Document:

exv10w12

Exhibit 10.12

REUNION HOSPITALITY TRUST, INC.

2010 EQUITY INCENTIVE PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.01. Affiliate
	 	 	1	 
	1.02. Agreement
	 	 	1	 
	1.03. Annual Incentive Award
	 	 	1	 
	1.04. Award
	 	 	1	 
	1.05. Board
	 	 	1	 
	1.06. Code
	 	 	1	 
	1.07. Committee
	 	 	1	 
	1.08. Common Share
	 	 	1	 
	1.09. Company
	 	 	1	 
	1.10. Completion Date
	 	 	2	 
	1.11. Control Change Date
	 	 	2	 
	1.12. Corporate Transaction
	 	 	2	 
	1.13. Corresponding SAR
	 	 	3	 
	1.14. Covered Employee
	 	 	3	 
	1.15. Dividend Equivalent Right
	 	 	3	 
	1.16. Effective Date
	 	 	3	 
	1.17. Exchange Act
	 	 	3	 
	1.18. Fair Market Value
	 	 	3	 
	1.19. FFO
	 	 	3	 
	1.20. Initial Value
	 	 	4	 
	1.21. Option
	 	 	4	 
	1.22. Other Equity-Based Award
	 	 	4	 
	1.23. Participant
	 	 	4	 
	1.24. Performance Award
	 	 	4	 
	1.25. Person
	 	 	4	 
	1.26. Plan
	 	 	4	 
	1.27. Restricted Stock Unit
	 	 	5	 
	1.28. SAR
	 	 	5	 
	1.29. Share Award
	 	 	5	 
	1.30. Ten Percent Shareholder
	 	 	5	 
	 
	 	 	 	 
	ARTICLE II PURPOSES
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III ADMINISTRATION
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV ELIGIBILITY
	 	 	6	 
	 
	 	 	 	 
	ARTICLE V COMMON SHARES SUBJECT TO PLAN
	 	 	6	 
	 
	 	 	 	 
	5.01. Common Shares Issued
	 	 	6	 
	5.02. Aggregate Limit
	 	 	7	 
	5.03. Award Grant Limits
	 	 	7	 

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	 	 	Page
	5.04. Reallocation of Shares
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VI OPTIONS
	 	 	7	 
	 
	 	 	 	 
	6.01. Award
	 	 	7	 
	6.02. Option Price
	 	 	7	 
	6.03. Maximum Option Period
	 	 	8	 
	6.04. Nontransferability
	 	 	8	 
	6.05. Transferable Options
	 	 	8	 
	6.06. Employee Status
	 	 	8	 
	6.07. Exercise
	 	 	9	 
	6.08. Payment
	 	 	9	 
	6.09. Shareholder Rights
	 	 	9	 
	6.10. Disposition of Shares
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VII SARS
	 	 	9	 
	 
	 	 	 	 
	7.01. Award
	 	 	9	 
	7.02. Maximum SAR Period
	 	 	10	 
	7.03. Nontransferability
	 	 	10	 
	7.04. Transferable SARs
	 	 	10	 
	7.05. Exercise
	 	 	10	 
	7.06. Employee Status
	 	 	10	 
	7.07. Settlement
	 	 	11	 
	7.08. Shareholder Rights
	 	 	11	 
	 
	 	 	 	 
	ARTICLE VIII SHARE AWARDS
	 	 	11	 
	 
	 	 	 	 
	8.01. Award
	 	 	11	 
	8.02. Vesting
	 	 	11	 
	8.03. Unrestricted Share Awards
	 	 	11	 
	8.04. Employee Status
	 	 	11	 
	8.05. Shareholder Rights
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IX PERFORMANCE AND ANNUAL INCENTIVE AWARDS
	 	 	12	 
	 
	 	 	 	 
	9.01. Award
	 	 	12	 
	9.02. Performance Conditions
	 	 	12	 
	9.03. Performance or Annual Incentive Awards Granted to Designated Covered Employees
	 	 	12	 
	9.04. Performance Goals Generally
	 	 	13	 
	9.05. Business Criteria
	 	 	13	 
	9.06. Timing For Establishing Performance Goals
	 	 	13	 
	9.07. Performance or Annual Incentive Award Pool
	 	 	13	 
	9.08. Settlement of Performance or Annual Incentive Awards; Other Terms
	 	 	13	 
	9.09. Written Determinations
	 	 	14	 
	9.10. Status of Section 9 Awards Under Code Section 162(m)
	 	 	14	 
	9.11. Payment
	 	 	14	 
	9.12. Shareholder Rights
	 	 	14	 

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	 	 	Page
	9.13. Nontransferability
	 	 	15	 
	9.14. Transferability
	 	 	15	 
	9.15. Employee Status
	 	 	15	 
	 
	 	 	 	 
	ARTICLE X OTHER EQUITY—BASED AWARDS
	 	 	15	 
	 
	 	 	 	 
	10.01. Award
	 	 	15	 
	10.02. Terms and Conditions
	 	 	15	 
	10.03. Payment or Settlement
	 	 	16	 
	10.04. Employee Status
	 	 	16	 
	10.05. Shareholder Rights
	 	 	16	 
	 
	 	 	 	 
	ARTICLE XI Restricted stock units
	 	 	16	 
	 
	 	 	 	 
	11.01. Restricted Stock Units
	 	 	16	 
	11.02. Vesting
	 	 	16	 
	11.03. Performance Goals
	 	 	16	 
	11.04. Ownership
	 	 	17	 
	11.05. Settlement
	 	 	17	 
	 
	 	 	 	 
	ARTICLE XII ADJUSTMENT UPON CHANGE IN COMMON STOCK
	 	 	17	 
	 
	 	 	 	 
	ARTICLE XIII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
	 	 	17	 
	 
	 	 	 	 
	ARTICLE XIV GENERAL PROVISIONS
	 	 	18	 
	 
	 	 	 	 
	14.01. Effect on Employment and Service
	 	 	18	 
	14.02. Unfunded Plan
	 	 	18	 
	14.03. Rules of Construction
	 	 	18	 
	14.04. Withholding Taxes
	 	 	18	 
	 
	 	 	 	 
	ARTICLE XV CORPORATE TRANSACTION
	 	 	19	 
	 
	 	 	 	 
	15.01. Impact of Corporate Transaction
	 	 	19	 
	15.02. Assumption Upon Corporate Transaction
	 	 	19	 
	15.03. Cash-Out Upon Corporate Transaction
	 	 	19	 
	15.04. Limitation of Benefits
	 	 	20	 
	 
	 	 	 	 
	ARTICLE XVI AMENDMENT
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XVII DURATION OF PLAN
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XVIII Choice of LAw
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XIX Code Section 409A
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XX EFFECTIVE DATE OF PLAN
	 	 	22	 

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ARTICLE I

DEFINITIONS

1.01. Affiliate

     Affiliate means any entity, whether now or hereafter existing, which controls, is controlled
by, or is under common control with, the Company (including, but not limited to, joint ventures,
limited liability companies and partnerships). For this purpose, the term “control” shall mean
ownership of 50% or more of the total combined voting power or value of all classes of shares or
interests in the entity, or the power to direct the management and policies of the entity, by
contract or otherwise.

1.02.  Agreement

     Agreement means a written agreement (including any amendment or supplement thereto) between
the Company and a Participant specifying the terms and conditions of an Award.

1.03. Annual Incentive Award

     Annual Incentive Award means an award granted under the Plan made subject to attainment of
performance goals (as described in Section 9) over a performance period of up to and including one
year (the fiscal year), unless otherwise specified by the Committee.

1.04. Award

     Award means an Option, SAR, Restricted Stock Unit, Share Award, Dividend Equivalent Right,
Performance Award, Annual Incentive Award, and Other Equity-Based Award or a combination thereof
granted under the Plan.

1.05.  Board

     Board means the Board of Directors of the Company.

1.06.  Code

     Code means the Internal Revenue Code of 1986, and any amendments thereto.

1.07.  Committee

     Committee means the Compensation Committee of the Board; provided, however, that with respect
to awards made to a member of the Board who is not an employee of the Company or an Affiliate,
“Committee” means the Board.

1.08. Common Share

     Common Share means shares of common stock, par value $0.001 per share, of the Company.

1.09.  Company

     Company means Reunion Hospitality Trust, Inc., a Maryland corporation.

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1.10. Completion Date

     Completion Date means the closing date of the initial public offering of the Common Shares and
the concurrent private placement of the Common Shares.

1.11. Control Change Date

     Control Change Date means the date on which a Corporate Transaction occurs. If a Corporate
Transaction occurs on account of a series of transactions, the “Control Change Date” is the date of
the last of such transactions.

1.12. Corporate Transaction

     “Corporate Transaction” shall mean a Corporate Transaction of the Company which will be deemed
to have occurred after the date hereof if:

	 	(1)	 	any “person” as such term is used in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof except that such term shall not
include (A) the Company or any of its subsidiaries, (B) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of
such securities, (D) any corporation owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their ownership of the Company’s
common shares, or (E) any person or group as used in Rule 13d-1(b) under the Exchange
Act, is or becomes the Beneficial Owner, as such term is defined in Rule 13d-3 under the
Exchange Act, directly or indirectly, of securities of the Company representing at least
50% of the combined voting power or common shares of the Company;
	 
	 	(2)	 	during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board or whose election by the Board or nomination for
election by the Company’s shareholders was approved by a vote of at least two-thirds
(2/3) of the Board then still in office cease for any reason to constitute at least a
majority thereof;
	 
	 	(3)	 	there is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent thereof) in
combination with the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any subsidiary of the Company, more
than 50% of the combined voting power and common shares of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or consolidation;
or
	 
	 	(4)	 	there is consummated an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets (or any transaction having a similar
effect, including a liquidation) other than a sale or disposition by the Company of all
or substantially all of the Company’s assets to an entity, more than fifty percent (50%)
of the combined voting power and common shares of which is owned by shareholders of the
Company in

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	 	 	 	substantially the same proportions as their ownership of the common shares of the
Company immediately prior to such sale.

1.13. Corresponding SAR

     Corresponding SAR means a SAR that is granted in relation to a particular Option and that can
be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to
which the SAR relates.

1.14. Covered Employee

     Covered Employee means an individual who is a Covered Employee within the meaning of
Section 162(m)(3) of the Code.

1.15. Dividend Equivalent Right

     Dividend Equivalent Right means the right, subject to the terms and conditions prescribed by
the Committee, of a Participant to receive (or have credited) cash, shares or other property in
amounts equivalent to the cash, shares or other property dividends declared on Common Shares with
respect to an Award, as determined by the Committee, in its sole discretion. The Committee may
provide that such Dividend Equivalents (if any) shall be distributed only when, and to the extent
that, the underlying Award is vested or earned and also may provide that Dividend Equivalents (if
any) shall be deemed to have been reinvested in additional Common Shares or otherwise reinvested.

1.16. Effective Date

     The Effective Date of the Plan is ___ ___, 2010.

1.17. Exchange Act

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

1.18. Fair Market Value

     Fair Market Value means, on any given date, the reported “closing” price of a Common Share on
the NASDAQ Global Market. If, on any given date, the Common Shares are not listed for trading on
the NASDAQ Global Market, then Fair Market Value shall be the “closing” price of a Common Share on
such other exchange on which the Common Shares are listed for trading or, if the Common Shares are
not listed on any exchange, the amount determined by the Committee using any reasonable method in
good faith and in accordance with the regulations under Section 409A of the Code.

1.19. FFO

     FFO means funds from operations, which, as currently defined by the National Association of
Real Estate Investment Trusts represents net income (computed in accordance with U.S. generally
accepted accounting principles), excluding gains and losses from sales of property, plus real
estate depreciation and

3

 

amortization (excluding amortization of deferred financing costs) and after adjustments for
unconsolidated partnerships and joint ventures, as such definition may be supplemented and modified
from time to time.

1.20. Initial Value

     Initial Value means, with respect to a Corresponding SAR, the option price per share of the
related Option and, with respect to an SAR granted independently of an Option, the price per Common
Share as determined by the Committee on the date of grant; provided, however, that the price shall
not be less than the Fair Market Value on the date of grant.

1.21. Option

     Option means a share option that entitles the holder to purchase from the Company a stated
number of Common Shares at the price set forth in an Agreement.

1.22. Other Equity-Based Award

     Other Equity-Based Award means any award other than an Option, Restricted Stock Unit, SAR,
Performance Award, Annual Incentive Award or a Share Award which, subject to such terms and
conditions as may be prescribed by the Committee, entitles a Participant to receive Common Shares
valued in whole or in part by reference to, or otherwise based on, Common Shares (including
securities convertible into Common Shares) or other equity interests of the Company’s subsidiaries.

1.23. Participant

     Participant means an employee or officer of the Company or an Affiliate, a member of the
Board, or a consultant who is an individual and provides bona fide services to the Company or an
Affiliate, and who satisfies the requirements of Article IV and is selected by the Committee to
receive an Award.

1.24. Performance Award

     Performance Award means an award granted under the Plan that is subject to the attainment of
performance goals (as described in Section 9) over a performance period of more than one year.

1.25. Person

     “Person” means any human being, firm, corporation, partnership, or other entity. “Person”
also includes any human being, firm, corporation, partnership, or other entity as defined in
sections 13(d)(3) and 14(d)(2) of the Exchange Act. Notwithstanding the preceding sentence, the
term “Person” does not include (i) the Company or any of its subsidiaries, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan of the Company or any Affiliate,
(iii) an underwriter temporarily holding securities pursuant to an offering of such securities or
(iv) any corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of the Common Shares.

1.26. Plan

     Plan means this Reunion Hospitality Trust, Inc. 2010 Equity Incentive Plan.

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1.27.  Restricted Stock Unit

     Restricted Stock Unit means an award granted under Section 11 of the Plan.

1.28.  SAR

     SAR means a share appreciation right that in accordance with the terms of an Agreement
entitles the holder to receive, with respect to each Common Share encompassed by the exercise of
the SAR, the excess, if any, of the Fair Market Value at the time of exercise over the Initial
Value. References to “SARs” include both Corresponding SARs and SARs granted independently of
Options, unless the context requires otherwise.

1.29. Share Award

     Share Award means Common Shares awarded to a Participant under Article VIII that may be either
restricted or unrestricted.

1.30. Ten Percent Shareholder

     Ten Percent Shareholder means any individual owning more than ten percent (10%) of the total
combined voting power of all classes of shares of the Company or of a “parent corporation” or
“subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company. An
individual shall be considered to own any voting shares owned (directly or indirectly) by or for
his or her brothers, sisters, spouse, ancestors or lineal descendants and shall be considered to
own proportionately any voting shares owned (directly or indirectly) by or for a corporation,
partnership, estate or trust of which such individual is a shareholder, partner or beneficiary.

ARTICLE II

PURPOSES

     The Plan is intended to (a) provide incentive to Participants to stimulate their efforts
toward the continued success of the Company and to operate and manage their businesses in a manner
that will provide for the long-term growth and profitability of the Company and its Affiliates; and
(b) provide a means of obtaining, rewarding and retaining key personnel and to associate their
interests with those of the Company and its shareholders. To this end, the Plan provides for the
grant of both Options qualifying under Section 422 of the Code (“incentive stock options”) and
Options not so qualifying, and the grant of SARs, Restricted Stock Units, Share Awards, Dividend
Equivalent Rights, Performance Awards and Annual Incentive Awards, and Other Equity-Based Awards in
accordance with the Plan and any procedures that may be established by the Committee. Any of these
awards may, but need not, be made as performance incentives to reward attainment of annual or
long-term performance goals in accordance with the terms hereof.

ARTICLE III

ADMINISTRATION

     The Plan shall be administered by the Committee. The Committee shall have authority to grant
Awards under the Plan upon such terms (not inconsistent with the provisions of this Plan), as the
Committee may consider appropriate in its sole discretion. Such terms may include conditions (in
addition to those

5

 

contained in this Plan), on the exercisability of all or any part of an Option, Restricted
Stock Unit or SAR or on the transferability or forfeitability of a Share Award, an award of
Performance Awards and Annual Incentive Awards or an Other Equity-Based Award. Notwithstanding any
such conditions, the Committee may, in its discretion, accelerate the time at which any Option,
Restricted Stock Unit or SAR may be exercised, or the time at which a Share Award or Other
Equity-Based Award may become transferable or nonforfeitable or the time at which an Other
Equity-Based Award or Performance Awards and Annual Incentive Awards may be settled. In addition,
the Committee shall have complete authority to interpret all provisions of this Plan; to prescribe
the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the
administration of the Plan (including rules and regulations that require or allow Participants to
defer the payment of benefits under the Plan); and to make all other determinations necessary or
advisable for the administration of this Plan. The Committee’s determinations under the Plan
(including without limitation, determinations of the individuals to receive Awards under the Plan,
the form, amount, vesting and timing of such Awards, the terms and provisions of such Awards and
the Agreements) need not be uniform and may be made by the Committee selectively among individuals
who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated. The express grant in the Plan of any specific power to the Committee shall not
be construed as limiting any power or authority of the Committee. Any decision made, or action
taken, by the Committee in connection with the administration of this Plan shall be final and
conclusive. The members of the Committee shall not be liable for any act done in good faith with
respect to this Plan or any Agreement, Option, SAR, Restricted Stock Unit, Share Award, Dividend
Equivalent Rights, Other Equity-Based Award or Performance Awards and Annual Incentive Awards. All
expenses of administering this Plan shall be borne by the Company.

ARTICLE IV

ELIGIBILITY

     Any employee or consultant of the Company or an Affiliate (including a trade or business that
becomes an Affiliate after the adoption of this Plan) and any member of the Board are eligible to
participate in this Plan. In addition, any other individual who provides significant services to
the Company or an Affiliate is eligible to participate in this Plan if the Committee, in its sole
discretion, determines that the participation of such individual is in the best interest of the
Company. The Committee may also grant Options, SARs, Share Awards, Performance Awards, Annual
Incentive Awards and Other Equity-Based Awards to an individual as an inducement to such individual
becoming eligible to participate in the Plan and prior to the date that the individual first
performs services for the Company or an Affiliate, provided that such awards will not become vested
or exercisable, and no shares shall be issued or other payment made to such individual with respect
to such awards prior to the date the individual first performs services for the Company or an
Affiliate.

ARTICLE V

COMMON SHARES SUBJECT TO PLAN

5.01. Common Shares Issued

     Upon the award of Common Shares, the Company may deliver to the Participant Common Shares from
its treasury shares or authorized but unissued Common Shares. Upon the exercise of any Option,
SAR, Restricted Stock Unit or Other Equity-Based Award denominated in Common Shares, the Company
may deliver to the Participant (or the Participant’s broker if the Participant so directs), Common
Shares from its treasury shares or authorized but unissued Common Shares.

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5.02. Aggregate Limit

     (a) The maximum aggregate number of Common Shares that may be issued under this Plan pursuant
to the exercise of Options, Restricted Stock Units and SARs, the grant of Share Awards or Other
Equity-Based Awards and the settlement of Performance Awards and Annual Incentive Awards is equal
to 663,750, or five percent (5% ) of the sum of (i) the number
of Common Shares and (ii) Subordinated Units outstanding on the Completion Date.

     (b) The maximum number of Common Shares that may be issued under this Plan in accordance with
Section 5.02(a) shall be subject to adjustment as provided in Article XI.

     (c) The maximum number of Common Shares that may be issued upon the exercise of Options that
are incentive stock options or Corresponding SARs that are related to incentive stock options shall
be determined in accordance with Sections 5.02(a) and 5.02(b).

5.03. Award Grant Limits

     The maximum number of Common Shares that may be issued to a Participant in one calendar year
as Options or SARs are 350,000, and the maximum number of Common Shares that may be issued to any
Participant in one calendar year, other than in the form of Options, SARs or restricted Shares, is
350,000. The maximum amount that may be earned as an Annual Incentive Award or other cash award
in any fiscal year by any one individual is $8,000,000 and the maximum amount that may be earned
as a Performance Award or other cash award in respect of a performance period by any one individual
is $15,000,000.

5.04. Reallocation of Shares

     If any award or grant under the Plan expires, is forfeited or is terminated without having
been exercised or is paid in cash without delivery of Common Shares, then any Common Shares covered
by such lapsed, cancelled, expired, unexercised or cash-settled portion of such award or grant and
any forfeited, lapsed or cancelled shall be available for the grant of other Options, Restricted
Stock Units, SARs, Share Awards, Other Equity-Based Awards and settlement of Performance Awards and
Annual Incentive Awards under this Plan.

ARTICLE VI

OPTIONS

6.01. Award

     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Option is to be granted and will specify the number of Common Shares covered by such
awards. The Committee also will specify whether Dividend Equivalent Rights are granted in
conjunction with the Option.

6.02. Option Price

     The price per Common Share purchased on the exercise of an Option shall be determined by the
Committee on the date of grant, but shall not be less than the Fair Market Value on the date the
Option is

7

 

granted. Notwithstanding the preceding sentence, the price per Common Share purchased on the
exercise of any Option that is an incentive stock option granted to an individual who is a Ten
Percent Shareholder on the date such option is granted, shall not be less than one hundred ten
percent (110%) of the Fair Market Value on the date the Option is granted. Except as provided in
Article XI, the price per share of an outstanding Option may not be reduced (by amendment,
cancellation and new grant or otherwise) without the approval of shareholders. An Option that is
an incentive stock option shall only be granted to a Participant who is an employee of the Company
or an Affiliate.

6.03. Maximum Option Period

     The maximum period in which an Option may be exercised shall be determined by the Committee on
the date of grant except that no Option shall be exercisable after the expiration of ten years from
the date such Option was granted. In the case of an incentive stock option granted to a Participant
who is a Ten Percent Shareholder on the date of grant, such Option shall not be exercisable after
the expiration of five years from the date of grant. The terms of any Option may provide that it is
exercisable for a period less than such maximum period.

6.04. Nontransferability

     Except as provided in Section 6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR
that relates to such Option must be transferred to the same person or persons or entity or
entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom the
Option is granted, the Option may be exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.

6.05. Transferable Options

     Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not
an incentive stock option may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be
permitted under Rule 16b-3 under the Exchange Act as in effect from time to time. The holder of an
Option transferred pursuant to this Section shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant; provided, however, that
such transferee may not transfer the Option except by will or the laws of descent and distribution.
In the event of any transfer of an Option (by the Participant or his transferee), the Option and
any Corresponding SAR that relates to such Option must be transferred to the same person or persons
or entity or entities.

6.06. Employee Status

     For purposes of determining the applicability of Section 422 of the Code (relating to
incentive stock options), or in the event that the terms of any Option provide that it may be
exercised only during employment or continued service or within a specified period of time after
termination of employment or continued service, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability, or other reasons shall
not be deemed interruptions of continuous employment or service.

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6.07. Exercise

     Subject to the provisions of this Plan and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in compliance with
such requirements as the Committee shall determine; provided, however, that incentive stock options
(granted under the Plan and all plans of the Company and its Affiliates) may not be first
exercisable in a calendar year for Common Shares having a Fair Market Value (determined as of the
date an Option is granted) exceeding $100,000. An Option granted under this Plan may be exercised
with respect to any number of whole shares less than the full number for which the Option could be
exercised. A partial exercise of an Option shall not affect the right to exercise the Option from
time to time in accordance with this Plan and the applicable Agreement with respect to the
remaining shares subject to the Option. The exercise of an Option shall result in the termination
of any Corresponding SAR to the extent of the number of shares with respect to which the Option is
exercised.

6.08. Payment

     Subject to rules established by the Committee and unless otherwise provided in an Agreement,
payment of all or part of the Option price may be made in cash, certified check, or by tendering
Common Shares. If Common Shares are used to pay all or part of the Option price, the sum of the
cash and cash equivalent and the Fair Market Value (determined as of the day preceding the date of
exercise) of the Common Shares surrendered must not be less than the Option price of the Common
Shares for which the Option is being exercised.

6.09. Shareholder Rights

     No Participant shall have any rights as a shareholder with respect to Common Shares subject to
an Option until the date of exercise of such Option.

6.10. Disposition of Shares

     A Participant shall notify the Company of any sale or other disposition of Common Shares
acquired pursuant to an Option that was an incentive stock option if such sale or disposition
occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of
the Common Shares to the Participant. Such notice shall be in writing and directed to the Secretary
of the Company.

ARTICLE VII

SARS

7.01. Award

     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom SARs are to be granted and will specify the number of Common Shares covered by such awards.
The Committee also will specify whether Dividend Equivalent Rights are granted in conjunction with
the SAR. No Participant may be granted Corresponding SARs (under the Plan and all plans of the
Company and its Affiliates) that are related to incentive stock options which are first exercisable
in any calendar year for Common Shares having an aggregate Fair Market Value (determined as of the
date the related Option is granted) that exceeds $100,000.

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7.02. Maximum SAR Period

     The term of each SAR shall be determined by the Committee on the date of grant, except that no
SAR shall have a term of more than ten years from the date of grant. In the case of a
Corresponding SAR that is related to an incentive stock option granted to a Participant who is a
Ten Percent Shareholder on the date of grant, such Corresponding SAR shall not be exercisable after
the expiration of five years from the date of grant. The terms of any SAR may provide that it has
a term that is less than such maximum period.

7.03. Nontransferability

     Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. In the event of any such transfer, a
Corresponding SAR and the related Option must be transferred to the same person or persons or
entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to
whom the SAR is granted, the SAR may be exercised only by the Participant. No right or interest of
a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.

7.04. Transferable SARs

     Section 7.03 to the contrary notwithstanding, if the Agreement provides, an SAR, other than a
Corresponding SAR that is related to an incentive stock option, may be transferred by a Participant
to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such
family members or a partnership in which such family members are the only partners, on such terms
and conditions as may be permitted under Rule 16b-3 under the Exchange Act as in effect from time
to time. The holder of an SAR transferred pursuant to this Section shall be bound by the same
terms and conditions that governed the SAR during the period that it was held by the Participant;
provided, however, that such transferee may not transfer the SAR except by will or the laws of
descent and distribution. In the event of any transfer of a Corresponding SAR (by the Participant
or his transferee), the Corresponding SAR and the related Option must be transferred to the same
person or person or entity or entities.

7.05. Exercise

     Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised
in whole at any time or in part from time to time at such times and in compliance with such
requirements as the Committee shall determine; provided, however, that a Corresponding SAR that is
related to an incentive stock option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value exceeds the option price of the related Option. An
SAR granted under this Plan may be exercised with respect to any number of whole shares less than
the full number for which the SAR could be exercised. A partial exercise of an SAR shall not
affect the right to exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the SAR. The exercise of a
Corresponding SAR shall result in the termination of the related Option to the extent of the number
of shares with respect to which the SAR is exercised.

7.06. Employee Status

     If the terms of any SAR provide that it may be exercised only during employment or continued
service or within a specified period of time after termination of employment or continued service,
the Committee may decide to what extent leaves of absence for governmental or military service,
illness,

10

 

temporary disability or other reasons shall not be deemed interruptions of continuous
employment or service.

7.07. Settlement

     At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be
settled in cash, Common Shares, or a combination of cash and Common Shares. No fractional share
will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu thereof.

7.08. Shareholder Rights

     No Participant shall, as a result of receiving an SAR, have any rights as a shareholder of the
Company or any Affiliate until the date that the SAR is exercised and then only to the extent that
the SAR is settled by the issuance of Common Shares. Notwithstanding the foregoing, the Committee
may provide in an Agreement that the holder of an SAR is entitled to Dividend Equivalents during
the period beginning on the date of the award and ending on the date the SAR is exercised.

ARTICLE VIII

SHARE AWARDS

8.01. Award

     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom a restricted or unrestricted Share Award is to be made and will specify the number of
Common Shares covered by such awards.

8.02. Vesting

     The Committee, on the date of the award, may prescribe that a Participant’s rights in a Share
Award shall be forfeitable or otherwise restricted for a period of time or subject to such
conditions as may be set forth in the Agreement. By way of example and not of limitation, the
Committee may prescribe that a Participant’s rights in a Share Award shall be forfeitable or
otherwise restricted subject to the attainment of objectives stated with reference to the
Company’s, an Affiliate’s or a business unit’s attainment of objectives stated with respect to
performance criteria established by the Committee.

8.03. Unrestricted Share Awards

     The Committee may, in its sole discretion, grant (or sell at par value or such other higher
purchase price determined by the Committee) unrestricted Share Awards pursuant to which a
Participant may receive Common Shares free of any restrictions. Unrestricted Share Awards may be
granted or sold in respect of past services, performance and other valid consideration, or in lieu
of, or in addition to, any cash compensation due to such Participant.

8.04. Employee Status

     In the event that the terms of any Share Award provide that shares may become transferable and
nonforfeitable thereunder only after completion of a specified period of employment or continuous
service, the Committee may decide in each case to what extent leaves of absence for governmental or
military

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service, illness, temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.

8.05. Shareholder Rights

     Unless otherwise specified in accordance with the applicable Agreement, while the Common
Shares granted pursuant to the Share Award may be forfeited or are nontransferable, a Participant
will have all rights of a stockholder with respect to a Share Award, including the right to receive
dividends and vote the shares; provided, however, that during such period (i) a Participant may not
sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares granted pursuant to a
Share Award, (ii) the Company shall retain custody of the certificates evidencing shares granted
pursuant to a Share Award, and (iii) the Participant will deliver to the Company a stock power,
endorsed in blank, with respect to each Share Award. The limitations set forth in the preceding
sentence shall not apply after the shares granted under the Share Award are transferable and are no
longer forfeitable.

ARTICLE IX

PERFORMANCE AND ANNUAL INCENTIVE AWARDS 

9.01. Award

     In accordance with the provisions of Article IV, the Committee will designate each Participant
to whom a Performance Award or Annual Incentive Award is to be made and will specify the number of
Common Shares covered by such award. The Committee also will specify whether Dividend Equivalent
Rights are granted in conjunction with the Performance Award or Annual Incentive Award.

9.02. Performance Conditions

     The right of a Participant to exercise or receive a grant or settlement of any Performance
Award or Annual Incentive Award, and the timing thereof, may be subject to such performance
conditions as may be specified by the Committee. The Committee may use such business criteria and
other measures of performance as it may deem appropriate in establishing any performance
conditions, and may exercise its discretion to reduce the amounts payable under any Award subject
to performance conditions, except as limited under this Section 9 in the case of a Performance
Award or Annual Incentive Award intended to qualify under Section 162(m) of the Code. If and to
the extent required under Section 162(m) of the Code, any power or authority relating to a
Performance Award or Annual Incentive Award intended to qualify under Section 162(m) of the Code,
shall be exercised by the Committee and not the Board.

9.03. Performance or Annual Incentive Awards Granted to Designated Covered Employees

     If and to the extent that the Committee determines that a Performance Award or Annual
Incentive Award to be granted to an individual who is designated by the Committee as likely to be a
Covered Employee should qualify as “performance-based compensation” for purposes of Section 162(m)
of the Code, the grant, exercise and/or settlement of such Performance Award or Annual Incentive
Award shall be contingent upon achievement of pre-established performance goals and other terms set
forth in this Section 9.

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9.04. Performance Goals Generally 

     The performance goals for such Performance Awards or Annual Incentive Awards shall consist of
one or more business criteria and a targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with this Section 9. Performance goals
shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and
regulations thereunder, including the requirement that the level or levels of performance targeted
by the Committee result in the achievement of performance goals being “substantially uncertain.”
The Committee may determine that such Performance Awards or Annual Incentive Awards shall be
granted, exercised and/or settled upon achievement of any one or more performance goals.
Performance goals may differ for Performance Awards or Annual Incentive Awards granted to any one
Participant or to different Participants.

9.05. Business Criteria 

     In establishing performance goals for Awards intended to comply with Section 162(m) of the
Code to be granted to covered Participants, the Committee shall use one or more of the following
business criteria: total shareholder return; total shareholder return as compared to total return
(on a comparable basis) of a publicly available index such as, but not limited to, the Standard &
Poor’s 500 Stock Index or the SNL U.S. REIT Hotel Index prepared by SNL Financial LC; FFO or FFO
per share; net income; pretax earnings; after-tax earnings; earnings before interest expense and
taxes; earnings before interest expense, taxes, depreciation or amortization; pretax operating
earnings after interest expense and before bonuses, service fees and extraordinary or special
items; operating margin; earnings per share; return on equity; return on assets; return on invested
capital; return on investment; operating earnings; working capital; ratio of debt to stockholders’
equity; revenue; book value; funds and/or cash available for distribution per share; cash flow;
economic value-added models or equivalent metrics; reductions in costs; appreciation in the fair
market value of the Common Shares; net earnings growth; share appreciation; related return ratios;
increase in revenues; net earnings; changes (or the absence of changes) in the per share or
aggregate market price of the Company’s Common Shares; number of securities sold; total revenue
growth; deployment of capital; or acquisition- related targets.

9.06. Timing For Establishing Performance Goals 

     Performance goals shall be established not later than the earlier of (i) 90 days after the
beginning of any performance period applicable to such Performance Awards or Annual Incentive
Awards, (ii) the day on which 25% of any performance period applicable to such Awards has expired,
and (iii) at such other date as may be required or permitted for “performance-based compensation”
under Section 162(m) of the Code.

9.07. Performance or Annual Incentive Award Pool 

     The Committee may establish a Performance Award or Annual Incentive Award pool, which shall be
an unfunded pool, for purposes of measuring performance in connection with Performance Awards or
Annual Incentive Awards.

9.08. Settlement of Performance or Annual Incentive Awards; Other Terms 

     Settlement of such Performance Awards or Annual Incentive Awards shall be in cash, Common
Shares, restricted Shares, other Awards or other property, in the discretion of the Committee. The
Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance Awards or Annual Incentive Awards. The Committee shall specify
the

13

 

circumstances in which such Performance Awards or Annual Incentive Awards shall be paid or
forfeited in the event of termination of service or employment by the Participant prior to the end
of a performance period or settlement of Performance Awards.

9.09. Written Determinations 

     All determinations by the Committee as to the establishment of performance goals, the amount
of any Performance Award pool or potential individual Performance Awards and as to the achievement
of performance goals relating to Performance Awards, and the amount of any Annual Incentive Award
pool or potential individual Annual Incentive Awards and the amount of final Annual Incentive
Awards, shall be made in writing in the case of any Award intended to qualify under Section 162(m)
of the Code. To the extent required to comply with, or not prohibited by, Section 162(m) of the
Code, the Committee may delegate any responsibility relating to such Performance Awards or Annual
Incentive Awards.

9.10. Status of Section 9 Awards Under Code Section 162(m) 

     It is the intent of the Company that Performance Awards and Annual Incentive Awards under
Section 9 hereof granted to Participants who are designated by the Committee as likely to be
Covered Employees within the meaning of Section 162(m) of the Code and regulations thereunder
shall, if so designated by the Committee, constitute “qualified performance-based compensation”
within the meaning of Section 162(m) of the Code and regulations thereunder. Accordingly, the
terms of Section 9, including the definitions of Covered Employee and other terms used therein,
shall be interpreted in a manner consistent with Section 162(m) of the Code and regulations
thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty
whether a given individual will be a Covered Employee with respect to a fiscal year that has not
yet been completed, the term Covered Employee as used herein shall mean only a person designated by
the Committee, at the time of grant of Performance Awards or an Annual Incentive Award, as likely
to be a Covered Employee with respect to that fiscal year. If any provision of the Plan or any
Agreement relating to such Performance Awards or Annual Incentive Awards does not comply or is
inconsistent with the requirements of Section 162(m) of the Code or regulations thereunder, such
provision shall be construed or deemed amended to the extent necessary to conform to such
requirements.

9.11. Payment

     In the discretion of the Committee, the amount payable when a Performance Award or Annual
Incentive Award is earned may be settled in cash, by the issuance of Common Shares, by the delivery
of other securities or property or a combination thereof. A fractional Common Share shall not be
deliverable when a Performance Award or Annual Incentive Award is earned, but a cash payment will
be made in lieu thereof. The amount payable when a Performance Award or Annual Incentive Award is
earned shall be paid in a lump sum.

9.12. Shareholder Rights

     A Participant, as a result of receiving a Performance Award or Annual Incentive Award, shall
not have any rights as a shareholder until, and then only to the extent that, the Performance Award
or Annual Incentive Award is earned and settled in Common Shares. After a Performance Award or
Annual Incentive Award is earned and settled in Common Shares, a Participant will have all the
rights of a shareholder as described in Section 8.05.

14

 

9.13. Nontransferability

     Except as provided in Section 9.06, Performance Awards and Annual Incentive Awards granted
under this Plan shall be nontransferable except by will or by the laws of descent and distribution.
No right or interest of a Participant in any Performance Awards and Annual Incentive Awards shall
be liable for, or subject to, any lien, obligation, or liability of such Participant.

9.14. Transferability

     Section 9.05 to the contrary notwithstanding, if the Agreement provides, Performance Awards
and Annual Incentive Awards may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be
permitted under Rule 16b-3 under the Exchange Act as in effect from time to time. The holder of
Performance Awards or Annual Incentive Awards transferred pursuant to this Section shall be bound
by the same terms and conditions that governed the Performance Awards and Annual Incentive Awards
during the period that they were held by the Participant; provided, however that such transferee
may not transfer Performance Awards or Annual Incentive Awards except by will or the laws of
descent and distribution.

9.15. Employee Status

     In the event that the terms of any Performance Award or Annual Incentive Award provide that no
payment will be made unless the Participant completes a stated period of employment or continued
service, the Committee may decide to what extent leaves of absence for government or military
service, illness, temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.

ARTICLE X

OTHER EQUITY—BASED AWARDS

10.01. Award

     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Other Equity-Based Award is to be made and will specify the number of Common Shares
covered by such awards. The Committee also will specify whether Dividend Equivalent Rights are
granted in conjunction with the Other Equity-Based Award.

10.02. Terms and Conditions

     The Committee, at the time an Other Equity-Based Award is made, shall specify the terms and
conditions which govern the award. The terms and conditions of an Other Equity-Based Award may
prescribe that a Participant’s rights in the Other Equity-Based Award shall be forfeitable,
nontransferable or otherwise restricted for a period of time or subject to such other conditions as
may be determined by the Committee, in its discretion and set forth in the Agreement. Other
Equity-Based Awards may be granted to Participants, either alone or in addition to other awards
granted under the Plan, and Other Equity-Based Awards may be granted in the settlement of other
Awards granted under the Plan.

15

 

10.03. Payment or Settlement

     Other Equity-Based Awards valued in whole or in part by reference to, or otherwise based on,
Common Shares, shall be payable or settled in Common Shares, cash or a combination of Common Shares
and cash, as determined by the Committee in its discretion.

10.04. Employee Status

     If the terms of any Other Equity-Based Award provides that it may be earned or exercised only
during employment or continued service or within a specified period of time after termination of
employment or continued service, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability or other reasons shall not be
deemed interruptions of continuous employment or service.

10.05. Shareholder Rights

     A Participant, as a result of receiving an Other Equity-Based Award, shall not have any rights
as a shareholder until, and then only to the extent that, the Other Equity-Based Award is earned
and settled in Common Shares.

ARTICLE XI

RESTRICTED STOCK UNITS

11.01. Restricted Stock Units

     Restricted Stock Units may be issued either alone, in addition to, or in tandem with other
Awards granted under the Plan and/or cash awards made outside of the Plan. After the Committee
determines that it will grant Restricted Stock Units under the Plan, it shall determine the
conditions and restrictions related to the Award, including the Restricted Unit Period (as defined
below) applicable to the Award, the imposition, if any, of any performance-based condition
(including attainment of performance goals) or other restriction on the Award, the number of
Restricted Stock Units, which shall be set forth in an Agreement.

11.02. Vesting

     With respect to an Award of Restricted Stock Units, which becomes nonforfeitable due to the
lapse of time, the Committee shall prescribe in the Agreement, the period in which such Restricted
Stock Unit becomes nonforfeitable (the “Restricted Unit Period”). Notwithstanding any provision to
the contrary, the Restricted Stock Unit, which becomes nonforfeitable due to the satisfaction of
certain pre-established performance-based objectives or any other conditions imposed by the
Committee, the measurement date of whether such performance-based objectives or other conditions
have been satisfied shall be a date no earlier than the first anniversary of the date of the award.

11.03. Performance Goals

     The Committee may also condition the grant of Restricted Stock Units upon the attainment of
performance goals. Any Restricted Stock Unit Award that is intended to comply with the
“performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code shall vest,
or be granted, subject to the attainment of Section 162(m) performance goals as set forth in
Section 9 hereof.

16

 

11.04. Ownership

     A Participant who is awarded Restricted Stock Units shall possess no incidents of ownership
with respect to such Awards provided that the Agreement may provide for payments in lieu of
dividends to such Participant.

11.05. Settlement

     Restricted Stock Units shall also be available as a form of payment in the settlement of other
Awards granted under the Plan. Restricted Stock Units may be paid in Common Shares, cash or any
other form of property, as the Committee shall determine. Subject to the provisions of the Plan,
the Committee shall have sole and complete authority to determine the employees, officers of the
Company or an Affiliate, directors or consultants to whom and the time or times at which such
Awards shall be made, the number of Common Shares to be granted pursuant to such Awards, and all
other conditions of the Awards. Any Restricted Stock Unit Award shall be subject to such other
terms and conditions as the Committee shall deem advisable or appropriate, consistent with the
provisions of the Plan as herein set forth.

ARTICLE XII

ADJUSTMENT UPON CHANGE IN COMMON STOCK

     The maximum number of Common Shares as to which Awards may be granted and the terms of
outstanding Awards shall be adjusted as determined by the Board in the event that (i) the Company
(a) effects one or more share dividends, extra-ordinary cash dividends, share split-ups,
subdivisions or consolidations of shares or (b) engages in a transaction to which Section 424 of
the Code applies or (ii) there occurs any other event which, in the judgment of the Board
necessitates such action. Any determination made under this Article XI by the Board shall be final
and conclusive.

     The issuance by the Company of shares of any class, or securities convertible into shares of
any class, for cash or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number of shares as to
which Awards maybe granted or the terms of outstanding Awards. The Committee may make Share Awards
and may grant Options, Restricted Stock Units, SARs, Performance Awards, Annual Incentive Awards or
Other Equity-Based Awards in substitution for performance shares, phantom shares, stock awards,
stock options, stock appreciation rights, or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction described in the first
paragraph of this Article XI. Notwithstanding any provision of the Plan (other than the limitation
of Section 5.02), the terms of such substituted Share Awards, SARs, Other Equity-Based Awards,
Options, Restricted Stock Units or Performance Awards and Annual Incentive Awards shall be as the
Committee, in its discretion, determines is appropriate.

ARTICLE XIII

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

     No Option, Restricted Stock Unit or SAR shall be exercisable, no Common Shares shall be
issued, no certificates for Common Shares shall be delivered, and no payment shall be made under
this Plan except in compliance with all applicable federal and state laws and regulations
(including, without limitation, withholding tax requirements), any listing agreement to which the
Company is a party, and the rules of all

17

 

domestic stock exchanges on which the Company’s shares may be listed. The Company shall have
the right to rely on an opinion of its counsel as to such compliance. Any certificate issued to
evidence Common Shares when a Share Award is granted, a Performance Award, Annual Incentive Award
or Other Equity-Based Award is settled or for which an Option, Restricted Stock Unit or SAR is
exercised may bear such legends and statements as the Committee may deem advisable to assure
compliance with federal and state laws and regulations. No Option, Restricted Stock Unit or SAR
shall be exercisable, no Share Award, Performance Award or Annual Incentive Award shall be granted,
no Common Shares shall be issued, no certificate for Common Shares shall be delivered, and no
payment shall be made under this Plan until the Company has obtained such consent or approval as
the Committee may deem advisable from regulatory bodies having jurisdiction over such matters.

ARTICLE XIV

GENERAL PROVISIONS

14.01. Effect on Employment and Service

     Neither the adoption of this Plan, its operation, nor any documents describing or referring to
this Plan (or any part thereof), shall confer upon any individual or entity any right to continue
in the employ or service of the Company or an Affiliate or in any way affect any right and power of
the Company or an Affiliate to terminate the employment or service of any individual or entity at
any time with or without assigning a reason therefor.

14.02. Unfunded Plan

     This Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be
required to segregate any assets that may at any time be represented by grants under this Plan.
Any liability of the Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.

14.03. Rules of Construction

     Headings are given to the articles and sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.

14.04. Withholding Taxes

     Each Participant shall be responsible for satisfying any income and employment tax withholding
obligations attributable to participation in the Plan. Unless otherwise provided by the Agreement,
any such withholding tax obligations may be satisfied in cash (including from any cash payable in
settlement of Performance Awards or Annual Incentive Awards, SARs or Other Equity-Based Award) or a
cash equivalent acceptable to the Committee. Any minimum statutory federal, state, district or
city withholding tax obligations also may be satisfied (a) by surrendering to the Company Common
Shares previously acquired by the Participant; (b) by authorizing the Company to withhold or reduce
the number of Common Shares otherwise issuable to the Participant upon the exercise of an Option,
Restricted Stock Unit or SAR, the settlement of a Performance Award, Annual Incentive Award or an
Other Equity-Based Award (if applicable) or the grant or vesting of a Share Award; or (c) by any
other method as may be approved by the

18

 

Committee. If Common Shares are used to pay all or part of such withholding tax obligation,
the Fair Market Value of the shares surrendered, withheld or reduced shall be determined as of the
day the tax liability arises.

ARTICLE XV

CORPORATE TRANSACTION

15.01. Impact of Corporate Transaction.

     Upon a Corporate Transaction, the Committee is authorized, but not obligated, to cause
(i) outstanding Options, Restricted Stock Units and SARs to become fully exercisable,
(ii) outstanding Share Awards to become transferable and nonforfeitable and (iii) outstanding
Performance Awards and Annual Incentive Awards and Other Equity-Based Awards to become earned and
nonforfeitable in their entirety, all as may be provided in the applicable Agreement or, if not
expressly addressed therein, as the Committee subsequently may determine in the event of any such
Corporate Transaction.

15.02. Assumption Upon Corporate Transaction.

     In the event of a Corporate Transaction, the Committee, in its discretion and without the need
for a Participant’s consent, may provide that an outstanding Option, Restricted Stock Unit, SAR,
Share Award, Performance Award, Annual Incentive Award or Other Equity-Based Award shall be assumed
by, or a substitute award granted by, the surviving entity in the Corporate Transaction. Such
assumed or substituted award shall be of the same type of award as the original Restricted Stock
Unit, Option, SAR, Share Award, Performance Award, Annual Incentive Award or Other Equity-Based
Award being assumed or substituted. The assumed or substituted award shall have a value, as of the
Control Change Date, that is substantially equal to the value of the original award (or the
difference between the Fair Market Value and the option price or Initial Value in the case of
Options and SARs) as the Committee determines is equitably required and such other terms and
conditions as may be prescribed by the Committee.

15.03. Cash-Out Upon Corporate Transaction.

     In the event of a Corporate Transaction, the Committee, in its discretion and without the need
of a Participant’s consent, may provide that each Option, Restricted Stock Unit, SAR, Share Award,
Performance Award, Annual Incentive Award and Other Equity-Based Award shall be cancelled in
exchange for a payment. The payment may be in cash, Common Shares or other securities or
consideration received by shareholders in the Corporate Transaction transaction. The amount of the
payment shall be an amount that is substantially equal to (i) the amount by which the price per
share received by shareholders in the Corporate Transaction exceeds the option price or Initial
Value in the case of an Option, Restricted Stock Unit and SAR, or (ii) the price per share received
by shareholders for each Common Share subject to a Share Award, Performance Award, Annual Incentive
Award or Other Equity-Based Award or (iii) the value of the other securities or property in which
the Performance Award, Annual Incentive Award or Other Equity-Based award is denominated. If the
option price or Initial Value exceeds the price per share received by shareholders in the Corporate
Transaction transaction, the Option, Restricted Stock Unit or SAR may be cancelled under this
Section 14.03 without any payment to the Participant.

19

 

15.04. Limitation of Benefits

     The benefits that a Participant may be entitled to receive under this Plan and other benefits
that a Participant is entitled to receive under other plans, agreements and arrangements (which,
together with the benefits provided under this Plan, are referred to as “Payments”), may constitute
Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Section
14.04, the Parachute Payments will be reduced if, and only to the extent that, a reduction will
allow a Participant to receive a greater Net After Tax Amount than a Participant would receive
absent a reduction. The Accounting Firm will first determine the amount of any Parachute Payments
that are payable to a Participant. The Accounting Firm also will determine the Net After Tax
Amount attributable to the Participant’s total Parachute Payments.

     The Accounting Firm will next determine the largest amount of Payments that may be made to the
Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped
Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable
to the Capped Payments.

     The Participant will receive the total Parachute Payments or the Capped Payments, whichever
provides the Participant with the higher Net After Tax Amount. If the Participant will receive the
Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any
noncash benefits under this Plan or any other plan, agreement or arrangement (with the source of
the reduction to be directed by the Participant) and then by reducing the amount of any cash
benefits under this Plan or any other plan, agreement or arrangement (with the source of the
reduction to be directed by the Participant). The Accounting Firm will notify the Participant and
the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and
will send the Participant and the Company a copy of its detailed calculations supporting that
determination.

     As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time
that the Accounting Firm makes its determinations under this Article XIV, it is possible that
amounts will have been paid or distributed to the Participant that should not have been paid or
distributed under this Section 14.04 (“Overpayments”), or that additional amounts should be paid or
distributed to the Participant under this Section 14.04 (“Underpayments”). If the Accounting Firm
determines, based on either the assertion of a deficiency by the Internal Revenue Service against
the Company or the Participant, which assertion the Accounting Firm believes has a high probability
of success or controlling precedent or substantial authority, that an Overpayment has been made,
the Participant must repay to the Company, without interest; provided, however, that no loan will
be deemed to have been made and no amount will be payable by the Participant to the Company unless,
and then only to the extent that, the deemed loan and payment would either reduce the amount on
which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed
under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or
substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the
Participant and the Company of that determination and the amount of that Underpayment will be paid
to the Participant promptly by the Company.

     For purposes of this Section 14.04, the term “Accounting Firm” means the independent
accounting firm engaged by the Company immediately before the Control Change Date. For purposes of
this Article XIV, the term “Net After Tax Amount” means the amount of any Parachute Payments or
Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and
any State or local income taxes applicable to the Participant on the date of payment. The
determination of the Net After Tax Amount

20

 

shall be made using the highest combined effective rate imposed by the foregoing taxes on
income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect
on the date of payment. For purposes of this Section 14.04, the term “Parachute Payment” means a
payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section
280G and the regulations promulgated or proposed thereunder.

     Notwithstanding any other provision of this Section 14.04, the limitations and provisions of
this Section 14.04 shall not apply to any Participant who, pursuant to an agreement with the
Company or the terms of another plan maintained by the Company, is entitled to indemnification for
any liability that the Participant may incur under Code Section 4999.

ARTICLE XVI

AMENDMENT

     The Board may amend or terminate this Plan at any time; provided, however, that no amendment
may adversely impair the rights of Participants with respect to outstanding awards. In addition, an
amendment will be contingent on approval of the Company’s shareholders if such approval is required
by law or the rules of any exchange on which the Common Shares are listed or if the amendment would
materially increase the benefits accruing to Participants under the Plan, materially increase the
aggregate number of Common Shares that may be issued under the Plan or materially modify the
requirements as to eligibility for participation in the Plan.

ARTICLE XVII

DURATION OF PLAN

     No Award may be granted under this Plan after the day before the tenth anniversary of the date
that the Plan is adopted by the Board. Awards granted before such date shall remain valid in
accordance with their terms.

ARTICLE XVIII

CHOICE OF LAW

     The law of the State of Maryland shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

ARTICLE XIX

CODE SECTION 409A

     To the extent applicable, this Plan and the Awards hereunder shall be administered, operated
and interpreted in accordance with Section 409A of the Code and Department of Treasury regulations
and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the Effective Date. Although, the Company
makes no guarantee with respect to the tax treatment of Awards granted hereunder and shall not be
responsible in any event with regard to non-compliance with Section 409A of the Code, the Plan is
intended to either comply with, or be exempt from, the requirements of Section 409A of the Code.
To the extent that the Plan is not exempt from the requirements of Section 409A of the Code, the
Plan is intended to comply with the requirements of Section 409A of the Code and shall be limited,
construed and interpreted in accordance with such intent. Notwithstanding the foregoing, in no
event whatsoever shall the Company be liable for any additional tax,

21

 

interest or penalty that may be imposed on a Participant by Section 409A of the Code or any
damages for failing to comply with Section 409A of the Code.

ARTICLE XX

EFFECTIVE DATE OF PLAN

     Awards may be granted under this Plan on and after the date that the Plan is adopted by the
Board, provided that, this Plan shall not be effective unless approved by holders of a majority of
the outstanding Common Shares entitled to vote and present or represented by properly executed and
delivered proxies at a duly held shareholders’ meeting at which a quorum is present or by unanimous
consent of the shareholders, within twelve months before or after the date that the Plan is adopted
                    .

22exv10w1

Exhibit 10.1

FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

by and among

DELTA APPAREL, INC.,

M. J. SOFFE, LLC,

JUNKFOOD CLOTHING COMPANY,

TO THE GAME, LLC,

ART GUN, LLC,

and

TCX, LLC,

as Borrowers

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as Lenders

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

and

BANK OF AMERICA, N.A.,

as Syndication Agent

 

WELLS FARGO CAPITAL FINANCE, LLC,

as Sole Lead Arranger

 

WELLS FARGO CAPITAL FINANCE, LLC,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Joint Bookrunners

 

Dated: May 27, 2011

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	SECTION 1. DEFINITIONS
	 	 	2	 
	SECTION 2. CREDIT FACILITIES
	 	 	34	 
	2.1 Loans
	 	 	34	 
	2.2 Letters of Credit
	 	 	35	 
	2.3 [Intentionally Omitted.]
	 	 	38	 
	2.4 Commitments
	 	 	38	 
	2.5 Voluntary Increase in Commitments
	 	 	38	 
	SECTION 3. INTEREST AND FEES
	 	 	39	 
	3.1 Interest
	 	 	39	 
	3.2 Fees
	 	 	40	 
	3.3 Changes in Laws and Increased Costs of Loans
	 	 	41	 
	3.4 Maximum Interest
	 	 	43	 
	SECTION 4. CONDITIONS PRECEDENT
	 	 	44	 
	4.1 Conditions Precedent to Initial Loans and Letters of Credit
	 	 	44	 
	4.2 Conditions Precedent to All Loans and Letters of Credit
	 	 	46	 
	SECTION 5. GRANT OF SECURITY INTEREST
	 	 	46	 
	5.1 Grant of Security Interest
	 	 	46	 
	5.2 Perfection of Security Interests
	 	 	48	 
	SECTION 6. COLLECTION AND ADMINISTRATION
	 	 	51	 
	6.1 Borrowers’ Loan Account
	 	 	51	 
	6.2 Statements
	 	 	51	 
	6.3 Collection of Accounts
	 	 	51	 
	6.4 Payments
	 	 	52	 
	6.5 Authorization to Make Loans
	 	 	55	 
	6.6 Use of Proceeds
	 	 	55	 
	6.7 Pro Rata Treatment
	 	 	55	 
	6.8 Sharing
of Payments, Etc.
	 	 	55	 
	6.9 Settlement Procedures
	 	 	56	 
	6.10 Obligations Several; Independent Nature of Lenders’ Rights
	 	 	58	 
	6.11 Appointment of Administrative Borrower as Agent for
Requesting Loans and Receipts of Loans and Statements
	 	 	59	 
	6.12 Nature and Extent of Each Borrower’s Liability
	 	 	59	 
	6.13 Taxes
	 	 	61	 
	SECTION 7. COLLATERAL REPORTING AND COVENANTS
	 	 	63	 
	7.1 Collateral Reporting
	 	 	63	 
	7.2 Accounts Covenants
	 	 	64	 
	7.3 Inventory Covenants
	 	 	65	 
	7.4 Equipment and Real Property Covenants
	 	 	66	 
	7.5 Power of Attorney
	 	 	66	 
	7.6 Right to Cure
	 	 	67	 
	7.7 Access to Premises
	 	 	67	 
	7.8 Appraisals
	 	 	67	 

-i-

 

	 	 	 	 	 
	 	 	Page
	SECTION 8. REPRESENTATIONS AND WARRANTIES
	 	 	68	 
	8.1 Corporate Existence, Power and Authority; Subsidiaries
	 	 	68	 
	8.2 Name; State of Organization; Chief Executive Office; Collateral Locations
	 	 	69	 
	8.3 Financial Statements; No Material Adverse Change
	 	 	69	 
	8.4 Priority of Liens, Title to Properties
	 	 	69	 
	8.5 Tax Returns
	 	 	69	 
	8.6 Litigation
	 	 	70	 
	8.7 Compliance with Other Agreements and Applicable Laws
	 	 	70	 
	8.8 Anti-Terrorism Laws
	 	 	70	 
	8.9 Environmental Compliance
	 	 	71	 
	8.10 Employee Benefits
	 	 	72	 
	8.11 Bank Accounts
	 	 	72	 
	8.12 Intellectual Property
	 	 	72	 
	8.13 Subsidiaries; Affiliates; Capitalization
	 	 	73	 
	8.14 Solvency
	 	 	73	 
	8.15 Labor Disputes
	 	 	73	 
	8.16 Restrictions on Subsidiaries
	 	 	73	 
	8.17 Material Contracts
	 	 	73	 
	8.18 Payable Practices
	 	 	74	 
	8.19 Accuracy and Completeness of Information
	 	 	74	 
	8.20 Survival of Warranties, Cumulative
	 	 	74	 
	SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
	 	 	74	 
	9.1 Maintenance of Existence
	 	 	74	 
	9.2 New Collateral Locations
	 	 	74	 
	9.3
Compliance with Laws, Regulations, Etc.
	 	 	75	 
	9.4 Payment of Taxes and Claims
	 	 	76	 
	9.5 Insurance
	 	 	76	 
	9.6 Financial Statements and Other Information
	 	 	76	 
	9.7 Sale of
Assets, Consolidation, Merger, Dissolution, Etc.
	 	 	78	 
	9.8 Encumbrances
	 	 	79	 
	9.9 Indebtedness
	 	 	80	 
	9.10 Loans,
Investments, Guarantees, Etc.
	 	 	81	 
	9.11 Dividends and Redemptions
	 	 	82	 
	9.12 Transactions with Affiliates
	 	 	83	 
	9.13 Additional Bank Accounts
	 	 	83	 
	9.14 Compliance with ERISA
	 	 	84	 
	9.15 End of Fiscal Years; Fiscal Quarters
	 	 	84	 
	9.16 Change in Business
	 	 	84	 
	9.17 Limitation of Restrictions Affecting Subsidiaries
	 	 	84	 
	9.18 Foreign
Assets Control Regulations, Etc.
	 	 	84	 
	9.19 After Acquired Real Property
	 	 	85	 
	9.20 Costs and Expenses
	 	 	85	 
	9.21 Further Assurances
	 	 	86	 
	9.22 Fixed Charge Coverage Ratio
	 	 	86	 
	9.23 Post-Closing Deliverables
	 	 	86	 
	SECTION 10. EVENTS OF DEFAULT AND REMEDIES
	 	 	86	 
	10.1 Events of Default
	 	 	86	 
	10.2 Remedies
	 	 	88	 

-ii-

 

	 	 	 	 	 
	 	 	Page
	SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
	 	 	91	 
	11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver
	 	 	91	 
	11.2 Waiver of Notices
	 	 	92	 
	11.3 Amendments and Waivers
	 	 	92	 
	11.4 Waiver of Counterclaims
	 	 	94	 
	11.5 Indemnification
	 	 	95	 
	SECTION 12. THE AGENT
	 	 	95	 
	12.1 Appointment and Authorization of Agent
	 	 	95	 
	12.2 Delegation of Duties
	 	 	96	 
	12.3 Liability of Agent
	 	 	96	 
	12.4 Reliance by Agent
	 	 	96	 
	12.5 Notice of Default or Event of Default
	 	 	97	 
	12.6 Credit Decision
	 	 	97	 
	12.7 Costs and Expenses; Indemnification
	 	 	98	 
	12.8 Agent in Individual Capacity
	 	 	98	 
	12.9 Successor Agent
	 	 	99	 
	12.10 Lender in Individual Capacity
	 	 	99	 
	12.11 Collateral Matters
	 	 	100	 
	12.12 Restrictions on Actions by Lenders; Sharing of Payments
	 	 	102	 
	12.13 Agency for Perfection
	 	 	102	 
	12.14 Payments by Agent to Lenders
	 	 	102	 
	12.15 Concerning the Collateral and Related Loan Documents
	 	 	102	 
	12.16 Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information
	 	 	103	 
	12.17 Additional Loans
	 	 	104	 
	12.18 Several Obligations; No Liability
	 	 	104	 
	SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
	 	 	104	 
	13.1 Term
	 	 	104	 
	13.2 Interpretative Provisions
	 	 	105	 
	13.3 Notices
	 	 	106	 
	13.4 Partial Invalidity
	 	 	107	 
	13.5 Confidentiality
	 	 	107	 
	13.6 Successors
	 	 	108	 
	13.7 Assignments; Participations
	 	 	109	 
	13.8 Entire Agreement
	 	 	110	 
	13.9 USA PATRIOT Act
	 	 	110	 
	13.10 Bank Product Providers
	 	 	111	 
	13.11 No Novation; Reaffirmation of Grant of Security Interest
	 	 	111	 
	13.12
Counterparts, Etc.
	 	 	112	 
	Fax No.: (770) 698-8324
	 	 	1	 
	[Signature pages to follow]
	 	 	3	 

-iii-

 

INDEX TO

EXHIBITS AND SCHEDULES

	 	 	 

	Exhibit A
	 	Assignment and Acceptance
	Exhibit B
	 	Applicable Margins for Interest Rate Calculation
	Exhibit C
	 	Bank Product Provider Letter Agreement
	Exhibit D
	 	Designated Account
	 
	 	 
	Schedule 1.21
	 	Commitments
	Schedule 1.24
	 	Customs Brokers
	Schedule 1.89
	 	Permitted Holders
	Schedule 8.2
	 	Places of Business
	Schedule 8.4
	 	Existing Liens
	Schedule 8.7
	 	Permits
	Schedule 8.11
	 	Bank Accounts
	Schedule 8.12
	 	Licenses Intellectual Property
	Schedule 8.15
	 	Labor Matters
	Schedule 8.17
	 	Material Contracts
	Schedule 9.9
	 	Existing Indebtedness
	Schedule 9.10
	 	Existing Loans, Advances and Guarantees
	Schedule 9.12
	 	Transactions with Affiliates

-iv-

 

FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     This FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated May 27, 2011 (this
“Agreement”), is entered into by and among DELTA APPAREL, INC., a Georgia corporation (“Delta”), M.
J. SOFFE, LLC, a North Carolina limited liability company and successor to M.J. Soffe Co.
(“Soffe”), JUNKFOOD CLOTHING COMPANY, a Georgia corporation (“Junkfood”), TO THE GAME, LLC, a
Georgia limited liability company (“TTG”), ART GUN, LLC, a Georgia limited liability company (“Art
Gun”), and TCX, LLC, a North Carolina limited liability company (“TCX”), and each Acquisition
Subsidiary that is from time to time a Borrower under the Loan Agreement (Delta, Soffe, Junkfood,
TTG, Art Gun, TCX and each such Acquisition Subsidiary being hereinafter collectively called
“Borrowers” and individually a “Borrower”); the parties hereto from time to time as Lenders,
whether by execution of this Agreement or an Assignment and Acceptance (each individually, a
“Lender” and collectively, “Lenders”); and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, successor by merger to Wachovia Bank, National Association (“Wells Fargo”), in
its capacity as agent for Lenders (together with its successors in such capacity, “Agent”).

W I T N E S S E T H:

     WHEREAS, Borrowers, certain financial institutions (collectively, “Existing Lenders”) and
Agent, in its capacity as agent for the Existing Lenders entered into that certain Third Amended
and Restated Loan and Security Agreement dated September 21, 2007 (as amended, modified or
supplemented from time to time prior to the date hereof, the “Existing Loan Agreement”); and

     WHEREAS, each Borrower has requested that the Existing Loan Agreement be amended and restated
in its entirety to become effective and binding on Borrowers pursuant to the terms hereof, and
Lenders (including Existing Lenders that are parties hereto) have agreed, subject to the terms of
this Agreement, to amend and restate the Existing Loan Agreement in its entirety to read as set
forth herein and to provide an amended and restated Credit Facility to Borrowers, which shall be
used by Borrowers to finance their mutual and collective enterprise of marketing, designing,
manufacturing and distributing branded and private-label apparel. In order to utilize the financial
powers of each Borrower in the most efficient and economical manner, and in order to facilitate the
financing of each Borrower’s needs, Lenders will, at the request of any Borrower, make loans to all
Borrowers under the amended and restated Credit Facility on a combined basis and in accordance with
the provisions hereinafter set forth. Borrowers’ business is a mutual and collective enterprise and
Borrowers believe that the consolidation of all Loans under this Agreement will enhance the
aggregate borrowing powers of each Borrower and ease the administration of their loan relationship
with Lenders, all to the mutual advantage of Borrowers. Lenders’ willingness to extend credit to
Borrowers and to administer each Borrower’s collateral security therefor, on a combined basis as
more fully set forth in this Agreement, is done solely as an accommodation to Borrowers and at
Borrowers’ request in furtherance of Borrowers’ mutual and collective enterprise; and

     WHEREAS, each Borrower has agreed to be jointly and severally liable for loans and all
outstanding other obligations under this Agreement and to guarantee the obligations of each of the
other Borrowers under this Agreement and each of the other Financing Agreements; and

     WHEREAS, Agent and Lenders (including Existing Lenders that are parties hereto) are willing to
amend and restate the Existing Loan Agreement, as hereinafter set forth, to, among other things,
increase the maximum amount of credit that may be obtained thereunder by Borrowers; and

 

 

     WHEREAS, each of Borrowers, Agent and Lenders acknowledges and agrees that (i) the Obligations
represent, among other things, the amendment, restatement, renewal, extension, consolidation and
modification of the Existing Obligations arising in connection with the Existing Loan Agreement and
the other Existing Financing Agreements executed in connection therewith; (ii) it intends that the
collateral pledged under the Existing Loan Agreement and the other Existing Financing Agreements
executed in connection therewith shall secure, without interruption or impairment of any kind, all
Existing Obligations under the Existing Loan Agreement and the other Existing Financing Agreements
executed in connection therewith, as amended, restated, renewed, extended, consolidated and
modified hereunder, together with all other Obligations hereunder; and (iii) all security interests
and liens evidenced by the Existing Loan Agreement and the other Existing Financing Agreements
executed in connection therewith are hereby ratified, confirmed and continued; and

     WHEREAS, Borrowers, Agent and Lender intend that (i) the provisions of the Existing Loan
Agreement and the other Existing Financing Agreements executed in connection therewith, to the
extent restated, renewed, extended, consolidated, amended and modified hereby and by the other
Financing Agreements dated as of the date hereof, be hereby superseded and replaced by the
provisions hereof and of the other Financing Agreements; and (ii) by entering into and performing
their respective obligations hereunder, this transaction shall not constitute a novation; and

     WHEREAS, each Lender is willing to agree (severally and not jointly) to make such loans and
provide such financial accommodations to Borrowers on a pro rata basis according to its Commitment
(as defined below) on the terms and conditions set forth herein and Agent is willing to act as
agent for Lenders on the terms and conditions set forth herein and the other Financing Agreements;

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

     SECTION 1. DEFINITIONS

     For purposes of this Agreement, the following terms shall have the respective meanings given
to them below:

     “Accounts” shall mean, as to each Borrower, all present and future rights of such Borrower to
payment of a monetary obligation, whether or not earned by performance, which is not evidenced by
chattel paper or an instrument, (a) for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a
secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or
charge card or information contained on or for use with the card.

     “Acquisition Agreement” shall mean, with respect to each Acquisition Transaction, each stock
purchase agreement, asset purchase agreement, or merger agreement, as the context may require, to
be executed and delivered by and among a Borrower or an Acquisition Subsidiary, as purchaser, and
the Acquisition Target or each owner, as seller, of the Capital Stock or assets to be sold to such
Borrower or Acquisition Subsidiary, together with any and all permitted amendments, modifications
and supplements thereto, restatements thereof and substitutes therefor.

     “Acquisition Consideration” shall mean the consideration given and to be given by a Borrower
or any Acquisition Subsidiary for or in an Acquisition Transaction, including the fair market value
of any cash, property, Capital Stock or services given and the amount of any Funded Debt assumed or
incurred by such Borrower or Acquisition Subsidiary in connection with such Acquisition
Transaction. For

-2-

 

purposes hereof, the fair market value of earn-out payments to be made by a Borrower or any
Acquisition Subsidiary for or in connection with any such Acquisition Transaction shall be
determined in accordance with GAAP as of the closing date for such Acquisition Transaction.

     “Acquisition Documents” shall mean, individually and collectively, as the context may require,
each Acquisition Agreement and any and all other agreements, documents or instruments at any time
executed and delivered by a Borrower or an Acquisition Subsidiary, an Acquisition Target or any
other Person in connection with an Acquisition Transaction.

     “Acquisition Subsidiary” shall mean a Subsidiary formed by a Borrower after the Closing Date
to purchase all of the issued and outstanding Capital Stock, or all or substantially all of the
assets, of an Acquisition Target or a division or separate line of business of an Acquisition
Target, or to be merged with or into an Acquisition Target, subject to the satisfaction of each of
the following conditions as determined by Agent: (a) no Default or Event of Default exists at the
time or would result therefrom; (b) such Borrower and such Subsidiary deliver to Agent any and all
documents, agreements, financial statements, projections and instruments reasonably requested by
Agent, in form and substance reasonably satisfactory to Agent in all respects, in connection with
such formation, including (i) such documents and other information as may be necessary for Agent
and any Lender to comply with the requirements of the USA PATRIOT Act, (ii) such documents and
instruments as may be necessary to grant or confirm to Agent a first priority perfected Lien on and
security interest in all of the assets of the Subsidiary, including the Capital Stock in such
Subsidiary owned by such Borrower (and subject to any permitted Liens), and (iii) a joinder
agreement executed by such Subsidiary, together with such other collateral documents and opinions
of counsel as may be requested by Agent, each in form and substance satisfactory to Agent; and (c)
such Borrower shall give Agent at least 7 days prior written notice before forming such Subsidiary
and provide copies of all organizational documents of such Subsidiary to Agent.

     “Acquisition Target” shall mean a Person whose Capital Stock or assets are to be purchased
pursuant to the terms of an Acquisition Agreement or a Person to be merged with or into an
Acquisition Subsidiary or Borrower pursuant to an Acquisition Agreement.

     “Acquisition Transaction” shall mean the transaction pursuant to an Acquisition Agreement for
the purchase of all of the issued and outstanding Capital Stock of, or all or substantially all of
the assets of, an Acquisition Target, or for the purchase of all or substantially all of the assets
of a division or separate line of business of an Acquisition Target, or for the merger of the
Acquisition Target with or into an Acquisition Subsidiary or Borrower.

     “Administrative Borrower” shall mean Delta, in its capacity as Administrative Borrower on
behalf of itself and the other Borrowers pursuant to Section 6.11 hereof and its successors and
assigns in such capacity.

     “Affected Lender” shall have the meaning set forth in Section 3.3(e) hereof.

     “Affiliate” shall mean, with respect to a specified Person, any other Person (a) which
directly or indirectly through one or more intermediaries controls, or is controlled by, or is
under common control with, such specified Person; (b) which beneficially owns or holds five (5%)
percent or more of any class of the Voting Stock or other equity interest of such specified Person;
or (c) of which five (5%) percent or more of the Voting Stock or other equity interest is
beneficially owned or held by such specified Person or a Subsidiary of such specified Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”) when used with respect to any
specified Person shall mean the possession, directly or indirectly, of the power to

-3-

 

direct or cause the direction of the management and policies of such Person, whether through the
ownership of Voting Stock, by agreement or otherwise.

     “Agent” shall mean Wells Fargo Bank, National Association, in its capacity as agent on behalf
of Lenders pursuant to the terms hereof and any replacement or successor agent hereunder.

     “Agent-Related Persons” shall mean Agent, together with its Affiliates, officers, directors,
employees, attorneys, and agents.

     “Agent Payment Account” shall mean the bank account of Agent as Agent may from time to time
designate for wiring or otherwise transferring, in immediately available funds, the items received
for deposit in, and the funds from time to time on deposit in, the Blocked Accounts.

     “Agreement Date” shall mean May 27, 2011.

     “Alternate Excess Availability” shall mean the amount, as determined by Agent, calculated at
any time, equal to: (a) the Borrowing Base minus (b) the amount of all then outstanding and
unpaid Obligations.

     “Anti-Terrorism Law” shall mean the USA PATRIOT Act or any other statute, regulation,
executive order, or other law pertaining to the prevention of future acts of terrorism, in each
case as such law may be amended from time to time.

     “Application Event” shall mean the occurrence of (a) a failure by Borrowers to repay all of
the Obligations in full on the Maturity Date or any earlier date upon which the Obligations become
due and payable in full, or (b) an Event of Default and the election by Agent or the Required
Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 6.4(b)
hereof.

     “Art Gun Purchase Agreement” shall mean that certain Asset Purchase Agreement among Delta, Art
Gun, and the Art Gun Sellers.

     “Art Gun Sellers” shall mean Barnett Koorse, Scott Valancy, and Evan Koorse, each an
individual resident of the State of Florida, and Art Gun Technologies, LLC, a Florida limited
liability company.

     “Art Gun Subordination Agreement” shall mean that certain Debt Subordination Agreement dated
December 28, 2009, among the Art Gun Sellers, Delta, Art Gun, and Agent.

     “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the form
of Exhibit A attached hereto (with blanks appropriately completed) delivered to Agent in
connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of
Section 13.7 hereof.

     “Average Daily Balance” shall have the meaning set forth in Section 3.2(b) hereof.

     “Bank Product Agreements” shall mean those agreements entered into from time to time by any
Borrower or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any
of the Bank Products.

     “Bank Product Provider” shall mean any Lender or any of its Affiliates; provided,
however, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a
Bank Product Provider with

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respect to a Bank Product unless and until Agent shall have received a Bank Product Provider Letter
Agreement from such Person and with respect to the applicable Bank Product within ten (10) days
after the provision of such Bank Product to any Borrower or its Subsidiaries; provided
further, however, that if, at any time, a Lender ceases to be a Lender hereunder,
then, from and after the date on which it ceases to be a Lender hereunder, neither it nor any of
its Affiliates shall constitute Bank Product Providers and the obligations with respect to Bank
Products provided by such former Lender or any of its Affiliates shall no longer constitute Banking
Relationship Debt.

     “Bank Product Provider Letter Agreement” shall mean a letter agreement in substantially the
form attached hereto as Exhibit C, in form and substance satisfactory to Agent, duly
executed by the applicable Bank Product Provider, the applicable Borrowers, and Agent.

     “Bank Product Reserve Amount” shall mean, as of any date of determination, the U.S. dollar
amount of (a) the Current Hedge Exposure and (b) reserves that Agent has determined it is necessary
or appropriate to establish in respect of Bank Products other than Hedge Agreements then provided
or outstanding.

     “Bank Products” shall mean any one or more of the following financial products or
accommodations extended to any Borrower or its Subsidiaries by a Bank Product Provider: (a) credit
cards, (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) purchase
cards (including so-called “procurement cards” or “P-cards”), (f) Cash Management Services, or (g)
transactions under Hedge Agreements.

     “Banking Relationship Debt” shall mean (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by any Borrower or its Subsidiaries to any Bank Product
Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any
Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender
purchasing participations from, or executing guarantees or indemnities or reimbursement obligations
to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product
Provider to such Borrower or its Subsidiaries; provided, however, in order for any
item described in clauses (a) (b), or (c) above, as applicable, to constitute “Banking Relationship
Debt”, (i) if the applicable Bank Product Provider is Wells Fargo or its Affiliates, then, if
requested by Agent, Agent shall have received a Bank Product Provider Letter Agreement within ten
(10) days after the date of such request, or (ii) if the applicable Bank Product Provider is any
other Person, the applicable Bank Product must have been provided on or after the Closing Date and
Agent shall have received a Bank Product Provider Letter Agreement within ten (10) days after the
date of the provision of the applicable Bank Product to such Borrower or its Subsidiaries.

     “Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from time to
time.

     “Base Rate” shall mean the greatest of (a) the Federal Funds Rate plus one-half of one percent
(0.5%), (b) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of three
(3) months and shall be determined on a daily basis), plus one (1) percentage point, and (c) the
rate of interest announced, from time to time, within Wells Fargo at its principal office in San
Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s
base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto and is evidenced by the
recording thereof after its announcement in such internal publications as Wells Fargo may
designate.

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     “Base Rate Loan” shall mean any Loans or portion thereof that bears interest at a rate
determined by reference to the Base Rate.

     “Blocked Accounts” shall have the meaning set forth in Section 6.3(a) hereof

     “Blocked Person” shall have the meaning set forth in Section 8.8.

     “Borrowing Base” shall mean, at any time, an amount equal:

     (a) the sum of:

     (i) eighty-five percent (85%) of the Net Amount of the Eligible Accounts, plus

     (ii) the lesser of:

	 	(1)	 	the Inventory Loan Limit, or
	 
	 	(2)	 	the lesser of (A) sixty percent (60%) of the Value of Eligible
Inventory consisting of finished goods (including finished garments
and headwear regardless of whether Borrowers classify such goods as
raw materials or finished goods), Borrowers’ raw materials consisting
of raw cotton and yarn for such finished goods, and finished yarn
categorized as work-in-process; or (B) eighty-five percent (85%) of
the Net Orderly Liquidation Value of such Eligible Inventory,
plus

     (iii) sixty-five percent (65%) of the appraised fair market value (based on
the most recent appraisal completed prior to the Closing Date that is in form,
contains assumptions and utilizes methods acceptable to Agent and that is
performed by an appraiser acceptable to Agent) of Eligible Real Property, which
amount shall be reduced on the first day of each month, commencing July 1, 2011,
by an amount equal to $150,150; plus

     (iv) eighty-five percent (85%) multiplied by the Net Orderly Liquidation
Value of the Eligible Equipment of Borrowers (based on the most recent appraisal
completed prior to the Closing Date), which amount shall be reduced on the first
day of each month, commencing July 1, 2011, by an amount equal to $62,906.45;
plus

     (v) the lesser of: (A) $7,500,000; or (B) forty-five percent (45%) of the
Net Orderly Liquidation Value of Eligible Trademarks (inclusive of any potential
value after tax benefit, at the Agent’s discretion); minus

     (b) the Reserves;

     “Business Day” shall mean any day other than a Saturday, Sunday, or other day on which
commercial banks are authorized or required to close under the laws of the State of New York or the
State

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of Georgia or the State of North Carolina, and a day on which the Reference Bank and Agent are open
for the transaction of business, except that if a determination of a Business Day shall relate to
any LIBOR Rate Loans, the term Business Day shall also exclude any day on which banks are closed
for dealings in dollar deposits in the London interbank market.

     “Capital Expenditures” shall mean, with respect to any Person, all expenditures made and
liabilities incurred for the acquisition of assets which are not, in accordance with GAAP, treated
as expense items for such Person in the year made or incurred or as a prepaid expense applicable to
a future year or years.

     “Capital Leases” shall mean, as applied to any Person, any lease of (or any agreement
conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee
which in accordance with GAAP, is required to be reflected as a liability on the balance sheet of
such Person.

     “Capital Stock” shall mean, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of such Person’s capital stock, or
partnership, limited liability company or other equity interests at any time outstanding, and any
and all rights, warrants or options exchangeable for or convertible into such capital stock or
other interests (but excluding any debt security that is exchangeable for or convertible into such
capital stock).

     “Cash Dominion Period” shall mean the period beginning on the date of a Cash Dominion Trigger
Event and ending on the day on which Agent has reasonably determined that (a) no Event of Default
exists, and (b) Borrowers have maintained Excess Availability in an amount equal to or greater than
twelve and one-half percent (12.5%) of the lesser of (i) the Borrowing Base and (ii) the Maximum
Credit, for a period of sixty (60) consecutive days.

     “Cash Dominion Trigger Event” shall mean (a) the occurrence of an Event of Default, or (b)
Agent’s reasonable determination that Excess Availability is less than an amount equal to twelve
and one-half percent (12.5%) of the lesser of (i) the Borrowing Base and (ii) the Maximum Credit.

     “Cash Equivalents” shall mean, at any time, (a) any evidence of Indebtedness with a maturity
date of one hundred eighty (180) days or less issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof; provided,
that, the full faith and credit of the United States of America is pledged in support
thereof; (b) certificates of deposit or bankers’ acceptances with a maturity of one hundred eighty
(180) days or less of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than $250,000,000; (c)
commercial paper (including variable rate demand notes) with a maturity of one hundred eighty (180)
days or less issued by a corporation (except an Affiliate of a Borrower) organized under the laws
of any State of the United States of America or the District of Columbia and rated at least A-1 by
Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. or at least P-1 by
Moody’s Investors Service, Inc.; (d) repurchase obligations with a term of not more than thirty
(30) days for underlying securities of the types described in clause (a) above entered into with
any financial institution having combined capital and surplus and undivided profits of not less
than $250,000,000; (e) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by the United States of America
or issued by any governmental agency thereof and backed by the full faith and credit of the United
States of America, in each case maturing within one hundred eighty (180) days or less from the date
of acquisition; provided, that, the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities
Dealers and Others, as adopted by the Comptroller of the Currency on October 31, 1985; and (f)
investments in money market funds and mutual funds which invest substantially all of their assets
in securities of the types described in clauses (a) through (e) above.

-7-

 

     “Cash Management Services” shall mean any cash management or related services including
treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards,
e-payables services, electronic funds transfer, interstate depository network, automatic clearing
house transfer (including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management arrangements.

     “Change of Control” shall mean (a) the transfer (in one transaction or a series of
transactions) of all or substantially all of the assets of any Borrower or Guarantor to any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act), other than as permitted in
Section 9.7 hereof; (b) the liquidation or dissolution of any Borrower or Guarantor or the adoption
of a plan by the stockholders of any Borrower or Guarantor relating to the dissolution or
liquidation of any Borrower or any Guarantor, other than as permitted in Section 9.7 hereof; (c)
the acquisition by any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act), except for one or more Permitted Holders, of beneficial ownership, directly or indirectly, of
a majority of the voting power of the total outstanding Voting Stock of any Borrower or Guarantor
or the Board of Directors of any Borrower or Guarantor; or (d) during any period of two (2)
consecutive years, individuals who at the beginning of such period constituted the Board of
Directors of any Borrower or Guarantor (together with any new directors who have been appointed by
any Permitted Holder, or whose nomination for election by the stockholders of such Borrower or
Guarantor, as the case may be, was approved by a vote of at least sixty-six and two-thirds (66
2/3%) percent of the directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of any Borrower then still in office.

     “Closing Date” shall mean the date on which all the conditions precedent in Section 4 hereof
are satisfied or waived and the initial Loans are made under this Agreement.

     “Code” shall mean the Internal Revenue Code of 1986, as the same now exists or may from time
to time hereafter be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.

     “Collateral” shall have the meaning set forth in Section 5.1 hereof.

     “Collateral Access Agreement” shall mean an agreement in writing, in form and substance
satisfactory to Agent, from any lessor of premises to any Borrower, or any other Person to whom any
Collateral (including Inventory, Equipment, bills of lading or other documents of title) is
consigned or who has custody, control or possession of any such Collateral or is otherwise the
owner or operator of any premises on which any of such Collateral is located, pursuant to which
such lessor, consignee or other Person, inter alia, acknowledges the first priority security
interest of Agent in such Collateral, agrees to waive any and all claims such lessor, consignee or
other Person may, at any time, have against such Collateral, whether for processing, storage or
otherwise, and agrees to permit Agent access to, and the right to remain on, the premises of such
lessor, consignee or other Person so as to exercise Agent’s rights and remedies and otherwise deal
with such Collateral and in the case of any consignee or other Person who at any time has custody,
control or possession of any Collateral, acknowledges that it holds and will hold possession of the
Collateral for the benefit of Agent and Lenders and agrees to follow all instructions of Agent with
respect thereto.

     “Commitment” shall mean, at any time, as to each Lender, the principal amount set forth beside
such Lender’s name on Schedule 1.21 hereto or in the Assignment and Acceptance pursuant to which
such Lender became a Lender hereunder in accordance with the provisions of Section 13.7 hereof, as
the same may be adjusted from time to time in accordance with the terms hereof; sometimes being
collectively referred to herein as “Commitments.”

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     “Converting Borrower” shall have the meaning set forth in Section 9.1 hereof.

     “Credit Facility” shall mean the Loans and Letters of Credit provided to or for the benefit of
Borrowers pursuant to Sections 2.1 and 2.2 hereof.

     “Current Hedge Exposure” shall mean, as of any date of determination, one hundred percent
(100%) of the aggregate mark-to-market exposure then owing by Borrowers and Obligors under Hedge
Agreements based on termination value after netting, using a mutually satisfactory method, and
furnished by Hedge Providers to Agent on a monthly basis (or more frequently, in the reasonable
discretion of Agent).

     “Customs Broker” shall mean each Person listed on Schedule 1.24 hereto or such other
Person as may be selected by any Borrower after the date hereof and after written notice by such
Borrower to Agent who is reasonably acceptable to Agent, including, in each case, any NVOCC that
provides customs brokerage services to a Borrower, provided, that, as to each such
Person (including those listed on Schedule 1.24), such Borrower has used reasonable efforts
to obtain a Collateral Access Agreement duly authorized, executed and delivered by such Person.

     “Default” shall mean an act, condition or event which with notice or passage of time or both
would constitute an Event of Default.

     “Default Rate” shall mean the interest rate referred to in clause (c) of the definition of
“Interest Rate”.

     “Defaulting Lender” shall mean any Lender that (a) has failed to fund any amounts required to
be funded by it hereunder within three (3) Business Days of the date that it is required to do so
hereunder (including the failure to make available to Agent amounts required for any Settlement
Period or to make a required payment in connection with any payment made by Issuing Bank in
connection with any Letter of Credit), (b) notified the Borrowers or Agent in writing that it does
not intend to comply with all or any portion of its funding obligations hereunder, (c) has made a
public statement to the effect that it does not intend to comply with its funding obligations
hereunder or under other agreements generally (as reasonably determined by Agent) under which it
has committed to extend credit, (d) failed, within three (3) Business Days after written request by
Agent, to confirm that it will comply with the terms hereof relating to its obligations to fund any
amounts required to be funded by it hereunder, (e) otherwise failed to pay over to Agent or any
other Lender any other amount required to be paid by it hereunder within three (3) Business Days of
the date that it is required to do so hereunder, or (f) (i) becomes or is insolvent or has a parent
company that has become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, or custodian or appointed for it, or has
taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or has a parent company that has become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian
appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval
of or acquiescence in any such proceeding or appointment.

     “Defaulting Lender Rate” shall mean (a) for the first three (3) days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the Interest Rate then applicable
to Loans that are Base Rate Loans.

     “Deposit Account Control Agreement” shall mean an agreement in writing, in form and substance
satisfactory to Agent, by and among Agent, any Borrower with a deposit account at any bank and the
bank at which such deposit account is at any time maintained which provides that such bank will
comply

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with instructions originated by Agent directing disposition of the funds in the deposit account
without further consent by such Borrower and such other terms and conditions as Agent may require,
including as to any such agreement with respect to any Blocked Account, providing that all items
received or deposited in the Blocked Accounts are the property of Agent, that the bank has no Lien
upon, or right to setoff against, the Blocked Accounts, the items received for deposit therein, or
the funds from time to time on deposit therein and that the bank will wire, or otherwise transfer,
in immediately available funds, on a daily basis to the Agent Payment Account all funds received or
deposited into the Blocked Accounts.

     “Designated Account” shall mean the account of Administrative Borrower identified on
Exhibit D.

     “Dilution Reserve” shall mean a reserve established by Agent in such amount as Agent may
determine at any time that (a) the percentage equal to; (i) bad debt write-downs or write-offs,
discounts, returns, promotions, credit, credit memos and other dilutive items with respect to
Accounts, divided by (ii) gross sales, exceeds (b) five percent (5%) on a
consolidated basis.

     “EBITDA” shall mean, as to Borrowers, with respect to any period, an amount equal to: (a) the
Net Income of Borrowers and their Subsidiaries for such period on a consolidated basis determined
in accordance with GAAP, plus (b) to the extent deducted in the computation of Net Income,
(i) depreciation, amortization and other non-cash charges (including imputed interest and deferred
compensation) for such period, all in accordance with GAAP, plus (ii) the Interest Expense
for such period, plus (iii) charges for Federal, Provincial, State, district, municipal,
local and foreign income taxes.

     “Eligible Accounts” shall mean Accounts created by a Borrower which are and continue to be
acceptable to Agent based on the criteria set forth below. In general, Accounts shall be Eligible
Accounts if:

     (a) such Accounts arise from the actual and bona fide sale and delivery of goods by such
Borrower or rendition of services by such Borrower in the ordinary course of its business which
transactions are completed in accordance with the terms and provisions contained in any documents
related thereto;

     (b) such Accounts are not unpaid more than the earlier of (i) sixty (60) days after the
original due date for them, or (ii) one hundred twenty (120) days after the date of the original
invoice for them (or one hundred fifty (150) days after the date of the original invoice for them
for certain account debtors of such Borrower which are pre-approved by Agent, on terms and
conditions acceptable to Agent);

     (c) such Accounts comply with the terms and conditions contained in Section 7.2(c) of this
Agreement;

     (d) such Accounts do not arise from sales on consignment, guaranteed sale, sale and return,
sale on approval, or other terms under which payment by the account debtor may be conditional or
contingent;

     (e) the chief executive office of the account debtor with respect to such Accounts is located
in the United States of America or Canada (provided, that, at any time promptly
upon Agent’s request, such Borrower shall execute and deliver, or cause to be executed and
delivered, such other agreements, documents and instruments as may be required by Agent to perfect
the security interests of Agent in those Accounts of an account debtor with its chief executive
office or principal place of business in Canada in accordance with the applicable laws of the
Province of Canada in which such chief executive office or principal place of business is located
and take or cause to be taken such other and further actions as Agent

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may request to enable Agent as secured party with respect thereto to collect such Accounts under
the applicable Federal or Provincial laws of Canada) or, at Agent’s option, if the chief executive
office and principal place of business of the account debtor with respect to such Accounts is
located other than in the United States of America or Canada, then if either: (i) the account
debtor has delivered to such Borrower an irrevocable letter of credit issued or confirmed by a bank
satisfactory to Agent and payable only in the United States of America and in U.S. dollars,
sufficient to cover such Account, in form and substance satisfactory to Agent and if required by
Agent, the original of such letter of credit has been delivered to Agent or Agent’s agent and such
Borrower has complied with the terms of Section 5.2(h) hereof with respect to the assignment of the
proceeds of such letter of credit to Agent or naming Agent as transferee beneficiary thereunder, as
Agent may specify, or (ii) such Account is subject to credit insurance payable to Agent issued by
an insurer and on terms and in an amount acceptable to Agent, or (iii) such Account is otherwise
acceptable in all respects to Agent (subject to such lending formula with respect thereto as Agent
may determine);

     (f) such Accounts do not consist of progress billings (such that the obligation of the account
debtors with respect to such Accounts is conditioned upon such Borrower’s satisfactory completion
of any further performance under the agreement giving rise thereto), bill and hold invoices or
retainage invoices, except as to bill and hold invoices, if Agent shall have received an agreement
in writing from the account debtor, in form and substance satisfactory to Agent, confirming the
unconditional obligation of the account debtor to take the goods related thereto and pay such
invoice;

     (g) the account debtor with respect to such Accounts has not asserted a counterclaim, defense
or dispute and does not have, and does not engage in transactions which may give rise to any right
of setoff or recoupment against such Accounts (but the portion of the Accounts of such account
debtor in excess of the amount at any time and from time to time owed by such Borrower to such
account debtor or claimed owed by such account debtor may be deemed Eligible Accounts);

     (h) there are no facts, events or occurrences which would impair the validity, enforceability
or collectability of such Accounts or reduce the amount payable or delay payment thereunder;

     (i) such Accounts are subject to the first priority, valid and perfected security interest of
Agent and any goods giving rise thereto are not, and were not at the time of the sale thereof,
subject to any Liens other than a Permitted Lien;

     (j) neither the account debtor nor any officer or employee of the account debtor with respect
to such Accounts is an officer, employee, agent or other Affiliate of any Borrower;

     (k) the account debtors with respect to such Accounts are not any foreign government, the
United States of America, any State, political subdivision, department, agency or instrumentality
thereof, unless, (i) the account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, and (ii) the Federal Assignment of
Claims Act of 1940, as amended or any similar State or local law, if applicable, has been complied
with in a manner satisfactory to Agent, or Agent, in its discretion, has expressly waived such
compliance with respect to Accounts, the aggregate amount of which do not exceed $7,500,000 at any
time;

     (l) there are no proceedings or actions which are threatened or pending against the account
debtors with respect to such Accounts which might result in any material adverse change in any such
account debtor’s financial condition;

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     (m) such Accounts of a single account debtor or its affiliates do not constitute more than
fifteen (15%) percent of all otherwise Eligible Accounts (but the portion of the Accounts not in
excess of such percentage may be deemed Eligible Accounts);

     (n) such Accounts are not owed by an account debtor who has Accounts unpaid more than the
earlier of (i) sixty (60) days after the original due date or for them, or (ii) one hundred twenty
(120) days after the original invoice date for them (or one hundred fifty (150) days after the date
of the original invoice for them for certain account debtors of such Borrower which are
pre-approved by Agent, on terms and conditions acceptable to Agent) which constitute more than
fifty (50%) percent of the total Accounts of such account debtor;

     (o) the account debtor is not located in a state requiring the filing of a Notice of Business
Activities Report or similar report in order to permit such Borrower to seek judicial enforcement
in such State of payment of such Account, unless such Borrower has qualified to do business in such
state or has filed a Notice of Business Activities Report or equivalent report for the then current
year or such failure to file and inability to seek judicial enforcement is capable of being
remedied without any material delay or material cost; and

     (p) such Accounts are owed by account debtors deemed creditworthy at all times by such
Borrower consistent with its current practice and who are reasonably acceptable to Agent.

General criteria for Eligible Accounts may be established and revised from time to time by Agent in
good faith based on an event, condition or other circumstance arising after the date hereof, or
existing on the date hereof to the extent Agent has no written notice thereof from a Borrower,
which adversely affects or could reasonably be expected to adversely affect the Accounts in the
good faith determination of Agent. Any Accounts which are not Eligible Accounts shall nevertheless
be part of the Collateral.

     “Eligible Equipment” shall mean Equipment owned or operated in the ordinary course of the
business of a Borrower, in each case which is acceptable to Agent based on the criteria set forth
below. In general, Eligible Equipment shall not include: (a) components which are not part of
operating Equipment; (b) Equipment which is uninsured, damaged, obsolete, in disrepair or under
repair; (c) spare parts for Equipment; (d) Equipment at premises other than those owned and
controlled by such Borrower, except any Equipment which would otherwise be deemed Eligible
Equipment that is not located at premises owned and operated by such Borrower may nevertheless be
considered Eligible Equipment: (i) as to locations which are leased by such Borrower, if Agent
shall have received a Collateral Access Agreement from the owner and lessor of such location, duly
authorized, executed and delivered by such owner and lessor or, if Agent shall not have received a
Collateral Access Agreement (in a form reasonably acceptable to Agent), Agent may, at its option,
nevertheless consider Equipment at such location to be Eligible Equipment to the extent Agent shall
have established such Reserves in respect of amounts at any time payable by such Borrower to the
owner and lessor thereof as Agent shall determine, and (ii) as to locations owned and operated by a
third Person, (A) if Agent shall have received a Collateral Access Agreement from such owner and
operator with respect to such location, duly authorized, executed and delivered by such owner and
operator or if Agent shall not have received a Collateral Access Agreement (in a form reasonably
acceptable to Agent), Agent may, at its option, nevertheless consider Equipment at such location to
be Eligible Equipment to the extent Agent shall have established such Reserves in respect of
amounts at any time payable by such Borrower to the owner and operator thereof as Agent shall
determine, and (B) in addition, as to locations owned and operated by a third Person, Agent shall
have received, if required by Agent: (1) UCC-1 financing statements between the owner and operator,
as consignee or bailee, and such Borrower, as consignor or bailor, in form and substance
satisfactory to Agent, which are duly assigned to Agent and (2) a written notice to any lender to
the owner and operator of the first priority security interest in such Equipment of Agent; (e)
Equipment subject to a

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security interest or other Lien in favor of any Person other than Agent except those permitted in
this Agreement (but without limiting the right of Agent to establish any Reserves with respect to
amounts secured by such security interest or other Lien in favor of any Person even if permitted
herein); (f) Equipment which is not subject to the first priority, valid and perfected security
interest of Agent; (g) Equipment which has become part of, or affixed to, any Real Property; or (h)
Equipment located outside the United States of America. The criteria for Eligible Equipment set
forth above may only be changed and any new criteria for Eligible Equipment may only be established
by Agent in good faith based on either: (i) an event, condition or other circumstance arising after
the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to
the extent Agent has no written notice thereof from a Borrower prior to the date hereof, in either
case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely
affect the Equipment in the good faith determination of Agent. Any Equipment which is not Eligible
Equipment shall nevertheless be part of the Collateral.

     “Eligible Inventory” shall mean Inventory consisting of finished goods held for resale in the
ordinary course of the business of a Borrower, finished garments and headwear (regardless of
whether Borrowers classify such goods as raw materials or finished goods), raw materials for such
finished goods and finished yarn categorized as work-in-process, which are acceptable to Agent
based on the criteria set forth below. In general, Eligible Inventory shall not include (a)
work-in-process (other than finished yarn); (b) raw materials other than yarn and raw cotton; (c)
spare parts for Equipment; (d) packaging and shipping materials; (e) supplies used or consumed in
such Borrower’s business; (f) Inventory at premises other than those owned and controlled by such
Borrower, except any Inventory which would otherwise be deemed Eligible Inventory at locations in
the United States of America which are not owned and operated by such Borrower may nevertheless be
considered Eligible Inventory: (i) as to locations which are leased by such Borrower, if Agent
shall have received a Collateral Access Agreement from the owner and lessor of such location, duly
authorized, executed and delivered by such owner and lessor, except that notwithstanding that Agent
shall not have received such an agreement for a particular leased location, Agent may consider
Inventory at such leased location which would otherwise be Eligible Inventory to be Eligible
Inventory and in such event, Agent may at any time establish such Reserves as Agent may determine
in respect of amounts at any time payable by such Borrower to the owner or lessor of such location,
without limiting any other rights and remedies of Agent under this Agreement or under the other
Financing Agreements with respect to the establishment of Reserves or otherwise and (ii) as to
premises of third parties (including consignees and processors), Agent shall have received a
Collateral Access Agreement duly authorized, executed and delivered by the owner and operator of
such premises (except that notwithstanding that Agent shall not have received such an agreement as
to a particular third party location, Agent may consider Inventory at such location which would
otherwise be Eligible Inventory to be Eligible Inventory and in such event, Agent may at any time
establish such Reserves as Agent may determine in respect of amounts at any time payable by such
Borrower to such third party, without limiting any other rights or remedies of Agent under this
Agreement or under the other Financing Agreements with respect to the establishment of Reserves or
otherwise), and in addition, if required by Agent, as to premises of third parties where assets of
such Borrower are located: (A) the owner and operator executes appropriate UCC-1 financing
statements in favor of such Borrower, which financing statements are duly assigned to Agent and (B)
any secured Agent to the owner and operator is properly notified of the first priority Lien on such
Inventory of Agent; (g) Inventory located outside the United States of America shall only be
Eligible Inventory if it is Eligible In-Transit Inventory; (h) Inventory subject to a security
interest or other Lien in favor of any Person other than Agent, except those permitted in this
Agreement; (i) bill and hold goods; (j) Inventory which is not subject to the first priority, valid
and perfected security interest of Agent; (k) damaged and/or defective Inventory which is
unsaleable or which such Borrower has not marked down to its realizable value; (l) Inventory
purchased or sold on consignment; (m) samples; (n) Inventory to be returned to vendors; (o)
Inventory subject to any License Agreement or other agreement that limits, conditions or restricts
such Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory unless the Licensor
has entered into a Licensor/Lender Agreement

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with Agent, except that notwithstanding that Agent shall not have received such a Licensor/Lender
Agreement for a particular License Agreement, Agent may consider Inventory subject to such License
Agreement which would otherwise be Eligible Inventory to be Eligible Inventory and in such event,
Agent may at any time establish such Reserves as Agent may determine in respect of amounts at any
time payable by such Borrower to the Licensor of such Inventory, without limiting any other rights
and remedies of Agent under this Agreement or under the other Financing Agreements with respect to
the establishment of Reserves or otherwise; or (p) Inventory that is the subject of an Intellectual
Property Claim. General criteria for Eligible Inventory may be established and revised from time to
time by Agent in good faith based on an event, condition or other circumstance arising after the
date hereof, or existing on the date hereof to the extent Agent has no written notice thereof from
a Borrower, which adversely affects or could reasonably be expected to adversely affect the
Inventory in the good faith determination of Agent. Any Inventory which is not Eligible Inventory
shall nevertheless be part of the Collateral.

     “Eligible In-Transit Inventory” shall mean Inventory of a Borrower that would constitute
Eligible Inventory but for the fact that it is in transit to the premises of a Borrower or a
Customs Broker located within the United States, and which is acceptable to Agent based on the
criteria set forth below. In general, inventory in transit shall only be deemed Eligible
In-Transit Inventory if: (a) it is in the United States in transit to the premises of a Borrower in
the United States and the requirements of clauses (i) through (v) below are satisfied in form and
substance satisfactory to Agent, or (b) it is outside of the United States in transit to either the
premises of a Customs Broker or the premises of a Borrower in the United States and the
requirements of clauses (i) through (vii) below are satisfied in form and substance satisfactory to
Agent: (i) as to premises which are not owned and controlled by a Borrower (and in the case of
inventory in transit from a location outside of the United States, the premises of a Customs
Broker), either (A) Agent has received a Collateral Access Agreement duly authorized, executed and
delivered by the owner, lessor and operator of such other premises (or by the Customs Broker) to
which the inventory is in transit, as the case may be, or (B), in Agent’s discretion, Agent shall
have established such Reserves as Agent may determine in respect of amounts at any time payable by
such Borrower to such owner, lessor and operator of such other premises (or to the Customs Broker);
(ii) title and risk of loss to the inventory shall have passed to such Borrower; (iii) the seller
of such inventory (A) has no right, to reclaim, divert the shipment of, reroute, repossess, stop
delivery or otherwise assert any Lien rights or title retention with respect to such inventory and
(B) has entered into an agreement with Agent waiving its Lien rights and any retention of title in
respect of such inventory and such agreement is in full force and effect; (iv) such inventory is
insured against types of loss, damage, hazards, and risks, and in amounts, satisfactory to Agent;
(v) such inventory is not subject to any letter of credit (including any Letter of Credit issued
hereunder); (vi) such inventory is subject to a tangible, negotiable bill of lading that: (A) was
issued by the carrier or, if a NVOCC is engaged by a Borrower, by the NVOCC, (B) is endorsed to the
order of Agent, (C) bears a notation on its face that such bill of lading is subject to the
security interest of Agent, and (D) is in the United States in the possession of Agent or the
Customs Broker dealing with such inventory and from whom Agent has received a Collateral Access
Agreement, duly authorized, executed and delivered by such Person, and such agreement is in full
force and effect, binding upon such Person and such Person has complied with the terms thereof; and
(vii) Agent has received (A) a copy of the certificate of marine cargo insurance in connection
therewith in which Agent has been named as an additional insured and lender’s loss payee in a
manner acceptable to Agent, (B) a certificate duly executed by an officer of such Borrower that
such Inventory satisfies all criteria to be otherwise deemed Eligible Inventory hereunder, and (C)
if requested by Agent, a copy of the invoice, packing slip and manifest with respect thereto.

     “Eligible Real Property” shall mean Real Property of Borrowers located in Cumberland County,
North Carolina, and Anderson County, Tennessee, owned in fee simple and subject to a Mortgage in
favor of Agent; provided, however, that Eligible Real Property shall not include
(a) Real Property subject

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to pending or threatened (in writing to a Borrower) condemnation by any Governmental Authority or
any pending or threatened (in writing to a Borrower) enforcement action by any Governmental
Authority with respect to the environmental condition of such Real Property; (b) Real Property
subject to a security interest or other Lien in favor of any Person other than Agent except those
permitted in this Agreement (but without limiting the right of Agent to establish any Reserves with
respect to amounts secured by such security interest or other Lien in favor of any Person even if
permitted herein); (c) Real Property which is not subject to the first priority, valid and
perfected security interest or Lien of Agent; (d) Real Property with respect to which improvements
thereon are uninsured; or (e) Real Property with respect to which Agent has not received an
appraisal pursuant to Section 7.4(a) hereof. The criteria for Eligible Real Property set forth
above may only be changed and any new criteria for Eligible Real Property may only be established
by Agent in good faith based on either (i) an event, condition or other circumstance arising after
the date hereof; or (ii) an event, condition or other circumstance existing on the date hereof to
the extent Agent has no written notice thereof from a Borrower prior to the date hereof, in either
case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely
affect the Real Property in the good faith determination of Agent. Any Real Property which is not
Eligible Real Property shall nevertheless be part of the Collateral.

     “Eligible Trademark” shall mean any federally registered trademark of Borrowers used in the
ordinary course of Borrowers’ business which is acceptable to Agent based on the criteria set forth
below. In general, Eligible Trademarks shall not include (a) any trademark subject to an
Intellectual Property Claim, any trademark securing Permitted Trademark Financing Debt, or any
trademark otherwise subject to a security interest or other Lien in favor of any Person other than
Agent except those permitted in this Agreement (but without limiting the right of Agent to
establish any Reserves with respect to amounts secured by such security interest or other Lien in
favor of any Person even if permitted herein); (b) any trademark which is not subject to the first
priority, valid and perfected security interest or Lien of Agent; (c) any trademark registered
exclusively outside the United States of America; or (d) any trademark with respect to which Agent
has not received an appraisal in form, scope and methodology acceptable to Agent and by an
appraiser acceptable to Agent, addressed to Agent and Lenders and upon which Agent and Lenders are
expressly permitted to rely. General criteria for Eligible Trademarks may be established and
revised from time to time by Agent in good faith based on an event, condition or other circumstance
arising after the date hereof, or existing on the date hereof to the extent Agent has no written
notice thereof from a Borrower, which adversely affects or could reasonably be expected to
adversely affect the trademark in the good faith determination of Agent. Any trademark which is not
an Eligible Trademark shall nevertheless be part of the Collateral.

     “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of any Lender and/or
any Affiliate of such Lender which is at least fifty (50%) percent owned by such Lender or its
parent company; (c) any Person (whether a corporation, partnership, trust or otherwise) that is
engaged in the business of making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of its business and is administered or managed
by a Lender or with respect to any Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and similar extensions of credit
and is managed by the same investment advisor as such Lender or by an institutional Affiliate of
such investment advisor, and in each case is approved by Agent and after the initial syndication of
the Credit Facility by Wells Fargo or its Affiliates, unless a Default or Event of Default exists,
Borrowers; and (d) any other commercial bank, financial institution or institutional “accredited
investor” (as defined in Regulation D under the Securities Act of 1993) approved by Agent;
provided, that, neither any Borrower nor any Guarantor nor any Affiliate of any
Borrower or Guarantor shall qualify as an Eligible Transferee and (ii) no Person to whom any
Indebtedness which is in any way subordinated in right of payment to any other Indebtedness of any
Borrower or Guarantor shall qualify as an Eligible Transferee, except as Agent may otherwise
specifically agree.

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     “Environmental Laws” shall mean all foreign, Federal, State and local laws (including common
law), legislation, rules, codes, licenses, permits (including any conditions imposed therein),
authorizations, judicial or administrative decisions, injunctions or agreements between any
Borrower and any Governmental Authority, (a) relating to pollution and the protection, preservation
or restoration of the environment (including air, water vapor, surface water, ground water,
drinking water, drinking water supply, surface land, subsurface land, plant and animal life or any
other natural resource), or to human health or safety, (b) relating to the exposure to, or the use,
storage, recycling, treatment, generation, manufacture, processing, distribution, transportation,
handling, labeling, production, release or disposal, or threatened release, of Hazardous Materials,
or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials. The term “Environmental Laws” includes (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal
Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of 1972, the
Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and Recovery
Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste
Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, (ii) applicable state
counterparts to such laws, and (iii) any common law or equitable doctrine that may impose liability
or obligations for injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.

     “Equipment” shall mean, as to each Borrower, all of such Borrower’s now owned and hereafter
acquired equipment, wherever located, including machinery, data processing and computer equipment
and computer hardware and software (whether owned or licensed, and including embedded software),
vehicles, tools, furniture, fixtures, all attachments, accessions and property now or hereafter
affixed thereto or used in connection therewith, and substitutions and replacements thereof,
wherever located.

     “ERISA” shall mean the United States Employee Retirement Income Security Act of 1974, together
with all rules, regulations and interpretations thereunder or related thereto.

     “ERISA Affiliate” shall mean any Person required to be aggregated with any Borrower or any
Subsidiaries of such Borrower under Sections 414(b), 414(c), 414(m) or 414(o) 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; (b) the adoption of any amendment to a
Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) 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;
(d) the filing pursuant to Section 412 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; (e) the occurrence of a
“prohibited transaction” with respect to which any Borrower or any Subsidiaries of such Borrower is
a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which
any Borrower or any Subsidiaries of such Borrower could otherwise be liable; (f) a complete or
partial withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan or a cessation
of operations which is treated as such a withdrawal or notification that a Multiemployer Plan is in
reorganization; (g) the filing of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings
by the Pension Benefit Guaranty Corporation to terminate a Plan or Multiemployer Plan; (h) an event
or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer
Plan; (i) the imposition of any liability under Title IV of ERISA, other than the Pension Benefit
Guaranty Corporation premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower
or any ERISA Affiliate; and (j) any other event or condition with respect to a Plan or

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Multiemployer Plan or any Plan subject to Title IV of ERISA maintained, or contributed to, by any
ERISA Affiliate that could reasonably be expected to result in liability of any Borrower.

     “Event of Default” shall mean the occurrence or existence of any event or condition described
in Section 10.1 hereof.

     “Excess Availability” shall mean the amount, as determined by Agent, calculated at any time,
equal to: (a) the lesser of (i) the Borrowing Base and (ii) the Maximum Credit, minus (b) the
amount of all then outstanding and unpaid Obligations.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, together with all rules,
regulations and interpretations thereunder or related thereto.

     “Executive Order 13224” shall mean Executive Order 13224 of September 21, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)).

     “Existing Financing Agreements” shall mean the “Financing Agreements” as defined in the
Existing Loan Agreement.

     “Existing Letters of Credit” shall mean, collectively, the letters of credit issued for the
account of any Borrower pursuant to the Existing Loan Agreement or for which any Borrower is
otherwise liable.

     “Existing Loan Agreement” shall have the meaning set forth in the recitals to this Agreement.

     “Existing Loans” shall mean the “Loans” under (and as defined in) the Existing Loan
Agreement.

     “Existing Obligations” shall mean the “Obligations” under (and as defined in) the Existing
Loan Agreement.

     “Federal Funds Rate” shall mean, for any period, a fluctuating interest rate per annum equal
to, for each day during such period, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by Agent from three Federal funds brokers of recognized
standing selected by it.

     “Fee Letter” shall mean collectively, the letter agreement dated April 1, 2011, by and among
Borrowers and Agent, setting forth certain fees payable by Borrowers to Agent for its benefit and
for the benefit of Lenders.

     “Financial Covenant Testing Period” shall mean the period beginning on the date of a Financial
Covenant Trigger Event, and ending on the day on which Agent has determined that (a) no Event of
Default exists or has existed for sixty (60) consecutive days, and (b) Borrowers have maintained
Alternate Excess Availability in an amount equal to or greater than twelve and one-half percent
(12.5%) of the lesser of (i) the Borrowing Base and (ii) the Maximum Credit, for a period of sixty
(60) consecutive days.

     “Financial Covenant Trigger Event” shall mean (a) the occurrence of an Event of Default or (b)
Agent’s reasonable determination in its discretion that Alternate Excess Availability is less than
an amount equal to twelve and one-half percent (12.5%) of the lesser of (i) the Borrowing Base and
(ii) the Maximum Credit.

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     “Financing Agreements” shall mean, collectively, this Agreement, the Art Gun Subordination
Agreement, the Pledge Agreement, the Guarantees, the Mortgages and all notes, guarantees, security
agreements and other agreements, documents and instruments now or at any time hereafter executed
and/or delivered by any Borrower or Obligor in connection with this Agreement.

     “Fixed Charge Coverage Ratio” shall mean, with respect to Borrowers and their Subsidiaries, on
a consolidated basis, for any period of determination, the ratio of (a) EBITDA of Borrowers during
such period minus the amount of any taxes paid in cash, cash dividends to the equity holders of
such Person, other distributions to equity holders of such Person, and redemptions with respect to
the Capital Stock of such Person (including, but not limited to stock repurchases) during the
period in question minus all Unfinanced Capital Expenditures made during such period minus
all regularly scheduled (as determined at the beginning of the respective period) principal
payments of Indebtedness for borrowed money and Indebtedness with respect to the Capital Leases
made during such period to (b) Fixed Charges of Borrowers and their Subsidiaries for the same
period.

     “Fixed Charges” for any Person during any period shall mean the sum of, without duplication,
(a) Interest Expense (including the interest component with respect to Indebtedness under Capital
Leases) paid in cash during such period, and (b) an amount equal to the sum of (i) the product of:
(A) $213,056.45 (which represents the aggregate monthly reduction of the Eligible Real Property and
Eligible Equipment components of the Borrowing Base in effect under this Agreement)
multiplied by (B) the cumulative number of months that elapsed during such period
since the Closing Date plus (ii) the product of: (A) $194,445 (which represents the
aggregate monthly reduction of the Eligible Real Property and Eligible Equipment components of the
Borrowing Base in effect under the Existing Loan Agreement) multiplied by (B) the
difference of twelve (12) minus the cumulative number of calendar months that have elapsed
during such period since the Closing Date.

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

     “Foreign Subsidiary” shall mean a Subsidiary that is a “controlled foreign corporation” under
Section 957 of the Code, such that a guaranty by such Subsidiary of the Obligations or a Lien on
the assets of such Subsidiary to secure the Obligations would result in material tax liability to
Borrowers.

     “Funded Debt” shall mean collectively, (a) the aggregate principal amount of Indebtedness for
borrowed money which would, in accordance with GAAP, be classified as long-term Indebtedness,
together with the current maturities thereof and the face amount of all outstanding letters of
credit; (b) all Indebtedness outstanding under any revolving credit, line of credit or renewals
thereof, notwithstanding that any such Indebtedness is created within one year of the expiration of
such agreement; and (c) all Indebtedness with respect to Capital Leases.

     “Funding Bank” shall have the meaning set forth in Section 3.3(a) hereof.

     “GAAP” shall mean generally accepted accounting principles in the United States of America as
in effect from time to time as set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that, for purposes of
Section 9.22 hereof and for purposes of calculating “Net Income” as defined in this Agreement,
until such time as Administrative Borrower notifies Agent of a change in GAAP that would have a
material effect on the calculation of Net Income or

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the covenant set forth in Section 9.22 and Borrowers and Agent mutually agree on the treatment of
such change or the recalculation of such covenant, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used in the preparation of the
most recent audited financial statements delivered to Agent prior to the date hereof.

     “Governmental Authority” shall mean any nation or government, any state, province, or other
political subdivision thereof, any central bank (or similar monetary or regulatory authority)
thereof, any entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of the foregoing.

     “Guarantee” shall mean, individually, any guarantee executed by a Guarantor, in form and
substance satisfactory to Agent, and “Guarantees” shall collectively refer to all such guarantees.

     “Guarantors” shall mean any Person that at any time after the date hereof becomes party to a
guarantee in favor of Agent or any Lender or otherwise liable on or with respect to the Obligations
or who is the owner of any property which is security for the Obligations (other than Borrowers);
each sometimes being referred to herein individually as a “Guarantor”.

     “Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and
wastes, including hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials,
biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or
type of pollutants or contaminants (including materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, or wastes
and including any other substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or toxic under any
Environmental Law).

     “Hedge Obligations” shall mean any and all obligations or liabilities, whether absolute or
contingent, due or to become due, now existing or hereafter arising, of any Borrower or its
Subsidiaries arising under, owing pursuant to, or existing in respect of Hedge Agreements entered
into with one or more of the Hedge Providers.

     “Hedge Provider” shall mean any Lender or any of its Affiliates; provided,
however, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a
Hedge Provider unless and until Agent shall have received a Bank Product Provider Letter Agreement
from such Person and with respect to the applicable Hedge Agreement within ten (10) days after the
execution and delivery of such Hedge Agreement with any Borrower or its Subsidiaries; provided
further, however, that if, at any time, a Lender ceases to be a Lender under this
Agreement, then, from and after the date on which it ceases to be a Lender thereunder, neither it
nor any of its Affiliates shall constitute Hedge Providers and the obligations with respect to
Hedge Agreements entered into with such former Lender or any of its Affiliates shall no longer
constitute Hedge Obligations.

     “Hedge Agreement” shall mean any interest rate protection agreement, foreign currency exchange
agreement, forward contract, currency swap agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

     “Holdout Lender” shall have the meaning set forth in Section 11.3(f) hereof.

     “Honduras JV” shall mean Green Valley Industrial Park, S.A.

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     “Honduras Subsidiary” shall mean each of Delta Apparel Honduras, S.A., a Honduran sociedad
anónima, Delta Cortes, S.A., a Honduran sociedad anónima, Atled Holding Company Honduras, S de RL,
a Honduran company, La Paz Honduras, S de RL, a Honduran company, and Ceiba Textiles, S de RL, a
Honduran company.

     “Hostile Acquisition” shall mean any investment in a Person, resulting in control of such
Person, involving a tender offer or proxy contest that has not been recommended or approved by the
board of directors or similar body of such Person that is the subject of the investment prior to
the first public announcement or disclosure relating to such investment.

     “Immaterial Subsidiary” shall mean any Subsidiary of a Borrower which accounted for less than
(a) two percent (2%) of the consolidated assets of the Borrowers and their Subsidiaries, on a
consolidated basis, as of the end of the Borrowers’ most recent fiscal year and (b) two percent
(2%) of the consolidated revenues of the Borrowers and their Subsidiaries, on a consolidated basis,
for the four fiscal quarters ending as of the Borrowers’ most recent fiscal year.

     “Increase Effective Date” shall have the meaning set forth in Section 2.5(b) hereof.

     “Indebtedness” shall mean, with respect to any Person, any liability, whether or not
contingent, (a) in respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof) or evidenced by bonds, notes,
debentures or similar instruments; (b) representing, the balance deferred and unpaid of the
purchase price of any property or services (except any such balance that constitutes an account
payable to a trade creditor (whether or not an Affiliate) created, incurred, assumed or guaranteed
by such Person in, the ordinary course of business of such Person in connection with obtaining
goods, materials or services that is not overdue by more than ninety (90) days, unless the trade
payable is being contested in good faith); (c) all obligations as lessee under leases which have
been, or should be, in accordance with GAAP recorded as Capital Leases; (d) any contractual
obligation, contingent or otherwise, of such Person to pay or be liable for the payment of any
indebtedness described in this definition of another Person, including, without limitation, any
such indebtedness, directly or indirectly guaranteed, or any agreement to purchase, repurchase, or
otherwise acquire such indebtedness, obligation or liability or any security therefor, or to
provide funds for the payment or discharge thereof, or to maintain solvency, assets, level of
income, or other financial condition; (e) all obligations with respect to redeemable stock and
redemption or repurchase obligations under any Capital Stock or other equity securities issued by
such Person; (f) all reimbursement obligations and other liabilities of such Person with respect to
surety bonds (whether bid, performance or otherwise), letters of credit, banker’s acceptances or
similar documents or instruments issued for such Person’s account; (g) all indebtedness of such
Person in respect of indebtedness of another Person for borrowed money or indebtedness of another
Person otherwise described in this definition which is secured by any consensual Lien, security
interest, collateral assignment, conditional sale, mortgage, deed of trust, or other encumbrance on
any asset of such Person, whether or not such obligations, liabilities or indebtedness are assumed
by or are a personal liability of such Person, all as of such time; (h) Banking Relationship Debt;
(i) all obligations, liabilities and indebtedness of such Person (marked to market) arising under
swap agreements, cap agreements and collar agreements and other agreements or arrangements designed
to protect such Person against fluctuations in interest rates or currency or commodity values; (j)
all obligations owed by such Person under License Agreements with respect to non-refundable,
advance or minimum guarantee royalty payments; (k) indebtedness of any partnership or joint venture
in which such Person is a general partner or a joint venturer to the extent such Person is liable
therefor as a result of such Person’s ownership interest in such entity, except to the extent that
the terms of such indebtedness expressly provide that such Person is not liable therefor or such
Person has no liability therefor as a matter of law and (l) the principal and interest portions of
all rental obligations of such Person under any synthetic lease or similar off-balance sheet
financing where such transaction is

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considered to be borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP.

     “Indemnified Liabilities” shall have the meaning set forth in Section 11.5 hereof.

     “Indemnitee” shall have the meaning set forth in Section 11.5 hereof.

     “Information Certificate” shall mean that certain Information Certificate dated May 27, 2011,
containing material information with respect to Borrowers and their respective businesses and
assets, executed and delivered by Borrowers to Agent in connection with the preparation of this
Agreement and the other Financing Agreements and the financing arrangements provided for herein.

     “Intellectual Property” shall mean, as to each Borrower, such Borrower’s now owned and
hereafter arising or acquired: patents, patent rights, patent applications, copyrights, works which
are the subject matter of copyrights, copyright applications, copyright registrations, trademarks,
servicemarks, trade names, trade styles, trademark and service mark applications, and licenses and
rights to use any of the foregoing and all applications, registrations and recordings relating to
any of the foregoing as may be filed in the United States Copyright Office, the United States
Patent and Trademark Office or in any similar office or agency of the United States, any State
thereof, any political subdivision thereof or in any other country or jurisdiction, together with
all rights and privileges arising under applicable law with respect to any Borrower’s use of any of
the foregoing; all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to sue for past, present and future
infringement of any of the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating standards; goodwill
(including any goodwill associated with any trademark or servicemark, or the license of any
trademark or servicemark); customer and other lists in whatever form maintained; trade secret
rights, copyright rights, rights in works of authorship, domain names and domain name registration;
software and contract rights relating to computer software programs, in whatever form created or
maintained.

     “Intellectual Property Claim” shall mean the assertion by any Person of a claim (whether
asserted in writing, by action, suit or proceeding or otherwise) that any Borrower’s ownership,
use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other
property is violative of any ownership or right to use any Intellectual Property of such Person.
Without limiting the generality of the foregoing, an Intellectual Property Claim shall include any
claim by an purchaser of Intellectual Property from a Borrower or other Person, and any claim by a
secured party holding a Lien on Intellectual Property pursuant to any Permitted Trademark Financing
Debt or otherwise.

     “Interest Expense” shall mean, for any period, as to any Person, all of the following as
determined on a consolidated basis in accordance with GAAP: (a) total interest expense, whether
paid or accrued during such period (including the interest component of Capital Leases for such
period), including all bank fees, commissions, discounts and other fees and charges owed with
respect to letters of credit (but excluding amortization of discount and amortization of deferred
financing fees paid in cash in connection with the transactions contemplated hereby, interest paid
in property other than cash and any other interest expense not payable in cash), minus (b)
any net payments received during such period as interest income received in respect of its
investments in cash.

     “Interest Period” shall mean, with respect to each LIBOR Rate Loan, a period commencing on the
date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the
conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending one (1), two (2), or three (3)
months thereafter; provided, however, that (a) interest shall accrue at the
applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period
to, but excluding, the day on which any

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Interest Period expires, (b) any Interest Period that would end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period shall end on the next preceding
Business Day, (c) with respect to an Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period), the Interest Period shall end on the last Business Day
of the calendar month that is one (1), two (2), or three (3) months after the date on which the
Interest Period began, as applicable, and (d) Borrowers may not elect an Interest Period which will
end after the Maturity Date.

     “Interest Rate” shall mean:

          (a) Subject to clauses (b) and (c) of this definition below: as to Base Rate Loans, the Base
Rate plus three-quarters of one percent (0.75%) and, as to LIBOR Rate Loans, a rate of one
and three-quarters percent (1.75%) per annum in excess of the LIBOR Rate (based on the LIBOR Rate
applicable for the Interest Period selected by Borrowers (or Administrative Borrower on behalf of
Borrowers) as in effect two (2) Business Days after the date of receipt by Agent of the request of
Borrowers (or Administrative Borrower on behalf of Borrowers) for such LIBOR Rate Loans in
accordance with the terms hereof, whether such rate is higher or lower than any rate previously
quoted to any Borrower);

          (b) Subject to clause (c) below, effective as and when set forth in Exhibit B hereto,
and each fiscal quarter ending thereafter, the Interest Rate payable by Borrowers shall be
increased or decreased, as the case may be, to the rate equal to the applicable margin set forth in
Exhibit B hereto, on a per annum basis, in excess of the Base Rate as to Base Rate Loans,
and in excess of the LIBOR Rate as to LIBOR Rate Loans, in each case, based on the quarterly
average of the Alternate Excess Availability of Borrowers for the immediately preceding three (3)
calendar months, as calculated by Agent in good faith.

          (c) Notwithstanding anything to the contrary contained in clauses (a) and (b) above, the
applicable margin otherwise used to calculate the Interest Rate shall be the highest percentage set
forth on Exhibit B hereto for each category of Loans (without regard to the amount of
Alternate Excess Availability) plus two (2%) percent per annum, at Agent’s option, without
notice, (i) either (A) for the period on and after the date of termination hereof until such time
as all Obligations are indefeasibly paid and satisfied in full, or (B) for the period from and
after the date of the occurrence of any Event of Default, and for so long as such Event of Default
is continuing as determined by Agent and (ii) on the Loans at any time outstanding in excess of the
amounts available to Borrowers under Section 2 (whether or not such excesses) arise or are made
with or without Agent’s knowledge or consent and whether made before or after an Event of Default.

     “Inventory” shall mean, as to each Borrower, all of such Borrower’s now owned and hereafter
existing or acquired goods, wherever located, which (a) are held by such Borrower for sale or lease
or to be furnished under a contract of service; (b) are furnished by such Borrower under a contract
of service; or (c) consist of raw materials, work in process, finished goods or materials used or
consumed in its business.

     “Inventory Loan Limit” shall mean $87,000,000.

     “Investment Property Control Agreement” shall mean an agreement in writing, in form and
substance satisfactory to Agent, by and among Agent, any Borrower and any securities intermediary,
commodity intermediary or other Person who has custody, control or possession of any investment
property of such Borrower acknowledging that such securities intermediary, commodity intermediary
or other Person has custody, control or possession of such investment property on behalf of Agent,
that it

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will comply with entitlement orders originated by Agent with respect to such investment property,
or other instructions of Agent, or (as the case may be) apply any value distributed on account of
any commodity contract as directed by Agent, in each case, without the further consent of such
Borrower and including such other terms and conditions as Agent may require.

     “Issuing Bank” shall mean Wells Fargo or any Lender that is approved by Agent that shall issue
a Letter of Credit for the account of a Borrower and have agreed in a manner satisfactory to Agent
to be subject to the terms hereof as an Issuing Bank.

     “Lender Group” shall mean each Lender (including the Issuing Bank) and Agent, or any one or
more of them.

     “Lender Group Expenses” shall mean all (a) costs or expenses (including taxes, and insurance
premiums) required to be paid by Borrowers or their Subsidiaries under any of the Financing
Agreements that are paid, advanced, or incurred by Lender Group, (b) out-of-pocket fees or charges
paid or incurred by Agent in connection with the Lender Group’s transactions with any Borrower or
its Subsidiaries under any of the Financing Agreements, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public record searches
(including tax Lien, litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles), filing, recording,
publication, appraisal (including periodic collateral appraisals or business valuations to the
extent of the fees and charges (and up to the amount of any limitation) contained herein or the Fee
Letter), real estate surveys, real estate title policies and endorsements, and environmental
audits, (c) Agent’s customary fees and charges (as adjusted from time to time) with respect to the
disbursement of funds (or the receipt of funds) to or for the account of any Borrower (whether by
wire transfer or otherwise), together with any out-of-pocket costs and expenses incurred in
connection therewith, (d) out-of-pocket charges paid or incurred by Agent resulting from the
dishonor of checks payable by or to any Obligor, (e) reasonable out-of-pocket costs and expenses
paid or incurred by the Lender Group during the continuance of an Event of Default to correct any
Default or an Event of Default or to enforce any provision of the Financing Agreements, in gaining
possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale,
or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) reasonable out-of-pocket audit fees and expenses (including travel, meals, and
lodging) of Agent related to any inspections or audits to the extent of the fees and charges (and
up to the amount of any limitation) contained herein or the Fee Letter, (g) reasonable
out-of-pocket costs and expenses of third party claims or any other third party suit paid or
incurred by the Lender Group in enforcing or defending the Financing Agreements or in connection
with the transactions contemplated by the Financing Agreements or the Lender Group’s relationship
with Borrowers or any of their Subsidiaries, (h) Agent’s reasonable costs and expenses (including
reasonable attorneys fees) incurred in advising, structuring, drafting, reviewing, administering
(including travel, meals, and lodging), syndicating, or amending the Financing Agreements, (i)
Agent’s and each Lender’s reasonable costs and expenses (including reasonable attorneys,
accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing
(including attorneys, accountants, consultants, and other advisors fees and expenses incurred in
connection with a “workout,” a “restructuring,” or a bankruptcy or other insolvency proceeding
concerning any Borrower or any of its Subsidiaries or in exercising rights or remedies under the
Financing Agreements), or defending the Financing Agreements, irrespective of whether suit is
brought, or in taking any remedial action taken regarding any Hazardous Material or as required by
any Environmental Laws, and (j) usage charges, charges, fees, costs and expenses for amendments,
renewals, extensions, transfers, or drawings from time to time imposed by the Issuing Bank in
respect of Letters of Credit and out-of-pocket charges, fees, costs and expenses paid or incurred
by the Issuing Bank in connection with the issuance, amendment, renewal, extension, or transfer of,
or drawing under, any Letter of Credit or any demand for payment thereunder.

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     “Lenders” shall mean the financial institutions who are signatories hereto as Lenders and
other Persons made a party to this Agreement as a Lender in accordance with Section 13.7 hereof,
and their respective successors and assigns; each sometimes being referred to herein individually
as a “Lender”.

     “Letter of Credit Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith, any application
therefor, and any agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing for (a) the rights
and obligations of the parties concerned or at risk or (b) any collateral security for such
obligations.

	 	 	“Letter of Credit Limit” shall mean $25,000,000.

     “Letter of Credit Obligations” shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all Letters of Credit outstanding at such time, plus (b) the aggregate amount of
all drawings under Letters of Credit for which Issuing Bank has not at such time been reimbursed,
plus (c) without duplication, the aggregate amount of all payments made by each Lender to Issuing
Bank with respect to such Lender’s participation in Letters of Credit as provided in Section 2.2
for which Borrowers have not at such time reimbursed the Lenders, whether by way of a Loan or
otherwise.

     “Letters of Credit” shall mean all letters of credit (whether documentary or stand-by and
whether for the purchase of Inventory, Equipment or otherwise) issued by an Issuing Bank for the
account of any Borrower pursuant to this Agreement, and all amendments, renewals, extensions or
replacements thereof and including the Existing Letters of Credit.

     “LIBOR Rate” shall mean the rate per annum rate appearing on Bloomberg L.P.’s (the
“Service”) Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any successor or
substitute page of such Service, or any successor to or substitute for such Service) two (2)
Business Days prior to the commencement of the requested Interest Period, for a term and in an
amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether
as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a
Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with this Agreement, which
determination shall be conclusive in the absence of manifest error.

     “LIBOR Rate Loan” shall mean any Loans or portion thereof that bears interest at a rate
determined by reference to the LIBOR Rate.

     “License Agreement” shall mean any agreement between a Borrower and a Licensor pursuant to
which such Borrower is authorized to use any Intellectual Property in connection with the
manufacturing, marketing, sale or other distribution of any Inventory of such Borrower.

     “Licensor” shall mean any Person from whom a Borrower obtains the right to use (whether on an
exclusive or non-exclusive basis) any Intellectual Property in connection with such Borrower’s
manufacture, marketing, sale or other distribution of any Inventory.

     “Licensor/Lender Agreement” shall mean an agreement between Agent and a Licensor by which
Agent is given the unqualified right, vis-à-vis such Licensor, to enforce Agent’s security
interests and Liens with respect to and to dispose of a Borrower’s Inventory with the benefit of
any Intellectual Property applicable thereto, irrespective of such Borrower’s default under any
License Agreement with such Licensor and which is otherwise in form and substance reasonably
satisfactory to Agent.

-24-

 

     “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, charge,
deposit arrangement, encumbrance, easement, Lien (statutory or other), security interest, or other
security arrangement and any other preference, priority, or preferential arrangement of any kind or
nature whatsoever, including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing lease having
substantially the same economic effect as any of the foregoing.

     “Loans” shall mean the loans now or hereafter made by or on behalf of any Lender or by Agent
for the benefit of any Borrower on a revolving basis (involving advances, repayments and
readvances) as set forth in Section 2.1 hereof.

     “Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition,
business, performance or operations of Borrowers, taken as a whole; (b) the legality, validity or
enforceability of this Agreement or any of the other Financing Agreements; (c) the legality,
validity, enforceability, perfection or priority of the security interests and Liens of Agent upon
the Collateral; (d) the Collateral or its value; (e) the ability of any Borrower to repay the
Obligations or of any Borrower to perform its obligations under this Agreement or any of the other
Financing Agreements as and when to be performed; or (f) the ability of Agent or any Lender to
enforce the Obligations or realize upon the Collateral or otherwise with respect to the rights and
remedies of Agent and Lenders under this Agreement or any of the other Financing Agreements.

     “Material Contract” shall mean (a) any contract or other agreement (other than the Financing
Agreements), written or oral, of any Borrower involving monetary liability of or to any Person in
an amount in excess of $2,500,000 in any fiscal year and (b) any other contract or other agreement
(other than the Financing Agreements), whether written or oral, to which any Borrower is a party as
to which the breach, nonperformance, cancellation or failure to renew by any party thereto would
have a Material Adverse Effect.

     “Maturity Date” shall have the meaning set forth in Section 13.1 hereof.

     “Maximum Credit” shall mean the amount of $145,000,000, subject to increase from time to time
pursuant to Section 2.5.

     “Maximum Interest Rate” shall mean the maximum non-usurious rate of interest under applicable
Federal or State law as in effect from time to time that may be contracted for, taken, reserved,
charged or received in respect of the indebtedness of Borrowers to Agent and Lenders, or to the
extent that at any time such applicable law may thereafter permit a higher maximum non-usurious
rate of interest, then such higher rate. Notwithstanding any other provision hereof, the Maximum
Interest Rate shall be calculated on a daily basis (computed on the actual number of days elapsed
over a year of three hundred sixty-five (365) or three hundred sixty-six (366) days, as the case
may be).

     “Mexican Subsidiary” shall mean Delta Campeche, S.A. de C.V., a company organized under the
laws of Mexico.

     “Mortgages” shall mean, individually and collectively, each of the following, as each may be
amended, modified, supplemented, extended or restated from time to time: (a) that certain Amended
and Restated Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing,
dated October 3, 2003, by Delta in favor of Agent with respect to the Real Property and related
assets of Delta located in Catawba County, North Carolina; (b) that certain Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated November 1, 2004, by
Delta in favor of Agent with respect to the Real Property and related assets of Delta located in
Anderson County, Tennessee; (c) that

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certain First Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing,
dated as of October 3, 2003, by Soffe in favor of Agent with respect to the Real Property and
related assets of Soffe located in Cumberland County, North Carolina; and (d) that certain First
Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of
October 3, 2003, by Soffe in favor of Agent with respect to the Real Property and related assets of
Soffe located in Robeson County, North Carolina.

     “Multiemployer Plan” shall mean a “multi-employer plan” as defined in Section 4001(a)(3) of
ERISA which is or was at any time during the current year or the immediately preceding six (6)
years contributed to by any Borrower or ERISA Affiliate, or with respect to which any Borrower,
Guarantor or any ERISA Affiliate may incur any liability.

     “Net Amount of Eligible Accounts” shall mean the gross amount of Eligible Accounts less (a)
sales, excise or similar taxes included in the amount thereof and (b) returns, discounts, claims,
credits and allowances of any nature at any time issued, owing, granted, outstanding, available or
claimed with respect thereto.

     “Net Income” shall mean, with respect to any Person, for any period, the aggregate of the net
income (loss) of such Person and its Subsidiaries, on a consolidated basis, for such period
(excluding to the extent included therein any extraordinary, one-time or nonrecurring gains) after
deducting all charges which should be deducted before arriving at the net income (loss) for such
period and after deducting the Provision for Taxes for such period, all as determined in accordance
with GAAP; provided, that, (a) the net income of any Person that is not a
wholly-owned Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid or payable to such
Person or a wholly-owned Subsidiary of such Person; and (b) the net income (if positive) of any
wholly-owned Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such wholly-owned Subsidiary to such Person or to any other wholly-owned
subsidiary of such Person is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such wholly-owned Subsidiary shall be excluded. For the purpose of this definition,
net income excludes any gain (but not loss) together with any related Provision for Taxes for such
gain (but not loss) realized upon the sale or other disposition of any assets that are not sold in
the ordinary course of business (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or of any Capital Stock of such Person or a Subsidiary of such Person and
any net income realized as a result of changes in accounting principles or the application thereof
to such Person; provided, the Honduras Subsidiaries and the Mexican Subsidiary shall be
considered to be wholly-owned Subsidiaries of Delta for purposes of the calculation of Net Income
hereunder so long as Delta owns at least 97% of the Capital Stock of each such Subsidiaries.

     “Net Orderly Liquidation Value” shall mean with respect to a Borrower’s Equipment, Inventory
and trademarks, the value that is estimated to be recoverable in an orderly liquidation of such
Equipment, Inventory or trademarks net of estimated liquidation expenses as determined from time to
time by an appraisal of such Equipment, Inventory or trademarks in form and containing assumptions
and appraisal methods satisfactory to Agent that is performed by a qualified appraisal company
selected by or acceptable to Agent; provided, that, with respect to any Eligible
Trademark registered both in and outside the United States of America, only the appraised value of
such Eligible Trademark in the United States shall be included in the Net Orderly Liquidation Value
therefor.

     “Net Proceeds” shall mean the aggregate cash proceeds received by any Borrower, or any
Subsidiaries of a Borrower, in respect of any asset sale permitted under Section 9.7 hereof, net of
the direct costs relating to such asset sale (including, without limitation, legal, accounting and
investment

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banking fees, and sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts applied to the repayment of indebtedness
secured by a Lien on the asset or assets that are the subject of such asset sale and any other
indebtedness required to be repaid in connection with such transaction and any reserve for
adjustment in respect of the sale price of such asset or assets. Net Proceeds shall exclude any
non-cash proceeds received from any asset sale, but shall include such proceeds when and as
converted by any Borrower or any Subsidiary of a Borrower to cash.

	 	 	“NVOCC” shall mean a non-vessel operating common carrier.

     “Obligations” shall mean (a) any and all Loans, Letter of Credit Obligations and all other
obligations, liabilities and indebtedness of every kind, nature and description owing by any or all
of the Borrowers to Agent or any Lender or any of their Affiliates or Issuing Bank, including
principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal,
surety, endorser, guarantor or otherwise, whether arising under this Agreement or otherwise,
whether now existing or hereafter arising, whether arising before, during or after the initial or
any renewal term of this Agreement or after the commencement of any case with respect to any or all
of the Borrowers under the Bankruptcy Code or any similar statute (including the payment of
interest and other amounts which would accrue and become due but for the commencement of such case,
whether or not such amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and however acquired by Agent or Lenders and (b)
for purposes only of Sections 5 and 6.4 hereof, any and all Banking Relationship Debt. From and
after the Closing Date, all Existing Obligations outstanding on the Closing Date shall be deemed to
be outstanding, and to constitute Obligations, under this Agreement, and shall be subject to all of
the terms and conditions hereof.

     “Obligor” shall mean any guarantor, endorser, acceptor, surety or other Person liable on or
with respect to the Obligations or who is the owner of any property which is security for the
Obligations (including Guarantors), other than a Borrower.

     “Participant” shall mean any financial institution that acquires and holds a participation in
the interest of any Lender in any of the Loans and Letters of Credit in conformity with the
provisions of Section 13.7 of this Agreement governing participations.

     “Permits” shall have the meaning set forth in Section 8.7(b) hereof.

     “Permitted Acquisition” shall mean any Acquisition Transaction, provided
that:

     (a) the Acquisition Target’s business is in a Permitted Business Field;

     (b) Agent shall have received copies of (i) the definitive Acquisition Documents and related
due diligence documents (including lien search reports, title insurance commitments and
environmental assessments), (ii) historical financial statements or other financial information of
the Acquisition Target in form and substance reasonably acceptable to Agent and (iii) all other
financial information, and such other documents and information, of the Acquisition Target as Agent
may reasonably request, all of which shall be reasonably acceptable to Agent;

     (c) if the acquired assets are to be included in the Borrowing Base simultaneously with the
consummation of the Permitted Acquisition, Agent’s examiners shall have completed a field exam and
audit of the Acquisition Target and, if Agent in its discretion elects, an appraisal of any
acquired assets consisting of Inventory, each in scope and with results reasonably acceptable to
Agent, or if such field

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exam and audit (and appraisal, if Agent so elects) are not conducted, then the assets of such
Acquisition Target shall not be included in the Borrowing Base and shall be ineligible for
borrowing purposes until such exam and audit (and appraisal, if Agent so elects) are conducted in
scope and with results reasonably acceptable to Agent;

     (d) the aggregate Acquisition Consideration for all Acquisition Transactions during any fiscal
year shall not exceed the lesser of (i) the sum of (a) $30,000,000 plus (b) the Permitted
Acquisition Carryover Amount for such fiscal year, and (ii) $45,000,000;

     (e) no Default or Event of Default shall exist at the time of the Acquisition Transaction or
after giving effect thereto;

     (f) Borrowers shall have delivered to Agent a certificate executed by the chief financial
officer of Borrowers which demonstrates to the reasonable satisfaction of Agent that:

     (i) at the time of such Acquisition Transaction, Borrowers shall have average Excess
Availability for the thirty (30) day period immediately preceding the date of such
Acquisition Transaction (calculated based on the amount of the Excess Availability on each
date during such period) of not less than (A) if the Acquisition Consideration for such
Acquisition Transaction is less than $10,000,000, an amount equal to or greater than twelve
and one-half percent (12.5%) of the lesser of (1) the Borrowing Base or (2) the Maximum
Credit, or (B) if the Acquisition Consideration for such Acquisition Transaction is equal to
or greater than $10,000,000, an amount equal to or greater than seventeen and one-half
percent (17.5%) of the lesser of (1) the Borrowing Base or (2) the Maximum Credit;

     (ii) at the time of and after giving pro forma effect to such Acquisition Transaction,
Borrowers shall have Excess Availability of not less than (A) if the Acquisition
Consideration for such Acquisition Transaction is less than $10,000,000, an amount equal to
or greater than twelve and one-half percent (12.5%) of the lesser of (1) the Borrowing Base
or (2) the Maximum Credit, or (B) if the Acquisition Consideration for such Acquisition
Transaction is equal to or greater than $10,000,000, an amount equal to or greater than
seventeen and one-half percent (17.5%) of the lesser of (1) the Borrowing Base or (2) the
Maximum Credit; and

     (iii) at the time of and after giving pro forma effect to such Acquisition Transaction
(as if such Acquisition Transaction occurred on the first day of the twelve (12) fiscal month
period that includes the most recent fiscal month for which Borrowers have delivered
financial statements to Agent pursuant to Section 9.6), Borrowers shall demonstrate a Fixed
Charge Coverage Ratio of at least 1.10 to 1.00 for the twelve (12) fiscal month period ending
on the last day of such fiscal month, provided, however, that Borrowers’ satisfaction
of such ratio need not be demonstrated if, at the time of and after giving pro forma effect
to such Acquisition Transaction, Excess Availability is equal to or greater than twenty-five
(25%) of the lesser of (A) the Borrowing Base or (B) the Maximum Credit;

     (g) any Indebtedness incurred to any or all of the sellers in connection with any such
Acquisition Transaction shall be subordinated to the prior payment and performance of the
Obligations pursuant to a debt subordination agreement that is in all respects acceptable to Agent;

     (h) the Acquisition Transaction is not a Hostile Acquisition;

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     (i) Borrowers shall have notified Agent in writing of the Acquisition Transaction (and
provided to Agent and each Lender a complete information package with respect to the Acquisition
Transaction) at least fourteen (14) days prior to the scheduled closing date of the Acquisition
Transaction;

     (j) the structure of the Acquisition Transaction shall be reasonably acceptable to Agent in
all material respects, including the requirement that, after giving effect to the Acquisition
Transaction, all of the Capital Stock of the Acquisition Target and/or Acquisition Subsidiary, as
appropriate, shall be directly or indirectly owned (legally and beneficially) by a Borrower and a
Borrower shall control all Voting Stock of any such Acquisition Target or Acquisition Subsidiary;
and

     (k) Agent contemporaneously with the closing of such Acquisition Transaction shall have
received (i) such documents and instruments as may be necessary to grant or confirm to Agent a
first priority perfected Lien on and security interest in all of the assets (including Capital
Stock) of the Acquisition Target and/or Acquisition Subsidiary, as appropriate, so acquired, and
(ii) if the Acquisition Target and/or Acquisition Subsidiary, as appropriate, acquired is not
merged into a Borrower or an Acquisition Subsidiary that already is a “Borrower” hereunder, a
Joinder Agreement executed by such Acquisition Target and/or Acquisition Subsidiary, as
appropriate, together with such other collateral documents and opinions of counsel as may be
requested by Agent, each in form and substance satisfactory to Agent.

     “Permitted Acquisition Carryover Amount” shall mean, for any fiscal year, an amount equal to
$30,000,000 minus the aggregate Acquisition Consideration paid in connection with all Acquisition
Transactions in the immediately preceding fiscal year; provided that the
calculation of “Permitted Acquisition Carryover Amount” hereunder, for any fiscal year, shall not
exceed $15,000,000.

     “Permitted Business Field” shall mean the business engaged in by Borrowers on the Closing Date
or a business substantially similar to the business engaged in by Borrowers on the Closing Date.

     “Permitted Central American Debt” shall mean Indebtedness incurred by the Honduras
Subsidiaries in the month of March 2011 and owing to Banco Ficohsa, a Honduran bank, subject to a
seven percent (7%) fixed interest rate, and incurred for the purpose of refinancing certain
existing Indebtedness owed by the Honduras Subsidiaries to such bank.

     “Permitted Foreign Debt” shall mean Indebtedness incurred by a Foreign Subsidiary, which is
formed by Borrowers or their Subsidiaries in compliance with this Agreement, with respect to one or
more working capital credit facilities for use in the operations of such Foreign Subsidiary at any
time after the Closing Date with respect to a credit facility in an aggregate principal amount
acceptable to Agent; provided that (a) such Indebtedness is not secured by any
stock or assets of any Borrower or Obligor, and any Lien upon the assets of such Foreign Subsidiary
to secure such Indebtedness (including Inventory of such Foreign Subsidiary) shall not extend or
continue following the sale of any such assets to a Borrower, and the secured party holding any
such Lien (and its successors and assigns), if required by Agent, is a party with Agent to an
intercreditor agreement that is in all respects acceptable to Agent, (b) such Indebtedness (except
in the case of the Permitted Central American Debt) matures on a date not earlier than six (6)
months after the last day of the Credit Facility and includes amortization payments (if any) in any
calendar year in an amount not greater than fifteen percent (15%) of the principal amount of such
Indebtedness, (c) such Indebtedness accrues interest at a rate determined in good faith by the
Board of Directors (or applicable governing authority) of such Foreign Subsidiary to be a market
rate of interest for such Indebtedness at the time of issuance thereof, (d) at the time of the
incurrence of such Indebtedness, such Indebtedness is permitted under the Material Contracts as in
effect on the date hereof without the need to obtain any waivers thereunder, and (e) such
Indebtedness is otherwise on terms and conditions

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satisfactory to Agent, acting reasonably. For the avoidance of doubt, the Permitted Central
American Debt constitutes Permitted Foreign Debt hereunder.

     “Permitted Holders” shall mean the Persons listed on Schedule 1.89 hereto and their
respective successors and assigns.

     “Permitted Indebtedness” shall have the meaning set forth in Section 9.9 hereof.

     “Permitted Liens” shall have the meaning set forth in Section 9.8 hereof.

     “Permitted Trademark Financing Debt” shall mean Indebtedness incurred by one or more Borrowers
at any time after the Closing Date with respect to a credit facility in an aggregate principal
amount acceptable to Agent; provided that (a) such Indebtedness is unsecured by any
stock or assets of any Borrower or Obligor other than certain or all of the trademarks of
Borrowers, (b) the secured party holding any Lien securing such Indebtedness (and its successors
and assigns), if required by Agent, is a party with Agent to an intercreditor agreement that is in
all respects acceptable to Agent, and specifically in which Agent is given the unqualified right,
vis-à-vis such secured party (and its successors and assigns), to enforce Agent’s security
interests and Liens with respect to and to dispose of a Borrower’s Inventory with the benefit of
any trademarks applicable thereto, irrespective of such Borrower’s default under any financing
agreements or other documents with such secured party, (c) any subsequent purchaser or licensor of
the trademarks (from either a Borrower or any other Person), if required by Agent, is a party to an
intercreditor agreement or other agreement that is in all respects acceptable to Agent, and
specifically in which Agent is given the unqualified right, vis-à-vis such purchaser or licensor
(and its successors and assigns), to enforce Agent’s security interests and Liens with respect to
and to dispose of a Borrower’s Inventory with the benefit of any trademarks applicable thereto,
irrespective of such Borrower’s default under any agreements or other documents with such purchaser
or licensor, (d) such Indebtedness matures on a date not earlier than six (6) months after the last
day of the Credit Facility and does not include any amortization payments, (e) such Indebtedness
accrues interest at a rate determined in good faith by the Board of Directors (or applicable
governing authority) of the applicable Borrower to be a market rate of interest for such
Indebtedness at the time of issuance thereof, (f) at the time of the incurrence of such
Indebtedness, such Indebtedness is permitted under the Material Contracts as in effect on the date
hereof without the need to obtain any waivers thereunder, (g) if such Indebtedness is to be secured
by a trademark of any Borrower that was included as an Eligible Trademark on the most recent report
detailing the calculation of the Borrowing Base delivered prior to the incurrence of such
Indebtedness, Agent shall have received an updated report that excludes such trademark from
Eligible Trademarks, (h) at the time of and after giving pro forma effect to the incurrence of such
Indebtedness, no Event of Default exists, and (i) such Indebtedness is otherwise on terms and
conditions satisfactory to Agent, acting reasonably.

     “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation
(including any corporation which elects subchapter S status under the Code), limited liability
company, limited liability partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any agency or
instrumentality or political subdivision thereof.

     “Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which any
Borrower sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multiemployer Plan has made contributions at any time during the
immediately preceding six (6) plan years.

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     “Pledge Agreement” shall mean that certain Amended and Restated Stock Pledge Agreement by
Borrowers in favor of Agent dated the date hereof.

     “Pro Rata Share” shall mean as to any Lender, the fraction (expressed as a percentage) the
numerator of which is such Lender’s Commitment and the denominator of which is the aggregate amount
of all of the Commitments of Lenders, as adjusted from time to time in accordance with the
provisions of Section 13.7 hereof; provided, that, if the Commitments have been
terminated, the numerator shall be the unpaid amount of such Lender’s Loans and its interest in the
Letters of Credit and the denominator shall be the aggregate amount of all unpaid Loans and Letters
of Credit.

     “Provision for Taxes” shall mean an amount equal to all taxes imposed on or measured by net
income, whether Federal, State, Provincial, municipal or local, and whether foreign or domestic,
that are paid or payable by any Person in respect of any period in accordance with GAAP.

     “Real Property” shall mean all now owned and hereafter acquired real property of each
Borrower, including leasehold interests, together with all buildings, structures, and other
improvements located thereon and all licenses, easements and appurtenances relating thereto,
wherever located, including the real property and related assets more particularly described in the
Mortgages.

     “Receivables” shall mean, as to each Borrower, all of the following now owned or hereafter
arising or acquired property of such Borrower: (a) all Accounts; (b) all amounts at any time
payable to such Borrower in respect of the sale or other disposition by such Borrower of any
Account or other obligation for the payment of money; (c) all interest, fees, late charges,
penalties, collection fees and other amounts due or to become due or otherwise payable in
connection with any Account; (d) all payment intangibles of such Borrower, letters of credit,
indemnities, guarantees, security or other deposits and proceeds thereof issued payable to such
Borrower or otherwise in favor of or delivered to such Borrower in connection with any Account; or
(e) all other accounts, contract rights, chattel paper, instruments, notes, general intangibles and
other forms of obligations owing to such Borrower, whether from the sale and lease of goods or
other property, licensing of any property (including Intellectual Property or other general
intangibles), rendition of services or from loans or advances by such Borrower or to or for the
benefit of any third Person (including loans or advances to any Affiliates or Subsidiaries of such
Borrower) or otherwise associated with any Accounts, Inventory or general intangibles of such
Borrower (including choses in action, causes of action, tax refunds, tax refund claims, any funds
which may become payable to such Borrower in connection with the termination of any Plan or other
employee benefit plan and any other amounts payable to such Borrower from any Plan or other
employee benefit plan, rights and claims against carriers and shippers, rights to indemnification,
business interruption insurance and proceeds thereof, casualty or any similar types of insurance
and any proceeds thereof and proceeds of insurance covering the lives of employees on which such
Borrower is a beneficiary).

     “Records” shall mean, as to each Borrower, all of such Borrower’s present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of
lading and other shipping evidence, statements, correspondence, memoranda, credit files and other
data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes
and other data and software storage media and devices, file cabinets or containers in or on which
the foregoing are stored (including any rights of such Borrower with respect to the foregoing
maintained with or by any other Person).

     “Replacement Lender” shall have the meaning set forth in Section 3.3(e) hereof.

     “Reference Bank” shall mean Wells Fargo Bank, National Association, or such other bank as
Agent may from time to time designate.

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     “Register” shall have the meaning set forth in Section 13.7(b) hereof.

     “Report” shall have the meaning set forth in Section 12.16 hereof.

     “Required Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate
sixty-six and two-thirds (66 2/3%) percent or more of the aggregate of the Commitments of all
Lenders, or if the Commitments shall have been terminated, Lenders to whom at least sixty-six and
two-thirds (66 2/3%) percent of the then outstanding Obligations are owing.

     “Reserves” shall mean as of any date of determination, such amounts as Agent may from time to
time establish and revise in good faith reducing the amount of Loans and Letters of Credit which
would otherwise be available to Borrowers under the lending formula(s) provided for herein: (a) to
reflect events, conditions, contingencies or risks arising after the date of this Agreement or of
which Agent had no actual knowledge as of such date, which, as determined by Agent in good faith,
adversely affect, or would have a reasonable likelihood of adversely affecting, either (i) the
Collateral or any other property which is security for the Obligations or its value, including any
Dilution Reserve, (ii) the assets, business or financial condition of any Borrower or Obligor or
(iii) the security interests and other rights of Agent or any Lender in the Collateral (including
the enforceability, perfection and priority thereof); or (b) to reflect Agent’s good faith belief
that any collateral report or financial information furnished by or on behalf of any Borrower or
Obligor to Agent is or may have been incomplete, inaccurate or misleading in any material respect;
or (c) to reflect outstanding Letters of Credit as provided in Section 2.2 hereof; or (d) in the
amount of any Bank Product Reserve Amount; or (e) in respect of any state of facts which Agent
determines in good faith constitutes an Event of Default or may, with notice or passage of time or
both, constitute an Event of Default. To the extent Agent may revise the lending formulas used to
determine the Borrowing Base or establish new criteria or revise existing criteria for Eligible
Accounts or Eligible Inventory so as to address any circumstances, condition, event or contingency
in an manner satisfactory to Agent, Agent shall not establish a Reserve for the same purpose. The
amount of any Reserve established by Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such reserve as determined by Agent in good faith.

     “Secured Parties” shall mean Agent, Lenders, Issuing Bank, and Wells Fargo or any other Lender
or Affiliate as the obligee with respect to any Banking Relationship Debt, and each counterparty to
any Hedge Agreement that is (or at the time such Hedge Agreement was entered into, was) a Lender or
an Affiliate of a Lender.

     “Settlement Period” shall have the meaning set forth in Section 6.9(b) hereof.

     “Solvent” shall mean, at any time with respect to any Person, that at such time such Person
(a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will
continue to have) sufficient capital (and not unreasonably small capital) to carry on its business
consistent with its practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights
of subrogation, contribution or indemnification arising pursuant to any guarantees given by such
Person) are greater than the Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such Person has a reasonable basis to believe, represents
an amount which can reasonably be expected to become an actual or matured liability (and including
as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as
reduced to reflect the probability of it becoming a matured liability).

     “Special Agent Advances” shall have the meaning set forth in Section 12.11 hereof.

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     “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any corporation, limited
liability company, limited liability partnership or other limited or general partnership, trust,
association or other business entity of which an aggregate of at least a majority of the
outstanding Capital Stock or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Capital Stock of any other
class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency), managers, trustees or other controlling Persons, or an equivalent
controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such
Person and/or one or more subsidiaries of such Person.

     “Taxes” shall mean any taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments and all interest, penalties or
similar liabilities with respect thereto; provided, however, that Taxes shall
exclude (i) any tax imposed on the net income or net profits of any Lender or any Participant
(including any branch profits taxes), in each case imposed by the jurisdiction (or by any political
subdivision or taxing authority thereof) in which such Lender or such Participant is organized or
the jurisdiction (or by any political subdivision or taxing authority thereof) in which such
Lender’s or such Participant’s principal office is located in each case as a result of a present or
former connection between such Lender or such Participant and the jurisdiction or taxing authority
imposing the tax (other than any such connection arising solely from such Lender or such
Participant having executed, delivered or performed its obligations or received payment under, or
enforced its rights or remedies hereunder or any other Financing Agreement); (ii) taxes resulting
from a Lender’s or a Participant’s failure to comply with the requirements of Section 6.13(c) or
(d), and (iii) any United States federal withholding taxes that would be imposed on amounts payable
to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign
Lender becomes a party hereto (or designates a new lending office), except that Taxes shall include
(A) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to
receive pursuant to Section 6.13(a), if any, with respect to such withholding tax at the time such
Foreign Lender becomes a party hereto (or designates a new lending office), and (B) additional
United States federal withholding taxes that may be imposed after the time such Foreign Lender
becomes a party hereto (or designates a new lending office), as a result of a change in law, rule,
regulation, order or other decision with respect to any of the foregoing by any Governmental
Authority.

     “Tax Lender” shall have the meaning set forth in Section 11.3(f) hereof.

     “Trading with the Enemy Act” shall have the meaning set forth in Section 9.18 hereof.

     “UCC” shall mean the Uniform Commercial Code as in effect in the State of Georgia, and any
successor statute, as in effect from time to time (except that terms used herein which are defined
in the Uniform Commercial Code as in effect in the State of Georgia on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment of such statute
except as Agent may otherwise determine).

     “Unfinanced Capital Expenditures” shall mean Capital Expenditures made that are not financed
with the proceeds of money borrowed. For the avoidance of doubt, Capital Expenditures that are
financed with Loans constitute Unfinanced Capital Expenditures.

     “USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (Public Law 107-56),
as in effect from time to time.

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     “Value” shall mean, as determined by Agent in good faith, with respect to Inventory, the lower
of (a) cost computed on a first-in, first-out basis in accordance with GAAP or (b) market value;
provided, that, for purposes of the calculation of the Borrowing Base, (i) the Value of the
Inventory shall not include: (A) the portion of the value of Inventory equal to the profit earned
by any Affiliate on the sale thereof to any Borrower or (B) write-ups or write-downs in value with
respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained
herein, the cost of the Inventory shall be computed in the same manner and consistent with the most
recent appraisal of the Inventory received and accepted by Agent prior to the date hereof, if any.

     “Voting Stock” shall mean with respect to any Person, (a) one (1) or more classes of Capital
Stock of such Person having general voting powers to elect at least a majority of the board of
directors, managers or trustees of such Person, irrespective of whether at the time Capital Stock
of any other class or classes have or might have voting power by reason of the happening of any
contingency, and (b) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such Person described in
clause (a) of this definition.

     “Wells Fargo” shall mean Wells Fargo Bank, National Association, a national bank, in its
individual capacity, and its successors and assigns.

SECTION 2. CREDIT FACILITIES

     2.1 Loans.

          (a) Subject to and upon the terms and conditions contained herein, each Lender severally (and
not jointly) agrees to fund its Pro Rata Share of Loans to Borrowers from time to time in amounts
requested by Borrowers up to the amount outstanding at any time equal to the lesser of: (i) the
Borrowing Base or (ii) the Maximum Credit at such time. Except as otherwise provided herein or
permitted hereunder, (y) the aggregate principal amount of the sum of the Loans and Letter of
Credit Obligations outstanding at any time to Borrowers shall not exceed the lesser of the
Borrowing Base or the Maximum Credit, and (z) the aggregate principal amount of the Loans
outstanding at any time to Borrowers based on the Eligible Inventory of Borrowers shall not exceed
the Inventory Loan Limit. If Agent shall determine, in its sole discretion, that a material
adverse change in the financial condition of any Borrower has occurred, or if a Default or Event of
Default exists, then Agent shall have the right (exercisable at such time or times as Agent deems
appropriate) to require that separate Borrowing Base calculations be made for each Borrower, as
well as the right to limit the use of proceeds of the Loans by each Borrower to an amount equal to
such Borrower’s Borrowing Base.

          (b) Agent may, in its discretion, from time to time, upon not less than five (5) days’ prior
notice to Borrowers, (i) reduce the lending formula with respect to Eligible Accounts to the extent
that Agent determines in good faith that (A) the dilution with respect to the Accounts for any
period (based on the ratio of (1) the aggregate amount of reductions in Accounts other than as a
result of payments in cash to (2) the aggregate amount of total sales) has increased in any
material respect or may be reasonably anticipated to increase in any material respect above
historical levels, or (B) the general creditworthiness of account debtors has materially declined
or (ii) reduce the lending formula(s) with respect to Eligible Inventory to the extent that Agent
determines that: (A) the number of days of the turnover of the Inventory for any period has changed
or (B) the liquidation value of the Eligible Inventory, or any category thereof, has decreased, or
(C) the nature, quality or mix of the Inventory has materially deteriorated. The amount of any
decrease in the lending formulas shall have a reasonable relationship to the event, condition or
circumstance which is the basis for such decrease as determined by Agent in good faith. In
determining whether to reduce the lending formula(s), Agent may consider

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events, conditions, contingencies or risks which are also considered in determining Eligible
Accounts, Eligible Inventory or in establishing Reserves.

          (c) Notwithstanding anything to the contrary contained herein, (i) the aggregate amount of
Loans and Letter of Credit Obligations based on Eligible Inventory consisting of yarn classified as
work-in-process outstanding at any time shall not exceed $2,500,000 at any time, and (ii) the
portion of the Borrowing Base on any date calculated with reference to Eligible Real Property,
Eligible Equipment, and Eligible Trademarks, collectively, shall not exceed twenty percent (20%) of
the Maximum Credit. In the event that the outstanding amount of any component of the Loans, or the
aggregate amount of the outstanding Loans and Letter of Credit Obligations, exceed the amounts
available under the lending formulas, the Letter of Credit Limit, the Inventory Loan Limit or the
Maximum Credit, as applicable, such event shall not limit, waive or otherwise affect any rights of
Agent or Lenders in that circumstance or on any future occasions and Borrowers shall, upon demand
by Agent, which may be made at any time or from time to time, immediately repay to Agent the entire
amount of any such excess(es) for which payment is demanded.

          (d) From and after the Closing Date, all Existing Loans outstanding on the Closing Date shall
be deemed to be made and outstanding, and to constitute Loans, under this Agreement, and shall be
subject to all of the terms and conditions hereof.

     2.2 Letters of Credit.

          (a) Subject to and upon the terms and conditions contained herein and in the Letter of Credit
Documents, at the request of a Borrower (or Administrative Borrower on behalf of such Borrower),
Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the account of
such Borrower one or more Letters of Credit, for the ratable risk of each Lender according to its
Pro Rata Share, containing terms and conditions acceptable to Agent and Issuing Bank. From and
after the Closing Date, all Existing Letters of Credit outstanding on the Closing Date shall be
deemed to be issued and outstanding, and to constitute Letters of Credit, under this Agreement and
all Letter of Credit Obligations (as defined in the Existing Loan Agreement) outstanding on the
Closing Date shall be deemed to be and constitute Letter of Credit Obligations under this
Agreement, and shall be subject to all of the terms and conditions hereof. Notwithstanding
anything contained herein to the contrary, the Issuing Bank may, but shall not be obligated to,
issue a Letter of Credit at any time or times one or more Lenders is a Defaulting Lender unless
Issuing Bank is satisfied that Borrowers have adequately cash collateralized such Defaulting
Lender’s Pro Rata Share of its participation in such Letter of Credit.

          (b) The Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of
such Borrower) shall give Agent and Issuing Bank two (2) Business Days’ prior written notice of
such Borrower’s request for the issuance of a Letter of Credit. Such notice shall be irrevocable
and shall specify the original face amount of the Letter of Credit requested, the effective date
(which date shall be a Business Day and in no event shall be a date less than ten (10) days prior
to the end of the then current term of this Agreement) of issuance of such requested Letter of
Credit, whether such Letter of Credit may be drawn in a single or in partial draws, the date on
which such requested Letter of Credit is to expire (which date shall be a Business Day and shall
not be more than one year from the date of issuance), the purpose for which such Letter of Credit
is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower requesting the
Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall attach to such
notice the proposed terms of the Letter of Credit. The renewal or extension of any Letter of
Credit shall, for purposes hereof be treated in all respects the same as the issuance of a new
Letter of Credit hereunder.

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          (c) In addition to being subject to the satisfaction of the applicable conditions precedent
contained in Section 4 hereof and the other terms and conditions contained herein, no Letter of
Credit shall be available unless each of the following conditions precedent have been satisfied in
a manner satisfactory to Agent: (i) the Borrower requesting such Letter of Credit (or
Administrative Borrower on behalf of such Borrower) shall have delivered to Issuing Bank at such
times and in such manner as Issuing Bank may require, an application, in form and substance
satisfactory to Issuing Bank and Agent, for the issuance of the Letter of Credit and such other
Letter of Credit Documents as may be required pursuant to the terms thereof, and the form and terms
of the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (ii) as of the
date of issuance, no order of any court, arbitrator or other Governmental Authority shall purport
by its terms to enjoin or restrain money center banks generally from issuing letters of credit of
the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation
applicable to money center banks generally and no request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over money center banks generally
shall prohibit, or request that Issuing Bank refrain from, the issuance of letters of credit
generally or the issuance of such Letter of Credit, (iii) after giving effect to the issuance of
such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit
Limit, and (iv) the Excess Availability, prior to giving effect to any Reserves with respect to
such Letter of Credit, on the date of the proposed issuance of any Letter of Credit shall be equal
to or greater than: (A) if the proposed Letter of Credit is for the purpose of purchasing Inventory
that would constitute Eligible Inventory but for the fact that it is or will be in transit to the
premises of a Borrower located within the United States, and the documents of title with respect
thereto are consigned and delivered to Issuing Bank at a location in the United States, the sum of
(1) the percentage equal to one hundred percent (100%) minus the then applicable percentage
with respect to Eligible Inventory set forth in the definition of the term Borrowing Base
multiplied by the Value of such Eligible Inventory, plus (2) freight,
taxes, duty and other amounts which Agent estimates must be paid in connection with such Inventory
upon arrival and for delivery to one of such Borrower’s locations for Eligible Inventory within the
United States of America and (B) if the proposed Letter of Credit is for any other purpose or the
documents of title are not consigned and delivered to Issuing Bank at a location in the United
States in connection with a Letter of Credit for the purpose of purchasing Inventory, an amount
equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto.
Effective on the issuance of each Letter of Credit, a Reserve shall be established in the
applicable amount set forth in Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B).

          (d) Except in Agent’s discretion, with the consent of the Required Lenders, the amount of all
outstanding Letter of Credit Obligations shall not at any time exceed the Letter of Credit Limit.

          (e) Each Borrower shall reimburse immediately Issuing Bank for any draw under any Letter of
Credit issued for the account of such Borrower and pay Issuing Bank the amount of all other charges
and fees payable to Issuing Bank in connection with any Letter of Credit issued for the account of
such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which
such Borrower may have at any time against Issuing Bank or any other Person. Each drawing under any
Letter of Credit or other amount payable in connection therewith when due shall constitute a
request by the Borrower for whose account such Letter of Credit was issued to Agent for a Base Rate
Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf
of Lenders as a Loan (or Special Agent Advance, as the case may be). The date of such Loan shall
be the date of the drawing or as to other amounts, the due date therefor. Any payments made by or
on behalf of Agent or any Lender to Issuing Bank and/or related parties in connection with any
Letter of Credit shall constitute additional Loans to such Borrower pursuant to this Section 2 (or
Special Agent Advances as the case may be).

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          (f) Borrowers and Guarantors shall indemnify and hold Agent, Issuing Bank, and Lenders
harmless from and against any and all losses, claims, damages, liabilities, costs and expenses
which Agent, Issuing Bank or any Lender may suffer or incur in connection with any Letter of Credit
and any documents, drafts or acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by Issuing Bank or correspondent with
respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or
expenses that are a direct result of the gross negligence or willful misconduct of such Person as
determined pursuant to a final non-appealable order of a court of competent jurisdiction. Each
Borrower and Guarantor assumes all risks with respect to the acts or omissions of the drawer under
or beneficiary of any Letter of Credit and for such purposes the drawer or beneficiary shall be
deemed such Borrower’s agent. Each Borrower and Guarantor assumes all risks for, and agrees to pay,
all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any
Letter of Credit or any documents, drafts or acceptances thereunder. Each Borrower and Guarantor
hereby releases and holds Agent, Issuing Bank and Lenders harmless from and against any acts,
waivers, errors, delays or omissions with respect to or relating to any Letter of Credit, except
for the gross negligence or willful misconduct of such Person as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction. The provisions of this Section 2.2(f)
shall survive the payment of Obligations and the termination of this Agreement.

          (g) In connection with Inventory purchased pursuant to any Letter of Credit, Borrowers and
Guarantors shall, at Agent’s request, instruct all suppliers, carriers, forwarders, Customs
Brokers, warehouses or others receiving or holding cash, checks, Inventory, documents or
instruments in which Agent holds a security interest that upon Agent’s request, such items are to
be delivered to Agent and/or subject to Agent’s order, and if they shall come into such Borrower’s
or Guarantor’s possession, to deliver them, upon Agent’s request, to Agent in their original form.
Except as otherwise provided herein, Agent shall not exercise such right to request such items so
long as no Default or Event of Default shall exist or have occurred and be continuing. Except as
Agent may otherwise specify, Borrowers and Guarantors shall designate Issuing Bank as the consignee
on all bills of lading and other negotiable and non-negotiable documents.

          (h) Each Borrower and Guarantor hereby irrevocably authorizes and directs Issuing Bank to name
such Borrower or Guarantor as the account party therein and to deliver to Agent all instruments,
documents and other writings and property received by Issuing Bank pursuant to the Letter of Credit
and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising
in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto.
Nothing contained herein shall be deemed or construed to grant any Borrower or Guarantor any right
or authority to pledge the credit of Agent or any Lender in any manner. Borrowers and Guarantors
shall be bound by any reasonable interpretation made in good faith by Agent, or Issuing Bank under
or in connection with any Letter of Credit or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any instructions of any Borrower
or Guarantor.

          (i) Immediately upon the issuance or amendment of any Letter of Credit, each Lender shall be
deemed to have irrevocably and unconditionally purchased and received, without recourse or
warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share of
the liability with respect to such Letter of Credit and the obligations of Borrowers with respect
thereto (including all Letter of Credit Obligations with respect thereto). Each Lender shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be
obligated to pay to Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such
obligations arising under such Letter of Credit. Without limiting the scope and nature of each
Lender’s participation in any Letter of Credit, to the extent that Issuing Bank has not been
reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such
Lender shall pay to Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts
then due to Issuing Bank in connection therewith.

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          (j) The obligations of Borrowers to pay each Letter of Credit Obligations and the obligations
of Lenders to make payments to Agent for the account of Issuing Bank with respect to Letters of
Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances, whatsoever,
notwithstanding the occurrence or continuance of any Default, Event of Default, the failure to
satisfy any other condition set forth in Section 4 or any other event or circumstance. If such
amount is not made available by a Lender when due, such Lender shall be deemed to be a Defaulting
Lender and Agent (for the account of the Issuing Bank) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in
full. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers to
reimburse Issuing Bank under any Letter of Credit or make any other payment in connection
therewith.

     2.3 [Intentionally Omitted.]

     2.4 Commitments. The aggregate amount of each Lender’s Pro Rata Share of the Loans and
Letter of Credit Obligations shall not exceed the amount of such Lender’s Commitment, as the same
may from time to time be amended in accordance with the provisions hereof.

     2.5 Voluntary Increase in Commitments.

          (a) Upon the terms and subject to the conditions set forth herein, on any Business Day during
the period from the Closing Date through the ninetieth (90th) day immediately prior to
the last calendar day of the term of this Agreement, and so long as no Default or Event of Default
exists or has occurred and is continuing, Borrowers may request on no more than three (3) occasions
during the term of this Agreement that the Commitments be increased and, upon such request, Agent
shall use reasonable efforts in light of then-current market conditions to solicit additional
Eligible Transferees to become Lenders for the purposes of this Agreement, or to encourage any
Lender to increase its Commitment; provided, that, (i) the amount of such increase be in a minimum
amount of $10,000,000, (ii) each Lender that is a party to this Agreement immediately prior to such
increase shall have the first option, and may elect, to fund its Pro Rata Share of the amount of
the increase in the Commitment (or any such greater amount in the event that one or more Lenders
does not elect to fund its respective Pro Rata Share of the amount of the increase in the
Commitment), thereby increasing its Commitment hereunder, but no Lender shall have any obligation
to do so, (iii) in the event that it becomes necessary to include a new Eligible Transferee to fund
the amount of the requested increase in the Commitment, each such Eligible Transferee shall become
a Lender hereunder and agree to become party to, and shall assume and agree to be bound by, this
Agreement, subject to all terms and conditions hereof; (iv) no Lender shall have an obligation to
Borrowers, Agent or any other Lender to increase its Commitment or its Pro Rata Share of the
Commitments, which decision shall be made in the sole discretion of each Lender; and (v) in no
event shall the addition of any Lender or Lenders or the increase in the Commitment of any Lender
under this Section 2.5 increase the Commitments to an aggregate amount greater than $200,000,000.
Upon the addition of any Lender, or the increase in the Commitment of any Lender, the dollar amount
of the Commitment set forth opposite each Lender’s name on Schedule 1.21 to this Agreement
shall be amended by Agent and Borrowers to reflect such addition or such increase, and Agent shall
deliver to Lenders and Borrowers a copy of such amendment. Lenders shall be entitled to receive
and Borrowers shall be obligated to pay a mutually agreeable amendment fee to Agent for the pro
rata benefit of those Lenders who increase their Commitment and any new Lenders, such fee to be
based upon the increase in their Commitments only and not on their aggregate Commitments after
giving effect to such increase.

          (b) If any requested increase in the Commitments is agreed to in accordance with subsection
(a) above, Agent and Borrowers shall determine the effective date of such increase (the “Increase
Effective Date”). Agent, with the consent and approval of Borrowers, shall promptly confirm in

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writing to Lenders the final allocation of such increase as of the Increase Effective Date, and
each new Lender and each existing Lender that has increased its Commitment shall purchase Loans and
Letter of Credit Obligations from each other Lender in an amount such that, after such purchase or
purchases, the amount of outstanding Loans and Letter of Credit Obligations from each Lender shall
equal such Lender’s respective Pro Rata Share of the Commitments, as modified to give effect to
such increase, multiplied by the aggregate amount of Loans outstanding and Letter
of Credit Obligations from all Lenders. As condition precedents to the effectiveness of such
increase, Borrowers shall deliver to Agent (i) a certificate dated as of the Increase Effective
Date (in sufficient copies for each Lender) signed by the Chief Financial Officer of Borrowers,
including a compliance certificate demonstrating compliance with the terms of this Agreement and
certification that, both before and after giving effect to such increase, each representation and
warranty contained in Section 8 is true and correct in all material respects on and as of the
Increase Effective Date (except to the extent that any such representation or warranty is stated to
relate solely to an earlier date), that the requested increase is permitted under all Material
Contracts, and that no Default or Event of Default exists or has occurred and is continuing, and
(ii) legal opinions from counsel to Borrowers in form and substance acceptable to Agent that, among
other things, the requested increase in the Commitments provided for herein does not violate any
Material Contract. Upon the request of any Lender, Borrowers shall deliver one or more promissory
notes reflecting the new or increased Commitment of each such Lender as of the Increase Effective
Date.

     SECTION 3. INTEREST AND FEES

     3.1 Interest.

          (a) Borrowers shall pay to Agent, for the benefit of Lenders, interest on the outstanding
principal amount of the Loans at the Interest Rate. All interest accruing hereunder on and after
the date of any Event of Default or termination hereof or on the principal amount of the Loans at
any time outstanding in excess of the amounts available to Borrowers under Section 2 (whether or
not such excess(es), arise or are made with or without Agent’s knowledge or consent and whether
made before or after an Event of Default) shall be payable ON DEMAND.

          (b) Borrowers (or Administrative Borrower on behalf of Borrowers) may from time to time
request LIBOR Rate Loans or that Base Rate Loans be converted to LIBOR Rate Loans or that any
existing LIBOR Rate Loans continue for an additional Interest Period. Such request from Borrowers
(or Administrative Borrower on behalf of Borrowers) shall specify the amount of the LIBOR Rate Loan
or the amount of the Base Rate Loans to be converted to LIBOR Rate Loans or the amount of the LIBOR
Rate Loan to be continued (subject to the limits set forth below) and the Interest Period to be
applicable to such LIBOR Rate Loans. Subject to the terms and conditions contained herein, two (2)
Business Days after receipt by Agent of such a request from Borrowers (or Administrative Borrower
on behalf of Borrowers), such Base Rate Loans shall be converted to LIBOR Rate Loans or such LIBOR
Rate Loans shall continue, as the case may be, provided, that, (i) no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute an Event of
Default shall exist or have occurred and be continuing, (ii) no party hereto shall have sent any
notice of termination of this Agreement, (iii) Borrowers (or Administrative Borrower on behalf of
Borrowers) shall have complied with such customary procedures as are established by Agent and
specified by Agent to Borrowers from time to time for requests by Borrowers for LIBOR Rate Loans,
(iv) no more than six (6) Interest Periods may be in effect at any one time, (v) the aggregate
amount of the LIBOR Rate Loans must be in an amount not less than $3,000,000 or an integral
multiple of $1,000,000 in excess thereof, and (vi) Agent and each Lender shall have determined that
the Interest Period or LIBOR Rate is available to Agent and such Lender and can be readily
determined as of the date of the request for such LIBOR Rate Loan by Borrowers (or Administrative
Borrower on behalf of Borrowers). Any request by Borrowers (or Administrative Borrower on behalf
of Borrowers) for a LIBOR Rate Loan or to convert Base Rate Loans to LIBOR Rate

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Loans or to continue any existing LIBOR Rate Loans shall be irrevocable. Notwithstanding anything
to the contrary contained herein, neither Agent, nor any Lender, nor any of their Participants, is
required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as
to which interest accrues at the LIBOR Rate.

          (c) Any LIBOR Rate Loans shall automatically convert to Base Rate Loans upon the last day of
the applicable Interest Period, unless Agent has received and approved a request to continue such
LIBOR Rate Loan at least two (2) Business Days prior to such last day in accordance with the terms
hereof. Any LIBOR Rate Loans shall, at Agent’s option, upon notice by Agent to convert to Base Rate
Loans in the event that this Agreement shall terminate or not be renewed. Borrowers shall pay to
Agent, for the benefit of Lenders, upon demand by Agent (or Agent may, at its option, charge any
loan account of Borrowers) any amounts required to compensate any Lender or participant with Lender
for any loss (including loss of anticipated profits), cost or expense incurred by such Person, as a
result of the conversion of LIBOR Rate Loans to Base Rate Loans pursuant to any of the foregoing.

          (d) Interest shall be payable by Borrowers to Agent, for the account of Agent and Lenders, as
applicable, monthly in arrears not later than the first day of each calendar month and shall be
calculated on the basis of a three hundred sixty (360) day year and actual days elapsed. Interest
shall also be payable with respect to any LIBOR Rate Loans on the last day of each applicable
Interest Period with respect to such Loans. On the last day of the Interest Period applicable to
each LIBOR Rate Loan, unless Borrowers have continued such LIBOR Rate Loan in accordance with this
Section 3.1, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to
the rate of interest then applicable to Base Rate Loans. Borrowers acknowledge and understand that
the calculation of interest on the basis of the actual days elapsed over the period of a three
hundred sixty (360) day year as opposed to a year of three hundred sixty-five (365) or three
hundred sixty-six (366) days results in a higher effective rate of interest. In the event the Base
Rate is changed from time to time hereafter, the interest rate on non-contingent Obligations (other
than LIBOR Rate Loans) shall automatically and immediately be increased or decreased by an amount
equal to such change in the Base Rate. In no event shall charges constituting interest payable by
Borrowers to Agent and Lenders exceed the maximum amount or the rate permitted under any applicable
law or regulation, and if any such part or provision of this Agreement is in contravention of any
such law or regulation, such part or provision shall be deemed amended to conform thereto.

     3.2 Fees.

     Borrowers agree to pay to Agent the following non-refundable fees as follows:

          (a) the fees set forth in the Fee Letter; and

          (b) for the benefit of Lenders, on the first day of each month in arrears while this Agreement
is in effect and for so long thereafter as any of the Obligations are outstanding, an unused line
fee at a rate equal to: (i) for the period beginning on the Closing Date through and including
September 30, 2011, 0.25% per annum calculated upon the amount by which the Maximum Credit exceeds
the average daily principal balance of the outstanding Loans and Letter of Credit Obligations
during the immediately preceding fiscal quarter (or part thereof), (ii) at all other times, (A) if
the average Excess Availability for the most recently completed fiscal quarter is less than an
amount equal to fifty percent (50%) of the Maximum Credit, 0.25% per annum calculated upon the
amount by which the Maximum Credit exceeds the average daily principal balance of the outstanding
Loans and Letter of Credit Obligations during the immediately preceding fiscal quarter (or part
thereof) (the “Average Daily Balance”), and (B) if the average Excess Availability for the most
recently completed fiscal quarter is greater than or equal to an amount equal to fifty percent
(50%) of the Maximum Credit, 0.375% per

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annum calculated upon the Average Daily Balance, which fee shall in each case be payable on the
first day of each month in arrears and shall be fully earned when due. Any adjustment to the unused
line fee rate pursuant to the immediately preceding sentence shall take effect on the first day of
the fiscal quarter immediately following the fiscal quarter with respect to which such rate is
determined; and

          (c) (i) for the benefit of Issuing Bank, in addition to any charges, fees or expenses charged
by Issuing Bank in connection with the Letters of Credit, a fronting fee equal to 0.125% of the
stated amount of each Letter of Credit, which fee shall be payable upon issuance of the Letter of
Credit and on each anniversary date of such issuance, and shall be payable on any increase in
stated amount made between any such dates, and (ii) for the benefit of Lenders, a letter of credit
fee at a rate equal to the applicable margin set forth in Exhibit B hereto, on a per annum
basis, in excess of the LIBOR Rate as to LIBOR Rate Loans, on the daily outstanding balance of the
Letter of Credit Obligations for the immediately preceding month (or part thereof), payable in
arrears as of the first day of each succeeding month, except that Agent may, and upon the written
direction of Required Lenders shall, require Borrowers to pay to Agent for the ratable benefit of
Lenders such letter of credit fee, at a rate equal to the Default Rate per annum on such daily
outstanding balance for: (x) the period from and after the date of termination hereof until Agent
and Lenders have received full and final payment of all Obligations (notwithstanding entry of a
judgment against Borrowers) and (y) the period from and after the date of the occurrence of an
Event of Default for so long as such Event of Default is continuing as determined by Agent. Such
letter of credit fee shall be calculated on the basis of a three hundred sixty (360) day year and
actual days elapsed and the obligation of Borrowers to pay such fee shall survive the termination
of this Agreement.

     3.3 Changes in Laws and Increased Costs of Loans.

          (a) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis
to take into account any additional or increased costs to such Lender of maintaining or obtaining
any eurodollar deposits or increased costs, in each case, due to changes in applicable law (other
than changes in laws relative to Taxes, which shall be governed by Section 6.13) occurring
subsequent to the Closing Date, including changes in tax laws (except changes of general
applicability in corporate income tax laws) and changes in the reserve requirements imposed by the
Board of Governors of the Federal Reserve System (or any successor), which additional or increased
costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate.
In any such event, the affected Lender shall give Borrowers and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the notice to each other Lender and,
upon its receipt of the notice from the affected Lender, Borrowers (or Administrative Borrower on
behalf of Borrowers) may, by notice to such affected Lender (i) require such Lender to furnish to
Borrowers a statement setting forth the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (ii) repay the LIBOR Rate Loans with respect to which
such adjustment is made (together with any amounts due under Section 3.3(c)).

          (b) In the event that any change in market conditions or any law, regulation, treaty, or
directive, or any change therein or in the interpretation or application thereof, shall at any time
after the date hereof, in the reasonable opinion of any Lender, make it unlawful for such Lender to
fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed
circumstances to Agent and Borrowers and Agent promptly shall transmit the notice to each other
Lender and (i) in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such
LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue
interest at the rate then applicable to Base Rate

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Loans, and (ii) Borrowers shall not be entitled to request LIBOR Rate Loans until such Lender
determines that it would no longer be unlawful to do so.

          (c) In connection with each LIBOR Rate Loan, Borrowers shall indemnify, defend, and hold Agent
and Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as
a result of (i) the payment of any principal of any LIBOR Rate Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of Default), (ii) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable
thereto, or (iii) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the
date specified in any request delivered pursuant hereto (such losses, costs, or expenses,
“Funding Losses”). A certificate of Agent or a Lender delivered to Borrowers
setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 3.3 shall be conclusive absent manifest error. Borrowers shall pay
such amount to Agent or the Lender, as applicable, within thirty (30) days of the date of its
receipt of such certificate.

          (d) If, after the date hereof, any Lender determines that (i) the adoption of or change in any
law, rule, regulation or guideline regarding capital or reserve requirements for banks or bank
holding companies, or any change in the interpretation, implementation, or application thereof by
any Governmental Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or directive of any such
entity regarding capital adequacy (whether or not having the force of law), has the effect of
reducing the return on such Lender’s or such holding company’s capital as a consequence of such
Lender’s Commitment, Loans or Letter of Credit Obligations hereunder to a level below that which
such Lender or such holding company could have achieved but for such adoption, change, or
compliance (taking into consideration such Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of such entity’s
capital) by any amount deemed by such Lender to be material, then such Lender may notify Borrowers
and Agent thereof. Following receipt of such notice, Borrowers agree to pay such Lender on demand
the amount of such reduction of return of capital as and when such reduction is determined, payable
within thirty (30) days after presentation by such Lender of a statement in the amount and setting
forth in reasonable detail such Lender’s calculation thereof and the assumptions upon which such
calculation was based (which statement shall be deemed true and correct absent manifest error). In
determining such amount, such Lender may use any reasonable averaging and attribution methods.
Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s right to demand such compensation; provided that
Borrowers shall not be required to compensate a Lender pursuant to this Section for any reductions
in return incurred more than one hundred eighty (180) days prior to the date that such Lender
notifies Borrowers of such law, rule, regulation or guideline giving rise to such reductions and of
such Lender’s intention to claim compensation therefor; provided further that if
such claim arises by reason of the adoption of or change in any law, rule, regulation or guideline
that is retroactive, then the one hundred eighty (180) day period referred to above shall be
extended to include the period of retroactive effect thereof.

          (e) If any Lender requests additional or increased costs referred to in Section 3.3(a) or
amounts under Section 3.3(d) or sends a notice under Section 3.2(d) relative to changed
circumstances (any such Lender, an “Affected Lender”), then such Affected Lender
shall use reasonable efforts to promptly designate a different one of its lending offices or to
assign its rights and obligations hereunder to another of its offices or branches, if (i) in the
reasonable judgment of such Affected Lender, such designation or assignment would eliminate or
reduce amounts payable pursuant to Section 3.3(a) or Section 3.3(d), as applicable, or would
eliminate the illegality of funding or maintaining LIBOR Rate Loans and (ii) in the reasonable
judgment of such Affected Lender, such designation or assignment would not subject it to any
material unreimbursed cost or expense and would not otherwise be materially

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disadvantageous to it. Borrowers agree to pay all reasonable out-of-pocket costs and expenses
incurred by such Affected Lender in connection with any such designation or assignment. If, after
such reasonable efforts, such Affected Lender does not so designate a different one of its lending
offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’
obligation to pay any future amounts to such Affected Lender pursuant to Section 3.3(a) or Section
3.3(d), as applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without
prejudice to any amounts then due to such Affected Lender under Section 3.3(a) or Section 3.3(d),
as applicable) may, unless prior to the effective date of any such assignment the Affected Lender
withdraws its request for such additional amounts under Section 3.3(a) or Section 3.3(d), as
applicable, or indicates that it is no longer unlawful to fund or maintain LIBOR Rate Loans, may
seek a substitute Lender reasonably acceptable to Agent to purchase the Obligations owed to such
Affected Lender and such Affected Lender’s Commitment hereunder (a “Replacement
Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender
shall assign to the Replacement Lender its Obligations and Commitment, pursuant to an Assignment
and Acceptance, and upon such purchase by the Replacement Lender, such Replacement Lender shall be
deemed to be a “Lender” for purposes of this Agreement and such Affected Lender shall cease to be a
“Lender” for purposes of this Agreement.

          (f) Notwithstanding anything herein to the contrary and for the avoidance of doubt, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all rules, regulations, orders,
requests, guidelines and directives in connection therewith, and all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to be a change in law
covered by this Section 3.3 regardless of the date enacted, adopted, issued or implemented.

     3.4 Maximum Interest.

          (a) Notwithstanding anything to the contrary contained in this Agreement or any of the other
Financing Agreements, in no event whatsoever shall the aggregate of all amounts that are contracted
for, charged or received by Lenders pursuant to the terms of this Agreement or any of the other
Financing Agreements and that are deemed interest under applicable law exceed the Maximum Interest
Rate (including, to the extent applicable, the provisions of Section 5197 of the Revised Statutes
of the United States of America as amended, 12 U.S.C. Section 85, as amended). No agreements,
conditions, provisions or stipulations contained in this Agreement or any of the other Financing
Agreements, or any Event of Default, or the exercise by Lenders of the right to accelerate the
payment or the maturity of all or any portion of the Obligations, or the exercise of any option
whatsoever contained in this Agreement or any of the other Financing Agreements, or the prepayment
by Borrowers of any of the Obligations, or the occurrence of any event or contingency whatsoever
shall entitle Agent or Lenders to contract for, charge or receive in any event, interest or any
charges, amounts, premiums or fees deemed interest by applicable law in excess of the Maximum
Interest Rate. In no event shall Borrowers be obligated to pay interest or such amounts as may be
deemed interest under applicable law in amounts which exceed the Maximum Interest Rate. All
agreements, conditions or stipulations, if any, which may in any event or contingency whatsoever
operate to bind, obligate or compel Borrowers to pay interest or such amounts which are deemed to
constitute interest in amounts which exceed the Maximum Interest Rate shall be without binding
force or effect, at law or in equity, to the extent of the excess of interest or such amounts which
are deemed to constitute interest over such Maximum Interest Rate.

          (b) In the event any Interest is charged or received in excess of the Maximum Interest Rate
(“Excess”), each Borrower acknowledges and stipulates that any such charge or receipt shall be the
result of an accident and bona fide error, and that any Excess received by Agent and Lenders shall
be applied first, to the payment of the then outstanding and unpaid principal hereunder; second to
the

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payment of the other Obligations then outstanding and unpaid; and third, returned to Borrowers, it
being the intent of the parties hereto not to enter into a usurious or otherwise illegal
relationship. The right to accelerate the maturity of any of the Obligations does not include the
right to accelerate any interest that has not otherwise accrued on the date of such acceleration,
and Agent and Lenders does not intend to collect any unearned interest in the event of any such
acceleration. Each Borrower recognizes that, with fluctuations in the rates of interest set forth
in Section 3.1 of this Agreement and the Maximum Interest Rate, such an unintentional result could
inadvertently occur. All monies paid to Agent or Lenders hereunder or under any of the other
Financing Agreements, whether at maturity or by prepayment, shall be subject to any rebate of
unearned interest as and to the extent required by applicable law.

          (c) By the execution of this Agreement, each Borrower agrees that (i) the credit or return of
any Excess shall constitute the acceptance by Borrowers of such Excess, and (ii) no Borrower shall
seek or pursue any other remedy, legal or equitable, against Agent and Lenders, based in whole or
in part upon contracting for, charging or receiving any interest or such amounts which are deemed
to constitute interest in excess of the Maximum Interest Rate. For the purpose of determining
whether or not any Excess has been contracted for, charged or received by Agent and Lenders, all
interest at any time contracted for, charged or received from Borrowers in connection with this
Agreement or any of the other Financing Agreements shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread during the entire term of this Agreement in
accordance with the amounts outstanding from time to time hereunder and the Maximum Interest Rate
from time to time in effect in order to lawfully charge the maximum amount of interest permitted
under applicable laws.

          (d) Borrowers, Agent and Lenders shall, to the maximum extent permitted under applicable law,
(i) characterize any non-principal payment as an expense, fee or premium rather than as interest
and (ii) exclude voluntary prepayments and the effects thereof.

          (e) The provisions of this Section 3.4 shall be deemed to be incorporated into each of the
other Financing Agreements (whether or not any provision of this Section is referred to therein).
Each of the Financing Agreements and communications relating to any interest owed by Borrowers and
all figures set forth therein shall, for the sole purpose of computing the extent of the
Obligations, be automatically recomputed by Borrowers, and by any court considering the same, to
give effect to the adjustments or credits required by this Section.

     SECTION 4. CONDITIONS PRECEDENT

     4.1 Conditions Precedent to Initial Loans and Letters of Credit. Each of the following
is a condition precedent to Agent and Lenders making the initial Loans and providing the initial
Letters of Credit hereunder:

          (a) all requisite corporate action and proceedings in connection with the transactions
contemplated by this Agreement and the other Financing Agreements shall be satisfactory in form and
substance to Agent, and Agent shall have received all information and copies of all documents,
including records of requisite corporate action and proceedings which Agent may have requested in
connection therewith, such documents where requested by Agent or its counsel to be certified by
appropriate corporate officers or Governmental Authorities;

          (b) all financial information, projections, budgets, business plans, cash flows and such other
information as Agent shall request from time to time, in each case in form and substance acceptable
to Agent, including (i) projected quarterly balance sheets, income statements and Excess
Availability of Borrowers and Guarantors for the period through the last day of Borrowers’ 2012
fiscal year, (ii) projected annual balance sheets, income statements and Excess Availability of
Borrowers and

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Guarantors for the period through the last day of Borrowers’ 2016 fiscal year, and (iii) any
updates or modifications to the projected financial statements of Borrowers and Guarantors
described hereinabove heretofore received by Agent, together with supporting documentation;

          (c) no material adverse change shall have occurred in the assets, business or financial
condition of Borrowers and their Subsidiaries, taken as a whole, since the date of Agent’s latest
field examination and no change or event shall have occurred which would impair the ability of
Borrowers or any Obligor to perform their obligations hereunder or under any of the other Financing
Agreements to which it is a party or of Agent to enforce the Obligations or realize upon the
Collateral;

          (d) Agent shall have completed its business and legal due diligence, with results satisfactory
to Agent, including (i) receipt and review of third party appraisals, in form and containing
assumptions and appraisal methods satisfactory to Agent by an appraiser acceptable to Agent on
which Agent and Lenders are permitted to rely, (ii) field examinations of the business and
Collateral of Borrowers in accordance with Agent’s customary procedures and practices and as
otherwise required by the nature and circumstances of the businesses of Borrowers, and (iii)
environmental assessments of the Real Property of Borrowers conducted by an independent
environmental engineering firm acceptable to Agent and in form, scope and methodology acceptable to
Agent;

          (e) Agent shall have received, in form and substance satisfactory to Agent, all consents,
waivers, acknowledgments and other agreements from third Persons which Agent may deem necessary or
desirable in order to permit, protect and perfect its security interests in and Liens upon the
Collateral or to effectuate the provisions or purposes of this Agreement and the other Financing
Agreements, including Collateral Access Agreements by owners and lessors of leased premises of each
Borrower and by warehouses at which Collateral is located;

          (f) the Excess Availability as determined by Agent, as of the date hereof, shall be not less
than $10,000,000 after giving effect to the initial Loans made or to be made and Letters of Credit
issued or to be issued in connection with the initial transactions contemplated hereunder;

          (g) Reserved.

          (h) Agent shall have received evidence, in form and substance satisfactory to Agent, that
Agent has a valid perfected first priority security interest and Lien in all of the Collateral;

          (i) Agent shall have received and reviewed UCC search results for all jurisdictions in the
United States and Canada which assets of each Borrower and Guarantor are located, which search
results shall be in form and substance satisfactory to Agent;

          (j) Agent shall have received, in form and substance satisfactory to Agent, a Uniform
Commercial Code financing statements on Form UCC-1 or Form UCC-3, as applicable, duly filed in such
office or offices as may be necessary or, in the opinion of Agent, desirable to perfect Agent’s
Liens in and to the collateral of Borrowers and their domestic Subsidiaries, and Agent shall have
received confirmation of the filing of all such financing statements;

          (k) Agent shall have received, at least five (5) Business Days prior to the Closing Date, a
certificate reasonably satisfactory to Agent, for benefit of itself and the Lenders, provided by
Borrowers that sets forth information required by the USA PATRIOT Act including, without
limitation, the identity of the Obligors, the name and address of the Obligors and other
information that will allow the Administrative Agent or any Lender, as applicable, to identify the
Obligors in accordance with the USA PATRIOT Act;

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          (l) Agent shall have received evidence of insurance and loss payee endorsements required
hereunder and under the other Financing Agreements, in form and substance satisfactory to Agent,
and certificates of insurance policies and/or endorsements naming Agent as loss payee;

          (m) Agent shall have received, in form and substance satisfactory to Agent, such opinion
letters of counsel to Borrowers and Guarantors with respect to the Financing Agreements and such
other matters as Agent may request;

          (n) the other Financing Agreements and all instruments and documents hereunder, including
amendments to the Mortgages, shall have been duly executed and delivered to Agent, in form and
substance satisfactory to Agent; and

          (o) Agent shall have received, reviewed and found acceptable fully paid endorsements to
Agent’s mortgagee title insurance policies (or binding commitments to issue endorsements to Agent’s
mortgagee title insurance policies, marked to Agent’s satisfaction to evidence the form of such
endorsements to be delivered after the Closing Date) with respect to the title insurance policies
that insure the Mortgages to create a valid Lien on all Real Property subject thereto, which
endorsements (and commitments therefor) shall give effect to the transactions contemplated by this
Agreement, shall “down-date” the effective date of the title insurance policy (or policies) to
which they relate and shall not have a specific survey exception.

     4.2 Conditions Precedent to All Loans and Letters of Credit. Each of the following is
an additional condition precedent to Agent and Lenders making Loans and/or providing Letters of
Credit to Borrowers, including the initial Loans and Letters of Credit and any future Loans and
Letters of Credit:

          (a) all representations and warranties contained herein and in the other Financing Agreements
shall be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of the making of each such Loan
or providing each such Letter of Credit, and after giving effect thereto, except to the extent that
such representations and warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of such earlier date);

          (b) no law, regulation, order, judgment or decree of any Governmental Authority shall exist,
and no action, suit, investigation, litigation or proceeding shall be pending or threatened in any
court or before any arbitrator or Governmental Authority, which (i) purports to enjoin, prohibit,
restrain or otherwise affect (A) the making of the Loans or providing the Letters of Credit, or (B)
the consummation of the transactions contemplated pursuant to the terms hereof or the other
Financing Agreements or (ii) has or could reasonably be expected to have a Material Adverse Effect;
and

          (c) no Default or Event of Default shall exist or have occurred and be continuing on and as of
the date of the making of such Loan or providing each such Letter of Credit and after giving effect
thereto.

     SECTION 5. GRANT OF SECURITY INTEREST

     5.1 Grant of Security Interest. To secure payment and performance of all Obligations,
(i) each Borrower hereby confirms the pledge and assignment to Agent, for itself and the benefit of
Secured Parties, of the Collateral under (and as defined in) the Existing Loan Agreement and the
other Existing Financing Agreements, and the creation in favor of Agent, for the benefit of the
Secured Parties, under the Existing Loan Agreement and such other Existing Financing Agreements of
a continuing security interest in and Lien upon such Collateral, all as security for the
Obligations, and (ii) each Borrower hereby grants

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to Agent, for itself and the benefit of Secured Parties, a continuing security interest in, a Lien
upon, and a right of set off against, and hereby assigns to Agent, for itself and the benefit of
Lenders, as security, all personal and real property and fixtures, and interests in property and
fixtures, of each Borrower, whether now owned or hereafter acquired or existing, and wherever
located (together with all other collateral security for the Obligations at any time granted to or
held or acquired by Agent or any Lender, collectively, the “Collateral”), including:

          (a) all Accounts;

          (b) all general intangibles, including, without limitation, all Intellectual Property;

          (c) all goods, including, without limitation, Inventory and Equipment;

          (d) all Real Property and fixtures;

          (e) all chattel paper including, without limitation, all tangible and electronic chattel
paper;

          (f) all instruments including, without limitation, all promissory notes;

          (g) all documents;

          (h) all deposit accounts;

          (i) all letters of credit, banker’s acceptances and similar instruments and including all
letter-of-credit rights;

          (j) all supporting obligations and all present and future Liens, security interests, rights,
remedies, title and interest in, to and in respect of Receivables and other Collateral, including
(i) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit
and credit and other insurance related to the Collateral, (ii) rights of stoppage in transit,
replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or
secured party, (iii) goods described in invoices, documents, contracts or instruments with respect
to, or otherwise representing or evidencing, Receivables or other Collateral, including returned,
repossessed and reclaimed goods, and (iv) deposits by and property of account debtors or other
Persons securing the obligations of account debtors;

          (k) all (i) investment property (including securities, whether certificated or uncertificated,
securities accounts, security entitlements, commodity contracts or commodity accounts) and (ii)
monies, credit balances, deposits and other property of such Borrower now or hereafter held or
received by or in transit to Agent, any Lender or its Affiliates or at any other depository or
other institution from or for the account of such Borrower, whether for safekeeping, pledge,
custody, transmission, collection or otherwise;

          (l) all commercial tort claims, including, without limitation, those identified in the
Information Certificate;

          (m) to the extent not otherwise described above, all Receivables;

          (n) all Records; and

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          (o) all products and proceeds of the foregoing, in any form, including insurance proceeds and
all claims against third parties for loss or damage to or destruction of or other involuntary
conversion of any kind or nature of any or all of the other Collateral.

     Subject to the restrictions on the incurrence of purchase money Indebtedness in Section 9.9(b)
hereof but notwithstanding anything to the contrary contained in clause (c) above, the types or
items of Collateral described in such clause shall not include any Equipment purchased with the
proceeds of such purchase money Indebtedness which is, or at the time of any Borrower’s acquisition
thereof shall be, subject to a purchase money lien or security interest (including capitalized or
finance leases) permitted under Section 9.8 hereof if: (a) the valid grant of a security interest
or Lien to Agent, for itself and the ratable benefit of Lenders, in such item of Equipment is
prohibited by the terms of the agreement between such Borrower and the holder of such purchase
money lien or security interest and the consent of such holder to Agent’s Lien has not been or is
not waived, or the consent of such holder has not been or is not otherwise obtained, or under
applicable law such prohibition cannot be waived and (b) the purchase money lien on such item of
Equipment is or shall become and remain valid and perfected.

     5.2 Perfection of Security Interests.

          (a) Each Borrower irrevocably and unconditionally authorizes Agent (or its agent) to file at
any time and from time to time such financing statements with respect to the Collateral naming
Agent or its designee as the secured party and such Borrower as debtor, as Agent may require, and
including any other information with respect to such Borrower or otherwise required by part 5 of
Article 9 of the Uniform Commercial Code of such jurisdiction as Agent may determine, together with
any amendment and continuations with respect thereto, which authorization shall apply to all
financing statements filed on, prior to or after the date hereof. Each Borrower hereby ratifies
and approves all financing statements naming Agent or its designee as secured party and such
Borrower as debtor with respect to the Collateral (and any amendments with respect to such
financing statements) filed by or on behalf of Agent prior to the date hereof and ratifies and
confirms the authorization of Agent to file such financing statements (and amendments, if any).
Each Borrower hereby authorizes Agent to adopt on behalf of such Borrower any symbol required for
authenticating any electronic filing. In the event that the description of the collateral in any
financing statement naming Agent or its designee as the secured party and any Borrower as debtor
includes assets and properties of such Borrower that do not at any time constitute Collateral,
whether hereunder, under any of the other Financing Agreements or otherwise, the filing of such
financing statement shall nonetheless be deemed authorized by such Borrower to the extent of the
Collateral included in such description and it shall not render the financing statement ineffective
as to any of the Collateral or otherwise affect the financing statement as it applies to any of the
Collateral. In no event shall any Borrower at any time file, or permit or cause to be filed, any
correction statement or termination statement with respect to any financing statement (or amendment
or continuation with respect thereto) naming Agent or its designee as secured party and such
Borrower as debtor.

          (b) No Borrower has any chattel paper (whether tangible or electronic) or instruments as of
the date hereof, except as set forth in the Information Certificate. In the event that any Borrower
shall be entitled to or shall receive any chattel paper or instrument after the date hereof, such
Borrower shall promptly notify Agent thereof in writing. Promptly upon the receipt thereof by or
on behalf of any Borrower (including by any agent or representative), such Borrower shall deliver,
or cause to be delivered to Agent, all tangible chattel paper and instruments that such Borrower
has or may at any time acquire, accompanied by such instruments of transfer or assignment duly
executed in blank as Agent may from time to time specify, in each case except as Agent may
otherwise agree. At Agent’s option, each Borrower shall, or Agent may at any time on behalf of
such Borrower, cause the original of any such instrument or chattel paper to be conspicuously
marked in a form and manner acceptable to Agent with the following legend referring to chattel
paper or instruments as applicable: “This [chattel

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paper][instrument] is subject to the security interest of Wells Fargo Bank, National Association,
as Agent, and any sale, transfer, assignment or encumbrance of this [chattel paper][instrument]
violates the rights of such secured party.”

          (c) In the event that any Borrower shall at any time hold or acquire an interest in any
electronic chattel paper or any “transferable record” (as such term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), such Borrower shall
promptly notify Agent thereof in writing. Promptly upon Agent’s request, each Borrower shall take,
or cause to be taken, such actions as Agent may request to give Agent control of such electronic
chattel paper under Section 9-105 of the UCC and control of such transferable record under Section
201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as in effect in such jurisdiction.

          (d) No Borrower has any deposit accounts as of the date hereof, except as set forth in the
Information Certificate. No Borrower shall, directly or indirectly, after the date hereof open,
establish or maintain any deposit account unless each of the following conditions is satisfied: (i)
Agent shall have received not less than five (5) Business Days prior written notice of the
intention of such Borrower to open or establish such account which notice shall specify in
reasonable detail and specificity acceptable to Agent the name of the account, the owner of the
account, the name and address of the bank at which such account is to be opened or established, the
individual at such bank with whom such Borrower is dealing and the purpose of the account, (ii) the
bank where such account is opened or maintained shall be acceptable to Agent, and (iii) on or
before the opening of such deposit account, such Borrower shall as Agent may specify either (A)
deliver to Agent a Deposit Account Control Agreement with respect to such deposit account duly
authorized, executed and delivered by such Borrower and the bank at which such deposit account is
opened and maintained or (B) arrange for Agent to become the customer of the bank with respect to
the deposit account on terms and conditions acceptable to Agent. The terms of this subsection (d)
shall not apply to deposit accounts specifically and exclusively used for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of any Borrower’s salaried
employees.

          (e) No Borrower owns or holds, directly or indirectly, beneficially or as record owner or
both, any investment property, as of the date hereof, or have any investment account, securities
account, commodity account or other similar account with any bank or other financial institution or
other securities intermediary or commodity intermediary as of the date hereof, in each case except
as set forth in the Information Certificate.

          (f) In the event that any Borrower shall be entitled to or shall at any time after the date
hereof hold or acquire any certificated securities, such Borrower shall promptly endorse, assign
and deliver the same to Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as Agent may from time to time specify. If any securities, now or hereafter
acquired by any Borrower are uncertificated and are issued to such Borrower its nominee directly by
the issuer thereof, such Borrower shall immediately notify Agent thereof and shall as Agent may
specify, either (i) cause the issuer to agree to comply with instructions from Agent as to such
securities, without further consent of such Borrower or such nominee, or (ii) arrange for Agent to
become the registered owner of the securities.

          (g) No Borrower shall, directly or indirectly, after the date hereof open, establish or
maintain any investment account, securities account, commodity account or any other similar account
(other than a deposit account) with any securities intermediary or commodity intermediary unless
each of the following conditions is satisfied: (i) Agent shall have received not less than five (5)
Business Days

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prior written notice of the intention of such Borrower to open or establish such account which
notice shall specify in reasonable detail and specificity reasonably acceptable to Agent the name
of the account, the owner of the account, the name and address of the securities intermediary or
commodity intermediary at which such account is to be opened or established, the individual at such
intermediary with whom such Borrower is dealing and the purpose of the account, (ii) the securities
intermediary or commodity intermediary (as the case may be) where such account is opened or
maintained shall be acceptable to Agent, and (iii) on or before the opening of such investment
account, securities account or other similar account with a securities intermediary or commodity
intermediary, or on such later date as Agent may request, such Borrower shall, as Agent may
specify, either (A) execute and deliver, and cause to be executed and delivered to Agent, an
Investment Property Control Agreement with respect thereto duly authorized, executed and delivered
by such Borrower and such securities intermediary or commodity intermediary or (B) arrange for
Agent to become the entitlement holder with respect to such investment property on terms and
conditions acceptable to Agent.

          (h) No Borrower is the beneficiary or otherwise entitled to any right to payment under any
letter of credit, banker’s acceptance or similar instrument as of the date hereof, except as set
forth in the Information Certificate. In the event that any Borrower shall be entitled to or shall
receive any right to payment under any letter of credit, banker’s acceptance or any similar
instrument, whether as beneficiary thereof or otherwise after the date hereof, such Borrower shall
promptly notify Agent thereof in writing. Each Borrower shall immediately, as Agent may specify,
either (i) deliver, or cause to be delivered to Agent, with respect to any such letter of credit,
banker’s acceptance or similar instrument, the written agreement of the issuer and any other
nominated Person obligated to make any payment in respect thereof (including any confirming or
negotiating bank), in form and substance satisfactory to Agent, consenting to the assignment of the
proceeds of the letter of credit to Agent by such Borrower and agreeing to make all payments
thereon directly to Agent or as Agent may otherwise direct or (ii) cause Agent to become, at
Borrowers’ expense, the transferee beneficiary of the letter of credit, banker’s acceptance or
similar instrument (as the case may be).

          (i) No Borrower has any commercial tort claims as of the date hereof, except as set forth in
the Information Certificate. In the event that any Borrower shall at any time after the date hereof
have any commercial tort claims, such Borrower shall promptly notify Agent thereof in writing,
which notice shall (i) set forth in reasonable detail the basis for and nature of such commercial
tort claim and (ii) include the express grant by such Borrower to Agent of a security interest in
such commercial tort claim (and the proceeds thereof). In the event that such notice does not
include such grant of a security interest, the sending thereof by such Borrower to Agent shall be
deemed to constitute such grant to Agent. Upon the sending of such notice, any commercial tort
claim described therein shall constitute part of the Collateral and shall be deemed included
therein. Without limiting the authorization of Agent provided in Section 5.2(a) hereof or otherwise
arising by the execution by such Borrower of this Agreement or any of the other Financing
Agreements, Agent is hereby irrevocably authorized from time to time and at any time to file such
financing statements naming Agent or its designee as secured party and such Borrower as debtor, or
any amendments to any financing statements, covering any such commercial tort claim as Collateral.
In addition, each Borrower shall promptly upon Agent’s request, execute and deliver, or cause to be
executed and delivered, to Agent such other agreements, documents and instruments as Agent may
require in connection with such commercial tort claim.

          (j) No Borrower has any goods, documents of title or other Collateral in the custody, control
or possession of a third party as of the date hereof, except as set forth in the Information
Certificate and except for goods located in the United States in transit to a location of such
Borrower permitted herein in the ordinary course of business of such Borrower in the possession of
the carrier transporting such goods. In the event that any goods, documents of title or other
Collateral are at any time after the date hereof in the custody, control or possession of any other
Person not referred to in the

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Information Certificate or such carriers, Borrowers shall promptly notify Agent thereof in
writing. Promptly upon Agent’s request, each Borrower shall deliver to Agent a Collateral Access
Agreement duly authorized, executed and delivered by such Person and the Borrower that is the owner
of such Collateral.

          (k) Each Borrower shall take any other actions reasonably requested by Agent from time to time
to cause the attachment, perfection and first priority of, and the ability of Agent to enforce, the
security interest of Agent in any and all of the Collateral, including, (i) executing, delivering
and, where appropriate, filing financing statements and amendments relating thereto under the UCC
or other applicable law, to the extent, if any, that such Borrower’s signature thereon is required
therefor, (ii) causing Agent’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or priority of, or ability of
Agent to enforce, the security interest of Agent in such Collateral, (iii) complying with any
provision of any statute, regulation or treaty of the United States as to any Collateral if
compliance with such provision is a condition to attachment, perfection or priority of, or ability
of Agent to enforce, the security interest of Agent in such Collateral, (iv) obtaining the consents
and approvals of any Governmental Authority or third party, including, without limitation, any
consent of any licensor, lessor or other Person obligated on Collateral, and taking all actions
required by any earlier versions of the UCC or by other law, as applicable in any relevant
jurisdiction.

     SECTION 6. COLLECTION AND ADMINISTRATION

     6.1 Borrowers’ Loan Account. Agent shall maintain one or more loan account(s) on its books in
which shall be recorded (a) all Loans, Letters of Credit and other Obligations and the Collateral,
(b) all payments made by or on behalf of Borrowers and (c) all other appropriate debits and credits
as provided in this Agreement, including fees, charges, costs, expenses and interest. All entries
in the loan account(s) shall be made in accordance with Agent’s customary practices as in effect
from time to time.

     6.2 Statements. Agent shall make available electronically to Administrative Borrower each
month a statement setting forth the balance in Borrowers’ loan account(s) maintained by Agent for
Borrowers pursuant to the provisions of this Agreement, including principal, interest, fees, costs
and expenses. Each such statement shall be subject to subsequent adjustment by Agent but shall,
absent manifest errors or omissions, be considered correct and deemed accepted by Borrowers and
conclusively binding upon Borrowers as an account stated except to the extent that Agent receives a
written notice from Administrative Borrower of any specific exceptions of Administrative Borrower
thereto within thirty (30) days after the date such statement has been made available
electronically to Administative Borrower by Agent. Until such time as Agent shall have make
available electronically to Administrative Borrower a written statement as provided above, the
balance in Borrowers’ loan account(s) shall be presumptive evidence of the amounts due and owing to
Agent and Lenders by Borrowers.

     6.3 Collection of Accounts.

          (a) Borrowers shall establish and maintain, at their expense, blocked accounts or lockboxes
and related blocked accounts (in either case, “Blocked Accounts”), as Agent may specify, with such
banks as are acceptable to Agent into which Borrowers shall promptly deposit and direct their
account debtors to directly remit all payments on Receivables and all payments constituting
proceeds of Inventory or other Collateral in the identical form in which such payments are made,
whether by cash, check or other manner. Borrowers shall deliver, or cause to be delivered to Agent
a Deposit Account Control Agreement in form and substance satisfactory to Agent, duly authorized,
executed and delivered by each bank where a Blocked Account is maintained as provided in Section
5.2 hereof or at any time and from time to time Agent may become the bank’s customer with respect
to any of the Blocked Accounts and promptly upon Agent’s request, Borrowers shall execute and
deliver such agreements and documents

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as Agent may require in connection therewith. During each Cash Dominion Period, (i) each Borrower
and Guarantor agrees that all payments made to such Blocked Accounts or other funds received and
collected by Agent or any Lender, whether in respect of the Receivables, as proceeds of Inventory
or other Collateral, or otherwise, shall be treated as payments to Agent and Lenders in respect of
the Obligations and shall constitute the property of Agent and Lenders to the extent of the then
outstanding Obligations, and (ii) Agent may disregard Borrowers’ instructions with respect to the
Blocked Accounts, exercise exclusive dominion and control over the Blocked Accounts, and apply
funds deposited therein as provided herein. Other than during a Cash Dominion Period, Borrowers
shall be permitted to transfer cash from the Blocked Accounts and to use the funds therein for
working capital and general corporate purposes to the extent permitted herein.

          (b) Each Borrower and all of such Borrower’s shareholders, directors, employees, agents,
Subsidiaries or other Affiliates shall, acting as trustee for Agent, receive, as the property of
Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of
Accounts or other Collateral which come into their possession or under their control and
immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to Agent. In no event shall
the same be commingled with any Borrower’s own funds. Borrowers agree to reimburse Agent on demand
for any amounts owed or paid to any bank at which a Blocked Account is established or any other
bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of
Agent’s payments to or indemnification of such bank or Person. The obligation of Borrowers to
reimburse Agent for such amounts pursuant to this Section 6.3 shall survive the payment of the
Obligations and termination of this Agreement.

     6.4 Payments.

          (a) So long as no Application Event has occurred and is continuing and except as otherwise
provided herein with respect to Defaulting Lenders, all principal and interest payments received by
Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of
the Obligations to which such payments relate held by each Lender) and all payments of fees and
expenses received by Agent (other than fees or expenses that are for Agent’s separate account or
for the separate account of the Issuing Bank) shall be apportioned ratably among the Lenders having
a Pro Rata Share of the Commitment or Obligation to which a particular fee or expense relates. All
payments to be made hereunder by Borrowers shall be remitted to the Agent Payment Account as
provided in Section 6.3 or such other place as Agent may designate from time to time, and all such
payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no
Application Event has occurred and is continuing, to reduce the balance of the Loans outstanding
and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled
thereto under applicable law.

          (b) At any time that an Application Event has occurred and is continuing and except as
otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and
all proceeds of Collateral received by Agent shall be applied as follows:

              (i) first, to pay any Lender Group Expenses (including cost or expense reimbursements)
or indemnities then due to Agent under the Financing Agreements, until paid in full,

              (ii) second, to pay any fees or premiums then due to Agent under the Financing
Agreements until paid in full,

              (iii) third, to pay interest due in respect of all Special Agent Advances until paid
in full,

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          (iv) fourth, to pay the principal of all Special Agent Advances until paid in full,

          (v) fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Financing Agreements,
until paid in full,

          (vi) sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the
Financing Agreements until paid in full,

          (vii) seventh, to pay interest accrued in respect of all Loans made by Agent on behalf of
Lenders pursuant to Section 6.9(b) until paid in full,

          (viii) eighth, to pay the principal of all Loans made by Agent on behalf of Lenders pursuant
to Section 6.9(b) until paid in full,

          (ix) ninth, ratably, to pay interest accrued in respect of the Loans (other than Special
Agent Advances),

          (x) tenth, ratably (A) to pay the principal of all Loans until paid in full, (B) to Agent,
to be held by Agent, for the benefit of Issuing Bank (and for the ratable benefit of each of the
Lenders that have an obligation to pay to Agent, for the account of the Issuing Bank, a share of
each payment made by Issuing Bank pursuant to a Letter of Credit), as cash collateral in an
amount up to one hundred five percent (105%) of the Letter of Credit Obligations (to the extent
permitted by applicable law, such cash collateral shall be applied to the reimbursement of any
payment made by Issuing Bank pursuant to a Letter of Credit as and when such disbursement occurs
and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such
Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this
Section 6.4(b), beginning with tier (i) hereof), and (C) ratably, to the Bank Product Providers
based upon amounts then certified by the applicable Bank Product Provider to Agent (in form and
substance satisfactory to Agent) to be due and payable to such Bank Product Providers on account
of Hedge Obligations as to which a Reserve has been established for the Current Hedge Exposure
applicable thereto,

          (xi) eleventh, to pay any other Obligations other than Obligations owed to Defaulting
Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts
then due and payable in respect of Banking Relationship Debt (including all Hedge Obligations for
which no Reserve has been established for the Current Hedge Exposure applicable thereto and the
portion of any Hedge Obligations in excess of the Reserve created therefor)), with any balance to
be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as
cash collateral (which cash collateral may be released by Agent to the applicable Bank Product
Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts
due and payable with respect to Banking Relationship Debt owed to the applicable Bank Product
Provider as and when such amounts first become due and payable and, if and at such time as all
such Banking Relationship Debt is paid or otherwise satisfied in full, the cash collateral held
by Agent in respect of such Banking Relationship Debt shall be reapplied pursuant to this Section
6.4(b), beginning with tier (i) hereof),

          (xii) twelfth, ratably to pay any Obligations owed to Defaulting Lenders; and

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     (xiii) thirteenth, to Borrowers (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.

          (c) Agent promptly shall distribute to each Lender, pursuant to the applicable wire
instructions received from each Lender in writing, such funds as it may be entitled to receive,
subject to a delay due to the timing of Settlement Periods as provided in Section 6.9(b).

          (d) In each instance, so long as no Application Event has occurred and is continuing, Section
6.4 shall not apply to any payment made by Borrowers to Agent and specified by Borrowers to be for
the payment of specific Obligations then due and payable (or prepayable) under any provision of
this Agreement or any other Financing Agreement.

          (e) For purposes of Section 6.4(b), “paid in full” of a type of Obligation means payment in
cash or immediately available funds of all amounts owing on account of such type of Obligation,
including interest accrued after the commencement of any bankruptcy or other insolvency proceeding,
default interest, interest on interest, and expense (including all Lender Group Expenses)
reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed
in whole or in part in any bankruptcy or other insolvency proceeding.

          (f) Notwithstanding anything to the contrary contained in this Agreement, unless so directed
by Administrative Borrower, or unless an Event of Default shall exist or have occurred and be
continuing, Agent shall not apply any payments which it receives to any LIBOR Rate Loans, except
(i) on the expiration date of the Interest Period applicable to any such LIBOR Rate Loans, or (ii)
in the event that there are no outstanding Base Rate Loans. Unless payment is otherwise timely made
by Borrowers, the becoming due of any Obligations, whether principal, interest, fees, costs or
expenses payable hereunder or under any of the other Financing Agreements or Bank Product
Agreement, including, Letter of Credit Fees, Lender Group Expenses, and any amounts due and payable
to the Bank Product Providers in respect of Bank Products, shall be deemed to be a request for
Loans on the applicable due date thereof, in the amount of such Obligations, and shall initially
accrue interest at the rate then applicable to Loans that are Base Rate Loans (unless and until
converted into LIBOR Rate Loans in accordance with the terms of this Agreement). The proceeds of
such Loans shall be disbursed as direct payment of the relevant Obligations. Borrowers shall make
all payments to Agent and Lenders on the Obligations free and clear of, and without deduction or
withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies,
imposts, fees, deductions, withholding, restrictions or conditions of any kind. If after receipt of
any payment of, or proceeds of Collateral applied to the payment of, any of the Obligations, Agent
or any Lender is required to surrender or return such payment or proceeds to any Person for any
reason, then the Obligations intended to be satisfied by such payment or proceeds shall be
reinstated and continue and this Agreement shall continue in full force and effect as if such
payment or proceeds had not been received by Agent or such Lender. Borrowers shall be liable to
pay to Agent, and do hereby indemnify and hold Agent and Lenders harmless for the amount of any
payments or proceeds surrendered or returned. This Section 6.4(f) shall remain effective
notwithstanding any contrary action which may be taken by Agent or any Lender in reliance upon such
payment or proceeds. This Section 6.4(f) shall survive the payment of the Obligations and the
termination of this Agreement.

          (g) In the event of a direct conflict between the priority provisions of this Section 6.4 and
any other provision contained in this Agreement or any other Financing Agreement, it is the
intention of the parties hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other. In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of Section
6.9(e) and this Section 6.4, then the provisions of Section 6.9(e) shall control and govern, and if
otherwise, then the terms and provisions of this Section 6.4, shall control and govern.

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     6.5 Authorization to Make Loans. Agent is authorized to make the Loans and provide Letters of
Credit based upon telephonic or other instructions received from anyone purporting to be an officer
of any Borrower or other authorized Person or, at the discretion of Agent, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letters of Credit hereunder shall
specify the date on which the requested advance is to be made or Letters of Credit established
(which day shall be a Business Day) and the amount of the requested Loan. Requests received after
11:00 a.m. (Atlanta, Georgia) time on any day shall be deemed to have been made as of the opening
of business on the immediately following Business Day. All Loans and Letters of Credit under this
Agreement shall be conclusively presumed to have been made to, and at the request of and for the
benefit of, Borrowers when deposited to the credit of Borrowers or otherwise disbursed or
established in accordance with the instructions of Borrowers or in accordance with the terms and
conditions of this Agreement.

     6.6 Use of Proceeds. All Loans made or Letters of Credit provided by Agent or Lenders to
Borrowers pursuant to the provisions hereof shall be used by Borrowers only for: (a) payments to
each of the Persons listed in the disbursement direction letter furnished by Borrowers to Agent on
the Closing Date; (b) costs, expenses and fees in connection with the preparation, negotiation,
execution and delivery of this Agreement and the other Financing Agreements; (c) for Permitted
Acquisitions, and (d) general operating, working capital and other proper corporate purposes of
Borrowers not otherwise prohibited by the terms hereof. None of the proceeds will be used, directly
or indirectly, for the purpose of purchasing or carrying any margin security or for the purposes of
reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the Loans to be considered a “purpose
credit” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System,
as amended.

     6.7 Pro Rata Treatment. Except to the extent otherwise provided in this Agreement: (a) the
making and conversion of Loans shall be made among the Lenders based on their respective Pro Rata
Shares as to the Loans and (b) each payment on account of any Obligations to or for the account of
one or more of Lenders in respect of any Obligations due on a particular day shall be allocated
among the Lenders entitled to such payments based on their respective Pro Rata Shares and shall be
distributed accordingly.

     6.8 Sharing of Payments, Etc.

          (a) Borrowers agree that, in addition to (and without limitation of) any right of setoff,
banker’s lien or counterclaim Agent or any Lender may otherwise have, each Lender shall be
entitled, at its option (but subject, as among Agent and Lenders, to the provisions of Section
12.12(a) hereof), to offset balances held by it for the account of any Borrower at any of its
offices, in dollars or in any other currency, against any principal of or interest on any Loans
owed to such Lender or any other amount payable to such Lender hereunder, that is not paid when due
(regardless of whether such balances are then due to such Borrower), in which case it shall
promptly notify Borrowers and Agent thereof; provided, that, such Lender’s failure to give such
notice shall not affect the validity thereof.

          (b) If any Lender (including Agent) shall obtain from any Borrower payment of any principal of
or interest on any Loan owing to it or payment of any other amount under this Agreement or any of
the other Financing Agreements through the exercise of any right of setoff, banker’s lien or
counterclaim or similar right or otherwise (other than from Agent as provided herein), and, as a
result of such payment, such Lender shall have received more than its Pro Rata Share of the
principal of the Loans or more than its share of such other amounts then due hereunder or
thereunder by Borrowers to such Lender than the percentage thereof received by any other Lender, it
shall promptly pay to Agent, for the benefit of Lenders, the amount of such excess and
simultaneously purchase from such other Lenders a participation in the Loans or such other amounts,
respectively, owing to such other Lenders (or such

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interest due thereon, as the case may be) in such amounts, and make such other adjustments from
time to time as shall be equitable, to the end that all Lenders shall share the benefit of such
excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving
such excess payment) in accordance with their respective Pro Rata Shares or as otherwise agreed by
Lenders. To such end all Lenders shall make appropriate adjustments among themselves (by the
resale of participation sold or otherwise) if such payment is rescinded or must otherwise be
restored.

          (c) Borrowers agree that any Lender purchasing a participation (or direct interest) as
provided in this Section may exercise, in a manner consistent with this Section, all rights of
setoff, banker’s lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such
Lender in the amount of such participation.

          (d) Nothing contained herein shall require any Lender to exercise any right of setoff,
banker’s lien, counterclaims or similar rights or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other Indebtedness or
obligation of any Borrower. If, under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender
shall, to the extent practicable, assign such rights to Agent for the benefit of Lenders and, in
any event, exercise its rights in respect of such secured claim in a manner consistent with the
rights of Lenders entitled under this Section to share in the benefits of any recovery on such
secured claim.

	6.9	 	Settlement Procedures.

          (a) In order to administer the Credit Facility in an efficient manner and to minimize the
transfer of funds between Agent and Lenders, Agent may, at its option, subject to the terms of this
Section, make available, on behalf of Lenders, the full amount of the Loans requested or charged to
Borrowers’ loan account(s) or otherwise to be advanced by Lenders pursuant to the terms hereof,
without requirement of prior notice to Lenders of the proposed Loans.

          (b) With respect to all Loans made by Agent on behalf of Lenders as provided in this Section,
the amount of each Lender’s Pro Rata Share of the outstanding Loans shall be computed weekly, and
shall be adjusted upward or downward on the basis of the amount of the outstanding Loans as of 5:00
p.m. (Atlanta, Georgia time) on the Business Day immediately preceding the date of each settlement
computation; provided, that, Agent retains the absolute right at any time or from time to time to
make the above described adjustments at intervals more frequent than weekly, but in no event more
than twice in any week. Agent shall deliver to each of the Lenders after the end of each week, or
at such lesser period or periods as Agent shall determine, a summary statement of the amount of
outstanding Loans for such period (such week or lesser period or periods being hereinafter referred
to as a “Settlement Period”). If the summary statement is sent by Agent and received by a Lender
prior to 12:00 p.m. (Atlanta, Georgia time), then such Lender shall make the settlement transfer
described in this Section by no later than 3:00 p.m. (Atlanta, Georgia time) on the same Business
Day and if received by a Lender after such time, then such Lender shall make the settlement
transfer by no later than 3:00 p.m. (Atlanta, Georgia time) on the next Business Day following the
date of receipt. If, as of the end of any Settlement Period, the amount of a Lender’s Pro Rata
Share of the outstanding Loans is more than such Lender’s Pro Rata Share of the outstanding Loans
as of the end of the previous Settlement Period, then such Lender shall forthwith (but in no event
later than the time set forth in the preceding sentence) transfer to Agent by wire transfer in
immediately available funds the amount of the increase. Alternatively, if the amount of a Lender’s
Pro Rata Share of the outstanding Loans in any Settlement Period is less than the amount of such
Lender’s Pro Rata Share of the outstanding Loans for the previous Settlement Period, Agent shall
forthwith transfer to such Lender by wire transfer in immediately available funds the amount of the
decrease. The obligation

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of each of the Lenders to transfer such funds and effect such settlement shall be irrevocable and
unconditional and without recourse to or warranty by Agent. Agent and each Lender agrees to mark
its books and records at the end of each Settlement Period to show at all times the dollar amount
of its Pro Rata Share of the outstanding Loans and Letters of Credit. Each Lender shall only be
entitled to receive interest on its Pro Rata Share of the Loans to the extent such Loans have been
funded by such Lender. Because Agent on behalf of Lenders may be advancing and/or may be repaid
Loans prior to the time when Lenders will actually advance and/or be repaid such Loans, interest
with respect to Loans shall be allocated by Agent in accordance with the amount of Loans actually
advanced by and repaid to each Lender and Agent and shall accrue from and including the date such
Loans are so advanced to but excluding the date such Loans are either repaid by Borrowers or
actually settled with the applicable Lender as described in this Section.

          (c) To the extent that Agent has made any such amounts available and the settlement described
above shall not yet have occurred, upon repayment of any Loans by Borrowers, Agent may apply such
amounts repaid directly to any amounts made available by Agent pursuant to this Section. In lieu of
weekly or more frequent settlements, Agent may, at its option, at any time require each Lender to
provide Agent with immediately available funds representing its Pro Rata Share of each Loan, prior
to Agent’s disbursement of such Loan to Borrowers. In such event, all Loans under this Agreement
shall be made by the Lenders simultaneously and proportionately to their Pro Rata Shares. No
Lender shall be responsible for any default by any other Lender in the other Lender’s obligation to
make a Loan requested hereunder nor shall the Commitment of any Lender be increased or decreased as
a result of the default by any other Lender in the other Lender’s obligation to make a Loan
hereunder.

          (d) Unless Agent receives notice from a Lender prior to 12:00 p.m. (Atlanta, Georgia time) on
the date of any Loan, that such Lender will not make available as and when required hereunder to
Agent for the account of a Borrower (or Administrative Borrower for the benefit of such Borrower)
the amount of that Lender’s Pro Rata Share of the Loan or other advance, Agent may assume that each
Lender has made or will make such amount available to Agent in immediately available funds on the
date of such Loan or advance and Agent may (but shall not be so required), in reliance upon such
assumption, make available to Borrowers on such date a corresponding amount. If any Lender shall
not have made its full amount available to Agent in immediately available funds and if Agent in
such circumstances has made available to Borrowers such amount, that Lender shall on the Business
Day following such Funding Date make such amount available to Agent, together with interest at the
Defaulting Lender Rate for each day during such period. A notice submitted by Agent to any Lender
with respect to amounts owing under this Section 6.9(b) shall be conclusive, absent manifest error.
If such amount is so made available, such payment to Agent shall constitute such Lender’s payment
of its Pro Rata Share of such Loan for all purposes of this Agreement. If such amount is not made
available to Agent on the Business Day following the date of such Loan or advance, Agent will
notify Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers shall
pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed
since the date of such Loan, at a rate per annum equal to the interest rate applicable at the time
to the advances composing such Loan.

          (e) Notwithstanding anything to the contrary in this Section 6.9, in the event that a Lender
is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the
Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in
this Section 6.9(e). Agent shall not be obligated to transfer to a Defaulting Lender any payments
made by a Borrower to Agent (including any principal, interest or fees) for the Defaulting Lender’s
benefit or any collections or proceeds of Collateral that would otherwise be remitted hereunder to
the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall
transfer any such payments, first, to Agent to the extent of any Loans that were made by Agent and
that were required to be, but were not, paid by the Defaulting Lender; second, to the Issuing Bank,
to the extent of the portion of a payment

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made by Issuing Bank pursuant to a Letter of Credit that was required to be, but was not, paid by
the Defaulting Lender; third, to each non-Defaulting Lender ratably in accordance with their
Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of a Loan
(or other funding obligation) was funded by such other non-Defaulting Lender); fourth, to a
suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be
made available to be re-advanced to or for the benefit of Borrowers as if such Defaulting Lender
had made its portion of Loans (or other funding obligations) hereunder; and fifth, from and after
the date on which all other Obligations have been paid in full, to such Defaulting Lender in
accordance with the twelfth clause of Section 6.4(b). Subject to the foregoing, Agent may hold and,
in its discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all
such payments received and retained by Agent for the account of such Defaulting Lender. Solely for
the purposes of voting or consenting to matters with respect to the Financing Agreements (including
the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the
fee payable under Section 3.2(b), such Defaulting Lender shall be deemed not to be a “Lender” and
such Lender’s Commitment shall be deemed to be zero. The provisions of this Section 6.9(e) shall
remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which
all of the non-Defaulting Lenders, Agent, Issuing Lender, and Borrowers shall have waived, in
writing, the application of this Section 6.9(e) to such Defaulting Lender, or (z) the date on which
such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays
to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to
fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform
its future obligations hereunder. The operation of this Section 6.9(e) shall not be construed to
increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by
such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve
or excuse the performance by any Borrower of its duties and obligations hereunder to Agent, Issuing
Bank, or to the Lenders other than such Defaulting Lender. Any failure by a Defaulting Lender to
fund amounts that it was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrowers, at their option, upon written
notice to Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting
Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the
arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance
in favor of the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being paid its share of the
outstanding Obligations (other than Banking Relationship debt, but including (1) all interest,
fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit); provided, however, that any such
assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver
of any Lenders’ or any Borrower’s rights or remedies against any such Defaulting Lender arising out
of or in relation to such failure to fund. In the event of a direct conflict between the priority
provisions of this Section 6.9(e) and any other provision contained in this Agreement or any other
Financing Agreement, it is the intention of the parties hereto that such provisions be read
together and construed, to the fullest extent possible, to be in concert with each other. In the
event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 6.9(e) shall control and govern.

     6.10 Obligations Several; Independent Nature of Lenders’ Rights. The obligation of each Lender
hereunder is several, and no Lender shall be responsible for the obligation or commitment of any
other Lender hereunder. Nothing contained in this Agreement or any of the other Financing
Agreements and no action taken by the Lenders pursuant hereto or thereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and subject to Section 12.12 hereof, each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it

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shall not be necessary for any other Lender to be joined as an additional party in any proceeding
for such purpose.

     6.11 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of
Loans and Statements.

          (a) Each Borrower hereby irrevocably appoints and constitutes Administrative Borrower as its
agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this
Agreement and the other Financing Agreements from Agent or any Lender in the name or on behalf of
such Borrower. Agent and Lenders may disburse the Loans to such bank account of Administrative
Borrower or a Borrower or otherwise make such Loans to a Borrower and provide such Letters of
Credit to a Borrower as Administrative Borrower may designate or direct, without notice to any
other Borrower or Guarantor. Notwithstanding anything to the contrary contained herein, Agent may
at any time and from time to time require that Loans to or for the account of any Borrower be
disbursed directly to an operating account of such Borrower.

          (b) Administrative Borrower hereby accepts the appointment by Borrowers to act as the agent
and attorney-in-fact of Borrowers pursuant to this Section 6.11. Administrative Borrower shall
ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the
account of Administrative Borrower, or the issuance of any Letter of Credit for a Borrower
hereunder, shall be paid to or for the account of such Borrower.

          (c) Each Borrower and other Guarantor hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to receive statements on account and all other notices from
Agent and Lenders with respect to the Obligations or otherwise under or in connection with this
Agreement and the other Financing Agreements.

          (d) Any notice, election, representation, warranty, agreement or undertaking by or on behalf
of any other Borrower or any Guarantor by Administrative Borrower shall be deemed for all purposes
to have been made by such Borrower or Guarantor, as the case may be, and shall be binding upon and
enforceable against such Borrower or Guarantor to the same extent as if made directly by such
Borrower or Guarantor.

          (e) No purported termination of the appointment of Administrative Borrower as agent as
aforesaid shall be effective, except after ten (10) days’ prior written notice to Agent.

     6.12 Nature and Extent of Each Borrower’s Liability.

          (a) Each Borrower shall be liable for, on a joint and several basis, and hereby guarantees the
timely payment by all other Borrowers of, all of the Loans and other Obligations, regardless of
which Borrower actually may have received the proceeds of any Loans or other extensions of credit
hereunder or the amount of such Loans received or the manner in which Agent or any Lender accounts
for such Loans or other extensions of credit on its books and records, it being acknowledged and
agreed that Loans to any Borrower inure to the mutual benefit of all Borrowers and that Agent and
Lenders are relying on the joint and several liability of Borrowers in extending the Loans and
other financial accommodations hereunder. Each Borrower hereby unconditionally and irrevocably
agrees that upon default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest owed on, any of the Loans or other Obligations, such
Borrower shall forthwith pay the same, without notice or demand.

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          (b) Each Borrower’s joint and several liability hereunder with respect to, and guaranty of,
the Loans and other Obligations shall, to the fullest extent permitted by applicable law, be
unconditional irrespective of (i) the validity, enforceability, avoidance or subordination of any
of the Obligations or of any promissory note or other document evidencing all or any part of the
Obligations, (ii) the absence of any attempt to collect any of the Obligations from any other
Borrower or any Guarantor or any Collateral or other security therefor, or the absence of any other
action to enforce the same, (iii) the waiver, consent, extension, forbearance or granting of any
indulgence by Agent or any Lender with respect to any provision of any instrument evidencing or
securing the payment of any of the Obligations, or any other agreement now or hereafter executed by
any other Borrower and delivered to Agent or any Lender, (iv) the failure by Agent to take any
steps to perfect or maintain the perfected status of its security interest in or Lien upon, or to
preserve its rights to, any of the Collateral or other security for the payment or performance of
any of the Obligations or Agent’s release of any Collateral or of its security interests or Liens
upon any Collateral, (v) Agent’s or Lenders’ election, in any proceeding instituted under the
Bankruptcy Code, for the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any
borrowing or grant of a security interest by any other Borrower, as debtor-in-possession under
Section 364 of the Bankruptcy Code, (vii) the release or compromise, in whole or in part, of the
liability of any Borrower or Guarantor for the payment of any of the Obligations, (viii) any
amendment or modification of any of the Financing Agreements or any waiver of a Default or Event of
Default, (ix) any increase in the amount of the Obligations beyond any limits imposed herein or in
the amount of any interest, fees or other charges payable in connection therewith, or any decrease
in the same, (x) the disallowance of all or any portion of Agent’s or any Lender’s claims against
any other Borrower or Guarantor for the repayment of any of the Obligations under Section 502 of
the Bankruptcy Code, or (xi) any other circumstance that might constitute a legal or equitable
discharge or defense of any Borrower. After the occurrence and during the continuance of any Event
of Default, Agent may proceed directly and at once, without notice to any Borrower or Guarantor,
against any or all of Borrowers to collect and recover all or any part of the Obligations, without
first proceeding against any other Borrower or Guarantor or against any Collateral or other
security for the payment or performance of any of the Obligations, and each Borrower waives any
provision under applicable law that might otherwise require Agent to pursue or exhaust its remedies
against any Collateral or any Borrower or Guarantor before pursuing another Borrower or Guarantor.
Each Borrower consents and agrees that Agent shall be under no obligation to marshal any assets in
favor of any Borrower or Guarantor or against or in payment of any or all of the Obligations.

          (c) No payment or payments made by a Borrower or Guarantor or received or collected by Agent
from a Borrower or any other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or in payment of the
Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any
Borrower under this Agreement, each of whom shall remain jointly and severally liable for the
payment and performance of all Loans and other Obligations until full payment of the Obligations.

          (d) Each Borrower is unconditionally obligated to repay the Obligations as a joint and several
obligor under this Agreement. If, as of any date, the aggregate amount of payments made by a
Borrower on account of the Obligations and proceeds of such Borrower’s Collateral that are applied
to the Obligations exceeds the aggregate amount of Loan proceeds actually used by such Borrower in
its business (such excess amount being referred to as an “Accommodation Payment”), then each of the
other Borrowers (each such Borrower being referred to as a “Contributing Borrower”) shall be
obligated to make contribution to such Borrower (the “Paying Borrower”) in an amount equal to (i)
the product derived by multiplying the sum of each Accommodation Payment of each Borrower by the
Allocable Percentage of the Borrower from whom contribution is sought less (ii) the amount, if any,
of the then outstanding Accommodation Payment of such Contributing Borrower (such last mentioned
amount which is to be subtracted from the aforesaid product to be increased by any amounts
theretofore paid by such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore

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received by such Contributing Borrower by way of contribution hereunder); provided, however, that a
Paying Borrower’s recovery of contribution hereunder from the other Borrowers shall be limited to
that amount paid by the Paying Borrower in excess of its Allocable Percentage of all Accommodation
Payments then outstanding of all Borrowers. As used herein, the term “Allocable Percentage” shall
mean, on any date of determination thereof, a fraction the denominator of which shall be equal to
the number of Borrowers who are parties to this Agreement on such date and the numerator of which
shall be 1; provided, however, that such percentages shall be modified in the event that
contribution from a Borrower is not possible by reason of insolvency, bankruptcy or otherwise by
reducing such Borrower’s Allocable Percentage equitably and by adjusting the Allocable Percentage
of the other Borrowers proportionately so that the Allocable Percentages of all Borrowers at all
times equals 100%.

          (e) Each Borrower hereby subordinates any claims, including any right of payment, subrogation,
contribution and indemnity, that it may have from or against any other Borrower or any Guarantor,
and any successor or assign of any other Borrower or any Guarantor, including any trustee, receiver
or debtor-in-possession, howsoever arising, due or owing or whether heretofore, now or hereafter
existing, to the full payment of all of the Obligations.

     6.13 Taxes.

          (a) All payments made by Borrowers hereunder or under any note or other Financing Agreements
shall be made without setoff, counterclaim, or other defense. In addition, all such payments shall
be made free and clear of, and without deduction or withholding for, any present or future Taxes,
and in the event any deduction or withholding of Taxes is required, Borrowers shall comply with the
next sentence of this Section 6.13(a). If any Taxes are so levied or imposed, Borrowers agree to
pay the full amount of such Taxes and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement, any note, or Financing Agreement, including any
amount paid pursuant to this Section 6.13(a) after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein; provided, however, that Borrowers
shall not be required to increase any such amounts if the increase in such amount payable results
from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally determined by
a court of competent jurisdiction). Borrowers shall furnish to Agent as promptly as possible after
the date the payment of any Tax is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by Borrowers.

          (b) Borrowers agree to pay any present or future stamp, value added or documentary taxes or
any other excise or property taxes, charges, or similar levies that arise from any payment made
hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise
with respect to this Agreement or any other Financing Agreement.

          (c) If a Lender or Participant is entitled to claim an exemption or reduction from United
States withholding tax, such Lender or Participant agrees with and in favor of Agent, to deliver to
Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the
following before receiving its first payment under this Agreement:

               (i) if such Lender or Participant is entitled to claim an exemption from United States
withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or
Participant, signed under penalty of perjury, that it is not a (1) a “bank” as described in Section
881(c)(3)(A) of the Code, (2) a ten percent (10%) shareholder of any Borrower (within the meaning
of Section 871(h)(3)(B) of the Code), or (3) a controlled foreign corporation related to any
Borrower within the meaning of Section 864(d)(4) of the Code, and (B) a properly completed and
executed Internal Revenue Service Form W-8BEN or Form W-8IMY (with proper attachments);

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               (ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of,
withholding tax under a United States tax treaty, a properly completed and executed copy of
Internal Revenue Service Form W-8BEN;

               (iii) if such Lender or Participant is entitled to claim that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively connected with a
United States trade or business of such Lender, a properly completed and executed copy of Internal
Revenue Service Form W-8ECI;

               (iv) if such Lender or Participant is entitled to claim that interest paid under this
Agreement is exempt from United States withholding tax because such Lender or Participant serves as
an intermediary, a properly completed and executed copy of Internal Revenue Service Form W-8IMY
(with proper attachments); or

               (v) a properly completed and executed copy of any other form or forms, including Internal
Revenue Service Form W-9, as may be required under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States withholding or backup withholding tax.

Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or
obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a
Participant, to the Lender granting the participation only) of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.

          (d) If a Lender or Participant claims an exemption from withholding tax in a jurisdiction
other than the United States, such Lender or such Participant agrees with and in favor of Agent, to
deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only)
any such form or forms, as may be required under the laws of such jurisdiction as a condition to
exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its
first payment under this Agreement, but only if such Lender or such Participant is legally able to
deliver such forms; provided, however, that nothing in this Section 6.13(d) shall require a Lender
or Participant to disclose any information that it deems to be confidential (including without
limitation, its tax returns). Each Lender and each Participant shall provide new forms (or
successor forms) upon the expiration or obsolescence of any previously delivered forms and to
promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation
only) of any change in circumstances which would modify or render invalid any claimed exemption or
reduction.

          (e) If a Lender or Participant claims exemption from, or reduction of, withholding tax and
such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant
agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender
granting the participation only) of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrowers to such Lender or Participant. To the extent of such percentage
amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to
Section 6.13(c) or 6.13(d) as no longer valid. With respect to such percentage amount, such
Participant or Assignee may provide new documentation, pursuant to Section 6.13(c) or 6.13(d), if
applicable. Each Borrower agrees that each Participant shall be entitled to the benefits of this
Section 6.13 with respect to its participation in any portion of the Commitments and the
Obligations so long as such Participant complies with the obligations set forth in this Section
6.13 with respect thereto.

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          (f) If a Lender or a Participant is entitled to a reduction in the applicable withholding tax,
Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold
from any interest payment to such Lender or such Participant an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other documentation
required by Section 6.13(c) or 6.13(d) are not delivered to Agent (or, in the case of a
Participant, to the Lender granting the participation), then Agent (or, in the case of a
Participant, to the Lender granting the participation) may withhold from any interest payment to
such Lender or such Participant not providing such forms or other documentation an amount
equivalent to the applicable withholding tax.

          (g) If the Internal Revenue Service or any other Governmental Authority of the United States
or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender
granting the participation) did not properly withhold tax from amounts paid to or for the account
of any Lender or any Participant due to a failure on the part of the Lender or any Participant
(because the appropriate form was not delivered, was not properly executed, or because such Lender
failed to notify Agent (or such Participant failed to notify the Lender granting the participation)
of a change in circumstances which rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in
the case of a Participant, such Participant shall indemnify and hold the Lender granting the
participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of
a Participant, to the Lender granting the participation), as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent
(or, in the case of a Participant, to the Lender granting the participation only) under this
Section 6.13, together with all costs and expenses (including attorneys fees and expenses). The
obligation of the Lenders and the Participants under this subsection shall survive the payment of
all Obligations and the resignation or replacement of Agent.

          (h) If Agent or a Lender determines, in its sole discretion, that it has received a refund of
any Taxes as to which it has been indemnified by Borrowers or with respect to which Borrowers have
paid additional amounts pursuant to this Section 6.13, so long as no Default or Event of Default
has occurred and is continuing, it shall pay over such refund to Borrowers (but only to the extent
of payments made, or additional amounts paid, by Borrowers under this Section 6.13 with respect to
Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental Authority with respect
to such a refund); provided, that Borrowers, upon the request of Agent or such Lender, agrees to
repay the amount paid over to Borrowers (plus any penalties, interest or other charges, imposed by
the relevant Governmental Authority, other than such penalties, interest or other charges imposed
as a result of the willful misconduct or gross negligence of Agent hereunder) to Agent or such
Lender in the event Agent or such Lender is required to repay such refund to such Governmental
Authority. Notwithstanding anything in this Agreement to the contrary, this Section 6.13 shall not
be construed to require Agent or any Lender to make available its tax returns (or any other
information which it deems confidential) to Borrowers or any other Person.

SECTION 7. COLLATERAL REPORTING AND COVENANTS

     Each Borrower hereby covenants and agrees, on behalf of itself and its Subsidiaries, as
applicable below, as follows:

     7.1 Collateral Reporting.

          (a) Borrowers shall provide Agent with the following documents in a form satisfactory to
Agent:

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               (i) on a monthly basis, or more frequently as Agent may request (A) perpetual inventory
reports, (B) inventory reports by location and category, (C) agings of accounts payable, and (D)
agings of accounts receivable (together with a reconciliation to the previous month’s aging and
general ledger);

               (ii) on a monthly basis, a report detailing the calculation of the Borrowing Base certified by
the chief financial officer of Delta or an authorized designee thereof, in form and substance
satisfactory to Agent; provided, that, if Excess Availability at any time is less than an amount
equal to twelve and one-half percent (12.5%) of the Maximum Credit, in Agent’s discretion and at
Agent’s request, Borrowers shall deliver to Agent such calculation of the Borrowing Base and
certification on a weekly basis until such time that Excess Availability is greater than or equal
to twelve and one-half percent (12.5%) of the Maximum Credit, for a period of sixty (60)
consecutive days, at which time the delivery requirements shall revert to a monthly basis;

               (iii) upon Agent’s request, (A) copies of customer statements and credit memos, remittance
advices and reports, and copies of deposit slips and bank statements, (B) copies of shipping and
delivery documents, and (C) copies of purchase orders, invoices and delivery documents for
Inventory and Equipment acquired by Borrowers;

               (iv) reports detailing any sales or transfers of Equipment or Real Property during the prior
month; and

               (v) such other reports as to the Collateral as Agent shall request from time to time.

          (b) If any of Borrowers’ records or reports of the Collateral are prepared or maintained by an
accounting service, contractor, shipper or other agent, Borrowers hereby irrevocably authorizes
such service, contractor, shipper or agent to deliver such records, reports, and related documents
to Agent and to follow Agent’s instructions with respect to further services at any time that an
Event of Default exists or has occurred and is continuing.

     7.2 Accounts Covenants.

          (a) Borrowers shall notify Agent promptly of: (i) any material delay in any Borrower’s
performance of any of its obligations to any account debtor involving an Account exceeding
$1,000,000 or the assertion of any claims, offsets, defenses or counterclaims by any account debtor
involving an amount exceeding $1,000,000, or any disputes with account debtors, or any settlement,
adjustment or compromise thereof involving an amount exceeding $1,000,000, (ii) all material
adverse information relating to the financial condition of any account debtor and (iii) any event
or circumstance which, to any Borrower’s knowledge would cause Agent to consider any then existing
Accounts as no longer constituting Eligible Accounts. No credit, discount, allowance or extension
or agreement for any of the foregoing shall be granted to any account debtor without Agent’s
consent, except in the ordinary course of a Borrower’s business in accordance with such Borrower’s
historical practices and policies. So long as no Event of Default exists or has occurred and is
continuing, Borrowers shall settle, adjust or compromise any claim, offset, counterclaim or dispute
with any account debtor. At any time that an Event of Default exists or has occurred and is
continuing, Agent shall, at its option, have the exclusive right to settle, adjust or compromise
any claim, offset, counterclaim or dispute with account debtors or grant any credits, discounts or
allowances.

          (b) Without limiting the obligation of Borrowers to deliver any other information to Agent,
Borrowers shall promptly report to Agent any return of Inventory by any one account debtor if (i)

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the Inventory so returned in such case has a value in excess of $1,000,000, and (ii) the Account
arising out of the sale of the Inventory so returned was not already excluded from Eligible
Accounts in whole or in part as a result of the account debtor’s potential return rights with
respect to such Inventory. At any time that Inventory is returned, reclaimed or repossessed, the
Account (or portion thereof) which arose from the sale of such returned, reclaimed or repossessed
Inventory shall not be deemed an Eligible Account. In the event any account debtor returns
Inventory when an Event of Default exists or has occurred and is continuing, Borrowers shall, upon
Agent’s request, (i) hold the returned Inventory in trust for Agent, (ii) segregate all returned
Inventory from all of its other property, (iii) dispose of the returned Inventory solely according
to Agent’s instructions, and (iv) not issue any credits, discounts or allowances with respect
thereto without Agent’s prior written consent.

          (c) With respect to each Account: (i) the amounts shown on any invoice delivered to Agent or
schedule thereof delivered to Agent shall be true and complete, (ii) no payments shall be made
thereon except payments immediately delivered to Agent pursuant to the terms of this Agreement,
(iii) no credit, discount, allowance or extension or agreement for any of the foregoing shall be
granted to any account debtor except as reported to Agent in accordance with this Agreement and
except for credits, discounts, allowances or extensions made or given in the ordinary course of
each Borrower’s business in accordance with practices and policies previously disclosed to Agent,
(iv) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing
or asserted with respect thereto except as reported to Agent in accordance with the terms of this
Agreement, (v) none of the transactions giving rise thereto will violate any applicable State or
Federal laws or regulations, all documentation relating thereto will be legally sufficient under
such laws and regulations and all such documentation will be legally enforceable in accordance with
its terms.

          (d) Agent shall have the right at any time or times, in Agent’s name or in the name of a
nominee of Agent, to verify the validity, amount or any other matter relating to any Account or
other Collateral, by mail, telephone, facsimile transmission or otherwise.

          (e) Borrowers shall deliver or cause to be delivered to Agent, with appropriate endorsement
and assignment, with full recourse to Borrowers, all chattel paper and instruments which any
Borrower now owns or may at any time acquire immediately upon any Borrower’s receipt thereof,
except as Agent may otherwise agree.

     7.3 Inventory Covenants. With respect to the Inventory, (a) each Borrower shall at all times
maintain inventory records reasonably satisfactory to Agent, keeping correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory, such Borrower’s cost
therefor and daily withdrawals therefrom and additions thereto; (b) Borrowers shall conduct cycle
counts of the Inventory throughout each year, but shall conduct a physical count of Inventory at
any time or times as Agent may request on or after an Event of Default, and promptly following such
physical inventory shall supply Agent with a report in the form and with such specificity as may be
reasonably satisfactory to Agent concerning such physical count; (c) Borrowers shall not remove any
Inventory from the locations set forth or permitted herein, without the prior written consent of
Agent, except for sales of Inventory in the ordinary course of a Borrower’s business and except to
move Inventory directly from one location set forth or permitted herein to another such location
and except for Inventory shipped from the manufacturer thereof to such Borrower which is in transit
to the locations set forth or permitted herein; (d) each Borrower shall, at its expense, at any
time or times as Agent may request upon the occurrence or during the existence of an Event of
Default, deliver or cause to be delivered to Agent written reports or appraisals as to the
Inventory in form, scope and methodology acceptable to Agent and by an appraiser acceptable to
Agent, addressed to Agent and Lenders upon which Agent and Lenders are expressly permitted to rely;
(e) each Borrower shall produce, use, store and maintain the Inventory with all reasonable care and
caution and in accordance with applicable standards of any insurance and in

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conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act
of 1938, as amended and all rules, regulations and orders related thereto); (f) each Borrower
assumes all responsibility and liability arising from or relating to the production, use, sale or
other disposition of the Inventory; (g) Borrowers shall not sell Inventory to any customer on
approval, or any other basis which entitles the customer to return or may obligate any Borrower to
repurchase such Inventory except for the right of return given to customers of such Borrower
consistent with its current policies as of the date hereof; (h) each Borrower shall keep the
Inventory in good and marketable condition; and (i) Borrowers shall not, without prior written
notice to Agent, acquire or accept any Inventory on consignment or approval.

     7.4 Equipment and Real Property Covenants. With respect to the Equipment and Real Property:
(a) each Borrower shall, at its expense, at any time or times as Agent may request upon the
occurrence or during the existence of an Event of Default, deliver or cause to be delivered to
Agent written reports or appraisals as to the Equipment and/or the Real Property in form, scope and
methodology acceptable to Agent and by an appraiser acceptable to Agent, addressed to Agent and
Lenders and upon which Agent and Lenders are expressly permitted to rely; (b) Borrowers shall keep
the Equipment in good order, repair, running and marketable condition (ordinary wear and tear
excepted); (c) Borrowers shall use the Equipment and Real Property with all reasonable care and
caution and in accordance with applicable standards of any insurance and in conformity with all
applicable laws; (d) the Equipment is and shall be used in a Borrower’s business and not for
personal, family, household or farming use; (e) Borrowers shall not remove any Equipment from the
locations set forth or permitted herein, except to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of a Borrower or to move Equipment
directly from one location set forth or permitted herein to another such location except for the
movement of motor vehicles used by or for the benefit of such Borrower in the ordinary course of
business and Borrowers shall not remove any Equipment currently located in the United States to any
location outside of the United States; (f) the Equipment is now and shall remain personal property
and Borrowers shall not permit any of the Equipment to be or become a part of or affixed to real
property so as to become a fixture or an accession to real property unless it is attached to the
Real Property subject to the Mortgage; and (g) each Borrower assumes all responsibility and
liability arising from the use of the Equipment and Real Property.

     7.5 Power of Attorney. Each Borrower hereby irrevocably designates and appoints Agent (and
all Persons designated by Agent) as such Borrower’s true and lawful attorney-in-fact, and
authorizes Agent, in such Borrower’s or Agent’s name, to: (a) at any time a Default or an Event of
Default exists or has occurred and is continuing, (i) demand payment on Receivables or other
Collateral, (ii) enforce payment of Receivables by legal proceedings or otherwise, (iii) exercise
all of such Borrower’s rights and remedies to collect any Receivable or other Collateral, (iv) sell
or assign any Receivable upon such terms, for such amount and at such time or times as Agent deems
advisable, (v) settle, adjust, compromise, extend or renew an Account, (vi) discharge and release
any Receivable, (vii) prepare, file and sign such Borrower’s name on any proof of claim in
bankruptcy or other similar document against an account debtor or other obligor in respect of any
Receivables or other Collateral, (viii) notify the post office authorities to change the address
for delivery of remittances from account debtors or other obligors in respect of Receivables or
other proceeds of Collateral to an address designated by Agent, and open and dispose of all mail
addressed to such Borrower and handle and store all mail relating to the Collateral; and (ix) do
all acts and things which are necessary, in Agent’s determination, to fulfill such Borrower’s
obligations under this Agreement and the other Financing Agreements and (b) at any time (i) during
a Cash Dominion Period, to take control in any manner of any item of payment in respect of
Receivables or constituting Collateral or otherwise received in or for deposit in the Blocked
Accounts or otherwise received by Agent or any Lender, including pursuant to Section 6.3(a), (ii)
during a Cash Dominon Period, to have access to any lockbox or postal box into which remittances
from account debtors or other obligors in respect of Receivables or other proceeds of Collateral
are sent or received, (iii) to endorse such

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Borrower’s name upon any items of payment in respect of Receivables or constituting Collateral or
otherwise received by Agent and any Lender and deposit the same in Agent’s account for application
to the Obligations, (iv) to endorse such Borrower’s name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Receivable or any goods
pertaining thereto or any other Collateral, including any warehouse or other receipts, or bills of
lading and other negotiable or non-negotiable documents, (v) to clear Inventory the purchase of
which was financed with a Letter of Credit through U.S. Customs in such Borrower’s name, Agent’s
name or the name of Agent’s designee, and to sign and deliver to customs officials powers of
attorney in such Borrower’s name for such purpose, and to complete in such Borrower’s or Agent’s
name, any order, sale or transaction, obtain the necessary documents in connection therewith and
collect the proceeds thereof, (vi) to sign such Borrower’s name on any verification of Receivables
and notices thereof to account debtors or other obligors in respect thereof and (vii) to execute in
such Borrower’s name and file any UCC financing statements or amendments thereto. Each Borrower
hereby releases Agent and Lenders and their respective officers, employees and designees from any
liabilities arising from any act or acts under this power of attorney and in furtherance thereof,
whether of omission or commission, except as a result of Agent’s or any Lender’s own gross
negligence or willful misconduct as determined pursuant to a final non-appealable order of a court
of competent jurisdiction.

     7.6 Right to Cure. Agent may, at its option, (a) upon notice to Administrative Borrower, cure
any default by any Borrower under any material agreement with a third party which affects the
Collateral, its value or the ability of Agent to collect, sell or otherwise dispose of the
Collateral or the rights and remedies of Agent therein or the ability of any Borrower to perform
its obligations hereunder or under the other Financing Agreements, (b) pay or bond on appeal any
judgment entered against any Borrower, (c) discharge taxes, Liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral and (d) pay any
amount, incur any expense or perform any act which, in Agent’s judgment, is necessary or
appropriate to preserve, protect, insure or maintain the Collateral and the rights of Agent and
Lenders with respect thereto. Agent may add any amounts so expended to the Obligations and charge
Borrowers’ account therefor, such amounts to be repayable by Borrowers on demand. Agent and Lenders
shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be
deemed to have assumed any obligation or liability of any Borrower. Any payment made or other
action taken by Agent or any Lender under this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to proceed accordingly.

     7.7 Access to Premises. From time to time as requested by Agent, at the cost and expense of
Borrowers, (a) Agent or its designee shall have complete access to all of each Borrower’s premises
during normal business hours and after notice to Administrative Borrower, or at any time and
without notice to any Borrower if an Event of Default exists or has occurred and is continuing, for
the purposes of inspecting, verifying and auditing the Collateral and all of each Borrower’s books
and records, including the Records, and (b) each Borrower shall promptly furnish to Agent such
copies of such books and records or extracts therefrom as Agent may request, and (c) Agent or any
Lender or Agent’s designee may use during normal business hours such of any Borrower’s personnel,
equipment, supplies and premises as may be reasonably necessary for the foregoing (provided, that,
such Borrower shall make such personnel, equipment, supplies and premises available to Agent or its
designee in such manner so as to minimize any interference with the operations of such Borrower and
so as to enable Agent or its designee to comply with applicable health and safety procedures and
regulations) and if an Event of Default exists or has occurred and is continuing for the collection
of Accounts and realization of other Collateral.

     7.8 Appraisals. Agent shall be entitled to conduct, and Borrowers shall be obligated to
reimburse Agent for:

     (a) (i) one (1) Inventory appraisal per calendar year so long as Excess Availability
is

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equal to or greater than $15,000,000 (such amount to be increased pro rata with the amount of
any increase in the Maximum Credit pursuant to Section 2.5), and (ii) at Agent’s discretion,
two (2) Inventory appraisals per calendar year so long as Excess Availability is less than
$15,000,000 (such amount to be increased pro rata with the amount of any increase in the
Maximum Credit pursuant to Section 2.5); provided, however, that there shall be no limit on
the number of Inventory appraisals that Agent may conduct or request or for which Borrowers
are obligated to reimburse Agent at any time Default or Event of Default exists or has
occurred and is continuing;

     (b) one (1) trademark/Intellectual Property appraisal per calendar year;

     (c) at Agent’s discretion, one (1) Real Property appraisal for each parcel of Real
Property constituting Eligible Real Property per calendar year, so long as Excess
Availability is less than $20,000,000 (such amount to be increased pro rata with the amount
of any increase in the Maximum Credit pursuant to Section 2.5); provided, however, that there
shall be no limit on the number of Real Property appraisals for each parcel of Real Property
constituting Eligible Real Property that Agent may conduct or request or for which Borrowers
are obligated to reimburse Agent at any time a Default or Event of Default exists or has
occurred and is continuing; and

     (d) at Agent’s discretion, one (1) Equipment appraisal per calendar year so long as
Excess Availability is less than $20,000,000 (such amount to be increased pro rata with the
amount of any increase in the Maximum Credit pursuant to Section 2.5; provided, however, that
there shall be no limit on the number of Equipment appraisals that Agent may conduct or
request or for which Borrowers are obligated to reimburse Agent at any time a Default or
Event of Default exists or has occurred and is continuing.

SECTION 8. REPRESENTATIONS AND WARRANTIES

     Each Borrower hereby represents and warrants to Agent, Lenders and Issuing Bank the following
(which shall survive the execution and delivery of this Agreement), the truth and accuracy of which
are a continuing condition of the making of Loans and providing Letters of Credit to Borrowers:

     8.1 Corporate Existence, Power and Authority; Subsidiaries. Each Borrower is a corporation or
limited liability company duly organized and in good standing under the laws of its state of
incorporation or organization and is duly qualified as a foreign entity and in good standing, in
all states or other jurisdictions where the nature and extent of the business transacted by it or
the ownership of assets makes such qualification necessary, except for those jurisdictions in which
the failure to so qualify would not have a material adverse effect on the financial condition,
results of operation or business of such Borrower and its Subsidiaries, taken as whole, or the
rights of Agent in or to any of the Collateral. The execution, delivery and performance of this
Agreement, the other Financing Agreements and the transactions contemplated hereunder and
thereunder are all within each Borrower’s corporate powers, have been duly authorized, are not in
contravention of law or the terms of any Borrower’s certificate of incorporation, by-laws, or other
organizational documentation, or any indenture, agreement or undertaking to which any Borrower is a
party or by which any Borrower or its property are bound, and will not result in the creation or
imposition of, or require or give rise to any obligation to grant, any Lien upon any property of
any Borrower except as otherwise expressly permitted pursuant to Section 9.8 of this Agreement.
This Agreement and the other Financing Agreements constitute legal, valid and binding obligations
of each Borrower enforceable in accordance with their respective terms.

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     8.2 Name; State of Organization; Chief Executive Office; Collateral Locations.

          (a) The exact legal name of each Borrower is as set forth on the signature page of this
Agreement and in the Information Certificate. No Borrower has, during the five years prior to the
date of this Agreement, been known by or used any other corporate or fictitious name or been a
party to any merger or consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property or assets out of the ordinary course of business, except as
set forth in the Information Certificate.

          (b) Each Borrower is an organization of the type and organized in the jurisdiction set forth
in the Information Certificate. The Information Certificate accurately sets forth the
organizational identification number of each Borrower or accurately states that such Borrower has
none and accurately sets forth the federal employer identification number of each Borrower.

          (c) The chief executive office and mailing address of each Borrower and each Borrower’s
Records concerning Accounts are located only at the address identified as such in Schedule 8.2 and
its only other places of business and the only other locations of Collateral, if any, are the
addresses set forth in Schedule 8.2, subject to the rights of any Borrower to establish new
locations in accordance with Section 9.2 below. The Information Certificate correctly identifies
any of such locations which are not owned by a Borrower and sets forth the owners and/or operators
thereof.

     8.3 Financial Statements; No Material Adverse Change.

          (a) All financial statements relating to any Borrower which have been or may hereafter be
delivered by any Borrower to Agent and Lenders have been prepared in accordance with GAAP and
fairly present the financial condition and the results of operation of such Borrower as at the
dates and for the periods set forth therein. Except as disclosed in any interim financial
statements furnished by Borrowers to Agent prior to the date of this Agreement, there has been no
act, condition or event which has had or is reasonably likely to have a Material Adverse Effect
since the date of the most recent audited financial statements furnished by Borrowers to Agent
prior to the date of this Agreement.

          (b) The pro forma balance sheets and future cash flow projections for Borrowers and their
Subsidiaries (together with the summaries of assumptions and projected assumptions, based on
historical performance with respect thereto) furnished by Borrowers to Agent prior to the date of
this Agreement represent the reasonable, good faith opinion of Borrowers and their management as to
the subject matter thereof.

     8.4 Priority of Liens, Title to Properties. The Liens granted to Agent under this Agreement
and the other Financing Agreements constitute valid and perfected first priority Liens and security
interests in and upon the Collateral subject only to the Liens indicated on Schedule 8.4 hereto and
the other Liens permitted under Section 9.8 hereof other than Collateral located in a Borrower’s
locations outside of the United States as set forth in item 9 of the Information Certificate. Each
Borrower has good and marketable title to all of its properties and assets subject to no Liens,
mortgages, pledges, security interests, encumbrances or charges of any kind, except those granted
to Agent and such others as are specifically listed on Schedule 8.4 hereto or permitted under
Section 9.8 hereof.

     8.5 Tax Returns. Each Borrower has filed, or caused to be filed, in a timely manner all tax
returns, reports and declarations which are required to be filed by it. All information in such tax
returns, reports and declarations is complete and accurate in all material respects. Each Borrower
has paid or caused to be paid all taxes due and payable or claimed due and payable in any
assessment received by it, except taxes the validity of which are being contested in good faith by
appropriate proceedings diligently

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pursued and available to such Borrower and with respect to which adequate reserves have been set
aside on its books. Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due and payable and
whether or not disputed.

     8.6 Litigation. Except as set forth on the Information Certificate, there is no present
investigation by any Governmental Authority pending, or to the best of each Borrower’s knowledge
threatened, against or affecting any Borrower, its assets or business and there is no action, suit,
proceeding or claim by any Person pending, or to the best of each Borrower’s knowledge threatened,
against any Borrower or its assets or goodwill, or against or affecting any transactions
contemplated by this Agreement, which if adversely determined against any Borrower could reasonably
be expected to have a Material Adverse Effect.

     8.7 Compliance with Other Agreements and Applicable Laws.

          (a) Borrowers are not in default in any material respect under, or in violation in any
material respect of any of the terms of, any material agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any of its assets are bound. Borrowers
are in compliance in all material respects with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority relating to its business, including those set
forth in or promulgated pursuant to the Occupational Safety and Health Act of 1970, as amended, the
Fair Labor Standards Act of 1938, as amended, ERISA, the Code, as amended, and the rules and
regulations thereunder, all Federal, State and local statutes, regulations, rules and orders
relating to consumer credit (including, as each has been amended, the Truth-in-Lending Act, the
Fair Credit Billing Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act, and
regulations, rules and orders promulgated thereunder), all Federal, State and local states,
regulations, rules and orders pertaining to sales of consumer goods (including, without limitation,
the Consumer Products Safety Act of 1972, as amended, and the Federal Trade Commission Act of 1914,
as amended, and all regulations, piles and orders promulgated thereunder).

          (b) Each Borrower has obtained all material permits, licenses, approvals, consents,
certificates, orders or authorizations of any governmental agency required for the lawful conduct
of its business. Schedule 8.7 hereto sets forth all material permits, licenses, approvals,
consents, certificates, orders or authorizations (the “Permits”) issued to or held by each Borrower
as of the date hereof by any federal, state, or local governmental agency and any applications
pending by each Borrower with such federal, state, or local governmental agency. The Permits
constitute all permits, licenses, approvals, consents, certificates, orders or authorizations
necessary for each Borrower to own and operate its business as presently conducted or proposed to
be conducted where the failure to have such Permits would have a material adverse effect on the
business, performance, operations or properties of such Borrower or the legality, validity or
enforceability of this Agreement or the other Financing Agreements or the ability of Borrowers and
their respective Subsidiaries, taken as a whole, to perform its obligations hereunder or any of the
other Financing Agreements or the rights and remedies of Agent hereunder or any of the other
Financing Agreements. All of the Permits are valid and subsisting and in full force and effect.
There are no actions, claims or proceedings pending or, to the knowledge of Borrowers, threatened
that seek the revocation, cancellation, suspension or modification of any of the Permits.

     8.8 Anti-Terrorism Laws.

          (a) General. None of the Obligors or their Affiliates is in violation of any Anti-Terrorism
Law or engages in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any Anti-Terrorism Law.

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          (b) Executive Order No. 13224. None of the Credit Party or their Affiliates is any of the
following (each a “Blocked Person”):

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

               (ii) a Person or entity with which any bank or other financial institution is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

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

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

               (v) a Person or entity who is affiliated with a Person or entity listed above.

          (c) None of the Obligors or their Affiliates (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person
or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to Executive Order No. 13224.

     8.9 Environmental Compliance.

          (a) Except as set forth in the Information Certificate, Borrowers and their Subsidiaries have
not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of
any Hazardous Materials, on or off its premises (whether or not owned by it) in any manner which at
any time violates any applicable Environmental Law in any material respect or any material license,
permit, certificate, approval or similar authorization thereunder and the operations of Borrowers
and their Subsidiaries comply in all material respects with all Environmental Laws and all
licenses, permits, certificates, approvals and similar authorizations thereunder.

          (b) Except as set forth in the Information Certificate, there has been no investigation,
proceeding, complaint, order, directive, claim, citation or notice by any Governmental Authority or
any other Person nor is any pending or to the best of each Borrower’s knowledge threatened, with
respect to any non-compliance with or violation of the requirements of any Environmental Law by any
Borrower or any Subsidiary of any Borrower or the release, spill or discharge, threatened or
actual, of any Hazardous Material or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials or any other
environmental, health or safety matter, which materially affects any Borrower or its business,
operations or assets or any properties at which any Borrower has transported, stored or disposed of
any Hazardous Materials.

          (c) Borrowers and their Subsidiaries have no material liability (contingent or otherwise) in
connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or
the generation, use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials.

          (d) Borrowers and their Subsidiaries have all material licenses, permits, certificates,
approvals or similar authorizations required to be obtained or filed in connection with the
operations of

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Borrowers under any Environmental Law and all of such licenses, permits, certificates, approvals or
similar authorizations are valid and in full force and effect.

     8.10 Employee Benefits.

          (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under
Section 401 (a) of the Code has received a favorable determination letter from the Internal Revenue
Service and to the best knowledge of each Borrower, nothing has occurred which would cause the loss
of such qualification. Each Borrower and its ERISA Affiliates have made all required contributions
to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has been made with respect
to any Plan.

          (b) There are no pending or to the best knowledge of each Borrower, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan
that has not been fully cured by reversal of the transaction or otherwise, including payment in
full of any applicable fees or penalties.

          (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) the current value
of each Plan’s assets (determined in accordance with the assumptions used for funding such Plan
pursuant to Section 412 of the Code) do not exceed such Plan’s liabilities under Section
4001(a)(16) of ERISA; (iii) Borrowers and their ERISA Affiliates have not incurred and do not
reasonably expect to incur, any liability under Title IV of ERISA with respect to any Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) Borrowers and their ERISA
Affiliates have not incurred and do not reasonably expect to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would result in such
liability), under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
Borrowers and their ERISA Affiliates have not engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.

     8.11 Bank Accounts. All of the deposit accounts, investment accounts or other accounts in the
name of or used by any Borrower maintained at any bank or other financial institution are set forth
on Schedule 8.11 hereto, subject to the right of each Borrower to establish new accounts in
accordance with Section 9.13 below.

     8.12 Intellectual Property. Each Borrower owns or licenses or otherwise has the right to use
all Intellectual Property necessary for the operation of its business as presently conducted or
proposed to be conducted. As of the date hereof, Borrowers do not have any Intellectual Property
registered, or subject to pending applications, in the United States Patent and Trademark Office or
any similar office or agency in the United States, any State thereof, any political subdivision
thereof or in any other country, other than those described in Schedule 8.12 hereto and has not
granted any material licenses with respect thereto other than as set forth in Schedule 8.12 hereto.
No event has occurred which permits or would permit after notice or passage of time or both, the
revocation, suspension or termination of such rights. To the best of the knowledge of each
Borrower, no slogan or other advertising device, product, process, method, substance or other
Intellectual Property or goods bearing or using any Intellectual Property presently contemplated to
be sold by or employed by any Borrower infringes any patent, trademark, servicemark, tradename,
copyright, license or other Intellectual Property owned by any other Person presently and no claim
or litigation is pending or threatened against or affecting any Borrower contesting its right to
sell or use any such Intellectual Property. Schedule 8.12 hereto sets forth all of the material
agreements or other material arrangements of each Borrower pursuant to which such Borrower has a
license or other right to use any trademarks, logos, designs, representations or other Intellectual
Property

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owned by another Person with respect to Eligible Inventory of such Borrower as in effect on the
date hereof and the dates of the expiration of such agreements or other arrangements of such
Borrower as in effect on the date hereof. No trademark, servicemark or other Intellectual Property
at any time used by any Borrower which is owned by another Person, or owned by such Borrower
subject to any Lien in favor of any Person other than Agent, is affixed to any Eligible Inventory,
unless, with respect solely to Inventory to which Intellectual Property of another Person is
subject, Agent has elected to include such Inventory as Eligible Inventory, and Agent has
established such Reserves as Agent may determine in respect of any amounts at any time owing by
such Borrower to the licensor of such Intellectual Property, in each case in accordance with the
terms of this Agreement.

     8.13 Subsidiaries; Affiliates; Capitalization.

          (a) No Borrower has any direct or indirect Subsidiaries or Affiliates nor is any Borrower
engaged in any joint venture or partnership except as set forth in the Information Certificate and
except for Acquisition Subsidiaries that are formed as permitted hereunder.

          (b) The issued and outstanding shares of Capital Stock of each Borrower are directly and
beneficially owned and held by the Persons indicated in the Information Certificate, and in each
case all of such shares have been duly authorized and are fully paid and non-assessable, free and
clear of all Liens of any kind, except as disclosed in writing to Agent prior to the date hereof.

     8.14 Solvency. Each Borrower is Solvent and will continue to be Solvent after the creation of
the Obligations, the security interests of Agent and the other transactions contemplated hereunder.

     8.15 Labor Disputes.

          (a) Set forth on Schedule 8.15 hereto is a list (including dates of termination) of all
collective bargaining or similar agreements between or applicable to any Borrower and any union,
labor organization or other bargaining agent in respect of the employees of any Borrower on the
date hereof.

          (b) There is (i) no significant unfair labor practice complaint pending against any Borrower
or, to the best of the knowledge of each Borrower, threatened against it, before the National Labor
Relations Board, and no significant grievance or significant arbitration proceeding arising out of
or under any collective bargaining agreement is pending on the date hereof against any Borrower or,
to best of the knowledge of each Borrower, threatened against it, and (ii) no significant strike,
labor dispute, slowdown or stoppage is pending against any Borrower or, to the best of the
knowledge of each Borrower, threatened against any Borrower.

     8.16 Restrictions on Subsidiaries. Except for restrictions contained in this Agreement or any
other agreement with respect to Indebtedness of Borrowers permitted hereunder as in effect on the
date hereof, there are no contractual or consensual restrictions on any Borrower or any
Subsidiaries of any Borrower which prohibit or otherwise restrict (a) the transfer of cash or other
assets (i) between any Borrower and any of its Subsidiaries or (ii) between any Subsidiaries of any
Borrower or (b) the ability of any Borrower or any of its Subsidiaries to incur Indebtedness or
grant security interests to Agent or any Lender in the Collateral.

     8.17 Material Contracts. Schedule 8.17 hereto sets forth all Material Contracts to which each
Borrower is a party or is bound as of the date hereof. Borrowers have delivered true, correct and
complete copies of such Material Contracts to Agent on or before the date hereof. No Borrower is
in breach of or in default in any material respect under any Material Contract and has not received
any notice of the intention of any other party thereto to terminate any Material Contract.

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     8.18 Payable Practices. Each Borrower and Guarantor have not made any material change in the
historical accounts payable practices from those in effect immediately prior to the date hereof.

     8.19 Accuracy and Completeness of Information. All information furnished by or on behalf of
any Borrower in writing to Agent or any Lender in connection with this Agreement or any of the
other Financing Agreements or any transaction contemplated hereby or thereby, including all
information on the Information Certificate is true and correct in all material respects on the date
as of which such information is dated or certified and does not omit any material fact necessary in
order to make such information not misleading. No event or circumstance has occurred which has had
or could reasonably be expected to have a Material Adverse Effect, which has not been fully and
accurately disclosed to Agent in writing.

     8.20 Survival of Warranties, Cumulative. All representations and warranties contained in this
Agreement or any of the other Financing Agreements shall survive the execution and delivery of this
Agreement and shall be deemed to have been made again to Agent and Lenders on the date of each
additional Loan, advance or Letter of Credit hereunder and shall be conclusively presumed to have
been relied on by Agent and Lenders regardless of any investigation made or information possessed
by Agent or any Lender. The representations and warranties set forth herein shall be cumulative and
in addition to any other representations or warranties which any Borrower shall now or hereafter
give, or cause to be given, to Agent or any Lender.

     SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS

     Each Borrower hereby covenants and agrees, on behalf of itself and its Subsidiaries, as
applicable below, as follows:

     9.1 Maintenance of Existence. Subject to Borrowers’ abilty to enter into mergers pursuant to
Section 9.7(a) hereof, each Borrower shall at all times preserve, renew and keep in full, force and
effect its corporate existence and rights and franchises with respect thereto and maintain in full
force and effect all permits, licenses, trademarks, tradenames, approvals, authorizations, leases
and contracts necessary to carry on the business as presently or proposed to be conducted.
Borrowers shall give Agent thirty (30) days prior written notice of any proposed change in any
Borrower’s name, which notice shall set forth the new name and Borrowers shall deliver to Agent a
copy of the amendment to the Certificate of Incorporation or Certificate of Organization (as
applicable) of such Borrower providing for the name change certified by the Secretary of State of
the jurisdiction of incorporation or organization of such Borrower as soon as it is available. Each
Borrower further agrees, on behalf of itself and its Subsidaries, that nothing herein shall
authorize any Borrower or any Subsidiary of a Borrower to convert from a corporation to a limited
liability company or from a limited liability company to a corporation, as the case may be, unless,
in each such case, Borrowers shall have given at least ninety (90) days prior written notice of
such conversion to Agent, Agent shall have concluded that, under Applicable Law, such conversion
shall not (x) detrimentally affect the enforceability of the Financing Agreements against the
Borrower to be so converted (the “Converting Borrower”) or the Liens in favor of Agent against the
Property of the Converting Borrower, or (y) affect in any way the Converting Borrower’s Obligations
that were incurred prior to giving effect to such conversion, and Borrowers shall have taken all
such actions as Agent may request in its discretion to maintain the perfection and priority of any
Liens of Agent that would otherwise be affected thereby and to ensure the enforceability of the
Obligations against such Converting Borrower.

     9.2 New Collateral Locations. Each Borrower may open any new location within the continental
United States provided such Borrower (a) gives Agent fifteen (15) days prior written notice of the
intended opening of any such new location and (b) executes and delivers, or causes to be executed
and

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delivered, to Agent such agreements, documents, and instruments as Agent may deem reasonably
necessary or desirable to protect its interests in the Collateral at such location.

     9.3 Compliance with Laws, Regulations, Etc.

          (a) Each Borrower shall, and shall cause any Subsidiary of such Borrower to, at all times,
comply in all material respects with all laws, rules, regulations, licenses, permits, approvals and
orders applicable to it and duly observe all requirements of any Federal, State or local
Governmental Authority, including ERISA, the Code, the Occupational Safety and Health Act of 1970,
as amended, the Fair Labor Standards Act of 1938, as amended, and all statutes, rules, regulations,
orders, permits and stipulations relating to environmental pollution and employee health and
safety, including all of the Environmental Laws.

          (b) At the reasonable request of Agent and in any event, to the extent required by applicable
law, each Borrower shall establish and maintain, at its expense, a system to assure and monitor its
continued compliance with all Environmental Laws in all of its operations, which system shall
include annual reviews of such compliance by employees or agents of such Borrower who are familiar
with the requirements of the Environmental Laws. Copies of all environmental surveys, audits,
assessments, feasibility studies and results of remedial investigations shall be promptly
furnished, or caused to be furnished, by each Borrower to Agent. Each Borrower shall take prompt
and appropriate action to respond to any non-compliance with any of the Environmental Laws and
shall regularly report to Agent on such response.

          (c) Each Borrower shall give both oral and written notice to Agent immediately upon such
Borrower’s receipt of any notice of, or such Borrower’s otherwise obtaining knowledge of, (i) the
occurrence of any event involving the release, spill or discharge, threatened or actual, of any
Hazardous Material or (ii) any investigation, proceeding, complaint, order, directive, claims,
citation or notice with respect to: (A) any non-compliance with or violation of any Environmental
Law by such Borrower or (B) the release, spill or discharge, threatened or actual, of any Hazardous
Material or (C) the generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials or (D) any other environmental, health or safety
matter, which affects such Borrower or its business, operations or assets or any properties at
which such Borrower transported, stored or disposed of any Hazardous Materials.

          (d) Without limiting the generality of the foregoing, whenever Agent reasonably determines
that there is non-compliance, or any condition which requires any action by or on behalf of any
Borrower in order to avoid any material non-compliance, with any Environmental Law, Borrowers
shall, at Agent’s request and Borrowers’ expense: (i) cause an independent environmental engineer
acceptable to Agent to conduct such tests of the site where such Borrower’s non-compliance or
alleged non-compliance with such Environmental Laws has occurred as to such non-compliance and
prepare and deliver to Agent a report as to such non-compliance setting forth the results of such
tests, a proposed plan for responding to any environmental problems described therein, and an
estimate of the costs thereof and (ii) provide to Agent a supplemental report of such engineer
whenever the scope of such non-compliance, or such Borrower’s response thereto or the estimated
costs thereof, shall change in any material respect.

          (e) Each Borrower shall indemnify and hold harmless Agent and Lenders and their respective
directors, officers, employees, agents, invitees, representatives, successors and assigns, from and
against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable
attorneys’ fees actually incurred and legal expenses) directly or indirectly arising out of or
attributable to the use, generation, manufacture, reproduction, storage, release, threatened
release, spill, discharge, disposal or presence of a Hazardous Material, including the costs of any
required or necessary repair,

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cleanup or other remedial work with respect to any property of such Borrower and the preparation
and implementation of any closure, remedial or other required plans. All representations,
warranties, covenants and indemnifications in this Section 9.3 shall survive the payment of the
Obligations and the termination of this Agreement.

     9.4 Payment of Taxes and Claims. Each Borrower shall, and shall cause any Subsidiary to, duly
pay and discharge all taxes, assessments, contributions and governmental charges upon or against it
or its properties or assets, except for taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to such Borrower or such
Subsidiary, as the case may be, and with respect to which adequate reserves have been set aside on
its books.

     9.5 Insurance. Each Borrower shall, and shall cause any Subsidiary to, at all times, maintain
with financially sound and reputable insurers insurance with respect to the Collateral against loss
or damage and all other insurance of the kinds and in the amounts customarily insured against or
carried by corporations of established reputation engaged in the same or similar businesses and
similarly situated. Said policies of insurance shall be satisfactory to Agent as to form, amount
and insurer. Each Borrower shall furnish certificates, policies or endorsements to Agent as Agent
shall require as proof of such insurance, and, if such Borrower fails to do so, Agent is
authorized, but not required, to obtain such insurance at the expense of Borrowers. All policies
shall provide for at least thirty (30) days’ prior written notice to Agent of any cancellation or
reduction of coverage (or ten (10) days’ prior written notice for cancellation due to non-payment
of premium) and that Agent may act as attorney for each Borrower in obtaining, and at any time an
Event of Default exists or has occurred and is continuing, adjusting, settling, amending and
canceling such insurance. Each Borrower shall cause Agent to be named as a lender’s loss payee and
an additional insured (but without any liability for any premiums) under such insurance policies
and each Borrower shall obtain non-contributory lender’s loss payable endorsements to all insurance
policies in form and substance satisfactory to Agent. Such lender’s loss payable endorsements shall
specify that the proceeds of such insurance shall be payable to Agent as its interests may appear
and further specify that Agent and Lenders shall be paid regardless of any act or omission by any
Borrower or any of its Affiliates. Without limiting any other rights of Agent or Lenders, at its
option, Agent may apply any insurance proceeds received by Agent at any time to the cost of repairs
or replacement of Collateral and/or to payment of the Obligations, whether or not then due, in any
order and in such manner as Agent may determine or hold such proceeds as cash collateral for the
Obligations.

     9.6 Financial Statements and Other Information.

          (a) Each Borrower shall, and shall cause any Subsidiary to, keep proper books and records in
which true and complete entries shall be made of all dealings or transactions of or in relation to
the Collateral and the business of such Borrower and its Subsidiaries in accordance with GAAP.
Borrowers shall promptly furnish to Agent and Lenders all such financial and other information as
Agent shall reasonably request relating to the Collateral and the assets, business and operations
of Borrowers, and to notify the auditors and accountants of Borrowers that Agent is authorized to
obtain such information directly from them. Without limiting the foregoing, Borrowers shall furnish
or cause to be furnished to Agent, the following: (i) within thirty (30) days after the end of each
fiscal month (other than at the end of a fiscal quarter), monthly unaudited consolidated financial
statements (including in each case balance sheets, and statements of income and loss, all in
reasonable detail, fairly presenting the financial position and the results of the operations of
Borrowers and their Subsidiaries as of the end of and through such fiscal month, certified to be
correct by the chief financial officer of Borrowers subject to normal year-end adjustments, (ii)
within forty-five (45) days after the end of each fiscal quarter (other than at the end of the
fiscal year), unaudited consolidated financial statements (including in each case balance sheets,
statements of income and loss, and statements of cash flows), and (iii) within ninety (90) days
after the end of each fiscal year, audited consolidated financial statements (including in each
case balance sheets,

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statements of income and loss, statements of cash flow and statements of shareholders’ equity), and
the accompanying notes thereto, all in reasonable detail, fairly presenting the financial position
and the results of the operations of Borrowers and their Subsidiaries as of the end of and for such
fiscal year, together with the unqualified opinion of independent certified public accountants,
which accountants shall be an independent accounting firm selected by Borrowers and reasonably
acceptable to Agent, that such financial statements have been prepared in accordance with GAAP, and
present fairly the results of operations and financial condition of Borrowers and their
Subsidiaries as of the end of and for the fiscal year then ended; and (iv) at such time as
available, but in no event later than thirty (30) days subsequent to the end of each fiscal year
(commencing with the fiscal year of Borrowers ending June 30, 2012), projected consolidated
financial statements (including in each case, forecasted balance sheets and statements of income
and loss, statements of cash flow, and projected Excess Availability) of Borrowers for the next
fiscal year, all in reasonable detail, and in a format consistent with the projections delivered by
Borrowers to Agent prior to the date hereof, together with such supporting information as Agent may
reasonably request. Such projected financial statements shall be prepared on a quarterly basis for
the next succeeding year. Such projections shall represent the reasonable best estimate by
Borrowers and Guarantors of the future financial performance of Borrowers for the periods set forth
therein and shall have been prepared on the basis of the assumptions set forth therein which
Borrowers and Guarantors believe are fair and reasonable as of the date of preparation in light of
current and reasonably foreseeable business conditions (it being understood that actual results may
differ from those set forth in such projected financial statements). If reasonably requested by
Agent, each year Borrowers shall provide to Agent a semi-annual update with respect to such
projections or at any time a Default or Event of Default exists or has occurred and is continuing,
more frequently as Agent may require.

          (b) Borrowers shall promptly notify Agent in writing of the details of (i) any loss, damage,
investigation, action, suit, proceeding or claim relating to the Collateral or any other property
which is security for the Obligations or which would result in any material adverse change in the
business, properties, assets, goodwill or condition, financial or otherwise, of Borrowers and their
Subsidiaries taken as a whole, (ii) any Material Contract of any Borrower being terminated or
amended or any new Material Contract entered into (in which event Borrowers shall provide Agent
with a copy of such Material Contract), (iii) any order, judgment or decree in excess of $2,500,000
shall have been entered against any Borrower or any of its properties or assets, (iv) any
notification of violation of laws or regulations received by any Borrower, (v) any ERISA Event, and
(vi) the occurrence of any Default or Event of Default.

          (c) To the extent not already provided by Borrowers in a publicly available format, or in any
case, if requested by Agent, Borrowers shall promptly furnish or cause to be furnished to Agent
copies of all reports which any Borrower sends to its stockholders generally and copies of all
reports and registration statements which any Borrower files with the Securities and Exchange
Commission, any national securities exchange or the National Association of Securities Dealers,
Inc. and such other reports as Agent may hereafter specifically identify to Administrative Borrower
that Agent will require be provided to Agent, all press releases and all other statements
concerning material changes or developments in the business of a Borrower made available by any
Borrower to the public.

          (d) Borrowers shall furnish or cause to be furnished to Agent such budgets, forecasts,
projections and other information respecting the Collateral and the business of Borrowers, as Agent
may, from time to time, reasonably request. Agent is hereby authorized to deliver a copy of any
financial statement or any other information relating to the business of Borrowers to any Court or
other Government Authority to the extent required by statute, rule, regulation, subpoena or court
order, or to any Affiliate of any Agent or Lender or to any participant or assignee or prospective
participant or assignee. Each Borrower hereby irrevocably authorizes and directs all accountants or
auditors to deliver to Agent, at Borrowers’ expense, copies of the financial statements of
Borrowers and any reports or

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management letters prepared by such accountants or auditors on behalf of Borrowers and to disclose
to Agent and Lenders such information as they may have regarding the business of Borrowers. Any
documents, schedules, invoices or other papers delivered to Agent or any Lender may be destroyed or
otherwise disposed of by Agent or such Lender one (1) year after the same are delivered to Agent or
such Lender, except as otherwise designated by Administrative Borrower to Agent or such Lender in
writing.

          (e) At any time or times that, pursuant to the terms of Section 9.22 hereof, the Fixed Charge
Coverage Ratio is not in effect, Borrowers shall, for informational purposes only, no later than
thirty (30) days following the last day of each month of Borrowers, report Borrowers’ calculation
of the Fixed Charge Coverage Ratio for the twelve (12) month period most recently ended.

     9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each Borrower shall not, and
shall not permit any Subsidiary to, directly or indirectly,

          (a) merge into or with or consolidate with any other Person or permit any other Person to
merge into or with or consolidate with it, except for (i) mergers of a Borrower into, or
consolidations of a Borrower with, another Borrower in which a Borrower is the surviving entity,
and (ii) mergers of an Acquisition Subsidiary into, or consolidations of an Acquisition Subsidiary
with, an Acquisition Target in connection with a Permitted Acquisition; or

          (b) sell, issue, assign, lease, license, transfer, abandon or otherwise dispose of any Capital
Stock or Indebtedness to any other Person or any of its assets to any other Person, except for:

               (i) sales, issuances, assignments, leases, licenses, transfers, abandonments, or other
dispositions of any Capital Stock or Indebtedness of any Borrower or any of its assets to any other
Borrower;

               (ii) sales of Inventory in the ordinary course of business;

               (iii) the disposition of worn-out or obsolete Equipment so long as (A) any proceeds are paid
to Agent and (B) such sales do not involve Equipment having an aggregate fair market value in
excess of $5,000,000 for all such Equipment disposed of in any fiscal year of Borrowers;

               (iv) the disposition of assets owned by Borrowers during the term of this Agreement having a
fair market value of not greater than $5,000,000, provided that, (A) no Default or Event of Default
shall exist at the time of and after giving effect to such disposition, and (B) none of such assets
shall have been included in the calculation of the Borrowing Base in the Borrowing Base Certificate
submitted to Agent pursuant to Section 9.6 hereof immediately prior to the consummation of the
disposition of assets;

               (v) the issuance by an Acquisition Subsidiary of Capital Stock to a Borrower in connection
with a Permitted Acquisition;

               (vi) the issuance and sale by any Borrower of Capital Stock of such Borrower after the date
hereof; provided, that, (A) Agent shall have received not less than ten (10) Business Days prior
written notice of such issuance and sale by such Borrower, which notice shall specify the parties
to whom such shares are to be sold, the terms of such sale, the total amount which it is
anticipated will be realized from the issuance and sale of such stock and the net cash proceeds
which it is anticipated will be received by such Borrower from such sale, (B) such Borrower shall
not be required to pay any cash dividends or repurchase or redeem such Capital Stock or make any
other payments in respect thereof except as permitted in Section 9.11 hereof, (C) the terms of such
Capital Stock, and the terms and

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conditions of the purchase and sale thereof, shall not include any terms that include any
limitation on the right of any Borrower to request or receive Loans or Letters of Credit or the
right of any Borrower to amend or modify any of the terms and conditions of this Agreement or any
of the other Financing Agreements or otherwise in any way relate to or affect the arrangements of
Borrowers with Agent or Lenders or are more restrictive or burdensome to any Borrower than the
terms of any Capital Stock in effect on the date hereof, and (D) as of the date of such issuance
and sale and after giving effect thereto, no Default or Event of Default shall exist or have
occurred;

               (vii) the issuance of Capital Stock of any Borrower consisting, of common stock pursuant to a
stock option plan, 401(k) plan, or incentive stock award plan of such Borrower for the benefit of
its employees, directors and consultants, provided, that, in no event shall such Borrower be
required to issue, or shall such Borrower issue, Capital Stock pursuant to such stock option plan,
401(k) plan, or incentive stock award plan which would result in an Event of Default; or

               (viii) dispositions of investments permitted under Section 9.10(b) to the extent the proceeds
thereof are used to acquire additional investments permitted under Section 9.10(b);

          (c) form or acquire any Subsidiaries other than those listed on the Information Certificate,
Acquisition Subsidiaries, and as permitted in accordance with Section 9.10 hereof;

          (d) wind up, liquidate or dissolve, except for liquidations or dissolutions of an Immaterial
Subsidiary; or

          (e) agree to do any of the foregoing.

     9.8 Encumbrances. Each Borrower shall not, and shall permit any Subsidiary to, create, incur,
assume or suffer to exist any Lien of any nature whatsoever on any of its assets or properties,
including the Collateral, except the following (“Permitted Liens”):

          (a) the security interests and Liens of Agent for itself and the benefit of Lenders;

          (b) Liens securing the payment of taxes, assessments or other government charges or levies,
either not yet overdue or the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower or such Subsidiary, as the case may
be and with respect to which adequate reserves have been set aside on its books;

          (c) non-consensual statutory Liens (other than Liens securing the payment of taxes) arising in
the ordinary course of such Borrower’s or such Subsidiary’s business to the extent: (i) such Liens
secure Indebtedness which is not overdue or (ii) such Liens secure Indebtedness relating to claims
or liabilities which are fully insured and being defended at the sole cost and expense and at the
sole risk of the insurer or being contested in good faith by appropriate proceedings diligently
pursued and available to such Borrower or such Subsidiary, in each case prior to the commencement
of foreclosure or other similar proceedings and with respect to which adequate reserves have been
set aside on its books;

          (d) zoning restrictions, easements, licenses, covenants and other restrictions affecting the
use of Real Property which do not interfere in any material respect with the use of such Real
Property or ordinary conduct of the business of such Borrower or such Subsidiary as presently
conducted thereon or materially impair the value of the Real Property which may be subject thereto;

          (e) purchase money security interests in Equipment (including Capital Leases) to secure
Indebtedness permitted under Section 9.9(b) hereof;

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          (f) Liens specified in any title insurance policy delivered to and accepted by Agent in
connection with any Mortgage;

          (g) Liens in the assets of the Honduras Subsidiaries to secure the Permitted Central American
Debt to the extent permitted under Section 9.9(g) hereof and Liens in the assets of other Foreign
Subsidiaries to secure Permitted Foreign Debt to the extent permitted under Section 9.9(h) hereto;

          (h) Liens in the trademarks of Borrowers to secure Permitted Trademark Financing Debt to the
extent permitted under Section 9.9(i) hereof;

          (i) Liens set forth on Schedule 8.4 hereto.

     9.9 Indebtedness. Each Borrower shall not, and shall not permit any Subsidiary to, incur,
create, assume, become or be liable in any manner with respect to, or permit to exist, any
Indebtedness, except the following (“Permitted Indebtedness”):

          (a) (i) the Obligations; (ii) guarantees permitted by Section 9.10(d) hereof; and (iii)
Indebtedness permitted by Section 9.10(h) hereof;

          (b) purchase money Indebtedness (including Capital Leases) to the extent secured by purchase
money security interests in Equipment (including Capital Leases) not to exceed $5,000,000 in the
aggregate at any time outstanding so long as such security interests do not apply to any property
of such Borrower other than the Equipment so acquired, and the Indebtedness secured thereby does
not exceed the cost of the Equipment so acquired;

          (c) Indebtedness of such Borrower under Hedge Agreements entered into for the purpose of
protecting a Person against fluctuations in interest rates; provided, that, such arrangements are
with banks or other financial institutions that have combined capital and surplus and undivided
profits of not less than $100,000,000 and are not for speculative purposes and such indebtedness
shall be unsecured;

          (d) Banking Relationship Debt of Borrowers entered into by Borrowers in the ordinary course of
the businesses of Borrowers consistent with the current practices of Borrowers as of the date
hereof;

          (e) Indebtedness of such Borrower under License Agreements with respect to non-refundable,
advance or minimum guarantee royalty payments, entered into by such Borrower in the ordinary course
of the businesses of such Borrower consistent with the current practices of such Borrower as of the
date hereof;

          (f) the Indebtedness set forth on Schedule 9.9 hereto; provided, that, (i) such Borrower may
only make regularly scheduled payments of principal and interest in respect of such Indebtedness in
accordance with the terms of the agreement or instrument evidencing or giving rise to such
Indebtedness as in effect on the date hereof, (ii) such Borrower shall not, directly or indirectly,
(A) amend, modify, alter or change the terms of such Indebtedness or any agreement, document or
instrument related thereto as in effect on the date hereof except, that, such Borrower may, after
prior written notice to Agent, amend, modify, alter or change the terms thereof so as to extend the
maturity thereof, or defer the timing of any payments in respect thereof, or to forgive or cancel
any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose, and (iii) such Borrower shall furnish to Agent all notices or

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demands in connection with such Indebtedness either received by such Borrower or on its behalf,
promptly after the receipt thereof, or sent by such Borrower or on its behalf, concurrently with
the sending thereof, as the case may be;

          (g) Permitted Central American Debt, in an aggregate principal amount not to exceed
$11,000,000;

          (h) Permitted Foreign Debt, so long as the sum of the aggregate amount of such Indebtedness
does not exceed at any time an amount equal to $30,000,000;

          (i) Permitted Trademark Financing Debt;

          (j) Indebtedness of Delta and Art Gun consisting of Earnout Amounts under (and as defined in)
the Art Gun Purchase Agreement, provided that the Art Gun Subordination Agreement is in full force
and effect; and

          (k) Indebtedness that is not included in any of the preceding clauses of this Section, and is
not secured by a Lien, so long as the sum of the aggregate amount of such Indebtedness does not
exceed at any time, as to all Borrowers and all of their Subsidiaries, an amount that is acceptable
to Agent, not to exceed $30,000,000.

     9.10 Loans, Investments, Guarantees, Etc. Each Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly, make any loans or advance money or property to any Person,
or invest in (by capital contribution, dividend or otherwise) or purchase or repurchase the Capital
Stock or Indebtedness or all or a substantial part of the assets or property of any Person, or
guarantee, assume, endorse, or otherwise become responsible for (directly or indirectly) the
Indebtedness, performance, obligations or dividends of any Person, or form or acquire any
Subsidiaries, or agree to do any of the foregoing, except:

          (a) the endorsement of instruments for collection or deposit in the ordinary course of
business;

          (b) investments in cash or Cash Equivalents, provided, that, (i) no Loans are then outstanding
and (ii) as to any of the foregoing, unless waived in writing by Agent, such Borrower shall take
such actions as are deemed necessary by Agent to perfect the security interest of Agent in such
investments;

          (c) the existing equity investments of such Borrower as of the date hereof in its
Subsidiaries, provided, that, such Borrower shall have no obligation to make any other investment
in, or loans to, or other payments in respect of, any such Subsidiaries;

          (d) guarantees by any Subsidiaries of any Borrower of the Obligations in favor of Agent and
Lenders;

          (e) stock or obligations issued to such Borrower by any Person (or the representative of such
Person) in respect of Indebtedness of such Person owing to such Borrower in connection with the
insolvency, bankruptcy, receivership or reorganization of such Person or a composition or
readjustment of the debts of such Person; provided, that, the original of any such stock or
instrument evidencing such obligations shall be promptly delivered to Agent, upon Agent’s request,
together with such stock power, assignment or endorsement by such Borrower as Agent may request;

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          (f) obligations of account debtors to such Borrower arising from Accounts which are past due
evidenced by a promissory note made by such account debtor payable to such Borrower; provided,
that, promptly upon the receipt of the original of any such promissory note by such Borrower, such
promissory note shall be endorsed to the order of Agent by such Borrower and promptly delivered to
Agent as so endorsed;

          (g) the loans, advances and guarantees set forth on Schedule 9.10 hereto; provided, that, (i)
such Borrower may only make regularly scheduled payments of principal and interest in respect of
such Indebtedness in accordance with the terms of the agreement or instrument evidencing or giving
rise to such Indebtedness as in effect on the date hereof, (ii) such Borrower shall not, directly
or indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or any agreement,
document or instrument related thereto as in effect on the date hereof except, that, such Borrower
may, after prior written notice to Agent, amend, modify, alter or change the terms thereof so as to
extend the maturity thereof, or defer the timing of any payments in respect thereof, or to forgive
or cancel any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce
the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose, and (iii) such Borrower shall furnish to Agent all notices or demands in connection with
such Indebtedness either received by such Borrower or on its behalf, promptly after the receipt
thereof, or sent by such Borrower or on its behalf, concurrently with the sending thereof, as the
case may be;

          (h) loans by such Borrower to any other Borrower after the date hereof;

          (i) Permitted Acquisitions and form Acquisition Subsidiaries in connection therewith;

          (j) upfront advances by such Borrower for anticipated royalties under License Agreements
entered into by such Borrower in the ordinary course of business of such Borrower consistent with
the current practices of such Borrower as of the date hereof; and

          (k) investments in the Honduras JV not to exceed an aggregate amount outstanding at any time
of $6,000,000 during the term of this Agreement.

     9.11 Dividends and Redemptions. Each Borrower shall, not, directly or indirectly, declare or
pay any dividends on account of any shares of class of Capital Stock of such Borrower now or
hereafter outstanding, or set aside or otherwise deposit or invest any sums for such purpose, or
redeem, retire, defease, purchase or otherwise acquire any shares of any class of Capital Stock (or
set aside or otherwise deposit or invest any sums for such purpose) for any consideration other
than common stock or apply or set apart any sum, or make any other distribution (by reduction of
capital or otherwise) in respect of any such shares or agree to do any of the foregoing except,
that:

          (a) any Subsidiary of such Borrower may pay dividends to such Borrower; and

          (b) such Borrower may pay cash dividends or distributions from funds legally available
therefor to its shareholders from time to time and may repurchase its Capital Stock
consisting of common stock, provided that, (i) as of the date of any such payment or repurchase and
after giving pro forma effect thereto, Borrowers shall have Excess Availability on such date, and
average Excess Availability for the thirty (30) day period immediately preceding such date, of not
less than $15,000,000, (ii) the aggregate amount of such cash dividends, distributions or
repurchases after the date of this Agreement does not exceed $19,000,000 plus fifty percent (50%)
of such Borrower’s cumulative Net Income for the period from the first day of Borrower’s 2012
fiscal year to the date of determination;

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(iii) Agent shall have received at least ten (10) days prior to any payment or repurchase, a
certificate signed by such Borrower’s chief financial officer (A) setting forth such Borrower’s Net
Income for the applicable period, and (B) certifying that such dividend, distribution or repurchase
is not in violation of applicable law or any other agreement to which such Borrower is a party or
by which such Borrower or its property is bound, and (iv) as of the date of any such payment or
repurchase and after giving pro forma effect thereto, no Default or Event of Default shall exist.

     9.12 Transactions with Affiliates. Each Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly,

          (a) except as set forth in Schedule 9.12 hereto, purchase, acquire or lease any property (or
processing services) from, or sell, transfer or lease any property to, any officer, director, agent
or other Person affiliated with such Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of such Borrower’s business and upon fair and reasonable terms no less
favorable to such Borrower than Borrower would obtain in a comparable arm’s length transaction with
an unaffiliated Person; or

          (b) make any payments of management, consulting or other fees for management or similar
services, or of any Indebtedness owing to any officer, employee, shareholder, director or other
Affiliate of such Borrower, except,

               (i) reasonable compensation to officers, employees and directors for services rendered to such
Borrower in the ordinary course of business;

               (ii) dividends permitted under Section 9.11(b) above;

               (iii) payments by such Borrower to a Foreign Subsidiary for (A) actual and necessary
reasonable out-of-pocket administrative, operating and capital expenditures of such Foreign
Subsidiary for the business of such Borrower as presently conducted in the ordinary course of
business (including lease payments, payroll, insurance, franchise taxes and similar items),
provided, that, the amount of all such payments permitted under this Section 9.12(b)(iii)(A) in
respect of capital expenditures shall not exceed $10,000,000 in the aggregate in any fiscal year of
such Borrower, and (B) actual and necessary reasonable out-of-pocket legal, accounting, insurance
(including premiums for such insurance), marketing, payroll and similar types of services paid for
by such Foreign Subsidiary in the ordinary course of its business as conducted as of the date
hereof or as the same may be directly attributable to such Borrower; provided, that, (1) such
expenses are in the ordinary course of and pursuant to the reasonable requirements of such
Borrower’s business as conducted on the date hereof, and (2) to the extent such expenses are
payable to such Foreign Subsidiary, such expenses shall be payable upon terms no less favorable to
such Borrower, than such Borrower, could obtain in a comparable arm’s length transaction with a
Person who is not an Affiliate;

               (iv) Indebtedness permitted under Section 9.10(h) above; and

               (v) investments in the Honduras JV permitted under Section 9.10(k) above.

     9.13 Additional Bank Accounts. Each Borrower shall not, directly or indirectly, open,
establish or maintain any deposit account, investment account or any other account with any bank or
other financial institution, other than the Blocked Accounts and the accounts set forth in Schedule
8.11 hereto, except: (a) as to any new or additional Blocked Accounts and other such new or
additional accounts which contain any Collateral or proceeds thereof, with the prior written
consent of Agent and subject to

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such conditions thereto as Agent may establish and (b) as to any accounts used by such
Borrower to make payments of payroll, taxes or other obligations to third parties, after prior
written notice to Agent.

     9.14 Compliance with ERISA. Each Borrower shall and shall cause each of its ERISA
Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal and State law; (b) cause each Plan which is
qualified under Section 401 (a) of the Code to maintain such qualification; (c) not terminate any
of such Plans so as to incur any liability to the Pension Benefit Guaranty Corporation; (d) not
allow or suffer to exist any prohibited transaction involving any of such Plans or any trust
created thereunder which would subject such Borrower or such ERISA Affiliate to a tax or penalty or
other liability on prohibited transactions imposed under Section 4975 of the Code or ERISA; (e)
make all required contributions to any Plan which it is obligated to pay under Section 302 of
ERISA, Section 412 of the Code or the terms of such Plan; (f) not allow or suffer to exist any
accumulated funding deficiency, whether or not waived, with respect to any such Plan; or (g) allow
or suffer to exist any occurrence of a reportable event or any other event or condition which
presents a material risk of termination by the Pension Benefit Guaranty Corporation of any such
Plan that is a single employer plan, which termination could result in any liability to the Pension
Benefit Guaranty Corporation.

     9.15 End of Fiscal Years; Fiscal Quarters: Each Borrower shall, for financial
reporting purposes, cause its, and each of its Subsidiaries’ (a) fiscal years to end the Saturday
closest to June 30 of each year and (b) fiscal quarters to end on the last day of the thirteenth
(13th) week following the end of the immediately preceding fiscal quarter; provided, that, the end
of the fourth fiscal quarter shall be on the last day of the fourteenth (14th) week following the
end of the third fiscal quarter whenever necessary to have the fourth fiscal quarter end on the
Saturday closest to June 30.

     9.16 Change in Business. Each Borrower shall not engage in any business other than
the business of such Borrower on the date hereof and any business reasonably related, ancillary or
complimentary to the business in which such Borrower is engaged on the date hereof.

     9.17 Limitation of Restrictions Affecting Subsidiaries. Each Borrower shall not,
directly, or indirectly, create or otherwise cause or suffer to exist any encumbrance or
restriction which prohibits or limits the ability of any Subsidiary of such Borrower to (a) pay
dividends or make other distributions or pay any Indebtedness owed to such Borrower or any
Subsidiary of such Borrower; (b) make loans or advances to such Borrower or any Subsidiary of such
Borrower; (c) transfer any of its properties or assets to any Borrower or any Subsidiary of a
Borrower; or (d) create, incur, assume or suffer to exist any Lien upon any of its property, assets
or revenues, whether now owned or hereafter acquired, other than encumbrances and restrictions
arising under (i) applicable law, (ii) this Agreement, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of such Borrower or any of its
Subsidiaries, (iv) customary restrictions on dispositions of real property interests found in
reciprocal easement agreements of such Borrower or its Subsidiary, (v) any agreement relating to
Permitted Indebtedness or Permitted Liens incurred by a Subsidiary of such Borrower prior to the
date on which such Subsidiary was acquired by such Borrower and outstanding on such acquisition
date, and (vi) the extension or continuation of contractual obligations in existence on the date
hereof; provided, that, any such encumbrances or restrictions contained in such extension or
continuation are no less favorable to Agent and Lenders than those encumbrances and restrictions
under or pursuant to the contractual obligations so extended or continued.

     9.18 Foreign Assets Control Regulations, Etc. None of the requesting or borrowing of
the Loans or the requesting or issuance, extension or renewal of any Letter of Credit or the use of
the proceeds of any thereof will violate the Trading With the Enemy Act (50 USC §1 et seq., as
amended) (the “Trading With the Enemy Act”) or any of the foreign assets control regulations of the
United States

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Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign Assets Control
Regulations”) or any enabling legislation or executive order relating thereto (including, but not
limited to (a) Executive Order 13224, and (b) the USA PATRIOT Act. None of the Obligors shall, nor
shall any of them permit any of their respective Subsidiaries to, (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including the making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked Person; (ii) deal in,
or otherwise engage in any transaction relating to, any property or interests in property blocked
pursuant to Executive Order No. 13224; or (iii) engage in on conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of
the prohibitions set forth in Executive Order No. 13224 or the USA PATRIOT Act. Each of the
Obligors shall deliver to Agent and Lenders any certification or other evidence requested from time
to time by Agent or any Lender, in Agent’s sole discretion, confirming such Person’s compliance
with this Section.

     9.19 After Acquired Real Property.. If any Borrower hereafter acquires any Real
Property, fixtures or any other property that is of the kind or nature described in the Mortgages
and such Real Property, fixtures or other property at any one location has a fair market value in
an amount equal to or greater than $2,500,000, or, with respect to all locations, having a fair
market value in an aggregate amount equal to $7,500,000 (or if a Default or Event of Default exists
or has occurred and is continuing, then regardless of the fair market value of such assets),
without limiting any other rights of Agent or any Lender, or duties or obligations of such
Borrower, upon Agent’s request, such Borrower shall execute and deliver to Agent a mortgage, deed
of trust or deed to secure debt, as Agent may determine, in form and substance substantially
similar to the Mortgages and as to any provisions relating to specific state laws satisfactory to
Agent and in form appropriate for recording in the real estate records of the jurisdiction in which
such Real Property or other property is located granting to Agent a first and only Lien and
mortgage on and security interest in such Real Property, fixtures or other property (except as such
Borrower would otherwise be permitted to incur hereunder or under the Mortgages or as otherwise
consented to in writing by Agent) and such other agreements, documents,. instruments and
information as Agent or any Lender may require in connection therewith.

     9.20 Costs and Expenses. Borrowers shall pay to Agent and Lenders on demand all
costs, expenses, filing fees and taxes paid or payable in connection with the preparation,
negotiation, execution, delivery, recording, administration, collection, liquidation, enforcement
and defense of the Obligations, Agent’s rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto, including any amendments,
supplements or consents which may hereafter be contemplated (whether or not executed) or entered
into in respect hereof and thereof, including: (a) all costs and expenses of filing or recording
(including Uniform Commercial Code financing statement filing taxes and fees, documentary taxes,
intangibles taxes and mortgage recording taxes and fees, if applicable); (b) costs and expenses and
fees for insurance premiums, environmental audits, surveys, assessments, engineering reports and
inspections, appraisal fees subject to Section 7.8 and search fees, costs and expenses of remitting
loan proceeds, collecting checks and other items of payment, and establishing and maintaining the
Blocked Accounts, together with Agent’s customary charges and fees with respect thereto; (c)
charges, fees or expenses charged by any
Issuing Bank in connection with any Letter of Credit; (d) costs and expenses of preserving and
protecting the Collateral; (e) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and Liens of Agent, selling or
otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Agreement
and the other Financing Agreements or defending any claims made or threatened against Agent or any
Lender arising out of the transactions contemplated hereby and thereby (including preparations for
and consultations concerning any such matters); (f) all out-of-pocket expenses and costs heretofore
and from time to time hereafter incurred by Agent during the course of periodic field examinations
of the Collateral and Borrowers’ operations, plus Agent’s then standard per diem charge
($1,000 as of Closing Date) per person per day for Agent’s examiners in the field and office;
and (g) the

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reasonable fees actually incurred and disbursements of counsel (including legal assistants) to
Agent in connection with any of the foregoing.

     9.21 Further Assurances. At the request of Agent at any time and from time to time,
each Borrower shall, at Borrowers’ expense, duly execute and deliver, or cause to be duly executed
and delivered, such further agreements, documents and instruments, and do or cause to be done such
further acts as may be necessary or proper to evidence, perfect, maintain and enforce the security
interests and the priority thereof in the Collateral and to otherwise effectuate the provisions or
purposes of this Agreement or any of the other Financing Agreements. Agent may at any time and
from time to time request a certificate from an officer of any Borrower representing that all
conditions precedent to the making of Loans and providing Letters of Credit contained herein are
satisfied. In the event of such request by Agent, Agent and Lenders may, at Agent’s option, cease
to make any further Loans or provide any further Letters of Credit until Agent has received such
certificate and, in addition, Agent has determined that such conditions are satisfied.

     9.22 Fixed Charge Coverage Ratio. During a Financial Covenant Testing Period,
Borrowers shall not permit the Fixed Charge Coverage Ratio, tested for the twelve (12) month period
ending on the last day of the most recently concluded month, to be less than 1.10 to 1.00.

     9.23 Post-Closing Deliverables. On or before forty-five (45) days after the Closing
Date (or such later date to which Agent may agree in writing, which in no event shall exceed ninety
(90) days after the Closing Date), deliver to Agent, in form and substance satisfactory to Agent,
Deposit Account Control Agreements by and among Agent, each Borrower and each bank where such
Borrower has a deposit account, in each case, duly authorized, executed and delivered by such bank
and such Borrower.

SECTION 10. EVENTS OF DEFAULT AND REMEDIES

     10.1 Events of Default. The occurrence or existence of any one or more of the
following events are referred to herein individually as an “Event of Default and collectively as
“Events of Default”:

          (a) (i) Borrowers fail to pay any of the Obligations when due or (ii) Borrowers or any Obligor
fails to perform any of the covenants contained in Sections 9.3, 9.4, 9.6, 9.13, 9.14 or 9.16 of
this Agreement and such failure shall continue for ten (10) days; provided, that, such ten (10) day
period shall not apply in the case of (A) any failure to observe any such covenant which is not
capable of being cured at all or within such ten (10) day period or which has been the subject of a
prior failure within a six (6) month period or (B) an intentional breach by any Borrower or Obligor
of any such covenant, (iii) Borrowers fails to perform any of the covenants contained in Section
9.22 of this Agreement, or (iv) any Borrower fails to perform any of the terms, covenants,
conditions or provisions contained in this Agreement or any of the other Financing Agreements other
than those described in Sections 10.1(a)(i), 10.1(a)(ii) and 10.1(a)(iii) above;

          (b) any representation, warranty or statement of fact made by any Borrower to Agent in this
Agreement, the other Financing Agreements or any other agreement, schedule, confirmatory assignment
or otherwise shall when made or deemed made be false or misleading in any material respect;

          (c) any Obligor revokes, terminates or fails to perform any of the terms, covenants,
conditions or provisions of any guarantee, endorsement or other agreement of such party in favor of
Agent;

          (d) any judgment for the payment of money is rendered against any Borrower or Obligor in
excess of $2,500,000 in any one case or in excess of $2,500,000 in the aggregate and shall

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remain undischarged or unvacated for a period in excess of thirty (30) days or execution shall at
any time not be effectively stayed, or any judgment other than for the payment of money, or
injunction, attachment, garnishment or execution is rendered against any Borrower or Obligor or any
of their assets having a value in excess of $2,500,000 in the aggregate;

          (e) any Obligor (being a natural person or a general partner of an Obligor which is a
partnership) dies or any Borrower or any Obligor, which is a partnership, limited liability
company, limited liability partnership or a corporation, dissolves or suspends or discontinues
doing business;

          (f) any Borrower or Obligor becomes insolvent (however defined or evidenced), makes an
assignment for the benefit of creditors, makes or sends notice of a bulk transfer or calls a
meeting of its creditors or principal creditors;

          (g) a case or proceeding under the Bankruptcy Code or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction
now or hereafter in effect (whether at law or in equity) is filed against any Borrower or Obligor
or all or any part of its properties and such petition or application is not dismissed within
forty-five (45) days after the date of its filing or such Borrower or Obligor shall file any answer
admitting or not contesting such petition or application or indicates its consent to, acquiescence
in or approval of, any such action or proceeding or the relief requested is granted sooner;

          (h) a case or proceeding under the Bankruptcy Code or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction
now or hereafter in effect (whether at law or equity) is filed by any Borrower or Obligor or for
all or any part of its property; or

          (i) any default by any Borrower or Obligor under any agreement, document or instrument
relating to any Indebtedness for borrowed money owing to any Person other than a Lender, or any
capitalized lease obligations, contingent Indebtedness in connection with any guarantee, letter of
credit, indemnity or similar type of instrument in favor of any Person other than Agent, in any
case in an amount in excess of $2,500,000, which default continues for more than the applicable
cure period, if any, with respect thereto, or any material default under any Material Contract to
any Person other than Agent;

          (j) any material provision hereof or of any of the other Financing Agreements shall for any
reason cease to be valid, binding and enforceable with respect to any party hereto or thereto
(other than Agent) in accordance with its terms, or any such party shall challenge the
enforceability hereof or thereof, or shall assert in writing, or take any action or fail to take
any action based on the assertion that any provision hereof or of any of the other Financing
Agreements has ceased to be or is otherwise not valid, binding or enforceable in accordance with
its terms, or any security interest provided for herein or in any of the other Financing Agreements
shall cease to be a valid and perfected first priority security interest in any of the Collateral
purported to be subject thereto (except as otherwise permitted herein or therein);

          (k) an ERISA Event shall occur which results in or could reasonably be expected to result in
liability of any Borrower in an aggregate amount in excess of $2,500,000;

          (l) any Change of Control shall occur;

          (m) the indictment by any Governmental Authority, or as Agent may reasonably and in good faith
determine, the threatened indictment by any Governmental Authority of any Borrower of which any
Borrower or Agent receives notice, in either case, as to which there is a reasonable possibility

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of an adverse determination, in the good faith determination of Agent, under any criminal statute,
or commencement or threatened commencement of criminal or civil proceedings against such Borrower,
pursuant to which statute or proceedings the penalties or remedies sought or available include
forfeiture of (i) any of the Collateral with an aggregate value in excess of $2,500,000 or more, or
(ii) any other property of any Borrower which is necessary or material to the conduct of its
business;

          (n) there shall be a material adverse change in the business, assets or prospects of Borrowers
and their Subsidiaries, taken as a whole, after the date hereof; or

          (o) there shall be an event of default under any of the other Financing Agreements.

     10.2 Remedies.

          (a) At any time an Event of Default exists or has occurred and is continuing, Agent and
Lenders shall have all rights and remedies provided in this Agreement, the other Financing
Agreements, the UCC and other applicable law, all of which rights and remedies may be exercised
without notice to or consent by any Borrower or Obligor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights, remedies and powers
granted to Agent and Lenders hereunder, under any of the other Financing Agreements, the UCC or
other applicable law, are cumulative, not exclusive and enforceable, in Agent’s discretion,
alternatively, successively, or concurrently on any one or more occasions, and shall include,
without limitation, the right to apply to a court of equity for an injunction to restrain a breach
or threatened breach by any Borrower of this Agreement or any of the other Financing Agreements.
Subject to Section 12 hereof, Agent may, at any time or times, proceed directly against any
Borrower or Obligor to collect the principal balance of the Obligations and all interest accrued
thereon without prior recourse to the Collateral.

          (b) Without limiting the foregoing, at any time an Event of Default exists or has occurred and
is continuing, Agent may, in its discretion and without limitation, (i) accelerate the payment of
the principal balance of the Obligations and all interest accrued thereon and demand immediate
payment thereof to Agent for itself and the ratable benefit of Lenders (provided, that, upon the
occurrence of any Event of Default described in Sections 10.1(g) or 10.1(h), the principal balance
of the Obligations and all interest accrued thereon shall automatically become immediately due and
payable) and (ii) terminate the Commitments and this Agreement (provided, that, upon the occurrence
of any Event of Default described in Sections 10.1(g) or 10.1(h), the Commitments and any other
obligation of Agent or a Lender hereunder shall automatically terminate).

          (c) Without limiting the foregoing, at any time an Event of Default exists or has occurred and
is continuing, Agent may, in its discretion, and upon the direction of the Required Lenders, shall
(i) with or without judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the Collateral or complete
processing, manufacturing and repair of all or any portion of the Collateral, (ii) require any
Borrower, at Borrowers’ expense, to assemble and make available to Agent any part or all of the
Collateral at any place and time designated by Agent, (iii) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (iv) remove any or all of the
Collateral from any premises on or in which the same may be located for the purpose of effecting
the sale, foreclosure or other disposition thereof or for any other purpose, (v) sell, lease,
transfer, assign, deliver or otherwise dispose of any and all Collateral (including entering into
contracts with respect thereto, public or private sales at any exchange, broker’s board, at
any office of Agent or elsewhere) at such prices or terms as Agent may deem reasonable, for cash,
upon credit or for future delivery, with Agent having the right to purchase the whole or any part
of the Collateral at any such public sale, all of the foregoing being free from any right or equity
of redemption of any Borrower, which right or equity of redemption is hereby expressly waived and
released by such Borrower

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and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased by Agent upon
credit terms or for future delivery, the Obligations shall not be reduced as a result thereof until
payment therefor is finally collected by Agent. If notice of disposition of Collateral is required
by law, five (5) days prior notice by Agent to Administrative Borrower designating the time and
place of any public sale or the time after which any private sale or other intended disposition of
Collateral is to be made, shall be deemed to be reasonable notice thereof and each Borrower waives
any other notice. In the event Agent institutes an action to recover any Collateral or seeks
recovery of any Collateral by way of prejudgment remedy, each Borrower waives the posting of any
bond which might otherwise be required. At any time an Event of Default exists or has occurred and
is continuing, upon Agent’s request, Borrowers will either, as Agent shall specify, furnish cash
collateral to Issuing Bank to be used to secure and fund the reimbursement obligations to Issuing
Bank in connection with any Letter of Credit Obligations or furnish cash collateral to Agent for
the Letter of Credit Obligations. Such cash collateral shall be in the amount equal to one hundred
five percent (105%) of the amount of the Letter of Credit Obligations plus the amount of any fees
and expenses payable in connection therewith through the end of the latest expiration date of the
Letters of Credit giving rise to such Letter of Credit Obligations.

          (d) At any time or times that an Event of Default exists or has occurred and is continuing,
Agent may, in its discretion, enforce the rights of any Borrower against any account debtor,
secondary obligor or other obligor in respect of any of the Accounts or other Receivables. Without
limiting the generality of the foregoing, Agent may, in its discretion, at such time or times (i)
notify any or all account debtors, secondary obligors or other obligors in respect thereof that the
Receivables have been assigned to Agent and that Agent has a security interest therein and Agent
may direct any or all account debtors, secondary obligors and other obligors to make payment of
Receivables directly to Agent, (ii) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of merchandise or otherwise, and upon any terms or conditions, any and all
Receivables or other obligations included in the Collateral and thereby discharge or release the
account debtor or any secondary obligors or other obligors in respect thereof without affecting any
of the Obligations, (iii) demand, collect or enforce payment of any Receivables or such other
obligations, but without any duty to do so, and Agent and Lenders shall not be liable for any
failure to collect or enforce the payment thereof nor for the negligence of its agents or attorneys
with respect thereto and (iv) take whatever other action Agent may deem necessary or desirable for
the protection of its interests and the interests of Lenders. At any time that an Event of Default
exists or has occurred and is continuing, at Agent’s request, all invoices and statements sent to
any account debtor shall state that the Accounts and such other obligations have been assigned to
Agent and are payable directly and only to Agent and Borrowers shall deliver to Agent such
originals of documents evidencing the sale and delivery of goods or the performance of services
giving rise to any Accounts as Agent may require. In the event any account debtor returns Inventory
when an Event of Default exists or has occurred and is continuing, Borrowers shall, upon Agent’s
request, hold the returned Inventory in trust for Agent, segregate all returned Inventory from all
of its other property, dispose of the returned Inventory solely according to Agent’s instructions,
and not issue any credits, discounts or allowances with respect thereto without Agent’s prior
written consent.

          (e) To the extent that applicable law imposes duties on Agent or any Lender to exercise
remedies in a commercially reasonable manner (which duties cannot be waived under such law), each
Borrower acknowledges and agrees that it is not commercially unreasonable for Agent or any Lender
(i) to fail to incur expenses reasonably deemed significant by Agent or any Lender to prepare
Collateral for disposition or otherwise to complete raw material or work in process into finished
goods or other finished products for disposition, (ii) to fail to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if not required by
other law, to fail to obtain consents of any Governmental Authority or other third party for the
collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise
collection remedies against account debtors, secondary obligors or other Persons obligated on
Collateral or to remove Liens or encumbrances on or any adverse claims against Collateral,

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(iv) to exercise collection remedies against account debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other collection specialists, (v)
to advertise dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as any Borrower, for expressions of interest in acquiring all or any
portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the
disposition of Collateral, whether or not the collateral is of a specialized nature, (viii) to
dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the
types included in the Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets,
(x) to disclaim disposition warranties, (xi) to purchase insurance or credit enhancements to insure
Agent or Lenders against risks of loss, collection or disposition of Collateral or to provide to
Agent or Lenders a guaranteed return from the collection or disposition of Collateral, or (xii) to
the extent deemed appropriate by Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist Agent in the collection or disposition of
any of the Collateral. Each Borrower acknowledges that the purpose of this Section is to provide
non-exhaustive indications of what actions or omissions by Agent or any Lender would not be
commercially unreasonable in the exercise by Agent or any Lender of remedies against the Collateral
and that other actions or omissions by Agent or any Lender shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section. Without limitation of the
foregoing, nothing contained in this Section shall be construed to grant any rights to any Borrower
or to impose any duties on Agent or Lenders that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section.

          (f) For the purpose of enabling Agent to exercise the rights and remedies hereunder, each
Borrower hereby grants to Agent, to the extent assignable, an, irrevocable, non exclusive license
(exercisable without payment of royalty or other compensation to such Borrower) to use, assign,
license or sublicense any of the trademarks, service-marks, trade names, business names, trade
styles, designs, logos and other source of business identifiers and other Intellectual Property and
general intangibles now owned or hereafter acquired by such Borrower, wherever the same maybe
located, including in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the compilation or printout
thereof.

          (g) Agent may apply the cash proceeds of Collateral actually received by Agent from any sale,
lease, foreclosure or other disposition of the Collateral to payment of the Obligations as provided
for in Section 6.4 hereof, whether or not then due. Borrowers shall remain liable to Agent and
Lenders for the payment of any deficiency with interest at the highest rate provided for herein and
all costs and expenses of collection or enforcement, including reasonable attorneys’ fees actually
incurred and legal expenses.

          (h) Without limiting the foregoing, upon the occurrence of an Event of Default or an event
which with notice or passage of time or both would constitute an Event of Default, Agent and
Lenders may, at Agent’s option, and upon the occurrence of an Event of Default at the direction of
the Required Lenders, Agent and Lenders shall, without notice, (i) cease making Loans or arranging
for Letters of Credit or reduce the lending formulas or amounts of Loans and Letters of Credit
available to Borrowers and/or (ii) terminate any provision of this Agreement providing for any
future Loans to be made by Agent and Lenders or Letters of Credit to be issued by Issuing Bank and
(ii) Agent may, at its option, establish such Reserves as Agent determines, without limitation or
restriction, notwithstanding anything to the contrary contained herein.

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	SECTION 11.	 	JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING
LAW

     11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

          (a) The validity, interpretation and enforcement of this Agreement and the other Financing
Agreements and any dispute arising out of the relationship between the parties hereto, whether in
contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Georgia
(without giving effect to principles of conflicts of law).

          (b) Each Borrower, Agent, Issuing Bank and Lenders irrevocably consent and submit to the
nonexclusive jurisdiction of the Superior Court of Fulton County, Georgia and the United States
District Court for the Northern District of Georgia and waive any objection based on venue or forum
non conveniens with respect to any action instituted therein arising under this Agreement or any of
the other Financing Agreements or in any way connected with or related or incidental to the
dealings of the parties hereto in respect of this Agreement or any of the other Financing
Agreements or the transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree that any dispute
with respect to any such matters shall be heard only in the courts described above (except that
Agent and Lenders shall have the right to bring any action or proceeding against any Borrower or
its property in the courts of any other jurisdiction which Agent deems necessary or appropriate in
order to realize on the Collateral or to otherwise enforce its rights against any Borrower or its
property).

          (c) Each Borrower hereby waives personal service of any and all process upon it and consents
that all such service of process may be made by certified mail (return receipt requested) directed
to its address set forth on the signature pages hereof and service so made shall be deemed to be
completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at
Agent’s option, by service upon such Borrower (or Administrative Borrower on behalf of such
Borrower) in any other manner provided under the rules of any such courts. Within thirty (30) days
after such service, each Borrower shall appear in answer to such process, failing which such
Borrower shall be deemed in default and judgment may be entered by Agent against such Borrower for
the amount of the claim and other relief requested.

          (d) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, AGENT. ISSUING BANK AND LENDERS
EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i)
ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR
ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH
BORROWER, AGENT, ISSUING BANK AND LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT SUCH
BORROWER, AGENT, ISSUING BANK OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

          (e) Agent, Lenders and Issuing Bank shall not have any liability to any Borrower (whether in
tort, contract, equity or otherwise) for losses suffered by such Borrower in connection with,

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arising out of, or in any way related to the transactions or relationships contemplated by this
Agreement, or any act, omission or event occurring in connection herewith, unless it is determined
by a final and non-appealable judgment or court order binding on Agent, such Lender or Issuing
Bank, as applicable, that the losses were the result of its acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Agent, each Lender and Issuing Bank shall
be entitled to the benefit of the rebuttable presumption that it acted in good faith and with the
exercise of ordinary care in the performance by it of the terms of this Agreement. Each Borrower:
(i) certifies that neither Agent, any Lender, Issuing Bank nor any representative, agent or
attorney acting for or on behalf of Agent, any Lender or Issuing Bank has represented, expressly or
otherwise, that Agent, Lenders and Issuing Bank would not, in the event of litigation, seek to
enforce any of the waivers provided for in this Agreement or any of the other Financing Agreements
and (ii) acknowledges that in entering into this Agreement and the other Financing Agreements,
Agent, Lenders and Issuing Bank are relying upon, among other things, the waivers and
certifications set forth in this Section 11.1 and elsewhere herein and therein.

     11.2 Waiver of Notices. Each Borrower hereby expressly waives demand, presentment,
protest and notice of protest and notice of dishonor with respect to any and all instruments and
chattel paper, included in or evidencing any of the Obligations or the Collateral, and any and all
other demands and notices of any kind or nature whatsoever with respect to the Obligations, the
Collateral and this Agreement, except such as are expressly provided for herein. No notice to or
demand on any Borrower which Agent or any Lender may elect to give shall entitle such Borrower to
any other or further notice or demand in the same, similar or other circumstances. Without
limiting the generality of the foregoing, each Borrower waives (i) notice prior to Agent’s taking
possession or control of any of the Collateral or any bond or security which might be required by
any court prior to allowing Agent to exercise any of Agent’s remedies, including the issuance of an
immediate writ of possession and (ii) the benefit of all valuation, appraisement and exemption
laws.

     11.3 Amendments and Waivers.

          (a) No amendment, waiver or other modification of any provision of this Agreement or any other
Financing Agreement (other than Bank Product Agreements or the Fee Letter), and no consent with
respect to any departure by Borrowers therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request of the Required
Lenders) and the Obligors that are party thereto and then any such waiver or consent shall be
effective, but only in the specific instance and for the specific purpose for which given;
provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed
by all of the Lenders directly affected thereby and all of the Obligors that are party thereto, do
any of the following:

               (i) increase the amount of or extend the expiration date of any Commitment of any Lender,

               (ii) postpone or delay any date fixed by this Agreement or any other Financing Agreement for
any payment of principal, interest, fees, or other amounts due hereunder or under any other
Financing Agreement,

               (iii) reduce the principal of, or the rate of interest on, any loan or other extension of
credit hereunder, or reduce any fees or other amounts payable hereunder or under any other
Financing Agreement (except that Agent alone may elect not to impose the Default Rate),

               (iv) amend, modify, or eliminate this Section or any provision of this Agreement providing for
consent or other action by all Lenders,

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               (v) amend, modify, or eliminate Sections 12.11(b) or (e),

               (vi) other than as permitted by Section 12.11, release Agent’s Lien in and to any of the
Collateral,

               (vii) amend, modify, or eliminate the definition of “Required Lenders” or “Pro Rata Share”,

               (viii) contractually subordinate any of Agent’s Liens,

               (ix) other than in connection with a merger, liquidation, dissolution or sale of such Person
expressly permitted by the terms hereof or the other Financing Agreements, release any Borrower or
Guarantor from any obligation for the payment of money or consent to the assignment or transfer by
any Borrower or Guarantor of any of their rights or duties under this Agreement or the other
Financing Agreements,

               (x) amend, modify, or eliminate any of the provisions of Section 6.4(a) or
(b),

               (xi) amend, modify, or eliminate any of the provisions of Section 13.7(a) to permit an Obligor
or an Affiliate of an Obligor to be permitted to become an Assignee, or

               (xii) amend, modify, or eliminate the definition of Borrowing Base, or any of the defined
terms (including the definitions of Eligible Account, Eligible Inventory, and Eligible InTransit
Inventory) that are used in such definition to the extent that any such change results in more
credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the
definition of Maximum Credit.

          (b) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive
(i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written
consent of Agent and Borrowers (and shall not require the written consent of any of the Lenders),
and (ii) any provision of Section 12 pertaining to Agent, or any other rights or duties of Agent
under this Agreement or the other Financing Agreements, without the written consent of Agent,
Borrowers, and the Required Lenders.

          (c) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive
any provision of this Agreement or the other Financing Agreements pertaining to Issuing Bank, or
any other rights or duties of Issuing Bank under this Agreement or the other Financing Agreements,
without the written consent of Issuing Bank, Agent, Borrowers, and the Required Lenders.

          (d) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive
any provision of this Agreement or the other Financing Agreements pertaining to Agent, with respect
to Loans made by Agent on behalf of Lenders during any Settlement Period, or any other rights or
duties of Agent in such capacity under this Agreement or the other Financing Agreements, without
the written consent of Agent, Borrowers, and the Required Lenders.

          (e) Notwithstanding anything to the contrary in this Section 11.3, (i) any amendment,
modification, elimination, waiver, consent, termination, or release of, or with respect to, any
provision of this Agreement or any other Financing Agreement that relates only to the relationship
of the Lender Group among themselves, and that does not affect the rights or obligations of
Borrowers, shall not require consent by or the agreement of any Obligor, and (ii) any amendment,
waiver, modification,

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elimination, or consent of or with respect to any provision of this Agreement or any other
Financing Agreement may be entered into without the consent of, or over the objection of, any
Defaulting Lender, other than any amendment, modification or consent that would extend or increase
such Defaulting Lender’s Commitment.

          (f) If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent,
authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has
received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or
all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under Section 6.13,
then Borrowers or Agent, upon at least 5 Business Days prior irrevocable notice, may permanently
replace any Lender that failed to give its consent, authorization, or agreement (a “Holdout
Lender”) or any Lender that made a claim for compensation (a “Tax Lender”) with one or more
Replacement Lenders (provided that each such Replacement Lenders has agreed to provide its consent,
authorization, or agreement to such action), and the Holdout Lender or Tax Lender, as applicable,
shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender
or Tax Lender, as applicable, shall specify an effective date for such replacement, which date
shall not be later than fifteen (15) Business Days after the date such notice is given.

          (g) Prior to the effective date of such replacement, the Holdout Lender or Tax Lender, as
applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance,
subject only to the Holdout Lender or Tax Lender, as applicable, being repaid in full its share of
the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including
(i) all interest, fees and other amounts that may be due in payable in respect thereof, and (ii) an
assumption of its Pro Rata Share of participations in the Letters of Credit). If the Holdout Lender
or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such Assignment and
Acceptance prior to the effective date of such replacement, Agent may, but shall not be required
to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Holdout
Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers such
Assignment and Acceptance, the Holdout Lender or Tax Lender, as applicable, shall be deemed to have
executed and delivered such Assignment and Acceptance. The replacement of any Holdout Lender or Tax
Lender, as applicable, shall be made in accordance with the terms of Section 13.7. Until such time
as one or more Replacement Lenders shall have acquired all of the Obligations, the Commitments, and
the other rights and obligations of the Holdout Lender or Tax Lender, as applicable, hereunder and
under the other Financing Agreements, the Holdout Lender or Tax Lender, as applicable, shall remain
obligated to make the Holdout Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Loans and
other advances and to purchase a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of such Letters of Credit.

          (h) No failure by Agent or any Lender to exercise any right, remedy, or option under this
Agreement or any other Financing Agreement, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is
in writing, and then only to the extent specifically stated. No waiver by Agent or any Lender on
any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict
performance by Borrowers of any provision of this Agreement. Agent’s and each Lender’s rights under
this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right
or remedy that Agent or any Lender may have.

     11.4 Waiver of Counterclaims. Each Borrower waives all rights to interpose any
claims, deductions, setoffs or counterclaims of any nature (other then compulsory counterclaims),
in any action or proceeding with respect to this Agreement, the Obligations, the Collateral or
any matter arising therefrom or relating hereto or thereto.

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     11.5 Indemnification. Each Borrower shall jointly and severally indemnify and hold
Agent, each Lender and Issuing Bank, and its officers, directors, agents, employees, advisors and
counsel and their respective Affiliates (each such Person being an “Indemnitee”), harmless from and
against any all of the following (collectively, the “Indemnified Liabilities”): all losses, claims,
damages, liabilities, costs or expenses (including reasonable attorneys’ fees and expenses) imposed
on, incurred by or asserted against any of them in connection with any litigation, investigation,
claim or proceeding commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Agreement, any other Financing
Agreements, or any undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto, including amounts paid in
settlement, court costs, and the reasonable fees and expenses of counsel, except, as to any
indemnified party, for such losses, claims, damages, liabilities, costs or expenses resulting from
gross negligence or willful misconduct of such party, its directors, agents, employees or counsel
as determined pursuant to a final, non-appealable order of a court of competent jurisdiction (but
without limiting the obligations of Borrowers or Guarantors as to any other Indemnitee). To the
extent that the undertaking to indemnify, pay and hold harmless set forth in this Section may be
unenforceable because it violates any law or public policy, Borrowers and Guarantors shall pay the
maximum portion which it is permitted to pay under applicable law to Agent and Lenders in
satisfaction of indemnified matters under this Section. To the extent permitted by applicable law,
no Borrower or shall assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement,
any of the other Financing Agreements or any undertaking or transaction contemplated hereby. No
Indemnitee referred to above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this Agreement or any of
the other Financing Agreements or the transaction contemplated hereby or thereby. All amounts due
under this Section shall be payable upon demand. The foregoing indemnity shall survive the payment
of the Obligations and the termination of this Agreement.

SECTION 12. THE AGENT

     12.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints Wells Fargo as its agent under this Agreement and the other Financing Agreements and each
Lender hereby irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to designate, appoint, and authorize) Agent to execute and deliver
each of the other Financing Agreements on its behalf and to take such other action on its behalf
under the provisions of this Agreement and each other Financing Agreement and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement
or any other Financing Agreement, together with such powers as are reasonably incidental thereto.
Agent agrees to act as agent for and on behalf of Lenders (and the Bank Product Providers) on the
conditions contained in this Section 12. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Financing Agreement, Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Financing Agreements, nor
shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product
Provider), and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Financing Agreement or otherwise exist
against Agent. Without limiting the generality of the foregoing, the use of the term “agent” in
this Agreement or the other Financing Agreements with reference to Agent is not intended to connote
any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only a representative
relationship between independent contracting parties. Each Lender hereby further authorizes (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to act as the secured party under each of the

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Financing Agreements that create a Lien on any item of Collateral. Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or pursuant to this
Agreement and the other Financing Agreements. Without limiting the generality of the foregoing, or
of any other provision of the Financing Agreements that provides rights or powers to Agent, Lenders
agree that Agent shall have the right to exercise the following powers as long as this Agreement
remains in effect: (a) maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Collateral, the collections of Borrowers and
their Subsidiaries, and related matters, (b) execute or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Financing Agreements, (c) make Loans, for
itself or on behalf of Lenders, as provided in the Financing Agreements, (d) exclusively receive,
apply, and distribute the collections of Borrowers and their Subsidiaries as provided in the
Financing Agreements, (e) open and maintain such bank accounts and cash management arrangements as
Agent deems necessary and appropriate in accordance with the Financing Agreements for the foregoing
purposes with respect to the Collateral and the collections of Borrowers and their Subsidiaries,
(f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with
respect to each Borrower and its Subsidiaries, the Obligations, the Collateral, the collections of
Borrowers and their Subsidiaries, or otherwise related to any of same as provided in the Financing
Agreements, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers pursuant to the
Financing Agreements.

     12.2 Delegation of Duties. Agent may execute any of its duties under this Agreement or
any other Financing Agreement by or through agents, employees or attorneys in fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be
responsible for the negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

     12.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with this Agreement or
any other Financing Agreement or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any Lender (or Bank
Product Provider) for any recital, statement, representation or warranty made by any Borrower or
any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this
Agreement or in any other Financing Agreement, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in connection with, this
Agreement or any other Financing Agreement, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Financing Agreement, or for any
failure of any Borrower or its Subsidiaries or any other party to any Financing Agreement to
perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lenders (or Bank Product Providers) to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions of, this Agreement
or any other Financing Agreement, or to inspect the books and records or properties of any Borrower
or its Subsidiaries except as otherwise provided for herein.

     12.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, telefacsimile or other electronic method of transmission, telex or telephone message,
statement or other document or conversation believed by it to be genuine and correct and to have
been signed,
sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to Borrowers or counsel to any Lender), independent accountants and other
experts selected by Agent. Agent shall be

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fully justified in failing or refusing to take any action under this Agreement or any other
Financing Agreement unless Agent shall first receive such advice or concurrence of Lenders as it
deems appropriate and until such instructions are received, Agent shall act, or refrain from
acting, as it deems advisable. If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by Lenders (and, if it so elects, the Bank Product Providers) against any
and all liability and expense that may be incurred by it by reason of taking or continuing to take
any such action. Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Financing Agreement in accordance with a request or
consent of the Required Lenders and such request and any action taken or failure to act pursuant
thereto shall be binding upon all Lenders (and Bank Product Providers).

     12.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for
the account of Lenders and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or Borrowers (or
Administrative Borrower) referring to this Agreement, describing such Default or Event of Default,
and stating that such notice is a “notice of default.” Agent promptly will notify Lenders of its
receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If any
Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify Agent of
such Event of Default. Each Lender shall be solely responsible for giving any notices to its
Participants, if any. Subject to Section 12.4, Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Required Lenders in accordance with Section
10.2; provided, however, that unless and until Agent has received any such request, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable.

     12.6 Credit Decision. Each Lender (and Bank Product Provider) acknowledges that none
of the Agent-Related Persons has made any representation or warranty to it, and that no act by
Agent hereinafter taken, including any review of the affairs of Borrowers and their Subsidiaries or
Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related
Person to any Lender (or Bank Product Provider). Each Lender represents (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to represent) to Agent that it
has, independently and without reliance upon any Agent-Related Person and based on such due
diligence, documents and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and other condition and
creditworthiness of any Borrower or any other Person party to a Financing Agreement, and all
applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own
decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to represent) that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Financing Agreements, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial and other condition
and creditworthiness of any Borrower or any other Person party to a Financing Agreement. Except for
notices, reports, and other documents expressly herein required to be furnished to Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender (or Bank Product
Provider) with any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any Borrower or any other Person
party to a Financing Agreement that may come into the possession of any of
the Agent-Related Persons. Each Lender acknowledges (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any
duty or responsibility, either initially or on a continuing basis (except to the extent, if any,
that is expressly specified herein) to provide such Lender (or Bank Product

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Provider) with any credit or other information with respect to any Borrower, its Affiliates or any
of their respective business, legal, financial or other affairs, and irrespective of whether such
information came into Agent’s or its Affiliates’ or representatives’ possession before or after the
date on which such Lender became a party to this Agreement (or such Bank Product Provider entered
into a Bank Product Agreement).

     12.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and
fulfillment of its functions, powers, and obligations pursuant to the Financing Agreements,
including court costs, attorneys fees and expenses, fees and expenses of financial accountants,
advisors, consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such
expenses pursuant to this Agreement or otherwise. Agent is authorized and directed to deduct and
retain sufficient amounts from the collections of Borrowers and their Subsidiaries received by
Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders (or Bank Product Providers). In the event Agent is not reimbursed for such costs
and expenses by Borrowers or their Subsidiaries, each Lender hereby agrees that it is and shall be
obligated to pay to Agent such Lender’s ratable thereof. Whether or not the transactions
contemplated hereby are consummated, each Lender, on a ratable basis, shall indemnify and defend
the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without
limiting the obligation of Borrowers to do so) from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross
negligence or willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make a Loan or other extension of credit hereunder. Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s
ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors,
and consultants fees and expenses) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any other Financing Agreement to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrowers. Notwithstanding anything herein to the contrary, Lenders
shall be liable and indemnify Agent-Related Persons only for Indemnified Liabilities and other
costs and expenses that relate to or arise from an Agent-Related Person acting as, or for, Agent
(in its capacity as Agent). The undertaking in this Section shall survive the payment of the
Obligations and the resignation or replacement of Agent.

     12.8 Agent in Individual Capacity. Wells Fargo and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire
equity interests in, and generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Borrowers and their Subsidiaries and Affiliates and any other
Person party to any Financing Agreement as though Wells Fargo were not Agent hereunder, and, in
each case, without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that, pursuant to such activities, Wells Fargo or
its Affiliates may receive information regarding a Borrower or its Affiliates or any other Person
party to any Financing Agreements that is subject to confidentiality obligations in favor of such
Borrower or such other Person and that prohibit the disclosure of such information to Lenders (or
Bank Product Providers), and Lenders acknowledge (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to acknowledge) that, in such
circumstances (and in the absence of a waiver of such confidentiality obligations, which
waiver Agent will use its reasonable best efforts to obtain), Agent shall

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not be under any obligation to provide such information to them. The terms “Lender” and “Lenders”
include Wells Fargo in its individual capacity.

     12.9 Successor Agent. Agent may resign as Agent upon thirty (30) days prior written
notice to Lenders (unless such notice is waived by the Required Lenders) and Borrowers (unless such
notice is waived by Borrowers) and without any notice to the Bank Product Providers. If Agent
resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of
Default has occurred and is continuing) the consent of Borrowers (such consent not to be
unreasonably withheld, delayed, or conditioned), appoint a successor Agent for Lenders (and the
Bank Product Providers). If, at the time that Agent’s resignation is effective, it is acting as the
Issuing Bank or making Loans on behalf of Lenders pursuant to Section 6.9, such resignation shall
also operate to effectuate its resignation as the Issuing Bank or to make Loans pursuant to Section
6.9, as applicable, and it shall automatically be relieved of any further obligation to issue
Letters of Credit or to make Loans pursuant to Section 6.9. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with
Lenders and Borrowers, a successor Agent, which shall be a Lender unless no Lender is willing to
accept such appointment. If Agent has materially breached or failed to perform any material
provision of this Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among Lenders with (so long as no Event of
Default has occurred and is continuing) the consent of Borrowers (such consent not to be
unreasonably withheld, delayed, or conditioned). In any such event, upon the acceptance of its
appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights,
powers, and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and
the retiring Agent’s appointment, powers, and duties as Agent shall be terminated. After any
retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor Agent has accepted appointment as Agent by the date which is thirty (30)
days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as Lenders appoint a successor Agent as provided for above.

     12.10 Lender in Individual Capacity. Any Lender and its respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from, provide Bank
Products to, acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their Subsidiaries and
Affiliates and any other Person party to any Financing Agreements as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender Group (or the Bank
Product Providers). The other members of the Lender Group acknowledge (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to
such activities, such Lender and its respective Affiliates may receive information regarding a
Borrower or its Affiliates or any other Person party to any Financing Agreements that is subject to
confidentiality obligations in favor of such Borrower or such other Person and that prohibit the
disclosure of such information to Lenders, and Lenders acknowledge (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such
circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver
such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any
obligation to provide such information to them. Each Lender, other than Wells Fargo, that is
designated (on the cover page of this Agreement or otherwise) as an “Agent,” “Bookrunner” or
“Arranger” of any type shall not have any right, power, responsibility or duty under any Financing
Agreements other than those applicable to all
Lenders, and shall in no event be deemed to have any fiduciary relationship with any other
Lender.

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     12.11 Collateral Matters.

          (a) Agent may, at its option, from time to time, at any time on or after a Default or an Event
of Default and for so long as the same is continuing or upon any other failure of a condition
precedent to the making of Loans and issuance of Letters of Credit hereunder, make such
disbursements and advances (“Special Agent Advances”) which Agent, in its sole discretion, deems
necessary or desirable either (i) to preserve or protect the Collateral or any portion thereof or
(ii) to enhance the likelihood or maximize the amount of repayment by Borrowers of the Loans and
other Obligations, provided, that, the aggregate principal amount of the Special Agent Advances
pursuant to this Section 12.11, plus the then outstanding principal amount of the additional Loans
and Letters of Credit which Agent may make or provide as set forth in Section 12.17 hereof, shall
not exceed the aggregate amount of ten (10%) percent of the Maximum Credit or (iii) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement or any of the other
Financing Agreements consisting of costs, fees and expenses and payments to Issuing Bank on account
of Letter of Credit Obligations. Special Agent Advances shall be repayable on demand and be
secured by the Collateral. Special Agent Advances shall not constitute Loans but shall otherwise
constitute Obligations hereunder. In no event shall the aggregate principal amount of the Special
Agent Advances, plus the then outstanding principal amount of all Loans and Letter of Credit
Obligations, exceed the Maximum Credit. Interest on Special Advances shall be payable at the
Interest Rate then applicable to Base Rate Loans. Agent shall notify each Lender and Borrowers in
writing of each such Special Agent Advance, which notice shall include a description of the purpose
of such Special Agent Advance. Without limitation of its obligations pursuant to Section 6.9, each
Lender agrees that it shall make available to Agent, upon Agent’s demand, in immediately available
funds, the amount equal to such Lender’s Pro Rata Share of each such Special Agent Advance. If
such funds are not made available to Agent by such Lender, such Lender shall be deemed a Defaulting
Lender and Agent shall be entitled to recover such funds, on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.

          (b) Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each
Bank Product Provider shall be deemed to authorize) Agent, at its option and in its discretion to
release any security interest in, mortgage or Lien upon, any of the Collateral (i) upon termination
of the Commitments and payment and satisfaction of all of the Obligations and delivery of cash
collateral to the extent required under Section 13.1 below, or (ii) constituting property being
sold or disposed of if Administrative Borrower or any Borrower certifies to Agent that the sale or
disposition is made in compliance with Section 9.7 hereof (and Agent may rely conclusively on any
such certificate, without further inquiry), or (iii) constituting property in which any Borrower or
Obligor did not own an interest at the time the Lien was granted or at any time thereafter, or (iv)
having a value in the aggregate in any fiscal year period of less than $5,000,000, and to the
extent Agent may release its security interest in and Lien upon any such Collateral pursuant to the
sale or other disposition thereof, such sale or other disposition shall be deemed consented to by
Lenders, or (v) if required or permitted under the terms of any of the other Financing Agreements,
including any intercreditor agreement, or (vi) constituting trademarks securing Permitted Trademark
Financing Debt if concurrently with such release (A) Administrative Borrower or any Borrower
certifies to Agent that the Indebtedness constituting the Permitted Trademark Financing Debt is
incurred, and Liens securing the same are granted, in compliance with Sections 9.8 and 9.9 hereof
(and Agent may rely conclusively on any such certificate, without further inquiry), and (B)
Borrowers deliver to Agent a report detailing the calculation of the Borrowing Base which excludes
therefrom any trademarks securing the Permitted Trademark Financing Debt, or (vii) approved,
authorized or ratified in writing by all of Lenders. Except as provided above, Agent will not
release any security interest in, mortgage or
Lien upon, any of the Collateral without the prior written authorization of all of Lenders.
Upon request by Agent at any time, Lenders will (and if so requested, Bank Product Providers will)
promptly confirm in writing Agent’s authority to release particular types or

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items of Collateral pursuant to this Section. In no event shall the consent or approval of Issuing
Bank be required to any release of Collateral.

          (c) Obligors and Lenders hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based upon the
instruction of the Required Lenders, to (i) consent to, credit bid or purchase (either directly or
through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof
conducted under the provisions of the Bankruptcy Code, including under Section 363 of the
Bankruptcy Code, (ii) credit bid or purchase (either directly or through one or more acquisition
vehicles) all or any portion of the Collateral at any sale or other disposition thereof conducted
under the provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the UCC, or (iii)
credit bid or purchase (either directly or through one or more acquisition vehicles) all or any
portion of the Collateral at any other sale or foreclosure conducted by Agent (whether by judicial
action or otherwise) in accordance with applicable law. In connection with any such credit bid or
purchase, the Obligations owed to Lenders and Bank Product Providers shall be entitled to be, and
shall be, credit bid on a ratable basis (with Obligations with respect to contingent or
unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not
unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of
the Collateral and, if such claims cannot be estimated without unduly delaying the ability of Agent
to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any
interest in the asset or assets purchased by means of such credit bid) and Lenders and Bank Product
Providers whose Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate amount of
Obligations so credit bid) in the asset or assets so purchased (or in the Capital Stock of the
acquisition vehicle or vehicles that are used to consummate such purchase). Except as provided
above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior
written authorization of (y) if the release is of all or substantially all of the Collateral, all
of the Lenders (without requiring the authorization of Bank Product Providers), or (z) otherwise,
Required Lenders (without requiring the authorization of Bank Product Providers).

          (d) Without any manner limiting Agent’s authority to act without any specific or further
authorization or consent by the Required Lenders, each Lender will (and if so requested, Bank
Product Providers will), upon request by Agent, confirm in writing Agent’s authority to release
Collateral pursuant to this Section; provided, however, that (i) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in Agent’s opinion, would
expose Agent to liability or create any obligation or entail any consequence other than the release
of such Lien without recourse, representation, or warranty, and (ii) such release shall not in any
manner discharge, affect, or impair the Obligations or any Lien (other than those expressly being
released) upon (or obligations of any Borrowers or any Obligor in respect of) all interests
retained by any Borrower or any Obligor, including, the proceeds of any sale, all of which shall
continue to constitute part of the Collateral. Lenders further hereby irrevocably authorize (and
by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by
Agent under any Financing Agreement to the holder of any Permitted Lien on such property if such
Permitted Lien secures Permitted Indebtedness consisting of purchase money Indebtedness.

          (e) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank Product
Providers) to assure that the Collateral exists or is owned by any Borrower or its Subsidiaries or
any Guarantor or is cared for, protected, or insured or has been encumbered, or that Agent’s Lien
has been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or that any particular items of
Collateral meet the eligibility criteria applicable in respect thereof or whether to impose,
maintain, reduce, or eliminate any particular reserve hereunder or whether the amount of any such
reserve is appropriate or not, or to exercise at all or in any particular

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manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent pursuant to this Agreement or any of
the other Financing Agreements, it being understood and agreed that in respect of the Collateral,
or any act, omission, or event related thereto, subject to the terms and conditions contained
herein, Agent may act in any manner it may deem appropriate, in its discretion given Agent’s own
interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other
duty or liability whatsoever to any Lender (or Issuing Bank or Bank Product Provider) as to any of
the foregoing, except as otherwise provided herein.

     12.12 Restrictions on Actions by Lenders; Sharing of Payments.

          (a) Each Lender agrees that it shall not, without the express written consent of Agent, set
off against the Obligations, any amounts owing by such Lender to any Borrowers or its Subsidiaries
or any deposit accounts of any Borrower or its Subsidiaries now or hereafter maintained with such
Lender. Each Lender further agrees that it shall not, unless specifically requested to do so in
writing by Agent, take or cause to be taken any action, including, the commencement of any legal or
equitable proceedings to enforce any Financing Agreement against Borrower or any Guarantor or to
foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

          (b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or
otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for
any such proceeds or payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and
with such endorsements as may be required to negotiate the same to Agent, or in immediately
available funds, as applicable, for the account of all Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase,
without recourse or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably as among Lenders in
accordance with their Pro Rata Shares; provided, however, that to the extent that such excess
payment received by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but without interest
except to the extent that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.

     12.13 Agency for Perfection. Agent hereby appoints each other Lender (and each Bank
Product Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to accept) such appointment) for the purpose
of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as
applicable, of the UCC can be perfected by possession or control. Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly
upon Agent’s request therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

     12.14 Payments by Agent to Lenders. All payments to be made by Agent to Lenders (or
Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant
to such wire transfer instructions as each party may designate for itself by written notice to
Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any
portion thereof) represents principal, premium, fees, or interest of the Obligations.

     12.15 Concerning the Collateral and Related Loan Documents. Each member of the Lender
Group authorizes and directs Agent to enter into this Agreement and the other Financing Agreements.

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Each member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to agree) that any action taken by Agent in accordance with the
terms of this Agreement or the other Financing Agreements relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such other powers that
are reasonably incidental thereto, shall be binding upon all of Lenders (and such Bank Product
Provider).

     12.16 Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information. By becoming a part to this Agreemetn, each Lender:

          (a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes
available, a copy of each field audit or examination report respecting any Borrower or its
Subsidiaries (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish
each Lender with such Reports,

          (b) expressly agrees and acknowledges that Agent does not (i) make any representation or
warranty as to the accuracy of any Report, and (ii) shall not be liable for any information
contained in any Report,

          (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that Agent or other party performing any audit or examination will inspect only
specific information regarding such Borrower and its Subsidiaries and will rely significantly upon
such Borrower’s and its Subsidiaries’ books and records, as well as on representations of such
Borrower’s personnel,

          (d) agrees to keep all Reports and other material, non-public information regarding Borrowers
and their Subsidiaries and their operations, assets, and existing and contemplated business plans
in a confidential manner in accordance with Section 13.5, and

          (e) without limiting the generality of any other indemnification provision contained in this
Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any
action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender
may reach or draw from any Report in connection with any loans or other credit accommodations that
the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s
participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii)
to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and
other amounts (including, attorneys fees and costs) incurred by Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.

In addition to the foregoing: (x) any Lender may from time to time request of Agent in writing that
Agent provide to such Lender a copy of any report or document provided by any Borrower or its
Subsidiaries to Agent that has not been contemporaneously provided by such Borrower or such
Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy
of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the
Financing Agreements, to request additional reports or information from such Borrower or its
Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as
specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of such Borrower
the additional reports or information reasonably specified by such Lender, and, upon receipt
thereof from such Borrower or such Subsidiary, Agent promptly shall provide a copy of
same to such Lender, and (z) any time that Agent renders to Borrowers a statement regarding the
Loan Account, Agent shall send a copy of such statement to each Lender.

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     12.17 Additional Loans. Agent shall not make any Loans or provide any Letters of
Credit to Borrowers on behalf of Lenders intentionally and with actual knowledge that such Loans or
Letters of Credit would cause the aggregate amount of the total outstanding Loans and Letter of
Credit Obligations to Borrowers to exceed the Borrowing Base, without the prior consent of all
Lenders, except, that, Agent may make such additional Loans or provide such additional Letters of
Credit on behalf of Lenders, intentionally and with actual knowledge that such Loans or Letters of
Credit will cause the total outstanding Loans and Letters of Credit to Borrowers to exceed the
Borrowing Base, as Agent may deem necessary or advisable in its discretion, provided, that: (a) the
total principal amount of the additional Loans or additional Letters of Credit to Borrowers which
Agent may make or provide after obtaining such actual knowledge that the aggregate principal amount
of the Loans equal or exceed the Borrowing Base shall not exceed the aggregate amount equal to
$5,000,000 outstanding at any time and shall not cause the total principal amount of the Loans and
Letter of Credit Obligations to exceed the Maximum Credit and (b) no such additional Loan or
Letters of Credit shall be outstanding more than thirty (30) days after the date such additional
Loan or Letter of Credit is made or issued (as the case may be), with five (5) days thereafter
during which no such new Loans or Letters of Credit are made or exist, except as the Required
Lenders may otherwise agree. Each Lender shall be obligated to pay Agent the amount of its Pro Rata
Share of any such additional Loans or Letters of Credit provided that Agent is acting in accordance
with the terms of this Section 12.17.

     12.18 Several Obligations; No Liability. Notwithstanding that certain of the
Financing Agreements now or hereafter may have been or will be executed only by or in favor of
Agent in its capacity as such, and not by or in favor of Lenders, any and all obligations on the
part of Agent (if any) to make any credit available hereunder shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time
outstanding, the amount of their respective Commitments. Nothing contained herein shall confer
upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the
business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Financing Agreements to
the extent any such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in Section 12.7, no member of
the Lender Group shall have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender
(or Bank Product Provider) to fulfill its obligations to make credit available hereunder, nor to
advance for such Lender (or Bank Product Provider) or on its behalf, nor to take any other action
on behalf of such Lender (or Bank Product Provider) hereunder or in connection with the financing
contemplated herein.

SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS

     13.1 Term.

          (a) This Agreement and the other Financing Agreements shall become effective as of the date
set forth on the first page hereof and shall continue in full force and effect for a term ending on
May 27, 2016 (the “Maturity Date”), unless sooner terminated pursuant to the terms hereof. Upon
the effective date of termination of the Financing Agreements, Borrowers shall pay to Agent, in
full, all outstanding and unpaid Obligations and shall furnish cash collateral to Agent in such
amounts as Agent determines are reasonably necessary to secure Agent and Lenders from loss, cost,
damage or expense, including reasonable attorneys’ fees actually incurred and legal expenses, in
connection with any contingent Obligations, including issued and
outstanding Letters of Credit and checks or other payments provisionally credited to the
Obligations and/or as to which Agent or any Lender has not yet received final and indefeasible
payment and any continuing obligations of Agent or any Lender pursuant to any

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Deposit Account Control Agreement. The amount of such cash collateral (or letter of credit, as
Agent may determine) as to any Letter of Credit Obligations shall be in the amount equal to one
hundred five (105%) percent of the amount of the Letter of Credit Obligations plus the amount of
any fees and expenses payable in connection therewith through the end of the latest expiration date
of the Letters of Credit giving rise to such Letter of Credit Obligations. Such payments in respect
of the Obligations and cash collateral shall be remitted by wire transfer in Federal funds to such
bank account of Agent, as Agent may, in its discretion, designate in writing to Administrative
Borrower for such purpose. Interest shall be due until and including the next Business Day, if the
amounts so paid by Borrowers to the bank account designated by Agent are received in such bank
account later than 12:00 noon, Atlanta, Georgia time.

          (b) No termination of the Commitments, this Agreement or any of the other Financing Agreements
shall relieve or discharge any Borrower of its respective duties, obligations and covenants under
this Agreement or any of the other Financing Agreements until all Obligations have been fully and
finally discharged and paid, and Agent’s continuing security interest in the Collateral and the
rights and remedies of Agent and Lenders hereunder, under the other Financing Agreements and
applicable law, shall remain in effect until all such Obligations have been fully and finally
discharged and paid. Accordingly, each Borrower and Guarantor waives any rights it may have under
the UCC to demand the filing of termination statements with respect to the Collateral and Agent
shall not be required to send such termination statements to Borrowers or Guarantors, or to file
them with any filing office, unless and until this Agreement shall have been terminated in
accordance with its terms and all Obligations paid and satisfied in full in immediately available
funds.

     13.2 Interpretative Provisions.

          (a) All terms used herein which are defined in Article 1, Article 8 or Article 9 of the UCC
shall have the meanings given therein unless otherwise defined in this Agreement.

          (b) All references to the plural herein shall also mean the singular and to the singular shall
also mean the plural unless the context otherwise requires.

          (c) All references to any Borrower, any Obligor, Agent, Lenders and Issuing Bank pursuant to
the definitions set forth in the recitals hereto, or to any other Person herein, shall include
their respective successors and assigns.

          (d) The words “hereof’, “herein”, “hereunder”, “this Agreement” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

          (e) The word “including” when used in this Agreement shall mean “including, without
limitation”.

          (f) An Event of Default shall exist or continue or be continuing until such Event of Default
is waived in accordance with Section 11.3 or is cured in a manner satisfactory, to Agent, if such
Event of Default is capable of being cured as determined by Agent.

          (g) All references to the term “good faith” used herein when applicable to Agent or any Lender
shall mean, notwithstanding anything to the contrary contained herein or in the UCC, honesty in
fact in the conduct or transaction concerned. Borrowers shall have the burden of proving any lack
of good faith on the part of Agent or any Lender alleged by any Borrower at any time.

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          (h) Any accounting term used in this Agreement shall have, unless otherwise specifically
provided herein, the meaning customarily given in accordance with GAAP, and all financial
computations hereunder shall be computed unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for inventory valuation as
used in the preparation of the financial statements of Borrowers most recently received by Agent
prior to the date hereof. Notwithstanding anything to the contrary contained in GAAP or any
interpretations or other pronouncements by the Financial Accounting Standards Board or otherwise,
the term “unqualified opinion” as used herein to refer to opinions or reports provided by
accountants shall mean an opinion or report that is unqualified and also does not include any
explanation, supplemental comment or other comment concerning the ability of the applicable Person
to continue as a going concern or the scope of the audit.

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

          (j) Unless otherwise expressly provided herein, (i) references herein to any agreement,
document or instrument shall be deemed to include all subsequent amendments, modifications,
supplements, extensions, renewals, restatements or replacements with respect thereto, but only to
the extent the same are not prohibited by the terms hereof or of any other Financing Agreement, and
(ii) references to any statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, recodifying, supplementing or
interpreting the statute or regulation.

          (k) The captions and headings of this Agreement are for convenience of reference only and
shall not affect the interpretation of this Agreement.

          (l) This Agreement and other Financing Agreements may use several different limitations, tests
or measurements to regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their terms.

          (m) This Agreement and the other Financing Agreements are the result of negotiations among and
have been reviewed by counsel to Agent and the other parties, and are the products of all parties.
Accordingly, this Agreement and the other Financing Agreements shall not be construed against Agent
or Lenders merely because of Agent’s or any Lender’s involvement in their preparation.

     13.3 Notices.

          (a) All notices, requests and demands hereunder shall be in writing and deemed to have been
given or made: if delivered in Person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested, five (5) days after
mailing. Notices delivered through electronic communications shall be effective to the extent set
forth in Section 13.3(b) below. All notices, requests and demands upon the parties are to be given
to the following addresses (or to such other address as any party may designate by notice in
accordance with this Section):

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	 	If to Borrowers:
	 	Delta Apparel, Inc. 

322 South Main Street

Greenville, South Carolina 29601 

Attention: Deborah H. Merrill, CFO

Telephone No.: (864) 232-5200 

Telecopy No.: (864) 232-5199
	 
	 	 	 	 
	 

	 	If to Agent:
	 	Wells Fargo Bank, National Association

1100 Abernathy Road Suite 1600

Atlanta, Georgia 30328

Attention: Delta Apparel Loan Administration

Telephone No.: (770) 508-1387

Telecopy No.: (770) 698-8324

          (b) Notices and other communications to Lenders and Issuing Bank hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant
to procedures approved by Agent or as otherwise determined by Agent, provided, that, the foregoing
shall not apply to notices to any Lender or Issuing Bank pursuant to Section 2 hereof if such
Lender or Issuing Bank, as applicable, has notified Agent that it is incapable of receiving notices
under such Section by electronic communication. Unless Agent otherwise requires, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the sender’s receipt
of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), provided, that, if such
notice or other communication is not given during the normal business hours of the recipient, such
notice shall be deemed to have been sent at the opening of business on the next Business Day for
the recipient, and (ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communications is
available and identifying the website address therefor.

     13.4 Partial Invalidity. If any provision of this Agreement is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this Agreement as a whole,
but this Agreement shall be construed as though it did not contain the particular provision held to
be invalid or unenforceable and the rights and obligations of the parties shall be construed and
enforced only to such extent as shall be permitted by applicable law.

     13.5 Confidentiality.

          (a) Agent, each Lender and Issuing Bank shall use all reasonable efforts to keep confidential,
in accordance with its customary procedures for handling confidential information and safe and
sound lending practices, any non-public information supplied to it by any Borrower pursuant to this
Agreement which is clearly and conspicuously marked as confidential at the time such information is
furnished by such Borrower to Agent, such Lender or Issuing Bank, provided, that, nothing contained
herein shall limit the disclosure of any such information: (i) to the extent required by statute,
rule, regulation, subpoena or court order, (ii) to bank examiners and other regulators, auditors
and/or accountants, or in connection with any litigation to which Agent, such Lender or Issuing
Bank is a party, (iii) to any Lender or Participant (or prospective Lender or Participant) or
Issuing Bank or to any Affiliate of any Lender so long as such Lender, Participant (or prospective
Lender or Participant), Issuing Bank or
Affiliate shall have been instructed to treat such information as confidential in accordance
with this Section 13.5, or (iv) to counsel for Agent, any Lender, Participant (or prospective
Lender or Participant) or Issuing Bank.

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          (b) In the event that Agent, any Lender or Issuing Bank receives a request or demand to
disclose any confidential information pursuant to any subpoena or court order, Agent or such Lender
or Issuing Bank, as the case may be, agrees (i) to the extent permitted by applicable law or if
permitted by applicable law, to the extent Agent or such Lender or Issuing Bank determines in good
faith that it will not create any risk of liability to Agent or such Lender or Issuing Bank, Agent
or such Lender or Issuing Bank will promptly notify Administrative Borrower of such request so that
Administrative Borrower may seek a protective order or other appropriate relief or remedy and (ii)
if disclosure of such information is required, disclose such information and, subject to
reimbursement by Borrowers of Agent’s or such Lender’s or Issuing Bank’s expenses, cooperate with
Administrative Borrower in the reasonable efforts to obtain an order or other reliable assurance
that confidential treatment will be accorded to such portion of the disclosed information which
Administrative Borrower so designates, to the extent permitted by applicable law or if permitted by
applicable law, to the extent Agent or such Lender or Issuing Bank determines in good faith that it
will not create any risk of liability to Agent or such Lender or Issuing Bank.

          (c) In no event shall this Section 13.5 or any other provision of this Agreement, any of the
other Financing Agreements or applicable law be deemed: (i) to apply to or restrict disclosure of
information that has been or is made public by any Borrower, Guarantor or any third party or
otherwise becomes generally available to the public other than as a result of a disclosure in
violation hereof, (ii) to apply to or restrict disclosure of information that was or becomes
available to Agent, any Lender (or any Affiliate of any Lender) or Issuing Bank on a
non-confidential basis from a Person other than a Borrower or Guarantor, (iii) to require Agent,
any Lender or Issuing Bank to return any materials furnished by a Borrower or Guarantor to Agent, a
Lender or Issuing Bank or prevent Agent, a Lender or Issuing Bank from responding to routine
informational requests in accordance with the Code of Ethics for the Exchange of Credit Information
promulgated by The Robert Morris Associates or other applicable industry standards relating to the
exchange of credit information. The obligations of Agent, Lenders and Issuing Bank under this
Section 13.5 shall supersede and replace the obligations of Agent, Lenders and Issuing Bank under
any confidentiality letter signed prior to the date hereof or any other arrangements concerning the
confidentiality of information provided by any Borrower or Guarantor to Agent or any Lender. In
addition, Agent and Lenders may disclose information relating to the Credit Facility to Gold Sheets
and other publications, with such information to consist of deal terms and other information
customarily found in such publications, and that, subject to Borrowers’ consent, which consent
shall not be unreasonably withheld or delayed, Wells Fargo may otherwise use the corporate name and
logo of Borrowers and Guarantors or deal terms in “tombstones” or other advertisements, public
statements or marketing materials.

     13.6 Successors. This Agreement, the other Financing Agreements and any other document
referred to herein or therein shall be binding upon and inure to the benefit of and be enforceable
by Agent, Lenders, Issuing Bank, Borrowers and their respective successors and assigns, except that
no Borrower may assign its rights under this Agreement, the other Financing Agreements and any
other document referred to herein or therein without the prior written consent of Agent. Any such
purported assignment without such express prior written consent shall be void. No Lender may assign
its rights and obligations under this Agreement without the prior written consent of Agent, except
as provided in Section 13.7 below. The terms and provisions of this Agreement and the other
Financing Agreements are for the purpose of defining the relative rights and obligations of
Borrowers, Agent, Lenders and Issuing Bank with respect to the transactions contemplated hereby and
there shall be no third party beneficiaries of any of the terms and provisions of this Agreement or
any of the other Financing Agreements.

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     13.7 Assignments; Participations.

          (a) Each Lender may assign all or, if less than all, a portion equal to at least $5,000,000 in
the aggregate for the assigning Lender, of such rights and obligations under this Agreement to one
or more Eligible Transferees (but not including for this purpose any assignments in the form of a
participation), each of which assignees shall become a party to this Agreement as a Lender by
execution of an Assignment and Acceptance; provided, that, (i) if such Eligible Transferee is not a
bank, Agent shall receive a representation in writing by such Eligible Transferee that no part of
its acquisition of its Loans is made out of assets of any employee benefit plan, (ii) such transfer
or assignment will not be effective until recorded by Agent on the Register and (iii) Agent shall
have received for its sole account payment of a processing fee from the assigning Lender or the
assignee in the amount of $5,000. As used in this Section, the term “employee benefit plan” shall
have the meaning assigned to it in Title I of ERISA and shall also include a “plan” as defined in
Section 4975(e)(1) of the Code.

          (b) Agent shall maintain a register of the names and addresses of Lenders, their Commitments
and the principal amount of their Loans (the “Register”). Agent shall also maintain a copy of each
Assignment and Acceptance delivered to and accepted by it and shall modify the Register to give
effect to each Assignment and Acceptance. The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and Borrowers, Obligors, Agent and Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by Administrative Borrower and any
Lender at any reasonable time and from time to time upon reasonable prior notice.

          (c) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and to the other Financing Agreements and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations
(including, without limitation, the obligation to participate in Letter of Credit Obligations) of a
Lender hereunder and thereunder and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement.

          (d) By execution and delivery of an Assignment and Acceptance, the assignor and assignee
thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any of the other Financing
Agreements or the execution, legality, enforceability, genuineness, sufficiency or value of this
Agreement or any of the other Financing Agreements furnished pursuant hereto, (ii) the assigning
Lender makes no representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower, any Obligor or any of their Subsidiaries or the performance or
observance by any Borrower or any Obligor of any of the Obligations; (iii) such assignee confirms
that it has received a copy of this Agreement and the other Financing Agreements, together with
such other documents and information it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the assigning Lender, Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under this
Agreement and the other Financing Agreements, (v) such assignee appoints and authorizes Agent
to take such action as agent on its behalf and to exercise such powers under this Agreement and the
other Financing Agreements as are delegated to Agent by the terms hereof and thereof, together with
such powers as are incidental thereto, and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this

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Agreement and the other Financing Agreements are required to be performed by it as a Lender. Agent
and Lenders may furnish any information concerning any Borrower or Obligor in the possession of
Agent or any Lender from time to time to assignees and Participants.

          (e) Each Lender may sell participations to one or more banks or other entities in or to all or
a portion of its rights and obligations under this Agreement and the other Financing Agreements
(including, without limitation, all or a portion of its Commitments and the Loans owing to it and
its participation in the Letter of Credit Obligations, without the consent of Agent or the other
Lenders); provided, that, (i) such Lender’s obligations under this Agreement (including, without
limitation, its Commitment hereunder) and the other Financing Agreements shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations, and Borrowers, Obligors and Agent shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement and the
other Financing Agreements, (iii) the Participant shall not have any rights under this Agreement or
any of the other Financing Agreements (the Participant’s rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by any Borrower or Obligor hereunder shall be
determined as if such Lender had not sold such participation, and (iv) if such Participant is not a
bank, represent that no part of its acquisition of its participation is made out of assets of any
employee benefit plan. As used in this Section, the term “employee benefit plan” shall have the
meaning assigned to it in Title I of ERISA and shall also include a “plan” as defined in Section
4975(e)(l) of the Code.

          (f) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such Lenders from such Federal
Reserve Bank; provided, that, no such pledge shall release such Lender from any of its obligations
hereunder or substitute any such pledgee for such Lender as a party hereto.

          (g) Borrowers shall assist Agent or any Lender permitted to sell assignments or participations
under this Section 13.7 in whatever manner necessary in order to enable or effect any such
assignment or participation, including (but not limited to) the execution and delivery of any and
all agreements, notes and other documents and instruments as shall be requested and the delivery of
informational materials, appraisals or other documents for, and the participation of relevant
management in meetings and conference calls with, potential Lenders or Participants. Borrowers
shall certify the correctness and accuracy of all descriptions of Borrowers and their affairs
provided, prepared or reviewed by any Borrower that are contained in any selling materials prepared
for potential Lenders in connection with the initial syndication of the Loans and all other
information provided by it and included in such materials.

     13.8 Entire Agreement. This Agreement, the other Financing Agreements, any supplements
hereto or thereto, and any instruments or documents delivered or to be delivered in connection
herewith or therewith represents the entire agreement and understanding concerning the subject
matter hereof and thereof between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties, commitments, proposals,
offers and contracts concerning the subject matter hereof, whether oral or written. In the event of
any inconsistency between the terms of this Agreement and any schedule or exhibit hereto, the terms
of this Agreement shall govern.

     13.9 USA PATRIOT Act. Each Lender that is subject to the requirements of the USA
PATRIOT Act hereby notifies Borrowers that pursuant to the requirements of the USA
PATRIOT Act, it is required to obtain, verify and record information that identifies
Borrowers, which information includes the name and address of Borrowers and other information that
will allow such Lender to identify Borrowers in accordance with the USA PATRIOT Act. In addition,
if Agent is required by law or

-110-

 

regulation or internal policies to do so, it shall have the right to periodically conduct (a) USA
PATRIOT Act searches, searches pursuant to the U.S. Department of Treasury’s Office of Foreign
Assets Control (“OFAC”), and customary individual background checks for the Borrowers and (b) OFAC
searches and customary individual background checks for each Borrower’s senior management and key
principals, and Borrowers agree to cooperate in respect of the conduct of such searches and further
agrees that the reasonable costs and charges for such searches shall constitute Lender Group
Expenses hereunder and be for the account of Borrowers.

     13.10 Bank Product Providers. Each Bank Product Provider shall be deemed a third
party beneficiary hereof and of the provisions of the other Financing Agreements for purposes of
any reference in a Financing Agreement to the parties for whom Agent is acting. Agent hereby agrees
to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product
Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed
Agent as its agent and to have accepted the benefits of the Financing Agreements; it being
understood and agreed that the rights and benefits of each Bank Product Provider under the
Financing Agreements consist exclusively of such Bank Product Provider’s being a beneficiary of the
Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to
share in payments and collections out of the Collateral as more fully set forth herein. In
addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be
automatically deemed to have agreed that Agent shall have the right, but shall have no obligation,
to establish, maintain, relax, or release reserves in respect of Banking Relationship Debt and that
if reserves are established there is no obligation on the part of Agent to determine or insure
whether the amount of any such reserve is appropriate or not. In connection with any such
distribution of payments or proceeds of Collateral, Agent shall be entitled to assume no amounts
are due or owing to any Bank Product Provider unless such Bank Product Provider has provided a
written certification (setting forth a reasonably detailed calculation) to Agent as to the amounts
that are due and owing to it and such written certification is received by Agent a reasonable
period of time prior to the making of such distribution. Agent shall have no obligation to
calculate the amount due and payable with respect to any Bank Products, but may rely upon the
written certification of the amount due and payable from the relevant Bank Product Provider. In
the absence of an updated certification, Agent shall be entitled to assume that the amount due and
payable to the relevant Bank Product Provider is the amount last certified to Agent by such Bank
Product Provider as being due and payable (less any distributions made to such Bank Product
Provider on account thereof). Borrowers may obtain Bank Products from any Bank Product Provider,
although Borrowers are not required to do so. Borrowers acknowledge and agree that no Bank Product
Provider has committed to provide any Bank Products and that the providing of Bank Products by any
Bank Product Provider is in the sole and absolute discretion of such Bank Product Provider.
Notwithstanding anything to the contrary in this Agreement or any other Financing Agreement, no
provider or holder of any Bank Product shall have any voting or approval rights hereunder (or be
deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or
products or the Obligations owing thereunder, nor shall the consent of any such provider or holder
be required (other than in their capacities as Lenders, to the extent applicable) for any matter
hereunder or under any of the other Financing Agreements, including as to any matter relating to
the Collateral or the release of Collateral or Guarantors.

	13.11	 	No Novation; Reaffirmation of Grant of Security Interest.

          (a) Each Borrower agrees that the security interests and Liens granted to Wells Fargo, as
Agent, pursuant to the Existing Loan Agreement and the Existing Financing Agreements, shall remain
outstanding and in full force and effect in accordance with the Existing
Financing Agreements, in each case, as amended as of the date hereof and shall continue to
secure the Obligations.

-111-

 

          (b) Each Borrower, Agent, Issuing Bank and each Lender acknowledges and agrees that (i) the
Obligations represent, among other things, the amendment, restatement, renewal, extension, and
modification of the Obligations (as defined in the Existing Loan Agreement) arising in connection
with the Existing Loan Agreement and the other Existing Financing Agreements executed in connection
therewith; (ii) each Borrower, Agent, Issuing Bank and each Lender intends that the Collateral
pledged under the Existing Loan Agreement and the other Existing Financing Agreements executed in
connection therewith shall secure, without interruption or impairment of any kind, all existing
Obligations (as defined in the Existing Loan Agreement) under the Existing Loan Agreement and the
other Existing Financing Agreements executed in connection therewith as amended, restated, renewed,
extended, and modified hereunder, together with all other Obligations hereunder; and (iii) all
security interests and Liens granted under or evidenced by the Existing Loan Agreement and the
other Existing Financing Agreements executed in connection therewith are hereby ratified, confirmed
and continued.

          (c) Each Borrower, Agent, Issuing Bank and each Lender intends that by entering into and
performing their respective obligations hereunder, this transaction shall not constitute a novation
or an accord and satisfaction.

     13.12 Counterparts, Etc. This Agreement or any of the other Financing Agreements may
be executed in any number of counterparts, each of which shall be an original, but all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement or any of the other Financing Agreements by telefacsimile or portable document
format by electronic mail shall have the same force and effect as the delivery of an original
executed counterpart of this Agreement or any of such other Financing Agreements. Any party
delivering an executed counterpart of any such agreement by telefacsimile or portable document
format by electronic mail shall also deliver an original executed counterpart, but the failure to
do so shall not affect the validity, enforceability or binding effect of such agreement.

[Signatures begin on following page]

-112-

 

     IN WITNESS WHEREOF, Agent, Lenders and Borrowers have caused these presents to be duty
executed as of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	BORROWERS:	 	 
	 
	 	 	 	 	 	 
	 	 	DELTA APPAREL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Deborah H. Merill
 

Deborah H. Merill
	 	 
	 

	 	Title:
	 	VP, CFO and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	322 South Main Street

Greenville, South Carolina 29601	 	 
	 
	 	 	 	 	 	 
	 	 	M.J. SOFFE, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Deborah H. Merill
 

Deborah H. Merill
	 	 
	 

	 	Title:
	 	VP, CFO and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	322 South Main Street

Greenville, South Carolina 29601	 	 
	 
	 	 	 	 	 	 
	 	 	JUNKFOOD CLOTHING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Deborah H. Merill
 

Deborah H. Merill
	 	 
	 

	 	Title:
	 	VP, CFO and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	322 South Main Street

Greenville, South Carolina 29601	 	 

[Signatures continued on following page]

Fourth Amended and Restated Loan and Security Agreement

 

 

	 	 	 	 	 	 	 

	 	 	TO THE GAME, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Deborah H. Merrill
 

Deborah H. Merrill
	 	 
	 

	 	Title:
	 	VP, CFO Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	322 South Main Street

Greenville, South Carolina 29601	 	 
	 
	 	 	 	 	 	 
	 	 	ART GUN, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Deborah H. Merrill
 

Deborah H. Merrill
	 	 
	 

	 	Title:
	 	VP, CFO Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	322 South Main Street

Greenville, South Carolina 29601	 	 
	 
	 	 	 	 	 	 
	 	 	TCX, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Deborah H. Merrill
 

Deborah H. Merrill
	 	 
	 

	 	Title:
	 	VP, CFO Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	322 South Main Street

Greenville, South Carolina 29601	 	 

[Signatures continued on following page]

Fourth Amended and Restated Loan and Security Agreement

 

 

	 	 	 	 	 	 	 

	 	 	AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO NATIONAL
BANK, 
NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Dan Denton
 

Dan Denton
	 	 
	 

	 	Title:
	 	VP	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	1100 Abernathy Road Suite 1600

MAC G0189-160

Atlanta, Georgia 30328	 	 
	 
	 	 	 	 	 	 
	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATlON	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Dan Denton
 

Dan Denton
	 	 
	 

	 	Title:
	 	VP	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	1100 Abernathy Road Suite 1600

MAC G0189-160

Atlanta, Georgia 30328	 	 

[Signatures continued on following page]

Fourth Amended and Restated Loan and Security Agreement

 

 

	 	 	 	 	 	 	 

	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Steven L. Hipsman
 

Steven L. Hipsman
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address: 

300 Galleria Parkway 

Suite 800

Atlanta, GA 30339	 	 

[Signatures continued on following page]

Fourth Amended and Restated Loan and Security Agreement

 

 

	 	 	 	 	 	 	 

	 	 	PNC BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Alex M Council
 

Alex M Council
	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address: 

One Piedmont Town Center 
4720
Piedmont Row Dr., Suite 300

Charlotte, N.C. 28210	 	 

Fourth Amended and Restated Loan and Security Agreement

 

 

EXHIBIT A

ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance”) dated as of
_____________, 20__ is made between ____________________(the “Assignor”) and
___________________________(the “Assignee”).

WITNESSETH:

     WHEREAS, Wells Fargo Bank, National Association, in its capacity as agent pursuant to the Loan
Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are
parties thereto as lenders (in such capacity, “Agent”), and the financial institutions which are
parties to the Loan Agreement as lenders (individually, each a “Lender” and collectively,
“Lenders”) have entered or are about to enter into financing arrangements pursuant to which Agent
and Lenders may make loans and advances and provide other financial accommodations to Delta
Apparel, Inc., M.J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC, Art Gun, LLC, and TCX,
LLC (collectively, “Borrowers”) as set forth in the Fourth Amended and Restated Loan and Security
Agreement, dated May 27, 2011, by and among Borrowers, Agent and Lenders (as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the
“Loan Agreement”), and the other agreements, documents and instruments referred to therein or at
any time executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, being collectively referred to
herein as the “Financing Agreements”);

     WHEREAS, as provided under the Loan Agreement, Assignor committed to making Loans (the
“Committed Loans”) to Borrowers in an aggregate amount not to exceed $__________ (the
“Commitment”);

     WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights and obligations of
Assignor under the Loan Agreement in respect of its Commitment in an amount equal to $_____________
(the “Assigned Commitment Amount”) on the terms and subject to the conditions set forth herein and
Assignee wishes to accept assignment of such rights and to assume such obligations from Assignor on
such terms and subject to such conditions;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the
parties hereto agree as follows:

     1. Assignment and Acceptance.

          (a) Subject to the terms and conditions of this Assignment and Acceptance, Assignor hereby
sells, transfers and assigns to Assignee, and Assignee hereby purchases, assumes and undertakes
from Assignor, without recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) an interest in (i) the Commitment and each of the Committed Loans of
Assignor and (ii) all related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Loan Agreement and the other Financing Agreements, so
that after giving effect thereto, the Commitment of Assignee shall be as set forth below and the
Pro Rata Share of Assignee shall be (___%) percent.

          (b) With effect on and after the Effective Date (as defined in Section 5 hereof), Assignee
shall be a party to the Loan Agreement and succeed to all of the rights and be obligated to

 

 

perform all of the obligations of a Lender under the Loan Agreement, including the requirements
concerning confidentiality and the payment of indemnification, with a Commitment in an amount equal
to the Assigned Commitment Amount. Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Agreement are required to be performed
by it as a Lender. It is the intent of the parties hereto that the Commitment of Assignor shall, as
of the Effective Date, be reduced by an amount equal to the Assigned Commitment Amount and Assignor
shall relinquish its rights and be released from its obligations under the Loan Agreement to the
extent such obligations have been assumed by Assignee; provided, that, Assignor shall not
relinquish its rights under Sections 2.1, 6.4, 6.8 and 6.9 of the Loan Agreement to the extent such
rights relate to the time prior to the Effective Date.

          (c) After giving effect to the assignment and assumption set forth herein, on the Effective
Date Assignee’s Commitment will be $____________.

          (d) After giving effect to the assignment and assumption set forth herein, on the Effective
Date Assignor’s Commitment will be $ _____________ (as such amount may be further reduced by any
other assignments by Assignor on or after the date hereof).

     2. Payments.

          (a) As consideration for the sale, assignment and transfer contemplated in Section 1 hereof,
Assignee shall pay to Assignor on the Effective Date in immediately available funds an amount equal
to $_____________, representing Assignee’s Pro Rata Share of the principal amount of all Committed
Loans.

          (b) Assignee shall pay to Agent the processing fee in the amount specified in Section 13.7(a)
of the Loan Agreement.

     3. Reallocation of Payments. Any interest, fees and other payments accrued to
the Effective Date with respect to the Commitment, Committed Loans and outstanding Letters of Credit shall be for
the account of Assignor. Any interest, fees and other payments accrued on and after the Effective
Date with respect to the Assigned Commitment Amount shall be for the account of Assignee. Each of
Assignor and Assignee agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant to the preceding
sentence and pay to the other party any such amounts which it may receive promptly upon receipt.

     4. Independent Credit Decision. Assignee acknowledges that it has received a
copy of the Loan Agreement and the Schedules and Exhibits thereto, together with copies of the most recent
financial statements of Borrowers and their Subsidiaries, and such other documents and information
as it has deemed appropriate to make its own credit and legal analysis and decision to enter into
this Assignment and Acceptance and agrees that it will, independently and without reliance upon
Assignor, Agent or any Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and legal decisions in taking or not
taking action under the Loan Agreement.

     5. Effective Date; Notices.

          (a) As between Assignor and Assignee, the effective date for this Assignment and Acceptance
shall be ___________, 20__ (the “Effective Date”); provided, that, the following conditions
precedent have been satisfied on or before the Effective Date:

-2-

 

	 	(i)	 	this Assignment and Acceptance shall be executed and delivered by Assignor and
Assignee;
	 
	 	(ii)	 	the consent of Agent as required for an effective assignment of the Assigned
Commitment Amount by Assignor to Assignee shall have been duly obtained and shall
be in full force and effect as of the Effective Date;
	 
	 	(iii)	 	written notice of such assignment, together with payment instructions,
addresses and related information with respect to Assignee, shall have been given
to Administrative Borrower and Agent; Assignee shall pay to Assignor all amounts
due to Assignor under this Assignment and Acceptance; and
	 
	 	(iv)	 	the processing fee referred to in Section 2(b) hereof shall have been paid to
Agent.

          (b) Promptly following the execution of this Assignment and Acceptance, Assignor shall deliver
to Administrative Borrower and Agent, for acknowledgment by Agent, a Notice of Assignment in the
form attached hereto as Schedule 1.

     6. [Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]

          (a) Assignee hereby appoints and authorizes Assignor in its capacity as Agent to take such
action as agent on its behalf to exercise such powers under the Loan Agreement as are delegated to
Agent by Lenders pursuant to the terms of the Loan Agreement.

          (b) Assignee shall assume no duties or obligations held by Assignor in its capacity as Agent
under the Loan Agreement.]

     7. Withholding Tax. Assignee (a) represents and warrants to Assignor, Agent and Borrowers
that under applicable law and treaties no tax will be required to be withheld by Assignee, Agent or
Borrowers with respect to any payments to be made to Assignee hereunder or under any of the
Financing Agreements, (b) agrees to furnish (if it is organized under the laws of any jurisdiction
other than the United States or any State thereof) to Agent and Borrowers, prior to the time that
Agent or Borrowers are required to make any payment of principal, interest or fees hereunder,
duplicate executed originals of either U.S. Internal Revenue Service Form W-8BEN or W-8ECI, as
applicable (wherein Assignee claims entitlement to the benefits of a tax treaty that provides for a
complete exemption from U.S. federal income withholding tax on all payments hereunder) and agrees
to provide new such Forms upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by Assignee, and (c) agrees to comply with all applicable U.S. laws and
regulations with regard to such withholding tax exemption.

	8.	 	Representations and Warranties.

          (a) Assignor represents and warrants that (i) it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear of any security
interest, Lien, encumbrance or other adverse claim, (ii) it is duly organized and existing and it
has the full power and authority to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents required or permitted to be executed
or delivered by it in connection with this Assignment and Acceptance and to fulfill its
obligations hereunder, (iii) no notices to, or consents, authorizations or approvals of, any
Person are required (other than any already given or

-3-

 

obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and
apart from any agreements or undertakings or filings required by the Loan Agreement, no further
action by, or notice to, or filing with, any Person is required of it for such execution, delivery
or performance, and (iv) this Assignment and Acceptance has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of Assignor, enforceable against Assignor
in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or affecting
creditors’ rights and to general equitable principles.

          (b) Assignor makes no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with the Loan Agreement or
any of the other Financing Agreements or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Agreement or any other instrument or document
furnished pursuant thereto. Assignor makes no representation or warranty in connection with, and
assumes no responsibility with respect to, the solvency, financial condition or statements of
Borrowers, Guarantors or any of their respective Affiliates, or the performance or observance by
Borrowers, Guarantors or any other Person, of any of their respective obligations under the Loan
Agreement or any other instrument or document furnished in connection therewith.

          (c) Assignee represents and warrants that (i) it is duly organized and existing and it has
full power and authority to take, and has taken, all action necessary to execute and deliver this
Assignment and Acceptance and any other documents required or permitted to be executed or delivered
by it in connection with this Assignment and Acceptance and to fulfill its obligations hereunder,
(ii) no notices to, or consents, authorizations or approvals of, any Person are required (other
than any already given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the
Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance, and (iii) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding obligation of Assignee,
enforceable against Assignee in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating
to or affecting creditors’ rights to general equitable principles.

     9. Further Assurances. Assignor and Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably request in connection
with the transactions contemplated by this Assignment and Acceptance, including the delivery of any
notices or other documents or instruments to Borrowers or Agent, which may be required in
connection with the assignment and assumption contemplated hereby.

     10. Miscellaneous

          (a) Any amendment or waiver of any provision of this Assignment and Acceptance shall be in
writing and signed by the parties hereto. No failure or delay by either party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without prejudice to any rights
with respect to any other for further breach thereof.

          (b) All payments made hereunder shall be made without any set-off or counterclaim.

          (c) Assignor and Assignee shall each pay its own costs and expenses incurred in connection
with the negotiation, preparation, execution and performance of this Assignment and Acceptance.

-4-

 

          (d) This Assignment and Acceptance may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same instrument.

          (e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF GEORGIA. Assignor and Assignee each irrevocably submits to the non-exclusive
jurisdiction of any State or Federal court sitting in Fulton County, Georgia over any suit, action
or proceeding arising out of or relating to this Assignment and Acceptance and irrevocably agrees
that all claims in respect of such action or proceeding may be heard and determined in such Georgia
State or Federal court. Each party to this Assignment and Acceptance hereby irrevocably waives, to
the fullest extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.

          (f) TO THE EXTENT PERMITTED BY APPLICABLE LAW, ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND
ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).

     IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and Acceptance to be
executed and delivered by their duly authorized officers as of the date first above written.

	 	 	 	 	 	 	 

	 	 	[ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	[ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

-5-

 

SCHEDULE 1

to

NOTICE OF ASSIGNMENT AND ACCEPTANCE

________________, 20__

Attn: ________________________

			
	     Re:	 	Delta Apparel, Inc., M.J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC, Art Gun, LLC
and TCX, LLC

Ladies and Gentlemen:

     Wells Fargo Bank, National Association, in its capacity as agent pursuant to the Loan
Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are
parties thereto as lenders (in such capacity, “Agent”), and the financial institutions which are
parties to the Loan Agreement as lenders (individually, each a “Lender” and collectively,
“Lenders”) have entered or are about to enter into financing arrangements pursuant to which Agent
and Lenders may make loans and advances and provide other financial accommodations to Delta
Apparel, Inc., M.J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC, Art Gun, LLC, and TCX,
LLC (collectively, “Borrowers”) as set forth in the Fourth Amended and Restated Loan and Security
Agreement, dated May 27, 2011, by and among Borrowers, Agent and Lenders (as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the
“Loan Agreement”), and the other agreements, documents and instruments referred to therein or at
any time executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, being collectively referred to
herein as the “Financing Agreements”). Capitalized terms not otherwise defined herein shall have
the respective meanings ascribed thereto in the Loan Agreement.

     l. We hereby give you notice of, and request your consent to, the assignment by
____________________ (the “Assignor”) to__________________ (the “Assignee”) such that after giving
effect to the assignment Assignee shall have an interest equal to______ (_%) percent of the total
Commitments pursuant to the Assignment and Acceptance Agreement attached hereto (the “Assignment
and Acceptance”). We understand that the Assignor’s Commitment shall be reduced by $___________, as
the same may be further reduced by other assignments on or after the date hereof.

     2. Assignee agrees that, upon receiving the consent of Agent to such assignment, Assignee will
be bound by the terms of the Loan Agreement as fully and to the same extent as if Assignee were the
Lender originally holding such interest under the Loan Agreement.

 

 

	 	3.	 	The following administrative details apply to Assignee:

	 	(A)	 	Notice address: ___________________ 

Assignee name: ___________________

Address: ________________________

               _________________________

               _________________________

Attention: ________________________

Telephone: _______________________

Telecopier: _______________________
	 
	 	(B)	 	Payment instructions:
	 
	 	 	 	Account No.: _____________________

At: _____________________________

Reference: _______________________

Attention: ________________________

     4. You are entitled to rely upon the representations, warranties and covenants
of each of Assignor and Assignee contained in the Assignment and Acceptance.

     IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of Assignment and Acceptance
to be executed by their respective duly authorized officials, officers or agents as of the date
first above mentioned.

	 	 	 	 	 	 	 

	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

-2-

 

ACKNOWLEDGED AND ASSIGNMENT

CONSENTED TO:

AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent

	 	 	 	 	 

	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

BORROWERS:*

	 	 	 	 	 	 	 	 	 	 	 

	DELTA APPAREL, INC.	 	 	 	M.J. SOFFE, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:

	 	 

	 	 	 	Name:
	 	 

	 	 
	Title:

	 	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JUNKFOOD CLOTHING COMPANY	 	 	 	TO THE GAME, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:

	 	 

	 	 	 	Name:
	 	 

	 	 
	Title:

	 	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ART GUN, LLC	 	 	 	TCX, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:

	 	 

	 	 	 	Name:
	 	 

	 	 
	Title:

	 	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

			
	*	 	No signature of Borrowers required if a Default or Event of Default exists.

-3-

 

EXHIBIT B

PRICING GRID

     For the period after the Closing Date until Borrowers deliver the financial statements and
compliance certificate required by Section 9.6 of the Agreement for the fiscal quarter ending
December 31, 2011, the applicable margin for Base Rate Loans will be 0.75% and the applicable
margin for LIBOR Rate Loans will be 1.75%. Thereafter, the applicable margin will be increased or
decreased on a quarterly basis, based upon the following pricing grid:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	When Average Alternate Excess	 	Applicable Base	 	Applicable LIBOR
	Level	 	Availability is:	 	Rate Margin	 	Rate Margin
	 
	 	I	 	 	< 20.0% of the Maximum Credit
	 	 	1.25	%	 	 	2.25	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	II	 	≥ 20.0% of the Maximum Credit but <
50.0% of the Maximum Credit
	 	 	1.00	%	 	 	2.00	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	III	 	≥ 50% of the Maximum Credit
	 	 	0.75	%	 	 	1.75	%

     At any time that an Event of Default exists or has occurred and is continuing, the applicable
margin shall be adjusted immediately to the margin applicable for Level I.

     The term “Average Alternate Excess Availability” shall mean, at any time, the average of the
aggregate amount of the Alternate Excess Availability of Borrowers, as calculated by Agent, for the
immediately preceding fiscal quarter.

     The applicable margin shall be calculated and established once each fiscal quarter, effective
as of the first day of the fiscal quarter following the fiscal quarter with respect to which Agent
has received the required financial statements and compliance certificate, and shall remain in
effect until adjusted thereafter as of the first day of a subsequent fiscal quarter.

     In the event that any financial statement or compliance certificate delivered by Borrowers for
any period is shown to be inaccurate (whether such inaccuracy is discovered at any time during the
effectiveness of the Credit Facility or up to six months thereafter), and such inaccuracy, if
corrected, would have led to the application of a higher applicable margin for any period than the
applicable margin applied for such period, then (i) Borrowers shall immediately deliver to Agent a
correct compliance certificate for such period, (ii) the applicable margin for such period shall be
deemed to be the applicable margin that would have been in effect for such period had the financial
statement or compliance certificate delivered by Borrowers not contained the inaccuracy, and (iii)
Borrowers shall immediately pay to Agent the accrued additional interest owing as a result of such
increased applicable margin for such period. Neither the recalculation of the applicable margin
for such a period, nor the payment by Borrowers of the accrued additional interest required, shall
limit the rights of Agent and Lenders with respect to their ability to charge interest at the
Default Rate or to declare any Event of Default or exercise any of their remedies during the
existence of such an Event of Default.

 

 

EXHIBIT C

BANK PRODUCT PROVIDER LETTER AGREEMENT

[Letterhead of Specified Bank Products Provider]

[Date]

Wells Fargo Bank, National Association, as Agent

1100 Abernathy Road Suite 1600

Atlanta, Georgia 30328

Attention: Delta Apparel Loan Administration

Fax No.: (770) 698-8324

Wells Fargo Capital Finance, LLC

2450 Colorado Avenue

Suite 3000 West

Santa Monica, California 90404

Attention: [__________________]

Fax No.: [__________________]

          Reference is hereby made to that certain Loan and Security Agreement, dated May 27, 2011 (as
amended, restated, supplemented, or modified from time to time, the “Credit Agreement”), by
and among the lenders party thereto (such lenders, together with their respective successors and
assigns, are referred to hereinafter each individually as a “Lender” and collectively as
the “Lenders”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
agent for the Lenders (together with its successors and assigns in such capacity, “Agent”),
and [________________________] (“Borrower”), and certain affiliates of Borrower. Capitalized terms
used herein but not specifically defined herein shall have the meanings ascribed to them in the
Credit Agreement.

          Reference is also made to that certain [describe the Bank Product Agreement or Agreements]
(the “Specified Bank Product Agreement [Agreements]”) dated as of [__________] by and
between [Lender or Affiliate of Lender] (the “Specified Bank Products Provider”) and
[identify the Loan Party or Subsidiary].

     1. Appointment of Agent. The Specified Bank Products Provider hereby designates and
appoints Agent, and Agent by its signature below hereby accepts such appointment, as its agent
under the Credit Agreement and the other Loan Documents. The Specified Bank Products Provider
hereby acknowledges that it has reviewed Sections 15.1, 15.2, 15.3, 15.4, 15.6, 15.7, 15.8,
15.9, 15.11, 15.12, 15.13, 15.14, 15.15, and 17.5 (collectively such sections are referred to
herein as the “Agency Provisions”), including, as applicable, the defined terms referenced
therein (but only to the extent used therein), and agrees to be bound by the provisions thereof.
Specified Bank Products Provider and Agent each agree that the Agency Provisions which govern the
relationship, and certain representations, acknowledgements, appointments, rights, restrictions,
and agreements, between the Agent, on the one hand, and the Lenders or the Lender Group, on the
other hand, shall, from and after the date of this letter agreement also apply to and govern,
mutatis mutandis, the relationship between the Agent, on the one hand, and the Specified Bank
Product Provider with respect to the Bank Products provided pursuant to the Specified Bank Product
Agreement[s], on the other hand.

 

 

     2. Acknowledgement of Certain Provisions of Credit Agreement. The
Specified Bank Products Provider hereby acknowledges that it has reviewed the
provisions of Sections 2.4(b)(ii), 14.1, 15.10, 15.11, and 17.5 of the Credit
Agreement, including, as applicable, the defined terms referenced therein, and agrees
to be bound by the provisions thereof. Without limiting the generality of any of the
foregoing referenced provisions, Specified Bank Product Provider understands and
agrees that its rights and benefits under the Loan Documents consist solely of it
being a beneficiary of the Liens and security interests granted to Agent and the right
to share in Collateral as set forth in the Credit Agreement.

     3. Reporting Requirements. Agent shall have no obligation to calculate the amount
due and payable with respect to any Bank Products. On a monthly basis (not later than the 10th
Business Day of each calendar month) or as more frequently as Agent shall request, the Specified
Bank Products Provider agrees to provide Agent with a written report, in form and substance
satisfactory to Agent, detailing Specified Bank Products Provider’s reasonable determination of the
credit exposure (and mark-to-market exposure) of Borrower and its Subsidiaries in respect of the
Bank Products provided by Specified Bank Products Provider pursuant to the Specified Bank Products
Agreement[s]. If Agent does not receive such written report within the time period provided above,
Agent shall assume that the credit exposure of Borrower and its Subsidiaries with respect to the
Bank Products provided pursuant to the Specified Bank Products Agreement[s] is the amount specified
in the most recent report received by Agent from such Specified Bank Products Provider; provided,
that if no written report has been received previously by Agent, Agent shall be entitled to assume
that the reasonable determination of the credit exposure of Borrower and its Subsidiaries with
respect to the Bank Products provided pursuant to the Specified Bank Products Agreement[s] is zero.

     4. Bank Product Reserve Conditions. Specified Bank Products Provider further
acknowledges and agrees that Agent shall have the right, but shall have no obligation to establish,
maintain, relax or release reserves in respect of any of the Bank Product Obligations and that if
reserves are established there is no obligation on the part of the Agent to determine or insure
whether the amount of any such reserve is appropriate or not. If Agent so chooses to implement a
reserve, Specified Bank Products Provider acknowledges and agrees that Agent shall be entitled to
rely on the information in the reports described above to establish the Bank Product Reserve
Amount.

     5. Bank Product Obligations. From and after the delivery to Agent of this letter
agreement duly executed by Specified Bank Product Provider and the acknowledgement of this letter
agreement by Agent and Borrower, the obligations and liabilities of Borrower and its Subsidiaries
to Specified Bank Product Provider in respect of Bank Products evidenced by the Specified Bank
Product Agreement[s] shall constitute Bank Product Obligations (and which, in turn, shall
constitute Obligations), and Specified Bank Product Provider shall constitute a Bank Product
Provider until such time as Specified Bank Products Provider or its affiliate is no longer a
Lender. Specified Bank Products Provider acknowledges that other Bank Products (which may or may
not be Specified Bank Products) may exist at any time.

     6. Notices. All notices and other communications provided for hereunder shall be given
in the form and manner provided in Section 11 of the Credit Agreement, and, if to Agent,
shall be mailed, sent, or delivered to Agent in accordance with Section 11 in the Credit
Agreement, if to Borrower, shall be mailed, sent, or delivered to Borrower in accordance with
Section 11 in the Credit Agreement, and, if to Specified Bank Products Provider, shall be
mailed,
sent or delivered to the address set forth below, or, in each case as to any party, at such
other address as shall be designated by such party in a written notice to the other party.

	 	 	 	 	 	 	 

	 

	 	If to Specified Bank	 	 	 	 
	 

	 	Products Provider:
	 	 

	 	 
	 

	 	 	 	

 

	 	 

 

 

                                                 

Attn:                                         

Fax No.                                         

     7. Miscellaneous. This letter agreement is for the benefit of the Agent, the Specified
Bank Products Provider, the Borrower and each of their respective successors and assigns
(including any successor agent pursuant to Section 15.9 of the Credit Agreement, but
excluding any successor or assignee of a Specified Bank Products Provider that does not
qualify as a Bank Product Provider). Unless the context of this letter agreement clearly
requires otherwise, references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the phrase
“and/or.” This letter agreement may be executed in any number of counterparts and by
different parties on separate counterparts. Each of such counterparts shall be deemed to be an
original, and all of such counterparts, taken together, shall constitute but one and the same
agreement. Delivery of an executed counterpart of this letter by telefacsimile or other means
of electronic transmission shall be equally effective as delivery of a manually executed
counterpart.

     8. Governing Law.

          (a) THE VALIDITY OF THIS LETTER AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

          (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS LETTER
AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS, AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. EACH OF
BORROWER, SPECIFIED BANK PRODUCTS PROVIDER, AND AGENT WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8(b).

          (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, SPECIFIED BANK PRODUCTS
PROVIDER, AND AGENT EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH OF BORROWER, SPECIFIED BANK PRODUCTS PROVIDER, AND AGENT EACH
REPRESENTS TO THE OTHERS THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS LETTER AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

[Signature pages to follow]

 

 

	 	 	 	 	 	 	 

	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	[SPECIFIED BANK PRODUCTS	 	 
	 	 	PROVIDER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Acknowledged, accepted, and agreed

as of the date first written above:

[___________________], as Borrower

	 	 	 	 	 

	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

Acknowledged, accepted, and

agreed as of _____________, 20__:

WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as Agent

	 	 	 	 	 

	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

 

 

EXHIBIT D 

DESIGNATED ACCOUNT

Delta’s deposit account with Agent with the following last four digits: 6159

 

 

Schedule 1.21

Commitments

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name of Lender	 	Commitment
	 	1.	 	 	Wells Fargo Bank, National Association
	 	$	75,000,000	 
	 	2 	 	 	Bank of America, N.A.
	 	$	45,000,000	 
	 	3.	 	 	PNC Bank, National Association
	 	$	25,000,000	 

 

 

Schedule 1.24

Customs Brokers

Smith Logistics International

10800 Northwest 97th Street

Suite 102

Miami, FL 33178

Contact: Igort Delhaya

Telephone: (305) 953 4100 ext, 350

Global Alliance Logistics

510 Plaza Drive

Suite 2720

College Park, GA 30349

Contact: Cheng Ching or Kam Leung

Telephone: (404) 767-6996

 

 

Schedule 1.89

Permitted Holders

With respect to all Borrowers other than Delta, each of the Borrowers is a Permitted Holder.

 

 

Schedule 8.2

Chief Executive Office; Places of Business and Collateral Locations

Chief Executive Offices:

	 	 	 

	Delta:

	 	322 South Main Street, Greenville, SC 29601
	Soffe:

	 	One Soffe Drive, Fayetteville, NC 29302
	Junkfood:

	 	322 South Main Street, Greenville, SC 29601
	To The Game:

	 	322 South Main Street, Greenville, SC 29601
	TCX:

	 	322 South Main Street, Greenville, SC 29601
	Art Gun:

	 	322 South Main Street, Greenville, SC 29601

Location of Books and Records:

In addition to their Chief Executive Offices, the Companies have books and records in the
following locations: Delta:

(1) 2750 Premiere Parkway, Suite 100, Duluth, GA 30097.

(2) Maiden Plant, P.O. Box 37, 100 West Pine Street, Maiden, NC 28650 — maintains payroll
records related to the plant and its operations.

(3) 4735 Corporate Drive, Suite 100, Concord, NC 28025 — maintains sales, accounts
receivable, inventory, and payroll records related to FunTees division.

(4) Payroll records are also kept at Delta’s distribution centers in Cranberry, New Jersey,
Santa Fe Springs, California, Clinton, Tennessee and Miramar, Florida.

Soffe:

(1) One Soffe Drive, Fayetteville, NC 28312

(2) Payroll records are also kept at Soffe’s distribution center in Santa Fe Springs,
California.

Junkfood:

5770 W. Jefferson Blvd, Los Angeles, California 90016

TTG:

16
Downing Drive, Phenix City, Alabama 36869

 

 

TCX:

115 East 3rd Street, Wendell, North Carolina 27591

Art Gun:

16085 NW 52 Ave, Miami
Lakes, Florida 33014

Other places of business and other location of Collateral are as follows:

Delta:

Distribution Center

370 J. D. Yarnell Industrial Parkway

Clinton, TN 37716

Distribution Center

Branbury Business Park, Building #5

5 Santa Fe Way

Cranbury, NJ 08512

Distribution Center

13220 Orden Drive

Santa Fe Springs, CA 90670

Distribution Center

11500 Miramar Parkway, Suite 100

Miramar, FL 33025

Sales Office

530 Seventh Avenue Suite #1106 New

York, NY 10018

Corporate

2750 Premiere Parkway, Suite 100

Duluth, GA 30097

Textile Plant

100 West Pine Street

Maiden, NC 28650

Textile Contractor

Charlotte, NC 28201

Offices

322 S. Main

Greenville, SC 29601

 

 

Headquarters (FunTees)

4735 Corporate Dr., Suite 100

Concord, NC 28026

Art R&D Dept (FunTees)

2583 Armentrout Dr

Concord, NC 28025

Sew R&D (FunTees)

217 Andrews St NW

Concord, NC 28027

Soffe:

Distribution Center

13220 Orden Drive

Santa Fe Springs, CA 90670

Corp/Dist/Embellish

Soffe Drive

Fayetteville, NC 28312

Textile Plant

Soffe Drive

Fayetteville, NC 28312

Distribution

1030 Ft. Worth

Fayetteville, NC 28312

Maintenance Shop

713 Dunn Road

Fayetteville, NC 28312

Sewing

13750 Hwy. 301 South

Rowland, NC 28484

Distribution

919 Filley St.

Lansing, MI 48906

Distribution

3503 Mississippi St.

Great Lake, IL 60088

 

 

Outlet Store off I-95

49 JR Road

Queens Square Shopping Center

Selma, NC 27576

Myrtle Beach Outlet Store

Tanger Outlet Center

10835 King Rd, (off hwy 17)

Myrtle Beach, SC 29572

Mebane Outlet Store 4000

Arrowhead Dr. NE

Mebane, NC 27302

River Bluff Condo

1611 Bluffside Drive, Apt 101

Fayetteville, NC 28312

Junkfood:

Distribution Center

13220 Orden Drive

Santa Fe Springs, CA 90670

Offices/Distribution

11725 Mississippi Avenue Los

Angeles, CA 90025

Offices/Distribution 5770

W. Jefferson Blvd. Los

Angeles, CA 90016

Office

860 S. Los Angeles Street

Los Angeles, CA

Contractor

2937 E. Maria Street

E. Rancho Domingue, CA 90221

To The Game:

Office/Distribution/Embellish

16 Downing Drive

Phenix City, AL 36869

 

 

Distribution

5654 Shepherdsville Road

Louisville, KY 40228

Retail

3707 A 2nd Avenue

Columbus, GA 31904

Distribution

11655 Central Parkway Suite 315

Jacksonville, FL 32224

TCX:

Headquarters & Operations

115 E Third Street

Wendell, NC 27591

Warehouse Pack & Hold

104 E Third Street

Wendell, NC 27591

Warehouse-Blanks 485

Old Wilson Rd.

Wendell, NC 27591

Art Gun:

Headquarters & Operations

16085 NW 52 Ave

Miami Lakes, FL 33014

 

 

Schedule 8.4

Existing Liens

Liens in favor of Agent.

Liens evidenced by the following UCC filings:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SECURED	 	DATE	 	DATE	 	 	 	 	 
	DEBTOR	 	JURISDICTION	 	PARTY	 	FILED	 	EXPIRES	 	COLLATERAL	 	FILE #	 
	Delta Apparel Inc.
	 	Barrow Cty., Georgia	 	Canon Financial Services	 	5/5/2009	 	5/5/2014	 	Notice of Lease of copiers  #001- 0198601-003	 	 	0072009007972	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Barrow Cty., Georgia	 	Raymond Leasing Corporation	 	3/26/2010	 	3/26/2015	 	Notice of Lease — Order picker  Serial # 560-10- A09240	 	 	0072010005175	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Barrow Cty., Georgia	 	Canon Financial Services	 	9/9/2010	 	9/9/2015	 	Notice of Lease of copiers	 	 	0072010017123	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Barrow Cty., Georgia	 	Canon Financial Services	 	9/17/2010	 	9/17/2015	 	Notice of Lease of copiers	 	 	0072010017711	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Barrow Cty., Georgia	 	Canon Financial Services	 	9/20/2010	 	9/20/2015	 	Notice of Lease  of copiers	 	 	0072010017824	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Gwinnett Cty., Georgia	 	GE Capital	 	3/25/04	 	3/25/2014 (continuation filed)	 	Notice of Lease — (3) Cannon
IR-5020I, (6) Canon IR-3320I, (3) Canon IR-2220I and (10) Canon IR-1370F Copiers	 	 	672004002860	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Barrow Cty., Georgia	 	US Bancorp	 	8/26/2009	 	8/26/2014	 	Shortel phone equipment	 	 	0072009015575	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Barrow Cty., Georgia	 	IBM Credit LLC	 	6/28/2010	 	6/28/2015	 	Notice of Lease — Equipment, software and accessories	 	 	0072010012365	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Fulton Cty., Georgia	 	Inter-Tel Leasing Inc.	 	6/1/2006	 	6/1/2011	 	Notice of Lease — Axxess CPU 128 System	 	 	060200606809	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Fulton Cty., Georgia	 	Inter-Tel Leasing, Inc.	 	10/11/2006	 	10/11/2011	 	“System” leased; Lease #114528	 	 	060200612616	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Junkfood Clothing Company
	 	Barrow Cty., Georgia	 	Konica Minolta Business Solutions U.S.A., Inc.	 	4/19/2007	 	4/19/2012	 	Notice of Lease — Konica Minolta Copier C6500 L#200321756	 	 	00720077802	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	M.J. Soffe, LLC
	 	NC Secretary of	 	ePlus	 	4/14/2011	 	4/14/2016	 	Information	 	 	20110032177F	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SECURED	 	DATE	 	DATE	 	 	 	 
	DEBTOR	 	JURISDICTION	 	PARTY	 	FILED	 	EXPIRES	 	COLLATERAL	 	FILE #
	 

	 	State
	 	Technology,
Inc.
	 	 	 	 	 	technology
equipment,
including
computer
equipment,
purchased on
credit, now or
hereafter, from
ePlus.	 	 

 

 

	Schedule 8.7

Permits

	1.	 	Wastewater Treatment NPDES Permit No. NC0006190, expires May 31, 2011. As of the Closing,
Delta is in the process of renewing this permit.
	 
	2.	 	Permit No. WQ0006984, Land Application of Wastewater Residuals, expires April 30, 2014.
	 
	3.	 	Air Permit No. 03922R15, expires May 31, 2015
	 
	4.	 	Underground Storage Tank Operating Permit; Certificate No. 2011008290, expires December 31,
2011

 

 

Schedule 8.12

Intellectual Property

Delta:

	 	 	 	 	 	 	 
	Trademark	 	Registration Number	 	Registration Date	 	Status
	Delta Est. 1903
	 	2294154
	 	November 23, 1999
	 	Active
	 	 	 	 	 	 	 
	Healthknit
	 	1955069
	 	February 6, 1996
	 	Active
	 	 	 	 	 	 	 
	Woodside
	 	1990387
	 	July 30, 1996
	 	Cancelled
	 	 	 	 	 	 	 
	Pro Weight
	 	1463625
	 	November 3, 1987
	 	Active
	 	 	 	 	 	 	 
	Royal First Class
	 	1405930
	 	August 19, 1986
	 	Cancelled
	 	 	 	 	 	 	 
	Sneakers
	 	1144290
	 	December 23, 1980
	 	Cancelled
	 	 	 	 	 	 	 
	Quail Hollow
	 	936138
	 	June 20, 1972
	 	Active
	 	 	 	 	 	 	 
	Healthknit
	 	727531
	 	February 13, 1962
	 	Cancelled
	 	 	 	 	 	 	 
	Healthknit
	 	644790
	 	April 30, 1957
	 	Active
	 	 	 	 	 	 	 
	Healthknit
	 	543705
	 	June 12, 1951
	 	Active
	 	 	 	 	 	 	 
	Magnum Weight
	 	3019396
	 	November 29, 2005
	 	Active
	 	 	 	 	 	 	 
	Delta Express
	 	1808125
	 	November 30, 1993
	 	Cancelled
	 	 	 	 	 	 	 
	Fun Tees
	 	1911515
	 	August 15, 1995
	 	Active
	 	 	 	 	 	 	 
	Your Lifestyle Fit 

to a Tee
	 	3952469
	 	April 26, 2011
	 	Active
	 	 	 	 	 	 	 
	Change That 

Shirt...Now!
	 	3931777
	 	March 15, 2011
	 	Active
	 	 	 	 	 	 	 
	Delta
	 	3926429
	 	March 1, 2011
	 	Active
	 	 	 	 	 	 	 
	QH
	 	38563373
	 	October 5, 2010
	 	Active
	 	 	 	 	 	 	 
	QH
	 	3856369
	 	October 5, 2010
	 	Active
	 	 	 	 	 	 	 
	Fun Tees Recycled
	 	3819380
	 	July 13, 2010
	 	Active
	 	 	 	 	 	 	 
	Fun Tees Organic
	 	3808089
	 	June 22, 2010
	 	Active

 

 

     Blend

	 	 	 	 	 
	Trademark	 	Serial Number	 	Application Date
	Standard Knitting 

Mills 1900
	 	77592358
	 	October 14, 2008
	 	 	 	 	 
	Standard Knitting 

Mills
	 	77588844
	 	October 8, 2008
	 	 	 	 	 
	2 Badd
	 	74565148
	 	Abandoned
	 	 	 	 	 
	Delta
	 	75613243
	 	Abandoned

Soffe:

	 	 	 	 	 	 	 
	Trademark	 	Registration Number	 	Registration Date	 	Status
	Soffe
	 	1743249
	 	December 29, 1992
	 	Active
	 	 	 	 	 	 	 
	Soffe
	 	1333340
	 	April 30, 1985
	 	Cancelled
	 	 	 	 	 	 	 
	Soffe
	 	3053916
	 	January 31, 2006
	 	Active
	 	 	 	 	 	 	 
	Cape Fear Trading 

Company
	 	3318885
	 	October 23, 2007
	 	Active
	 	 	 	 	 	 	 
	Play With Intensity or 

Get Out of the Game
	 	3865479
	 	October 19, 2010
	 	Active
	 	 	 	 	 	 	 
	Soffe Dri Cotton
	 	3686452
	 	September 22, 2009
	 	Active
	 	 	 	 	 	 	 
	Soffe Dri
	 	3680146
	 	September 8, 2009
	 	Active
	 	 	 	 	 	 	 
	IA
	 	3110926
	 	July 4, 2006
	 	Active
	 	 	 	 	 	 	 
	Intensity Athletics
	 	2233133
	 	March 23, 1999
	 	Active

	 	 	 	 	 	 	 
	Trademark	 	Serial Number	 	Application Date	 	 
	Made By U.S.
	 	85225871
	 	January 25, 2011	 	 
	 	 	 	 	 	 	 
	S
	 	85112839
	 	August 20, 2010	 	 
	 	 	 	 	 	 	 
	Athletic Kids
	 	74316558
	 	Abandoned	 	 

 

 

Junkfood:

	 	 	 	 	 	 	 
	Trademark	 	Registration Number	 	Registration Date	 	Status
	Vitamin T
	 	2863263
	 	July 13, 2004
	 	Cancelled
	 	 	 	 	 	 	 
	Junk Food
	 	2589059
	 	July 2, 2002
	 	Active
	 	 	 	 	 	 	 
	Junk Food
	 	3665030
	 	August 4, 2009
	 	Active
	 	 	 	 	 	 	 
	Junk Mail
	 	3286389
	 	August 28, 2007
	 	Active
	 	 	 	 	 	 	 
	Sweet and Sour
	 	3815844
	 	July 6, 2010
	 	Active
	 	 	 	 	 	 	 
	Junk Food
	 	3711277
	 	November 17, 2009
	 	Active
	 	 	 	 	 	 	 
	Trademark
	 	Serial Number
	 	Application Date	 	 
	 
	 	 
	 	 	 	 
	Patriotic Peace Design
	 	77958107
	 	March 12, 2010	 	 
	 	 	 	 	 	 	 
	Junk Food
	 	77693637
	 	March 18, 2009	 	 
	 	 	 	 	 	 	 
	Junk Food
	 	77693627
	 	March 18, 2009	 	 
	 	 	 	 	 	 	 
	Junk Food
	 	77693619
	 	March 18, 2009	 	 
	 	 	 	 	 	 	 
	Junk Food
	 	77693603
	 	March 18, 2009	 	 
	 	 	 	 	 	 	 
	Worn Right
	 	77534000
	 	July 29, 2008	 	 
	 	 	 	 	 	 	 
	True Vintage
	 	77533988
	 	July 29, 2008	 	 
	 	 	 	 	 	 	 
	Junk Food Gourmet
	 	78560398
	 	Abandoned	 	 
	 	 	 	 	 	 	 
	Junk Food Gourmet
	 	77822117
	 	Abandoned	 	 
	 	 	 	 	 	 	 
	Special Sauce
	 	76382058
	 	Abandoned	 	 
	 	 	 	 	 	 	 
	Free Love
	 	77001873
	 	Abandoned	 	 

TTG:

AMERICAN MARKS

	 	 	 	 	 	 	 
	Trademark	 	Registration Number	 	Registration Date	 	Status
	The Game
	 	1410919
	 	September 23, 1986
	 	Active

 

 

	 	 	 	 	 	 	 
	Trademark	 	Registration Number	 	Registration Date	 	Status
	The Game
(script design)
	 	1561018
	 	October 17, 1989
	 	Active
	 	 	 	 	 	 	 
	G Design (design)
	 	1495869
	 	July 12, 1988
	 	Active
	 	 	 	 	 	 	 
	Circle Design (design)
	 	1489462
	 	May 24, 1988
	 	Active
	 	 	 	 	 	 	 
	Split-Bar Design
(design)
	 	2275077
	 	September 7, 1999
	 	Active
	 	 	 	 	 	 	 
	Two-Bar Design
(design)
	 	2576773
	 	June 4, 2002
	 	Active
	 	 	 	 	 	 	 
	Three-Bar Design
(design)
	 	3564708
	 	January 20, 2009
	 	Active
	 	 	 	 	 	 	 
	Miscellaneous Design
(design)
	 	3733344
	 	January 5, 2010
	 	Active
	 	 	 	 	 	 	 
	Kudzu
	 	2715347
	 	May 13, 2003
	 	Active
	 	 	 	 	 	 	 
	Kudzu and Design
(design)
	 	1942163
	 	December 19, 1995
	 	Active
	 	 	 	 	 	 	 
	G-Girl Exclusively by
the Game
	 	3030061
	 	December 13, 2005
	 	Active
	 	 	 	 	 	 	 
	Kudzu
	 	2062094
	 	May 13, 1997
	 	Cancelled
	 	 	 	 	 	 	 
	K Design
	 	1981669
	 	June 18, 1996
	 	Cancelled

	 	 	 	 	 	 	 
	Trademark	 	Serial Number	 	Application Date	 	 	 	 
	Uvapor
	 	85301147
	 	April 21, 2011

 

 

CANADIAN MARKS

	 	 	 	 	 
	Trademark	 	Serial No./Registration No.
	The Game & G Design (design)

	 	 	424085	 

CHINESE MARKS

	 	 	 	 	 
	Trademark	 	Serial No./Registration No.
	The Game & G Design (design)

	 	 	612830	 

JAPANESE MARKS

	 	 	 	 	 
	Trademark	 	Serial No./Registration No.
	The Game & G Design (design)

	 	 	2693238	 

MEXICAN MARKS

	 	 	 	 	 
	Trademark	 	Serial No./Registration No.
	The Game & G Design (design)

	 	 	442664	 

NEW ZEALAND MARKS

	 	 	 	 	 
	Trademark	 	Serial No./Registration No.
	The Game

	 	 	227595	 

Art Gun:

     None.

TCX:

	 	 	 	 	 	 	 
	Trademark	 	Registration Number	 	Registration Date	 	Status
	Just For Us

	 	3085231
	 	April 25, 2006
	 	Active
	 	 	 	 	 	 	 
	TCX Apparel
	 	3164387
	 	October 31, 2006
	 	Active
	 	 	 	 	 	 	 
	Sergeant Design
	 	3092867
	 	May 16, 2006
	 	Active
	 	 	 	 	 	 	 
	Cotton Ball Design
	 	2842697
	 	May 18, 2004
	 	Active

	 	 	 	 	 	 	 
	Trademark	 	Serial Number	 	Application Date	 	 
	The Cotton Exchange
	 	85069964
	 	June 23, 2010	 	 
	 	 	 	 	 	 	 
	TCX
	 	85069979
	 	June 23, 2010	 	 

 

 

Schedule 8.11

Accounts

Delta maintains the following accounts (identified by last 4 digits of account number):

Rosenthal Collins Group, LLC Brokerage Account:

Acct: 1001

Roth Capital Partners, LLC Account:

Acct: R XN1

Borrowers maintain the following deposit accounts with Wells Fargo Bank, National Association
(identified by last 4 digits of account number):

Delta

Settlement Account

5530

Junkfood

Collection Account

1743

Soffe

Collection Account

6088

TCX

Collection Account

0870

TTG

Collection Account

1038

Delta

Disbursement Account

6159

Delta

Payroll Account

5269

Delta

Accounts Payable

5256

 

 

Delta Corporate Accounts Payable

6109

Junkfood

Disbursement Acct

3039

Soffe

Accounts Payable

9137

TCX

Accounts Payable

0351

TTG

Payroll Account

3746

TTG

Accounts Payable

3814

Kudzu by TTG

Accounts Payable

2912

Outdoors Direct by TTG

Accounts Payable

3733

Delta (FunTees)

Division Account

5189

NC Factory Account

0211

Employees Benefit Account

7292

Delta

Corporate Card Account

9542

 

 

Art Gun

1238

 

 

Schedule 8.15

Labor Matters

None.

 

 

Schedule 8.17

Material Contracts

Contracts listed as Exhibits 2.1, 2.1.1., 2.2, 2.3, and 10.3 through 10.11 of Delta’s Form 10-K
filed with the Securities and Exchange Commission on September 1, 2010.

 

 

Schedule 9.9

Existing Indebtedness

Indebtedness owed to Lenders.

Potential earnout payments to the Art Gun sellers, the fair value of which is considered to be de
minimus. See Note P — Goodwill and Contingent Consideration to the Condensed Consolidated
Financial Statements included in Item 1 of Delta’s Form 10-Q filed with the SEC on February 2,
2011.

Future minimum royalty payments under license agreements in amounts disclosed in Note O — License
Agreements to the Condensed Consolidated Financial Statements included in Item 1 of Delta’s Form
10-Q filed with the SEC on May 5, 2011.

Art Gun is a party to Capital Leases. Payments required pursuant to such Capital Leases are less
than $100,000 in the aggregate.

Indebtedness secured by the Liens set forth on Schedule 8.4

 

 

Schedule 9.10

Loans, Investments, Guarantees, Etc.

See Schedule 9.9.

 

 

Schedule 9.12

Transactions with Affiliates

Ceiba Textiles, S de R.L leases property in Green Valley Industrial Park from Green Valley
Industrial Park, S.A.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}]]