Document:

exv10w1

Exhibit 10.1

EXECUTION VERSION

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of August 19, 2011

among

KIRKLAND’S STORES, INC.,

as the Lead Borrower

For

The Borrowers Named Herein

The Guarantors Named Herein

BANK OF AMERICA, N.A.

as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer

and

The Other Lenders Party Hereto

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Sole Lead Arranger and Sole Bookrunner

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section	 	Page	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	 
	 	 	 	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	41	 
	1.03 Accounting Terms
	 	 	42	 
	1.04 Rounding
	 	 	43	 
	1.05 Times of Day
	 	 	43	 
	1.06 Letter of Credit Amounts
	 	 	43	 
	 
	 	 	 	 
	ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS
	 	 	43	 
	 
	 	 	 	 
	2.01 Committed Loans; Reserves
	 	 	43	 
	2.02 Borrowings, Conversions and Continuations of Committed Loans
	 	 	44	 
	2.03 Letters of Credit
	 	 	46	 
	2.04 Swing Line Loans
	 	 	54	 
	2.05 Prepayments
	 	 	56	 
	2.06 Termination or Reduction of Commitments
	 	 	57	 
	2.07 Repayment of Loans
	 	 	58	 
	2.08 Interest
	 	 	58	 
	2.09 Fees
	 	 	59	 
	2.10 Computation of Interest and Fees
	 	 	59	 
	2.11 Evidence of Debt.
	 	 	59	 
	2.12 Payments Generally; Agent’s Clawback
	 	 	60	 
	2.13 Sharing of Payments by Lenders
	 	 	61	 
	2.14 Settlement Amongst Lenders
	 	 	62	 
	 
	 	 	 	 
	ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY; APPOINTMENT OF LEAD BORROWER
	 	 	62	 
	 
	 	 	 	 
	3.01 Taxes
	 	 	62	 
	3.02 Illegality
	 	 	64	 
	3.03 Inability to Determine Rates
	 	 	64	 
	3.04 Increased Costs; Reserves on LIBOR Rate Loans
	 	 	65	 
	3.05 Compensation for Losses
	 	 	66	 
	3.06 Mitigation Obligations; Replacement of Lenders
	 	 	67	 
	3.07 Survival
	 	 	67	 
	3.08 Designation of Lead Borrower as Borrowers’ Agent
	 	 	67	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	 	 	68	 
	 
	 	 	 	 
	4.01 Conditions of Initial Credit Extension
	 	 	68	 
	4.02 Conditions to all Credit Extensions
	 	 	70	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	71	 
	 
	 	 	 	 
	5.01 Existence, Qualification and Power
	 	 	71	 
	5.02 Authorization; No Contravention
	 	 	72	 
	5.03 Governmental Authorization; Other Consents
	 	 	72	 
	5.04 Binding Effect
	 	 	72	 
	5.05 Financial Statements; No Material Adverse Effect
	 	 	72	 
	5.06 Litigation
	 	 	73	 

(i)

 

	 	 	 	 	 
	Section	 	Page	 
	5.07 No Default
	 	 	73	 
	5.08 Ownership of Property; Liens
	 	 	73	 
	5.09 Environmental Compliance
	 	 	74	 
	5.10 Insurance
	 	 	74	 
	5.11 Taxes
	 	 	74	 
	5.12 ERISA Compliance
	 	 	75	 
	5.13 Subsidiaries; Equity Interests
	 	 	75	 
	5.14 Margin Regulations; Investment Company Act
	 	 	76	 
	5.15 Disclosure
	 	 	76	 
	5.16 Compliance with Laws
	 	 	76	 
	5.17 Intellectual Property; Licenses, Etc.
	 	 	76	 
	5.18 Labor Matters
	 	 	76	 
	5.19 Security Documents
	 	 	77	 
	5.20 Solvency
	 	 	78	 
	5.21 Deposit Accounts; Credit Card Arrangements
	 	 	78	 
	5.22 Brokers
	 	 	78	 
	5.23 Customer and Trade Relations
	 	 	78	 
	5.24 Material Contracts
	 	 	78	 
	5.25 Casualty
	 	 	78	 
	 
	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	78	 
	 
	 	 	 	 
	6.01 Financial Statements
	 	 	78	 
	6.02 Certificates; Other Information
	 	 	79	 
	6.03 Notices
	 	 	81	 
	6.04 Payment of Obligations
	 	 	82	 
	6.05 Preservation of Existence, Etc.
	 	 	82	 
	6.06 Maintenance of Properties
	 	 	82	 
	6.07 Maintenance of Insurance
	 	 	83	 
	6.08 Compliance with Laws
	 	 	84	 
	6.09 Books and Records; Accountants
	 	 	84	 
	6.10 Inspection Rights
	 	 	84	 
	6.11 Additional Loan Parties
	 	 	85	 
	6.12 Cash Management
	 	 	86	 
	6.13 Information Regarding the Collateral
	 	 	87	 
	6.14 Physical Inventories
	 	 	87	 
	6.15 Environmental Laws
	 	 	88	 
	6.16 Further Assurances
	 	 	88	 
	6.17 Compliance with Terms of Leaseholds
	 	 	89	 
	6.18 Material Contracts
	 	 	89	 
	 
	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	89	 
	 
	 	 	 	 
	7.01 Liens
	 	 	89	 
	7.02 Investments
	 	 	89	 
	7.03 Indebtedness; Disqualified Stock; Equity Issuances
	 	 	89	 
	7.04 Fundamental Changes
	 	 	90	 
	7.05 Dispositions
	 	 	90	 
	7.06 Restricted Payments
	 	 	90	 
	7.07 Prepayments of Indebtedness
	 	 	91	 
	7.08 Change in Nature of Business
	 	 	91	 
	7.09 Transactions with Affiliates
	 	 	91	 
	7.10 Burdensome Agreements
	 	 	92	 

(ii)

 

	 	 	 	 	 
	Section	 	Page	 
	7.11 Use of Proceeds
	 	 	92	 
	7.12 Amendment of Material Documents
	 	 	92	 
	7.13 Fiscal Year
	 	 	92	 
	7.14 Deposit Accounts; Credit Card Processors
	 	 	92	 
	7.15 Consolidated Fixed Charge Coverage Ratio
	 	 	93	 
	 
	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
	 	 	93	 
	 
	 	 	 	 
	8.01 Events of Default
	 	 	93	 
	8.02 Remedies Upon Event of Default
	 	 	95	 
	8.03 Application of Funds
	 	 	96	 
	 
	 	 	 	 
	ARTICLE IX THE AGENT
	 	 	98	 
	 
	 	 	 	 
	9.01 Appointment and Authority
	 	 	98	 
	9.02 Rights as a Lender
	 	 	98	 
	9.03 Exculpatory Provisions
	 	 	98	 
	9.04 Reliance by Agent
	 	 	99	 
	9.05 Delegation of Duties
	 	 	99	 
	9.06 Resignation of Agent
	 	 	99	 
	9.07 Non-Reliance on Agent and Other Lenders
	 	 	100	 
	9.08 No Other Duties, Etc.
	 	 	100	 
	9.09 Agent May File Proofs of Claim
	 	 	100	 
	9.10 Collateral and Guaranty Matters
	 	 	101	 
	9.11 Notice of Transfer
	 	 	102	 
	9.12 Reports and Financial Statements
	 	 	102	 
	9.13 Agency for Perfection
	 	 	103	 
	9.14 Indemnification of Agent
	 	 	103	 
	9.15 Relation among Lenders
	 	 	103	 
	9.16 Defaulting Lender
	 	 	103	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	104	 
	 
	 	 	 	 
	10.01 Amendments, Etc.
	 	 	104	 
	10.02 Notices; Effectiveness; Electronic Communications
	 	 	106	 
	10.03 No Waiver; Cumulative Remedies
	 	 	107	 
	10.04 Expenses; Indemnity; Damage Waiver
	 	 	108	 
	10.05 Payments Set Aside
	 	 	109	 
	10.06 Successors and Assigns
	 	 	109	 
	10.07 Treatment of Certain Information; Confidentiality
	 	 	113	 
	10.08 Right of Setoff
	 	 	114	 
	10.09 Interest Rate Limitation
	 	 	114	 
	10.10 Counterparts; Integration; Effectiveness
	 	 	114	 
	10.11 Survival
	 	 	114	 
	10.12 Severability
	 	 	115	 
	10.13 Replacement of Lenders
	 	 	115	 
	10.14 Governing Law; Jurisdiction; Etc.
	 	 	116	 
	10.15 Waiver of Jury Trial
	 	 	117	 
	10.16 No Advisory or Fiduciary Responsibility
	 	 	117	 
	10.17 USA PATRIOT Act Notice
	 	 	117	 
	10.18 Foreign Asset Control Regulations
	 	 	118	 
	10.19 Time of the Essence
	 	 	118	 
	10.20 Press Releases
	 	 	118	 
	10.21 Additional Waivers
	 	 	118	 

(iii)

 

	 	 	 	 	 
	Section	 	Page	 
	10.22 No Strict Construction
	 	 	120	 
	10.23 Attachments
	 	 	120	 
	10.24 Amendment and Restatement
	 	 	120	 
	 
	 	 	 	 
	SIGNATURES
	 	 	S-1	 

(iv)

 

SCHEDULES

	 	 	 

	1.01

	 	Borrowers
	2.01

	 	Commitments and Applicable Percentages
	5.01

	 	Loan Parties Organizational Information
	5.08(b)(1)

	 	Owned Real Estate
	5.08(b)(2)

	 	Leased Real Estate
	5.10

	 	Insurance
	5.13

	 	Subsidiaries; Other Equity Investments
	5.18

	 	Collective Bargaining Agreements
	5.21(a)

	 	DDAs
	5.21(b)

	 	Credit Card Arrangements
	5.24

	 	Material Contracts
	6.02

	 	Financial and Collateral Reporting
	7.01

	 	Existing Liens
	7.02

	 	Existing Investments
	7.03

	 	Existing Indebtedness
	10.02

	 	Agent’s Office; Certain Addresses for Notices

EXHIBITS

	 	 	 

	 

	 	Form of
	 
	 	 
	A

	 	Committed Loan Notice
	B

	 	Swing Line Loan Notice
	C-1

	 	Revolving Note
	C-2

	 	Swing Line Note
	D

	 	Compliance Certificate
	E

	 	Assignment and Assumption
	F

	 	Borrowing Base Certificate
	G

	 	Credit Card Notification

(v)

 

AMENDED AND RESTATED CREDIT AGREEMENT

     This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of August 19, 2011, among

     KIRKLAND’S STORES, INC., a Tennessee corporation (the “Lead Borrower”);

     the Persons named on Schedule 1.01 hereto (collectively with the Lead Borrower, the
“Borrowers”);

     the Guarantors (as defined herein);

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

     BANK OF AMERICA, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and an L/C
Issuer (each as defined herein); and

     WELLS FARGO BANK, NATIONAL ASSOCIATION, as an L/C Issuer (as defined herein).

W I T N E S S E T H:

     WHEREAS, the Borrowers have requested that the Lenders make available to the Borrowers a
revolving credit facility (including a letter of credit sub-facility) in an initial maximum amount
not to exceed $50,000,000, the proceeds of which, in each case, shall be used by the Borrowers for
purposes permitted under, and otherwise in accordance with and subject to the terms of, this
Agreement;

     WHEREAS, prior to the date of this Agreement, the Loan Parties, on the one hand, and Bank of
America, N.A. (as successor in interest to Fleet Retail Group, Inc.), as Agent thereunder, and the
lenders party thereto, on the other hand, previously entered into a Loan and Security Agreement
dated as of October 4, 2004 (as amended and in effect, the “Existing Credit Agreement”), pursuant
to which the lenders party thereto provided the Borrowers with certain financial accommodations;
and

     WHEREAS, in accordance with Section 11.3 of the Existing Credit Agreement, the Loan Parties,
the Lenders, and the Agent desire to amend and restate the Existing Credit Agreement as provided
herein and in the Security Agreement.

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this
Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged,
the undersigned hereby agree that the Existing Credit Agreement shall be amended and restated in
its entirety to read as set forth herein and in the Security Agreement (it being agreed that
neither this Agreement nor the Security Agreement shall be deemed to evidence or result in a
novation or repayment and reborrowing of the Obligations under the Existing Credit Agreement):

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

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

1

 

     “Accelerated Borrowing Base Delivery Event” means either (i) the occurrence and continuance of
any Event of Default, or (ii) the failure of the Borrowers to maintain Availability at least equal
to the greater of (x) 17.5% of the Loan Cap and (y) $7,000,000. For purposes of this Agreement,
the occurrence of an Accelerated Borrowing Base Delivery Event shall be deemed continuing (i) so
long as such Event of Default has not been waived, and/or (ii) if the Accelerated Borrowing Base
Delivery Event arises as a result of the Borrowers’ failure to achieve Availability as required
hereunder, until Availability has exceeded the greater of (x) 17.5% of the Loan Cap and (y)
$7,000,000 for thirty (30) consecutive calendar days, in which case an Accelerated Borrowing Base
Delivery Event shall no longer be deemed to be continuing for purposes of this Agreement;
provided that an Accelerated Borrowing Base Delivery Event shall be deemed continuing (even
if an Event of Default is no longer continuing and/or Availability exceeds the required amount for
thirty (30) consecutive days) at all times during any Fiscal Year after an Accelerated Borrowing
Base Delivery Event has occurred and been discontinued on two (2) occasions in such Fiscal Year.
The termination of an Accelerated Borrowing Base Delivery Event as provided herein shall in no way
limit, waive or delay the occurrence of a subsequent Accelerated Borrowing Base Delivery Event in
the event that the conditions set forth in this definition again arise.

     “Acceptable Document of Title” means, with respect to any Inventory, a tangible, negotiable
bill of lading or other Document (as defined in the UCC) that (a) is issued by a common carrier
which is not an Affiliate of the Approved Foreign Vendor or any Loan Party which is in actual
possession of such Inventory, (b) is issued to the order of a Loan Party or, if so requested by the
Agent, to the order of the Agent, (c) names the Agent as a notify party and bears a conspicuous
notation on its face of the Agent’s security interest therein, (d) is not subject to any Lien
(other than in favor of the Agent), and (e) is on terms otherwise reasonably acceptable to the
Agent.

     “ACH” means automated clearing house transfers.

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

     “Account” means “accounts” as defined in the UCC, and also means a right to payment of a
monetary obligation, whether or not earned by performance, (a) for property that has been or is to
be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be
rendered, (c) for a secondary obligation incurred or to be incurred or (d) arising out of the use
of a credit or charge card or information contained on or for use with the card.

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

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

     “Adjusted LIBOR Rate” means, with respect to any LIBOR Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of one percent (1%)) equal
the LIBOR Rate for such Interest Period multiplied by the Statutory Reserve Rate. The Adjusted
LIBOR Rate will be adjusted automatically as to all LIBOR Borrowings then outstanding as of the
effective date of any change in the Statutory Reserve Rate.

2

 

     “Adjustment Date” means the first day of each Fiscal Quarter, commencing October 30, 2011.

     “Administrative Agent” means Bank of America, in its capacity as administrative agent under
any of the Loan Documents, or any successor thereto.

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

     “Affiliate” means, with respect to any Person, (i) another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under common Control with
the Person specified, (ii) any director, officer, managing member, partner, trustee, or beneficiary
of that Person, (iii) any other Person directly or indirectly holding 10% or more of any class of
the Equity Interests of that Person, and (iv) any other Person 10% or more of any class of whose
Equity Interests is held directly or indirectly by that Person.

     “Agent” means Bank of America in its capacity as Administrative Agent and Collateral Agent, or
any successor thereto.

     “Agent Parties” shall have the meaning specified in Section 10.02(c).

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

     “Aggregate Commitments” means the Commitments of all the Lenders. As of the Effective Date,
the Aggregate Commitments are $50,000,000.

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

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

     “Applicable Lenders” means the Required Lenders, all affected Lenders, or all Lenders, as the
context may require.

     “Applicable Margin” means:

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

     (b) From and after the first Adjustment Date and on each Adjustment Date thereafter,
the Applicable Margin shall be determined from the following pricing grid based upon the
Average Daily Availability as of the Fiscal Quarter ended immediately preceding such
Adjustment Date; provided that notwithstanding anything to the contrary set forth
herein, upon the occurrence of an Event of Default, the Agent may, and at the direction of
the Required Lenders shall, immediately increase the Applicable Margin to that set forth in
Level III (even if the Average Daily Availability requirements for a different Level have
been met) and interest shall accrue at the Default Rate; provided further if any
Borrowing Base Certificate is at any time restated or otherwise revised (including as a
result of an audit) or if the information set forth in any Borrowing Base Certificate
otherwise proves to be false or incorrect such that the Applicable

3

 

Margin would have been
higher than was otherwise in effect during any period, without constituting a waiver of any
Default or Event of Default arising as a result thereof, interest due
under this Agreement shall be immediately recalculated at such higher rate for any
applicable periods and shall be due and payable on demand.

	 	 	 	 	 	 	 
	Level	 	Average Daily Availability	 	LIBOR Margin	 	Base Rate Margin
	I
	 	Greater than $30,000,000
	 	1.75%
	 	0.75%
	 	 	 	 	 	 	 
	II
	 	Equal to or less than

$30,000,000 but greater than

$15,000,000
	 	2.00%
	 	1.00%
	 	 	 	 	 	 	 
	III
	 	Equal to or less than

$15,000,000
	 	2.25%
	 	1.25%

     “Applicable Percentage” means with respect to any Lender at any time, the percentage (carried
out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time. If the commitment of each Lender to make Loans and the obligation of the
L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 2.06 or
Section 8.02 or if the Aggregate Commitments have expired, then the Applicable Percentage
of each Lender shall be determined based on the Applicable Percentage of such Lender most recently
in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each
Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

     “Applicable Rate” means, at any time of calculation, (a) with respect to Commercial Letters of
Credit, a per annum rate equal to fifty percent (50%) of the Applicable Margin for Loans which are
LIBOR Rate Loans, and (b) with respect to Standby Letters of Credit, a per annum rate equal to the
Applicable Margin for Loans which are LIBOR Rate Loans.

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

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender, (c) an entity or an Affiliate of an entity that administers or manages a
Lender, or (d) the same investment advisor or an advisor under common control with such Lender,
Affiliate or advisor, as applicable.

     “Approved Foreign Vendor” means a Foreign Vendor which (a) is located in any country
acceptable to the Agent in its discretion, (b) has received timely payment or performance of all
obligations owed to it by the Loan Parties, (c) has not asserted and has no right to assert any
reclamation,

4

 

repossession, diversion, stoppage in transit, Lien or title retention rights in
respect of such Inventory, and (d), if so requested by the Agent, has entered into and is in full
compliance with the terms of a Foreign Vendor Agreement.

     “Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as sole
lead arranger and sole bookrunner.

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

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

     “Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease Obligation
of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease or similar payments under the relevant
lease or other applicable agreement or instrument that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP if such lease, agreement or instrument were
accounted for as a capital lease.

     “Audited Financial Statements” means the audited consolidated balance sheet of the Parent and
its Subsidiaries for the fiscal year ended January 29, 2011, and the related consolidated
statements of income or operations, Shareholders’ Equity and cash flows for such fiscal year of the
Parent and its Subsidiaries, including the notes thereto.

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

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

          (a) The Loan Cap

     Minus

          (b) The aggregate unpaid balance of Credit Extensions to, or for the account of, the
Borrowers.

     In calculating Availability at any time and for any purpose under this Agreement, the Lead
Borrower shall certify to the Agent that all accounts payable and Taxes are being paid on a timely
basis.

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

     “Availability Reserves” means, without duplication of any other Reserves or items that are
otherwise addressed or excluded through eligibility criteria, such reserves as the Agent from time
to time determines in its discretion as being appropriate (a) to reflect the impediments to the
Agent’s ability to

5

 

realize upon the Collateral, (b) to reflect claims and liabilities that the
Agent determines may need to be satisfied in connection with the realization upon the Collateral,
(c) to reflect criteria, events, conditions, contingencies or risks which the Agent believes in
good faith could adversely affect any component of the Borrowing Base, or the assets, business,
financial performance or financial condition of any Loan Party, or (d) to reflect that a Default or
an Event of Default then exists. Without limiting the generality of the
foregoing, Availability Reserves may include, in the Agent’s discretion, (but are not limited
to) reserves based on: (i) rent; (ii) customs duties, and other costs to release Inventory which is
being imported into the United States; (iii) outstanding Taxes and other governmental charges,
including, without limitation, ad valorem, real estate, personal property, sales, claims of the
PBGC and other Taxes which may have priority over the interests of the Agent in the Collateral;
(iv) salaries, wages and benefits due to employees of any Borrower, (v) Customer Credit
Liabilities, (vi) customer deposits, (viii) reserves for reasonably anticipated changes in the
Appraised Value of Eligible Inventory between appraisals, (viii) warehousemen’s or bailee’s charges
and other Permitted Encumbrances which may have priority over the interests of the Agent in the
Collateral, (ix) amounts due to vendors on account of consigned goods, (x) Cash Management
Reserves, (xi) Bank Products Reserves and (xii) royalties payable in respect of licensed
merchandise.

     “Average Daily Availability” shall mean the average daily Availability for the immediately
preceding Fiscal Quarter.

     “Bank of America” means Bank of America, N.A. and its successors.

     “Bank Products” means any services of facilities provided to any Loan Party by the Agent, any
Lender, or any of their respective Affiliates, including, without limitation, on account of (a)
Swap Contracts, (b) purchase cards, (c) leasing, and (d) supply chain finance services (including,
without limitation, trade payable services and supplier accounts receivable purchases), but
excluding Cash Management Services.

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

     “Banker’s Acceptance” means a time draft or bill of exchange or other deferred payment
obligation relating to a Commercial Letter of Credit which has been accepted by the L/C Issuer.

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

     “Base Rate” means for any day a fluctuating rate per annum equal to the highest of
(a) the rate of interest in effect for such day as publicly announced from time to time by Bank of
America as its “prime rate”; (b) the Federal Funds Rate for such day, plus 0.50%; and (c) the LIBOR
Rate for a 30 day interest period as determined on such day, plus 1.0%. The “prime rate” is a rate
set by Bank of America based upon various factors including Bank of America’s costs and desired
return, general economic conditions and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below such announced rate. Any change in Bank of
America’s prime rate, the Federal Funds Rate or the LIBOR Rate for a 30 day interest period as
determined on such day, respectively, shall take effect at the opening of business on the day
specified in the public announcement of such change.

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

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     “Blocked Account” has the meaning provided in Section 6.12(a)(ii).

     “Blocked Account Agreement” means with respect to an account established by a Loan Party, an
agreement, in form and substance satisfactory to the Agent, establishing control (as defined in the
UCC) of such account by the Agent and whereby the bank maintaining such account agrees, upon the
occurrence and during the continuance of a Cash Dominion Event, to comply only with the
instructions originated by the Agent without the further consent of any Loan Party.

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

     “Borrower Materials” has the meaning specified in Section 6.02.

     “Borrowers” has the meaning specified in the introductory paragraph hereto.

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

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

          (a) the face amount of Eligible Credit Card Receivables multiplied by 90%;

          plus

          (b) the product of (i) 90% multiplied by (ii) the Appraised Value of Eligible Inventory
of the Loan Parties, net of Inventory Reserves, multiplied by (iii) the Cost of Eligible
Inventory of the Loan Parties;

          minus

          (c) the then amount of all Availability Reserves;

provided that in no event shall the amounts available to be borrowed against
Eligible In-Transit Inventory hereunder exceed the In-Transit Cap.

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

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

     “Capital Expenditures” means, with respect to any Person for any period, the sum of (a) (x)
all expenditures made (whether made in the form of cash or other property) or costs incurred for
the acquisition or improvement of fixed or capital assets of such Person (excluding normal
replacements and

7

 

maintenance which are properly charged to current operations), in each case that
are (or should be) set forth as capital expenditures in a Consolidated statement of cash flows of
such Person for such period, in each case prepared in accordance with GAAP, minus (y) tenant
allowances received in cash during such period from landlords for operating lease agreements for
new Stores, and (b) Capital Lease Obligations incurred by a Person during such period.

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

     “Cash Collateral Account” means a non-interest bearing account established by one or more of
the Loan Parties with Bank of America, and in the name of, the Agent (or as the Agent shall
otherwise direct) and under the sole and exclusive dominion and control of the Agent, in which
deposits are required to be made in accordance with Section 2.03(g) or 8.02(c).

     “Cash Collateralize” has the meaning specified in Section 2.03(g). Derivatives of such
term have corresponding meanings.

     “Cash Dominion Event” means either (i) the occurrence and continuance of any Event of Default,
or (ii) the failure of the Borrowers at any time to maintain Availability of at least the greater
of (x) 17.5% of the Loan Cap or (y) $7,000,000. For purposes of this Agreement, the occurrence of
a Cash Dominion Event shall be deemed continuing (i) so long as such Event of Default has not been
waived, and/or (ii) if the Cash Dominion Event arises as a result of the Borrowers’ failure to
achieve Availability as required hereunder, until Availability has exceeded the greater of (x)
17.5% of the Loan Cap or (y) $7,000,000 for thirty (30) consecutive days, in which case a Cash
Dominion Event shall no longer be deemed to be continuing for purposes of this Agreement; provided
that that a Cash Dominion Event shall be deemed continuing (even if an Event of Default is no
longer continuing and/or Availability exceeds the required amount for thirty (30) consecutive days)
at all times during any Fiscal Year after a Cash Dominion Event has occurred and been discontinued
on two (2) occasions in such Fiscal Year. The termination of a Cash Dominion Event as provided
herein shall in no way limit, waive or delay the occurrence of a subsequent Cash Dominion Event in
the event that the conditions set forth in this definition again arise.

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

     “Cash Management Services” means any cash management services provided to any Loan Party by
the Agent or any Lender or any of their respective Affiliates, including, without limitation, (a)
ACH transactions, (b) controlled disbursement services, treasury, depository, overdraft, and
electronic funds transfer services, (c) credit card processing services, and (d) credit or debit
cards.

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

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

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

8

 

     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority, provided
however, for purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, guidelines or directives in
connection therewith, and (ii) all rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall
be deemed to have gone into effect and been adopted after the Effective Date.

     “Change of Control” means an event or series of events by which:

     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or only after
the passage of time (such right, an “option right”)), directly or indirectly, of 25%
or more of the Equity Interests of the Parent entitled to vote for members of the board of
directors or equivalent governing body of the Parent on a fully-diluted basis (and taking
into account all such Equity Interests that such “person” or “group” has the right to
acquire pursuant to any option right); or

     (b) during any period of 12 consecutive months, a majority of the members of the board
of directors or other equivalent governing body of the Parent cease to be composed of
individuals (i) who were members of that board or equivalent governing body on the first day
of such period, (ii) whose election or nomination to that board or equivalent governing body
was approved by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing body or
(iii) whose election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or on behalf of the board
of directors); or

     (c) any Person or two or more Persons acting in concert shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of the Parent, or
control over the Equity Interests of the Parent entitled to vote for members of the board of
directors or equivalent governing body of the Parent on a fully-diluted basis (and taking
into account all such securities that such Person or Persons have the right to acquire
pursuant to any option right) representing 25% or more of the combined voting power of such
securities; or

9

 

     (d) any “change in control” or “sale” or “disposition” or similar event as defined in
any Organizational Document of any Loan Party or in any Material Contract, or any document
governing Material Indebtedness of any Loan Party; or

     (e) the Parent fails at any time to own, directly or indirectly, 100% of the Equity
Interests of each other Loan Party free and clear of all Liens (other than the Liens in
favor of the Agent), except where such failure is as a result of a transaction permitted by
the Loan Documents.

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

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

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

     “Collateral Agent” means Bank of America, acting in such capacity under any of the Loan
Documents for its own benefit and the ratable benefit of the other Credit Parties, or any successor
thereto.

     “Commercial Letter of Credit” means any letter of credit or similar instrument (including,
without limitation, Bankers’ Acceptances) issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services by a Loan Party in
the ordinary course of business of such Loan Party.

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

     “Commitment Fee Percentage” means .375% per annum.

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

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

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

10

 

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

     “Concentration Account” has the meaning provided in Section 6.12(c).

     “Consent” means actual consent given by a Lender from whom such consent is sought.

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

     “Consolidated EBITDA” means, at any date of determination, an amount equal to Consolidated Net
Income of the Parent and its Subsidiaries for the most recently completed Measurement Period, plus
(a) the following to the extent deducted in calculating such Consolidated Net Income: (i)
Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income
Taxes, (iii) depreciation and amortization expense, (iv) stock compensation charges which do not
represent a cash item in such period or any future period, and (v) other non-recurring expenses
reducing such Consolidated Net Income which do not represent a cash item in such period or any
future period (in each case of or by the Parent and its Subsidiaries for such Measurement Period),
minus (b) the following to the extent included in calculating such Consolidated Net Income: (i)
Federal, state, local and foreign income tax credits and (ii) all non-cash items increasing
Consolidated Net Income (in each case of or by the Parent and its Subsidiaries for such Measurement
Period), all as determined on a Consolidated basis in accordance with GAAP.

     “Consolidated Fixed Charge Coverage Ratio” means, at any date of determination, the ratio of
(a) (i) Consolidated EBITDA for such period minus (ii) Capital Expenditures made during such
period, minus (iii) the aggregate amount of Federal, state, local and foreign income taxes paid in
cash during such period (but not less than zero) to (b) the sum of (i) Debt Service Charges plus
(ii) the aggregate amount of all Restricted Payments, in each case, of or by the Parent and its
Subsidiaries for the most recently completed Measurement Period, all as determined on a
Consolidated basis in accordance with GAAP.

     “Consolidated Interest Charges” means, for any Measurement Period, an amount equal to (a) the
sum of (x) all interest, premium payments, debt discount, fees, charges and related expenses in
connection with borrowed money (including capitalized interest) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest in accordance with GAAP,
including, without limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs under Swap Contracts,
but excluding any non-cash or deferred interest financing costs, and (y) the portion of rent
expense with respect to such period under Capital Lease Obligations that is treated as interest in
accordance with GAAP, minus (b) interest income during such period (excluding any portion of
interest income representing accruals of amounts received in a previous period), in each case of or
by the Parent and its Subsidiaries for the most recently completed Measurement Period, all as
determined on a Consolidated basis in accordance with GAAP.

     “Consolidated Net Income” means, as of any date of determination, the net income of the Parent
and its Subsidiaries for the most recently completed Measurement Period, all as determined on a
Consolidated basis in accordance with GAAP, provided, however, that there shall be excluded (a)
extraordinary gains and extraordinary losses for such Measurement Period, (b) the income (or loss)
of any Subsidiary during such Measurement Period in which any other Person has a joint interest,
except to the extent of the amount of cash dividends or other distributions actually paid in cash
to any of the Parent or its Subsidiaries during such period, (c) the income (or loss) of a
Subsidiary during such Measurement

11

 

Period and accrued prior to the date it becomes a Subsidiary of
the Parent and its Subsidiaries or is merged into or consolidated with the Parent or any of its
Subsidiaries or such Person’s assets are acquired by the Parent or any of its Subsidiaries, and (d)
the income of any direct or indirect Subsidiary of the Parent to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its Organization Documents or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary,
except that the Parent’s equity in any net loss of any such Subsidiary for such Measurement Period
shall be included in determining Consolidated Net Income.

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

     “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

     “Convert”, “Conversion” and “Converted” each refers to a conversion of Committed Loans of one
Type into Committed Loans of the other Type.

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

     “Covenant Compliance Event” means that Availability at any time is less than or equal to the
greater of (x) 10% of the Loan Cap or (y) $5,000,000. For purposes hereof, the occurrence of a
Covenant Compliance Event shall be deemed continuing until Availability has exceeded the greater of
(x) 10% of the Loan Cap or (y) $5,000,000 for sixty (60) consecutive days, in which case a Covenant
Compliance Event shall no longer be deemed to be continuing for purposes of this Agreement;
provided that a Covenant Compliance Event shall be deemed continuing (even if Availability exceeds
the required amount for sixty (60) consecutive days) at all times during any Fiscal Year after a
Covenant Compliance Event has occurred and been discontinued on two (2) occasions in such Fiscal
Year. The termination of a Covenant Compliance as provided herein shall in no way limit, waive or
delay the occurrence of a subsequent Covenant Compliance Event in the event that the conditions set
forth in this definition again arise.

     “Credit Card Notifications” has the meaning provided in Section 6.12(a)(i).

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

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

12

 

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

     “Credit Party Expenses” means (a) all reasonable out-of-pocket expenses incurred by the Agent,
the Arranger and their respective Affiliates, in connection with this Agreement and the other Loan
Documents, including without limitation (i) the reasonable fees, charges and disbursements of (A)
counsel for the Agent and the Arranger, (B) outside consultants for the Agent, (C) appraisers, and
(D) commercial finance examiners, and (ii) in connection with (A) the syndication of the credit
facilities provided for herein, (B) the preparation, negotiation, administration, management, execution
and delivery of this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), (C) the enforcement or protection of their rights in connection with this
Agreement or the Loan Documents or efforts to preserve, protect, collect, or enforce the Collateral
or in connection with any proceeding under any Debtor Relief Laws, or (D) any workout,
restructuring or negotiations in respect of any Obligations; (b) with respect to any L/C Issuer,
and its Affiliates, all reasonable out-of-pocket expenses incurred in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder; and
(c) all reasonable out-of-pocket expenses incurred by the Credit Parties who are not the Agent, the
Arranger, an L/C Issuer or any Affiliate of any of them, after the occurrence and during the
continuance of an Event of Default, provided that such Credit Parties shall be entitled to
reimbursement for no more than one counsel representing all such Credit Parties (absent a conflict
of interest in which case the Credit Parties may engage and be reimbursed for additional counsel).

     “Customer Credit Liabilities” means at any time, the aggregate remaining value at such time of
(a) outstanding gift certificates and gift cards of the Borrowers entitling the holder thereof to
use all or a portion of the certificate or gift card to pay all or a portion of the purchase price
for any Inventory, and (b) outstanding merchandise credits of the Borrowers.

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

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

     “Debt Service Charges” means for any Measurement Period, the sum of (a) Consolidated Interest
Charges paid or required to be paid for such Measurement Period, plus (b) principal payments made
or required to be made on account of Indebtedness (excluding the Obligations and any Synthetic
Lease Obligations but including, without limitation, Capital Lease Obligations) for such
Measurement Period, in each case determined on a Consolidated basis in accordance with GAAP.

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

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

     “Default Rate” means a rate per annum equal to the applicable rate of interest with respect to
each Loan (including the Applicable Margin) otherwise in effect from time to time plus 2.00% per
annum.

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

     “Deteriorating Lender” means any Defaulting Lender or any Lender as to which (a) the Agent has
a good faith belief that such Lender has defaulted in fulfilling its obligations under one or more
other syndicated credit facilities, or (b) a Person that Controls such Lender has been deemed
insolvent or become the subject of a bankruptcy, insolvency or similar proceeding.

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

     “Disqualified Stock” means any Equity Interest that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each case at the option
of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the
Loans mature. The amount of Disqualified Stock deemed to be outstanding at any time for purposes
of this Agreement will be the maximum amount that the Lead Borrower and its Subsidiaries may become
obligated to pay upon maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock or portion thereof, plus accrued dividends.

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

     “Effective Date” means the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 10.01.

     “Eligible Assignee” means (a) a Credit Party or any of its Affiliates; (b) a bank, insurance
company, or company engaged in the business of making commercial loans, which Person, together with
its Affiliates, has a combined capital and surplus in excess of $250,000,000; (c) an Approved Fund;
(d) any Person to whom a Credit Party assigns its rights and obligations under this Agreement as
part of an assignment and transfer of such Credit Party’s rights in and to a material portion of
such Credit Party’s

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portfolio of asset based credit facilities, and (e) any other Person (other
than a natural person) approved by (i) the Agent, the L/C Issuers and the Swing Line Lender, and
(ii) unless an Event of Default has occurred and is continuing, the Lead Borrower (each such
approval not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include a Loan Party or any of the Loan Parties’
Affiliates or Subsidiaries.

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

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

     (b) Credit Card Receivables that have been outstanding for more than five (5) Business
Days from the date of sale;

     (c) Credit Card Receivables (i) that are not subject to a perfected first-priority
security interest in favor of the Agent, or (ii) with respect to which a Loan Party does not
have good, valid and marketable title thereto, free and clear of any Lien (other than Liens
granted to the Agent pursuant to the Security Documents);

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

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

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

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

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

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

     (j) Credit Card Receivables which the Agent determines in its discretion to be
uncertain of collection or which do not meet such other reasonable eligibility criteria for
Credit Card Receivables as the Agent may determine.

     “Eligible In-Transit Inventory” means, as of any date of determination thereof, without
duplication of other Eligible Inventory, In-Transit Inventory:

     (a) Which has been shipped from a foreign location for receipt by a Loan Party, but
which has not yet been delivered to such Loan Party, which In-Transit Inventory has been in
transit for sixty (60) days or less from the date of shipment of such Inventory;

     (b) For which the purchase order is in the name of a Loan Party and title and risk of
loss has passed to such Loan Party;

     (c) For which an Acceptable Document of Title has been issued, and in each case as to
which the Agent has control (as defined in the UCC) over the documents of title which
evidence ownership of the subject Inventory (such as, if requested by the Agent, by the
delivery of a Customs Broker/Carrier Agreement);

     (d) Which is insured to the reasonable satisfaction of the Agent (including, without
limitation, marine cargo insurance);

     (e) the Foreign Vendor with respect to such In-Transit Inventory is an Approved Foreign
Vendor;

     (f) For which payment of the purchase price has been made by the Borrower or the
purchase price is supported by a Commercial Letter of Credit; and

     (g) Which otherwise would constitute Eligible Inventory;

provided that the Agent may, in its discretion, exclude any particular Inventory from the
definition of “Eligible In-Transit Inventory” in the event the Agent determines that such
Inventory is subject to any Person’s right of reclamation, repudiation, stoppage in transit
or any event has occurred or is reasonably anticipated by the Agent to arise which may
otherwise adversely impact the ability of the Agent to realize upon such Inventory.

     “Eligible Inventory” means, as of the date of determination thereof, without duplication, (i)
Eligible In-Transit Inventory, and (ii) items of Inventory of a Loan Party that are finished goods,
merchantable and readily saleable to the public in the ordinary course of the Loan Party’s business
deemed by the Agent in its discretion to be eligible for inclusion in the calculation of the
Borrowing Base, in each case that, except as otherwise agreed by the Agent, (A) complies with each
of the representations and warranties respecting Inventory made by the Loan Parties in the Loan
Documents, and (B) is not excluded as ineligible by virtue of one or more of the criteria set forth
below. Except as otherwise agreed

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by the Agent, in its discretion, the following items of Inventory shall not be included in Eligible Inventory:

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

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

     (c) Inventory (other than Eligible In-Transit Inventory) that is not located in the
United States of America (excluding territories or possessions of the United States) at a
location that is owned or leased by a Loan Party, except (i) Inventory in transit in the
continental United States between such owned or leased locations, or (ii) to the extent that
the Loan Parties have furnished the Agent with (A) any UCC financing statements or other
documents that the Agent may determine to be necessary to perfect its security interest in
such Inventory at such location, and (B) a Collateral Access Agreement executed by the Person owning any such location
on terms reasonably acceptable to the Agent;

     (d) Inventory that is located in a distribution center leased by a Loan Party unless
the applicable lessor has delivered to the Agent a Collateral Access Agreement;

     (e) Inventory that is comprised of goods which (i) are damaged, defective, “seconds,”
or otherwise unmerchantable, (ii) are to be returned to the vendor, (iii) are obsolete or
slow moving, or custom items, work-in-process, raw materials, or that constitute samples,
spare parts, promotional, marketing, labels, bags and other packaging and shipping materials
or supplies used or consumed in a Loan Party’s business, (iv) are seasonal in nature and
which have been packed away for sale in the subsequent season, (v) not in compliance with
all standards imposed by any Governmental Authority having regulatory authority over such
Inventory, its use or sale, or (vi) are bill and hold goods;

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

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

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

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

     (j) Inventory acquired in a Permitted Acquisition or which is not of the type usually
sold in the ordinary course of the Loan Parties’ business, unless and until the Agent has
completed or received (A) an appraisal of such Inventory from appraisers satisfactory to the
Agent and establishes Inventory Reserves (if applicable) therefor, and otherwise agrees that
such Inventory shall be deemed Eligible Inventory, and (B) such other due diligence as the
Agent may require, all of the results of the foregoing to be reasonably satisfactory to the
Agent.

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

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

     “Equipment” has the meaning set forth in the UCC.

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

     “ERISA” means the Employee Retirement Income Security Act of 1974.

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

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

     “Event of Default” has the meaning specified in Section 8.01. An Event of Default
shall be deemed to be continuing unless and until that Event of Default has been duly waived as
provided in Section 10.01 hereof.

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

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

     “Existing Credit Agreement” has the meaning given such term in the recitals hereto.

     “Existing Letters of Credit” means all Letter of Credit Accommodations (as defined in the
Existing Credit Agreement) outstanding under the Existing Credit Agreement on the Effective Date.

     “Extraordinary Receipt” means any cash received by or paid to or for the account of any Person
not in the ordinary course of business, including tax refunds, pension plan reversions, indemnity
payments and any purchase price adjustments.

     “Facility Guaranty” means the Guaranty made by the Guarantors in favor of the Agent and the
other Credit Parties, in form reasonably satisfactory to the Agent.

     “FATCA” means current Section 1471 through 1474 of the Code or any amended version or
successor provision that is substantively similar and, in each case, any regulations promulgated
thereunder and any interpretation and other guidance issued in connection therewith.

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

     “Fee Letter” means the letter agreement, dated the Effective Date, among the Borrowers and the
Agent.

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     “Fiscal Month” means any fiscal month of any Fiscal Year, which month shall generally end on
the Saturday closest to the end of each calendar month in accordance with the fiscal accounting
calendar of the Loan Parties.

     “Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarters shall generally
end on the Saturday closest to the end of each April, July, October and January of such Fiscal Year
in accordance with the fiscal accounting calendar of the Loan Parties.

     “Fiscal Year” means any 52 week period or 53 week period ending on the Saturday closest to
January 31 of any calendar year.

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

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

     “Foreign Vendor” means a Person that sells In-Transit Inventory to a Loan Party.

     “Foreign Vendor Agreement” means an agreement between a Foreign Vendor and the Agent in form
and substance satisfactory to the Agent and pursuant to which, among other things, the parties
shall agree upon their relative rights with respect to In-Transit Inventory of a Loan Party
purchased from such Foreign Vendor.

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

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

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

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

     “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation,

20

 

(iii) to maintain working capital, equity capital or any other financial statement condition
or liquidity or level of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the
payment or performance thereof or to protect such obligee against loss in respect thereof (in whole
or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by
such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain
any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as
a verb has a corresponding meaning.

     “Guarantor” means the Parent and each Subsidiary of the Parent or any Borrower (other than the
Borrowers) existing on the Effective Date and each other Subsidiary of the Parent or any Borrower
that shall be required to execute and deliver a Facility Guaranty pursuant to Section 6.11.

     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.

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

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

     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

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

     (c) net obligations of such Person under any Swap Contract;

     (d) all obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business and, in each
case, not past due for more than 60 days);

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

     (f) All Attributable Indebtedness of such Person;

     (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other Person
(including, without limitation, Disqualified Stock), or any warrant, right or option to
acquire such

21

 

Equity Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

     (h) all Guarantees of such Person in respect of any of the foregoing.

     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

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

     “Information” has the meaning specified in Section 10.07.

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

     “Interest Payment Date” means, (a) as to any LIBOR Rate Loan, the last day of each Interest
Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest
Period for a LIBOR Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as
to any Base Rate Loan (including a Swing Line Loan), the first Business Day of each month and the
Maturity Date.

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

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

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

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

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

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

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

     “In-Transit Cap” means, as of any date of determination, ten percent (10%) of the Loan Cap
(without giving effect to this In-Transit Cap in the calculation of the Borrowing Base).

     “In-Transit Inventory” means Inventory of a Loan Party which is in the possession of a common
carrier and is in transit from a Foreign Vendor of a Loan Party from a location outside of the
continental United States to a location of a Loan Party that is within the continental United
States.

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

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

     (a) Obsolescence;

     (b) Seasonality;

     (c) Shrink;

     (d) Imbalance;

     (e) Change in Inventory character;

     (f) Change in Inventory composition;

     (g) Change in Inventory mix;

     (h) Mark-downs (both permanent and point of sale);

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     (i) Retail mark-ons and mark-ups inconsistent with prior period practice and
performance, industry standards, current business plans or advertising calendar and planned
advertising events; and

     (j) Out-of-date and/or expired Inventory.

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

     “IRS” means the United States Internal Revenue Service.

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

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

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

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

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

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

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

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

     “L/C Issuer” means, individually and collectively, each of Bank of America and Wells Fargo
Bank, National Association in its respective capacity as issuer of Letters of Credit hereunder, or
any

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successor issuer of Letters of Credit hereunder (which successor may only be a Lender selected
by the Agent in its discretion). An L/C Issuer may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such L/C Issuer, in which case the term “L/C
Issuer” shall include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

     “L/C Obligations” means, as at any date of determination, the aggregate undrawn amount
available to be drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amounts
available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.06. For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of any Rule under the ISP or any Article of UCP 600, such
Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be
drawn.

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

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

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

     “Letter of Credit” means each Banker’s Acceptance, each Standby Letter of Credit and each
Commercial Letter of Credit issued hereunder, and shall include the Existing Letters of Credit.

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

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

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

     “Letter of Credit Sublimit” means an amount equal to $15,000,000. The Letter of Credit
Sublimit is part of, and not in addition to, the Aggregate Commitments. A permanent reduction of
the Aggregate Commitments shall not require a corresponding pro rata reduction in the Letter of
Credit Sublimit; provided, however, that if the Aggregate Commitments are reduced to an amount less
than the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be reduced to an
amount equal to (or, at Lead Borrower’s option, less than) the Aggregate Commitments.

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

     “LIBOR Rate” means for any Interest Period with respect to a LIBOR Rate Loan, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as designated by the
Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such
Interest

25

 

Period) with a term equivalent to such Interest Period. If such rate is not available at such
time for any reason, then the “LIBOR Rate” for such Interest Period shall be the rate per annum
determined by the Agent to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the LIBOR Rate Loan being
made, continued or Converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period.

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

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

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

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

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

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

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

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

     “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect
upon, the operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of any Loan Party or the Parent and its Subsidiaries taken as
a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations
under any Loan Document to which it is a party; or (c) a material impairment of the rights and
remedies of the Agent or the Credit Parties under any Loan Document or a material adverse effect
upon the legality, validity, binding effect or

26

 

enforceability against any Loan Party of any Loan Document to which it is a party. In
determining whether any individual event would result in a Material Adverse Effect, notwithstanding
that such event in and of itself does not have such effect, a Material Adverse Effect shall be
deemed to have occurred if the cumulative effect of such event and all other then existing events
would result in a Material Adverse Effect.

     “Material Contract” means, with respect to any Person, each contract to which such Person is a
party involving aggregate consideration payable to or by such Person of $250,000 or more in any
Fiscal Year or otherwise material to the business, condition (financial or otherwise), operations,
performance, properties or prospects of such Person.

     “Material Indebtedness” means Indebtedness (other than the Obligations) of the Loan Parties in
an aggregate principal amount exceeding $500,000. For purposes of determining the amount of
Material Indebtedness at any time, (a) the amount of the obligations in respect of any Swap
Contract at such time shall be calculated at the Swap Termination Value thereof, (b) undrawn
committed or available amounts shall be included, and (c) all amounts owing to all creditors under
any combined or syndicated credit arrangement shall be included.

     “Maturity Date” means August 19, 2016.

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

     “Measurement Period” means, at any date of determination, the most recently completed twelve
Fiscal Months of the Parent.

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

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

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

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

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

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

     “Note” means (a) a promissory note made by the Borrowers in favor of a Lender evidencing
Committed Loans made by such Lender, substantially in the form of Exhibit C-1, and (b) the
Swing Line Note, as each may be amended, supplemented or modified from time to time.

     “NPL” means the National Priorities List under CERCLA.

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

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

     “Other Liabilities” means any obligation on account of (a) any Cash Management Services
furnished to any of the Loan Parties or any of their Subsidiaries and/or (b) any Bank Product
furnished to any of the Loan Parties and/or any of their Subsidiaries.

     “Other Taxes” means all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made hereunder or under any
other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document, excluding, however, any such amounts imposed as a
result of an assignment by a Lender of its Loan or Commitment.

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

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

     “Parent” means Kirkland’s, Inc., a Tennessee corporation.

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

     “Participation Register” has the meaning provided therefor in Section 10.06(d).

     “Payment Conditions” means, at the time of determination with respect to any specified
transaction or payment, that (a) no Default or Event of Default then exists or would arise as a
result of entering into such transaction or the making of such payment, and (b) after giving effect
to such transaction or payment, the Pro Forma Availability Condition has been satisfied and the
Consolidated Fixed Charge Coverage Ratio, as projected on a pro-forma basis for the twelve months
immediately preceding such transaction or payment, will be equal to or greater than 1.1:1.0. Prior
to undertaking any transaction or payment which is subject to the Payment Conditions, the Loan
Parties shall deliver to the Agent evidence of satisfaction of the conditions contained in clause
(b) above on a basis (including, without limitation, giving due consideration to results for prior
periods) reasonably satisfactory to the Agent.

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “PCAOB” means the Public Company Accounting Oversight Board.

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

     “Permitted Acquisition” means an Acquisition in which all of the following conditions are
satisfied:

     (a) Such Acquisition shall have been approved by the Board of Directors of the Person
(or similar governing body if such Person is not a corporation) which is the subject of such
Acquisition and such Person shall not have announced that it will oppose such Acquisition or
shall not have commenced any action which alleges that such Acquisition shall violate
applicable Law;

     (c) The Lead Borrower shall have furnished the Agent with thirty (30) days’ prior
written notice of such intended Acquisition and shall have furnished the Agent with a
current draft of the Acquisition documents (and final copies thereof as and when executed),
a summary of any due diligence undertaken by the Loan Parties in connection with such
Acquisition, appropriate financial statements of the Person which is the subject of such
Acquisition, pro forma projected financial statements for the twelve (12) month period
following such Acquisition after giving effect to such Acquisition (including balance
sheets, cash flows and income statements by month for the acquired Person, individually, and
on a Consolidated basis with all Loan Parties), and such other information as the Agent may
reasonably require, all of which shall be reasonably satisfactory to the Agent;

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     (d) Either (i) the legal structure of the Acquisition shall be acceptable to the Agent
in its discretion, or (ii) the Loan Parties shall have provided the Agent with a favorable
solvency opinion from an unaffiliated third party valuation firm reasonably satisfactory to
the Agent;

     (f) After giving effect to the Acquisition, if the Acquisition is an Acquisition of
Equity Interests, a Loan Party shall acquire and own, directly or indirectly, a majority of
the Equity Interests in the Person being acquired and shall Control a majority of any voting
interests or shall otherwise Control the governance of the Person being acquired;

     (g) Any assets acquired shall be utilized in, and if the Acquisition involves a merger,
consolidation or acquisition of Equity Interests, the Person which is the subject of such
Acquisition shall be engaged in, a business otherwise permitted to be engaged in by a
Borrower under this Agreement;

     (h) If the Person which is the subject of such Acquisition will be maintained as a
Subsidiary of a Loan Party, or if the assets acquired in an Acquisition will be transferred
to a Subsidiary which is not then a Loan Party, such Subsidiary shall have been joined as a
“Borrower” hereunder or as a Guarantor, as the Agent shall determine, and the Agent shall
have received a first priority security interest in such Subsidiary’s Equity Interests and
property of such Subsidiary and of the same nature as constitutes Collateral under the
Security Documents; and

     (i) The Loan Parties shall have satisfied the Payment Conditions.

     “Permitted Disposition” means any of the following:

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

     (b) bulk sales or other dispositions of the Inventory of a Loan Party not in the
ordinary course of business in connection with Permitted Store Closings, at arm’s length;

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

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

     (e) dispositions of Equipment in the ordinary course of business that is substantially
worn, damaged, obsolete or, in the judgment of a Loan Party, no longer useful or necessary
in its business or that of any Subsidiary so long as such dispositions do not involve
Equipment having an aggregate fair market value in excess of $500,000 for all such Equipment
disposed of by all Loan Parties in any Fiscal Year;

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

     (g) Sales, transfers and dispositions by any Subsidiary which is not a Loan Party to
another Subsidiary that is not a Loan Party; and

30

 

     (h) as long as no Default or Event of Default then exists or would arise therefrom,
sales of Real Estate of any Loan Party (or sales of any Person or Persons created to hold
such Real Estate or the Equity Interests in such Person or Persons), including
sale-leaseback transactions involving any such Real Estate pursuant to leases on market
terms, as long as, (A) such sale is made for fair market value, and (B) in the case of any
sale-leaseback transaction permitted hereunder, the Agent shall have received from each such
purchaser or transferee a Collateral Access Agreement on terms and conditions reasonably
satisfactory to the Agent.

     “Permitted Encumbrances” means:

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

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

     (c) Pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations,
other than any Lien imposed by ERISA;

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

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

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

     (g) Liens existing on the Effective Date and listed on Schedule 7.01 and any
Permitted Refinancings thereof;

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

     (i) Liens in favor of the Agent arising under or pursuant to the Loan Documents;

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

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     (k) Possessory Liens in favor of brokers and dealers arising in connection with the
acquisition or disposition of Investments owned as of the Effective Date and Permitted
Investments, provided that such liens (a) attach only to such Investments and (b)
secure only obligations incurred in the ordinary course and arising in connection with the
acquisition or disposition of such Investments and not any obligation in connection with
margin financing;

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

     (m) Liens arising from precautionary UCC filings regarding “true” operating leases or,
to the extent permitted under the Loan Documents, the consignment of goods to a Loan Party;

     (n) voluntary Liens on property (other than property of the type included in the
Borrowing Base) in existence at the time such property is acquired pursuant to a Permitted
Acquisition or on such property of a Subsidiary of a Loan Party in existence at the time
such Subsidiary is acquired pursuant to a Permitted Acquisition; provided, that such
Liens are not incurred in connection with or in anticipation of such Permitted Acquisition
and do not attach to any other assets of any Loan Party or any Subsidiary; and

     (o) Liens in favor of customs and revenues authorities imposed by applicable Laws
arising in the ordinary course of business in connection with the importation of goods and
securing obligations (i) that are not overdue by more than thirty (30) days, or (ii)(A) that
are being contested in good faith by appropriate proceedings, (B) the applicable Loan Party
or Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (C) such contest effectively suspends collection of the contested
obligation and enforcement of any Lien securing such obligation.

     “Permitted Indebtedness” means each of the following as long as no Default or Event of Default
exists or would arise from the incurrence thereof:

     (a) Indebtedness outstanding on the Effective Date and listed on Schedule 7.03
and any Permitted Refinancing thereof;

     (b) Indebtedness of any Loan Party to any other Loan Party;

     (c) Purchase money Indebtedness of any Loan Party to finance the acquisition of any
personal property consisting solely of fixed or capital assets, including Capital Lease
Obligations, and any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition thereof, and
Permitted Refinancings thereof, provided, however, that the aggregate
principal amount of Indebtedness permitted by this clause (c) shall not exceed $2,500,000 at
any time outstanding and further provided that, if requested by the Agent, the Loan
Parties shall use commercially reasonable efforts to cause the holders of such Indebtedness
to enter into an access and use agreement on terms reasonably satisfactory to the Agent;

     (d) Indebtedness incurred for the construction or acquisition or improvement of, or to
finance or to refinance, any Real Estate owned by any Loan Party (including therein any
Indebtedness incurred in connection with sale-leaseback transactions permitted hereunder and
any

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Synthetic Lease Obligations), provided that, the Loan Parties shall use
commercially reasonable efforts to cause the holders of such Indebtedness and the lessors
under any sale-leaseback transaction to enter into a Collateral Access Agreement on terms
reasonably satisfactory to the Agent;

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

     (f) obligations (contingent or otherwise) of any Loan Party or any Subsidiary thereof
existing or arising under any Swap Contract, provided that such obligations are (or
were) entered into by such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with fluctuations in interest rates or foreign exchange
rates, and not for purposes of speculation or taking a “market view;”

     (g) Indebtedness with respect to the deferred purchase price for any Permitted
Acquisition, provided that such Indebtedness does not require the payment in cash of
principal (other than in respect of working capital adjustments) prior to the Maturity Date,
has a final maturity which extends beyond the Maturity Date, and is subordinated to the
Obligations on terms reasonably acceptable to the Agent;

     (h) Indebtedness of any Person that becomes a Subsidiary of a Loan Party in a Permitted
Acquisition, which Indebtedness is existing at the time such Person becomes a Subsidiary of
a Loan Party (other than Indebtedness incurred solely in contemplation of such Person’s
becoming a Subsidiary of a Loan Party);

     (i) The Obligations; and

     (j) unsecured Subordinated Indebtedness.

     “Permitted Investments” means each of the following:

     (a) readily marketable obligations issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof having maturities
of not more than 360 days from the date of acquisition thereof; provided that the
full faith and credit of the United States of America is pledged in support thereof;

     (b) commercial paper issued by any Person organized under the laws of any state of the
United States of America and rated at least “Prime-1” (or the then equivalent grade) by
Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with
maturities of not more than 180 days from the date of acquisition thereof;

     (c) time deposits with, or insured certificates of deposit or bankers’ acceptances of,
any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the
United States of America, any state thereof or the District of Columbia or is the principal
banking subsidiary of a bank holding company organized under the laws of the United States
of America, any state thereof or the District of Columbia, and is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (b) of this definition and (iii) has combined capital and surplus of at
least $1,000,000,000, in each case with maturities of not more than 180 days from the date
of acquisition thereof;

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     (d) Fully collateralized repurchase agreements with a term of not more than thirty (30)
days for securities described in clause (a) above (without regard to the limitation on
maturity contained in such clause) and entered into with a financial institution satisfying
the criteria described in clause (c) above or with any primary dealer and having a market
value at the time that such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such counterparty entity with whom such repurchase agreement
has been entered into;

     (e) Investments, classified in accordance with GAAP as current assets of the Loan
Parties, in any money market fund, mutual fund, or other investment companies that are
registered under the Investment Company Act of 1940, as amended, which are administered by
financial institutions that have the highest rating obtainable from either Moody’s or S&P,
and which invest solely in one or more of the types of securities described in clauses (a)
through (d) above;

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

     (g) (i) Investments by any Loan Party and its Subsidiaries in their respective
Subsidiaries outstanding on the Effective Date, (ii) additional Investments by any Loan
Party and its Subsidiaries in Loan Parties (other than the Parent), and (iii) additional
Investments by Subsidiaries of the Loan Parties that are not Loan Parties in other
Subsidiaries that are not Loan Parties;

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

     (i) Guarantees constituting Permitted Indebtedness;

     (j) so long as no Default or Event of Default has occurred and is continuing or would
result from such Investment, Investments by any Loan Party in Swap Contracts permitted
hereunder;

     (k) Investments received in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;

     (l) advances to officers, directors and employees of the Loan Parties and Subsidiaries
in the ordinary course of business (i) in an aggregate amount not to exceed $250,000 at any
time outstanding, for travel, entertainment, relocation and analogous ordinary business
purposes, and (ii) in an aggregate amount not to exceed $1,000,000 at any time outstanding
to permit such officers, directors and employees to purchase Equity Interests in a Loan
Party so long as no Default or Event of Default shall have occurred and be continuing;

     (m) Investments constituting Permitted Acquisitions; and

     (n) Capital contributions made by any Loan Party to another Loan Party;

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

     “Permitted Overadvance” means an Overadvance made by the Agent, in its discretion, which:

     (a) Is made to maintain, protect or preserve the Collateral and/or the Credit Parties’
rights under the Loan Documents or which is otherwise for the benefit of the Credit Parties;

     (b) Is made to enhance the likelihood of, or to maximize the amount of, repayment of
any Obligation;

     (c) Is made to pay any other amount chargeable to any Loan Party hereunder; and

     (d) Together with all other Permitted Overadvances then outstanding, shall not (i)
exceed ten percent (10%) of the Borrowing Base at any time or (ii) unless a Liquidation is
occurring, remain outstanding for more than forty-five (45) consecutive Business Days,
unless in each case, the Required Lenders otherwise agree;

provided however, that the foregoing shall not (i) modify or abrogate any of the
provisions of Section 2.03 regarding the Lenders’ obligations with respect to Letters of
Credit or Section 2.04 regarding the Lenders’ obligations with respect to Swing Line Loans,
or (ii) result in any claim or liability against the Agent (regardless of the amount of any
Overadvance) for Unintentional Overadvances, and such Unintentional Overadvances shall not reduce
the amount of Permitted Overadvances allowed hereunder, and further provided that in no
event shall the Agent make an Overadvance, if after giving effect thereto, the principal amount of
the Credit Extensions would exceed the Aggregate Commitments (as in effect prior to any termination
of the Commitments pursuant to Section 2.06 hereof).

     “Permitted Refinancing” means, with respect to any Person, any Indebtedness issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund
(collectively, to “Refinance”), the Indebtedness being Refinanced (or previous refinancings
thereof constituting a Permitted Refinancing); provided, that (a) the principal amount (or
accreted value, if applicable) of such Permitted Refinancing does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so Refinanced (plus unpaid accrued interest
and premiums thereon and underwriting discounts, defeasance costs, fees, commissions and expenses),
(b) the weighted average life to maturity of such Permitted Refinancing is greater than or equal to
the weighted average life to maturity of the Indebtedness being Refinanced (c) such Permitted
Refinancing shall not require any scheduled principal payments due prior to the Maturity Date in
excess of, or prior to, the scheduled principal payments due prior to such Maturity Date for the
Indebtedness being Refinanced, (d) if the Indebtedness being Refinanced is subordinated in right of
payment to the Obligations under this Agreement, such Permitted Refinancing shall be subordinated
in right of payment to such Obligations on terms at least as favorable to the Credit Parties as
those contained in the documentation governing the Indebtedness being Refinanced, (e) no Permitted
Refinancing shall have direct or indirect obligors who were not also obligors of the Indebtedness
being Refinanced, or greater guarantees or security, than the Indebtedness being Refinanced, (f)
such Permitted Refinancing shall be otherwise on terms not materially less favorable to the Credit
Parties than those contained in the documentation governing the Indebtedness being

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Refinanced, including, without limitation, with respect to financial and other covenants and
events of default, (g) the interest rate applicable to any such Permitted Refinancing shall not
exceed the then applicable market interest rate, and (h) at the time thereof, no Default or Event
of Default shall have occurred and be continuing.

     “Permitted Store Closings” means (a) Store closures and related Inventory dispositions which
do not exceed in any Fiscal Year of the Parent and its Subsidiaries, ten percent (10%) of the
number of the Loan Parties’ Stores as of the beginning of such Fiscal Year (net of Store
relocations and openings for such Fiscal Year), and (b) the related Inventory is either moved to a
distribution center or another retail location of the Loan Parties for future sale in the ordinary
course of business or is disposed of, if requested by the Agent, in accordance with liquidation
agreements and with professional liquidators reasonably acceptable to the Agent.

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

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

     “Platform” has the meaning specified in Section 6.02.

     “Prepayment Event” means:

     (a) Any Disposition (including pursuant to a sale and leaseback transaction) of any
property or asset of a Loan Party provided that any Disposition of property and
assets of the type not included in the Borrowing Base in an amount in excess of $500,000 in
any Fiscal Year or $1,000,000 in the aggregate for all such Dispositions after the Effective
Date, in each case prior to the occurrence of a Cash Dominion Event, shall not be deemed a
Prepayment Event;

     (b) Any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of (and payments in lieu thereof), any
property or asset of a Loan Party in an amount in excess of $100,000, unless (i) the
proceeds therefrom are required to be paid to the holder of a Lien on such property or asset
having priority over the Lien of the Agent or (ii) prior to the occurrence of a Cash
Dominion Event, the proceeds therefrom are deposited into a segregated account and utilized
for purposes of replacing or repairing the assets in respect of which such proceeds, awards
or payments were received within 180 days of the occurrence of the damage to or loss of the
assets being repaired or replaced;

     (c) The issuance by a Loan Party of any Equity Interests, other than any such issuance
of Equity Interests (i) to a Loan Party, (ii) as consideration for a Permitted Acquisition
or (iii) as a compensatory issuance to any employee, director, or consultant (including
under any option plan);

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

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

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     “Pro Forma Availability Condition” shall mean, for any date of calculation with respect to any
transaction or payment, the Pro Forma Excess Availability following, and after giving effect to,
such transaction or payment, will be equal to or greater than the greater of (i) 20% of the Loan
Cap and (ii) $10,000,000.

     “Pro Forma Excess Availability” shall mean, for any date of calculation, after giving pro
forma effect to the transaction then to be consummated, the projected Availability as of the end of
each Fiscal Month during any subsequent projected twelve (12) Fiscal Months.

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

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

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

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

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

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

     “Reports” has the meaning provided in Section 9.12(b).

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

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

     “Reserves” means all Inventory Reserves and Availability Reserves. The Agent shall have the
right, at any time and from time to time after the Effective Date in its discretion to establish,
modify or eliminate Reserves.

     “Responsible Officer” means the chief executive officer, president, chief financial officer,
any vice president, secretary or assistant secretary, treasurer or assistant treasurer of a Loan
Party or any of the other individuals designated in writing to the Agent by an existing Responsible
Officer of a Loan Party as an authorized signatory of any certificate or other document to be
delivered hereunder. Any document delivered hereunder that is signed by a Responsible Officer of a
Loan Party shall be conclusively

37

 

presumed to have been authorized by all necessary corporate, partnership and/or other action
on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

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

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

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

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

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

     “Security Agreement” means the Amended and Restated Security Agreement dated as of the
Effective Date among the Loan Parties and the Agent.

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

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

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

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

     “Solvent” and “Solvency” means, with respect to any Person on a particular date, that on such
date (a) at fair valuation, all of the properties and assets of such Person are greater than the
sum of the debts, including contingent liabilities, of such Person, (b) the present fair saleable
value of the properties and assets of such Person is not less than the amount that would be
required to pay the probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its properties and assets and pay its debts and
other liabilities, contingent obligations and other commitments as they mature in the normal course
of business, (d) such Person does not intend to, and does not believe that it will, incur debts
beyond such Person’s ability to pay as such debts mature, and (e)

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such Person is not engaged in a business or a transaction, and is not about to engage in a
business or transaction, for which such Person’s properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing practices in the
industry in which such Person is engaged. The amount of all guarantees at any time shall be
computed as the amount that, in light of all the facts and circumstances existing at the time, can
reasonably be expected to become an actual or matured liability.

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

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

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

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

     “Subordinated Indebtedness” means Indebtedness which is expressly subordinated in right of
payment to the prior payment in full of the Obligations and which is in form and on terms approved
in writing by the Agent.

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

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and

39

 

(b) any and all transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together with any related
schedules, a “Master Agreement”), including any such obligations or liabilities under any Master
Agreement.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).

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

     “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or
any successor swing line lender hereunder.

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

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

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

     “Swing Line Sublimit” means an amount equal to the lesser of (a) $5,000,000 and (b) the
Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate
Commitments.

     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called
synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession
of property (including sale and leaseback transactions), in each case, creating obligations that do
not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief
Laws to such Person, would be characterized as the indebtedness of such Person (without regard to
accounting treatment).

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

     “Termination Date” means the earliest to occur of (i) the Maturity Date, (ii) the date on
which the maturity of the Obligations is accelerated (or deemed accelerated) and the Commitments
are irrevocably terminated (or deemed terminated) in accordance with Article VIII, or (iii)
the termination of the Commitments in accordance with the provisions of Section 2.06
hereof.

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

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

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

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

     “UCP 600” means the rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce and dated as of July 1, 2007 (or such
later version thereof as may be in effect at the time of issuance).

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

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

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

     “Unintentional Overadvance” means an Overadvance which, to the Agent’s knowledge, did not
constitute an Overadvance when made but which has become an Overadvance resulting from changed
circumstances beyond the control of the Credit Parties, including, without limitation, a reduction
in the Appraised Value of property or assets included in the Borrowing Base or misrepresentation by
the Loan Parties.

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

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

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

     (a) The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation.” The word “will” shall be construed to have the same meaning
and effect as the word “shall.” Unless the context requires otherwise, (i) any definition
of or reference to any agreement, instrument or other

41

 

document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s successors and
assigns, (iii) the words “herein,” “hereof” and “hereunder,” and
words of similar import when used in any Loan Document, shall be construed to refer to such
Loan Document in its entirety and not to any particular provision thereof, (iv) all
references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or interpreting such
law and any reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

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

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

     (d) Any reference herein or in any other Loan Document to the satisfaction, repayment,
or payment in full of the Obligations shall mean the repayment in Dollars in full in cash or
immediately available funds (or, in the case of contingent reimbursement obligations with
respect to Letters of Credit and Bank Products (other than Swap Contracts), providing Cash
Collateralization) of all of the Obligations (including the payment of any termination
amount then applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Swap Contracts) other than (i) unasserted
contingent indemnification Obligations, (ii) any Obligations relating to Bank Products
(other than Swap Contracts) that, at such time, are allowed by the applicable Bank Product
provider to remain outstanding without being required to be repaid or Cash Collateralized,
and (iii) any Obligations relating to Swap Contracts that, at such time, are allowed by the
applicable provider of such Swap Contracts to remain outstanding without being required to
be repaid.

     1.03 Accounting Terms

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

     (b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan Document, and either
the Lead Borrower or the Required Lenders shall so request, the Agent, the Lenders and the
Lead

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Borrower shall negotiate in good faith to amend such ratio or requirement to preserve
the original intent thereof in light of such change in GAAP (subject to the approval of the
Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Lead Borrower shall provide to the Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.

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

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

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

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

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

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

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

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

Within the limits of each Lender’s Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05,
and reborrow under this

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Section 2.01. Committed Loans may be Base Rate Loans or LIBOR Rate
Loans, as further provided herein.

     2.02 Borrowings, Conversions and Continuations of Committed Loans.

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

          (b) Each Committed Borrowing, each Conversion of Committed Loans from one Type to the other,
and each continuation of LIBOR Rate Loans shall be made upon the Lead Borrower’s irrevocable notice
to the Agent, which may be given by telephone. Each such notice must be received by the Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of,
Conversion to or continuation of LIBOR Rate Loans or of any Conversion of LIBOR Rate Loans to Base
Rate Loans, and (ii) one Business Day prior to the requested date of any Borrowing of Base Rate
Loans. Each telephonic notice by the Lead Borrower pursuant to this Section 2.02(b) must
be confirmed promptly by delivery to the Agent of a written Committed Loan Notice, appropriately
completed and signed by a Responsible Officer of the Lead Borrower. Each Borrowing of, Conversion
to or continuation of LIBOR Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof. Except as provided in Sections 2.03(c) and
2.04(c), each Borrowing of or Conversion to Base Rate Loans shall be in such minimum
amounts as the Agent may require. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Lead Borrower is requesting a Committed Borrowing, a Conversion of
Committed Loans from one Type to the other, or a continuation of LIBOR Rate Loans, (ii) the
requested date of the Borrowing, Conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Committed Loans to be borrowed, Converted or
continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are
to be Converted, and (v) if applicable, the duration of the Interest Period with respect thereto.
If the Lead Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the
Lead Borrower fails to give a timely notice requesting a Conversion or continuation, then the
applicable Committed Loans shall be made as, or Converted to, Base Rate Loans. Any such automatic
Conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable LIBOR Rate Loans. If the Lead Borrower requests a Borrowing
of, Conversion to, or continuation of LIBOR Rate Loans in any such Committed Loan Notice, but fails
to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.
Notwithstanding anything to the contrary herein, a Swing Line Loan may not be Converted to a LIBOR
Rate Loan.

          (c) Following receipt of a Committed Loan Notice, the Agent shall promptly notify each Lender
of the amount of its Applicable Percentage of the applicable Committed Loans, and if no timely
notice of a Conversion or continuation is provided by the Lead Borrower, the Agent shall notify
each Lender of the details of any automatic Conversion to Base Rate Loans described in Section
2.02(b). In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Agent in immediately available funds at the Agent’s Office not later than 1:00
p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of
the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), the Agent shall use reasonable efforts to make all funds
so received available to the Borrowers in like funds by no later than 4:00 p.m. on the day of
receipt by the Agent either by (i) crediting the account of the Lead Borrower on the books of Bank
of America with the amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the

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Agent by the Lead
Borrower; provided, however, that if, on the date the Committed Loan Notice with
respect to such Borrowing is given by the Lead Borrower, there are L/C Borrowings outstanding, then
the proceeds of such Borrowing, first, shall be applied to the payment in full of any such
L/C Borrowings, and second, shall be made available to the Borrowers as provided above.

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

          (e) Except as otherwise provided herein, a LIBOR Rate Loan may be continued or Converted only
on the last day of an Interest Period for such LIBOR Rate Loan. During the existence of a Default
or an Event of Default, no Loans may be requested as, Converted to or continued as LIBOR Rate Loans
without the Consent of the Required Lenders.

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

          (g) After giving effect to all Committed Borrowings, all Conversions of Committed Loans from
one Type to the other, and all continuations of Committed Loans as the same Type, there shall not
be more than five (5) Interest Periods in effect with respect to LIBOR Rate Loans.

          (h) The Agent, the Lenders, the Swing Line Lender and the L/C Issuer shall have no obligation
to make any Loan or to provide any Letter of Credit if an Overadvance would result. The Agent may,
in its discretion, make Permitted Overadvances without the consent of the Borrowers, the Lenders,
the Swing Line Lender and the L/C Issuer, and the Borrowers and each Lender, the Swing Line Lender
and L/C Issuer shall be bound thereby. Any Permitted Overadvance may constitute a Swing Line Loan.
A Permitted Overadvance is for the account of the Borrowers and shall constitute a Base Rate Loan
and an Obligation and shall be repaid by the Borrowers in accordance with the provisions of
Section 2.05(c). The making of any such Permitted Overadvance on any one occasion shall
not obligate the Agent or any Lender to make or permit any Permitted Overadvance on any other
occasion or to permit such Permitted Overadvances to remain outstanding. The making by the Agent of
a Permitted Overadvance shall not modify or abrogate any of the provisions of Section 2.03
regarding the Lenders’ obligations to purchase participations with respect to Letter of Credits or
of Section 2.04 regarding the
Lenders’ obligations to purchase participations with respect to Swing Line Loans. The Agent
shall have no liability for, and no Loan Party or Credit Party shall have the right to, or shall,
bring any claim of any kind whatsoever against the Agent with respect to Unintentional Overadvances
regardless of the amount of any such Overadvances.

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     2.03 Letters of Credit.

          (a) The Letter of Credit Commitment.

               (i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in
reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time
to time on any Business Day during the period from the Effective Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of the Loan Parties, and to amend or
extend Letters of Credit previously issued by it, in accordance with Section 2.03(b) below,
and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the Loan Parties and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with respect to
any Letter of Credit, (x) the Total Outstandings shall not exceed the Loan Cap, (y) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of
Credit Sublimit. Each request by the Lead Borrower for the issuance or amendment of a Letter of
Credit shall be deemed to be a representation by the Borrowers that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the preceding sentence. Within
the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to
obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed. Any L/C Issuer (other than Bank of America or any of its
Affiliates) shall notify the Agent in writing on each Business Day of all Letters of Credit issued
on the prior Business Day by such L/C Issuer, provided that (A) until the Agent advises any
such Issuing Bank that the provisions of Section 4.02 are not satisfied, or (B) the
aggregate amount of the Letters of Credit issued in any such week exceeds such amount as shall be
agreed by the Agent and the L/C Issuer, such L/C Issuer shall be required to so notify the Agent in
writing only once each week of the Letters of Credit issued by such L/C Issuer during the
immediately preceding week as well as the daily amounts outstanding for the prior week, such notice
to be furnished on such day of the week as the Agent and such L/C Issuer may agree. In connection
with any distributions to be made hereunder or any other Credit Extensions made by the Agent on
behalf of the Lenders, the Agent shall be entitled to assume that no Letters of Credit have been
issued by such L/C Issuer and are outstanding unless the Agent has received written notice thereof
from such L/C Issuer in accordance with the immediately preceding sentence. All Existing Letters
of Credit shall be deemed to have been issued pursuant hereto, and from and after the Effective
Date shall be subject to and governed by the terms and conditions hereof.

               (ii) No L/C Issuer shall issue any Letter of Credit, if:

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

               (B) subject to Section 2.03(b)(iii), the expiry date of such requested
Commercial Letter of Credit would occur more than 120 days after the date of issuance or
last extension, unless the Required Lenders have approved such expiry date; or

               (C) the expiry date of such requested Letter of Credit would occur after the Letter of
Credit Expiration Date, unless either such Letter of Credit is Cash Collateralized on or
prior to the date of issuance of such Letter of Credit (or such later date as to

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which the Agent and the applicable L/C Issuer may agree) or all the Lenders have
approved such expiry date.

               (iii) No L/C Issuer shall issue any Letter of Credit without the prior consent of the Agent
if:

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

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

               (C) such Letter of Credit is to be denominated in a currency other than Dollars;
provided that if the L/C Issuer, in its discretion, issues a Letter of Credit
denominated in a currency other than Dollars, all reimbursements by the Borrowers of the
honoring of any drawing under such Letter of Credit shall be paid in the currency in which
such Letter of Credit was denominated;

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

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

               (iv) No L/C Issuer shall amend any Letter of Credit if the L/C Issuer would not be permitted
at such time to issue such Letter of Credit in its amended form under the terms hereof or if the
beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

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

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

               (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of
the Lead Borrower delivered to an L/C Issuer (with a copy to the Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer of the Lead
Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Agent not
later than 11:00 a.m. at least two Business Days (or such other date and time as the Agent and the
L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may
require. In the case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A)
the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a
Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C
Issuer may require. Additionally, the Lead Borrower shall furnish to the L/C Issuer and the Agent
such other documents and information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or the Agent may require.

               (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Agent (by telephone or in writing) that the Agent has received a copy of such Letter of
Credit Application from the Lead Borrower and, if not, the L/C Issuer will provide the Agent with a
copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Agent or any
Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in Article IV
shall not then be satisfied or unless the L/C Issuer would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit under the terms hereof (by reason of the
provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit
for the account of the applicable Loan Party or enter into the applicable amendment, as the case
may be, in each case in accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance or amendment of each Letter of Credit, each Lender shall be deemed to
(without any further action), and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer, without recourse or warranty, a risk participation in such Letter of Credit in an
amount equal to the product of such Lender’s Applicable Percentage times the Stated Amount
of such Letter of Credit. Upon any change in the Commitments under this Agreement, it is hereby
agreed that with respect to all L/C Obligations, there shall be an automatic adjustment to the
participations hereby created to reflect the new Applicable Percentages of the assigning and
assignee Lenders.

               (iii) If the Lead Borrower so requests in any applicable Letter of Credit Application, the L/C
Issuer may, in its sole and absolute discretion, agree to issue a Standby Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period (commencing with the date of
issuance of such Standby Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Standby Letter of Credit is issued. Unless otherwise directed by the
L/C Issuer, the Lead Borrower shall not be required to make a

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specific request to the L/C Issuer
for any such extension. Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C
Issuer to permit the extension of such Standby Letter of Credit at any time to an expiry date not
later than the Letter of Credit Expiration Date; provided, however, that the L/C
Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not
be permitted, or would have no obligation, at such time to issue such Standby Letter of Credit in
its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii)
or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by
telephone or in writing) on or before the day that is five Business Days before the Non-Extension
Notice Date (1) from the Agent that the Required Lenders have elected not to permit such extension
or (2) from the Agent, any Lender or the Lead Borrower that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in each such case directing
the L/C Issuer not to permit such extension.

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

          (c) Drawings and Reimbursements; Funding of Participations.

               (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under
such Letter of Credit, the applicable L/C Issuer shall notify the Lead Borrower and the Agent
thereof not less than two (2) Business Days prior to the Honor Date (as defined below);
provided, however, that any failure to give or delay in giving such notice shall
not relieve the Borrowers of their obligation to reimburse the L/C Issuer and the Lenders with
respect to any such payment. On the date of any payment by the L/C Issuer under a Letter of Credit
(each such date, an “Honor Date”), the Borrowers shall be deemed to have requested a
Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the
amount of such payment, without regard to the minimum and multiples specified in Section
2.02(b) for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Loan Cap and the conditions set forth in Section 4.02 (other than
the delivery of a Committed Loan Notice). In the event that such Committed Borrowing cannot be made
pursuant to the terms hereof, then not later than 11:00 a.m. on the Honor Date, the Borrowers shall
reimburse the L/C Issuer through the Agent in an amount equal to the amount of such drawing. If
the Borrowers fail to so reimburse the L/C Issuer by such time, the Agent shall promptly notify
each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and the amount of such Lender’s Applicable Percentage thereof. Any notice given by
the L/C Issuer or the Agent pursuant to this Section 2.03(c)(i) may be given by telephone
if immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such notice.

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

               (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be
satisfied or for any other reason, the Borrowers shall be deemed to have incurred from the L/C
Issuer an

49

 

L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which
L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest
at the
Default Rate. In such event, each Lender’s payment to the Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.

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

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

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

          (d) Repayment of Participations.

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

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

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

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

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

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

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

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

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

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

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          (f) Role of L/C Issuer. Each Lender and the Borrowers agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the L/C Issuer, the
Agent, any of their respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; (iii) any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit or any error in interpretation of technical terms; or (iv) the due
execution, effectiveness, validity or enforceability of any document or instrument related to any
Letter of Credit or Issuer Document. The Borrowers hereby assume all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not, preclude
the Borrowers pursuing such rights and remedies as they may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, the Agent, any of their
respective Related Parties nor any correspondent, participant, or assignee of the L/C Issuer shall
be liable or responsible to the Loan Parties for any of the matters described in clauses (i)
through (iv) above, or for any action, neglect or omission under or in connection with any Letter
of Credit or Issuer Documents, including, without limitation, the issuance or amendment of any
Letter of Credit, the failure to issue or amend any Letter of Credit, or the honoring or
dishonoring of any demand under any Letter of Credit, and such action or neglect or omission will
be binding upon the Borrowers; provided that, anything in such clauses to the contrary
notwithstanding, the Borrowers may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to
punitive, consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove
were caused by the L/C Issuer’s willful misconduct or gross negligence. In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any notice or information to
the contrary (or the L/C Issuer may refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit and may disregard
any requirement in a Letter of Credit that notice of dishonor be given in a particular manner and
any requirement that presentation be made at a particular place or by a particular time of day),
and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason. The L/C Issuer shall not be responsible for the wording of any Letter
of Credit (including, without limitation, any drawing conditions or any terms or conditions that
are ineffective, ambiguous, inconsistent, unduly complicated or reasonably impossible to satisfy),
notwithstanding any assistance the L/C Issuer may provide to the Borrowers with drafting or
recommending text for any Letter of Credit Application or with the structuring of any transaction
related to any Letter of Credit, and the Borrowers hereby acknowledge and agree that any such
assistance will not constitute legal or other advice by the L/C Issuer or any representation or
warranty by the L/C Issuer that any such wording or such Letter of Credit will be effective.
Without limiting the foregoing, the L/C Issuer may, as it deems appropriate, modify or alter and
use in any Letter of Credit the terminology contained on the Letter of Credit Application for such
Letter of Credit.

          (g) Cash Collateral. Upon the request of the Agent, if, as of the Letter of Credit
Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrowers shall, in
each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations.
Sections 2.05 and 8.02(c) set forth certain additional requirements to deliver Cash
Collateral hereunder. For purposes of this Section 2.03, Section 2.05 and
Section 8.02(c), “Cash Collateralize” means to pledge and deposit

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with or deliver
to the Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances in an amount equal to 105% of the Outstanding Amount
of all L/C Obligations, pursuant to documentation in form and substance satisfactory to the Agent
and the L/C Issuer (which documents are hereby Consented to by the Lenders). The Borrowers hereby
grant to the Agent a security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing to secure all Obligations. Such cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of America (except that
Permitted Investments of the type listed in
clauses (a) through (e) of the definition thereof may be made at the request of the Lead
Borrower at the option and in the sole discretion of the Agent (and at the Borrowers’ risk and
expense); interest or profits, if any, on such investments shall accumulate in such account). If
at any time the Agent determines that any funds held as cash collateral are subject to any right or
claim of any Person other than the Agent or that the total amount of such funds is less than the
aggregate Outstanding Amount of all L/C Obligations, the Borrowers will, forthwith upon demand by
the Agent, pay to the Agent, as additional funds to be deposited as cash collateral, an amount
equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if
any, then held as cash collateral that the Agent determines to be free and clear of any such right
and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as cash
collateral, such funds shall be applied to reimburse the L/C Issuer and, to the extent not so
applied, shall thereafter be applied to satisfy other Obligations.

          (h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C Issuer
and the Lead Borrower when a Letter of Credit is issued (including any such agreement applicable to
an Existing Letter of Credit), (i) the rules of the ISP shall apply to each Standby Letter of
Credit, and (ii) the rules of the UCP shall apply to each Commercial Letter of Credit.

          (i) Letter of Credit Fees. The Borrowers shall pay to the Agent for the account of
each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of
Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the daily Stated
Amount under each such Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit). For purposes of computing the daily amount available to be drawn under any
Letter of Credit, the amount of the Letter of Credit shall be determined in accordance with
Section 1.06. Letter of Credit Fees shall be (i) due and payable on the first Business Day
of each April, July, October and January, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand, and (ii) computed on a quarterly basis in arrears for the immediately preceding quarter.
Notwithstanding anything to the contrary contained herein, while any Event of Default exists, all
Letter of Credit Fees shall accrue at the Default Rate as provided in Section 2.08(b)
hereof.

          (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrowers shall pay directly to the L/C Issuer for its own account a fronting fee (i) with respect
to each Commercial Letter of Credit, at a rate equal to 0.125% per annum, computed on the Stated
Amount of such Letter of Credit, and payable upon the issuance or amendment thereof, and (ii) with
respect to each Standby Letter of Credit, at a rate equal to 0.125% per annum, computed on the
Stated Amount available to be drawn under such Letter of Credit and on a quarterly basis in arrears
for the immediately preceding quarter. Such fronting fees shall be due and payable on the first
Business Day of each April, July, October and January, commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter
on demand. For purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of the Letter of Credit shall be determined in accordance with Section
1.06. In addition, the Borrowers shall pay directly to the L/C Issuer for its own account the
customary issuance, presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in

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effect. Such
customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

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

     2.04 Swing Line Loans.

          (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing
Line Lender may, in its discretion, in reliance upon the agreements of the other Lenders set forth
in this Section 2.04, make loans (each such loan, a “Swing Line Loan”) to the
Borrowers from time to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding
the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the
Outstanding Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender’s Commitment; provided, however, that
after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed Loan Cap,
and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender at such time,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations
at such time, plus such Lender’s Applicable Percentage of the Outstanding Amount of all
Swing Line Loans at such time shall not exceed such Lender’s Commitment, and provided,
further, that the Borrowers shall not use the proceeds of any Swing Line Loan to refinance
any outstanding Swing Line Loan, and provided further that the Swing Line Lender may
refuse, and such refusal shall not be deemed an abuse of the Swing Line Lender’s discretion to make
Swing Line Loans as provided herein, to make any Swing Line Loan at any time when any Lender is at
such time a Defaulting Lender or Deteriorating Lender hereunder, unless the Swing Line Lender has
entered into satisfactory arrangements with the Borrower or such Lender to eliminate the Swing Line
Lender’s risk with respect to such Lender. Within the foregoing limits, and subject to the other
terms and conditions hereof, the Borrowers may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall
bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line
Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal
to the product of such Lender’s Applicable Percentage multiplied by the amount of such Swing Line
Loan. The Swing Line Lender shall have all of the benefits and immunities (A) provided to the
Agent in Article IX with respect to any acts taken or omissions suffered by the Swing Line
Lender in connection with Swing Line Loans made by it or proposed to be made by it as if the term
“Agent” as used in Article IX included the Swing Line Lender with respect to such acts or
omissions, and (B) as additionally provided herein with respect to the Swing Line Lender.

          (b) Borrowing Procedures. Each Swing Line Borrowing may, in the Swing Line Lender’s
discretion, be made upon the Lead Borrower’s irrevocable notice to the Swing Line Lender and the
Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender
and the Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the
amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date,
which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery
to the Swing Line Lender and the Agent of a written Swing Line Loan Notice, appropriately completed
and signed by a Responsible Officer of the Lead Borrower. Promptly after receipt by the Swing Line
Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Agent
(by telephone or in writing) that the Agent has also received such Swing Line Loan Notice and, if
not, the Swing Line Lender will notify the Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the
Agent at the request of the

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Required Lenders prior to 2:00 p.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of
the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B)
that one or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender may, not later
than 4:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of
its Swing Line Loan available to the Borrowers either by (i) crediting the account of the Lead
Borrower on the books of Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Swing Line Lender by the Lead Borrower; provided,
however, that if, on the date of the proposed Swing Line Loan, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in
full of any such L/C Borrowings, and second, shall be made available to the Borrowers as
provided above.

          (c) Refinancing of Swing Line Loans.

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

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

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

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certificate of the Swing Line Lender submitted to
any Lender (through the Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.

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

          (d) Repayment of Participations.

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

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

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

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

     2.05 Prepayments.

          (a) The Borrowers may, upon irrevocable notice from the Lead Borrower to the Agent, at any
time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or
penalty; provided that (i) such notice must be received by the Agent not later than 11:00
a.m. (A) three Business Days prior to any date of prepayment of LIBOR Rate Loans and (B) on the
date of prepayment of Base Rate Loans; (ii) any prepayment of LIBOR Rate Loans shall be in a
principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; and (iii) any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof, or, in

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each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid and, if LIBOR Rate Loans, the Interest Period(s) of such Loans. The Agent
will promptly notify each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage of such prepayment. If such notice is given by the Lead Borrower,
the Borrowers shall make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of a LIBOR Rate Loan shall be
accompanied by all accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Applicable Percentages.

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

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

          (d) The Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations to the
extent required pursuant to the provisions of Section 6.12 hereof.

          (e) The Borrowers shall prepay the Loans and Cash Collateralize the L/C Obligations in an
amount equal to the Net Proceeds received by a Loan Party on account of a Prepayment Event,
irrespective of whether a Cash Dominion Event then exists and is continuing.

          (f) Prepayments made pursuant to Section 2.05(c), (d) and (e) above,
first, shall be applied ratably to the L/C Borrowings and the Swing Line Loans,
second, shall be applied ratably to the outstanding Committed Loans, third, shall
be used to Cash Collateralize the remaining L/C Obligations (except that with respect to
Section 2.05(d) and (e), such Cash Collateralization shall be required only if an
Event of Default is then continuing); and, fourth, the amount remaining, if any, after the
prepayment in full of all L/C Borrowings, Swing Line Loans and Committed Loans outstanding at such
time and the Cash Collateralization of the remaining L/C Obligations (to the extent required
hereunder) in full may be retained by the Borrowers for use in the ordinary course of its business.
Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash
Collateral shall be applied (without any further action by or notice to or from the Borrowers or
any other Loan Party) to reimburse the L/C Issuer or the Lenders, as applicable.

     2.06 Termination or Reduction of Commitments.

          (a) The Borrowers may, upon irrevocable notice from the Lead Borrower to the Agent, terminate
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit or from time to
time permanently reduce the Aggregate Commitments, the Letter of Credit Sublimit or the

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Swing Line
Sublimit; provided that (i) any such notice shall be received by the Agent not later than
11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof, (iii) the Borrowers shall not terminate or reduce (A) the Aggregate Commitments if,
after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments, (B) the Letter of Credit Sublimit if, after giving effect
thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would
exceed the Letter of Credit Sublimit, and (C) the Swing Line Sublimit if, after giving effect
thereto, and to any concurrent payments hereunder, the Outstanding Amount of Swing Line Loans
hereunder would exceed the Swing Line Sublimit.

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

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

     2.07 Repayment of Loans.

          (a) The Borrower shall repay to the Lenders on the Termination Date the aggregate principal
amount of Committed Loans outstanding on such date.

          (b) To the extent not previously paid, the Borrower shall repay the outstanding balance of the
Swing Line Loans on the Termination Date.

     2.08 Interest.

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

          (b)  (i) If any amount payable under any Loan Document is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such
amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal
to the Default Rate to the fullest extent permitted by Law.

               (ii) If any other Event of Default exists, then the Agent may, and upon the request of the
Required Lenders shall, notify the Lead Borrower that all outstanding Obligations shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate and
thereafter such Obligations shall bear interest at the Default Rate to the fullest extent permitted
by Law.

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

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

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

          (a) Commitment Fee. The Borrowers shall pay to the Agent for the account of each
Lender in accordance with its Applicable Percentage, a commitment fee equal to the Commitment Fee
Percentage multiplied by the actual daily amount by which the Aggregate Commitments exceed the
Total Outstandings. The commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article IV is not met,
and shall be due and payable quarterly in arrears for the immediately preceding quarter on the
first Business Day of each April, July, October, and January, commencing with the first such date
to occur after the Effective Date, and on the last day of the Availability Period.

          (b) Other Fees. The Borrower shall pay to the Arranger and the Agent for their own
respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees
shall be fully earned when paid and shall not be refundable for any reason whatsoever.

     2.10 Computation of Interest and Fees. All computations of interest for Base Rate Loans when
the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees
and interest shall be made on the basis of a 360-day year and actual days elapsed. Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided that any
Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day. Each determination by the Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

     2.11 Evidence of Debt.

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

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maturity of its Loans and payments with respect
thereto. Upon receipt of an affidavit of a Lender as to the loss, theft, destruction or mutilation
of such Lender’s Note and upon cancellation of such Note, the Borrowers will issue, in lieu
thereof, a replacement Note in favor of such Lender, in the same principal amount thereof and
otherwise of like tenor.

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

     2.12 Payments Generally; Agent’s Clawback.

          (a) General. All payments to be made by the Borrowers shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrowers hereunder shall be made to the Agent, for the
account of the respective Lenders to which such payment is owed, at the Agent’s Office in Dollars
and in immediately available funds not later than 2:00 p.m. on the date specified herein. The
Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by the Agent after 2:00 p.m. shall, at the option of the
Agent, be deemed received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. If any payment (other than with respect to payment of a LIBOR Loan) to
be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made
on the next following Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.

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

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

     A notice of the Agent to any Lender or the Lead Borrower with respect to any amount owing
under this subsection (b) shall be conclusive, absent manifest error.

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

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

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

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

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

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

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

     2.14 Settlement Amongst Lenders

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

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

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY;

APPOINTMENT OF LEAD BORROWER

     3.01 Taxes.

          (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if
the Borrowers shall be required by Law to deduct any Indemnified Taxes (including any Other Taxes)
from such payments, then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums payable under this
Section) the Agent,

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Lenders or L/C Issuer, as the case may be, receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with Law.

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

          (c) Indemnification by the Loan Parties. The Loan Parties shall indemnify the Agent,
each Lender and each L/C Issuer, within 20 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by such Agent, such Lender or such L/C
Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Lead Borrower by a Lender or the L/C Issuer (with a
copy to the Agent), or by the Agent on its own behalf or on behalf of the Agent, a Lender or the
L/C Issuer, shall be conclusive absent manifest error.

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

          (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which any Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Lead Borrower (with a copy to the
Agent), at the time or times prescribed by Law or reasonably requested by the Lead Borrower or the
Agent, such properly completed and executed documentation prescribed by Law as will permit such
payments to be made without withholding or at a reduced rate of withholding. Such delivery shall
be provided on the Effective Date and on or before such documentation expires or becomes obsolete
or after the occurrence of an event requiring a change in the documentation most recently
delivered. In addition, any Lender, if requested by the Lead Borrower or the Agent, shall deliver
such other documentation prescribed by Law or reasonably requested by the Lead Borrower or the
Agent as will enable the Lead Borrower or the Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.

     Without limiting the generality of the foregoing, in the event that any Borrower is resident
for tax purposes in the United States, (A) any Lender that is a “United States person” within the
meaning of Section 7701(a)(30) of the Code shall deliver to the Lead Borrower and the Agent
executed originals of IRS Form W-9 or such other documentation or information prescribed by
applicable Laws or reasonably requested by on behalf of such Borrower or the Agent as will enable
such Lead Borrower or the Agent, as the case may be, to determine whether or not such Lender is
subject to backup withholding or information reporting requirements; and (B) any Foreign Lender
shall deliver to the Lead Borrower and the Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the Lead Borrower or the Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the following is
applicable:

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

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

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

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

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

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

     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in
connection with any request for a LIBOR Rate Loan or a Conversion to or continuation thereof that

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

     3.04 Increased Costs; Reserves on LIBOR Rate Loans.

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

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

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

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

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

          (b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change
in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such
Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below
that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could
have achieved but for such

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Change in Law (taking into consideration such Lender’s or the L/C
Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with
respect to capital adequacy), then from time to time the Loan Parties will pay to such Lender or
the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such
Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such
reduction suffered.

          (c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its
holding company, as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Lead Borrower shall be conclusive absent manifest error. The Loan Parties shall
pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such
certificate within 20 days after receipt thereof.

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

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

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

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

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

     (c) any assignment of a LIBOR Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Lead Borrower pursuant to
Section 10.13;

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including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrowers shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

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

     3.06 Mitigation Obligations; Replacement of Lenders.

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

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

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

     3.08 Designation of Lead Borrower as Borrowers’ Agent.

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

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

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

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     4.01 Conditions of Initial Credit Extension. The effectiveness of this Agreement is subject
to satisfaction of the following conditions precedent:

     (a) The Agent’s receipt of the following, each of which shall be originals, telecopies
or other electronic image scan transmission (e.g., “pdf” or “tif “ via e-mail) (followed
promptly by originals) unless otherwise specified, each dated the Effective Date (or, in the
case of certificates of governmental officials, a recent date before the Effective Date) and
each in form and substance satisfactory to the Agent:

     (i) counterparts of this Agreement each properly executed by a Responsible
Officer of the signing Loan Party and the Lenders sufficient in number for
distribution to the Agent, each Lender and the Lead Borrower;

     (ii) a Note executed by the Borrowers in favor of each Lender requesting a
Note;

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

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

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

     (vi) a certificate of a Responsible Officer of the Lead Borrower certifying (A)
that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, (B) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect, (C) to the
Solvency of the Loan Parties as of the Effective Date after giving effect to the
transactions contemplated hereby, and (D) either that (1) no
consents, licenses or approvals are required in connection with the execution,
delivery

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and performance by such Loan Party and the validity against such Loan Party
of the Loan Documents to which it is a party, or (2) that all such consents,
licenses and approvals have been obtained and are in full force and effect;

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

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

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

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

     (xi) (A) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Agent to be
filed, registered or recorded to create or perfect the first priority Liens intended
to be created under the Loan Documents and all such documents and instruments shall
have been so filed, registered or recorded to the satisfaction of the Agent, (B) the
Credit Card Notifications, and Blocked Account Agreements required pursuant to
Section 6.12 hereof shall have been obtained, and (C) control agreements
with respect to the Loan Parties’ securities and investment accounts have been
obtained; and

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

     (b) After giving effect to (i) any Loans outstanding hereunder, (ii) any charges to the
Loan Account made in connection herewith and (iii) all Existing Letters of Credit and any
other Letters of Credit to be issued at, or immediately subsequent to, such establishment,
Availability shall be greater than $20,000,000.

     (c) The Agent shall have received a Borrowing Base Certificate dated the Effective
Date, relating to the month ended on July 31, 2011, and executed by a Responsible Officer of
the Lead Borrower.

     (d) The Agent shall be reasonably satisfied that any financial statements delivered to
it and the Lenders fairly present the business and financial condition of the Loan Parties
and that there has been no Material Adverse Effect since the date of the Audited Financial
Statements.

     (e) The Agent and the Lenders shall have received and be satisfied with (i) updated
projections, which shall include an Availability model, Consolidated income statement,
balance

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sheet, and statement of cash flow, by month, each prepared in conformity with GAAP and
consistent with the Loan Parties’ then current practices and (b) such other information
(financial or otherwise) reasonably requested by the Agent.

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

     (g) There shall not have occurred any default of any Material Contract of any Loan
Party which could reasonably be expected to have a Material Adverse Effect.

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

     (i) All fees required to be paid to the Agent or the Arranger on or before the
Effective Date shall have been paid in full, and all fees required to be paid to the Lenders
on or before the Effective Date shall have been paid in full.

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

     (k) The Agent and the Lenders shall have received all documentation and other
information required by regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including without limitation the USA PATRIOT
Act.

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

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

     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request
for Credit Extension (other than a Committed Loan Notice requesting only a Conversion of Committed
Loans to the other Type, or a continuation of LIBOR Rate Loans) and of each L/C Issuer to issue
each Letter of Credit is subject to the following conditions precedent:

     (a) The representations and warranties of each Loan Party contained in Article
V or in any other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct on and as of
the date of such Credit Extension, except (i) to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier
date, (ii) in the case of any representation and warranty qualified by materiality,
they shall be true

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and correct in all respects and (iii) for purposes of this Section
4.02, the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.

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

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

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

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a Conversion
of Committed Loans to the other Type or a continuation of LIBOR Rate Loans) submitted by the Lead
Borrower shall be deemed to be a representation and warranty by the Borrowers that the conditions
specified in Sections 4.02(a), (b) and (d) have been satisfied on and as of the date of the
applicable Credit Extension. The conditions set forth in this Section 4.02 are for the
sole benefit of the Credit Parties, but until the Required Lenders (or, if there are two (2) or
fewer Lenders, any Lender) otherwise direct the Agent to cease making Loans and issuing Letters of
Credit, the Lenders will fund their Applicable Percentage of all Loans and L/C Advances and
participate in all Swing Line Loans and Letters of Credit whenever made or issued, which are
requested by the Lead Borrower and which, notwithstanding the failure of the Loan Parties to
comply with the provisions of this Article IV, agreed to by the Agent, provided,
however, the making of any such Loans or the issuance of any Letters of Credit shall not be deemed
a modification or waiver by any Credit Party of the provisions of this Article IV on any
future occasion or a waiver of any rights or the Credit Parties as a result of any such failure to
comply.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

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

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

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

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

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

     5.05 Financial Statements; No Material Adverse Effect.

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

          (b) The unaudited Consolidated balance sheet of the Parent and its Subsidiaries dated April
30, 2011, and the related Consolidated statements of income or operations, Shareholders’ Equity and
cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of the Parent and its Subsidiaries as of
the date thereof and their results of operations for the period covered thereby, subject, in the
case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

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

          (d) To the best knowledge of the Lead Borrower, no Internal Control Event exists or has
occurred since the date of the Audited Financial Statements that has resulted in or could
reasonably be

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expected to result in a misstatement in any material respect, (i) in any financial
information delivered or to be delivered to the Agent or the Lenders, (ii) of the Borrowing Base,
(iii) of covenant compliance calculations provided hereunder or (iv) of the assets, liabilities,
financial condition or results of operations of the Parent and its Subsidiaries on a Consolidated
basis.

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

     5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of the Loan Parties after due and diligent investigation, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan
Party or any of its Subsidiaries or against any of its properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect.

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

     5.08 Ownership of Property; Liens

          (a) Each of the Loan Parties has good record and marketable title in fee simple to or valid
leasehold interests in, all Real Estate necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each of the Loan Parties has good and marketable title
to, valid leasehold interests in, or valid licenses to use all personal property and assets
material to the ordinary conduct of its business.

          (b) Schedule 5.08(b)(1) sets forth the address (including street address, county and
state) of all Real Estate (excluding Leases) that is owned by the Loan Parties, together with a
list of the holders of any mortgage or other Lien thereon as of the Effective Date. Each Loan
Party has good, marketable and insurable fee simple title to the Real Estate owned by such Loan
Party or such Subsidiary, free and clear of all Liens, other than Permitted Encumbrances.
Schedule 5.08(b)(2) sets forth the address (including street address, county and state) of
all Leases of the Loan Parties, together with the name of each lessor and its contact information
with respect to each such Lease as of the Effective Date. Each of such Leases is in full force and
effect and the Loan Parties are not in default of the terms thereof.

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

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

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

     5.09 Environmental Compliance.

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

          (b) None of the properties currently or formerly owned or operated by any Loan Party is listed
or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list
or is adjacent to any such property; there are no and never have been any underground or
above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in
which Hazardous Materials are being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or, to the best of the knowledge of the Loan Parties,
on any property formerly owned or operated by any Loan Party; there is no asbestos or
asbestos-containing material on any property currently owned or operated by any Loan Party; and
Hazardous Materials have not been released, discharged or disposed of on any property currently or
formerly owned or operated by any Loan Party.

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

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

     5.11 Taxes. The Loan Parties have filed all Federal, state and other material tax returns and
reports required to be filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or their properties,
income or assets otherwise

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due and payable, except those which are being contested in good faith by
appropriate proceedings being diligently conducted, for which adequate reserves have been provided
in accordance with GAAP, as to which Taxes no Lien has been filed and which contest effectively
suspends the collection of the contested obligation and the enforcement of any Lien securing such
obligation. There is no proposed tax assessment against any Loan Party that would, if made, have a
Material Adverse Effect. No Loan Party or any Subsidiary thereof is a party to any tax sharing
agreement.

     5.12 ERISA Compliance.

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

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

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

     5.13 Subsidiaries; Equity Interests. As of the Effective Date, the Loan Parties have no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, which
Schedule sets forth the legal name, jurisdiction of incorporation or formation and authorized
Equity Interests of each such Subsidiary. All of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan
Party in the amounts specified on Part (a) of Schedule 5.13 free and
clear of all Liens except for those created under the Security Documents. Except as set forth
in Schedule 5.13, there are no outstanding rights to purchase any Equity Interests in any
Subsidiary. As of the Effective Date, the Loan Parties have no equity investments in any other
corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.
All of the outstanding Equity Interests in the Loan Parties have been validly issued, and are
fully paid and non-assessable and are owned in the amounts specified on Part (c) of Schedule
5.13 and, except for the outstanding Equity Interests in the Parent, are free and clear of all
Liens except for those created under the Security Documents. The copies of the Organization
Documents of each Loan Party and each amendment thereto provided pursuant to Section 4.01
are true and correct copies of each such document, each of which is valid and in full force and
effect.

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     5.14 Margin Regulations; Investment Company Act.

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

          (b) None of the Loan Parties, any Person Controlling any Loan Party, or any Subsidiary is or
is required to be registered as an “investment company” under the Investment Company Act of 1940.

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

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

     5.17 Intellectual Property; Licenses, Etc.
The Loan Parties own, or possess the right to use, all of the Intellectual Property, licenses,
permits and other authorizations that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person. To the best knowledge
of the Lead Borrower, no current Intellectual Property employed, or now contemplated to be
employed, by any Loan Party infringes upon any current Intellectual Property rights held by any
other Person. No claim or litigation regarding any of the foregoing is pending against any of the
Loan Parties or, to the best knowledge of the Lead Borrower, threatened in writing against any of
the Loan Parties, which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

     5.18 Labor Matters.

     There are no strikes, lockouts, slowdowns or other material labor disputes against any Loan
Party pending or, to the knowledge of any Loan Party, threatened. The hours worked by and payments
made to employees of the Loan Parties comply with the Fair Labor Standards Act and any other
applicable federal, state, local or foreign Law dealing with such matters except to the extent that
any such violation

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could not reasonably be expected to have a Material Adverse Effect. No Loan
Party has incurred any liability or obligation under the Worker Adjustment and Retraining Act or
similar state Law. All payments due from any Loan Party, or for which any claim may be made
against any Loan Party, on account of wages and employee health and welfare insurance and other
benefits, have been paid or properly accrued in accordance with GAAP as a liability on the books of
such Loan Party. Except as set forth on Schedule 5.18, no Loan Party is a party to or bound
by any collective bargaining agreement, management agreement, employment agreement, bonus,
restricted stock, stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement. There are no representation proceedings pending or, to any Loan Party’s
knowledge, threatened to be filed with the National Labor Relations Board, and no labor
organization or group of employees of any Loan has made a pending demand for recognition. There are
no complaints, unfair labor practice charges, grievances, arbitrations, unfair employment practices
charges or any other claims or complaints against any Loan Party pending or, to the knowledge of
any Loan Party, threatened to be filed with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or termination of
employment of any employee of any Loan Party. The consummation of the transactions contemplated by
the Loan Documents will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which any Loan Party is bound.

     5.19 Security Documents.

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

          (b) When the Security Agreement (or a short form thereof) is filed in the United States Patent
and Trademark Office and the United States Copyright Office and when financing statements, releases
and other filings in appropriate form are filed in the offices specified on Schedule II of the
Security Agreement, the Agent shall have a fully perfected Lien on, and security interest in, all
right, title and interest of the applicable Loan Parties in the Intellectual Property Collateral
(as defined in the Security Agreement) in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or analogous document in the
United States Patent and Trademark Office or the United States Copyright Office, as applicable, in
each case prior and superior in right to any other Person (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United States Copyright Office
may be necessary to perfect a Lien on registered trademarks, trademark applications and copyrights
acquired by the Loan Parties after the Effective Date).

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     5.20 Solvency

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

     5.21 Deposit Accounts; Credit Card Arrangements.

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

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

     5.22 Brokers. No broker or finder brought about the obtaining, making or closing of the Loans
or transactions contemplated by the Loan Documents, and no Loan Party or Affiliate thereof has any
obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

     5.23 Customer and Trade Relations. There exists no actual or, to the knowledge of any Loan
Party, threatened, termination or cancellation of, or any material adverse modification or change
in the business relationship of any Loan Party with any supplier material to its operations.

     5.24 Material Contracts. Schedule 5.24 sets forth all Material Contracts to which any
Loan Party is a party or is bound as of the Effective Date. The Loan Parties have delivered true,
correct and complete copies of such Material Contracts to the Agent on or before the Effective
Date. The Loan Parties are not in breach or in default in
any material respect of or under any Material Contract and have not received any notice of the
intention of any other party thereto to terminate any Material Contract.

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

ARTICLE VI

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied (other than contingent indemnification claims for
which a claim has not been asserted), or any Letter of Credit shall remain outstanding, the Loan
Parties shall, and shall (except in the case of the covenants set forth in Sections
6.01, 6.02, and 6.03) cause each Subsidiary to:

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

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     (a) as soon as available, but in any event within 90 days after the end of each Fiscal
Year of the Parent, a Consolidated balance sheet of the Parent and its Subsidiaries as at
the end of such Fiscal Year, and the related Consolidated statements of income or
operations, Shareholders’ Equity and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all in reasonable detail
and prepared in accordance with GAAP, such Consolidated statements to be audited and
accompanied by a report and unqualified opinion of a Registered Public Accounting Firm of
nationally recognized standing reasonably acceptable to the Agent, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit;

     (b) as soon as available, but in any event within 30 days after the end of each of the
Fiscal Months of each Fiscal Year of the Parent (unless such month is the last month of a
Fiscal Quarter, and then within 45 days after the end of such month), a Consolidated balance
sheet of the Parent and its Subsidiaries as at the end of such Fiscal Month, and the related
Consolidated statements of income or operations, Shareholders’ Equity and cash flows for
such Fiscal Month, and for the portion of the Parent’s Fiscal Year then ended, setting forth
in each case in comparative form the figures for (A) such period set forth in the
projections delivered pursuant to Section 6.01(c) hereof, (B) the corresponding Fiscal Month
of the previous Fiscal Year and (C) the corresponding portion of the previous Fiscal Year,
all in reasonable detail, such Consolidated statements to be certified by a Responsible
Officer of the Lead Borrower as fairly presenting the financial condition, results of
operations, Shareholders’ Equity and cash flows of the Parent and its Subsidiaries as of the
end of such Fiscal Month in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;

     (c) as soon as available, but in any event no more than 30 days after the end of each
Fiscal Year of the Parent, forecasts prepared by management of the Lead Borrower, in form
satisfactory to the Agent, of Availability and the Consolidated balance sheets and
statements of income or operations and cash flows of the Parent and its Subsidiaries on a
monthly basis for the immediately following Fiscal Year (including the fiscal year in which
the Maturity Date occurs), and as soon as available, any significant revisions to such
forecast with respect to such Fiscal Year.

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

     (a) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and 6.01(b), (i) a duly completed Compliance Certificate
signed by a Responsible Officer of the Lead Borrower, and in the event of any change in
generally accepted accounting principles used in the preparation of such financial
statements, the Lead Borrower shall also provide a statement of reconciliation conforming
such financial statements to GAAP and (ii) a copy of management’s discussion and analysis
with respect to such financial statements;

     (b) on the fifteenth (15th) day of each Fiscal Month (or, if such day is not
a Business Day, on the next succeeding Business Day), a Borrowing Base Certificate showing
the Borrowing Base as of the close of business as of the last day of the immediately
preceding Fiscal Month, each Borrowing Base Certificate to be certified as complete and
correct by a Responsible Officer of the Lead Borrower; provided that at any time
that an Accelerated Borrowing Base Delivery Event has occurred and is continuing, such
Borrowing Base Certificate shall be delivered on

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Wednesday of each week (or, if Wednesday is
not a Business Day, on the next succeeding Business Day), as of the close of business on the
immediately preceding Saturday;

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

     (d) promptly after the same are available, copies of each annual report, proxy or
financial statement or other report or communication sent to the stockholders of the Loan
Parties, and copies of all annual, regular, periodic and special reports and registration
statements which any Loan Party may file or be required to file with the SEC under Section
13 or 15(d) of the Securities Exchange Act of 1934 or with any national securities exchange;

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

     (f) as soon as available, but in any event within 30 days after the end of each Fiscal
Year of the Loan Parties, a report summarizing the insurance coverage (specifying type,
amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such
additional information as the Agent, or any Lender through the Agent, may reasonably
specify;

     (g) promptly after the Agent’s request therefor, copies of all Material Contracts and
documents evidencing Material Indebtedness;

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

     (i) promptly, such additional information regarding the business affairs, financial
condition or operations of any Loan Party or any Subsidiary, or compliance with the terms of
the Loan Documents, as the Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or 6.01(b), or
Section 6.02(c) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Lead Borrower posts such documents, or provides a link
thereto on the Lead Borrower’s website on the Internet at the website address listed on
Schedule 10.02; or (ii) on which such documents are posted on the Lead Borrower’s behalf on
an Internet or intranet website, if any, to which each Lender and the Agent have access (whether a
commercial, third-party website or whether sponsored by the Agent); provided that: (i) the
Lead Borrower shall deliver paper copies of such documents to the Agent or any Lender that requests
the Lead Borrower to deliver such paper copies until a written request to cease delivering paper
copies is given by the Agent or such Lender and (ii) the Lead Borrower shall notify the Agent (by
telecopier or electronic mail) of the posting of any such documents and provide to the Agent by
electronic mail electronic versions (i.e., soft copies) of such documents. The Agent shall
have no obligation to

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request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by the Loan Parties with
any such request for delivery, and each Lender shall be solely responsible for requesting delivery
to it or maintaining its copies of such documents.

     The Loan Parties hereby acknowledge that (a) the Agent and/or the Arranger will make available
to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Loan
Parties hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Loan Parties or their securities) (each, a “Public
Lender”). The Loan Parties hereby agree that they will use commercially reasonable efforts to
identify that portion of the Borrower Materials that may be distributed to the Public Lenders and
that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x)
by marking Borrower Materials “PUBLIC,” the Loan Parties shall be deemed to have authorized the
Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not
containing any material non-public information (although it may be sensitive and proprietary) with
respect to the Loan Parties or their securities for purposes of United States Federal and state
securities laws (provided, however, that to the extent such Borrower Materials
constitute Information, they shall be treated as set forth in Section 10.07); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor”; and (z) the Agent and the Arranger shall be entitled to
treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor.”

     6.03 Notices. Promptly notify the Agent:

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

     (b) of any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect,

     (c) of any breach or non-performance of, or any default under, a Material Contract or
with respect to Material Indebtedness of any Loan Party or any Subsidiary thereof;

     (d) of any dispute, litigation, investigation, proceeding or suspension between any
Loan Party or any Subsidiary thereof and any Governmental Authority, in each case having a
value of more than $250,000; or the commencement of, or any material development in, any
litigation or proceeding affecting any Loan Party or any Subsidiary thereof, including
pursuant to any applicable Environmental Laws, in each case having a value of more than
$250,000;

     (e) of the occurrence of any ERISA Event;

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

     (g) of any change in any Loan Party’s senior executive officers;

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

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     (i) of any collective bargaining agreement or other labor contract to which a Loan
Party becomes a party, or the application for the certification of a collective bargaining
agent;

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

     (k) of any casualty or other insured damage to any portion of the Collateral having a
value of more than $250,000 or the commencement of any action or proceeding for the taking
of any interest in a portion of the Collateral having a value of more than $250,000 under
power of eminent domain or by condemnation or similar proceeding or if any portion of the
Collateral having a value of more than $250,000 is damaged or destroyed;

     (l) of any transaction of the nature contained in Article VII hereof, occurring
after the Effective Date, and

     (m) of any failure by any Loan Party to pay rent at (i) any of the Loan Parties’
distribution centers or warehouses; (ii) ten percent (10%) or more of such Loan Party’s
Store locations or (iii) any of such Loan Party’s locations if such failure would be
reasonably likely to result in a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of the Lead Borrower setting forth details of the occurrence referred to therein and stating what
action the Lead Borrower has taken and proposes to take with respect thereto.

     6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or
assets, (b) all lawful claims (including, without limitation, claims of landlords,
warehousemen, customs brokers, freight forwarders, consolidators, and carriers) which, if unpaid,
would by Law become a Lien upon its property; and (c) all Material Indebtedness, as and when due
and payable, but subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness, except, in each case, where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively
suspends collection of the contested obligation and enforcement of any Lien securing such
obligation, (d) no Lien has been filed with respect thereto and (e) the failure to make payment
pending such contest could not reasonably be expected to result in a Material Adverse Effect.
Nothing contained herein shall be deemed to limit the rights of the Agent with respect to
determining Reserves pursuant to this Agreement.

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

     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals
and

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replacements thereof except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.

6.07 Maintenance of Insurance. (a) Maintain with financially sound and reputable
insurance companies reasonably acceptable to the Agent that are not Affiliates of the Loan
Parties, insurance with respect to its properties and business against loss or damage of the
kinds customarily insured against by Persons engaged in the same or similar business and
operating in the same or similar locations or as is required by Law, of such types and in
such amounts (after giving effect to any self-insurance compatible with the following
standards) as are customarily carried under similar circumstances by such other Persons and
as are reasonably acceptable to the Agent.

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

     (c) Cause fire and extended coverage policies maintained with respect to any Collateral
to be endorsed or otherwise amended to include (i) a non-contributing mortgage clause
(regarding improvements to Real Estate) and lenders’ loss payable clause (regarding personal
property), in form and substance satisfactory to the Agent, which endorsements or amendments
shall provide that the insurer shall pay all proceeds otherwise payable to the Loan
Parties under the policies directly to the Agent, (ii) a provision to the effect that none
of the Loan Parties, Credit Parties or any other Person shall be a co-insurer and (iii) such
other provisions as the Agent may reasonably require from time to time to protect the
interests of the Credit Parties.

     (d) Cause commercial general liability policies to be endorsed to name the Agent as an
additional insured.

     (e) Cause business interruption policies to name the Agent as a loss payee and to be
endorsed or amended to include (i) a provision that, from and after the Effective Date, the
insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies
directly to the Agent, (ii) a provision to the effect that none of the Loan Parties, the
Agent, the Agent or any other party shall be a co-insurer and (iii) such other provisions as
the Agent may reasonably require from time to time to protect the interests of the Credit
Parties.

     (f) Cause each such policy referred to in this Section 6.07 to also provide
that it shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium except upon not less than ten (10) days’ prior written notice thereof by the insurer
to the Agent (giving the Agent the right to cure defaults in the payment of premiums) or
(ii) for any other reason except upon not less than thirty (30) days’ prior written notice
thereof by the insurer to the Agent.

     (g) Deliver to the Agent, prior to the cancellation, modification or non-renewal of any
such policy of insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Agent, including an insurance binder)
together with evidence satisfactory to the Agent of payment of the premium therefor.

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     (h) Permit any representatives that are designated by the Agent to inspect the
insurance policies maintained by or on behalf of the Loan Parties and to inspect books and
records related thereto and any properties covered thereby.

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

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

     6.09 Books and Records; Accountants.

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

          (b) at all times retain a Registered Public Accounting Firm which is reasonably satisfactory
to the Agent and shall instruct such Registered Public Accounting Firm to cooperate with, and be
available to, the Agent or its representatives to discuss the Loan Parties’ financial performance,
financial condition, operating results, controls, and such other matters, within the scope of the
retention of such Registered Public Accounting Firm, as may be raised by the Agent.

     6.10 Inspection Rights.

          (a) Permit representatives and independent contractors of the Agent to visit and inspect any
of its properties, to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and Registered Public Accounting Firm, all at the expense of the Loan Parties
and at such reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Lead Borrower; provided, however,
that when a Default or an Event of Default exists the Agent (or any of its representatives or
independent contractors) may do any of the foregoing at the expense of the Loan Parties at any time
during normal business hours and without advance notice.

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          (b) Upon the request of the Agent after reasonable prior notice, permit the Agent or
professionals (including investment bankers, consultants, accountants, and lawyers) retained by the
Agent to conduct commercial finance examinations and other evaluations, including, without
limitation, of (i) the Lead Borrower’s practices in the computation of the Borrowing Base (ii) the
assets included in the Borrowing Base and related financial information such as, but not limited
to, sales, gross margins, payables, accruals and reserves, and (iii) the Loan Parties’ business
plan, forecasts and cash flows. The Loan Parties shall pay the reasonable fees and expenses of the
Agent and such professionals with respect to (i) up to one (1) commercial finance examination in
any twelve month period if Availability is greater than the greater of (x) 50% of the Loan Cap or
(y) $7,000,000, (ii) up to two (2) commercial finance examinations in any twelve month period if
Availability is less than 50% of the Loan Cap but equal to or greater than the greater of (x) 17.5%
of the Loan Cap or (y) $7,000,000, and (iii) up to three (3) commercial finance examinations in any
twelve month period of Availability is less than the greater of (x) 17.5% of the Loan Cap or (y)
$7,000,000. Notwithstanding the foregoing, the Agent may cause additional commercial finance
examinations to be undertaken (i) as it in its discretion deems necessary or appropriate, at its
own expense or, (ii) if required by Law or if a Default or Event of Default shall have occurred and
be continuing, at the expense of the Loan Parties.

          (c) Upon the request of the Agent after reasonable prior notice, permit the Agent or
professionals (including appraisers) retained by the Agent to conduct appraisals of the Collateral,
including, without limitation, the assets included in the Borrowing Base. The Loan Parties shall
pay the reasonable fees and expenses of the Agent and such professionals with respect to (i) up to
one (1) appraisal in any twelve month period if Availability is greater than the greater of (x) 50%
of the Loan Cap or (y) $7,000,000, (ii) up to two (2) appraisals in any twelve month period if
Availability is less than 50% of the Loan Cap but equal to or greater than the greater of (x) 17.5%
of the Loan Cap or (y) $7,000,000, and (iii) up to three (3) appraisals in any twelve month period
of Availability is less than the greater of (x)
17.5% of the Loan Cap or (y) $7,000,000. Notwithstanding the foregoing, the Agent may cause
additional appraisals to be undertaken (i) as it in its discretion deems necessary or appropriate,
at its own expense or, (ii) if required by Law or if a Default or Event of Default shall have
occurred and be continuing, at the expense of the Loan Parties.

     6.11 Additional Loan Parties. Notify the Agent at the time that any Person becomes a
Subsidiary, and promptly thereafter (and in any event within twenty (20) days or such longer time
period as the Agent may agree in its reasonable discretion), cause any such Person (a) which is not
a CFC to (i) become a Loan Party by executing and delivering to the Agent a Joinder to this
Agreement or a Joinder to the Facility Guaranty or such other documents as the Agent shall deem
appropriate for such purpose, (ii) grant a Lien to the Agent on such Person’s assets of the same
type that constitute Collateral to secure the Obligations, and (iii) deliver to the Agent documents
of the types referred to in clauses (iii) and (iv) of Section 4.01(a) and favorable
opinions of counsel to such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause (a)), and (b) if any
Equity Interests or Indebtedness of such Person are owned by or on behalf of any Loan Party, to
pledge such Equity Interests and promissory notes evidencing such Indebtedness (except that, if
such Subsidiary is a CFC, the Equity Interests of such Subsidiary to be pledged may be limited to
65% of the outstanding voting Equity Interests of such Subsidiary and 100% of the non-voting Equity
Interests of such Subsidiary), in each case in form, content and scope reasonably satisfactory to
the Agent. In no event shall compliance with this Section 6.11 waive or be deemed a waiver
or Consent to any transaction giving rise to the need to comply with this Section 6.11 if
such transaction was not otherwise expressly permitted by this Agreement or constitute or be deemed
to constitute, with respect to any Subsidiary, an approval of such Person as a Borrower or permit
the inclusion of any acquired assets in the computation of the Borrowing Base.

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     6.12 Cash Management.

          (a) On or prior to the Effective Date:

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

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

          (b) ACH or wire transfer no less frequently than daily (and whether or not there are then any
outstanding Obligations) to a Blocked Account all amounts on deposit in each DDA (net of any
minimum balance, not to exceed $2,500.00, as may be required to be kept in the subject DDA by the
depository institution at which such DDA is maintained) and all payments due from credit card
processors.

          (c) After the occurrence and during the continuance of a Cash Dominion Event, cause the ACH or
wire transfer to the concentration account maintained by the Agent at Bank of America (the
“Concentration Account”), no less frequently than daily (and whether or not there are then
any outstanding Obligations), all cash receipts and collections received by each Loan Party from
all sources, including, without limitation, the following:

          (i) all available cash receipts from the sale of Inventory (including without
limitation, proceeds of credit card charges) and other assets (whether or not constituting
Collateral);

          (ii) all proceeds of collections of Accounts;

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

          (iv) the then contents of each DDA (net of any minimum balance, not to exceed
$2,500.00, as may be required to be kept in the subject DDA by the depository institution at
which such DDA is maintained); and

          (v) the then entire ledger balance of each Blocked Account (net of any minimum balance,
not to exceed $2,500.00, as may be required to be kept in the subject Blocked Account by the
Blocked Account Bank).

          (d) The Concentration Account shall at all times be under the sole dominion and control of the
Agent. The Loan Parties hereby acknowledge and agree that (i) the Loan Parties have no right of
withdrawal from the Concentration Account, (ii) the funds on deposit in the Concentration Account
shall at all times be collateral security for all of the Obligations and (iii) the funds on deposit
in the Concentration Account shall be applied to the Obligations as provided in this Agreement. In
the event that, notwithstanding the provisions of this Section 6.12, any Loan Party
receives or otherwise has dominion and control of any such cash receipts or collections, such
receipts and collections shall be held in trust by such Loan Party for the Agent, shall not be
commingled with any of such Loan Party’s other

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funds or deposited in any account of such Loan Party
and shall, not later than the Business Day after receipt thereof, be deposited into the
Concentration Account or dealt with in such other fashion as such Loan Party may be instructed by
the Agent.

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

     6.13 Information Regarding the Collateral.

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

          (b) Should any of the information on any of the Schedules hereto become inaccurate or
misleading in any material respect as a result of changes after the Effective Date, advise the
Agent in writing of such revisions or updates as may be necessary or appropriate to update or
correct the same.
From time to time as may be reasonably requested by the Agent, the Lead Borrower shall
supplement each Schedule hereto, or any representation herein or in any other Loan Document, with
respect to any matter arising after the Effective Date that, if existing or occurring on the
Effective Date, would have been required to be set forth or described in such Schedule or as an
exception to such representation or that is necessary to correct any information in such Schedule
or representation which has been rendered materially inaccurate thereby (and, in the case of any
supplements to any Schedule, such Schedule shall be appropriately marked to show the changes made
therein). Notwithstanding the foregoing, no supplement or revision to any Schedule or
representation shall be deemed the Credit Parties’ consent to the matters reflected in such updated
Schedules or revised representations nor permit the Loan Parties to undertake any actions otherwise
prohibited hereunder or fail to undertake any action required hereunder from the restrictions and
requirements in existence prior to the delivery of such updated Schedules or such revision of a
representation; nor shall any such supplement or revision to any Schedule or representation be
deemed the Credit Parties’ waiver of any Default or Event of Default resulting from the matters
disclosed therein.

     6.14 Physical Inventories.

          (a) Cause not less than one physical inventory to be undertaken, at the reasonable expense of
the Loan Parties, in each Fiscal Year consistent with past practices, conducted by such inventory
takers as are reasonably satisfactory to the Agent and following such methodology as is consistent
with the methodology used in the immediately preceding inventory or as otherwise may be reasonably
satisfactory to the Agent. The Agent, at the reasonable expense of the Loan Parties, may
participate in and/or observe each scheduled physical count of Inventory which is undertaken on
behalf of any Loan Party. The Lead Borrower, within 21 days following the completion of such
inventory, shall provide the Agent with a reconciliation of the results of such inventory (as well
as of any other physical

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inventory or cycle counts undertaken by a Loan Party) and shall post such
results to the Loan Parties’ stock ledgers and general ledgers, as applicable.

          (b) Permit the Agent, in its discretion, if any Default or Event of Default exists, to cause
additional such inventories to be taken as the Agent determines (each, at the expense of the Loan
Parties).

     6.15 Environmental Laws.

          (a) Conduct its operations and keep and maintain its Real Estate in material compliance with
all Environmental Laws; (b) obtain and renew all environmental permits necessary for its operations
and properties; and (c) implement any and all investigation, remediation, removal and response
actions that are appropriate or necessary to maintain the value and marketability of the Real
Estate or to otherwise materially comply with Environmental Laws pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or release of any Hazardous Materials
on, at, in, under, above, to, from or about any of its Real Estate, provided,
however, that neither a Loan Party nor any of its Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and adequate reserves have been
set aside and are being maintained by the Loan Parties with respect to such circumstances in
accordance with GAAP.

     6.16 Further Assurances.

          (a) Execute any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of financing statements and
other documents), that may be required under any Law, or which any Agent may request, to
effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect
or perfect the Liens created or intended to be created by the Security Documents or the validity or
priority of any such Lien, all at the reasonable expense of the Loan Parties. The Loan Parties also
agree to provide to the Agent, from time to time upon request, evidence satisfactory to the Agent
as to the perfection and priority of the Liens created or intended to be created by the Security
Documents.

          (b) If any material assets are acquired by any Loan Party after the Effective Date (other than
assets constituting Collateral under the Security Documents that become subject to the perfected
first-priority Lien under the Security Documents upon acquisition thereof), notify the Agent
thereof, and the Loan Parties will cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or shall be requested by any Agent to
grant and perfect such Liens, including actions described in paragraph (a) of this Section
6.16, all at the reasonable expense of the Loan Parties. In no event shall compliance with this
Section 6.16(b) waive or be deemed a waiver or Consent to any transaction giving rise to
the need to comply with this Section 6.16(b) if such transaction was not otherwise
expressly permitted by this Agreement or constitute or be deemed to constitute Consent to the
inclusion of any acquired assets in the computation of the Borrowing Base.

          (c) Use, and cause each of the Subsidiaries to use, their commercially reasonable efforts to
obtain lease terms in any Lease entered into by any Loan Party after the Effective Date not
expressly prohibiting the recording in the relevant real estate filing office of an appropriate
memorandum of lease and the encumbrancing of the leasehold interest of such Loan Party in the
property that is the subject of such Lease.

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          (d) Upon the request of the Agent, cause each of its customs brokers, freight forwarders,
consolidators and/or carriers to deliver an agreement (including, without limitation, a Customs
Broker/Carrier Agreement) to the Agent covering such matters and in such form as the Agent may
reasonably require.

     6.17 Compliance with Terms of Leaseholds.

     Except as otherwise expressly permitted hereunder, (a) make all payments and otherwise perform
all obligations in respect of all Leases to which any Loan Party or any of its Subsidiaries is a
party to keep such Leases in full force and effect (except those payments or obligations which are
being contested in good faith by appropriate proceedings being diligently conducted, for which
adequate reserves have been provided in accordance with GAAP), (b) not allow such Leases to lapse
or be terminated or any rights to renew such Leases to be forfeited or cancelled except in the
ordinary course of business, consistent with past practices, (c) notify the Agent of any default by
any party with respect to such Leases and cooperate with the Agent in all respects to cure any such
default, and (d) cause each of its Subsidiaries to do the foregoing, except, in any case, where the
failure to do so, either individually or in the aggregate, could not be reasonably likely to have a
Material Adverse Effect.

     6.18 Material Contracts. (a) Perform and observe all the terms and provisions of each
Material Contract to be performed or observed by it, (b) maintain each such Material Contract in
full force and effect except to the extent such Material Contract is no longer used or useful in
the conduct of the business of the Loan Parties in the ordinary course of business, consistent with
past practices, (c) enforce each such Material Contract in accordance with its terms, (d) upon
request of the Agent, make such demands and requests for information and reports or for action from
any other party to each such Material Contract as any Loan Party or any of its Subsidiaries is
entitled to make under such Material Contract, and (e) cause each of its Subsidiaries to do the
foregoing.

ARTICLE VII

NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied (other than contingent indemnification claims for
which a claim has not been asserted), or any Letter of Credit shall remain outstanding, no Loan
Party shall, nor shall it permit any Subsidiary to, directly or indirectly:

     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired or sign or file or suffer to exist
under the UCC or any similar Law or statute of any jurisdiction a financing statement that names
any Loan Party or any Subsidiary thereof as debtor; sign or suffer to exist any security agreement
authorizing any Person thereunder to file such financing statement; sell any of its property or
assets subject to an understanding or agreement (contingent or otherwise) to repurchase such
property or assets with recourse to it or any of its Subsidiaries; or assign or otherwise transfer
any accounts or other rights to receive income, other than, as to all of the above, Permitted
Encumbrances.

     7.02 Investments. Make any Investments, except Permitted Investments.

     7.03 Indebtedness; Disqualified Stock; Equity Issuances

          (a) Create, incur, assume, guarantee, suffer to exist or otherwise become or remain liable
with respect to, any Indebtedness, except Permitted Indebtedness; (b) issue Disqualified Stock, or

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(c) issue and sell any other Equity Interests (other than compensatory issuances of Equity
Interests to employees, directors or consultants (including under any option plan) of the Loan
Parties) unless (i) such Equity Interests shall be issued solely by the Parent, (ii) such Equity
Interests provide that all dividends and other Restricted Payments) in respect thereof shall be
made solely in additional shares of such Equity Interests, in lieu of cash, (iii) such Equity
Interests shall not be subject to redemption other than redemption at the option of the Parent
issuing such Equity Interests and in accordance with the limitations contained in this Agreement,
and (iv) all Restricted Payments in respect of such Equity Interests are expressly subordinated to
the Obligations.

     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another
Person, (or agree to do any of the foregoing), except that, so long as no Default or Event of
Default shall have occurred and be continuing prior to or immediately after giving effect to any
action described below or would result therefrom:

     (a) any Subsidiary which is not a Loan Party may merge with (i) a Loan Party,
provided that the Loan Party shall be the continuing or surviving Person, or (ii)
any one or more other Subsidiaries which are not Loan Parties, provided that when
any wholly-owned Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary
shall be the continuing or surviving Person;

     (b) any Subsidiary which is a Loan Party may merge into any Subsidiary which is a Loan
Party or into a Borrower, provided that in any merger involving a Borrower, a
Borrower shall be the continuing or surviving Person;

     (c) in connection with a Permitted Acquisition, any Subsidiary of a Loan Party may
merge with or into or consolidate with any other Person or permit any other Person to merge
with or into or consolidate with it; provided that (i) the Person surviving such
merger shall be a wholly-owned Subsidiary of a Loan Party and such Person shall become a
Loan Party in accordance with the provisions of Section 6.11 hereof, and (ii) in the
case of any such merger to which any Loan Party is a party, such Loan Party is the surviving
Person; and

     (d) any CFC that is not a Loan Party may merge into any CFC that is not a Loan Party.

     7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition,
except Permitted Dispositions.

     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that each of the following shall be
permitted so long as no Default or Event of Default shall have occurred and be continuing prior, or
immediately after giving effect, to the following, or would result therefrom:

     (a) each Subsidiary of a Loan Party may make Restricted Payments to any Loan Party;

     (b) the Loan Parties and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common Equity Interests of
such Person;

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     (c) if the Payment Conditions are satisfied, the Loan Parties and each Subsidiary may
purchase, redeem or otherwise acquire Equity Interests issued by it; provided that,
one (1) time during each twelve month period, solely for the purposes of determining whether
the Payment Conditions have been satisfied under this Section 7.06(c), the Consolidated
Fixed Charge Coverage Ratio shall be calculated with respect to any Restricted Payment
proposed to be made under this Section 7.06(c) during such period without including such
Restricted Payment in such calculation; and

     (d) if (i) (x) no Loans have been outstanding for the six (6) month period immediately
preceding such payment, (y) no Loans are projected to be borrowed by the Borrowers pursuant
to the projections delivered by the Loan Parties pursuant to 6.01(c) hereof for the six (6)
month period immediately following such payment, and (z) the Parent uses cash on hand to
make such payment, or (ii) the Payments Conditions are satisfied, the Parent may declare or
pay cash dividends to its stockholders.

     7.07 Prepayments of Indebtedness.

     Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof
in any manner any Indebtedness, or make any payment in violation of any subordination terms of any
Subordinated Indebtedness, except (a) as long as no Default or Event of Default then exists,
regularly
scheduled or mandatory repayments, repurchases, redemptions or defeasances of (i) Permitted
Indebtedness (other than Subordinated Indebtedness), and (ii) Subordinated Indebtedness in
accordance with the subordination terms thereof, (b) voluntary prepayments, repurchases,
redemptions or defeasances of (i) Permitted Indebtedness (but excluding on account of any
Subordinated Indebtedness) as long as the Payment Conditions are satisfied, and (ii) Subordinated
Indebtedness in accordance with the subordination terms thereof and as long as the Payment
Conditions are satisfied, and (c) Permitted Refinancings of any such Indebtedness.

     7.08 Change in Nature of Business

          (a) In the case of the Parent, engage in any business or activity other than (a) the direct or
indirect ownership of all outstanding Equity Interests in the other Loan Parties, (b) maintaining
its corporate existence, (c) participating in tax, accounting and other administrative activities
as the parent of the consolidated group of companies, including the Loan Parties, (d) the execution
and delivery of the Loan Documents to which it is a party and the performance of its obligations
thereunder, and (e) activities incidental to the businesses or activities described in clauses
(a) through (d) of this Section 7.08(a).

          (b) In the case of each of the Loan Parties, engage in any line of business substantially
different from the business conducted by the Loan Parties and their Subsidiaries on the Effective
Date or any business substantially related or incidental thereto.

     7.09 Transactions with Affiliates. Enter into, renew, extend or be a party to any transaction
of any kind with any Affiliate of any Loan Party, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to the Loan Parties or
such Subsidiary as would be obtainable by the Loan Parties or such Subsidiary at the time in a
comparable arm’s length transaction with a Person other than an Affiliate, provided that
the foregoing restriction shall not apply to (a) a transaction between or among the Loan Parties,
(b) advances for commissions, travel and other similar purposes in the ordinary course of business
to directors, officers and employees, (c) the issuance of Equity Interests in the Parent to any
officer, director, employee or consultant of the Parent or any of its Subsidiaries, (d) the payment
of reasonable fees and out-of-pocket costs to directors, and compensation

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and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees
of the Parent or any of its Subsidiaries, and (e) any issuances of securities of the Parent (other
than Disqualified Stock and other Equity Interests not permitted hereunder) or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment
agreements, stock options and stock ownership plans (in each case in respect of Equity Interests in
the Parent) of the Parent or any of its Subsidiaries.

     7.10 Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary
to make Restricted Payments or other distributions to any Loan Party or to otherwise transfer
property to or invest in a Loan Party, (ii) of any Subsidiary to Guarantee the Obligations, (iii)
of any Subsidiary to make or repay loans to a Loan Party, or (iv) of the Loan Parties or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person in favor of
the Agent; provided, however, that this clause (iv) shall not prohibit any negative
pledge incurred or provided in favor of any holder of Indebtedness permitted under clauses (c) or
(d) of the definition of Permitted Indebtedness solely to the extent any such negative pledge
relates to the property financed by or the subject of such Indebtedness; or (b) requires the grant
of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation
of such Person.

     7.11 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (a) to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose
of purchasing or carrying margin stock or to refund Indebtedness originally incurred for such
purpose, or (b) for any purposes other than (i) the acquisition of working capital assets in the
ordinary course of business, (ii) to finance Capital Expenditures of the Loan Parties, and (iii)
for general corporate purposes, in each case to the extent expressly permitted under Law and the
Loan Documents.

     7.12 Amendment of Material Documents.

     Amend, modify or waive any of a Loan Party’s rights under (a) its Organization Documents in a
manner materially adverse to the Credit Parties, or (b) any Material Contract or Material
Indebtedness (other than on account of any Permitted Refinancing thereof), in each case to the
extent that such amendment, modification or waiver would result in a Default or Event of Default
under any of the Loan Documents, would be materially adverse to the Credit Parties, or otherwise
would be reasonably likely to have a Material Adverse Effect.

     7.13 Fiscal Year.

     Change the Fiscal Year of any Loan Party, or the accounting policies or reporting practices of
the Loan Parties, except as required by GAAP.

     7.14 Deposit Accounts; Credit Card Processors.

     Open new DDAs unless the Loan Parties shall have delivered to the Agent Blocked Account
Agreements consistent with the provisions of Section 6.12 and otherwise satisfactory to the
Agent. No Loan Party shall maintain any bank accounts or enter into any agreements with credit
card processors other than the ones expressly contemplated herein or in Section 6.12
hereof.

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     7.15 Consolidated Fixed Charge Coverage Ratio.

     During the continuance of a Covenant Compliance Event, permit the Consolidated Fixed Charge
Coverage Ratio, calculated as of the last day of each month for each Measurement Period, to be less
than 1.1:1.0.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

     8.01 Events of Default. Any of the following shall constitute an Event of Default:

     (a) Non-Payment. The Borrowers or any other Loan Party fails to pay when and
as required to be paid herein, (i) any amount of principal of, or interest on, any Loan or
any L/C Obligation, or deposit any funds as Cash Collateral in respect of L/C Obligations,
or (ii) any fee due hereunder, or (iii) any other amount payable hereunder or under any
other Loan Document; or

     (b) Specific Covenants. Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.01, 6.02, 6.03,
6.05, 6.07, 6.10, 6.11, 6.12, or 6.13 or
Article VII; or

     (c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for 10 days
after the sooner to occur of Lead Borrower’s receipt of notice of such breach or failure
from the Agent and the date on which such breach or failure first becomes known to any Loan
Party; or

     (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any Loan Party
herein, in any other Loan Document, or in any document delivered in connection herewith or
therewith (including, without limitation, any Borrowing Base Certificate) shall be incorrect
or misleading in any material respect when made or deemed made; or

     (e) Cross-Default. (i) Any Loan Party (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Material Indebtedness, or (B) fails to observe or perform any other agreement
or condition relating to any such Material Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs, the effect of
which default or other event is to cause, or to permit the holder or holders of such
Material Indebtedness or the beneficiary or beneficiaries of any Guarantee thereof (or a
trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Material Indebtedness to be demanded or
to become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such Material Indebtedness
to be made, prior to its stated maturity or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract
an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of
default under such Swap Contract as to which a Loan Party or any Subsidiary thereof is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined in such Swap Contract) under such Swap Contract as to which a Loan Party or any
Subsidiary thereof is an Affected Party (as so defined in such Swap Contract) and, in either
event,

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the Swap Termination Value owed by the Loan Party or such Subsidiary as a result
thereof is greater than $500,000; or

     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its property; or a proceeding
shall be commenced or a petition filed, without the application or consent of such Person,
seeking or requesting the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed and the appointment continues
undischarged, undismissed or unstayed for 60 calendar days or an order or decree approving
or ordering any of the foregoing shall be entered; or any proceeding under any Debtor Relief
Law relating to any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or

     (g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to pay its
debts as they become
due in the ordinary course of business, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material part of the
property of any such Person; or

     (h) Judgments. There is entered against any Loan Party or any Subsidiary
thereof (i) one or more judgments or orders for the payment of money in an amount exceeding
$250,000 as to any one such judgment or order or in an aggregate amount exceeding $500,000
as to all such judgments and orders (in each case to the extent not covered by independent
third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company,
has been notified of the potential claim and does not dispute coverage), or (ii) any one or
more non-monetary judgments that have, or could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B) there is a
period of 30 consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, is not in effect; or

     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result in liability
of any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the
PBGC in an aggregate amount in excess of $200,000 or which would reasonably likely result in
a Material Adverse Effect, or (ii) a Loan Party or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan
in an aggregate amount in excess of $200,000 or which would reasonably likely result in a
Material Adverse Effect; or

     (j) Invalidity of Loan Documents. (i) Any provision of any Loan Document, at
any time after its execution and delivery and for any reason, ceases to be in full force and
effect; or any Loan Party or any other Person contests in any manner the validity or
enforceability of any provision of any Loan Document; or any Loan Party denies that it has
any or further liability or obligation under any provision of any Loan Document, or purports
to revoke, terminate or rescind any provision of any Loan Document or seeks to avoid, limit
or otherwise adversely affect any Lien purported to be created under any Security Document;
or (ii) any Lien purported to be

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created under any Security Document shall cease to be, or
shall be asserted by any Loan Party or any other Person not to be, a valid and perfected
Lien on any Collateral, with the priority required by the applicable Security Document; or

     (k) Change of Control. There occurs any Change of Control; or

     (l) Cessation of Business. Except as otherwise expressly permitted hereunder,
the Loan Parties, taken as a whole, shall take any action to suspend the operation of their
business in the ordinary course, liquidate all or a material portion of their assets or
Store locations, or employ an agent or other third party to conduct a program of closings,
liquidations or “Going-Out-Of-Business” sales of any material portion of their business; or

     (m) Loss of Collateral. There occurs any uninsured loss to any material
portion of the Collateral; or

     (n) Breach of Contractual Obligation. Any Loan Party or any Subsidiary thereof
fails to make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Material Contract or fails to observe
or perform any other agreement or condition relating to any such Material Contract or
contained in
any instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to permit the
counterparty to such Material Contract to terminate such Material Contract; or

     (o) Indictment. (i) Any Loan Party is (A) criminally indicted or convicted of
a felony for fraud or dishonesty in connection with the Loan Parties’ business, or (B)
charged by a Governmental Authority under any law that would reasonably be expected to lead
to forfeiture of any Collateral having a value in excess of $250,000, or (ii) any director
or senior officer of any Loan Party is (A) criminally indicted or convicted of a felony for
fraud or dishonesty in connection with the Loan Parties’ business, unless such director or
senior officer promptly resigns or is removed or replaced or (B) charged by a Governmental
Authority under any law that would reasonably be expected to lead to forfeiture of any
material portion of Collateral; or

     (p) Guaranty. The termination or attempted termination of any Facility
Guaranty except as expressly permitted hereunder or under any other Loan Document; or

     (q) Subordination. (i) The subordination provisions of the documents
evidencing or governing any Subordinated Indebtedness (the “Subordinated
Provisions”) shall, in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable against any holder of the applicable Subordinated
Indebtedness; or (ii) any Borrower or any other Loan Party shall, directly or indirectly,
disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of
the Subordination Provisions, (B) that the Subordination Provisions exist for the benefit of
the Credit Parties, or (C) that all payments of principal of or premium and interest on the
applicable Subordinated Indebtedness, or realized from the liquidation of any property of
any Loan Party, shall be subject to any of the Subordination Provisions.

     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Agent may, or, at the request of the Required Lenders shall, take any or all of the following
actions:

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     (a) declare the Commitments of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such Commitments and
obligations shall be terminated;

     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other Obligations to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Loan Parties;

     (c) require that the Loan Parties Cash Collateralize the L/C Obligations; and

     (d) whether or not the maturity of the Obligations shall have been accelerated pursuant
hereto, proceed to protect, enforce and exercise all rights and remedies of the Credit
Parties under this Agreement, any of the other Loan Documents or Law, including, but not
limited to, by suit in equity, action at law or other appropriate proceeding, whether for
the specific performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are evidenced, and,
if such amount shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Credit Parties;

provided, however, that upon the occurrence of any Default or Event of Default with
respect to any Loan Party or any Subsidiary thereof under Section 8.01(f), the obligation
of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions
shall automatically terminate, the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and payable, and the
obligation of the Loan Parties to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Agent, any L/C Issuer or
any Lender.

     No remedy herein is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of Law.

     8.03 Application of Funds. After the exercise of any remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set forth in the proviso
to Section 8.02), any amounts received on account of the Obligations shall be applied by
the Agent in the following order:

     First, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting fees, indemnities, Credit Party Expenses and other amounts
(including fees, charges and disbursements of counsel to the Agent and amounts payable under
Article III) payable to the Agent;

     Second, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting indemnities, Credit Party Expenses, and other amounts (other than
principal, interest and fees) payable to the Lenders and the L/C Issuers (including Credit
Party Expenses to the respective Lenders and the L/C Issuers and amounts payable under
Article III), ratably among them in proportion to the amounts described in this
clause Second payable to them;

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     Third, to the extent not previously reimbursed by the Lenders, to payment to
the Agent of that portion of the Obligations constituting principal and accrued and unpaid
interest on any Permitted Overadvances;

     Fourth, to the extent that Swing Line Loans have not been refinanced by a
Committed Loan, payment to the Swing Line Lender of that portion of the Obligations
constituting accrued and unpaid interest on the Swing Line Loans;

     Fifth, to the extent that Swing Line Loans have not been refinanced by a
Committed Loan, to payment to the Swing Line Lender of that portion of the Obligations
constituting unpaid principal of the Swing Line Loans;

     Sixth, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Committed Loans, L/C Borrowings and other Obligations, and fees
(including Letter of Credit Fees), ratably among the Lenders and the L/C Issuers in
proportion to the respective amounts described in this clause Sixth payable to them;

     Seventh, to payment of that portion of the Obligations constituting unpaid
principal of the Committed Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuers in proportion to the respective amounts described in this clause Seventh
held by them;

     Eighth, to the Agent for the account of the L/C Issuers, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of
Credit;

     Ninth, to payment of all other Obligations (including without limitation the
cash collateralization of unliquidated indemnification obligations as provided in
Section 10.04(g), but excluding any Other Liabilities), ratably among the Credit
Parties in proportion to the respective amounts described in this clause Ninth held
by them;

     Tenth, to payment of that portion of the Obligations arising from Cash
Management Services, ratably among the Credit Parties in proportion to the respective
amounts described in this clause Tenth held by them;

     Eleventh, to payment of all other Obligations arising from Bank Products,
ratably among the Credit Parties in proportion to the respective amounts described in this
clause Eleventh held by them; and

     Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Loan Parties or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Eighth above shall be applied to satisfy
drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Obligations, if any, in the order set forth above.

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ARTICLE IX

THE AGENT

     9.01 Appointment and Authority.

          Each of the Lenders (in its capacity as a Lender), the Swing Line Lender and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the administrative agent and
collateral agent hereunder and under the other Loan Documents and authorizes the Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof
or thereof (including, without limitation, acquiring, holding and enforcing any and all Liens on
Collateral granted by any of the Loan Parties to secure any of the Obligations), together with such
actions and powers as are reasonably incidental thereto. The provisions of this Article are solely
for the benefit of the Agent, the Lenders and the L/C Issuer, and no Loan Party or any Subsidiary
thereof shall have rights as a third party beneficiary of any of such provisions.

     9.02 Rights as a Lender. The Person serving as the Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the same as though they
were not the Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the Person serving as the Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act
as the financial advisor or in any other advisory capacity for and generally engage in any kind of
business with the Loan Parties or any Subsidiary or other Affiliate thereof as if such Person were
not the Agent hereunder and without any duty to account therefor to the Lenders.

     9.03 Exculpatory Provisions. The Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the generality of the
foregoing, the Agent:

     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing;

     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Agent is required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that the
Agent shall not be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Agent to liability or that is contrary to any Loan Document or Law;
and

     (c) shall not, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Loan Parties or any of its Affiliates that is communicated to or
obtained by the Person serving as the Agent or any of its Affiliates in any capacity.

The Agent shall not be liable for any action taken or not taken by it (i) with the Consent or at
the request of the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances
as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross
negligence or willful misconduct as determined by a final and non-appealable judgment of a court of
competent jurisdiction.

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     The Agent shall not be deemed to have knowledge of any Default or Event of Default unless and
until notice describing such Default or Event of Default is given to the Agent by the Loan Parties,
a Lender or the L/C Issuer. In the event that the Agent obtains such actual knowledge or receives
such a notice, the Agent shall give prompt notice thereof to each of the other Credit Parties.
Upon the occurrence of a Default or an Event of Default, the Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by the Applicable
Lenders. Unless and until the Agent shall have received such direction, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with respect to any such
Default or Event of Default as it shall deem advisable in the best interest of the Credit Parties.
In no event shall the Agent be required to comply with any such directions to the extent that the
Agent believes that its compliance with such directions would be unlawful.

     The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder
or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement, instrument or
document or the creation, perfection or priority of any Lien purported to be created by the
Security Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of
any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Agent.

     9.04 Reliance by Agent.

     The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or other writing
(including, but not limited to, any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person. The Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless the Agent shall have received written notice
to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit. The Agent may consult with legal counsel (who may be counsel for any
Loan Party), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.

     9.05 Delegation of Duties. The Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by the Agent. The Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties
of the Agent and any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as activities as the
Agent.

     9.06 Resignation of Agent. The Agent may at any time give written notice of its resignation
to the Lenders, the L/C Issuer and the Lead Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the Lead Borrower, to
appoint a successor,

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which shall be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may on behalf of the Lenders and the L/C
Issuer, appoint a successor Agent meeting the qualifications set forth above; provided that
if the Agent shall notify the Lead Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Loan Documents (except that in the case of any Collateral held by the Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Agent shall
continue to hold such collateral security until such time as a successor Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to or through the Agent
shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the
Required Lenders appoint a successor Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Agent hereunder with notice of such acceptance provided
to the Lead Borrower, such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be
discharged from all of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this Section). The fees payable by the
Borrowers to a successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed to in writing between the Lead Borrower and such successor Agent. After the
retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this
Article and Section 10.04 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Agent was acting as Agent hereunder.

     9.07 Non-Reliance on Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges
that it has, independently and without reliance upon the Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also
acknowledges that it will, independently and without reliance upon the Agent or any other Lender or
any of their Related Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder. Except as provided in Section 9.12, the Agent shall not
have any duty or responsibility to provide any Credit Party with any other credit or other
information concerning the affairs, financial condition or business of any Loan Party that may come
into the possession of the Agent.

     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
Bookrunner, Arranger, Syndication Agent or Documentation Agent, if any, listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity as the Agent, a Lender or the L/C Issuer hereunder.

     9.09 Agent May File Proofs of Claim. In case of the pendency of any proceeding under any
Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether the Agent shall have
made any demand on the Loan Parties) shall be entitled and empowered, by intervention in such
proceeding or otherwise

     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing
and

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unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders, the L/C Issuer, the Agent and the other Credit Parties
(including any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the L/C Issuer, the Agent, such Credit Parties and their respective agents
and counsel and all other reasonable amounts due the Lenders, the L/C Issuer the Agent and
such Credit Parties under Sections 2.03(i), 2.03(j) and 2.03(k) as
applicable, 2.09 and 10.04) allowed in such judicial proceeding; and

     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such
payments to the Agent and, if the Agent shall consent to the making of such payments directly to
the Lenders and the L/C Issuer, to pay to the Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agent and its agents and counsel, and any other
reasonable amounts due the Agent under Sections 2.09 and 10.04.

     Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or
accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Issuer
or to authorize the Agent to vote in respect of the claim of any Lender or the L/C Issuer in any
such proceeding.

     9.10 Collateral and Guaranty Matters. The Credit Parties irrevocably authorize the Agent, at
its option and in its discretion,

     (a) to release any Lien on any property granted to or held by the Agent under any Loan
Document (i) upon termination of the Aggregate Commitments and payment in full of all
Obligations (other than contingent indemnification obligations for which no claim has been
asserted) and the expiration, termination or Cash Collateralization of all Letters of
Credit, (ii) that is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in
writing by the Applicable Lenders in accordance with Section 10.01;

     (b) to subordinate any Lien on any property granted to or held by the Agent under any
Loan Document to the holder of any Lien on such property that is permitted by clause (h) of
the definition of Permitted Encumbrances; and

     (c) to release any Guarantor from its obligations under the Facility Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

Upon request by the Agent at any time, the Applicable Lenders will confirm in writing the Agent’s
authority to release or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the Facility Guaranty pursuant to this Section
9.10. In each case as specified in this Section 9.10, the Agent will, at the Loan
Parties’ expense, execute and deliver to the applicable Loan Party or any other Person designated
by the applicable Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest granted under the
Security Documents or to subordinate its interest in

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such item, or to release such Guarantor from its obligations under the Facility Guaranty, in each
case in accordance with the terms of the Loan Documents and this Section 9.10.

     9.11 Notice of Transfer.

     The Agent may deem and treat a Lender party to this Agreement as the owner of such Lender’s
portion of the Obligations for all purposes, unless and until, and except to the extent, an
Assignment and Acceptance shall have become effective as set forth in Section 10.06.

     9.12 Reports and Financial Statements.

     By signing this Agreement, each Lender:

     (a) agrees to furnish the Agent, with such frequency as the Agent may reasonably
request, with a summary of all Other Liabilities due or to become due to such Lender. In
connection with any distributions to be made hereunder, the Agent shall be entitled to
assume that no amounts are due to any Lender on account of Other Liabilities unless the
Agent has received written notice thereof from such Lender;

     (b) is deemed to have requested that the Agent furnish, and the Agent agrees to
furnish, such Lender, promptly after they become available, copies of all Borrowing Base
Certificates and financial statements required to be delivered by the Lead Borrower
hereunder and all commercial finance examinations and appraisals of the Collateral received
by the Agent (collectively, the “Reports”);

     (c) expressly agrees and acknowledges that the Agent makes no representation or
warranty as to the accuracy of the Reports, and shall not be liable for any information
contained in any Report;

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

     (e) agrees to keep all Reports confidential in accordance with the provisions of
Section 10.07 hereof; and

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

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     9.13 Agency for Perfection.

     Each Lender hereby appoints each other Lender as agent for the purpose of perfecting Liens for
the benefit of the Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC
or any other Law of the United States can be perfected only by possession or control. Should any
Lender (other than the Agent) obtain possession or control of any such Collateral, such Lender
shall notify the Agent thereof, and, promptly upon the Agent’s request therefor shall deliver such
Collateral to the Agent or otherwise deal with such Collateral in accordance with the Agent’s
instructions.

     9.14 Indemnification of Agent. Without limiting the obligations of Loan Parties hereunder,
the Lenders shall indemnify the Agent, each L/C Issuer and any Related Party, as the case may be
ratably according to their Applicable Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Agent, any L/C Issuer and their Related Parties in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted to be taken by the
Agent, any L/C Issuer and their Related Parties in connection therewith; provided, that no
Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent’s,
any L/C Issuer’s and their Related Parties’ gross negligence or willful misconduct as determined by
a final and nonappealable judgment of a court of competent jurisdiction.

     9.15 Relation among Lenders. The Lenders are not partners or co-venturers, and no Lender
shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of
the Agent) authorized to act for, any other Lender.

     9.16 Defaulting Lender.

          (a) If for any reason any Lender shall become a Defaulting Lender or shall fail or refuse to
abide by its obligations under this Agreement, including without limitation its obligation to make
available to Agent its Applicable Percentage of any Loans, expenses or setoff or purchase its
Applicable Percentage of a participation interest in the Swingline Loans or L/C Borrowings and such
failure is not cured within one (1) Business Day after receipt from the Agent of written notice
thereof, then, in addition to the rights and remedies that may be available to the other Credit
Parties, the Loan Parties or any other party at law or in equity, and not at limitation thereof,
(i) such Defaulting Lender’s right to participate in the administration of, or decision-making
rights related to, the Obligations, this Agreement or the other Loan Documents shall be suspended
during the pendency of such failure or refusal, and (ii) a Defaulting Lender shall be deemed to
have assigned any and all payments due to it from the Loan Parties, whether on account of
outstanding Loans, interest, fees or otherwise, to the remaining non-Defaulting Lenders for
application to, and reduction of, their proportionate shares of all outstanding Obligations, and
(iii) at the option of the Agent, any amount payable to such Defaulting Lender hereunder (whether
on account of principal, interest, fees or otherwise) shall, in lieu of being distributed to such
Defaulting Lender, be retained by the Agent as cash collateral for future funding obligations of
the Defaulting Lender in respect of any Loan or existing or future participating interest in any
Swing Line Loan or Letter of Credit. The Defaulting Lender’s decision-making and participation
rights and rights to payments as set forth in clauses (i), (ii) and (iii) hereinabove shall be
restored only upon the payment by the Defaulting Lender of its Applicable Percentage of any
Obligations, any participation obligation, or expenses as to which it is delinquent, together with
interest thereon at the rate set forth in Section 2.13(c) hereof from the date when
originally due until the date upon which any such amounts are actually paid.

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          (b) The non-Defaulting Lenders shall also have the right, but not the obligation, in their
respective, sole and absolute discretion, to cause the termination and assignment, without any
further action by the Defaulting Lender for no cash consideration (pro rata, based
on the respective Commitments of those Lenders electing to exercise such right), of the Defaulting
Lender’s Commitment to fund future Loans. Upon any such purchase of the Applicable Percentage of
any Defaulting Lender, the Defaulting Lender’s share in future Credit Extensions and its rights
under the Loan Documents with respect thereto shall terminate on the date of purchase, and the
Defaulting Lender shall promptly execute all documents reasonably requested to surrender and
transfer such interest, including, if so requested, an Assignment and Acceptance.

          (c) Each Defaulting Lender shall indemnify the Agent and each non-Defaulting Lender from and
against any and all loss, damage or expenses, including but not limited to reasonable attorneys’
fees and funds advanced by the Agent or by any non-Defaulting Lender, on account of a Defaulting
Lender’s failure to timely fund its Applicable Percentage of a Loan or to otherwise perform its
obligations under the Loan Documents.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc.(a) No amendment or waiver of any provision of this Agreement or
any other Loan Document, and no Consent to any departure by any Loan Party therefrom, shall
be effective unless in writing signed by the Agent, with the Consent of the Required
Lenders, and the Lead Borrower or the applicable Loan Party, as the case may be, and each
such waiver or Consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver
or consent shall:

     (i) increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written Consent of such
Lender;

     (ii) as to any Lender, postpone any date fixed by this Agreement or any other
Loan Document for (i) any scheduled payment (including the Maturity Date) of
principal, interest, fees or other amounts due hereunder or under any of the other
Loan Documents without the written Consent of such Lender, or (ii) any scheduled or
mandatory reduction or termination of the Aggregate Commitments hereunder or under
any other Loan Document, without the written Consent of such Lender;

     (iii) as to any Lender, reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing held by such Lender, or (subject to
clause (iv) of the second proviso to this Section 10.01) any fees or other
amounts payable hereunder or under any other Loan Document to or for the account of
such Lender, without the written Consent of such Lender; provided,
however, that only the Consent of the Required Lenders shall be necessary to
amend the definition of “Default Rate” or to waive any obligation of the Borrowers
to pay interest or Letter of Credit Fees at the Default Rate;

     (iv) as to any Lender, change Section 2.13 or Section 8.03 in a
manner that would alter the pro rata sharing of payments required thereby without
the written Consent of such Lender;

     (v) change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders

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required to amend, waive or otherwise modify any rights hereunder or under any
other Loan Document or make any determination or grant any consent hereunder or
thereunder, without the written Consent of each Lender;

     (vi) except as expressly permitted hereunder or under any other Loan Document,
release, or limit the liability of, any Loan Party without the written Consent of
each Lender;

     (vii) except for Permitted Dispositions or as provided in Section 9.10,
release all or substantially all of the Collateral from the Liens of the Security
Documents without the written Consent of each Lender;

     (viii) change the definition of the term “Borrowing Base” or any component
definition thereof if as a result thereof the amounts available to be borrowed by
the Borrowers would be increased without the written Consent of each Lender,
provided that the foregoing shall not limit the discretion of the Agent to change,
establish or eliminate any Reserves;

     (ix) modify the definition of Permitted Overadvance so as to increase the
amount thereof or, except as otherwise provided in such definition, the time period
for which a Permitted Overadvance may remain outstanding without the written Consent
of each Lender; and

     (x) except as expressly permitted herein or in any other Loan Document,
subordinate the Obligations hereunder or the Liens granted hereunder or under the
other Loan Documents, to any other Indebtedness or Lien, as the case may be without
the written Consent of each Lender;

and, provided further, that (i) no amendment, waiver or Consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or Consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or Consent shall,
unless in writing and signed by the Agent in addition to the Lenders required above, affect the
rights or duties of any Agent under this Agreement or any other Loan Document; and (iv) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the
parties thereto. Notwithstanding anything to the contrary herein, no Deteriorating Lender or
Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or Consent
hereunder, except that the Commitment of such Lender may not be increased or extended without the
consent of such Lender.

     (b) Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (x) no provider or holder of any Bank Products or Cash Management Services shall
have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its
status as the provider or holder of such agreements or products or the Obligations owing
thereunder, nor shall the consent of any such provider or holder be required (other than in
their capacities as Lenders, to the extent applicable) for any matter hereunder or under any
of the other Loan Documents, including as to any matter relating to the Collateral or the
release of Collateral or any Loan Party, and (y) any Loan Document may be amended and waived
with the consent of the Administrative Agent at the request of the Lead Borrower without the
need to obtain the

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consent of any other Lender if such amendment or waiver is delivered in order (i) to
comply with local Law or advice of local counsel, (ii) to cure ambiguities or defects or
(iii) to cause any Loan Document to be consistent with this Agreement and the other Loan
Documents.

     (c) If any Lender does not Consent (a “Non-Consenting Lender”) to a proposed
amendment, waiver, consent or release with respect to any Loan Document that requires the
Consent of each Lender and that has been approved by the Required Lenders, the Lead Borrower
may replace such Non-Consenting Lender in accordance with Section 10.13;
provided that such amendment, waiver, consent or release can be effected as a result
of the assignment contemplated by such Section 10.06 (together with all other such
assignments required by the Lead Borrower to be made pursuant to this paragraph).

     10.02 Notices; Effectiveness; Electronic Communications.

          (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

          (i) if to the Loan Parties, the Agent, Bank of America as L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and

          (ii) if to any other Lender and Wells Fargo Bank, National Association, as L/C Issuer,
to the address, telecopier number, electronic mail address or telephone number specified in
its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day for the recipient).
Notices delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).

          (b) Electronic Communications. Notices and other communications to the Lenders and
the L/C Issuer hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the Agent,
provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer
pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the
Agent that it is incapable of receiving notices under such Article by electronic communication.
The Agent or the Lead Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices or
communications.

     Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is not sent during
the normal

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business hours of the recipient, such notice or communication shall be deemed to have been
sent at the opening of business on the next Business Day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the website address
therefor.

          (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Agent or any of its Related Parties
(collectively, the “Agent Parties”) have any liability to any Loan Party, any Lender, the
L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Loan Parties’ or the Agent’s
transmission of Borrower Materials through the Internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to any Loan Party, any Lender, the L/C Issuer or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

          (d) Change of Address, Etc. Each of the Loan Parties, the Agent, the L/C Issuer and
the Swing Line Lender may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other Lender may change its
address, telecopier or telephone number for notices and other communications hereunder by notice to
the Lead Borrower, the Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender
agrees to notify the Agent from time to time to ensure that the Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and electronic mail address to
which notices and other communications may be sent and (ii) accurate wire instructions for such
Lender.

          (e) Reliance by Agent, L/C Issuer and Lenders. The Agent, the L/C Issuer and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan
Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Loan Parties even if
(i) such notices were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Loan Parties shall indemnify the
Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs,
reasonable expenses and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Loan Parties. All telephonic notices to and other
telephonic communications with the Agent may be recorded by the Agent, and each of the parties
hereto hereby consents to such recording.

     10.03 No Waiver; Cumulative Remedies. No failure by any Credit Party to exercise, and no
delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder or under any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided herein and

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in the other Loan Documents are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law. Without limiting the generality of the foregoing, the making of a
Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event
of Default, regardless of whether any Credit Party may have had notice or knowledge of such Default
or Event of Default at the time.

     10.04 Expenses; Indemnity; Damage Waiver.

          (a) Costs and Expenses. The Borrowers shall pay all Credit Party Expenses.

          (b) Indemnification by the Loan Parties. The Loan Parties shall indemnify the Agent
(and any sub-agent thereof), each other Credit Party, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless (on an after tax basis) from, any and all losses, claims, causes of action,
damages, liabilities, settlement payments, costs, and related reasonable expenses (including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other
Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby, or the
administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or
the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor
a demand for payment under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit, any bank advising or
confirming a Letter of Credit and any other Person seeking to enforce the rights of a Borrower,
beneficiary, transferee, or assignee or Letter of Credit proceeds or the holder of an instrument or
document related to any Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Loan Party or any of its
Subsidiaries, or any Environmental Liability related in any way to any Loan Party or any of its
Subsidiaries, (iv) any claims of, or amounts paid by any Credit Party to, a Blocked Account Bank or
other Person which has entered into a control agreement with any Credit Party hereunder, or (v) any
actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or
by any Borrower or any other Loan Party or any of the Loan Parties’ directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or
not caused by or arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or related reasonable
expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y)
result from a claim brought by a Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrowers or such Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

          (c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Law, the
Loan Parties shall not assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby
or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall
be liable for any damages

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arising from the use by unintended recipients of any information or other materials
distributed to such unintended recipients by such Indemnitee through telecommunications, electronic
or other information transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent jurisdiction.

          (d) Payments. All amounts due under this Section shall be payable on demand therefor.

          (e) Survival. The agreements in this Section shall survive the resignation of any
Agent and the L/C Issuer, the assignment of any Commitment or Loan by any Lender, the replacement
of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

     10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Loan Parties
is made to any Credit Party, or any Credit Party exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any settlement entered
into by such Credit Party in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to be satisfied shall
be revived and continued in full force and effect as if such payment had not been made or such
setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the
Agent upon demand its Applicable Percentage (without duplication) of any amount so recovered from
or repaid by the Agent, plus interest thereon from the date of such demand to the date such payment
is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this Agreement.

     10.06 Successors and Assigns.

          (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder or under any other Loan Document without the prior written Consent
of the Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of
Section 10.06(b), (ii) by way of participation in accordance with the provisions of
Section 10.06(d), or (iii) by way of pledge or assignment of a security interest subject to
the restrictions of Section 10.06(f) (and any other attempted assignment or transfer by any
party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each of the Credit
Parties) any legal or equitable right, remedy or claim under or by reason of this Agreement.

          (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment(s) and the Loans (including for purposes of this Section
10.06(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it);
provided that any such assignment shall be subject to the following conditions:

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          (i) Minimum Amounts.

               (A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to
a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, no
minimum amount need be assigned; and

               (B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or,
if the Commitment is not then in effect, the principal outstanding balance of the Loans of
the assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $5,000,000 unless each of the Agent and, so long as no Default or Event of
Default has occurred and is continuing, the Lead Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group) will be treated as a single assignment for purposes of
determining whether such minimum amount has been met;

          (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned, except that this
clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of
Swing Line Loans;

          (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

               (A) the consent of the Lead Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) a Default or Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund with respect to such Lender; and

               (B) the consent of the Agent, the L/C Issuer and the Swing Line Lender (such consent
not to be unreasonably withheld or delayed) shall be required for assignments in respect of
any Commitment if such assignment is to a Person that is not a Lender, an Affiliate of such
Lender or an Approved Fund with respect to such Lender; and

          (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500, provided, however, that the Agent may, in its
sole discretion, elect to waive such processing and recordation fee in the case of any
assignment. The assignee, if it shall not be a Lender, shall deliver to the Agent an
Administrative Questionnaire.

Subject to acceptance and recording thereof by the Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, including, for the avoidance of doubt, the obligation to provide the Lead Borrower and
the Agent with

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any tax forms required by Section 3.01(e) hereof, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, and 10.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment. Upon request, the Borrowers (at their expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this subsection shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with Section 10.06(d).

          (c) Register. The Agent, acting solely for this purpose as an agent of the Borrowers,
shall maintain at the Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitments of, and
principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, absent manifest error, and the Loan Parties, the Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Lead Borrower and any Lender at any reasonable time and from time
to time upon reasonable prior notice.

          (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Loan Parties or the Agent, sell participations to any Person (other than a natural person or
the Loan Parties or any of the Loan Parties’ Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i)
such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations and
(iii) the Loan Parties, the Agent, the Lenders and the L/C Issuer shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any Participant shall agree in writing to comply with all confidentiality obligations
set forth in Section 10.07 as if such Participant was a Lender hereunder.

     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to Section
10.01 that affects such Participant. Subject to subsection (e) of this Section, the Loan
Parties agree that each Participant shall be entitled to the benefits of Sections 3.01,
3.04 and 3.05 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 10.06(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a
Lender. Each Lender that sells a participation, acting solely for this purpose as an agent of the
Borrowers, shall maintain a register for the recordation of the names and addresses of the
Participants and principal amounts of the of each Participant’s interest in the Loans and L/C
Obligations (the “Participation Register”). The entries in the Participation Register
shall be conclusive, absent manifest error, and the Loan Parties, the Agent and the Lenders may
treat each Person whose name is recorded in the Participation Register pursuant to the terms hereof
as the owner of such participation for all purposes of this Agreement, notwithstanding notice to
the contrary. The

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Participation Register shall be available for inspection by the Agent and the Lead Borrower at
any reasonable time and from time to time upon reasonable prior notice.

          (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Lead Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Lead Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit of the Loan
Parties, to comply with Section 3.01(e) as though it were a Lender.

          (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.

          (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

          (h) Resignation as L/C Issuer or Swing Line Lender after Assignment or Resignation.

          (i) Notwithstanding anything to the contrary contained herein, if at any time Bank of
America assigns all of its Commitment and Loans pursuant to subsection (b) above, or resigns
as Agent in accordance with the provisions of Section 9.06, Bank of America may, (i)
upon 30 days’ notice to the Lead Borrower and the Lenders, resign as L/C Issuer and/or (ii)
with duplication of any notice required under Section 9.06, upon 30 days’ notice to the Lead
Borrower and the Lenders, resign as Swing Line Lender. In the event of any such resignation
as L/C Issuer or Swing Line Lender, the Lead Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Lead Borrower to appoint any such successor shall
affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case
may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers,
privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as L/C Issuer and all L/C
Obligations with respect thereto (including the right to require the Lenders to make Base
Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a)
such successor shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the
successor L/C Issuer shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of America
with respect to such Letters of Credit.

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          (ii) Notwithstanding anything to the contrary contained herein, if at any time Wells
Fargo Bank, National Association assigns all of its Commitment and Loans pursuant to
subsection (b) above, Wells Fargo Bank, National Association may, upon 30 days’ notice to
the Lead Borrower and the Lenders, resign as L/C Issuer. In the event of any such
resignation as L/C Issuer, the Lead Borrower shall be entitled to appoint from among the
Lenders a successor L/C Issuer hereunder; provided, however, that no failure
by the Lead Borrower to appoint any such successor shall affect the resignation of Wells
Fargo Bank, National Association as L/C Issuer. If Wells Fargo Bank, National Association
resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the
L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). Upon the
appointment of a successor L/C Issuer, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer, and (b)
the successor L/C Issuer shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other arrangements
satisfactory to Wells Fargo Bank, National Association to effectively assume the obligations
of Wells Fargo Bank, National Association with respect to such Letters of Credit.

     10.07 Treatment of Certain Information; Confidentiality. Each of the Credit Parties agrees to
maintain the confidentiality of the Information (as defined below), except that Information may be
disclosed (a) to its Affiliates, Approved Funds, and to its and its Affiliates’ and Approved Funds’
respective partners, directors, officers, employees, agents, funding sources, attorneys, advisors
and representatives (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority), (c) to the extent required by Laws
or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any Swap Contract relating to any Loan
Party and its obligations, (g) with the consent of the Lead Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to any Credit Party or any of their respective Affiliates on a
non-confidential basis from a source other than the Loan Parties.

     For purposes of this Section, “Information” means all information received from the Loan
Parties or any Subsidiary thereof relating to the Loan Parties or any Subsidiary thereof or their
respective businesses, other than any such information that is available to any Credit Party on a
non-confidential basis prior to disclosure by the Loan Parties or any Subsidiary thereof, provided
that, in the case of information received from any Loan Party or any Subsidiary after the Effective
Date, such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

     Each of the Credit Parties acknowledges that (a) the Information may include material
non-public information concerning the Loan Parties or a Subsidiary, as the case may be, (b) it has
developed

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compliance procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with Law, including Federal and state
securities Laws.

     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing or if any
Lender shall have been served with a trustee process or similar attachment relating to property of
a Loan Party, each Lender, the L/C Issuer and each of their respective Affiliates is hereby
authorized at any time and from time to time, after obtaining the prior written consent of the
Agent or the Required Lenders, to the fullest extent permitted by Law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in whatever currency) or
other property at any time held and other obligations (in whatever currency) at any time owing by
such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the
Borrowers or any other Loan Party against any and all of the Obligations now or hereafter existing
under this Agreement or any other Loan Document to such Lender or the L/C Issuer, regardless of the
adequacy of the Collateral, and irrespective of whether or not such Lender or the L/C Issuer shall
have made any demand under this Agreement or any other Loan Document and although such obligations
of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or
office of such Lender or the L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness. The rights of each Lender, the L/C Issuer and their respective
Affiliates under this Section are in addition to other rights and remedies (including other rights
of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender
and the L/C Issuer agrees to notify the Lead Borrower and the Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by Law (the “Maximum Rate”). If the Agent
or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal,
refunded to the Borrowers. In determining whether the interest contracted for, charged, or
received by the Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by Law, (a) characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.

     10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the
Agent and when the Agent shall have received counterparts hereof that, when taken together, bear
the signatures of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy, pdf or other electronic transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.

     10.11 Survival. All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such representations and
warranties have been or will be relied upon by the Credit Parties, regardless of any investigation
made by any Credit Party or on their behalf and notwithstanding that any Credit Party may have had
notice or knowledge of any

114

 

Default or Event of Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding. Further, the provisions of
Sections 3.01, 3.04, 3.05 and 10.04 and Article IX
shall survive and remain in full force and effect regardless of the repayment of the Obligations,
the expiration or termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof. In connection with the termination of this Agreement and
the release and termination of the security interests in the Collateral, the Agent may require such
indemnities and collateral security as they shall reasonably deem necessary or appropriate to
protect the Credit Parties against (x) loss on account of credits previously applied to the
Obligations that may subsequently be reversed or revoked, (y) any obligations that may thereafter
arise with respect to the Other Liabilities, and (z) any Obligations that may thereafter arise
under Section 10.04 hereof.

     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

     10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04,
or if the Borrowers are required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a
Deteriorating Lender or a Defaulting Lender or a Non-Consenting Lender, then the Borrowers may, at
their sole expense and effort, upon notice to such Lender and the Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the restrictions contained
in, and consents required by, Section 10.06), all of its interests, rights and obligations
under this Agreement and the related Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

     (a) the Borrowers shall have paid to the Agent the assignment fee specified in
Section 10.06(b);

     (b) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Loan Documents (including any
amounts under Section 3.05) from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all other
amounts);

     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and

     (d) such assignment does not conflict with Laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.

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     10.14 Governing Law; Jurisdiction; Etc.

          (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

          (b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE LOAN PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL
COURT. EACH OF THE LOAN PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT
SHALL AFFECT ANY RIGHT THAT ANY CREDIT PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

          (c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE LOAN PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

          (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

          (e) ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AGREES THAT ANY ACTION
COMMENCED BY ANY LOAN PARTY ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT SOLELY IN A COURT OF THE STATE OF NEW
YORK SITTING IN THE BOROUGH OF MANHATTAN OR ANY FEDERAL COURT SITTING THEREIN AS THE AGENT MAY
ELECT IN ITS SOLE DISCRETION AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT
TO ANY SUCH ACTION.

116

 

     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby, the Loan Parties each acknowledge and agree that: (i) the credit
facility provided for hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification hereof or of any other
Loan Document) are an arm’s-length commercial transaction between the Loan Parties, on the one
hand, and the Credit Parties, on the other hand, and each of the Loan Parties is capable of
evaluating and understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver
or other modification hereof or thereof); (ii) in connection with the process leading to such
transaction, each Credit Party is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary, for the Loan Parties or any of their respective Affiliates,
stockholders, creditors or employees or any other Person; (iii) none of the Credit Parties has
assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Loan Parties
with respect to any of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof or of any other Loan
Document (irrespective of whether any of the Credit Parties has advised or is currently advising
any Loan Party or any of its Affiliates on other matters) and none of the Credit Parties has any
obligation to any Loan Party or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv)
the Credit Parties and their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Loan Parties and their respective Affiliates,
and none of the Credit Parties has any obligation to disclose any of such interests by virtue of
any advisory, agency or fiduciary relationship; and (v) the Credit Parties have not provided and
will not provide any legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other modification hereof or
of any other Loan Document) and each of the Loan Parties has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate. Each of the Loan Parties
hereby waives and releases, to the fullest extent permitted by law, any claims that it may have
against each of the Credit Parties with respect to any breach or alleged breach of agency or
fiduciary duty.

     10.17 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined)
and the Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Act”), it is required to obtain, verify and record information
that identifies each Loan Party, which information includes the name and address of each Loan Party
and other information that will allow such Lender, each L/C Issuer or the Agent, as applicable, to
identify each Loan Party in accordance with the Act. Each Loan Party is in compliance, in all
material respects, with the Patriot Act. No part of the proceeds of the Loans will be used by the
Loan Parties, directly or indirectly, for any

117

 

payments to any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

     10.18 Foreign Asset Control Regulations. The Loan Parties agree that neither of the advance
of the Loans nor the use of the proceeds of any thereof or of any Letter of Credit will violate the
Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy Act”)
or any of the foreign assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any enabling
legislation or executive order relating thereto (which for the avoidance of doubt shall include,
but shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56)). Furthermore, none of the Loan Parties or their Affiliates (a) is or will become a
“blocked person” as described in the Executive Order, the Trading With the Enemy Act or the Foreign
Assets Control Regulations or (b) engages or will engage in any dealings or transactions, or be
otherwise associated, with any such “blocked person” or in any manner violative of any such order.

     10.19 Time of the Essence. Time is of the essence of the Loan Documents.

     10.20 Press Releases.

          (a) Each Credit Party executing this Agreement agrees that neither it nor its Affiliates will
in the future issue any press releases or other public disclosure using the name of the Agent or
its Affiliates or referring to this Agreement or the other Loan Documents without at least two (2)
Business Days’ prior notice to the Agent and without the prior written consent of the Agent unless
(and only to the extent that) such Credit Party or Affiliate is required to do so under Law and
then, in any event, such Credit Party or Affiliate will consult with the Agent before issuing such
press release or other public disclosure.

          (b) Each Loan Party consents to the publication by the Agent or any Lender of advertising
material relating to the financing transactions contemplated by this Agreement using any Loan
Party’s name, product photographs, logo or trademark. The Agent or such Lender shall provide a
draft reasonably in advance of any advertising material to the Lead Borrower for review and comment
prior to the publication thereof. The Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table measurements.

     10.21 Additional Waivers.

          (a) The Obligations are the joint and several obligation of each Loan Party. To the fullest
extent permitted by Law, the obligations of each Loan Party shall not be affected by (i) the
failure of any Credit Party to assert any claim or demand or to enforce or exercise any right or
remedy against any other Loan Party under the provisions of this Agreement, any other Loan Document
or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, this Agreement or any other Loan Document, or (iii) the failure to
perfect any security interest in, or the release of, any of the Collateral or other security held
by or on behalf of the Agent or any other Credit Party.

118

 

          (b) The obligations of each Loan Party shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in full in cash of
the Obligations after the termination of the Commitments), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of any of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall not be discharged
or impaired or otherwise affected by the failure of the Agent or any other Credit Party to assert
any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any
other agreement, by any waiver or modification of any provision of any thereof, any default,
failure or delay, willful or otherwise, in the performance of any of the Obligations, or by any
other act or omission that may or might in any manner or to any extent vary the risk of any Loan
Party or that would otherwise operate as a discharge of any Loan Party as a matter of law or equity
(other than the indefeasible payment in full in cash of all the Obligations after the termination
of the Commitments).

          (c) To the fullest extent permitted by Law, each Loan Party waives any defense based on or
arising out of any defense of any other Loan Party or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the liability of any other Loan
Party, other than the indefeasible payment in full in cash of all the Obligations and the
termination of the Commitments. The Agent and the other Credit Parties may, at their election,
foreclose on any security held by one or more of them by one or more judicial or non-judicial
sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations, make any other accommodation with any other Loan Party, or exercise any
other right or remedy available to them against any other Loan Party, without affecting or
impairing in any way the liability of any Loan Party hereunder except to the extent that all the
Obligations have been indefeasibly paid in full in cash and the Commitments have been terminated.
Each Loan Party waives any defense arising out of any such election even though such election
operates, pursuant to Law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Loan Party against any other Loan Party, as the case may be, or any
security.

          (d) Each Loan Party is obligated to repay the Obligations as joint and several obligors under
this Agreement. Upon payment by any Loan Party of any Obligations, all rights of such Loan Party
against any other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior
in right of payment to the prior indefeasible payment in full in cash of all the Obligations and
the termination of the Commitments. In addition, any indebtedness of any Loan Party now or
hereafter held by any other Loan Party is hereby subordinated in right of payment to the prior
indefeasible payment in full of the Obligations and no Loan Party will demand, sue for or otherwise
attempt to collect any such indebtedness. If any amount shall erroneously be paid to any Loan
Party on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such indebtedness of any Loan Party, such amount shall be held in trust for the benefit
of the Credit Parties and shall forthwith be paid to the Agent to be credited against the payment
of the Obligations, whether matured or unmatured, in accordance with the terms of this Agreement
and the other Loan Documents. Subject to the foregoing, to the extent that any Borrower shall,
under this Agreement as a joint and several obligor, repay any of the Obligations constituting
Loans made to another Borrower hereunder or other Obligations incurred directly and primarily by
any other Borrower (an “Accommodation Payment”), then the Borrower making such
Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed
by, each of the other Borrowers in an amount, for each of such other Borrowers, equal to a fraction
of such Accommodation Payment, the numerator of which fraction is such other Borrower’s Allocable
Amount and the denominator of which is the sum of the Allocable Amounts of all of the Borrowers.
As

119

 

of any date of determination, the “Allocable Amount” of each Borrower shall be equal
to the maximum amount of liability for Accommodation Payments which could be asserted against such
Borrower hereunder without (a) rendering such Borrower “insolvent” within the meaning of Section
101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”)
or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such Borrower
with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy
Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower unable to pay
its debts as they become due within the meaning of Section 548 of the Bankruptcy Code or Section 4
of the UFTA, or Section 5 of the UFCA.

     10.22 No Strict Construction.

     The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

     10.23 Attachments.

     The exhibits, schedules and annexes attached to this Agreement are incorporated herein and
shall be considered a part of this Agreement for the purposes stated herein, except that in the
event of any conflict between any of the provisions of such exhibits and the provisions of this
Agreement, the provisions of this Agreement shall prevail.

     10.24 Amendment and Restatement.

     This Agreement, together with the Security Agreement, is an amendment and restatement of the
Existing Credit Agreement, it being acknowledged and agreed that as of the Effective Date all
obligations outstanding under or in connection with the Existing Credit Agreement and any of the
other Loan Documents (such obligations, collectively, the “Existing Obligations”) constitute
obligations under this Agreement. This Agreement is in no way intended to constitute a novation of
the Existing Credit Agreement or the Existing Obligations. With respect to (i) any date or time
period occurring and ending prior to the Effective Date, the Existing Credit Agreement and the
other Loan Documents shall govern the respective rights and obligations of any party or parties
hereto also party thereto and shall for such purposes remain in full force and effect; and (ii) any
date or time period occurring or ending on or after the Effective Date, the rights and obligations
of the parties hereto shall be governed by this Agreement (including, without limitation, the
exhibits and schedules hereto) and the other Loan Documents. From and after the Effective Date,
any reference to the Existing Credit Agreement in any of the other Loan Documents executed or
issued by and/or delivered to any one or more parties hereto pursuant to or in connection therewith
shall be deemed to be a reference to this Agreement, and the provisions of this Agreement shall
prevail in the event of any conflict or inconsistency between such provisions and those of the
Existing Credit Agreement.

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

	 	 	 	 	 
	 	BORROWERS:

KIRKLAND’S STORES, INC., as Lead Borrower and 

as a Borrower

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLANDS.COM, LLC, as a Borrower

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLAND’S TEXAS, LLC, as a Borrower

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	GUARANTORS:

KIRKLAND’S, INC., as Parent and as a Guarantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLAND’S DC, INC., as a Guarantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 

Signature Page to Amended and Restated Credit Agreement

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Administrative Agent

and Collateral Agent

 	 
	 	By:  	/s/ Christine M. Scott
 	 
	 	 	Name:  	Christine M. Scott 	 
	 	 	Title:  	SVP-Director 	 
	 
	 	BANK OF AMERICA, N.A., as a Lender, L/C Issuer

and Swing Line Lender

 	 
	 	By:  	/s/ Christine M. Scott
 	 
	 	 	Name:  	Christine M. Scott 	 
	 	 	Title:  	SVP-Director 	 
	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Robert Chakarian
 	 
	 	 	Name:  	Robert Chakarian 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Amended and Restated Credit Agreementexv10w2

Exhibit 10.2

 

AMENDED AND RESTATED SECURITY AGREEMENT

by

KIRKLAND’S STORES, INC.

as Lead Borrower

and

THE OTHER BORROWERS AND GUARANTORS PARTY HERETO

FROM TIME TO TIME

and

BANK OF AMERICA, N.A.,

as Agent

Dated as of August 19, 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	PREAMBLE 
	 	 	1	 
	 	 	 	 	 
	 
	RECITALS 
	 	 	1	 
	 	 	 	 	 
	 
	AGREEMENT 
	 	 	2	 
	 
	ARTICLE I	 	 	 	 
	 
	DEFINITIONS AND INTERPRETATION	 	 	 	 
	 
	SECTION 1.1. Definitions
	 	 	2	 
	SECTION 1.2. Interpretation
	 	 	6	 
	SECTION 1.3. Information Certificate.
	 	 	7	 
	 
	ARTICLE II	 	 	 	 
	 
	GRANT OF SECURITY AND SECURED OBLIGATIONS	 	 	 	 
	 
	SECTION 2.1. Pledge; Grant of Security Interest
	 	 	7	 
	SECTION 2.2. Secured Obligations
	 	 	8	 
	SECTION 2.3. Security Interest
	 	 	8	 
	 
	ARTICLE III	 	 	 	 
	 
	PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
 USE OF COLLATERAL	 	 	 	 
	 
	SECTION 3.1. Delivery of Certificated Securities Collateral
	 	 	9	 
	SECTION 3.2. Perfection of Uncertificated Securities Collateral
	 	 	9	 
	SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security Interest
	 	 	9	 
	SECTION 3.4. Other Actions
	 	 	10	 
	SECTION 3.5. Supplements; Further Assurances
	 	 	13	 
	 
	ARTICLE IV	 	 	 	 
	 
	REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	 	 
	 
	SECTION 4.1. Title
	 	 	14	 

-i-

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 4.2. Limitation on Liens; Defense of Claims; Transferability of Collateral
	 	 	14	 
	SECTION 4.3. Chief Executive Office; Change of Name; Jurisdiction of Organization
	 	 	14	 
	SECTION 4.4. Location of Inventory and Equipment
	 	 	15	 
	SECTION 4.5. Condition and Maintenance of Equipment
	 	 	15	 
	SECTION 4.6. Due Authorization and Issuance
	 	 	15	 
	SECTION 4.7. No Conflicts, Consents, etc.
	 	 	15	 
	SECTION 4.8. Collateral
	 	 	16	 
	SECTION 4.9. Insurance
	 	 	16	 
	SECTION 4.10. Payment of Taxes; Compliance with Laws; Contested Liens; Claims
	 	 	16	 
	-SECTION 4.11. Access to Collateral, Books and Records; Other Information
	 	 	17	 
	 
	ARTICLE V	 	 	 	 
	 
	CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL	 	 	 	 
	 
	SECTION 5.1. Pledge of Additional Securities Collateral
	 	 	17	 
	SECTION 5.2. Voting Rights; Distributions; etc.
	 	 	17	 
	SECTION 5.3. Organization Documents
	 	 	19	 
	SECTION 5.4. Defaults, Etc.
	 	 	19	 
	SECTION 5.5. Certain Agreements of Grantors As Issuers and Holders of Equity Interests
	 	 	19	 
	 
	ARTICLE VI	 	 	 	 
	 
	CERTAIN PROVISIONS CONCERNING INTELLECTUAL
 PROPERTY COLLATERAL	 	 	 	 
	 
	SECTION 6.1. Grant of License
	 	 	20	 
	SECTION 6.2. Registrations
	 	 	20	 
	SECTION 6.3. No Violations or Proceedings
	 	 	20	 
	SECTION 6.4. Protection of Agent’s Security
	 	 	20	 
	SECTION 6.5. After-Acquired Property
	 	 	21	 
	SECTION 6.6. Modifications
	 	 	22	 
	SECTION 6.7. Litigation
	 	 	22	 
	SECTION 6.8. Third Party Consents
	 	 	22	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VII	 	 	 	 
	 
	CERTAIN PROVISIONS CONCERNING ACCOUNTS	 	 	 	 
	 
	SECTION 7.1. Special Representations and Warranties
	 	 	22	 
	SECTION 7.2. Maintenance of Records
	 	 	23	 
	SECTION 7.3. Legend
	 	 	23	 
	SECTION 7.4. Modification of Terms, Etc.
	 	 	23	 
	SECTION 7.5. Collection
	 	 	23	 
	 
	ARTICLE VIII	 	 	 	 
	 
	REMEDIES	 	 	 	 
	 
	SECTION 8.1. Remedies
	 	 	24	 
	SECTION 8.2. Notice of Sale
	 	 	26	 
	SECTION 8.3. Waiver of Notice and Claims
	 	 	26	 
	SECTION 8.4. Certain Sales of Collateral
	 	 	26	 
	SECTION 8.5. No Waiver; Cumulative Remedies
	 	 	27	 
	SECTION 8.6. Certain Additional Actions Regarding Intellectual Property
	 	 	28	 
	SECTION 8.7. Application of Proceeds
	 	 	28	 
	 
	ARTICLE IX	 	 	 	 
	 
	MISCELLANEOUS	 	 	 	 
	 
	SECTION 9.1. Concerning Agent
	 	 	28	 
	SECTION 9.2. Agent May Perform; Agent Appointed Attorney-in-Fact
	 	 	29	 
	SECTION 9.3. Expenses
	 	 	30	 
	SECTION 9.4. Continuing Security Interest; Assignment
	 	 	30	 
	SECTION 9.5. Termination; Release
	 	 	30	 
	SECTION 9.6. Modification in Writing
	 	 	31	 
	SECTION 9.7. Notices
	 	 	31	 
	SECTION 9.8. GOVERNING LAW
	 	 	32	 
	SECTION 9.9. CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY TRIAL
	 	 	32	 
	SECTION 9.10. Severability of Provisions
	 	 	33	 
	SECTION 9.11. Execution in Counterparts; Effectiveness
	 	 	33	 
	SECTION 9.12. No Release
	 	 	33	 
	SECTION 9.13. Obligations Absolute
	 	 	34	 
	SECTION 9.14. Existing Security Provisions Amended and Restated
	 	 	34	 

SIGNATURES

-iii-

 

	 	 	 
	 	 	Page
	EXHIBIT 1

	 	Form of Securities Pledge Amendment
	SCHEDULE I

	 	Intercompany Notes
	SCHEDULE II

	 	Filings, Registrations and Recordings
	SCHEDULE III

	 	Pledged Interests
	SCHEDULE IV

	 	Organizational Information

-iv-

 

AMENDED AND RESTATED SECURITY AGREEMENT

          AMENDED AND RESTATED SECURITY AGREEMENT dated as of August 19, 2011 (as amended, restated,
supplemented or otherwise modified from time to time in accordance with the provisions hereof, this
“Security Agreement”) made by (i) KIRKLAND’S STORES, INC., a Tennessee corporation having
an office at 2501 McGavock Pike, Suite 1000, Nashville, Tennessee 37214, as lead borrower for
itself and the other Borrowers (the “Lead Borrower”), (ii) THE OTHER BORROWERS LISTED ON
THE SIGNATURE PAGES HERETO (together with the Lead Borrower, the “Original Borrowers”) OR
FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the “Additional
Borrowers,” and together with the Original Borrowers, the “Borrowers”), and (iii) THE
GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO (the “Original Guarantors”) AND THE OTHER
GUARANTORS FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the “Additional
Guarantors,” and together with the Original Guarantors, the “Guarantors”), as pledgors,
assignors and debtors (the Borrowers, together with the Guarantors, in such capacities and together
with any successors in such capacities, the “Grantors,” and each, a “Grantor”), in
favor of BANK OF AMERICA, N.A., having an office at 100 Federal Street, 9th Floor, Boston,
Massachusetts 02110, in its capacities as administrative agent and collateral agent for the Credit
Parties (as defined in the Credit Agreement defined below) pursuant to the Credit Agreement, as
pledgee, assignee and secured party (in such capacities and together with any successors in such
capacities, the “Agent”).

R E C I T A L S :

          A. The Grantors, the Agent, and the Lenders party thereto, among others, have, in connection
with the execution and delivery of this Security Agreement, entered into that certain Amended and
Restated Credit Agreement dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

          B. The Guarantors have, pursuant to that certain Guaranty dated as of the date hereof (as
amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”),
among other things, unconditionally guaranteed the Guaranteed Obligations (as defined in the
Guaranty).

          C. The Borrowers and the Guarantors will receive substantial benefits from the execution,
delivery and performance of the Obligations and the Guaranteed Obligations and each is, therefore,
willing to enter into this Security Agreement.

          D. This Security Agreement is given by each Grantor in favor of the Agent for the benefit of
the Agent and the other Credit Parties to secure the payment and performance of all of the Secured
Obligations (as hereinafter defined).

          E. It is a condition to the obligations of the Lenders to make the Loans under the Credit
Agreement and a condition to the L/C Issuers issuing Letters of Credit under the

 

 

Credit Agreement that each Grantor execute and deliver the applicable Loan Documents,
including this Security Agreement.

A G R E E M E N T :

          NOW THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor and the
Agent hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

     SECTION 1.1. Definitions.

          (a) Unless otherwise defined herein or in the Credit Agreement, capitalized terms used
herein that are defined in the UCC shall have the meanings assigned to them in the UCC.

          (b) Capitalized terms used but not otherwise defined herein that are defined in
the Credit Agreement shall have the meanings given to them in the Credit Agreement.

          (c) The following terms shall have the following meanings:

          “Additional Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.

          “Agent” shall have the meaning assigned to such term in the Preamble hereof.

          “Borrowers” shall have the meaning assigned to such term in the Preamble hereof.

          “Claims” shall mean any and all property taxes and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or assessed against,
and all claims (including, without limitation, landlords’, carriers’, mechanics’, workmen’s,
repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising
by operation of law) against, all or any portion of the Collateral.

          “Collateral” shall have the meaning assigned to such term in SECTION 2.1 hereof.

2

 

          “Control” shall mean (i) in the case of each DDA, “control,” as such term is defined
in Section 9-104 of the UCC, and (ii) in the case of any security entitlement, “control,” as such
term is defined in Section 8-106 of the UCC.

          “Control Agreements” shall mean, collectively, the Blocked Account Agreements and the
Securities Account Control Agreements.

          “Copyrights” shall mean, collectively, with respect to each Grantor, all copyrights
(whether statutory or common Law, whether established or registered in the United States or any
other country or any political subdivision thereof whether registered or unregistered and whether
published or unpublished) and all copyright registrations and applications made by such Grantor, in
each case, whether now owned or hereafter created or acquired by or assigned to such Grantor,
including, without limitation, each of the registrations and applications listed in Section 16 of
the Information Certificate, together with any and all (i) rights and privileges arising under
applicable Law with respect to such Grantor’s use of such copyrights, (ii) reissues, renewals,
continuations and extensions thereof, (iii) income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable with respect thereto, including, without limitation, damages
and payments for past, present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future infringements thereof.

          “Credit Agreement” shall have the meaning assigned to such term in Recital A
hereof.

          “Distributions” shall mean, collectively, with respect to each Grantor, all Restricted
Payments from time to time received, receivable or otherwise distributed to such Grantor in respect
of or in exchange for any or all of the Pledged Interests or Intercompany Notes.

          “Excluded Property” shall mean the following:

     (a) any license, permit or lease held by any Grantor (i) that validly prohibits the
creation by such Grantor of a security interest therein or thereon or (ii) to the extent
that applicable Law prohibits the creation of a security interest therein or thereon;

     (b) any Intellectual Property Collateral consisting of intent-to-use trademark
applications, for which the creation by a Grantor of a security interest therein is
prohibited without the consent of third party or by applicable Law;

provided, however, that in each case described in clauses (a) and (b) of
this definition, such property shall constitute “Excluded Property” only to the extent and
for so long as such license, permit, lease or applicable Law validly prohibits the creation
of a Lien on such property in favor of the Agent and, upon the termination of such
prohibition (howsoever occurring), such property shall cease to constitute “Excluded
Property”; provided further, that “Excluded Property” shall not
include the right to receive any

3

 

proceeds arising therefrom or any other rights referred to in Sections 9-406(f), 9-407(a) or
9-408(a) of the UCC or any Proceeds, substitutions or replacements of any Excluded Property
(unless such Proceeds, substitutions or replacements would otherwise constitute Excluded
Property).

          “Goodwill” shall mean, collectively, with respect to each Grantor, the goodwill
connected with such Grantor’s business including, without limitation, (i) all goodwill connected
with the use of and symbolized by any of the Intellectual Property Collateral in which such Grantor
has any interest, (ii) all know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae, descriptions, compositions, technical data,
drawings, specifications, name plates, catalogs, confidential information and the right to limit
the use or disclosure thereof by any Person, pricing and cost information, business and marketing
plans and proposals, consulting agreements, engineering contracts and such other assets which
relate to such goodwill and (iii) all product lines of such Grantor’s business.

          “Grantor” shall have the meaning assigned to such term in the Preamble hereof.

          “Guarantors” shall have the meaning assigned to such term in the Preamble hereof.

          “Guaranty” shall have the meaning assigned to such term in Recital B hereof.

          “Information Certificate” shall mean that certain information certificate dated as of
the date hereof, executed and delivered by the Parent, on behalf of itself and the other Grantors,
in favor of the Agent for the benefit of the Agent and the other Credit Parties, and each other
Information Certificate (which shall be in form and substance reasonably acceptable to the Agent)
executed and delivered by the applicable Borrower or Guarantor or by the Parent on behalf of such
Borrower or Guarantor in favor of the Agent for the benefit of the Agent and the other Credit
Parties contemporaneously with the execution and delivery of a Joinder Agreement executed in
accordance with Section 6.11 of the Credit Agreement, in each case, as the same may be amended,
amended and restated, restated, supplemented or otherwise modified from time to time in accordance
with the Credit Agreement.

          “Intellectual Property Collateral” shall mean, collectively, the Patents, Trademarks,
Copyrights, Licenses and Goodwill.

          “Intercompany Notes” shall mean, with respect to each Grantor, all intercompany notes
described on Schedule I hereto and each intercompany note hereafter acquired by such
Grantor and all certificates, instruments or agreements evidencing such intercompany notes, and all
assignments, amendments, restatements, supplements, extensions, renewals, replacements or
modifications thereof to the extent permitted pursuant to the terms hereof.

          “Lead Borrower” shall have the meaning assigned to such term in the Preamble hereof.

4

 

          “Letters of Credit” unless the context otherwise requires, shall have the meaning
given to such term in the UCC.

          “Licenses” shall mean, collectively, with respect to each Grantor, all license and
distribution agreements with any other Person with respect to any Patent, Trademark or Copyright or
any other patent, trademark or copyright, whether such Grantor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement, together with any and
all (i) renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties,
damages, claims and payments now and hereafter due and/or payable thereunder and with respect
thereto including, without limitation, damages and payments for past, present or future
infringements or violations thereof, (iii) rights to sue for past, present and future infringements
or violations thereof and (iv) other rights to use, exploit or practice any or all of the Patents,
Trademarks or Copyrights or any other patent, trademark or copyright.

          “Patents” shall mean, collectively, with respect to each Grantor, all patents issued
or assigned to and all patent applications made by such Grantor (whether established or registered
or recorded in the United States or any other country or any political subdivision thereof),
including, without limitation, those patents, patent applications listed in Section 16 of the
Information Certificate, together with any and all (i) rights and privileges arising under
applicable Law with respect to such Grantor’s use of any patents, (ii) inventions and improvements
described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (iv) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements thereof, (v) rights corresponding
thereto throughout the world and (vi) rights to sue for past, present or future infringements
thereof.

          “Pledged Interests” shall mean, collectively, with respect to each Grantor, all Equity
Interests in any issuer now existing or hereafter acquired or formed, including, without
limitation, all Equity Interests of such issuer described in Schedule III hereof and all
Equity Interests in any successor corporation or interests or certificates of any successor limited
liability company, partnership or other entity owned by such Grantor formed by or resulting from
any consolidation, merger or amalgamation in which any Person listed in Section 1 of the
Information Certificate is not the surviving entity, together with all rights, privileges,
authority and powers of such Grantor relating to such Equity Interests issued by any such issuer or
any such successor Person under the Organization Documents of any such issuer or any such successor
Person, and the certificates, instruments and agreements representing such Equity Interests and any
and all interest of such Grantor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by such Grantor in any manner, and
all other Investment Property owned by such Grantor; provided, however, that to the extent
applicable, Pledged Interests shall not include any interest possessing more than 65% of the voting
power or control of all classes of interests entitled to vote of any CFC to the extent such pledge
would result in an adverse tax consequence to such Grantor.

5

 

          “Secured Obligations” shall mean the Obligations (as defined in the Credit Agreement)
and the Guaranteed Obligations; provided, however, that Other Liabilities shall be Secured
Obligations solely to the extent that there is sufficient Collateral following satisfaction of the
Obligations described in clause (a) of the definition of Obligations.

          “Securities Account Control Agreement” shall mean an agreement in form and substance
satisfactory to the Agent with respect to any Securities Account of a Grantor.

          “Securities Act” means the Securities Exchange Act of 1934 and the applicable
regulations promulgated by the Securities and Exchange Commission pursuant to such Act.

          “Securities Collateral” shall mean, collectively, the Pledged Interests, the
Intercompany Notes and the Distributions.

          “Security Agreement” shall have the meaning assigned to such in the Preamble hereof.

          “Trademarks” shall mean, collectively, with respect to each Grantor, all trademarks
(including service marks), slogans, logos, certification marks, trade dress, uniform resource
locations (URLs), domain names, corporate names and trade names, whether registered or
unregistered, owned by or assigned to such Grantor and all registrations and applications for the
foregoing (whether statutory or common Law and whether established or registered in the United
States or any other country or any political subdivision thereof), including, without limitation,
the registrations and applications listed in Section 16 of the Information Certificate, together
with any and all (i) rights and privileges arising under applicable Law with respect to such
Grantor’s use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof,
(iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect thereto, including, without limitation, damages, claims and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto throughout the world and
(v) rights to sue for past, present and future infringements thereof.

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

          SECTION 1.2. Interpretation. The rules of interpretation specified in Article I of the Credit Agreement shall be
applicable to this Security Agreement.

6

 

          SECTION 1.3. Information Certificate. The Agent and each Grantor agree that the
Information Certificate, and all schedules, amendments and supplements thereto are and shall at all
times remain a part of this Security Agreement.

ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

          SECTION 2.1. Pledge; Grant of Security Interest. As collateral security for the
payment and performance in full of all the Secured Obligations, each Grantor hereby pledges and
grants to the Agent for the benefit of the Agent and the other Credit Parties, a lien on and
security interest in and to all of the right, title and interest of such Grantor in, to and under
all personal property and interests in such personal property, wherever located, and whether now
existing or hereafter arising or acquired from time to time (collectively, the
“Collateral”), including, without limitation:

	 	(i)	 	all Accounts;
	 
	 	(ii)	 	all Goods, including Equipment, Inventory and Fixtures;
	 
	 	(iii)	 	all Documents, Instruments and Chattel Paper;
	 
	 	(iv)	 	all Letters of Credit and Letter-of-Credit Rights;
	 
	 	(v)	 	all Securities Collateral;
	 
	 	(vi)	 	all Investment Property;
	 
	 	(vii)	 	all Intellectual Property Collateral;
	 
	 	(viii)	 	all Commercial Tort Claims, including, without limitation, those described
in Section 13 of the Information Certificate;
	 
	 	(ix)	 	all General Intangibles;
	 
	 	(x)	 	all Deposit Accounts;
	 
	 	(xi)	 	all Supporting Obligations;
	 
	 	(xii)	 	all books and records relating to the Collateral; and
	 
	 	(xiii)	 	to the extent not covered by clauses (i) through (xii) of this sentence,
all other personal property of such Grantor, whether tangible or intangible
and all Proceeds and products of each of the foregoing and all accessions to,

7

 

	 	 	 	substitutions and replacements for, and rents, profits and products of, each
of the foregoing, any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to such Grantor from time to time with respect to any of
the foregoing.

          Notwithstanding anything to the contrary contained in clauses (i) through (xiii) above, the
security interest created by this Security Agreement shall not extend to, and the term “Collateral”
and any defined term included in the definition of “Collateral” shall not include, any Excluded
Property, and the Grantors shall from time to time at the request of the Agent give written notice
to the Agent identifying in reasonable detail the Excluded Property and shall provide to the Agent
such other information regarding the Excluded Property as the Agent may reasonably request.

          SECTION 2.2. Secured Obligations. This Security Agreement secures, and the Collateral
is collateral security for, the payment and performance in full when due of the Secured
Obligations.

          SECTION 2.3. Security Interest. (a) Each Grantor hereby irrevocably authorizes the
Agent at any time and from time to time to authenticate and file in any relevant jurisdiction any
financing statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction
for the filing of any financing statement or amendment relating to the Collateral, including,
without limitation, (i) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor, (ii) a description of the Collateral
as “all assets of the Grantor, wherever located, whether now owned or hereafter acquired” and (iii)
in the case of a financing statement filed as a fixture filing, a sufficient description of the
real property to which such Collateral relates. Each Grantor agrees to provide all information
described in the immediately preceding sentence to the Agent promptly upon request.

          (b) Each Grantor hereby ratifies its prior authorization for the Agent to file in any relevant
jurisdiction any financing statements or amendments thereto relating to the Collateral if filed
prior to the date hereof.

          (c) Each Grantor hereby further authorizes the Agent to file filings
with the United States Patent and Trademark Office and United States Copyright Office (or any
successor office or any similar office in any other country) or other necessary documents for the
purpose of perfecting, confirming, continuing, enforcing or protecting the security interest
granted by such Grantor hereunder in any Intellectual Property Collateral, without the signature of
such Grantor, and naming such Grantor, as debtor, and the Agent, as secured party.

8

 

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF COLLATERAL

          SECTION 3.1. Delivery of Certificated Securities Collateral. Each Grantor represents
and warrants that all certificates, agreements or instruments representing or evidencing the
Securities Collateral in existence on the date hereof have been delivered to the Agent in suitable
form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment
in blank and that the Agent has a perfected first priority security interest therein. Each Grantor
hereby agrees that all certificates, agreements or instruments representing or evidencing
Securities Collateral acquired by such Grantor after the date hereof, shall promptly (and in any
event within three (3) Business Days) upon receipt thereof by such Grantor be delivered to and held
by or on behalf of the Agent pursuant hereto. All certificated Securities Collateral shall be in
suitable form for transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably satisfactory to the Agent.
The Agent shall have the right, at any time upon the occurrence and during the continuance of any
Event of Default, to endorse, assign or otherwise transfer to or to register in the name of the
Agent or any of its nominees or endorse for negotiation any or all of the Securities Collateral,
without any indication that such Securities Collateral is subject to the security interest
hereunder. In addition, the Agent shall have the right with written notice to exchange
certificates representing or evidencing Securities Collateral for certificates of smaller or larger
denominations, accompanied by instruments of transfer or assignment and letters of direction duly
executed in blank.

          SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each Grantor
represents and warrants that the Agent has a perfected first priority security interest in all
uncertificated Pledged Interests pledged by it hereunder that is in existence on the date hereof
and that the applicable Organization Documents do not require the consent of the other
shareholders, members, partners or other Person to permit the Agent or its designee to be
substituted for the applicable Grantor as a shareholder, member, partner or other equity owner, as
applicable, thereto. Each Grantor hereby agrees that if any of the Pledged Interests are at any
time not evidenced by certificates of ownership, then each applicable Grantor shall, to the extent
permitted by applicable Law and upon the request of the Agent, cause such pledge to be recorded on
the equityholder register or the books of the issuer, execute customary pledge forms or other
documents necessary or reasonably requested to complete the pledge and give the Agent the right to
transfer such Pledged Interests under the terms hereof and, provide to
the Agent an opinion of counsel, in form and substance reasonably satisfactory to the Agent,
confirming such pledge and perfection thereof.

          SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security
Interest. Each Grantor represents and warrants that the only filings, registrations and
recordings necessary and appropriate to create, preserve, protect, publish notice of and perfect
the security interest granted by each Grantor to the Agent (for the benefit of the Agent and the
other Credit Parties) pursuant to this Security Agreement in respect of the

9

 

Collateral are listed
on Schedule II hereto. Each Grantor represents and warrants that all such filings,
registrations and recordings have been delivered to the Agent in completed and, to the extent
necessary or appropriate, duly executed form for filing in each governmental, municipal or other
office specified in Schedule II. Each Grantor agrees that at the sole cost and expense of
the Grantors, (i) such Grantor will maintain the security interest created by this Security
Agreement in the Collateral as a perfected first priority security interest and shall defend such
security interest against the claims and demands of all Persons (other than with respect to
Permitted Encumbrances), (ii) such Grantor shall furnish to the Agent from time to time statements
and schedules further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Agent may reasonably request, all in reasonable detail and
(iii) at any time and from time to time, upon the written request of the Agent, such Grantor shall
promptly and duly execute and deliver, and file and have recorded, such further instruments and
documents and take such further action as the Agent may reasonably request, including the filing
of any financing statements, continuation statements and other documents (including this Security
Agreement) under the UCC (or other applicable Laws) in effect in any jurisdiction with respect to
the security interest created hereby and the execution and delivery of Control Agreements, all in
form reasonably satisfactory to the Agent and in such offices (including, without limitation, the
United States Patent and Trademark Office and the United States Copyright Office) wherever required
by applicable Law in each case to perfect, continue and maintain a valid, enforceable, first
priority security interest in the Collateral as provided herein and to preserve the other rights
and interests granted to the Agent hereunder, as against the Grantors and third parties (other than
with respect to Permitted Encumbrances), with respect to the Collateral.

          SECTION 3.4. Other Actions. In order to further evidence the attachment, perfection
and priority of, and the ability of the Agent to enforce, the Agent’s security interest in the
Collateral, each Grantor represents, warrants and agrees, in each case at such Grantor’s own
expense, with respect to the following Collateral that:

     (a) Instruments and Tangible Chattel Paper. As of the date hereof (i) no
amount payable under or in connection with any of the Collateral is evidenced by any
Instrument or Tangible Chattel Paper other than such Instruments and Tangible Chattel
Paper listed in Section 23 of the Information Certificate and (ii) each Instrument and
each item of Tangible Chattel Paper listed in Section 23 of the Information Certificate, to
the extent requested by the Agent, has been properly endorsed, assigned and delivered to the
Agent, accompanied by instruments of transfer or assignment and letters of direction duly
executed in blank. If any amount payable under or in connection with any of the Collateral
shall be evidenced by any Instrument or Tangible Chattel Paper, the Grantor acquiring such
Instrument or Tangible Chattel Paper shall forthwith endorse, assign and deliver the same to
the Agent, accompanied by such instruments of transfer or assignment duly executed in blank
as the Agent may reasonably request from time to time.

     (b) Investment Property. (i) As of the date hereof (1) it has no Securities
Accounts other than those listed in Section 15 of the Information Certificate, (2) it does

10

 

not hold, own or have any interest in any certificated securities or uncertificated
securities other than those constituting Pledged Interests with respect to which the Agent
has a perfected first priority security interest in such Pledged Interests, and (3) it has
entered into a duly authorized, executed and delivered Securities Account Control Agreement
with respect to each Securities Account listed in Section 15 of the Information Certificate
with respect to which the Agent has a perfected first priority security interest in such
Securities Accounts by Control.

     (ii) If any Grantor shall at any time hold or acquire any certificated securities,
other than any securities of any CFC not required to be pledged hereunder, such Grantor
shall promptly (a) notify the Agent thereof and endorse, assign and deliver the same to the
Agent, accompanied by such instruments of transfer or assignment duly executed in blank, all
in form and substance reasonably satisfactory to the Agent or (b) deliver such securities
into a Securities Account with respect to which a Securities Account Control Agreement is in
effect in favor of the Agent. If any securities now or hereafter acquired by any Grantor,
other than any securities of any CFC not required to be pledged hereunder, are
uncertificated, such Grantor shall promptly notify the Agent thereof and pursuant to an
agreement in form and substance reasonably satisfactory to the Agent, either (a) grant
Control to the Agent and cause the issuer to agree to comply with instructions from the
Agent as to such securities, without further consent of any Grantor or such nominee, (b)
cause a security entitlement with respect to such uncertificated security to be held in a
Securities Account with respect to which the Agent has Control or (c) arrange for the Agent
to become the registered owner of the securities. Grantor shall not hereafter establish and
maintain any Securities Account with any Securities Intermediary unless (1) the applicable
Grantor shall have given the Agent ten (10) Business Days’ prior written notice of its
intention to establish such new Securities Account with such Securities Intermediary, (2)
such Securities Intermediary shall be reasonably acceptable to the Agent and (3) such
Securities Intermediary and such Grantor shall have duly executed and delivered a Control
Agreement with respect to such Securities Account. Subject to the terms of the Credit
Agreement, each Grantor shall accept any cash and Investment Property which are proceeds of
the Pledged Interests in trust for the benefit of the Agent and promptly upon receipt
thereof, deposit any cash
received by it into an account in which the Agent has Control, or with respect to any
Investment Properties or additional securities, take such actions as required above with
respect to such securities. The Agent agrees with each Grantor that the Agent shall not
give any entitlement orders or instructions or directions to any issuer of uncertificated
securities or Securities Intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by such Grantor, unless a Cash Dominion Event has occurred
and is continuing. No Grantor shall grant control over any Pledged Interests to any Person
other than the Agent.

     (iii) As between the Agent and the Grantors, the Grantors shall bear the investment
risk with respect to the Investment Property and Pledged Interests, and the risk of loss of,
damage to, or the destruction of the Investment Property and Pledged

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Interests, whether in
the possession of, or maintained as a security entitlement or deposit by, or subject to the
control of, the Agent, a Securities Intermediary, any Grantor or any other Person;
provided, however, that nothing contained in this SECTION 3.4(b) shall
release or relieve any Securities Intermediary of its duties and obligations to the Grantors
or any other Person under any Control Agreement or under applicable Law. Each Grantor shall
promptly pay all Claims and fees of whatever kind or nature with respect to the Pledged
Interests pledged by it under this Security Agreement. In the event any Grantor shall fail
to make such payment contemplated in the immediately preceding sentence, the Agent may do so
for the account of such Grantor and the Grantors shall promptly reimburse and indemnify the
Agent for all costs and expenses incurred by the Agent under this SECTION 3.4(b) and under
SECTION 9.3 hereof.

     (c) Electronic Chattel Paper and Transferable Records. As of the date hereof
no amount payable under or in connection with any of the Collateral is evidenced by any
Electronic Chattel Paper or any “transferable record” (as that term is defined in Section
201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section
16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction).
If any amount payable under or in connection with any of the Collateral shall be evidenced
by any Electronic Chattel Paper or any transferable record, the Grantor acquiring such
Electronic Chattel Paper or transferable record shall promptly notify the Agent thereof and
shall take such action as the Agent may reasonably request to vest in the Agent control
under UCC Section 9-105 of such Electronic Chattel Paper or control under Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record. The Agent agrees with such Grantor that the Agent will
arrange, pursuant to procedures reasonably satisfactory to the Agent and so long as such
procedures will not result in the Agent’s loss of control, for the Grantor to make
alterations to the Electronic Chattel Paper or transferable record permitted under UCC
Section 9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act of Section 16 of the Uniform Electronic Transactions Act
for a party in control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after
taking into account any action by such Grantor with respect to such Electronic Chattel
Paper or transferable record.

     (d) Letter-of-Credit Rights. If such Grantor is at any time a beneficiary
under a Letter of Credit now or hereafter issued in favor of such Grantor, (which, for the
avoidance of doubt, shall not include any Letter of Credit issued pursuant to the Credit
Agreement), such Grantor shall promptly notify the Agent thereof and such Grantor shall, at
the request of the Agent, pursuant to an agreement in form and substance reasonably
satisfactory to the Agent, either (i) arrange for the issuer and any confirmer of such
Letter of Credit to consent to an assignment to the Agent of, and to pay to the Agent, the
proceeds of, any drawing under the Letter of Credit or (ii) arrange for the Agent to become
the beneficiary of such Letter of Credit, with the Agent agreeing, in each case,

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that the
proceeds of any drawing under the Letter of Credit are to be applied as provided in the
Credit Agreement.

     (e) Commercial Tort Claims. As of the date hereof it holds no Commercial Tort
Claims other than those listed in Section 13 of the Information Certificate. If any Grantor
shall at any time hold or acquire a Commercial Tort Claim, such Grantor shall immediately
notify the Agent in writing signed by such Grantor of the brief details thereof and grant to
the Agent in such writing a security interest therein and in the Proceeds thereof, all upon
the terms of this Security Agreement, with such writing to be in form and substance
reasonably satisfactory to the Agent.

          SECTION 3.5. Supplements; Further Assurances. Each Grantor shall take such further
actions, and execute and deliver to the Agent such additional assignments, agreements, supplements,
powers and instruments, as the Agent may in its reasonable judgment deem necessary or appropriate,
wherever required by Law, in order to perfect, preserve and protect the security interest in the
Collateral as provided herein and the rights and interests granted to the Agent hereunder, to carry
into effect the purposes hereof or better to assure and confirm unto the Agent or permit the Agent
to exercise and enforce its rights, powers and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor shall make, execute, endorse,
acknowledge, file or refile and/or deliver to the Agent from time to time upon reasonable request
such lists, descriptions and designations of the Collateral, copies of warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security agreements, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments. If an Event of Default has occurred and is continuing, the Agent may
institute and maintain, in its own name or in the name of any Grantor, such suits and proceedings
as the Agent may be advised by counsel shall be necessary or expedient to prevent any impairment of
the security interest in or the perfection thereof in the Collateral. All of the foregoing shall
be at the sole cost and expense of the Grantors. The Grantors and the Agent acknowledge that this
Security Agreement is intended to grant to the Agent for the benefit of the Agent and the other
Credit Parties a security interest in and Lien upon the Collateral and shall not constitute or
create a present assignment of any of the Collateral.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

          In addition to, and without limitation of, each of the representations, warranties and
covenants set forth in the Credit Agreement and the other Loan Documents, each Grantor represents,
warrants and covenants as follows:

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          SECTION 4.1. Title. No financing statement or other public notice with respect to all
or any part of the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Agent pursuant to this Security Agreement or as are permitted by the
Credit Agreement. No Person other than the Agent has control or possession of all or any part of
the Collateral, except as permitted by the Credit Agreement.

          SECTION 4.2. Limitation on Liens; Defense of Claims; Transferability of Collateral.
Each Grantor is as of the date hereof, and, as to Collateral acquired by it from time to time after
the date hereof, such Grantor will be, the sole direct and beneficial owner of all Collateral
pledged by it hereunder free from any Lien or other right, title or interest of any Person other
than the Liens and security interest created by this Security Agreement and Permitted Encumbrances.
Each Grantor shall, at its own cost and expense, defend title to the Collateral pledged by it
hereunder and the security interest therein and Lien thereon granted to the Agent and the priority
thereof against all claims and demands of all Persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Agent or any other Credit Party other than (i) with
respect to claims or demands regarding priority of Liens, Permitted Encumbrances having priority by
operation of law, and (ii) with respect to all other claims and demands, Permitted Encumbrances.
There is no agreement, and no Grantor shall enter into any agreement or take any other action, that
would restrict the transferability of any of the Collateral or otherwise impair or conflict with
such Grantors’ obligations or the rights of the Agent hereunder.

          SECTION 4.3. Chief Executive Office; Change of Name; Jurisdiction of Organization.
(a) The exact legal name, type of organization, jurisdiction of organization, federal taxpayer
identification number, organizational identification number and chief executive office of such
Grantor is set forth in Schedule IV annexed hereto. Such Grantor shall furnish to
the Agent prompt written notice of any change in (i) its corporate name, (ii) the location of
its chief executive office, its principal place of business, any office in which it maintains books
or records relating to Collateral owned by it or any office or facility at which Collateral owned
by it is located (including the establishment of any such new office or facility), (iii) its
identity or type of organization or corporate structure, (iv) its federal taxpayer identification
number or organizational identification number or (v) its jurisdiction of organization (in each
case, including, without limitation, by merging with or into any other entity, reorganizing,
dissolving, liquidating, reincorporating or incorporating in any other jurisdiction). Such Grantor
agrees (A) not to effect or permit any such change unless all filings have been made under the UCC
or otherwise that are required in order for the Agent to continue at all times following such
change to have a valid, legal and perfected first priority security interest in all the Collateral
(subject to, with respect to priority, Permitted Encumbrances having priority by operation of law)
and (B) to take all action reasonably satisfactory to the Agent to maintain the perfection and
priority of the security interest of the Agent for the benefit of the Agent and the other Credit
Parties in the Collateral intended to be granted hereunder. Each Grantor agrees to promptly
provide the Agent with certified Organization Documents reflecting any of the changes described in
the preceding sentence.

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          (b) The Agent may rely on opinions of counsel as to whether any or
all UCC financing statements of the Grantors need to be amended as a result of any of the changes
described in SECTION 4.3(a). If any Grantor fails to provide information to the Agent about such
changes on a timely basis, the Agent shall not be liable or responsible to any party for any
failure to maintain a perfected security interest in such Grantor’s property constituting
Collateral, for which the Agent needed to have information relating to such changes. The Agent
shall have no duty to inquire about such changes if any Grantor does not inform the Agent of such
changes, the parties acknowledging and agreeing that it would not be feasible or practical for the
Agent to search for information on such changes if such information is not provided by any Grantor.

          SECTION 4.4. Location of Inventory and Equipment. As of the Closing Date, all
Equipment and Inventory of such Grantor is located at the chief executive office or such other
location listed in Schedule 5.08(b)(1) and Schedule 5.08(b)(2) of the Credit Agreement.

          SECTION 4.5. Condition and Maintenance of Equipment. The Equipment of such Grantor is in
good repair, working order and condition, reasonable wear and tear excepted. Each Grantor shall
cause the Equipment to be maintained and preserved in good repair, working order and condition,
reasonable wear and tear excepted, and shall as quickly as commercially reasonable make or cause to
be made all repairs, replacements and other improvements which are necessary in the conduct of such
Grantor’s business.

          SECTION 4.6. Due Authorization and Issuance. All of the Pledged Interests have been, and to the extent any Pledged Interests are
hereafter issued, such shares or other equity interests will be, upon such issuance, duly
authorized, validly issued and, to the extent applicable, fully paid and non-assessable. All of
the Pledged Interests have been fully paid for, and there is no amount or other obligation owing by
any Grantor to any issuer of the Pledged Interests in exchange for or in connection with the
issuance of the Pledged Interests or any Grantor’s status as a partner or a member of any issuer of
the Pledged Interests. None of the Pledged Interests were issued in violation of any preemptive
rights or any agreement by which any Grantor is bound.

          SECTION 4.7. No Conflicts, Consents, etc. No consent of any party (including,
without limitation, equity holders or creditors of such Grantor) and no consent, authorization,
approval, license or other action by, and no notice to or filing with, any Governmental Authority
or regulatory body or other Person is required (A) for the grant of the security interest by such
Grantor of the Collateral pledged by it pursuant to this Security Agreement or for the execution,
delivery or performance hereof by such Grantor, (B) for the exercise by the Agent of the voting or
other rights provided for in this Security Agreement, or (C) for the exercise by the Agent of the
remedies in respect of the Collateral pursuant to this Security Agreement except, in each case, (w)
the authorizations, approvals, actions, consents, notices and filings that have been duly obtained,
taken, given or made and are in full force and effect, (x) filings necessary to perfect the
security interest in the Collateral granted by the Grantors to the Agent for the benefit of the
Agent and the other Credit Parties, (y) as may be

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required in connection with such disposition by
laws affecting the foreclosure of security interests generally, and (z) applicable Laws governing
the offering and sale of securities. Following the occurrence and during the continuation of an
Event of Default, if the Agent desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Security Agreement and determines it necessary to obtain
any approvals or consents of any Governmental Authority or any other Person therefor, then, upon
the reasonable request of the Agent, such Grantor agrees to use commercially reasonable efforts to
assist and aid the Agent to obtain as soon as commercially practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers.

          SECTION 4.8. Collateral. All information set forth herein, including the schedules
annexed hereto, and all information contained in any documents, schedules and lists heretofore
delivered to any Credit Party in connection with this Security Agreement, in each case, relating to
the Collateral, is accurate and complete in all material respects. The Collateral described on the
schedules annexed hereto or in the Information Certificate constitutes all of the property of such
type of Collateral owned or held by the Grantors.

          SECTION 4.9. Insurance. Such Grantor shall (i) maintain or shall cause to be maintained such insurance as is
required pursuant to Section 6.07 of the Credit Agreement; (ii) maintain such other insurance as
may be required by applicable Law; and (iii) furnish to the Agent, upon written request, full
information as to the insurance carried. Each Grantor hereby irrevocably makes, constitutes and
appoints the Agent (and all officers, employees or agents designated by the Agent) as such
Grantor’s true and lawful agent (and attorney-in-fact), exercisable only after the occurrence and
during the continuance of an Event of Default, for the purpose of making, settling and adjusting
claims in respect of the Collateral under policies of insurance, endorsing the name of such Grantor
on any check, draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or in part relating thereto, the Agent may, without
waiving or releasing any obligation or liability of the Grantors hereunder or any Default or Event
of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Agent deems advisable. All sums
disbursed by the Agent in connection with this SECTION 4.9, including reasonable attorneys’ fees,
court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Agent and shall be additional Secured Obligations secured hereby.

          SECTION 4.10. Payment of Taxes; Compliance with Laws; Contested Liens; Claims. Each
Grantor represents and warrants that all Claims imposed upon or assessed against the Collateral
have been paid and discharged except to the extent such Claims constitute a Lien not yet due and
payable or a Permitted Encumbrance or are otherwise being contested in accordance with Section 6.04
of the Credit Agreement. Each Grantor shall comply with all applicable Law relating to the
Collateral the failure to comply with which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Each Grantor may

16

 

at its own expense contest the
validity, amount or applicability of any Claims so long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Credit Agreement.
Notwithstanding the foregoing provisions of this SECTION 4.10, no contest of any such obligation
may be pursued by such Grantor if such contest would expose the Agent or any other Credit Party to
(i) any possible criminal liability or (ii) any additional civil liability for failure to comply
with such obligations unless such Grantor shall have furnished a bond or other security therefor
satisfactory to the Agent, or such other Credit Party, as the case may be.

          SECTION 4.11. Access to Collateral, Books and Records; Other Information. Without
limitation or duplication of the provisions of Section 6.10 of the Credit Agreement, upon
reasonable prior request to each Grantor, the Agent, its agents, accountants and attorneys shall
have full and free access to visit and inspect, as applicable, during normal business hours, all of
the Collateral including, without limitation, all of the books,
correspondence and records of such Grantor relating thereto. The Agent and its
representatives may examine the same, take extracts therefrom and make photocopies thereof, and
such Grantor agrees to render to the Agent, at such Grantor’s cost and expense, such clerical and
other assistance as may be reasonably requested by the Agent with regard thereto. Such Grantor
shall, at any and all times, within a reasonable time after written request by the Agent, furnish
or cause to be furnished to the Agent, in such manner and in such detail as may be reasonably
requested by the Agent, additional information with respect to the Collateral.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

          SECTION 5.1. Pledge of Additional Securities Collateral. Each Grantor shall, upon
obtaining any Pledged Interests or Intercompany Notes of any Person required to be pledged
hereunder, accept the same in trust for the benefit of the Agent and forthwith deliver to the Agent
a pledge amendment, duly executed by such Grantor, in substantially the form of Exhibit 1
annexed hereto (each, a “Pledge Amendment”), and the certificates and other documents
required under SECTION 3.1 and SECTION 3.2 hereof in respect of the additional Pledged Interests or
Intercompany Notes which are to be pledged pursuant to this Security Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional Pledged Interests or
Intercompany Notes. Each Grantor hereby authorizes the Agent to attach each Pledge Amendment to
this Security Agreement and agrees that all Pledged Interests or Intercompany Notes listed on any
Pledge Amendment delivered to the Agent shall for all purposes hereunder be considered Collateral.

          SECTION 5.2. Voting Rights; Distributions; etc.

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          (i) So long as no Event of Default shall have occurred and be continuing, each Grantor shall
be entitled to exercise any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with the terms or purposes hereof,
the Credit Agreement or any other Loan Document evidencing the Secured Obligations. The Agent
shall be deemed without further action or formality to have granted to each Grantor all necessary
consents relating to voting rights and shall, if necessary, upon written request of any Grantor and
at the sole cost and expense of the Grantors, from time to time execute and deliver (or cause to be
executed and delivered) to such Grantor all such instruments as such Grantor may reasonably request
in order to permit such Grantor to exercise the voting and other rights which it is entitled to
exercise pursuant to this SECTION 5.2(i).

          (ii) Upon the occurrence and during the continuance of any Event of Default, all rights of
each Grantor to exercise the voting and other consensual rights it would otherwise be
entitled to exercise pursuant to SECTION 5.2(i) hereof without any action, other than, in the
case of any Securities Collateral, or the giving of any notice shall immediately cease, and all
such rights shall thereupon become vested in the Agent, which shall thereupon have the sole right
to exercise such voting and other consensual rights; provided that the Agent shall have the
right, in its sole discretion, from time to time following the occurrence and continuance of an
Event of Default to permit such Grantor to exercise such rights under SECTION 5.2(i). After such
Event of Default is no longer continuing, each Grantor shall have the right to exercise the voting,
managerial and other consensual rights and powers that it would otherwise be entitled to pursuant
to SECTION 5.2(i) hereof.

          (iii) So long as no Cash Dominion Event shall have occurred and be continuing, each Grantor
shall be entitled to receive and retain, and to utilize free and clear of the Lien hereof, any and
all Distributions, but only if and to the extent made in accordance with, and to the extent
permitted by, the provisions of the Credit Agreement; provided, however, that any
and all such Distributions consisting of rights or interests in the form of securities shall be
forthwith delivered to the Agent to hold as Collateral and shall, if received by any Grantor, be
received in trust for the benefit of the Agent, be segregated from the other property or funds of
such Grantor and be forthwith delivered to the Agent as Collateral in the same form as so received
(with any necessary endorsement). The Agent shall, if necessary, upon written request of any
Grantor and at the sole cost and expense of the Grantors, from time to time execute and deliver (or
cause to be executed and delivered) to such Grantor all such instruments as such Grantor may
reasonably request in order to permit such Grantor to receive the Distributions which it is
authorized to receive and retain pursuant to this SECTION 5.2(iii).

          (iv) Upon the occurrence and during the continuance of any Cash Dominion Event, all rights of
each Grantor to receive Distributions which it would otherwise be authorized to receive and retain
pursuant to SECTION 5.2(iii) hereof shall cease and all such rights shall thereupon become vested
in the Agent, which shall thereupon have the sole right to receive and hold as Collateral such
Distributions. After such Cash Dominion Event is no longer continuing, each Grantor shall have the
right to receive the Distributions which it would be authorized to receive and retain pursuant to
SECTION 5.2(ii).

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          (v) Each Grantor shall, at its sole cost and expense, from time to time execute and deliver to
the Agent appropriate instruments as the Agent may reasonably request in order to permit the Agent
to exercise the voting and other rights which it may be entitled to exercise pursuant to SECTION
5.2(ii) hereof and to receive all Distributions which it may be entitled to receive under SECTION
5.2(iii) hereof.

          (vi) All Distributions which are received by any Grantor contrary to the provisions of SECTION
5.2(ii) hereof shall be received in trust for the benefit of the Agent, shall be segregated from
other funds of such Grantor and shall immediately be paid over to the Agent as Collateral in the
same form as so received (with any necessary endorsement).

          SECTION 5.3. Organization Documents. Each Grantor has delivered to the Agent true,
correct and complete copies of its Organization Documents. The Organization Documents are in full
force and effect. No Grantor will terminate or agree to terminate any Organization Documents or
make any amendment or modification to any Organization Documents (including electing to treat any
Pledged Interests of such Grantor as a security under Section 8-103 of the UCC) except to the
extent permitted pursuant to the Credit Agreement.

          SECTION 5.4. Defaults, Etc. Such Grantor is not in default in the payment of any
portion of any mandatory capital contribution, if any, required to be made under any agreement to
which such Grantor is a party relating to the Pledged Interests pledged by it, and such Grantor is
not in violation of any other provisions of any such agreement to which such Grantor is a party, or
otherwise in default or violation thereunder. No Securities Collateral pledged by such Grantor is
subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or
alleged against such Grantor by any Person with respect thereto, and as of the date hereof, there
are no certificates, instruments, documents or other writings (other than the Organization
Documents and certificates, if any, delivered to the Agent) which evidence any Pledged Interests of
such Grantor.

          SECTION 5.5. Certain Agreements of Grantors As Issuers and Holders of Equity
Interests.

          (i) In the case of each Grantor which is an issuer of Securities Collateral, such Grantor
agrees to be bound by the terms of this Security Agreement relating to the Securities Collateral
issued by it and will comply with such terms insofar as such terms are applicable to it.

          (ii) In the case of each Grantor which is a partner or member, as the case may be, in a
partnership, limited liability company or other entity, such Grantor hereby consents to the extent
required by the applicable Organization Documents to the pledge by each other Grantor, pursuant to
the terms hereof, of the Pledged Interests in such partnership, limited liability company or other
entity and, upon the occurrence and during the continuance of an Event of Default, to the extent
permitted under applicable Law, to the transfer of such Pledged Interests to the Agent or its
nominee and to the substitution of the Agent or its nominee as a substituted partner or member in
such partnership, limited liability company or other entity with

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all the rights, powers and duties
of a general partner or a limited partner or member, as the case may be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

          SECTION 6.1. Grant of License. Without limiting the rights of the Agent as the holder
of a Lien on the Intellectual Property Collateral, for the purpose of enabling the Agent, during
the continuance of an Event of Default, to exercise rights and remedies under Article VIII
hereof at such time as the Agent shall be lawfully entitled to exercise such rights and remedies,
and for no other purpose, each Grantor hereby grants to the Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty, rent or other
compensation to such Grantor but exercisable only during the continuance of an Event of Default) to
use, assign, license or sublicense any of the Intellectual Property Collateral now owned or
hereafter acquired by such Grantor) and to occupy any Real Property owned or leased by such
Grantor, wherever the same may be located, including in such license access to all media in which
any of the licensed items may be recorded or stored and to all computer programs used for the
compilation or printout hereof.

          SECTION 6.2. Registrations. Except pursuant to licenses and other user agreements
entered into by any Grantor in the ordinary course of business, on and as of the date hereof (i)
each Grantor owns and possesses the right to use, and has done nothing to authorize or enable any
other Person to use, any material Copyright, Patent or Trademark listed in Section 16 of the
Information Certificate, and (ii) all registrations listed in Section 16 of the Information
Certificate are valid and in full force and effect.

          SECTION 6.3. No Violations or Proceedings. To each Grantor’s knowledge, on and as of
the date hereof, there is no violation by others of any right of such Grantor with respect to any
Copyright, Patent or Trademark listed in Section 16 of the Information Certificate, respectively,
pledged by it under the name of such Grantor.

          SECTION 6.4. Protection of Agent’s Security. On a continuing basis, each Grantor
shall, at its sole cost and expense, (i) promptly following its becoming aware thereof, notify the
Agent of (A) any material adverse determination in any proceeding in the United States Patent and
Trademark Office or the United States Copyright Office with respect to any Patent, Trademark or
Copyright necessary for the conduct of business of such Grantor or (B) the institution of any
proceeding or any adverse determination in any federal, state or local court or administrative body
regarding such Grantor’s claim of ownership in or right to use any of the Intellectual Property
Collateral material to the use and operation of the Collateral, its right to register such
Intellectual Property Collateral or its
right to keep and maintain such registration in

20

 

full force and effect, (ii) maintain and
protect the Intellectual Property Collateral necessary for the conduct of business of such Grantor,
(iii) not permit to lapse or become abandoned any Intellectual Property Collateral necessary for
the conduct of business of such Grantor, and not settle or compromise any pending or future
litigation or administrative proceeding with respect to such Intellectual Property Collateral, in
each case except as shall be consistent with commercially reasonable business judgment and, if any
Event of Default has occurred and is continuing, with the prior approval of the Agent (such
approval not to be unreasonably withheld), (iv) upon such Grantor’s obtaining knowledge thereof,
promptly notify the Agent in writing of any event which may be reasonably expected to materially
and adversely affect the value or utility of the Intellectual Property Collateral or any portion
thereof material to the use and operation of the Collateral, the ability of such Grantor or the
Agent to dispose of the Intellectual Property Collateral or any portion thereof or the rights and
remedies of the Agent in relation thereto including, without limitation, a levy or threat of levy
or any legal process against the Intellectual Property Collateral or any portion thereof, (v) not
license the Intellectual Property Collateral other than licenses entered into by such Grantor in,
or incidental to, the ordinary course of business, or amend or permit the amendment of any of the
material licenses in a manner that materially and adversely affects the right to receive payments
thereunder, or in any manner that would materially impair the value of the Intellectual Property
Collateral or the Lien on and security interest in the Intellectual Property Collateral intended to
be granted to the Agent for the benefit of the Agent and the other Credit Parties, without the
consent of the Agent, (vi) until the Agent exercises its rights to make collection, diligently keep
adequate records respecting the Intellectual Property Collateral and (vii) furnish to the Agent
from time to time upon the Agent’s reasonable request therefor detailed statements and amended
schedules further identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property Collateral as the Agent may
from time to time request. Notwithstanding the foregoing, nothing herein shall prevent any Grantor
from selling, disposing of or otherwise using any Intellectual Property Collateral as permitted
under the Credit Agreement.

          SECTION 6.5. After-Acquired Property. If any Grantor shall, at any time before this
Security Agreement shall have been terminated in accordance with SECTION 9.5(a), (i) obtain any
rights to any additional Intellectual Property Collateral or (ii) become entitled to the benefit of
any additional Intellectual Property Collateral or any renewal or extension thereof, including any
reissue, division, continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions hereof shall
automatically apply thereto and any such item enumerated in clause (i) or (ii) of this SECTION 6.5
with respect to such Grantor shall automatically constitute Intellectual Property Collateral if
such would have constituted Intellectual Property Collateral at the time of execution hereof and be
subject to the Lien and security interest created by this Security Agreement without further action
by any party. With respect to any federally registered Intellectual Property Collateral, each
Grantor shall promptly (a) provide to the Agent written notice of any of the foregoing and (b)
confirm the attachment of the Lien and security interest created by this Security Agreement to any
rights described in clauses (i) and (ii) of the immediately preceding

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sentence of this SECTION 6.5 by
execution of an instrument in form reasonably acceptable to the Agent.

          SECTION 6.6. Modifications. Each Grantor authorizes the Agent to modify this Security
Agreement by amending Section 16 of the Information Certificate to include any Intellectual
Property Collateral acquired or arising after the date hereof of such Grantor including, without
limitation, any of the items listed in SECTION 6.5 hereof.

          SECTION 6.7. Litigation. Unless there shall occur and be continuing any Event of
Default, each Grantor shall have the right to commence and prosecute in its own name, as the party
in interest, for its own benefit and at the sole cost and expense of the Grantors, such
applications for protection of the Intellectual Property Collateral and suits, proceedings or other
actions to prevent the infringement, counterfeiting, unfair competition, dilution, diminution in
value or other damage as are necessary to protect the Intellectual Property Collateral. Upon the
occurrence and during the continuance of any Event of Default, the Agent shall have the right but
shall in no way be obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Grantor, the Agent or the other Credit Parties to
enforce the Intellectual Property Collateral and any license thereunder. In the event of such
suit, each Grantor shall, at the reasonable request of the Agent, do any and all lawful acts and
execute any and all documents requested by the Agent in aid of such enforcement and the Grantors
shall promptly reimburse and indemnify the Agent, as the case may be, for all costs and expenses
incurred by the Agent in the exercise of its rights under this SECTION 6.7 in accordance with
SECTION 9.3 hereof. In the event that the Agent shall elect not to bring suit to enforce the
Intellectual Property Collateral, each Grantor agrees, at the request of the Agent, to take all
commercially reasonable actions necessary, whether by suit, proceeding or other action, to prevent
the infringement, counterfeiting, unfair competition, dilution, diminution in value of or other
damage to any of the Intellectual Property Collateral by others and for that purpose agrees to
diligently maintain any suit, proceeding or other action against any Person so infringing necessary
to prevent such infringement.

          SECTION 6.8. Third Party Consents. Each Grantor shall use commercially reasonable
efforts to obtain the consent of third parties to the extent such consent is necessary or desirable
to create a valid, perfected security interest in favor of the Agent in any Intellectual Property
Collateral.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING ACCOUNTS

          SECTION 7.1. Special Representations and Warranties. As of the time when each of its
Accounts is included in the Borrowing Base as an Eligible Credit Card Receivable, each Grantor
shall be deemed to have represented and warranted that such Account and all

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records, papers and
documents relating thereto (i) are genuine and correct and in all material respects what they
purport to be, (ii) represent the legal, valid and binding obligation of the account debtor, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar Laws relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability, evidencing indebtedness unpaid and owed by such account debtor, arising
out of the performance of labor or services or the sale, lease, license, assignment or other
disposition and delivery of the goods or other property listed therein or out of an advance or a
loan, and (iii) are in all material respects in compliance and conform with all applicable material
federal, state and local Laws and applicable Laws of any relevant foreign jurisdiction.

          SECTION 7.2. Maintenance of Records. Each Grantor shall keep and maintain at its own
cost and expense materially complete records of each Account, in a manner consistent with prudent
business practice, including, without limitation, records of all payments received, all credits
granted thereon, all merchandise returned and all other documentation relating thereto. Each
Grantor shall, at such Grantor’s sole cost and expense, upon the Agent’s demand made at any time
after the occurrence and during the continuance of any Event of Default, deliver all tangible
evidence of Accounts, including, without limitation, all documents evidencing Accounts and any
books and records relating thereto to the Agent or to its representatives (copies of which evidence
and books and records may be retained by such Grantor). Upon the occurrence and during the
continuance of any Event of Default, the Agent may transfer a full and complete copy of any
Grantor’s books, records, credit information, reports, memoranda and all other writings relating to
the Accounts to and for the use by any Person that has acquired or is contemplating acquisition of
an interest in the Accounts or the Agent’s security interest therein in accordance with applicable
Law without the consent of any Grantor.

          SECTION 7.3. Legend. Each Grantor shall legend, at the request of the Agent made at
any time after the occurrence and during the continuance of any Event of Default and in form and
manner reasonably satisfactory to the Agent, the Accounts and the other books, records and
documents of such Grantor evidencing or pertaining to the Accounts with an appropriate reference to
the fact that the Accounts have been collaterally assigned to the Agent for the benefit of the
Agent and the other Credit Parties and that the Agent has a security interest therein.

          SECTION 7.4. Modification of Terms, Etc. No Grantor shall rescind or cancel any
indebtedness evidenced by any Account or modify any term thereof or make any adjustment with
respect thereto except in the ordinary course of business consistent with prudent business
practice, or extend or renew any such indebtedness except in the ordinary course of business
consistent with prudent business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Account or interest therein except in the ordinary course
of business consistent with prudent business practice or in accordance with the Credit Agreement
without the prior written consent of the Agent.

          SECTION 7.5. Collection. Each Grantor shall cause to be collected from the account
debtor of each of the Accounts, as and when due in the ordinary course of business

23

 

consistent with
prudent business practice (including, without limitation, Accounts that are delinquent, such
Accounts to be collected in accordance with generally accepted commercial collection procedures),
any and all amounts owing under or on account of such Account, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such Account. The costs
and expenses (including, without limitation, reasonable attorneys’ fees) of collection, in any
case, whether incurred by any Grantor, the Agent or any other Credit Party, shall be paid by the
Grantors.

ARTICLE VIII

REMEDIES

          SECTION 8.1. Remedies. Upon the occurrence and during the continuance of any Event
of Default the Agent may, and at the direction of the Required Lenders, shall, from time to time in
respect of the Collateral, in addition to the other rights and remedies provided for herein, under
applicable Law or otherwise available to it:

          (i) Personally, or by agents or attorneys, immediately take possession of the Collateral or
any part thereof, from any Grantor or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may enter upon any Grantor’s
premises where any of the Collateral is located, remove such Collateral, remain present at such
premises to receive copies of all communications and remittances relating to the Collateral and use
in connection with such removal and possession any and all services, supplies, aids and other
facilities of any Grantor;

          (ii) Demand, sue for, collect or receive any money or property at any time payable or
receivable in respect of the Collateral including, without limitation, instructing the
obligor or obligors on any agreement, instrument or other obligation constituting part of the
Collateral to make any payment required by the terms of such agreement, instrument or other
obligation directly to the Agent, and in connection with any of the foregoing, compromise, settle,
extend the time for payment and make other modifications with respect thereto; provided,
however, that in the event that any such payments are made directly to any Grantor, prior
to receipt by any such obligor of such instruction, such Grantor shall segregate all amounts
received pursuant thereto in trust for the benefit of the Agent and shall promptly pay such amounts
to the Agent;

          (iii) Sell, assign, grant a license to use or otherwise liquidate, or direct any Grantor to
sell, assign, grant a license to use or otherwise liquidate, any and all investments made in whole
or in part with the Collateral or any part thereof, and take possession of the proceeds of any such
sale, assignment, license or liquidation;

          (iv) Take possession of the Collateral or any part thereof, by directing any Grantor in
writing to deliver the same to the Agent at any place or places so designated by the Agent, in
which event such Grantor shall at its own expense: (a) forthwith cause the same to be

24

 

moved to the
place or places designated by the Agent and therewith delivered to the Agent, (b) store and keep
any Collateral so delivered to the Agent at such place or places pending further action by the
Agent, and (c) while the Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to preserve and maintain them in
good condition. Each Grantor’s obligation to deliver the Collateral as contemplated in this
SECTION 8.1 is of the essence hereof. Upon application to a court of equity having jurisdiction,
the Agent shall be entitled to a decree requiring specific performance by any Grantor of such
obligation;

          (v) Withdraw all moneys, instruments, securities and other property in any bank, financial
securities, deposit or other account of any Grantor constituting Collateral for application to the
Secured Obligations as provided in Article VIII hereof;

          (vi) Retain and apply the Distributions to the Secured Obligations as provided in Article
VIII hereof;

          (vii) Exercise any and all rights as beneficial and legal owner of the Collateral, including,
without limitation, perfecting assignment of and exercising any and all voting, consensual and
other rights and powers with respect to any Collateral to the extent not prohibited by applicable
Law; and

          (viii) Exercise all the rights and remedies of a secured party under the UCC, and the Agent
may also in its sole discretion, without notice except as specified in SECTION 8.2 hereof, sell,
assign or grant a license to use the Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange, broker’s board or at any of the Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such
other terms as the Agent may deem commercially reasonable. The Agent or any other Credit
Party or any of their respective Affiliates may be the purchaser, licensee, assignee or
recipient of any or all of the Collateral at any such sale and shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or any portion of the
Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations
owed to such Person as a credit on account of the purchase price of any Collateral payable by such
Person at such sale. Each purchaser, assignee, licensee or recipient at any such sale shall
acquire the property sold, assigned or licensed absolutely free from any claim or right on the part
of any Grantor, and each Grantor hereby waives, to the fullest extent permitted by Law, all rights
of redemption, stay and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The Agent may adjourn
any public or private sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to which it was so
adjourned. To the fullest extent permitted by Law, each Grantor hereby waives any claims against
the Agent arising by reason of the fact that the price at which any Collateral may have been sold,
assigned or licensed at such a private sale was less than the price which might have

25

 

been obtained
at a public sale, even if the Agent accepts the first offer received and does not offer such
Collateral to more than one offeree.

          SECTION 8.2. Notice of Sale. Each Grantor acknowledges and agrees that, to the extent
notice of sale or other disposition of Collateral shall be required by applicable Law and unless
the Collateral is perishable or threatens to decline speedily in value, or is of a type customarily
sold on a recognized market (in which event the Agent shall provide such Grantor such advance
notice as may be practicable under the circumstances), ten (10) days’ prior notice to such Grantor
of the time and place of any public sale or of the time after which any private sale or other
intended disposition is to take place shall be commercially reasonable notification of such
matters. No notification need be given to any Grantor if it has signed, after the occurrence of an
Event of Default, a statement renouncing or modifying (as permitted under Law) any right to
notification of sale or other intended disposition.

          SECTION 8.3. Waiver of Notice and Claims. Each Grantor hereby waives, to the fullest
extent permitted by applicable Law, notice or judicial hearing in connection with the Agent’s
taking possession or the Agent’s disposition of any of the Collateral, including, without
limitation, any and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Grantor would otherwise have under law, and each Grantor hereby further
waives, to the fullest extent permitted by applicable Law: (i) all damages occasioned by such
taking of possession, (ii) all other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Agent’s rights hereunder and (iii) all rights
of redemption, appraisal, valuation, stay, extension or moratorium now or hereafter in force under
any applicable Law. The Agent shall not be liable for any incorrect or improper payment made
pursuant to this
Article VIII in the absence of gross negligence or willful misconduct. Any sale of,
or the grant of options to purchase, or any other realization upon, any Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity, of the applicable
Grantor therein and thereto, and shall be a perpetual bar both at law and in equity against such
Grantor and against any and all Persons claiming or attempting to claim the Collateral so sold,
optioned or realized upon, or any part thereof, from, through or under such Grantor.

          SECTION 8.4. Certain Sales of Collateral.

          (i) Each Grantor recognizes that, by reason of certain prohibitions contained in law, rules,
regulations or orders of any Governmental Authority (including, without limitation, the Securities
Act, and applicable state securities Laws), the Agent may be compelled, with respect to any sale of
all or any part of the Collateral (including, without limitation, Securities Collateral and
Investment Property), to limit purchasers to those who meet the requirements of such Governmental
Authority (which requirements may include, with respect to Securities Collateral and/or Investment
Property, that such purchasers shall agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not with a view to the
distribution or resale thereof). Each Grantor acknowledges that any such sales may be at prices
and on terms less favorable to the Agent than those obtainable

26

 

through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to a registration
statement under the Securities Act), and, notwithstanding such circumstances, agrees that any such
restricted sale shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable Law, the Agent shall have no obligation to engage in public
sales and no obligation to delay the sale of any Securities Collateral or Investment Property for
the period of time necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state securities Laws, even if
such issuer would agree to do so.

          (ii) If the Agent determines to exercise its right to sell any or all of the Securities
Collateral or Investment Property, upon written request, the applicable Grantor shall from time to
time furnish to the Agent all such information as the Agent may reasonably request in order to
determine the number of securities included in the Securities Collateral or Investment Property
which may be sold by the Agent as exempt transactions under the Securities Act and the rules of the
Securities and Exchange Commission thereunder, as the same are from time to time in effect.

          (iii) Each Grantor further agrees that a breach of any of the covenants contained in this
SECTION 8.4 will cause irreparable injury to the Agent and the other Credit Parties, that the Agent
and the other Credit Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this SECTION 8.4 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and
agrees not to assert any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred and is continuing.

          SECTION 8.5. No Waiver; Cumulative Remedies.

          (i) No failure on the part of the Agent to exercise, no course of dealing with respect to, and
no delay on the part of the Agent in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any other right, power
or remedy; nor shall the Agent be required to look first to, enforce or exhaust any other security,
collateral or guaranties. The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.

          (ii) In the event that the Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Security Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall have been determined
adversely to the Agent, then and in every such case, the Grantors, the Agent and each other Credit
Party shall be restored to their respective former positions and rights hereunder with respect to
the Collateral, and all rights, remedies and powers of the Agent and the other Credit Parties shall
continue as if no such proceeding had been instituted.

27

 

          SECTION 8.6. Certain Additional Actions Regarding Intellectual Property. If any Event
of Default shall have occurred and be continuing, upon the written demand of Agent, each Grantor
shall execute and deliver to Agent an assignment or assignments of the registered Patents,
Trademarks and/or Copyrights and such other documents as are necessary or appropriate to carry out
the intent and purposes hereof to the extent such Grantor in its commercially reasonable business
judgment concludes that such assignment does not result in any loss of rights therein under
applicable Law. Within five (5) Business Days of written notice thereafter from Agent, each
Grantor shall make available to Agent, to the extent within such Grantor’s power and authority,
such personnel in such Grantor’s employ on the date of the Event of Default as Agent may reasonably
designate to permit such Grantor to continue, directly or indirectly, to produce, advertise and
sell the products and services sold by such Grantor under the registered Patents, Trademarks and/or
Copyrights, and such Persons shall be reasonably available to perform their prior functions on
Agent’s behalf.

          SECTION 8.7. Application of Proceeds. The proceeds received by the Agent in respect
of any sale of, collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Agent of its remedies shall be applied, together with any other
sums then held by the Agent pursuant to this Security Agreement, in accordance with and as set
forth in Section 8.03 of the Credit Agreement.

ARTICLE IX

MISCELLANEOUS

          SECTION 9.1. Concerning Agent.

          (i) The Agent has been appointed as administrative agent and as collateral agent pursuant to
the Credit Agreement. The actions of the Agent hereunder are subject to the provisions of the
Credit Agreement. The Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of the Collateral), in accordance with
this Security Agreement and the Credit Agreement. The Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be liable for the negligence or misconduct
of any such agents or attorneys-in-fact so long as such agents or attorneys-in-fact are appointed
with due care. The Agent may resign and a successor Agent may be appointed in the manner provided
in the Credit Agreement. Upon the acceptance of any appointment as the Agent by a successor Agent
in accordance with the terms of the Credit Agreement, that successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the retiring Agent under
this Security Agreement, and the retiring Agent shall thereupon be discharged from its duties and
obligations under this Security Agreement. After any retiring Agent’s resignation, the provisions
hereof shall inure to its benefit as to any actions taken or omitted to be taken by it under this
Security Agreement while it was the Agent.

28

 

           (ii) The Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral is accorded treatment
substantially equivalent to that which the Agent, in its individual capacity, accords its own
property consisting of similar instruments or interests, it being understood that neither the Agent
nor any of the other Credit Parties shall have responsibility for, without limitation (i)
ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Securities Collateral, whether or not the Agent or any other Credit
Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Collateral. In no event shall the Agent’s
or any other Credit Party’s responsibility for the custody and preservation of the Collateral in
its possession extend to matters beyond the control of such Person, including, without limitation,
acts of God, war, insurrection, riot, governmental actions or acts of any corporate or other
depository.

          (iii) The Agent shall be entitled to rely upon any written notice, statement, certificate,
order or other document or any telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person, and, with respect to all
matters pertaining to this Security Agreement and its duties hereunder, upon advice of counsel
selected by it.

          (iv) If any item of Collateral also constitutes collateral granted to Agent under any other
deed of trust, mortgage, security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of trust, mortgage,
security agreement, pledge or instrument of any type in respect of such collateral, Agent, in its
sole discretion, shall select which provision or provisions shall control.

          SECTION 9.2. Agent May Perform; Agent Appointed Attorney-in-Fact. If any Grantor
shall fail to perform any covenants contained in this Security Agreement or in the Credit Agreement
(including, without limitation, such Grantor’s covenants to (i) pay the premiums in respect of all
required insurance policies hereunder, (ii) pay Claims, (iii) make repairs, (iv) discharge Liens or
(v) pay or perform any other obligations of such Grantor with respect to any Collateral) or if any
warranty on the part of any Grantor contained herein shall be breached, the Agent may (but shall
not be obligated to) do the same or cause it to be done or remedy any such breach, and may expend
funds for such purpose; provided, however, that Agent shall in no event be bound to
inquire into the validity of any tax, lien, imposition or other obligation which such Grantor fails
to pay or perform as and when required hereby. Any and all amounts so expended by the Agent shall
be paid by the Grantors in accordance with the provisions of SECTION 9.3 hereof. Neither the
provisions of this SECTION 9.2 nor any action taken by Agent pursuant to the provisions of this
SECTION 9.2 shall prevent any such failure to observe any covenant contained in this Security
Agreement nor any breach of warranty from constituting an Event of Default. Each Grantor hereby
appoints the Agent its attorney-in-fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor, or otherwise, from time to time after the occurrence and during
the continuation of an Event of Default in the Agent’s discretion to take any action and to execute
any instrument consistent with

29

 

the terms of the Credit Agreement and the other Security Documents
which the Agent may deem necessary to accomplish the purposes hereof. The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment shall be irrevocable
for the term hereof. Each Grantor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof.

          SECTION 9.3. Expenses. Each Grantor will upon demand pay to the Agent the amount of
any and all amounts required to be paid pursuant to Section 10.04 of the Credit Agreement.

          SECTION 9.4. Continuing Security Interest; Assignment. This Security Agreement shall
create a continuing security interest in the Collateral and shall (i) be binding upon the Grantors,
their respective successors and assigns, and (ii) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the
Agent and the other Credit Parties and each of their respective successors, transferees and
assigns. No other Persons (including, without limitation, any other creditor of any Grantor) shall
have any interest herein or any right or benefit with respect hereto. Without limiting the
generality of the foregoing clause (ii), any Credit Party may assign or otherwise transfer any
indebtedness held by it secured by this Security Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof granted to such
Credit Party, herein or otherwise, subject, however, to the provisions of the Credit Agreement.

     SECTION 9.5. Termination; Release(a) This Security Agreement, the Lien in favor
of the Agent (for the benefit of the Agent and the other Credit Parties) and all other
security interests granted hereby shall terminate with respect to all Secured Obligations
(other than contingent indemnification claims for which a claim has not been asserted) when
(i) the Commitments shall have expired or been terminated, (ii) the principal of and
interest on each Loan and all fees and other Secured Obligations (other than contingent
indemnification claims for which a claim has not been asserted) shall have been indefeasibly
paid in full in cash, (iii) all Letters of Credit (as defined in the Credit Agreement) shall
have (A) expired or terminated and have been reduced to zero, (B) been Cash Collateralized
to the extent required by the Credit Agreement, or (C) been supported by another letter of
credit in a manner reasonably satisfactory to the applicable L/C Issuer and the Agent, and
(iv) all Unreimbursed Amounts shall have been indefeasibly paid in full in cash,
provided, however, that (A) this Security Agreement, the Lien in favor of
the Agent (for the benefit of the Agent and the other Credit Parties) and all other security
interests granted hereby shall be reinstated if at any time payment, or any part thereof, of
any Secured Obligation is rescinded or must otherwise be restored by any Credit Party or any
Grantor upon the bankruptcy or reorganization of any Grantor or otherwise, and (B) in
connection with the termination of this Security Agreement, the Agent may require such
indemnities and collateral security as it shall reasonably deem necessary or appropriate to
protect the Credit Parties against (x) loss on account of credits previously applied to the
Secured Obligations that may subsequently be reversed or revoked, (y) any obligations that
may thereafter arise with respect to the Other Liabilities,

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and (z) any Secured Obligations
that may thereafter arise under Section 10.04 of the Credit Agreement.

     (b) The Collateral shall be released from the Lien of this Security Agreement in
accordance with the provisions of the Credit Agreement. Upon termination hereof or any
release of Collateral in accordance with the provisions of the Credit Agreement, the Agent
shall, upon the request and at the sole cost and expense of the Grantors, assign, transfer
and deliver to the Grantors or any other Persons designated by the Grantors in writing,
against receipt and without recourse to or warranty by the Agent, such of the Collateral to
be released (in the case of a release) or all of the Collateral (in the case of termination
of this Security Agreement) as may be in possession of the Agent and as shall not have been
sold or otherwise applied pursuant to the terms hereof, and, with respect to
any other Collateral, proper documents and instruments (including UCC-3 termination
statements or releases) acknowledging the termination hereof or the release of such
Collateral, as the case may be.

     (c) At any time that the respective Grantor desires that the Agent take any action
described in clause (b) of this SECTION 9.5, such Grantor shall, upon request of the Agent,
deliver to the Agent an officer’s certificate certifying that the release of the respective
Collateral is permitted pursuant to clause (a) or (b) of this SECTION 9.5. The Agent shall
have no liability whatsoever to any other Credit Party as the result of any release of
Collateral by it as permitted (or which the Agent in good faith believes to be permitted) by
this SECTION 9.5.

          SECTION 9.6. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any departure by any Grantor
therefrom, shall be effective unless the same shall be made in accordance with the terms of the
Credit Agreement and unless in writing and signed by the Agent and the Grantors. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Grantor from the terms of any provision hereof shall be
effective only in the specific instance and for the specific purpose for which made or given.
Except where notice is specifically required by this Security Agreement or any other document
evidencing the Secured Obligations, no notice to or demand on any Grantor in any case shall entitle
any Grantor to any other or further notice or demand in similar or other circumstances.

          SECTION 9.7. Notices. Unless otherwise provided herein or in the Credit Agreement,
any notice or other communication herein required or permitted to be given shall be given in the
manner and become effective as set forth in the Credit Agreement, as to any Grantor, addressed to
it at the address of the Lead Borrower set forth in the Credit Agreement and as to the Agent,
addressed to it at the address set forth in the Credit Agreement, or in each case at such other
address as shall be designated by such party in a written notice to the other parties hereto
complying as to delivery with the terms of this SECTION 9.7.

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          SECTION 9.8. GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

          SECTION 9.9. CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.

          (a) EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF
THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH GRANTOR
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECURITY AGREEMENT OR IN ANY
OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY CREDIT PARTY MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY
GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (b) EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (A) OF THIS SECTION. EACH GRANTOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

          (c) EACH GRANTOR AGREES THAT ANY ACTION COMMENCED BY ANY GRANTOR ASSERTING ANY CLAIM OR
COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE BROUGHT SOLELY IN A COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR ANY
FEDERAL COURT SITTING

32

 

THEREIN AS THE AGENT MAY ELECT IN ITS SOLE DISCRETION AND CONSENTS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT TO ANY SUCH ACTION.

          (d) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 9.7. NOTHING IN
THIS SECURITY AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

          (e) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
AND WHETHER INITIATED BY OR AGAINST ANY SUCH PERSON OR IN WHICH ANY SUCH PERSON IS JOINED AS A
PARTY LITIGANT). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 9.10. Severability of Provisions. Any provision hereof which 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 or
affecting the validity or enforceability of such provision in any other jurisdiction.

          SECTION 9.11. Execution in Counterparts; Effectiveness. This Security Agreement may
be executed in any number of counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a signature page of
this Security Agreement by telecopy, pdf or other electronic transmission shall be as effective as
delivery of a manually executed counterpart of this Security Agreement.

          SECTION 9.12. No Release. Nothing set forth in this Security Agreement shall relieve
any Grantor from the performance of any term, covenant, condition or agreement on such Grantor’s
part to be performed or observed under or in respect of any of the Collateral or from any liability
to any Person under or in respect of any of the Collateral or shall impose any obligation on the
Agent or any other Credit Party to perform or observe any such term, covenant, condition or
agreement on such Grantor’s part to be so performed or observed or shall impose any liability on
the Agent or any other Credit Party for any act or omission on the part of such

33

 

Grantor relating thereto or for
any breach of any representation or warranty on the part of such Grantor contained in this
Security Agreement, the Credit Agreement or the other Loan Documents, or under or in respect of the
Collateral or made in connection herewith or therewith. The obligations of each Grantor contained
in this SECTION 9.12 shall survive the termination hereof and the discharge of such Grantor’s other
obligations under this Security Agreement, the Credit Agreement and the other Loan Documents.

          SECTION 9.13. Obligations Absolute. All obligations of each Grantor hereunder shall
be absolute and unconditional irrespective of:

     (i) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any Grantor;

     (ii) any lack of validity or enforceability of the Credit Agreement or any other Loan
Document, or any other agreement or instrument relating thereto;

     (iii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Secured Obligations, or any other amendment or waiver of or any consent to
any departure from the Credit Agreement or any other Loan Document or any other agreement or
instrument relating thereto;

     (iv) any pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any guarantee, for all or
any of the Secured Obligations;

     (v) any exercise, non-exercise or waiver of any right, remedy, power or privilege under
or in respect hereof, the Credit Agreement or any other Loan Document except as specifically
set forth in a waiver granted pursuant to the provisions of SECTION 9.6 hereof; or

     (vi) any other circumstances which might otherwise constitute a defense available to,
or a discharge of, any Grantor (other than the termination of this Security Agreement in
accordance with SECTION 9.5(a) hereof).

          SECTION 9.14. Existing Security Provisions Amended and Restated. This Security
Agreement is an amendment and restatement of (i) the provisions of the Existing Credit Agreement
with respect to the grant of security interest by each Grantor, (ii) that certain Amended and
Restated Pledge Agreement dated as of February 10, 2011 among the Lead Borrower, the Parent and the
Agent, and (iii) that certain Trademark Security Agreement dated as of October 4, 2004 between the
Parent and Fleet Retail Group, Inc. (as predecessor in interest to the Agent) (the foregoing, each
as amended and in effect as of the date hereof, collectively, the “Existing Security
Provisions”). This Security Agreement is in no way
intended to constitute a novation of the Existing Security Provisions or the “Obligations” (as
defined in the Existing Credit Agreement). With respect to (i) any date or time period occurring
and ending prior to the Effective Date, the Existing Security Provisions and the other loan
documents executed in

34

 

connection therewith (the “Existing Loan Documents”) shall govern the
respective rights and obligations of any party or parties hereto also party thereto and shall for
such purposes remain in full force and effect; and (ii) any date or time period occurring or ending
on or after the Effective Date, the rights and obligations of the parties hereto shall be governed
by this Security Agreement (including, without limitation, the schedules hereto) and the other Loan
Documents. From and after the Effective Date, the provisions of this Security Agreement shall
prevail in the event of any conflict or inconsistency between such provisions and those of the
Existing Security Provisions. Any security granted pursuant to or in connection with the Existing
Credit Agreement and the other Existing Loan Documents (whether pursuant to the Existing Security
Provisions or otherwise) shall continue to secure the obligations of the Grantors arising pursuant
to or in connection with the Credit Agreement (including all such obligations arising initially
pursuant to or in connection with the Existing Credit Agreement and the other Existing Loan
Documents).

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

35

 

          IN WITNESS WHEREOF, the Grantors and the Agent have caused this Security Agreement to be duly
executed and delivered by their duly authorized officers as of the date first above written.

	 	 	 	 	 
	 	KIRKLAND’S, INC, as a Grantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLAND’S STORES, INC., as a Grantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLANDS.COM, LLC, as a Grantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLAND’S TEXAS, LLC, as a Grantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 
	 	KIRKLAND’S DC, INC., as a Grantor

 	 
	 	By:  	/s/ W. Michael Madden
 	 
	 	 	Name:  	W. Michael Madden 	 
	 	 	Title:  	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Agent

 	 
	 	By:  	/s/ Christine M. Scott
 	 
	 	 	Name:  	Christine M. Scott 	 
	 	 	Title:  	SVP-Director 	 
	 

Signature Page to Security Agreement

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