Document:

ex10-14.htm

    Exhibit
10.14

    NOTE
HOLDER SETTLEMENT AGREEMENT

    

    As noted
in the attached letter to Security Holders dated May 7, 2008 (the “Transmittal
Letter”), Muragai is “unwilling for the most part to provide funds to pay past
liabilities” and that “concessions by other debt holders” are required as a
condition to closing the funding. In this regard, we are requesting that
creditors agree to a cash settlement for less than the full amount owed to them
as specifically set forth below. Interest has been accrued through April 11,
2008 on the note.

    

    Management
and the Board of Directors hereby request that you execute this agreement to
accept cash as settlement for your note and interest due, and return the
agreement along with your note in the enclosed envelope. The agreement only
becomes effective upon closing of the funding. Otherwise the agreement and note
will be returned to you. Assuming the funding is closed a check from the Company
will be mailed to you within 10 days of the close and the note will be marked
paid.

    

    Settlement
Agreement

    

    The
undersigned hereby agrees simultaneous with the closing of the transaction with
Muragai as described in the Transmittal Letter, to accept the cash amount set
forth below as full payment for the face amount of note and accrued interest
both as set forth below, thereby canceling such face amount of note and interest
due. I further agree that upon receipt of the cash set forth that no additional
interest will accrue beyond April 11, 2008.

    

    Face
amount of notes $70,410.83 (Seventy thousand
Four hundred Ten and 83/100 dollars)

    

    Interest
due $3,819.55 (Three
thousand Eight hundred Nineteen and 55/100 dollars)

    

    Amount of
cash accepted $18,557.59 (Eighteen
thousand Five hundred Fifty-seven and 59/100 dollars)

    

    
      
        
          
            	 
      	
                    Signature:

                  
	 
      	
                    /s/ Andrews Kurth LLP

                  
	 
      	
                    (exactly
      as it appears on the note)

                  
	 
      	 
      
	 
      	
                    Print
      Name:

                  
	 
      	
                    WM Allen Benge

                  
	 
      	 
      
	 
      	
                    Address:

                  
	 
      	
                    1717
      Main St. Suite 3700

                  
	 
      	
                    Dallas,
      TX 75201

                  
	 
      	
                    214-659-4658

                  
	 
      	 
      
	
                    Control
      # NP08010bws8k012209ex10_1.htm

    
      
         

      

      
         

        
          

        

      

       

    

    EXECUTION
COPY

    

    

    SECOND
AMENDED AND RESTATED CREDIT AGREEMENT

    

    dated as
of

    January
21, 2009

    

    among

    

    BROWN
SHOE COMPANY, INC.,

    as Lead
Borrower for:

    

    BROWN
SHOE COMPANY, INC.

    SIDNEY
RICH ASSOCIATES, INC.

    BROWN
GROUP RETAIL, INC.

    BROWN
SHOE INTERNATIONAL CORP.

    BUSTER
BROWN & CO.

    BENNETT
FOOTWEAR GROUP LLC

    and

    SHOES.COM,
INC.

    

    BROWN
SHOE COMPANY OF CANADA LTD

    as a Loan
Party

    

    The
LENDERS Party Hereto,

    

    BANK OF
AMERICA, N.A.

    as Lead
Issuing Bank

    

    BANK OF
AMERICA, N.A.

    as
Administrative Agent and Collateral Agent,

    

    

    WELLS
FARGO RETAIL FINANCE, LLC

    as an
Issuing Bank and as Syndication Agent,

    

    BANK OF
AMERICA, N.A.  and JPMORGAN CHASE BANK, N.A.

    as
co-Documentation Agents,

    

    and

    

    BANC OF
AMERICA SECURITIES LLC and WELLS FARGO RETAIL FINANCE, LLC

    as Joint
Lead Arrangers,

    

    and

    

    BANC OF
AMERICA SECURITIES LLC, WELLS FARGO RETAIL FINANCE, LLC and JPMORGAN CHASE BANK,
N.A.

    as Joint
Lead Bookrunners

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    1.        DEFINITIONS. 

    1.1           Defined
Terms 

    1.2           Terms
Generally 

    1.3           Accounting
Terms 

    1.4           Rounding. 

    1.5           Letter of Credit Amounts. 

    2.        AMOUNT AND
TERMS OF CREDIT 

    2.1           Commitment
of the Lenders 

    2.2           Increase in
Total Commitments 

    2.3           Changes to
Reserves 

    2.4           Making of
Loans 

    2.5           Overadvances 

    2.6           Swingline
Loans. 

    2.7           Letters of
Credit and Acceptances 

    2.8           Settlements
Amongst Lenders 

    2.9           Notes;
Repayment of Loans 

    2.10           Interest on
Loans 

    2.11           Default
Interest 

    2.12           Certain
Fees 

    2.13           Commitment
Fee 

    2.14           Letter of
Credit Fees 

    2.15           Acceptance
Fee 

    2.16           Nature of
Fees 

    2.17           Termination
or Reduction of Commitments 

    2.18           Alternate
Rate of Interest 

    2.19           Conversion and Continuation of Loans

    2.20           Mandatory
Prepayment; Cash Collateral; Commitment
Termination 

    2.21           Optional
Prepayment of Loans; Reimbursement of Lenders 

    2.22           Maintenance
of Loan Account; Statements of Account 

    2.23           Cash
Receipts. 

    2.24           Application
of Payments. 

    2.25           Increased
Costs 

    2.26           Change in
Legality 

    2.27           Payments 

    2.28           Taxes 

    2.29           Security
Interests in Collateral 

    2.30           Mitigation
Obligations; Replacement of Lenders 

    3.        REPRESENTATIONS
AND WARRANTIES 

    3.1           Organization;
Powers 

    3.2           Authorization; Enforceability. 

    3.3           Governmental
Approvals; No Conflicts 

    3.4           Financial
Condition 

    3.5           Properties. 

    3.6           Litigation
and Environmental Matters. 

    3.7           Compliance
with Laws and Agreements 

    3.8           Investment and Holding Company Status

    3.9           Taxes 

    3.10           ERISA;
Foreign Plans

    3.11           Common
Enterprise 

    3.12           Disclosure 

    3.13           Subsidiaries 

    3.14           Insurance 

    3.15           Labor
Matters 

    3.16           Certain
Transactions 

    3.17           Restrictions
on the Loan Parties 

    3.18           Security
Documents 

    3.19           Federal
Reserve Regulations 

    3.20           Solvency 

    3.21           Franchises,
Patents, Copyrights, Etc 

    3.22           DDAs,
Credit Card Arrangements, Etc 

    3.23           Customer
and Trade Relations

    3.24           Casualty 

     

    4.        CONDITIONS

    4.1           Closing
Date 

    4.2           Conditions
Precedent to Each Loan and Each Letter of Credit and Each
Acceptance 

    5.        AFFIRMATIVE
COVENANTS 

    5.1           Financial
Statements and Other Information 

    5.2           Notices of
Material Events 

    5.3           Information
Regarding Collateral 

    5.4           Existence;
Conduct of Business 

    5.5           Payment of
Obligations 

    5.6           Maintenance
of Properties 

    5.7           Insurance 

    5.8           Intentionally
Omitted 

    5.9           Books and
Records; Inspection and Audit Rights 

    5.10           Fiscal Year

    5.11           Physical
Inventories. 

    5.12           Compliance
with Laws 

    5.13           Use of
Proceeds and Letters of Credit and Acceptances

    5.14           Additional
Subsidiaries

    5.15           Further
Assurances 

    6.        NEGATIVE
COVENANTS 

    6.1           Indebtedness
and Other Obligations 

    6.2           Liens

    6.3           Fundamental
Changes 

    6.4           Investments, Loans, Advances, Guarantees and
Acquisitions

    6.5           Asset
Sales 

    6.6           Restrictive
Agreements 

    6.7           Restricted
Payments; Certain Payments of Indebtedness 

    6.8           Transactions
with Affiliates 

    6.9           Additional
Subsidiaries 

    6.10           Amendment
of Material Documents 

    6.11           Environmental
Laws 

    6.12           Fiscal
Year 

    6.13           Minimum
Fixed Charge Coverage Ratio 

    7.        EVENTS OF DEFAULT

    7.1           Events of
Default 

    7.2           Remedies on
Default 

    7.3           Application of Proceeds

    8.        THE AGENTS

    8.1           Administration
by Administrative Agent 

    8.2           Appointment
and Duties of Collateral Agent 

    8.3           Sharing of
Excess Payments 

    8.4           Agreement
of Applicable Lenders 

    8.5           Liability of Agents

    8.6           Notice of
Default 

    8.7           Lenders’ Credit Decisions

    8.8           Reimbursement and Indemnification

    8.9           Rights of
Agents 

    8.10           Notice of
Transfer 

    8.11           Successor Agent

    8.12           Reports and Financial Statements

    8.13           Defaulting
Lender 

    8.14           Agency for
Perfection

    8.15           Relation
Among the Lenders

    8.16           Administrative
Agent 

    8.17           Collateral and Guaranty Matters

    8.18           Syndication Agent, Documentation Agents, and Lead
Arranger

    9.        MISCELLANEOUS

    9.1           Notices

    9.2           Waivers;
Amendments

    9.3           Expenses;
Indemnity; Damage Waiver

    9.4           Designation
of Lead Borrower as Borrowers’ Agent. 

    9.5           Successors
and Assigns 

    9.6           Survival

    9.7           Counterparts;
Integration; Effectiveness 

    9.8           Severability 

    9.9           Right of
Setoff 

    9.10           Governing Law; Jurisdiction; Consent to Service of
Process

    9.11           WAIVER OF
JURY TRIAL 

    9.12           Press
Releases and Related Matters 

    9.13           Headings 

    9.14           Interest
Rate Limitation 

    9.15           Additional
Waivers 

    9.16           Confidentiality 

    9.17           Conflicts
with other Loan Documents 

    9.18           Judgment
Currency 

    9.19           Patriot
Act; Proceeds of Crime Act. 

    9.20           Foreign
Asset Control Regulations. 

    9.21           No Advisory or Fiduciary Responsibility.

    9.22           Additional Borrowers. 

    9.23           Existing
Credit Agreement Amended and Restated 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBITS

    

    A           Assignment and Acceptance

    B           Revolving Note

    C           Perfection Certificate

    D           Borrowing Base Certificate

    E           Compliance Certificate

    F           Notice of Borrowing

    G           Form of Credit Card Notification

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULES

    

    
      
        	 1.1	Lenders and
      Commitments
	 3.1	Organizational
      Information
	 3.5(b)	Title to Properties;
      Real Estate
	 3.6	Disclosed
      Matters
	 3.10	ERISA
	 3.13	Subsidiaries
	 3.14	Insurance
	 3.15	Labor
    Matters
	 3.16	Affiliate
      Transactions
	 4.1(c)	Foreign
      Qualification Terminations
	 3.21	Intellectual
      Property
	 3.22	Credit Card
      Arrangements, Blocked Account Agreements and
  DisbursementAccounts
	 5.1(h)	Financial Reporting
      Requirements
	 6.1	Indebtedness
	 6.2	Liens
	 6.4	Investments
	 6.6	Restrictive
      Agreements
	 	 

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECOND
AMENDED AND RESTATED CREDIT AGREEMENT dated
as of January 21, 2009 (this “Agreement”)
among

     

    BROWN
SHOE COMPANY, INC., a corporation organized under the laws of the State of New
York having a place of business at 8300 Maryland Avenue, St. Louis, Missouri
63105, as Lead Borrower for the Borrowers, being

     

    said BROWN SHOE COMPANY,
INC.,

     

    SIDNEY RICH ASSOCIATES, INC., a
corporation organized under the laws of the State of Missouri having a place of
business at 8300 Maryland Avenue, St. Louis, Missouri 63105 (“Sidney
Rich”),

     

    BROWN GROUP RETAIL, INC., a corporation
organized under the laws of the Commonwealth of Pennsylvania having a place of
business at 8300 Maryland Avenue, St. Louis, Missouri 63105 (“Brown
Retail”),

     

    BROWN SHOE INTERNATIONAL CORP., a
corporation organized under the laws of the State of Delaware having a place of
business at 8300 Maryland Avenue, St. Louis, Missouri 63105 (“Brown
International”),

     

    BUSTER BROWN & CO., a corporation
organized under the laws of the State of Missouri having a place of business at
8300 Maryland Avenue, St. Louis, Missouri 63105 (“Buster Brown”),

     

                BENNETT
FOOTWEAR GROUP LLC, a limited liability company organized under the laws of the
State of Delaware having a place of business at 8300 Maryland Avenue, St. Louis,
Missouri 63105 (“Bennett”), and

     

    SHOES.COM, INC., a corporation
organized under the laws of the State of Delaware having a place of business at
8300 Maryland Avenue, St. Louis, Missouri 63105 (“Shoes.com”);

     

    BROWN
SHOE COMPANY OF CANADA LTD, a Canadian corporation having a place of business at
1857 Rogers Road, Perth, Ontario, Canada K7H 3E8, as a Loan Party but not as a
Borrower (“Brown Canada”);

     

    the
LENDERS party hereto; and

     

    BANK OF
AMERICA, N.A., as Lead Issuing Bank, a national banking association having a
place of business at 100 Federal Street, Boston, Massachusetts 02110;
and

     

    BANK OF
AMERICA, N.A., as Administrative Agent and Collateral Agent for the Secured
Parties, a national banking association, having a place of business at 100
Federal Street, Boston, Massachusetts 02110;  and

     

    WELLS
FARGO RETAIL FINANCE, LLC, as an Issuing Bank and as Syndication
Agent;  and

     

    BANK OF
AMERICA, N.A. and JPMORGAN CHASE BANK, N.A.,  as co-Documentation
Agents;

     

    in
consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

    

    W I T N E S S E T H:

    

    WHEREAS,
the Borrowers, Brown Shoe Company of Canada Ltd, the Lenders party thereto, and
Bank of America, N.A., as Administrative Agent and Collateral Agent for the
Lenders, are party to that certain Amended and Restated Credit Agreement dated
as of July 21, 2004 (as amended and in effect, the “Existing Credit
Agreement”); and

     

    WHEREAS,
certain of the Lenders under the Existing Credit Agreement have assigned their
rights and obligations thereunder to Persons who are, or shall become, Lenders
under this Agreement; and

     

    WHEREAS,
the Commitments of certain Persons who are Lenders under the Existing Credit
Agreement and are continuing as Lenders under this Agreement are being modified
as provided herein; and

     

    WHEREAS,
the Borrowers, the Administrative Agent and the Lenders hereunder desire to
amend and restate the Existing Credit Agreement as provided herein.

     

    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 Lenders, the Agents, and the Borrowers hereby agree
that the Existing Credit Agreement shall be amended and restated, without
novation, in its entirety to read as follows:

     

    1.  DEFINITIONS.    Defined
Terms. As used
in this Agreement, the following terms have the meanings specified
below:

     

    “ACH” shall mean the
automated clearing house transfers of funds for the account of any Loan
Party.

     

    “Acceptance” means a
time draft or bill of exchange relating to a Commercial Letter of Credit which
has been accepted by any Acceptance Lender in its absolute
discretion.

     

    “Acceptance Fees”
means the fees payable in respect of Acceptances pursuant to Section 2.15.

     

    “Acceptance Fee
Percentage” means:

     

    
      
        	
                 

                Average
      Excess Availability

              	
                 

                Applicable
      Percentage

              
	
                 

                Less
      than $125,000,000

              	
                 

                1.625%

              
	
                 

                Greater
      than or equal to $125,000,000 but less than $250,000,000

              	
                 

                1.50%

              
	
                 

                Greater
      than or equal to $250,000,000

              	
                 

                1.375%

              

      

    

    

    From the Closing Date through the last
day of the second full Fiscal Quarter following the Closing Date (ending August
1, 2009), the Acceptance Fee Percentage shall be 1.50% per annum. The Acceptance
Fee Percentage shall thereafter be adjusted quarterly upon the Administrative
Agent’s furnishing the Lead Borrower with a calculation of Average Excess
Availability for the immediately preceding Fiscal Quarter, which calculation
shall be furnished within four (4) Business Days after the end of each Fiscal
Quarter. Any such adjustment shall become effective prospectively on and after
the sixth Business Day after the end of each Fiscal Quarter. If a Default or
Event of Default exists at the time any reduction in the Acceptance Fee
Percentage is to be implemented, such reduction shall not occur until the first
day of the first calendar month following the date on which such Default or
Event of Default is waived or cured, and at the option of the Administrative
Agent or at the direction of the Required Lenders upon the occurrence and during
the continuance of an Event of Default, the Acceptance Fee Percentage shall be
set at the highest level set forth above and shall be determined in the manner
set forth in Section 2.15 hereof; provided further if
any Borrowing Base Certificates are at any time restated or otherwise revised
(including as a result of an audit) or if the information set forth in any
Borrowing Base Certificates otherwise proves to be false or incorrect as of the
date of such Borrowing Base Certificate such that the Acceptance Fee Percentage
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, such Acceptance Fee Percentage due under this Agreement shall be
immediately recalculated at such higher rate for any applicable periods and
shall be due and payable on demand.

    

    “Acceptance Lender”
means any Lender in its capacity as an “acceptance lender” of Acceptances
hereunder.

     

    “Acceptance Reimbursement
Obligations” means, at any time and without duplication, the aggregate
indebtedness, liabilities, and obligations of the Borrowers to pay to any
Acceptance Lender (or reimburse any Acceptance Lender for) any amount due under
any Acceptance at maturity.

     

    “Accommodation
Payment” as defined in Section 9.15(c).

     

    “Account” shall mean
“accounts” as defined in the UCC, including, without limitation,
all:  accounts, accounts receivable, and rights to payment (whether or
not earned by performance) for: property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of; services rendered or to be
rendered; a policy of insurance issued or to be issued; a secondary obligation
incurred or to be incurred; arising out of the use of a credit or charge card or
information contained on or used with that card.

     

    “Additional Commitment
Lender” as defined in Section 2.2(a).

     

    “Adjusted Fixed Charge
Coverage Ratio” means, as of the last day of any Fiscal Quarter of the
Lead Borrower, for the preceding four Fiscal Quarters then ended, the ratio of
(a) Consolidated EBITDA for such period, to (b) Adjusted Fixed Charges for such
period.

     

    “Adjusted Fixed
Charges” means, for any period, as determined for the Lead Borrower and
its Subsidiaries on a Consolidated basis, without duplication, the sum of (a)
Consolidated Interest Expense during such period, (b) Maintenance Capital
Expenditures during such period, (c) scheduled principal payments of
Indebtedness payable over the course of the preceding four (4) Fiscal Quarters,
(d) federal, state, local, and foreign income taxes net of refunds received, to
the extent any such taxes are paid in cash during such period (excluding taxes
paid to repatriate foreign earnings for fiscal periods which are more than
twelve months prior to the date of determination of Adjusted Fixed Charges for
any period), and (e) Restricted Payments during such period, excluding any
Restricted Payments (x) consisting of dividends or distributions made in Capital
Stock under clause (a) of
the definition thereof and (y) permitted under Section 6.7(a)(iii)

     

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

     

    “Adjusted Net Earnings from
Operations” means, with respect to any fiscal period of the Lead
Borrower, the Lead Borrower’s and its Subsidiaries’ net income after provision
for income taxes for such fiscal period, excluding any and all of the following
included in such net income determined on a Consolidated basis in accordance
with GAAP: (a) gain or loss arising from the sale of any capital assets, (b)
gain or loss arising from any write-up or write-down in the book value of any
fixed or intangible assets, (c) earnings or losses of any Person (other than a
Subsidiary of the Lead Borrower) in which the Lead Borrower or any consolidated
Subsidiary of the Lead Borrower has an ownership interest unless (and only to
the extent) any such earnings shall actually have been received by the Lead
Borrower or such consolidated Subsidiary in the form of cash distributions, (d)
gains or losses arising from the acquisition of debt or equity securities of the
Lead Borrower or any of its Subsidiaries or from the cancellation or forgiveness
of Indebtedness, (e) gains or losses arising from extraordinary items as
determined in accordance with GAAP, (f) gains or losses arising from any
non-recurring non-cash transactions, (g) gains or losses arising from any
non-recurring cash transactions up to $5,000,000 after taxes in the aggregate in
any Fiscal Year, and (h) gains and losses from the recording of share based
compensation, including, without limitation, stock option expense.

     

    “Administrative Agent”
means Bank of America, N.A., in its capacity as administrative agent for the
Secured Parties hereunder.

     

    “Affiliate” means,
with respect to a specified Person, (i) any other Person Controlling, Controlled
by or under direct or indirect common Control with that Person, (ii) any
other Person directly or indirectly holding 5% or more of any class of the
Capital Stock or other equity interests (including options, warrants,
convertible securities and similar rights) of that Person, (iii) any other
Person 5% or more of any class of whose Capital Stock or other equity interests
(including options, warrants, convertible securities and similar rights) is held
directly or indirectly by that Person, and (iv) any other Person that
Controls that Person.

     

    “Agents” means
collectively, the Administrative Agent and the Collateral Agent.

     

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

     

    “Allocable Amount” as
defined in Section 9.15.

     

    “Applicable Commitment Fee
Percentage” means the applicable percentage set forth in the grid
below:

     

    
      
        	
                Average
      Excess Availability in the preceding Fiscal Quarter

              	
                Applicable
      Commitment Fee Percentage

              
	
                Less
      than $125,000,000

              	
                0.375%

              
	
                Greater
      than or equal to $125,000,000 but less than $250,000,000

              	
                0.50%

              
	
                Greater
      than or equal to $250,000,000

              	
                0.75%

              

      

    

    

     

    “Applicable Law” means
as to any Person: (i) all statutes, rules, regulations, orders, or other
requirements having the force of law and (ii) all court orders, judgments and
injunctions, and/or similar rulings, in each instance ((i) and (ii)) of or by
any Governmental Authority, or court, or tribunal which are applicable to such
Person, or any property of such Person.

     

    “Applicable Lenders”
means the Required Lenders or all Lenders, as applicable.

     

    “Applicable Margin”
means the applicable percentage for Prime Rate Loans and LIBO Loans set forth
below:

     

    
      
        	
                 

                Level

              	
                 

                Average
      Excess Availability

              	
                 

                Prime
      Rate Loans

              	
                 

                LIBO
      Loans

              
	
                 

                I

              	
                 

                Less
      than $125,000,000

              	
                 

                3.25%

              	
                 

                3.25%

              
	
                 

                II

              	
                 

                Greater
      than or equal to $125,000,000 but less than $250,000,000

              	
                 

                3.00%

              	
                 

                3.00%

              
	
                 

                III

              	
                 

                Greater
      than or equal to $250,000,000

              	
                 

                2.75%

              	
                 

                2.75%

              

      

    

    

    Except as
provided below, the Applicable Margin shall be adjusted upon the Administrative
Agent’s furnishing the Lead Borrower with a calculation of Average Excess
Availability for the immediately preceding Fiscal Quarter, which calculation
shall be furnished within four (4) Business Days after the end of each Fiscal
Quarter. Any such adjustment shall become effective prospectively on and after
the sixth Business Day after the end of each Fiscal Quarter. Notwithstanding the
foregoing, the Applicable Margin shall be based on Level II through the last day
of the second full Fiscal Quarter following the Closing Date (ending August 1,
2009). Upon the occurrence and during the continuance of an Event of Default, at
the option of the Administrative Agent or at the direction of the Required
Lenders, interest shall accrue at Level I and shall be determined in the manner
set forth in Section 2.11; provided further if
any Borrowing Base Certificates are at any time restated or otherwise revised
(including as a result of an audit) or if the information set forth in any
Borrowing Base Certificates otherwise proves to be false or incorrect as of the
date of such Borrowing Base Certificate such that the Applicable 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.

     

    “Appraisal Percentage”
means 85%.

     

    “Appraised Value
Percentage” means with respect to Inventory of any Loan Party, the
orderly liquidation value thereof (expressed as a percentage of the Cost of such
Inventory) as determined from time to time (and updated at least once in each
calendar year) in a manner acceptable to the Administrative Agent by an
experienced and reputable independent appraiser acceptable to the Administrative
Agent, net of all costs of liquidation thereof.

     

    “Approved Fund” means
any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

     

    “Assignment and
Acceptance” means an assignment and acceptance entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section 9.5), and accepted by the
Administrative Agent, in the form of Exhibit A or any
other form approved by the Administrative Agent.

     

    “Availability
Reserves” means, without duplication of any other Reserves or items that
are otherwise addressed or excluded through eligibility criteria or in the most
recently conducted appraisal, such reserves as the Administrative Agent from
time to time determines in the Administrative Agent’s Permitted Discretion
(after consultation with the Lead Borrower (whose consent to any Availability
Reserve shall not be required)) as being appropriate (a) to reflect the
impediments to the Collateral Agent’s ability to realize upon the Collateral,
(b) to reflect claims and liabilities that the Administrative Agent determines
will need to be satisfied in connection with the realization upon the
Collateral, (c) to reflect criteria, events, conditions, contingencies or risks
which 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, in the Administrative Agent’s Permitted
Discretion, Availability Reserves may include (but are not limited to) (i)
reserves for rent at leased locations; (ii) reserves based on Customer Credit
Liabilities; (iii) reserves for customs, duties, and other costs to release
Inventory which is being imported into the United States of America; (iv)
reserves for outstanding taxes and other governmental charges, including, ad
valorem, real estate, personal property, and other taxes which might have
priority over the interests of the Collateral Agent in the Collateral; (v)
reserves for accrued, unpaid interest on the Obligations; (vi) reserves for
salaries, wages and benefits due to employees of any Borrower; (vii) reserves
for warehouseman’s or bailee’s charges; (viii) Bank Products Reserves; (ix) Cash
Management Reserves; (x) reserves for reasonably anticipated changes in
appraised value of Inventory between appraisals; and (xi) reserves for amounts
secured by any Liens, choate or inchoate, which rank or are capable of ranking
in priority to the Collateral Agent’s and/or Lenders’ Liens and/or for amounts
which may represent costs relating to the enforcement of the Collateral Agent’s
Liens including, without limitation, in the good faith credit discretion of the
Administrative Agent, any such amounts due and not paid for vacation pay, wages,
amounts due and not paid under any legislation relating to workers’ compensation
or to employment insurance, all amounts deducted or withheld and not paid and
remitted when due under the Income Tax Act (Canada),
amounts currently or past due and not paid for realty, municipal or similar
taxes (to the extent impacting personal or moveable property) and all amounts
currently or past due and not contributed, remitted or paid to any Plan or under
the Canada Pension Plan, the Pension Benefits Act
(Ontario) or any similar statutes.  Availability Reserves shall
be established and calculated in a manner and methodology consistent with the
Administrative Agent’s practices with the Loan Parties as of the Closing Date,
provided that
in establishing and calculating any such Availability Reserves, the
Administrative Agent may take into account changes to the Loan Parties’ business
after the Closing Date, and provided further,
however, that if (x) an Event of Default exists, (y) any of the conditions
described in clauses (ii) and (iii) of the first sentence of the definition of
“Permitted Discretion” apply, or (z) any factor or circumstance described in
clause (D) of the second sentence of the definition of “Permitted Discretion”
exists, then Availability Reserves may be established and calculated in a manner
and methodology consistent with the Administrative Agent’s practices as of the
Closing Date with other similarly situated borrowers.  The
Availability Reserves in effect on the Closing Date are reflected on the
Borrowing Base Certificate delivered to the Administrative Agent pursuant to
Section 4.1(d) hereof.

     

    “Average Excess
Availability” means, the average daily Excess Availability for the
immediately preceding Fiscal Quarter.  The Administrative Agent shall
provide the Lead Borrower with a calculation of Average Excess Availability on
the fourth Business Day of each Fiscal Quarter for the immediately preceding
Fiscal Quarter  upon request of the Lead Borrower, or alternatively,
give the Lead Borrower electronic access to the Administrative Agent’s systems
to the extent necessary to provide such information.

     

    “B&H” means
B&H Footwear Company Limited, a Hong Kong corporation and a joint venture
between a Subsidiary of the Lead Borrower and an unrelated third
party.

     

    “Bank of America”
means Bank of America, N.A., a national banking association.

     

    “Bank Products” means
one or more of the following types of services or facilities provided to any
Loan Party by any Lender or any of its Affiliates: (a) Hedging Agreements, (b)
purchase cards and (c) leasing, but excluding Cash Management
Services.

     

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

     

    “Bankruptcy Code”
means Title 11 of the United States Code (11 U.S.C.  Section 101 et
seq.) as now or hereafter in effect, or any successor thereto and (ii) the
Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act
(Canada) and the Winding-up Act (Canada), as now or hereafter in effect, or any
successor thereto.

     

    “Bennett” has the
meaning provided therefor in the Recitals.

     

    “Blocked Account
Agreements” means agency agreements with the banks maintaining deposit
accounts of any of the Loan Parties where funds from one or more DDAs are
concentrated, which agreements shall be in form and substance reasonably
satisfactory to the Administrative Agent.

     

    “Blocked Account
Banks” means (i) Bank of America, and (ii) each other bank with whom the
Loan Parties have entered into Blocked Account Agreements.

     

    “Blocked Accounts”
means each deposit account of the Loan Parties which is the subject of a Blocked
Account Agreement or is maintained with Bank of America.

     

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

     

    “Borrowers” means,
individually and collectively, the Lead Borrower, Sidney Rich, Brown Retail,
Brown International, Buster Brown, Bennett, Shoes.com, and any other Person
which becomes a “Borrower” in accordance with the provisions of this
Agreement.

     

    “Borrowing” means (a)
the incurrence of Loans of a single Type, on a single date and having, in the
case of LIBO Loans, a single Interest Period, or (b) a Swingline
Loan.

     

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

     

    (a)           (i)
an amount equal to (A) the Appraised Value Percentage of Eligible Inventory,
multiplied by (B) an
amount equal to (x) the Cost of such Eligible Inventory, minus (y) Inventory
Reserves, multiplied by
(ii) the Appraisal Percentage; plus

     

    (b)           with
respect to any Eligible Letter of Credit, (i) an amount equal to (A) the
Appraised Value Percentage of the Inventory supported by such Eligible Letter of
Credit, multiplied by
(B) an amount equal to (x) the Cost of such Inventory when completed, minus (y)
Inventory Reserves, multiplied
by (ii) the Appraisal Percentage; plus

     

    (c)           ninety
percent (90%) of the Net Amount of Eligible Credit Card Receivables; plus

     

    (d)           eighty-five
percent (85%) of the Net Amount of Eligible Accounts; minus

     

    (e)           the
then amount of all Availability Reserves.

     

    “Borrowing Base
Certificate” has the meaning assigned to such term in Section 5.1(f).

     

    “Borrowing Request”
means a request by the Lead Borrower on behalf of the Borrowers for a Borrowing
in accordance with Section 2.4.

     

    “Borrower Security
Agreement” means the Amended and Restated Security Agreement dated as of
July 21, 2004 and executed and delivered by the Borrowers to the Collateral
Agent for the benefit of the Secured Parties, as amended and in effect from time
to time.

     

    “Breakage Costs” has
the meaning set forth in Section 2.21(b).

     

    “Brown Canada” has the
meaning provided therefor in the Recitals.

     

    “Brown International”
has the meaning provided therefor in the Recitals.

     

    “Brown Retail” has the
meaning provided therefor in the Recitals.

     

    “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Boston, Massachusetts are authorized or required by law to remain closed, provided that, when
used in connection with a LIBO Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.

     

    “Buster Brown” has the
meaning provided therefor in the Recitals.

     

    “Canadian Guaranty”
means the Amended and Restated Canadian Facility Guaranty, dated as of July 21,
2004 and executed and delivered by Brown Canada to the Collateral Agent for the
benefit of the Secured Parties, as amended and in effect from time to
time.

     

    “Canadian Pension
Plans” means collectively, (i) The Pension Plan for the Salaried Staff
and Salespersons of Brown Shoe Company of Canada Ltd and (ii) The Pension Plan
for the Designated Employees of Brown Shoe Company of Canada Ltd.

     

    “Canadian Security
Agreements” means the Amended and Restated Canadian Security Agreement
and the Amended and Restated Deed of Moveable Hypothec, each dated as of July
21, 2004 and executed and delivered by Brown Canada to the Collateral Agent for
the benefit of the Secured Parties, as amended and in effect from time to
time.

     

    “Canadian Subsidiary”
means any Subsidiary that is organized under the laws of Canada or any province
thereof.

     

    “Capital Expenditures”
means, with respect to any Person for any period, (a) all expenditures made
(whether made in the form of cash or other property) or costs incurred for the
acquisition, improvement or repair of fixed or capital assets of such Person
(but excluding any asset acquired (x) in connection with a Permitted
Acquisition, or (y) with the proceeds of insurance or condemnation awards), 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, and (b) Capital Lease Obligations
incurred by a Person during such period to the extent capitalized in accordance
with GAAP.

     

    “Capital Lease
Obligations” of any Person means 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 capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with
GAAP.

     

    “Capital Stock” 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.

     

    “Cash Collateral
Account” means an interest-bearing account established by the Borrowers
with the Collateral Agent at Bank of America under the sole and exclusive
dominion and control of the Collateral Agent designated as the “Brown Shoe Cash
Collateral Account”.

     

    “Cash Dominion Event”
means either (i) the occurrence and continuance of any Event of Default, or (ii)
the failure of the Borrowers to maintain for three (3) consecutive Business Days
Excess Availability of at least the greater of (A) seventeen and one-half
(17.5%) percent of the lesser of (x) the then Borrowing Base or (y) the then
Total Commitments and (B) $25,000,000.  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 cured or waived, and/or (ii)
if the Cash Dominion Event arises as a result of the Borrowers’ failure to
maintain Excess Availability as required hereunder, until Excess Availability
has exceeded the greater of (i) seventeen and one-half (17.5%) percent of the
lesser of (x) the then Borrowing Base or (y) the then Total Commitments and (ii)
$25,000,000 for thirty (30) consecutive calendar days, in which case a Cash
Dominion Event shall no longer be deemed to be continuing for purposes of this
Agreement; provided
that a Cash Dominion Event shall be deemed continuing (even if an Event
of Default is no longer continuing and/or Excess Availability exceeds the
required amount for thirty (30) consecutive Business Days) after a Cash Dominion
Event has occurred and been discontinued on two (2) occasions in any twelve (12)
month period; provided further
that such Cash Dominion Event shall terminate on the date that is twelve
months after the date of the first discontinuance described in the foregoing
proviso but only if on
such date an Event of Default is no longer continuing and/or Excess Availability
exceeds the required amount for thirty (30) consecutive Business Days (without
limiting the Administrative Agent’s right to assert the existence of a Cash
Dominion Event thereafter).

     

    “Cash Management
Reserves ” means such reserves as the Administrative Agent, from time to
time, determines in its Permitted 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 one or more of the following types or services or
facilities provided to any Loan Party by any Lender or any of its Affiliates:
(a) ACH transactions, (b) other cash management services, including, without
limitation, controlled disbursement services, treasury, depository, overdraft,
and electronic funds transfer services, (c) foreign exchange facilities, (d)
credit card processing services, and (e) credit or debit cards.

     

    “Cash Receipts” has
the meaning provided therefor in Section 2.23(b).

     

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

     

    “Change in Control”
means, at any time, (a) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Lead Borrower by Persons who were
neither (i) nominated by the board of directors of the Lead Borrower nor
(ii) appointed by directors so nominated; or (b) any person (within the
meaning of the Securities and Exchange Act of 1934, as amended), which is or
becomes the beneficial owner (within the meaning of Rule 13d-3 and 13d-5 of the
Securities and Exchange Act of 1934, as amended) directly or indirectly of fifty
percent (50%) or more of the total voting power of the Voting Stock of the Lead
Borrower on a fully diluted basis, whether as a result of the issuance of
securities of the Lead Borrower, any merger, consolidation, sale, or
distribution, or otherwise, or (c) the failure of the Lead Borrower to own,
directly or indirectly, 100% (or such lesser percentage as may be owned directly
or indirectly, as of the Closing Date or as of the later acquisition thereof) of
the Capital Stock or ownership interest, as applicable, of all other Loan
Parties (other than Shoes.com), except where such failure is as a result of a
transaction permitted by the Loan Documents; or (d) the failure of the Lead
Borrower to own, directly or indirectly, 80% of the Capital Stock or ownership
interest, as applicable, of Shoes.com, except where such failure is as a result
of a transaction permitted by the Loan Documents; or (e) any “change in control”
or similar event however defined in any documents governing Material
Indebtedness of any Loan Party.

     

    “Change in Law” means
(a) the adoption of any law, rule or regulation after the Relevant Date,
(b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the Relevant Date or
(c) compliance by any Lender, Issuing Bank or Acceptance Lender (or, for
purposes of Section 2.25, by any lending office
of such Lender, Issuing Bank or Acceptance Lender or by such Lender’s, Issuing
Bank’s or Acceptance Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Relevant Date.

     

    “Charges” has the
meaning provided therefor in Section 9.14.

     

    “Charter Document”
means as to any Person, its partnership agreement, certificate or articles of
incorporation, operating agreement, membership agreement or similar constitutive
document or agreement, its by-laws and 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 Capital Stock, its partnership interests,
membership interests or other equity interests and all other arrangements
relating to the Control or management of such Person.

     

    “Civil Code” means the
Civil Code of Quebec and all regulations thereunder, as amended from time to
time, and any successor statutes.

     

    “Closing Date” means
the date on which the conditions specified in Section 4.1 are satisfied (or waived by the Administrative
Agent).

     

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

     

    “Collateral” means any
and all “Collateral” as defined in any applicable Security
Document.

     

    “Collateral Agent”
means Bank of America, N.A., in its capacity as collateral agent under the
Security Documents.

     

    “Commercial Letter of
Credit” means any Letter of Credit issued for the purpose of providing
the primary payment mechanism in connection with the purchase of any materials,
goods or services by a Borrower in the ordinary course of business of such
Borrower.

     

    “Commercial Letter of Credit
Fee” means with respect to any Commercial Letter of Credit issued
hereunder and the Existing Letters of Credit which are Commercial Letters of
Credit, the applicable percentage specified corresponding to the Average Excess
Availability, as set forth below, respectively, in each case subject to
adjustment from time to time thereafter:

     

    
      
        	
                Average
      Excess Availability

              	
                Fee

              
	
                Less
      $125,000,000

              	
                1.625%

              
	
                Greater
      than or equal to $125,000,000 but less than $250,000,000

              	
                1.50%

              
	
                Greater
      than or equal to $250,000,000

              	
                1.375%

              

      

    

    

     

    From the
Closing Date through the last day of the second full Fiscal Quarter following
the Closing Date (ending August 1, 2009), the Commercial Letter of Credit Fee
shall be shall be 1.50% per annum. The Commercial Letter of Credit Fee
Percentage shall thereafter be adjusted quarterly upon the Administrative
Agent’s furnishing the Lead Borrower with a calculation of Average Excess
Availability for the immediately preceding Fiscal Quarter, which calculation
shall be furnished within four (4) Business Days after the end of each Fiscal
Quarter. Any such adjustment shall become effective prospectively on and after
the sixth Business Day after the end of each Fiscal Quarter.  If a
Default or Event of Default exists at the time any reduction in the Commercial
Letter of Credit Fee is to be implemented, such reduction shall not occur until
the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured, and at the option of the
Administrative Agent or at the direction of the Required Lenders upon the
occurrence and during the continuance of an Event of Default, the Commercial
Letter of Credit Fee shall be set at the highest level set forth above and shall
be determined in the manner set forth in Section 2.14(a)(iii) hereof; provided further if
any Borrowing Base Certificates are at any time restated or otherwise revised
(including as a result of an audit) or if the information set forth in any
Borrowing Base Certificates otherwise proves to be false or incorrect as of the
date of such Borrowing Base Certificate such that the Commercial Letter of
Credit Fee 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, such Commercial Letter of Credit Fee due under this
Agreement shall be immediately recalculated at such higher rate for any
applicable periods and shall be due and payable on demand.

     

    “Commitment” means,
with respect to each Lender, the commitment of such Lender hereunder in the
amount set forth opposite its name on Schedule 1.1 hereto
or as may subsequently be set forth in the Register from time to time, as the
same may be either (i) reduced from time to time pursuant to Section 2.17 hereof, or (ii) increased from time to time
pursuant to Section 2.2 hereof.

     

    “Commitment Fee” has
the meaning provided therefor in Section 2.13.

     

    “Commitment Increase”
has the meaning provided therefor in Section 2.2(a).

     

    “Commitment
Percentage” means, with respect to each Lender, that percentage of the
Commitments of all Lenders hereunder in the amount set forth opposite its name
on Schedule 1.1
hereto or as may subsequently be set forth in the Register from time to time, as
the same may be either (i) reduced from time to time pursuant to Section 2.17 hereof, or (ii) increased or reduced from time to
time pursuant to Section 2.2 hereof.

     

    “Compliance
Certificate” has the meaning provided in Section 5.01(d).

     

    “Concentration
Account” has the meaning provided therefor in Section 2.23(a).

     

    “Confirmation
Agreement” means that certain Confirmation, Ratification and Amendment of
Ancillary Loan Documents dated as of the date hereof by and among the Loan
Parties and the Agents.

     

    “Consolidated” means,
when used to modify a financial term, test, statement, or report of a Person,
refers to 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 with respect to any Fiscal Period of the Lead Borrower, the result for
such period of (i) Adjusted Net Earnings from Operations, plus (ii)
depreciation, amortization and all other non-cash charges that were deducted in
the calculation of Adjusted Net Earnings from Operations for such period plus (iii) federal,
state, local and foreign income taxes that were deducted in the calculation of
Adjusted Net Earnings from Operations for such period, plus (iv)
Consolidated Interest Expense to the extent deducted in the calculation of
Adjusted Net Earnings from Operations for such period, in each case determined
on a Consolidated basis in accordance with GAAP.

     

    “Consolidated Interest
Expense” means, for any period for any Person, interest expense of such
Person for such period, determined on a Consolidated basis in accordance with
GAAP.

     

    “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. The terms “Controlling” and
“Controlled”
have meanings correlative thereto.

     

    “Cost” means, with
respect to Inventory, the lower of cost (on a first-in, first-out basis) or
market value, as reported on the Borrowers’ inventory records and in a manner
consistent with current practice.

     

    “Credit Card
Notifications” has the meaning provided therefor in Section 2.23(d).

     

    “Credit Card
Receivables” means each Account together with all income, payments and
proceeds thereof, owed by a major credit or debit card issuer (including, but
not limited to, Visa, Mastercard, American Express, JCB, Paypal, BillMeLater and
Discover and such other issuers approved by the Administrative 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 Exposure” has
the meaning set forth in Section 8.13.

     

    “Credit Extensions” as
of any day, shall be equal to the sum of (a) the principal balance of all Loans
then outstanding, (b) the then amount of the Letter of Credit Outstandings and
(c) the aggregate amount of any unpaid Acceptance Reimbursement Obligations,
whether or not then due.

     

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

     

    “DDAs” means any
checking or other demand deposit account maintained by any Loan
Party.

     

    “Default” means any
event or condition that constitutes an Event of Default or that upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.

     

    “Defaulting Lender”
means any Lender, as determined by the Administrative Agent, (i) that has failed
or refused to abide by its obligations under this Agreement, including without
limitation, its obligation to make available to Administrative Agent its
Commitment Percentage of any Revolving Loans, expenses or setoff or purchase its
pro rata share
of a participation interest in the Swingline Loans and Letters of Credit, (ii)
that has otherwise failed to pay over to the Administrative Agent any other
amount required to be paid by it hereunder within two (2) days of receipt from
the Administrative Agent of written notice thereof, (iii) that has notified any
Borrower, the Administrative Agent, any Issuing Bank, the Swingline Lender or
any Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this
Agreement or under other agreements in which it commits to extend credit, (iv)
as to which the Administrative Agent, Swingline Lender or Lead Issuing Bank has
a good faith belief that such Lender has defaulted in fulfilling its obligations
under one or more other syndicated credit facilities, or (v) which has (a)
become or is insolvent or a Person that Controls such Lender has become or is
insolvent or (b) become the subject of a bankruptcy or insolvency proceeding, or
has had a receiver, interim receiver, receiver and manager, administrator,
liquidator, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or a Person that Controls
such Lender has become the subject of a bankruptcy or insolvency proceeding, or
has had a receiver, interim receiver, receiver and manager, administrator,
liquidator, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.

    

    “Designated
Disposition” means the sale, transfer, lease or other disposition by a
Loan Party of any one or more of the following: (i) any item of Real Estate
owned by a Loan Party and located in Canada as identified on Schedule 3.5
hereto, and (ii) the Real Estate owned by the Lead Borrower located in Sikeston,
Missouri and Fredericktown, Missouri and used as warehouses.

     

    “Disbursement
Accounts” has the meaning provided therefor in Section 2.23(a).

     

    “Disqualified Stock”
means any Capital Stock of any Person that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable 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
is redeemable at the option of the holder thereof, in whole or in part, in each
case prior to the Termination Date.

     

    “Dollar Equivalent” of
an amount denominated in currency other than Dollars shall mean, at any time for
the determination thereof, the amount of Dollars which could be purchased with
the amount of such other currency involved in such computation at the spot
exchange rate therefor as quoted by the Agent as of 11:00 A.M. (Boston time) on
the date two Business Days prior to the date of any determination thereof for
purchase on such date.

     

    “Dollars” or “$” refers to lawful
money of the United States of America.

     

    “Domestic Subsidiary”
means any Subsidiary that is organized under the laws of the United States of
America or any state thereof or the District of Columbia.

     

    “Earn-Out Obligations”
means any contingent consideration payable to the seller in connection with a
Permitted Acquisition based on future operating performance of the acquired
Person or assets or other purchase price adjustment or indemnification
obligation payable following the consummation of such Permitted Acquisition
based on criteria set forth in the documentation governing or relating to such
Permitted Acquisition.

     

    “Edelman” means
Edelman Shoe, Inc.

     

    “Edelman Acquisition”
has the meaning provided therefor in the definition of “Permitted
Acquisition”.

     

    “EDGAR” means the
Electronic Data Gathering, Analysis and Retrieval system maintained by the
Securities and Exchange Commission.

     

    “Eligible Accounts”
means Accounts (other than Credit Card Receivables) due to a Loan Party as arise
in the ordinary course of business, which have been earned by performance, and
are deemed by the Administrative Agent in its reasonable
discretion  to be eligible for inclusion in the calculation of the
Borrowing Base. Without limiting the foregoing, unless otherwise approved in
writing by the Administrative Agent, none of the following shall be deemed to be
Eligible Accounts:

     

    (a)           Accounts
that have been outstanding for more than ninety (90) days past the invoice date
or that are more than sixty (60) days past due; provided that
Eligible Accounts may include up to $3,000,000 of Accounts for which more than
ninety (90) days but less than one hundred twenty (120) days have elapsed since
the date of the original invoice therefor, but which are less than sixty (60)
days past due, in the ordinary course of the Loan Parties’ business and provided further that
Eligible Accounts may include Accounts of major department stores, including,
without limitation, Macy’s, Dillards and Nordstrom, for which more than one
hundred twenty (120) days but less than one hundred forty-five days (145) have
elapsed since the date of the original invoice therefor, but which are less than
sixty (60) days past due, in the ordinary course of the Loan Parties’
business;

     

    (b)           Accounts
due from any Person to the extent that fifty percent (50%) or more of all
Accounts from such Person are not Eligible Accounts pursuant to the other
provisions of this definition;

     

    (c)           Accounts
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
Collateral Agent, for its benefit and the ratable benefit of the Secured
Parties, pursuant to the Security Documents);

     

    (d)           Accounts
that are not subject to a first priority security interest in favor of the
Collateral Agent, for the benefit of itself and the Secured
Parties;

     

     (e)           Accounts
with respect to which any of the representations, warranties, covenants and
agreements contained in any Loan Document are incorrect or have been
breached;

     

    (f)           Accounts
with respect to which a check, promissory note, draft, trade acceptance, or
other instrument for the payment of money has been received, presented for
payment and returned uncollected for any reason;

     

    (g)           Accounts
which represent a progress billing or as to which the applicable Loan Party has
extended the time for payment without the consent of the Administrative Agent
(for the purposes hereof, “progress billing” means any invoice for goods sold or
leased or services rendered under a contract or agreement pursuant to such the
obligation to pay such invoice is conditioned upon such Loan Party’s completion
of any further performance under such contract or agreement);

     

    (h)           Accounts
with respect to which any one or more of the following events has occurred to
the account debtor on such Account:  (i) death or judicial
declaration of incompetency of such account debtor who is a natural person;
(ii) the filing by or against such account debtor of a request, proposal or
petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under the Bankruptcy
Code or other similar Applicable Law of any jurisdiction or any other
bankruptcy, insolvency, or similar laws of the United States of America or
Canada, any state, province or territory thereof, or any foreign jurisdiction,
now or hereafter in effect; (iii) the making of any general assignment for
the benefit of creditors by such account debtor; (iv) the appointment of a
receiver or trustee for such account debtor or for any of the assets of the
account debtor, including, without limitation, the appointment of or taking
possession by a “custodian,” as defined in the Bankruptcy Code; (v) the
institution by or against such account debtor of any other type of insolvency
proceeding (under the Bankruptcy Code or other similar Applicable Law of any
jurisdiction or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, such account debtor; (vi) the sale, assignment, or transfer of
all or any material part of the assets of such account debtor; (vii) the
nonpayment generally by such account debtor of its debts as they become due; or
(viii) the cessation of the business of such account debtor as a going
concern;

     

    (i)           Accounts
owed by a Person which (i) does not maintain its chief executive office in
the United States of America or Canada, (ii) is not organized under the
laws of the United States of America or Canada or any political subdivision,
state, or province thereof, or (iii) is the government of any foreign
country or sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency, public corporation,
or other instrumentality thereof, except to the extent that such Account is
secured or payable by a letter of credit or acceptance satisfactory to the
Administrative Agent in its discretion;

     

    (j)           Accounts
owed by a Person which is an Affiliate (other than, prior to the time a Loan
Party or any of its Subsidiaries exercises Control of Edelman, Accounts owed by
Edelman which arise in the ordinary course of business and on terms and
conditions not less favorable to the Loan Parties than could be obtained on an
arm’s-length basis from unrelated third parties), director, officer, or employee
of such Loan Party;

     

    (k)           Accounts
with respect to which either the perfection, enforceability, or validity of the
Collateral Agent’s Liens in such Account, or the Collateral Agent’s right or
ability to obtain direct payment to the Collateral Agent of the proceeds of such
Account, is governed by any federal, state, provincial or local statutory
requirements other than those of the UCC, PPSA, Civil Code, or the Mortgages Act
(Ontario) (except as provided in clause (m)
following);

     

    (l)           Accounts
owed by a Person to which a Loan Party, is indebted in any way, or which is
subject to any right of setoff or recoupment by such Person, unless such Person
has entered into an agreement reasonably acceptable to the Administrative Agent
to waive setoff rights, or as to which such Person has disputed liability or
made any claim with respect to any other Account due from such Person, but in
each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;

     

    (m)           Accounts
owed by the government of the United States of America or Canada, or any
department, agency, public corporation, or other instrumentality thereof,
unless, in the case of the United States of America, the Federal Assignment of
Claims Act of 1940, as amended (31 U.S.C. 3727 et seq.), and any other steps
necessary to perfect the Agent’s Liens therein, have been complied with to the
Administrative Agent’s satisfaction with respect to such Account;

     

    (n)           Accounts
owed by any state, province, municipality, or other political subdivision of the
United States of America or any other government, country or jurisdiction, or
any department, agency, public corporation, or other instrumentality thereof and
as to which the Administrative Agent determines that its Lien therein is not or
cannot be perfected;

     

    (o)           Accounts
which represent a sale on a bill-and-hold, guaranteed sale, sale and return,
sale on approval, consignment (other than with respect to consignments to
Bloomingdales, Inc. and/or QVC in an aggregate amount not to exceed $2,000,000),
or other repurchase or return (excluding sales subject to returns of defective
merchandise returned in the ordinary course of business) basis;

     

    (p)           Accounts
owed by trade vendors in connection with marketing and advertising costs
expended by a Loan Party;

     

    (q)           Accounts
which are evidenced by a promissory note or other instrument or by chattel
paper;

     

    (r)           Accounts
with respect to which the account debtor is located in any state requiring the
filing of a Notice of Business Activities Report or similar report in order to
permit such Loan Party to seek judicial enforcement in such state of payment of
such Account, unless such Loan Party has qualified to do business in such state
or has filed a Notice of Business Activities Report or equivalent report for the
then current year;

     

    (s)           Accounts
which arise out of a sale not made in the ordinary course of such Loan Party’s
business;

     

    (t)           Accounts
with respect to which the goods giving rise to such Account have not been
shipped and delivered to and accepted by, or have been rejected or objected to
by, the account debtor or the services giving rise to such Account have not been
performed by such Loan Party, and, if applicable, accepted by the account
debtor, or the account debtor revokes its acceptance of such goods or
services;

     

    (u)           Accounts
owed by a Person, or group of affiliated Persons, which is obligated to the Loan
Parties respecting Accounts the aggregate unpaid balance of which exceeds
twenty-five percent (25%) of the aggregate unpaid balance of all Accounts owed
to the Loan Parties at such time by all of the Loan Parties’ account debtors,
but only to the extent of such excess; provided that, for
purposes of this clause (u), all Accounts due from Macy’s shall, subject to the
other provisions of this definition, be included as Eligible Accounts
notwithstanding the aggregate of such Accounts exceeds the foregoing limitation
as long as the debt rating for Macy’s by S&P (or any successor thereto) is
BBB- or better; provided further, if
S&P no longer provides such rating, the debt rating for Macy’s by Moody’s
Investor Service, Inc. (or any successor thereto) is  Baa3 or
better;

     

    (v)           Accounts
with respect to which such Loan Party or the Administrative Agent has, in the
exercise of the Administrative Agent’s reasonable credit judgment after
consultation with the Lead Borrower, deemed such Account as uncollectible or has
any reason to believe that such Account is uncollectible; and

     

    (w)           Accounts
which the Administrative Agent determines in its reasonable credit judgment is
ineligible for any other reason.

     

    If any
Account at any time ceases to be an Eligible Account, then such Account shall
promptly be excluded from the calculation of the Borrowing Base.

     

    “Eligible Assignee”
means (a) a commercial bank, commercial finance company, or other asset
based lender having total assets in excess of $1,000,000,000, (b) any
Lender listed on the signature pages of this Agreement, (c) any Affiliate
of any Lender, (d) an Approved Fund, and (e) if an Event of Default has
occurred and is continuing, any Person reasonably acceptable to the
Administrative Agent; 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 such criteria 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 is originated in the ordinary course
of business of such Loan Party, and (ii) in each case is deemed by the
Administrative Agent in its reasonable discretion  to be eligible for
inclusion in the calculation of the Borrowing Base. 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.  Without limiting the foregoing, unless otherwise approved in
writing by the Administrative Agent, none of the following shall be deemed to be
Eligible Credit Card Receivables:

     

    
      	
               
      

            	
              (a)

            	
              Credit
      Card Receivables which do not constitute “Accounts” (as defined
      herein);

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              Credit
      Card Receivables 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 Collateral Agent, for its benefit and the ratable
      benefit of the Secured Parties, pursuant to the Security
      Documents);

            

    

     

    
      	
               
      

            	
              (d)

            	
              Credit
      Card Receivables that are not subject to a first priority security
      interest in favor of the Collateral Agent, for its benefit and the ratable
      benefit of the Secured Parties (it being the intent that chargebacks in
      the ordinary course by such processors shall not be deemed violative of
      this clause);

            

    

     

    
      	
               
      

            	
              (e)

            	
              Credit
      Card Receivables which are disputed, are with recourse to a Loan Party, or
      with respect to which a claim, counterclaim, right of setoff, recoupment
      or chargeback has been asserted, unless such Person has entered into an
      agreement reasonably acceptable to the Administrative Agent to waive
      setoff rights, but in each such case only to the extent of such claim,
      counterclaim, right of setoff, recoupment or chargeback, it being
      understood that for purposes of this clause (e), “with recourse” means
      solely that the applicable Loan Party is liable to the relevant credit
      card processor in the event that the credit cardholder fails to pay his or
      her credit card bill;

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

            	
              Credit
      Card Receivables with respect to which any one or more of the following
      events has occurred to the issuer or payment processor of the applicable
      credit card:  (i)  the filing by or against such issuer or
      payment processor of a request, proposal or petition for liquidation,
      reorganization, arrangement, adjustment of debts, adjudication as a
      bankrupt, winding-up, or other relief under the Bankruptcy Code or other
      similar Applicable Law of any jurisdiction or any other bankruptcy,
      insolvency, or similar laws of the United States of America or Canada, any
      state, province or territory thereof, or any foreign jurisdiction, now or
      hereafter in effect; (ii) the making of any general assignment for
      the benefit of creditors by such issuer or payment processor;
      (iii) the appointment of a receiver or trustee for such issuer or
      payment processor or for any of the assets of the issuer or payment
      processor, including, without limitation, the appointment of or taking
      possession by a “custodian,” as defined in the Bankruptcy Code;
      (iv) the institution by or against such issuer or payment processor
      of any other type of insolvency proceeding (under the Bankruptcy Code or
      other similar Applicable Law of any jurisdiction or otherwise) or of any
      formal or informal proceeding for the dissolution or liquidation of,
      settlement of claims against, or winding up of affairs of, such issuer or
      payment processor; (v) the sale, assignment, or transfer of all or
      any material part of the assets of such issuer or payment processor;
      (vi) the nonpayment generally by such issuer or payment processor of
      its debts as they become due; or (vii) the cessation of the business
      of such issuer or payment processor as a
going;

            

    

     

    
      	
               
      

            	
              (h)

            	
              Credit
      Card Receivables with respect to which either the perfection,
      enforceability, or validity of the Collateral Agent’s Liens in such Credit
      Card Receivables, or the Collateral Agent’s right or ability to obtain
      direct payment to the Collateral Agent of the proceeds of such Credit Card
      Receivables, is governed by any federal, state, provincial or local
      statutory requirements other than those of the UCC, PPSA, Civil Code, or
      the Mortgages Act (Ontario);

            

    

     

    
      	
               
      

            	
              (i)

            	
              Credit
      Card Receivables which are not valid, legally enforceable obligations of
      the applicable issuer with respect
thereto;

            

    

     

    
      	
               
      

            	
              (j)

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

            

    

     

    
      	
               
      

            	
              (k)

            	
              Credit
      Card Receivables which are evidenced by a promissory note or other
      instrument or by chattel paper;

            

    

     

    
      	
               
      

            	
              (l)

            	
              Credit
      Card Receivables with respect to which such Loan Party or the
      Administrative Agent has, in the Administrative Agent’s reasonable credit
      judgment, deemed such Credit Card Receivables as uncollectible or has any
      reason to believe that such Credit Card Receivables are uncollectible;
      and

            

    

     

    
      	
               
      

            	
              (m)

            	
              Credit
      Card Receivables which the Administrative Agent determines in its
      reasonable credit judgment is ineligible for any other
    reason.

            

    

     

    If any
Credit Card Receivable at any time ceases to be an Eligible Credit Card
Receivable, then such Credit Card Receivable shall promptly be excluded from the
calculation of the Borrowing Base.

    

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

     

     (a)
(i) which has been shipped from a location within the United States of America
or Canada for receipt by a Loan Party within sixty (60) days of the date of
determination, but which has not yet delivered to such Loan Party, (ii) for
which title has passed to such Loan Party, (iii) for which the bill of lading or
other document of title reflects a Loan Party as consignee, (iv) which is
insured to the reasonable satisfaction of the Collateral Agent, and (v) which
otherwise would constitute Eligible Inventory;  and

     

    (b) (i)
which has been shipped from a location (other than one within the United States
of America or Canada) for receipt by a Loan Party within sixty (60) days of the
date of determination and is reflected in the Loan Parties’ import system, but
which has not yet delivered to such Loan Party, (ii) for which title has passed
to such Loan Party, (iii) for which the bill of lading or other document of
title reflects a Loan Party as consignee (along with delivery to such Loan Party
or its customs broker of the documents of title with respect thereto), (iv) as
to which the Collateral Agent has control over a set of documents of title which
evidence ownership of the subject Inventory (such as, if requested by the
Collateral Agent, by the delivery of a customs broker agency agreement,
satisfactory to the Collateral Agent), (v) which is insured to the reasonable
satisfaction of the Collateral Agent, and (vi) which otherwise would constitute
Eligible Inventory.

     

    “Eligible Inventory”
means, as of the date of determination thereof, (a) Eligible In-Transit
Inventory, and (b) items of Inventory of the Loan Parties that are finished
goods, merchantable and readily saleable to the public in the ordinary course,
in each case deemed by the Administrative Agent in its reasonable discretion to
be eligible for inclusion in the calculation of the Borrowing Base. Without
limiting the foregoing, unless otherwise approved in writing by the
Administrative Agent, none of the following shall be deemed to be Eligible
Inventory:

     

    (a)  Inventory
that is not owned solely by one or more Loan Parties, or is leased or on
consignment to a Loan Party or by a Loan Party to another Person (other than
consigned inventory at Bloomingdale’s, Inc. and/or QVC in an aggregate amount
not to exceed $2,000,000 so long as the Collateral Agent shall have received an
agreement from Bloomingdale’s, Inc. and/or QVC, as applicable, to provide the
Collateral Agent with access to the Inventory of such Loan Party held by such
Person on consignment and a reasonable time to repossess or remove such
Inventory (or dispose of such Inventory from the premises of Bloomingdale’s,
Inc. and/or QVC, as applicable), in form and substance reasonably satisfactory
to the Collateral Agent), or such Loan Party does not have good and valid title
thereto;

     

    (b)  Except
as provided in clause (n) below, Inventory (including any portion thereof in
transit from vendors, other than Eligible In-Transit Inventory) that is not
located at a warehouse facility, distribution center or store, in each case that
is owned or leased by a Loan Party;

     

    (c)  Inventory
that represents (i) goods damaged, defective or otherwise unmerchantable,
(ii) goods that do not conform in all material respects to the
representations and warranties contained in this Agreement or any of the
Security Documents, or (iii) goods that are obsolete, slow moving, stale, or not
usable or saleable at prices approximating at least Cost; in the normal course
of such Loan Party’s business, in each case, to the extent any of the foregoing
((i) through (iii)) is not factored into the calculation of Appraised Value
Percentage;

     

    (d)  Inventory
that is not located in the United States of America (excluding territories and
possessions thereof) or Canada other than Eligible In-Transit
Inventory;

     

    (e)  Inventory
(other than Inventory subject to Permitted Encumbrances described in clause (ii)
of the definition thereof) that is not subject to a perfected first priority
security interest in favor of the Collateral Agent for the benefit of the
Secured Parties;

     

    (f)  Inventory
which consists of work-in-process, chemicals, samples, protoypes, shopping bags
and similar supplies which are not intended for sale in the ordinary course of
business (but specifically excluding purses, satchels, backpacks and similar
finished goods which are merchantable and readily saleable to the public in the
ordinary course) packing and shipping materials and other similar
non-merchandise categories;

     

    (g)  Inventory
as to which insurance in compliance with the provisions of Section 5.7 hereof is not in effect;

     

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

     

    (i)   Inventory
which is acquired in a Permitted Acquisition unless the Collateral Agent, in its
Permitted Discretion, agrees that such Inventory shall temporarily be deemed
Eligible Inventory, provided,
however that if the Collateral Agent so agrees, the advance rate for such
Inventory shall not exceed 50% of the Cost of such Inventory and such Inventory
shall be deemed Eligible Inventory for no more than ninety (90) days except as
set forth in the following proviso, and provided further that, during
such ninety (90) day period referred to above, the Collateral Agent shall cause
an appraisal of such Inventory to be completed, shall establish Inventory
Reserves (if applicable) therefor, and shall otherwise determine whether such
Inventory shall be deemed Eligible Inventory;

     

    (j)      Inventory
that does not consist of finished goods;

     

    (k)   Eligible
In-Transit Inventory to the extent such Inventory exceeds 15% of total Inventory
as shown on the Consolidated financial statements of the Lead
Borrower.

     

    (l)   Inventory
that that is not reflected in the details of a current perpetual inventory
report (unless reflected in a report to the Administrative Agent as “in-transit”
Inventory)

     

    (m)   Inventory
that contains or bears any proprietary rights licensed to a Loan Party by any
Person, if the Administrative Agent is not satisfied that it may sell or
otherwise dispose of such Inventory in accordance with the terms of the Security
Documents without infringing the rights of the licensor of such proprietary
rights or violating any contract with such licensor (and without payment of any
royalties other than any royalties due with respect to the sale or disposition
of such Inventory pursuant to the existing license agreement), unless either (i)
the licensor has entered into a consent or sublicense agreement with the
Collateral Agent in form and substance reasonably acceptable to the Agents (it
being understood that each such agreement entered into pursuant to the Existing
Credit Agreement shall be deemed to satisfy the  requirement set forth
in this clause (i)), (ii) the Adjusted Fixed Charge Coverage Ratio is greater
than 1.25:1.00, or (iii)  if the Adjusted Fixed Charge Coverage Ratio
is less than 1.25:1.00, (A) such Inventory (other than Inventory of the Famous
Footwear Division of the Loan Parties) from a licensor shall be deemed Eligible
Inventory only to the extent that the value of such Inventory does not exceed
$15,000,000, and (B) licensed Inventory in the Famous Footwear Division of the
Loan Parties shall be deemed Eligible Inventory only to the extent that the
value of such Inventory does not exceed $15,000,000 (excluding Dr. Scholls
Inventory); or

     

    (n)   Inventory
that is located in a public warehouse or in possession of a bailee or in a
facility leased by such Loan Party, if the applicable warehouseman, bailee, or
lessor has not delivered to the Collateral Agent, if requested by the Collateral
Agent, a subordination agreement or cession of rank and, as to any such Person,
an agreement to provide the Collateral Agent with access to the Inventory
located in or on such Real Estate and with respect to any such lessor, a
reasonable time to sell and dispose of the Inventory from such Real Estate, in
form and substance reasonably satisfactory to the Collateral Agent or if a
Reserve for rents or storage charges has not been established for Inventory at
that location, it being understood that each such agreement entered into
pursuant to the Existing Credit Agreement shall be deemed to satisfy each of the
foregoing requirements.

     

    “Eligible Letter of
Credit” means, as of any date of determination thereof, a Commercial
Letter of Credit which supports the purchase of Inventory, (i) which Inventory
does not constitute Eligible In-Transit Inventory and for which no documents of
title have then been issued; (ii) which Inventory otherwise would constitute
Eligible Inventory (without giving effect to the exclusions set forth in clauses
(b), (d) and (n) of the definition of “Eligible Inventory”), (c) which
Commercial Letter of Credit has an expiry within sixty (60) days of the date of
initial issuance of such Commercial Letter of Credit, and (iv) which Commercial
Letter of Credit provides that it may be drawn only after the Inventory is
completed and after documents of title have been issued for such Inventory
reflecting a Borrower or the Collateral Agent as consignee of such
Inventory.

     

    “Environmental Laws”
means all Applicable Laws issued, promulgated or entered into by or with any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, handling, treatment, storage, disposal,
Release or threatened Release of any Hazardous Material or to health and safety
matters.

     

    “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, natural resource damage, costs of environmental
remediation, administrative oversight costs, fines, penalties or indemnities),
of any Person directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transporta­tion, storage, treatment or disposal 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.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.

     

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

     

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

     

    “Event of Default” has
the meaning assigned to such term in Section 7.1.  An “Event of Default” shall be deemed
to have occurred and to be continuing unless and until that Event of Default has
been duly waived in writing or cured, in each case as provided in this
Agreement.

     

    “Excess Availability”
means, as of any date of determination, the excess, if any, of (a) the lesser of
the then Total Commitments or the Borrowing Base, over (b) the outstanding
Credit Extensions.

     

    “Excluded Taxes”
means, with respect to the Agents, any Lender, any Issuing Bank, any Acceptance
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrowers hereunder, (a) income or franchise taxes
imposed on (or measured by) its gross or net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any Borrower is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by a
Borrower under Section 2.30(b)), any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender’s failure to comply with
Section 2.28, 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 Borrowers with respect to such withholding tax pursuant to
Section 2.28(a).

     

    “Existing Acceptances”
means each of the acceptances issued under the Existing Credit Agreement prior
to the date hereof.

     

    “Existing Credit
Agreement” has the meaning set forth in the Preamble to the
Agreement.

     

    “Existing Letters of
Credit” means each of the letters of credit issued under the Existing
Credit Agreement prior to the date hereof.

     

    “Facility Guaranty”
means collectively, the Canadian Guaranty and the Amended and Restated Domestic
Guaranty in each case dated as of July 21, 2004, executed by the applicable
Facility Guarantors in favor of the Agents, the Issuing Banks, Acceptance
Lenders, the Lenders and the other Secured Parties.

     

    “Facility Guarantors”
means each Borrower and Brown Canada.

     

    “Facility Guarantors’
Collateral Documents” means all security agreements, pledge agreements,
and other instruments, documents or agreements executed and/or amended and
delivered by the Facility Guarantors to secure the Facility Guaranty and/or the
Obligations.

     

    “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     

    “Fee Letter” means the
letter entitled “Fee Letter” among the Borrowers and the Administrative Agent
dated as of October 31, 2008, as such letter may from time to time be
amended.

     

    “Financial Officer”
means, with respect to any Borrower, the chief financial officer, chief
accounting officer, senior vice president-finance, treasurer, controller or
assistant controller of such Borrower.

     

    “Fiscal Period” means
one of the three Fiscal Periods in a Fiscal Quarter each of which is
approximately one month in duration.  There are twelve (12) Fiscal
Periods in each Fiscal Year.

     

    “Fiscal Quarter” means
one of four thirteen (13) week or, if applicable, fourteen (14) week quarters in
a Fiscal Year, with the first of such quarters beginning on the first day of a
Fiscal Year and ending on Saturday of the thirteenth (or fourteenth, if
applicable) week in such quarter.

     

    “Fiscal Year” means,
with respect to the Lead Borrower, the Lead Borrower’s Fiscal Year for financial
accounting purposes.  The current Fiscal Year of the Lead Borrower
will end on January 31, 2009.

     

    “Fixed Charge Coverage
Measurement Date” means the last day of any Fiscal Quarter of the Lead
Borrower immediately preceding a measurement event.  As used in this
definition, “measurement event” means any failure of the Loan Parties to
maintain Excess Availability equal to or in excess of seventeen and one-half
(17.5%) percent of the lesser of (i) the then Total Commitments or (ii) the then
Borrowing Base on any day.

     

    “Fixed Charge Coverage
Ratio” means, as of the last day of any Fiscal Quarter of the Lead
Borrower for the preceding four Fiscal Quarters then ended, the ratio of (a)
Consolidated EBITDA for such period, to (b) Fixed Charges for such
period.

     

    “Fixed Charges” means,
for any period, as determined for the Lead Borrower and its Subsidiaries on a
Consolidated basis, without duplication, the sum of (a) Consolidated Interest
Expense during such period, (b) Capital Expenditures (excluding Capital
Expenditures funded with Indebtedness other than Revolving Loans) during such
period, (c) scheduled principal payments of Indebtedness payable over the course
of the preceding four (4) Fiscal Quarters, (d) federal, state, local, and
foreign income taxes net of refunds received, to the extent any such taxes are
paid in cash during such period (excluding taxes paid to repatriate foreign
earnings for fiscal periods which are more than twelve months prior to the date
of determination of Fixed Charges for any period), and (e) Restricted Payments
during such period, excluding any Restricted Payments (x) consisting of
dividends or distributions made in Capital Stock under clause (a) of
the definition thereof and (y) permitted under Section 6.7(a)(iii).

     

    “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than the
United States of America or any State thereof or the District of
Columbia.

     

    “Foreign Plan” means
any benefit plan established or maintained outside of the United States of
America which a Loan Party maintains, sponsors, or to which such Person has any
obligation or liability and which provides or otherwise makes available
retirement or deferred benefits of any kind whatsoever to
employees.

     

    “Foreign Subsidiary”
means any Subsidiary other than a Domestic Subsidiary.

     

    “Fronting Fee” has the
meaning given to such term in Section 2.14(b).

     

    “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
accounting principles which are (a) consistent with those promulgated or adopted
by the Financial Accounting Standards Board and its predecessors (or successors)
in effect and applicable to that accounting period in respect of which reference
to GAAP is being made, and (b) consistently applied with past financial
statements of the Lead Borrower and its Subsidiaries on a Consolidated basis
adopting the same principles.

     

    “Governmental
Authority” means the government of the United States of America or Canada
or any other nation or any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, department, agency, board, commission, tribunal,
committee,  court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

     

    “Guarantee” of or by
any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
acceptance or letter of guaranty issued to support such Indebtedness or
obligation, provided that the
term “Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.

     

    “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, mold and other fungi,
bacteria, and all other substances or wastes of any nature regulated pursuant to
any Environmental Law, including any material listed as a hazardous substance
under Section 101(14) of CERCLA.

     

    “Headquarters” means
the Real Estate at which the Lead Borrower’s headquarters are maintained and
other Real Estate located adjacent thereto, including the Real Estate located at
8300, 8350, 8400 and 8500 Maryland Avenue, St. Louis, Missouri and the lot at
the corner of Maryland Avenue and Topton Way, St. Louis, Missouri.

     

    “Hedging Agreement”
means any interest rate protection agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, foreign currency
exchange agreement, commodity price protection agreement, or other interest or
currency exchange rate or commodity price hedging arrangement designed to hedge
against fluctuations in interest rates or foreign exchange rates.

     

    “Indebtedness” of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money (including any obligations for borrowed money which are without
recourse to the credit of such Person), (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business and, in each case, not past due for more than 90 days after the date
on which such trade account payable was created unless such account is the
subject of a bona fide dispute and adequate reserves have been established
therefor in accordance with GAAP), (f) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent
or otherwise, of such Person in respect of bankers’ acceptances, (k) the net
termination obligations of all Hedging Agreements, and (l) the present value
(discounted at the interest rate applicable to such obligations) of the
principal and interest portions of all rental obligations of such Person under
any Synthetic Lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.  The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.

     

    “Indemnified Taxes”
means Taxes other than Excluded Taxes.

     

    “Indemnitee” has the
meaning provided therefor in Section 9.3(b).

     

    “Interest Payment
Date” means (a) with respect to any Prime Rate Loan (including a
Swingline Loan), the fifteenth day of each January, April, July and October, and
(b) with respect to any LIBO Loan, on the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part, and, in addition, if
such LIBO Loan has an Interest Period of greater than 90 days, on the last day
of the third, sixth and ninth months of such Interest Period, as
applicable.  Except as otherwise provided herein, if any day on which
a payment is due is not a Business Day, then the payment shall be due on the
next day following which is a Business Day and such extension of time shall be
included in computing interest and fees in connection with such
payment.

     

    “Interest Period”
means, with respect to any LIBO Borrowing, the period commencing on the date of
such Borrowing and ending seven days, fourteen days or twenty-one days or one,
two, three or six months thereafter, and, if available from all of the
Lenders, nine months or twelve months thereafter, as the Lead Borrower may elect
by notice to the Administrative Agent in accordance with the provisions of this
Agreement, provided that
(a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month during which such Interest Period ends) shall end on
the last Business Day of the calendar month of such Interest Period, and (c) any
Interest Period which would otherwise end after the Termination Date shall end
on the Termination Date. 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.

     

    “Inventory” has the
meaning assigned to such term in the Security Agreements.

     

    “Inventory Reserves”
means, without duplication of any other Reserves or items that are otherwise
addressed or excluded through eligibility criteria or in the most recently
conducted appraisal, such reserves as may be established from time to time by
the Administrative Agent in the Administrative Agent’s Permitted Discretion
(after consultation with the Lead Borrower (whose consent to any Inventory
Reserves shall not be required)) with respect to the determination of the
saleability, at retail, of the Eligible Inventory or which reflect such other
factors as affect the appraised or market value of the Eligible Inventory.
Without limiting the generality of the foregoing, in the Administrative Agent’s
Permitted Discretion, Inventory Reserves may include (but are not limited to)
reserves based on (i) Shrink; (ii) capitalized freight and internal profit
reserves used in the Borrowers’ calculation of cost of goods sold; (iii)
obsolescence; (iv) seasonality; (v) imbalance; (vi) change in Inventory
character or composition; (vii) change in inventory mix; (viii) reasonably
anticipated changes in appraised value of Inventory between appraisals; and (ix)
retail markdowns and markups inconsistent with prior period practice and
performance; industry standards; current business plans; or advertising calendar
and planned advertising events.  Inventory Reserves shall be
established and calculated in a manner and methodology consistent with the
Administrative Agent’s practices with the Loan Parties as of the Closing Date,
provided that
in establishing and calculating any such Inventory Reserves, the Administrative
Agent may take into account changes to the Loan Parties’ business after the
Closing Date, and provided further,
however, that if (x) an Event of Default exists, (y) any of the conditions
described in clauses (ii) and (iii) of the first sentence of the definition of
“Permitted Discretion” apply, or (z) any factor or circumstance described in
clause (D) of the second sentence of the definition of “Permitted Discretion”
exists, then Inventory Reserves may be established and calculated in a manner
and methodology consistent with the Administrative Agent’s practices as of the
Closing Date with other similarly situated borrowers.  The Inventory
Reserves in effect on the Closing Date are reflected on the Borrowing Base
Certificate delivered to the Administrative Agent pursuant to Section 4.1(d)
hereof.

     

    “Investment” has the
meaning provided therefor in Section 6.4.

     

    “Issuing Bank” means,
collectively, the Lead Issuing Bank, Wells Fargo Retail Finance, LLC, and, upon
the reasonable consent of the Administrative Agent, up to two (2) additional
Lenders (other than the Lead Issuing Bank and Wells Fargo Retail Finance, LLC),
provided that
any such additional Lender shall be deemed an Issuing Bank hereunder solely
during the period during which a Letter of Credit issued by such Lender (other
than the Lead Issuing Bank and Wells Fargo Retail Finance, LLC) is outstanding
and either undrawn (in whole or in part) or with respect to which there is an
unreimbursed L/C Disbursement. Any Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank, in which case during the period during which any such Letter of Credit is
outstanding and either undrawn (in whole or in part) or with respect to which
there is an unreimbursed L/C Disbursement, during such period the term “Issuing
Bank” shall include any such Affiliate with respect to such Letters of
Credit.

     

    “L/C Disbursement”
means a payment made by any Issuing Bank pursuant to a Letter of
Credit.

     

    “Lead Borrower” means
Brown Shoe Company, Inc.

     

    “Lead Issuing Bank”
means Bank of America, in its capacity as such and any successor in such
capacity.

     

    “Lenders” means the
Persons identified on Schedule 1.1 and each
assignee that becomes a party to this Agreement as set forth in Section 9.5(b), or each Person that becomes an Additional
Commitment Lender as set forth in Section 2.2(a).

     

    “Letter of Credit”
means a letter of credit that satisfies all of the following conditions: (i) is
issued pursuant to this Agreement for the account of any Borrower or any
Facility Guarantor or for the joint account of any Borrower or any Facility
Guarantor and any Loan Party or any of its Subsidiaries, (ii) is a Standby
Letter of Credit or Commercial Letter of Credit, (iii) is issued in connection
with the purchase of Inventory by any Loan Party, or in support of an obligation
of any Loan Party or any of its Subsidiaries incurred in the ordinary course of
business, or for any other purpose that is reasonably acceptable to the
Administrative Agent, and (iv) is in form and substance reasonably satisfactory
to the Lead Issuing Bank and, if applicable, the Issuing Bank issuing such
Letter of Credit. Without limiting the foregoing, the Existing Letters of Credit
shall be deemed Letters of Credit issued under this Agreement.

     

    “Letter of Credit
Fees” means the fees payable in respect of Letters of Credit pursuant to
Section 2.14.

     

    “Letter of Credit
Outstandings” means, at any time, the sum of (a) with respect to Letters
of Credit outstanding at such time, the aggregate maximum amount that then is or
at any time thereafter may become available for drawing or payment thereunder
plus (b) all
amounts theretofore drawn or paid under Letters of Credit for which the
applicable Issuing Bank has not then been reimbursed by the Loan
Parties.

     

    “LIBO Borrowing” means
a Borrowing comprised of LIBO Loans.

     

    “LIBO Loan” means any
Loan bearing interest at a rate determined by reference to the Adjusted LIBO
Rate in accordance with the provisions of Section 2.

     

    “LIBO Rate” means,
with respect to any LIBO Borrowing for any Interest Period, 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 Administrative 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 Period) with a term equivalent to such Interest
Period.  If such rate is not available at such time for any reason,
then the “LIBO Rate” for such Interest Period shall be the rate per annum
determined by the Administrative 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 LIBO 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.

     

    “Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset,
(b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset (c) any other lien, charge, privilege, secured claim, title
retention, garnishment right, deemed trust, encumbrance or other right affecting
assets, choate or inchoate, arising by any statute, act of law of any
jurisdiction at common law or in equity or by agreement; and (d) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.

     

    “Loan
Account”  has the meaning assigned to such term in Section 2.22(a).

     

    “Loan Documents” means
this Agreement, the Notes, the Letters of Credit, the Fee Letter, all Borrowing
Base Certificates, the Blocked Account Agreements, the Credit Card
Notifications, the Security Documents, the Facility Guaranty, the Confirmation
Agreement, and any other instrument or agreement now or hereafter executed and
delivered in connection herewith or therewith, or in connection with any Bank
Product or Cash Management Services.

     

    “Loan Party” means
each Borrower and each Facility Guarantor.

     

    “Loans” means all
loans (including, without limitation, Revolving Loans and Swingline Loans) at
any time made to the Borrowers or for account of the Borrowers pursuant to this
Agreement.

     

    “Macy’s” means,
collectively, Macy’s Inc. (formerly known as Federated Department Stores, Inc.)
and any successor thereto.

     

    “Maintenance Capital
Expenditures” means Capital Expenditures incurred for the purposes of
maintaining existing facilities, but excluding initial expenditures related to
new facilities and remodels of existing facilities.

     

    “Margin Stock” has the
meaning assigned to such term in Regulation U.

     

    “Material Adverse
Effect” means a material adverse effect on (a) the business,
operations, property, assets, or condition, financial or otherwise, of the Loan
Parties, taken as a whole, (b) the ability of the Loan Parties, taken as a
whole, to perform any material obligation or to pay any Obligations under this
Agreement or any of the other Loan Documents, or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the material rights or remedies of the Administrative Agent, the Collateral
Agent or the Lenders hereunder or thereunder.

     

     “Material
Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) of any one or more of the Loan Parties in an aggregate principal amount
exceeding $15,000,000.

     

    “Material Subsidiary”
means each Domestic Subsidiary (other than Edelman unless and until the Lead
Borrower or any other Loan Party owns 100% of the Capital Stock of Edelman) or
Canadian Subsidiary of a Loan Party which, as of the last day of any Fiscal
Quarter, satisfied any one or more of the following tests:

     

    (a)           such
Subsidiary owns property that would constitute Collateral valued in excess of
$10,000,000; or

     

    (b)           such
Subsidiary has revenues in any Fiscal Year in excess of $50,000,000;
or

     

    (c)           such
Subsidiary, and all other Subsidiaries which are not Loan Parties own property
that would constitute Collateral valued in excess of $25,000,000, then all such
Subsidiaries shall be deemed Material Subsidiaries; or

     

    (d)           such
Subsidiary and all other Subsidiaries which are not Loan Parties have revenues
in any Fiscal Year in excess of $100,000,000, then all such Subsidiaries shall
be deemed Material Subsidiaries.

     

    For
clarity, a Subsidiary shall not be deemed a “Material Subsidiary” unless it
meets any of the foregoing tests, notwithstanding that such Subsidiary is the
holder of the Capital Stock of another Subsidiary which satisfies such
tests.

     

    “Maturity Date” means
January 21, 2014.

     

    “Maximum Rate” has the
meaning provided therefor in Section 9.14.

     

    “Minority Lenders” has
the meaning provided therefor in Section 9.2(c).

     

    “Moody’s” means
Moody’s Investors Service, Inc.

     

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

     

    “Net Amount of Eligible
Credit Card Receivables” means, at any time, the gross amount of Eligible
Credit Card Receivables less, without duplication, (a) sales, excise, or similar
taxes which are not reserved in the Borrowing Base, and (b) with respect to
Eligible Credit Card Receivables, returns, discounts, claims, credits,
allowances, accrued rebates, offsets, deductions, counterclaims, disputes, and
other defenses of any nature at any time issued, owing, granted, outstanding,
available, or claimed, in each case calculated and determined in
Dollars.

     

    “Net Amount of Eligible
Accounts” means, at any time, the gross amount of Eligible Accounts less,
without duplication, (a) sales, excise, or similar taxes which are not reserved
in the Borrowing Base, and (b) with respect to Eligible Accounts, returns,
discounts, claims, credits, allowances, accrued rebates, offsets, deductions,
counterclaims, disputes, and other defenses of any nature at any time issued,
owing, granted, outstanding, available, or claimed, in each case calculated and
determined in Dollars.

     

    “Noncompliance Notice”
has the meaning provided therefor in Section 2.6(b).

     

    “Notes” means (a) the
promissory notes of the Borrowers substantially in the form of Exhibit B, each
payable to the order of a Lender, evidencing the Revolving Loans and (b) the
Swingline Note.

     

    “Obligations” means
(a) the due and punctual payment by the Borrowers of (i) the principal of,
and interest (including all interest that accrues after the commencement of any
case or proceeding by or against any Borrower under any federal or state
bankruptcy, insolvency, receivership or similar law, whether or not allowed in
such case or proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Borrowers under the Credit Agreement in
respect of any Letter of Credit or Acceptance, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise, of the Loan Parties to the Secured
Parties under the Credit Agreement and the other Loan Documents, including all
monetary obligations that accrue after the commencement of any case or
proceeding by or against any Borrower under any federal or state bankruptcy,
insolvency, receivership or similar law, whether or not allowed in such case or
proceeding, (b) the due and punctual payment and performance of all covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant to
this Agreement and the other Loan Documents, and (c) solely to the extent that
there is sufficient Collateral following satisfaction of the Obligations
described in clause (a) of this definition, the payment and performance under
any transaction with any Lender or any of its Affiliates, which arises out of
any Bank Products or Cash Management Services.

     

    “Other Taxes” means
any and all current or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made under
any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document.

     

    “Overadvance” means,
at any time of calculation, a circumstance in which the Credit Extensions exceed
the lesser of (a) the Total Commitments or (b) the Borrowing Base.

     

    “Participant” has the
meaning provided therefor in Section 9.5(e).

     

    “Payment Conditions”
means, at the time of determination with respect to a specified transaction or
payment, that (a) no Default or Event of Default then exists or would arise as a
result of the  entering into such transaction or the making of such
payment and (b) prior to and after giving effect to such transaction or payment,
Excess Availability shall exceed the greater of (i) twenty percent (20%) of the
lesser of the then (x) Total Commitments or (y) Borrowing Base and (ii)
$25,000,000; (c) the Adjusted Fixed Charge Coverage Ratio, on a pro-forma basis
(in each case, after giving effect to such transaction or payment) for the two
(2) most recent full Fiscal Quarters preceding such transaction or payment and
for two (2) full Fiscal Quarters following such transaction or payment
(determined on a projected and pro forma basis), shall be equal to or greater
than 1.0:1.0 and (d) the Loan Parties shall have provided the Administrative
Agent with a certificate from a Financial Officer demonstrating to the
reasonable satisfaction of the Administrative Agent that, on a pro forma basis
(after giving effect to such transaction or payment), the Loan Parties, taken as
a whole, are, and will be, Solvent.

     

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

     

    “Perfection
Certificate” means a certificate in the form of Exhibit C to this
Agreement or any other form approved by the Collateral Agent.

     

    “Permitted
Acquisition” means collectively:

     

    (a) so
long as prior to and after giving effect to such Acquisition, no Default or
Event of Default will exist or arise therefrom, the acquisition by a Borrower or
Facility Guarantor of all or a portion of the Capital Stock of Edelman not owned
directly or indirectly by the Lead Borrower on the Closing Date or all or
substantially all of the assets of Edelman (the “Edelman
Acquisition”), provided that, if
upon the consummation of such acquisition any Loan Party shall directly or
indirectly hold 100% of the issued and outstanding Capital Stock of Edelman,
Edelman shall become a Borrower or Facility Guarantor hereunder in accordance
with the provisions of Section 5.14 hereof; and

     

    (b) an
Investment in, a purchase of the Capital Stock in, or the acquisition of all or
a substantial portion of the assets or properties of, any Person or of any
business unit or division of any Person, the entering into any exchange of
securities with any Person, or the entering into any transaction, merger or
consolidation of any Person, or any acquisition of any retail store locations of
any Person (each of the foregoing an “Acquisition”) in each case under this
clause (b) which satisfies each of the following conditions:

     

    
      	
               
      

            	
              (i)

            	
              The
      Acquisition is of a business permitted to be conducted by the Borrowers
      pursuant to Section 6.3(b) hereof;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Prior
      to and after giving effect to the Acquisition, no Default or Event of
      Default will exist or will arise
therefrom;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      Borrowers shall have furnished the Administrative Agent with the
      information required under Section 5.1(i) of this
    Agreement;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              If
      the Acquisition is of the Capital Stock of any Person, the Acquisition is
      structured so that the Person shall become a wholly owned Subsidiary of
      the Lead Borrower and such Person will become a Borrower or Facility
      Guarantor if required in accordance with Section 5.14 hereof and if such
      Person is required to become a Borrower or Facility Guarantor, the
      Borrowers (including such Person) shall take such steps as are necessary
      to grant to the Collateral Agent, for the benefit of the Secured Parties,
      a legal, valid and enforceable first priority security interest (except as
      provided in Section 6.2 hereof) in all of the assets (that would otherwise
      constitute Collateral) acquired in connection with such
      Acquisition;

            

    

     

    
      	
               
      

            	
              (v)

            	
              If
      a Borrower shall merge with such other Person, such Borrower shall be the
      surviving party of such merger;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              such
      acquisition shall not be a hostile or contested
    acquisition;

            

    

     

    
      	
              (vii)  

            	
              the
      total consideration paid or payable in connection with any Acquisition
      (whether in cash, property or securities) shall not exceed $35,000,000 for
      any Acquisition or $100,000,000 in the aggregate for all Acquisitions
      after the Closing Date, unless, in each case, the Payment Conditions are
      satisfied, provided that
      the Edelman Acquisition shall not be taken into account in determining the
      utilization of the foregoing baskets and such baskets shall not apply to
      the Edelman Acquisition; and

            

    

     

    
      	
              (viii)  

            	
              no
      Loan Party shall, as a result of or in connection with any such
      acquisition, assume or incur any direct or contingent liabilities (whether
      relating to environmental, tax, litigation, or other matters) that could
      reasonably be expected, as of the date of such acquisition, to result in
      the existence or occurrence of a Material Adverse
  Effect.

            

    

     

    “Permitted Discretion”
means the Administrative Agent’s good faith credit judgment based upon any
factor or circumstance which it reasonably believes in good faith: (i) will or
could reasonably be expected to adversely affect the value of the Collateral,
the enforceability or priority of the Collateral Agent’s Liens thereon in favor
of the Secured Parties or the amount which the Collateral Agent and the Secured
Parties would likely receive (after giving consideration to delays in payment
and costs of enforcement) in the liquidation of such Collateral; (ii) suggests
that any collateral report or financial information delivered to the
Administrative Agent by or on behalf of the Loan Parties is incomplete,
inaccurate or misleading in any material respect; (iii) could reasonably be
expected to materially increase the likelihood of a bankruptcy, reorganization
or other insolvency proceeding involving any Loan Party; or (iv) creates or
reasonably could be expected to create a Default or Event of
Default.  In exercising such judgment, the Administrative Agent may
consider such factors or circumstances already included in or tested by the
definition of Eligible Accounts, Eligible in-Transit Inventory, or Eligible
Inventory, as well as any of the following: (A) the financial and business
climate and prospects of any Loan Party’s industry and general macroeconomic
conditions; (B) changes in demand for and pricing of Inventory; (C) changes in
any concentration of risk with respect to Inventory; (D) any other factors or
circumstances that will or could reasonably be expected to have a Material
Adverse Effect; (E) audits of books and records by third parties, history of
chargebacks or other credit adjustments; and (F) any other factors that change
or could reasonably be expected to change the credit risk of lending to the
Borrowers on the security of the Accounts and
Inventory.  Notwithstanding the foregoing, it shall not be within
Permitted Discretion for the Administrative Agent to establish Reserves which
are duplicative of each other whether or not such reserves fall under more than
one reserve category.

     

    “Permitted
Encumbrances” means:

     

    (i)           Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.5;

     

    (ii)           carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.5, provided, however,
that the aggregate amount of such Liens, may not at any time exceed $35,000,000
from and after the Closing Date;

     

    (iii)           pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance, old-age pension and other social security
laws or regulations;

     

    (iv)           deposits
to secure the performance of bids, trade contracts, leases, contracts (other
than for the repayment of borrowed money), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;

     

    (v)           judgment
Liens in respect of judgments that do not constitute an Event of Default under
Section 7.1(l);

     

    (vi)           easements,
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 interfere with the ordinary conduct of business of any Loan
Party;

     

    (vii)           Possessory
Liens in favor of brokers and dealers arising in connection with the acquisition
or disposition of Investments owned as of the date hereof 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;

    
       

      (viii)           Landlords'
and lessors' Liens in respect of rent not in default; and

    

     

    (ix)           Liens
in favor of a financial institution encumbering deposits (including the right of
setoff) held by such financial institution in the ordinary course of its
business to secure Indebtedness permitted hereunder and which are within the
general parameters customary in the banking industry

     

    provided that, except
as provided in any one or more of clauses (i) through (vi) above, the term
“Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

     

    “Permitted
Investments” means each of the following:

     

    (i)           Investments
in direct obligations of the United States of America (or any agency thereof or
any obligations guaranteed by the United States of America, provided that such
obligations mature within one year from the date of acquisition
thereof;

     

    (ii)           Investments
in commercial paper maturing within 90 days from the date of acquisition thereof
and having, at such date of acquisition, a credit rating of at least A-2 or P-2
from S&P or from Moody’s;

     

    (iii)           Investments
in certificates of deposit maturing within one year from the date of
acquisition, banker’s acceptances, Eurodollar bank deposits, and overnight bank
deposits, in each case issued by or created by, or with, a Lender, an Affiliate
of a Lender or a bank or trust company organized under the laws of the United
States of America or Canada or any state, province or territory thereof, having
capital and surplus aggregating at least $100,000,000, and other bank deposits
to the extent such deposits are insured by a Governmental Authority or pursuant
to any governmental deposit insurance program or are in the process of
collection and transfer in the ordinary course of business to any deposit
account which is maintained in the name of the Collateral Agent or the
Administrative Agent or any Loan Party, or any of them, as the Administrative
Agent may determine, on terms acceptable to the Administrative
Agent;

     

    (iv)           Investments
in mutual funds substantially all of the assets of which are securities of the
type described in clauses (i), (ii) and (iii) of this definition;

     

    (v)           Investments
by the Loan Parties in deposit accounts in the ordinary course of business with
financial institutions (A) located in the United States of America and Canada,
and (B) located in a jurisdiction other than the United States of America and
Canada in an amount not in excess of $5,000,000 in the aggregate;
and

     

    (vi)           fully
collateralized repurchase obligations of any commercial bank organized under the
laws of the United States of America or any state thereof, having capital and
surplus aggregating at least $100,000,000, having a term of not more than thirty
(30) days, with respect to securities issued or fully guaranteed or insured by
the government of the United States of America;

     

    provided that,
notwithstanding the foregoing, (i) after the occurrence and during the
continuance of a Cash Dominion Event, no such Investments (other than those
described in clause (v) above) shall be permitted by a Borrower unless either
(A) no Loans are then outstanding, or (B) the Investment is a temporary
Investment pending expiration of an Interest Period for a LIBO Loan, the
proceeds of which Investment will be applied to the Obligations after the
expiration of such Interest Period,  and (ii) such Investments are
pledged by the applicable Borrower to the Administrative Agent as additional
collateral for the Obligations pursuant to such agreements as may be reasonably
required by the Administrative Agent.

     

    “Permitted
Overadvance” means an Overadvance determined by the Administrative Agent,
in its reasonable discretion, (a) which is made to maintain, protect or preserve
the Collateral and/or the Lenders’ rights under the Loan Documents, or (b) which
is otherwise in the Lenders’ interests; provided that
Permitted Overadvances shall not (i) exceed five percent of the then Borrowing
Base in the aggregate outstanding at any time and (ii) remain outstanding for
more than thirty consecutive Business Days, unless in case of clause (ii) the
Required Lenders otherwise agree; and provided further that
the foregoing shall not (1) modify or abrogate any of the provisions of Section
2.7(h) regarding the Lenders’ obligations with
respect to L/C Disbursements, or (2) result in any claim or liability against
the Administrative Agent (regardless of the amount of any Overadvance) for
“inadvertent Overadvances” (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)), and further provided that
in no event shall the Administrative Agent make an Overadvance, if after giving
effect thereto, the principal amount of the Credit Extensions (including any
Overadvance or proposed Overadvance) would exceed the Total
Commitments.

     

    “Permitted Stock
Repurchase” means a purchase by the Lead Borrower of Capital Stock of the
Lead Borrower; provided that the
aggregate of all such purchases shall not exceed $35,000,000 for any Permitted
Stock Repurchase or $100,000,000 in the aggregate for all Permitted Stock
Repurchases after the Closing Date, unless, in each case, the Payment Conditions
are satisfied.

     

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

     

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

     

    “PPSA” means the Personal Property Security
Act (Ontario) ( or any successor statute) or similar legislation of any
other Canadian jurisdiction, the laws of which are required by such legislation
to be applied in connection with the issue, perfection, enforcement,
opposability, validity or effect of security interests.

     

    “Prime Rate” means,
for any day, a fluctuating rate per annum equal to the highest of (a) the
Federal Funds Effective Rate plus 1/2 of 1%, (b) the Adjusted LIBO Rate for an
Interest Period of one month determined at approximately 11:00 a.m. (London
time) on such day plus 1.00% per annum
and (c) the rate of interest in effect for such day as publicly announced from
time to time by Bank of America as its “prime rate.”  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 such
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.

     

    “Prime Rate Loan”
means any Loan bearing interest at a rate determined by reference to the Prime
Rate in accordance with the provisions of Section 2.

     

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

     

    “Refinancing Notes”
means publicly issued or privately placed notes which refinance all or a portion
of the Senior Notes so long as, after giving effect thereto (i) the aggregate
principal amount of the Senior Notes and Refinancing Notes outstanding after
giving effect to the issuance of the Refinancing Notes is not greater than the
outstanding principal amount of the Senior Notes immediately prior to the
issuance of the Refinancing Notes (except by the amount of any accrued interest,
expenses, fees, and premium paid in connection with such refinancing), (ii) the
result of such refinancing shall not result in a maturity date which is earlier
than six (6) months following the Maturity Date or decreased weighted average
life, (iii) the holders of such refinancing notes are not afforded covenants,
defaults, rights or remedies, taken as a whole, which are materially more
burdensome to the obligor or obligors than those contained in the Senior Notes
being refinanced, (iv) the obligor or obligors under any such refinancing notes
and the collateral, if applicable, granted pursuant to any such refinancing
notes are the same (or in the case of collateral, the same or less than) as the
obligor(s) and collateral under the Senior Notes being refinanced, (v) the
subordination, to the extent applicable, and other material provisions of the
refinancing notes are no less favorable to the Lenders than those terms of the
Senior Notes being refinanced, and (vi) the refinancing notes are not
exchangeable or convertible into any other Indebtedness which does not comply
with clauses (i) through (v) above.

     

    “Register” has the
meaning set forth in Section 9.5(c).

     

    “Regulation U”
means Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     

    “Regulation X”
means Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     

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

     

    “Release” has the
meaning set forth in Section 101(22) of CERCLA.

     

    “Relevant Date” means
(i) in the case of each Lender signatory hereto on the Closing Date, the Closing
Date, and (ii) in the case of each other Lender, the effective date of the
Assignment and Acceptance or other document pursuant to which it becomes a
Lender.

     

     “Required Lenders”
means, at any time, at least three (3) Lenders having Commitments greater than
50% of the Total Commitments, or if the Commitments have been terminated,
Lenders holding in the aggregate greater than 50% of all Loans and Letters of
Credit Outstanding (with the aggregate amount, without duplication, of each
Lender’s risk participation and funded participation in Letters of Credit and
Swingline Loans being deemed “held” by such Lender (and an Issuing Bank or
Swingline Lender) for purposes of this definition).

     

    “Reserves” means the
Inventory Reserves and Availability Reserves.

     

    “Responsible Officer”
means with respect to any Borrower, the chief executive officer or the president
or any Financial Officer.

     

    “Restricted Payment”
means, with respect to any Person (other than a natural person): (a) the
payment or making of any dividend or other distribution of property in respect
of such Person’s Capital Stock (or any options or warrants for, or other rights
with respect to, such Capital Stock) of such Person, other than distributions
solely in such Person’s Capital Stock (or any options or warrants for, or other
rights with respect to, such Capital Stock) of the same class; or (b) the
redemption or other acquisition by such Person of any Capital Stock (or any
options or warrants for, or other rights with respect to, such Capital Stock) of
such Person (including without limitation, any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of Capital Stock); provided that
(x) the issuance or redemption of the Lead Borrower’s Capital Stock to or
from any officer, director or employee of any Borrower or any of its
Subsidiaries in the ordinary course of the Lead Borrower’s business (including,
without limitation, in the ordinary operation of the Lead Borrower’s employee
benefit plans or in connection with directors’ plans or compensation),
(y) the issuance to holders of Capital Stock of the Lead Borrower of rights
to acquire additional Capital Stock on the occurrence of any specified event or
circumstance, and (z) any redemption of rights to acquire additional stock
under any “poison pill” rights agreement of the Lead Borrower (as such agreement
may be amended or replaced) but only if the redemption price thereunder is not
in excess of the redemption price under the most recent “poison pill” rights
agreement of the Lead Borrower that existed prior to the Closing Date (as
defined in the Existing Credit Agreement), shall not constitute a Restricted
Payment hereunder.

     

    “Revolving Loans”
means all Loans at any time made by a Lender pursuant to Article
II.

     

    “S&P” means
Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies,
Inc.

     

    “Secured Parties” has
the meaning assigned to such term in the Security Agreements.

     

    “Security Agreements”
means, collectively, the Borrower Security Agreement and the Canadian Security
Agreements.

     

    “Security Documents”
means the Security Agreements, the Facility Guaranty, the Facility Guarantors’
Collateral Documents, and each other security agreement, guaranty or other
instrument or document executed and delivered pursuant to Section 5.15 or any other provision hereof or any other Loan
Document, to secure any of the Obligations.

     

    “Senior Notes
Indenture” means the Indenture, dated as of April 22, 2005, among the
Lead Borrower, the guarantors party thereto and U.S. Bank National Association,
as successor trustee, pursuant to which the Senior Notes were
issued.

     

    “Senior Notes” means
the Lead Borrower’s 8.75% Senior Notes due 2012 issued pursuant to the Senior
Notes Indenture.

     

    “Settlement Date” has
the meaning provided in Section 2.8(b).

     

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

     

    “Shoes.com” has the
meaning provided therefor in the Recitals.

     

    “Sidney Rich” has the
meaning provided therefor in the Recitals.

     

    “Solvent” means, with
respect to any Person on a particular date, that on such date (a) at fair
valuations, 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) 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.

     

     “Standby Letter of
Credit” means any Letter of Credit other than a Commercial Letter of
Credit.

     

    “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
Board to which the Administrative Agent is subject with respect to the
Adjusted LIBO 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.  LIBO 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.

     

    “Subordinated Debt”
means unsecured Indebtedness of any Loan Party entered into after the Closing
Date (including any such Indebtedness that is convertible into Capital Stock
(other than Disqualified Stock)) which is subordinated to payment of the
Obligations on terms and conditions reasonably acceptable to the Administrative
Agent, and any amendments, renewals, restatements, or other modifications
thereof.

     

    “Subsidiary” means,
with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, directly or indirectly owned, controlled or held, or (b) that is, as
of such date, otherwise directly or indirectly Controlled, by the parent and/or
one or more subsidiaries of the parent. Unless the context otherwise requires,
all references in the Loan Documents to “Subsidiaries” shall be deemed to refer
to Subsidiaries of the Lead Borrower.  Notwithstanding anything herein
to the contrary, (i) Edelman shall not be deemed to be a Subsidiary until such
time as the Lead Borrower directly or indirectly owns more than 50% of the
Capital Stock thereof and (ii) B&H and its subsidiaries shall not be deemed
to be Subsidiaries until such time as the Lead Borrower directly or indirectly
owns 100% of the Capital Stock of B&H.

     

    “Super-Majority
Lenders” means, at any time, Lenders having Commitments equal in the
aggregate to at least 75% of the Total Commitments, or if the Commitments have
been terminated, Lenders holding in the aggregate at least 75% of all Loans and
Letters of Credit Outstanding (with the aggregate amount, without duplication,
of each Lender’s risk participation and funded participation in Letters of
Credit and Swingline Loans being deemed “held” by such Lender (and an Issuing
Bank or Swingline Lender) for purposes of this definition).

     

     “Swingline Lender”
means Bank of America, N.A., in its capacity as lender of Swingline Loans
hereunder.

     

    “Swingline Loan” means
a Loan made by the Swingline Lender to the Borrowers pursuant to Section 2.6 hereof.

     

    “Swingline Note” means
the promissory note, dated July 21, 2004, made by the Borrowers to the Swingline
Lender to evidence the Swingline Loans.

     

    “Synthetic Lease”
means any lease or other agreement for the use or possession of property
creating obligations which does not appear as Indebtedness on the balance sheet
of the lessee thereunder but which, upon the insolvency or bankruptcy of such
Person, would be characterized as Indebtedness of such lessee without regard to
the accounting treatment.

     

    “Taxes” means any and
all current or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

     

    “Termination Date”
means the earliest to occur of (i) the Maturity Date, (ii) the date on which the
maturity of the Loans are accelerated and the Commitments are terminated in
accordance with Section 7.1, or (iii) the date of
the occurrence of any Event of Default pursuant to Section 7.1(i) or 7.1(j).

     

    “Termination Event”
means (a) the complete or partial withdrawal of a Facility Guarantor from a
Foreign Plan during a plan year; or (b) the filing of a notice of interest to
terminate in whole or in part a Foreign Plan or the treatment of a Foreign Plan
amendment as a termination of partial termination; or (c) the institution of
proceedings by any Governmental Authority to terminate in whole or in part or
have a trustee appointed to administer a Foreign Plan; or (d) any other event or
condition which might constitute grounds for the termination of, winding up or
partial termination of winding up or the appointment of trustee to administer,
any Foreign Plan.  Notwithstanding the foregoing, the partial wind-up
of the Canadian Pension Plans currently in process or contemplated to begin
within a reasonable period of time after the Closing Date shall not be deemed to
be a Termination Event.

     

    “Total Commitments”
means, at any time, the sum of the Commitments at such time.

     

    “Type”, when used in
reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference
to the Adjusted LIBO Rate or the Prime Rate.

     

    “UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New
York.

     

    “Unused Commitment”
means, on any day, (a) the then Total Commitments minus (b) the sum of
(i) the principal amount of Loans then outstanding (including the principal
amount of Swingline Loans then outstanding), and (ii) the then Letter of Credit
Outstandings and (iii) the then unreimbursed Acceptances.

     

    “Voting Stock” means,
with respect to any corporation, the outstanding stock of all classes (or
equivalent interests) which ordinarily, in the absence of contingencies,
entitles holders thereof to vote for the election of directors (or Persons
performing similar functions) of such corporation, even though the right so to
vote has been suspended by the happening of such contingency.

     

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

     

    1.2 Terms
Generally. The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding mascu­line, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”.  The word “will” shall be construed to
have the same meaning and effect as the word “shall”.  Unless the
context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns or, for natural persons, such Person’s successors, heirs,
executors, administrators and other legal representatives, (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Sections, Exhibits and
Schedules shall be construed to refer to Sections of, and Exhibits and Schedules
to, this Agreement, (e) 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, (f) all financial statements and other financial information
provided by the Loan Parties to the Administrative Agent or any Lender shall be
provided with reference to Dollars, and (g) this Agreement and the other Loan
Documents are the result of negotiation among, and have been reviewed by counsel
to, among others, the Loan Parties and the Administrative Agent and are the
product of discussions and negotiations among all
parties.  Accordingly, this Agreement and the other Loan Documents are
not intended to be construed against the Administrative Agent or any of the
Lenders merely on account of the Administrative Agent’s or any Lender’s
involvement in the preparation of such documents.

     

    1.3 ­Accounting
Terms. Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect on the Closing
Date, on a basis consistent with the financial statements referred to in
Section 4.1(h) of this Agreement, provided
that, if the Borrowers request an amendment to any provision hereof to reflect
the effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrowers that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
provision shall have been amended in accordance herewith.  In the
event that the Loan Parties are required to or elect to adopt the International
Financial Reporting Standards (“IFRS”) prior to the
Maturity Date, the Lead Borrower shall notify the Administrative Agent at least
90 days prior to the date on which IFRS will apply and the Administrative Agent
and the Lead Borrower shall negotiate in good faith such amendments to this
Agreement and the other Loan Documents are appropriate.

     

    1.4 Rounding.

     

    Any
financial ratios required to be maintained by the Borrowers 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).

     

    1.5 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 the terms of any 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.

     

    2.  AMOUNT AND TERMS
OF CREDIT.

     

    2.1 ­Commitment
of the Lenders.

     

    (a) Each
Lender severally and not jointly with any other Lender, agrees, upon the terms
and subject to the conditions herein set forth, to extend credit to the
Borrowers on a revolving basis, in the form of Revolving Loans, participations
in Swingline Loans, and Letters of Credit and in an amount not to exceed the
lesser of such Lender’s Commitment or such Lender’s Commitment Percentage of the
lesser of (x) the Borrowing Base or (y) the Total Commitments, subject to the
following limitations:

     

    (i) The
aggregate outstanding amount of the Credit Extensions shall not at any time
exceed the lower of (i) (x) $380,000,000, or (y) such greater amount or lesser
amount to which the Total Commitments have then been increased or decreased by
the Borrowers pursuant to Sections 2.2 and/or 2.17 hereof, or (ii) the then amount of the Borrowing
Base plus any Permitted Overadvances.

     

    (ii) No Lender
(other than the applicable Issuing Bank) shall be obligated to issue any Letter
of Credit, and Letters of Credit shall be available from the Issuing Banks,
subject to the ratable participation of all Lenders, as set forth in Section 2.7. The aggregate Letter of Credit Outstandings shall
not at any time exceed $100,000,000, and the aggregate amount of Letter of
Credit Outstandings with respect to Standby Letters of Credit shall not at any
time exceed $50,000,000.

     

    (iii) Subject
to all of the other provisions of this Agreement, Revolving Loans that are
repaid may be reborrowed prior to the Termination Date. No new Credit Extension,
however, shall be made to the Borrowers after the Termination Date.

     

    (b) Each
Borrowing of Revolving Loans (other than Swingline Loans) shall be made by the
Lenders pro
rata in
accordance with their respective Commitments.  The failure of any
Lender to make any Loan shall neither relieve any other Lender of its obligation
to fund its Loan in accordance with the provisions of this Agreement nor
increase the obligation of any such other Lender.

     

    2.2 ­Increase in
Total Commitments.

     

    (a) So long
as no Default or Event of Default exists or would arise therefrom, the Lead
Borrower shall have the right at any time, and from time to time, to request an
increase of the Total Commitments by an aggregate amount (for all such requests)
not exceeding (i) $150,000,000, plus (ii) an amount equal to the amount of the
Commitment of any Defaulting Lender whose Commitment has been terminated but who
was not replaced by another Lender or other financial institution at the time of
such termination, as adjusted to reflect any pro rata decrease in the Total
Commitments pursuant to Section 2.17 hereof which occurred after such
termination.  Any such requested increase shall be first made to all
existing Lenders on a pro rata basis.  At the time of sending such
request, the Lead Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).     Each Lender shall
notify the Administrative Agent within such time period whether or not it agrees
to increase its Commitment and, if so, whether by an amount equal to, greater
than, or less than its pro rata share of such requested increase.  Any
Lender not responding within such time period shall be deemed to have declined
to increase its Commitment.  To the extent that the existing Lenders
decline to increase their Commitments, or decline to increase their Commitments
to the amount requested by the Lead Borrower, the Administrative Agent, in
consultation with the Lead Borrower, will use its reasonable efforts to arrange
for other Persons to become a Lender hereunder and to issue commitments in an
amount equal to the amount of the increase in the Total Commitments requested by
the Lead Borrower and not accepted by the existing Lenders (each such increase
by either means, a “Commitment Increase,” and each Person issuing, or Lender
increasing, its Commitment, an “Additional Commitment Lender”), provided, however, that (i)
no Lender shall be obligated to provide a Commitment Increase as a result of any
such request by the Borrowers, (ii) any Additional Commitment Lender which is
not an existing Lender shall be subject to the approval of the Administrative
Agent, the Lead Issuing Bank and the Lead Borrower (which approval shall not be
unreasonably withheld or delayed), and (iii) each Commitment Increase shall be
in integral multiples of $1,000,000.00, provided that without
the consent of the Administrative Agent (in consultation with the Lead
Borrower), at no time shall the Commitment of any Additional Commitment Lender
which is not an existing Lender be less than $10,000,000.00.

     

    (b) No
Commitment Increase shall become effective unless and until each of the
following conditions have been satisfied:

     

    (i) If an
Additional Commitment Lender is not an existing Lender, the Borrowers, the
Administrative Agent, and any Additional Commitment Lender shall have executed
and delivered a joinder to the Loan Documents in such form as the Administrative
Agent shall reasonably require;

     

    (ii) The
Borrowers shall have paid such fees and other compensation to the Additional
Commitment Lenders as the Lead Borrower and such Additional Commitment Lenders
shall agree;

     

    (iii) The
Borrowers shall have paid such arrangement fees to the Administrative Agent or
its Affiliates as the Lead Borrower and the Administrative Agent may
agree;

     

    (iv) The
Borrowers shall deliver to the Administrative Agent and the Lenders certificates
of the Secretary or Assistant Secretary of each Borrower attaching a true,
complete and correct copy of the resolutions of such Borrower authorizing the
borrowing under the Commitment Increase and certifying that such resolution is
in full force and effect, it being understood and agreed that such resolutions
may be adopted at any time and provide for borrowings under Commitment Increases
from time to time requested;

     

    (v) A Note
will be issued at the Borrowers’ expense, to each such Additional Commitment
Lender, to be in conformity with requirements of Section 2.9 hereof (with appropriate modification) to the
extent necessary to reflect the new Commitment of such Additional Commitment
Lender; and

     

    (vi) The
Borrowers and the Additional Commitment Lender shall have delivered such other
instruments, documents and agreements as the Administrative Agent may reasonably
have requested, including, without limitation, in the case of an Additional
Commitment Lender which is a Foreign Lender, such documents as are set forth in
Section 2.28 hereof to evidence an exemption form withholding tax with respect
to payments made to such Additional Commitment Lender.

     

    (c) The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Commitment Increase (with each date of such effectiveness being referred
to herein as a “Commitment Increase Date”), and at such time (i) the Total
Commitments under, and for all purposes of, this Agreement shall be increased by
the aggregate amount of such Commitment Increases, (ii) Schedule 1.1 shall be
deemed modified, without further action,  to reflect the revised
Commitments and Commitment Percentages of the Lenders, and (iii) this Agreement
shall be deemed amended, without further action, to the extent necessary to
reflect such increased Total Commitments (including, without limitation, Section
2.1(a)(i)).

     

    (d) In
connection with Commitment Increases hereunder, the Lenders and the Borrowers
agree that, notwithstanding anything to the contrary in this Agreement, (i) the
Borrowers shall, in coordination with the Administrative Agent, (x) repay
outstanding Loans of certain Lenders, and obtain Loans from certain other
Lenders (including the Additional Commitment Lenders), or (y) take such other
actions as reasonably may be required by the Administrative Agent, in each case
to the extent necessary so that all of the Lenders effectively participate in
each of the outstanding Loans pro rata on the basis of their Commitment
Percentages (determined after giving effect to any increase in the Total
Commitments pursuant to this Section 2.2), and (ii) the Borrowers shall pay to
the Lenders any Breakage Costs in connection with any repayment and/or Loans
required pursuant to preceding clause (i).  Without limiting the
Obligations of the Borrowers provided for in this Section 2.2, the Administrative Agent and the Lenders agree
that they will use their best efforts to attempt to minimize any Breakage Costs
which the Borrowers would otherwise incur in connection with the implementation
of an increase in the Total Commitments.

     

    2.3 Changes to
Reserves. The
Administrative Agent may hereafter, establish additional Reserves or change any
of the foregoing Reserves, in the exercise of Permitted Discretion of the
Administrative Agent upon two (2) Business Days’ prior notice to the Lead
Borrower, (during which period the Administrative Agent shall be available to
discuss any such proposed Reserve with the Borrowers); provided that no such
prior notice shall be required for  (1) changes to any Reserves
resulting solely by virtue of mathematical calculations of the amount of the
Reserve in accordance with the methodology of calculation previously utilized,
or (2) changes to Reserves or establishment of additional Reserves if a Material
Adverse Effect has occurred or it would be reasonably likely that the Lenders
would be materially and adversely affected were such Reserve not changed or
established prior to the expiration of such two (2) Business Day
period.

     

    2.4 ­Making of
Loans. (a) .  (a)           Except
as set forth in Sections 2.18 and 2.26, Loans (other than Swingline Loans) by
the Lenders shall be either Prime Rate Loans or LIBO Loans as the Lead Borrower
on behalf of the Borrowers may request subject to and in accordance with this
Section 2.4, provided that all Swingline Loans shall be only Prime Rate Loans.
All Loans made pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, be Loans of the same Type. Each Lender may fulfill
its Commitment with respect to any Loan by causing any lending office of such
Lender to make such Loan; but any such use of a lending office shall not affect
the obligation of the Borrowers to repay such Loan in accordance with the terms
of the applicable Note.  Each Lender shall, subject to its overall
policy considerations, use reasonable efforts (but shall not be obligated) to
select a lending office (or transfer its Loans to another lending office) which
will not result in the payment of increased costs by the Borrowers pursuant to
Section 2.25.  Subject to the other provisions of this Section 2.4 and
the provisions of Section 2.26, Borrowings of Loans of more than one Type may be
incurred at the same time, but no more than fifteen (15) Borrowings of LIBO
Loans may be outstanding at any time.

     

    (b) The Lead
Borrower shall give the Administrative Agent (i) in the case of each LIBO
Borrowing, at least three (3) Business Days’, and (ii) in the case of each
Borrowing of Prime Rate Loans on the date of the requested Borrowing, prior
irrevocable written notice of borrowing (which may be by electronic
transmission) delivered to the Administrative Agent in the form attached hereto
as Exhibit F  Any
such notice, to be effective, must be received by the Administrative Agent not
later than 12:00 noon., Boston time, on the third Business Day in the case of
LIBO Loans prior to the date, and on the same Business Day in the case of Prime
Rate Loans, on which such Borrowing is to be made. Such notice shall be
irrevocable and shall specify the amount of the proposed Borrowing (which shall
be in an integral multiple of $1,000,000, but not less than $5,000,000 in the
case of LIBO Loans) and the date thereof (which shall be a Business
Day).  Unless otherwise directed in such notice and so long as no Cash
Dominion Event has occurred and is continuing, the proceeds of Loans shall be
credited to Account No. 5045183372 maintained by the Borrowers with Bank of
America.  Such notice shall specify whether the Borrowing then being
requested is to be a Borrowing of Prime Rate Loans or LIBO Loans and, if LIBO
Loans, the Interest Period with respect thereto. If no election of Interest
Period is specified in any such notice for a Borrowing of LIBO Loans, such
notice shall be deemed a request for an Interest Period of one month. If no
election is made as to the Type of Loan, such notice shall be deemed a request
for a Borrowing of Prime Rate Loans. The Administrative Agent shall promptly
notify each Lender of its proportionate share of such Borrowing, the date of
such Borrowing, the Type of Borrowing being requested and the Interest Period or
Interest Periods applicable thereto, as appropriate. On the borrowing date
specified in such notice, each Lender shall make its share of the Borrowing
available at the office of the Administrative Agent at 100 Federal Street,
Boston, Massachusetts 02110, no later than 3:00 p.m., Boston time, in
immediately available funds. Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with this Section 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 Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrowers severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount 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 Admini­strative Agent, at
(i) in the case of such Lender, the Federal Funds Effective Rate or
(ii) in the case of the Borrowers, the interest rate applicable to Prime
Rate Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing. Upon
receipt of the funds made available by the Lenders to fund any Borrowing
hereunder, the Administrative Agent shall disburse such funds in the manner
specified in the notice of borrowing delivered by the Lead Borrower and shall
use reasonable efforts to make the funds so received from the Lenders available
to the Borrowers no later than 3:00 p.m., Boston time.

     

    (c) The
Administrative Agent, without the request of the Lead Borrower, may, to the
extent not timely paid, advance any interest, fee, service charge, or other
payment to which any Agent or their Affiliates or any Lender is entitled from
any Borrower pursuant hereto or any other Loan Document and may charge the same
to the Loan Account notwithstanding that an Overadvance may result
thereby.  The Administrative Agent shall advise the Lead Borrower in
writing of any such advance or charge promptly after the making thereof. Such
action on the part of the Administrative Agent shall not constitute a waiver of
the Administrative Agent’s rights and each Borrower’s obligations under Section
2.4(a). Any amount which is added to the principal
balance of the Loan Account as provided in this Section 2.4(c) shall bear interest at the interest rate then
and thereafter applicable to Prime Rate Loans.

     

    2.5 Overadvances. The
Agents and the Lenders have no obligation to make any Loan or to provide any
Letter of Credit or Acceptance if an Overadvance would result. The
Administrative Agent may, in its discretion, make Permitted Overadvances without
the consent of the Lenders and each Lender shall be bound
thereby.  Any Permitted Overadvances may constitute Swingline
Loans.  The making of any Permitted Overadvance is for the benefit of
the Borrowers; such Permitted Overadvances constitute Revolving Loans and
Obligations. The making of any such Permitted Overadvances on any one occasion
shall not obligate the Administrative Agent or any Lender to make or permit any
Permitted Overadvances on any other occasion or to permit such Permitted
Overadvances to remain outstanding.

     

    2.6 Swingline
Loans.

     

    (a) The
Swingline Lender is authorized by the Lenders and shall, subject to the
provisions of this Section, make Swingline Loans up to $35,000,000 in the
aggregate outstanding at any time (which requests for Borrowings of Swingline
Loans shall be in minimum integrals of $500,000) consisting only of Prime Rate
Loans, upon a notice of Borrowing received by the Administrative Agent and the
Swingline Lender (which notice, at the Swingline Lender’s discretion, may be
submitted prior to 1:00 p.m., Boston time, on the Business Day on which such
Swingline Loan is requested). Swingline Loans shall be subject to periodic
settlement with the Lenders under Section 2.8
below.

     

    (b) Swingline
Loans may be made only in the following circumstances: (A) for administrative
convenience, the Swingline Lender shall, at the Lead Borrower’s request, make
Swingline Loans in reliance upon the Borrowers’ actual or deemed representations
under Section 4.2, that the applicable conditions
for borrowing are satisfied or (B) for Permitted Overadvances.  If the
conditions for borrowing under Section 4.2 cannot be
fulfilled at the time of a requested Swingline Loan, the Lead Borrower shall
give immediate notice thereof to the Administrative Agent and the Swingline
Lender (a “Noncompliance
Notice”), and the Administrative Agent shall promptly provide each Lender
with a copy of the Noncompliance Notice. If the conditions for borrowing under
Section 4.2 cannot be fulfilled, the Required
Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon
shall, cease making Swingline Loans (other than Permitted Overadvances) until
such conditions can be satisfied or are waived in accordance with
Section 9.2. Unless the Required Lenders so
direct the Swingline Lender, the Swingline Lender may, but is not obligated to,
continue to make Swingline Loans beginning one Business Day after the
Non-Compliance Notice is furnished to the Lenders. Notwithstanding the
foregoing, no Swingline Loans shall be made pursuant to this subsection (b)
(other than Permitted Overadvances) if the aggregate outstanding amount of the
Credit Extensions would exceed the  lower of (i)(x) $380,000,000, or
(y) such greater amount or lesser amount to which the Total Commitments have
then been increased or decreased by the Borrowers pursuant to Sections 2.2 and/or 2.17 hereof, or
(ii) the then amount of the Borrowing Base.

     

    2.7 ­Letters
of Credit and
Acceptances.

     

    (a) Letters of Credit Issued and
Acceptances Created.

     

    (i) Letters of Credit Issued and
Acceptances Created by the Issuing Banks.  Subject to the terms
and conditions of this Agreement, if requested by the Lead Borrower on behalf of
the Borrowers, each Issuing Bank agrees to issue one or more Commercial Letters
of Credit or Standby Letters of Credit and one or more Acceptances, in each case
denominated in Dollars, Canadian Dollars or Euros (it being agreed and
understood that an Acceptance may be rejected for payment by an Issuing Bank as
an Acceptance Lender if it is not in compliance with any underlying application,
agreement, or Letter of Credit relating thereto) for the account of any of the
Borrowers (whether one or more) or in support of an obligation of any Loan Party
or any of the Borrowers’ Subsidiaries which are not Loan Parties, in each case
at any time and from time to time after the date hereof and prior to the
Termination Date.

     

    (ii) Intentionally
Omitted.

     

    (iii) In
General.  No Letter of Credit or Acceptance shall be issued if
after giving effect to such issuance (A) the aggregate Letter of Credit
Outstandings shall exceed $100,000,000, (B) the aggregate Letter of Credit
Outstandings with respect to Standby Letters of Credit shall exceed $50,000,000
or (C) the aggregate Credit Extensions would exceed the limitation set forth in
Section 2.1(a)(i); and provided, further, that no
Letter of Credit or Acceptance shall be issued if (i) any order, judgment or
decree of any Governmental Authority or arbitrator shall by its terms purport to
enjoin or restrain the applicable Issuing Bank or Acceptance Lender from issuing
such Letter of Credit or Acceptance, or any law applicable to such Issuing Bank
or Acceptance Lender or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over such
Issuing Bank or Acceptance Lender shall prohibit, or request that such Issuing
Bank or Acceptance Lender refrain from, the issuance of letters of credit or
acceptances generally or such Letter of Credit or Acceptance in particular or
shall impose upon such Issuing Bank or Acceptance Lender with respect to such
Letter of Credit or Acceptance any restriction, reserve or capital requirement
(for which such Issuing Bank or Acceptance Lender is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Bank or Acceptance Lender any unreimbursed loss, cost or expense (for which such
Issuing Bank or Acceptance Lender is not otherwise compensated hereunder) which
was not applicable on the Closing Date and which such Issuing Bank or Acceptance
Lender in good faith deems material to it, (ii) the issuance of such Letter of
Credit or Acceptance would violate one or more policies of such Issuing Bank or
Acceptance Lender applicable to letters of credit or acceptances generally,
(iii) a default of any Lender’s obligations to fund hereunder exists or any
Lender is at such time a Defaulting Lender hereunder, unless such Issuing Bank
or Acceptance Lender has entered into arrangements satisfactory to such Issuing
Bank or Acceptance Lender with the Borrowers or such Lender to eliminate such
Issuing Bank’s or Acceptance Lender’s risk with respect to such Lender, or (iv)
such Issuing Bank or Acceptance Lender shall have received notice from the
Administrative Agent or the Required Lenders that the conditions to such
issuance have not been met.  Each Issuing Bank and Acceptance Lender
(other than the Lead Issuing Bank or any of its Affiliates) shall notify the
Administrative Agent in writing on each Business Day of all Letters of Credit
and Acceptances issued on the prior Business Day by such Issuing Bank or
Acceptance Lender, provided that (A)
until the Administrative Agent advises any such Issuing Bank or Acceptance
Lender that the provisions of Section 4.02 are not satisfied, or (B) the
aggregate amount of the Letters of Credit and Acceptances issued in any such
week exceeds such amount as shall be agreed by the Administrative Agent and such
Issuing Bank or Acceptance Lender, such Issuing Bank or Acceptance Lender shall
be required to so notify the Administrative Agent in writing only once each week
of the Letters of Credit and Acceptances issued by such Issuing Bank or
Acceptance Lender 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 Administrative Agent and such Issuing Bank or Acceptance
Lender may agree.

     

    (b) Each
Standby Letter of Credit shall expire no later than the close of business on the
earlier of (i) the date one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (ii) the date that is ten (10)
Business Days prior to the Maturity Date, provided that upon
the request of the applicable Borrower and subject to the other requirements of
this Section, the Leading Issuing Bank shall, and each other applicable Issuing
Bank may, in its sole and absolute discretion, agree to issue one or more
Standby Letters of Credit that have automatic extension provisions (each, an
“Auto-Extension Letter
of Credit”); provided that any
such Auto-Extension Letter of Credit must permit such Issuing Bank 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 applicable Issuing Bank, the Lead Borrower shall not be required to make a
specific request to such Issuing Bank 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 applicable Issuing Bank to permit the
extension of such Standby Letter of Credit at any time to an expiry date not
later than the date that is ten (10) Business Days prior to the Maturity Date;
provided, however, that such
Issuing Bank shall not permit any such extension if (A) the applicable Issuing
Bank 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, 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 Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from the
Administrative 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 such Issuing Bank not to permit such
extension.

     

    (c) Each
Commercial Letter of Credit shall expire no later than the close of business on
the earlier of (i) the date 180 days after the date of the issuance of such
Commercial Letter of Credit and (ii) the date that is ten (10) Business
Days prior to the Maturity Date; provided that the
applicable Borrower may request that the applicable Issuing Bank issue a
Commercial Letter of Credit with an expiration date after the Maturity Date,
provided further
that with respect to any such Commercial Letter of Credit, the Borrowers
shall deposit in the Cash Collateral Account an amount in cash equal to 105% of
each such Letter of Credit Outstandings thirty (30) days prior to the Maturity
Date.

     

    (d) Each
Acceptance shall expire no later than the close of business on the earlier of
(i) the date 180 days after the date of the issuance of such Acceptance and
(ii) the date that is five (5) Business Days prior to the Maturity Date;
provided that
the applicable Borrower may request that the applicable Acceptance Lender issue
an Acceptance with an expiration date after the Maturity Date, provided further that
with respect to any such Acceptance, the Borrowers shall deposit in the Cash
Collateral Account an amount in cash equal to 105% of each such Acceptance
Letter of Credit Outstandings thirty (30) days prior to the Maturity
Date.

     

    (e) Drafts
drawn under any Letter of Credit or Acceptance shall be reimbursed by the
Borrowers by paying to the Administrative Agent an amount equal to such drawing
(together with interest as provided in Section 2.7(g)) not later than 1:00 p.m.,
Boston time, on the Business Day immediately following the day that the Lead
Borrower receives notice of such drawing, provided that the
Lead Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.4 that such payment be financed with a
Revolving Loan consisting of a Prime Rate Loan, or a Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrowers’ obligation to
make such payment shall be discharged and replaced by the resulting Prime Rate
Loan or Swingline Loan. The applicable Issuing Bank or Acceptance Lender, as
applicable, shall, promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit or an
Acceptance. The applicable Issuing Bank or Acceptance Lender, as applicable,
shall promptly notify the Administrative Agent and the Lead Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Issuing Bank or Acceptance Lender, as applicable, has made or will make payment
thereunder, provided that any
failure to give or delay in giving such notice shall not relieve the Borrowers
of their obligation to reimburse such Issuing Bank or Acceptance Lender and the
Lenders with respect to any such payment.

     

    (f) If an
Issuing Bank shall make any L/C Disbursement or an Acceptance Lender shall make
any disbursement pursuant to an Acceptance, then, unless the Borrowers shall
reimburse such Issuing Bank or Acceptance Lender, as applicable, in full on the
date such payment is made, the unpaid amount thereof shall bear interest, for
each day from the including the date such payment is made to but excluding the
date that the Borrowers reimburse such Issuing Bank or Acceptance Lender, as
applicable, therefor, at the rate per annum then applicable to Prime Rate Loans,
provided that if the Borrowers fail to reimburse such Issuing Bank or Acceptance
Lender, as applicable, when due pursuant to paragraph (e) of this Section,
then Section 2.11 shall apply. Interest accrued pursuant to this paragraph
shall be for the account of such Issuing Bank or Acceptance Lender, as
applicable, except that interest accrued on and after the date of payment by any
Lender pursuant to paragraph (h) of this
Section to reimburse such Issuing Bank or Acceptance Lender, as applicable,
shall be for the account of such Lender to the extent of such
payment.

     

    (g) Immediately
upon the issuance of any Letter of Credit by an Issuing Bank (or the amendment
of a Letter of Credit increasing the amount thereof) or the issuance of any
Acceptance by an Acceptance Lender (or the amendment of an Acceptance increasing
the amount thereof), and without any further action on the part of such Issuing
Bank or Acceptance Lender, such Issuing Bank or Acceptance Lender, as
applicable, shall be deemed to have sold to each Lender, and each such Lender
shall be deemed unconditionally and irrevocably to have purchased from such
Issuing Bank or Acceptance Lender, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender’s Commitment
Percentage, in such Letter of Credit or Acceptance, each drawing thereunder and
the obligations of the Borrowers under this Agreement and the other Loan
Documents with respect thereto. Upon any change in the Commitments pursuant to
Section 2.2, 2.17, and/or 9.5, it is hereby agreed that with respect to all
Letter of Credit Outstandings, there shall be an automatic adjustment to the
participations hereby created to reflect the new Commitment Percentages of the
assigning and assignee Lenders and any Additional Commitment
Lender.   Any action taken or omitted by such Issuing Bank or
Acceptance Lender under or in connection with a Letter of Credit or Acceptance,
if taken or omitted in the absence of gross negligence, bad faith or willful
misconduct, shall not create for such Issuing Bank or Acceptance Lender, as
applicable, any resulting liability to any Lender.

     

    (h) In the
event that an Issuing Bank makes any L/C Disbursement or an Acceptance Lender
makes any disbursement pursuant to an Acceptance, and the Borrowers shall not
have reimbursed such amount in full to such Issuing Bank or Acceptance Lender,
as applicable, pursuant to Section 2.7(e), such Issuing Bank or Acceptance
Lender, as applicable, shall promptly notify the Administrative Agent, which
shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Administrative Agent for the account of
such Issuing Bank or Acceptance Lender, as applicable, the amount of such
Lender’s Commitment Percentage of such unreimbursed payment and in same day
funds. If such Issuing Bank or Acceptance Lender, as applicable, so notifies the
Administrative Agent, and the Administrative Agent so notifies the Lenders prior
to 12:00 noon, Boston time, on any Business Day, each such Lender shall make
available to such Issuing Bank or Acceptance Lender, as applicable, such
Lender’s Commitment Percentage of the amount of such payment on such Business
Day in same day funds (or if such notice is received by the Lenders after 12:00
noon., Boston time on the day of receipt, payment shall be made on the
immediately following Business Day).  If and to the extent such Lender
shall not have so made its Commitment Percentage of the amount of such payment
available to such Issuing Bank or Acceptance Lender, as applicable, such Lender
agrees to pay to such Issuing Bank or Acceptance Lender, as applicable,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Administrative Agent
for the account of such Issuing Bank or Acceptance Lender, as applicable, at the
Federal Funds Effective Rate. Each Lender agrees to fund its Commitment
Percentage of such unreimbursed payment notwithstanding a failure to satisfy any
applicable lending conditions or the provisions of Sections 2.1 or 2.7, or the
occurrence of the Termination Date. The failure of any Lender to make available
to such Issuing Bank or Acceptance Lender, as applicable, its Commitment
Percentage of any payment under any Letter of Credit or Acceptance shall neither
relieve any Lender of its obligation hereunder to make available to such Issuing
Bank or Acceptance Lender, as applicable, its Commitment Percentage of any
payment under any Letter of Credit or Acceptance on the date required, as
specified above, nor increase the obligation of such other Lender. Whenever any
Lender has made payments to an applicable Issuing Bank or Acceptance Lender, as
applicable, in respect of any reimbursement obligation for any Letter of Credit
or Acceptance, such Lender shall be entitled to share ratably, based on its
Commitment Percentage, in all payments and collections thereafter received on
account of such reimbursement obligation.

     

    (i) Whenever
the Borrowers desire that an Issuing Bank issue a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit) or that an
Acceptance Lender issue an Acceptance (or the amendment, renewal or extension of
an outstanding Acceptance), the Lead Borrower shall give to such Issuing Bank or
Acceptance Lender, as applicable, and the Administrative Agent at least three
(3) Business Days’ prior written (including telegraphic, telex, facsimile or
cable communication) notice (or such shorter period as may be agreed upon in
writing by such Issuing Bank or Acceptance Lender, as applicable and Lead
Borrower) specifying the date on which the proposed Letter of Credit or
Acceptance is to be issued, amended, renewed or extended (which shall be a
Business Day), the stated amount of the Letter of Credit or Acceptance so
requested, the expiration date of such Letter of Credit or Acceptance, the name
and address of the beneficiary thereof, and the provisions thereof. If requested
by such Issuing Bank or Acceptance Lender, as applicable, the Borrowers shall
also submit a letter of credit application on such Issuing Bank’s or Acceptance
Lender’s, as applicable, standard form in connection with any request for the
issuance, amendment, renewal or extension of a Letter of Credit or
Acceptance.

     

    (j) The
obligations of the Borrowers to reimburse the applicable Issuing Bank for any
L/C Disbursement and the applicable Acceptance Lender for any disbursement
pursuant to an Acceptance shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation: (i) any lack of validity or
enforceability of any Letter of Credit or Acceptance; (ii) the existence of any
claim, setoff, defense or other right which the Borrowers may have at any time
against a beneficiary of any Letter of Credit or Acceptance or against such
Issuing Bank or Acceptance Lender, as applicable, or any of the Lenders, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction; (iii) any draft, demand, certificate or other document
presented under any Letter of Credit or Acceptance proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; (iv) payment by such Issuing Bank or
Acceptance Lender, as applicable, of any Letter of Credit or Acceptance against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit or Acceptance; (v) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrowers’ obligations hereunder; or (vi) the fact that any Event of Default
shall have occurred and be continuing. None of the Administra­tive Agent,
the Lenders, the Issuing Banks, the Acceptance Lenders or any of their
Affiliates shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or Acceptance
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or 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
Acceptance (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank or Acceptance Lender,
provided that
the foregoing shall not be construed to excuse such Issuing Bank or Acceptance
Lender, as applicable, from liability to the Borrowers to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrowers to the extent permitted by Applicable Law)
suffered by the Borrowers that are caused by such Issuing Bank’s or Acceptance
Lender’s, as applicable, failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit or Acceptance
comply with the terms thereof. The parties hereto expressly agree that, in the
absence of gross negligence, bad faith or willful misconduct on the part of any
Issuing Bank or Acceptance Lender, as applicable (as finally determined by a
court of competent jurisdiction), such Issuing Bank or Acceptance Lender, as
applicable, shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in compliance with the terms of a Letter of Credit or Acceptance, the
applicable Issuing Bank or Acceptance Lender, as applicable, may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or 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 or Acceptance.

     

    (k) If any
Event of Default shall occur and be continuing, on the Business Day that the
Lead Borrower receives notice from the Administra­tive Agent or the Required
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrowers shall deposit in the Cash Collateral Account an amount in cash equal
to 105% of the Letter of Credit Outstandings as of such date plus any accrued
and unpaid interest thereon. Each such deposit shall be held by the Collateral
Agent as collateral for the payment and performance of the Obligations of the
Borrowers under this Agreement. The Collateral Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
Cash Collateral Account. Other than any interest earned on the investment of
such deposits, which investments shall be made at the option and sole discretion
of the Collateral Agent at the request of the Lead Borrower and at the
Borrowers’ risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such Cash Collateral Account shall be applied by the Collateral Agent to
reimburse the applicable Issuing Bank for payments on account of drawings under
Letters of Credit for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the Letter of Credit Outstandings at such time or, if the
Loans have matured or the maturity of the Loans has been accelerated, be applied
to satisfy other Obligations of the Borrowers under this Agreement.

     

    (l) The
Borrowers, the Administrative Agent and the Lenders agree that the Existing
Letters of Credit shall be deemed Letters of Credit hereunder as if issued by an
Issuing Bank, and the Existing Acceptances shall be deemed Acceptances hereunder
as if issued by an Acceptance Lender.

     

    (m) For
purposes of calculating the outstanding Credit Extensions, the Administrative
Agent shall, monthly or more frequently in the Administrative Agent’s sole
discretion, make the necessary exchange rate calculations for any Letters of
Credit denominated in currency other than Dollars, to determine whether any such
excess exists on such date.

     

    (n) All
reimbursements to be made by the Loan Parties with respect to Letters of Credit
shall be made in Dollars or in such other currency as the Letter of Credit is
denominated.  All participations in Letters of Credit by the Lenders
shall be made in such currency as the Letter of Credit is denominated or in the
Dollar Equivalent thereof.

     

    2.8 ­Settlements
Amongst Lenders.   (a)           The
Swingline Lender may, at any time, and shall, not less frequently than weekly,
on behalf of the Borrowers (which hereby authorize the Swingline Lender to act
in their behalf in that regard) request the Administrative Agent to cause the
Lenders to make a Revolving Loan (which shall be a Prime Rate Loan) in an amount
equal to such Lender’s Commitment Percentage of the outstanding amount of
Swingline Loans made in accordance with Section 2.6, which request may be made
regardless of whether the conditions set forth in Section 4 have been satisfied.
Upon such request, each Lender shall make available to the Administrative Agent
the proceeds of such Revolving Loan for the account of the Swingline Lender. If
the Swingline Lender requires a Revolving Loan to be made by the Lenders and the
request therefor is received at or prior to 1:00 p.m., Boston time, on a
Business Day, such transfers shall be made in immediately available funds no
later than 3:00 p.m., Boston time, that day; and, if the request therefor is
received after 1:00 p.m., Boston time, then no later than 3:00 p.m., Boston
time, 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
Administrative Agent or the Swingline Lender. If and to the extent any Lender
shall not have so made its transfer to the Administrative Agent, such Lender
agrees to pay to the Administrative 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 Administrative Agent at the Federal Funds Effective
Rate.

     

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

     

    (c) The
Administrative Agent shall deliver to each of the Lenders promptly after the
Settlement Date a summary statement of the amount of outstanding Revolving Loans
and Swingline Loans for the period and the amount of repayments received for the
period. As reflected on the summary statement: each Lender shall transfer to the
Administrative Agent (as provided below), or the Administrative Agent shall
transfer to each Lender, such amounts as are necessary to insure that, after
giving effect to all such transfers, the amount of Revolving Loans made by each
Lender shall be equal to such Lender’s applicable Commitment Percentage of
Revolving Loans outstanding as of such Settlement Date. If the summary statement
requires transfers to be made to the Administrative Agent by the Lenders and is
received at or prior to 1:00 p.m., Boston time, on a Business Day, such
transfers shall be made in immediately available funds no later than 3:00 p.m.,
Boston time, that day; and, if received after 1:00 p.m., Boston time, then no
later than 3:00 p.m., Boston time, 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 Administrative Agent. If and to the extent any
Lender shall not have so made its transfer to the Administrative Agent, such
Lender agrees to pay to the Administrative 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 Administrative Agent at the Federal Funds
Effective Rate.

     

    2.9 ­Notes;
Repayment of Loans.   To
the extent requested by a Lender, the Loans made by such Lender shall be
evidenced by a Note duly executed on behalf of the Borrowers, dated the Closing
Date, in substantially the form attached hereto as Exhibit B, payable to
the order of such Lender in an aggregate principal amount equal to such Lender’s
Commitment.

     

    (b) Each
Lender is hereby authorized by the Borrower to endorse on a schedule attached to
each Note delivered to such Lender (or on a continuation of such schedule
attached to such Note and made a part thereof), or otherwise to 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, each payment of interest on any such Loan and the other
information provided for on such schedule; provided, however, that the
failure of any Lender to make such a notation or any error therein shall not
affect the obligation of the Borrowers to repay the Loans made by such Lender in
accordance with the terms of this Agreement and the applicable
Notes.

     

    (c) Upon
receipt of an affidavit of a Lender as to the loss, theft, destruction or
mutilation of such Lender’s Note and an indemnity in form and substance
reasonably satisfactory to the Lead Borrower, 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.

     

    2.10 ­Interest
on Loans.      (a)      Subject
to Section 2.11, each Prime Rate Loan shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as
applicable) at a rate per annum that shall be equal to the then Prime Rate,
plus the
Applicable Margin for Prime Rate Loans.

     

    (b) Subject
to Section 2.11, each LIBO Loan shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as applicable)
at a rate per annum equal, during each Interest Period applicable thereto, to
the Adjusted LIBO Rate for such Interest Period, plus the Applicable
Margin for LIBO Loans.

     

    (c) Accrued
interest on all Loans shall be payable in arrears on each Interest Payment Date
applicable thereto, on the Termination Date, after the Termination Date on
demand and (with respect to LIBO Loans) upon any repayment or prepayment thereof
(on the amount prepaid).

     

    2.11 ­Default
Interest.  Effective
upon the occurrence of any Event of Default and at all times thereafter while
such Event of Default is continuing, at the option of the Administrative Agent
or upon the direction of the Required Lenders, interest shall accrue on all
outstanding Loans (including Swingline Loans) (after as well as before judgment,
as and to the extent permitted by law) at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
applicable) equal to the rate (including the Applicable Margin for Loans) in
effect from time to time plus 2.00% per annum,
and such interest shall be payable on demand.

     

    2.12 ­Certain
Fees.  The
Borrowers shall pay to the Administrative Agent, for the account of the
Administrative Agent, the fees set forth in the Fee Letter as and when payment
of such fees is due as therein set forth.

     

    2.13 Commitment
Fee.  The
Borrowers shall pay to the Administrative Agent for the account of the Lenders,
a commitment fee (the “Commitment Fee”)
equal to the Applicable Commitment Fee Percentage (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as applicable),
multiplied by the average daily balance of the Unused Commitment for each day
commencing on and including the Closing Date and ending on but excluding the
Termination Date.

     

    The
Commitment Fee so accrued in any calendar quarter shall be payable on or prior
to the fifteenth day of each January, April, July, and October, in arrears,
commencing April 15, 2009, except that all Commitment Fees so accrued as of the
Termination Date shall be payable on the Termination Date.  The
Administrative Agent shall pay the Commitment Fee to the Lenders based upon
their Commitment Percentages.

     

    2.14 ­Letter of Credit
Fees .  (a)           The
Borrowers shall pay the Administrative Agent, for the account of the Lenders in
accordance with their respective Commitment Percentages, on the fifteenth day of
each January, April, July and October, in arrears, a fee (each, a “Letter of Credit
Fee”) equal to the following per annum percentages multiplied by the face
amount of each of the following categories of Letters of Credit outstanding
during the subject quarter:

     

    (i) Each
Standby Letter of Credit:  At the then Applicable Margin per annum for
LIBO Loans.

     

    (ii) Each
Commercial Letter of Credit:  At the then Applicable Commercial Letter
of Credit Fee.

     

    (iii) After the
occurrence and during the continuance of an Event of Default, at the option of
the Administrative Agent or upon the direction of the Required Lenders, the
Letter of Credit Fees set forth in clauses (i) and (ii) above, shall be
increased by an amount equal to two percent (2%) per annum.

     

    (b) The
Borrowers shall pay to the applicable Issuing Bank for its own account a
fronting fee (the “Fronting Fee”) with respect to each Letter of Credit issued
by it, at a rate equal to 0.125% per cent per annum, computed on the amount of
such Letter of Credit, and payable on the fifteenth day of each January, April,
July and October, in arrears.  In addition, the Borrowers shall pay to
the applicable Issuing Bank, in addition to the Letter of Credit Fees otherwise
provided for hereunder, fees and charges in connection with the issuance,
negotiation, settlement, amendment and processing of each Letter of Credit
issued by such Issuing Bank in the amounts as such Issuing Bank and the Lead
Borrower may agree.

     

    (c) All
Letter of Credit Fees shall be computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as applicable.

     

    2.15 Acceptance
Fee.  Subject
to Section 9.14, the Borrowers agree to pay to the Administrative Agent, for the
account of the Lenders, in accordance with their respective Commitment
Percentages, for each Acceptance, a fee (the “Acceptance Fee”)
equal to the Acceptance Fee Percentage, multiplied by the face amount of each
Acceptance, plus all reasonable
out-of-pocket costs, fees, and expenses incurred by the applicable Acceptance
Lender in connection with the application for, processing of, issuance of, or
amendment to any Acceptance.  The Acceptance Fee shall be payable in
arrears on the fifteenth day of each January, April, July, and October and on
the Termination Date for any three (3) month period, or shorter period if
calculated for the period beginning on the Closing Date or for such period
ending on the Termination Date, in which an Acceptance was issued and/or in
which an Acceptance remained outstanding.  After the occurrence and
during the continuance of an Event of Default, at the option of the
Administrative Agent or upon the direction of the Required Lenders, the
Acceptance Fee shall be increased by an amount equal to two percent (2%) per
annum.  Subject to Section 9.14, the Acceptance Fee shall be computed
on the basis of the actual number of days elapsed over a year of 365 or 366
days, as applicable.  In addition, the Borrowers shall pay to the
Acceptance Lender for its own account a fronting fee with respect to each
Acceptance, at a rate equal to 0.125% per cent per annum, computed on the amount
of such Acceptance, computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as applicable, and payable on the fifteenth day
of each January, April, July and October, in arrears.

     

    2.16 ­Nature of
Fees.  All
fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent, for the respective accounts of the Administrative Agent,
the Issuing Banks, the Acceptance Lenders and the Lenders, as provided herein.
All fees shall be fully earned on the date when due and shall not be refundable
under any circumstances.

     

    2.17 ­Termination or Reduction of Commitments.  Upon
at least ten (10) Business Days’ prior written notice to the Administrative
Agent, the Lead Borrower may at any time in whole permanently terminate the
Total Commitments. In addition, upon at least five (5) Business Days’ prior
written notice to the Administrative Agent, the Lead Borrower may at any time in
part permanently reduce the Total Commitments. Each such reduction shall be in
the principal amount of $5,000,000 or any multiple of $5,000,000; provided that the
Borrowers shall not terminate or reduce (A) the Total Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Credit
Extensions outstanding would exceed the Total Commitments, (B) the sublimit for
Letters of Credit set forth in Section 2.1(a)(ii) if, after giving effect
thereto, the Letter of Credit Oustandings not fully cash collateralized
hereunder would exceed such sublimit, and (C) the sublimit for Swingline Loans
set forth in Section 2.6(a) hereof if, after giving effect thereto, and to any
concurrent payments hereunder, the outstanding amount of Swingline Loans
hereunder would exceed such sublimit. If, after giving effect to any reduction
of the Total Commitments, the sublimit for Letters of Credit set forth in
Section 2.1(a)(ii) hereof or the sublimit for Swingline Loans set forth in
Section 2.6(a) hereof exceeds the amount of the Total Commitments, such
sublimits shall be automatically reduced by the amount of such
excess.  Each such reduction or termination shall (i) be applied
ratably to the Commitment of each Lender and (ii) be irrevocable when given. At
the effective time of each such reduction or termination, the Borrowers shall
pay to the Administrative Agent for application as provided herein (i) all
Commitment Fees accrued on the amount of the Total Commitments so terminated or
reduced through the date thereof, (ii) any amount by which the Credit Extensions
outstanding on such date exceed the amount to which the Total Commitments are to
be reduced effective on such date, in each case pro rata based on the
amount prepaid, and (iii) any Breakage Costs, if applicable.

     

    2.18 ­Alternate
Rate of Interest.  If
prior to the commence­ment of any Interest Period for a LIBO
Borrowing:

     

    (a) the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate for such Interest Period; or

     

    (b) the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate for such Interest Period will not adequately and fairly reflect the cost to
such Lenders of making or maintaining their Loans included in such Borrowing for
such Interest Period;

     

    then the
Administrative Agent shall give notice thereof to the Lead Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter (but in
any event, within two (2) Business Days) and, until the Administrative Agent
notifies the Lead Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Borrowing Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a LIBO
Borrowing shall be ineffective and (ii) if any Borrowing Request requests a
LIBO Borrowing, such Borrowing shall be made as a Borrowing of Prime Rate
Loans.

     

    2.19 ­Conversion and
Continuation of Loans.  The
Lead Borrower on behalf of the Borrowers shall have the right at any
time,

     

    (a) on three
(3) Business Days’ prior irrevocable notice to the Administrative Agent (which
notice, to be effective, must be received by the Administrative Agent not later
than 12:00 noon, Boston time, on the third Business Day preceding the date of
any conversion), (x) to convert any outstanding Borrowings of  Prime
Rate Loans (but in no event Swingline Loans) to Borrowings of LIBO Loans, or (y)
to continue an outstanding Borrowing of LIBO Loans for an additional Interest
Period,

     

    (b) on one
Business Day’s irrevocable notice to the Administrative Agent (which notice, to
be effective, must be received by the Administrative Agent not later than 12:00
noon, Boston time, on the date of any conversion), to convert any outstanding
Borrowings of LIBO Loans to a Borrowing of  Prime Rate
Loans,

     

    subject
to the following:

     

    (i) without
the consent of the Required Lenders, no Borrowing of Loans may be converted
into, or continued as, LIBO Loans at any time when an Event of Default has
occurred and is continuing;

     

    (ii) if less
than a full Borrowing of Loans is converted, such conversion shall be made pro rata among the
Lenders, as applicable, in accordance with the respective principal amounts of
the Loans comprising such Borrowing held by such Lenders immediately prior to
such conversion;

     

    (iii) the
aggregate principal amount of Loans being converted into or continued as LIBO
Loans shall be in an integral of $1,000,000 and at least
$5,000,000;

     

    (iv) each
Lender shall effect each conversion by applying the proceeds of its new LIBO
Loan or Prime Rate Loan, as the case may be, to its Loan being so
converted;

     

    (v) the
Interest Period with respect to a Borrowing of LIBO Loans effected by a
conversion or in respect to the Borrowing of LIBO Loans being continued as LIBO
Loans shall commence on the date of conversion or the expiration of the current
Interest Period applicable to such continued Borrowing, as the case may
be;

     

    (vi) a
Borrowing of LIBO Loans may be converted only on the last day of an Interest
Period applicable thereto;

     

    (vii) each
request for a conversion or continuation of a Borrowing of LIBO Loans which
fails to state an applicable Interest Period shall be deemed to be a request for
an Interest Period of one month; and

     

    (viii) no more
than fifteen (15) Borrowings of LIBO Loans may be outstanding at any
time.

     

    If the
Lead Borrower does not give notice to convert any Borrowing of Prime Rate Loans,
or does not give notice to continue, or does not have the right to continue, any
Borrowing as LIBO Loans, in each case as provided above, such Borrowing shall
automatically be converted to, or continued as, as applicable, a Borrowing of
Prime Rate Loans at the expiration of the then current Interest Period. The
Administrative Agent shall, after it receives notice from the Borrower, promptly
give each Lender notice of any conversion, in whole or part, of any Loan made by
such Lender.

     

    2.20 ­Mandatory
Prepayment; Cash Collateral; Commitment
Termination.  The
outstanding Obligations shall be subject to mandatory prepayment as
follows:

     

    (a) If at any
time the amount of the Credit Extensions exceeds the lower of (i) the then
amount of the Total Commitments, and (ii) the then amount of the Borrowing Base,
the Borrowers will immediately upon notice from the Administrative Agent (which
may be given by the Administrative Agent in its discretion and shall be given by
the Administrative Agent upon the request of the Required Lenders) (A) prepay
the Loans in an amount necessary to eliminate such excess, and (B) if, after
giving effect to the prepayment in full of all outstanding Loans such excess has
not been eliminated, deposit cash into the Cash Collateral Account in an amount
equal to 105% of the Letter of Credit Outstandings.  Without in any
way limiting the foregoing, the Administrative Agent shall, weekly or more
frequently in the Administrative Agent’s Permitted Discretion, make the
necessary exchange rate calculations with respect to Letters of Credit
denominated in a currency other than Dollars, to determine whether any excess
exists on such date.

     

    (b) To the
extent required pursuant to Section 2.23, the
Revolving Loans shall be repaid daily in accordance with the provisions of said
Section 2.23.

     

    (c) Subject
to the foregoing, outstanding Prime Rate Loans shall be prepaid before
outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall
be in an integral multiple of $1,000,000. No prepayment of LIBO Loans shall be
permitted pursuant to this Section 2.20 other than
on the last day of an Interest Period applicable thereto, unless the Borrowers
reimburse the Lenders for all Breakage Costs associated therewith in accordance
with Section 2.21(b) below. In order to avoid such Breakage Costs, as long as no
Event of Default has occurred and is continuing, the Administrative Agent shall
hold all amounts required to be applied to LIBO Loans in the Cash Collateral
Account and will apply such funds to the applicable LIBO Loans at the end of the
then pending Interest Period therefor and such LIBO Loans shall continue to bear
interest at the rate set forth in Section 2.10 until
the amounts in the Cash Collateral Account have been so applied (provided that
the foregoing shall in no way limit or restrict the Agents’ rights upon the
subsequent occurrence of an Event of Default). No partial prepayment of a
Borrowing of LIBO Loans shall result in the aggregate principal amount of the
LIBO Loans remaining outstanding pursuant to such Borrowing being less than
$5,000,000 (unless all such outstanding LIBO Loans are being prepaid in full).
Any prepayment of the Revolving Loans shall not permanently reduce the
Commitments.

     

    (d) All
amounts required to be applied to all Loans hereunder (other than Swingline
Loans) shall be applied ratably in accordance with each Lender’s Commitment
Percentage.

     

    (e) Upon the
Termination Date, the Commitments and the credit facility provided hereunder
shall be terminated in full and the Borrowers shall pay, in full and in cash,
all outstanding Loans and all other outstanding Obligations then due, and shall
fully cash collateralize or replace all Letters of Credit and Acceptances and
reimburse all L/C Disbursements and shall provide collateral security to the
extent required by Section 9.6 hereof.

     

    2.21 ­Optional
Prepayment of Loans; Reimbursement of Lenders.  (a)           The
Borrowers shall have the right at any time and from time to time to prepay
outstanding Loans in whole or in part, (x) with respect to LIBO Loans, upon at
least two Business Days’ prior written, telex or facsimile notice to the
Administrative Agent prior to 12:00 noon, Boston time, and (y) with respect to
Prime Rate Loans, upon written, telex or facsimile notice to the Administrative
Agent prior to 12:00 noon, Boston time, on the date of prepayment, subject to
the following limitations:

     

    (i) All
prepayments under Section 2.20 and this Section 2.21
shall be paid to the Administrative Agent for application, first, to the
prepayment of outstanding Swingline Loans, second, to the
prepayment of other outstanding Loans ratably in accordance with each Lender’s
Commitment Percentage, and third, to the funding
of a cash collateral deposit in the Cash Collateral Account in an amount equal
to 105% of all Letter of Credit Outstandings to the extent required by this
Agreement.

     

    (ii) Subject
to the foregoing, outstanding Prime Rate Loans shall be prepaid before
outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall
be in an integral multiple of $1,000,000. No prepayment of LIBO Loans shall be
permitted pursuant to this Section 2.21 other than
on the last day of an Interest Period applicable thereto, unless the Borrowers
reimburse the Lenders for all Breakage Costs associated therewith in accordance
with Section 2.21(b) below. No partial prepayment of a Borrowing of LIBO Loans
shall result in the aggregate principal amount of the LIBO Loans remaining
outstanding pursuant to such Borrowing being less than $5,000,000 (unless all
such outstanding LIBO Loans are being prepaid in full).

     

    (iii) Each
notice of prepayment shall specify the prepayment date, the principal amount and
Type of the Loans to be prepaid and, in the case of LIBO Loans, the Borrowing or
Borrowings pursuant to which such Loans were made. Each notice of prepayment
shall be irrevocable and shall commit the Borrowers to prepay such Loan by the
amount and on the date stated therein. The Administrative Agent shall, promptly
after receiving notice from the Lead Borrower hereunder, notify each Lender of
the principal amount and Type of the Loans held by such Lender which are to be
prepaid, the prepayment date and the manner of application of the
prepayment.

     

    (b) The
Borrowers shall reimburse each Lender for any loss incurred or to be incurred by
it in the reemployment of the funds released resulting from (i) any prepayment
(for any reason whatsoever, including, without limitation, conversion to Prime
Rate Loans or acceleration by virtue of, and after, the occurrence of an Event
of Default) of any LIBO Loan required or permitted under this Agreement, if such
Loan is prepaid other than on the last day of the Interest Period for such Loan,
(ii) the failure of a Borrower to borrow a LIBO Loan for any reason on the first
day of the applicable Interest Period after the Lead Borrower delivers a notice
of borrowing under Section 2.4 in respect thereof,
or (iii) the failure of the Borrowers to prepay any Loan on the date specified
in any prepayment notice delivered pursuant to Section 2.21(a). Such loss shall
be the amount as reasonably determined by such Lender as the excess, if any, of
(A) the amount of interest which would have accrued to such Lender on the amount
so paid or not borrowed at a rate of interest equal to the Adjusted LIBO
Rate  for such Loan, for the period from the date of such payment or
failure to borrow to the last day (x) in the case of a payment or refinancing of
a LIBO Loan other than on the last day of the Interest Period for such Loan, of
the then current Interest Period for such Loan or (y) in the case of such
failure to borrow, of the Interest Period for such LIBO Loan which would have
commenced on the date of such failure to borrow, over (B) the amount of interest
which would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the London interbank
market (collectively, “Breakage Costs”). Any
Lender demanding reimbursement for such loss shall deliver to the Lead Borrower
from time to time one or more certificates setting forth the amount of such loss
as determined by such Lender and setting forth in reasonable detail the manner
in which such amount was determined.  A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be presumptively correct absent manifest error.
The Borrowers shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt of such certificate; provided, however,
that if any Breakage Costs are incurred as a result of repayment of Loans on the
Maturity Date or the refinancing of this credit facility and so long as the
amount of such Breakage Costs is included as part of the payoff amount set forth
in the relevant payoff letter and the relevant Lender has delivered the
certificate required hereby, payment of such Breakage Costs shall be made on the
date of such termination or the Maturity Date, as applicable.

     

    (c) Intentionally
Omitted.

     

    (d) Whenever
any partial prepayment of Loans are to be applied to LIBO Loans, such LIBO Loans
shall be prepaid in the chronological order of their Interest Payment
Dates.

     

    2.22 ­Maintenance of Loan
Account; Statements of Account .
(a)           The
Administrative Agent shall maintain an account on its books in the name of the
Borrowers (the “Loan
Account”) which will reflect (i) all Loans and other advances made by the
Lenders to the Borrowers or for the Borrowers’ account, (ii) all L/C
Disbursements, fees and interest that have become payable as herein set forth,
and (iii) any and all other monetary Obligations that have become
payable.

     

    (b) The Loan
Account will be credited with all amounts received by the Administrative Agent
from the Borrowers or otherwise for the Borrowers’ account, including all
amounts received in the Concentration Account from the Blocked Account Banks,
and the amounts so credited shall be applied as set forth in Section 2.24(a).

     

    (c) After the
end of each month, (i) each Lender shall furnish a written statement to the
Administrative Agent and the Lead Borrower setting forth the amount of
obligations due to such Lender or its Affiliate (other than customary fees and
expenses charged in the ordinary course) on account of Bank Products and Cash
Management Services as of such month end, and (ii) the Administrative Agent
shall send to the Lead Borrower a statement accounting for the charges, loans,
advances and other transactions occurring among and between the Administrative
Agent, the Lenders and the Borrowers during that month (other than on account of
Bank Products and Cash Management Services). The monthly statements shall,
absent manifest error, be an account stated, which is presumptively correct
unless the Lead Borrower provides the Administrative Agent with a written
objection to any such statement within twenty (20) days of receipt of such
statement, which written objection shall state with particularity the reason for
such objection.

     

    2.23 ­Cash
Receipts.  (a)           The
Collateral Agent shall maintain account number 5045183372 at Bank of America (the
“Concentration
Account”).  Subject to the rights of the Loan Parties set forth
below during any period during which no Cash Dominion Event has occurred and is
continuing, the Concentration Account is and shall remain, under the sole
dominion and control of the Collateral Agent.  The Loan Parties may
maintain one or more disbursement accounts (the “Disbursement
Accounts”) to be used by the Loan Parties for disbursements and payments
(including payroll) in the ordinary course of business or as otherwise permitted
hereunder.

     

    (b) All cash
receipts and other proceeds from the sale or disposition of any Collateral
relating to the Loan Parties’ operations in the United States of America or
Canada, as applicable, including, without limitation, the proceeds of all credit
card charges (all such cash receipts and proceeds, “Cash Receipts”) shall
be deposited into one or more DDAs established for the account of the applicable
Loan Party in the United States of America or Canada, as
applicable.  Notwithstanding the foregoing, Cash Receipts from the
Loan Parties’ wholesale operations in the United States of America or Canada, as
applicable (whether received in a lockbox or otherwise) shall, promptly on
receipt, be deposited directly in or transferred by ACH or wire transfer to the
Concentration Account or a Blocked Account.

     

    (c) So long
as no Cash Dominion Event has occurred and is continuing:

     

    (i) the Loan
Parties may direct, and shall have sole control over, the manner of disposition
of its funds in the DDA Accounts, the Blocked Accounts, the Concentration
Account and each Disbursement Account and may close or change the services
provided in respect of DDA Accounts, Blocked Accounts and Disbursement Accounts,
provided that
in the case of a closure of a Blocked Account, the funds on deposit therein
shall be transferred to another Blocked Account or the Concentration Account;
and

     

    (ii) the Loan
Parties shall cause the ACH or wire transfer of all available and collected Cash
Receipts in each such DDA to a Blocked Account or the Concentration Account not
less frequently than each Business Day (or with respect to the Loan Parties
situated in Canada, not less frequently than twice each week), provided that (A)
to the extent that on any Business Day technical problems prevent any such ACH
or wire, such funds shall be transferred on the next following Business Day on
which technical problems do not prevent such transfer and (B) notwithstanding
the foregoing, the Loan Parties need not cause the ACH or wire transfer from a
DDA to a Blocked Account or the Concentration Account such reasonable amount
(based upon prior business practices of the Borrowers but in no event to exceed
$50,000.00 (or such higher amount as the Administrative Agent in its Permitted
Discretion determines) for any single DDA or $250,000.00 (or such higher amount
as the Administrative Agent in its Permitted Discretion determines) in the
aggregate for all DDAs as is necessary or appropriate to cover dishonored
checks, credit card chargebacks, bank fees and similar charges, in each case in
the ordinary course of business.

     

    (d) After the
occurrence and during the continuation of a Cash Dominion Event:

     

    (i) at the
request of Administrative Agent, the Loan Parties shall deliver to the
Administrative Agent (A) a list of all present DDAs maintained by the Loan
Parties, which list includes, with respect to each depository (1) the name and
address of that depository; (2) the account number(s) maintained with such
depository; and (3) to the extent known, a contact person at such depository
(the “DDA List”), and (B) deliver to the Administrative Agent notifications (the
“Credit Card
Notifications”) substantially in the form of Exhibit G hereto (or such
other form as may be reasonably satisfactory to the Administrative Agent)
executed on behalf of the Loan Parties with each of the Loan Parties’ major
credit card processors;

     

    (ii) (x) no
Borrower shall have any access to or right of withdrawal from the Concentration
Account, (y) upon notice to a Blocked Account Bank, no Borrower shall have any
access to or right of withdrawal from the Blocked Accounts maintained with such
Blocked Account Bank, and (z) the funds on deposit in the Concentration
Account shall continue to be collateral security for all of the Obligations and
shall be applied as provided in Section 2.24;

     

    (iii) upon the
Administrative Agent’s instruction, the Loan Parties shall cause the ACH or wire
transfer to any Blocked Account or the Concentration Account (whether or not
there is then an outstanding balance in the Loan Account, unless the Commitments
have been terminated hereunder and the Obligations have been paid in full) of
all available and collected Cash Receipts in each such DDA, provided that (i) the
Administrative Agent shall not require more than one such transfer each day,
(ii) to the extent that on any Business Day technical problems prevent any such
ACH or wire, such funds shall be transferred on the next following Business Day
on which technical problems do not prevent such transfer and (iii)
notwithstanding the foregoing, (x) the Loan Parties need not cause the ACH or
wire transfer from a DDA to a Blocked Account or the Concentration Account such
reasonable amount (based upon prior business practices of the Borrowers but in
no event to exceed $150,000.00 in the aggregate or such higher amount as the
Administrative Agent in its Permitted Discretion determines) as is necessary or
appropriate to cover dishonored checks, credit card chargebacks, bank fees and
similar charges, in each case in the ordinary course of business; and (y) so
long as the Obligations have not been accelerated, the Loan Parties shall not be
required to transfer or cause the transfer of any funds on deposit in any
Canadian Blocked Account to any United States Blocked Account or the
Concentration Account; and

     

    (iv) in the
event that, notwithstanding the provisions of this Section 2.23, the Loan
Parties receive or otherwise have dominion and control of any such proceeds or
collections, such proceeds and collections shall be held in trust by the Loan
Parties for the Administrative Agent and shall not be commingled with any of the
Loan Parties’ other funds or deposited in any account of any Loan Party other
than as instructed by the Administrative Agent.

     

    2.24 ­Application of Payments.  (a) Upon
either (i) the occurrence of a Cash Dominion Event or (ii) the occurrence of an
Event of Default and acceleration of the time for payment of the Obligations,
all amounts received in the Concentration Account from any source, including the
Blocked Account Banks, and other amounts received by the Administrative Agent,
including, without limitation, all payments by the Borrowers and any proceeds
realized from any Loan Party or on account of any Collateral shall be applied,
on the day of receipt, in the following order: first, to pay fees
and expense reimbursements and indemnification then due and payable to the
Administrative Agent, the Issuing Banks, the Acceptance Lenders and the
Collateral Agent (other than those relating solely to Bank Products and Cash
Management Services); second, to pay
interest then due and payable on Credit Extensions; third, to repay
outstanding Swingline Loans; fourth, to repay
other outstanding Revolving Loans that are Prime Rate Loans and all outstanding
reimbursement obligations under Letters of Credit and Acceptances; fifth, to repay
outstanding Revolving Loans that are LIBO Loans and all Breakage Costs due in
respect of such repayment pursuant to Section 2.21(b) or, at the Lead Borrower’s
option, to fund a cash collateral deposit to the Cash Collateral Account
sufficient to pay, and with direction to pay, all such outstanding LIBO Loans on
the last day of the then-pending Interest Period therefor; sixth, if an Event of
Default then exists and is continuing, to fund a cash collateral deposit in the
Cash Collateral Account in an amount equal to 105% of all Letter of Credit
Outstandings; seventh, to pay all
Obligations then due arising out of any Cash Management Services provided by any
Lender or its Affiliate, and, in the event that the Obligations have been
accelerated, to provide collateral security to the extent required by Section
9.6 hereof, and eighth, to pay all
other Obligations that are then outstanding and then due and payable, including
without limitation, all Obligations arising out of any Bank Products provided by
any Lender or its Affiliate and, in the event that the Obligations have been
accelerated, to provide collateral security to the extent required by Section
9.6 hereof.  If all amounts set forth in clauses first through and
including eighth above are
paid, any excess amounts shall be deposited in a separate cash collateral
account, and shall promptly be released to the Borrowers upon the request of the
Lead Borrower.

     

    (b) All
credits against the Obligations shall be effective on the day of receipt
thereof, and shall be conditioned upon final payment to the Administrative Agent
of the items giving rise to such credits. If any item credited to the Loan
Account is dishonored or returned unpaid for any reason, whether or not such
return is rightful or timely, the Administrative Agent shall have the right to
reverse such credit and charge the amount of such item to the Loan Account and
the Borrowers shall indemnify the Administrative Agent, the Collateral Agent,
the Issuing Banks, the Acceptance Lenders and the Lenders against all claims and
losses resulting from such dishonor or return.

     

    2.25 ­Increased
Costs.

     

    (a) If any
Change in Law shall:

     

    (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender or any holding company of any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank or
Acceptance Lender; or

     

    (ii) impose on
any Lender or any Issuing Bank or Acceptance Lender or the London interbank
market any other condition affecting this Agreement or LIBO Loans made by such
Lender or any Letter of Credit or Acceptance 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 LIBO Loan (or of maintaining its obligation to
make any such Loan) or to increase the cost to such Lender, Issuing Bank or
Acceptance Lender of partici­pating in, issuing or maintaining any Letter of
Credit or Acceptance or to reduce the amount of any sum received or
receiv­able by such Lender or Issuing Bank or Acceptance Lender hereunder
(whether of principal, interest or otherwise) other than Taxes, which shall be
governed by Section 2.28 hereof, then the Borrowers will pay to such Lender,
Issuing Bank or Acceptance Lender, as the case may be, such additional amount or
amounts as will compensate such Lender, Issuing Bank or Acceptance Lender, as
the case may be, for such additional costs incurred or reduction
suffered.

     

    (b) If any
Lender, any Issuing Bank or any Acceptance Lender determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s, Issuing Bank’s or Acceptance Lender’s capital
or on the capital of such Lender’s, Issuing Bank’s or Acceptance Lender’s
holding company, if any, as a consequence of this Agreement or the Loans made
by, or participations in Letters of Credit or Acceptances held by, such Lender,
or the Letters of Credit issued by such Issuing Bank, or the Acceptances issued
by such Acceptance Lender, to a level below that which such Lender, Issuing Bank
or Acceptance Lender or such Lender’s, Issuing Bank’s or Acceptance Lender’s
holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s, Issuing Bank’s or Acceptance Lender’s policies and
the policies of such Lender’s, Issuing Bank’s or Acceptance Lender’s holding
company with respect to capital adequacy), then from time to time the Borrowers
will pay to such Lender, Issuing Bank or Acceptance Lender, as the case may be,
such additional amount or amounts as will compensate such Lender, Issuing Bank
or Acceptance Lender or such Lender’s, Issuing Bank’s or Acceptance Lender’s
holding company for any such reduction suffered.

     

    (c) A
certificate of a Lender, an Issuing Bank or an Acceptance Lender setting forth
the amount or amounts necessary to compensate such Lender, Issuing Bank or
Acceptance Lender or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section and setting forth in reasonable detail
the manner in which such amount or amounts were determined shall be delivered to
the Lead Borrower and shall be conclusive absent manifest error. The Borrowers
shall pay such Lender, Issuing Bank or the Acceptance Lender, as the case may
be, the amount shown as due on any such certificate within ten
(10) Business Days after receipt thereof.

     

    (d) Failure
or delay on the part of any Lender, any Issuing Bank or any Acceptance Lender to
demand compensation pursuant to this Section within ninety (90) days of the
effective date of the relevant Change in Law shall constitute a waiver of such
Lender’s, Issuing Bank’s or Acceptance Lender’s right to demand such
compensation.

     

    2.26 ­Change in
Legality.

     

    (a) Notwithstanding
anything to the contrary contained elsewhere in this Agreement, if (x) any
Change in Law shall make it unlawful for a Lender to make or maintain a LIBO
Loan or to give effect to its obligations as contemplated hereby with respect to
a LIBO Loan or (y) at any time any Lender determines that the making or
continuance of any of its LIBO Loans has become impracticable as a result of a
contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in the London interbank market,
then, by written notice to the Lead Borrower, such Lender may (i) declare that
LIBO Loans will not thereafter be made by such Lender hereunder, whereupon any
request by the Borrowers for a LIBO Borrowing shall, as to such Lender only, be
deemed a request for a Prime Rate Loan unless such declaration shall be
subsequently withdrawn; and (ii) require that all outstanding LIBO Loans made by
it be converted to Prime Rate Loans, in which event all such LIBO Loans shall be
automatically converted to Prime Rate Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any Lender shall
exercise its rights under clause (i) or (ii) of this paragraph (a), all payments
and prepayments of principal which would otherwise have been applied to repay
the LIBO Loans that would have been made by such Lender or the converted LIBO
Loans of such Lender shall instead be applied to repay the Prime Rate Loans made
by such Lender in lieu of, or resulting from the conversion of, such LIBO
Loans.

     

    (b) For
purposes of this Section 2.26, a notice to the Lead Borrower by any Lender
pursuant to paragraph (a) above shall be effective, and if any LIBO Loans shall
then be outstanding, on the last day of the then-current Interest Period; and
otherwise such notice shall be effective on the date of receipt by the Lead
Borrower.

     

    2.27 ­Payments.  (a) The
Borrowers shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest, fees or reimbursement
of drawings under Letters of Credit or Acceptances, or of amounts payable under
Sections 2.21(b), 2.25 or 2.28, or otherwise) prior to 2:00 p.m., Boston
time, on the date when due, in immediately available funds, without setoff or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 100
Federal Street, Boston, Massachusetts, except payments to be made directly to
the applicable Issuing Bank or Acceptance Lender or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.21(b),
2.25, 2.28 or 9.3 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administra­tive Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment under any Loan Document
(other than payments with respect to LIBO Borrowings) shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, if any payment due with respect to LIBO Borrowings
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, unless that succeeding Business
Day is in the next calendar month, in which event, the date of such payment
shall be on the last Business Day of subject calendar month, and, in the case of
any payment accruing interest, interest thereon shall be payable for the period
of such extension. All payments under each Loan Document shall be made in
Dollars (except that drawings under Letters of Credit shall be reimbursed in the
same currency as such Letter of Credit was denominated).

     

    (b) If at any
time insufficient funds are received by and available to the Administrative
Agent to pay fully all Obligations then due hereunder, such funds shall be
applied ratably among the parties entitled thereto in accordance with the
provisions of Section 2.24(a) hereof.

     

    (c) Unless
the Administrative Agent shall have received notice from the Lead Borrower prior
to the date on which any payment is due to the Administrative Agent for the
account of the Lenders or the applicable Issuing Bank or Acceptance Lender
hereunder that the Borrowers will not make such payment, the Administrative
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 applicable Issuing Bank or Acceptance Lender, 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, the Issuing Banks or Acceptance Lenders, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or Issuing Bank or Acceptance
Lender, 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
Administrative Agent, at the Federal Funds Effective Rate.

     

    (d) If any
Lender shall fail to make any payment required to be made by it pursuant to this
Agreement, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under this Agreement until all such unsatisfied obligations are
fully paid.

     

    2.28 ­Taxes.

     

    (a) 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
deduction for any Indemnified Taxes or Other Taxes, provided that if the
Borrowers shall be required to deduct any Indemnified Taxes or 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 Agents, any Lender, any Issuing
Bank or any Acceptance Lender (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 pay the
full amount deducted to the relevant Governmental Authority in accordance with
Applicable Law.

     

    (b) In
addition, the Borrowers shall pay any Other Taxes to the relevant Governmental
Authority in accordance with Applicable Law.

     

    (c) The
Borrowers shall indemnify the Agents, each Lender, each Issuing Bank and each
Acceptance Lender, within ten (10) Business Days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by such Agent,
such Lender, Issuing Bank, or Acceptance Lender, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrowers
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) 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 Borrowers by a Lender, an Issuing Bank, an Acceptance Lender, or by any
Agent on its own behalf or on behalf of a Lender, an Issuing Bank or an
Acceptance Lender setting forth in reasonable detail the manner in which such
amount was determined, shall be conclusive absent manifest error.

     

    (d) As soon
as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrowers to a Governmental Authority, the Borrowers shall deliver to the
Administrative 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 Administrative Agent.

     

    (e) Any
Foreign Lender that is entitled to an exemption from or reduction in withholding
tax shall deliver to the Lead Borrower and the Admini­stra­tive Agent
two copies of either United States Internal Revenue Service Form W-8BEN or Form
W-8ECI, or any subsequent versions thereof or successors thereto, or, in the
case of a Foreign Lender’s claiming exemption from or reduction in U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, a Form W-8BEN, or any subsequent versions
thereof or successors thereto (and, if such Foreign Lender delivers a Form
W-8BEN, a certificate representing that such Foreign Lender is not a bank for
purposes of Section 881(c) of the Code, is not a “10 percent shareholder” of the
Borrowers within the meaning of section 881(c)(3)(B) of the Code, and is not a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code,
properly completed and duly executed by such Foreign Lender claiming complete
exemption from or reduced rate of, United States federal withholding tax on
payments by the Borrowers under this Agreement and the other Loan Documents, or
in the case of a Foreign Lender claiming exemption for “portfolio interest”
certifying that it is not a foreign corporation, partnership, estate or trust.
Such forms shall be delivered by each Foreign Lender on or before the date it
becomes a party to this Agreement (or, in the case of a transferee that is a
participation holder, on or before the date such participation holder becomes a
transferee hereunder) and on or before the date, if any, such Foreign Lender
changes its applicable lending office by designating a different lending office
(a “New Lending Office”). In addition, each Foreign Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Foreign Lender. Notwithstanding any other provision of this
Section 2.28(e), a Foreign Lender shall not be required to deliver any form
pursuant to this 2.28(e) that such Foreign Lender is not legally able to
deliver.

     

    (f) The
Borrowers shall not be required to indemnify any Foreign Lender or to pay any
additional amounts to any Foreign Lender in respect of United States federal
withholding tax pursuant to paragraph (a) or (c) above to the extent that the
obligation to pay such additional amounts would not have arisen but for a
failure by such Foreign Lender to comply with the provisions of paragraph (e)
above. Should a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrowers shall, at such Lender’s expense, take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.

     

    2.29 ­Security
Interests in Collateral.  To
secure their Obligations under this Agreement and the other Loan Documents, the
Borrowers have granted, and have caused each Facility Guarantor to grant to the
Collateral Agent, for its benefit and the ratable benefit of the other Secured
Parties, a first-priority security interest in all of the Collateral pursuant
hereto and to the Security Documents.

     

    2.30 ­Mitigation
Obligations; Replacement of Lenders.

     

            (a) If any
Lender requests compensation under Section 2.25, 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 2.28, 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
reasonable judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Sections 2.25 or
2.28, as the case may be, in the future and (ii) 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; provided, however, that the
Borrowers shall not be liable for such costs and expenses of a Lender requesting
compensation if (i) such Lender becomes a party to this Agreement on a date
after the Closing Date and (ii) the relevant Change in Law occurs on a date
prior to the date such Lender becomes a party hereto.

     

    (b) If any
Lender requests compensation under Section 2.25, 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 2.28, or if any
Lender is a Defaulting Lender, then the Borrowers may, at their sole expense and
effort, upon notice to such Lender and the Administrative Agent, and at the
option of the Borrowers, either (x) permanently reduce the Total Commitments
pursuant to Section 2.17 hereof in an amount equal to such Lender’s Commitment
(and notwithstanding anything to the contrary set forth in this Agreement
regarding the pro rata reduction of Commitments hereunder), provided that such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in unreimbursed drawings under Letters
of Credit, Acceptances and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder (notwithstanding anything in
this Agreement to the contrary regarding the pro rata sharing of payments), from
the Borrowers, or (y) require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.5), all its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
obligations (which Eligible Assignee may be another Lender, if a Lender accepts
such assignment), provided that
(i) except in the case of an assignment to another Lender, the Borrowers
shall have received the prior written consent of the Administrative Agent, the
Lead Issuing Bank, each other Lender which is then an Issuing Bank, and the
Swingline Lender, which consent shall not unrea­sonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit, Acceptances and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, 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) and (iii) in the
case of any such assignment resulting from a claim for compensation under
Section 2.25 or payments required to be made
pursuant to Section 2.28, such assignment will result in a reduction in
such compensation or payments. A Lender shall not be required to make any such
assignment and 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.

     

    3.  REPRESENTATIONS
AND WARRANTIES.  Each
Loan Party, jointly and severally, represents and warrants to the Agents and the
Lenders that:

     

    3.1 Organization; Powers. Each
Loan Party is, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and each such Person has all
requisite power and authority to carry on its business as now conducted, and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required. Schedule 3.1 sets forth, as of the Closing Date, each
Loan Party’s legal name as it appears in the official filings in its state of
organization, its state of organization, organization type, organization number,
if any issued by its state of organization, and except with respect to Brown
Canada, its federal employer identification number.

     

    3.2 Authorization;
Enforceability.   The
transactions contemplated hereby and by the other Loan Documents to be entered
into by each Loan Party are within such Loan Party’s corporate or limited
liability company powers and have been duly authorized by all necessary
corporate, membership and other action. This Agreement and the other Loan
Documents have been duly executed and delivered by each Loan Party which is a
party thereto and constitutes a legal, valid and binding obligation of such Loan
Party, enforceable 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.

     

    3.3 Governmental
Approvals; No Conflicts. The
transactions to be entered into contemplated by the Loan Documents (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except (i) for such as have been
obtained or made and are in full force and effect, (ii) for those which could
not be reasonably be expected to have a Material Adverse Effect, and (iii)
for  filings and recordings necessary to perfect Liens created under
the Loan Documents, (b) will not violate any Applicable Law or regulation
or the Charter Documents of any Loan Party or any order of any Governmental
Authority, except for such violation which could not reasonably be expected to
have a Material Adverse Effect, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon any Loan Party
or their respective assets, except for such violation or default which could not
reasonably be expected to have a Material Adverse Effect, or give rise to a
right thereunder to require any payment to be made by any Loan Party in excess
of $5,000,000, and (d) will not result in the creation or imposition of any
Lien on any asset of any Loan Party, except Liens created under the Loan
Documents or otherwise permitted hereby or thereby.

     

    3.4 Financial
Condition.  The Lead
Borrower has heretofore furnished to the Lenders (a) its Form 10-K containing
the Consolidated balance sheet, and statements of earnings, shareholders’
equity, and cash flows for the Lead Borrower and its Subsidiaries as of and for
the Fiscal Year ending February 2, 2008, and (b) its Form 10-Q containing the
Consolidated balance sheet, and statements of earnings, and cash flows for the
Lead Borrower and its Subsidiaries as of and for the Fiscal Quarter ending
November 1, 2008. Such financial statements present fairly, in all material
respects, the financial position, results of operations and cash flows of the
Lead Borrower and its Subsidiaries, in each case, as of such dates and for such
periods on a Consolidated basis in accordance with GAAP, subject, in the case of
the Fiscal Quarter financial statements, to year end audit adjustments and the
absence of footnotes.  Since February 2, 2008, there have been no
changes in the assets, liabilities, financial condition or business of the Lead
Borrower and its Subsidiaries which has had a Material Adverse
Effect.

     

    3.5 Properties.

     

    (a) Each Loan
Party has good title to, or valid leasehold interests in, all of such Person’s
real and personal, moveable and immoveable, property material to its business,
except for defects which could not reasonably be expected to have a Material
Adverse Effect.

     

    (b) Schedule 3.5(b) sets forth, as
of the Closing Date, a complete and correct list of the address of all Real
Estate that is owned by each Loan Party, all leases and subleases of Real Estate
by each Loan Party as lessee or sublessee, and all leases and subleases of Real
Estate by each Loan Party as lessor or sublessor.  Each of the leases
and subleases is valid and enforceable in accordance with its terms, and is in
full force and effect and no default by any party to any such lease or sublease
exists, except as could not reasonably be expected to result in a Material
Adverse Effect.  Each Loan Party has good and marketable title in fee
simple to the Real Estate owned by such Loan Party, or valid leasehold interests
in all Real Estate leased by such Loan Party, and each Loan Party has good and
merchantable title or valid leasehold interests to all of its other property
reflected on the most recent financial statements delivered to the
Administrative Agent and the Lenders, except as disposed of in the ordinary
course of business since the date thereof, free of all Liens except those
permitted pursuant to Section 6.2 hereof.

     

    3.6 Litigation and
Environmental Matters.  

     

    (a) There are
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Loan Party, threatened
against or affecting any such Person (i)  as to which there is a reasonable
possi­bility of an adverse determination and that, if adversely
deter­mined, could reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect (other than those set forth on Schedule 3.6) or
(ii) that involve any of the Loan Documents.

     

    (b) Except
for the matters set forth on Schedule 3.6, and except as
could not reasonably be expected to have a Material Adverse Effect, 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, to the knowledge of any Loan Party 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.

     

    (c) Since the
date of this Agreement, there has been no change in the status of the matters
set forth on Schedule
3.6 that,
individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.

     

    3.7 Compliance with
Laws and Agreements. Each
Loan Party is in compliance with all laws, regulations and orders of any
Governmental Authority applicable such Person or its property and all
indentures, material agreements evidencing any Material Indebtedness, and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is
continuing.

     

    3.8 Investment and
Holding Company Status. No Loan
Party is an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.

     

    3.9 Taxes. Each
Loan Party has timely filed or caused to be filed all tax returns and reports
required to have been filed and has paid or caused to be paid all taxes required
to have been paid by it, except (a) taxes that are being contested in good faith
by appropriate proceedings, for which such Person has set aside on its books
adequate reserves, and as to which no Lien in excess of $5,000,000 has arisen,
or (b) to the extent that the failure to do so could not reasonably be expected
to result in a Material Adverse Effect.

     

    3.10 ERISA; Foreign
Plans.

     

    (a) Except as
set forth on Schedule 3.10, no Loan Party is party to a Plan.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. The present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements of the Lead Borrower and its Subsidiaries on a Consolidated basis
reflecting such amounts, exceed the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements of the Lead Borrower and its Subsidiaries on a
Consolidated basis reflecting such amounts, exceed the fair market value of the
assets of all such underfunded Plans.

     

    (b) No
Termination Event has occurred or is reasonably expected to
occur.  Each Foreign Plan is in compliance in all material respects
with the laws and regulations applicable to such Foreign Plan and each Loan
Party has satisfied all contribution obligations in all material respects with
respect to such Foreign Plan (to the extent applicable).  Each Foreign
Plan and related funding arrangement that is intended to qualify for tax-favored
status has been reviewed and approved for such status by the appropriate
Governmental Authority (or has been submitted for such review and approval
within the applicable time period), and nothing has occurred and no condition
exists that is likely to cause the loss or denial of such tax-favored
status.  No Foreign Plan has any liabilities in any material respect
in excess of the current value of such Foreign Plan’s assets, determined in
accordance with the assumptions used for funding such Foreign Plan pursuant to
reasonable accounting standards in accordance with applicable law.  No
Loan Party has incurred or reasonably expects to incur any material liability as
a result of the termination or other insolvency of any Foreign Plan or any
material liability which is not otherwise funded or satisfied with readily
available assets set aside with respect to such Foreign Plan.

     

    3.11 Common
Enterprise.  The
successful operation and condition of each of the Loan Parties is dependent upon
the continued successful performance of the functions of the group of Loan
Parties as a whole and the successful operation of each Loan Party is dependent
upon the successful performance and operation of each other Loan
Party.  Each of the Loan Parties expects to derive benefit (and its
board of directors or other governing body has determined that it may reasonably
be expected to derive benefit) directly and indirectly from successful
operations of the Lead Borrower and each of the other Loan
Parties.  Each Loan Party expects to derive benefit (and its board of
directors or other governing body has determined that it may reasonably be
expected to derive benefit) directly and indirectly from the credit extended by
the Lenders, the Issuing Banks and the Acceptance Lenders to the Loan Parties
hereunder, both in their separate capacities and as members of the group of
companies.  Each Loan Party has determined that the execution,
delivery and performance of this Agreement and any other Loan Document to be
executed by such Loan Party is within its purpose, will be of direct and
indirect benefit to such Loan Party, and is in its best interests.

     

    3.12 Disclosure.  The Loan Parties have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Loan
Party is subject, and all other matters known to any such Person, that,
individually or in the aggregate, in each case, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(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.

     

    3.13 Subsidiaries. On and as of the Closing Date, the authorized Capital Stock or
other equity, and the number of issued and outstanding shares of Capital Stock
or other equity, of the Borrowers and each other Loan Party and each of their
Subsidiaries is as described in Schedule 3.13.  All such
outstanding shares of Capital Stock or other equity of the Borrowers and each
other Loan Party have been duly and validly issued, in compliance with all legal
requirements relating to the authorization and issuance of shares of Capital
Stock or other equity, and are fully paid and non-assessable.  On and
as of the Closing Date, there is no other Capital Stock or ownership interest of
any class outstanding of the Borrowers or of any other Loan Party. Except as set
forth on Schedule 3.13 or as otherwise permitted under this Agreement, none of
the Loan Parties is party to any joint venture, general or limited partnership,
or limited liability company agreements.

     

    3.14 Insurance. Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties as of the Closing Date. Each of
such policies is in full force and effect. As of the Closing Date, all premiums
in respect of such insurance that are due and payable have been
paid.

     

    3.15 Labor
Matters.
Except as
set forth on Schedule 3.15, as of the Closing Date, (a) there is no collective
bargaining agreement or other labor contract covering employees of any Loan
Party, (b) no such collective bargaining agreement or other labor contract is
scheduled to expire during the term of this Agreement, (c) to the knowledge of
the Loan Parties, no union or other labor organization is seeking to organize,
or to be recognized as, a collective bargaining unit of employees of any Loan
Party or for any similar purpose except as could not reasonably be expected to
result in a Material Adverse Effect, and (d) there is no pending or (to the best
of any Loan Party’s knowledge) threatened, strike, work stoppage, material
unfair labor practice claim, or other material labor dispute against or
affecting any Loan Party or its employees except as could not reasonably be
expected to result in a Material Adverse Effect.

     

    3.16 Certain
Transactions.  Except
as set forth on Schedule 3.16, none of the
officers, partners, directors, or employees of any Loan Party is presently a
party to any transaction with any other Loan Party or any Affiliate, officer or
director that would be prohibited by Section 6.8.

     

    3.17 Restrictions on
the Loan Parties.  No
Loan Party is a party to or bound by any contract, agreement or instrument, or
subject to any charter or other corporate restriction, that has or could
reasonably be expected to have a Material Adverse Effect.

     

    3.18 Security
Documents. The
Security Documents create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
and hypothec in the Collateral described therein as security for the Obligations
to the extent that a legal, valid, binding and enforceable security interest in
such Collateral may be created under any Applicable Law of the United States of
America and any states thereof, including, without limitation, the applicable
Uniform Commercial Code, and under any Applicable Law of Canada and any
provinces thereof, including, without limitation, the PPSA and the Civil Code,
and the Security Documents constitute, or will upon the filing of financing
statements and the obtaining of “control”, in each case, as applicable, with
respect to the relevant Collateral as required under the applicable Uniform
Commercial Code, PPSA or Civil Code, the creation of a fully perfected first
priority Lien on, and security interest and hypothec in, all right, title and
interest of the Borrowers and each Facility Guarantor thereunder in such
Collateral, in each case prior and superior in right to any other Person (other
than Permitted Encumbrances having priority under Applicable Law), except as
permitted hereunder or under any other Loan Document, in each case to the extent
that a security interest may be perfected by the filing of a financing statement
or hypothec under the applicable Uniform Commercial Code, PPSA or Civil Code, or
by obtaining “control”.

     

    3.19 Federal Reserve
Regulations.

     

    (a) No Loan
Party is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin
Stock.

     

    (b) No part
of the proceeds of any Loan or any Letter of Credit or Acceptance will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to buy or carry Margin Stock or to extend credit to
others for the purpose of buying or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose or (ii) for any purpose
that entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation U or X.

     

    3.20 Solvency. The
Loan Parties, taken as a whole, are Solvent. No transfer of property is being
made by any Loan Party and no obligation is being 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.

     

    3.21 Franchises,
Patents, Copyrights, Etc.  Except
as otherwise set forth on Schedule 3.21 hereto, each
Loan Party owns, or is licensed to use, all franchises, patents, copyrights,
trademarks, tradenames, service marks, licenses and permits, and other
intellectual property and rights in respect of the foregoing, necessary for the
conduct of its business as substantially now conducted without known conflict or
infringement with any rights of any other Person and, in each case, free of any
Lien that is not a Permitted Encumbrance.

     

    3.22 DDAs, Credit
Card Arrangements, Etc. Schedule 3.22 sets
forth, as of the Closing Date, a list of all (i) arrangements to which any Loan
Party is a party with respect to the payment to any Borrower of the proceeds of
all credit card charges for sales by such Loan Party in the United States of
America and Canada and specifying whether a Credit Card Notification with
respect thereto is in effect on the Closing Date, (ii) Blocked Account
Agreements entered into by a Loan Party (or similar agreements entered into
pursuant to the Existing Credit Agreement) which are in effect on the Closing
Date and (iii) Disbursement Accounts maintained by the Loan Parties as of the
Closing Date.

     

    3.23 Customer and
Trade Relations.  There
exists no actual or, to the knowledge of any Loan Party, threatened in writing,
termination or cancellation of, or any adverse modification or change in the
business relationship of any Loan Party with any supplier material to the
operations of the Loan Parties taken as a whole, which termination, cancellation
or adverse modification or change could reasonably be expected to have a
Material Adverse Effect.

     

    3.24 Casualty.

     

    As of the
Closing Date, 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.

    

    4.  CONDITIONS.

     

    4.1 Closing
Date.

     

     The
effectiveness of this Agreement and the obligation of the Lenders and of the
Issuing Banks and of the Acceptance Lenders hereunder is subject to the
following conditions precedent:

     

    (a) The
Agents (or their counsel) shall have received from each party hereto either
(i) a counterpart of this Agreement and all other Loan Documents not
delivered under the Existing Credit Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the Agents (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement and all other Loan
Documents.

     

    (b) The
Agents shall have received a favorable written opinion (addressed to each Agent
and the Lenders on the Closing Date and dated the Closing Date) of each of (i)
Bryan Cave LLP, special United States counsel to the Loan Parties, (ii) Lang
Michener LLP, special Ontario counsel to Brown Canada, and (iii) WolfBlock LLP,
special Pennsylvania counsel to Brown Retail, covering such matters relating to
the Loan Parties, the Loan Documents or the transactions contemplated thereby as
the Required Lenders shall reasonably request. The Borrowers hereby request such
counsel to deliver such opinion.

     

    (c) The
Agents shall have received such documents and certificates as the Agents or
their counsel may reasonably request relating to the organization, existence and
good standing of each Loan Party (it being understood and agreed that each Loan
Party will be required to deliver a good standing certificate from its
jurisdiction of organization or formation, as well as a good standing
certificate for each foreign jurisdiction where such Loan Party is qualified to
do business other than those jurisdictions where a Loan Party is terminating its
qualification as set forth on Schedule 4.1(c)), the
authorization of the transactions contemplated by the Loan Documents and any
other legal matters relating to the Loan Parties, the Loan Documents or the
transactions contemplated thereby, all in form and substance reasonably
satisfactory to the Agents and their counsel.

     

    (d) The
Agents shall have received a Borrowing Base Certificate dated the Closing Date,
relating to the month ended on January 3, 2009, and executed by a Financial
Officer of the Lead Borrower, which Borrowing Base Certificate shall show that,
as of the Closing Date after giving effect to (i) any Loans made or outstanding
on the Closing Date and (ii) any Letters of Credit to be issued on the Closing
Date and Existing Letters of Credit, Excess Availability shall be not less than
$120,000,000.

     

    (e) The
Agents shall have received a certificate, reasonably satisfactory in form and
substance to the Agents, (i) with respect to the solvency of the Loan Parties on
a Consolidated basis, as of the Closing Date, and (ii) certifying that, as of
the Closing Date, the representations and warranties made by the Borrowers in
the Loan Documents are true and complete (other than representations and
warranties that relate solely to an earlier date) and that no event has occurred
(or failed to occur) which is or which, solely with the giving of notice or
passage of time (or both) would be a Default or an Event of
Default.

     

    (f) The
Agents shall have received (i) an updated appraisal (based on net liquidation
value) by a third party appraiser acceptable to the Collateral Agent of all
Inventory of the Loan Parties, the results of which are satisfactory to the
Collateral Agent and (ii) a written report regarding the results of a commercial
finance examination of the Loan Parties, which shall be satisfactory to the
Collateral Agent.

     

    (g) All
necessary consents and approvals to the transactions contemplated hereby shall
have been obtained and shall be reasonably satisfactory to the
Agents.

     

    (h) The
Administrative Agent shall have received and be satisfied with (i) a detailed
forecast for the period commencing on the Closing Date and ending with the end
of the then next Fiscal Year, which shall include an Availability model,
Consolidated income statement, balance sheet, and statement of cash flow, by
quarter, each prepared in conformity with GAAP and consistent with the Loan
Parties’ then current practices and (ii) such other information (financial or
otherwise) reasonably requested by the Administrative Agent.

     

    (i) The
Agents shall be reasonably satisfied that any financial statements delivered to
them fairly present the business and financial condition of the Loan Parties,
and that there has been no material adverse change in the assets, business,
operation, financial or other condition, or income of the Loan Parties, taken as
a whole, since the date of the most recent financial information delivered to
the Agents.

     

    (j) Except as
set forth on Schedule
3.6, there shall not be pending any litigation or other proceeding,
which, if adversely determined, (and a reasonable possibility of such adverse
determination reasonably exists), could reasonably be expected to have a
Material Adverse Effect on the Loan Parties, taken as a whole.

     

    (k) There
shall not have occurred any default, nor shall any event exist which is, or
solely with the passage of time, the giving of notice or both, would be a
default under any Material Indebtedness of any Loan Party.

     

    (l) The
Collateral Agent shall have received all documents and instruments, including
Uniform Commercial Code financing statements, required by law or reasonably
requested by the Collateral 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 Collateral Agent and with
respect to any Loan Party located in or organized under the laws of Canada, all
filings and recordations required by Requirements of Law of Canada (including,
without limitation, under the PPSA and the Civil Code) in all jurisdictions that
the Collateral Agent may deem necessary or desirable in order to perfect the
Collateral Agent's Lien in any Collateral located in Canada.

     

    (m) To the
extent not delivered under the Existing Credit Agreement, the Collateral Agent
shall have received Blocked Account Agreements with the Blocked Account Banks on
or before the Closing Date.

     

    (n) All fees
due at or immediately after the Closing Date and all reasonable costs and
expenses incurred by the Agents in connection with the establishment of the
credit facility contemplated hereby (including the reasonable fees and expenses
of counsel to the Agents) shall have been paid in full, except that the fees and
expenses of such counsel shall be paid on the earlier of the Closing Date or
within three (3) Business Day after receipt of invoice therefor.

     

    (o) The
consummation of the transactions contemplated hereby shall not (a) violate
any Applicable Law, or (b) conflict with, or result in a default or event
of default under, any material agreement of Borrowers or any other Loan Party,
taken as a whole.  No event shall exist which is, or solely with the
passage of time, the giving of notice or both, would be a default under any
material agreement of any Loan Party.

     

    (p) No
material changes in governmental regulations or policies affecting the
Borrowers, the Agents or any Lender involved in this transaction shall have
occurred prior to the Closing Date which could, individually or in the
aggregate, materially adversely affect the transaction contemplated by this
Agreement.

     

    (q) There
shall be no Default or Event of Default on the Closing Date.

     

    (r) To the
extent not delivered under the Existing Credit Agreement, the Collateral Agent
shall have received, and be satisfied with, evidence of the Borrowers’
insurance, together with such endorsements as are required by the Loan
Documents.

     

    (s) The
Borrowers shall have paid all accrued and unpaid interest, fees, and expenses
due under the Existing Credit Agreement to the Persons entitled
thereto.

     

    (t) Assignments
amongst the Lenders party to the Existing Credit Agreement and the Lenders party
to this Agreement shall have been executed and delivered to the Administrative
Agent to the extent deemed necessary by the Administrative Agent.

     

    (u) The Lead
Arrangers shall have achieved syndication of the Loans.

     

    (v) There
shall have been delivered to the Administrative Agent such additional
instruments and documents as the Agents or counsel to the Agents reasonably may
require or request.

     

    The
Administrative Agent shall notify the Lead Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, this Agreement shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.2) at or prior to 5:00 p.m., Boston time, on
January 31, 2009, (and, in the event such conditions are not so satisfied or
waived, this Agreement shall terminate at such time).

     

    4.2 ­Conditions
Precedent to Each Loan and Each Letter of Credit and Each
Acceptance.  In
addition to those conditions described in Section 4.1, the obligation of the Lenders to make each Loan
and of the Issuing Banks to issue each Letter of Credit and of the Acceptance
Lenders to issue each Acceptance, is subject to the following conditions
precedent:

     

    (a) ­Notice. The
Administrative Agent shall have received a notice with respect to such Borrowing
or issuance, as the case may be, as required by Section 2.

     

    (b) Representations and
Warranties. All representations and warranties contained in this
Agreement and the other Loan Documents or otherwise made in writing in
connection herewith or therewith shall be true and correct in all material
respects on and as of the date of each Borrowing or the issuance of each Letter
of Credit or Acceptance, as applicable, hereunder with the same effect as if
made on and as of such date, except that such  representations and
warranties (i) that relate solely to an earlier date shall be true and correct
as of such earlier date and (ii) shall be true and correct in all respects if
they are qualified by a materiality standard.

     

    (c) No Default. On the
date of, and after giving effect to, each Borrowing hereunder and the issuance
of each Letter of Credit or Acceptance, the Borrowers shall be in compliance
with all of the terms and provisions set forth herein and in the other Loan
Documents to be observed or performed and no Default or Event of Default shall
have occurred and be continuing.

     

    (d) Borrowing Base
Certificate. The Administrative Agent shall have received
the  most recently required Borrowing Base Certificate, with each such
Borrowing Base Certificate including schedules as required by the Administrative
Agent.

     

    The
request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrowers that the conditions specified in this Section 4.2 have been satisfied at that time and that after
giving effect to such extension of credit the Borrowers shall continue to be in
compliance with the Borrowing Base.  The conditions set forth in this
Section 4.2 are for the sole benefit of the
Administrative Agent and each Lender and may be waived by the Administrative
Agent in whole or in part without prejudice to the Administrative Agent or any
Lender, including, without limitation, without prejudice to the Required
Lenders’ rights under Section 7.1 and 9.2 hereof.

     

    5.  AFFIRMATIVE
COVENANTS.  Until
the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other Obligations payable hereunder and
under the other Loan Documents shall have been paid in full and all Letters of
Credit and Acceptances shall have expired or terminated or have been fully cash
collateralized or replaced and all L/C Disbursements shall have been reimbursed,
each Loan Party covenants and agrees with the Agents and the Lenders
that:

     

    5.1 Financial
Statements and Other Information.  The Lead
Borrower will furnish to the Agents for delivery to the Lenders, each of the
following, provided that the Lead Borrower need not furnish copies of
information referred to in subsections (a), (b), (g) or (m) if on or before the
applicable day set forth below, such information is available either on EDGAR or
on the Lead Borrower’s web site:

     

    (a) within
ninety-five (95) days after the end of each Fiscal Year of the Lead Borrower and
its Subsidiaries, a copy of its Form 10-K containing the Consolidated balance
sheet and related statements of earnings, shareholders’ equity and cash flows as
of the end of and for such year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all audited and reported on by Ernst
& Young, LLP or another independent public accountant of recognized national
standing (without a “going concern” or like qualification or exception and
without a qualification or exception as to the scope of such audit) to the
effect that such Consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the Lead
Borrower and its Subsidiaries on a Consolidated basis in accordance with GAAP
consistently applied, and a written statement by such accountants to the effect
that such accountants have reviewed this Agreement and that in auditing such
Consolidated financial statements, nothing came to their attention to cause them
to believe that the Loan Parties had failed to comply with the terms, covenants,
provisions or conditions of this Agreement insofar as they relate to accounting
matters, except for those described in reasonable detail in such
statement;

     

    (b) within
fifty (50) days after the end of each of the first three Fiscal Quarters of each
Fiscal Year, its Form 10-Q containing the Consolidated balance sheet and related
statements of earnings, and cash flows of the Lead Borrower and its
Subsidiaries, as of the end of and for such Fiscal Quarter and the elapsed
portion of the Fiscal Year, with comparative results to the same Fiscal Periods
of the prior Fiscal Year, all certified by a Financial Officer of the Lead
Borrower as presenting in all material respects the financial condition and
results of operations of the Lead Borrower and its Subsidiaries in accordance
with GAAP consistently applied, subject to normal year end audit adjustments and
the absence of footnotes;

     

    (c) within
thirty (30) days after the end of each of fiscal month of the Lead Borrower and
its Subsidiaries, if so requested by the Administrative Agent, Consolidated and
consolidating balance sheet and related statements of operations, stockholders’
equity and cash flows of the Lead Borrower and its Subsidiaries, as of the end
of and for such month and the elapsed portion of the Fiscal Year, with
comparative results to the same Fiscal Periods of the prior Fiscal Year and to
the Lead Borrower’s and its Subsidiaries’ budget for such Fiscal Year furnished
pursuant to Section 5.1(e) hereof;

     

    (d) concurrently
with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of the Lead Borrower in the form of Exhibit E (a
“Compliance Certificate”) (i) certifying as to whether a Default or Event of
Default has occurred and, if a Default or Event of Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations with
respect to the Fixed Charge Coverage Ratio for such period (whether or not it is
then required to be tested hereunder), (iii) certifying that such financial
statements present in all material respects the financial condition and results
of operations of the Lead Borrower and its Subsidiaries in accordance with GAAP
consistently applied for such period, subject, in the case of the quarterly
statements, to normal year end audit adjustments and the absence of footnotes,
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the Lead Borrower’s and its Subsidiaries’ audited
financial statements referred to in Section 3.4
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such Compliance Certificate, and (v)
containing either a certification that there has been no change to the
information disclosed in any of the Schedules delivered in connection with
Sections 3.1 through 3.24 of this Agreement or any other Loan Document (or after
the delivery of the first Compliance Certificate delivered pursuant to this
subsection, as previously certified), or, if so, specifying all such changes,
provided that,
notwithstanding the foregoing, no such revisions or updates shall be deemed to
have amended, modified, or superseded any such schedules as originally attached
hereto (or after the delivery of the first Compliance Certificate delivered
pursuant to this subsection, as previously certified), or to have cured any
breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such schedules, unless and until the Administrative Agent
shall have accepted in writing such revisions or updates to any such schedules;
and provided
further that the Administrative Agent shall be deemed to have accepted
such revisions or updates unless the Administrative Agent delivers a written
objection thereto to the Lead Borrower within thirty (30) days after the date
such revisions or updates have been received;

     

    (e) no sooner
than sixty (60) days and not less than thirty (30) days prior to the
commencement of each Fiscal Year of the Loan Parties, a detailed preliminary
Consolidated and consolidating budget by month for such Fiscal Year (including a
projected Consolidated and consolidating balance sheet and related statements of
projected operations and cash flow as of the end of and for such Fiscal Year)
and, within forty-five (45) days after the commencement of each such Fiscal
Year, a final Consolidated and consolidating budget by month for such Fiscal
Year;

     

    (f) within
seventeen (17) days (or such longer period as the Administrative Agent may agree
in its reasonable discretion, but in any event not to exceed twenty-five (25)
days) after the end of each month, a certificate in the form of Exhibit D (a “Borrowing Base
Certificate”) showing the Borrowing Base as of the close of business on
the last day of the immediately preceding month, each such Borrowing Base
Certificate to be certified as complete and correct on behalf of the Loan
Parties by a Financial Officer of the Lead Borrower, provided, however, if and so
long as an Event of Default has occurred and is continuing or if Excess
Availability is less than the greater of (i) twenty (20%) percent of the lesser
of the then (x) Total Commitments or (y) Borrowing Base and (ii) $25,000,000,
Administrative Agent may require that Borrowers furnish such Borrowing Base
Certificate (showing the Borrowing Base as of the close of business on the last
day of the immediately preceding week) weekly on Wednesday of each
week;

     

    (g) promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Lead Borrower or any
other Loan Party with the Securities and Exchange Commission, or any
Govern­mental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as the case may
be;

     

    (h) the
financial and collateral reports described on Schedule 5.1(h) hereto, at the times set forth in such
Schedule;

     

    (i) with
respect to each Permitted Acquisition, to the extent permitted by Applicable
Law, as soon as available, but not less than ten (10) Business Days prior to the
consummation of a Permitted Acquisition, written notice to the Administrative
Agent of such Permitted Acquisition together with a copy of all business and
financial information reasonably requested by the Administrative Agent and, in
the event that the total consideration paid or payable in connection with such
Permitted Acquisition (whether in cash, property or securities) exceeds
$35,000,000 or the total consideration paid or payable in connection with such
Permitted Acquisition together with all other Permitted Acquisitions consummated
after the Closing Date (whether in cash, property or securities) exceeds
$100,000,000, a certificate of a Financial Officer of the Lead Borrower
certifying (and showing the calculations therefor in reasonable detail) that the
Payment Conditions will be satisfied, and (ii) as soon as available the
information provided to the board of directors of the Lead Borrower with respect
to such Permitted Acquisition;

     

    (j) with
respect to each Permitted Acquisition, to the extent permitted by Applicable
Law, as soon as available, (i) copies of the most recent audited (if available),
and if later, unaudited Consolidated financial statements of the Person which is
the subject of the Permitted Acquisition, (ii) a description of the proposed
Permitted Acquisition in such detail as the Administrative Agent may reasonably
request, including copies of letters of intent and purchase and sale agreements
or other acquisition documents executed in connection with the proposed
Permitted Acquisition, (iii) an unaudited pro forma Consolidated
balance sheet and income statement of the Loan Parties as of the end of the most
recently completed fiscal quarter but prepared as though the Permitted
Acquisition had occurred on such date and related pro forma calculations of
Excess Availability (as of the last day of each Fiscal Quarter) and the Fixed
Charge Coverage Ratio for the subsequent four fiscal quarters period, and (iv)
unaudited projections of balance sheets and income statements and related
calculations for the following four fiscal quarters, assuming the Permitted
Acquisition has closed;

     

    (k) notice of
any intended (i) sale or other disposition of assets of any Loan Party permitted
under Section 6.5(c), (d) and (e) hereof at least
three (3) Business Days prior to the date of consummation such sale or
disposition or (ii) incurrence of any Indebtedness permitted hereunder promptly
following the incurrence of such Indebtedness;

     

    (l) within
fifteen (15) days after receipt thereof, copies of all final (as distinguished
from a preliminary or discussion draft) reports submitted to the Lead Borrower
or any other Loan Party by independent certified public accountants in
connection with each annual, interim or special audit of the books of the Loan
Parties made by such accountants, including any management letter commenting on
the Borrowers’ internal controls submitted by such accountants to management in
connection with their annual audit;

     

    (m) promptly
after their preparation, copies of any and all proxy statements, financial
statements (other than those described in subsections (a) and (b) hereof), and
reports which the Lead Borrower makes available to its shareholders or any
holder of any Indebtedness;

     

    (n) if
requested by the Administrative Agent, promptly after filing with the IRS or any
other applicable Governmental Authority, a copy of each tax return filed by any
Loan Party;

     

    (o) within
seventeen (17) days (or such longer period as the Administrative Agent may agree
in its reasonable discretion, but in any event not to exceed twenty-five (25)
days) of the end of each fiscal month (unless specifically indicated otherwise),
or more frequently if requested by the Administrative Agent, as of the preceding
fiscal month end, in form reasonably satisfactory to the Administrative Agent:
(a) a schedule of each Loan Party’s Accounts created since the last such
schedule; (b) an aging of each Loan Party’s Accounts together with a
reconciliation to the previous fiscal month end’s accounts receivable balance of
such Loan Party’s Accounts and to its general ledger; (c) a summary aging
by payee of each Loan Party’s accounts payable; and (d) upon the Agent’s
request, a statement of the balance of each of the intercompany accounts of the
Loan Parties; and

     

    (p) promptly
following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Lead Borrower or any other Loan
Party, or compliance with the terms of any Loan Document, as the Agents or any
Lender may reasonably request.

     

    5.2 Notices of
Material Events. The
Borrowers will, and will cause each other Loan Party to furnish to the
Administrative Agent, the Issuing Banks, the Acceptance Lenders, the Collateral
Agent, and each Lender prompt written (except as provided in clause (e) below)
notice of the following:

     

    (a) the
occurrence of any Default or Event of Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with respect
thereto;

     

    (b) the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting any Loan Party that,
if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

     

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

     

    (d) any other
development that results in, or could reasonably be expected to result in, a
Material Adverse Effect;

     

    (e) telephonic
notice of any change of the chief executive officer or chief financial officer
of the Lead Borrower;

     

    (f) any
pending or threatened (in writing) strike, work stoppage, unfair labor practice
claim, or other labor dispute affecting any Loan Party which could reasonably be
expected to have, or has resulted in, a Material Adverse Effect;

     

    (g) the
filing of any Lien for unpaid taxes in excess of $5,000,000 against any Loan
Party;

     

    (h) any
casualty or other insured damage to any material portion of the Collateral or
the commencement of any action or proceeding for the taking of any material
portion of the Collateral or any part thereof or interest therein under power of
eminent domain or by condemnation or similar proceeding;

     

    (i) the
discharge by any Loan Party of its present independent accountants or any
withdrawal or resignation by such independent accountants; and

     

    (j) any
material adverse change in the business, operations, or financial affairs of the
Loan Parties taken as a whole.

     

    Each
notice delivered under this Section shall be accompanied by a statement of a
Financial Officer or other executive officer of the Lead Borrower setting forth
the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect
thereto.

     

    5.3 Information
Regarding Collateral.

     

    (a) The Lead
Borrower will furnish to the Administrative Agent at least thirty (30) days’
prior written notice of any change (i) in any Loan Party’s legal name or in
any trade name used to identify it in the conduct of its business or in the
ownership of its properties, (ii) in 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) in any Loan Party’s identity or
organizational structure or (iv) in any Loan Party’s jurisdiction of
incorporation, Federal Taxpayer Identification Number or organizational
identification number assigned to it by its state of organization.

     

    (b) Each
year, at the time of delivery of annual financial statements with respect to the
preceding Fiscal Year pursuant to Section 5.1(a), the Lead Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer of the
Lead Borrower setting forth the information required pursuant to Section 2
of the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent Perfection Certificate delivered
pursuant to this Section.

     

    5.4 Existence;
Conduct of Business. Each
Borrower will, and will cause each other Loan Party to, do or cause to be done
all things necessary to comply with its respective Charter Documents, and to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business, provided
that the foregoing shall not prohibit any merger, amalgamation, consolidation,
liquidation, or dissolution permitted under Section 6.3 or any sale, lease,
transfer or other disposition permitted under Section 6.5.

     

    5.5 Payment of
Obligations.

     

    (a) Each
Borrower will, and will cause each other Loan Party to, pay its Indebtedness and
other obliga­tions (other than Indebtedness described in the parenthetical
in clause (a) of the definition thereof which is not Material Indebtedness
unless the failure to so pay such Indebtedness could reasonably be expected to
result in a Material Adverse Effect), including tax liabilities, before the same
shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropri­ate proceedings,
(b) such Borrower or such other 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, (d) no Lien secures
such obligation (other than tax Liens in an amount not to exceed $5,000,000),
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 Administrative Agent under Section
2.3.

     

    (b) Without
limiting the foregoing, the Lead Borrower shall either defease, repurchase or
redeem the Senior Notes as permitted by Section 6.7(b)(ii) hereof or refinance
the Senior Notes with Refinancing Notes, in each case at least 120 days prior to
the scheduled maturity date of the Senior Notes, provided, however, that (i) the
failure of the Borrower to have defeased, repurchased or redeemed the Senior
Notes or to have refinanced the Senior Notes at least 120 days prior to the
scheduled maturity date of the Senior Notes as provided above shall not
constitute a Default or Event of Default and (ii) if the Senior Notes have not
been so defeased, repurchased, redeemed or refinanced as provided above, the
Administrative Agent shall impose an Availability Reserve in an amount equal to
the outstanding principal amount of the Senior Notes until such Senior Notes are
repurchased, redeemed or refinanced.

     

    5.6 Maintenance of
Properties. Each
Borrower will, and will cause each other Loan Party to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.

     

    5.7 Insurance.

     

    (a) Each
Borrower will, and will cause each other Loan Party
to,  (i) maintain insurance with financially sound and reputable
insurers reasonably acceptable to the Administrative Agent (or, to the extent
consistent with prudent business practice, a program of self-insurance approved
by the Administrative Agent, such approval not to be unreasonably withheld) on
such of its property and in at least such amounts and against at least such
risks as is customary with companies in the same or similar businesses operating
in the same or similar locations, including public liability insurance against
claims for personal injury or death occurring upon, in or about or in connection
with the use of any properties owned, occupied or controlled by it (including
the insurance required pursuant to the Security Documents); (ii) maintain such
other insurance as may be required by law; and (iii) furnish to the
Administrative Agent, upon written request, full information as to the insurance
carried.  The Administrative Agent shall not, by the fact of
approving, disapproving, accepting, obtaining or failing to obtain any such
insurance, incur liability for the form or legal sufficiency of insurance
contracts, solvency of insurance companies or payment of lawsuits, and each Loan
Party hereby expressly assumes full responsibility therefor and liability, if
any, thereunder.  The Borrowers shall, and shall cause each other Loan
Party to, furnish to the Administrative Agent certificates or other evidence
satisfactory to the Administrative Agent of compliance with the foregoing
insurance provisions.  The Lead Borrower shall promptly notify the
Administrative Agent with respect to any claim relating in whole or in part to
the Collateral in excess of $3,000,000.  So long as no Cash Dominion
Event has occurred and is continuing, the Loan Parties shall have the right to
negotiate and/or settle insurance claims without the consent or approval of the
Administrative Agent.  After the occurrence of a Cash Dominion Event
and during the continuance thereof, the Loan Parties will not settle any
insurance claim with a value in excess of $3,000,000 without the consent of the
Administrative Agent, which consent will not be unreasonably withheld or
delayed.

     

    (b) For each
of the insurance policies covering Collateral, each Loan Party shall cause the
Collateral Agent to be named as a loss payee or additional insured, as
applicable, in a manner acceptable to the Administrative Agent.  Each
all risk property insurance policy covering Collateral shall contain (i) a
clause or endorsement requiring the insurer to give not less than thirty (30)
days prior written notice to the Collateral Agent in the event of cancellation
or non-renewal of such policy for any reason whatsoever except non-payment of
premium and a clause or endorsement requiring the insurer to give not less than
ten (10) days prior written notice to the Collateral Agent in the event of
cancellation of such policy for non-payment of premium (giving the Collateral
Agent the right to cure defaults in the payment of premiums), (ii) to the extent
available from the applicable insurer, a clause or endorsement stating that the
interest of the Collateral Agent shall not be impaired or invalidated by any act
or neglect of the insured Person or the owner of any premises, including,
without limitation, as a result of the use of any such premises for purposes
more hazardous than are permitted by such policy, and (iii) to the extent
available from the applicable insurer, a clause or endorsement stating that none
of the Loan Parties, the Administrative Agent, the Collateral Agent, or any
other party shall be a coinsurer.  Each commercial general liability
policy shall contain (1) a clause or endorsement requiring the insurer to give
not less than thirty (30) days prior written notice to the Collateral Agent in
the event of cancellation or non-renewal of such policy for any reason
whatsoever except non-payment of premium and a clause or endorsement requiring
the insurer to give not less than ten (10) days prior written notice to the
Collateral Agent in the event of cancellation of such policy for non-payment of
premium (giving the Collateral Agent the right to cure defaults in the payment
of premiums), and (2) a clause or endorsement stating that the Collateral Agent
shall be named as additional insured parties, mortgagee or assignee, as
applicable.  All premiums for such required insurance shall be paid by
the Loan Parties when due, and certificates of insurance shall be sent to the
appropriate Loan Parties and the Collateral Agent, and if requested by the
Collateral Agent, photocopies of the policies, shall be delivered to the
Collateral Agent. The Loan Parties shall deliver to the Collateral Agent, prior
to the cancellation 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 Collateral Agent).  To the extent
requested by the Collateral Agent, the Loan Parties shall deliver to the
Collateral Agent evidence satisfactory to the Collateral Agent of payment of the
applicable portion of the annual premium then due and payable.  If any
Loan Party fails to procure (or cause to be procured) such insurance or to pay
the premiums therefor when due, the Agents may, without waiving any Event of
Default occasioned thereby, obtain such insurance and pay such premiums at the
expense of the Loan Parties.  All proceeds of any insurance claim
relating to Collateral shall be promptly deposited by the applicable Loan Party
to a Blocked Account or the Concentration Account, and such proceeds until so
deposited shall be held in trust for the Collateral Agent by the applicable Loan
Party.  The Agents shall apply any proceeds received in accordance
with Section 2.24 hereof or Section 6.2 of the
Security Agreement, as applicable.

     

    (c) None of
the Agents or other Secured 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 5.7.  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 Agent or
Secured 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 Agents and the other
Secured Parties and their agents and employees.  The designation of
any form, type or amount of insurance coverage by any Agent or Secured Party
under this Section 5.7 shall in no event be deemed a
representation, warranty or advice by such Agent or Secured Party that such
insurance is adequate for the purposes of the business of the Loan Parties or
the protection of their properties.

     

    (d) The Lead
Borrower shall respond to requests from the Collateral Agent for information
relating to insurance within ten (10) Business Days of the Lead Borrower’s
receipt of such request.  To the extent that the Lead Borrower fails
to reasonably satisfy such request within such period, the Lead Borrower will
permit any representatives that are designated by the Collateral 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. The Loan Parties shall pay the reasonable fees and expenses of any
representatives retained by the Collateral Agent to conduct any such
inspection.

     

    5.8 Intentionally
Omitted.

     

    5.9 Books and
Records; Inspection and Audit Rights.

     

    (a) Each
Borrower will, and will cause each other Loan Party to, keep proper books of
record and account in which full, true and correct entries in all material
respects are made of all dealings and transactions in relation to its business
and activities. Each Borrower will permit any representatives designated by any
Agent, upon reasonable prior notice (unless an Event of Default has occurred and
is continuing in which event no such notice shall be required), to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers, all on
reasonable advance notice to the Lead Borrower (unless an Event of Default then
exists) and at such reasonable times during normal business hours and as often
as reasonably requested.

     

    (b) Each
Borrower will, and will cause each other Loan Party to, from time to time upon
the reasonable request and reasonable prior notice of the Collateral Agent or
the Required Lenders through the Administrative Agent, permit any Agent or
professionals (including consultants, accountants, lawyers and appraisers)
retained by the Agents to conduct appraisals, commercial finance examinations
and other evaluations, including, without limitation, of (i) the Borrowers’
practices in the computation of the Borrowing Base and (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.  Without
limiting the foregoing:

     

    (i) during
any period of four (4) consecutive Fiscal Quarters during which Excess
Availability is at all times greater than or equal to the greater of (A)
seventeen and one-half percent (17.5%) of the lesser of the then (x) Total
Commitments or (y) Borrowing Base and (ii) $25,000,000, the Administrative Agent
or professionals (including consultants, accountants, lawyers and appraisers)
retained by the Agents shall conduct one (1) appraisal of the Loan Parties’
Inventory and one (1) commercial finance examination;

     

    (ii) during
any period of four (4) consecutive Fiscal Quarters during which Excess
Availability is at any time less than the greater of (A) seventeen and one-half
percent (17.5%) of the lesser of the then (x) Total Commitments or (y) Borrowing
Base and (ii) $25,000,000, in addition to the appraisal and commercial finance
examination described in clause (i) above, the Administrative Agent or
professionals (including consultants, accountants, lawyers and appraisers)
retained by the Agents shall conduct one (1) additional appraisal of the Loan
Parties’ Inventory and one (1) additional commercial finance examination;
and

     

    (iii) in
addition to the appraisals and commercial finance examinations described in
clauses (i) and (ii) above, in the Administrative Agent’s discretion, the
Administrative Agent or professionals (including consultants, accountants,
lawyers and appraisers) retained by the Agents may conduct one (1) additional
appraisal of the Loan Parties’ Inventory and one (1) additional commercial
finance examination during any period of four (4) consecutive Fiscal
Quarters.

     

    The Loan
Parties shall pay the reasonable fees and expenses of the Administrative Agent
or professionals (including consultants, accountants, lawyers and appraisers)
retained by the Agents in connection with the appraisals and commercial finance
examinations (i) described in clauses (i), (ii) and (iii) above, (ii) undertaken
at any time at the request of the Administrative Agent if required by Applicable
Law and (iii) undertaken at the request of the Administrative Agent, as it in
its discretion deems necessary or appropriate, after the occurrence and the
continuation of an Event of Default.  In addition to the foregoing the
Administrative Agent will have the right to conduct additional commercial
finance examinations and appraisals during normal business hours and upon
reasonable advance notice at the expense of the Administrative Agent, as it in
its discretion deems necessary or appropriate.

     

    (c) The
Borrowers shall, at all times, retain independent certified public accountants
who are reasonably satisfactory to the Administrative Agent.

     

    5.10 Fiscal
Year.  Each
Loan Party shall have a fiscal year of a 52 or 53 week period ending on the
Saturday nearest to January 31st and shall notify the Administrative Agent of
any change in such fiscal year.

     

    5.11 Physical
Inventories.

     

    (a) The
Collateral Agent, at the expense of the Loan Parties, may participate in and/or
observe each physical count and/or inventory of so much of the Collateral as
consists of Inventory which is undertaken on behalf of the Loan Parties so long
as such participation does not disrupt the normal inventory schedule or
process.

     

    (b) The Loan
Parties, at their own expense, shall undertake physical inventories and cycle
counts to be undertaken at the times, using practices, and in the manner
consistent with their practices in effect on the Closing Date.

     

    (c) Upon the
request of the Collateral Agent, the Loan Parties shall provide the Collateral
Agent with a reconciliation of the results of each such physical inventory or
cycle count.  The Loan Parties shall post the results of each such
physical inventory to the Loan Parties’ stock ledger and general ledger, as
applicable.

     

    (d) The
Collateral Agent, in its discretion, if any Event of Default exists, may cause
such additional inventories to be taken as the Collateral Agent determines
(each, at the expense of the Loan Parties).  The Collateral Agent
shall use its best efforts to schedule any such inventories so as to not
unreasonably disrupt the operation of the Loan Parties’ business.

     

    5.12 Compliance with
Laws. Each
Borrower will, and will cause each other Loan Party to, comply in all material
respects with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

     

    5.13 Use of
Proceeds and Letters of Credit and
Acceptances. The
proceeds of Loans made hereunder and Letters of Credit and Acceptances issued
hereunder will be used only (a) for Restricted Payments and Permitted
Acquisitions, (b) to finance the acquisition of working capital assets of the
Loan Parties, including the purchase of inventory and equipment, in each case in
the ordinary course of business, (c) to finance Capital Expenditures of the
Borrowers, (d) to defease, redeem or repurchase the Senior Notes in accordance
with Section 6.7(b)(ii) hereof and (e) for general corporate purposes, all to
the extent permitted herein. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations U and
X.

     

    5.14 Additional
Subsidiaries.  If
any additional Material Subsidiary of any Loan Party is formed or acquired after
the Closing Date or if any Subsidiary becomes a Material Subsidiary, the Lead
Borrower will notify the Administrative Agent thereof and the Loan Parties will
cause such Material Subsidiary to become a Borrower or Facility Guarantor
hereunder, as the Administrative Agent may request, and under each applicable
Security Document in the manner provided therein within fifteen (15) days after
such Material Subsidiary is formed or acquired or becomes a Material Subsidiary
and promptly take such actions to create and perfect Liens on such Material
Subsidiary’s assets that would otherwise constitute Collateral to secure the
Obligations as any Agent shall reasonably request.

     

    5.15 Further
Assurances.  (a)
Each Loan Party will 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 Applicable Law, or which any Agent or
the Required Lenders may reasonably 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 expense of the Loan Parties.
The Loan Parties also agree to provide to the Agents, from time to time upon
request, evidence reasonably satisfactory to the Agents as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.

     

    (b)           If
any material assets which would otherwise constitute Collateral are acquired by
any Loan Party after the Closing Date (other than assets constituting Collateral
under the applicable Security Agreement that become subject to the Lien of such
Security Agreement upon acquisition thereof), the Lead Borrower will notify the
Agents thereof, and will cause such assets to be subjected to a Lien securing
the Obligations and will take such actions as shall be necessary or reasonably
requested by the Collateral Agent to grant and perfect such Liens, including
actions described in paragraph (a) of this Section, all at the expense of
the Loan Parties.

     

    (c)           Upon
the request of the Administrative Agent, the Loan Parties shall cause each of
their customs brokers and/or warehouses that have not already done so to deliver
an agreement to the Administrative Agent covering such matters and in form
substantially similar to the agreements with customs brokers and/or warehouse in
effect on the Closing Date.

     

    6.  NEGATIVE
COVENANTS.

     

    Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees and other Obligations payable hereunder and under the other
Loan Documents have been paid in full and all Letters of Credit and Acceptances
have expired or terminated or have been fully cash collateralized or replaced
and all L/C Disbursements shall have been reimbursed, each Loan Party covenants
and agrees with the Agents and the Lenders that:

     

    6.1 Indebtedness and
Other Obligations. The
Borrowers will not, and will not permit any other Loan Party to, create, incur,
assume or permit to exist any Indebtedness, except, as long as no Event of
Default exists at the time of incurrence of such Indebtedness or would arise
therefrom:

     

    (a) Indebtedness
created under the Loan Documents;

     

    (b) Indebtedness
set forth in Schedule
6.1 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof;

     

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

     

    (d) Indebtedness
of  the Loan Parties to finance the acquisition of any 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 extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or decreased
weighted average life thereof, provided that the aggregate principal amount of
Indebtedness permitted by this clause (d) shall not exceed $35,000,000 at any
time outstanding unless, at the time of incurrence of any Indebtedness which
would result in such amount being exceeded, the Payment Conditions shall have
been satisfied;

     

    (e) Indebtedness
incurred to finance any Real Estate now or hereafter owned by any Borrower or
incurred in connection with any sale-leaseback transaction;

     

    (f) Indebtedness
under Hedging Agreements, other than for speculative purposes, entered into in
the ordinary course of business;

     

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

     

    (h) Unsecured
Indebtedness of a Loan Party to one or more Foreign Subsidiaries in an aggregate
principal amount at any one time outstanding not in excess of
$200,000,000;

     

    (i) Indebtedness
in respect of the Senior Notes and the Refinancing Notes;

     

    (j) Subordinated
Debt (other than Indebtedness described in subsection (k) below) provided that after
giving effect to the incurrence thereof, the Payment Conditions are
satisfied;

     

    (k) Unsecured
Indebtedness for borrowed money, including, without limitation, Subordinated
Debt (other than Indebtedness described in subsection (j) above), provided that (A)
after giving effect to the incurrence thereof and the projected refinancing or
refunding thereof, the Payment Conditions are satisfied (except that it shall
not be necessary to satisfy the Payment Conditions with respect to any such
refinancing, refunding or exchange for any bridge facility permitted under this
Section 6.1(k)) with the proceeds of any publicly issued or privately placed
notes, any exchange notes or any rollover notes, in each case issued to
refinance or refund, or in exchange for any such bridge facility), (B)
constitutes a bridge loan pending the consummation of a debt or equity issuance,
and (C) the principal of which will not be repaid (other than (1) from the
proceeds of such debt or equity issuance or from any rollover loans, publicly
issued or privately placed notes, or exchange notes issued in exchange for the
bridge loan, or (2) as permitted pursuant to Section 6.7(b)(i) hereof) until all
Obligations have been paid in full and all Commitments terminated;

     

    (l) Indebtedness
represented by letters of credit or acceptances issued in any currency other
than Dollars which any Issuing Bank or Acceptance Lender, as applicable, was
unable or unwilling to issue according to the terms hereof backed by Dollar
denominated Letters of Credit or Acceptances;

     

    (m) Guarantees
of Indebtedness otherwise allowed under this Section 6.1 and Section 6.4 hereof
and other obligations of any other Loan Party which do not constitute
Indebtedness,

     

    (n) Guarantees
of lease obligations for retail and other business locations sold by a Loan
Party in connection with any sale permitted pursuant to Section 6.5 hereof but
only to the extent of any such lease obligation as of the date of sale of such
location;

     

    (o) Other
unsecured Guarantees of Indebtedness and other obligations of any Subsidiary
which is not a Loan Party, provided that no
payment shall be made on account of any such Guarantee unless the Payment
Conditions are satisfied at the time of payment;

     

    (p) In
addition to Indebtedness permitted under subsection (h) above, Indebtedness (i)
owing by a Loan Party to any other Subsidiary of the Lead Borrower which is not
a Loan Party, subject to the Dollar limitations set forth in clause (r) hereof,
and (ii) Indebtedness of a Subsidiary of the Lead Borrower which is not a Loan
Party to another such Subsidiary which is not a Loan Party;

     

    (q) Indebtedness
assumed by a Loan Party or a Subsidiary of a Loan Party or a Person who will
become a Loan Party (or Indebtedness secured by a Lien in effect prior to any
such acquisition on property acquired in connection with such acquisition, which
property would not be of a type included in the Borrowing Base) in connection
with a Permitted Acquisition, provided that the aggregate principal amount of
Indebtedness permitted by this clause (q) shall not exceed $35,000,000 at any
time outstanding unless, at the time of incurrence of any Indebtedness which
would result in such amount being exceeded, the Payment Conditions shall have
been satisfied;

     

    (r) Indebtedness
consisting of Earn-Out Obligations, but only to the extent that the contingent
consideration relating thereto is paid within thirty (30) days after the amount
due is finally determined; and

     

    (s) other
unsecured Indebtedness in an aggregate principal amount not to exceed
$100,000,000 at any time outstanding, unless at the time of incurrence of any
Indebtedness which would result in such amount being exceeded, the Payment
Conditions shall have been satisfied.

     

    6.2 Liens. The
Borrowers will not, and will not permit any other Loan Party to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
Accounts) or rights in respect of any thereof, except as long as no Event of
Default exists at the time of creation or incurrence of such Lien or would arise
therefrom:

     

    (a) Liens
created under the Loan Documents;

     

    (b) Permitted
Encumbrances;

     

    (c) any Lien
on any property or asset of any Borrower or other Loan Party set forth in Schedule 6.2, provided that (i)
such Lien shall not apply to any other property or asset of such Person and (ii)
such Lien shall secure only those obligations that it secures as of the Closing
Date, and extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

     

    (d) Liens on
fixed or capital assets acquired by any Loan Party, provided that (i)
such Liens secure Indebtedness permitted by Section 6.1(d), (ii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring such fixed or capital assets and (iii) such
Liens shall not apply to any other property or assets of the Borrowers or other
Loan Party;

     

    (e) Liens to
secure Indebtedness permitted by Section 6.1(e)
provided that
such Liens shall not apply to any property or assets of the Loan Parties other
than the Real Estate so financed or which is the subject of a sale-leaseback
transaction;

     

    (f) Liens to
secure Indebtedness permitted by Section 6.1(q), provided that (i)
such Lien shall not apply to any other property or asset of such Person, (ii)
such Lien shall not have been incurred in contemplation of, or in connection
with, such Permitted Acquisition, (iii) shall secure only those obligations that
it secures as of the date of the Permitted Acquisition, and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof, and (iv) shall not apply to any Collateral;

     

    (g) Liens
existing on assets prior to the acquisition thereof, which are directly or
indirectly acquired in a Permitted Acquisition provided that (i)
such Liens secure Indebtedness permitted under Section 6.1 hereof or obligations
to a lessor under a lease of Real Estate to a Loan Party, (ii) such Liens are
not created in contemplation of or in connection with such Permitted
Acquisition, (iii) such Liens shall not apply to any other property or assets of
a Loan Party, (iv) such Liens shall secure only the Indebtedness or other
obligations that such Liens secure on the date of the Permitted Acquisition; and
(v) such Liens shall not attach to assets which would be of a type included as
Collateral or in the Borrowing Base, except for non-material Liens acceptable to
the Administrative Agent; and

     

    (h) Liens on
cash and cash equivalents to secure letters of credit permitted pursuant to
Section 6.1(q).

     

    6.3 Fundamental
Changes.  (a)           The
Borrowers shall not, and shall not permit any other Loan Party to, liquidate,
merge, amalgamate, or consolidate into or with any other Person or enter into or
undertake any plan or agreement of liquidation, merger, amalgamation, or
consolidation with any other Person, provided that (i) a Loan Party may merge or
amalgamate with another Person in connection with a Permitted Acquisition if
such Loan Party is the surviving company, (ii) any wholly-owned Subsidiary of
any Borrower may merge, amalgamate, or consolidate into or with such Borrower or
any other wholly-owned Subsidiary of such Borrower if no Default or Event of
Default has occurred and is continuing or would result from such merger and if
such Borrower, a Loan Party (if such Loan Party is a party to such merger) or
such Subsidiary is the surviving company, (iii) a Subsidiary of any Borrower may
merge or amalgamate into another entity in connection with a Permitted
Acquisition if, upon consummation of such merger or amalgamation, the surviving
entity shall be a direct or indirect wholly-owned Subsidiary of such Borrower
and becomes a Borrower or Facility Guarantor and a party to the Security
Documents, (iv) any Domestic Subsidiary may merge into any other Domestic
Subsidiary, provided
that if a Loan Party is a party to such merger, either such Loan Party
shall be the surviving company or the surviving company shall become a Loan
Party, and (v) the Lead Borrower may merge with a newly formed shell
corporation, the sole purpose and effect of which merger is to reincorporate the
Lead Borrower in a state of the United States of America other than the State of
New York and where the surviving corporation in such merger
has  complied with its obligations under Section 5.14 hereof
simultaneously with such merger.

     

    (b) The
Borrowers shall not, and shall not permit any other Loan Party to, engage to any
material extent in any business other than businesses of the type conducted by
the Loan Parties on the date of execution of this Agreement and businesses
reasonably related thereto, except that any Loan Party may withdraw from any
business activity which such Loan Party reasonably deems unprofitable or
unsound, provided that
promptly after such withdrawal, the Lead Borrower shall provide the
Administrative Agent with written notice thereof.

     

    6.4 Investments,
Loans, Advances, Guarantees and Acquisitions. The
Borrowers shall not, and shall not permit any other Loan Party to, purchase,
hold or acquire (including pursuant to any merger or amalgamation with any
Person that was not a wholly owned Subsidiary prior to such merger or
amalgamation) any Capital Stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any Indebtedness
of, or make or permit to exist any Investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit
(each of the foregoing, an “Investment”), except for:

     

    (a) Permitted
Acquisitions;

     

    (b) Permitted
Investments;

     

    (c) Investments
existing on the Closing Date, and set forth on Schedule 6.4, to the
extent such investments would not be permitted under any other clause of this
Section;

     

    (d) 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;

     

    (e) Investments
in Hedging Agreements other than for speculative purposes, entered into in the
ordinary course of business;

     

    (f) Permitted
Stock Repurchases, as long as no Event of Default exists at the time of making
of such Permitted Stock Repurchase or would arise therefrom;

     

    (g) Investments
by a Loan Party in a Subsidiary (including, without limitation, in a Foreign
Subsidiary) which is not a Loan Party, in a joint venture (including, without
limitation, in or with a foreign Person) or in a Person (including, without
limitation, in a foreign Person)which constitutes a minority equity interest in
such Person provided that such
Investments do not exceed $35,000,000 for any single Investment or $100,000,000
in the aggregate for all such Investments after the Closing Date, unless, in
each case, the Payment Conditions are satisfied; and provided further that
for purposes of calculation, the amount of any Investment shall be the aggregate
cash Investment less
all cash returns, cash dividends and cash distributions (or the fair market
value of any non-cash returns, dividends and distributions) received by such
Loan Party from such Subsidiary, joint venture or Person;

     

    (h) Investments
by a Loan Party Borrower in another Loan Party;

     

    (i) Commissions,
loans or advances to employees for the purpose of travel, entertainment or
relocation in the ordinary course of business and consistent with past
practices, provided that the aggregate amount thereof outstanding at any one
time shall not, if not repaid, be reasonably expected to have a Material Adverse
Effect; and

     

    (j) other
Investments in an aggregate amount not to exceed $35,000,000 after the Closing
Date.

     

    6.5 Asset
Sales.

     

    The
Borrowers will not, and will not permit any other Loan Party to, sell, transfer,
lease or otherwise dispose of any asset, including any Capital Stock, nor will
the Loan Parties issue any additional shares of its Capital Stock or other
ownership interests in such Loan Party, or issue any shares of Disqualified
Stock, except as long as no Event of Default would arise therefrom:

     

    (a) (i) sales
of Inventory, or (ii) used, obsolete or surplus property, or
(iii)  Permitted Investments, in each case in the ordinary course of
business;

     

    (b) sales,
transfers and dispositions among the Loan Parties;

     

    (c) the sale
of the Headquarters;

     

    (d) the sale
and leaseback of any other of the Loan Parties’ Real Estate or other fixed
assets;

     

    (e) the
Designated Dispositions;

     

    (f) other
sales, transfers, or dispositions of assets not in the ordinary course of
business (including retail store locations) provided that (x) no Default
or Event of Default then exists or would arise therefrom and (y) if the fair
market value of all such other sales, transfers and dispositions exceeds
$35,000,000 for the Loan Parties in the aggregate during any Fiscal Year (net of
the related sales costs, if any, of such other property), all of the proceeds of
such sale, transfer or disposition (net of the related sales costs, if any, of
such other property) in excess of $35,000,000 shall be paid to the
Administrative Agent (whether or not a Cash Dominion Event has occurred and is
then continuing) for application to the Obligations, provided further that, if a
Cash Dominion Event then exists and is continuing, all of such proceeds (and not
only those in excess of $35,000,000) shall be paid to the Administrative Agent
for application to the Obligations; and

     

    (g) the
issuance of additional shares of Capital Stock or other ownership interests in a
Loan Party (other than Disqualified Stock) as long as no Change in Control
results therefrom;

     

    provided that all
sales, transfers, leases and other dispositions permitted hereby (other than
sales, transfers and other disposition permitted under clauses (a)(ii), (b) and
(g)) shall be made at arm’s length and for fair value and solely for cash
consideration; and further provided that
the authority granted hereunder may be terminated in whole or in part by the
Administrative Agent upon the occurrence and during the continuance of any Event
of Default.

     

    6.6 Restrictive
Agreements. The Borrowers will
not, and will not permit any other Loan Party to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of any
Loan Party to create, incur or permit to exist any Lien upon any of its property
or assets in favor of the Secured Parties, or (b) the ability of (i) any
Loan Party (other than the Lead Borrower) to pay dividends or other
distributions with respect to any shares of its Capital Stock or (ii) any Loan
Party to make or repay loans or advances to any Loan Party or to guarantee
Indebtedness of any Loan Party, provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by Applicable
Law or by the Loan Documents, (ii) the foregoing shall not apply to restrictions
and conditions existing on the Closing Date identified on Schedule 6.6 hereto
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
that such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of this Section shall
not apply to restrictions of conditions imposed by any agreement relating to
secured Indebtedness permitted hereunder if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, and (v) clause
(a) of this Section shall not apply to customary provisions in leases or
licenses or other agreements, including, without limitation, those relating to
franchises, patents, copyrights, trademarks, tradenames, service marks, licenses
and permits, and other intellectual property restricting the assignment
thereof.

     

    6.7 Restricted
Payments; Certain Payments of Indebtedness.  (a)
The Borrowers will not, and will not permit any other Loan Party to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except as long as no Default or Event of Default exists or would arise therefrom
(i) the Lead Borrower may declare and pay dividends quarterly with respect to
its Capital Stock provided that the
aggregate of all such dividends shall not exceed $35,000,000 for any single
dividend declared to stockholders or $100,000,000 in the aggregate for all such
dividends after the Closing Date, unless, in each case, the Payment Conditions
are satisfied, (ii) the Lead Borrower may declare dividends payable solely in
additional shares of its common stock, (iii) the Subsidiaries of the Lead
Borrower may declare and pay cash dividends with respect to their Capital Stock,
and (iv) the Lead Borrower may make Permitted Stock Repurchases.

     

    (b)           The
Borrowers will not at any time, and will not permit any other Loan Party to make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness (other
than the Loans), except:

     

    (i) payment
when due (excluding any voluntary prepayments and, unless otherwise agreed by
the Required Lenders, payments due upon a Change in Control) of principal,
interest, fees and expense reimbursements with respect to Indebtedness permitted
under Section 6.1, but only to the extent required
under the terms of the documents evidencing such Indebtedness;

     

    (ii) voluntary
prepayments of Indebtedness (including, without limitation, deposits of assets
to defease the Senior Notes and purchases, repurchases or redemptions of all or
any portion of the Senior Notes, whether on the open market or otherwise but
excluding voluntary prepayments of Subordinated Debt), as long as the Payment
Conditions are satisfied;

     

    (iii) Intentionally
Omitted; and

     

    (iv) refinancings
of Indebtedness described in clauses (i) and (ii), above, to the extent
permitted by Section 6.1, including, without
limitation, any refinancing as a result of any rollover loans, publicly issued
or privately placed notes or exchange notes issued in exchange for such
Indebtedness, and all fees and expenses payable in connection with such
refinancing.

     

    6.8 Transactions
with Affiliates.  Except
as set forth on Schedule 3.16 and
Restricted Payments and other transactions expressly permitted under the terms
of this Agreement, the Loan Parties will not at any time sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, officers or directors, except (a)
transactions in the ordinary course of business that are at prices and on terms
and conditions not less favorable to the Loan Parties than could be obtained on
an arm’s-length basis from unrelated third parties, (b) transactions between or
among the Loan Parties not involving any of its Affiliates, officers or
directors which would not otherwise violate the provisions of the Loan
Documents, and (c) advances for commissions, travel and other similar purposes
in the ordinary course of business to directors, officers and
employees.

     

    6.9 Additional
Subsidiaries.  The
Borrowers will not, and will not permit any other Loan Party to, create any
additional Subsidiary unless no Default or Event of Default would arise
therefrom and the requirements of Section 5.14, to the extent applicable, are
satisfied.

     

    6.10 Amendment of
Material Documents. The
Borrowers will not, and will not permit any other Loan Party to, amend, modify
or waive any of its rights under (a) its Charter Documents, or (b) any other
Material Indebtedness or material agreements, in each case to the extent that
such amendment, modification or waiver could reasonably likely to result in a
Material Adverse Effect.

     

    6.11 Environmental
Laws.  The
Loan Parties shall not (a) fail to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, or (b) become subject to any Environmental
Liability, in each case which is reasonably likely to have a Material Adverse
Effect.

     

    6.12 Fiscal
Year.  The Loan Parties shall not change their Fiscal Year
without the prior written consent of the Administrative Agent, which consent
shall not be unreasonably withheld.

     

    6.13 Minimum Fixed
Charge Coverage Ratio.   If
Excess Availability is less than the greater of (i) seventeen and one-half
(17.5%) percent of the lesser of the then (x) Total Commitments or (y) Borrowing
Base and (ii) $25,000,000 at any time, the Loan Parties shall maintain a Fixed
Charge Coverage Ratio, calculated on a trailing four Fiscal Quarters basis of
not less than 1.0:1.0.  Such Fixed Charge Coverage Ratio shall be
first tested monthly as of the month ending immediately prior to the date that
Excess Availability is first less than the greater of (i) seventeen and one-half
(17.5%) percent of the lesser of the then (x) Total Commitments or (y) Borrowing
Base and (ii) $25,000,000 and shall continue to be tested until Excess
Availability has exceeded the greater of (i) seventeen and one-half (17.5%)
percent of the lesser of the then (x) Total Commitments or (y) Borrowing Base
and (ii) $25,000,000 on each day for two consecutive Fiscal
Quarters.

     

    7.  EVENTS OF
DEFAULT.

     

    7.1 Events of
Default.  If
any of the following events (“Events of Default”) shall occur:

     

    (a) Any Loan
Party shall fail to pay any principal or interest with respect to any Loan or
any reimbursement obligation in respect of any L/C Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;

     

    (b) Any Loan
Party shall fail to pay any fees or other amounts due under this Agreement or
any other Loan Document (other than an amount referred to in
clause (a) of this Section), within three (3) Business Days of the
date when same shall become due and payable;

     

    (c) any
representation or warranty made or deemed made by or on behalf of any Loan Party
in or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any material respect when made or deemed
made;

     

    (d) the Loan
Parties shall fail to observe or perform any covenant, condition or agreement
contained in Sections 2.23, 5.1(a), 5.1(b), 5.1(d), 5.1(e), 5.1(f), 5.2,
5.4, 5.7, 5.9, 5.13, 5.14 or in Section 6;

     

    (e) any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause (a), (b),
(c), or (d) of this Section), and such failure shall continue unremedied for a
period of 15 days after notice thereof from the Administrative Agent to the Lead
Borrower;

     

    (f) any
Borrower shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness when and as the
same shall become due and payable (after giving effect to the expiration of any
grace or cure period set forth therein) other than a failure to make any payment
in respect of a Guarantee where such payment is prohibited by Section
6.1(o);

     

    (g) any Loan
Party shall fail to perform any material covenant or condition contained in any
material contract or agreement to which it is party as and when such performance
is required (after giving effect to the expiration of any grace or cure period
set forth therein);

     

    (h) any event
or condition occurs that (i) results in any Material Indebtedness becoming due
prior to its scheduled maturity or (ii) enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any such
Material Indebtedness or any trustee or agent on its or their behalf to cause
any such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity,
or to undertake any enforcement action with respect to any Material
Indebtedness, unless in the case of this clause (ii) such action is being
contested in good faith by appropriate proceedings, such contest effectively
suspends any enforcement action, and pending such contest, a Material Adverse
Effect could not reasonably be expected to result therefrom, provided that with
respect to any Material Indebtedness which is with recourse only to specific
assets of the Loan Parties, the foregoing shall not constitute an Event of
Default unless a Material Adverse Effect could reasonably be expected to result
from such action;

     

    (i) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of
any Loan Party or its debts or which seeks to stay or has the effect of staying
any creditor, or of a substantial part of its assets, under any federal, state
or provincial bankruptcy, insolvency, receivership, liquidation, winding up,
corporate or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator, administrator,
monitor, or similar official for any Loan Party or for a substantial part of its
assets, and, in any such case, either (x) such proceeding or petition shall
continue undismissed for 30 days or an order or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect for 60
days, or (y) a Material Adverse Effect shall have occurred;

     

    (j) any Loan
Party shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal,
state  or provincial bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (i) of this Section, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator, administrator,
monitor, or similar official for any Loan Party or for a substan­tial part
of its assets, (iv) file an answer admit­ting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

     

    (k) any Loan
Party shall become unable, admit in writing its inability or fail generally to
pay its debts as they become due;

     

    (l) one or
more uninsured judgments for the payment of money in an aggregate amount in
excess of $15,000,000 shall be rendered against any Loan Party or any
combination thereof and the same shall remain undischarged for a period of
thirty (30) consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any material assets of any Loan Party to enforce any such
judgment;

     

    (m) (i)           any
challenge by or on behalf of any Loan Party or other Person to the validity of
any Loan Document or the applicability or enforceability of any Loan Document
strictly in accordance with the subject Loan Document’s terms or which seeks to
void, avoid, limit, or otherwise adversely affect any security interest created
by or in any Loan Document or any payment made pursuant thereto;

     

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

     

    

    (n) a Change
in Control shall occur;

     

    (o) an ERISA
Event or Termination Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events or Termination
Events that have occurred, could reasonably be expected to result in liability
of the Borrowers in an aggregate amount exceeding $15,000,000;

     

    (p) the
occurrence of any uninsured loss (exclusive of any deductible retained by the
Borrowers under its insurance policies) to any material portion of the
Collateral;

     

    (q) the
indictment of, or institution of any legal process or proceeding against, any
Loan Party, under any federal, state, provincial, municipal, and other civil or
criminal statute, rule, regulation, order, or other requirement having the force
of law where the relief, penalties, or remedies sought or available include the
forfeiture of any material portion of the Collateral;

     

    (r) there is
filed against any Loan Party any action, suit, or proceeding under any federal,
state, or provincial racketeering statute (including the Racketeer Influenced
and Corrupt Organization Act of 1970), which action, suit, or proceeding
(i) is not dismissed within one hundred twenty (120) days and
(ii) could reasonably be expected to result in the confiscation or
forfeiture of any material portion of the Collateral;

     

    (s) the
imposition of any stay or other order, the effect of which could reasonably be
to restrain in any material way the conduct by the Loan Parties, taken as a
whole, of their business in the ordinary course; or

     

    (t) except as
otherwise permitted hereunder, the determination by any Loan Party, whether by
vote of such Person’s board of directors or otherwise to: suspend the operation
of such Person’s business in the ordinary course, liquidate all or a material
portion of such Person’s assets or store locations, or employ an agent or other
third party to conduct any so-called store closing, store liquidation or
“Going-Out-Of-Business” sales.

     

    then, and
in every such event (other than an event with respect to each Loan Party
described in clause (h) or (i) of this Section), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Lead Borrower, take any
of the following actions, at the same or different times: (i) reduce the Total
Commitments, or the advance rates against Eligible Accounts and/or Eligible
Inventory used in computing the Borrowing Base, or reduce one or more of the
other elements used in computing the Borrowing Base or, without limiting the
definitions of Availability Reserves or Inventory Reserves, establish additional
Reserves or increase any Reserves thereunder; (ii) restrict the amount of or
refuse to make Revolving Loans; (iii) restrict or refuse to provide Letters of
Credit or Acceptances, (iv) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (v) declare the Loans and other
Obligations then outstanding to be due and payable, and thereupon the principal
of the Loans and Obligations so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; and (vi) require the Borrowers to furnish cash
collateral in an amount equal to 105% of the Letter of Credit Outstandings, (to
be applied in accordance with the provisions of Section 2.7(k) hereof) and in
case of any event with respect to any Borrower described in clause (h) or (i) of
this Section, the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Loan Parties accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Loan Parties.

     

    7.2 ­Remedies on
Default.  In
case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the maturity of the Loans and other Obligations
shall have been accelerated pursuant hereto, the Administrative Agent may, and
at the direction of the Required Lenders shall, proceed to protect and enforce
its rights and remedies under this Agreement or any of the other Loan Documents
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 Agents or the Lenders. 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.

     

    7.3 ­Application
of Proceeds.
After the
occurrence of an Event of Default and acceleration of the Obligations, all
proceeds realized from any Loan Party or on account of any Collateral shall be
applied in the manner set forth in Section 2.24 of this Agreement. All amounts
required to be applied to Loans hereunder (other than Swingline Loans) shall be
applied ratably in accordance with each Lender’s Commitment
Percentage.

     

    8.  THE
AGENTS.

     

    8.1 Administration
by Administrative Agent.  Each
Lender, the Collateral Agent, the Issuing Banks, the Acceptance Lenders and each
Secured Party hereby irrevocably designate Bank of America, N.A. as
Administrative Agent under this Agreement and the other Loan
Documents.  The general administration of the Loan Documents shall be
by the Administrative Agent. The Lenders, the Collateral Agent, the Issuing
Banks, the Acceptance Lenders and the Secured Parties each hereby irrevocably
authorizes the Administrative Agent (i) to enter into the Loan Documents to
which it is a party and (ii) at its discretion, to take or refrain from taking
such actions as agent on its behalf and to exercise or refrain from exercising
such powers under the Loan Documents as are delegated by the terms hereof or
thereof, as appropriate, together with all powers reasonably incidental thereto.
The Administrative Agent shall have no duties or responsibilities except as set
forth in this Agreement and the other Loan Documents, nor shall it have any
fiduciary relationship with any Lender, and no implied covenants,
responsibilities, duties, obligations, or liabilities shall be read into the
Loan Documents or otherwise exist against the Administrative Agent.

     

    8.2 Appointment and
Duties of Collateral Agent. Each
Lender, the Administrative Agent, the Issuing Banks, the Acceptance Lenders and
each Secured Party hereby irrevocably (i) designate Bank of America, N.A. as
Collateral Agent under this Agreement and the other Loan Documents, (ii)
authorize the Collateral Agent to enter into the Security Documents and the
other Loan Documents to which it is a party and to perform its duties and
obligations thereunder, together with all powers reasonably incidental thereto,
and (iii) agree and consent to all of the provisions of the Security Documents.
All Collateral shall be held or administered by the Collateral Agent (or its
duly-appointed agent) for its benefit and for the ratable benefit of the other
Secured Parties. Any proceeds received by the Collateral Agent from the
foreclosure, sale, lease or other disposition of any of the Collateral and any
other proceeds received pursuant to the terms of the Security Documents or the
other Loan Documents shall be paid over to the Administrative Agent for
application as provided in Sections 2.20, 2.24, or 7.3, as applicable. The
Collateral Agent shall have no duties or responsibilities except as set forth in
this Agreement and the other Loan Documents, nor shall it have any fiduciary
relationship with any Lender, and no implied covenants, responsibilities,
duties, obligations, or liabilities shall be read into the Loan Documents or
otherwise exist against the Collateral Agent.

     

    Without
limiting the generality of the foregoing, for the purposes of creating a solidarite′ active in
accordance with Article 1541 of the Civil Code of Quebec, between each Secured
Party, taken individually, and the Collateral Agent, each Loan Party and each
Secured Party (on its own behalf) acknowledges and agrees with the Collateral
Agent that such Secured Party and the Collateral Agent are conferred the legal
status of solidary creditors of each Loan Party in respect of all Obligations,
present and future, owed by each Loan Party to each Secured Party and the Agents
hereunder and under the other Loan Documents (collectively, the “Solidary
Claim”).  Accordingly, but subject (for the avoidance of doubt)
to Article 1542 of the Civil Code of Quebec, each Loan Party is irrevocably
bound to the Collateral Agent and each other Secured Party in respect of the
entire Solidary Claim of the Collateral Agent and such Secured
Party.  As a result of the foregoing, the parties hereto acknowledge
that the Collateral Agent and each other Secured Party shall at all times have a
valid and effective right of action for the entire Solidary Claim of the
Collateral Agent and such other Secured Party and the right to give full
acquittance for it and that, accordingly, without limiting the generality of the
foregoing, the Collateral Agent, as solidary creditor for itself and each other
Secured Party, shall, at all times have a valid and effective right of action in
respect of all Obligations, present and future, owed by each Loan Party to the
Collateral Agent and to the other Secured Parties or any of them under this
Agreement and the other Loan Documents and the right to give a full acquittance
for the same.  The parties further agree and acknowledge that the
Collateral Agent's Liens on the Collateral shall be granted to the Collateral
Agent, for its own benefit and for the benefit of the other Secured Parties and
as solidary creditor as hereinabove set forth.

     

    8.3 ­Sharing of
Excess Payments; Payments Set
Aside.

     

    (a) Each of
the Lenders, the Agents, the Issuing Banks and Acceptance Lenders agrees that if
it shall, through the exercise of a right of banker’s lien, setoff or
counterclaim against the Borrowers, including, but not limited to, a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim and received by such Lender,
Agent, Issuing Bank or Acceptance Lender under any applicable bankruptcy,
insolvency or other similar law, or otherwise, obtain payment in respect of the
Obligations owed it (an “excess payment”) as a
result of which such Lender, Agent, Issuing Bank or Acceptance Lender has
received payment of any Loans or other Obligations outstanding to it in excess
of the amount that it would have received if all payments at any time applied to
the Loans and other Obligations had been applied in the order of priority set
forth in Section 7.3, then such Lender, Agent,
Issuing Bank or Acceptance Lender shall promptly purchase at par (and shall be
deemed to have thereupon purchased) from the other Lenders, such Agent, the
Issuing Banks and Acceptance Lenders, as applicable, a participation in the
Loans and Obligations outstanding to such other Persons, in an amount determined
by the Administrative Agent in good faith as the amount necessary to ensure that
the economic benefit of such excess payment is reallocated in such manner as to
cause such excess payment and all other payments at any time applied to the
Loans and other Obligations to be effectively applied in the order of priority
set forth in Section 7.3 pro rata in proportion to
its Commitment Percentage; provided, that if any
such excess payment is thereafter recovered or otherwise set aside such purchase
of participations shall be correspondingly rescinded (without interest). The
Borrowers expressly consent to the foregoing arrangements and agree that any
Lender, any Agent, any Issuing Bank, or any Acceptance Lender holding (or deemed
to be holding) a participation in any Loan or other Obligation may exercise any
and all rights of banker’s lien, setoff or counterclaim with respect to any and
all moneys owing by such Borrower to such Lender, Agent, Issuing Bank or
Acceptance Lender as fully as if such Lender, Agent, Issuing Bank, or Acceptance
Lender held a Note and was the original obligee thereon, in the amount of such
participation.

     

    (b) To the
extent that any payment by or on behalf of the Loan Parties is made to any
Lender, or any Lender 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 Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under the Bankruptcy Code or otherwise, then (i) 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 (ii) each Lender,
Issuing Bank and Acceptance Lender severally agrees to pay to the Agents upon
demand its pro
rata share
(without duplication) of any amount so recovered from or repaid by the
Agents.  The obligations of the Lenders, the Issuing Banks and the
Acceptance Lenders under clause (ii) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this
Agreement.

     

    8.4 ­Agreement
of Applicable Lenders.
Upon any
occasion requiring or permitting an approval, consent, waiver, election or other
action on the part of the Applicable Lenders, action shall be taken by the
Agents for and on behalf or for the benefit of all Lenders upon the direction of
the Applicable Lenders, and any such action shall be binding on all Lenders. No
amendment, modification, consent, or waiver shall be effective except in
accordance with the provisions of Section 9.2.

     

    8.5 ­Liability of
Agents.

     

    (a) Each of
the Agents, when acting on behalf of the Lenders, the Issuing Banks and
Acceptance Lenders, may execute any of its respective duties under this
Agreement by or through any of its respective officers, agents and employees,
and none of the Agents nor their respective directors, officers, agents or
employees shall be liable to the Lenders, Issuing Banks or Acceptance Lenders or
any of them for any action taken or omitted to be taken in good faith, or be
responsible to the Lenders, Issuing Banks or Acceptance Lenders or to any of
them for the consequences of any oversight or error of judgment, or for any
loss, except to the extent of any liability imposed by law by reason of such
Agent’s own gross negligence or willful misconduct. The Agents and their
respective directors, officers, agents and employees shall in no event be liable
to the Lenders, Issuing Banks or Acceptance Lenders or to any of them for any
action taken or omitted to be taken by them pursuant to instructions received by
them from the Applicable Lenders or in reliance upon the advice of counsel
selected by it. Without limiting the foregoing, none of the Agents, nor any of
their respective directors, officers, employees, or agents (A) shall be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, or (B) shall 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
Administrative Agent or the Collateral Agent, as applicable, is required to
exercise as directed in writing by the Applicable Lenders, provided that no
Agent shall be required to take any action that, in its respective opinion or
the opinion of its counsel, may expose such Agent to liability or that is
contrary to any Loan Document or applicable law, or (C) shall, except as
expressly set forth herein and in the other Loan Documents, have any duty to
disclose, or shall 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 Administrative Agent, the Collateral Agent
or any of its Affiliates in any capacity, or (D) shall be responsible to any
Lender, Issuing Bank or Acceptance Lender for the due execution, validity,
genuineness, effectiveness, sufficiency, or enforceability of, or for any
recital, statement, warranty or representation in, this Agreement, any Loan
Document or any related agreement, document or order, or (E) shall be required
to ascertain or to make any inquiry concerning the performance or observance by
any Loan Party of any of the terms, conditions, covenants, or agreements of this
Agreement or any of the Loan Documents, or (F) shall be responsible to any
Lender, Issuing Bank or Acceptance Lender for the state or condition of any
properties of the Loan Parties or any other obligor hereunder constituting
Collateral for the Obligations of the Loan Parties hereunder or under any of the
other Loan Documents, or any information contained in the books or records of
the Loan Parties; or (G) shall be responsible to any Lender, Issuing Bank or
Acceptance Lender for the validity, enforceability, collectibility,
effectiveness or genuineness of this Agreement or any other Loan Document or any
other certificate, document or instrument furnished in connection therewith; or
(H) shall be responsible to any Lender, Issuing Bank or Acceptance Lender for
the validity, priority or perfection of any Lien securing or purporting to
secure the Obligations or the value or sufficiency of any of the
Collateral.

     

    (b) The
Agents may execute any of their duties under this Agreement or any other Loan
Document by or through their agents or attorneys-in-fact, and shall be entitled
to the advice of counsel concerning all matters pertaining to their rights and
duties hereunder or under the Loan Documents.  The Agents shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by them with reasonable care.

     

    (c) None of
the Agents nor any of their respective directors, officers, employees, or agents
shall have any responsibility to the Borrowers on account of the failure or
delay in performance or breach by any Lender (other than by any Agent in its
capacity as a Lender), Issuing Bank or Acceptance Lender of any of their
respective obligations under this Agreement or any of the other Loan Documents
or in connection herewith or therewith.

     

    (d) The
Agents shall be entitled to rely, and shall be fully protected in relying, upon
any notice, consent, certificate, affidavit, or other document or writing
believed by them to be genuine and correct and to have been signed, sent or made
by the proper person or persons, and upon the advice and statements of legal
counsel (including, without, limitation, counsel to the Loan Parties),
independent accountants and other experts selected by the Agents.  The
Agents shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless they shall first receive such
advice or concurrence of the Applicable Lenders as they deem appropriate or they
shall first be indemnified to their satisfaction by the Lenders against any and
all liability and expense which may be incurred by them by reason of the taking
or failing to take any such action.

     

    8.6 Notice of
Default.
The
Agents shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Agents have actual knowledge of the same
or have received notice from a Lender or the Lead Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the event that the Agents obtain
such actual knowledge or receives such a notice, the Agents shall give prompt
notice thereof to each of the Lenders.  The Agents 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 Agents shall
have received such direction, the Agents 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 they shall deem advisable in the best interest of
the Lenders.  In no event shall the Agents be required to comply with
any such directions to the extent that the Agents believe that the Agents’
compliance with such directions would be unlawful.

     

    8.7 Lenders’ Credit
Decisions.
Each
Lender acknowledges that it has, independently and without reliance upon the
Agents or any other Lender, and based on the financial statements prepared by
the Loan Parties and such other documents and information as it has deemed
appropriate, made its own credit analysis and investigation into the business,
assets, operations, property, and financial and other condition of the Loan
Parties and has made its own decision to enter into this Agreement and the other
Loan Documents.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in determining whether or not
conditions precedent to closing any Loan hereunder have been satisfied and in
taking or not taking any action under this Agreement and the other Loan
Documents.

     

    8.8 ­Reimbursement and Indemnification.
Each
Lender agrees (i) to reimburse (x) each Agent for such Lender’s Commitment
Percentage of any expenses and fees incurred by such Agent for the benefit of
the Lenders, Issuing Banks or Acceptance Lenders under this Agreement and any of
the other Loan Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders, Issuing Banks or Acceptance Lenders, and any other expense incurred in
connection with the operations or enforcement thereof not reimbursed by the Loan
Parties and (y) each Agent for such Lender’s Commitment Percentage of any
expenses of such Agent incurred for the benefit of the Lenders, Issuing Banks or
Acceptance Lenders that the Loan Parties have agreed to reimburse pursuant to
Section 9.3 of this Agreement or pursuant to any other Loan Document and has
failed to so reimburse and (ii) to indemnify and hold harmless the Agents and
any of their directors, officers, employees, or agents, on demand, in the amount
of such Lender’s Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against it or any of them in any way
relating to or arising out of this Agreement or any of the Loan Documents or any
action taken or omitted by it or any of them under this Agreement or any of the
other Loan Documents to the extent not reimbursed by the Borrowers (except such
as shall result from their respective gross negligence or willful
misconduct).  The provisions of this Section 8.8 shall survive the
repayment of the Obligations and the termination of the
Commitments.

     

    8.9 ­Rights of
Agents.
It is
understood and agreed that the Agents shall have the same rights and powers
hereunder (including the right to give such instructions) as the other Lenders
and may exercise such rights and powers, as well as its rights and powers under
other agreements and instruments to which it is or may be party, and engage in
other transactions with the Loan Parties, as though it were not the
Administrative Agent or the Collateral Agent, respectively, of the Lenders under
this Agreement.  Without limiting the foregoing, the Agents and their
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of commercial or investment banking, trust, advisory or other business with
the Loan Parties and their Subsidiaries and Affiliates as if they were not the
Agents hereunder.

     

    8.10 ­Notice of
Transfer.
The
Agents 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 9.5(b).

     

    8.11 ­Successor
Agent.
Any Agent
may resign at any time by giving five (5) Business Days’ written notice thereof
to the Lenders, the Issuing Banks, the Acceptance Lenders, the other Agents and
the Lead Borrower. Upon any such resignation of any Agent, the Required Lenders
shall have the right to appoint a successor Agent, which so long as there is no
Default or Event of Default shall be reasonably satisfactory to the Lead
Borrower (whose consent shall not be unreasonably withheld or delayed). If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment, within 30 days after the retiring Agent’s giving
of notice of resignation, the retiring Agent may, on behalf of the Lenders, the
other Agents, the Issuing Banks and the Acceptance Lenders, appoint a successor
Agent which shall be (i) a commercial bank (or affiliate thereof) organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of a least $100,000,000, (ii) or a Person
capable of complying with all of the duties of such Agent (and the Issuing
Banks), hereunder (in the opinion of the retiring Agent and as certified to the
Lenders in writing by such successor Agent) which, in the case of (i) and (ii)
above, so long as there is no Default or Event of Default shall be reasonably
satisfactory to the Lead Borrower (whose consent shall not be unreasonably
withheld or delayed). Upon the acceptance of any appointment as Agent by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent’s resignation hereunder as such Agent,
the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was such
Agent under this Agreement.

     

    8.12 ­Reports and Financial
Statements.
Promptly
after receipt thereof from the Borrowers, the Administrative Agent shall remit
to each Lender and the Collateral Agent copies of all financial statements
required to be delivered by the Borrowers hereunder and all commercial finance
examinations and appraisals of the Collateral received by the Administrative
Agent (collectively, the “Reports”) .  Each Lender

     

    (i) expressly
agrees and acknowledges that the Administrative Agent makes no representation or
warranty as to the accuracy of the Reports, and (ii) shall not be liable for any
information contained in any Report;

     

    (ii) expressly
agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the Administrative Agent or any other Person 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;

     

    (iii) subject
to the provisions of Section 9.16, if applicable, agrees to keep all Reports
confidential and strictly for its internal use, and not to distribute except to
its Participants, or use any Report in any other manner; and

     

    (iv) without
limiting the generality of any other indemnification provision contained in this
Agreement, agrees:  (i) to hold the Agents 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 Loan Parties, or the indemnifying Lender’s participation in, or
the indemnifying Lender’s purchase of, a Loan or Loans of the Borrowers; and
(ii) to pay and protect, and indemnify, defend, and hold the Agents 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 Agents 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.

     

    8.13 Defaulting
Lender.  Notwithstanding
any provision of this Agreement to the contrary, if any Lender becomes a
Defaulting Lender, then the following provisions shall apply for so long as such
Lender is a Defaulting Lender:

     

    (a) The sum
of such Defaulting Lender’s outstanding Revolving Credit Loans plus its risk
participations in outstanding Swingline Loans and Letter of Credit Outstandings
(collectively, its “Credit Exposure”) and
such Defaulting Lender’s Commitment shall not be included in determining whether
all Lenders or the Required Lenders have taken or may take any action hereunder
(including any consent to any amendment or waiver pursuant to Section 9.2);
provided that
any waiver, amendment or modification requiring the consent of all Lenders or
each affected Lender which affects such Defaulting Lender differently than other
affected Lenders shall require the consent of such Defaulting
Lender;

     

    (b) Subject
to clause (c) below, 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 until, as a result of application of such assigned
payments, the Lenders’ respective Commitment Percentages of all outstanding
Obligations shall have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency;

     

    (c) At the
option of the Borrowers, any amount payable to such Defaulting Lender hereunder
(whether on account of principal, interest, fees or otherwise and including any
amount that would otherwise be payable to such Defaulting Lender pursuant to
Section 8.3) shall, in lieu of being distributed to such Defaulting Lender, be
retained by the Administrative Agent in a segregated account and, subject to any
applicable requirements of law, be applied at such time or times as may be
determined by the Administrative Agent, (i) first, to the payment of any amounts
owing by such Defaulting Lender to any Administrative Agent hereunder, (ii)
second, pro rata, to the payment of any amounts owing by such Defaulting Lender
to any Issuing Bank or the Swingline Lender hereunder, (iii) third, if so
determined by the Administrative Agent or requested by an Issuing Bank or the
Swingline Lender, held in such account as cash collateral for future funding
obligations of the Defaulting Lender in respect of any existing or future
participating interest in any Swingline Loan or Letter of Credit, (iv) fourth,
to the funding of any Loan in respect of which such Defaulting Lender has failed
to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (v) fifth, if so determined by the Administrative Agent
and the Borrowers, held in such account as cash collateral for future funding
obligations of the Defaulting Lender in respect of any Loans under this
Agreement, (vi) sixth, to the payment of any amounts owing to the Lenders or any
Issuing Bank or the Swingline Lender as a result of any judgment of a court of
competent jurisdiction obtained by any Lender or such Issuing Bank or Swingline
Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement, and (vii) seventh, to such
Defaulting Lender; provided that if such payment is (x) a prepayment of the
principal amount of any Loans or reimbursement obligations in respect of LC
Disbursements which a Defaulting Lender has funded its participation obligations
and (y) made at a time when the conditions set forth in Section 4.2 are
satisfied, such payment shall be applied solely to prepay the Loans of, and
reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to
being applied to the prepayment of any Loans, or reimbursement obligations owed
to, any Defaulting Lender.

     

    (d) The
Defaulting Lender’s decision-making and participation rights and rights to
payments as set forth in clauses (a) through (c) hereinabove shall be restored
only upon the payment by the Defaulting Lender of its Commitment 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 2.11 hereof from the date when originally due until the
date upon which any such amounts are actually paid.

     

    (e) The
non-defaulting Lenders shall also have the right, but not the obligation, in
their respective, sole and absolute discretion, to acquire for no cash
consideration, (pro rata, based on the
respective Commitments of those Lenders electing to exercise such right) the
Defaulting Lender’s Commitment to fund future Loans (the “Defaulting Lender’s Future
Commitment”).  Upon any such purchase of the Commitment
Percentage of any Defaulting Lender’s Future Commitment, the Defaulting Lender’s
share in future Loans 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.  Each Defaulting Lender shall indemnify the Agents 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 any Agent or by any non-defaulting Lender, on account of a
Defaulting Lender’s failure to timely fund its pro rata share of a Loan
or to otherwise perform its obligations under the Loan
Documents.  Nothing contained in this Section 8.13(e) shall be deemed
to limit or modify the rights of the Borrowers pursuant to Section 2.30
hereof.

     

    8.14 Agency for
Perfection.  Each
Lender hereby appoints each other Lender as agent for the purpose of perfecting
Liens, for the benefit of the Agents and the Secured Parties, in assets which,
in accordance with Article 9 of the UCC or any other Applicable Law of the
United States of America or Canada under the PPSA or otherwise can be perfected
only by possession.  Should any Lender (other than the Agents) obtain
possession of any such Collateral, such Lender shall notify the Agents thereof,
and, promptly upon the Agents’ request therefor shall deliver such Collateral to
the Agents or otherwise deal with such Collateral in accordance with the Agents’
instructions.

     

    8.15 Relation Among
the 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 Agents) authorized to act for, any other
Lender.

     

    8.16 Administrative
Agent May File Proofs
of Claim.  In case of the pendency of any proceeding under
the Bankruptcy Code or any other judicial proceeding relative to any Loan Party,
the Administrative Agent (irrespective of whether the principal of any Loan or
Letter of Credit or Acceptance shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
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, Letters of Credit, Acceptance Reimbursement
Obligations and all other Obligations that are owing and unpaid and to file such
other documents as may be necessary or advisable in order to have the claims of
the Lenders, the Issuing Banks, the Acceptance Lenders, the Administrative Agent
and the other Secured Parties (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the Issuing
Banks, the Acceptance Lenders, the Administrative Agent, such Secured Parties
and their respective agents and counsel and all other amounts due the Lenders,
the Issuing Banks, the Acceptance Lenders, the Administrative Agent, such
Secured Parties under Sections 2.7, 2.12, 2.13, 2.14, 2.15 and 9.3 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, monitor or
other similar official in any such judicial proceeding is hereby authorized by
each Lender, Issuing Bank and Acceptance Lender to make such payments to the
Administrative Agent and, if the Administrative Agent shall consent to the
making of such payments directly to the Lenders, the Issuing Banks and the
Acceptance Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.12 through 2.15 and 9.3.

     

    Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender, any Issuing
Bank or any Acceptance Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender,
any Issuing Bank or any Acceptance Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender, any Issuing Bank or any
Acceptance Lender in any such proceeding.

    

    8.17 Collateral and
Guaranty Matters.  The Lenders irrevocably authorize the Agents, at their option and
in their discretion,

     

    (a) to
execute a release of any Lien on any property granted to or held by the
Collateral Agent under any Loan Document (i) upon termination of the Total
Commitments and (A) payment in full of all Obligations (other than contingent
indemnification obligations for which no claim has been asserted), (B) (x) the
expiration or termination of all Letters of Credit or (y) the deposit of cash
collateral with the Administrative Agent in an amount equal to 105% of the
Letter of Credit Outstandings, and (C) the providing of collateral security to
the extent required by Section 9.6 hereof, (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 9.2;

     

    (b) to
subordinate any Lien on any property granted to or held by the Collateral Agent
under any Loan Document to the holder of any Lien on such property that is
permitted by Section 6.2(d); 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 any Agent at any time, the Applicable Lenders will confirm in writing
such 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 8.17.  In each
case as specified in this Section 8.17, the Agents will, at the Loan Parties’
expense, execute and deliver to 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 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
8.17.

    

    8.18 Syndication
Agent, Documentation Agents, and Lead Arrangers and Lead
Bookrunners. Notwithstanding
the provisions of this Agreement or any of the other Loan Documents, the
Syndication Agent and the co-Documentation Agents shall have no powers, rights,
duties, responsibilities or liabilities in such capacities with respect to this
Agreement and the other Loan Documents.

     

    9.  MISCELLANEOUS.

     

    9.1 Notices. Except
in the case of notices and other communications expressly permitted to be given
by telephone, 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 telecopy, as follows:

     

    (a) if to any
Loan Party, to it at Brown Shoe Company, Inc., 8300 Maryland Avenue, St. Louis,
Missouri 63105, Attention: Chief Financial Officer (Telecopy No. (314)
854-2152), with a copies to Bryan Cave LLP, One Metropolitan Square, 211 North
Broadway, St. Louis, Missouri 63102, Attention: William Seabaugh, Esquire
(Telecopy No. (314) 259-2020) and Bryan Cave LLP 1290 Avenue of the Americas,
New York, New York 10104, Attention: Jeffrey S. Chavkin, Esquire (Telecopy No.
(212) 904-0501);

     

    (b) if to the
Administrative Agent or the Collateral Agent, to Bank of America, N.A., 100
Federal Street, Boston, Massachusetts 02110, Attention: Keith Vercauteren
(Telecopy No. (617) 434-4339), with a copy (other than with respect to notices
of borrowing and interest rate elections or conversions) to Riemer &
Braunstein LLP, Three Center Plaza, Boston, Massachusetts 02108, Attention:
David S. Berman, Esquire (Telecopy No. (617) 880-3456);

     

    (c) if to any
other Lender, to it at its address (or telecopy number) set forth on the
signature pages hereto or on any Assignment and Acceptance for such
Lender.

     

    Any party
hereto may change its address or telecopy number for notices and other
communi­cations hereunder by notice to the other parties hereto. All notices
and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given three days after
mailing or otherwise on the date of receipt.

     

    9.2 Waivers;
Amendments.

     

    (a) No
failure or delay by the Agents, the Issuing Banks, the Acceptance Lenders or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discon­tinuance
of steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power. The rights and
remedies of the Agents, the Issuing Banks, the Acceptance Lenders and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit or Acceptance shall not be construed as a waiver
of any Default or Event of Default, regardless of whether the Agents, any
Lender, any Issuing Bank or any Acceptance Lender may have had notice or
knowledge of such Default or Event of Default at the time.

     

    (b) Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except, in the case of this Agree­ment,
pursuant to an agreement or agreements in writing entered into by the Loan
Parties and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Agents and
the Loan Parties that are parties thereto, in each case with the consent of the
Required Lenders, provided that no such
agreement shall (i) increase the Commitment of any Lender without such
Lender’s prior consent, (ii) except as provided in Section 2.2, increase the
Total Commitments without the written consent of all of the Lenders, (iii)
reduce the principal amount of any Loan or L/C Disbursement or reduce the rate
of interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iv) postpone the scheduled date of
payment of the principal amount of any Loan or L/C Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of the
Commitments or the Maturity Date, without the written consent of each Lender
affected thereby, (v) change Sections 2.8(b), 2.8(c), 2.20, 2.23, or 2.24,
without the written consent of each Lender, (vi) change any of the provisions of
this Section 9.2 or the definition of the term “Required Lenders”,
“Super-Majority Lenders”, “Minority Lenders” or any other provision of any Loan
Document specifying the number or percentage of Lenders required to waive, amend
or modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vii) release any Loan
Party from its obligations under any Loan Document, or limit its liability in
respect of such Loan Document (except to the extent permitted in the Loan
Documents), without the written consent of each Lender, (viii) except for sales
described in Section 6.5 or as permitted in the Security Documents, release
any material portion of the Collateral from the Liens of the Security Documents,
without the written consent of each Lender, (ix) 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 Administrative Agent to change, establish
or eliminate any Reserves, provided further that the
Administrative Agent shall not change or eliminate the Reserve set forth in
Section 5.5(b) hereof without the consent of the Super-Majority Lenders, (x)
increase the Permitted Overadvance, without the written consent of each Lender,
(xi) except as permitted hereunder, 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 prior written consent of
each Lender, or (xii) increase the amount available as Swingline Loans without
the prior written consent of each Lender, and provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Agents, the Issuing Banks or the Acceptance Lenders without the prior
written consent of the Agents, the applicable Issuing Bank or the applicable
Acceptance Lender, as the case may be.

     

    (c) Notwithstanding
anything to the contrary contained in this Section 9.2, in the event that the Lead Borrower requests that
this Agreement or any other Loan Document be modified, amended or waived in a
manner which would require the consent of the Lenders pursuant to
Section 9.2(b) and such amendment is approved by the Required Lenders, but
not by the requisite percentage of the Lenders, the Borrowers, and the Required
Lenders shall be permitted to amend this Agreement without the consent of the
Lender or Lenders which did not agree to the modification or amendment requested
by the Lead Borrower (such Lender or Lenders, collectively the “Minority Lenders”)
subject to providing for (w) the termination of the Commitment of each of the
Minority Lenders, (x) the addition to this Agreement of one or more other
financial institutions which would qualify as an Eligible Assignee (subject to
the approval of the Administrative Agent, which approval shall not be
unreasonably withheld), or an increase in the Commitment of one or more of the
Required Lenders, so that the Total Commitments after giving effect to such
amendment shall be in the same amount as the Total Commitments immediately
before giving effect to such amendment, (y) if any Loans are outstanding at the
time of such amendment, the making of such additional Loans by such new or
increasing Lender or Lenders, as the case may be, as may be necessary to repay
in full the outstanding Loans (including principal, interest, and fees) of the
Minority Lenders immediately before giving effect to such amendment and (z) such
other modifications to this Agreement or the Loan Documents as may be
appropriate and incidental to the foregoing.

     

    (d) No notice
to or demand on any Loan Party shall entitle any Loan Party to any other or
further notice or demand in the same, similar or other circumstances. Each
holder of a Note shall be bound by any amendment, modification, waiver or
consent authorized as provided herein, whether or not a Note shall have been
marked to indicate such amendment, modification, waiver or consent and any
consent by a Lender, or any holder of a Note, shall bind any Person subsequently
acquiring a Note, whether or not a Note is so marked. No amendment to this
Agreement shall be effective against any Loan Party unless signed by the
applicable Loan Party.

     

    9.3 Expenses; Indemnity; Damage
Waiver .  The
Loan Parties shall jointly and severally pay (i) all reasonable
out-of-pocket expenses incurred by the Agents and their Affiliates, including
the reasonable fees, charges and disbursements of counsel for the Agents,
outside consultants for the Agents, appraisers, and for commercial finance
examinations, in connection with the arrangement of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provi­sions thereof (whether
or not the transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Issuing Banks or
Acceptance Lenders in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or Acceptance or any demand for payment
thereunder, and (iii) all reasonable out-of-pocket expenses incurred by the
Agents, the Issuing Banks, the Acceptance Lenders or any Lender, including the
reasonable fees, charges and disbursements of any counsel and any outside
consultants for the Agents, or the Issuing Banks, Acceptance Lenders or Lenders,
for appraisers, commercial finance examinations, and environmental site
assessments, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit or Acceptances issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit or Acceptances; provided that the Lenders who
are not the Agents, the Issuing Banks or the Acceptance Lenders shall be
entitled to reimbursement for no more than one counsel representing all such
Lenders (absent a conflict of interest in which case the Lenders may engage and
be reimbursed for additional counsel).

     

    (b) The Loan
Parties shall jointly and severally indemnify the Agents, the Issuing Banks, the
Acceptance Lenders and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any other agreement
or instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
transactions contemplated by the Loan Documents or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or Acceptance or the
use of the proceeds therefrom (including any refusal by an Issuing Bank or
Acceptance Lender to honor a demand for payment under a Letter of Credit or
Acceptance if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit or Acceptance),
(iii) any actual or alleged presence or release of Hazardous Materials on
or from any property currently or formerly owned or operated by any Loan Party,
or any Environmental Liability of any Loan Party, (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, or (v) any documentary
taxes, assessments or similar charges made by any Governmental Authority by
reason of the execution and delivery of this Agreement or any other Loan
Document, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee or any Affiliate
of such Indemnitee (or of any officer, director, employee, advisor or agent of
such Indemnitee or any such Indemnitee’s Affiliates).  In connection
with any indemnified claim hereunder, the Indemnitee shall be entitled to select
its own counsel and the Loan Parties shall promptly pay the reasonable fees and
expenses of such counsel.

     

    (c) To the
extent that any Borrower fails to pay any amount required to be paid by it to
the Agents, the Issuing Banks or Acceptance Lenders under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay to the Agents, the
Issuing Banks or the Acceptance Lenders, as the case may be, such Lender’s
Commitment Percentage of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Agents, the
Issuing Banks or the Acceptance Lenders.

     

    (d) To the
extent permitted by Applicable Law, no Loan Party shall assert, and each Loan
Party hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated by the Loan
Documents, any Loan or Letter of Credit or Acceptance or the use of the proceeds
thereof.

     

    (e) All
amounts due under this Section shall be payable promptly after written demand
therefor, which demand shall include calculations of the amount claimed in
reasonable detail.

     

    9.4 Designation of
Lead Borrower as Borrowers’ Agent.

     

    (a) Each
Borrower hereby irrevocably designates and appoints the Lead Borrower as that
Borrower’s agent to obtain Loans and Letters of Credit or Acceptances hereunder,
the proceeds of which shall be available to each Borrower for those uses as
those set forth herein. As the disclosed principal for its agent, each Borrower
shall be obligated to the Agents and each Lender on account of Loans so made and
Letters of Credit and Acceptances so issued hereunder as if made directly by the
Lenders to that Borrower, notwithstanding the manner by which such Loans and
Letters of Credit and Acceptances are recorded on the books and records of the
Lead Borrower and of any Borrower.

     

    (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,
guarantees, and agrees to discharge all Obligations of all other Borrowers as if
the Borrower so assuming and guarantying were each other Borrower.

     

    (c) Subject
to Section 2.7, 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 Loan.

     

    (i)  The
Lead Borrower shall cause the transfer of the proceeds of each Loan to the
(those) Borrower(s) on whose behalf such Loan was obtained. Neither the Agents
nor any Lender shall have any obligation to see to the application of such
proceeds.

     

    (ii) If, for
any reason, and at any time during the term of this Agreement,

     

    (A)           any
Borrower, including the Lead Borrower, as agent for the Borrowers, shall be
unable to, or prohibited from carrying out the terms and conditions of this
Agreement; or

     

    (B)           the
Administrative Agent deems it inexpedient (in the Administrative Agent’s sole
and absolute discretion) to continue making Loans and cause Letters of Credit
and Acceptances to be issued to or for the account of any particular Borrower,
or to channel such Loans and Letters of Credit and Acceptances through the Lead
Borrower,

     

    then the
Lenders may make Loans directly to, and cause the issuance of Letters of Credit
and Acceptances directly for the account of such of the Borrowers as the
Administrative Agent determines to be expedient, which Loans may be made without
regard to the procedures otherwise included herein.

    

    (d) In the
event that the Administrative Agent determines to forgo the procedures included
herein pursuant to which Loans and Letters of Credit and Acceptances are to be
channeled through the Lead Borrower, then the Administrative Agent may designate
one or more of the Borrowers to fulfill the financial and other reporting
requirements otherwise imposed herein upon the Lead Borrower.

     

    (e) Each of
the Borrowers shall remain jointly and severally liable to the Agents and the
Lenders for the payment and performance of all Obligations (which payment and
perfor­mance shall continue to be secured by all Collateral granted by each
of the Borrowers) notwithstanding any determination by the Administrative Agent
to cease making Loans or causing Letters of Credit or Acceptances to be issued
to or for the benefit of any Borrower.

     

    (f) The
authority of the Lead Borrower to request Loans on behalf of, and to bind, the
Borrowers, shall continue unless and until the Administrative Agent acts as
provided in subparagraph (c), above, or the Administrative Agent actually
receives

     

    (i) written
notice of: (i) the termina­tion of such authority, and (ii) the subsequent
appointment of a successor Lead Borrower, which notice is signed by the
respective Presidents of each Borrower (other than the President of the Lead
Borrower being replaced) then eligible for borrowing under this Agreement;
and

     

    (ii) written
notice from such successive Lead Borrower (i) accept­ing such appointment;
(ii) acknowledging that such removal and appoint­ment has been effected by
the respective Presidents of such Borrowers eligible for borrowing under this
Agreement; and (iii) acknowledging that from and after the date of such
appointment, the newly appointed Lead Borrower shall be bound by the terms
hereof, and that as used herein, the term “Lead Borrower” shall mean and include
the newly appointed Lead Borrower.

     

    9.5 Successors and
Assigns .  (a)           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
(including any Affiliate of an Issuing Bank or Acceptance Lender that issues any
Letter of Credit or Acceptance), except that no Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any such attempted assignment or transfer
without such consent 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
(including any Affiliate of any Issuing Bank or Acceptance Lender that issues
any Letter of Credit or Acceptance) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Banks, the
Acceptance Lenders and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

     

    (b) Any
Lender may 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 and the Loans at the time owing to it), provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund, each of the Lead Borrower (but only if no Event of
Default then exists), the Agents, the Lead Issuing Bank and the other Lenders
that are then Issuing Banks must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed),
(ii) except in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000 (and
in $2,500,000 integral multiples in excess thereof) unless the Administrative
Agent otherwise consents, (iii) unless a Lender has assigned and delegated all
of its rights and obligations under the Loan Documents, no such assignment
and/or delegation shall be permitted unless, after giving effect thereto, such
Lender retains a Commitment in a minimum amount of $10,000,000, (iv) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations, and (v) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of
$5,000.  Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified
in each Assignment and Acceptance the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its
obliga­tions under this Agreement (and, in the case of an Assignment and
Acceptance 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 Section 9.3). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this paragraph 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
paragraph (e) of this Section.  The Loan Parties hereby
acknowledge and agree that any assignment shall give rise to a direct obligation
of the Loan Parties to the assignee and that the assignee shall be considered to
be a “Lender” for all purposes under this Agreement and the other Loan
Documents

     

    (c) The
Administrative Agent, acting for this purpose as an agent of the Loan Parties,
shall maintain at one of its offices in Boston, Massachusetts a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and L/C Disbursements 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 Administrative Agent, the Issuing Banks, the Acceptance Lenders 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, the Issuing Banks, the Acceptance
Lenders and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

     

    (d) Upon its
receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

     

    (e) Any
Lender may, without the consent of the Loan Parties, the Agents, and the Issuing
Banks or Acceptance Lenders, sell participations to one or more banks or other
entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it), provided that
(i) such Lender’s obligations under this Agreement and the other Loan
Documents 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 Agents, the Issuing Banks, the
Acceptance Lenders and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells a participation in the Commitments, the Loans, the Letters of
Credit Outstandings and the Acceptance Reimbursement Obligations shall provide
that such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, modification or waiver of any provision of the Loan
Documents, provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.2(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrowers agree
that each Participant shall be entitled to the benefits of Sections 2.25, 2.27,
and 2.28 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.9 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.27(c) as though it were a
Lender.

     

    (f) A
Participant shall not be entitled to receive any greater payment under
Sections 2.25, 2.27 and 2.28 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 2.28
unless (i) 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 2.28(e) as though it were a Lender and (ii) such
Participant is eligible for exemption from the withholding tax referred to
therein, following compliance with Section 2.28(e).

     

    (g) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including, without limitation, any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

     

    9.6 Survival. All covenants, agreements, representations and warranties made by
the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit or
Acceptances, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Agents, the Issuing Banks, the
Acceptance Lenders or any Lender may have had notice or knowledge of any Default
or Event of Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other Obligation is outstanding and unpaid or any Letter of Credit or Acceptance
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.25, 2.28, and 9.3 and Section 8 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and Acceptances 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 Agents may require (x) such reasonable
indemnities and/or collateral security in a form (including, without limitation,
a letter of credit or cash collateral) and amount that is reasonable under the
circumstances to protect the Agents, the Issuing Banks, the Acceptance Lenders
and the Lenders against loss on account of credits previously applied to the
Obligations that may subsequently be reversed or revoked, (y) collateral
security in a form (including, without limitation, a letter of credit or cash
collateral) and amount that is reasonable under the circumstances to protect the
Agents, the Issuing Banks, the Acceptance Lenders and the Lenders against any
obligations that (i) shall become due and owing with respect to any Hedging
Agreements which do not terminate upon the termination of this Agreement or (ii)
are then due and owing and have not then been paid with respect to any Cash
Management Services or other Bank Products not covered in clause (i) above, and
(z) collateral security in a form (including, without limitation, a letter of
credit or cash collateral) and amount that is reasonable under the circumstances
to protect the Agents, the Issuing Banks, the Acceptance Lenders and the Lenders
against any claims asserted in writing at the time of such termination for
indemnification in accordance with Section 9.3 hereof.

     

    9.7 Counterparts;
Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and the Fee Letter 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 4.1, this Agreement shall
become effective when it shall have been executed by the Agents and the Lenders
and when the Administrative Agent shall have received counterparts hereof that,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.

     

    9.8 Severability. Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

     

    9.9 Right of
Setoff. In addition to any rights or remedies of the Lenders provided by
Applicable Law, if an Event of Default exists or the Revolving Credit Loans have
been accelerated, each Lender is hereby authorized at any time and from time to
time, without prior notice to the Loan Parties, any such notice being waived by
the Loan Parties to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held by, and other indebtedness at any time owing by, such Lender or
any Affiliate of such Lender to or for the credit or the account of the Loan
Parties against any and all Obligations owing to such Lender, now or hereafter
existing, irrespective of whether or not the Agent or such Lender shall have
made demand under this Agreement or any other Loan Documents and although such
Obligations may be contingent or unmatured or otherwise fully secured and
regardless of the adequacy of the Collateral. Each Lender agrees to promptly
notify the Loan Parties and the Agent after any such setoff and application made
by such Lender; provided, however,
the failure to give such notice shall not affect the validity of such setoff and
application.  NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE
ANY RIGHT OF SETOFF, BANKER’S LIEN OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR
PROPERTY OF ANY LOAN PARTY HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR
WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT OR THE REQUIRED
LENDERS.

     

    9.10 ­Governing
Law; Jurisdiction; Consent to Service of Process.
(a)  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO ITS PRINCIPLES
RELATING TO CHOICE AND CONFLICTS OF LAW), BUT INCLUDING SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.

     

    (b)           The
Loan Parties agree that any suit for the enforcement of this Agreement or any
other Loan Document may be brought in any New York state or federal court
sitting in the Borough of Manhattan as the Administrative Agent may elect in its
sole discretion and consent to the non-exclusive jurisdiction of such
courts.  The Borrowers hereby waive any objection which they may now
or hereafter have to the venue of any such suit or any such court or that such
suit is brought in an inconvenient forum. The Borrowers agree that any action
commenced by any Borrower asserting any claim or counterclaim arising under or
in connection with this Agreement or any other Loan Document shall be brought
solely in any New York state or federal court sitting in the Borough of
Manhattan as the Administrative Agent may elect in its sole discretion and
consent to the exclusive jurisdiction of such courts with respect to any such
action.

     

    (c)           Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.1. Nothing in
this Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by
law.

     

    9.11 WAIVER OF JURY
TRIAL. EACH
PARTY HERETO HEREBY 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 AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTA­TIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY 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 BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     

    9.12 Press Releases
and Related Matters.   Each
Loan Party hereby consents that the Agents and each Lender may issue and
disseminate to the public general information describing the credit
accommodation entered into pursuant to this Agreement, including the name and
address of the Loan Parties and a general description of the Loan Parties’
business and may, with the Lead Borrower’s prior written consent, use each Loan
Party’s name in advertising and other promotional material.

     

    9.13 Headings.
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

     

    9.14 Interest Rate
Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
that are treated as interest on such Loan under Applicable Law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with Applicable Law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such
Lender.

     

    9.15 ­Additional
Waivers .  (a)           The
Obligations are the joint and several obligations of each Loan
Party.  To the fullest extent permitted by Applicable Law, the
obligations of the Loan Parties hereunder shall not be affected by (i) the
failure of any Agent or any other Secured 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, any other Loan Document,
or any other agreement, including with respect to any other Borrower of the
Obligations under this Agreement, or (iii) the failure to perfect any
security interest in, or the release of, the Collateral or any other the
security held by or on behalf of the Collateral Agent or any other Secured
Party.

     

    (b) The
obligations of each Loan Party hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability 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 any Agent or any other Secured 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, by any default, failure or delay, willful or
otherwise, in the performance 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
Borrower or that would otherwise operate as a discharge of any Loan Party as a
matter of law or equity (other than the payment in full in cash of all the
Obligations).

     

    (c) To the
fullest extent permitted by Applicable 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 payment in full in cash of all the Obligations. The Collateral Agent and the
other Secured Parties may, at their election, foreclose on any security held by
one or more of them by one or more judicial or nonjudicial 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 paid in full
in cash. Pursuant to Applicable Law, each Loan Party waives any defense arising
out of any such election even though such election operates, pursuant to
Applicable 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
Borrower 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 payment in full in cash of all the Obligations. 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 payment in
full of the Obligations. None of the Loan Parties 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 (a) such subrogation,
contribution, reimbursement, indemnity or similar right or (b) any such
indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Secured Parties and shall forthwith be paid to the Collateral
Agent to be credited against the payment of the Obligations, whether matured or
unmatured, in accordance with the terms of the 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 Revolving 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 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.

     

    9.16 Confidentiality.  Each of the Agents, Issuing Banks, Acceptance Lenders
and the Lenders agrees that it will use its best efforts not to disclose without
the prior written consent of the Lead Borrower (other than to its employees,
auditors, counsel or other professional advisors, to Affiliates or to another
Lender if the Lender or such Lender’s holding or parent company in its sole
discretion determines that any such party needs access to such information,
which party shall be informed of the confidential nature thereof and shall agree
to keep such information confidential in accordance with the terms of this
Section 9.16) any information with respect to any Loan Party which is furnished
pursuant to this Agreement and which either is financial information or is
designated by the Lead Borrower to the Administrative Agent in writing as
confidential, provided that any Lender may disclose any such information (a) as
has become generally available to the public, (b) as was available to any Lender
on a non-confidential basis prior to its disclosure by such Lender, (c) as
becomes available to any Lender on a non-confidential basis from a Person other
than a Loan Party who, to the best knowledge of such Lender, is not otherwise
bound by a confidentiality agreement with any Loan Party or is not otherwise
prohibited from transmitting the information to such Lender, (d) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States of America or elsewhere) or their successors, (e) as may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, provided
that if the Lender is able to do so prior to complying with the summons
or subpoena, such Lender shall provide the Lead Borrower with prompt notice of
such requested disclosure so that the Borrowers may seek a protective order or
other appropriate remedy (nothing contained herein however shall result in such
Lender’s non-compliance with Applicable Law), (f) in order to comply with any
law, order, regulation or ruling applicable to such Lender, (g) in connection
with the enforcement of remedies under this Agreement and the other Loan
Documents, and (h) to any prospective transferee in connection with any
contemplated transfer of any of the Loans or Notes or any interest therein by
such Lender provided that such prospective transferee agrees to be bound by the
provisions of this Section. The Borrowers hereby agree that the failure of a
Lender to comply with the provisions of this Section 9.16 shall not relieve the
Borrowers of any of their obligations to such Lender under this Agreement and
the other Loan Documents. 

     

    9.17 Conflicts with
other Loan Documents.  Unless
otherwise expressly provided in this Agreement (or in another Loan Document by
specific reference to the applicable provision contained in this Agreement), if
any provision contained in this Agreement conflicts with any provision of any
other Loan Document, the provision contained in this Agreement shall govern and
control.

     

    9.18 Judgment
Currency. If for
the purpose of obtaining judgment in any court it is necessary to convert an
amount due hereunder in the currency in which it is due (the “Original Currency”)
into another currency (the “Second Currency”),
the rate of exchange applied shall be that at which, in accordance with normal
banking procedures, the Administrative Agent could purchase in the Boston
foreign exchange market, the Original Currency with the Second Currency on the
date two (2) Business Days preceding that on which judgment is given. Each
Borrower agrees that its obligation in respect of any Original Currency due from
it hereunder shall, notwithstanding any judgment or payment in such other
currency, be discharged only to the extent that, on the Business Day following
the date the Administrative Agent receives payment of any sum so adjudged to be
due hereunder in the Second Currency, the Administrative Agent may, in
accordance with normal banking procedures, purchase, in the Boston foreign
exchange market, the Original Currency with the amount of the Second Currency so
paid; and if the amount of the Original Currency so purchased or could have been
so purchased is less than the amount originally due in the Original Currency,
each Borrower agrees as a separate obligation and notwithstanding any such
payment or judgment to indemnify the Administrative Agent against such loss. The
term “rate of exchange” in this Section 9.18 means
the spot rate at which the Administrative Agent, in accordance with normal
practices, is able on the relevant date to purchase the Original Currency with
the Second Currency, and includes any premium and costs of exchange payable in
connection with such purchase.

     

    9.19 Patriot Act;
Proceeds of Crime Act.

     

    Each
Lender that is subject to the Act (as hereinafter defined) and the
Administrative 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 or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the Act. Each Loan
Party has not violated and is in compliance, in all material respects, with the
Patriot Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada).  No part of the proceeds of the Loans will be used by
the Loan Parties, directly or indirectly, for any 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.

    

    9.20 Foreign Asset
Control Regulations.

     

    Neither
of the advance of the Revolving Loans nor the use of the proceeds of any thereof
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 Borrowers 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".

    

    9.21 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 Agents and the Lenders, 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 of the Agents and each Lender
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
Agents or any Lender 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 Agents or any Lender has
advised or is currently advising any Loan Party or any of its Affiliates on
other matters) and none of the Agents or any Lender 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 Agents, the Lenders 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 Agents or any Lender has any obligation to disclose
any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) neither the Agents nor any Lender has provided or will
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 Agents or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty.

     

    9.22 Additional
Borrowers.

     

    Upon the
written request of the Lead Borrower to the Administrative Agent, any Domestic
Subsidiary may become a Borrower hereunder (whether or not such Domestic
Subsidiary is required to become a party hereto pursuant to Section 5.14 hereof)
upon the delivery to the Administrative Agent of a joinder to this Agreement,
joinders to other Loan Documents, as applicable, opinions of counsel,
certificates and such other documentation as the Administrative Agent shall
reasonably request, and the taking of such actions to create and perfect Liens
on such Domestic Subsidiary’s assets that would otherwise constitute Collateral
to secure the Obligations as the Administrative Agent shall reasonably
request.

    

    9.23 Existing Credit
Agreement Amended and Restated.  This
Agreement shall amend and restate the Existing Credit Agreement in its entirety,
with the parties hereby agreeing that there is no novation of the Existing
Credit Agreement.  On the Closing Date, the rights and obligations of
the parties under the Existing Credit Agreement shall be subsumed within and be
governed by this Agreement; provided, however, that each of the “Loans” (as such
term is defined in the Existing Credit Agreement) outstanding under the Existing
Credit Agreement on the Closing Date shall, for purposes of this Agreement, be
included as Loans hereunder and each of the “Letters of Credit” and
“Acceptances” (as defined in the Existing Credit Agreement) outstanding under
the Existing Credit Agreement on the Closing Date shall be Letters of Credit and
Acceptances hereunder.

     

    

    [balance
of page left intentionally blank; signature pages follow]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

    BROWN
SHOE COMPANY, INC.

    SIDNEY
RICH ASSOCIATES, INC.

    BROWN
GROUP RETAIL, INC.

    BROWN
SHOE INTERNATIONAL CORP.

    BUSTER
BROWN & CO.

    BENNETT
FOOTWEAR GROUP LLC

    SHOES.COM,
INC.

    as to
each of the foregoing

    

    

    By:           /s/ Mark E.
Hood

    Name:                      Mark
E. Hood

    
      	
               
      

            	
              Title:

            	
              Senior
      Vice President and

            

    

    Chief
Financial Officer

    

    

    BROWN
SHOE COMPANY OF CANADA LTD

    

    By:           /s/ Mark E.
Hood

    Name:                      Mark
E. Hood

    
      	
               
      

            	
              Title:

            	
              Senior
      Vice President – Finance

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    BANK OF
AMERICA, N.A.,

    as
Administrative Agent, as Collateral Agent, as Lead Issuing Bank and as
Lender

    

    

    By:           /s/ Christine
Hutchinson

    Name:                      Christine
Hutchinson

    Title:                      Principal

    

    Address:

    

    100
Federal Street, 9th Floor

    Boston,
Massachusetts 02110

    Attn: Mr.
Keith Vercauteren

    Telephone:
(617) 434-4045

    Telecopy:
(617) 434-4339

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    JPMORGAN
CHASE BANK, N.A.,

    as a
Lender

    

    

    By:           /s/ Scott
Troy

    Name:                      Scott
Troy

    Title:                      Vice
President

    

    Address:

    

    JPMorgan
Chase Bank, N.A.

    270 Park
Avenue, 44th
Floor

    New York,
New York 10017

    Attention:  Scott
Troy, Account Executive

    Telephone:  (212)
270-0372

    Facsimile:  (646)
534-2274

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WELLS
FARGO RETAIL FINANCE, LLC,

    as a
Lender

    

    

    By:           /s/ Connie
Liu

    Name:                      Connie
Liu

    Title:                      Assistant
Vice President

    

    Address:

    

    Wells
Fargo Retail Finance, LLC

    One
Boston Place, 18th
Floor

    Boston,
Massachusetts 02108

    Attention:  Connie
Liu, Vice President

    Telephone:  (617)
854-7232

    Facsimile:  (866)
303-3944

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SUNTRUST
BANK,

    as a
Lender

    

    

    By:           /s/ Patrick
Wiggins

    Name:                      Patrick
Wiggins

    Title:                      Vice
President

    

    Address:

    

    SunTrust
Bank

    303
Peachtree Street

    Atlanta,
Georgia 30308

    Attention:  Patrick
Wiggins, Vice President

    Telephone:  (404)
658-4931

    Facsimile:  (404)
813-5890

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    REGIONS
BANK,

    as a
Lender

    

    

    By:           /s/ Christine M.
Ferrise

    Name:                      Christine
M. Ferrise

    Title:                      Attorney-in-Fact/SVP

    

    Address:

    

    Regions
Bank

    599
Lexington Avenue, 45th
Floor

    New York,
New York 10022

    Attention:  Kevin
Rogers, Vice President

    Telephone:  (212)
935-2237

    Facsimile:  (212)
935-7458

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CAPITAL
ONE LEVERAGE FINANCE CORP.,

    as a
Lender

    

    

    By:           /s/ Nick
Malatestinic

    Name:                      Nick
Malatestinic

    Title:                      SVP

    

    Address:

    

    Capital
One Leverage Finance Corp.

    265
Broadhollow Road, 4th
Floor

    Melville,
New York 11747

    
      	
               
      

            	
              Attention:  Nick
      Malatestinic, SVP – Credit Manager

            

    

    Telephone:  (631)
531-2131

    Facsimile:  (631)
531-2765

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT A

     

    ASSIGNMENT
AND ACCEPTANCE

     

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

    For an
agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns
to [the Assignee][the respective Assignees], and [the][each] Assignee hereby
irrevocably purchases and assumes from [the Assignor][the respective Assignors],
subject to and in accordance with the Standard Terms and Conditions and the
Credit Agreement, as of the Effective Date inserted by the Administrative Agent
as contemplated below (i) all of [the Assignor’s][the respective Assignors’]
rights and obligations in [its capacity as a Lender][their respective capacities
as Lenders] under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
[the Assignor][the respective Assignors] under the respective facilities
identified below (including, without limitation, participations in Letters of
Credit and Swingline Loans included in such facilities5) and (ii) to the extent
permitted to be assigned under Applicable Law, all claims, suits, causes of
action and any other right of [the Assignor (in its capacity as a Lender)][the
respective Assignors (in their respective capacities as Lenders)] against any
Person, whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned by [the][any] Assignor to
[the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned
Interest”).  Each such sale and assignment is without recourse
to [the][any] Assignor and, except as expressly provided in this Assignment and
Acceptance, without representation or warranty by [the][any]
Assignor.

     

    
      	 1.	 Assignor[s]:	
               

              _____________________________

               

              ______________________________ 

            

    

     

     

    
      	
              2.

            	
              Assignee[s]:

            	
              ______________________________

            

    

    

    
      	
               
      

            	
              ______________________________

            

    

    

    
      	
              3.

            	
              Borrowers:

            	
              Brown
      Shoe Company, Inc., a New York corporation (the “Lead
      Borrower”), Sidney Rich Associates, Inc., a Missouri corporation,
      Brown Group Retail, Inc., a Pennsylvania corporation, Brown Shoe
      International Corp. (f/k/a Brown Shoe International, LLC), a Delaware
      corporation, Buster Brown & Co., a Missouri corporation, Bennett
      Footwear Group LLC, a Delaware limited liability company, and Shoes.com,
      Inc., a Delaware corporation

            

    

    

    
      	
              4.

            	
              Administrative
      Agent: Bank of America, N.A., as the Administrative Agent under the
      Credit Agreement.

            

    

    

    
      	
              5.

            	
              Credit
      Agreement:

            	
              Second
      Amended and Restated Credit Agreement dated as of January 21, 2009 (as
      such may be amended, modified, supplemented or restated hereafter,
      the  “Credit
      Agreement”) by, among others, the Lead Borrower and the other
      Borrowers, Brown Shoe Company of Canada Ltd, the Lenders from time to time
      party thereto, Bank of America, N.A., as Administrative Agent and
      Collateral Agent for the Lenders (in such capacity, the “Agent”), and
      Bank of America, N.A., as Lead Issuing
Bank.

            

    

    

    
      	
              6.

            	
              Assigned
      Interest[s]:

            

    

    
      
        	
                
                   

                   

                   

                  Assignor[s]6

                

              	
                
                   

                   

                   

                  Assignee[s]7

                

              	
                Aggregate

                Amount
      of

                Commitment/Loans

                for all Lenders8

              	
                Amount
      of

                Commitment/Loans

                Assigned9

              	
                Percentage

                Assigned
      of

                Commitment/

                Loans10

              
	 
      	 
      	
                $____________

              	
                $______

              	
                _________%

              
	 
      	 
      	
                $____________

              	
                $______

              	
                _________%

              

      

    

     

    [7.           Trade
Date:                                __________________]11

     

    
 

    Effective
Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE DATE OF DELIVERY OF THIS 

     

    ASSIGNMENT
AND ACCEPTANCE FOR RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

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

    

    ASSIGNOR

    [NAME OF
ASSIGNOR]

    

    By:           _____________________________

    Name:                      _____________________________

    Title:                      _____________________________

    

    

    

    ASSIGNEE

    [NAME OF
ASSIGNEE]

    

    By:           _____________________________

    Name:                      _____________________________

    Title:                      _____________________________

    

    [Consented
to and]12 Accepted:

    

    BANK OF
AMERICA, N.A., as

    [Administrative
Agent][Lead Issuing Bank]

    

    By:           _____________________________

    Name:                                                                                     _____________________________

    Title:                                                                                     _____________________________

    

    

    [Consented
to:]13

    

    BROWN
SHOE COMPANY, INC., as Lead Borrower

    

    By:           _____________________________

    Name:                                                                                     _____________________________

    Title:                      _____________________________

    

    

    [Consented
to:]14

    

    [_____________],
as an Issuing Bank

    

    By:           _____________________________

    Name:                                                                                     _____________________________

    Title:                      _____________________________

    

    

      

    

      
      1 For bracketed language here and
elsewhere in this form relating to the Assignor(s), if the assignment is from a
single Assignor, choose the first bracketed language.  If the
assignment is from multiple Assignors, choose the second bracketed
language.

    

      
      2 For bracketed language here and
elsewhere in this form relating to the Assignee(s), if the assignment is to a
single Assignee, choose the first bracketed language.  If the
assignment is to multiple Assignees, choose the second bracketed
language.

    

      
      3 Select as
appropriate.

    

      
      4 Include bracketed language if there are
either multiple Assignors or multiple Assignees.

    

      
      5 Include all applicable subfacilities,
if any.

    

      
      6 List
each Assignor, as appropriate.

    

      
      7 List each Assignee, as
appropriate.

    

      
      8 Amounts in
this column and in the column immediately to the right to be adjusted by the
counterparties to take into account any payments or prepayments made between the
Trade Date and the Effective Date.

    

      
      9 Subject
to minimum amount requirements and the proportionate amount requirements
pursuant to Section 9.5(b) of the Credit Agreement.

    

      
      10 Set
forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all
Lenders thereunder.

    

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

    

      
      12 To the extent that (i) the
Administrative Agent’s consent is required under Section 9.5(b)(i) of the Credit
Agreement, or (ii) the Lead Issuing Bank’s consent is required under Section
9.5(b)(i) of the Credit Agreement.

    

      
      13 To the extent required under Sections
9.5(b)(i) of the Credit Agreement.

    

      
      14 To the extent required under Sections
9.5(b)(i) of the Credit Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE

    

    Reference
is made to the Second Amended and Restated Credit Agreement dated as of January
21, 2009 (as such may be amended, modified, supplemented or restated hereafter,
the  “Credit
Agreement”) by, among others, the Brown Shoe Company, Inc., a New York
corporation (the “Lead
Borrower”), the Borrowers from time to time party thereto, Brown Shoe
Company of Canada Ltd, the Lenders from time to time party thereto, Bank of
America, N.A., as Administrative Agent and Collateral Agent for the Lenders (in
such capacity, the “Agent”), and Bank of
America, N.A., as Lead Issuing Bank.

    

    STANDARD
TERMS AND CONDITIONS FOR

    ASSIGNMENT
AND ACCEPTANCE

    

    1.         Representations and
Warranties.

    

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

    

    1.2.              Assignee.  [The][Each]
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Acceptance and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it meets all the requirements to be an
Eligible Assignee under the Credit Agreement (subject to such consents, if any,
as may be required under Section 9.5(b)(i) of
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of [the][the relevant] Assigned Interest, shall have the obligations
of a Lender thereunder, (iv) it is sophisticated with respect to decisions to
acquire assets of the type represented by [the][such] Assigned Interest and
either it, or the Person exercising discretion in making its decision to acquire
[the][such] Assigned Interest, is experienced in acquiring assets of such type,
(v) it has received a copy of the Credit Agreement, and has received or has been
accorded the opportunity to receive copies of the most recent financial
statements delivered pursuant to Section 5.1 thereof,
as applicable, and such other documents and information as it deems appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance and to purchase [the][such] Assigned Interest, (vi) it has,
independently and without reliance upon the Administrative Agent, Collateral
Agent, or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Assignment and Acceptance and to purchase [the][such] Assigned Interest, and
(vii) if it is a Foreign Lender, attached hereto is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by [the][such] Assignee; and (b) agrees that (i) it will,
independently and without reliance upon the Administrative Agent, the Collateral
Agent, [the][any] Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.

    

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

    

    3.         General
Provisions.  This Assignment and Acceptance shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Acceptance may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page
of this Assignment and Acceptance by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment and
Acceptance.  This agreement shall be governed by, and construed in
accordance with, the law of the State of New York (without regard to its
principles relating to choice and conflicts of law), but including Section
5-1401 of the New York General Obligations law.

    

    4.         Fees.    This
Assignment and Acceptance shall be delivered to the Administrative Agent with a
processing and recordation fee of $5,000.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit B

    

    Form of Revolving
Note

    

    

    
      
        

      

    SECOND
AMENDED AND RESTATED REVOLVING NOTE

    

    
      
        

      

    

    $_______________ _________,
2009

    

    FOR VALUE
RECEIVED, Brown Shoe Company, Inc., a New York corporation having a place of
business at 8300 Maryland Avenue, St. Louis, Missouri 63105 (the “Lead Borrower”) and
each of Sidney Rich Associates, Inc., a Missouri corporation, Brown Group
Retail, Inc., a Pennsylvania corporation, Brown Shoe International Corp. (f/k/a
Brown Shoe International, LLC), a Delaware corporation, Buster Brown & Co.,
a Missouri corporation, Bennett Footwear Group LLC, a Delaware limited liability
company, and Shoes.com, Inc., a Delaware corporation, each having a place of
business at 8300 Maryland Avenue, St. Louis, Missouri 63105 (hereinafter,
together with the Lead Borrower, singly, a “Borrower”, and
collectively, the “Borrowers”, together
with successors and assigns), jointly and severally promise to pay to the order
of _____________________________ (hereinafter, together with its successors in
title and assigns, the “Lender”), c/o Bank of
America, N.A., 100 Federal Street, Boston, Massachusetts 02110, the principal
sum of ______________________ ($______________), or, if less, the aggregate
unpaid principal balance of Revolving Loans made by the Lender to or for the
account of any Borrower on the Termination Date pursuant to the Second Amended
and Restated Credit Agreement dated as of January 21, 2009 (as such may be
amended, modified, supplemented or restated hereafter, the “Credit Agreement”)
by, among others, (i) the Borrowers, (ii) the Lenders from time to time party
thereto, (iii) Bank of America, N.A., as Administrative Agent and Collateral
Agent for the Lenders (in such capacity, the “Agent”), and as
Swingline Lender, and (iv) Bank of America, N.A., as Lead Issuing Bank, with
interest, fees, expenses, and costs at the rate and payable in the manner stated
therein.

    

    This is a
“Revolving Note” to which reference is made in the Credit Agreement and is
subject to all terms and provisions thereof.  The principal of, and
interest on, this Revolving Note shall be payable at the times, in the manner,
and in the amounts as provided in the Credit Agreement and shall be subject to
prepayment and acceleration as provided therein.  [This Revolving Note
replaces in its entirety that certain Amended and Restated Revolving Note dated
as of July 21, 2004 by, among others, certain of the Borrowers, in favor of the
Lender.]  Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Credit Agreement.

    

    The
Agent’s books and records concerning the Revolving Loans, the accrual of
interest thereon, and the repayment of such Revolving Loans, shall be prima
facie evidence of the indebtedness hereunder, absent manifest
error.

    

    No delay
or omission by the Agent or the Lender in exercising or enforcing any of Agent’s
or such Lender’s powers, rights, privileges, remedies, or discretions hereunder
shall operate as a waiver thereof on that occasion nor on any other
occasion.  No waiver of any Event of Default shall operate as a waiver
of any other Event of Default, nor as a continuing waiver.

    

    Each
Borrower, and each endorser and guarantor of this Revolving Note, waives
presentment, demand, notice, and protest, except for notices expressly provided
for in the Credit Agreement or any other Loan Document, and also waives any
delay on the part of the holder hereof.  Each Borrower assents to any
extension or other indulgence (including, without limitation, the release or
substitution of Collateral) permitted by any Agent and/or the Lender with
respect to this Revolving Note and/or any Collateral or any extension or other
indulgence with respect to any other liability or any collateral given to secure
any other liability of any Borrower or any other Person obligated on account of
this Revolving Note.

    

    This
Revolving Note shall be binding upon each Borrower, and each endorser and
guarantor hereof, and upon their respective successors, assigns, and
representatives, and shall inure to the benefit of the Lender and its
successors, endorsees, and assigns.

    

    The
liabilities of each Borrower, and of any endorser or guarantor of this Revolving
Note, are joint and several, provided, however, the
release by Agent or the Lender of any one or more such Persons shall not release
any other Person obligated on account of this Revolving Note.  Each
reference in this Revolving Note to each Borrower, any endorser, and any
guarantor, is to such Person individually and also to all such Persons
jointly.  No Person obligated on account of this Revolving Note may
seek contribution from any other Person also obligated unless and until all
liabilities, obligations and indebtedness to the Lender of the Person from whom
contribution is sought have been satisfied in full.

    

    Each
Borrower agrees that any suit for the enforcement of this Revolving Note or any
other Loan Document may be brought in any New York state or federal court
sitting in the Borough of Manhattan as the Lender may elect in its sole
discretion and consent to the non-exclusive jurisdiction of such
courts.  Each Borrower hereby waives any objection which they may now
or hereafter have to the venue of any such suit or any such court or that such
suit is brought in an inconvenient forum.  Each Borrower agrees that
any action commenced by any Borrower asserting any claim or counterclaim arising
under or in connection with this Revolving Note or any other Loan Document shall
be brought solely in any New York state or federal court sitting in the Borough
of Manhattan as the Lender may elect in its sole discretion and consent to the
non-exclusive jurisdiction of such courts.

    

    THIS
REVOLVING NOTE IS DELIVERED TO THE LENDER AT THE OFFICES OF THE AGENT IN BOSTON,
MASSACHUSETTS, AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO ITS PRINCIPLES RELATING TO
CHOICE AND CONFLICTS OF LAW), BUT INCLUDING SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

    

    Each
Borrower makes the following waiver knowingly, voluntarily, and intentionally,
and understands that the Agent and the Lender, in the establishment and
maintenance of their respective relationship with the Borrowers contemplated by
this Revolving Note, is relying thereon. EACH BORROWER, EACH GUARANTOR, ENDORSER
AND SURETY, AND THE LENDER BY ITS ACCEPTANCE HEREOF, HEREBY 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 REVOLVING NOTE, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTA­TIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY 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 THE CREDIT AGREE­MENT AND THIS REVOLVING NOTE BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

    

    

    

    [Signature
Page Follows]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Borrowers have caused this Revolving Note to be duly
executed as of the date set forth above.

    

    

    BORROWERS:

    

    BROWN
SHOE COMPANY, INC.

    SIDNEY
RICH ASSOCIATES, INC.

    BROWN
GROUP RETAIL, INC.

    BUSTER
BROWN & CO.

    BROWN SHOE INTERNATIONAL CORP.

    BENNETT
FOOTWEAR GROUP LLC

    SHOES.COM,
INC.

    as to
each of the foregoing

    

    

    By:           _________________________

    Name:                      Mark
E. Hood

    Title:                      Senior
Vice President and

    Chief Financial Officer

    

    

    

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit C

    

    PERFECTION
CERTIFICATE

    

    

    Reference
is made to the Second Amended and Restated Credit Agreement dated as of January
21, 2009 (as such may be amended, modified, supplemented or restated hereafter,
the “Credit
Agreement”) by, among others, (i) Brown Shoe Company, Inc., a New York
corporation (the “Lead
Borrower”), (ii) the other Borrowers from time to time party thereto,
(iii) Brown Shoe Company of Canada Ltd (“Brown Canada”), as a
Loan Party, (iv) the Lenders from time to time party thereto, and (v) Bank of
America, N.A., as Administrative Agent and Collateral Agent for the Lenders, and
as Lead Issuing Bank.

     

    Reference
is also made to a certain Amended and Restated Security Agreement dated as of
July 21, 2004 (as such may be amended, modified, supplemented or restated
hereafter, the “Security Agreement”)
by and among the Grantors (as defined in the Security Agreement) and Bank of
America, N.A., as collateral agent (in such capacity herein, the “Collateral Agent”)
for the Secured Parties (as defined in the Security
Agreement).  Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement or the
Security Agreement (as applicable).

     

    The
under­signed, the __________________of each Grantor, hereby certifies to the
Collateral Agent and each other Secured Party as follows:

     

    10. Names and Identifying
Information.

     

    10.1 The exact
legal name of each Grantor as it appears in its certificate of incorporation or
other equivalent formation document, as amended to date, is as
follows:

     

    

    10.2 The
following is the type of organization of each Grantor:

     

    
      
        	
                Grantor

              	
                Type
      of Organization

              
	 
      	 
      

      

    

    

    

    10.3 The
jurisdiction of organization of each Grantor is as follows:

     

    

    
      
        	
                Grantor

              	
                Jurisdiction
      of Organization

              
	 
      	 
      

      

    

    

    10.4 The
following is each Grantor’s state issued organizational identification
number:

     

    
      
        	
                Grantor

              	
                Organizational
      Identification Number

              
	 
      	 
      

      

    

    

    

    10.5 The
following is each Grantor’s federal taxpayer identification number:

     

    
      
        	
                Grantor

              	
                Federal
      Taxpayer Identification Number

              
	 
      	 
      

      

    

    

     

    10.6 The
following is a list of jurisdictions in which each Grantor is authorized to do
business other than those jurisdictions where a Loan Party is terminating its
qualifications as set forth on Schedule 4.1(c) of the Credit Agreement (and,
with respect to Brown Canada only, provinces in which Collateral is
located):

     

    
      
        	
                Grantor

              	
                Jurisdictions/Provinces

              
	 
      	 
      

      

    

    

     

    

     

    11. ­Current
Locations.

     

    

    11.1 The
following is the mailing address for each Grantor:

     

    
      
        	
                Grantor

              	
                Mailing Address (include
      street address, city, state, zip code)

              
	 
      	 
      

      

    

    

    

    

    

    11.2 The
following are the names and addresses of all persons or entities other than any
Grantor (such as customs brokers, bailees, consignees or warehousemen) which
have possession or are intended to have possession of any of the Collateral
(other than in-transit inventory) and the nature of such party’s possession
(such as customs broker, bailee, consignee, warehouseman, or
other):

     

    
      
        
          	
                  Grantor

                	
                  Name

                	
                  Mailing
      Address

                	
                  City

                	
                  State

                	
                  Nature
      of Possession

                
	 
      	 
      	 
      	 
      	 
      	 
      

        

      

    

    

     

    12. No Unusual
Transactions.  Except for those purchases, acquisitions, and
other transactions set forth below, all of the Collateral has been originated by
the Grantors in the ordinary course of each Grantor’s business or consists of
Goods which have been acquired by the Grantors in the ordinary course from a
Person in the business of selling Goods of that kind:

     

    The
undersigned hereby acknowledges and agrees that the Collateral Agent and each
other Secured Party is relying on the representations and warranties made herein
in connection with the Credit Agreement.

     

    

     

    [signature
page follows]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the undersigned has duly executed this Perfection
Certificate.

     

    

    LEAD
BORROWER:

    

    BROWN
SHOE COMPANY, INC.

    

    

    

    
      	
               
      

            	
              By:

            	
              _________________________________

            

    

    Name:                      Mark
E. Hood

    Title:                      Senior
Vice President and

    Chief Financial Officer

    

    

    

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT D

    

      
        
          
            
              
                	
                        BANK
      OF AMERICA, NATIONAL ASSOCIATION

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        CONSOLIDATED
      CERTIFICATE  #

                      	 
      	 
      	
                        DATE:

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                        BABC
      USE ONLY

                      
	
                        ACCOUNTS
      RECEIVABLE (DETAIL SHOWN ON ATTACHED SCHEDULE 1)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         1.  BEGINNING
      BALANCE LINE 6 LAST REPORT

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         2.  PLUS:  SALES
      AS OF

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         3.  LESS:  CREDITS
      AS OF

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         4.  LESS:  GROSS
      COLLECTIONS

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         5.  +/-
      ADJUSTMENTS

                      	 
      	 
      	 
      	 
      	
                                                -

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         6.  ENDING
      BALANCE

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         7.  -
      INELIGIBLE

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         8.  NET
      AMOUNT OF ELIGIBLE ACCOUNTS

                      	 
      	 
      	
                         ADVANCE
      RATE

                      	
                        85%

                      	 
      	
                                                -

                      	 
      	 
      	 
      	 
      	 
      
	
                        CREDIT
      CARD ACCOUNTS RECEIVABLE (DETAIL SHOWN ON ATTACHED SCHEDULE 2)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        9.
      CREDIT CARD A/R

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        10.
      LESS: INELIGIBLES

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        11.
      NET AMOUNT OF ELIGIBLE CREDIT CARD A/R

                      	
                                                -

                      	 
      	
                         ADVANCE
      RATE

                      	
                        90%

                      	 
      	
                                                -

                      	 
      	 
      	 
      	 
      	 
      
	
                        PERPETUAL
      INVENTORY (DETAIL SHOWN ON ATTACHED SCHEDULE
      3)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        12.
      INVENTORY AVAILABILITY BASED ON APPRAISED VALUE

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        13.
      INVENTORY COMPONENT OF BORROWING BASE (LINE 12)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        AVAILABILITY
      RESERVES (DETAIL SHOWN ON ATTACHED SCHEDULE
      4)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        14.  LESS:
      AVAILABILITY RESERVES

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        15.  BORROWING
      BASE (LINE 8 + LINE 11 + LINE 13 + LINE 14)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                                                              -

                      	 
      	 
      	 
      
	
                        CREDIT
      EXTENSIONS

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        16.  OUTSTANDING
      LOAN BALANCE AS OF

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        17.  MERCHANDISE
      L/C's as of:

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        18.  STANDBY
      L/C's as of:

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        19.  BANKERS'
      ACCEPTANCES

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                                                -

                      	 
      	 
      	 
      	 
      	 
      
	
                        20.  TOTAL
      CREDIT EXTENSIONS

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                                                              -

                      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        EXCESS
      AVAILABILITY

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        21.  TOTAL
      COMMITMENTS (PER SCHEDULE 1.1 OF THE AGREEMENT)

                      	 
      	 
      	 
      	 
      	
                             380,000,000

                      	 
      	 
      	 
      	 
      	 
      
	
                        22.  BORROWING
      BASE (LINE 15)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                                                -

                      	 
      	 
      	 
      	 
      	 
      
	
                        23.  LESSER
      OF TOTAL COMMITMENTS OR BORROWING BASE (LESSER OF LINE 21 OR LINE
      22)

                      	 
      	
                                                              -

                      	 
      	 
      	 
      
	
                        24.  LESS:
      TOTAL CREDIT EXTENSIONS (LINE 20)

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                                                              -

                      	 
      	 
      	 
      
	
                        25.  EXCESS
      AVAILABILITY

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                         $                  -

                      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        THE
      UNDERSIGNED REPRESENTS AND WARRANTS THAT THE INFORMATION SET FORTH ABOVE
      AND ON THE ATTACHED SCHEDULES IS TRUE AND COMPLETE IN ALL MATERIAL
      RESPECTS.  THE UNDERSIGNED GRANTS A SECURITY INTEREST IN THE
      COLLATERAL REFLECTED ABOVE TO BANK OF AMERICA, NATIONAL ASSOCIATION, AS
      AGENT FOR THE LENDERS, AND REPRESENTS AND WARRANTS THAT SAID COLLATERAL
      COMPLIES IN ALL MATERIAL RESPECTS WITH THE REPRESENTATIONS, WARRANTIES AND
      COVENANTS CONTAINED IN THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
      BY, AMONG OTHERS BROWN SHOE COMPANY, INC., CERTAIN OF ITS SUBSIDIARIES,
      BANK OF AMERICA, NATIONAL ASSOCIATION, AS AGENT, AND THE OTHER LENDERS
      PARTY THERETO.

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        BROWN
      SHOE COMPANY, INC.,

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        AS
      A BORROWER AND AS AGENT FOR THE BORROWERS:

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        AUTHORIZED
      SIGNATURE:

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                        TITLE:

                      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT E

    

    FORM OF COMPLIANCE
CERTIFICATE

    

    To:           Bank
of America,
N.A.                                                                           Date:                      _____________________

    100 Federal Street

    Boston, Massachusetts
02110

    Attention: Mr. Keith
Vercauteren

    

    Re:           Second
Amended and Restated Credit Agreement dated as of January 21, 2009 (as amended,
amended and restated, modified, supplemented or renewed from time to time the
“Credit
Agreement”) by, among others, BROWN SHOE COMPANY, INC. (the “Lead Borrower”),
SIDNEY RICH ASSOCIATES, INC., BROWN GROUP RETAIL, INC., BROWN SHOE INTERNATIONAL
CORP., BUSTER BROWN & CO., BENNETT FOOTWEAR GROUP LLC, and SHOES.COM, INC.
(together with the Lead Borrower, the “Borrowers”), BROWN
SHOE COMPANY OF CANADA LTD, as a Loan Party, the Lenders from time to time party
thereto, and Bank of America, N.A., as administrative agent and collateral agent
for the Lenders (in such capacities, the “Agent”) and as Lead
Issuing Bank.  Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms in the Credit
Agreement.

     

    The
undersigned, a duly authorized and acting Financial Officer of the Lead
Borrower, hereby certifies to you as follows:

     

    13. No
Defaults.  No Default presently exists, except as set forth in
Appendix
I.

     

    14. Financial
Calculations.  Attached hereto as Appendix II are all
relevant reasonably detailed calculations for the Fixed Charge Coverage Ratio
for the period ending ________.

     

    15. No Material Accounting
Changes, Etc.  The financial statements furnished to the Agent
for the quarter/year ending _____________ were prepared in accordance with GAAP
consistently applied and present fairly in all material respects the financial
condition of the Lead Borrower and its Subsidiaries at the close of, and the
results of the Borrowers’ operations for, the period(s) covered, subject to,
with respect to the quarterly financial statements, normal year end audit
adjustments and the absence of footnotes. There has been no change in GAAP or
the application thereof since the date of the audited financial statements
furnished to the Agent for the Fiscal Year ending February 2, 2008, other than
the material accounting changes as disclosed on Appendix III
hereto.

     

    16. Schedules.  There
has been no change to the information disclosed in any of Schedules 3.1 through
3.24 to the Credit Agreement, or any of the schedules to the Perfection
Certificate or any other Loan Document (or after the delivery of the first
Compliance Certificate delivered pursuant to Section 5.1(d) of the Credit
Agreement, as previously certified), other than the changes as disclosed on
Appendix IV
hereto; provided that,
notwithstanding the foregoing, no such revisions or updates shall be deemed to
have amended, modified, or superseded any such schedules as originally attached
to the Credit Agreement (or after the delivery of the first Compliance
Certificate delivered pursuant to Section 5.1(d) of the Credit Agreement, as
previously certified), or to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such schedules, unless
and until the Administrative Agent shall have accepted in writing such revisions
or updates to any such schedules; and provided further that
the Administrative Agent shall be deemed to have accepted such revisions or
updates unless the Administrative Agent delivers a written objection thereto to
the Lead Borrower within thirty (30) days after the date such revisions or
updates have been received.

     

    [signature
page follows]

     

    

     

    IN
WITNESS WHEREOF, I have executed this Certificate this _____ day of __________,
____.

    

          By:                      ____________________________________

    Financial
Officer of Lead Borrower

    

    Name:______________________________

    Title:_______________________________

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
I

    

    Except as
set forth below, no Default presently exists. [If a Default exists, the
following describes the nature of the Default in reasonable detail and the
steps, if any, being taken or contemplated by the Loan Parties to be taken on
account thereof]

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Appendix
II

    

    Fixed Charge Coverage
Ratio for the Fiscal Quarter ending

    _________________
(calculated for preceding four Fiscal Quarters

     then
ended):                                                                                                                                ____________

    

    1.           Consolidated
EBITDA for the preceding four Fiscal Quarters then ended (in the case of clauses
(a), (b), (c) and (d) below, determined on a Consolidated basis):

    

    (a)           Adjusted
Net Earnings from Operations for such period:____________

    

    Plus

    

    (b)           depreciation,
amortization and all other non-cash charges that

    were
deducted in the calculation of Adjusted Net Earnings from

    Operations
for such
period:                                                                                                                     ____________

    

    Plus

    

    (c)           federal,
state, local and foreign  income taxes that were deducted

    in the
calculation of Adjusted Net Earnings from Operations for

    such
period:                                                                                                           ____________

    

    Plus

    

    (d)           Consolidated
Interest Expense to the extent deducted in the

    calculation
of Adjusted Net Earnings from Operations for such

    period:                                                                                                           ____________

    

    2.           Consolidated
EBITDA for the preceding four Fiscal Quarters then ended

    [the sum
of Line 1(a) through Line
1(d)]:                                                                                                                                ____________

    

    3.           Fixed
Charges for the preceding four Fiscal Quarters then ended (in the case of
clauses (a), (b), (c), (d) and (e) below, determined on a Consolidated
basis):

    

    (a)           Consolidated
Interest Expense during such period:____________

    

    Plus

    

    (b)           Capital
Expenditures (excluding Capital Expenditures funded

    with
Indebtedness other than Revolving Loans) during such
period:____________

    

    Plus

    

    (c)           scheduled
principal payments of Indebtedness payable over the

    course of
the preceding four (4) Fiscal
Quarters:                                                                                                                     ____________

    

    Plus

    

    (d)           federal,
state, local, and foreign income taxes net of refunds

    received,
to the extent any such taxes are paid in cash during such

    period
(excluding taxes paid to repatriate foreign earnings for fiscal

    periods
which are more than twelve months prior to the date of

    determination
of Fixed Charges for any
period):                                                                                                                     ____________

    

    Plus

    

    (e)           Restricted
Payments during such period, excluding any Restricted

    Payments
(x) consisting of dividends or distributions made in

    Capital
Stock under clause (a) of
the definition thereof and (y)

    permitted
under Section 6.7(a)(iii) of the Credit Agreement:____________

    

    

    4.           Fixed
Charges for the preceding four Fiscal Quarters then ended

    [the sum
of Line 3(a) through Line
3(e)]:                                                                                                                                ____________

    

    5.           Fixed
Charge Coverage Ratio as of the Fiscal Quarter ending

    _________________
(calculated for preceding four Fiscal

    Quarters
then ended) [Line 2 divided by Line 4]:____________

    

    

    Covenant:  If Excess Availability is less than
the greater of (i) seventeen and one-half (17.5%) percent of the lesser of the
then (x) Total Commitments or (y) Borrowing Base and (ii) $25,000,000 at any
time, the Loan Parties shall maintain a Fixed Charge Coverage Ratio, calculated
on a trailing four Fiscal Quarters basis of not less than
1.0:1.0.  Such Fixed Charge Coverage Ratio shall be first tested
monthly as of the month ending immediately prior to the date that Excess
Availability is first less than the greater of (i) seventeen and one-half
(17.5%) percent of the lesser of the then (x) Total Commitments or (y) Borrowing
Base and (ii) $25,000,000 and shall continue to be tested until Excess
Availability has exceeded the greater of (i) seventeen and one-half (17.5%)
percent of the lesser of the then (x) Total Commitments or (y) Borrowing Base
and (ii) $25,000,000 on each day for two consecutive Fiscal
Quarters.

    

    

    Is
covenant required to be
tested?                                                                                                Yes
_________                                           No
_________

    

    

    If
covenant is required to be tested, in
compliance?                                                                    Yes
_________              No _________

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
III

    

    Except as
set forth below, no material changes in GAAP or the application thereof have
occurred since the Fiscal Year ending February 2, 2008. [If material changes in
GAAP or in application thereof have occurred, the following describes the nature
of the changes in reasonable detail and the effect, if any, of each such
material change in GAAP or in application thereof on the financial statements
delivered in accordance with the Credit Agreement].

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
IV

    

    Except as
set forth below, there has been no change to the information disclosed in any of
Schedules 3.1 through 3.24 to the Credit Agreement, or any of the schedules to
the Perfection Certificate or any other Loan Document (or after the delivery of
the first Compliance Certificate delivered pursuant to Section 5.1(d) of the
Credit Agreement, as previously certified); provided that,
notwithstanding the foregoing, no such revisions or updates shall be deemed to
have amended, modified, or superseded any such schedules as originally attached
to the Credit Agreement (or after the delivery of the first Compliance
Certificate delivered pursuant to Section 5.1(d) of the Credit Agreement, as
previously certified), or to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such schedules, unless
and until the Administrative Agent shall have accepted in writing such revisions
or updates to any such schedules; and provided further that
the Administrative Agent shall be deemed to have accepted such revisions or
updates unless the Administrative Agent delivers a written objection thereto to
the Lead Borrower within thirty (30) days after the date such revisions or
updates have been received.

     

    

     

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT
F

     

    NOTICE OF
BORROWING

     

    

    To:           Bank
of America,
N.A.                                                                           Date:                      _____________________

    100 Federal Street

    Boston, Massachusetts
02110

    Attention: Mr. Keith
Vercauteren

     

    Re:           Second
Amended and Restated Credit Agreement dated as of January 21, 2009 (as amended,
amended and restated, modified, supplemented or renewed from time to time, the
“Credit
Agreement”) by, among others, BROWN SHOE COMPANY, INC. (the “Lead Borrower”),
SIDNEY RICH ASSOCIATES, INC., BROWN GROUP RETAIL, INC., BROWN SHOE INTERNATIONAL
CORP., BUSTER BROWN & CO., BENNETT FOOTWEAR GROUP LLC, and SHOES.COM, INC.
(together with the Lead Borrower, the “Borrowers”), BROWN
SHOE COMPANY OF CANADA LTD, as a Loan Party, the Lenders from time to time party
thereto, and Bank of America, N.A., as administrative agent and collateral agent
for the Lenders (in such capacities, the “Agent”) and as Lead
Issuing Bank.

     

    Ladies
and Gentlemen:

     

    Reference
is made to the above described Credit Agreement.  All capitalized
terms used but not defined herein shall have the meanings set forth in the
Credit Agreement.  The Lead Borrower, as agent for itself and the
other Borrowers pursuant to Section 9.4 of the Credit Agreement, hereby
irrevocably notifies you of the Borrowing specified below:

     

    The
Business Day of the proposed Borrowing(s) is/are
__________________.

     

    The
aggregate amount of the proposed Borrowing(s) is $___________________, which
Borrowing(s) shall consist of the following Types:

     

    
      	
              Type
      of Borrowing

              (Prime
      Rate or LIBO)

            	
              Amount

            	
              Interest
      Period for LIBO Advances

            
	 
      	
              $___________________

            	
              [months]     [days]

            
	 
      	
              $___________________

            	
              [months]     [days]

            
	 
      	
              $___________________

            	
              [months]     [days]

            
	 
      	
              $___________________

            	
              [months]     [days]

            

    

    

     

    The
account to which the proceeds of such Borrowing are to be deposited, if
notAccount No. 5045183372 maintained by the Borrowers with Bank of America,N.A.,
is as follows: ________________________________________.

     

    The Lead
Borrower hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the proposed Borrowing, before and after
giving effect thereto and to the application of the proceeds
thereof:

     

    (a)           All
representations and warranties made by the Borrowers in the Loan Documents are
true and correct in all material respects on and as of the date hereof, except
(i) that such representations and warranties (A) that relate solely to an
earlier date are true and correct in all material respects as of such earlier
date and (B) are true and correct in all respects if they are qualified by a
materiality standard and (ii) to the extent that the Agent and the Lenders have
been notified by the Borrowers that any representation or warranty is not
correct and the Required Lenders have explicitly waived in writing compliance
with such representation or warranty;

     

    (b)           No
event has occurred and is continuing, or would result from the proposed
Borrowing, which constitutes or would constitute a Default or an Event of
Default; and

     

    (c)           After
giving effect to the proposed Borrowing(s) set forth in Section 0 above, there will be no more than fifteen (15)
Borrowings of LIBO Loans outstanding under the Credit Agreement.

     

    This
Notice of Borrowing is issued pursuant to and is subject to the Credit
Agreement.

     

    [Remainder
of page intentionally left blank]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This
Notice of Borrowing is duly executed as of the date set forth
above.

     

    LEAD
BORROWER:

     

    BROWN SHOE COMPANY, INC., asagent for
itself and the other Borrowers

     

    By:           _____________________________

    Name:
_______________________

    Title:
________________________

    1128759.1

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit G

    

    Form of Credit Card
Notification

    

    CREDIT
CARD NOTIFICATION

    PREPARE
ON BORROWER LETTERHEAD - ONE FOR EACH PROCESSOR OF EACH LOAN PARTY

    

    

    

    

     _________________,
20__

    

    

    

    
      	
              To:

            	
              [Name
      and Address of Credit Card
Processor]

            

    

    (the
"Processor")

    

    Re:           _______________________

    Merchant
Account Number: ____________________

    

    Dear
Sir/Madam:

    

    _______________,
a _______________ (the "[Borrower/Guarantor]"),
has entered into various financing agreements with Bank of America, N.A., a
national banking association with offices at 100 Federal Street, Boston,
Massachusetts 02110, as collateral agent (in such capacity, herein the "Collateral Agent")
for the ratable benefit of a syndicate of lenders and certain other secured
parties (the "Secured
Parties"), pursuant to which agreements the [Borrower/Guarantor] has
granted to the Collateral Agent (for the ratable benefit of the Collateral Agent
and the other Secured Parties) a [hypothec on and a] security interest in and
to, among other things, the [Borrower's/Guarantor’s] accounts, including,
without limitation, all amounts due or to become due from the Processor to the
[Borrower/Guarantor].

     

    Under the
terms and provisions of such financing agreements, the [Borrower/Guarantor] is,
under certain circumstances, obligated to deliver all proceeds of the
[Borrower's/Guarantor’s] accounts, accounts receivable, and inventory to the
Collateral Agent.  Such proceeds include all credit card charges
submitted by the [Borrower/Guarantor] to the Processor for processing and the
amounts which the Processor owes to the [Borrower/Guarantor] on account thereof
(the "Credit Card
Proceeds").

     

    Until the
Processor receives written notification from the Collateral Agent that a
Dominion Period has commenced, the Processor may follow the
[Borrower's/Guarantor’s] instructions with respect to the Credit Card Proceeds
and other amounts due from the Processor to the
[Borrower/Guarantor].  During any Dominion Period, all amounts as may
become due from time to time from the Processor to the [Borrower/Guarantor]
(including without limitation, Credit Card Proceeds, payments from any reserve
account or the like, or other payments) shall be transferred only as
follows:

     

    16.1 By ACH,
Depository Transfer Check, or Electronic Depository Transfer to:

     

    ___________________

    ABA #
______________

    For
Credit to Bank of America, N.A.

    (Brown
Shoe Concentration Account)

    Account
No. ___________________

    Re:
____________________

    

    or

    

    16.2 As the
Processor may be otherwise instructed from time to time in writing by an officer
of the Collateral Agent.

     

    The
“Dominion Period” means each period which commences upon receipt by the
Processor of written notice from the Collateral Agent in the form of Attachment
I and which terminates upon receipt by the Process of written notice from the
Collateral Agent in the form of Attachment II.

     

    Upon
request of the Collateral Agent, a copy of each periodic statement issued by the
Processor to the [Borrower/Guarantor] should be provided to the Collateral Agent
at the following address (which address may be changed upon seven (7) days’
written notice given to the Processor by the Collateral Agent):

     

    Bank of
America, N.A.

    100
Federal Street

    Boston,
Massachusetts 02110

    Attention:
Mr. Keith Vercauteren

    Re: Brown
Shoe Company, Inc.

    

    The
Processor shall be fully protected in acting on any order or direction by the
Collateral Agent respecting the Credit Card Proceeds and other amounts without
making any inquiry whatsoever as to the Collateral Agent's right or authority to
give such order or direction or as to the application of any payment made
pursuant thereto.

     

    This
letter may be amended only by the written agreement of the Processor, the
[Borrower/Guarantor], and an officer of the Collateral Agent and may be
terminated solely by written notice signed by an officer of the Collateral
Agent. The [Borrower/Guarantor] shall not have any right to terminate this
letter nor, except as provided in this Agreement, amend it.

     

    Very truly yours,

    

    ____________________________

    

    By:
______________________________

    
      	
               
      

            	
              Name:

            	
              ___________________________

            

    

    
      	
               
      

            	
              Title:

            	
              ___________________________

            

    

    

    

    cc:           Bank
of America, N.A.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Attachment
I

    

    To:           __________________

    __________________

    __________________

    

    Re:           __________________

    Merchant Account
Number  _______________

    

    Ladies
and Gentlemen:

    

    Reference is made to the Credit Card
Notification dated as of _____________ by ___________ to you regarding the above
described merchant account.  In accordance with the Credit Card
Notification, we hereby give you notice that a Dominion Period is in effect and
of our exercise of control of the Credit Card Proceeds and other payments due
from you to ____________.  We hereby instruct you to transfer funds as
provided in the Credit Card Notification or otherwise in accordance with our
instructions.

    

    Very truly yours,

    

    BANK OF AMERICA, N.A.

    

    ________________________

    Name:___________________

    Title:____________________

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Attachment
II

    

    To:           __________________

    __________________

    __________________

    

    Re:           __________________

    Merchant Account
Number  _______________

    

    Ladies
and Gentlemen:

    

    Reference is made to the Credit Card
Notification dated as of _____________ by ___________ to you regarding the above
described merchant account and the notice, dated __________, we delivered to you
pursuant thereto.  In accordance with the Credit Card Notification, we
hereby give you notice that the Dominion Period we declared pursuant to such
notice is terminated and ___________ is entitled to exercise control of the
Credit Card Proceeds and other payments due from you to
____________.  We hereby instruct you to cease transferring funds as
provided in the Credit Card Notification.

    

    Very truly yours,

    

    BANK OF AMERICA, N.A.

    

    ________________________

    Name:___________________

    Title:____________________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
1.1

    Lenders
and Commitments

    

    

    

    
      	
               

              Lender

            	
              Commitment
      Amount

            	
              Commitment
      Percentage

            
	
              Bank
      of America, N.A.

            	
              $125,000,000.00

            	
              32.895%

            
	
              Wells
      Fargo Retail Finance, LLC

            	
              $125,000,000.00

            	
              32.895%

            
	
              JPMorgan
      Chase Bank, N.A.

            	
              $50,000,000.00

            	
              13.158%

            
	
              Sun
      Trust Bank

            	
              $30,000,000.00

            	
              7.894%

            
	
              Capital
      One Leverage Finance Corp.

            	
              $25,000,000.00

            	
              6.579%

            
	
              Regions
      Bank

            	
              $25,000,000.00

            	
              6.579%

            
	
              TOTAL

            	
              $380,000,000.00

            	
              100.00%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}]]