Document:

f8k123109ex10i_cinnabar.htm

     

    Exhibit 10.1

     

    
      EXECUTIVE
EMPLOYMENT AGREEMENT

      

      This EXECUTIVE EMPLOYMENT
AGREEMENT, is dated as of this 31st day of December, 2009 (the “Agreement”), by and
between Cinnabar Ventures, Inc., a Nevada corporation (the “Company”), and
Richard Allan Lisa (the “Executive”).

      

      BACKGROUND

      

      WHEREAS, the Company is
engaged in the business of developing, manufacturing and marketing consumer and
business technology services including both software and hardware products
distributed nationally and internationally;

      

      WHEREAS, the Company believes
that the Executive possesses the skills and abilities necessary for the Company
to meet its current and future objectives;

      

      WHEREAS, the Executive desires
to provide such services to the Company in such capacities, on and subject to
the terms and conditions hereof; and

      

      NOW, THEREFORE, in
consideration of the mutual covenants set forth below, the parties hereby agree
as follows.

      

      AGREEMENT

      

      Section
1. Employment.

      

      1.1 Employment. Subject
to all of the terms and conditions hereof, the Company does hereby employ the
Executive and the Executive does hereby accept the employment.

      

      1.2 Term. This Agreement
shall be in effect for a period of five (5) years (the “Initial Term”)
beginning on the date of execution of this Agreement (the “Effective Date”), and
shall renew for an additional five (5) year term, unless otherwise agreed by the
parties in writing, and then shall automatically be renewed for additional one
(1) year terms unless terminated by either party as set forth
below.

      

      1.3  Duties.

      

      (a)  Capacity.  So
long as he is employed by Company, Executive shall be employed as the President
and Chief Operating Officer (“COO”) of the Company
and will be an employee of the Company at all times during the term of this
Agreement. Company and Executive acknowledge and agree that Executive’s position
is the President and COO and shall be entitled to the rights and benefits that
are afforded to the responsibilities of a President and COO. Executive will
report directly to the Company’s Chief Executive Office. Executive will also
serve as a member of the Company’s Board of Directors (the “Board of Directors”).
The duties and corresponding authority will be negotiated between the Company’s
Chief Executive Officer, the Chairman of the Board and Executive on an annual
basis (collectively, the “Employment”).

       

       

      
        
           

        

        
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      (b)  Schedule.  So
long as he is employed by Company, Executive shall devote the majority of
Executive’s working time and attention, as necessary, to faithfully and fully
carry out his duties described herein; provided, however, Executive may (i)
serve as a director of other business organizations with the prior written
approval of Company (ii) devote time to and invest in non-competing side
activities, provided that such activities do not individually or in the
aggregate interfere with his duties so as to adversely affect Company’s
business. Executive shall at all times perform his duties and obligations
faithfully, diligently and to the best of Executive’s ability.

      

      (c)  Key Man Insurance.
Company may, for its benefit and at its own expense, insure Executive’s life.
Executive agrees to submit to such physical examination and supply such
information as may be reasonably required in connection therewith.

      

      Section
2. Compensation.

      

      2.1 Base
Compensation.  Subject to increases pursuant to the cost of
living adjustment described below in Section 2.3, Company shall pay to Executive
an annual base salary (the “Base Salary”)
according to the following schedule: (i) Year 1 of employment: Three Hundred and
Fifty Thousand US Dollars (US$350,000.00); (ii) Years 2 thru 5 of Employment:
Six Hundred Thousand US Dollars (US$600,000.00). During the term of this
Agreement or such greater amount as may be determined upon a review of
Executive’s performance to be undertaken pursuant to Company policy regarding
performance reviews by the Chief Executive Officer and the Chairman of the Board
at least once annually.

      

      2.2 Schedule of Compensation
payment.  Executive’s Base Salary shall be payable according to
the following schedule:

      

      (a) Year 1 of Employment. Executive’s
Base Salary shall be payable according to the following schedule: (i) Fifty
Thousand US Dollars (US$50,000.00) upon joint signature (Company and Executive)
of this Agreement; (ii) An additional Seventy Five Thousand US Dollars
(US$75,000.00) due upon the first day of employment with the Company; and (iii)
the balance of Two Hundred and Twenty Five Thousand US Dollars (US$225,000.00)
payable in twelve (12) equal installments through the balance of the first
year.

      

      (b) Years 2 through 5 of Employment.
Executive’s Base Salary shall be payable according to the following schedule:
Executive shall be paid Six Hundred Thousand US Dollars (US$600,000.00) in 26
equal installments made every two weeks of each year.

      

      2.3 Cost of Living
Adjustment.  Executive’s Base Salary at the commencement of the
second and each subsequent year shall be adjusted to provide for all cost of
living increases based upon the percentage increase (if any) in the Consumer
Price Index for All Urban Consumers (l967=l00; All Cities), prepared by the
United States Bureau of Labor Statistics, or any successor thereto, over said
Index in effect at the commencement of the preceding calendar year. During the
term of this Agreement, the Executive’s Base Salary will be equal to or greater
than all other salaries of employees of the Company, except for such salaries of
superior officers as designated by the Chairman of the Board.

      

      2.4 Minimum Income
Guarantee. The Company agrees to fully compensate Executive for the first
two years of income (US$950,000.00) as the minimum amount to be earned over the
term of this Agreement (the “Minimum Income
Guarantee”). The Minimum Income Guarantee shall survive all instances of
termination as provided for in Section 4 of this Agreement.

       

       

      
        
           

        

        
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      2.5 Alternative
Compensation.  In the event the Chief Executive Officer
determines that the Company cannot afford to pay Executive any portion of
Minimum Income Guarantee, Executive may, at his sole option elect one of the
following:

      

      (a) Elect
to receive compensation from the company thru immediate divesture or sales of
Company assets so as to satisfy any balance owed for the income guarantee in
section 2.4.

       

      (b) Agree
to defer receipt of his Base Salary until such time as the Company has the funds
to pay him. In the event that Executive elects this option, the unpaid salary
shall be paid with no interest. However, the Company, as additional
compensation, shall immediately issue Executive an amount of Common Stock equal
to 20% of the deferred Salary based upon a market value determined to be the
average 30-day trading price prior to each such election; or

       

      (c) Elect
to convert all, or a portion of the unpaid Salary into the Company’s common
stock (the “Common
Stock”) at a market value equal to 80% of the average 30-day trading
price prior to each election.

      

      2.6 Signing
Bonus.  In addition to the Base Salary, Company shall issue to
the Executive as a signing bonus (i) Three Hundred Thousand (300,000) options to
purchase Common Stock at a strike price of one cent ($0.01), to be fully vested
upon the mutual completion of this Agreement and (ii) One Hundred and Sixty
Thousand (160,000) options to purchase Common Stock at a strike price of one
cent ($0.01), to be vested in equal amounts of Forty thousand (40,000) shares
per year over the four years following the first year of Employment with the
Company (the “Signing
Bonus”).

      

      2.7 Relocation Expenses.
The Company shall pay the Executive’s reasonable moving expenses for his
relocation from Chicago, Illinois to Phoenix, Arizona.  In the event
that the Company cannot afford to pay said moving expenses at the time they are
incurred, the Executive shall be reimbursed as soon as is reasonably practicable
thereafter, but not more than six (6) months from the date
hereof.  The Company shall pay all the Executive’s reasonable expenses
in connection with the Executive’s services hereunder.

      

      2.8 Bonus
Compensation.

      

      2.8.1. Additional Stock
Grants. In addition to the Base Salary and Signing Bonus, the Company
shall issue to the Executive 100,000 shares of Common Stock on each one (1) year
anniversary while employed with the Company.

      

      2.8.2. Automatic Contract
Surrender.  In the event of merger or acquisition of the
Company, this contract has a minimum buy-out clause of Ten Million US Dollars
(US$10,000,000). The purchaser or acquirer may demand buy-out for any reason by
notice and payment.  This action accelerates vesting period for all
stock options and additional stock grants under the term length of this
agreement.

      

      2.8.3. Quarterly Revenue
Bonus. Company shall pay Executive a quarterly revenue bonus of one-half
percent (0.5%) of Company revenue. This is to be paid in once per fiscal quarter
distributions within four weeks of each fiscal quarterly close.

       

       

      
        
           

        

        
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      2.8.4. Certain
Benefits.  Executive shall be entitled to participate in all
employee benefit programs established by the Company from time to time for
employees or executives of Company, to the extent that executives or senior
management employees of Company generally are eligible to participate in such
programs. Executive shall be further entitled to an annual paid vacation of five
(5) weeks and other benefits in accordance with Company’s policies as from time
to time established by the Company or the Company’s Board of Directors for
employees and/or senior executive officers and the following: (i) full medical,
dental, vision, life, and disability insurance plans for Executive and/or his
immediate family; (ii) a per month automobile leasing, operating, insurance and
maintenance expense allowance of $2,000 per month or the cash equivalent in the
form of an expense reimbursement; (iii) cell phone, personal computer, internet
access, and other communication device acquisition and operating expenses; (iv)
out of state living expenses not to exceed $2,500 per month; (v) a managed 401K
and retirement investment account program with a qualified investment firm to be
paid for by Company; (vi) an unlimited expense account via a Company paid
American Express card; and (vii) upon request access to a Company paid private
jet service to be prudently used at the discretion of Executive pursuant to
execution of the duties of President and COO.

      

      2.8.5  Severance Compensation for
Termination Without Cause. In the event that Executive’s employment is
terminated by Company without cause including but not limited to an involuntary
change of position (other than as a result of the termination of this Agreement
pursuant to Sections 3.1. or 3.2) or terminated by Executive as a result of a
material breach of this Agreement by Company (any of the foregoing, an “Involuntary
Termination”), Executive shall receive from Company, on the effective
date of the Involuntary Termination, a lump sum amount equal to two times the
Executive’s then current Base Salary plus the full quarterly revenue bonus for
one full year then in effect. Further, all stock options, including those
contained in the Signing Bonus, that Executive would be eligible to receive
through the natural term of this Agreement will immediately become fully vested.
In the event Executive or her family is ineligible under the terms of any
insurance to continue to be covered, the Company shall provide Executive and
Executive’s family with substantially equivalent coverage through other sources
or will provide Executive with a lump sum payment equal to the agreed upon value
of the continuation of such insurance coverage to which Executive is entitled
under this Section not to exceed, not to exceed Twenty Five Thousand US Dollars
(US$25,000.00).

      

      Section
3. Proprietary Rights.

      

      3.1 Confidentiality. The
Executive recognizes and acknowledges that certain confidential business and
technical information used by the Executive in connection with his duties
hereunder is a valuable and unique asset of the Company. Executive agrees that
he shall at all times maintain the confidentiality of the proprietary
information and trade secrets of the Company, and that he shall, during the
Restricted Period (as defined herein), refrain from disclosing any such
information to the disadvantage of the Company.

      

      3.2 Non-Competition. The
Executive covenants and agrees that for so long as he is providing services
under this Agreement and for a period of twelve (12) months after this Agreement
terminates (such period of time hereinafter referred to as the “Restricted Period”),
the Executive shall not directly or indirectly, own, manage, control, operate,
invest in or become principal of, employee of, director of, or consultant to,
any business, entity or venture that is in direct competition with the Company.
For purposes of this section, “in competition with the company” means soliciting
a customer for products that directly compete with those of the Company being
produced and/or marketed by the Company or products that Executive is aware the
Company intends to develop, produce and/or market.

       

       

      
        
           

        

        
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      3.2.1. During the Restricted Period,
the Executive shall not, directly or indirectly:

      

      (i) solicit, in competition with the
Company, any person who is a customer of any business conducted by the Company;
or

      

      (ii) in any manner whatsoever induce,
or assist others to induce, any supplier of the Company to terminate its
association with the Company or do anything, directly or indirectly, to
interfere with the business relationship between the Company, and any of their
respective current or prospective suppliers.

      

      3.2.2. During the Restricted Period the
Executive shall not, directly or indirectly, solicit or induce any employee of
the Company to terminate his employment for any purpose, including without
limitation, in order to enter into employment with any entity which competes
with any business conducted by the Company.

      

      3.3  Company.  For
purposes of this Section 3, “Company” shall mean the Company and any and all of
its subsidiaries and affiliates.

      

      3.4 Remedies.  It
is expressly understood and agreed that the services to be rendered hereunder by
the Executive are special, unique, and of extraordinary character, and in the
event of the breach by the Executive of any of the terms and conditions of this
Agreement on his part to be performed hereunder, or in the event of the breach
or threatened breach by the Executive of the terms and provisions of this
Section 3 of this Agreement, then the Company shall be entitled, if it so
elects, to institute and prosecute any proceedings in any court of competent
jurisdiction, either in law or equity, for such relief as it deems appropriate,
including without limiting the generality of the foregoing, any proceedings, to
obtain damages for any breach of this Agreement, or to enforce the specific
performance thereof by the Executive.

      

      3.5 Notwithstanding anything contained
herein to the contrary regarding the Effective Date of this Agreement, Executive
shall be bound by the terms and conditions of this Section 3, immediately upon
the date of execution of this Agreement.

      

      Section
4. Termination.

      

      4.1 Death. This Agreement
shall terminate upon Executive’s death. In the event of Executive’s death while
in the employ of Company, Company shall pay to such person or persons as the
Executive may specifically designate (successively or contingently) by filing a
written beneficiary designation with Company during Executive’s lifetime (the
“Designated
Beneficiaries”) 100% of Executive’s Base Salary as in effect immediately
prior to Executive’s death, payable to Executive’s Designated Beneficiaries at
the beginning of each month for a period of twelve (12) months following
Executive’s death.

      

      4.2 Termination for
Cause. Company shall have the right to terminate this Agreement and
Executive’s employment hereunder for cause upon written notice to Executive. The
term “cause” shall mean Executive must have (i) been willful, gross or
persistent in Executive’s inattention to Executive’s duties or Executive
committed acts which constitute willful or gross misconduct and, after written
notice of the same has been given to Executive and he has been given an
opportunity to cure the same within one hundred and eighty (180) days after such
notice; or (ii) committed fraud against the Company. If Executive’s employment
is terminated for cause, as defined above, and Executive does not consent to
such termination, the existence of such cause shall be determined by an
independent arbitrator appointed by the American Arbitration Association. In
connection with the appointment of an arbitrator, both parties agree to submit
the question to final and binding arbitration by an appointee of the American
Arbitration Association and to cooperate with the arbitrator, with all costs of
arbitration paid by the Company.

       

       

      
        
           

        

        
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      4.3 Indemnification of
Executive. Company shall defend and indemnify Executive at Company’s sole
expense to the full extent of applicable state, federal, and international law
with respect to all claims, causes of action and adversarial proceedings of
every nature to which Executive is or may become subjected in his role as an
Officer or Director of Company and Executive shall have the right to select his
own counsel. Company’s indemnification duty shall survive the termination or
expiration of this Agreement. In the event that Company elects to change
coverage or carriers for its Directors and Officers insurance (“D & O
Insurance”), Company shall notify Executive of such change and arrange to
purchase, at a minimum, a five-year tail policy for such former insurance policy
at the sole expense of Company and deliver evidence of such tail policy to
Executive within five (5) days after termination of Company’s existing D & O
Insurance.

      

      Section
5. General.

      

      5.1 Applicable Law. This
document shall, in all respects, be governed by the laws of the State of Florida
excluding any conflicts of laws provisions.

      

      5.2 Arbitration. Any
dispute arising out of or relating to this Agreement shall be arbitrated before
a single arbitrator in accordance with the commercial arbitration rules of the
American Arbitration Association.  Arbitration shall take place in Lee
County, Florida, and each Party waives any objection which it may now or
hereafter have to the venue of any such suit, action or proceeding. The
arbitrator shall rule on all matters including without limitation, emergency
injunctive relief and attorneys’ fees.

      

      5.3 Survival.  The
Parties agree that the covenants contained in Section 3 above shall survive any
termination of employment by the Executive and any termination of this
Agreement. In addition, the Parties agree that any compensation or right which
shall have accrued to the Executive as of the date of any termination of
employment or termination hereof shall survive any such termination and shall be
paid when due to the extent accrued on the date of such
termination.

      

      5.4 Assignability.  All
of the terms and provisions contained herein shall inure to the benefit of and
shall be binding upon the Parties and their respective heirs, personal
representatives, successors and assigns.  The obligations of the
Executive may not be delegated, except as set forth herein, however, and the
Executive may not, without the Company’s written consent thereto, assign,
transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any interest therein.  Any such attempted delegation or
disposition shall be null and void and without effect.  The Company
and the Executive agree that this Agreement and all of the Company’s rights and
obligations hereunder may be assigned or transferred by the Company to and may
be assumed by and become binding upon and may inure to the benefit of any
affiliate of or successor to the Company.  The term “successor” shall
mean, with respect to the Company or any of its subsidiaries, and any other
corporation or other business entity which, by merger, consolidation, purchase
of the assets, or otherwise, acquires all or a material part of the assets of
the Company.  Any assignment by the Company of its rights and
obligations hereunder to any affiliate of or successor shall not be considered a
termination of employment for purposes of this Agreement.

       

       

      
        
           

        

        
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      5.5 Notices. Any and all
notices required or desired to be given hereunder by either party shall be in
writing and shall be validly given or made to the other if delivered either
personally, by telex, facsimile transmission, same day delivery service,
overnight expedited delivery service, or if deposited in the United States Mail,
certified or registered, postage prepaid, return receipt requested.  If
notice is served personally, notice shall be deemed effective upon receipt. If
notice is served by telex or by facsimile transmission, notice shall be deemed
effective upon transmission, provided that such notice is confirmed in writing
by the sender within one day after transmission. If notice is served by same day
delivery service or overnight expedited delivery service, notice shall be deemed
effective three (3) days after it is sent. In all instances, notice shall be
sent to the parties at the following addresses:

      

       If to the Company:

      

      Cinnabar Ventures, Inc.

      17595 S. Tamiami Trail
#300

      Ft. Myers, FL 33908

      Facsimile: (239) 791-3828

      

      If to the Executive:

      

      Richard A. Lisa

      661 Regal Lane

      Algonquin, IL 60102

      Facsimile: (847) 854-7696

      

      Either
party may change its address for the purpose of receiving notices by a written
notice given to the other party.

      

      5.6 Modifications or
Amendments. No amendment, change or modification of this document shall
be valid unless in writing and signed by each of the parties.

      

      5.7 Waiver. No reliance
upon or waiver of one or more provisions of this Agreement shall constitute a
waiver of any other provisions hereof.

      

      5.8 Severability. If any
provision of this Agreement as applied to either party or to any circumstances
shall be adjudged by a court of competent jurisdiction to be void or
unenforceable, the same shall in no way affect any other provision of this
Agreement or the validity or enforceability of this Agreement.  If any
court construes any of the provisions to be unreasonable because of the duration
of such provision or the geographic or other scope thereof, such court may
reduce the duration or restrict the geographic or other scope of such provision
and enforce such provision as so reduced or restricted.

      

      5.9 Separate
Counterparts. This document may be executed in one or more separate
counterparts, each of which, when so executed, shall be deemed to be an
original. Such counterparts shall, together, constitute and shall be one and the
same instrument.

       

       

      
        
           

        

        
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      5.10 Headings.  The
captions appearing at the commencement of the sections hereof are descriptive
only and are for convenience of reference.  Should there be any
conflict between any such caption and the section at the head of which it
appears, the substantive provisions of such section and not such caption shall
control and govern in the construction of this document.

      

      5.11 Specific Performance.
It is agreed that the rights granted to the parties hereunder are of a special
and unique kind and character and that, if there is a breach by either party of
any material provision of this document, the other party would not have any
adequate remedy at law.  It is expressly agreed, therefore, that the
rights of the parties may be enforced by an action for specific performance and
other equitable relief.

      

      5.12 Further
Assurances.  Each of the parties shall execute and deliver any
and all additional papers, documents and other assurances, and shall do any and
all acts and things reasonably necessary in connection with the performance of
their obligations hereunder and to carry out their intentions as set forth
herein.

      

      5.13 Entire Agreement.
This Agreement constitutes the entire understanding and agreement of the parties
with respect to the subject matter of this Agreement, and any and all prior
agreements, understandings or representations are hereby terminated and canceled
in their entirety.

      

      5.14 Neutral Construction.
Neither party may rely on any drafts of this Agreement in any interpretation of
the Agreement. Each party to this Agreement has reviewed this Agreement and has
participated in its drafting and, accordingly, neither party shall attempt to
invoke the normal rule of construction to the effect that ambiguities are to be
resolved against the drafting party in any interpretation of this
Agreement.

      

      5.15 Attorneys’ Fees. In
the event that either party hereto commences litigation against the other to
enforce such party’s rights hereunder, the prevailing party shall be entitled to
recover all costs, expenses and fees, including reasonable attorneys’ fees
(including in-house counsel), paralegals’ fees, and legal assistants’ fees
through all appeals.

      

      [-signature
page follows-]

       

       

      
        
           

        

        
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      INWITNESS WHEREOF, the Parties
hereto have caused this Agreement to be duly executed as of the date first above
written.

      

       

      CINNABAR VENTURES,
INC.,

      a Nevada
Corporation

       

       

       

      By:
__________________________

      Name:
Richard Granville

      Title:
Chief Executive Officer

       

      

      

      By:
___________________________

      Name:
Richard A. Lisa

      Title:
President and COO

      
 

       

       

       9ex10_1.htm

    Exhibit 10.1

     

     

    EXECUTION
VERSION

     

     

    AMENDED
AND RESTATED

    SECURED
REVOLVING LOAN AGREEMENT

     

     

    AMENDED
AND RESTATED SECURED REVOLVING LOAN AGREEMENT, dated as of December 28, 2009 (as
the same may be amended, supplemented or otherwise modified from time to time,
the "Credit
Agreement"), between THE TALBOTS, INC., a corporation duly organized and
validly existing under the laws of the State of Delaware (the "Borrower") and AEON
CO., LTD., a corporation organized and existing under the laws of Japan (the
"Lender").

     

    WHEREAS,
the Borrower requested, and the Lender agreed pursuant to the terms of that
certain Secured Revolving Loan Agreement, dated as of April 10, 2009 (as
amended, modified and supplemented, the "Existing Credit
Agreement"), to provide the Borrower with $150 million in revolving
credit facilities;

     

    WHEREAS,
the Borrower has requested certain modifications to the credit facilities,
including an increase in the Revolving Loan Commitment under the Existing Credit
Agreement;

     

    WHEREAS,
the Lender has agreed to make the requested revolving credit facility available
to the Borrower on the terms and conditions hereinafter set forth;
and

     

    WHEREAS,
this Credit Agreement is given in amendment to, restatement of and substitution
for the Existing Credit Agreement.

     

    NOW,
THEREFORE, in consideration of these premises and the mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the Lender hereby agree as follows:

     

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

     

    "Aeon Agreement" shall
mean the Repurchase, Repayment and Support Agreement, dated as of December 8,
2009, by and between the Borrower, BPW Acquisition Corp., a Delaware
corporation, Aeon (U.S.A.), Inc., a Delaware corporation, and the Lender, as
amended, supplemented or otherwise modified from time to time.

     

    "Affiliate" shall
mean, as to any Person, any corporation or other entity that, directly or
indirectly, controls, is controlled by or is under common control with such
Person.  For purposes of this definition, the term "
 control" (including "
 controlling," "
 controlled by" and "
 under common
control with") of a Person means the possession, direct or indirect, of the
power to vote 10% or more of the voting stock of such Person or to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting stock, by contract or otherwise.  For
the purposes of Section 3 and Section 4 of this Credit Agreement, the Lender and
its Affiliates (other than any Person constituting an Affiliate of the Borrower
solely by virtue of the Lender's ownership of voting stock of the Borrower)
shall not constitute an Affiliate of the Borrower.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Ancillary Agreements"
shall have the meaning ascribed thereto in the BPW Merger Agreement on the date
hereof.

     

    "Applicable Spread"
shall mean a rate per annum equal to 6.00%.

     

    "Asset Disposition"
shall mean any Disposition of property or series of related Dispositions of
property, including any Capital Stock, by the Borrower or any of its
Subsidiaries (excluding any such Disposition permitted by clause (i), (ii),
(iii), (iv) or (v) of Section 4.21).

     

    "Assignee" is defined
in Section 8.3(a).

     

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

     

    "Borrower" is defined
in the preamble of this Credit Agreement.

     

    "Borrowing Date" shall
mean the date on which a Revolving Loan is made by the Lender in favor of the
Borrower.

     

    "Borrower's Account"
shall mean the bank account established by the Borrower, at a financial
institution designated by the Lender prior to the initial Borrowing Date, for
the purposes of this Credit Agreement (or such other bank account as the parties
hereto may mutually agree).

     

    "BPW Merger Agreement"
shall mean the Agreement and Plan of Merger, dated as of December 8, 2009, among
the Borrower, BPW Acquisition Corp., a Delaware corporation, and Talbots
Acquisition Inc., a Delaware corporation and a wholly-owned subsidiary of the
Borrower, as amended, supplemented or otherwise modified from time to
time.

     

    "Business Day" shall
mean any day other than a Saturday, Sunday or other day on which commercial
banks are required or authorized to be closed in New York, New York or Tokyo,
Japan; provided, however, that when
used in connection with the payment or prepayment of any amounts accruing
interest at such rate or providing notices in connection with such rate, "
 Business Day" shall mean any Business Day in New York, New
York or Tokyo, Japan in which dealings in Dollars are carried on in the London
interbank market; provided, further, that when
used in connection with the calculation or determination of LIBOR, "
 Business Day" shall mean any Business Day in London, in
which dealings in Dollars are carried on in the London interbank
market.

     

    "Capital Expenditures"
shall mean for any period, with respect to any Person, the aggregate of all
expenditures (whether paid in cash or other consideration or accrued as a
liability and including that portion of Capital Lease Obligations which is
capitalized on the consolidated balance sheet of such Person) by such Person and
its Subsidiaries during such period for the acquisition or leasing (pursuant to
a capital lease) of fixed or capital assets or additions to equipment (including
capitalized replacements, capitalized repairs and improvements during such
period) that, in conformity with GAAP, are included in "

additions to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of such Person and its
Subsidiaries.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    "Closing Date" shall
mean the later to occur of (i) December 28, 2009 and (ii) the first Business Day
after the conditions precedent set forth in Section 5.1 hereof have been
satisfied or waived in accordance with the terms hereof.

     

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

     

    "Collateral" means all
"Collateral" referred to in the Collateral Documents, consisting of
substantially all existing and after acquired assets of the Borrower and the
Guarantors and including the Mortgaged Properties, all inventory of the Borrower
and the Guarantors and substantially all of the consumer credit/charge card
receivables owed to the Borrower or any Guarantor from time to
time.

     

    "Collateral Documents"
means, collectively, the Security Agreement, the Mortgages and any other
documents granting a Lien upon the Collateral as security for payment of the
Obligations.

     

    "Credit Card
Receivables" shall have the meaning set forth in the Security
Agreement.

     

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

     

    "Default Rate" is
defined in Section 2.5.

     

    "Dispose" or "Disposition" shall
mean any transaction, or series of related transactions, pursuant to which any
Person or any of its Subsidiaries sells, assigns, transfers or otherwise
disposes of any property or assets (whether now owned or hereafter acquired) to
any other Person, in each case, whether or not the consideration therefor
consists of cash, securities or other assets owned by the acquiring
Person.

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    "Domestic Subsidiary"
shall mean, with respect to any Person, each Subsidiary of such Person organized
under the laws of the United States of America, any State thereof or the
District of Columbia.

     

    "Eligible Credit Card
Receivables" shall have the meaning set forth in the Security
Agreement.

     

    "EMAIL" is defined in
Section 8.6.

     

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

     

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

     

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

     

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

     

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

     

    "ERISA Event" shall
mean (a) any "
 reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to
a Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Plan of an "

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    "Event of Default" is
defined in Section 6.1 hereof.

     

    "Excluded Subsidiary"
shall mean each non wholly-owned Subsidiary of the Borrower and each Subsidiary
of the Borrower that is not a Guarantor.

     

    "Excluded Taxes"
means, (i) any Taxes imposed on the recipient's overall net income, or franchise
or other taxes imposed in lieu of Taxes on overall net income (however
denominated), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located (or, in the case of the Lender, in which its applicable lending
office is located) or otherwise as a result of a present or former connection
between the recipient and the jurisdiction imposing such Tax, other than a
connection arising from such recipient having executed, received a payment under
or enforced this Credit Agreement and (ii) any branch profits taxes imposed by
the United States; it being understood, for the avoidance of doubt, that
Excluded Taxes shall not include any withholding tax, including, without
limitation, a withholding tax imposed by the United States on payments to a
non-US, person who is not otherwise subject to tax in the United States on a net
income basis, other than any withholding tax that would apply to amounts payable
to a recipient at the time the recipient becomes a party to this Agreement or is
attributable to the recipient's failure to comply with Section
7.2(f).

     

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

     

    "FAX" is defined in
Section 8.6.

     

    "Federal Funds Rate"
shall mean (i) for any Business Day, the rate on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not published for any Business Day, the average of the
quotations for such day on such transactions received by the Lender from three
Federal funds brokers of recognized standing selected by the Lender, and (ii)
for any day which is not a Business Day, the Federal Funds Rate for the
preceding Business Day.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

    "Guaranty" means the
Guaranty, dated as of April 10, 2009, executed and delivered by each Guarantor
in favor of the Lender, as reaffirmed by each Guarantor pursuant to the
Reaffirmation Agreement to Guaranty to be executed and delivered by each
Guarantor in favor of the Lender in the form of Exhibit C
hereto.

     

    "Guarantors" means (a)
the Initial Guarantors and (b) each other Person that becomes a Guarantor after
the Closing Date pursuant to Section 4.24, and "Guarantor" means any
one of them.

     

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

     

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

     

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

     

    "Indebtedness" shall
mean with respect to any Person, without duplication, (i) all indebtedness of
such Person for borrowed money, (ii) all obligations of such Person for the
deferred purchase price of assets or services acquired by such Person which, in
accordance with GAAP, would be shown on the liability side of the balance sheet
of such Person, (iii) all obligations of such Person under or evidenced by
bonds, debentures, notes or other similar instruments or upon which interest
payments are customarily made, (iv) all obligations and liabilities, contingent
or otherwise, of such Person in respect of letters of credit, acceptances and
similar facilities, including, without duplication, all drafts drawn thereunder,
(v) all obligations of the kind referred to in clauses (i) through (iv) and (vi)
through (viii) of this definition secured by any Lien on any property owned by
such Person whether or not owing by such Person and even though such Person has
not assumed or become liable for payment thereof, (vi) all Capitalized Lease
Obligations of such Person, (vii) all obligations and liabilities of such Person
created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender thereunder
are limited to repossession or sale of such property, or agreements to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (viii) solely for purposes
of Section 6.1(e), contingent obligations of such Person under any Hedging
Agreements, as calculated in accordance with accepted practice, (ix) all
obligations referred to in clauses (i) through (viii) of this definition of
another Person (a) guaranteed directly or indirectly in any manner by such
Person or (b) secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
any property owned by such Person; provided, however, that the
term Indebtedness shall not include (y) trade payables (including trade letters
of credit issued for the account of such Person in the ordinary course of its
business, but excluding drafts drawn thereunder or any reimbursement obligations
in respect thereof) or accrued expenses, in each case arising in the ordinary
course of business and not more than 60 days delinquent or (z) gift cards and
other customer liabilities arising in the ordinary course of business of such
Person.  The Indebtedness of any Person shall include the Indebtedness
of any partnership of or joint venture in which such Person is a general partner
or joint venturer.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    "Initial Guarantors"
shall mean each Domestic Subsidiary of Borrower listed on Schedule 1(a)
hereto.

     

    "Interest Payment
Date" shall mean the last day of each calendar month.

     

    "Interest Period"
shall mean, with respect to a Revolving Loan, the period commencing on and
including the Borrowing Date of such Revolving Loan and ending on but excluding
the Maturity Date.

     

    "Lender" is defined in
the preamble of this Credit Agreement.

     

    "LIBOR" shall mean,
with respect to any Revolving Loan:

     

    (a)         the
rate of interest per annum determined by the Lender on the basis of the rate for
deposits in Dollars for a period comparable to such Interest Period commencing
on the first day of such Interest Period appearing on Page 3750 of the Telerate
screen or any successor thereto at approximately 11:00 a.m. (London time) on the
date two Business Days prior to the first day of such Interest Period,
or

     

    (b)         if
the rate in the preceding subsection (a) is not available, the rate of interest
per annum determined by the Lender to be the rate in the London interbank market
at approximately 11:00 a.m. (London time) on the date two Business Days prior to
the first day of such Interest Period for the offering by Mizuho in the
interbank market of deposits in Dollars for a period equal to such Interest
Period in amounts comparable to the principal amount of such Revolving Loan to
which such Interest Period applies, at the time as of which the Lender makes
such determination.

     

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

     

    "Loan Account" is
defined in Section 2.9 hereof.

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    "Material Adverse
Effect" shall mean a material adverse effect on any of (a) the
operations, business, assets, properties, or condition (financial or otherwise)
of the Borrower and its Subsidiaries, taken as a whole; provided, that, a general delay
in the payment of accounts or expenses payable by the Borrower or its
Subsidiaries not resulting in litigation shall be excluded, (b) the ability of
the Borrower or any of its Subsidiaries to perform any of its obligations
hereunder, under any Note or under any other Loan Document to which it is a
party and (c) the legality, validity or enforceability of this Credit Agreement,
any Note or any other Loan Document.

     

    "Maturity Date" shall
mean (i) the earlier of (A) the consummation of the Qualified Transaction and
(B) April 16, 2010, or, if such day is not a Business Day, the next succeeding
Business Day or (ii) such earlier date on which the Revolving Loans become due
and payable (whether at stated maturity, by mandatory prepayment, by
acceleration or otherwise) in accordance with the terms hereof.

     

    "Mortgaged Properties"
means the owned real properties and all improvements thereon of the Borrower or
any Guarantor listed on Schedule 1(b)
hereto.

     

    "Mortgages" means any
mortgage, deed of trust or other agreement which conveys or evidences a Lien in
favor of the Lender, on the Mortgaged Properties.

     

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

     

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

     

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

     

    "Notice of Borrowing"
is defined in Section 2.2 hereof.

     

    "Other Taxes" is
defined in Section 7.2(b).

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    "Permitted
Indebtedness" shall mean:

     

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

     

    (b)         any
other Indebtedness listed on Schedule 2.10 or
Schedule 4.17
(including Indebtedness under lines of credit and other credit facilities
described on such Schedule, as in effect on the date hereof), and the extension
of maturity, refinancing or modification of the terms thereof; provided, however, that after
giving effect to such extension, refinancing or modification: (A) the amount of
such Indebtedness is not greater than the amount of Indebtedness outstanding
immediately prior to such extension, refinancing or modification and (B) such
Indebtedness does not have the benefit of covenants more restrictive in any
material respect than those set forth in this Credit Agreement;

     

    (c)         Indebtedness
evidenced by Capitalized Lease Obligations entered into in order to finance
Capital Expenditures made by the Borrower in accordance with the provisions of
this Credit Agreement, which Indebtedness, when aggregated with the principal
amount of all Indebtedness incurred under this clause (c) and clause (d) of this
definition, does not exceed $100,000,000 at any time outstanding;

     

    (d)         Indebtedness
permitted by clause (d) or (e) of the definition of "Permitted
Liens";

     

    (e)         Indebtedness
permitted under Section 4.19; and

     

    (f)         Subordinated
Debt.

     

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

     

    "Permitted Liens"
shall mean:

     

    (a)         Liens
for taxes, assessments and governmental charges the payment of which is not
required under Section 4.7;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    (g)         Liens
securing Indebtedness permitted by subsection (b) of the definition of Permitted
Indebtedness; provided, that, the Borrower
provides, and causes its Subsidiaries to provide, concurrently therewith, that
the obligations under this Credit Agreement, the Note and each other Loan
Document are equally and ratably so secured.

     

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

     

    (i)        
 Liens in favor of the Lender created by the Collateral
Documents.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    "Qualified
Transaction" shall collectively refer to (i) the merger of BPW
Acquisition Corp. with and into Talbots Acquisition, Inc. pursuant to the terms
and conditions of the BPW Merger Agreement and (ii) the Stock Repurchase and
Debt Repayment (as such terms are defined in, and contemplated by, the Aeon
Agreement); provided, such
transactions, together with any concurrent financing, will result in sufficient
net cash proceeds to the Borrower to enable the Borrower to repay, in full, all
of its then outstanding obligations under this Credit Agreement and all then
outstanding Indebtedness described in Schedule 4.17 upon the closing of such
transactions.

     

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

     

    "Revolving Commitment
Period" shall mean the period from and including the Closing Date to the
Maturity Date.

     

    "Revolving Loan" is
defined in Section 2.1 hereof.

     

    "Revolving Loan
Availability" shall mean, at any time of determination, an amount equal
to the Revolving Loan Commitment in effect as such time, less the aggregate
principal amount of Revolving Loans outstanding at such time.

     

    "Revolving Loan
Commitment" is defined in Section 2.1 hereof.

     

    "Secured Party" has
the meaning assigned to such term in the Security Agreement.

     

    "Security Agreement"
means the amended and restated security agreement to be entered into among the
Borrower, the Guarantors and the Lender, which conveys or evidences a Lien in
favor of the Lender, on the Collateral other than the Mortgaged
Properties.

     

    "Solvent" shall mean,
with respect to any Person on a particular date, that on such date (a) the fair
value of the property of such Person is not less than the total amount of the
liabilities of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its existing debts as they become absolute
and matured, (c) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, and (d) such Person is not engaged
in a business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    "Subordinated Debt"
shall mean any Indebtedness of the Borrower that (i) does not mature prior
to August 31, 2012, (ii) is not required to be repaid, prepaid, redeemed,
amortized, repurchased or defeased, in whole or in part, prior to August 31,
2012 (other than (x) pursuant to an acceleration of the obligations thereunder
by the lenders party thereto following an event of default and (y) pursuant to
customary asset sale or change in control provisions requiring redemption or
repurchase thereof, in each case only if and to the extent then permitted by
this Credit Agreement and the subordination provisions of such Indebtedness),
(iii) is not secured by any assets of the Borrower or any Subsidiary,
(iv) is not exchangeable or convertible into Indebtedness of the Borrower
or any Subsidiary (except other Subordinated Debt) or any preferred stock
other than Non-Cash Pay Preferred Stock, (v) does not have the benefit of
covenants more restrictive in any material respect than those set forth in this
Credit Agreement and (vi) is subordinated to the obligations of the Borrower
under this Credit Agreement pursuant to a written agreement reasonably
satisfactory in form and substance to and approved in writing by the
Lender.

     

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

     

    "Taxes" is defined in
Section 7.2(a).

     

    "Threshold Amount"
shall mean $10,000,000.

     

    "Uniform Commercial
Code" is defined in Section 1(c).

     

    "USA Patriot Act" is
defined in Section 4.14.

     

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

     

    (b)         Terms
Generally.  The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words "include", "

includes" and "
 including" shall be deemed to be followed by
the phrase "
 without limitation".  The word "
 will" shall be construed to have the same meaning and
effect as the word "
 shall".  Unless the context
requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "
 herein", "

hereof" and "
 hereunder", and words of similar import, shall
be construed to refer to this Credit Agreement in its entirety and not to any
particular provision hereof, (iv) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Credit Agreement and (v) the words "
 asset" and "
 property" shall be
construed to have the same meaning and effect and to refer to any right or
interest in or to assets and properties of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible.

     

    
      
        
        

      

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

     

    (d)         Time
References.  Unless otherwise indicated herein, all references
to time of day refer to Eastern Standard Time or Eastern daylight saving time,
as in effect in New York City on such day.  For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "
 from" means "
 from and
including" and the words "
 to" and "

until" each means "
 to but excluding"; provided, however, that with
respect to a computation of fees or interest payable to the Lender, such period
shall in any event consist of at least one full day.

     

    2.             The Revolving
Loans

     

    2.1       
  The Revolving Loan Commitment.  Upon
satisfaction or waiver of all terms and conditions precedent to borrowing
(including, if applicable, absence of any Default) set forth herein, the Lender
agrees, from time to time on any Business Day during the Revolving Commitment
Period, to make revolving loans to the Borrower (the "Revolving
Loans") in amounts, which together with all outstanding Revolving Loans,
will not exceed in the aggregate the principal amount of $250,000,000 (the
"Revolving
Loan Commitment").    The Revolving Loan Commitment
shall be subject to reduction and/or termination as herein provided (including,
without limitation, pursuant to Sections 2.6 and 6.2 hereof).  On the
terms and subject to the conditions hereof, the Borrower may from time to time
borrow, prepay, and re-borrow the Revolving Loans.  Any such borrowing
may be denominated in Dollars, as hereinafter provided, and shall be in the
minimum aggregate principal amount of $10,000,000.  On the Maturity
Date, the Revolving Loan Commitment shall terminate and the Lender shall have no
obligation whatsoever to make any further Revolving Loans to the
Borrower.

     

    2.2        
 Making the
Revolving Loans. 
Each Revolving Loan shall be made upon written notice (in form and substance
satisfactory to the Lender, a "Notice of
Borrowing"), given by the Borrower to the Lender at least three Business
Days prior to the proposed Borrowing Date thereof; provided, that the
initial Borrowing Date shall be December 29, 2009 if the Borrower has delivered
a Notice of Borrowing at least one Business Day prior to such
date.  Each Notice of Borrowing shall be irrevocable and shall specify
therein (A) the proposed Borrowing Date, which shall be a Business Day and (B)
the principal amount of such Revolving Loan.  Upon fulfillment of the
applicable conditions set forth in Section 5 hereof (or the waiver thereof by
the Lender as herein prescribed), the Lender shall make such Revolving Loan to
be made by it hereunder by wire transfer of immediately available funds by
2:00 p.m., New York City time on the Borrowing Date, to the Borrower's
Account.

     

    
      
        
        

      

      
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    2.3           Interest.

     

    (a)         Each
Revolving Loan shall bear interest for each day during each Interest Period with
respect thereto at a rate per annum equal to the sum of (a) LIBOR and (b) the
Applicable Spread.

     

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

     

    (c)         Notwithstanding
anything herein to the contrary, all accrued interest shall be payable on each
date principal is payable hereunder pursuant to Sections 2.4 and 2.8 or such
earlier date as herein required.

     

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

     

    (e)         In
the event, and on each occasion, that on the date two Business Days prior to the
commencement of any Interest Period during which any Revolving Loan accrues
interest at a rate based upon LIBOR, the Lender shall have in good faith
determined that Dollar deposits are generally not available in the London
interbank market, or that reasonable means do not exist for ascertaining LIBOR,
or that the rates at which such Dollar deposits are being offered will not
adequately and fairly reflect the cost of making or maintaining such Revolving
Loan at LIBOR during such Interest Period, the Lender shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Borrower.  In the event of any such determination, interest shall
accrue with respect to such Revolving Loan during such Interest Period at a rate
equal to the Federal Funds Rate plus the Applicable Spread.  Each
determination by the Lender hereunder shall be conclusive absent manifest
error.

     

    2.4           Principal Repayment;
Note.

     

    (a)         The
Borrower shall repay the outstanding principal amount of all outstanding
Revolving Loans, together with all other outstanding amounts due and owing
hereunder or under the other Loan Documents, on the Maturity Date.

     

     

    (b)         The
Lender may request that the Revolving Loans be evidenced by a
Note.  In such event, the Borrower shall execute and deliver to the
Lender a Note payable to the order of the Lender, in a principal amount equal to
the Revolving Loans.  Thereafter, the Revolving Loans evidenced by
such Note and interest thereon shall at all times (including after assignment
pursuant to Section 8.3) be represented by one or more Notes in such form
payable to the order of the payee named therein.  The Lender is hereby
authorized by the Borrower to endorse on the schedule attached to a Note (or on
a continuation of such schedule attached to such Note and made a part thereof)
an appropriate notation evidencing the date and amount of the Revolving Loans
made by the Lender, the date and amount of each principal payment and prepayment
with respect thereto and the interest rate applicable thereto; provided, however, that the
failure of the Lender to make any such notation (or any error in such notation)
shall not affect any obligations of the Borrower hereunder or under any
Note.  The Notes and the books and records of the Lender shall be
conclusive evidence of the information set forth therein absent manifest
error.

     

    
      
        
        

      

      
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    2.5           Default Interest.  If
at any time any Event of Default occurs and is continuing, the principal,
interest, fees and all other amount payable hereunder or under any other Loan
Document shall bear interest, from the date such Event of Default occurred until
such Event of Default is fully cured or waived, payable on demand, at a rate
equal at all times to 15.00% per annum (the "Default
Rate").

     

    2.6           Termination or Reduction of
Revolving Loan Commitment.

     

    (a)         Optional Termination or
Reduction.  The Borrower shall have the right at any time or
from time to time, without premium or penalty, upon not less than three Business
Days' prior irrevocable written notice to the Lender, to terminate or reduce the
Revolving Loan Commitment.  Any such reduction of the Revolving Loan
Commitment shall be in an amount that is an integral multiple of $10,000,000 and
not less than $10,000,000.  Any termination or reduction of the
Revolving Loan Commitment pursuant to this Section 2.6(a) shall be
permanent.

     

    (b)         Mandatory Reduction and
Termination.  Upon the consummation of the Qualified
Transaction, the Revolving Loan Commitment shall be reduced to zero, and any
Revolving Loans outstanding in excess of the then Revolving Loan Availability
shall be immediately prepaid in accordance with Section 2.7(b).  Any
such reduction and termination of the Revolving Loan Commitment pursuant to this
Section 2.6(b) shall be permanent.

     

    2.7           Prepayments.

     

    (a)         Optional
Prepayments.  The Borrower may, upon at least three (3) Business
Days' prior written notice to the Lender, prepay all or any portion of the
aggregate principal amount of the outstanding Revolving Loans.  Each
such prepayment shall be in an amount not less than $10,000,000 or an integral
multiple thereof and any portion of the Revolving Loans may be designated by the
Borrower to be prepaid if and only to the extent that prepayment is made on an
Interest Payment Date or subject to the payment of amounts described in Section
7.1(d) and (e).  Each prepayment made pursuant to this Section shall
be accompanied by the payment of (i) accrued interest to date of such prepayment
on the amount prepaid and (ii) any and all payments required pursuant to Section
7.1 in respect of such prepayment.

     

    
      
        
        

      

      
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    (b)         Mandatory
Prepayments.  If at any
time the outstanding amount of the Revolving Loans causes the Revolving Loan
Availability to be less than zero, the Borrower will immediately prepay the
Revolving Loans in an amount necessary to eliminate such
deficiency.

     

    2.8           Method of
Payment.

     

    (a)         Payments
Generally.  The Borrower shall make each payment required to be
made by it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of amounts payable under Section 7.1, or
otherwise) by the time expressly required hereunder or under such other Loan
Document for such payment (or, if no such time is expressly required, by 12:00
p.m., New York City time), on the date when due, in immediately available funds,
without setoff or counterclaim.  Any amounts received after such time
on any date may, in the discretion of the Lender, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  Any prepayments made pursuant to Section 2.7 made
on a date other than an Interest Payment Date shall subject to the amounts
payable in Section 7.1(d) and (e).  The Borrower will make each
payment under this Credit Agreement to the Lender's Account in Dollars and in
immediately available funds, except that payments pursuant to Section 7.1 shall
be made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein.  All
payments under each Loan Document shall be made in Dollars.

     

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

     

    (c)         All
computations of interest and fees shall be made by the Lender on the basis of a
year of 365/6 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable; provided, however, that if a
Revolving Loan is repaid on the same day on which it is made, one day's interest
shall be paid on such Revolving Loan.

     

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

     

    2.9           Loan
Account. The
Lender will maintain on its books a loan account in the Borrower's name (the
"Loan
Account"), showing the Revolving Loans, prepayments, the computation and
payment of interest, and any other amounts due and sums paid hereunder and under
the other Loan Documents.  The entries made by the Lender in the Loan
Account shall be conclusive and binding on the Borrower as to the amount at any
time due from the Borrower, absent manifest error.

     

    
      
        
        

      

      
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    2.10          Use of
Proceeds.  The
Borrower shall apply the proceeds of the Revolving Loans solely to (a)­
permanently­­­­­­­­­­­­­­­­­­­­­­
repay the Indebtedness set forth on Schedule 2.10, (b) fund working capital and
other general corporate purposes of the Borrower up to $10,000,000 and (c) pay
fees and expenses in connection with the transactions contemplated
hereby.

    2.11          Upfront
Fee.  On or prior to the initial Borrowing Date, the Borrower
shall pay to the Lender a non refundable upfront fee equal to
$1,700,000.

     

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

     

    3.1           Organization.  The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.  Each Subsidiary of the
Borrower is duly organized and existing and in good standing under the laws of
the jurisdiction of its organization.  Schedule 3.1 contains
a true and complete list of the Subsidiaries of the Borrower as of the date
hereof.

     

    3.2           Power and
Authority.  Each of
the Borrower and its Subsidiaries has all requisite corporate power and
authority to carry on its present business, to own its property and assets and
to execute, deliver and perform this Credit Agreement, each Note, if any, and
each other Loan Document to which it is a party.  Each of the Borrower
and its Subsidiaries is duly qualified or licensed as a foreign corporation
authorized to conduct its activities and is in good standing in all
jurisdictions in which the character of the properties owned or leased by it or
the nature of the activities conducted makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not be
reasonably likely to result in a Material Adverse Effect.

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    3.7           Governmental
Consents.  No
consent, approval, authorization or order of, notice to or declaration or filing
with, any administrative body or agency or other Governmental Authority on the
part of the Borrower or any of its Subsidiaries is required for the valid
execution, delivery and performance by the Borrower or any of its Subsidiaries
of this Credit Agreement, the Notes, if any, or the other Loan Documents, except
for such as have been obtained or made and are in full force and
effect.

     

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

     

    3.9           Other
Obligations.  None
of the Borrower or any of its Subsidiaries is in default in any material respect
in the performance, observance or fulfillment of any obligation, covenant or
condition in any agreement, document or instrument to which it is a party or by
which it is bound which is reasonably likely to result in a Material Adverse
Effect.

     

    3.10          Financial
Information.

     

    (a)         The
Borrower has heretofore furnished to the Lender its consolidated balance sheets,
its consolidated statements of earnings, its consolidated statements of cash
flows and its consolidated statements of stockholder's equity as of and for the
fiscal year ended January 31, 2009, reported on by Deloitte & Touche LLP,
independent registered public accounting firm, and (B) as of and for the fiscal
quarters and the portion of the fiscal year ended May 2, 2009, August 1, 2009
and October 31, 2009.  Such financial statements present fairly, in
all material respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause (B)
above.

     

    
      
        
        

      

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

     

    3.11          Accuracy of
Information.  All
factual information heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Lender for purposes of or in
connection with this Credit Agreement, any other Loan Document or any
transaction contemplated hereby or thereby (true and complete copies of which
were furnished to the Lender in connection with its execution and delivery
hereof) is, and all other factual information hereafter furnished by or on
behalf of the Borrower or any of its Subsidiaries to the Lender will be, true
and accurate in every material respect on the date as of which such information
is dated or certified and, in respect of such information heretofore or
contemporaneously furnished to the Lender, as of the date of the execution and
delivery of this Credit Agreement by the Lender and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any material
fact necessary to make such information not misleading.  With respect
to any such factual information pertaining to Persons other than the Borrower,
its Subsidiaries or its Affiliates, the foregoing representation is made to the
best knowledge of the Borrower.  All projections heretofore or
contemporaneously furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Lender for purposes of or in connection with this Credit
Agreement or any transaction contemplated hereby have been prepared by the
Borrower or such Subsidiaries based upon estimates and assumptions stated
therein, all of which the Borrower believes to be reasonable and fair in light
of current conditions and current facts known to the Borrower and, as of the
Closing Date, reflect the Borrower's good faith and reasonable estimates of the
future financial performance of the Borrower and its Subsidiaries and of the
other information projected therein for the periods set forth therein; provided, however, that any and
all financial projections are subject to uncertainties and contingencies, many
of which are beyond the Borrower's control and no assurance is or can be given
that any financial projections or other results contemplated therein will be
realized.

     

    3.12          Seniority.  The
obligations of the Borrower and the Guarantors under this Credit Agreement and
the other Loan Documents to which it is a party rank, and at all times shall
rank, at least pari
passu in priority of payment and in all other respects with all other
unsecured Indebtedness of the Borrower and each of the Guarantors.

     

    
      
        
        

      

      
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    3.13          Investment Company
Act.  Neither
the Borrower nor any of its Subsidiaries is an "investment company" or an
"affiliated person" or "
 promoter" of, or "
 principal underwriter" of or for, an "

investment company", as such terms are defined in the Investment Company Act of
1940, as amended.

     

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

     

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

     

    3.16          Solvency.  Each
of the Borrower and its Subsidiaries will be Solvent after giving effect to the
transactions contemplated by this Credit Agreement and the other Loan
Documents.

     

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

     

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

     

    
      
        
        

      

      
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    3.18          Properties; Intellectual
Property; Eligible Credit Card Receivables.  (a)  The
Borrower and each Subsidiary has good title to, or valid leasehold interests in,
all its material real and personal property free and clear of all Liens, except
for Permitted Liens and defects in title, in each case that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.  The Borrower or any
Subsidiary, as applicable, owns good, marketable and indefeasible title to the
Mortgaged Properties in fee.

     

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

     

    (c)         The
Mortgages, when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in connection
therewith, will create valid, perfected first priority liens on the Mortgaged
Properties, as the case may be, subject only to Permitted Liens. The Permitted
Liens do not and will not materially adversely affect or interfere with the
value, or current use or operation, of the Mortgaged Properties, or the security
intended to be provided by the Mortgaged Properties or Borrower's or any
Subsidiary's ability to repay the Obligations in accordance with the terms of
the Loan Documents.

     

    (d)         As
of the end of the most recently completed month, the Borrower and the Guarantors
collectively own no less than $135 million in Credit Card Receivables of which
at least 90% are Eligible Credit Card Receivables (as such terms are defined in
the Security Agreement), in each case, free and clear of all Liens, except
Permitted Liens.

     

    3.19           Security Interest in
Collateral.  The provisions of this Agreement and the other
Loan Documents create legal and valid Liens on all the Collateral of the type in
which a security interest can be created under Article 9 of the Uniform
Commercial Code in favor of the Lender; and upon the proper filing of UCC
financing statements required pursuant to Section 5.1(a)(v)) and the Mortgages
with respect to the Mortgaged Properties, such Liens will constitute perfected
and continuing Liens on the Collateral (to the extent a security interest in
such Collateral and any proceeds of any item of Collateral can be perfected
through the filing of UCC financing statements), securing the Obligations,
enforceable against the Borrower and each Subsidiary, as applicable, and all
third parties, and having priority over all other Liens on the
Collateral.

     

    
      
        
        

      

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

     

    4.1          
 Financial
Statements; Proxy Statements;
Additional Information; Notices.

     

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

     

    (i)      within
120 days after the end of each fiscal year of the Borrower its consolidated
balance sheets as of the end of such fiscal year and the related consolidated
statements of earnings, consolidated statements of cash flows and consolidated
statements of stockholder's equity of the Borrower and its Subsidiaries, which
shall be in reasonable detail and shall be audited by independent certified
public accountants of nationally recognized standing selected by the Borrower
and reasonably satisfactory to the Lender, and as to which such accountants
shall have expressed a written opinion (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) that such statements fairly present the financial position
of the Borrower and its Subsidiaries for the period then ended and have been
prepared in accordance with GAAP, and that the examination of such accounts was
made in accordance with the Standards of Public Company Accounting Oversight
Board (United States) and accordingly included such tests of the accounting
records and such other auditing procedures as were considered necessary under
the circumstances;

     

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

     

    
      
        
        

      

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

     

    (iv)   
Within 30 days after the end of each fiscal month during the Revolving
Commitment Period, receipt by the Lender of a financial report of the Borrower
and its consolidated subsidiaries for such month, in form and substance
reasonably satisfactory to the Lender, including  a reasonably
detailed calculation of the Borrower's and each Subsidiaries Credit Card
Receivables.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    4.3           Books and
Records.  The Borrower shall and shall cause each of its
Subsidiaries to keep and maintain adequate records and books of account, with
complete entries made in accordance with GAAP, consistently
applied.

     

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

     

    4.5           Maintenance of Property;
Compliance with Legal Requirements; Eligible Credit Card
Receivables.

     

    (a)         Borrower
will keep the Mortgaged Properties in good working order and repair, reasonable
wear and tear excepted.  Borrower shall from time to time make, or
cause to be made, all reasonably necessary and desirable repairs, renewals,
replacements, betterments and improvements thereto.  Borrower shall
comply with, and shall cause the Mortgaged Properties to be operated,
maintained, repaired and improved in compliance in all material respects with,
all requirements of applicable law and insurance.

     

    (b)         Borrower
shall ensure that at least $135 million of Credit Card Receivables are owed to
the Borrower and the Guarantors and that at least 90% of such Credit Card
Receivables are Eligible Credit Card Receivables (as such terms are defined in
the Security Agreement), measured as of the last day of any calendar month, and
are possessed by the Borrower and the Guarantors, in each case, free and clear
of all Liens, except Permitted Liens.

     

    
      
        
        

      

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

     

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

     

    4.8           Further
Assurances.

     

    (a)         The
Borrower shall do, and shall cause each of its Subsidiaries to, execute,
acknowledge and deliver at the sole cost and expense of the Borrower or its
Subsidiaries, all documents, financing statements, instruments and agreements
and take such further acts (including the filing and recording of financing
statements and other documents) and deeds as the Lender may reasonably require
from time to time to carry out the intention or facilitate the performance of
the terms of this Credit Agreement or any other Loan Document or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Collateral Documents or the validity or priority of any such Lien, all at the
expense of the Borrower.  The Borrower also agrees to provide to the
Lender, from time to time upon request, evidence reasonably satisfactory to the
Lender as to the perfection and priority of the Liens created or intended to be
created by the Collateral Documents.

     

    (b)         If
any material assets which would otherwise constitute Collateral are acquired by
the Borrower or any Guarantor after the Closing Date (other than assets
constituting Collateral under the applicable Collateral Document that become
subject to the Lien of such Collateral Document upon acquisition thereof), the
Borrower will notify the Lender 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 Lender to grant and perfect such
Liens, including actions described in paragraph (a) of this Section 4.8, all at
the expense of the Borrower.

     

    4.9           Merger, Consolidation,
etc.  The Borrower shall not and shall cause each of its
Subsidiaries not to:

     

    (a)         merge,
consolidate or amalgamate with or into any other Person, except with respect to
the merger contemplated by the BPW Merger Agreement; provided, that, any
wholly-owned Guarantor may merge with an into the Borrower or any other
wholly-owned Guarantor;

     

    (b)         dissolve,
wind-up or liquidate; provided, that, any Subsidiary
may be dissolved or liquidated if the board of directors of the Borrower
determines in good faith such liquidation or dissolution is in the best
interests of the Borrower and not materially disadvantageous to the
Lender;

     

    
      
        
        

      

      
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    (c)         purchase
or otherwise acquire all or substantially all of the assets, liabilities or
properties of any other Person; provided, that, the Borrower or
any wholly-owned Guarantor may acquire all or substantially all of the assets,
liabilities or properties of any wholly-owned Guarantor; or

     

    (d)         Dispose
of all or substantially all of its non-"
 Margin Stock" (as
defined in Regulation U of the Board) assets or properties whether in any single
transaction or one or more transactions in the aggregate; except to the Borrower
or any wholly-owned Guarantor.

     

    4.10          Change in Nature of
Business.  The Borrower shall not and shall cause each of its
Subsidiaries not to make any material changes in the nature of its business
activities as presently conducted.

     

    4.11          Transactions with
Affiliates.  The Borrower shall not and shall cause each of its
Subsidiaries not to enter into any transaction with any of its Affiliates (other
than between or among Borrower and/or one or more wholly-owned Guarantors),
unless such transaction is otherwise permitted hereunder or is in the ordinary
course of business of the Borrower or such Subsidiary, as applicable, and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as applicable, than it would obtain in a comparable arm's length transaction
with a Person which is not an Affiliate.

     

    4.12          Amendment of Material
Documents.  The Borrower shall not and shall cause each of its
Subsidiaries not to amend, modify, waive, terminate or release (a) its
certificate of incorporation or (b) any agreement relating to the Qualified
Transaction, in each case, in any manner which is reasonably likely to
materially adversely affect the Borrower, any Subsidiary or the Lender's rights
under any of the Loan Documents or such person's ability to enforce any such
rights.

     

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

     

    4.14      
   USA
PATRIOT Act Compliance.  The Borrower shall provide, and shall
cause each of its Subsidiaries and Affiliates to provide, such information and
take such actions as are reasonably requested by the Lender in order to assist
the Lender in maintaining compliance with the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (as amended, the "USA Patriot Act") or
similar laws and the rules and regulations promulgated thereunder, in each case,
as the same may be in effect from time to time.

     

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

     

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

     

    
      
        
        

      

      
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    4.17          Indebtedness.  The
Borrower shall not, and shall not permit its Subsidiaries to, create, incur,
assume, guarantee or suffer to exist, or otherwise become or remain liable with
respect to, or permit any of its Subsidiaries to create, incur, assume,
guarantee or suffer to exist or otherwise become or remain liable with respect
to, any Indebtedness other than Permitted Indebtedness.

     

    4.18          Restricted
Payments.  The Borrower shall not, and shall not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (i) the Borrower may declare and pay
dividends with respect to its Capital Stock payable solely in additional shares
of its common stock, (ii) any Subsidiary may declare and pay dividends to the
Borrower or, in the case of any Subsidiary that is wholly owned by another
Subsidiary, to such other Subsidiary, (iii) the Borrower may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the Borrower and its Subsidiaries, and (iv)
netting shares under employee benefit plans to settle option price payments owed
by employees and directors with respect thereto and settling employees' and
directors' federal, state and income tax liabilities (if any) related
thereto.

     

    4.19          Loans, Advances,
Investments, Etc.  The Borrower shall not, and shall not permit
its Subsidiaries to, make or commit or agree to make any loan, advance,
guarantee of obligations, other extension of credit or capital contributions to,
or hold or invest in or commit or agree to hold or invest in, or purchase or
otherwise acquire or commit or agree to purchase or otherwise acquire any shares
of the Capital Stock, bonds, notes, debentures or other securities of, or make
or commit or agree to make any other investment in, any other Person, or
purchase or own any futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or permit any of its Subsidiaries to do any of the foregoing,
except for: 

     

    (a)         loans,
advances and other investments by the Borrower to any wholly-owned Guarantor, by
any such wholly-owned Guarantor to the Borrower or by any such wholly-owned
Guarantor to any other such wholly-owned Guarantor, made in the ordinary course
of business and, which such loans, advances or investments, when aggregated with
all loans, advances and investments made to Excluded Subsidiaries under clause
(iii) below, does not exceed in the aggregate for the Borrower and all of its
Subsidiaries at any one time outstanding $50,000,000 (calculated on the basis of
the actual amount of all such loans, advances and investments (net of any
amounts repaid to the Borrower or such Subsidiaries) and without regard to any
increase or decrease in the value thereof or to any write off, write down or
other similar reduction);

     

    
      
        
        

      

      
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    (b)         loans,
advances and other investments by the Borrower to any Excluded Subsidiary, by
any Excluded Subsidiary to the Borrower or by any such Excluded Subsidiary to
any other such Excluded Subsidiary, made in the ordinary course of business and
not exceeding in the aggregate for the Borrower and all of the Excluded
Subsidiaries at any one time outstanding $10,000,000, plus the value of
inventory advanced to such Excluded Subsidiaries in the ordinary course of
business (and receivables/payables related to such inventory) (calculated on the
basis of the actual amount of all such loans, advances and investments (net of
any amounts repaid to the Borrower or such Excluded Subsidiaries) and without
regard to any increase or decrease in the value thereof or to any write off,
write down or other similar reduction); and

     

    (c)         Permitted
Investments.

     

    4.20     
    Sale/Leaseback
Transactions.  Except for sale/leaseback transactions entered
into in the ordinary course of business with respect to a retail location, the
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.

     

    4.21          Asset
Dispositions.  The Borrower will not, and will not permit any
of its Subsidiaries to Dispose of any asset which has a Fair Market Value in
excess of $1,000,000, including any Capital Stock owned by it, nor will the
Borrower permit any of its Subsidiaries to issue any additional Capital Stock in
such Subsidiary, except:

     

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

     

    (b)         sales,
transfers, licenses, leases or other dispositions of assets (including Capital
Stock) or issuances of any additional Capital Stock by Borrower to any
wholly-owned Subsidiaries, by any such wholly-owned Subsidiary to Borrower, and
by any such wholly-owned Subsidiary to any other such wholly-owned Subsidiary;
provided, that, any such
dispositions to a Subsidiary shall be made in compliance with Section
4.11;

     

    (c)         sales
transfers, licenses, leases or other dispositions deemed to occur as a result of
the creation of Liens permitted by Section 4.16;

     

    (d)         sale/leasebacks
permitted by Section 4.20; and

     

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

     

    
      
        
        

      

      
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    4.22          Capital
Expenditures.  The Borrower will not, nor will it permit any
Subsidiary to contract for, purchase or make any expenditure or commitments for
Capital Expenditures in any fiscal year in excess of the amount contained in a
budget approved by the Lender.

     

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

     

    4.24          Formation of
Subsidiaries.  At the time that the Borrower forms any direct
or indirect Domestic Subsidiary or acquires any direct or indirect Domestic
Subsidiary after the Closing Date, the Borrower shall concurrently with such
formation or acquisition cause any such new Subsidiary to become a party to (i)
the Guaranty by executing a Guaranty Agreement Supplement in the form provided
in the Guaranty and (ii) each applicable Collateral Document in the manner
provided therein 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.

     

    4.25          Negative Pledge
Clauses.  The Borrower shall not, and shall cause each of its
Subsidiaries not to, enter into or suffer to exist or become effective any
agreement that prohibits or limits the ability of any the Borrower or any
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
property or revenues, whether now owned or hereafter acquired, other than (i)
this Credit Agreement and the other Loan Documents, (ii) customary
non-assignment provisions in licenses or sublicenses of intellectual property
and (iii) the BPW Merger Agreement and the Ancillary Agreements (provided that
any Liens under this Credit Agreement shall not be restricted), purchase money
Liens or any Capital Lease Obligations otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
financed thereby).

     

    4.26          Clauses Restricting
Subsidiary Distributions.  The Borrower shall not, and shall
cause each of its Subsidiaries not to, enter into or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Subsidiary of the Borrower to (i) make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the
Borrower or any other Subsidiary of the Borrower, (ii) make loans or advances
to, or other investments in, the Borrower or any other Subsidiary of the
Borrower or (iii) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (A) any restrictions existing under the Loan
Documents or under the BPW Merger Agreement and the Ancillary Agreements, (B)
any restrictions with respect to a Subsidiary imposed pursuant to an agreement
that has been entered into in connection with the Disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary and (C)
contractual encumbrances or restrictions in effect on the Closing Date under
Indebtedness existing on the Closing Date.

     

    
      
        
        

      

      
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    5.           Conditions
Precedent.

     

    5.1           Conditions Precedent to the
Closing.  The
obligation of the Lender to make the Revolving Loans is subject to the prior
fulfillment of the following conditions:

     

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

     

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

     

    (ii)  
  Note.  To
the extent requested by the Lender, the Lender (or its counsel) shall have
received a Note, in the amount of the Revolving Loan, duly executed by an
authorized officer of the Borrower.

     

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

     

    (iv)    Mortgages.   Each
of the Mortgages, duly executed by the Borrower and each Subsidiary a party
thereto.  Each document (including any UCC financing statement)
required by the Mortgages or under law or reasonably requested by the Lender to
be filed, registered or recorded in order to create in favor of the Lender, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Permitted Liens), shall be in
proper form for filing, registration or recordation. The Lender shall have a
security interest in the Collateral of the type and priority described in the
Mortgages (subject only to Permitted Liens).

     

    (v) 
   Security
Agreement.   The Security Agreement, duly executed by the
Borrower and each Subsidiary a party thereto.  Each document
(including any UCC financing statement) required by the Security Agreement or
under law or reasonably requested by the Lender to be filed, registered or
recorded in order to create in favor of the Lender, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Permitted Liens), shall be in proper form for
filing, registration or recordation. The Lender shall have a security interest
in the Collateral of the type and priority described in the Security Agreement
(subject only to Permitted Liens).

     

    
      
        
        

      

      
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    (vi)    Executed
Guaranty.  The Guaranty, duly executed by an authorized officer
of each of the Guarantors.

     

    (vii)   Opinion of Counsel to the
Borrower.  A favorable written opinion of Dewey & LeBoeuf
LLP, counsel for the Borrower, in form and substance reasonably satisfactory to
the Lender and covering such matters relating to the Borrower and the
Guarantors, the Loan Documents and such other matters reasonably requested by
the Lender.

     

    (b)         Legality.  The
making of the Revolving Loans and the consummation of the transactions
contemplated hereunder shall not contravene any law, rule or regulation
applicable to the Lender, the Borrower or any of its Subsidiaries.

     

    (c)         Approvals.  All
consents, authorizations and approvals of, and filings and registrations with,
and all other actions in respect of, any Governmental Authority or other Person
required in connection with the making of the Revolving Loans or the conduct of
business of the Borrower and its Subsidiaries shall have been obtained and shall
be in full force and effect.

     

    (d)         Existing Lender
Waivers.  All necessary consents and approvals to the
transactions contemplated hereby from each of the existing lenders to the
Borrower and its Subsidiaries, including the granting of the Liens in favor of
the Lender on the Collateral, shall have been obtained without the requirement
of the establishment of a pari
passu Lien on the Collateral, and in form reasonably satisfactory to the
Lender; it being understood that to the extent the consent of any lender under
the Indebtedness described in Schedule 2.10 is so required and such lender does
not so agree, the applicable Indebtedness of such lender shall be repaid in full
on the Closing Date.

     

    5.2           Conditions Precedent to
Revolving Loans. The obligation of the Lender to make Revolving Loans on
or after the Closing Date and prior to the Maturity Date shall, in addition to
the fulfillment of the conditions set forth in Section 5.1 above, be subject to
the following:

     

    (a)         Notice of Borrowing.
The Lender shall have received a Notice of Borrowing, duly executed by an
authorized officer of the Borrower as required under Section 2.2
hereof.  The submission by the Borrower of such Notice of Borrowing to
the Lender and the Borrower's acceptance of the proceeds of such Revolving Loans
shall be deemed to be a representation and warranty by the Borrower that all of
the applicable conditions precedent set forth herein have been
satisfied.

     

    (b)         Representations and
Warranties.  The representations and warranties contained in
Sections 3.1, 3.2, 3.3, 3.4, 3.12 and 3.19 of this Credit Agreement shall be
true and correct in all material respects as though made on and as of the
Borrowing Date; provided, that, if the proceeds
of such Revolving Loan are to be utilized in accordance with Section 2.10(b),
then all representations and warranties contained in Section 3 of this Credit
Agreement shall be true and correct in all material respects as though made on
and as of the Borrowing Date.

     

    
      
        
        

      

      
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    (c)         Defaults.  No
Event of Default described in Section 6.1(f) or (h) shall have occurred and be
continuing on the date of such Revolving Loans or would result from making of
such Revolving Loans; provided, that, if the proceeds
of such Revolving Loan are to be utilized in accordance with Section 2.10(b),
then No Default, Event of Default or Material Adverse Effect shall have occurred
and be continuing on the date of such Revolving Loans or would result from
making of such Revolving Loans.

     

    (d)         Proceedings.  There
shall not exist any judgment, order or injunction which prevents the Lender from
making the Revolving Loans and no statute, rule or regulation shall have been
enacted, promulgated or enforced by any Governmental Authority which results in
the Lender's making the Revolving Loans illegal.

     

    (e)         Availability.  After
giving effect to the making of such Revolving Loans, the Revolving Loan
Availability with respect to Revolving Loans shall be not less than
zero.

     

    6.           Events of
Default.

     

    6.1           Events of
Default.  Each
of the following events and occurrences shall constitute an "Event of Default"
under this Credit Agreement:

     

    (a)         The
Borrower or any Subsidiary shall fail to pay when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) (i) any
principal of any Revolving Loan or any Note, or (ii) any interest on any
Revolving Loan or any Note, any fee, any indemnity or any other amount payable
hereunder or under any other Loan Document and any such failure referred to in
this clause (ii) shall continue for three (3) Business Days; or

     

    (b)         Any
representation or warranty made or deemed made by the Borrower or any Subsidiary
in any Loan Document or any certificate, report or other document delivered to
the Lender pursuant to any Loan Document shall have been incorrect or misleading
in any material respect when made or deemed made and such misrepresentation
continues unremedied for a period of forty-five (45) days after the earlier of
(x) notice from the Lender or (y) such time as the Borrower or any Subsidiary
becomes aware of the same; or

     

    (c)         The
Borrower or any Subsidiary shall fail to perform or shall violate any provision,
covenant, condition or agreement in Section 4 of this Credit Agreement (other
than 4.1 through 4.8, 4.10, 4.11, 4.13, 4.14, 4.20, 4.22 and 4.24) of this
Credit Agreement and, if such failure or violation is remediable, was not due to
actions or inactions taken by the Borrower or any Subsidiary constituting gross
negligence, willful misconduct or bad faith and would not materially adversely
impact the Lender's Liens on the Collateral, continues unremedied for a period
of thirty (30) days after the earlier of (i) notice from the Lender or (ii) such
time as the Borrower or any Subsidiary becomes aware of the same;
or

     

    
      
        
        

      

      
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    (d)         The
Borrower or any Subsidiary shall fail to perform or shall violate any provision,
covenant, condition or agreement of this Credit Agreement or any other Loan
Document on its part to be performed or observed (other than those set forth in
paragraphs (a), (b) and (c) of this Section 6.1) and such failure or violation
is not remediable or, if remediable and would not materially adversely impact
the Lender's Liens on the Collateral, continues unremedied for a period of
forty-five (45) days after the earlier of (i) notice from the Lender or (ii)
such time as the Borrower or any Subsidiary becomes aware of the same;
or

     

    (e)         Any
event or condition shall occur that results in the acceleration of the maturity
of any Indebtedness of the Borrower or any Subsidiary under any agreement,
document or instrument with respect to an aggregate amount of Indebtedness equal
to or greater than the Threshold Amount (or the equivalent thereof in any
foreign currency), other than any Indebtedness then held by the Lender or any of
its Affiliates; or

     

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

     

    (g)         The
validity or enforceability of this Credit Agreement or any other Loan Document
shall be contested by or on behalf of the Borrower or any Subsidiary; or a
proceeding shall be commenced by a Governmental Authority having jurisdiction
over the Borrower or any Subsidiary seeking to establish the invalidity thereof;
or the Borrower or any Subsidiary shall deny that it has any further liability
or obligation under any Loan Document to which it is a party; or any Collateral
Document or financing statement after delivery thereof shall for any reason
(other than as permitted under any Collateral Document) cease to create a valid
and perfected Lien on and security interest in any material amount of the
Collateral purported to be covered thereby.

     

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

     

    
      
        
        

      

      
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    7.           Additional Costs and
Expenses; Indemnity.

     

    7.1           (a)        The
Borrower shall pay to (x) the Lender on demand all reasonable out-of-pocket
costs and expenses of the Lender actually incurred in connection with the
preparation, execution and delivery of this Credit Agreement, each Note and any
other Loan Documents or any amendment, modification or waiver of the provisions
hereof or thereof, and (y) the Lender all out-of-pocket costs and expenses
incurred in connection with:  (i) the negotiation of any
restructuring, work-out or renegotiation of any terms of this Credit Agreement,
any Note or any other Loan Documents or the obligations of the Borrower
hereunder or thereunder, (ii) the enforcement of the preservation or protection
of the Lender' rights under this Credit Agreement and the other Loan Documents
and (iii) the response to any subpoena or similar process compelling the
production of documents or other response in connection with this Credit
Agreement, any Note or any other Loan Documents, including without limitation,
in each case, the reasonable and actual fees and expenses of outside counsel for
the Lender, and the Borrower further agrees to indemnify the Lender and their
respective officers, directors and employees against any losses, damages, claims
and expenses arising out of the use or proposed use by the Borrower of any
Revolving Loan hereunder.  In addition, the Borrower agrees to defend,
indemnify and hold harmless the Lender and their respective officers, directors
and employees from and against any losses, damages, liabilities, obligations,
penalties, fees, costs and expenses, including without limitation, the
reasonable and actual fees and expenses of outside counsel for the Lender,
arising out of or relating to the negotiation, preparation, execution, delivery
and performance and administration of this Credit Agreement and the other Loan
Documents, and the consummation of the transactions contemplated hereunder and
thereunder and any claim, litigation, investigation or proceeding relating to
any of the foregoing including, without limitation, all Environmental
Liabilities and Costs arising from or in connection with:  (i) the
past, present or future operations of the Borrower or any of its Subsidiaries
involving any damage to real or personal property or natural resources or harm
or injury alleged to have resulted from any release of Hazardous Materials, (ii)
any Environmental Action or (iii) a breach by the Borrower or any of its
Subsidiaries of any Environmental Law; provided, however, that none of
the foregoing indemnity obligations of the Borrower shall extend to any
liability, obligation, loss, damage, penalty, claim, action, suit, cost, expense
or disbursement to the extent resulting from the willful misconduct or gross
negligence of the Lender as determined by a final non-appealable judgment of a
court of competent jurisdiction. 

     

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

     

    
      
        
        

      

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

     

    (d)         If,
due to any prepayment pursuant to Section 2.7 hereof or any acceleration of the
maturity of the Revolving Loans pursuant to Section 6 hereof or any other
prepayment hereunder, the Lender is subject to a change of interest rate on the
Revolving Loans or the Lender receives payment of principal of the Revolving
Loans other than as provided herein, the Borrower shall, promptly after demand
by the Lender, pay to the Lender any amounts required to compensate the Lender
for any additional losses, costs or expenses which it may reasonably incur as a
result of such change or payment, including, without limitation, any loss, cost
or expense incurred by reason of liquidation or reemployment of deposits or
other funds acquired by the Lender to fund or maintain the Lender's Revolving
Loans.  A certificate setting forth the amount of such additional
losses, costs or expenses submitted to the Borrower by the Lender shall, in the
absence of manifest error, be conclusive evidence thereof.

     

    (e)         If,
due to any prepayment pursuant to Section 2.7 hereof or any acceleration of the
maturity of the Revolving Loans pursuant to Section 6 hereof or any other
prepayment hereunder other than on an Interest Payment Date, the Borrower shall,
promptly after demand by the Lender, pay to the Lender any amounts required to
compensate the Lender for any additional losses, costs or expenses which it may
reasonably incur in connection with the termination of any Hedging Agreements
with respect to the Revolving Loans.  A certificate setting forth the
amount of such additional losses, costs or expenses submitted to the Borrower by
the Lender shall, in the absence of manifest error, be conclusive evidence
thereof.

     

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

     

    7.2           Taxes.

     

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

     

    
      
        
        

      

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

     

    (c)         The
Borrower shall indemnify and agrees to hold harmless the Lender for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
7.2), other than Excluded Taxes, paid by the Lender or any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted.  This indemnification shall be made within five (5) days
after the date the Lender makes written demand therefor, specifying in
reasonable detail the basis, calculation and amount of such Taxes or Other Taxes
and any liabilities arising therefrom.

     

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

     

    (e)         Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations contained in this Section 7.2 shall survive the
payment in full of the principal, interest and all other amounts under this
Credit Agreement and under any other Loan Document and the termination of this
Credit Agreement and each other Loan Document until the expiration of the
statute of limitations applicable to the subject Taxes.

     

    (f)    
     The Lender agrees that, at the request of the
Borrower, it will deliver to the Borrower two properly completed and duly
executed copies of Internal Revenue Service form W-8BEN or any subsequent
version thereof or successor thereto, certifying that the Lender is entitled to
a reduced rate of withholding from United States backup withholding tax on
payments pursuant to this Credit Agreement (and shall deliver to the Borrower
additional copies of the relevant forms on or before the date that such form
expires, and shall promptly notify the Borrower of any form or other
documentation previously submitted that becomes incorrect).

     

    (g)         The
Borrower shall not be required to indemnify the Lender, or pay any additional
amounts to the Lender, in respect of Taxes and liabilities arising therefrom
pursuant to this Section 7.2 to the extent that the obligation to pay such
additional amounts would not have arisen but for a failure by the Lender to
comply with the provisions of clause (f) above.

     

    
      
        
        

      

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

     

    8.           Miscellaneous.

     

    8.1           Entire
Agreement.  This
Credit Agreement, the other Loan Documents and the documents referred to herein
and therein constitute the entire obligation of the parties with respect to the
subject matter hereof and shall supersede any prior expressions of intent or
understanding with respect to the transactions herein and therein contemplated,
including the Existing Credit Facility and the Notice of Borrowing from the
Borrower under the Existing Credit Facility, dated December 21, 2009; provided, that, if the
conditions set forth in Section 5.1 or, to the extent relating to the initial
funding hereunder, the conditions set forth in Section 5.2, are not satisfied
(or waived by the Lender) on or prior to December 28, 2009, this Credit
Agreement shall terminate and be of no further force or effect and the Existing
Credit Facility and the Notice of Borrowing thereunder shall be reinstated in
their entirety.  Notwithstanding the foregoing, upon the repayment in
full by the Borrower of all Indebtedness listed in Schedule 2.10
hereunder, (i) the Support Letter (Financial), dated as of April 9, 2009, from
the Lender to the Borrower and (ii) the Letter of Support, dated as of April 9,
2009, from the Lender to the Borrower shall terminate in their entirety and be
of no further force or effect.  For the avoidance of doubt, the Aeon
Agreement shall survive.

     

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

     

    8.3           Assignment; Binding
Effect.

     

    
      
        
        

      

      
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    (a)         Successors and
Assigns.  The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and its
successors and assigns permitted hereby, except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void), it being
understood that mergers, consolidations and other corporate changes permitted by
Section 4.9 of this Credit Agreement shall not be deemed to be assignments for
purposes of this sentence, and (ii) (1) the Lender may assign to one or
more assignees (each, an "Assignee") all or a
portion of its rights and obligations under this Credit Agreement with notice to
the Borrower or (2) the Lender may at any time, with notice to the Borrower,
sell participations to any Person; provided, that, if no Event of
Default shall have occurred and be then continuing, the prior written consent of
the Borrower (which consent shall not be unreasonably withheld) shall be
required.

     

    (b)         The
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Credit Agreement to secure obligations of the
Lender, including 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 the Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for the Lender
as a party hereto.

     

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

     

    8.5           Submission to
Jurisdiction.

     

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

     

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

     

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

     

    
      
        
        

      

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

     

     

    To the
Borrower:

     

    THE
TALBOTS, INC.

    One
Talbots Drive

    Hingham,
Massachusetts  02043

    Telephone:  (781)
749-7600

    FAX:  (781)
749-0865

    EMAIL:

    Attention:  Michael
Scarpa, CFO

     

    with a
copy (which shall not constitute notice) to:

     

    THE
TALBOTS, INC.

    211 South
Ridge Street

    Suite
100

    Rye
Brook, NY  10573

    Attn:
Richard T. O'Connell, Jr., Executive Vice President and General
Counsel

     

    To the
Lender:

     

    AEON CO.,
LTD.

    5-1,
1-chome, Nakase

    Mihama-ku,
Chiba-shi

    Chiba,
261-8515 Japan

    Telephone:  +81-043-212-6089

    FAX:
+81-043-212-6813

    EMAIL:  h_wakabaya@aeon.biz

    Attention:  International
Division

     

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

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    8.7           Amendments, Etc.  No
amendment or waiver of any provision of this Credit Agreement and the other Loan
Documents, and no consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Lender and, in the case of an amendment, the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.  Notwithstanding the foregoing, the
terms hereof may only be amended in accordance with the provisions of the
Subordination Agreement.

     

    8.8           Release of
Collateral.  Upon the sale, lease, transfer or other
disposition of any item of Collateral (including, without limitation, as a
result of the sale, in accordance with the terms of the Loan Documents, of the
Subsidiary that owns such Collateral) in accordance with the terms of the Loan
Documents, the Lender, at the Borrower's expense, execute and deliver to the
Borrower or such Guarantor such documents in form and substance reasonably
satisfactory to the Lender as may be reasonably requested to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents in accordance with the terms of the Loan
Documents.

     

    8.9           Confidentiality.  The
Lender agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates' respective directors, officers, employees, agents,
advisors and representatives, in each case, who have a need to know as a result
of their being involved in the execution or performance of this agreement and
the transactions contemplated hereby (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to a Loan Document,
(e) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section 8.9, to any Assignee of or participant in, or any prospective
Assignee of or participant in, any of its rights or obligations under this
Agreement or any pledgee referred to in Section 8.3, (g) with the consent of the
Borrower or (h) to the extent such Information becomes publicly available other
than as a result of a breach of this Section or becomes available to the Lender
or any of its Affiliates on a non-confidential basis from a source other than
the Borrower.  For purposes of this Section 8.9, "Information" means
all information received from the Borrower relating to the Borrower or any
Subsidiary or their respective businesses, other than any such information that
is available to the Lender on a non-confidential basis prior to disclosure by
the Borrower or any Subsidiary.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

     

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

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

     

    [SIGNATURE
PAGE FOLLOWS.]

     

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

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

     

     

    
      
        	 	THE
      TALBOTS, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	/s/ Richard
      T. O’Connell, Jr.	 
	 	 	 	Name: 
      Richard T. O’Connell, Jr.	 
	 	 	 	Title: 
      Secretary	 
	 	 	 
	 	Signed
      in: 	Rye Brook, NY 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	AEON
      CO., LTD.	 
	 	 	 	 
	 	 	 	 
	 	By: 	 	/s/
      Masaaki Toyoshima 	 
	 	 	 	Name:  Masaaki
      Toyoshima	 
	 	 	 	Title:
      Vice President &	 
	 	 	 	 	Chief
      Financial Officer	 
	 	 	 	 	 	 
	 	Signed
      in:    	JAPAN	 
	 	 	 	 
	 	 	 	 

      

    

     

     

     

     

    
      
        
        

      

      
        [Loan
Agreement]

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    NOTE

     

    
      	
              US$_____________

            	
              ________
      __ ,
  20__

            

    

     

    FOR VALUE
RECEIVED, The Talbots Inc. (the "Borrower")
unconditionally promises to pay to the order of Aeon Co., Ltd. a corporation
organized under the laws of Japan (the "Lender"), to the
Lender's Account specified in the Credit Agreement described below, the
principal sum of ___________________________ ($_____________) or such lesser
amount as may be outstanding from time to time hereunder and to pay interest
thereon at such rates and according to such methods of calculation as are
provided pursuant to the Amended and Restated Secured Revolving Loan Agreement,
dated as of December 28, 2009, by and among the Borrower and the Lender (as the
same may be amended, supplemented, or otherwise modified from time to time, the
"Credit
Agreement").  The Borrower hereby authorizes the Lender to
enter on the schedule attached hereto the dates, amounts, denomination,
maturities, interest rates and interest periods applicable to each borrowing and
absent manifest error such notations shall be binding and conclusive upon the
Borrower; provided, however, that failure
by the Lender to make any notation on such schedule or any error in such
notations shall in no way affect the Borrower's obligation to repay outstanding
amounts on this Note.

     

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

     

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

     

    This Note
is issued pursuant to the terms of the Credit Agreement and is subject to the
terms and conditions and entitled to the benefits therein
provided.  Upon the occurrence of an Event of Default (as defined in
the Credit Agreement), the principal of and the accrued interest on this Note
may become due and payable in the manner and with the same effect as provided in
the Credit Agreement, without presentment, demand, protest or notice of any kind
unless otherwise expressly required therein.

     

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

     

    
      
        	 
      	
                THE
      TALBOTS, INC.

              
	 
      	 
      
	 	 
	 	 
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              	 
      
	 
      	 
      	
                Title:

              	 
      

      

    

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    SCHEDULE

     

    
      
        	
                Date
      of

                Loan

              	
                Amount

                of
      Loan

              	
                Interest

              	
                Amount

                Paid/Prepaid

              	
                Unpaid
      

                Principal
      

                Balance

              	
                Maturity
      

                Date

              	
                Notation
      

                Made
      By

              

               

      
        
          	
                   

                   

                	 
      	 
      	 
      	 
      	 
      	 
      
	
                   
      

                   

                	 
      	 
      	 
      	 
      	 
      	 
      
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                   

                	 	 	 	 	 	 
	
                   

                	 	 	 	 	 	 

        

         

        
          
            
            

          

          
            A-2

            
              

            

          

          
            
            

          

        

         

        
          
            
              
              

            

            
              
                	
                         

                      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         
      

                         

                      	 
      	 
      	 
      	 
      	 
      	 
      
	
                         

                         

                      	 	 	 	 	 	 
	
                         

                         

                      	 	 	 	 	 	 
	
                         

                         

                      	 	 	 	 	 	 
	
                         

                         

                      	 	 	 	 	 	 
	
                         

                         

                      	 	 	 	 	 	 
	
                         

                         

                      	 	 	 	 	 	 

              

               

               

               

               

              
                
                  
                  

                

                
                  A-3

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    Exhibit
C

     

    REAFFIRMATION
AGREEMENT TO GUARANTY

    

    

    REAFFIRMATION AGREEMENT TO
GUARANTY, dated as of December 28, 2009 (this “Agreement”), made by each
domestic Subsidiary of The Talbots, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware (the “Borrower”) listed on the
signature pages hereto (the “Guarantors”) in favor of Aeon
Co., Ltd., a corporation organized and existing under the laws of Japan, as a
lender under the Credit Agreement referred to below (together with its
successors and assigns in such capacity, “Lender”).

    

    PRELIMINARY
STATEMENTS:

    

    A.           The
Borrower and Lender entered into the Amended and Restated Secured Revolving Loan
Agreement, dated as of December 28, 2009 (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), which amended and restated the Secured Revolving Loan Agreement, dated
as of April 10, 2009 (as amended, modified and supplemented, the “Existing Credit Agreement”)
among the Borrower and Lender.

     

    B.           The
Guarantors and Lender are party to the Guaranty Agreement, dated as of April 10,
2009 (together with all exhibits and schedules thereto and as amended, amended
and restated, supplemented, replaced or otherwise modified from time to time,
the “Guaranty”).

     

    C.           In
connection with the amendment and restatement of the Existing Credit Agreement
pursuant to the Credit Agreement, each Guarantor has agreed to reaffirm its
obligations under the Guaranty.

     

    NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     

    1.      Reaffirmation.

     

    (a)         Each
Guarantor hereby acknowledges that it has reviewed the terms and provisions of
the Existing Credit Agreement and the Credit Agreement and consents to the
amendment and restatement of the Existing Credit Agreement effected pursuant to
the Credit Agreement.  Each Guarantor hereby confirms that the
Guaranty guarantees and will continue to guaranty, to the fullest extent
possible (in accordance with the terms thereof) the payment and performance of
all “Obligations” (as such term is defined in the Guaranty), including without
limitation the payment and performance of all such “Obligations” in respect of
the obligations of Borrower now or hereafter existing under or in respect of the
Credit Agreement.

     

    (b)         Each
Guarantor acknowledges and agrees that the Guaranty shall continue in full force
and effect and that all of its obligations thereunder are and shall continue to
be valid and enforceable (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability) and
shall not be impaired or limited by the execution or effectiveness of the Credit
Agreement.  Each Guarantor represents and warrants that all of its
representations and warranties contained in the Guaranty are true, correct and
complete in all material respects on and as of the date hereof to the same
extent as though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

     

    (c)         Each
Guarantor acknowledges and agrees that (i) notwithstanding any conditions to
effectiveness set forth in the Credit Agreement, the Guarantor is not required
by the terms of the Existing Credit Agreement or any other Loan Document to
consent to the amendment and restatement of the Credit Agreement effected
pursuant to the Credit Agreement and (ii) nothing in the Existing Credit
Agreement, the Credit Agreement or any other Loan Document shall be deemed to
require the consent of the Guarantor to any future amendment and restatement of
the Credit Agreement.

     

    2.      Waivers.

     

    (a)         Each
Guarantor agrees that its obligations under the Guaranty are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Obligations.  In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:  (i) Lender may from time to time, without notice
or demand and without affecting the validity or enforceability of this Agreement
or the Guaranty or giving rise to any limitation, impairment or discharge of
such Guarantor’s liability under the Guaranty, (A) renew, extend, accelerate or
otherwise change the time, place, manner or terms of payment of the Obligations,
(B) settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations, (C) request and accept guaranties of the
Obligations and take and hold other security for the payment of the Obligations,
(D) release, exchange, compromise, subordinate or modify, with or without
consideration, any other security for payment of the Obligations, any guaranties
of the Obligations, or any other obligation of any Person with respect to the
Obligations, (E) enforce and apply any other security now or hereafter held by
or for the benefit of Lender in respect of the Obligations and direct the order
or manner of sale thereof, or exercise any other right or remedy that Lender may
have against any such security, in its discretion may determine consistent with
the Credit Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and (F) exercise any other rights available to Lender under the Loan Documents,
at law or in equity; and (ii) this Agreement, the Guaranty and the obligations
of each Guarantor hereunder and thereunder shall be valid and enforceable and
shall not be subject to any limitation, impairment or discharge for any reason
(other than payment in full of the Obligations), including, without limitation,
the occurrence of any of the following, whether or not such Guarantor shall have
had notice or knowledge of any of them:  (A) any failure to assert or
enforce or agreement not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy with respect to the
Obligations or any agreement relating thereto, or with respect to any guaranty
of or other security for the payment of the Obligations, (B) any waiver,
amendment or modification of, or any consent to departure from, any of the terms
or provisions of the Credit Agreement, any of the other Loan Documents or any
agreement or instrument executed pursuant thereto, or of any guaranty or other
security for the Obligations, (C) the Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect, (D) the application of payments received from any source to the payment
of indebtedness other than the Obligations, even though Lender might have
elected to apply such payment to any part or all of the Obligations, (E) any
failure to perfect or continue perfection of a security interest in any other
collateral which secures any of the Obligations, (F) any defenses, set-offs or
counterclaims which the Borrower may allege or assert against Lender in respect
of the Obligations, including, without limitation, failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury, and (G) any other act or thing or omission, or delay
to do any other act or thing, which may or might in any manner or to any extent
vary the risk of any Guarantor as an obligor in respect of the
Obligations.

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

     

    (b)         Each
Guarantor hereby waives, for the benefit of Lender:  (i) any right to
require Lender as a condition of payment or performance by such Guarantor, to
(A) proceed against the Borrower, any guarantor of the Obligations or any other
Person, (B) proceed against or exhaust any other security held from the
Borrower, any guarantor of the Obligations or any other Person, (C) proceed
against or have resort to any balance of any deposit account or credit on the
books of Lender in favor of the Borrower or any other Person, or (D) pursue any
other remedy in the power of Lender whatsoever; (ii) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of the Borrower including, without limitation, any defense based on or arising
out of the lack of validity or the unenforceability of the Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Borrower from any cause other than payment in full of the
Obligations in immediately available funds; (iii) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (iv) any defense based upon Lender’s errors or omissions in the
administration of the Obligations, except behavior which amounts to bad faith;
(v) (A) any principles or provisions of law, statutory or otherwise, which are
or might be in conflict with the terms of this Agreement and any legal or
equitable discharge of such Guarantor’s obligations hereunder, (B) the benefit
of any statute of limitations affecting such Guarantor’s liability hereunder or
the enforcement hereof, (C) any rights to set-offs, recoupments and
counterclaims, and (D) promptness, diligence and any requirement that Lender
protect, secure, perfect or insure any other security interest or lien or any
property subject thereto; (vi) notices, demands, presentments, protests, notices
of protest, notices of dishonor and notices of any action or inaction, notices
of default under the Credit Agreement or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Obligations or
any agreement related thereto, notices of any extension of credit to the
Borrower and notices of any of the matters referred to in the preceding
paragraph and any right to consent to any thereof; and (vii) to the fullest
extent permitted by law, any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Agreement.

     

    (c)         Until
the Obligations have been paid in full in immediately available funds and the
Revolving Loan Commitments shall have terminated, each Guarantor shall withhold
exercise of (i) any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against the Borrower or any of its
assets in connection with this Agreement or the Guaranty or the performance by
such Guarantor of its obligations hereunder and thereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including, without limitation, (A) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against the Borrower, (B) any right to enforce, or to participate
in, any claim, right or remedy that Lender now has or may hereafter have against
the Borrower, and (C) any benefit of, and any right to participate in, any other
collateral or security now or hereafter held by Lender and (ii) any right of
contribution such Guarantor now has or may hereafter have against any guarantor
of the Obligations.  Each Guarantor further agrees that, to the extent
the agreement to withhold exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
the Borrower or against any other collateral or security, and any rights of
contribution such Guarantor may have against any such guarantor, shall be junior
and subordinate to any rights Lender may have against the Borrower, to all
right, title and interest Lender may have in any such other collateral or
security, and to any right Lender may have against any such
guarantor.

     

    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

     

    (d)         Lender
shall have no obligation to disclose or discuss with any Guarantor their
assessment, or such Guarantor’s assessment, of the financial condition of the
Borrower.  Each Guarantor has adequate means to obtain information
from the Borrower on a continuing basis concerning the financial condition of
the Borrower and its ability to perform its obligations under the Loan
Documents, and such Guarantor assumes the responsibility for being and keeping
informed of the financial condition of the Borrower and of all circumstances
bearing upon the risk of nonpayment of the Obligations.  Each
Guarantor hereby waives and relinquishes any duty on the part of Lender to
disclose any matter, fact or thing relating to the business, operations or
condition of the Borrower now known or hereafter known by Lender.

     

    3.      Governing
Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.  EACH GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A
JURY TRIAL IN CONNECTION WITH ANY ACTION RELATED TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.

     

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

     

    5.      Severability.  Any
provision of this Agreement held to be invalid, illegal, ineffective or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality, ineffectiveness or
unenforceability without affecting the validity, legality, effectiveness 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.

     

    [Signature Pages
Follow]

     

     

     

     

    
      
        
        

      

      
        C-4

        
          

        

      

      
        
        

      

    

     

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

     

     

    
      
        	 
      	
                TALBOTS
      CLASSICS, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                THE
      TALBOTS GROUP, LIMITED PARTNERSHIP

              
	 
      	 
      	 
      
	 
      	
                By:  The
      Talbots, Inc., its sole general partner

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                TALBOTS
      IMPORT, LLC

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	 
      	 
      

      

    

     

    
      
        
        

      

      
        C-5

        
          

        

      

      
        
        

      

    

     

    
      
        
          	 
      	
                  
                    TALBOTS
      INTERNATIONAL RETAILING LIMITED, INC.

                  

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 
	 
      	
                  By:

                	 
      	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  
                    TALBOTS
      CLASSICS FINANCE COMPANY, INC.

                  

                
	 
      	 
      	 
      
	 	 	 
	 
      	 
      	 
      
	 
      	
                  By:

                	 
      	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  
                    TALBOTS
      (U.K.) RETAILING LIMITED

                  

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  By:

                	 
      	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                
	 
      	 
      	 
      

        

      

       

      
        
          
            	 
      	
                    
                      
                        TALBOTS
      (CANADA), INC.

                      

                    

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 
	 
      	
                    By:

                  	 
      	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  
	 
      	 
      	 
      
	 
      	 
      	 
      

             

            
              
                
                

              

              
                C-6

                
                  

                

              

              
                
                

              

            

             

            	 
      	
                    
                      
                        AEON
      CO., LTD.

                      

                    

                  
	 
      	 
      	 
      
	 	 	 
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  

          

        

         

         

         

         

         

         

        
          
            
            

          

          
            C-7

            
              

            

          

          
            
            

          

        

      

    

     

    Schedule
1(a)

    

    Initial
Guarantors

    

    
      	
              Guarantor

            	
              Jurisdiction

            
	
              Talbots
      Classics, Inc.

            	
              Massachusetts

            
	
              The
      Talbots Group, Limited Partnership

            	
              Massachusetts

            
	
              Talbots
      Import, LLC

            	
              Delaware

            
	
              Talbots
      International Retailing Limited, Inc.

            	
              Delaware

            
	
              Talbots
      Classics Finance Company, Inc.

            	
              Delaware

            
	
              Talbots
      (U.K.) Retailing Limited

            	
              Delaware

            
	
              Talbots
      (Canada), Inc.

            	
              Delaware

            

    

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
1(b)

    

    Mortgaged
Properties

    

    The real
property and all improvements thereon at the Talbots headquarters complex
located at 175 Beal Street, Hingham, MA 02043

    

    The real
property and all improvements thereon at Talbots' Lakeville Distribution Center
located at 175 Kenneth Welch Drive, Lakeville, MA  02348.

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.10

     

    Use of
Proceeds

     

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

     

    Short Tem
Loan Agreement dated April 17, 2009, between The Talbots, Inc., as Borrower,
with The Norinchukin Bank, as Lender, for $28,000,000.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
3.1

    

    Borrower
Subsidiaries

    

    
      	
              Subsidiary

            	
              Jurisdiction

            
	
              Talbots
      Classics, Inc.

            	
              Massachusetts

            
	
              The
      Talbots Group, Limited Partnership

            	
              Massachusetts

            
	
              Talbots
      Import, LLC

            	
              Delaware

            
	
              Birch
      Pond Realty Corporation

            	
              Delaware

            
	
              Talbots
      International Retailing Limited, Inc.

            	
              Delaware

            
	
              Talbots
      Classics Finance Company, Inc.

            	
              Delaware

            
	
              Talbots
      Classics National Bank

            	
              Rhode
      Island

            
	
              Talbots
      (U.K.) Retailing Limited

            	
              Delaware

            
	
              Talbots
      Charitable Foundation, Inc.

            	
              Delaware

            
	
              Talbots
      (Canada), Inc.

            	
              Delaware

            
	
              Talbots
      (Canada) Corporation

            	
              Nova
      Scotia, Canada

            
	
              Tailor
      Acquisition, Inc.

            	
              Delaware

            

    

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
4.16

     

    Existing
Liens

     

    None

     

     

     

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
4.17

     

    Existing
Indebtedness

     

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

     

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]