereunder, (v) all
obligations of the kind referred to in clauses (i) through (iv) and (vi) through (viii) of this
definition secured by any Lien on any property owned by such Person whether or not owing by such
Person and even though such Person has not assumed or become liable for payment thereof, (vi) all
Capitalized Lease Obligations of such Person, (vii) all obligations and liabilities of such Person
created or arising

4

 

under any conditional sales or other title retention agreement with respect to property used
and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or
lender thereunder are limited to repossession or sale of such property, or agreements to pay a
specified purchase price for goods or services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (viii) solely for purposes of Section 6.1(e) hereof,
contingent obligations of such Person under any Hedging Agreements, as calculated in accordance
with accepted practice, (ix) all obligations referred to in clauses (i) through (viii) of this
definition of another Person (a) guaranteed directly or indirectly in any manner by such Person or
(b) secured by (or for which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property owned by such Person;
provided, however, that the term Indebtedness shall not include (y) trade payables
(including trade letters of credit issued for the account of such Person in the ordinary course of
its business, but excluding drafts drawn thereunder or any reimbursement obligations in respect
thereof) or accrued expenses, in each case arising in the ordinary course of business and not more
than 60 days delinquent or (z) gift cards and other customer liabilities arising in the ordinary
course of business of such Person. The Indebtedness of any Person shall include the Indebtedness of
any partnership of or joint venture in which such Person is a general partner or joint venturer.

     “Interest Rate” shall mean Base Rate plus 100.0 bp.

     “Interest Period” shall mean (a) the initial period commencing on the Borrowing Date
and ending on the last day in the calendar month in which the Borrowing Date has occurred, and (b)
thereafter, each period commencing on the first day of the immediately succeeding calendar month
and ending on the last day in the same calendar month; provided, however, that (i)
if any Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the immediately preceding Business Day, and
(ii) no Interest Period shall end after the Maturity Date and any Interest Period which would, but
for this clause, end after the Maturity Date shall instead end on the Maturity Date.

     “JJGI” shall mean J. Jill Group, Inc., a Delaware corporation.

     “Lender” is defined in the preamble of this Loan Agreement.

     “Lien” shall mean any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential arrangement of any
nature whatsoever.

     “Loan Account” is defined in Section 2.8 hereof.

     “Loan Documents” shall mean each of this Loan Agreement, the Note and each other
document, instrument and agreement executed and delivered pursuant to or in connection herewith or
therewith, as the same may be amended, supplemented or otherwise modified from time to time.

     “Material Adverse Effect” shall mean a material adverse effect on any of (a) the
operations, business, assets, properties, or condition (financial or otherwise) of the Borrower,
(b) the ability of the Borrower to perform any of its obligations hereunder, under the Note or
under any other Loan Document to which it is a party and (c) the legality, validity or
enforceability of this Loan

5

 

Agreement, the Note or any other Loan Document; provided, however, that the proposed sale of
JJGI shall not be considered as a Material Adverse Effect to the operation of the Borrower.

     “Maturity Date” shall mean the earlier of (i) December 29, 2009, or, if such day is
not a Business Day, the immediately preceding Business Day and (ii) such earlier date on which the
Term Loan becomes due and payable (whether at stated maturity, by mandatory prepayment, by
acceleration or otherwise) in accordance with the terms hereof.

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

     “New Lending Office” is defined in Section 7.2(g) hereof.

     “Non-Cash Pay Preferred Stock” shall mean preferred Capital Stock of the Borrower that
(a) is not required to be prepaid, redeemed, repurchased or defeased, in whole or in part, whether
on one or more fixed dates, upon the occurrence of one or more events or at the option of any
holder thereof, and which do not require any payment of cash dividends or distributions, in each
case prior to the date that is six months after the Maturity Date and (b) is not exchangeable or
convertible into Indebtedness of the Borrower or any Subsidiary or any preferred stock or other
Capital Stock (other than common equity of the Borrower or other Non-Cash Pay Preferred Stock).

     “Non-US Lender” is defined in Section 7.2(f) hereof.

     “Note” shall mean a promissory note of the Borrower evidencing the Term Loan, payable
to the order of the Lender, substantially in the form of Exhibit A hereto, as the same may
be amended, supplemented and otherwise modified from time to time, or any substitute therefor.

     “Operating Lease Obligations” shall mean all obligations for the payment of rent for
any real or personal property under leases or agreements to lease, other than Capitalized Lease
Obligations.

     “Other Taxes” is defined in Section 7.2(b) hereof.

     “Parent” shall mean AEON (U.S.A.), Inc.

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

     “Permitted Indebtedness” shall mean:

     (a) any Indebtedness owing to the Lender under this Loan Agreement and the other Loan
Documents;

     (b) any other Indebtedness listed on Schedule 4.1(s) (including Indebtedness under lines of
credit and other credit facilities described on such Schedule, as in effect on the date hereof),
and the extension of maturity, refinancing or modification of the terms thereof; provided,
however, that after giving effect to such extension, refinancing or modification, the
amount of such Indebtedness is not greater than the amount of Indebtedness outstanding immediately
prior to such extension, refinancing or modification;

     (c) Indebtedness evidenced by Capitalized Lease Obligations entered into in order to finance
Capital Expenditures made by the Borrower in accordance with the provisions of this Loan Agreement,
which Indebtedness, when aggregated with the principal amount of all Indebtedness

6

 

incurred under this clause (c) and clause (d) of this definition, does not exceed $100,000,000
at any time outstanding;

     (d) Indebtedness permitted by clause (d) of the definition of “Permitted Liens”;

     (e) Indebtedness permitted under Section 4.1(s) hereof;

     (f) Subordinated Debt; and

     (g) unsecured Indebtedness not otherwise permitted hereunder.

     “Permitted Investments” shall mean (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case, maturing within six months
from the date of acquisition thereof; (b) commercial paper, maturing not more than 270 days after
the date of issue rated P-1 by Moody’s or A-1 by Standard & Poor’s; certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial banking institutions
and money market or demand deposit accounts maintained at commercial banking institutions, each of
which is a member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000; repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major money center banks
included in the commercial banking institutions described in clause (c) above and which are secured
by readily marketable direct obligations of the United States Government or any agency thereof; (e)
money market accounts maintained with mutual funds having assets in excess of $2,500,000,000; and
(f) tax exempt securities rated A or better by Moody’s or A+ or better by Standard & Poor’s
maturing within six months from the date of acquisition thereof.

     “Permitted Liens” shall mean:

     (a) Liens for taxes, assessments and governmental charges the payment of which is not required
under Section 4.1(i) hereof;

     (b) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and
other similar Liens arising in the ordinary course of business and securing obligations (other than
Indebtedness for borrowed money) that are not overdue by more than 30 days or are being contested
in good faith and by appropriate proceedings promptly initiated and diligently conducted, and a
reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made
therefor;

     (c) Liens described on Schedule 4.1(r) hereof, but not the extension of coverage thereof to
other property or the extension of maturity, refinancing or other modification of the terms thereof
or the increase of the Indebtedness secured thereby;

     (d) (i) purchase money Liens on equipment acquired or held by the Borrower or any, of its
Subsidiaries in the ordinary course of its business to secure the purchase price of such equipment
or Indebtedness incurred solely for the purpose of financing the acquisition of such equipment or
(ii) Liens existing on such equipment at the time of its acquisition; provided,
however, that (A) no such Lien shall extend to or cover any other property of the Borrower
or any of its Subsidiaries, (B) the principal amount of the Indebtedness secured by any such Lien
shall not exceed the lesser of 90% of the fair market value or the cost of the property so held or
acquired and (C) the aggregate principal amount of Indebtedness secured by any or all such Liens
shall not exceed at any one time outstanding $100,000,000;

7

 

     (e) deposits and pledges of cash securing (i) obligations incurred in respect of workers’
compensation, unemployment insurance or other forms of governmental insurance or benefits, (ii) the
performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory
obligations, (iii) obligations on surety or appeal bonds, but only to the extent such deposits or
pledges are incurred or otherwise arise in the ordinary course of business and secure obligations
not past due, or (iv) letters of credit or other extensions of credit extended for any of the
foregoing purposes;

     (f) easements, zoning restrictions and similar encumbrances on real property and minor
irregularities in the title thereto that do not (i) secure obligations for the payment of money or
(ii) materially impair the value of such property or its use by the Borrower or any of its
Subsidiaries in the normal conduct of such Person’s business;

     (g) Liens securing Indebtedness permitted by subsection (c) of the definition of Permitted
Indebtedness;

     (h) Liens securing obligations of the Borrower under the Aeon Secured Loan Agreement; and

     (i) Liens necessary or desirable to consummate of the Securitization Transactions.

     “Person” shall mean a natural person, corporation, partnership, limited liability
company or partnership, association, joint-stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity.

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

     “Release” shall mean any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the outdoor or indoor
environment.

     “Restricted Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of Capital Stock of the
Borrower or any of its Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares of Capital Stock of the
Borrower or any option, warrant or other right to acquire any such shares of Capital Stock of the
Borrower.

     “Securitization Transactions” means the one or more securitizations or other
transactions (whether in the form of a sale (with or without recourse), a secured financing or
other structured finance transaction) by the Borrower and the Guarantors with Aeon Co., Ltd. and/or
other third parties with respect to all or a portion of the Collateral in part to repay in full the
Aeon Secured Loan Agreement, as determined by the Borrower and Aeon Co., Ltd.

     “Solvent” shall mean, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is not less than the total amount of the
liabilities of such Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such Person on its
existing debts as they become absolute and matured, (c) such Person is able to realize upon its
assets and pay its debts

8

 

and other liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (d) such Person does not intend to, and does not believe that it will
incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they
mature, and (e) such Person is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Person’s property would constitute
unreasonably small capital.

     “Subordinated Debt” shall mean any Indebtedness of the Borrower that (i) does not
mature prior to the date that is six months after the Maturity Date, (ii) is not required to be
repaid, prepaid, redeemed, amortized, repurchased or defeased, in whole or in part, prior to the
date that is six months after the Maturity Date (other than (x) pursuant to an acceleration of the
obligations thereunder by the lenders party thereto following an event of default and (y) pursuant
to customary asset sale or change in control provisions requiring redemption or repurchase thereof,
in each case only if and to the extent then permitted by this Loan Agreement and the subordination
provisions of such Indebtedness), (iii) is not secured by any assets of the Borrower or any
Subsidiary, (iv) is not exchangeable or convertible into Indebtedness of the Borrower or any
Subsidiary (except other Subordinated Debt) or any preferred stock other than Non-Cash Pay
Preferred Stock, (v) does not have the benefit of covenants more restrictive in any material
respect than those set forth in this Loan Agreement and (vi) is subordinated to the obligations of
the Borrower under this Loan Agreement pursuant to a written agreement reasonably satisfactory in
form and substance to and approved in writing by the Lender.

     “Subsidiary” shall mean, as to any Person, any corporation or other entity of which
Capital Stock or other ownership interests having (in the absence of contingencies) ordinary voting
power to elect at least a majority of the board of directors (or persons performing similar
functions) of such corporation or other entity which is, at the time of determination, owned
directly, or indirectly through one or more intermediaries, by such Person.

     “Taxes” is defined in Section 7.2(a) hereof.

     “Term Loan” shall mean the loan in the principal amount of $28,000,000 made by the
Lender to the Borrower on the Closing Date pursuant to Section 2.1 hereof.

     “Threshold Amount” shall mean $10,000,000.

     “Tilton Property” shall mean that certain real property located in the Town of Tilton,
County of Belknap and State of New Hampshire owned by the Borrower, as further described in that
certain Mortgage, Assignment of Leases and Rents and Security Agreement dated March 1, 1999, by
mortgagor to mortgagee, and record in the Belknap County Registry of Deeds (the “Recorder’s
Office”) in Book 151 at Page 0596.

     “Total Indebtedness” shall mean, as of any date, the aggregate principal amount of
Indebtedness of the Borrower and its Subsidiaries outstanding as of such date, computed on a
consolidated basis in accordance with GAAP. For avoidance of doubt “Total Indebtedness” shall
exclude contingent obligations of the Borrower and its Subsidiaries, so long as under GAAP such
obligations should be excluded

     “Uniform Commercial Code” is defined in Section 1(c) hereof.

     “USA Patriot Act” is defined in Section 4.1(p) hereof.

9

 

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

          (b) Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. Unless the context
requires otherwise, (i) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (iii) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Loan
Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Loan Agreement and (v) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any right or interest in or to
assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible
or intangible. References in this Loan Agreement to “determination” by the Lender include good
faith estimates by the Lender (in the case of quantitative determinations) and good faith beliefs
by the Lender (in the case of qualitative determinations).

          (c) Accounting and Other Terms. Unless otherwise expressly provided herein, each
accounting term used herein shall have the meaning given it under GAAP applied on a basis
consistent with those used in preparing the financial statements referred to in Section 3(j). All
terms used in this Loan Agreement which are defined in Article 8 or Article 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York (the “Uniform
Commercial Code”) and which are not otherwise defined herein shall have the same meanings
herein as set forth therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall continue to have the
same meaning notwithstanding any replacement or amendment of such statute except as the Lender may
otherwise determine.

     Time References. Unless otherwise indicated herein, all references to time of day
refer to Eastern Standard Time or Eastern daylight saving time, as in effect in New York City on
such day. For purposes of the computation of a period of time from a specified date to a later
specified date, the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding”; provided, however, that with respect to a computation of
fees or interest payable to the Lender, such period shall in any event consist of at least one full
day.

          2. The Term Loan.

          2.1. The Term Loan. The Lender agrees to make the Term Loan to the Borrower in lump
sum on the Closing Date. Any principal amount of the Term Loan which is repaid or prepaid may not
be reborrowed.

10

 

          2.2. Making the Term Loan. The Term Loan shall be made on the Closing Date. Upon
fulfillment of the applicable conditions set forth in Section 5 hereof (or the waiver thereof by
the Lender as herein prescribed), the Lender shall make the Term Loan to be made by it hereunder on
the Closing Date by wire transfer of immediately available funds by 2:00 p.m., New York City time,
to the Borrower in same day funds at the Borrower’s bank account with the Lender’s office at 245
Park Avenue, 21st Floor, New York, NY 10169, or at such other bank account as the Borrower shall
designate in writing to the Lender.

          2.3. Interest.

          (a) The Term Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Interest Rate.

          (b) Subject to Section 2.5 hereof, interest shall be payable on the Term Loan (i) in arrears
on the last day of each Interest Period and (ii) on the date on which the principal amount of the
Term Loan becomes due and payable hereunder (whether at stated maturity, by mandatory prepayment,
optional prepayment, acceleration or otherwise).

          (c) Notwithstanding anything herein to the contrary, all accrued interest shall be payable on
each of the last day of each month and each date principal is payable hereunder pursuant to
Sections 2.4 and 2.6 hereof or such earlier date as herein required.

          (d) Interest shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.

          2.4. Principal Repayment; Note.

          (a) The aggregate principal amount of the outstanding Term Loan shall be repayable in lump sum
on the Maturity Date. In any event, the Borrower shall repay the principal amount of the
outstanding Term Loan, together with all other outstanding amounts due and owing hereunder or under
the other Loan Documents, on the Maturity Date.

          (b) The Term Loan shall be evidenced by the Note. The Borrower shall execute and deliver to
the Lender the Note payable to the order of the Lender, in the principal amount equal to the
Lender’s Term Loan. The Lender is hereby authorized by the Borrower to endorse on the schedule
attached to the Note (or on a continuation of such schedule attached to such Note and made a part
thereof) an appropriate notation evidencing the date and amount of the Term Loan made by the
Lender, the date and amount of each principal payment and prepayment with respect thereto and the
interest rate applicable thereto; provided, however, that the failure of the Lender to make any
such notation (or any error in such notation) shall not affect any obligations of the Borrower
hereunder or under the Note. The Note and the books and records of the Lender shall be conclusive
evidence of the information set forth therein absent manifest error.

          2.5. Default Interest. If at any time any Default under Section 6.1(a) or Section
6.1(f) hereof shall exist, (a) the principal of the Term Loan shall bear interest, from the date
such Default occurred until such Default is fully cured or waived, payable on demand, at a rate
equal at all times to the rate otherwise applicable thereto plus 2% per annum, and (b) interest,
fees and other amounts payable hereunder or under any other Loan Document shall bear interest from
the

11

 

date such Default occurred until such Default is fully cured or waived, payable on demand, at
a rate equal at all times to the Base Rate in effect from time to time plus 2% per annum (the rates
described in clauses (a) and (b) are hereinafter referred to as the “Default Rate”).

          2.6. Prepayments; Optional Prepayments. The Borrower may, upon at least five (5)
Business Days’ prior written notice to the Lender, prepay all or any portion of the principal
amount of the Term Loan. Each such prepayment shall be in an amount not less than $1,000,000 or an
integral multiple thereof and any portion of the Term Loan may be designated by the Borrower to be
prepaid if and only to the extent that prepayment is made on the last day of an Interest Period.
Each prepayment made pursuant to this Section shall be accompanied by the payment of (i) accrued
interest to date of such prepayment on the amount prepaid and (ii) any and all amounts then due and
owing hereunder; provided, however, that the Lender agrees not to charge to the Borrower any
losses, costs or expenses incurred by reason of such optional prepayment. Any principal of the
Term Loan that is prepaid may not be reborrowed.

          2.7. Method of Payment.

          (a) Payments Generally; Sharing of Setoffs. The Borrower shall make each payment
required to be made by it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of amounts payable under Section 7.1 hereof, or otherwise) by the
time expressly required hereunder or under such other Loan Document for such payment (or, if no
such time is expressly required, by 12:00 p.m., New York City time), on the date when due, in
immediately available funds, without setoff or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Lender, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. The Borrower will make each
payment under this Loan Agreement to the Lender’s Account in Dollars and in immediately available
funds, and payments pursuant to Section 7.1 hereof shall be made also directly to the Lender and
payments pursuant to other Loan Documents shall be made to the Person specified therein.

          (b) Any payments shall be applied first to default charges, indemnities, expenses and other
non-principal and interest amounts owed under any of the Loan Documents, if any, then to interest
due and payable on the Term Loan, and thereafter to the principal amount of the Term Loan due and
payable.

          (c) If the Lender shall, by exercising any right of setoff or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on the Term Loan resulting in the Lender
receiving payment of a greater proportion of the aggregate amount of the outstanding Term Loan
owing the Lender, the Lender may apply such greater proportion amount to any payment of other
amounts owing to the Lender under this Loan Agreement, and the balance if any will be returned to
the Borrower. The Borrower consents to the foregoing.

          (d) All computations of interest and fees shall be made on the basis of a year of 360 days for
the actual number of days elapsed (including the first day but excluding the last day) occurring in
the period for which such interest is payable; provided, however, that if the Term
Loan is repaid on the same day on which it is made, one day’s interest shall be paid on such Term
Loan; provided, further, that interest based on the Base Rate shall be computed on the basis

12

 

of a year of 360 days for the actual number of days elapsed (including the first day but
excluding the last day). Each change in the Base Rate shall immediately and simultaneously result
in a corresponding change in the Default Rate.

          (e) Whenever any payment to be made hereunder or under any instrument delivered hereunder
shall be stated to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest; provided, however, that if such extension
would cause such payment to be made in a new calendar month or beyond the Maturity Date, such
payment shall be made on the immediately preceding Business Day.

          (f) The Borrower hereby authorizes the Lender, if and to the extent payment is not made when
due under any Loan Document, to charge from time to time against any account of the Borrower with
the Lender any amount so due. The Lender agrees to promptly notify the Borrower of any such charge
made by the Lender; provided, however, that the Lender shall incur no liability for
failing to do so and the failure of the Lender to so notify the Borrower shall in no event diminish
the Lender’s right to make such charge under this Section 2.7(f).

          2.8. Loan Account. The Lender maintains on its books a loan account in the Borrower’s
name (the “Loan Account”), showing the Term Loan, prepayments, the computation and payment
of interest, and any other amounts due and sums paid hereunder and under the other Loan Documents.
The entries made by the Lender in the Loan Account shall be conclusive and binding on the Borrower
and the Lender as to the amount at any time due from the Borrower, absent manifest error.

          2.9. Use of Proceeds. The Borrower shall apply the proceeds of the Term Loan solely
to (a) fund working capital and other general corporate purposes of the Borrower and (b) pay fees
and expenses in connection with the transactions contemplated hereby.

          3. Representations and Warranties. The Borrower hereby represents and warrants to the
Lender as follows:

          (a) Organization of Borrower. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.

          (b) Power and Authority. The Borrower has all requisite corporate power and authority
to carry on its present business, to own its property and assets and to execute; deliver and
perform this Loan Agreement, the Note, if any, and each other Loan Document to which it is a party.
The Borrower is duly qualified or licensed as a foreign corporation authorized to conduct its
activities and is in good standing in all jurisdictions in which the character of the properties
owned or leased by it or the nature of the activities conducted makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed would not be
reasonably likely to result in a Material Adverse Effect. The Parent is the record and, to the best
knowledge of the Borrower, beneficial owner of, and has the unrestricted power to vote, not less
than 51% of all of the voting securities and the outstanding Capital Stock of the Borrower and has
the voting power to elect at least a majority of the directors of the Borrower.

13

 

          (c) Authorization of Borrowing. All appropriate and necessary corporate, shareholder
and other actions and approvals have been taken or obtained by the Borrower to authorize the
execution and delivery of this Loan Agreement, the Note, if any, and the other Loan Documents to
which it is a party and to authorize the performance and observance of the terms of each.

          (d) Agreement Binding; No Conflicts. This Loan Agreement constitutes, and the Note,
if any, and the other Loan Documents when executed and delivered pursuant hereto will constitute,
the legal, valid and binding obligations of the Borrower, as the case may be, enforceable against
the Borrower in accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of
creditors’ rights generally, and by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or equity). The execution, delivery and performance of this
Loan Agreement, the Note, and the other Loan Documents and the use of the proceeds of the Term Loan
do not and will not (i) violate or conflict with (A) any provisions of law or any order, rule,
directive or regulation of any court or other Governmental Authority, (B) the charter, by-laws or
other organizational documents of the Borrower or (C) except as would not be reasonably likely to
result in a Material Adverse Effect, any agreement, document or instrument to which the Borrower or
any Subsidiary is a party or by which its respective assets or properties are bound, (ii) except as
would not be reasonably likely to result in a Material Adverse Effect, constitute a default or an
event or circumstance that with the giving of notice or the passing of time, or both, would
constitute a default under any such agreement, document or instrument, (iii) except as would not be
reasonably likely to result in a Material Adverse Effect, result in the creation or imposition of
any Lien, charge or encumbrance of any nature whatsoever upon any assets or properties of the
Borrower or any Subsidiary, or (iv) except as would not be reasonably likely to result in a
Material Adverse Effect, result in any suspension, revocation, impairment, forfeiture or nonrenewal
of any permit, license, authorization or approval applicable to its respective operations or any of
its properties.

          (e) Compliance with Law. There does not exist any conflict with, or violation, or
breach of, any law or any regulation, order, writ, injunction or decree of any court or
governmental instrumentality, which conflict, violation or breach could reasonably be expected to
result in a Material Adverse Effect.

          (f) Taxes. The Borrower has filed all Tax returns required to be filed and has paid
all taxes, assessments, fees and other governmental charges due upon the Borrower with respect to
the conduct of its operations or otherwise the failure of which to file or to pay could reasonably
be expected to result in a Material Adverse Effect, except to the extent that the Borrower is
contesting in good faith its obligation to pay such taxes or charges and the Borrower has
adequately accrued for such payments in accordance with and to the extent required by GAAP. There
are no tax audits presently being conducted in respect of the Borrower or any of its Subsidiaries
that could reasonably be expected to result in a Material Adverse Effect.

          (g) Governmental Consents. No consent, approval, authorization or order of, notice to
or declaration or filing with, any administrative body or agency or other Governmental Authority on
the part of the Borrower is required for the valid execution, delivery and

14

 

performance by the Borrower of this Loan Agreement, the Note, or the other Loan Documents,
except for such as have been obtained or made and are in full force and effect.

          (h) Litigation. There are no pending or, to the knowledge of the Borrower, threatened
legal actions, suits, claims or administrative, arbitration or other proceedings against the
Borrower or its Subsidiaries that if adversely determined could reasonably be expected to result in
a Material Adverse Effect.

          (i) Other Obligations. The Borrower is not in default in any material respect in the
performance, observance or fulfillment of any obligation, covenant or condition in any agreement,
document or instrument to which it is a party or by which it is bound which is reasonably likely to
result in a Material Adverse Effect.

          (j) Financial Information.

               (i) The Borrower has heretofore furnished to the Lender its consolidated balance sheets, its
consolidated statements of earnings, its consolidated statements of cash flows and its consolidated
statements of stockholder’s equity (A) as of January 31, 2009, reported on by Deloitte & Touche
LLP, independent registered public accounting firm. Such financial statements present fairly, in
all material respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with
GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (B) above.

               (ii) All other financial information provided to the Lender by or on behalf of the Borrower
and its Affiliates has been prepared in accordance with GAAP and fairly presents, in accordance
with GAAP consistently applied, the financial position and results of operations for the periods
therein indicated, and there has been no material adverse change in the financial condition,
operations, business or prospects of the Borrower since January 31, 2009.

          (k) Accuracy of Information. All factual information heretofore or contemporaneously
furnished by or on behalf of the Borrower to the Lender for purposes of or in connection with this
Loan Agreement, any other Loan Document, or any transaction contemplated hereby or thereby (true
and complete copies of which were furnished to the Lender in connection with its execution and
delivery hereof) is, and all other factual information hereafter furnished by or on behalf of the
Borrower to the Lender will be, true and accurate in every material respect on the date as of which
such information is dated or certified and, in respect of such information heretofore or
contemporaneously furnished to the Lender, as of the date of the execution and delivery of this
Loan Agreement to the Lender and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such information not
misleading. With respect to any such factual information pertaining to Persons other than the
Borrower, its Subsidiaries or its Affiliates, the foregoing representation is made to the best
knowledge of the Borrower. All projections heretofore or contemporaneously furnished by or on
behalf of the Borrower to the Lender for purposes of or in connection with this Loan Agreement or
any transaction contemplated hereby have been prepared by the Borrower based upon estimates and
assumptions stated therein, all of which the Borrower believes to be reasonable and fair in light
of current conditions and current facts

15

 

known to the Borrower and, as of the Closing Date, reflect the Borrower’s good faith and
reasonable estimates of the future financial performance of the Borrower and of the other
information projected therein for the periods set forth therein; provided, however,
that any and all financial projections are subject to uncertainties and contingencies, many of
which are beyond the Borrower’s control and no assurance is or can be given that any financial
projections or other results contemplated therein will be realized.

          (l) Seniority. The obligations of the Borrower under this Loan Agreement and the
other Loan Documents to which it is a party rank at least pari passu in priority of payment and in
all other respects with all other unsecured Indebtedness of the Borrower.

          (m) Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an
“investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or
for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as
amended.

          (n) Permits, Etc. The Borrower has all permits, consents, licenses, authorizations,
approvals, entitlements and accreditations required for it lawfully to own, lease, manage or
operate, or to acquire each business currently owned, leased, managed or operated, or to be
acquired, by it, except for failures which are not reasonably likely to result in an Material
Adverse Effect. No condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, consent, license, authorization, approval, entitlement or
accreditation and which is reasonably likely to result in a Material Adverse Effect, a Default or
an Event of Default and there is no written claim that any such permit, consent, license,
authorization, approval, entitlement or accreditation is not in full force and effect.

          (o) Environmental Matters. Except to the extent not reasonably likely to result in a
Material Adverse Effect, (i) none of the operations of the Borrower or any of its Subsidiaries
violate any Environmental Law, (ii) no Environmental Actions have been asserted against the
Borrower or any of its Subsidiaries in writing nor does the Borrower have any knowledge of any
threatened or pending Environmental Action against the Borrower, any of its Subsidiaries or any
predecessor in interest, (iii) neither the Borrower nor any of its Subsidiaries has incurred any
Environmental Liabilities and Costs and (iv) to the Borrower’s knowledge, neither the Borrower nor
any of its Subsidiaries has any contingent liability in connection with any release of any
Hazardous Material into the environment.

          (p) Solvency. The Borrower is Solvent and will be Solvent after giving effect to the
transactions contemplated by this Loan Agreement and the other Loan Documents.

          (q) ERISA; Margin Regulations. (i) No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.
The present value of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair market value of the
assets of such Plan by an amount that would reasonably be expected to have

16

 

a Material Adverse Effect, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of all such underfunded Plans by an amount that
would reasonably be expected to have a Material Adverse Effect.

               (ii) None of the Borrower or any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of buying or carrying
Margin Stock. No part of the proceeds of the Term Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, in any manner or for any purpose
that would result in a violation by the Lender, the Borrower or such Subsidiary of the regulations
of the Board, including Regulation U or X.

          (r) Properties; Intellectual Property. (i) The Borrower and each Subsidiary has good
title to, or valid leasehold interests in, all its material real and personal property free and
clear of all Liens, except for the “Existing Liens” set forth in Schedule 4.1(r) hereto and
Permitted Liens and defects in title, in each case that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for their intended
purposes.

               (ii) The Borrower and each Subsidiary owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business, and the use thereof
by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except,
in each case, for any matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

          4. Covenants. The Borrower hereby covenants to the Lender that, unless the Lender
shall otherwise consent in writing, during the term of this Loan Agreement or so long as (a) any
amounts owed hereunder or under any other Loan Document are outstanding, or (b) this Loan Agreement
and the other Loan Documents have not been terminated, the Borrower shall (unless the prior written
consent of the Lender has been obtained) perform the following obligations:

          4.1. (a) Financial Statements. The Borrower shall deliver to the Lender.

               (i) as soon as available and in any event within 60 days after the end of each fiscal quarter
of the Borrower commencing with the first fiscal quarter of the Borrower ending after the Closing
Date, consolidated balance sheets, consolidated statements of earnings, consolidated statements of
cash flows and consolidated statements of stockholder’s equity of the Borrower and its Subsidiaries
as at the end of such quarter, and for the period commencing at the end of the immediately
preceding fiscal year and ending with the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding date or period of the immediately preceding
fiscal year, all in reasonable detail and certified by an authorized officer of the Borrower as
fairly presenting, in all material respects, the financial position of the Borrower and its
Subsidiaries as of the end of such quarter and the results of operations and cash flows of the
Borrower and its Subsidiaries for such quarter, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements of the Borrower and its
Subsidiaries furnished to the Lender, subject to normal year-end adjustments; and

17

 

               (ii) simultaneously with the delivery of the financial statements of the Borrower and its
Subsidiaries required by clauses (i) of this Section 4.1(a), a certificate of an authorized officer
of the Borrower stating that such authorized officer has reviewed the provisions of this Loan
Agreement and the other Loan Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the Borrower and its Subsidiaries during
the period covered by such financial statements with a view to determining whether the Borrower and
its Subsidiaries were in compliance with all of the provisions of this Loan Agreement and such Loan
Documents at the times such compliance is required hereby and thereby, and that such review has not
disclosed, and such authorized officer has no knowledge of, the existence during such period of an
Event of Default or Default or, if an Event of Default or Default existed, describing the nature
and period of existence thereof and the action which the Borrower and its Subsidiaries propose to
take or have taken with respect thereto.

          (b) Proxy Statements, etc. Promptly after the sending or filing thereof, the Borrower
will provide to the Lender copies of all proxy statements, financial statements, and reports which
the Borrower sends to its stockholders, and copies of all regular, periodic, and special reports,
and all registration statements which the Borrower files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or with any national
securities exchange.

          (c) Additional Information. The Borrower shall make available and provide to the
Lender such further information and documents concerning its business and affairs including,
without limitation, the budgets and business plans of the Borrower and its Subsidiaries and using
commercially reasonable efforts to provide to the Lender information with respect to accountant’s
letters, in each case as the Lender may from time to time reasonably request.

          (d) Notices. The Borrower shall promptly notify the Lender of:

               (i) any investigation by or proceeding in or before any court, arbitrator, administrative body
or agency or other Governmental Authority (other than routine inquiries by a governmental agency),
including, without limitation, any Environmental Action, which investigation, proceeding or action
is reasonably likely to result in a Material Adverse Effect, Default or Event of Default and, upon
request, provide the Lender with all material documents and information furnished by the Borrower
in connection therewith;

               (ii) the occurrence of any Default or Event of Default or any other development which is
reasonably likely to result in a Material Adverse Effect, which notice shall be provided to the
Lender as soon as possible, but in no event later than five (5) days after the Borrower becomes
aware of the same and shall include a statement as to what action the Borrower has taken and/or
proposes to take with respect thereto;

               (iii) any change in the Borrower’s key management personnel, including without limitation, its
President, Controller or Treasurer; and

18

 

               (iv) the occurrence of any ERISA Event that, alone or together with any other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse Effect.

          (e) Compliance with Laws, Etc. The Borrower shall comply in all material respects
with the requirements of all applicable laws (including, without limitation, any Environmental Law)
and maintain and preserve its corporate existence and, except to the extent that the failure to do
so could not reasonably be expected to have a Material Adverse Effect, rights and privileges.

          (f) Books and Records. The Borrower shall keep and maintain adequate records and
books of account, with complete entries made in accordance with GAAP, consistently applied.

          (g) Inspection Rights. The Borrower shall permit the Lender or any of its agents and
representatives at any time and from time to time during reasonable business hours and, provided no
Default or Event of Default has occurred and is continuing, on reasonable prior notice to the
Borrower, to examine and make copies of and abstracts from its records and books of account, to
visit and inspect its properties, to conduct audits and make examinations and discuss its affairs,
finances and accounts with any of its directors, officers, employees, accountants or other
representatives.

          (h) Insurance. The Borrower shall maintain or cause to be maintained, and cause each
of its Subsidiaries to maintain or cause to be maintained (in each case in the Borrower’s name or
in the name of such Subsidiary, as the case may be), with responsible, financially sound and
reputable insurance companies insurance with respect to its properties and business against such
casualties and contingencies and of such types and in such amounts as is customary in the case of
similar businesses.

          (i) Taxes. The Borrower shall timely pay and discharge all material taxes,
assessments, levies and governmental charges upon it or against any of its properties, assets or
income except to the extent that the Borrower shall be contesting in good faith its obligation to
pay such taxes or charges and the Borrower has adequately accrued for such payments in accordance
with and to the extent required by GAAP.

          (j) Further Assurances. The Borrower shall do, execute, acknowledge and deliver at
the sole cost and expense of the Borrower, all documents, instruments and agreements and take such
further acts and deeds as the Lender may reasonably require from time to time to carry out the
intention or facilitate the performance of the terms of this Loan Agreement or any other Loan
Document.

          (k) Merger, Consolidation, etc. The Borrower shall not:

               (i) merge, consolidate or amalgamate with or into any other Person unless: (A) the Borrower is
the surviving entity, (B) the Borrower provides the Lender with at least 30 days’ prior written
notice thereof, (C) the documentation in connection therewith is reasonably satisfactory in form
and substance to the Lender, (D) the Borrower provides the Lender with such documents, certificates
and opinions as the Lender may reasonably request, in form and substance reasonably satisfactory to
the Lender, including, without limitation, a legal opinion

19

 

given by counsel reasonably satisfactory to the Lender regarding the legal, valid and binding
nature of the Loan Documents and the enforceability thereof and such other matters as the Lender
may reasonably request, and (E) no Material Adverse Effect or any Default or Event of Default shall
occur and be continuing both immediately before and immediately after such merger, consolidation or
amalgamation;

               (ii) dissolve, wind-up or liquidate;

               (iii) purchase or otherwise acquire all or substantially all of the assets, liabilities or
properties of any other Person to the extent a Material Adverse Effect or any Default or Event of
Default may result therefrom; or

               (iv) sell, lease, transfer or otherwise dispose of all or substantially all of its
non-“Margin Stock” (as defined in Regulation U of the Board) assets or properties whether
in any single transaction or one or more transactions in the aggregate except for the sale of JJGI.

          (l) Change in Nature of Business. The Borrower shall not make any material changes in
the nature of its business activities as presently conducted to the extent reasonably likely to
result in a Material Adverse Effect.

          (m) Transactions with Affiliates. The Borrower shall not enter into any transaction
with any of its Affiliates unless such transaction is otherwise permitted hereunder or is in the
ordinary course of business of the Borrower and upon fair and reasonable terms no less favorable to
the Borrower than it would obtain in a comparable arm’s length transaction with a Person which is
not an Affiliate; provided, that this Section 4.1(m) shall not prohibit the Borrower from
consummating the Securitization Transactions.

          (n) Corporate Documents. The Borrower shall not amend its certificate of
incorporation in any manner which is reasonably likely to materially adversely affect the Lender’s
rights under any of the Loan Documents or the Lender’s ability to enforce any such rights.

          (o) Fiscal Year. The Borrower shall not permit its fiscal year to end on a day other
than the first Saturday between January 28th and February 3rd of any given year.

          (p) USA PATRIOT Act Compliance. The Borrower shall provide, and shall cause each of
its Subsidiaries and Affiliates to provide, such information and take such actions as are
reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (as amended, the “USA Patriot Act”) or similar laws and the rules and
regulations promulgated thereunder, in each case, as the same may be in effect from time to time.

          (q) Seniority. The obligations of the Borrower under this Loan Agreement and the
other Loan Documents to which it is a party shall at all times rank at least pari passu in priority
of payment and in all other respects with all other unsecured senior Indebtedness of the Borrower.

20

 

          (r) Liens, Etc. The Borrower shall not, and shall not permit its Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon or with respect to any of its properties,
whether now owned or hereafter acquired; file or suffer to exist under the Uniform Commercial Code
or any similar law or statute of any jurisdiction, a financing statement (or the equivalent
thereof) that names it or any of its Subsidiaries as debtor; sign or suffer to exist any security
agreement authorizing any secured party thereunder to file such financing statement (or the
equivalent thereof); sell any of its property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales of accounts
receivable other than in connection with collection of defaulted accounts receivable) with recourse
to it or any of its Subsidiaries or assign or otherwise transfer; or permit any of its Subsidiaries
to assign or otherwise transfer, any account or other right to receive income, other than, as to
all of the above, Permitted Liens.

          (s) Indebtedness. The Borrower shall not, and shall not permit its Subsidiaries to,
create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with
respect to, or permit any of its Subsidiaries to create, incur, assume, guarantee or suffer to
exist or otherwise become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness and Indebtedness incurred by the Borrower or its Subsidiaries in connection with the
Securitization Transactions.

          (t) Restricted Payments. The Borrower shall not, and shall not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except (a) the Borrower may declare and pay dividends with respect to its Capital Stock
payable solely in additional shares of its common stock, (b) so long as no Event of Default has
occurred and is continuing, the Borrower may declare and pay dividends with respect to its Capital
Stock, (c) any Subsidiary may declare and pay dividends to the Borrower or, in the case of any
Subsidiary that is wholly owned by another Subsidiary, to such other Subsidiary, (d) the Borrower
may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the Borrower and its Subsidiaries, (e) so long as no Event of
Default has occurred and is continuing, the Borrower may repurchase its Capital Stock and (f)
netting shares under employee benefit plans to settle option price payments owed by employees and
directors with respect thereto and settling employees’ and directors’ federal, state and income tax
liabilities (if any) related thereto.

          (u) Loans, Advances, Investments, Etc. The Borrower shall not, and shall not permit
its Subsidiaries to, make or commit or agree to make any loan, advance, guarantee of obligations,
other extension of credit or capital contributions to, or hold or invest in or commit or agree to
hold or invest in, or purchase or otherwise acquire or commit or agree to purchase or otherwise
acquire any shares of the Capital Stock, bonds, notes, debentures or other securities of, or make
or commit or agree to make any other investment in, any other Person, or purchase or own any
futures contract or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or permit any of its Subsidiaries
to do any of the foregoing, except for: (i) investments existing on the date hereof, as set forth
on Schedule 4.1(u) hereto, but not any increase in the amount thereof as set forth in such Schedule
or any other modification of the terms thereof, (ii) loans, advances and other investments by the
Borrower to any of its Subsidiaries, by any such Subsidiary to the Borrower or by any such
Subsidiary to any other such Subsidiary, made in the ordinary course of business and not

21

 

exceeding in the aggregate for the Borrower and all of its Subsidiaries at any one time
outstanding $50,000,000 (calculated on the basis of the actual amount of all such loans, advances
and investments (net of any amounts repaid to the Borrower or such Subsidiaries) and without regard
to any increase or decrease in the value thereof or to any write off, write down or other similar
reduction), (iii) Permitted Investments and (iv) the Securitization Transactions.

          (v) Sale/Leaseback Transactions. Except for sale/leaseback transactions entered into
in the ordinary course of business with respect to a retail location, the Borrower will not, and
will not permit any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property sold or transferred.

          (w) Asset Dispositions. The Borrower will not, and will not permit any of its
Subsidiaries to, sell, transfer, license, lease or otherwise dispose of any asset which has a Fair
Market Value in excess of $1,000,000, including any Capital Stock owned by it, nor will the
Borrower permit any of its Subsidiaries to issue any additional Capital Stock in such Subsidiary,
except:

               (i) (A) sales of inventory and (B) sales, transfers, licenses, leases or other dispositions of
the Tilton Property or other used, surplus, obsolete or worn-out assets (including real property)
and Permitted Investments in the ordinary course of business;

               (ii) sales, transfers, licenses, leases or other dispositions of assets (including Capital
Stock) or issuances of any additional Capital Stock by Borrower to any of its Subsidiaries, by any
such Subsidiary to Borrower, and by any such Subsidiary to any other such Subsidiary;
provided that any such dispositions to a Subsidiary shall be made in compliance with
Section 4.1(m) hereof;

               (iii) sales transfers, licenses, leases or other dispositions deemed to occur as a result of
the creation of Liens permitted by Section 4.1(r) hereof;

               (iv) sale/leaseback transactions permitted by Section 4.1(v) hereof;

               (v) the termination, surrender or sublease of a real estate lease of the Borrower or any of
its Subsidiaries;

               (vi) the sale of JJGI;

               (vii) the Securitization Transactions.

          (x) Subordinated Debt. The Borrower will not, nor will it permit any Subsidiary to,
make or agree to make, directly or indirectly, any payment or other distribution (whether in cash,
securities or other property) of or in respect of principal of or interest on any Subordinated Debt
or other Indebtedness expressly subordinated in right of payment to the obligations of the Borrower
hereunder, including any sinking fund or similar deposit with respect to any of them, or any
prepayment, purchase, redemption, retirement, acquisition, cancellation or termination of any such
Subordinated Debt or other Indebtedness prior to its scheduled maturity, except

22

 

regularly scheduled interest payments, as and when due (other than interest payments
prohibited by the subordination provisions thereof).

          (y) Change of Control. The Borrower shall cause AEON Co., Ltd. hold or own directly
or indirectly at least 51% of the issued and outstanding shares of common stock of the Borrower
during the term of this Loan Agreement.

          5. Conditions Precedent to the Term Loan.

          5.1. The obligation of the Lender to make the Term Loan is subject to the prior fulfillment of
the following conditions:

          (a) Documents. The Lender shall have received the following, each in form and
substance satisfactory to the Lender:

               (i) Executed Agreement. This Loan Agreement, duly executed by an authorized officer
of the Borrower.

               (ii) Note. The Lender shall have received on behalf of the Lender the Note, in the
principal amount of $28,000,000, duly executed by an authorized officer of the Borrower.

               (iii) Borrower’s Officer’s Certificate. A certificate of an authorized officer of the
Borrower, substantially in the form of Exhibit B hereto, certifying, among other things, as to (w)
the organizational documents and by-laws of the Borrower, (x) resolutions of the board of directors
of the Borrower authorizing the Borrower to execute, deliver and perform this Loan Agreement, the
Note, and each other Loan Document to which it is a party; (y) the names and signatures of the
officers of the Borrower authorized to execute this Loan Agreement, the Note, and each other Loan
Documents to which it is a party; and (z) the absence of any amendment or modification to any of
the attached organizational documents or by-laws (or the equivalent thereof), if any, of the
Borrower.

               (iv) Good Standing. A certificate of the appropriate official(s) of the state of
organization of the Borrower and each of its significant domestic Subsidiaries certifying as of a
recent date not more than 30 days prior the Closing Date as to the subsistence in good standing of,
and the payment of taxes by, the Borrower and such Subsidiary in such states; provided,
however, that in the case of a Subsidiary of the Borrower that is not organized in the State of
Delaware, the Borrower may, after using commercially reasonable efforts to obtain a certificate of
payment of taxes for such Subsidiary, deliver to the Lender such certificate within 180 days of the
Closing Date, provided, further, however, that the Borrower shall have no
obligation to deliver such certificate if it is unable to do so due to a failure to pay taxes that
are contested in the manner permitted under this Agreement.

               (v) Other Items. Such other agreements, instruments, approvals, opinions and
documents as the Lender may reasonably request.

          (b) Fees and Expenses. The Lender shall have received all of the fees, costs and
expenses that are then due and payable hereunder and under the other Loan Documents.

23

 

          (c) Legality. The making of the Term Loan and the consummation of the transactions
contemplated hereunder shall not contravene any law, rule or regulation applicable to the Lender or
the Borrower.

          (d) Representations and Warranties. All of the representations and warranties
contained in Section 3 of this Loan Agreement, in each other Loan Document and in each certificate
and other writing delivered to the Lender pursuant hereto or thereto on or prior to the date of the
Term Loan shall be true and correct in all material respects as though made on and as of such date.
The acceptance by the Borrower of the proceeds of the Term Loan shall be deemed to be a
representation and warranty by the Borrower to the Lender to such effect.

          (e) Defaults; Material Adverse Effect. No Default or Event of Default shall have
occurred and be continuing on the date of the Term Loan or would result from making the Term Loan.
No Material Adverse Effect shall have occurred and be continuing since January 31, 2009 or would
result from making the Term Loan. The acceptance by the Borrower of the proceeds of the Term Loan
shall be deemed to be a representation and warranty by the Borrower to the Lender to such effect.

          (f) Proceedings. There shall not exist any threatened or pending action, proceeding
or counterclaim by or before any court or governmental, administrative or regulatory agency or
authority, domestic or foreign, (i) challenging the consummation of the transactions contemplated
hereby or which would restrain, prevent or impose burdensome conditions on any transaction
contemplated hereunder, which could reasonably be expected to have a Material Adverse Effect, (ii)
seeking to prohibit the ownership or operation by the Borrower of all or a material portion of its
business or assets which could reasonably be expected to have a Material Adverse Effect, or (iii)
seeking to obtain, or having resulted in the entry of any judgment, order or injunction that (A)
would restrain, prohibit or impose adverse conditions on the ability of the Lender to make the Term
Loan, (B) could reasonably be expected to affect the legality, validity or enforceability of any of
the Loan Documents or the ability of any party thereto to perform its obligations thereunder or (C)
is seeking any material damages as a result thereof.

          (g) Approvals. All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental Authority or other Person
required in connection with the making of the Term Loan or the conduct of the Borrower’s business
shall have been obtained and shall be in full force and effect.

          6. Events of Default.

          6.1. Events of Default. Each of the following events and occurrences shall constitute
an “Event of Default” under this Loan Agreement:

          (a) The Borrower shall fail to pay when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) (i) any principal of the Term Loan or the Note, or
(ii) any interest on the Term Loan or the Note, any fee, any indemnity or any other amount payable
hereunder or under any other Loan Document and any such failure referred to in this clause (ii)
shall continue for 2 Business Days; or

24

 

          (b) Any representation or warranty made or deemed made by the Borrower in any Loan Document or
any certificate, report or other document delivered to the Lender pursuant to any Loan Document
shall have been incorrect or misleading in any material respect when made or deemed made; or

          (c) The Borrower shall fail to perform or shall violate any provision, covenant, condition or
agreement in Section 4.1 of this Loan Agreement (other than 4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.1(e),
4.1(f), 4.1(g), 4.1(h), 4.1(i) and 4.1(j)); or

          (d) The Borrower shall fail to perform or shall violate any provision, covenant, condition or
agreement of this Loan Agreement or any other Loan Document on its part to be performed or observed
(other than those set forth in paragraphs (a), (b) and (c) of this Section 6.1) and such failure or
violation is not remediable or, if remediable, continues unremedied for a period of thirty (30)
days after the earlier of (i) notice from the Lender or (ii) such time as the Borrower becomes
aware of the same; or

          (e) Any event or condition shall occur that results in the acceleration of the maturity of any
Indebtedness of the Borrower under any agreement, document or instrument with respect to an
aggregate amount of Indebtedness equal to or greater than the Threshold Amount (or the equivalent
thereof in any foreign currency), or that enables the holder of such Indebtedness or any Person
acting on such holder’s behalf to accelerate the maturity thereof; or

          (f) The Borrower is adjudicated a bankrupt or insolvent, or admits in writing its inability to
pay its debts as they become due or makes an assignment for the benefit of creditors, or ceases
doing business as a going concern or applies for or consents to the appointment of any receiver or
trustee, or such receiver, trustee or similar officer is appointed with the application or consent
of the Borrower, or bankruptcy, dissolution, liquidation or reorganization proceedings (or
proceedings similar in purpose and effect) are instituted by the Borrower or are instituted against
(and not vacated or discharged within 60 days) the Borrower; or

          (g) Any money judgment or warrant of attachment or similar process involving, individually or
in the aggregate, in excess of the Threshold Amount (or the equivalent thereof in any foreign
currency) shall be entered or filed against the Borrower and shall remain undischarged, unvacated
or unbonded for a period of 30 days; or

          (h) The validity or enforceability of this Loan Agreement or any other Loan Document shall be
contested by or on behalf of the Borrower; or a proceeding shall be commenced by a Governmental
Authority having jurisdiction over the Borrower seeking to establish the invalidity thereof; or the
Borrower shall deny that it has any further liability or obligation under any Loan Document to
which it is a party; or

          (i) AEON Co. Ltd. shall cease to own, directly or indirectly, at least 51% of the issued and
outstanding common stock of the Borrower; or

          (j) The occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in a Material Adverse Effect; or

25

 

          (k) The Borrower shall fail to perform or violate any provisions of the Subordinated Credit
Facility Agreement dated July 18, 2008 between the Borrower and AEON U.S.A. Inc., and such failure
causes such agreement to be terminated or ceased to exist; or

          (l) The information of the Borrower as set forth in Section 8.6 hereof is erroneous, and the
Lender will be unable to make contact with the Borrower.

          6.2. Consequence of Default. Upon the occurrence of any Event of Default (i)
described in subsection (f) of Section 6.1 hereof, the Term Loan and all other amounts payable
hereunder, under the Note and under any other Loan Document shall automatically become immediately
due and payable, without presentment, demand, protest or other requirement of any kind, all of
which are hereby expressly waived by the Borrower or (ii) described in any other subsection of
Section 6.1 hereof and during the continuance thereof, the Lender may, and upon direction of the
Lender shall, by notice of default given to the Borrower, declare all of the outstanding principal
amount of the Term Loan and all other amounts payable hereunder, under the Note and under any other
Loan Document to be immediately due and payable, whereupon the unpaid principal amount of the Note,
together with accrued interest thereon, and all such other amounts, shall be immediately due and
payable without presentment, protest, demand or other requirement of any kind, each of which is
hereby expressly waived by the Borrower.

          7. Additional Costs and Expenses; Indemnity.

          7.1. (a) The Borrower shall pay to (x) the Lender on demand all reasonable out-of-pocket costs
and expenses of the Lender actually incurred in connection with the preparation, execution and
delivery of this Loan Agreement, the Note and any other Loan Document or any amendment,
modification or waiver of the provisions hereof or thereof, and (y) the Lender’s all out-of-pocket
costs and expenses incurred in connection with: (i) the negotiation of any restructuring, work-out
or renegotiation of any terms of this Loan Agreement, the Note or any other Loan Documents or the
obligations of the Borrower hereunder or thereunder, (ii) the enforcement of the preservation or
protection of the Lender’s rights under this Loan Agreement, the Note or the other Loan Document
and (iii) the response to any subpoena or similar process compelling the production of documents or
other response in connection with this Loan Agreement, the Note or any other Loan Documents,
including without limitation, in each case, the reasonable and actual fees and expenses of outside
counsel for the Lender, and the Borrower further agrees to indemnify the Lender and its respective
officers, directors and employees against any losses, damages, claims and expenses arising out of
the use or proposed use by the Borrower of the Term Loan hereunder. In addition, the Borrower
agrees to defend, indemnify and hold harmless the Lender and its respective officers, directors and
employees from and against any losses, damages, liabilities, obligations, penalties, fees, costs
and expenses, including without limitation, the reasonable and actual fees and expenses of outside
counsel for the Lender, arising out of or relating to the execution, delivery and performance and
administration of this Loan Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereunder and thereunder and any claim, litigation, investigation or
proceeding relating to any of the foregoing including, without limitation, all Environmental
Liabilities and Costs arising from or in connection with: (i) the past, present or future
operations of the Borrower or any of its Subsidiaries involving any damage to real or personal
property or natural resources or harm or injury alleged to have resulted from any release of
Hazardous Materials, (ii)

26

 

any Environmental Action or (iii) a breach by the Borrower or any of its Subsidiaries of any
Environmental Law; provided, however, that none of the foregoing indemnity
obligations of the Borrower shall extend to any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement to the extent resulting from the willful
misconduct or gross negligence of the Lender as determined by a final non-appealable judgment of a
court of competent jurisdiction.

          (b) If any future applicable law, regulation or directive, or any change of any existing law,
regulation or directive or in the interpretation thereof, or compliance by the Lender with any
request or requirement (whether or not having the force of law) of any relevant central bank or
other comparable agency, imposes, modifies or deems applicable any reserve, special deposit,
premium, assessment or similar requirement against assets held by, or deposits in or for the
account of, or advances or loans by, or any other acquisition of funds by the Lender, any capital
adequacy standard or other condition with respect to this Loan Agreement, the Note or any other
Loan Document, and the result of any of the foregoing is to increase the cost to the Lender of
maintaining advances or credit or to reduce any amount receivable in respect thereof, then the
Lender may notify the Borrower, and the Borrower shall pay within five (5) Business Days of the
date of such notice such amount as the Lender may specify to be necessary to compensate the Lender
for such reduced receipt, together with interest on such amount from the date demanded until
payment in full thereof at the same rate applicable to the Term Loan. The determination by the
Lender of any amount due under this Section 7.1(b) as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest error, be conclusive
evidence thereof.

          (c) If, after the date hereof, by reason of any applicable law or regulation or regulatory
requirement or the interpretation or application thereof, it shall become unlawful or otherwise
prohibited for the Lender to make or maintain the Term Loan or any portion thereof or give effect
to any of its obligations or benefits as contemplated by this Loan Agreement and the other Loan
Documents, the obligation of the Lender to make, fund and maintain the Term Loan or any portion
thereof under this Loan Agreement shall be suspended until the Lender shall notify the Borrower
that the circumstances causing such suspension no longer exist and the Borrower shall forthwith
prepay to the Lender the principal amount of the Term Loan owed to the Lender, together with
interest accrued thereon and all other amounts owed with respect thereto.

          (d) If, due to any acceleration of the maturity of the Term Loan pursuant to Section 6 hereof,
the Lender is subject to a change of interest rate on the Term Loan or the Lender receives payment
of principal of the Term Loan other than as provided herein, the Borrower shall, promptly after
demand by the Lender, pay to the Lender any amounts required to compensate the Lender for any
additional losses, costs or expenses which it may reasonably incur as a result of such change or
payment, including, without limitation, any loss, cost or expense incurred by reason of liquidation
or reemployment of deposits or other funds acquired by the Lender to fund or maintain the Term
Loan. A certificate setting forth the amount of such additional losses, costs or expenses submitted
to the Borrower by the Lender shall, in the absence of manifest error, be conclusive evidence
thereof; provided, however, that this subparagraph (d) shall not apply to any prepayment of the
Loan pursuant to Section 2.6 hereof.

27

 

          (e) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 7.1 shall survive the payment
in full of the principal, interest and all other amounts under this Loan Agreement and under any
other Loan Document and the termination of this Loan Agreement and each other Loan Document.

          7.2. Taxes.

          (a) Any and all payments made by the Borrower hereunder shall be made free and clear of and
without deduction for any present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto (all such taxes, levies, imposts,
deductions, charges, withholdings and liabilities, being hereinafter referred to as
“Taxes”), except as otherwise required by law. If and to the extent that Taxes, other than
Excluded Taxes, are required to be withheld from any payment, (i) except to the extent provided in
Section 7.2(g) hereof the amount of such payment shall be increased to the extent necessary to
cause the Lender to receive (after the withholding of such Taxes) an amount equal to the amount it
would have received had the withholding of such Taxes not been required, and (ii) the Borrower
shall withhold such Taxes from such increased payment and pay such Taxes to the relevant taxation
authority or other authority for the account of the Lender in accordance with applicable law.

          (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise from any payment made
hereunder or under any other Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, this Loan Agreement or any other Loan Document, excluding taxes, for the
avoidance of doubt, on the overall net income of the Lender (hereinafter referred to as “Other
Taxes”) and except to the extent provided in Section 7.2(g) hereof.

          (c) The Borrower shall indemnify and agrees to hold harmless the Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 7.2), other than Excluded Taxes and except to
the extent provided in Section 7.2(g) hereof, paid by the Lender or 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. This indemnification shall be made within
five (5) days after the date the Lender makes written demand therefor, specifying in reasonable
detail the basis, calculation and amount of such Taxes or Other Taxes and any liabilities arising
therefrom.

          (d) Within 30 days after the date of the Borrower’s payment or a payment on behalf of the
Borrower of any Taxes with respect to any payment due hereunder or under any other Loan Document,
the Borrower will furnish to the Lender, as applicable, at its address referred to in Section 8.6
hereof, the original or a certified copy of a receipt evidencing payment thereof.

          (e) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations contained in this Section 7.2 shall survive the payment in full of the
principal, interest and all other amounts under this Loan Agreement and

28

 

under any other Loan Document and the termination of this Loan Agreement and each other Loan
Document until the expiration of the statute of limitations applicable to the subject Taxes.

          (f) The Lender that is organized under the laws of a jurisdiction outside the United States (a
“Non-U.S. Lender”) agrees that it shall deliver to the Borrower two properly completed and
duly executed copies of either U.S. Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or any
subsequent versions thereof or successors thereto. Additionally, the Lender agrees that, at the
request of the Borrower, it will deliver to the Borrower two properly completed and duly executed
copies of Internal Revenue Service Form W-9 or any subsequent version thereof or successor thereto,
certifying that such Lender is entitled to a complete exemption from United States backup
withholding tax on payments pursuant to this Loan Agreement. Any person supplying forms or other
documentation pursuant to this Section 7.2(f) shall deliver to the Borrower additional copies of
the relevant forms on or before the date that such form expires, and shall promptly notify the
Borrower if any form or other documentation previously submitted becomes incorrect.

          (g) The Borrower shall not be required to indemnify the Lender, or pay any additional amounts
to the Lender, in respect of Taxes and liabilities arising therefrom pursuant to this Section 7.2
to the extent that (i) the obligation to withhold or pay amounts with respect to such Tax existed
on the date the Lender became a party to this Loan Agreement or, with respect to payments to a
different lending office (a “New Lending Office”), the date such Lender designated such New Lending
Office with respect to the Term Loan; provided, however, that this clause (i) shall
not apply to the extent the indemnity payment or additional amounts the Lender through a New
Lending Office, would be entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment, participation or
transfer to the Lender making the designation of such New Lending Office, would have been entitled
to receive in the absence of such assignment, participation, transfer or designation, or (ii) the
obligation to pay such additional amounts would not have arisen but for a failure by the Lender to
comply with the provisions of clause (1) above.

          (h) If the Lender determines, in its sole discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which
the Borrower has paid additional amounts, in either case pursuant to this Section 7.2 it shall pay
to the Borrower an amount equal to such refund recovered (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund or recovery), net of all out-of-pocket expenses of
the Lender, and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund or recovery); provided, however, that the
Borrower shall promptly repay the amount paid over to the Borrower to the Lender in the event the
Lender is required to repay such refund to the relevant Governmental Authority. This Section 7.2(h)
shall not be construed to require the Lender to make available its tax returns (or any other
information that it deems confidential) to the Borrower or any other Person.

          7.3. Mitigation Obligations; Replacement of Lender. If the Lender requests
compensation under Section 7.1(b) or (c) or Section 7.2 hereof, or if the Borrower is required to
pay any additional amount to the Lender or any Governmental Authority for the account of the Lender
pursuant to Section 7.2 hereof, then the Lender shall use reasonable efforts to designate a

29

 

different lending office for funding or booking the Term Loan hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or affiliates, if, in the
judgment of the Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant thereto in the future and (ii) would not subject the Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to the Lender. If the Lender requests
compensation under Section 7.1(b) or (c) or Section 7.2 hereof, or if the Borrower is required to
pay any additional amount to the Lender or any Governmental Authority for the account of the Lender
pursuant to Section 7.2 hereof, then the Borrower may, at its sole expense and effort, upon notice
to such Lender, require the Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 8.3), all its interests, rights and obligations
under this Loan Agreement to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (A) in the case of any
such assignment resulting from a claim for compensation under Section 7.1(b) or (c) hereof or
payments required to be made pursuant to Section 7.2 hereof, such assignment will result in a
material reduction in such compensation or payments and (B) the Lender shall have received payment
of an amount equal to the outstanding principal of the Term Loan, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, including any amount payable under Section
7.1(d) hereof, from the assignee (to the extent of such outstanding principal, accrued interest and
fees) or the Borrower (in the case of all other amounts). The Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by the Lender or
otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease
to apply.

          8. Miscellaneous.

          8.1. Entire Agreement. This Loan Agreement, the other Loan Documents and the
documents referred to herein and therein constitute the entire obligation of the parties with
respect to the subject matter hereof and shall supersede any prior expressions of intent or
understanding with respect to the transactions herein and therein contemplated.

          8.2. No Waiver; Cumulative Rights. The failure or delay of the Lender to require
performance by the Borrower of any provision of this Loan Agreement shall not operate as a waiver
thereof, nor shall it affect the Lender’s rights to require performance of such provision at any
time thereafter, nor shall it affect or impair any of the remedies, powers or rights of the Lender
with respect to any other or subsequent failure, delay or default. Each and every right granted to
the Lender hereunder or under any other Loan Document or in connection herewith or therewith shall
be cumulative and may be exercised at any time.

          8.3. Assignment; Binding Effect.

          (a) Successors and Assigns. The provisions of this Loan Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and its successors and assigns
permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void), it being
understood that mergers, consolidations and other corporate changes permitted by Section 4.1 of
this Loan Agreement shall not be deemed to be assignments for purposes of this sentence,

30

 

and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except
in accordance with this Section. Nothing in this Loan Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their successors and assigns
permitted hereby, and, to the extent expressly contemplated hereby, an Affiliate of the Lender) any
legal or equitable right, remedy or claim under or by reason of this Loan Agreement.

          8.4. GOVERNING LAW; JURY TRIAL. THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF. THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN
CONNECTION WITH ANY ACTION RELATED TO THIS LOAN AGREEMENT, THE NOTE EXECUTED PURSUANT HERETO OR ANY
OTHER LOAN DOCUMENT.

          8.5. Submission to Jurisdiction.

          (a) The Borrower hereby irrevocably agrees that any legal action or proceedings against it
with respect to this Loan Agreement, the Note or any other Loan Document may be brought in any
court of the State of New York or any Federal Court of the United States of America located in the
County of the State of New York, or both, as the Lender may elect, and by execution and delivery of
this Loan Agreement the Borrower hereby submits to and accepts with regard to any such action or
proceeding service of process by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the Borrower at its address set forth in Section 8.6 hereof.

          (b) The Borrower hereby irrevocably waives any objection which it may now or hereafter have to
the laying of the venue of any suit, action or proceeding arising out of or relating to this Loan
Agreement, the Note or any other Loan Document in the State of New York and hereby further
irrevocably waives any claim that the State of New York is not a convenient forum for any such
suit, action or proceeding.

          (c) To the extent that the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the Borrower hereby irrevocably waives such immunity in respect of its obligations
under this Loan Agreement and any other Loan Document to which it is a party.

31

 

          8.6. Notices. Any notice hereunder shall be in writing and shall be personally
delivered, transmitted by postage prepaid registered or certified mail or by overnight mail, or
transmitted by telephonic facsimile (“FAX”) to the parties as follows:

	 	 	 
	To the Borrower:

	 	THE TALBOTS, INC.

175 Beal Street

Hingham, Massachusetts 02043

Telephone: (781) 741-7850

FAX: (781) 741-7771

Attention:Mr. Michael Scarpa, CFO

E-mail: michael.scarpa@Talbots.com
	 
	 	 
	To the Lender:

	 	THE NORINCHUKIN BANK

New York Branch

245 Park Avenue, 21st Floor

New York, New York 10167

Telephone: (212) 716-9670

FAX: (212) 697-5754

Attention: Corporate Finance Group

               All notices and other communications shall be deemed to have been duly given on (i) the date
of receipt if delivered personally, (ii) the date five (5) days after posting if transmitted by
registered or certified mail, (iii) on the Business Day after having been sent if transmitted by
overnight mail with a reputable courier, or (iv) the date of transmission if transmitted by FAX and
receipt is confirmed.

          8.7. Amendments, Etc. No amendment or waiver of any provision of this Loan Agreement,
and no consent to any departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Lender, and, in the case of an amendment, the
Borrower, and then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

          8.8. Usury. Anything in this Loan Agreement to the contrary notwithstanding, the
obligation of the Borrower to pay interest on the Term Loan and the Note or any other amount due
and owing hereunder or under any other Loan Document shall be subject to the limitation that no
payment of such interest shall be required to the extent that receipt of such payment would be
contrary to applicable usury laws.

          8.9. Counterparts; Facsimile Signature. This Loan Agreement may be signed in any
number of counterparts. Either a single counterpart or a set of counterparts when signed by all the
parties hereto shall constitute a full and original agreement for all purposes. Delivery of any
executed signature page hereof or of any amendment, waiver or consent to this Loan Agreement by
facsimile transmission shall be as effective as delivery of a manually executed counterpart
thereof.

32

 

          8.10. Severability. Any provision of this Loan Agreement or any other Loan Document
that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

          8.11. Right of Set-Off. Upon the occurrence and during the continuance of any Event
of Default, the Lender is hereby authorized at any time and from time to time, without notice to
the Borrower (any such notice being expressly waived by the Borrower) and to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other Indebtedness at any time owing by the Lender or
any of their respective Affiliates to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing hereunder or under any other
Loan Document, irrespective of whether or not the Lender shall have made any demand hereunder or
thereunder and although such obligations may be unmatured. The Lender agrees promptly to notify the
Borrower 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 or any obligations of the Borrower to
the Lender hereunder or under any other Loan Document or otherwise. The rights of the Lender under
this Section 8.11 are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which the Lender may have under law, equity or otherwise.

          8.12. No Party Deemed Drafter. The Borrower and the Lender agree that no party hereto
shall be deemed to be the drafter of this Loan Agreement.

          8.13. USA Patriot Act Notification. The following notification is provided to the:
Borrower pursuant to Section 326 of the USA Patriot Act:

     IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight
the funding of terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify and record information that identifies each person or entity that
opens an account, including any deposit account, treasury management account, loan, other extension
of credit or other financial services product. WHAT THIS MEANS FOR THE BORROWER: When the Borrower
opens an account, the Lender will ask the Borrower for certain information, including, without
limitation, the Borrower’s name, tax identification number, business address and other information
that will allow the Lender to identify the Borrower. The Lender may also seek to see the Borrower’s
legal organizational documents or other identifying documents, among other things. The Borrower
agrees to cooperate with the Lender and provide true, accurate complete information to the Lender
in response to any such request.

[SIGNATURE PAGE FOLLOWS.]

33

 

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

	 	 	 	 	 
	 	THE TALBOTS, INC.

 	 
	 	By:  	/s/ Michael Scarpa
 	 
	 	 	Name:  	Michael Scarpa 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	THE NORINCHUKIN BANK

NEW YORK BRANCH

 	 
	 	By:  	/s/ Noritsugu Sato
 	 
	 	 	Name:  	Noritsugu Sato 	 
	 	 	Title:  	General Manager 	 
	 

34

 

EXHIBIT A

NOTE

			
	 	 	 
	US$28,000,000.00
	 	April 17, 2009

     FOR VALUE RECEIVED, The Talbots Inc. (the “Borrower”) unconditionally promises to pay
to the order of The Nornichukin Bank (the “Lender”), at the Lender’s office at 245 Park
Avenue, 21st Floor, New York, NY 10167-0104, or such other place as the Lender designates from time
to time, the principal sum of Twenty-Eight Million Dollars ($28,000,000) or such lesser amount as
may be outstanding from time to time hereunder and to pay interest thereon at such rates and
according to such methods of calculation as are provided pursuant to the Short Term Loan Agreement,
dated as of April 17, 2009, by and between the Borrower and between the Lender (as the same may be
amended, supplemented, or otherwise modified from time to time, the “Loan Agreement”). The
Borrower hereby authorizes the Lender to enter on the schedule attached hereto the dates, amounts,
denomination, maturities, interest rates and interest periods applicable to the Term Loan and
absent manifest error such notations shall be binding and conclusive upon the Borrower;
provided, however, that failure by the Lender to make any notation on such schedule
or any error in such notations shall in no way affect the Borrower’s obligation to repay
outstanding amounts on this Note.

     The outstanding principal of this Note and any accrued interest thereon shall be repaid as set
forth in the Loan Agreement, with final payment on the Maturity Date.

     All payments of principal and interest on this Note shall be payable in lawful money of the
United States of America in immediately available funds without set-off, defense or counterclaim.

     This Note is issued pursuant to the terms of the Loan Agreement and is subject to the terms
and conditions and entitled to the benefits therein provided. Capitalized terms used in this Note
and not defined herein have the respective meanings assigned to them in the Loan Agreement. Upon
the occurrence of an Event of Default, the principal of and the accrued interest on this Note may
become due and payable in the manner and with the same effect as provided in the Loan Agreement,
without presentment, demand, protest or notice of any kind unless otherwise expressly required
therein.

A-1

 

     Failure or delay of the holder of this Note to enforce any provision of this Note shall not be
deemed a waiver of any such provision, nor shall the holder of this Note be estopped from enforcing
any such provision at a later time. Any waiver of any provision hereof must be in writing. This
Note shall be governed by and interpreted in accordance with the laws of the State of New York
without regard to the conflict of law provisions thereof.

	 	 	 	 	 
	 	THE TALBOTS, INC.

 	 
	 	By:  	/s/ Michael Scarpa
 	 
	 	 	Name:  	Michael Scarpa 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

A-2

 

SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Unpaid	 	 	 	 
	Date of	 	Amount of	 	 	 	 	 	 	Amount	 	 	Principal	 	 	Notation	 
	Loan	 	Loan	 	 	Interests	 	 	Paid/Prepaid	 	 	Balance	 	 	Made By	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

A-3

 

EXHIBIT B

OFFICER’S CERTIFICATE OF BORROWER

I, Richard T. O’Connell, Jr., the Secretary of The Talbots, Inc., a Delaware corporation (the
“Borrower”), do hereby certify that:

	 	1.	 	The Borrower has full corporate power and authority to execute, enter into and
deliver the Short Term Loan Agreement, dated as of April 17, 2009 by and between the
Borrower and The Norinchukin Bank, New York Branch (the “Lender”), (the
“Loan Agreement”; terms defined in the Loan Agreement shall have the
same meaning in this certificate), together with the Note and each other Loan Document
to which it is a party.
	 
	 	2.	 	All corporate action necessary to authorize the execution, delivery and
performance of the Loan Agreement, the Note and each other Loan Document has been taken
by resolutions of the Board of Directors of the Borrower adopted by written consent by
such Board of Directors and such resolutions have not been modified or amended in any
respect and are in full force and effect on the date hereof.
	 
	 	3.	 	Attached hereto as Exhibit A is a true, correct and complete copy of the
Borrower’s Certificate of Incorporation, together with all amendments there to, as in
effect on and as of the date hereof.
	 
	 	4.	 	Attached hereto as Exhibit B is a true, correct and complete copy of the
Borrower’s Bylaws, together with all amendments thereto, as in effect on and as of the
date hereof.
	 
	 	5.	 	Attached hereto as Exhibit C is a true, correct and complete copy of the
resolutions of the Board of Directors of the Borrower approving and authorizing the
execution, delivery and performance of the Loan Agreement, the Note and each other Loan
Document, which resolutions remain in full force and effect without modification or
amendment on and as of the date hereof.
	 
	 	6.	 	All representations and warranties contained in the Loan Agreement are true and
correct in all material respects on and as of the date hereof.
	 
	 	7.	 	No Default or Event of Default or any Material Adverse Effect has occurred and
is continuing on and as of the date hereof or would result from the Loan Agreement
becoming effective in accordance with its terms, both immediately before and
immediately after giving effect to the Term Loan.
	 
	 	8.	 	The Borrower has performed in all material respects all agreements and
satisfied in all material respects all conditions, which the Loan Agreement provides
shall be performed by it on or before the date hereof.

B-4

 

	 	9.	 	The following persons are, and have been at all times since a date prior to
January 17, 2009, duly qualified and acting officers of the Borrower duly elected or
appointed to the offices set forth opposite the name of such person, and each such
person who, as an officer of the Borrower, signed the Loan Agreement, the Note and any
other Loan Documents was duly elected or appointed, qualified and acting as such
officer at the time of such signing and delivery, and the signature of each such person
appearing on such documents is such person’s genuine signature.

	 	 	 	 	 
	Name	 	Office	 	Signature
	 
	 	 	 	 
	Trudy F. Sullivan

	 	President and CEO	 	 
	 
	 	 	 	 
	Michael Scarpa

	 	Chief Financial Officer	 	 
	 
	 	 	 	 
	Carol G. Stone

	 	Senior Vice President	 	 

	 	10.	 	No proceeding for the winding-up, liquidation, dissolution or sale of all
substantially all of the assets of the Borrower is pending or contemplated.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Borrower.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Name:  	Richard T. O’Connell, Jr. 	 
	 	Title:  	Executive Vice President, Real Estate,
Legal, Store Planning & Design and
Construction, and Secretary 	 
	 

          Dated: April 17, 2009

          I, Michael Scarpa, the Chief Financial Officer of The Talbots, Inc. (the “Borrower”)
hereby certify that I am the duly elected, qualified and acting Chief Financial Officer of the
Borrower and that Richard T. O’Connell, Jr. is the duly elected, qualified and acting Secretary of
the Borrower and such person’s signature above is the true and genuine signature of such person.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Name:  	Michael Scarpa 	 
	 	Title:  	Chief Financial Officer 	 
	 

B-5

 

Schedule 4.1(r)

Existing Liens

	1.	 	The Mortgage Note dated March 1, 1999 in the principal amount of $12,000,000, by Birch
Pond Realty Corporation (“Mortgagee”) to John Hancock Real Estate Finance (“Mortgagor”) is
secured by:

	 	•	 	that certain Mortgage, Assignment of Leases and Rents and Security Agreement dated
March 1, 1999, by Mortgagor to Mortgagee, and record in the Belknap County Registry of
Deeds (the “Recorder’s Office”) in Book 1518 at Page 0596, encumbering certain real
property located in the Town of Tilton, County of Belknap and State of New Hampshire
and the improvements thereon;
	 
	 	•	 	a certain Assignment of Leases and Rents dated March 1, 1999, by Mortgagor to
Mortgagee, and record in the Recorder’s Office in Book 1518 at Page 0680;
	 
	 	•	 	a certain UCC-1 Financing Statement dated March 3, 1999 and recorded in the
Recorder’s Office in Book 1518 at Page 0692; and
	 
	 	•	 	a certain UCC-1 Financing Statement dated March 3, 1999 and recorded in the
Recorder’s Office in Book 1518 at Page 0699.

B-6

 

Schedule 4.1(s)

Existing Indebtedness

Revolving Credit Facility dated January 25, 1994, as amended, between The Talbots, Inc. as Borrower
with The Norinchukin Bank as Lender, for $28,000,000.

Revolving Credit Agreement dated January 25, 1994, as amended, between The Talbots, Inc. as
Borrower with Sumitomo Mitsui Banking Corporation as Lender, for $16,000,000.

Revolving Credit Agreement dated April 17, 2003, as amended, between The Talbots, Inc. as Borrower
with Mizuho Corporate Bank, Ltd. as Lender, for $18,000,000.

Revolving Loan Credit Agreement dated January 28, 2004, as amended, between The Talbots, Inc. as
Borrower with Mizuho Corporate Bank, Ltd. as Lender, for $18,000,000.

Credit Agreement dated March 28, 2007, between The Talbots, Inc. as Borrower with The Bank of
Tokyo-Mitsubishi UFJ, Ltd. as Lender for $20,000,000.

Term Loan Agreement dated July 16, 2008, between The Talbots, Inc. as Borrower with Aeon (U.S.A) as
Lender, for $50,000,000.

Revolving Credit Agreement dated December 29, 2008, between The Talbots, Inc. as Borrower with
Mizuho Corporate Bank, Ltd. as Lender, for $75,000,000.

Revolving Credit Agreement dated December 30, 2008, between The Talbots, Inc. as Borrower with
Sumitomo Mitsui Banking Corporation as Lender, for $50,000,000.

Revolving Credit Agreement dated January 2, 2009, between The Talbots, Inc. as Borrower with The
Norinchukin Bank as Lender, for $25,000,000.

Term Loam Facility Agreement dated February 25, 2009, between The Talbots, Inc. as Borrower with
Aeon Co. Ltd. as Lender, for $200,000,000.

Revolving Credit Agreement dated February 26, 2009, between The Talbots, Inc. as Borrower with Bank
of Tokyo-Mitsubishi UFJ, Ltd. as Lender, for $15,000,000.

Secured Revolving Loan Agreement dated April 10, 2009, between The Talbots, Inc. as Borrower with
Aeon Co. Ltd. as Lender, for $150,000,000.

The Mortgage Note dated March 1, 1999 in the principal amount of $12,000,000, by Birch Pond Realty
Corporation to John Hancock Real Estate Finance.

B-7

 

Schedule 4.1(s)

Existing Indebtedness (continued)

Standby Letter of Credit issued September 29, 2008 by Mizuho Corporate Bank, Ltd. with Citibank
(South Dakota) N.A. as beneficiary, for $2,000,000.

Standby Letter of Credit issued November 18, 2008 by Mizuho Corporate Bank, Ltd. with Schwarz Paper
Company as beneficiary, for $200,000.

B-8

 

Schedule 4.1(u)

Existing Investments

none

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]