Document:

exv10w2

Exhibit 10.2

CONFORMED COPY

 

Belk, Inc.

Belk Administration Company

Belk International, Inc.

Belk Stores Services, Inc.

Belk-Simpson Company, Greenville, South Carolina

The Belk Center, Inc..

Belk Accounts Receivable, LLC

Belk Stores of Virginia LLC

Belk Gift Card Company LLC

Belk Merchandising, LLC

Belk Texas Holdings LLC

Belk Department Stores LP

Belk Ecommerce LLC

Belk Stores of Mississippi LLC

$50,000,000 5.70% Senior Notes due November 23, 2020

 

Note Purchase Agreement

 

Dated as of November 23, 2010

 

 

 

TABLE OF CONTENTS

(not part of the Agreement)

	 	 	 
	Section	 	Page
	SECTION 1. Authorization of Notes
	 	2
	Section 1.1 Description of Notes
	 	2
	Section 1.2 Provisions Relating to the Notes
	 	2
	SECTION 2. Sale and Purchase of Notes
	 	2
	SECTION 3. Closing
	 	2
	SECTION 4. Conditions to Closing
	 	3
	Section 4.1 Representations and Warranties
	 	3
	Section 4.2 Performance; No Default
	 	3
	Section 4.3 Compliance Certificates
	 	3
	Section 4.4 Opinions of Counsel
	 	3
	Section 4.5 Purchase Permitted By Applicable Law, Etc
	 	3
	Section 4.6 Sale of Other Notes
	 	4
	Section 4.7 Payment of Documentation Fee
	 	4
	Section 4.8 Private Placement Number
	 	4
	Section 4.9 Changes in Corporate Structure
	 	4
	Section 4.10 Funding Instructions
	 	4
	Section 4.11 Proceedings and Documents
	 	4
	SECTION 5. Representations and Warranties of the Obligors
	 	4
	Section 5.1 Organization; Power and Authority
	 	4
	Section 5.2 Authorization, Etc
	 	5
	Section 5.3 Disclosure
	 	5
	Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates
	 	5
	Section 5.5 Financial Statements; Material Liabilities
	 	6
	Section 5.6 Compliance with Laws, Other Instruments, Etc
	 	6
	Section 5.7 Governmental Authorizations, Etc
	 	6
	Section 5.8 Litigation; Observance of Agreements, Statutes and Orders
	 	7
	Section 5.9 Taxes
	 	7
	Section 5.10 Title to Property; Leases
	 	7
	Section 5.11 Licenses, Permits, Etc
	 	8
	Section 5.12 Compliance with ERISA
	 	8
	Section 5.13 Private Offering by the Obligors
	 	9
	Section 5.14 Use of Proceeds; Margin Regulations
	 	9
	Section 5.15 Existing Debt; Future Liens
	 	9

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TABLE OF CONTENTS

(not part of the Agreement)

	 	 	 
	Section	 	Page
	Section 5.16 Foreign Assets Control Regulations, Etc
	 	10
	Section 5.17 Status under Certain Statutes
	 	11
	Section 5.18 Environmental Matters
	 	11
	Section 5.19 Employee Relations
	 	11
	Section 5.20 Notes Rank Pari Passu
	 	12
	Section 5.21 Solvency of the Obligors
	 	12
	Section 5.22 Consideration
	 	12
	SECTION 6. Representations of the Purchasers
	 	12
	Section 6.1 Purchase for Investment
	 	12
	Section 6.2 Accredited Investor
	 	12
	Section 6.3 Source of Funds
	 	12
	SECTION 7. Information as to the Obligors
	 	14
	Section 7.1 Financial and Business Information
	 	14
	Section 7.2 Officer’s Certificate
	 	17
	Section 7.3 Visitation
	 	17
	SECTION 8. Payment of the Notes
	 	18
	Section 8.1 Required Prepayments
	 	18
	Section 8.2 Optional Prepayments
	 	18
	Section 8.3 Allocation of Partial Prepayments
	 	19
	Section 8.4 Maturity; Surrender, Etc
	 	19
	Section 8.5 Purchase of Notes
	 	19
	Section 8.6 Make-Whole Amount
	 	19
	SECTION 9. Affirmative Covenants
	 	21
	Section 9.1 Compliance with Law
	 	21
	Section 9.2 Insurance
	 	21
	Section 9.3 Maintenance of Properties
	 	21
	Section 9.4 Payment of Taxes and Claims
	 	22
	Section 9.5 Corporate Existence, Etc
	 	22
	Section 9.6 Designation of Subsidiaries
	 	22
	Section 9.7 Notes to Rank Pari Passu
	 	22
	Section 9.8 Books and Records
	 	23
	Section 9.9 Additional Obligors; Release of Obligors
	 	23
	SECTION 10. Negative Covenants
	 	24

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TABLE OF CONTENTS

(not part of the Agreement)

	 	 	 
	Section	 	Page
	Section 10.1 Consolidated Debt to Consolidated Tangible Capitalization
	 	24
	Section 10.2 Fixed Charge Coverage Ratio
	 	24
	Section 10.3 Priority Debt
	 	24
	Section 10.4 Limitation on Liens
	 	24
	Section 10.5 Sales of Assets
	 	26
	Section 10.6 Merger and Consolidation
	 	27
	Section 10.7 Transactions with Affiliates
	 	28
	Section 10.8 Terrorism Sanctions Regulations
	 	28
	Section 10.9 Line of Business
	 	28
	SECTION 11. Events of Default
	 	29
	SECTION 12. Remedies on Default, Etc
	 	31
	Section 12.1 Acceleration
	 	31
	Section 12.2 Other Remedies
	 	31
	Section 12.3 Rescission
	 	32
	Section 12.4 No Waivers or Election of Remedies, Expenses, Etc
	 	32
	SECTION 13. Registration; Exchange; Substitution of Notes
	 	32
	Section 13.1 Registration of Notes
	 	32
	Section 13.2 Transfer and Exchange of Notes
	 	33
	Section 13.3 Replacement of Notes
	 	33
	SECTION 14. Payments on Notes
	 	34
	Section 14.1 Place of Payment
	 	34
	Section 14.2 Home Office Payment
	 	34
	SECTION 15. Expenses, Etc
	 	34
	Section 15.1 Transaction Expenses
	 	34
	Section 15.2 Survival
	 	35
	SECTION 16. Survival of Representations and Warranties; Entire Agreement
	 	35
	SECTION 17. Amendment and Waiver
	 	35
	Section 17.1 Requirements
	 	35
	Section 17.2 Solicitation of Holders of Notes
	 	35
	Section 17.3 Binding Effect, Etc
	 	36
	Section 17.4 Notes Held by the Obligors, Etc
	 	36
	SECTION 18. Notices
	 	36
	SECTION 19. Reproduction of Documents
	 	37

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TABLE OF CONTENTS

(not part of the Agreement)

	 	 	 
	Section	 	Page
	SECTION 20. Confidential Information
	 	37
	SECTION 21. Substitution of Purchaser
	 	38
	SECTION 22. Miscellaneous
	 	39
	Section 22.1 Successors and Assigns
	 	39
	Section 22.2 Payments Due on Non-Business Days
	 	39
	Section 22.3 Accounting Terms
	 	39
	Section 22.4 Joint and Several Liability of Obligors
	 	39
	Section 22.5 Severability
	 	40
	Section 22.6 Construction
	 	40
	Section 22.7 Counterparts
	 	40
	Section 22.8 Governing Law
	 	41
	Section 22.9 Jurisdiction and Process; Waiver of Jury Trial
	 	41

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Attachments to Note Purchase Agreement:

	 	 	 	 	 

	Schedule A

	 	—
	 	Information Relating to Purchasers
	 
	 	 	 	 
	Schedule B

	 	—
	 	Defined Terms
	 
	 	 	 	 
	Schedule 5.3

	 	—
	 	Disclosure Materials
	 
	 	 	 	 
	Schedule 5.4

	 	—
	 	Subsidiaries of the Obligors, Ownership of Subsidiary Stock, Affiliates
	 
	 	 	 	 
	Schedule 5.5

	 	—
	 	Financial Statements
	 
	 	 	 	 
	Schedule 5.15

	 	—
	 	Existing Debt
	 
	 	 	 	 
	Schedule 5.19

	 	—
	 	Employee Relations
	 
	 	 	 	 
	Schedule 10.4

	 	—
	 	Existing Liens
	 
	 	 	 	 
	Exhibit 1

	 	—
	 	Form of Senior Notes due November 23, 2020
	 
	 	 	 	 
	Exhibit 2

	 	—
	 	Form of Joinder
	 
	 	 	 	 
	Exhibit 4.4(a)

	 	—
	 	Form of Opinion of Assistant General Counsel to the Obligors
	 
	 	 	 	 
	Exhibit 4.4(b)

	 	—
	 	Form of Opinion of Special Counsel to the Obligors

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Belk, Inc.

Belk Administration Company

Belk International, Inc.

Belk Stores Services, Inc.

Belk-Simpson Company, Greenville, South Carolina

The Belk Center, Inc.

Belk Accounts Receivable, LLC

Belk Stores of Virginia LLC

Belk Gift Card Company LLC

Belk Merchandising, LLC

Belk Texas Holdings LLC

Belk Department Stores LP

Belk Ecommerce LLC

Belk Stores of Mississippi LLC

2801 West Tyvola Road

Charlotte, North Carolina 28217

$50,000,000 5.70% Senior Notes due November 23, 2020

Dated as of

November 23, 2010

To the Purchasers listed in

    the attached Schedule A:

Ladies and Gentlemen:

     Belk, Inc., a Delaware corporation (the “Company”), Belk Administration
Company, a North Carolina corporation (“Administration”), Belk International, Inc., a
North Carolina corporation (“International”), Belk Stores Services, Inc., a North Carolina
corporation (“Stores Services”), Belk-Simpson Company, Greenville, South Carolina, a South
Carolina corporation (“Belk-Simpson”), The Belk Center, Inc., a North Carolina corporation
(“Belk Center”),, Belk Accounts Receivable, LLC, a North Carolina limited liability
company (“Belk Accounts”), Belk Stores of Virginia LLC, a North Carolina limited liability
company (“Belk Virginia”), Belk Gift Card Company LLC, a North Carolina limited liability
company (“Belk Gift Card”), Belk Merchandising, LLC, a North Carolina limited liability
company (“Merchandising”), Belk Texas Holdings LLC, a North Carolina limited liability
company (“Belk Holdings”), Belk Department Stores LP, a North Carolina limited partnership
(“Belk Department Stores”), Belk Ecommerce LLC, a North Carolina limited liability company
(“Belk Ecommerce”), and Belk Stores of Mississippi LLC, a Mississippi limited liability
company (“Belk Mississippi”), (the Company, Administration, International, Stores Services,
Belk-Simpson, Belk Center, Belk Accounts, Belk Virginia, Belk Gift Card, Merchandising, Belk
Holdings, Belk Department Stores, Belk Ecommerce and Belk Mississippi and each other Person
required to become an obligor hereunder pursuant to Section 9.9, being

 

 

sometimes hereinafter referred to individually as an “Obligor” and collectively as the “Obligors”), jointly and
severally, agree with the purchasers listed in the attached Schedule A (the “Purchasers”) as
follows:

SECTION 1. Authorization of Notes.

     Section 1.1 Description of Notes. The Obligors will authorize the issue and sale of
$50,000,000 aggregate principal amount of their 5.70% Senior Notes due November 23, 2020 (the
“Notes”). As used herein, the term “Notes” shall mean all notes originally delivered pursuant to
this Agreement and any such notes issued in substitution therefor pursuant to Section 13. The
Notes shall be substantially in the forms set out in Exhibit 1, with such changes therefrom, if
any, as may be approved by the Purchasers and the Obligors. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

     Section 1.2 Provisions Relating to the Notes. The Notes shall bear interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid principal thereof from the date of
issuance at the rate of 5.70% per annum, payable semiannually in arrears on the 23rd day of each of
May and November in each year commencing on May 23, 2011 and, to the extent permitted by law,
interest (so computed) on any overdue payment of interest and, during the continuance of an Event
of Default, on the unpaid principal thereof and on any overdue payment of Make-Whole Amount at the
Default Rate, until such overdue amounts shall have been paid or such Event of Default shall no
longer exist.

SECTION 2. Sale and Purchase of Notes.

     Subject to the terms and conditions of this Agreement, the Obligors will issue and sell to
each Purchaser and each Purchaser will purchase from the Obligors, at the closing provided for in
Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at
the purchase price of 100% of the principal amount thereof. The obligations of each Purchaser
hereunder are several and not joint obligations and no Purchaser shall have any liability to any
Person for the performance or nonperformance of any obligation by any other Purchaser hereunder.

SECTION 3. Closing.

     The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Prudential Capital Group, 1114 Avenue of the Americas, New York, NY 10036 at 11:00 a.m.,
New York time, at a closing on November 23, 2010 or on such other Business Day thereafter as may be
agreed upon by the Obligors and the Purchasers (the “Closing Date”), but in no event later than
November 24, 2010. On the Closing Date, the Obligors will deliver to each Purchaser the Notes to
be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as such Purchaser may request) dated the Closing Date and
registered in such Purchaser’s name (or in the name of its nominee), against delivery by such
Purchaser to the Obligors or their order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the account of the Obligors.
If, on the Closing Date, the Obligors shall fail to tender such Notes

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to any Purchaser as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall, at
its election, be relieved of all further obligations under this Agreement, without thereby waiving
any rights such Purchaser may have by reason of such failure or such nonfulfillment.

SECTION 4. Conditions to Closing.

     Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser on
the Closing Date is subject to the fulfillment to such Purchaser’s satisfaction, prior to or on the
Closing Date, of the following conditions:

     Section 4.1 Representations and Warranties. The representations and warranties of the
Obligors in this Agreement shall be correct when made and on the Closing Date.

     Section 4.2 Performance; No Default.  Each Obligor shall have performed and complied
with all agreements and conditions contained in this Agreement required to be performed or complied
with by it prior to or on the Closing Date, and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or
Event of Default shall have occurred and be continuing. Neither any Obligor nor any Subsidiary
shall have entered into any transaction since December 31, 2009 that would have been prohibited by
Section 10 hereof had such Section applied since such date.

     Section 4.3 Compliance Certificates.

     (a) Officer’s Certificate. Each Obligor shall have delivered to such Purchaser an
Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in
Sections 4.1, 4.2 and 4.9 have been fulfilled.

     (b) Secretary’s Certificate. Each Obligor shall have delivered to such Purchaser a
certificate of its Secretary or an Assistant Secretary, dated the Closing Date, certifying
as to the resolutions attached thereto and other corporate or other proceedings relating to
the authorization, execution and delivery of the Notes and this Agreement.

     Section 4.4 Opinions of Counsel. Such Purchaser shall have received opinions in form
and substance satisfactory to such Purchaser, dated the Closing Date (a) from [Luther T. Moore],
Esq., Assistant General Counsel of the Obligors, covering the matters set forth in Exhibit 4.4(a)
and covering such other matters incident to the transactions contemplated hereby as such Purchaser
or special counsel to the Purchasers may reasonably request and (b) from Moore Van Allen, PLLC,
special counsel for the Obligors, covering the matters set forth in Exhibit 4.4(b) and covering
such other matters incident to the transactions contemplated hereby as such Purchaser or special
counsel to the Purchasers may reasonably request (and each Obligor hereby instructs its counsel to
deliver such opinion to the Purchasers).

     Section 4.5 Purchase Permitted By Applicable Law, Etc. On the Closing Date, such
Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, without recourse to provisions (such as Section
1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance

-3-

 

companies without restriction as to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation. If requested by such Purchaser,
such Purchaser shall have received from each Obligor an Officer’s Certificate certifying as to such
matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine
whether such purchase is so permitted.

     Section 4.6 Sale of Other Notes.  On the Closing Date, the Obligors shall sell to
each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it on the
Closing Date as specified in Schedule A.

     Section 4.7 Payment of Documentation Fee. Without limiting the provisions of Section 15.1,
the Obligors shall have paid on or before the Closing Date, a documentation fee in an amount not in
excess of $7,000 to the account of the Purchasers in the amounts and to the accounts set forth in
Schedule A with respect to such Purchaser.

     Section 4.8 Private Placement Number. A Private Placement Number issued by Standard
& Poor’s CUSIP Service Bureau (in cooperation with the SVO of the NAIC) shall have been obtained
for the Notes.

     Section 4.9 Changes in Corporate Structure.  No Obligor shall have changed its
jurisdiction of organization or been a party to any merger or consolidation or shall have succeeded
to all or any substantial part of the liabilities of any other entity, at any time following the
date of the most recent financial statements referred to in Schedule 5.5.

     Section 4.10 Funding Instructions. At least three Business Days prior to the Closing
Date, each Purchaser shall have received written instructions signed by a Responsible Officer of
the Company on letterhead of the Company directing the manner of the payment of funds and setting
forth (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number, (c)
the account name and number into which the purchase price for the Notes is to be deposited and (d)
the name and telephone number of the account representative responsible for verifying receipt of
such funds.

     Section 4.11 Proceedings and Documents. All corporate and other organizational
proceedings in connection with the transactions contemplated by this Agreement and all documents
and instruments incident to such transactions shall be satisfactory to such Purchaser and special
counsel to the Purchasers, if any, and such Purchaser and special counsel to the Purchasers, if
any, shall have received all such counterpart originals or certified or other copies of such
documents as such Purchaser or such special counsel may reasonably request.

SECTION 5. Representations and Warranties of the Obligors.

     The Obligors, jointly and severally, represent and warrant to each Purchaser that:

     Section 5.1 Organization; Power and Authority. Each Obligor is a corporation, limited
liability company or limited partnership, as applicable, duly organized, validly existing

-4-

 

and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation, foreign limited liability company or foreign limited partnership, as
applicable, and is in good standing in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be so qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. Each Obligor has the corporate or other organizational power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof.

     Section 5.2 Authorization, Etc. This Agreement and the Notes have been duly
authorized by all necessary corporate or other organizational action on the part of each Obligor,
and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of each Obligor enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

     Section 5.3 Disclosure. This Agreement, the documents, certificates or other
writings identified in Schedule 5.3 and the financial statements listed in Schedule 5.5, in each
case, delivered to the Purchasers prior to the date hereof (this Agreement and such documents,
certificates or other writings and such financial statements being referred to, collectively, as
the “Disclosure Documents"), taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein not misleading in
any material respect in light of the circumstances under which they were made. Except as disclosed
in the Disclosure Documents, since January 30, 2010, there has been no change in the financial
condition, operations, business or properties of the Obligors or any Restricted Subsidiary except
changes that individually or in the aggregate would not reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Obligors that would reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

     Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates. 

     (a) Schedule 5.4 contains (except as noted therein) complete and correct lists (1) of
each Obligor’s Restricted and Unrestricted Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by each
Obligor and each other Subsidiary, (2) of each Obligor’s Affiliates, other than Subsidiaries
and (3) of each Obligor’s directors and senior officers.

     (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by any Obligor and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are owned
by such Obligor or such Subsidiaries free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).

-5-

 

     (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal entity and is in
good standing in each jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own
or hold under lease the properties it purports to own or hold under lease and to transact
the business it transacts and proposes to transact.

     (d) No Subsidiary is a party to, or otherwise subject to, any legal, regulatory,
contractual or other restriction (other than this Agreement, the agreements listed on
Schedule 5.4 and customary limitations imposed by corporate or similar law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to any Obligor or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such Subsidiary.

     Section 5.5 Financial Statements; Material Liabilities. The Obligors have delivered
to each Purchaser copies of the consolidated financial statements of the Company and its
Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates specified in such Schedule
and the consolidated results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments). The Company and its Subsidiaries do not
have any Material liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

     Section 5.6 Compliance with Laws, Other Instruments, Etc. The execution, delivery
and performance by each Obligor of this Agreement and the Notes will not (a) contravene, result in
any breach of, or constitute a default under, or result in the creation of any Lien in respect of
any property of such Obligor or any of its Subsidiaries under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which such Obligor or any of its Subsidiaries is bound or by which such
Obligor or any of its Subsidiaries or any of their respective properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to such
Obligor or any of its Subsidiaries or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to such Obligor or any of its Subsidiaries.

     Section 5.7 Governmental Authorizations, Etc. Subject to compliance by the
Purchasers with the representations and warranties set forth in Section 6 and the procedures set
forth in Section 13, no consent, approval or authorization of, or registration, filing or
declaration

-6-

 

with, any Governmental Authority is required in connection with the execution, delivery
or performance by any Obligor of this Agreement or the Notes.

     Section 5.8 Litigation; Observance of Agreements, Statutes and Orders. 

     (a) There are no actions, suits, investigations or proceedings pending or, to the
knowledge of any Obligor, threatened against or affecting any Obligor or any Restricted
Subsidiary or any property of any Obligor or any Restricted Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, would reasonably be expected to have a Material Adverse
Effect.

     (b) Neither any Obligor nor any Restricted Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation (including, without
limitation, Environmental Laws or the USA Patriot Act) of any Governmental Authority, which
default or violation, individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect.

     Section 5.9 Taxes. The Obligors and their Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due
and payable on such returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, except for any taxes and assessments (a) the
amount of which is not, individually or in the aggregate, Material or (b) the amount, applicability
or validity of which is currently being contested in good faith by appropriate proceedings and with
respect to which an Obligor or a Subsidiary, as the case may be, has established adequate reserves
in accordance with GAAP. No Obligor knows of any basis for any other tax or assessment that would
reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on
the books of the Obligors and their Subsidiaries in respect of federal, state or other taxes for
all fiscal periods are adequate in accordance with GAAP. The federal income tax liabilities of the
Company and its Subsidiaries have been finally determined (whether by reason of completed audits or
the statute of limitations having run) for all fiscal years up to and including the fiscal year
ended February 2, 2008.

     Section 5.10 Title to Property; Leases. The Obligors and their Restricted
Subsidiaries have good title to their respective properties that, individually or in the aggregate,
are Material, including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by any Obligor or any Restricted
Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens prohibited by this Agreement. All leases that,
individually or in the aggregate, are Material are valid and subsisting and are in full force and effect in all
material respects.

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     Section 5.11 Licenses, Permits, Etc.

     (a) The Obligors and their Restricted Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, proprietary software, service
marks, trademarks, trade names and domain names or rights thereto, that, individually or in
the aggregate, are Material, without known conflict with the rights of others.

     (b) To the best knowledge of each Obligor, no product of any Obligor or any Restricted
Subsidiary infringes in any material respect any license, permit, franchise, authorization,
patent, copyright, proprietary software, service mark, trademark, trade name, domain name or
other right owned by any other Person the effect of which would reasonably be expected to
have a Material Adverse Effect.

     (c) To the best knowledge of each Obligor, there is no violation by any Person of any
right of any Obligor or any Restricted Subsidiary with respect to any patent, copyright,
proprietary software, service mark, trademark, trade name, domain name or other right owned
or used by any Obligor or any Restricted Subsidiary the effect of which would reasonably be
expected to have a Material Adverse Effect.

     Section 5.12 Compliance with ERISA. 

     (a) Each Obligor and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material Adverse Effect.
Neither any Obligor nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the incurrence of any such
liability by any Obligor or any ERISA Affiliate, or in the imposition of any Lien on any of
the rights, properties or assets of any Obligor or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section
401(a)(29) or 412 of the Code or Section 4068 of ERISA, other than such liabilities or Liens
as would not be, individually or in the aggregate, Material.

     (b) The present value of the aggregate benefit liabilities under each of the Plans
subject to Section 412 of the Code, determined as of the end of such Plan’s most recently
ended plan year on the basis of the actuarial assumptions specified for funding purposes in
such Plan’s most recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities. The term “benefit
liabilities” has the meaning specified in Section 4001 of ERISA and the terms “current
value” and “present value” have the meanings specified in Section 3 of ERISA.

     (c) The Obligors and their ERISA Affiliates have not incurred any withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under Section 4201 or

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4204 of ERISA in respect of Multiemployer Plans that, individually or in the aggregate, are
Material.

     (d) The expected post-retirement benefit obligation (determined as of the last day of
the Company’s most recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by Section 4980B of the Code) of the Obligors and their
Subsidiaries is not Material.

     (e) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of Section
406 of ERISA or in connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by the Obligors to each Purchaser in the
first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy
of such Purchaser’s representation in Section 6.3 as to the sources of the funds to be used
to pay the purchase price of the Notes to be purchased by such Purchaser.

     Section 5.13 Private Offering by the Obligors. No Obligor nor anyone acting on its
behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect thereof with, any Person
other than the Purchasers and not more than 10 other Institutional Investors of the type described
in clause (c) of the definition thereof, each of which has been offered the Notes in connection
with a private sale for investment. No Obligor nor anyone acting on its behalf has taken any
action that would subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act or to the registration requirements of any securities or blue sky
laws of any applicable jurisdiction.

     Section 5.14 Use of Proceeds; Margin Regulations. The Obligors will apply the
proceeds of the sale of the Notes to the prepayment of existing indebtedness and for other general
corporate purposes of the Obligors. No part of the proceeds from the sale of the Notes hereunder
will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221),
or for the purpose of buying or carrying or trading in any securities under such circumstances as
to involve the Obligors in a violation of Regulation X of said Board (12 CFR 224) or to involve any
broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 10% of the value of the consolidated total assets of any Obligor and its
Subsidiaries and no Obligor has any present intention that margin stock will constitute more than
10% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of
buying or carrying” shall have the meanings assigned to them in said Regulation U.

     Section 5.15 Existing Debt; Future Liens.

     (a) Except as described therein, Schedule 5.15 sets forth, as of the date hereof, (1) a
complete and correct list of all outstanding Debt having a principal balance in excess of
$1,000,000 of the Obligors and their Restricted Subsidiaries (including a

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description of the
obligors and obligees, principal amount outstanding and collateral therefor, if any, and
guaranty thereof, if any), since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of such Debt of
the Obligors or their Restricted Subsidiaries and (2) the aggregate principal amount of all
outstanding Debt which individually has an outstanding principal balance of $1,000,000 or
less, since which date there has been no Material change in the aggregate amount thereof.
Neither any Obligor nor any Restricted Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any Debt having a
principal balance in excess of $1,000,000 of any Obligor or any Restricted Subsidiary and no
event or condition exists with respect to any such Debt of any Obligor or any Restricted
Subsidiary that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Debt to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.

     (b) Except as disclosed in Schedule 5.15, neither any Obligor nor any Restricted
Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter acquired, to
be subject to a Lien not permitted by Section 10.4.

     (c) Neither any Obligor nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Debt having a principal balance in excess
of $1,000,000 of such Obligor or such Subsidiary, any agreement relating thereto or any
other agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the incurring of,
Debt of any Obligor, except as specifically indicated in Schedule 5.15.

     Section 5.16 Foreign Assets Control Regulations, Etc. 

     (a) Neither the sale of the Notes by the Obligors hereunder nor their use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating
thereto.

     (b) Neither any Obligor nor any Subsidiary (1) is a Person described or designated in
the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control or in Section 1 of the Anti-Terrorism Order or (2) to the best knowledge of the
Obligors, engages in any dealings or transactions with any such Person. Each Obligor and
its Subsidiaries are in compliance, in all material respects, with the USA Patriot Act.

     (c) No part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, by any Obligor or any Subsidiary for any payments to any government official
or employee, political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain

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or direct business
or obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming in all cases that such act applies to the
Obligors.

     Section 5.17 Status under Certain Statutes. Neither any Obligor nor any Restricted
Subsidiary is an “investment company” registered or required to be registered under the Investment
Company Act of 1940, as amended, or is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.

     Section 5.18 Environmental Matters.

     (a) Neither any Obligor nor any Restricted Subsidiary has knowledge of any liability or
has received any notice of any liability, and no proceeding has been instituted raising any
liability against any Obligor or Restricted Subsidiary or any of their respective real
properties now or formerly owned, leased or operated by any of them, or other assets,
alleging any damage to the environment or violation of any Environmental Laws, except, in
each case, such as would not reasonably be expected to result in a Material Adverse Effect.

     (b) Neither any Obligor nor any Restricted Subsidiary has knowledge of any facts which
would give rise to any liability, public or private, for violation of Environmental Laws or
damage to the environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as would not reasonably be expected to result in a
Material Adverse Effect.

     (c) Neither any Obligor nor any Restricted Subsidiary has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of them or has
disposed of any Hazardous Materials in each case in a manner contrary to any Environmental
Laws and in each case in any manner that would reasonably be expected to result in a
Material Adverse Effect.

     (d) To the best knowledge of the Obligors, all buildings on all real properties now
owned, leased or operated by any Obligor or any Restricted Subsidiary are in compliance with
applicable Environmental Laws, except where failure to comply would not reasonably be
expected to result in a Material Adverse Effect.

     Section 5.19 Employee Relations. Each Obligor and each of its Restricted Subsidiaries has a
stable work force in place and is not, as of the Closing Date, party to any collective bargaining
agreement nor has any labor union been recognized as the representative of its employees except as
set forth on Schedule 5.19. No Obligor knows of any pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving its employees
or those of its Restricted Subsidiaries.

     Section 5.20 Notes Rank Pari Passu. Subject to applicable set off rights of creditors’
generally, the Obligors have no reason to believe that the obligations of each Obligor under this

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Agreement and the Notes do not rank pari passu in right of payment with all other senior unsecured
Debt (actual or contingent) of such Obligor, including, without limitation, all senior unsecured
Debt of such Obligor described in Schedule 5.15.

     Section 5.21 Solvency of the Obligors. The Obligors, considered as a whole, are solvent and
have assets having a value both at fair valuation and at present fair salable value greater than
the amount required to pay their debts as they become due and greater than the amount that will be
required to pay their probable liability on existing debts as they become due and matured. The
Obligors, taken as a whole, do not intend to incur, or believe or should have believed that they
will incur, debts beyond their ability to pay such debts as they become due. The Obligors, taken
as a whole, will not be rendered insolvent by the execution, delivery and performance of their
obligations under this Agreement or the Notes. The Obligors, taken as a whole, do not intend to
and will not hinder, delay or defraud its creditors by or through the execution, delivery or
performance of their obligations under this Agreement or the Notes.

     Section 5.22 Consideration. Considered on a combined basis, there will be provided to the
Obligors a substantial economic benefit and adequate consideration for the issuance and sale of the
Notes and the execution and delivery of this Agreement by reason of, among other reasons, the
proceeds of the Notes being used in the manner set forth in Section 5.14 and therefore will enhance
the business and operating position of each Obligor.

SECTION 6. Representations of the Purchasers.

     Section 6.1 Purchase for Investment. Each Purchaser severally represents that it is
purchasing the Notes for its own account or for one or more separate accounts maintained by it or
for the account of one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of such Purchaser’s or such pension or trust fund’s property
shall at all times be within such Purchaser’s or such pension or trust fund’s control. Each
Purchaser understands that the Notes have not been registered under the Securities Act or any state
securities laws and may be resold only if registered pursuant to the provisions of the Securities
Act or any state securities laws or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required by law, and that
the Obligors are not required to register the Notes.

     Section 6.2 Accredited Investor. Each Purchaser severally represents that it is an
“accredited investor” (within the meaning of Rule 501(a) of Regulation D under the Securities Act)
acting for its own account (and not for the account of others) or as a fiduciary or agent for
others (which others are also “accredited investors”) and is a Qualified Institutional Buyer. Each
Purchaser further severally represents that such Purchaser has had the opportunity to ask questions
of the Obligors and has received answers concerning the terms and conditions of the sale of the
Notes.

     Section 6.3 Source of Funds. Each Purchaser severally represents that at least one of the
following statements is an accurate representation as to each source of funds (a “Source”) to be
used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser
hereunder:

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     (a) the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general
account contract(s) held by or on behalf of any employee benefit plan together with the
amount of the reserves and liabilities for the general account contract(s) held by or on
behalf of any other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the general account
do not exceed 10% of the total reserves and liabilities of the general account (exclusive of
separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed
with such Purchaser’s state of domicile; or

     (b) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any annuitant)) are
not affected in any manner by the investment performance of the separate account; or

     (c) the Source is either (1) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (2) a bank collective investment fund, within the meaning of PTE
91-38 and, except as disclosed by such Purchaser to the Obligors in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or

     (d) the Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s
assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM (applying the
definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in
any Obligor and (1) the identity of such QPAM and (2) the names of all employee benefit
plans whose assets are included in such investment fund have been disclosed to the Obligors
in writing pursuant to this clause (d); or

     (e) the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within
the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a Person controlling or controlled
by the INHAM (applying the definition of “control” in

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Section IV(d) of the INHAM Exemption)
owns a 5% or more interest in any Obligor and (1) the identity of such INHAM and (2) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Obligors in writing pursuant to this clause (e); or

     (f) the Source is a governmental plan; or

     (g) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Obligors in writing pursuant to this clause (g); or

     (h) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.

As used in this Section 6.3, the terms “employee benefit plan,” “governmental plan,” and “separate
account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 7. Information as to the Obligors.

     Section 7.1 Financial and Business Information. The Obligors shall deliver to each holder of
Notes that is an Institutional Investor:

     (a) Quarterly Statements — within 60 days after the end of each quarterly fiscal
period in each fiscal year of the Company (other than the last quarterly fiscal period of
each such fiscal year), copies of:

     (1) an unaudited consolidated balance sheet of the Company and its Subsidiaries
as at the end of such quarter, and

     (2) unaudited consolidated statements of income, retained earnings and cash
flows of the Company and its Subsidiaries, for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending with such
quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer of each Obligor as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that delivery within the
time period specified above of copies of the Company’s Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the SEC shall be deemed
to satisfy the requirements of this Section 7.1(a);

     (b) Annual Statements — within 105 days after the end of each fiscal year of the
Company, copies of:

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     (1) a consolidated balance sheet of the Company and its Subsidiaries, as at the
end of such year, and

     (2) consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries, for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion
thereon of independent certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their results of operations
and cash flows and have been prepared in conformity with GAAP, and that the examination of
such accountants in connection with such financial statements has been made in accordance
with the standards of the Public Company Accounting Oversight Board (United States), and
that such audit provides a reasonable basis for such opinion in the circumstances, provided
that delivery within the time period specified above of copies of the Company’s Annual
Report on Form 10-K for such fiscal year (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy
the requirements of this Section 7.1(b);

     (c) SEC and Other Reports — except for filings delivered pursuant to Sections 7.1(a)
and (b) above, promptly upon their becoming available one copy of (1) each financial
statement, notice or proxy statement sent by any Obligor or any Subsidiary to its principal
lending banks as a whole (excluding information or notices sent to such banks in the
ordinary course of administration of a bank facility, such as information relating to
pricing and borrowing availability) or to its public securities holders generally and (2)
each regular or periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments thereto filed by
any Obligor or any Subsidiary with the SEC and of all press releases and other statements
made available generally by any Obligor or any Subsidiary to the public concerning
developments that are Material;

     (d) Notice of Default or Event of Default — promptly, and in any event within 10 days
after a Responsible Officer of any Obligor becomes aware of (1) the existence of any Default
or Event of Default or that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in paragraph (f) of Section 11, a
written notice specifying the nature and period of existence thereof
and what action the Obligors are taking or propose to take with respect thereto or (2)
the occurrence of a Change in Control (under and as defined in the Bank Credit Agreement);

     (e) ERISA Matters — promptly, and in any event within 10 days after a Responsible
Officer of any Obligor becomes aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Obligors propose to take, or an ERISA
Affiliate proposes to take, with respect thereto:

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     (1) with respect to any Plan, any reportable event, as defined in Section
4043(c) of ERISA and the regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on the date thereof; or

     (2) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by any Obligor or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or

     (3) any event, transaction or condition that could result in the incurrence of
any liability by any Obligor or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the imposition of a penalty or excise tax under the provisions of the Code
relating to employee benefit plans, or the imposition of any Lien on any of the
rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title
I or IV of ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then existing, would
reasonably be expected to have a Material Adverse Effect;

     (f) Notices from Governmental Authority — promptly, and in any event within 30 days of
receipt thereof, copies of any notice to any Obligor or any Subsidiary from any federal or
state Governmental Authority relating to any order, ruling, statute or other law or
regulation specifically directed to an Obligor or a Subsidiary (as opposed to any entity
generally) that would reasonably be expected to have a Material Adverse Effect; and

     (g) Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition, assets or
properties of any Obligor or any Subsidiary or relating to the ability of the Obligors to
perform their obligations hereunder or under the Notes as from time to time may be
reasonably requested by any such holder of Notes or such information regarding the Obligors
required to satisfy the requirements of 17 C.F.R. §230.144A, as amended from time to time,
in connection with any contemplated transfer of the Notes pursuant to Rule 144A of the
Securities Act.

     Notwithstanding the foregoing, in the event that one or more Unrestricted Subsidiaries of the
Company shall either (i) own more than 10% of the consolidated total assets of the Company and its
Subsidiaries or (ii) account for more than 10% of the consolidated gross revenues of the Company
and its Subsidiaries, in each case determined in accordance with GAAP, then, within the respective
periods provided in Sections 7.1(a) and (b) above, the Obligors shall deliver to each holder of
Notes that is an Institutional Investor, unaudited financial statements of the character and for
the dates and periods as in said Sections 7.1(a) and (b) covering such group of Unrestricted
Subsidiaries (on a consolidated basis), together with a consolidating statement reflecting
eliminations or adjustments required in order to reconcile the financial statements of

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such group of Unrestricted Subsidiaries to the consolidated financial statements delivered
pursuant to Sections 7.1(a) and (b).

     Section 7.2 Officer’s Certificate. Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate signed by
a Senior Financial Officer of each Obligor setting forth:

     (a) Covenant Compliance — the information (including detailed calculations with
respect to Sections 10.1 through 10.3, inclusive) required in order to establish whether the
Obligors were in compliance with the requirements of Section 10.1 through Section 10.5,
inclusive, during the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under
the terms of such Sections, and the calculation of the amount, ratio or percentage then in
existence); and

     (b) Event of Default — a statement that such officer has reviewed the relevant terms
hereof and has made, or caused to be made, under his or her supervision, a review of the
transactions and conditions of the Obligors and their Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists, specifying the nature and period of existence thereof
and what action the Obligors shall have taken or propose to take with respect thereto.

     Section 7.3 Visitation. Each Obligor shall permit the representatives of each holder of Notes
that is an Institutional Investor:

     (a) No Default — if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to such Obligor, to visit the principal executive
office of such Obligor, to discuss the affairs, finances and accounts of such Obligor and
its Subsidiaries with such Obligor’s officers, and (with the consent of such Obligor, which
consent will not be unreasonably withheld) its independent public accountants, and (with the
consent of such Obligor, which consent will not be unreasonably withheld) to visit the other
offices and properties of such Obligor and each Restricted Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense of the Obligors, to visit and
inspect any of the offices or properties of such Obligor or any Restricted Subsidiary, to
examine all their respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers and independent public accountants (and by this
provision such Obligor authorizes said accountants to discuss the affairs, finances and
accounts of such Obligor and its Restricted Subsidiaries), all at such times and as often as
may be requested.

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SECTION 8. Payment of the Notes.

     Section 8.1 Required Prepayments. The Notes shall not be subject to any required prepayments
and the entire unpaid principal amount of the Notes shall become due and payable on November 23,
2020.

     Section 8.2 Optional Prepayments.

     (a) Optional Prepayments of Notes. During any period when no Default or Event of
Default exists or would be caused by an optional prepayment of Notes, the Obligors may, at
their option, upon notice as provided below, prepay at any time all, or from time to time
any part of, the Notes, in an amount not less than $1,000,000 in the case of a partial
prepayment (or such lesser amount as shall be required to effect a partial prepayment
resulting from a prepayment pursuant to Section 10.5), at 100% of the principal amount so
prepaid, plus accrued and unpaid interest, plus the Make-Whole Amount, if any, determined
for the prepayment date with respect to such principal amount.

     (b) Optional Prepayment following Default. During any period when a Default or Event
of Default exists or would be caused by an optional prepayment of Notes, the Obligors may,
at their option, upon notice as provided below, prepay at any time all, or from time to time
any part of, the Notes, in an amount not less than $1,000,000 in the case of a partial
prepayment (or such lesser amount as shall be required to effect a partial prepayment
resulting from a prepayment pursuant to Section 10.5), at 100% of the principal amount so
prepaid, plus accrued and unpaid interest, plus, the Make-Whole Amount, if any, in each
case, determined for the prepayment date with respect to such principal amount. In no event
shall the rights of the Company under this Section 8.2(b) extend the date payment is due in
respect of any Notes that have become due and payable pursuant to Section 12.1. Acceptance
of a prepayment of Notes pursuant to this Section 8.2(b) shall not constitute a waiver of
any Default or Event of Default.

     (c) Notice of Optional Prepayments. The Obligors will give each holder of Notes to be
prepaid pursuant to this Section 8.2 (with a copy to each other holder of Notes) written
notice of each optional prepayment under this Section 8.2 not less than 30 days and not more
than 60 days prior to the date fixed for such prepayment. Each such notice shall specify
such date (which shall be a Business Day), the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be accompanied by a
certificate signed by a Senior Financial Officer of each Obligor as to the estimated
Make-Whole Amount due in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of such computation. Two
Business Days prior to such prepayment, the Obligors shall deliver to each holder of Notes a
certificate signed by a Senior Financial Officer of each Obligor specifying the calculation
of each such Make-Whole Amount as of the specified prepayment date.

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     Section 8.3 Allocation of Partial Prepayments. In the case of any partial prepayment of the
Notes pursuant to the provisions of Section 8.2, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore called for
prepayment. Each purchase made pursuant to Section 8.5 shall be applied only to the Notes of the
holders who are participating in such purchase.

     Section 8.4 Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day), together with
interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Obligors shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Obligors and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

     Section 8.5 Purchase of Notes. The Obligors will not, and will not permit any Affiliate to,
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
except (a) upon the payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes or (b) pursuant to a written offer to purchase any outstanding Notes made
by one or more Obligors or an Affiliate pro rata to each holder of Notes at the time outstanding
upon the same terms and conditions. Any such offer shall provide each holder with sufficient
information to enable it to make an informed decision with respect to such offer and shall remain
open for at least 20 Business Days. If the holders of more than 50% of the outstanding principal
amount of the Notes for which an offer has been made pursuant to this Section 8.5 accept such
offer, the Obligors shall promptly notify the remaining holders of such fact and the expiration
date for the acceptance by such holders of Notes of such offer shall be extended by the number of
days necessary to give each such remaining holder at least 10 Business Days from its receipt of
such notice to accept such offer. The Obligors will promptly cancel all Notes acquired by it or
any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

     Section 8.6 Make-Whole Amount. The term “Make-Whole Amount” shall mean with respect to any
Note an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note, minus the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount, the following terms have the following meanings:

     “Called Principal” shall mean, with respect to the Called Principal of any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the context
requires.

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     “Discounted Value” shall mean, with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments from their respective
scheduled due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on such Note is payable) equal to the Reinvestment
Yield.

     “Reinvestment Yield” shall mean, with respect to the Called Principal of any Note,
0.50% plus the yield to maturity calculated by using (a) the yields reported, as of 10:00
a.m. (New York, New York time) on the second Business Day preceding the Settlement Date on
screen “PX-1” on the Bloomberg Financial Market Service (“Bloomberg”) (or such other
information service as may replace Bloomberg) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date or (b) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported as of the second
Business Day preceding the Settlement Date, in Federal Reserve
Statistical Release H. 15
(519) (or any comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called Principal as
of such Settlement Date. In either case, the yield will be determined, if necessary, by (1)
converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (2) interpolating linearly on a straight line basis between
(i) the actively traded U.S. Treasury security with the maturity closest to and greater than
the Remaining Average Life and (ii) the actively traded U.S. Treasury security with the
maturity closest to and less than the Remaining Average Life. The Reinvestment Yield shall
be rounded to the number of decimal places as appears in the interest rate of the Notes.

     “Remaining Average Life” shall mean, with respect to the Called Principal of any Note,
the number of years (calculated to the nearest one-twelfth year) obtained by dividing (a)
such Called Principal into (b) the sum of the products obtained by multiplying (1) the
principal component of each Remaining Scheduled Payment by (2) the number of years
(calculated to the nearest one-twelfth year) that will elapse between the Settlement Date
and the scheduled due date of such Remaining Scheduled Payment.

     “Remaining Scheduled Payments” shall mean, with respect to the Called Principal of any
Note, all payments of such Called Principal and interest thereon that would be due after the
Settlement Date if no payment of such Called Principal were made prior to its scheduled due
date, provided that if such Settlement Date is not a date on which interest payments are due
to be made under the terms of such Note, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued to such Settlement Date
and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.

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     “Settlement Date” shall mean, with respect to the Called Principal of any Note, the
date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.

SECTION 9. Affirmative Covenants.

     The Obligors, jointly and severally, covenant that so long as any of the Notes are
outstanding:

     Section 9.1 Compliance with Law. Without limiting Section 10.8, each Obligor will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot
Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 9.2 Insurance. Each Obligor will, and will cause each Restricted Subsidiary to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on such terms
and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities engaged in the same or
a similar business and similarly situated.

     Section 9.3 Maintenance of Properties. Each Obligor will, and will cause each Restricted
Subsidiary to, maintain and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent any Obligor or any Restricted Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is desirable in the
conduct of its business and such Obligor or such Restricted Subsidiary, as applicable, has
concluded that such discontinuance would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

     Section 9.4 Payment of Taxes and Claims. Each Obligor will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,
governmental charges or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes, assessments, governmental charges or levies have become due
and payable and before they have become delinquent and all claims for which sums have become due
and payable that have or might become a Lien on properties or assets of any Obligor or any
Subsidiary not permitted by Section 10.4, provided that neither any Obligor nor any Subsidiary need
pay any such tax, assessment, governmental charge, levy or claim if (a) the

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amount, applicability
or validity thereof is contested by such Obligor or such Subsidiary on a
timely basis in good faith and in appropriate proceedings, and such Obligor or such Subsidiary
has established adequate reserves therefor in accordance with GAAP on the books of such Obligor or
such Subsidiary or (b) the non-filing of all such tax returns or the nonpayment of all such taxes,
assessments, governmental charges, levies and claims, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.

     Section 9.5 Corporate Existence, Etc. Subject to Section 10.6, each Obligor will at all times
preserve and keep in full force and effect its corporate or other organizational existence.
Subject to Sections 10.5 and 10.6, the Obligors will at all times preserve and keep in full force
and effect the legal existence of each of the Restricted Subsidiaries (unless merged into the
Company or another Obligor) and all rights and franchises of each Obligor and their Restricted
Subsidiaries unless, in the good faith judgment of the Obligors, the termination of or failure to
preserve and keep in full force and effect such legal existence, right or franchise would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 9.6 Designation of Subsidiaries. The Obligors may from time to time cause any Obligor
(other than the Company) or any Restricted Subsidiary to be designated as an Unrestricted
Subsidiary or any Unrestricted Subsidiary to be designated as a Restricted Subsidiary; provided,
however, that at the time of such designation and immediately after giving effect thereto, (a) no
Default or Event of Default would exist under the terms of this Agreement and (b) the Obligors and
their Subsidiaries or Restricted Subsidiaries, as the case may be, would be in compliance with all
of the covenants set forth in this Section 9 and Section 10 if tested on the date of such action
and provided, further, that once a Subsidiary has been designated an Unrestricted Subsidiary or a
Restricted Subsidiary pursuant to this Section 9.6, it shall not thereafter be redesignated as a
Restricted Subsidiary or an Unrestricted Subsidiary on more than one occasion. Within 10 days
following any designation described above, the Obligors will deliver to each holder of Notes a
notice of such designation accompanied by a certificate signed by a Senior Financial Officer of
each Obligor certifying compliance with all requirements of this Section 9.6 and setting forth all
information required in order to establish such compliance.

     Section 9.7 Notes to Rank Pari Passu. Other than on account of actions, if any, taken by any
holder or holders of Notes, each Obligor shall cause the Notes and all other obligations of such
Obligor under this Agreement at all times to be direct and senior unsecured obligations of such
Obligor ranking pari passu as against the assets of such Obligor with all other present and future
unsecured Debt (actual or contingent) of such Obligor which is not expressed to be subordinate or
junior in rank to any other unsecured Debt of such Obligor.

     Section 9.8 Books and Records. Each Obligor will, and will cause each Restricted Subsidiary
to, maintain proper books of record and account in conformity with GAAP and all applicable
requirements of any Governmental Authority having legal or regulatory jurisdiction over such
Obligor or such Restricted Subsidiary, as the case may be.

     Section 9.9 Additional Obligors; Release of Obligors.

     (a) The Obligors will cause any Subsidiary which becomes a co-obligor or guarantor in
respect of Debt under the Bank Credit Agreement, the 2005 Note Agreement

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or the 2007 Note Agreement to become a party to this Agreement and deliver to each of
the holders of the Notes (concurrently with becoming a co-obligor or guarantor in respect of
the Bank Credit Agreement, the 2005 Note Agreement or the 2007 Note Agreement, as
applicable) the following items:

     (1) a joinder to this Agreement in the form attached hereto as Exhibit 2
pursuant to which such Subsidiary becomes an Obligor hereunder and under the Notes
(the “Joinder”);

     (2) a certificate signed by a Responsible Officer of such Subsidiary making
representations and warranties to the effect of those contained in Section 5 (other
than those contained in (i) Sections 5.3, 5.5, 5.13 and 5.14 and (ii) any other
section so long as such Subsidiary shall have set forth in such certificate the
basis for not making such representation and warranty), with respect to such
Subsidiary, this Agreement and the Notes, as applicable; provided that in the event
such Subsidiary is not able to make the representations and warranties contained in
Section 5.6 or Section 5.7, the Obligors shall give written notice thereof to each
holder of Notes at least 10 Business Days prior to the execution and delivery of the
Joinder; and

     (3) an opinion of counsel (who may be in-house counsel for the Obligors)
addressed to each of the holders of Notes satisfactory to the Required Holders, to
the effect that the Joinder entered into by such Subsidiary has been duly
authorized, executed and delivered and that this Agreement and the Notes constitute
the legal, valid and binding contracts and agreements of such Subsidiary enforceable
against such Subsidiary in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting the enforcement of creditors’ rights generally and by general
equitable principles.

     (b) If at any time, pursuant to the terms and conditions of the Bank Credit Agreement,
the 2005 Note Agreement and the 2007 Note Agreement, any Obligor (other than the Company) is
no longer obligated as a co-obligor and/or a guarantor under the Bank Credit Agreement, the
2005 Note Agreement and the 2007 Note Agreement, and the Company shall have delivered to
each holder of Notes an Officer’s Certificate from the Company certifying that (1) such
Obligor is not obligated as a co-obligor and/or a guarantor under the Bank Credit Agreement,
the 2005 Note Agreement and the 2007 Note Agreement and (2) immediately preceding the
release of such Obligor from this Agreement and the Notes and after giving effect thereto,
no Default or Event of Default shall have existed or would exist, then, upon receipt by the
holders of Notes of such Officer’s Certificate, such Obligor shall be released and deemed
discharged from its obligations under this Agreement and the Notes.

     (c) So long as no Default or Event of Default shall then exist, any Obligor (other than
the Company) may be released and discharged from its obligations under this Agreement and
the Notes (1) with the written consent of the Required Holders or (2)
upon any Obligor being designated as an Unrestricted Subsidiary in accordance with

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Section 9.6; provided that, in connection with clause (2) above, such Obligor is not then
presently, or is concurrently being released as, a co-obligor and/or a guarantor under the
Bank Credit Agreement, the 2005 Note Agreement or the 2007 Note Agreement.

     (d) The Company agrees that it will not, nor will it permit any Obligor, Subsidiary or
Affiliate to, directly or indirectly, pay or cause to be paid any consideration or
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or
grant any security, to any creditor of any Obligor or of any Affiliate as consideration for
or as an inducement to the entering into by any such creditor of any release or discharge of
any Obligor with respect to any liability of such Obligor as an obligor and/or a guarantor
under or in respect of Debt outstanding under the Bank Credit Agreement, the 2005 Note
Agreement or the 2007 Note Agreement, unless such consideration or remuneration is
concurrently paid, or security is concurrently granted, on the same terms, ratably to each
of the holders of the Notes.

SECTION 10. Negative Covenants.

     The Obligors, jointly and severally, covenant that so long as any of the Notes are
outstanding:

     Section 10.1 Consolidated Debt to Consolidated Tangible Capitalization. The Obligors will
not, as of the end of any fiscal quarter, permit (a) Consolidated Debt on such date to exceed more
than (b) 60% of Consolidated Tangible Capitalization on such date.

     Section 10.2 Fixed Charge Coverage Ratio. The Obligors will not, as of the end of any fiscal
quarter, permit the Fixed Charge Coverage Ratio to be less than 1.75 to 1.00.

     Section 10.3 Priority Debt. The Obligors will not, as of the end of any fiscal quarter,
permit the aggregate amount of all Priority Debt to exceed an amount equal to 20% of Net Worth
determined as of the end of the then most recently ended fiscal quarter of the Company; provided,
however that Liens permitted by this Section 10.3 may not secure obligations of the Company or any
Subsidiary under any principal credit facility, including, without limitation, the Bank Credit
Agreement, unless and until provision is made whereby the Notes shall be concurrently secured by
such Lien equally and ratably with such other credit facility pursuant to an agreement or
agreements in form and substance reasonably acceptable to the Required Holders.

     Section 10.4 Limitation on Liens. The Obligors will not, and will not permit any Restricted
Subsidiary to, directly or indirectly create, incur, assume or permit to exist (upon the happening
of a contingency or otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts receivable) of any
such Obligor or any such Restricted Subsidiary, whether now owned or held or hereafter acquired, or
any income or profits therefrom, or assign or otherwise convey any right to receive income or
profits (unless it makes, or causes to be made, effective provision whereby the Notes will be
equally and ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required Holders and,
in any such case, the Notes shall have the benefit, to the fullest extent that, and with

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such priority as, the holders of the Notes may be entitled under applicable law, of an equitable Lien on
such property), except:

     (a) Liens for taxes, assessments or other governmental charges that are not yet due and
payable or the payment of which is not at the time required by Section 9.4;

     (b) any attachment or judgment Lien, unless the judgment it secures shall constitute an
Event of Default under Section 11(i);

     (c) Liens incidental to the conduct of business or the ownership of properties and
assets (including landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s and other
similar Liens for sums (1) which are not overdue for a period of more than 30 days or (2)
are being contested on a timely basis in good faith and by appropriate proceedings) and
Liens to secure the performance of bids, tenders, leases or trade contracts or to secure
statutory obligations (including obligations under workers compensation, unemployment
insurance and other social security legislation), surety or appeal bonds or other Liens
incurred in the ordinary course of business and not in connection with the borrowing of
money;

     (d) leases or subleases granted to others, easements, rights-of-way, restrictions and
other similar charges or encumbrances, in each case incidental to the ownership of property
or assets or the ordinary conduct of the business of an Obligor or any Restricted
Subsidiary, and Liens incidental to minor survey exceptions and the like, provided that such
Liens do not, in the aggregate, materially detract from the value of such property;

     (e) Liens securing Debt of a Restricted Subsidiary to an Obligor or to another
Restricted Subsidiary or of an Obligor to another Obligor;

     (f) Liens existing on the Closing Date and reflected in Schedule 10.4;

     (g) Liens incurred after the Closing Date given to secure the payment of the purchase
price incurred in connection with the acquisition, construction or improvement of property
(other than accounts receivable or inventory) useful and intended to be used in carrying on
the business of an Obligor or a Restricted Subsidiary, including Liens existing on such
property at the time of acquisition or construction thereof or improvement thereon or Liens
incurred within 365 days of such acquisition or completion of such construction or
improvement; provided that (1) the Lien shall attach solely to the property acquired,
purchased, constructed or improved, (2) at the time of acquisition, construction or
improvement of such property (or, in the case of any Lien incurred within 365 days of such
acquisition or completion of such construction or improvement, at the time of the incurrence
of the Debt secured by such Lien), the aggregate amount remaining unpaid on all Debt secured
by Liens on such property, whether or not assumed by an Obligor or a Restricted Subsidiary,
shall not exceed the lesser of (i) the cost of such acquisition, construction or improvement
or (ii) the Fair Market Value at the time such property is
acquired or constructed or improvement of such property is completed, as the case may
be, (as determined in good faith by one or

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more officers of such Obligor or such Restricted
Subsidiary to whom authority to enter into the transaction has been delegated by the board
of directors of such Obligor or such Restricted Subsidiary), (3) the aggregate principal
amount of all Debt secured by such Liens would be permitted by the limitation set forth in
Section 10.1 if tested on the date of such action and not as of the end of the immediately
preceding fiscal quarter and (4) at the time of such incurrence and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing;

     (h) any Lien existing on property of a Person immediately prior to its being
consolidated with or merged into an Obligor or a Restricted Subsidiary or its becoming a
Subsidiary, or any Lien existing on any property acquired by any Obligor or any Restricted
Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby
shall have been assumed); provided that (1) no such Lien shall have been created or assumed
in contemplation of such consolidation or merger or such Person’s becoming a Subsidiary or
such acquisition of property, (2) each such Lien shall extend solely to the item or items of
property so acquired and, if required by the terms of the instrument originally creating
such Lien, other property which is an improvement to or is acquired for specific use in
connection with such acquired property, (3) the aggregate principal amount of all Debt
secured by such Liens would be permitted by the limitation set forth in Section 10.1 if
tested on the date such property is acquired and not as of the end of the immediately
preceding fiscal quarter and (4) at the time of such incurrence and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing;

     (i) any extensions, renewals or replacements of any Lien permitted by the preceding
paragraphs (f), (g) and (h) of this Section 10.4; provided that (1) no additional property
shall be encumbered by such Liens, (2) the unpaid principal amount of the Debt or other
obligations secured thereby shall not be increased; and

     (j) other Liens not otherwise permitted by paragraphs (a) through (i), inclusive, of
this Section 10.4 securing Debt; provided that (1) the aggregate principal amount of all
Debt secured by such Liens shall be permitted by the limitations set forth in Sections 10.1
and 10.3 if tested on the date such Lien is incurred and not as of the end of the
immediately preceding fiscal quarter and (2) at the time of such incurrence and after giving
effect thereto, no Default or Event of Default shall have occurred or be continuing.

     Section 10.5 Sales of Assets. The Obligors will not, and will not permit any Restricted
Subsidiary to, sell, lease or otherwise dispose of any substantial part (as defined below) of the
assets of the Obligors and the Restricted Subsidiaries; provided, however, that any Obligor or any
Restricted Subsidiary may sell, lease or otherwise dispose of assets constituting a substantial
part of the assets of the Obligors and the Restricted Subsidiaries if such assets are
sold for Fair Market Value and, at such time and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing and an amount equal to the net proceeds received
from such sale, lease or other disposition (but only with respect to that portion of such assets
that exceeds the
definition of “substantial part” set forth below) shall be used within 365 days of such sale,
lease or disposition, in any combination:

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     (a) to acquire productive assets used or useful in carrying on the business of the
Obligors and the Restricted Subsidiaries and having a Fair Market Value at least equal to
the Fair Market Value of such assets sold, leased or otherwise disposed of; and/or

     (b) to prepay or retire Senior Debt of an Obligor and/or a Restricted Subsidiary,
provided that, to the extent any such proceeds are used to prepay the outstanding principal
amount of the Notes, such prepayment shall be made in accordance with the terms of Section
8.2.

     As used in this Section 10.5, a sale, lease or other disposition of assets shall be deemed to
be a “substantial part” of the assets of the Obligors and the Restricted Subsidiaries if the book
value of such assets, when added to the book value of all other assets sold, leased or otherwise
disposed of by the Obligors and the Restricted Subsidiaries during the period of 12 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 10% of the book value
of Consolidated Total Assets, determined as of the end of the fiscal quarter immediately preceding
such sale, lease or other disposition; provided that there shall be excluded from any determination
of a “substantial part” (1) any sale, lease or other disposition of assets in the ordinary course
of business of the Obligors and the Restricted Subsidiaries, (2) any sale, lease or other
disposition of assets from any Obligor to another Obligor or to any Wholly-Owned Restricted
Subsidiary or from any Restricted Subsidiary to an Obligor or a Wholly-Owned Restricted Subsidiary
and (3) any sale of property acquired or constructed by any Obligor or any Restricted Subsidiary
after the Closing Date to any Person within 365 days following the acquisition or completion of
construction of such property by any Obligor or any Restricted Subsidiary if an Obligor or a
Restricted Subsidiary shall concurrently with such sale, lease such property, as lessee.

     Section 10.6 Merger and Consolidation. The Obligors will not, and will not permit any
Restricted Subsidiary to, consolidate with or merge with any other Person or convey, transfer or
lease all or substantially all of its assets in a single transaction or series of transactions to
any Person; provided that:

     (a) any Restricted Subsidiary (that is not an Obligor) may (1) consolidate with or
merge with, or convey, transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to, (i) an Obligor or another Restricted Subsidiary so
long as in any merger or consolidation involving an Obligor, such Obligor shall be the
surviving or continuing corporation or (ii) any other Person so long as the surviving or
continuing entity is the Restricted Subsidiary or (2) convey, transfer or lease all of its
assets in compliance with the provisions of Section 10.5; and

     (b) any Obligor may consolidate or merge with, or convey, transfer or lease all or
substantially all of the assets of such Obligor in a single transaction or series of
transactions to, any Person so long as:

     (1) the successor formed by such consolidation or the survivor of such merger
or the Person that acquires by conveyance, transfer or lease all or substantially
all of the assets of such Obligor as an entirety, as the case may be

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(the “Successor
Corporation”), shall be a solvent entity organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia;

     (2) if the Successor Corporation is not an Obligor, (i) such Successor
Corporation shall have executed and delivered to each holder of Notes its assumption
of the due and punctual performance and observance of each covenant and condition of
this Agreement and the Notes (pursuant to such agreements and instruments as shall
be reasonably satisfactory to the Required Holders), (ii) the Successor Corporation
shall have caused to be delivered to each holder of Notes an opinion of independent
counsel reasonably acceptable to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in accordance
with their terms and comply with the terms hereof and (iii) each other Obligor shall
have reaffirmed in writing its obligations under this Agreement and the Notes; and

     (3) immediately after giving effect to such transaction no Default or Event of
Default would exist.

     Section 10.7 Transactions with Affiliates. The Obligors will not, and will not permit any
Restricted Subsidiary to, enter into directly or indirectly any Material transaction or Material
group of related transactions (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate (other than an
Obligor or another Restricted Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of such Obligor’s or such Restricted Subsidiary’s business and upon fair
and reasonable terms no less favorable to such Obligor or such Restricted Subsidiary than would be
obtainable in a comparable arm’s-length transaction with a Person not an Affiliate; provided that
the Obligors and any Restricted Subsidiary may enter into transactions with an Affiliate that is a
captive insurance company so long as such transaction or transactions are on fair and reasonable
terms no less favorable to such Obligor or such Restricted Subsidiary than would be obtainable in a
comparable arm’s-length transaction with a Person not an Affiliate.

     Section 10.8 Terrorism Sanctions Regulations. The Obligors will not, and will not permit any
of their Subsidiaries to, (a) become a Person described or designated in the Specially Designated
Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (b) to the best knowledge of the Obligors, engage in any dealings or
transactions with any such Person.

     Section 10.9 Line of Business. The Obligors will not, and will not permit any Restricted
Subsidiary to, engage in any business if, as a result, the general nature of the business in which
the Obligors and their Restricted Subsidiaries, taken as a whole, would then be engaged would be
substantially changed from the general nature of the business in which the Obligors and their
Restricted Subsidiaries are engaged on the date hereof and businesses reasonably related
thereto; provided that this provision shall not restrict the Obligors and their Restricted
Subsidiaries from owning all or a portion of the stock of an entity that is considered to be a
captive insurance company.

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SECTION 11. Events of Default.

     An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

     (a) the Obligors default in the payment of any principal of or Make-Whole Amount, if
any, on any Note when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or

     (b) the Obligors default in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or

     (c) the Obligors default in the performance of or compliance with any term contained in
Section 7.1(a), (b) or (d), Section 7.2 or Section 10.1 through 10.3, inclusive; or

     (d) the Obligors default in the performance of or compliance with any term contained
herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and
such default is not remedied within 30 days after the earlier of (1) the date a Responsible
Officer of any Obligor has or should have delivered to the holders of the Notes the notice
required in Section 7.1(d) or (2) the date any Obligor receives written notice of such
default from any holder of a Note (any such written notice to be identified as a “notice of
default” and to refer specifically to this paragraph (d) of Section 11); or

     (e) any representation or warranty made in writing by or on behalf of any Obligor or by
any officer of any Obligor in this Agreement or any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or

     (f) (1) any Obligor or any Restricted Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or make-whole
amount or interest (in the payment amount of at least $250,000) on any Debt other than the
Notes that is outstanding in an aggregate principal amount of at least $10,000,000 beyond
any period of grace provided with respect thereto, (2) any Obligor or any Restricted
Subsidiary is in default in the performance of or compliance with any term (other than
default in a payment term described in clause (1) of this paragraph (f) where such Debt has
not been declared due and payable) of any instrument, mortgage, indenture or other agreement
relating to any Debt other than the Notes in an aggregate principal amount of at least
$10,000,000 or any other condition exists, and as a consequence of such default or condition
such Debt has become, or has been declared, due and payable or one or more Persons has the
right to declare such Debt to be due and payable before its stated maturity or before its
regularly scheduled dates of payment or (3) as a consequence
of the occurrence or continuation of any event or condition (other than the passage of
time or the right of the holder of Debt to convert such Debt into equity interests), any
Obligor or any Restricted Subsidiary has become obligated to purchase or repay Debt other
than the Notes before its regular maturity or before its regularly scheduled dates of

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payment in an aggregate outstanding principal amount of at least $10,000,000 or one or more
Persons have the right to require any Obligor or any Restricted Subsidiary to purchase or
repay such Debt; or

     (g) any Obligor or any Material Subsidiary (1) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (2) files, or consents by answer
or otherwise to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction,
(3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of
a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (5) is adjudicated as insolvent or to
be liquidated or (6) takes corporate action for the purpose of any of the foregoing; or

     (h) a court or governmental authority of competent jurisdiction enters an order
appointing, without consent by any Obligor or any Material Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of any Obligor or any Material Subsidiary, or any
such petition shall be filed against any Obligor or any Material Subsidiary and such
petition shall not be dismissed or stayed within 90 days; or

     (i) a final judgment or judgments at any one time outstanding for the payment of money
aggregating in excess of $10,000,000 are rendered against one or more of any Obligor or any
Restricted Subsidiary and which judgments are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the
expiration of such stay; or

     (j) if (1) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under Section 412 of the Code, (2) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under Section 4042 of ERISA to terminate
or appoint a trustee to administer any Plan or the PBGC shall have notified any Obligor or
any ERISA Affiliate that a Plan may become a subject of any such proceedings, (3) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of Section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $10,000,000, (4) any Obligor or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, (5) any Obligor or any ERISA Affiliate withdraws from any
Multiemployer Plan or (6) any Obligor or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare

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benefits in a manner that could
increase the liability of any Obligor or any Subsidiary thereunder; and any such event or
events described in clauses (1) through (6) above, either individually or together with any
other such event or events, could reasonably be expected to have a Material Adverse Effect.

     As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit
plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 12.Remedies on Default, Etc. 

     Section 12.1 Acceleration.

     (a) If an Event of Default with respect to an Obligor described in paragraph (g) or (h)
of Section 11 (other than an Event of Default described in clause (1) of paragraph (g) or
described in clause (6) of paragraph (g) by virtue of the fact that such clause encompasses
clause (1) of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.

     (b) If any other Event of Default has occurred and is continuing, the Required Holders
may at any time at its or their option, by notice or notices to the Obligors, declare all
the Notes then outstanding to be immediately due and payable.

     (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has
occurred and is continuing with respect to any Notes, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or their option,
by notice or notices to the Obligors, declare all the Notes held by such holder or holders
to be immediately due and payable.

     Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes,
plus (1) all accrued and unpaid interest thereon (including, but not limited to, interest accrued
thereon at the Default Rate) and (2) the Make-Whole Amount, if any, determined in respect of such
principal amount (to the full extent permitted by applicable law) shall all be immediately due and
payable, in each and every case without presentment, demand, protest or further notice, all of
which are hereby waived. Each Obligor acknowledges, and the parties hereto agree, that each holder
of a Note has the right to maintain its investment in the Notes free from repayment by the Obligors
(except as herein specifically provided for) and that the provision for payment of the Make-Whole
Amount, if any, by the Obligors in the event that the Notes are prepaid or are accelerated as a
result of an Event of Default, is intended to provide compensation for the deprivation of such
right under such circumstances.

     Section 12.2 Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained

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herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or otherwise.

     Section 12.3 Rescission. At any time after any Notes have been declared due and payable
pursuant to paragraph (b) or (c) of Section 12.1, the Required Holders, by written notice to the
Obligors, may rescind and annul any such declaration and its consequences if (a) the Obligors have
paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and overdue Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b)
neither any Obligor nor any other Person shall have paid any amounts which have become due solely
by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 17 and (d) no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3
will extend to or affect any subsequent Event of Default or Default or impair any right consequent
thereon.

     Section 12.4 No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the obligations of the
Obligors under Section 15, the Obligors will pay to the holder of each Note on demand such further
amount as shall be sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation, reasonable
attorneys’ fees, expenses and disbursements.

SECTION 13. Registration; Exchange; Substitution of Notes.

     Section 13.1 Registration of Notes. The Obligors shall keep at the principal executive office
of the Company a register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the name and address of
each transferee of one or more Notes shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the
Obligors shall not be affected by any notice or knowledge to the contrary. The Obligors shall give
to any holder of a Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders of Notes (and
each holder of a Note shall be deemed to have consented to such release of information by the
Obligors).

     Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note to the Company at the
address and to the attention of the designated officer (all as specified in Section 18(3)), for
registration of transfer or exchange (and in the case of a surrender for registration of transfer
accompanied by a written instrument of transfer duly executed by the

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registered holder of such Note
or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address
and other information for notices of each transferee of such Note or part thereof), within 10
Business Days thereafter, the Obligors shall execute and deliver, at the Obligors’ expense (except
as provided below), one or more new Notes (as requested by the holder thereof) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Obligors may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than $100,000 and
integral multiples of $100,000 in excess thereof, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than, or other than a multiple of, $100,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.3, provided, that such transferee may (in reliance
upon information provided by the Obligors, which shall not be unreasonably withheld) make a
representation to the effect that the purchase by such transferee will not constitute a non-exempt
prohibited transaction under Section 406(a) of ERISA.

     Section 13.3 Replacement of Notes. Upon receipt by the Obligors at the address and to the
attention of the designated officer (all as specified in Section 18(3)) of evidence reasonably
satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified
Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to
be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

the Obligors at their own expense shall execute and deliver not more than five Business Days
following satisfaction of such conditions, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated
Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have
been paid thereon.

SECTION 14. Payments on Notes. 

     Section 14.1 Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New
York at the principal office of JPMorgan Chase Bank, N.A., in such jurisdiction. The Obligors may
at any time, by notice to each holder of a Note, change the place

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of payment of the Notes so long
as such place of payment shall be either the principal office of an Obligor in such jurisdiction or
the principal office of a bank or trust company in such jurisdiction.

     Section 14.2 Home Office Payment. So long as any Purchaser or its nominee shall be the holder
of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Obligors will pay all sums becoming due on such Note for principal, Make-Whole
Amount, if any, and interest by the method and at the address specified for such purpose for such
Purchaser on Schedule A hereto, or by such other method or at such other address as such Purchaser
shall have from time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon, except that upon
written request of the Obligors made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Obligors pursuant to Section 14.1. Prior to
any sale or other disposition of any Note held by any Purchaser or its nominee, such Purchaser
will, at its election, either endorse thereon the amount of principal paid thereon and the last
date to which interest has been paid thereon or surrender such Note to the Obligors in exchange for
a new Note or Notes pursuant to Section 13.2. The Obligors will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note.

SECTION 15. Expenses, Etc.

     Section 15.1 Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Obligors will pay all costs and expenses (including reasonable attorneys’ fees of
a special counsel, if any, and, if reasonably required by the Required Holders, local or other
counsel) incurred by each Purchaser and each other holder of a Note in connection with such
transactions and in connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes, or by reason of being a holder of any Note and (b) the
costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency
or bankruptcy of any Obligor or any Subsidiary or in connection with any work-out or restructuring
of the transactions contemplated hereby and by the Notes; provided that, in connection with the
closing on the Closing Date, the Obligors shall only be required to pay the documentation fee
referred to in Section 4.7. The Obligors will pay, and will save each Purchaser and each other
holder of a Note harmless from, all claims in respect of
any fees, costs or expenses if any, of brokers and finders (other than those, if any, retained
by a Purchaser or other holder in connection with its purchase of the Notes).

     Section 15.2 Survival. The obligations of the Obligors under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.

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SECTION 16. Survival of Representations and Warranties; Entire Agreement.

     All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note may be relied upon by any subsequent holder
of any Note, regardless of any investigation made at any time by or on behalf of any Purchaser or
any other holder of any Note. All statements contained in any certificate or other instrument
delivered by or on behalf of any Obligor pursuant to this Agreement shall be deemed representations
and warranties of such Obligor under this Agreement. Subject to the preceding sentence, this
Agreement and the Notes embody the entire agreement and understanding between the Purchasers and
the Obligors and supersede all prior agreements and understandings relating to the subject matter
hereof.

SECTION 17. Amendment and Waiver.

     Section 17.1 Requirements. This Agreement and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Obligors and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used in any such Section), will be effective as to any holder of Notes
unless consented to by such holder of Notes in writing and (b) no such amendment or waiver may,
without the written consent of all of the holders of Notes at the time outstanding affected
thereby, (1) subject to the provisions of Section 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or reduce the rate of interest or
change the time of payment or method of computation of interest (if such change results in a
decrease in the interest rate) or of the Make-Whole Amount, if any, on, the Notes, (2) change the
percentage of the principal amount of the Notes the holders of which are required to consent to any
such amendment or waiver or (3) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

     Section 17.2 Solicitation of Holders of Notes.

     (a) Solicitation. The Obligors will provide each holder of the Notes (irrespective of
the amount of Notes then owned by it) with sufficient information, sufficiently far in
advance of the date a decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or consent in respect of
any of the provisions hereof or of the Notes. The Obligors will deliver executed or true
and correct copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes
promptly following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.

     (b) Payment. The Obligors will not, directly or indirectly, pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or otherwise,
or grant any security or provide other credit support, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof unless such remuneration

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is concurrently paid, or security is concurrently granted or other credit support is
concurrently provided, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.

     (c) Consent in Contemplation of Transfer. Any consent made pursuant to this Section 17
by a holder of Notes that has transferred or has agreed to transfer its Notes to any Obligor
or any Affiliate and has provided or has agreed to provide such written consent as a
condition to such transfer shall be void and of no force or effect except solely as to such
holder, and any amendments effected or waivers granted or to be effected or granted that
would not have been or would not be so effected or granted but for such consent (and the
consents of all other holders of Notes that were acquired under the same or similar
conditions) shall be void and of no force or effect except solely as to such holder.

     Section 17.3 Binding Effect, Etc. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Obligors without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Obligors and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be amended or
supplemented.

     Section 17.4 Notes Held by the Obligors, Etc. Solely for the purpose of determining whether
the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by any Obligor or any of their Affiliates
shall be deemed not to be outstanding.

SECTION 18. Notices.

     All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid) or (b) by a recognized overnight delivery service
(charges prepaid). Any such notice must be sent:

     (1) if to a Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in Schedule A, or at such other address as
such Purchaser or its nominee shall have specified to the Obligors in writing
pursuant to this Section 18;

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     (2) if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Obligors in writing pursuant to this
Section 18; or

     (3) if to any Obligor, to such Obligor c/o the Company at the address set forth
at the beginning hereof to the attention of the Chief Financial Officer, with a copy
to the General Counsel, or at such other address as such Obligor shall have
specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19. Reproduction of Documents.

     This Agreement and all documents relating hereto, including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser
on the Closing Date (except the Notes themselves) and (c) financial statements, certificates and
other information previously or hereafter furnished to any holder of Notes, may be reproduced by
such holder by any photographic, photostatic, electronic, digital or other similar process and such
holder may destroy any original document so reproduced. Each Obligor agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such holder of Notes in the regular
course of business) and any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence. This Section 19 shall not prohibit any Obligor or any
other holder of Notes from contesting any such reproduction to the same extent that it could
contest the original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.

SECTION 20. Confidential Information.

     For the purposes of this Section 20, “Confidential Information” shall mean information
delivered to any Purchaser by or on behalf of any Obligor or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature
and that was clearly marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of such Obligor or such Subsidiary, provided that such
term does not include information that (a) was publicly known or otherwise known to such Purchaser
prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or
omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by any Obligor or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are
otherwise publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser in good faith to
protect confidential information of third parties delivered to such Purchaser; provided that such
Purchaser may deliver or disclose Confidential Information to (1) such Purchaser’s directors,
trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented

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by such Purchaser’s Notes), (2) such Purchaser’s financial advisors and other professional
advisors who agree to hold confidential the Confidential Information substantially in accordance
with the terms of this Section 20, (3) any other holder of any Note, (4) any Institutional Investor
to which such Purchaser sells or offers to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 20), (5) any Person from which such Purchaser offers
to purchase any security of any Obligor (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section 20), (6) any federal
or state regulatory authority having jurisdiction over such Purchaser, (7) the NAIC or the SVO or,
in each case, any similar organization or any nationally recognized rating agency that requires
access to information about such Purchaser’s investment portfolio or (8) any other Person to which
such delivery or disclosure may be necessary or appropriate (i) to effect compliance with any law,
rule, regulation or order applicable to such Purchaser, (ii) in response to any subpoena or other
legal process, (iii) in connection with any litigation to which such Purchaser is a party or
(iv) if an Event of Default has occurred and is continuing, to the extent such Purchaser may
reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement
or for the protection of the rights and remedies under such Purchaser’s Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.
On reasonable request by the Obligors in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or requested by such
holder (other than a holder that is a party to this Agreement or its nominee), such holder will
enter into an agreement with the Obligors embodying the provisions of this Section 20.

SECTION 21. Substitution of Purchaser.

     Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser
of the Notes that such Purchaser has agreed to purchase hereunder, by written notice to the
Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such
Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon
receipt of such notice, any reference to such Purchaser in this Agreement (other than in this
Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser. In the
event that such Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter
transfers to such original Purchaser all of the Notes then held by such Affiliate, upon receipt by
the Obligors of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this
Agreement (other than in this Section 21), shall no longer be deemed to refer to such Affiliate,
but shall refer to such original Purchaser and such original Purchaser shall again have all the
rights of an original holder of the Notes under this Agreement.

SECTION 22. Miscellaneous.

     Section 22.1 Successors and Assigns. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their

-38-

 

respective successors and assigns (including, without limitation, any subsequent holder of a
Note) whether so expressed or not.

     Section 22.2 Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice
of any optional prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount, if any, or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next succeeding Business
Day; provided that if the maturity date of any Note is a date other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next succeeding Business Day and
shall include the additional days elapsed in the computation of interest payable on such next
succeeding Business Day.

     Section 22.3 Accounting Terms. All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP.
Except as otherwise specifically provided herein, (a) all computations made pursuant to this
Agreement shall be made in accordance with GAAP and (b) all financial statements shall be prepared
in accordance with GAAP.

     Section 22.4 Joint and Several Liability of Obligors.

     (a) Each Obligor shall be liable for all amounts due to any holder of Notes under this
Agreement, regardless of which Obligor actually receives the proceeds of the Notes or the
amount of such proceeds received or the manner in which such holder accounts for such Notes
on its books and records. Each Obligor’s obligations with respect to the Notes shall be
primary obligations of such Obligor.

     (b) An Obligor’s obligations arising as a result of the joint and several liability of
the Obligors hereunder with respect to the Notes (as an obligor under the Notes and not as a
guarantor) shall, to the fullest extent permitted by law, be unconditional irrespective of
(1) the validity or enforceability, avoidance or subordination of the obligations hereunder
and under the Notes of any of the other Obligors or of any promissory note or other document
evidencing all or any part of the obligations of any of the other Obligors, (2) the absence
of any attempt to collect the obligations from any other Obligor, any other guarantor or any
other security therefor, or the absence of any other action to enforce the same, (3) the
waiver, consent, extension, forbearance or granting of any indulgence by any holder with
respect to any provision of any instrument evidencing the obligations of any of the other
Obligors, or any part thereof, or any other agreement now or hereafter executed by any of
the other Obligors and delivered to any holder, (4) the failure by any Holder to take any
steps to perfect and maintain any security interest in, or to preserve its rights to, any
security or collateral for the obligations of any of the other Obligors, (5) any holder’s
election, in any proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code, (6) any borrowing or grant of a security interest
by any of the other Obligors, as debtors in possession under Section 364 of the Bankruptcy
Code, (7) the disallowance of all or any portion of any holder’s claim(s) for the repayment of the

-39-

 

obligations hereunder and under the Notes of any of the other Obligors under Section 502 of the Bankruptcy Code or (8) any other circumstances
which might constitute a legal or equitable discharge or defense of a guarantor or of any of
the other Obligors. With respect to an Obligor’s obligations arising as a result of the
joint and several liability of the Obligors hereunder with respect to the Notes (as an
obligor under the Notes and not as a guarantor), each Obligor waives, until the obligations
hereunder and under the Notes shall have been paid in full and this Agreement shall have
been terminated, any right to enforce any right of subrogation or any remedy which any
holder now has or may hereafter have against any Obligor, any endorser or any guarantor of
all or any part of such obligations, and any benefit of, and any right to participate in,
any security or collateral given to any holder to secure payment of the obligations or any
other liability of any Obligor to any holder.

     (c) Upon any Event of Default, the holders may proceed directly and at once, without
notice, against any Obligor to collect and recover the full amount, or any portion of the
obligations owing hereunder and under the Notes, without first proceeding against any of the
other Obligors or any other Person, or against any security or collateral for such
obligations. Each Obligor consents and agrees that the holders of Notes shall not be under
any obligation to marshal any assets in favor of any Obligor or against or in payment of any
or all of the obligations hereunder and under the Notes.

     Section 22.5 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.6 Construction. Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

     For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof.

     Section 22.7 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.

     Section 22.8 Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would permit the application of
the laws of a jurisdiction other than such State.

-40-

 

     Section 22.9 Jurisdiction and Process; Waiver of Jury Trial.

     (a) Each Obligor irrevocably submits to the non-exclusive jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New York, over any
suit, action or proceeding arising out of or relating to this Agreement or the Notes. To
the fullest extent permitted by applicable law, each Obligor irrevocably waives and agrees
not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject
to the jurisdiction of any such court, any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

     (b) Each Obligor consents to process being served by or on behalf of any holder of
Notes in any suit, action or proceeding of the nature referred to in Section 22.9(a) by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, return receipt requested, to it at its address specified in
Section 18 or at such other address of which such holder shall then have been notified
pursuant to said Section. Each Obligor agrees that such service upon receipt (i) shall be
deemed in every respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and
held to be valid personal service upon and personal delivery to it. Notices hereunder shall
be conclusively presumed received as evidenced by a delivery receipt furnished by the United
States Postal Service or any reputable commercial delivery service.

     (c) Nothing in this Section 22.9 shall affect the right of any holder of a Note to
serve process in any manner permitted by law, or limit any right that the holders of any of
the Notes may have to bring proceedings against an Obligor in the courts of any appropriate
jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in
any other jurisdiction.

     (d) The parties hereto hereby waive trial by jury in any action brought on
or with respect to this Agreement, the Notes or any other document executed in connection
herewith or therewith.

* * * * *

-41-

 

     The execution hereof by the Purchasers shall constitute a contract among the Obligors and the
Purchasers for the uses and purposes hereinabove set forth.

	 	 	 	 	 
	 	Belk, Inc.

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Administration Company

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk International, Inc.

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Stores Services, Inc.

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk-Simpson Company, Greenville, South

Carolina

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 

-42-

 

	 	 	 	 	 

	 	 	 	 	 
	 	The Belk Center, Inc.

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Accounts Receivable, LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Stores of Virginia LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Gift Card Company LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Merchandising, LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Belk Texas Holdings LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 

-43-

 

	 	 	 	 	 
	 	Belk Department Stores LP

      By: Belk, Inc., its General Partner

 	 

	 	 	 	 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	 	Belk Ecommerce LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	 	Belk Stores of Mississippi LLC

 	 
	 	By  	/s/ Kevin Binkley
 	 
	 	 	Name:  	Kevin Binkley 	 
	 	 	Title:  	Treasurer 	 

-44-

 

	 	 	 	 	 

Accepted as of the date first written above.

	 	 	 	 	 
	 	THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

 	 
	 	By:  	/s/ Jay White
 	 
	 	 	Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	THE PRUDENTIAL LIFE INSURANCE

COMPANY, LTD.

 	 
	 	By:  	 Prudential Investment Management (Japan),
 	 
	 	 	Inc., as Investment Manager    	 

	 	 	 	 	 
	 	By:  	                                              Prudential Investment Management, Inc.,
 	 
	 	 	as Sub-Adviser 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                      /s/ Jay White
 	 
	 	 	Vice President 	 
	 	 	 	 
	 

-45-

 

INFORMATION
RELATING TO PURCHASERS

PURCHASER SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of Notes	 	Note
	 	 	 	 	to be Purchased	 	Denomination(s)
	 

	 	THE PRUDENTIAL INSURANCE COMPANY OF

AMERICA
	 	$	40.000.000.00	 	 	$	40,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	(1)

	 	All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Account Name: Prudential Managed Portfolio
Account No.: P86188 (please do not include
spaces) (in the case of payments on account of
the Note originally issued in the principal
amount of $40,000,000.00)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	JPMorgan Chase Bank 

New York, NY

ABA No.: 021-000-021	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Each such wire transfer shall set forth the name
of the Company, a reference to “5.70% Senior
Notes due November 23, 2020, PPN [_____]” and
the due date and application (as among
principal, interest and Make-Whole Amount) of
the payment being made.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(2)

	 	Address for all notices relating to payments:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	The Prudential Insurance Company of America	 	 	 	 	 	 	 	 
	 

	 	c/o Investment Operations Group	 	 	 	 	 	 	 	 
	 

	 	Gateway Center Two, 10th Floor	 	 	 	 	 	 	 	 
	 

	 	100 Mulberry Street	 	 	 	 	 	 	 	 
	 

	 	Newark, NJ 07102-4077	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Attention: Manager, Billings and Collections	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(3)

	 	Address for all other communications and notices:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	The Prudential Insurance Company of America	 	 	 	 	 	 	 	 
	 

	 	c/o Prudential Capital Group	 	 	 	 	 	 	 	 
	 

	 	1170 Peachtree Street	 	 	 	 	 	 	 	 
	 

	 	Suite 500	 	 	 	 	 	 	 	 
	 

	 	Atlanta, GA 30309	 	 	 	 	 	 	 	 

Schedule A

(to Note Purchase Agreement)

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of Notes	 	Note
	 	 	 	 	to be Purchased	 	Denomination(s)
	 

	 	Attention: Managing Director	 	 	 	 	 	 	 	 
	 

	 	cc: Vice President and Corporate Counsel	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(4)

	 	Recipient of telephonic prepayment notices:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Manager, Trade Management Group	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Telephone: (973) 367-3141	 	 	 	 	 	 	 	 
	 

	 	Facsimile: (888) 889-3832	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(5)

	 	Address for Delivery of Notes:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Send physical security by nationwide overnight

delivery service to:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Prudential Capital Group	 	 	 	 	 	 	 	 
	 

	 	1170 Peachtree Street	 	 	 	 	 	 	 	 
	 

	 	Suite 500	 	 	 	 	 	 	 	 
	 

	 	Atlanta, GA 30309	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Attention: Michael R. Fierro, Esq.	 	 	 	 	 	 	 	 
	 

	 	Telephone: (404) 870-3753	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(6)

	 	Tax Identification No.: 22-1211670	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Fee amount to account P86188	 	$	5,600	 	 	 	 	 

A-2

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of Notes	 	Note
	 	 	 	 	to be Purchased	 	Denomination(s)
	 

	 	THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.
	 	$	10,000,000.00	 	 	$	10,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	(1)

	 	All principal, interest and Make-Whole Amount payments on
account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	JPMorgan Chase Bank	 	 	 	 	 	 	 	 
	 

	 	New York, NY	 	 	 	 	 	 	 	 
	 

	 	ABA No.: 021-000-021	 	 	 	 	 	 	 	 
	 

	 	Account No.: P86291	 	 	 	 	 	 	 	 
	 

	 	Account Name: The Prudential Life Insurance Company, Ltd.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Each such wire transfer shall set forth the name of the
Company, a reference to “5.70% Senior Notes due November 23,
2020, PPN [___]” and the due date and application (as among
principal, interest and Make-Whole Amount) of the payment
being made.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(2)

	 	All payments, other than principal, interest or Make-Whole
Amount, on account of Notes held by such purchaser shall be
made by wire transfer of immediately available funds for
credit to:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	JPMorgan Chase Bank	 	 	 	 	 	 	 	 
	 

	 	New York, NY	 	 	 	 	 	 	 	 
	 

	 	ABA No. 021-000-021	 	 	 	 	 	 	 	 
	 

	 	Account No. 304199036	 	 	 	 	 	 	 	 
	 

	 	Account Name: Prudential International Insurance Service Co.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Each such wire transfer shall set forth the name of the
Company, a reference to “5.70% Senior Notes due November 23,
2020, PPN [_____]” and the due date and application (e.g.,
type of fee) of the payment being made.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(3)

	 	Address for all notices relating to payments:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	The Prudential Life Insurance Company, Ltd.	 	 	 	 	 	 	 	 
	 

	 	2-13-10, Nagatacho	 	 	 	 	 	 	 	 
	 

	 	Chiyoda-ku, Tokyo 100-0014, Japan	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Telephone: 81-3-5501-5190	 	 	 	 	 	 	 	 
	 

	 	Facsimile: 81-03-5501-5037	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of Notes	 	Note
	 	 	 	 	to be Purchased	 	Denomination(s)
	 

	 	E-mail:
osamu.egi@prudential.com	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Attention: Osamu Egi, Team Leader of Financial Reporting
Team	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(4)

	 	Address for all other communications and notices:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Prudential Private Placement Investors, L.P.	 	 	 	 	 	 	 	 
	 

	 	c/o Prudential Capital Group	 	 	 	 	 	 	 	 
	 

	 	1170 Peachtree Street, Suite 500	 	 	 	 	 	 	 	 
	 

	 	Atlanta, GA 30309	 	 	 	 	 	 	 	 
	 

	 	Attention: Managing Director	 	 	 	 	 	 	 	 
	 

	 	cc: Vice President and Corporate Counsel	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(5)

	 	Address for Delivery of Notes:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Send physical security by nationwide overnight delivery

service to:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Prudential Capital Group	 	 	 	 	 	 	 	 
	 

	 	1170 Peachtree Street, Suite 500	 	 	 	 	 	 	 	 
	 

	 	Atlanta, GA 30309	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Attention: Michael R. Fierro, Esq.	 	 	 	 	 	 	 	 
	 

	 	Telephone: (404) 870-3753	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(6)

	 	Tax Identification No.: 98-0433392	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Fee amount to account P86291	 	$	1,400	 	 	 	 	 

A-4 

 

Defined Terms

     As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

     “2005 Note Agreement” shall mean that certain Note Purchase Agreement, dated as of July 12,
2005, by and among the Company, Obligors and the purchasers party thereto, as the same may be
amended, restated, joined, supplemented or otherwise modified from time to time, and any renewals,
extensions or replacements thereof.

     “2007 Note Agreement” shall mean that certain Note Purchase Agreement, dated as of August 31,
2007, by and among the Company, Obligors and the purchasers party thereto, as the same may be
amended, restated, joined, supplemented or otherwise modified from time to time, and any renewals,
extensions or replacements thereof.

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

     “Affiliate” shall mean, at any time, and with respect to any Person, any other Person that at
such time directly or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person and, with respect to any Obligor, shall include
any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of
voting or equity interests of any Obligor or any Subsidiary or any Person of which the Obligors and
their Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more
of any class of voting or equity interests. As used in this definition, “Control” shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a
reference to an Affiliate of the Company.

     “Agreement” is defined in the first paragraph of this Agreement.

     “Anti-Terrorism Order” shall mean Executive Order No. 13,224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

     “Bank Credit Agreement” shall mean the Second Amended and Restated Credit Agreement dated as
of October 2, 2006 by and among the Company, the other Obligors, Wells

Schedule B

(to Note Purchase Agreement)

 

 

Fargo Bank, National Association, as administrative agent, and the other financial institutions party thereto, as the
same may be amended, restated, joined, supplemented or otherwise modified from time to time, and
any renewals, extensions or replacements thereof, which constitute the primary bank credit facility
of the Company and its Subsidiaries including, without limitation, the expected Third Amended and
Restated Credit Agreement to be entered into with Wells Fargo Bank, National Association.

     “Business Day” shall mean (a) for purposes of Section 8.6 only, any day other than a Saturday,
a Sunday or a day on which commercial banks in New York, New York are required or authorized to be
closed and (b) for the purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York, New York or Charlotte, North
Carolina are required or authorized to be closed.

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

     “Closing Date” is defined in Section 3.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the
rules and regulations promulgated thereunder from time to time.

     “Company” is defined in the first paragraph of this Agreement.

     “Confidential Information” is defined in Section 20.

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

     “Consolidated Adjusted Debt” shall mean, at any time, the sum of (a) Funded Debt at such time
and (b) the product of (1) Rental Expense for the period of four consecutive fiscal quarters ending
on or immediately prior to such date and (2) eight.

     “Consolidated Debt” shall mean, as of any date of determination, the total amount of all Debt
of the Obligors and the Restricted Subsidiaries determined on a Consolidated basis in accordance
with GAAP.

     “Consolidated Tangible Capitalization” shall mean, as of any date of determination, (i)
Consolidated Total Assets minus (ii) goodwill.

     “Consolidated Total Assets” shall mean, as of any date of determination, the total amount of
all assets of the Obligors and the Restricted Subsidiaries, determined on a Consolidated basis in
accordance with GAAP.

     “Debt” shall mean, with respect to the Obligors and the Restricted Subsidiaries at any date
and without duplication, the sum of the following calculated in accordance with GAAP: (a) all

B-2

 

Funded Debt, (b) all Additional Debt, (c) all obligations to pay the deferred purchase price of
property or services of any such Person (including, without limitation, all obligations under
non-competition agreements), except trade payables arising in the ordinary course of business not
more than 90 days past due, (d) all Debt of any other Person secured by a Lien on any asset of any
such Person, (e) all Guaranty Obligations of any such Person with respect to liabilities of a type
described in clauses (a) though (d) above, (f) all reimbursement obligations of any such Person in
respect of letters of credit and banker’s acceptances issued for the account of such Person, (g)
all obligations of any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities or partnership interests of such Person
and (h) all net payment obligations incurred by any such Person pursuant to Hedging Agreements.

     “Default” shall mean an event or condition described in Section 11 the occurrence or existence
of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

     “Default Rate” shall mean that rate of interest that is the greater of (a) 7.70% per annum or
(b) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. in New York,
New York as its “reference” rate.

     “Disclosure Documents” is defined in Section 5.3.

     “EBITDA” shall mean, for any period, the sum of the following determined on a Consolidated
basis, without duplication, for the Obligors and the Restricted Subsidiaries in accordance with
GAAP: (a) Net Income for such period plus (b) the sum of the following to the extent deducted in
determining Net Income for such period: (1) income and franchise taxes, (2) Interest Expense and
(3) amortization, depreciation and other non-cash charges, including those related to the closing
of store locations less (c) interest income and any extraordinary gains. For purposes of
calculating EBITDA for any period, if during such period any Obligor or any Restricted Subsidiary
shall have acquired or disposed of any Person or acquired or disposed of all or substantially all
of the operating assets of any Person, EBITDA for such period shall be calculated after giving pro
forma effect thereto as if such transaction occurred on the first day of such period.

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

     “Environmental Laws” shall mean any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time in effect.

B-3

 

     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that is
treated as a single employer together with any Obligor under Section 414 of the Code.

     “Event of Default” is defined in Section 11.

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

     “Fair Market Value” shall mean, at any time and with respect to any property, the sale value
of such property that would be realized in an arm’s-length sale at such time between an informed
and willing buyer and an informed and willing seller (neither being under a compulsion to buy or
sell), as reasonably determined in the good faith opinion of the applicable Obligor’s board of
directors.

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

     “Fixed Charges” shall mean, for any period and without duplication, the sum of the following
determined on a Consolidated basis in accordance with GAAP for the Obligors and the Restricted
Subsidiaries: (a) Interest Expense for such period and (b) Rental Expense for such period.

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

     “GAAP” shall mean those generally accepted accounting principles as in effect from time to
time in the United States of America; provided that, if the Obligors notify each holder of Notes
that the Obligors wish to amend any negative covenants (or any definition hereof) to eliminate the
effect of any change in generally accepted accounting principles occurring after the Closing Date
or in the application thereof on the operation of such covenant or definition (or if the Obligors
shall have received notice from the Required Holders requesting an amendment to any negative
covenant (or any definition hereof) for such purpose), then the Obligors’ compliance with such
covenant or the meaning of such definition shall be determined on the basis of generally accepted
accounting principles in effect immediately before the relevant change in generally accepted
accounting principles or in the application thereof became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Obligors and the Required
Holders. Notwithstanding the foregoing, for purposes of determining compliance with the financial
covenants contained in this Agreement, including without limitation the covenants contained in
Section 10, any election by the Company to measure any assets or liabilities using fair value (as
permitted by FASB ASC 825 or any similar accounting standard) shall be disregarded and such
determination shall be made as if such election had not been made.

     “Governmental Authority” shall mean

B-4

 

          (a) the government of

     (1) the United States of America or any state or other political subdivision
thereof, or

     (2) any jurisdiction in which any Obligor or any Restricted Subsidiary conducts
all or any part of its business, or which has jurisdiction over any properties of
any Obligor or any Restricted Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

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

     “Hazardous Material” shall mean any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law including, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.

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

     “holder” shall mean, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Obligors pursuant to Section 13.1.

     “INHAM Exemption” is defined in Section 6.3(e).

B-5

 

     “Institutional Investor” shall mean (a) any Purchaser, (b) any holder of a Note holding
(together with one or more of its affiliates) more than $2,000,000 of the aggregate principal
amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment company, any insurance company, any
broker or dealer, or any other similar financial institution or entity, regardless of legal form
and (d) any Related Fund of any holder of any Note.

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

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

     “Joinder” is defined in Section 9.9(a).

     “Lien” shall mean, with respect to any Person, any mortgage, leasehold mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale or other title
retention agreement (other than an operating lease) or Capital Lease, upon or with respect to any
property or asset of such Person (including, in the case of stock, shareholder agreements, voting
trust agreements and all similar arrangements).

     “Make-Whole Amount” is defined in Section 8.6.

     “Material” shall mean material in relation to the business, operations, affairs, financial
condition, assets or properties of the Obligors and the Restricted Subsidiaries, taken as a whole.

     “Material Adverse Effect” shall mean a material adverse effect on (a) the business,
operations, affairs, financial condition, assets or properties of the Obligors and the Restricted
Subsidiaries, taken as a whole, (b) the ability of the Obligors to perform their obligations under
this Agreement and the Notes or (c) the validity or enforceability of this Agreement or the Notes.

     “Material Subsidiary” shall mean, at any time, any Restricted Subsidiary of the Obligors
which, together with all other Restricted Subsidiaries of such Restricted Subsidiary, accounts for
more than (a) 5% of the Consolidated Total Assets or (b) 5% of consolidated gross revenue of the
Obligors and the Restricted Subsidiaries.

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

B-6

 

     “NAIC” shall mean the National Association of Insurance Commissioners or any successor
thereto.

     “NAIC Annual Statement” is defined in Section 6.3(a).

     “Net Income” shall mean, with respect to the Obligors and the Restricted Subsidiaries, for any
period, the net income (or loss) of the Obligors and the Restricted Subsidiaries for such period,
determined on a Consolidated basis in accordance with GAAP; provided that there shall be excluded
from Net Income (a) the net income (or loss) of any Person (other than a Restricted Subsidiary
which shall be subject to clause (c) below), in which any Obligor or any Restricted Subsidiary has
a joint interest with a third party, except to the extent such net income is actually paid to such
Obligor or such Restricted Subsidiary by dividend or other distribution during such period, (b) the
net income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of
such Person or is merged into or consolidated with such Person or any of its Restricted
Subsidiaries or that Person’s assets are acquired by such Person or any of its Restricted
Subsidiaries except to the extent included pursuant to the foregoing clause (a), and (c) the net
income (if positive) of any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary to any Obligor or any Restricted
Subsidiary of such net income (1) 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 Restricted Subsidiary or (2) would be subject to any taxes payable on
such dividends or distributions.

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

     “Notes” is defined in Section 1.

     “Obligor” or “Obligors” is defined in the first paragraph of this Agreement.

     “Officer’s Certificate” of any Person shall mean a certificate of a Senior Financial Officer
or of any other officer of such Person whose responsibilities extend to the subject matter of such
certificate.

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

     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA or
any successor thereto.

B-7

 

     “Person” shall mean an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or a government or agency or political subdivision
thereof.

     “Plan” shall mean an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is or,
within the preceding five years, has been established or maintained, or to which contributions are
or, within the preceding five years, have been made or required to be made, by any Obligor or any
ERISA Affiliate or with respect to which any Obligor or any ERISA Affiliate may have any liability.

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

     “Priority Debt” shall mean (without duplication), as of the date of any determination thereof,
the sum of (a) all unsecured Debt of Restricted Subsidiaries (that are not Obligors) but excluding
(1) unsecured Debt owing to any Obligor or any other Restricted Subsidiary and (2) Debt outstanding
at the time such Person became a Restricted Subsidiary (other than an Unrestricted Subsidiary which
is designated or redesignated as a Restricted Subsidiary pursuant to Section 9.6); provided that
such Debt shall have not been incurred in contemplation of such Person becoming a Restricted
Subsidiary and (b) all Debt of the Obligors and the Restricted Subsidiaries secured by Liens other
than Debt secured by Liens permitted by paragraphs (a) through (j), inclusive, of Section 10.4.

     “property” or “properties” shall mean, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.

     “PTE” is defined in Section 6.3(a).

     “Purchasers” is defined in the first paragraph of this Agreement.

     “QPAM Exemption” is defined in Section 6.3(d).

     “Qualified Institutional Buyer” shall mean any Person who is a qualified institutional buyer
within the meaning of such term as set forth in Rule 144(a)(1) under the Securities Act.

     “Related Fund” shall mean, with respect to any holder of any Note, any fund or entity that (a)
invests in securities or bank loans and (b) is advised or managed by such holder, the same
investment advisor as such holder or by an affiliate of such holder or such investment advisor.

     “Rental Expense” shall mean, with respect to the Obligors and the Restricted Subsidiaries for
any period, payments made during such period pursuant to all obligations of the Obligors and the
Restricted Subsidiaries under leases (other than Capital Leases) of real property or personal
property, whether now existing or hereafter entered into, excluding any amounts

B-8

 

required to be paid by the lessee (whether or not therein designated as rental or additional rental) (a) which are on
account of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges
or (b) which are based on profits, revenues or sales realized by the lessee from the leased
property or otherwise based on the performance of the lessee. For purposes of calculating Rental
Expense for any period, if during such period any Obligor or any Restricted Subsidiary shall have
acquired or disposed of any Person or acquired or disposed of all or substantially all of the
operating assets of any Person, Rental Expense for such period shall be calculated after giving pro
forma effect thereto as if such transaction occurred on the first day of such period.

     “Required Holders” shall mean, at any time, the holders of more than 50% in principal amount
of the Notes at the time outstanding (exclusive of Notes then owned by any Obligor or any of its
Affiliates and any Notes held by parties who are contractually required to abstain from voting with
respect to matters affecting the holders of the Notes).

     “Responsible Officer” shall mean, with respect to any Person, any Senior Financial Officer and
any other officer of such Person with responsibility for the administration of the relevant portion
of this Agreement.

     “Restricted Subsidiary” shall mean any Subsidiary in which (a) at least a majority of the
voting securities are owned by the Obligors and/or one or more Wholly-Owned Restricted Subsidiaries
and (b) the Obligors have not designated as an Unrestricted Subsidiary on the Closing Date or by
notice in writing given to the holders of Notes in accordance with the provisions of Section 9.6.

     “SEC” shall mean the Securities and Exchange Commission of the United States, or any successor
thereto.

     “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

     “Senior Debt” shall mean, as of the date of any determination thereof, all Consolidated Debt,
other than Subordinated Debt.

     “Senior Financial Officer” shall mean, with respect to any Person, the chief financial
officer, principal accounting officer, treasurer or controller of such Person.

     “Source” is defined in Section 6.3.

     “Subordinated Debt” shall mean all unsecured Debt of the Obligors which shall contain or have
applicable thereto subordination provisions providing for the subordination thereof to other Debt
of the Obligors (including, without limitation, the obligations of the Obligors under this
Agreement or the Notes).

     “Subsidiary” shall mean, as to any Person, any corporation, association or other business
entity in which such Person or one or more of its Subsidiaries or such Person and one or more of
its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons

B-9

 

performing similar functions) of such entity, and any partnership or joint venture if more than a
50% interest in the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and
does ordinarily take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of an Obligor.

     “Successor Corporation” is defined in Section 10.6(b)(1).

     “SVO” shall mean the Securities Valuation Office of the NAIC or any successor thereto.

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

     “Unrestricted Subsidiary” shall mean any Subsidiary so designated by the Obligors on the
Closing Date or by notice in writing given to the holders of Notes in accordance with the
provisions of Section 9.6.

     “U.S. Dollars” shall mean lawful money of the United States of America.

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

     “Wholly-Owned Restricted Subsidiary” shall mean, at any time, any Restricted Subsidiary 100%
of all of the equity interests (except directors’ qualifying shares) and voting interests of which
are owned by any one or more of the Company and the Company’s other Wholly-Owned Restricted
Subsidiaries at such time.

B-10

 

Disclosure Materials

[TO BE PROVIDED BY THE COMPANY]

Schedule 5.3

(to Note Purchase Agreement)

 

 

Subsidiaries of the Obligors, Ownership of Subsidiary
Stock, Affiliates

	 	 	 	 	 
	 	 	State of	 	 
	Subsidiary	 	Incorporation	 	Stockholder
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 

Schedule  5.4

(to Note Purchase Agreement)

 

 

Financial Statements

[TO BE PROVIDED BY THE COMPANY]

Schedule 5.5

(to Note Purchase Agreement)

 

 

Existing Debt; Future Liens

[TO BE PROVIDED BY THE COMPANY]

Schedule 5.15

(to Note Purchase Agreement)

 

 

Employee Relations

     [None.]

Schedule 5.19

(to Note Purchase Agreement)

 

 

Form of Note

Belk, Inc.

Belk Administration Company

Belk International, Inc.

Belk Stores Services, Inc.

Belk-Simpson Company, Greenville, South Carolina

The Belk Center, Inc.

Belk Accounts Receivable, LLC

Belk Stores of Virginia LLC

Belk Gift Card Company LLC

Belk Merchandising, LLC

Belk Texas Holdings LLC

Belk Department Stores LP

Belk Ecommerce LLC

Belk Stores of Mississippi LLC

5.70% Senior Note due November 23, 2020

	 	 	 

	No. R-___

	 	_________, 20__
	$__________

	 	PPN [__________]

     For Value Received, the undersigned, Belk, Inc., a Delaware corporation (the
“Company”), Belk Administration Company, a North Carolina corporation (“Administration”),
Belk International, Inc., a North Carolina corporation (“International”), Belk Stores
Services, Inc., a North Carolina corporation (“Stores Services”), Belk-Simpson Company,
Greenville, South Carolina, a South Carolina corporation (“Belk-Simpson”), The Belk
Center, Inc., a North Carolina corporation (“Belk Center”), Belk Accounts Receivable,
LLC, a North Carolina limited liability company (“Belk Accounts”), Belk Stores of Virginia
LLC, a North Carolina limited liability company (“Belk Virginia”), Belk Gift Card Company
LLC, a North Carolina limited liability company (“Belk Gift Card”), Belk Merchandising,
LLC, a North Carolina limited liability company (“Merchandising”), Belk Texas Holdings
LLC, a North Carolina limited liability company (“Belk Holdings”), Belk Department Stores
LP, a North Carolina limited partnership (“Belk Department Stores”), Belk Ecommerce
LLC, a North Carolina limited liability company (“Belk Ecommerce”), and Belk Stores of
Mississippi LLC, a Mississippi limited liability company (“Belk Mississippi”), (the Company,
Administration, International, Stores Services, Belk-Simpson, Belk Center, Belk Accounts, Belk
Virginia, Belk Gift Card, Merchandising, Belk Holdings, Belk Department Stores, Belk Ecommerce and
Belk Mississippi being sometimes hereinafter referred to individually as an “Obligor” and
collectively as the “Obligors”), hereby jointly and severally promise to pay to
_____________________ or registered assigns, the principal sum of ______________ Dollars
(or so much thereof as shall not have been prepaid) on November 23, 2020 with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate
of 5.70% per annum from the date hereof, payable semi-annually, on the 23rd day of each
of May and November in each year and at maturity,

Exhibit 1

(to Note Purchase Agreement)

 

 

commencing on May 23, 2011, until the principal hereof shall have become due and payable, and
(b) to the extent permitted by law, at a rate per annum equal to the Default Rate, on any overdue
payment of interest and, during the continuance of any Event of Default, on the unpaid balance
hereof and on any overdue payment of any Make-Whole Amount, payable semi-annually as aforesaid (or,
at the option of the registered holder hereof, on demand).

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of JPMorgan
Chase Bank, N.A., in New York, New York or at such other place as the Obligors shall have
designated by written notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

     This Note is one of the Senior Notes (herein called the “Notes”) issued pursuant to the Note
Purchase Agreement dated as of November 23, 2010 (as from time to time amended, supplemented or
modified, the “Note Purchase Agreement”), among the Obligors and the Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representations set forth in Section 6.3 of the Note Purchase
Agreement, provided, that such holder may (in reliance upon information provided by the Obligors,
which shall not be unreasonably withheld) make a representation to the effect that the purchase by
any holder of any Note will not constitute a non-exempt prohibited transaction under Section 406(a)
of ERISA. Unless otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Obligors may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Obligors will not be affected by any notice to the
contrary.

     This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.

     If an Event of Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.

E-1-2

 

	 	 	 	 	 
	 	Belk, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Administration Company

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk International, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Stores Services, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk-Simpson Company, Greenville, South

Carolina

 	 
	 	By  	 	 
	 	 	Name:	 	 
	 	 	Title:  	 	 
	 
	 	The Belk Center, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-1-3

 

	 	 	 	 	 

	 	 	 	 	 
	 	Belk Accounts Receivable, LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Stores of Virginia LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Gift Card Company LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Merchandising, LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Texas Holdings LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Department Stores LP

 	 

	 	 	 	 	 
	 	By:  	                                                     Belk, Inc., its General Partner
 	 
	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-1-4

 

	 	 	 	 	 
	 	Belk Ecommerce LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Stores of Mississippi LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-1-5

 

	 	 	 	 	 

Form of Joinder Agreement

     This Joinder Agreement dated as of ____________, ____, between and among Belk,
Inc., a Delaware corporation (the “Company”), Belk Administration Company, a North
Carolina corporation (“Administration”), Belk International, Inc., a North Carolina
corporation (“International”), Belk Stores Services, Inc., a North Carolina corporation
(“Stores Services”), Belk-Simpson Company, Greenville, South Carolina, a South Carolina
corporation (“Belk-Simpson”), The Belk Center, Inc., a North Carolina corporation (“Belk
Center”), Belk Accounts Receivable, LLC, a North Carolina limited liability company (“Belk
Accounts”), Belk Stores of Virginia LLC, a North Carolina limited liability company (“Belk
Virginia”), Belk Gift Card Company LLC, a North Carolina limited liability company (“Belk
Gift Card”), Belk Merchandising, LLC, a North Carolina limited liability company
(“Merchandising”), Belk Texas Holdings LLC, a North Carolina limited liability company
(“Belk Holdings”), Belk Department Stores LP, a North Carolina limited partnership (“Belk
Department Stores”), Belk Ecommerce LLC, a North Carolina limited liability company (“Belk
Ecommerce”), and Belk Stores of Mississippi LLC, a Mississippi limited liability company
(“Belk Mississippi”), (the Company, Administration, International, Stores Services, Belk-Simpson,
Belk Center, Belk Accounts, Belk Virginia, Belk Gift Card, Merchandising, Belk Holdings, Belk
Department Stores, Belk Ecommerce and Belk Mississippi being sometimes hereinafter referred to
individually as an “Original Obligor” and collectively as the “Original Obligors”),
_______________, a ____________ [corporation] (the “New Obligor”), and each of the holders of the
Notes (as defined in the Note Purchase Agreement referred to below) (the “Noteholders”), under that
certain Note Purchase Agreement, dated as of November 23, 2010, by and among the Original Obligors
and the Noteholders party thereto (the “Note Purchase Agreement”).

RECITALS:

     Whereas, the New Obligor has become obligated, directly or indirectly, in respect of
obligations existing under the Bank Credit Agreement, the 2005 Note Agreement or the 2007 Note
Agreement and is a part of an affiliated group of entities with the Original Obligors;

     Whereas, Section 9.9(a) of the Note Purchase Agreement requires that any Person which
becomes obligated, directly or indirectly, in respect of obligations existing under the Bank Credit
Agreement shall promptly execute a joinder agreement to the Note Purchase Agreement and the Notes
and join the Note Purchase Agreement and the Notes as an Obligor for all purposes thereunder;

     Whereas, the New Obligor wishes to become an Obligor under the Note Purchase
Agreement and the Notes and to become obligated to abide by all covenants and agreements of the
Obligors under the Note Purchase Agreement and the Notes; and

Exhibit 2

(to Note Purchase Agreement)

 

 

     Whereas, the New Obligor has determined that it is in the best interests of the
Obligors to comply with the provisions of the Note Purchase Agreement and for the New Obligor to
become an Obligor.

     Now, Therefore, for good and valuable consideration, receipt of which is hereby
acknowledged by the New Obligor, and in order to induce the Noteholders and any future holders of
Notes to continue the financial accommodations made to the Obligors under the Note Purchase
Agreement and the Notes, the parties hereto hereby agree as follows:

     1. Definitions. Terms not defined herein shall have the meaning assigned to them in the Note
Purchase Agreement.

     2. Representations. The Original Obligors and the New Obligor, jointly and severally,
represent and warrant to the Noteholders that:

     (a) The New Obligor meets the requirements of Section 9.9(a) of the Note Purchase
Agreement and all conditions to the execution and delivery of this Joinder Agreement
contained in Section 9.9(a) to the Note Purchase Agreement have been satisfied;

     (b) This Joinder Agreement has been duly authorized, executed and delivered by the New
Obligor and constitutes the legal, valid and binding contract and agreement of such New
Obligor enforceable in accordance with its terms, except as an enforcement of such terms may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and by general equitable principles; and

     (c) No Default or Event of Default exists or will result from the designation of the
New Obligor as an Obligor, nor would any such Default or Event of Default have resulted had
such designation been effective as of the most recently ended fiscal quarter of the
Obligors.

     3. Undertakings. The terms and provisions of the Note Purchase Agreement are hereby
incorporated into this Joinder Agreement by reference and made a part hereof as if set forth in
full herein. The New Obligor hereby agrees to each and every covenant, agreement, term and
provision of the Note Purchase Agreement and the Notes (including any amendments and supplements
thereto made after the date hereof in accordance with the terms of the Note Purchase Agreement).
The New Obligor hereby specifically agrees with the Noteholders as follows:

     (a) The New Obligor agrees to become, and by this Joinder Agreement has become, an
Obligor;

     (b) The New Obligor agrees to be bound by all the terms and provisions of the Note
Purchase Agreement and the Notes, including those covenants, agreements and restrictions
applicable to Obligors; and

E-2-2

 

     (c) The New Obligor agrees that it is liable, jointly and severally, with the other
Obligors for the payment when due of all obligations payable by the Obligors under the Note
Purchase Agreement and the Notes.

     The provisions of this Section 3 shall be effective from the date of this Joinder Agreement
until the date on which the Notes have been indefeasibly paid in full in cash.

     4. New Notes. Upon the request of the Required Holders, the Obligors shall execute and
deliver new Notes reflecting the addition of the New Obligor as an Obligor under the Notes.

     In Witness Whereof, the parties hereto have caused this Joinder Agreement to be duly
executed and delivered by their respective duly authorized officers, as of the date first above
written.

	 	 	 	 	 
	 	Very truly yours,

Belk, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Administration Company

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk International, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Stores Services, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-2-3

 

	 	 	 	 	 

	 	 	 	 	 
	 	Belk-Simpson Company, Greenville, South Carolina

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The Belk Center, Inc.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Accounts Receivable, LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Stores of Virginia LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Gift Card Company LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Merchandising, LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-2-4

 

	 	 	 	 	 
	 	Belk Texas Holdings LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Department Stores LP

 	 

	 	 	 	 	 
	 	By:  	                                                     Belk, Inc., its General Partner
 	 
	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	Belk Ecommerce LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Belk Stores of Mississippi LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[New Obligor]

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-2-5

 

	 	 	 	 	 

Form of Opinion of Assistant General Counsel

to the Obligors

     The closing opinion of [Luther T. Moore], Esq., Assistant General Counsel of the Obligors,
which is called for by Section 4.4(a) of the Note Purchase Agreement, shall be dated the Closing
Date and addressed to the Purchasers, shall be satisfactory in scope and form to each Purchaser and
shall be to the effect that:

[To Come].

     The opinion of [Luther T. Moore], Esq., shall cover such other matters relating to the sale of
the Notes as each Purchaser may reasonably request. With respect to matters of fact on which such
opinion is based, such counsel shall be entitled to rely on appropriate certificates of public
officials and other officers of the Obligors and their Subsidiaries and shall provide that (i)
subsequent holders of the Notes may rely upon such opinion and (ii) such opinion may be provided to
Governmental Authorities, including, without limitation, the National Association of Insurance
Commissioners.

Exhibit 4.4(a)

(to Note Purchase Agreement)

 

 

Form of Opinion of Special Counsel

to the Obligors

     The closing opinion of Moore Van Allen, PLLC, special counsel to the Obligors, which is called
for by Section 4.4(b) of the Note Purchase Agreement, shall be dated the Closing Date and addressed
to the Purchasers, shall be satisfactory in scope and form to each Purchaser and shall be to the
effect that:

[To Come].

     The opinion of Moore Van Allen, PLLC, shall cover such other matters relating to the sale of
the Notes as each Purchaser may reasonably request. With respect to matters of fact on which such
opinion is based, such counsel shall be entitled to rely on appropriate certificates of public
officials and other officers of the Obligors and their Subsidiaries and shall provide that (i)
subsequent holders of the Notes may rely upon such opinion and (ii) such opinion may be provided to
Governmental Authorities, including, without limitation, the National Association of Insurance
Commissioners.

Exhibit 4.4(b)

(to Note Purchase Agreement)exv10w1

Exhibit 10.1

SECURED PROMISSORY NOTE

					
	 	 	 	 	 
	$4,847,927.25
	 	Houston, Texas
	 	October 15, 2010
	Please note this amount
is not the total for 

sales order EQL1475.
It represents the 
amount
invoiced on
September 23, 2010	 	 	 	 

     FOR VALUE RECEIVED, the undersigned, MITCHAM INDUSTRIES, an entity organized
under the laws of Texas (hereinafter called “Maker”, whether one or more), jointly and
severally, promises to pay to the order of SERCEL, INC., an Oklahoma corporation
(hereinafter called “Payee”, which term shall herein in every instance refer to any owner
or holder of this Note), the sum of Four Million Eight Hundred Forty Seven Thousands Nine
Hundred Twenty Seven United States Dollars and Twenty Five United States Cents,
$4,847,927.25, together with interest on the principal hereof from time to time
outstanding from the date hereof until maturity at the per annum rate hereinafter stated,
said principal and interest being payable in lawful money of the United States of America
at the offices of 17200 Park Row, Houston, Harris County, Texas 77084, or at such other
place which Payee may hereafter designate in writing.

     The unpaid principal amount from time to time outstanding on this Note shall bear
interest during each day of the term of the loan evidenced hereby at a fixed per annum
rate of eight percent (8%) per annum. The interest rate applicable to the unpaid
principal amount from time to time outstanding on this Note, whether prior to or
following maturity, is referred to herein as the “Agreed Rate”. After maturity (whether
by acceleration in the event of default or otherwise), all amounts outstanding hereunder
shall bear interest at the Highest Lawful Rate (as such term is hereinafter defined).

     Interest on this Note shall be calculated on a per annum basis of 365 days;

     All sums paid hereon (whether regularly scheduled payment or prepayment) shall be
applied first to the satisfaction of accrued unpaid interest and the remainder, if any,
to the reduction of the principal balance hereof.

     This Note is due and payable as follows: a down payment of One Million Two Hundred
Ten Thousand Six Hundred Seventy Two United States Dollars and Twenty Five United States
Cents, $1,210,672.25 is due at time of signing this note. The remaining balance to be
paid in eighteen (18) monthly installments of principal and interest that is defined in
the Attached Payment Schedule, Appendix A, the first such installment being due and
payable on or before November 15, 2010, and continuing regularly thereafter on the 15th
day of each month thereafter through and including April 30, 2012, at which time the
entire remaining outstanding principal balance of this Note and all unpaid accrued
interest, if not sooner paid, shall be due and payable in full.

     Maker shall have the privilege to prepay this Note at any time, and from time to
time, in whole or in part, without penalty or fee. All such partial prepayments applied
against the principal under this Note shall be applied in the inverse order of maturity.
Any

SERCEL — MITCHAM INDUSTRIES

EQL1475

October 15, 2010

Page 1 of 6

 

prepayment of principal under this Note shall include accrued interest to the date of
prepayment on the principal amount being prepaid.

     In the case of an Event of Default (as defined below), then Payee shall have the option, to
the extent permitted by applicable law, to declare this Note due and payable (unless, as provided
below, an Event of Default occurs which causes this Note to be automatically due and payable, upon
which no declaration shall be required), whereupon the entire unpaid principal balance of this
Note and all accrued unpaid interest thereon shall thereupon at once mature and become due and
payable without presentment, demand, protest or notice of any kind (including, but not limited to,
notice of intention to accelerate or notice of acceleration), all of which are hereby expressly
waived by Maker.

     The occurrence of any one or more of the following events with regard to Maker shall
constitute an Event of Default hereunder:

	 	(A)	 	Maker shall fail to pay, for a period longer than three (3) days after when
due, any installment of principal or interest hereunder or under any other instrument
or agreement between Maker and Payee;
	 
	 	(B)	 	Maker shall fail to perform any of the obligations, covenants or agreements
legally imposed by the terms of this Note or any instrument securing its payment or
any of the obligations, covenants or agreements legally imposed by the terms of any
other instrument or agreement between Maker and Payee, including the Security
Agreement (as defined below), which is not cured within ten (10) days after Maker
receives written notice from Payee;
	 
	 	(C)	 	Maker shall breach any representation and warranty made under this Note or
under the Security Agreement (as defined below) ;
	 
	 	(D)	 	Maker shall be merged with any entity when Maker is not the surviving company
or all or part of its assets or businesses are transferred to any third party.
	 
	 	(E)	 	Maker shall admit its inability to pay its debts as they mature or shall make
any assignment for the benefit of itself or any of its creditors;
	 
	 	(E)	 	Maker or any guarantor hereof shall default in the payment of any other
indebtedness Maker or any guarantor hereof owes to Payee or default in the performance
of any obligation set forth in any instrument securing the payment of any other
indebtedness Maker or such guarantor owes to Payee;
	 
	 	(F)	 	A receiver or trustee shall be appointed for the Maker or for any substantial
part of its assets, or any proceedings shall be instituted for the dissolution or the
full or partial liquidation of the Maker and, except with respect to any such
appointments requested or instituted by Maker, such receiver or trustee shall not be
discharged within thirty (30) days of his appointment, and, except with respect to any
such proceedings instituted by Maker, such

SERCEL — MITCHAM INDUSTRIES

EQL1475

October 15, 2010

Page 2 of 6

 

	 	 	 	proceedings shall not be discharged within thirty (30) days of their
commencement, or Maker shall discontinue business or materially change the nature
of its business; or
	 
	 	(G)	 	A creditor of Maker shall file or commence any levy of attachment, execution
or other similar process against assets of Maker valued in excess of $25,000 which
potential loss is not covered by insurance or which proceeding is not being contested
in good faith by Maker, or obtain possession of any of the Collateral (as defined in
the Security Agreement) by any means, including (without implied limitation) levy,
distraint, replevin, or self-help.

     Following the occurrence of any Event of Default, the Payee at its option, may declare the
entire principal balance and accrued interest owing hereon at once and immediately due and payable
on demand and the entire unpaid principal amount owed hereunder, all interests accrued thereon and
all other obligations of the Maker shall automatically become due and payable without further
action of any kind. Failure to exercise this option shall not constitute a waiver of the right to
exercise the same in the event of a subsequent default. The occurrence of events mentioned in
points D to G inclusive shall cause this Note to be automatically accelerated and to be due and
payable in its entirety without any other declaration.

     It is the intention of the parties hereto to conform strictly to applicable usury laws as in
effect from time to time during the term of this Note. Accordingly, it is agreed that,
notwithstanding any provision of this Note to the contrary, if any transaction or transactions
contemplated hereby would be usurious under applicable law (including the laws of the United
States of America, or of any other jurisdiction whose laws may be mandatory), then, in that event,
notwithstanding anything to the contrary in this Note, or any agreement entered into in connection
with this Note, it is agreed as follows: (i) the provisions of this paragraph shall govern and
control; (ii) the aggregate of all interest under applicable law that is contracted for, charged
or received under this Note shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be promptly credited to Maker by Payee (or, if
such consideration shall have been paid in full, such excess shall be promptly refunded to Maker
by Payee); (iii) neither Maker nor any other person or entity now or hereafter liable in
connection with this Note shall be obligated to pay the amount of such interest to the extent that
it is in excess of the maximum interest permitted by the applicable usury laws; and (iv) the
effective rate of interest shall be ipso facto reduced to the Highest Lawful Rate. All
sums paid, or agreed to be paid, to Payee for the use, forbearance and detention of the
indebtedness of Maker to Payee shall, to the extent permitted by applicable law, be amortized, pro
rated, allocated and spread throughout the full term of the indebtedness described in this Note,
until payment in full so that the actual rate of interest does not exceed the Highest Lawful Rate
in effect at any particular time during the full term thereof. The maximum lawful interest rate,
if any, referred to in this paragraph that may accrue pursuant to this Note is referred to herein
as the “Highest Lawful Rate”. If at any time the Agreed Rate shall exceed the Highest Lawful Rate,
and thereafter the Agreed Rate should become less than the Highest Lawful Rate, the rate of
interest payable in such latter time shall be the Highest Lawful Rate until Payee shall have
received

SERCEL — MITCHAM INDUSTRIES

EQL1475

October 15, 2010

Page 3 of 6

 

the amount of interest which Payee would have otherwise received if the Agreed Rate had not
been limited by the Highest Lawful Rate during the period of time that the Agreed Rate exceeded
the Highest Lawful Rate. If at maturity or final payment of this Note the total amount of interest
paid or accrued under the foregoing provisions is less than the total amount of interest which
would have accrued if the Agreed Rate had at all times been in effect, then Maker agrees to pay to
Payee, to the extent allowed by law, an amount equal to the difference between (a) the lesser of
(i) the amount of interest which would have accrued if the Highest Lawful Rate had at all times
been in effect or (ii) the amount of interest which would have accrued if the Agreed Rate had at
all times been in effect, and (b) the amount of interest accrued in accordance with the other
provisions of this Note.

     Except as otherwise provided herein, Maker and any and all sureties, guarantors and endorsers
of this Note and all other parties now or hereafter liable hereon severally waive grace, demand,
presentment for payment, protest, notice of any kind (including, but not limited to, notice of
dishonor, notice of protest, notice of intention to accelerate and notice of acceleration) and
diligence in collecting and bringing suit against any party hereto and agree (i) to all extensions
and partial payments, with or without notice, before or after maturity, (ii) to any substitution,
exchange or release of any security now or hereafter given for this Note, (iii) to the release of
any party primarily or secondarily liable hereon, and (iv) that it will not be necessary for
Payee, in order to enforce payment of this Note, to first institute or exhaust Payee’s remedies
against Maker or any other party liable therefore or against any security for this Note.

     In the event of any default hereunder and this Note is collected by suit or legal proceedings
or through bankruptcy proceedings, Maker agrees to pay, in addition to all other amounts owing
hereunder, all expenses and costs of collection, including reasonable attorney’s fees incurred by
the holder hereof.

     If any payment of principal or interest on this Note shall become due on a Saturday, Sunday
or legal banking holiday, such payment shall be made on the next succeeding business day and such
extension of time shall in such case be included in computing interest in connection with such
payment.

     Any check, draft, money order or other instrument given in payment of all or any portion
hereof may be accepted by Payee and handled in collection in the customary manner, but the same
shall not constitute payment hereunder or diminish any rights of Payee except to the extent that
actual cash proceeds of such instrument are unconditionally received by Payee. In connection
therewith, any such payments received by the holder hereof after noon of any business day shall be
posted and applied to the indebtedness evidenced by this Note on the next business day of the
holder hereof.

     Maker shall pay to Payee a late charge of five percent (5%) of any monthly installment not
received by Payee within five (5) days after the installment is due.

     This Note has been executed and delivered in and shall be construed in accordance with and
governed by the laws of the State of Texas and of the United States of America, except that Tex.
Fin. Code Ann. Ch. 346, as amended (which regulates certain revolving

SERCEL — MITCHAM INDUSTRIES

EQL1475

October 15, 2010

Page 4 of 6

 

credit loan accounts and revolving tri-party accounts) shall not apply hereto. Debtor
irrevocably submits to the exclusive jurisdiction of Texas courts for the purpose of any action or
other proceeding arising out of this Agreement. The Parties expressly waive any right to a trial
by jury in any action or proceeding to enforce or defend any rights under this Agreement and agree
that any such action or proceeding shall be tried before a court and not before a jury.

     Maker represents, warrants and covenants that (i) the loan evidenced by this Note is made
solely for business, commercial or investment purposes (and not for personal, family, or
agricultural purposes), (ii) Maker is a corporation in existence and in good standing in its state
of incorporation and in each state in which Maker’s business requires Maker to qualify to do
business, (iii) Maker is duly authorized to enter into and execute this Note and each of the other
documents and instruments executed in connection therewith and (iv) the person executing this note
and all other documents executed in connection therewith is a duly elected officer of Maker and is
authorized to execute this Note and (v) this Note represents valid and binding obligations of
Maker enforceable in accordance with its terms.

     This Note, the obligations evidenced hereby or Payee’s rights hereunder may be assigned from
time to time, and in any such case the assignee shall be entitled to all of the rights, privileges
and remedies granted in this note and in any other documents and instruments executed in
connection herewith.

     This Note is entitled to the benefits and security afforded by that certain Security
Agreement of even date herewith executed by Maker in favor of Payee (the “Security Agreement”),
creating a lien on certain personal property more fully described in said Security Agreement.

	 	 	 	 	 
	Maker’s Address:	
MAKER:

MITCHAM INDUSTRIES, a corporation organized under the laws of Texas

 	 
	8175 Highway 75 South 	By:  	/s/ Robert P. Capps	 
	Huntsville TX 77340 	 	Name:  	Robert P. Capps	 
	USA 	 	Title:  	Executive Vice President	 
	 

SERCEL — MITCHAM INDUSTRIES

EQL1475

October 15, 2010

Page 5 of 6

 

Appendix A

EQL1475

	 	 	 	 	 

	Total Amount =
	 	 	4,847,927.25	 
	Number of Payments =
	 	 	18	 
	Down Payment
	 	 	1,210,672.25	 
	 
	 	 	 	 
	Interest Rate =
	 	 	8.00	%
	 
	 	 	 	 
	Amount financed:
	 	 	3,637,255.00	 
	 
	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Due Date	 	Payment	 	Principal	 	Interest	 	Principal Balance
	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ship Date:
	 	10/8/2010	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1
	 	November 15, 2010	 	 	215,443.09	 	 	 	185,149.24	 	 	 	30,293.85	 	 	 	3,452,105.76	 
	2
	 	December 15, 2010	 	 	215,443.09	 	 	 	192,744.31	 	 	 	22,698.78	 	 	 	3,259,361.45	 
	3
	 	January 15, 2011	 	 	215,443.09	 	 	 	193,297.29	 	 	 	22,145.80	 	 	 	3,066,064.15	 
	4
	 	February 15, 2011	 	 	215,443.09	 	 	 	194,610.65	 	 	 	20,832.44	 	 	 	2,871,453.50	 
	5
	 	March 15, 2011	 	 	215,443.09	 	 	 	197,821.02	 	 	 	17,622.07	 	 	 	2,673,632.48	 
	6
	 	April 15, 2011	 	 	215,443.09	 	 	 	197,277.04	 	 	 	18,166.05	 	 	 	2,476,355.44	 
	7
	 	May 15, 2011	 	 	215,443.09	 	 	 	199,160.20	 	 	 	16,282.89	 	 	 	2,277,195.23	 
	8
	 	June 15, 2011	 	 	215,443.09	 	 	 	199,970.64	 	 	 	15,472.45	 	 	 	2,077,224.59	 
	9
	 	July 15, 2011	 	 	215,443.09	 	 	 	201,784.63	 	 	 	13,658.46	 	 	 	1,875,439.96	 
	10
	 	August 15, 2011	 	 	215,443.09	 	 	 	202,700.37	 	 	 	12,742.72	 	 	 	1,672,739.59	 
	11
	 	September 15, 2011	 	 	215,443.09	 	 	 	204,077.63	 	 	 	11,365.46	 	 	 	1,468,661.96	 
	12
	 	October 15, 2011	 	 	215,443.09	 	 	 	205,786.13	 	 	 	9,656.96	 	 	 	1,262,875.82	 
	13
	 	November 15, 2011	 	 	215,443.09	 	 	 	206,862.45	 	 	 	8,580.64	 	 	 	1,056,013.37	 
	14
	 	December 15, 2011	 	 	215,443.09	 	 	 	208,499.44	 	 	 	6,943.65	 	 	 	847,513.93	 
	15
	 	January 15, 2012	 	 	215,443.09	 	 	 	209,684.64	 	 	 	5,758.45	 	 	 	637,829.29	 
	16
	 	February 15, 2012	 	 	215,443.09	 	 	 	211,109.35	 	 	 	4,333.74	 	 	 	426,719.93	 
	17
	 	March 15, 2012	 	 	215,443.09	 	 	 	212,730.79	 	 	 	2,712.30	 	 	 	213,989.14	 
	18
	 	April 15, 2012	 	 	215,443.09	 	 	 	213,989.14	 	 	 	1,453.95	 	 	 	0.00	 
	 	 	 	 	 
	 
	 	 	 	 	3,877,975.66	 	 	 	3,637,255.00	 	 	 	240,720.66	 	 	 	 	 
	 	 	 	 	 

SERCEL — MITCHAM INDUSTRIES

EQL1475

October 15, 2010

Page 6 of 6

 

SECURITY AGREEMENT

          This Security Agreement dated as of the 15th day of October, 2010 is between
MITCHAM INDUSTRIES, an entity organized under the laws of Texas (“Debtor”), and SERCEL, INC., an
Oklahoma corporation (“Secured Party”).

WITNESSETH:

          WHEREAS, effective as of the date hereof, Secured Party sold, transferred and conveyed to
Debtor that certain equipment described on Exhibit “A” hereto (the “Equipment”), in
exchange for a promissory note of Debtor to Secured Party in the original principal amount of Four
Million Eight Hundred Forty Seven Thousand Nine Hundred Twenty Seven United States Dollars and
Twenty Five Cents, $4,847,927.25, (*Please note this amount is not the total for sales order
EQL1475. It represents the amount invoiced on September 23, 2010) dated of even date herewith (the
“Note”);

          WHEREAS, Debtor desires to provide security to Secured Party for the performance and payment
of the Note;

          NOW, THEREFORE, in consideration of the premises and agreements contained herein, Debtor and
Secured Party hereby agree as follows:

          Section 1. Definitions. Any terms used in this Security Agreement that are
defined in the Texas Business and Commerce Code (the “U.C.C.”) shall have the meaning assigned to
those terms by the U.C.C. in effect as of the date hereof or as otherwise required by law.

          Section 2. Security Interest, Collateral and Obligations.

          2.01. Grant and Obligations. Debtor hereby grants to Secured Party a
security interest in the Collateral as defined in Section 2.02 below to secure the
performance and payment of the Obligations. “Obligations” shall mean, collectively,
(a) the punctual payment of any and all amounts owing, or to be owing, by Debtor to
Secured Party under the Note; and (b) any renewals, extensions, or rearrangements
of the Note.

          2.02. Collateral. “Collateral” shall mean (i) the Equipment including all modifications
thereto, substitutions and exchange, (ii) all proceeds, other profits, rentals or receipts, in
whatever form , arising from the collection, sale, lease, exchange, assignment, licensing or other
dispositions of, or realization upon, any Collateral described above including, without
limitation, all claims of Debtor against third parties for loss of, damage to or destruction of,
or for proceeds payable under policies of insurance with respect to any Collateral, in each case
whether now existing or hereafter arising, (iii) all books and records relating to the Equipment
in the possession or control of Debtor.

          Section 3. Debtor’s Representations, Warranties and Agreements. Debtor represents and
warrants to Secured Party and agrees that:

SERCEL — MICHAM INDUSTRIES

EQL1475

October 15, 2010

Page 1 of 7

 

          3.01. Disposal of Collateral. Debtor will not sell, transfer or otherwise
dispose of any of the Collateral.

          3.02. Information. Debtor shall keep accurate and complete records of the
Collateral, shall give Secured Party or its representatives reasonable access to such records
during normal business hours and upon prior written notice to Debtor shall provide such other
information concerning Debtor and the Collateral as Secured Party may reasonably require. The
address of Debtor’s place of business, chief executive office and office where Debtor keeps its
records concerning the Collateral is at the address set forth beside Debtor’s signature on this
Security Agreement. Debtor shall notify Secured Party ten (10) days in advance of any change in
its address, any change of or additions to the location of its place of business, chief
executive office or office where it keeps its records, and any change in its name, identity, or
structure.

          3.03. Other Liens. There is no certificate of title, financing statement or other
writing showing any lien on the Collateral. Debtor has good and marketable title to the
Collateral, free and clear of all other liens and encumbrances, subject only to the security
interest of Secured Party. Debtor has full power and lawful authority to grant to Secured Party
a security interest in the Collateral as provided in this Security Agreement. Debtor will defend
the Collateral against the claims and demands of all third persons and will not permit the
creation of any charge, lien, security interest, adverse claim or encumbrance of any and every
nature whatsoever against the Collateral or any part thereof.

          3.04.
Covenants Concerning the Collateral. The Collateral shall remain in Debtor’s
possession or control. Debtor shall bear all risk of loss with respect to the Collateral. At any
reasonable time and upon reasonable prior written notice to Debtor, Secured Party may inspect
during normal business hours the Collateral. Debtor shall assist Secured Party in making any
such inspection. Debtor shall maintain all equipment that is Collateral in the same good
condition existing as of the date of this Security Agreement, except for reasonable wear and
tear, and such equipment will not be used in violation of any statute or ordinance or in a not
careful and improper manner. Debtor shall replace within a reasonable time all parts that may be
worn out, lost, destroyed or otherwise rendered unfit for use with appropriate replacement
parts.

          3.05. Insurance. Debtor will maintain reasonable amounts of insurance on the
Collateral (in an amount not less than the outstanding balance under the Note) and name the
Secured party as a loss payee and additional insured on its policies of insurance. Such
insurance shall also include general liability insurance in an amount of not less than
$1,000,000 per incident and $5,000,000 in the aggregate. If any insurance required hereby
expires, is cancelled or is otherwise not in full force and effect, at Secured Party’s option,
Secured Party may obtain replacement insurance, which may, but need not, be single interest
insurance in favor of Secured Party. Secured Party may pay the premiums thereunder and add the
amount of such premiums to the Obligations. Debtor agrees to reimburse Secured Party on demand
for any amounts so paid.

          The all risk policy shall (i) name Secured Party and its assigns as sole loss payee (ii)
contain a breach of warranty endorsement insuring Secured Party and its assigns notwithstanding
a breach or violation of the policy by Debtor; (iii) be issued by a company that is approved to
do business in the State of Texas and that is acceptable to Secured Party in its sole
discretion; (iv) contain a clause in a form acceptable to Secured Party providing that the
insurer shall waive all of

SERCEL — MICHAM INDUSTRIES

EQL1475

October 15, 2010

Page 2 of 7

 

its rights of recovery, under legal or conventional subrogation or otherwise, against Secured
Party, and (v) provide for no less than thirty (30) days prior written notice of cancellation or
non-renewal to Lessor and its successors or assigns.

          Debtor hereby appoints Secured Party as its attorney-in-fact with full power, rights, and
authority with respect to the policies required under this Section, including, without limitation,
the right to request payments and execute and endorse all documents, checks, drafts or other
instruments necessary or advisable to secure payments due under any policy required under this
Section._ The foregoing appointment shall not relieve Debtor from its obligation to procure the
insurance policies required herein, to make timely insurance claims and to otherwise cooperate
with insurance carriers. Proceeds from any policy required hereunder shall be made payable first
to Secured Party to the extent of its liability or loss, if any. Debtor shall deliver to Secured
Party a certificate of insurance with respect to the policy required under this Section together
with a copy of the endorsement naming Secured Party as additional insured and loss payee not later
than the Effective Date, and a certificate of insurance with respect to each renewal or
replacement thereof not later than fifteen (15) days before any such insurance policy expires.
Lessee will be responsible for all deductible amounts.

          3.06. Further Assurances. Debtor will do, make, procure, execute and deliver all
acts, things, writings and assurances as Secured Party may at any time reasonably request to
perfect, protect, assure or enforce its interest, rights and remedies created by or arising in
connection with this Security Agreement, including the execution of financing statements.

          3.07. Power, Authority and Existence. The execution, delivery and performance of this
Security Agreement and all other instruments and agreements executed by Debtor are within Debtor’s
power and authority, are not on the date of execution of this Agreement and thereafter will not be
in contravention of law, or any indenture, agreement or undertaking to which Debtor is a party or
by which Debtor is bound or will be bound after the execution of this Agreement.

          3.08. Assessments. Debtor shall promptly pay when due all taxes, assessments, license
fees, registration fees, and governmental charges levied or assessed against Debtor or with
respect to the Collateral or any part thereof.

          3.09. Time of the Essence. Debtor agrees that in performing any act under this
Security Agreement, time shall be of the essence and Secured Party’s acceptance of partial or
delinquent payments, or failure of Secured Party to exercise any right or remedy, shall not be a
waiver of any obligation of Debtor or right of Secured Party or constitute a waiver of any similar
or dissimilar default subsequently occurring.

          Section 4. Event of Default. Debtor shall be in default under this Security
Agreement (any such default being referred to as an “Event of Default”) if a default has occurred
in any obligation of Debtor under the Note or this Security Agreement or if the Debtor is in the
breach of any representation, warranty, covenant, agreement or condition hereunder.

          Section 5. Rights of Secured Party.

SERCEL — MICHAM INDUSTRIES
EQL1475

October 15, 2010

Page 3 of 7

 

          5.01.
Rights After Default. Secured Party may, in its discretion, after the
occurrence of an Event of Default: (a) bring any action at law or in equity to protect its
interest in the Collateral or to obtain damages for or to prevent deterioration or destruction of
the Collateral other than ordinary wear and tear in connection with its intended primary use and
(b) exercise any right of a secured creditor under the U.C.C. or other applicable laws or(c)
exercise any right of a debtor under maritime laws.

          5.02.
Discharges, Liens, etc. At its option, Secured Party may make payments to
discharge taxes, liens or security interest or other encumbrances at any time levied or placed on
the Collateral and take any other action necessary to obtain, preserve, and enforce the security
interest and the rights and remedies granted in this Security Agreement and maintain and preserve
the Collateral. Such payments and any other expenses incurred by Secured Party in taking such
action shall become part of the Obligations. Debtor agrees to reimburse Secured Party on demand
for any such payments made or expenses incurred by Secured Party.

          5.03. U.C.C. Remedies. Upon the occurrence and during the continuance of an Event of
Default, and at any time thereafter, Secured Party may declare the Obligations or any part thereof
immediately due and payable, without demand, notice of intention to accelerate, notice of
acceleration, notice of non payment, presentment, protest notice of dishonor or any other notice
whatsoever all of which are hereby waived by Debtor and may demand payment of the Obligations and
shall have the rights and remedies of a secured party under the U.C.C. or any other applicable
laws, including without limitation, the right to sell, lease or otherwise dispose of any or all of
the Collateral in any manner allowed by the U.C.C. Secured Party may require Debtor to assemble
the Collateral and make it available to Secured Party at a place to be designated by Secured Party
which is reasonably convenient for both parties. Secured Party shall have the right to take
possession of all or any part of the Collateral or any security therefore and of all books,
records, papers and documents of Debtor or in Debtor’s possession or control relating to the
Collateral and may lawfully and without breach of the peace enter upon any premises upon which any
of the Collateral or any security therefore or any of such books, records, papers or documents are
situated and remove the same therefrom without any liability for trespass or damages thereby
occasioned unless arising out of Secured Party’s gross negligence or willful misconduct. Unless
the Collateral is perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Secured Party will send Debtor ten (10) days’ prior written notice of
the time and place of any public sale or other disposition thereof or of the time after which any
private sale or other disposition thereof is to be made. The requirement of sending reasonable
notice shall be met if such notice is deposited in the U.S. Mail, postage prepaid, certified mail,
return receipt requested, addressed to Debtor at the address set forth beside Debtor’s signature
on this Security Agreement at least ten (10) days before the time of the sale or disposition of
the Collateral. Debtor shall be liable for all expenses, including without limitation, reasonable
attorneys’ fees and court costs, actually incurred by Secured Party in repossessing, storing,
preparing for sale, lease or other disposition, or selling, leasing or otherwise disposing of the
Collateral. The Collateral may be sold, leased or otherwise disposed of as an entirety or in such
parcels as Secured Party may elect, and it shall not be necessary for Secured Party to have actual
possession of the Collateral or to have it present when the sale, lease or other disposition is
made. Debtor shall remain liable for any deficiency.

SERCEL — MICHAM INDUSTRIES

EQL1475

October 15, 2010

Page 4 of 7

 

          5.04.
No Waiver. Debtor may remedy any Event of Default and the Secured Party
may waive any Event of Default without waiving any other Event of Default. The remedies of
Secured Party are cumulative, and the exercise or partial exercise of any one or more of the
remedies provided for herein shall not be construed as a waiver of any of the other remedies of
Secured Party. No delay of Secured Party in exercising any power or right shall operate as a
waiver thereof. Secured Party’s failure to exercise this security interest against all or any
portion of the Collateral at any time, does not waive any right of Secured Party to later assert
any or any other right, power or remedy of Secured Party with respect to such Collateral as
provided herein.

          5.05.
Assignment. This Security Agreement, the Obligations or Secured Party’s
rights hereunder may be assigned from time to time by the Secured Party, and in any such case
the assignee shall be entitled to all of the rights, privileges and remedies granted in this
Security Agreement to Secured Party.

          Section 6. Additional Agreements.

          6.01. Miscellaneous. “Secured Party” and “Debtor” as used in this Security
Agreement include the successors, legal representatives, receivers and assigns of those parties.
The divisions of this Security Agreement into sections and subsections and the titles thereto
have been made for convenience only and shall be given no substantive meaning or significance
whatever in construing the terms and provisions of this Security Agreement.

          6.02. Choice of Law. Unless expressly provided elsewhere in this Security
Agreement, this Security Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Texas. Debtor irrevocably submits to the exclusive jurisdiction of
Texas courts for the purpose of any action or other proceeding arising out of this Agreement.

     The Parties expressly waive any right to a trial by jury in any action or proceeding to
enforce or defend any rights under this Agreement and agree that any such action or proceeding
shall be tried before a court and not before a jury.

          6.03.
Illegality. If any provision of this Security Agreement is rendered or
declared invalid, illegal or ineffective by reason of any existing or subsequently enacted
legislation or by decree of a court of competent jurisdiction, such legislation or decree shall
not impair, invalidate or nullify the remainder of this Security Agreement which shall remain in
full force and effect.

          6.04.
Continuing Agreement. The security interest hereby granted and all of the
terms and provisions in this Agreement shall be deemed a continuing agreement. They shall
continue in full force and effect and remain effective between the parties until full and
indefeasible payment of the Obligations.

SERCEL — MICHAM INDUSTRIES

EQL1475

October 15, 2010

Page 5 of 7

 

          6.05. Amendments. No modification, variation or amendment of or to this
Security Agreement shall be effective unless in writing signed by Debtor and Secured Party.

          6.06. Notice. Any notice or demand to Debtor or Secured Party hereunder or in
connection herewith may be given and shall conclusively be deemed and considered to have been given
and received upon the deposit thereof in the U.S. Mail, in writing, duly stamped and mailed by
certified mail, return receipt requested and addressed to the address set forth on this Security
Agreement, or at such other address as Debtor or Secured Party may designate to the other in
writing.

DEBTOR:

	 	 	 	 	 
	Address:                               	MITCHAM INDUSTREIS

 	 
	8175 Highway 75 South 	By:  	/s/ Robert P. Capps	 
	Huntsville, TX 77340 	 	Name:  	Robert P. Capps	 
	 	 	Title:  	Executive Vice President	 
	 

SECURED PARTY:

	 	 	 	 	 
	Address:                                	SERCEL, INC.

 	 
	17200 Park Row 	By:  	 	 
	Houston, Texas 77084 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SERCEL — MICHAM INDUSTRIES

EQL1475

October 15, 2010

Page 6 of 7

 

			
	 	 	 
	MITCHAM INDUSTRIES

8175 Highway 75 South

Huntsville, TX 77340

USA
	 	

Exhibit “A”

Please note this amount is not the total for sales order EQL1475. It represents the
amount invoiced on September 23, 2010.

	 	 	 	 	 	 	 
	INVOCE No.	 	INVOICE DATE	 	INVOICE TOTAL
	50329
	 	June 30, 2010	 	 	4,441,598.68	 
	51125
	 	August 31, 2010	 	 	2,745.27	 
	51137
	 	August 31, 2010	 	 	357,828.80	 
	51414
	 	September 23, 2010	 	 	45,754.50	 
	 
	 	 	 	 	 	 
	 
	 	TOTAL INVOICED AMOUNT:	 	$	4,847,927.25	 

SERCEL — MICHAM INDUSTRIES

EQL1475

October 15, 2010

Page 7 of 7

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