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M,#`P,#`P(#8U-3,U(&8-"C`P,#`P,#`P,#`@-C4U,S4@9@T*,#`P,#`P,#`P
M,"`V-34S-2!F#0HP,#`P,#`P,#`P(#8U-3,U(&8-"C`P,#`P,#`P,#`@-C4U
M,S4@9@T*,#`P,#`P,#`P,"`V-34S-2!F#0HP,#`P,#`P,#`P(#8U-3,U(&8-
M"C`P,#`P,#`P,#`@-C4U,S4@9@T*,#`P,#`P,#`P,"`V-34S-2!F#0HP,#`P
M,#`P,#`P(#8U-3,U(&8-"C`P,#`P,#`P,#`@-C4U,S4@9@T*,#`P,#`P,#`P
M,"`V-34S-2!F#0HP,#`P,#`P,#`P(#8U-3,U(&8-"C`P,#`P,#`P,#`@-C4U
M,S4@9@T*,#`P,#`P,#`P,"`V-34S-2!F#0HP,#`P,#`P,#`P(#8U-3,U(&8-
M"C`P,#`P,#`P,#`@-C4U,S4@9@T*,#`P,#`P,#`P,"`V-34S-2!F#0HP,#`P
M,#`P,#`P(#8U-3,U(&8-"C`P,#`P,#`P,#`@-C4U,S4@9@T*=')A:6QE<@T*
F/#PO4VEZ92`R-S`^/@T*<W1A<G1X<F5F#0HQ,38-"B4E14]&#0H_
`
end
</PDF>2.03

     

    

     

     

    $125,000,000

     

     

    CREDIT
      AGREEMENT

     

    Dated
      as
      of October 24, 2006

     

    among

     

    THE
      BOMBAY COMPANY, INC.

     

    EACH
      OF
      ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO,

     

    as
      Borrowers

     

    THE
      LENDERS AND L/C ISSUERS PARTY HERETO,

     

    GENERAL
      ELECTRIC CAPITAL CORPORATION,
      

     

    as
      Administrative Agent and Collateral Agent

     

    and

     

    GE
      CANADA
      FINANCE HOLDING COMPANY,
      

     

    as
      Canadian Agent

     

     

    ♦
♦
      ♦

     

     

    GE
      CAPITAL MARKETS, INC.,
      

     

     

    as
      Sole
      Lead Arranger and Bookrunner

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
               

            	
              Page

            
	
              ARTICLE
                I

            	
              DEFINITIONS,
                INTERPRETATION AND ACCOUNTING
                TERMS......................................

            	
              1

            
	
              Section
                1.1 

            	
              Defined
                Terms.................................................................................................................................

            	
              1

            
	
              Section
                1.2 

            	
              UCC
                Terms......................................................................................................................................

            	
              33

            
	
              Section
                1.3 

            	
              Accounting
                Terms and
                Principles...............................................................................................

            	
              33

            
	
              Section
                1.4 

            	
              Interpretation..................................................................................................................................

            	
              34

            
	
              ARTICLE
                II 

            	
              THE
                FACILITIES............................................................................................................................

            	
              35

            
	
              Section
                2.1 

            	
              Revolving
                Credit
                Commitments....................................................................................................

            	
              35

            
	
              Section
                2.2 

            	
              Borrowing
                Procedures...................................................................................................................

            	
              37

            
	
              Section
                2.3 

            	
              Swing
                Loans....................................................................................................................................

            	
              41

            
	
              Section
                2.4 

            	
              Letters
                of
                Credit..............................................................................................................................

            	
              44

            
	
              Section
                2.5 

            	
              Reduction
                and Termination of the
                Commitments......................................................................

            	
              47

            
	
              Section
                2.6 

            	
              Repayment
                of
                Loans......................................................................................................................

            	
              47

            
	
              Section
                2.7 

            	
              Optional
                Prepayments...................................................................................................................

            	
              47

            
	
              Section
                2.8 

            	
              Mandatory
                Prepayments...............................................................................................................

            	
              47

            
	
              Section
                2.9 

            	
              Interest.............................................................................................................................................

            	
              48

            
	
              Section
                2.10 

            	
              Conversion
                and Continuation
                Options.......................................................................................

            	
              49

            
	
              Section
                2.11 

            	
              Fees..................................................................................................................................................

            	
              50

            
	
              Section
                2.12 

            	
              Application
                of
                Payments...............................................................................................................

            	
              50

            
	
              Section
                2.13 

            	
              Payments
                and
                Computations........................................................................................................

            	
              52

            
	
              Section
                2.14 

            	
              Evidence
                of
                Debt............................................................................................................................

            	
              54

            
	
              Section
                2.15 

            	
              Suspension
                of Eurodollar Rate
                Option.......................................................................................

            	
              55

            
	
              Section
                2.16 

            	
              Breakage
                Costs; Increased Costs; Capital
                Requirements........................................................

            	
              56

            
	
              Section
                2.17 

            	
              Taxes................................................................................................................................................

            	
              57

            
	
              Section
                2.18 

            	
              Substitution
                of
                Lenders.................................................................................................................

            	
              59

            
	
              ARTICLE
                III

            	
              CONDITIONS
                TO LOANS AND LETTERS OF
                CREDIT.........................................................

            	
              60

            
	
              Section
                3.1

            	
              Conditions
                Precedent to Initial Loans and Letters of
                Credit...................................................

            	
              60

            
	
              Section
                3.2

            	
              Conditions
                Precedent to Each Loan and Letter of
                Credit.........................................................

            	
              63

            
	
              Section
                3.3

            	
              Determinations
                of Initial Borrowing
                Conditions........................................................................

            	
              63

            
	
              ARTICLE
                IV

            	
              REPRESENTATIONS
                AND
                WARRANTIES.............................................................................

            	
              63

            
	
              Section
                4.1

            	
              No
                Encumbrances..........................................................................................................................

            	
              63

            
	
              Section
                4.2

            	
              Accounts.........................................................................................................................................

            	
              64

            
	
               

            	
               

            	
               

            
	
               

            	
               TABLE
                OF CONTENTS

            	
               

            
	
               

            	
              (Continued)

            	
               

            
	
               

            	
               

            	
               

            
	
              Section
                4.3

            	
              Eligible
                Inventory...........................................................................................................................

            	
              64

            
	
              Section
                4.4

            	
              Location
                of
                Inventory....................................................................................................................

            	
              64

            
	
              Section
                4.5

            	
              Inventory
                Records.........................................................................................................................

            	
              64

            
	
              Section
                4.6

            	
              Name,
                Jurisdiction of Incorporation; Location of Chief Executive

            	
               

            
	
               

            	
              Office;
                FEIN; Organizational ID
                Number....................................................................................

            	
              64

            
	
              Section
                4.7

            	
              Due
                Organization and Qualification;
                Subsidiaries....................................................................

            	
              65

            
	
              Section
                4.8

            	
              Due
                Authorization; No
                Conflict...................................................................................................

            	
              65

            
	
              Section
                4.9

            	
              Litigation..........................................................................................................................................

            	
              66

            
	
              Section
                4.10

            	
              No
                Material Adverse
                Effect..........................................................................................................

            	
              66

            
	
              Section
                4.11

            	
              Fraudulent
                Transfer.......................................................................................................................

            	
              67

            
	
              Section
                4.12

            	
              Canadian
                Benefit Plans and Canadian Pension
                Plans..............................................................

            	
              67

            
	
              Section
                4.13

            	
              ERISA...............................................................................................................................................

            	
              67

            
	
              Section
                4.14

            	
              Environmental
                Condition..............................................................................................................

            	
              67

            
	
              Section
                4.15

            	
              Brokerage
                Fees...............................................................................................................................

            	
              68

            
	
              Section
                4.16

            	
              Intellectual
                Property.......................................................................................................................

            	
              68

            
	
              Section
                4.17

            	
              Leases..............................................................................................................................................

            	
              68

            
	
              Section
                4.18

            	
              Deposit
                Accounts..........................................................................................................................

            	
              68

            
	
              Section
                4.19

            	
              Complete
                Disclosure......................................................................................................................

            	
              68

            
	
              Section
                4.20

            	
              Credit
                Card
                Receipts......................................................................................................................

            	
              68

            
	
              Section
                4.21

            	
              Holding
                Company and Investment Company
                Acts..................................................................

            	
              69

            
	
              Section
                4.22

            	
              Absence
                of Financing Statements,
                etc.......................................................................................

            	
              69

            
	
              Section
                4.23

            	
              Certain
                Transactions......................................................................................................................

            	
              69

            
	
              Section
                4.24

            	
              Regulations
                U and
                X......................................................................................................................

            	
              69

            
	
              Section
                4.25

            	
              Labor
                Relations...............................................................................................................................

            	
              69

            
	
              Section
                4.26

            	
              Indebtedness...................................................................................................................................

            	
              70

            
	
              Section
                4.27

            	
              Payment
                of
                Taxes............................................................................................................................

            	
              70

            
	
              Section
                4.28

            	
              Foreign
                Assets Control Regulations,
                Etc...................................................................................

            	
              70

            
	
              Section
                4.29

            	
              No
                Burdensome Obligations; No
                Defaults.................................................................................

            	
              70

            
	
              ARTICLE
                V

            	
              REPORTING
                COVENANTS..........................................................................................................

            	
              71

            
	
              Section
                5.1

            	
              Accounting
                System;
                Access........................................................................................................

            	
              71

            
	
              Section
                5.2

            	
              Collateral
                Reporting........................................................................................................................

            	
              71

            
	
              Section
                5.3

            	
              Financial
                Statements, Reports,
                Certificates................................................................................

            	
              71

            
	
               

            	
               

            	
               

            
	
               

            	
              TABLE
                OF CONTENTS

            	
               

            
	
               

            	
               (continued)   

            	
               

            
	
               

            	
               

            	
               

            
	
              Section
                5.4

            	
              Right
                to Inspect; Inventories, Appraisals Audits and
                Assessments....................................

            	
              73

            
	
              ARTICLE
                VI

            	
              AFFIRMATIVE
                COVENANTS.....................................................................................................

            	
              76

            
	
              Section
                6.1

            	
              Returns.............................................................................................................................................

            	
              76

            
	
              Section
                6.2

            	
              Maintenance
                of
                Properties............................................................................................................

            	
              76

            
	
              Section
                6.3

            	
              Taxes.................................................................................................................................................

            	
              76

            
	
              Section
                6.4

            	
              Insurance.........................................................................................................................................

            	
              77

            
	
              Section
                6.5

            	
              Location
                of
                Inventory....................................................................................................................

            	
              77

            
	
              Section
                6.6

            	
              Compliance
                with Laws,
                Etc............................................................................................................

            	
              77

            
	
              Section
                6.7

            	
              Leases...............................................................................................................................................

            	
              77

            
	
              Section
                6.8

            	
              Existence...........................................................................................................................................

            	
              78

            
	
              Section
                6.9

            	
              Environmental..................................................................................................................................

            	
              78

            
	
              Section
                6.10

            	
              Disclosure
                Updates........................................................................................................................

            	
              78

            
	
              Section
                6.11

            	
              Formation
                of
                Subsidiaries..............................................................................................................

            	
              78

            
	
              Section
                6.12

            	
              Additional
                Collateral
                Covenants..................................................................................................

            	
              79

            
	
              Section
                6.13

            	
              Investment
                Proceeds,
                Etc..............................................................................................................

            	
              79

            
	
              Section
                6.14

            	
              Immediate
                Notice to the Administrative
                Agent..........................................................................

            	
              79

            
	
              Section
                6.15

            	
              Inactive
                Subsidiaries......................................................................................................................

            	
              80

            
	
              Section
                6.16

            	
              Further
                Assurances........................................................................................................................

            	
              80

            
	
              Section
                6.17

            	
              Governing
                Documents...................................................................................................................

            	
              80

            
	
              Section
                6.18

            	
              Deposit
                Accounts; Securities Accounts and Cash Collateral
                Accounts..............................

            	
              81

            
	
              Section
                6.19

            	
              Release
                of Eligible Real
                Property..................................................................................................

            	
              83

            
	
              Section
                6.20

            	
              Canadian
                Pension Plans and Benefit
                Plans.................................................................................

            	
              83

            
	
              Section
                6.21

            	
              Grant
                of Non-Exclusive
                License....................................................................................................

            	
              83

            
	
              ARTICLE
                VII

            	
              NEGATIVE
                COVENANTS.............................................................................................................

            	
              85

            
	
              Section
                7.1

            	
              Indebtedness...................................................................................................................................

            	
              85

            
	
              Section
                7.2

            	
              Liens.................................................................................................................................................

            	
              86

            
	
              Section
                7.3

            	
              Restrictions
                on Negative Pledges and Upstream
                Limitation....................................................

            	
              86

            
	
              Section
                7.4

            	
              Restrictions
                on Fundamental
                Changes.......................................................................................

            	
              86

            
	
              Section
                7.5

            	
              Disposal
                of Assets; Sale and
                Leaseback....................................................................................

            	
              87

            
	
              Section
                7.6

            	
              Change
                Name; Change Governing
                Documents..........................................................................

            	
              87

            
	
              Section
                7.7

            	
              Prepayments
                and
                Amendments....................................................................................................

            	
              88

            
	
               

            	
               

            	
               

            
	
               

            	
               TABLE
                OF CONTENTS

            	
               

            
	
               

            	
               (continued)

            	
               

            
	
               

            	
               

            	
               

            
	
              Section
                7.8

            	
              Consignments..................................................................................................................................

            	
              88

            
	
              Section
                7.9

            	
              Distributions....................................................................................................................................

            	
              88

            
	
              Section
                7.10

            	
              Accounting
                Methods.....................................................................................................................

            	
              89

            
	
              Section
                7.11

            	
              Investments,
                Acquisitions............................................................................................................

            	
              89

            
	
              Section
                7.12

            	
              Transactions
                with
                Affiliates..........................................................................................................

            	
              89

            
	
              Section
                7.13

            	
              Suspension.......................................................................................................................................

            	
              89

            
	
              Section
                7.14

            	
              Use
                of
                Proceeds...............................................................................................................................

            	
              89

            
	
              Section
                7.15

            	
              Inventory
                with
                Bailees....................................................................................................................

            	
              89

            
	
              Section
                7.16

            	
              Store
                Openings and
                Closings........................................................................................................

            	
              90

            
	
              Section
                7.17

            	
              Securities
                Accounts........................................................................................................................

            	
              90

            
	
              Section
                7.18

            	
              Deposit
                Accounts, Credit Card Agreements,
                etc.......................................................................

            	
              90

            
	
              Section
                7.19

            	
              Employee
                Benefit
                Plans..................................................................................................................

            	
              90

            
	
              Section
                7.20

            	
              Margin
                Regulations........................................................................................................................

            	
              91

            
	
              ARTICLE
                VIII

            	
              EVENTS
                OF
                DEFAULT..................................................................................................................

            	
              91

            
	
              Section
                8.1

            	
              Definition..........................................................................................................................................

            	
              91

            
	
              Section
                8.2

            	
              Remedies...........................................................................................................................................

            	
              93

            
	
              Section
                8.3

            	
              Actions
                in Respect of Letters of
                Credit.......................................................................................

            	
              94

            
	
              ARTICLE
                IX

            	
              THE
                ADMINISTRATIVE
                AGENT................................................................................................

            	
              94

            
	
              Section
                9.1

            	
              Appointment
                and
                Duties...............................................................................................................

            	
              94

            
	
              Section
                9.2

            	
              Binding
                Effect..................................................................................................................................

            	
              95

            
	
              Section
                9.3

            	
              Use
                of
                Discretion.............................................................................................................................

            	
              95

            
	
              Section
                9.4

            	
              Delegation
                of Rights and
                Duties...................................................................................................

            	
              96

            
	
              Section
                9.5

            	
              Reliance
                and
                Liability......................................................................................................................

            	
              96

            
	
              Section
                9.6

            	
              Agent
                Individually..........................................................................................................................

            	
              97

            
	
              Section
                9.7

            	
              Lender
                Credit
                Decision...................................................................................................................

            	
              97

            
	
              Section
                9.8

            	
              Expenses;
                Indemnities....................................................................................................................

            	
              97

            
	
              Section
                9.9

            	
              Resignation
                of Administrative Agent or L/C
                Issuer..................................................................

            	
              98

            
	
              Section
                9.10

            	
              Release
                of Collateral or
                Guarantors..............................................................................................

            	
              99

            
	
              Section
                9.11

            	
              Additional
                Secured
                Parties............................................................................................................

            	
              99

            
	
              ARTICLE
                X

            	
              MISCELLANEOUS.........................................................................................................................

            	
              100

            
	
              Section
                10.1

            	
              Amendments,
                Waivers,
                Etc...........................................................................................................

            	
              100

            
	
               

            	
               

            	
               

            
	
               

            	
               TABLE
                OF CONTENTS

            	
               

            
	
               

            	
               (continued)

            	
               

            
	
               

            	
               

            	
               

            
	
              Section
                10.2

            	
              Assignments
                and Participations; Binding
                Effect.......................................................................

            	
              101

            
	
              Section
                10.3

            	
              Costs
                and
                Expenses........................................................................................................................

            	
              104

            
	
              Section
                10.4

            	
              Indemnities.......................................................................................................................................

            	
              104

            
	
              Section
                10.5

            	
              Survival.............................................................................................................................................

            	
              105

            
	
              Section
                10.6

            	
              Limitation
                of Liability for Certain
                Damages.................................................................................

            	
              105

            
	
              Section
                10.7

            	
              Lender-Creditor
                Relationship........................................................................................................

            	
              105

            
	
              Section
                10.8

            	
              Right
                of
                Setoff..................................................................................................................................

            	
              106

            
	
              Section
                10.9

            	
              Sharing
                of Payments,
                Etc...............................................................................................................

            	
              106

            
	
              Section
                10.10

            	
              Marshaling;
                Payments Set
                Aside.................................................................................................

            	
              106

            
	
              Section
                10.11

            	
              Notices..............................................................................................................................................

            	
              107

            
	
              Section
                10.12

            	
              Electronic
                Transmissions...............................................................................................................

            	
              109

            
	
              Section
                10.13

            	
              Governing
                Law.................................................................................................................................

            	
              110

            
	
              Section
                10.14

            	
              Jurisdiction.......................................................................................................................................

            	
              110

            
	
              Section
                10.15

            	
              Waiver
                of Jury
                Trial........................................................................................................................

            	
              111

            
	
              Section
                10.16

            	
              Severability.......................................................................................................................................

            	
              111

            
	
              Section
                10.17

            	
              Execution
                in
                Counterparts..............................................................................................................

            	
              111

            
	
              Section
                10.18

            	
              Entire
                Agreement.............................................................................................................................

            	
              111

            
	
              Section
                10.19

            	
              Use
                of
                Name.....................................................................................................................................

            	
              111

            
	
              Section
                10.20

            	
              Non-Public
                Information;
                Confidentiality.....................................................................................

            	
              112

            
	
              Section
                10.21

            	
              Judgment
                Currency.........................................................................................................................

            	
              112

            
	
              Section
                10.22

            	
              Patriot
                Act
                Notice............................................................................................................................

            	
              112

            

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULES

     

    Schedule I - Commitments

    Schedule
      4.7 - 
      Subsidiaries

    Schedule 4.9 - Litigation

    Schedule 4.14 - Environmental
      Condition

    Schedule 4.20 - Credit
      Card Receipts

    Schedule 5.2 - Collateral
      Reporting

    Schedule
      7.1 - Existing
      Indebtedness

    Schedule
      7.2 - Existing
      Liens

    Schedule 7.12 - Affiliates

    Schedule 7.16 - Store
      Openings and Closings

    

    EXHIBITS

     

    Exhibit A - Form
      of
      Assignment

    Exhibit B - Form
      of
      Note

    Exhibit C - Form
      of
      Notice of Borrowing

    Exhibit D - Form
      of
      Swingline Request

    Exhibit E - Form
      of
      L/C Request

    Exhibit F - Form
      of
      Notice of Conversion or Continuation

    Exhibit G - Form
      of
      Compliance Certificate

    Exhibit H - Form
      of
      Guaranty and Security Agreement

    Exhibit I - Borrowing
      Base Certificate

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    This
      CREDIT
      AGREEMENT,
      dated
      as of October 24, 2006, is entered into among THE
      BOMBAY COMPANY, INC.,
      a
      Delaware corporation (the “Parent”),
      each
      of Parent’s Subsidiaries identified on the signature pages hereof (such
      Subsidiaries, together with Parent, are referred to hereinafter each
      individually, as a “Borrower”,
      and
      collectively, as the “Borrowers”),
      the
      Lenders (as defined below), the L/C Issuers (as defined below), GENERAL
      ELECTRIC CAPITAL CORPORATION
      (“GE
      Capital”),
      as
      administrative agent and collateral agent for the Lenders and the L/C Issuers
      (in such capacity, and together with its successors and permitted
      assigns, the
      “Administrative
      Agent”)
      and GE
      CANADA FINANCE HOLDING COMPANY (“GE
      Canada”),
      as
      Canadian agent (in such capacity, the “Canadian
      Agent”).

     

    The
      parties hereto agree as follows:

     

    ARTICLE
      I  

     

     

    DEFINITIONS,
      INTERPRETATION AND ACCOUNTING TERMS

     

    Section 1.1  Defined
      Terms.
      As used
      in this Agreement, the following terms have the following meanings:

     

    “Accounts”
means
      an “account” (as defined under the UCC) and any and all supporting obligations
      in respect thereof.

     

    “Account
      Debtor”
means
      any Person who is or who may become obligated under, with respect to, or on
      account of, an Account.

     

    “Adjusted
      Availability”
means
      as of any date of determination, if such date is a Business Day, and determined
      at the close of business on the immediately preceding Business Day, if such
      date
      of determination is not a Business Day, the amount as determined by the
      Administrative Agent at any time, in its Permitted Discretion, equal to the
      remainder of (a) the Aggregate Borrowing Base minus
      (b) the
      sum of the U.S. Revolving Credit Outstandings and the Canadian Revolving Credit
      Outstandings (in each case, determined after giving effect to all sublimits
      and
      Reserves then applicable hereunder).

     

    “Administrative
      Agent”
means
      GE Capital, solely in its capacity at the administrative agent and collateral
      agent for the Lenders and the L/C Issuers.

     

    “Affected
      Lender”
has
      the
      meaning specified in Section 2.18(b).

     

    “Affiliate”
means,
      as applied to any Person, any other Person who, directly or indirectly,
      controls, is controlled by, or is under common control with, such Person;
provided,
      however,
      no
      Secured Party shall be deemed an Affiliate of the Group Members. For purposes
      of
      this definition, “control” means the possession, directly or indirectly, of the
      power to direct the management and policies of a Person, whether through the
      ownership of Stock, by contract, or otherwise; provided,
      however,
      that,
      for purposes of Section
      7.12
      hereof:
      (a) any Person which owns directly or indirectly 20% or more of the Voting
      Stock
      of a Person or 20% or more of the partnership or other ownership interests
      of a
      Person (other than as a limited partner of such Person) shall be deemed to
      control such Person; and (b) each director (or comparable manager) of a Person
      shall be deemed to be an Affiliate of such Person.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Agent”
means
      the Administrative Agent and the Canadian Agent or, as the context requires,
      either of them.

     

    “Aggregate
      Borrowing Base”
means
      as of any date of determination, an amount equal to the U.S. Borrowing Base
      plus
      the
      Canadian Borrowing Base.

     

    “Agreement”
means
      this Credit Agreement.

     

    “Applicable
      Margin” means,
      with respect to Revolving Loans, Swing Loans, Canadian Swing Loans and the
      Unused Commitment Fee, a percentage equal to (a) during the period commencing
      on
      the Closing Date and ending 5 Business Days after the receipt by the
      Administrative Agent of the Compliance Certificate for the Fiscal Year ending
      January, 2007 required to be delivered pursuant to Section
      5.3,
      with
      respect to (i) Loans, Swing Loans and Canadian Swing Loans maintained as Base
      Rate Loans a rate equal to 0.0% per annum and (ii) Loans maintained as
      Eurodollar Rate Loans, a rate equal to 1.25% per annum and (b) thereafter,
      as of
      each date of determination (and until the next such date of determination),
      a
      per annum percentage equal to the per annum percentage set forth below in the
      applicable column opposite the level corresponding to the average Adjusted
      Availability for the most recently ended Fiscal Quarter:

     

    
      	
               

              LEVEL

               

            	
               

              AVERAGE
                ADJUSTED AVAILABILITY 

               

            	
               

              BASE
                RATE LOANS

               

            	
               

              EURODOLLAR
                RATE LOANS

               

            	
               

              UNUSED
                COMMITMENT FEE

               

            
	
               

              REVOLVING
                LOANS, SWING LOANS AND CANADIAN SWING LOANS

               

            	
               

              REVOLVING
                LOANS

               

            
	
               

              I

               

            	
               

              Greater
                than $50,000,000

               

            	
               

              0%

               

            	
               

              1.00%

               

            	
               

              0.20%

               

            
	
               

              II

               

            	
               

              Less
                than or equal to $50,000,000 and or greater than $35,000,000

               

            	
               

              0%

               

            	
               

              1.25%

               

            	
               

              0.20%

               

            
	
               

              III

               

            	
               

              Less
                than or equal to $35,000,000 and or greater than $25,000,000

               

            	
               

              0%

               

            	
               

              1.50%

               

            	
               

              0.20%

               

            
	
               

              IV

               

            	
               

              Less
                than or equal to $25,000,000

               

            	
               

              0%

               

            	
               

              1.75%

               

            	
               

              0.20%

               

            

    

    

    Each
      date
      of determination for the “Applicable
      Margin”
shall
      be the date that is 5 Business Days after delivery by the Borrower to the
      Administrative Agent of a new Compliance Certificate with respect to each Fiscal
      Quarter pursuant to Section 5.3.
      Notwithstanding anything to the contrary set forth in this Agreement, the
      Applicable Margin shall equal the percentage set forth in the appropriate column
      opposite Level IV in the table above, effective immediately upon failure to
      deliver a Compliance Certificate pursuant to Section
      5.3
      until
      the date immediately following the date on which the Compliance Certificate
      is
      delivered.

     

    “Appraised
      Value”
means
      the fair market value as determined by an appraisal report conforming to the
      Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
      in form and substance and from independent appraisers satisfactory to the
      Administrative Agent in its Permitted Discretion.

     

    “Approved
      Customs Broker”
means
      a
      customs broker selected by the Borrowers acceptable to the Administrative Agent
      in its Permitted Discretion (and which may be affiliated with one of the
      Lenders, the Administrative Agent or the Canadian Agent) to perform port of
      entry services, to accept and process inventory imported by a U.S. Borrower
      and
      who has executed and delivered a customs broker agreement in form and substance
      satisfactory to the Administrative Agent in its Permitted Discretion, duly
      executed and delivered to the Administrative Agent by a Customs Broker and
      the
      applicable Borrower.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Approved
      Fund”
means,
      with respect to any Lender, any Person (other than a natural Person) that (a)
      is
      or will be engaged in making, purchasing, holding or otherwise investing in
      commercial loans and similar extensions of credit in the ordinary course of
      its
      business and (b) is advised or managed by (i) such Lender, (ii) any Affiliate
      of
      such Lender or (iii) any Person (other than an individual) or any Affiliate
      of
      any Person (other than an individual) that administers or manages such
      Lender.

     

    “Approved
      Inventory Servicer”
means
      RGIS Inventory Specialists, Western Inventory Service, Washington Inventory
      Service and any other third parties acceptable to the Administrative Agent
      in
      its Permitted Discretion (and which may be affiliated with one of the Lenders).
      

     

    “Assignment”
means
      an assignment agreement entered into by a Lender, as assignor, and any
      prospective assignee thereof and accepted by the Administrative Agent, in
      substantially the form of Exhibit A.

     

    “Availability”
means,
      as of any date of determination, if such date is a Business Day, and determined
      at the close of business on the immediately preceding Business Day, if such
      date
      of determination is not a Business Day, the amount as determined by the
      Administrative Agent at any time, in its Permitted Discretion equal to (a)
      the
      lesser of (i) the sum of the Maximum Revolver Amount and the Maximum Canadian
      Revolver Amount and (ii) the Aggregate Borrowing Base, minus
      (b)
      the
      sum of the U.S. Revolving Credit Outstandings and the Canadian Revolving Credit
      Outstandings (in each case, determined after giving effect to all sublimits
      and
      Reserves then applicable hereunder).

     

    “Bailee
      Acknowledgment”
means
      a
      record in form and substance satisfactory to the Administrative Agent
      authenticated by any bailee, warehouseman or other third party in possession
      of
      any inventory acknowledging that it holds possession of the applicable inventory
      for the benefit of the Administrative Agent, on behalf of the Secured
      Parties.

     

    “Bankruptcy
      Code”
means
      title 11 of the United States Bankruptcy Code, as in effect from time to
      time.

     

    “Base
      Rate”
means,
      at any time, a rate per annum equal to the higher of (a) the rate last quoted
      by
      The Wall Street Journal as the “base rate on corporate loans posted by at least
      75% of the nation’s largest banks” in the United States or, if The Wall Street
      Journal ceases to quote such rate, the highest per annum interest rate published
      by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519)
      (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no
      longer quoted therein, any similar rate quoted therein (as determined by the
      Administrative Agent) or any similar release by the Federal Reserve Board (as
      determined by the Administrative Agent) and (b) the sum of 0.5% per annum and
      the Federal Funds Rate.

     

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

     

    “Benefit
      Plan”
means
      a
“defined benefit plan” (as defined in Section 3(35) of ERISA) subject to
      Title IV of ERISA for which any Borrower or any Subsidiary or ERISA Affiliate
      of
      any Borrower has been an “employer” (as defined in Section 3(5) of ERISA)
      within the past six years.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Bombay
      Canada”
means
      The Bombay Furniture Company of Canada Inc., a corporation continued under
      the
      laws of the Province of Ontario. 

     

    “Bombay
      Office Complex”
Real
      Property located in Tarrant County, Texas with the legal description known
      as
      Lot 1, Block A, Bombay Addition to the City of Fort Worth, Tarrant County,
      Texas, according to plat recorded in Cabinet A, Page 10625, Plat Records of
      Tarrant County Texas, the office buildings and improvements thereon, the
      fixtures thereon and the related equipment.

     

    “Books”
means
      all of each Group Member’s now owned or hereafter acquired books and records
      (including all of its Records indicating, summarizing, or evidencing its assets
      (including the Collateral) or liabilities, all of each Group Member’s Records
      relating to its or their business operations or financial condition, and all
      of
      each Group Member’s goods or general intangibles related to such
      information).

     

    “Borrower”
has
      the
      meaning specified in the preamble.

     

    “Borrowing”
means
      a
      borrowing consisting of Loans (other than Swing Loans and Loans deemed made
      pursuant to Section 2.3
      or
2.4)
      made in
      one Facility on the same day by the Lenders according to their respective
      Commitments under such Facility.

     

    “Borrowing
      Base”
means
      as the context may require, the U.S. Borrowing Base, and/or the Canadian
      Borrowing Base.

     

    “Borrowing
      Base Certificate”
means
      a
      certificate in the form of Exhibit
      I,
      with
      respect to the Aggregate Borrowing Base and as such form may be revised from
      time to time by the Administrative Agent.

     

    “Business
      Day”
means
      any day of the year that is not a Saturday, Sunday or a day on which banks
      are
      required or authorized to close in New York City, New York, the State of Texas
      or, in respect of any Canadian Revolving Loan or Canadian Swing Loan, Toronto,
      Canada, and, when determined in connection with notices and determinations
      in
      respect of any Eurodollar Rate or Eurodollar Rate Loan or any funding,
      conversion, continuation, Interest Period or payment of any Eurodollar Rate
      Loan, that is also a day on which dealings in Dollar deposits are carried on
      in
      the London interbank market.

     

    “Canadian
      Agent”
means
      GE Canada, solely in its capacity as agent for the Canadian Lenders hereunder
      and any other holders of Obligations related to the Canadian Revolving Loans
      and
      the Canadian Swing Loans and any successor thereto.

     

    “Canadian
      Benefit Plans”
means
      any plan, fund, program, or policy, whether oral or written, formal or informal,
      funded or unfunded, insured or uninsured, providing employee benefits, including
      medical, hospital care, dental, sickness, accident, disability, life insurance,
      pension, retirement or savings benefits, under which Bombay Canada has any
      liability with respect to any employee or former employee, but excluding any
      Canadian Pension Plans.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Canadian
      Borrowing Base”
means,
      with respect to Bombay Canada, as of any date of determination, an amount equal
      to:

     

    (a)  92.5%
      of
      the Net Retail Liquidation Value of Eligible Inventory owned by Bombay Canada;
      provided,
      however,
      that
 during the Seasonal Period, the advance rate shall be of 97.5% of the Net
      Retail Liquidation Value of Eligible Inventory owned by Bombay Canada,
plus,

     

    (b)  90.0%
      of
      the face amount of Eligible Accounts of Bombay Canada, plus,

     

    (c)  90.0%
      of
      the face amount of Eligible Credit Card Receivables of Bombay Canada,
minus,

     

    (d)  the
      aggregate of such Reserves as may have been established by the Administrative
      Agent.

     

    “Canadian
      Eligible In-Transit Inventory”
means
      inventory of Bombay Canada that does not qualify as Eligible Inventory under
      clause
      (b)
      of the
      definition of Eligible Inventory solely because it is not at a location in
      Canada set forth on Schedule
      4(b)
      of the
      Perfection Certificate or in transit among such locations in Canada and that
      meets the following criteria, which criteria may be revised by the
      Administrative Agent in its Permitted Discretion from time to time after the
      Closing Date:

     

    (a) the
      inventory was the subject of a Qualified Import Letter of Credit, or was paid
      for in full by Bombay Canada;

     

    (b) such
      inventory currently is in transit (whether by vessel, air, or land) to a
      location set forth on Schedule
      4(b)
      of the
      Perfection Certificate in Canada that is the subject of a Bailee Acknowledgment
      or a Collateral Access Agreement;

     

    (c) title
      to
      such inventory has passed to Bombay Canada;

     

    (d) such
      inventory is insured against types of loss, damage, hazards, and risks, and
      in
      amounts, satisfactory to the Administrative Agent in its Permitted
      Discretion;

     

    (e) Bombay
      Canada has provided a certificate to the Canadian Agent that certifies that,
      to
      the best knowledge of Bombay Canada, such inventory meets all of Bombay Canada’s
      representations and warranties contained in the Loan Documents concerning
      Eligible Inventory, that Bombay Canada know of no reason why such inventory
      would not be accepted by Bombay Canada when it arrives in Canada, and that
      the
      shipment as evidenced by the documents conforms to the related order documents;
      and

     

    (f) if
      subject to a Qualified Import Letter of Credit, the Underlying Letter of Credit
      has been drawn upon and the Underlying Issuer has honored such drawing and
      the
      Administrative Agent has honored its obligations to the Underlying Issuer under
      the applicable Qualified Import Letter of Credit.

     

    “Canadian
      Lender”
means
      each Lender which (a) is incorporated and operating under the laws of Canada
      or
      a province thereof or which is an authorized foreign bank within the meaning
      of
      Part I, section 2 of the Bank Act (Canada) and amounts paid or credited to
      or by
      it under this Agreement and the other Loan Documents are in respect of its
      Canadian banking business, and (b) has a Canadian Revolving Credit Commitment
      holds Canadian Revolving Loans or participates in any Canadian Swing
      Loan.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Canadian
      Non-Funding Lender”
has
      the
      meaning specified in Section
      2.2B(c).

     

    “Canadian
      Pension Plans”
means
      each pension plan required to be registered under Canadian federal or provincial
      law that is maintained or contributed to by Bombay Canada for its employees
      or
      former employees, but does not include the Canada Pension Plan or the Quebec
      Pension Plan as maintained by the Government of Canada or the Province of
      Quebec, respectively.

     

    “Canadian
      Priority Payables”
means,
      at any time with respect to Bombay Canada:

     

    (a) the
      amount past due and owing by Bombay Canada, or the accrued amount for which
      Bombay Canada has an obligation to remit to a Governmental Authority or other
      Person pursuant to any applicable law, rule or regulation, in respect of (i)
      pension fund obligations; (ii) unemployment insurance; (iii) goods and services
      taxes, sales taxes, employee income taxes and other taxes payable or to be
      remitted or withheld; (iv) workers’ compensation; (v) vacation pay; and (vi)
      other like charges and demands; in each case, in respect of which any
      Governmental Authority or other Person may claim a security interest, lien,
      trust or other claim ranking or capable of ranking prior to or pari passu with
      one or more of the Liens granted in the Loan Documents; and

     

    (b) the
      amount equal to the percentage applicable to inventory in the calculation of
      the
      Canadian Borrowing Base multiplied by the aggregate value of the Eligible
      Inventory which the Administrative Agent, in good faith, considers is or may
      be
      subject to a right of a supplier to repossess goods pursuant to Section 81.1
      of
      the Bankruptcy and Insolvency Act (Canada) or any applicable laws granting
      revendication or similar rights to unpaid suppliers or any similar laws of
      Canada or any other applicable jurisdiction, in each case, where such supplier’s
      right ranks or is capable of ranking prior to or pari passu with one or more
      of
      the Liens granted in the Loan Documents.

     

    “Canadian
      Revolving Credit Commitment”
means,
      with respect to each Canadian Lender, the commitment of such Canadian Lender
      to
      make Canadian Revolving Loans and acquire interests in other Canadian Revolving
      Credit Outstandings, which commitment is in the amount set forth opposite such
      Canadian Lender’s name on Schedule I
      under
      the caption “Canadian
      Revolving Credit Commitment”,
      as
      amended to reflect Assignments and as such amount may be reduced pursuant to
      this Agreement. The aggregate amount of the Canadian Revolving Credit
      Commitments on the date hereof equals $18,000,000.

     

    “Canadian
      Revolving Credit Facility”
means
      the Canadian Revolving Credit Commitments and the provisions herein related
      to
      the Canadian Revolving Loans and Canadian Swing Loans.

     

    “Canadian
      Revolving Credit Outstandings”
means,
      at any time, the sum of, in each case to the extent outstanding at such time,
      the aggregate principal amount of the Canadian Revolving Loans and Canadian
      Swing Loans.

     

    “Canadian
      Revolving Loan”
has
      the
      meaning specified in Section 2.1B.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Canadian
      Security Documents”
means
      each of the various Canadian security agreements by and among Bombay Canada
      and
      the Canadian Agent, and any and all acknowledgments of security, or similar
      agreements made in favor of the Canadian Agent by Bombay Canada, and any
      agreement delivered on or after the Closing Date (including by way of supplement
      to the foregoing) by any Person granting a Lien on the assets of such Person
      to
      secure all or any part of the Obligations of, or any bond issued by, Bombay
      Canada to the Canadian Agent, including, without limitation, any security
      granted by Bombay Canada pursuant to the laws of the Province of Quebec, in
      each
      case as amended, supplemented or modified from time to time in accordance with
      its terms.

     

    “Canadian
      Swing Loan”
has
      the
      meaning specified in Section
      2.3B(a).

     

    “Canadian
      Swingline Commitment”
means
      $2,000,000.

     

    “Canadian
      Swingline Lender”
means,
      each in its capacity as Canadian Swingline Lender hereunder, GE
      Canada or,
      upon
      the resignation of GE Canada as Canadian Agent hereunder, any Canadian Lender
      (or Affiliate or Approved Fund of any Canadian Lender) that agrees, with the
      approval of the Canadian Agent (or, if there is no such successor Canadian
      Agent, the Required Lenders) and the Parent, to act as the Canadian Swingline
      Lender hereunder.

     

    “Capital
      Lease”
means,
      with respect to any Person, any lease of, or other arrangement conveying the
      right to use, any property (whether real, personal or mixed) by such Person
      as
      lessee that has been or should be accounted for as a capital lease on a balance
      sheet of such Person prepared in accordance with GAAP.

     

    “Cash
      Collateral Account”
means
      a
      deposit account or securities account in the name of the Borrowers and under
      the
      sole control (as defined in the applicable UCC) of the Administrative Agent
      and
      (a) in the case of a deposit account, from which the Borrower may not make
      withdrawals except as permitted by the Administrative Agent and (b) in the
      case
      of a securities account, with respect to which the Administrative Agent shall
      be
      the entitlement holder and the only Person authorized to give entitlement orders
      with respect thereto.

     

    “Cash
      Dominion Event”
means
      (a) the occurrence and continuance of any Event of Default, or (b) the period
      commencing with each failure by the Borrowers to maintain Adjusted Availability
      in an amount of less than (i) ten percent (10%) of the Aggregate Borrowing
      Base
      for a period of 5 consecutive Business Days or (ii) five percent (5%) of the
      Aggregate Borrowing Base at any time and, in each case, ending with the
      occurrence of a Cash Dominion Reversion; provided,
      however
      that (y)
      no more than 2 Cash Dominion Reversions may occur in any 12 month period and
      (z)
      if an additional Cash Dominion Event occurs during such 12 month period, no
      further Cash Dominion Reversions may occur through and including the Scheduled
      Maturity Date. 

     

    “Cash
      Dominion Reversion”
means
      that the Borrowers shall have maintained Adjusted Availability in an amount
      of
      not less than fifteen percent (15%) of the Aggregate Borrowing Base for a period
      of 30 consecutive Business Days as evidenced by a Compliance Certificate
      delivered to the Administrative Agent; provided,
      however
      that (a)
      no more than 2 Cash Dominion Reversions may occur in any 12 month period and
      (b)
      if an additional Cash Dominion Event occurs during such 12 month period, no
      further Cash Dominion Reversions may occur through and including the Scheduled
      Maturity Date.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “Cash
      Equivalents”
means
      (a) marketable direct obligations issued or unconditionally guaranteed by the
      United States or issued by any agency thereof and backed by the full faith
      and
      credit of the United States, in each case maturing within 1 year from the date
      of acquisition thereof, (b) marketable direct obligations issued by any state
      of
      the United States or any political subdivision of any such state or any public
      instrumentality thereof maturing within 1 year from the date of acquisition
      thereof and, at the time of acquisition, having the highest rating obtainable
      from either S&P or Moody’s, (c) commercial paper maturing no more than 270
      days from the date of acquisition thereof and, at the time of acquisition,
      having a rating of A-2 or P-2, or better, from S&P or Moody’s, (d)
      commercial notes and bonds, or variable rate demand notes issued by any
      commercial institution with a rating of not less than A, as determined by
      S&P or Moody’s, (e) certificates of deposit or bankers’ acceptances maturing
      within 1 year from the date of acquisition thereof either (i) issued by any
      bank
      organized under the laws of the United States or any state thereof which bank
      has a rating of A or A2, or better, from S&P or Moody’s, or (ii)
      certificates of deposit less than or equal to $100,000 in the aggregate issued
      by any other bank insured by the Federal Deposit Insurance Corporation,
      (f) Eurodollar deposits, and (g) money market or other mutual funds
      substantially all of whose assets comprise securities of the types described
      in
      preceding clauses
      (a)-(f)
      above.

     

    “Cash
      Management Bank”
has
      the
      meaning specified in Section
      6.18(a).

     

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

     

    “Change
      of Control”
means
      (a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of
      the United States Securities and Exchange Act of 1934, as amended), becomes
      the
      beneficial owner (as defined in Rule 13d-3 under such Exchange Act), directly
      or
      indirectly, of 50%, or more, of the Voting Stock of Parent, or (b) a majority
      of
      the members of the Board of Directors do not constitute Continuing
      Directors.

     

    “Closing
      Date”
means
      the first date on which any Loan is made or any Letter of Credit is
      Issued.

     

    “Code”
means
      the U.S. Internal Revenue Code of 1986.

     

    “Collateral”
means
      all property and interests in property and proceeds thereof now owned or
      hereafter acquired by any Loan Party in or upon which a Lien is granted or
      purported to be granted pursuant to any Loan Document.

     

    “Collateral
      Access Agreement”
means
      a
      waiver or consent in form and substance satisfactory to the Administrative
      Agent
      executed by any lessor of Real Property leased by a Borrower (exclusive of
      retail store locations) or any other Person having a Lien upon, or having rights
      or interests in the inventory pledged hereunder or a Bailee
      Acknowledgment.

     

    “Collections”
means
      all cash, checks, credit card slips or receipts, notes, instruments, and other
      items of payment (including insurance proceeds, proceeds of cash sales, rental
      proceeds, and tax refunds) of the Borrowers.

     

    “Commitment”
means,
      with respect to any Lender, such Lender’s Revolving Credit
      Commitment.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

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

     

    “Concentration
      Account”
means
      an account designated as such on Schedule
      8
      of the
      Perfection Certificate.

     

    “Continuing
      Director”
means
      (a) any member of the Board of Directors who was a director of Parent on the
      Closing Date, and (b) any individual who becomes a member of the Board of
      Directors after the Closing Date if such individual was appointed or nominated
      for election to the Board of Directors by a majority of the then Continuing
      Directors.

     

    “Contractual
      Obligation”
means,
      with respect to any Person, any provision of any Security issued by such Person
      or of any document or undertaking (other than a Loan Document) to which such
      Person is a party or by which it or any of its property is bound or to which
      any
      of its property is subject.

     

    “Control
      Agreement”
means,
      with respect to any deposit account, any securities account, commodity account,
      securities entitlement or commodity contract (except for accounts designated
      as
“Store Accounts” on Schedule
      8
      of the
      Perfection Certificate), an agreement, in form and substance satisfactory to
      the
      Administrative Agent, among the Administrative Agent, the financial institution
      or other Person at which such account is maintained or with which such
      entitlement or contract is carried and the Loan Party maintaining such account,
      effective to grant “control” (as defined under the applicable UCC) over such
      account to the Administrative Agent.

     

    “Controlled
      Deposit Account”
means
      each deposit account (including all funds on deposit therein) that is the
      subject of an effective Control Agreement and that is maintained by any Loan
      Party with a financial institution.

     

    “Controlled
      Securities Account”
means
      each securities account or commodity account (including all financial assets
      held therein and all certificates and instruments, if any, representing or
      evidencing such financial assets) that is the subject of an effective Control
      Agreement and that is maintained by any Loan Party with a securities
      intermediary or commodity intermediary.

     

    “Copyrights”
means
      all rights, title and interests (and all related IP Ancillary Rights) arising
      under any Requirement of Law in or relating to copyrights and all mask work,
      database and design rights, whether or not registered or published, all
      registrations and recordations thereof and all applications in connection
      therewith.

     

    “Corporate
      Chart”
means
      a
      document in form reasonably acceptable to the Administrative Agent and setting
      forth, as of a date set forth therein, for each Person that is a Loan Party,
      that is subject to Section 6.11
      or that
      is a Subsidiary or joint venture of any of them, (a) the full legal name of
      such
      Person, (b) the jurisdiction of organization and any organizational number
      and
      tax identification number of such Person, (c) the location of such Person’s
      chief executive office (or, if applicable, sole place of business) and (d)
      the
      number of shares of each class of Stock of such Person (other than Parent)
      authorized, the number outstanding and the number and percentage of such
      outstanding shares for each such class owned, directly or indirectly, by any
      Loan Party or any Subsidiary of any of them.

     

    “Cost”
means
      the calculated cost of purchases, as determined from invoices received by a
      Borrower, such Borrower’s purchase journal or stock ledger, based upon such
      Borrower’s accounting practices known to the Administrative Agent, which
      practices are in effect on the date on which this Agreement was executed or
      subsequently adopted with the written approval of the Administrative Agent.
      “Cost” does not include the value of any capitalized costs unrelated to the
      acquisitions of inventory used in the Borrowers’ calculation of cost of goods
      sold, but may include other charges used in such Borrower’s determination of
      cost of goods sold and bringing goods to market, all within the Administrative
      Agent’s Permitted Discretion and in accordance with GAAP.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    “Credit
      Card Agreements”
means
      those certain credit card receipts agreements, each in form and substance
      reasonably satisfactory to the Administrative Agent and each of which is among
      the Administrative Agent, the applicable Borrower and the applicable Credit
      Card
      Processors.

     

    “Credit
      Card Issuer”
means
      collectively (a) MasterCard or Visa bank credit or debit cards or other bank
      credit or debit cards issued through MasterCard International, Inc., Visa,
      U.S.A., Inc. or Visa International, American Express, Discover, and Diners
      Club
      (or their respective successors), and (b) private label credit cards of the
      Borrowers; provided,
      however,
      Accounts due from private label credit card issuers shall not be included in
      Eligible Credit Card Receivables unless and until (i) the Administrative Agent
      has completed a review of such Accounts, including, without limitation, any
      agreements between a Borrower and a private label credit card provider, the
      results of which shall be satisfactory to the Administrative Agent in its
      reasonable discretion, and (ii) the Administrative Agent has notified the Parent
      of its consent to such inclusion and to the amount of any Reserves which shall
      be taken in connection with such inclusion. Accordingly, the Borrowers
      acknowledge and agree that Accounts due from private label credit card issuers
      shall not be included in the calculation of the U.S. Borrowing Base or the
      Canadian Borrowing Base on the Closing Date.

     

    “Credit
      Card Processor”
means
      any Person that acts as a credit card clearinghouse or processor with respect
      to
      any sales transactions involving credit card purchases by customers using credit
      cards issued by any Credit Card Issuer.

     

    “Default”
means
      any Event of Default and any event that, with the passing of time or the giving
      of notice or both, would become an Event of Default.

     

    “Disclosure
      Documents”
means,
      collectively, (a) all confidential information memoranda and related materials
      prepared in connection with the syndication of the Facilities and (b) all other
      documents filed by any Group Member with the United States Securities and
      Exchange Commission.

     

    “Documentary
      Letter of Credit”
means
      any Letter of Credit that is drawable upon presentation of documents evidencing
      the sale or shipment of goods purchased by any Borrower in the ordinary course
      of its business.

     

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

     

    “Domestic
      Person”
means
      any “United
      States person”
under
      and as defined in Section 770l(a)(30) of the Code.

     

    “E-Fax”
means
      any system used to receive or transmit faxes electronically.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    “Electronic
      Transmission”
means
      each document, instruction, authorization, file, information and any other
      communication transmitted, posted or otherwise made or communicated by e-mail
      or
      E-Fax, or otherwise to or from an E-System or other equivalent
      service.

     

    “Eligible
      Accounts”
means
      those Accounts created by Wholesale in the ordinary course of its business
      in
      connection with or that arise out of its sale of goods on a whole-sale basis,
      that comply with each of the representations and warranties respecting Eligible
      Accounts made in the Loan Documents, and that are not excluded as ineligible
      by
      virtue of one or more of the excluding criteria set forth below; provided,
      however,
      that
      such criteria may be revised from time to time by the Administrative Agent
      in
      the Administrative Agent’s Permitted Discretion. In determining the amount to be
      included, Eligible Accounts shall be calculated net of customer deposits and
      unapplied cash. Eligible Accounts shall not include the following:

     

    (a) Accounts
      that the Account Debtor has failed to pay within 60 days of original invoice
      date or Accounts with selling terms of more than 60 days;

     

    (b) Accounts
      owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts
      owed by that Account Debtor (or its Affiliates) are deemed ineligible under
      clause
      (a)
      above;

     

    (c) Accounts
      with respect to which the Account Debtor is an Affiliate of a U.S. Borrower
      or
      an employee or agent of a U.S. Borrower or any Affiliate of a U.S.
      Borrower;

     

    (d) Accounts
      arising in a transaction wherein goods are placed on consignment or are sold
      pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill
      and
      hold, or any other terms by reason of which the payment by the Account Debtor
      may be conditional;

     

    (e) Accounts
      that are not payable in Dollars;

     

    (f) Accounts
      with respect to which the Account Debtor either (i) does not maintain its chief
      executive office in the United States, or (ii) is not organized under the laws
      of the United States or any state thereof, or (iii) is the government of any
      foreign country or sovereign state, or of any state, province, municipality,
      or
      other political subdivision thereof, or of any department, agency, public
      corporation, or other instrumentality thereof, unless (y) the Account is
      supported by an irrevocable letter of credit satisfactory to the Administrative
      Agent (as to form, substance, and issuer or domestic confirming bank) that
      has
      been delivered to the Administrative Agent and is directly drawable by the
      Administrative Agent, or (z) the Account is covered by credit insurance in
      form,
      substance, and amount, and by an insurer, satisfactory to the Administrative
      Agent;

     

    (g) Accounts
      with respect to which the Account Debtor is either (i) the United States or
      any
      department, agency, or instrumentality of the United States (exclusive, however,
      of Accounts with respect to which Wholesale has complied, to the reasonable
      satisfaction of the Administrative Agent, with the Assignment of Claims Act,
      31
      USC § 3727), or (ii) any state of the United States;

     

    (h) Accounts
      with respect to which the Account Debtor is a creditor of Wholesale, has or
      has
      asserted a right of setoff, or has disputed its obligation to pay all or any
      portion of the Account, to the extent of such claim, right of setoff, or
      dispute;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (i) Accounts
      with respect to an Account Debtor whose total obligations owing to Wholesale
      exceed 10% (such percentage, as applied to a particular Account Debtor, being
      subject to reduction by the Administrative Agent in its Permitted Discretion
      if
      the creditworthiness of such Account Debtor deteriorates) of all Eligible
      Accounts, to the extent of the obligations owing by such Account Debtor in
      excess of such percentage; provided,
      however,
      that,
      in each case, the amount of Eligible Accounts that are excluded because they
      exceed the foregoing percentage shall be determined by the Administrative Agent
      based on all of the otherwise Eligible Accounts prior to giving effect to any
      eliminations based upon the foregoing concentration limit;

     

    (j) Accounts
      with respect to which the Account Debtor is subject to an Insolvency Proceeding,
      is not Solvent, has gone out of business, or as to which Wholesale has received
      notice of an imminent Insolvency Proceeding or a material impairment of the
      financial condition of such Account Debtor;

     

    (k) Accounts,
      the collection of which, Agent, in its Permitted Discretion, believes to be
      doubtful by reason of the Account Debtor’s financial condition;

     

    (l) Accounts
      that are not subject to a valid and perfected first priority Lien in favor
      of
      the Administrative Agent;

     

    (m) Accounts
      with respect to which (i) the goods giving rise to such Account have not been
      shipped and billed to the Account Debtor, or (ii) the services giving rise
      to
      such Account have not been performed and billed to the Account Debtor;
      or

     

    (n) Accounts
      that represent the right to receive progress payments or other advance billings
      that are due prior to the completion of performance by the Wholesale of the
      subject contract for goods or services.

     

    Notwithstanding
      the foregoing, that portion of the U.S. Borrowing Base attributable to Eligible
      Accounts shall not exceed $5,000,000 at any time. In addition, Eligible Accounts
      shall not be included in the calculation of the U.S. Borrowing Base, unless
      and
      until (i) the Administrative Agent has completed a review of such Accounts,
      the
      results of which shall be satisfactory to the Administrative Agent in its
      reasonable discretion, and (ii) the Administrative Agent has notified U.S.
      Borrower in writing of its consent to such inclusion and to the amount of any
      Reserves which shall be taken in connection with such inclusion. Accordingly,
      U.S. Borrowers acknowledge and agree that Eligible Accounts shall not be
      included in the calculation of the U.S. Borrowing Base on the Closing
      Date.

     

    “Eligible
      Credit Card Receivables”
means
      Accounts (other than Eligible Accounts) due to a Borrower on a non recourse
      basis from a Credit Card Issuer or Credit Card Processor arising in the ordinary
      course of business and net of such Credit Card Issuer’s or Credit Card
      Processor’s expenses and chargebacks, which have been earned by performance and
      are not deemed by the Administrative Agent, in its Permitted Discretion, to
      be
      ineligible for inclusion in the calculation of the Borrowing Base by virtue
      of
      one or more of the excluding criteria set forth below. Unless otherwise approved
      in writing by the Administrative Agent, none of the following shall be deemed
      to
      be Eligible Credit Card Receivables:

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (a) Accounts
      that have been outstanding for more than 5 Business Days from the date of
      sale;

     

    (b) Accounts
      with respect to which a Borrower does not have good, valid and marketable title
      thereto, free and clear of any Lien (other than Liens granted to the
      Administrative Agent, for its benefit and the ratable benefit of the relevant
      Lenders, pursuant to the Loan Documents);

     

    (c) Accounts
      that are not subject to a first priority security interest in favor of the
      Administrative Agent, for the benefit of itself and Lenders;

     

    (d) Accounts
      which are disputed, subject to recourse against a Borrower, or with respect
      to
      which a claim, counterclaim, offset or chargeback has been asserted (to the
      extent of such claim, counterclaim, offset or chargeback); or

     

    (e) Accounts,
      the collection of which, the Administrative Agent, in its Permitted Discretion,
      believes to be doubtful by reason of the Account Debtor’s financial
      condition.

     

    “Eligible
      Inventory”
means
      (a) Eligible In-Transit Inventory, and (b) inventory of the relevant Borrower
      consisting of finished goods held for sale in the ordinary course of such
      Borrowers’ business located at one of such Borrower’s business locations set
      forth on Schedule
      4(b)
      of the
      Perfection Certificate (or in-transit between any such locations), that complies
      with each of the representations and warranties respecting Eligible Inventory
      made by such Borrower in the Loan Documents, and that is not excluded as
      ineligible by virtue of one or more of the excluding criteria set forth below,
      which criteria may be fixed and revised from time to time by the Administrative
      Agent in its Permitted Discretion to address the results of any audit or
      appraisal performed by the Administrative Agent from time to time after the
      Closing Date. In determining the value of Eligible Inventory, inventory shall
      be
      valued at the lower of Cost or market on a basis consistent with the Borrower’s
      accounting practices.

     

    An
      item
      of inventory (that is not Eligible In-Transit Inventory) shall not be included
      in Eligible Inventory if:

     

    (a) a
      Borrower does not have good, valid and marketable title thereto (including
      inventory acquired on consignment);

     

    (b) (i)
      in
      the case of the U.S. Borrowers, it is not located at one of the locations in
      the
      United States set forth on Schedule
      4(b)
      of the
      Perfection Certificate or in transit from one such location to another such
      location, as such locations are updated by the U.S. Borrowers from time to
      time
      by written notice to the Administrative Agent, and (ii) in the case of Bombay
      Canada, it is not located at one of the locations in Canada set forth on
Schedule
      4(b)
      of the
      Perfection Certificate or in transit from one such location to another such
      location, as such locations are updated by Bombay Canada from time to time
      by
      written notice to the Administrative Agent;

     

    (c) except
      with respect to inventory described in clause
      (b)
      of
Section
      6.5,
      it is
      located at a warehouse, distribution center or other real property (other than
      a
      retail store location) leased by a Borrower or in a fulfillment center or
      contract warehouse, in each case, unless it is subject to a Collateral Access
      Agreement executed by the lessor, fulfillment services provider or other
      applicable third party;

     

    (d) it
      is
      located in a contract warehouse or is otherwise stored with a bailee,
      warehouseman or similar third party unless it is subject to a Bailee
      Acknowledgment executed by the bailee, warehouseman, or other third party,
      as
      the case may be, and unless it is segregated or otherwise separately
      identifiable from goods of others, if any, stored on the premises;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (e) it
      is not
      subject to a valid and perfected first priority security the Administrative
      Agent’s Lien;

     

    (f) it
      consists of goods returned or rejected by a Borrower’s customers unless such
      goods are repackaged and saleable in the ordinary course of such Borrower’s
      business; or

     

    (g) other
      than saleable clearance goods arising in the ordinary course of business
      consistent with past practice, consists of goods that are obsolete or slow
      moving (for example, more than 18 months old), custom items, work-in-process,
      raw materials, or goods that constitute spare parts, packaging and shipping
      materials, supplies used or consumed in a Borrower’s business, bill and hold
      goods, defective goods, and “seconds,” or inventory acquired on
      consignment.

     

    “Eligible
      In-Transit Inventory”
means
      collectively, Canadian Eligible In-Transit Inventory and U.S. Eligible
      In-Transit Inventory. Notwithstanding the foregoing, that portion of the
      Aggregate Borrowing Base attributable to Eligible In-Transit Inventory shall
      not
      exceed twenty percent (20%) of the Aggregate Borrowing Base at any
      time.

     

    “Eligible
      Real Property”
means
      the Real Property consisting of the Bombay Office Complex and which is subject
      to the Mortgage and a Lien in favor of the Administrative Agent for the benefit
      of the relevant Secured Parties and upon which no other Liens exist, other
      than
      Permitted Liens.

     

    “Environmental
      Actions”
means
      any complaint, summons, citation, notice, directive, order, claim, litigation,
      investigation, judicial or administrative proceeding, judgment, letter, or
      other
      communication, each, by or from any Governmental Authority, or any third party
      involving (x) violations of Environmental Laws or (y) releases of Hazardous
      Materials from (a) any assets, properties, or businesses of any Borrower or
      any
      predecessor in interest, (b) from adjoining properties or businesses, or (c)
      from or onto any facilities which received Hazardous Materials generated by
      any
      Borrower or any predecessor in interest.

     

    “Environmental
      Law”
means
      any applicable federal, state, provincial, foreign or local statute, law, rule,
      regulation, ordinance, code, binding and enforceable guideline, binding and
      enforceable written policy or rule of common law now or hereafter in effect
      and
      in each case as amended, or any judicial or administrative interpretation
      thereof, including any judicial or administrative order, consent decree or
      judgment, to the extent binding on the Borrowers, relating to the environment,
      employee health and safety, or Hazardous Materials, including CERCLA; RCRA;
      the
      Federal Water Pollution Control Act, 33 USC §1251 et seq.
      the
      Toxic Substances Control Act, 15 USC §2601 et seq.
      the
      Clean Air Act, 42 USC §7401 et seq.;
      the
      Safe Drinking Water Act, 42 USC §3803 et seq.;
      the Oil
      Pollution Act of 1990, 33 USC §2701 et seq.;
      the
      Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC §11001
et seq.;
      the
      Hazardous Material Transportation Act, 49 USC §1801 et seq.;
      and the
      Occupational Safety and Health Act, 29 USC §651 et seq.
      (to the
      extent it regulates occupational exposure to Hazardous Materials); any state
      and
      local or foreign counterparts or equivalents, in each case as amended from
      time
      to time.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    “Environmental
      Liabilities and Costs”
means
      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,
      or consultants, and costs of investigation and feasibility studies), fines,
      penalties, sanctions, and interest incurred as a result of any claim or demand
      by any Governmental Authority or any third party, and which relate to any
      Environmental Action.

     

    “Environmental
      Lien”
means
      any Lien in favor of any Governmental Authority for Environmental Liabilities
      and Costs.

     

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

     

    “ERISA
      Affiliate”
      means
      any
      Person which is
      under
      common control, or treated
      as a
      single employer,
      with a
      Borrower under §414 of the Code.

     

    “ERISA
      Reportable Event”
means
      a
      reportable event with respect to a Guaranteed Pension Plan within the meaning
      of
§4043 of ERISA and the regulations promulgated thereunder.

     

    “E-Signature”
means
      the process of attaching to or logically associating with an Electronic
      Transmission an electronic symbol, encryption, digital signature or process
      (including the name or an abbreviation of the name of the party transmitting
      the
      Electronic Transmission) with the intent to sign, authenticate or accept such
      Electronic Transmission.

     

    “E-System”
means
      any electronic system, including Intralinks®
      and any
      other Internet or extranet-based site, whether such electronic system is owned,
      operated or hosted by the Administrative Agent, any of its Related Persons
      or
      any other Person, providing for access to data protected by passcodes or other
      security system.

     

    “Eurodollar
      Base Rate”
means,
      with respect to any Interest Period for any Eurodollar Rate Loan, the rate
      determined by the Administrative Agent to be the offered rate for deposits
      in
      Dollars for the applicable Interest Period appearing on the Dow Jones Markets
      Telerate Page 3750 as of 11:00 a.m. (London time) on the second full
      Business Day next preceding the first day of each Interest Period. In the event
      that such rate does not appear on the Dow Jones Markets Telerate Page 3750
      (or
      otherwise on the Dow Jones Markets screen) at such time, the “Eurodollar Base
      Rate” shall be determined by reference to such other comparable publicly
      available service for displaying the offered rate for deposit in Dollars in
      the
      London interbank market as may be selected by the Administrative Agent and,
      in
      the absence of availability, such other method to determine such offered rate
      as
      may be selected by the Administrative Agent in its sole discretion.

     

    “Eurodollar
      Rate”
means,
      with respect to any Interest Period and for any Eurodollar Rate Loan, an
      interest rate per annum determined as the ratio of (a) the Eurodollar Base
      Rate
      with respect to such Interest Period for such Eurodollar Rate Loan to (b) the
      difference between the number one and the Eurodollar Reserve Requirements with
      respect to such Interest Period and for such Eurodollar Rate Loan.

     

    “Eurodollar
      Rate Loan”
means
      any Loan that bears interest based on the Eurodollar Rate.

     

    “Eurodollar
      Reserve Requirements”
means,
      with respect to any Interest Period and for any Eurodollar Rate Loan, a rate
      per
      annum equal to the aggregate, without duplication, of the maximum rates
      (expressed as a decimal number) of reserve requirements in effect 2 Business
      Days prior to the first day of such Interest Period (including basic,
      supplemental, marginal and emergency reserves) under any regulations of the
      Federal Reserve Board or other Governmental Authority having jurisdiction with
      respect thereto dealing with reserve requirements prescribed for eurocurrency
      funding (currently referred to as “eurocurrency liabilities” in Regulation D of
      the Federal Reserve Board) maintained by a member bank of the United States
      Federal Reserve System.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    “Event
      of Default”
has
      the
      meaning specified in Section 8.1.

     

    “Excluded
      Foreign Subsidiary”
means
      any Subsidiary that is not a Domestic Person.

     

    “Existing
      Agent”
means
      Wells Fargo Retail Finance, LLC, in its capacity as administrative agent under
      the Existing Credit Agreement.

     

    “Existing
      Credit Agreement”
means
      that certain Credit Agreement, dated as of September 29, 2004, as amended,
      among
      the Borrower, the institutions party thereto as lenders and issuers and the
      Existing Agent.

     

    “Facilities”
means
      the U.S. Revolving Credit Facility and the Canadian Revolving Credit
      Facility.

     

    “Federal
      Funds Rate”
means,
      for any period, a fluctuating interest rate per annum equal for each day during
      such period to the weighted average of the rates on overnight federal funds
      transactions with members of the Federal Reserve System arranged by federal
      funds brokers, as determined by the Administrative Agent in its sole
      discretion.

     

    “Federal
      Reserve Board”
means
      the Board of Governors of the United States Federal Reserve System and any
      successor thereto.

     

    “Fee
      Letter”
means
      the letter agreement, dated as of September 14, 2006, addressed to the Parent
      from the Administrative Agent and accepted by the Parent, with respect to
      certain fees to be paid from time to time to the Administrative Agent and its
      Related Persons.

     

    “FEIN”
means
      Federal Employer Identification Number.

     

    “Financial
      Statement”
means
      each financial statement delivered pursuant to Sections
      4.10
      and
5.3.

     

    “Fiscal
      Period”
means
      one of three fiscal periods in a Fiscal Quarter, the first of such periods
      comprised of four weeks, the second of such periods comprised of five weeks,
      and
      the third of such periods comprised of four weeks, with each of the weeks in
      a
      Fiscal Quarter ending on the close of business on a Saturday (except that the
      last fiscal period in the last Fiscal Quarter of a 53 week year shall be five
      weeks). There are twelve Fiscal Periods in a Fiscal Year.

     

    “Fiscal
      Quarter”
means
      one of four thirteen or fourteen week quarters in a Fiscal Year, with the first
      of such quarters beginning on the first day of a Fiscal Year and ending on
      the
      Saturday of the last week in such quarter.

     

    “Fiscal
      Year”
means
      the fifty-two or fifty-three week period ending on the Saturday closest to
      the
      last day of January of any calendar year.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    “GAAP”
means
      generally accepted accounting principles in the United States of America, as
      in
      effect from time to time, set forth in the opinions and pronouncements of the
      Accounting Principles Board and the American Institute of Certified Public
      Accountants, in the statements and pronouncements of the Financial Accounting
      Standards Board and in such other statements by such other entity as may be
      in
      general use by significant segments of the accounting profession that are
      applicable to the circumstances as of the date of determination. Subject to
      Section 1.3,
      all
      references to “GAAP”
shall
      be to GAAP applied consistently with the principles used in the preparation
      of
      the Financial Statements described in Sections 4.10
      and
5.3.

     

    “GE
      Canada”
has
      the
      meaning specified in the preamble.

     

    “GE
      Capital”
has
      the
      meaning specified in the preamble.

     

    “Governmental
      Authority”
means
      any nation, sovereign or government, any state, province or other political
      subdivision thereof, any agency, authority or instrumentality thereof and any
      entity or authority exercising executive, legislative, taxing, judicial,
      regulatory or administrative functions of or pertaining to government, including
      any central bank regulatory body, arbitrator, public sector entity,
      supra-national entity (including the European Union and the European Central
      Bank) and any self-regulatory organization (including the National Association
      of Insurance Commissioners).

     

    “Governing
      Documents”
means,
      with respect to any Person, collectively and, in each case, together with any
      modification of any term thereof, (a) the articles of incorporation, certificate
      of incorporation, constitution or certificate of formation of such Person,
      (b)
      the bylaws, operating agreement or joint venture agreement of such Person,
      (c)
      any other constitutive, organizational or governing document of such Person,
      whether or not equivalent, and (d) any other document setting forth the manner
      of election or duties of the directors, officers or managing members of such
      Person or the designation, amount or relative rights, limitations and
      preferences of any Stock of such Person.

     

    “Group
      Members”
means,
      collectively, any Borrower and its Subsidiaries.

     

    “Guaranteed
      Pension Plan”
means
      any employee pension benefit plan within the meaning of §3(2) of ERISA
      maintained or contributed to by any Borrower or any ERISA Affiliate the benefits
      of which are guaranteed on termination in full or in part by the PBGC pursuant
      to Title IV of ERISA, other than a Multiemployer Plan.

     

    “Guarantor”
means
      each Wholly Owned Subsidiary of the Borrower party to the Guaranty and Security
      Agreement and each other Person that enters into any Guaranty Obligation with
      respect to any Obligation of any Loan Party; provided,
      that an
      Excluded Foreign Subsidiary shall not guaranty the Obligations of the U.S.
      Borrowers.

     

    “Guaranty
      and Security Agreement”
means
      a
      guaranty and security agreement, in substantially the form of Exhibit H,
      among
      the Administrative Agent, the U.S. Borrowers and other Guarantors from time
      to
      time party thereto.

     

    “Guaranty
      Obligation”
means,
      as applied to any Person, any direct or indirect liability, contingent or
      otherwise, of such Person for any Indebtedness, lease, dividend or other
      obligation (the “primary
      obligation”)
      of
      another Person (the “primary
      obligor”),
      if
      the purpose or intent of such Person in incurring such liability, or the
      economic effect thereof, is to guarantee such primary obligation or provide
      support, assurance or comfort to the holder of such primary obligation or to
      protect or indemnify such holder against loss with respect to such primary
      obligation, including (a) the direct or indirect guaranty, endorsement (other
      than for collection or deposit in the ordinary course of business), co-making,
      discounting with recourse or sale with recourse by such Person of any primary
      obligation, (b) the incurrence of reimbursement obligations with respect to
      any
      letter of credit or bank guarantee in support of any primary obligation, (c)
      the
      existence of any Lien, or any right, contingent or otherwise, to receive a
      Lien,
      on the property of such Person securing any part of any primary obligation
      and
      (d) any liability of such Person for a primary obligation through any
      Contractual Obligation (contingent or otherwise) or other arrangement (i) to
      purchase, repurchase or otherwise acquire such primary obligation or any
      security therefor or to provide funds for the payment or discharge of such
      primary obligation (whether in the form of a loan, advance, stock purchase,
      capital contribution or otherwise), (ii) to maintain the solvency, working
      capital, equity capital or any balance sheet item, level of income or cash
      flow,
      liquidity or financial condition of any primary obligor, (iii) to make
      take-or-pay or similar payments, if required, regardless of non-performance
      by
      any other party to any Contractual Obligation, (iv) to purchase, sell or lease
      (as lessor or lessee) any property, or to purchase or sell services, primarily
      for the purpose of enabling the primary obligor to satisfy such primary
      obligation or to protect the holder of such primary obligation against loss
      or
      (v) to supply funds to or in any other manner invest in, such primary obligor
      (including to pay for property or services irrespective of whether such property
      is received or such services are rendered); provided,
      however,
      that
“Guaranty
      Obligations”
shall
      not include (x) endorsements for collection or deposit in the ordinary course
      of
      business and (y) product warranties given in the ordinary course of business.
      The outstanding amount of any Guaranty Obligation shall equal the outstanding
      amount of the primary obligation so guaranteed or otherwise supported or, if
      lower, the stated maximum amount for which such Person may be liable under
      such
      Guaranty Obligation.

     

    
      
        
        

      

      
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    “Hazardous
      Material”
means
      (a) substances that are defined or listed in, or otherwise classified
      pursuant to, any applicable laws or regulations as “hazardous substances,”
“hazardous materials,” “hazardous wastes,” “toxic substances,” or any other
      formulation intended to define, list, or classify substances by reason of
      deleterious properties such as ignitability, corrosivity, reactivity,
      carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or
      petroleum derived substances, natural gas, natural gas liquids, synthetic gas,
      drilling fluids, produced waters, and other wastes associated with the
      exploration, development, or production of crude oil, natural gas, or geothermal
      resources, (c) any flammable substances or explosives or any radioactive
      materials, and (d) asbestos in any form or electrical equipment that contains
      any oil or dielectric fluid containing levels of polychlorinated biphenyls
      in
      excess of 50 parts per million.

     

    “Hedging
      Agreement”
means
      any Interest Rate Contract, foreign exchange, swap, option or forward contract,
      spot, cap, floor or collar transaction, any other derivative instrument and
      any
      other similar speculative transaction and any other similar agreement or
      arrangement designed to alter the risks of any Person arising from fluctuations
      in any underlying variable.

     

    “Indebtedness”
means,
      as to any Person means, without duplication: (a) all obligations for borrowed
      money, (b) all obligations evidenced by bonds, debentures, notes, or other
      similar instruments and all reimbursement or other obligations in respect of
      letters of credit, bankers acceptances, interest rate swaps, or other financial
      products, (c) all obligations as a lessee under Capital Leases, (d) all
      obligations or liabilities of others secured by a Lien on any asset of a Person
      or its Subsidiaries, irrespective of whether such obligation or liability is
      assumed, (e) all obligations to pay the deferred purchase price of assets (other
      than trade payables incurred in the ordinary course of business), (f) all
      obligations owing under Hedging Agreements or similar agreements, (g) all sales
      by such Person of (i) accounts or general intangibles for money due or to become
      due, (ii) chattel paper, instruments or documents creating or evidencing a
      right
      to payment of money, or (iii) other receivables (collectively “receivables”),
      whether pursuant to a purchase facility or otherwise, other than in connection
      with the disposition of the business operations of such Person relating thereto
      or a disposition of defaulted receivables for collection and not as a financing
      arrangement, and together with any obligation of such Person to pay any
      discount, interest, fees, indemnities, penalties, recourse, expenses or other
      amounts in connection therewith, (h) every obligation of such Person (an “equity
      related purchase obligation”) to purchase, redeem, retire or otherwise acquire
      for value any shares of Stock issued by such Person or any rights measured
      by
      the value of such Stock, (i) every obligation in respect of Indebtedness of
      any
      other entity (including any partnership in which such Person is a general
      partner) to the extent that such Person is liable therefor as a result of such
      Person’s ownership interest in or other relationship with such entity, except to
      the extent that the terms of such Indebtedness provide that such Person is
      not
      liable therefor and such terms are enforceable under applicable law, (j) any
      obligation guaranteeing or intended to guarantee (whether directly or indirectly
      guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation
      of any other Person that constitutes Indebtedness under any of clauses
      (a)
      through
(i)
      above,
      and (k) every obligation of such Person under any Synthetic Lease.

     

    
      
        
        

      

      
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    “Indemnified
      Matter”
has
      the
      meaning specified in Section 10.4.

     

    “Indemnitee”
has
      the
      meaning specified in Section 10.4.

     

    “Initial
      Projections”
means
      those financial projections, dated August 24, 2006 covering the Fiscal Years
      ending in January 2007 and January 2008 and delivered to the Administrative
      Agent by the Borrower prior to the date hereof.

     

    “Insolvency
      Proceeding”
means
      any proceeding commenced by or against any Person under any provision of the
      Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’
Creditors Arrangement Act (Canada), or under any other state or federal
      bankruptcy or insolvency law, assignments for the benefit of creditors, formal
      or informal moratoria, compositions, extensions generally or with creditors,
      or
      proceedings seeking liquidation, winding up, reorganization, arrangement,
      adjustment, protection, or other similar relief.

     

    “Intellectual
      Property”
means
      all rights, title and interests in or relating to intellectual property and
      industrial property arising under any Requirement of Law and all IP Ancillary
      Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet
      Domain Names, Trade Secrets and IP Licenses.

     

    “Interest
      Period”
means,
      with respect to any Eurodollar Rate Loan, the period commencing on the date
      such
      Eurodollar Rate Loan is made or converted to a Eurodollar Rate Loan or, if
      such
      loan is continued, on the last day of the immediately preceding Interest Period
      therefor and, in each case, ending 7 days or 1, 2, 3 or 6 months thereafter,
      as
      selected by the Borrower pursuant hereto; provided,
      however,
      that
      (a) if any Interest Period would otherwise end on a day that is not a Business
      Day, such Interest Period shall be extended to the next succeeding Business
      Day,
      unless the result of such extension would be to extend such Interest Period
      into
      another such Business Day falls in the next calendar month, in which case such
      Interest Period shall end on the immediately preceding Business Day, (b) any
      Interest Period that begins on the last Business Day of a calendar month (or
      on
      a day for which there is no numerically corresponding day in the calendar month
      at the end of such Interest Period) shall end on the last Business Day of a
      calendar month, (c) the Borrower may not select any Interest Period for
      Eurodollar Rate Loans ending after the Scheduled Maturity Date, (d) the Borrower
      may not select any Interest Period in respect of Eurodollar Rate Loans having
      an
      aggregate principal amount of less than $1,000,000 and (e) there shall be
      outstanding at any one time no more than 10 Interest Periods.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    “Interest
      Rate Contracts”
means
      all interest rate swap agreements, interest rate cap agreements, interest rate
      collar agreements and interest rate insurance.

     

    “Internet
      Domain Names”
means
      all rights, title and interests (and all related IP Ancillary Rights) arising
      under any Requirement of Law in or relating to Internet domain
      names.

     

    “Inventory
      Reserves”
means
      such reserves as may be established from time to time by Administrative Agent
      in
      its Permitted Discretion with respect to the determination of the saleability,
      at retail, of the Eligible Inventory or which reflect such other factors as
      affect the market value of the Eligible Inventory. Without limiting the
      generality of the foregoing, Inventory Reserves may include (but are not limited
      to) (a) reserves based on obsolescence or inventory shrinkage, (b) the estimated
      reclamation claims of unpaid sellers of inventory sold to a Borrower, (c) change
      in inventory character, composition or mix, (d) imbalance of inventory, retail
      markdowns or markups inconsistent with prior period practice and performance,
      current business plans, or advertising calendar and planned advertising events,
      (e) the change in the Net Retail Liquidation Value of the inventory, or (f)
      as
      reasonably required by the Administrative Agent to protect Collateral value
      based upon changes to the ordinary course of business of the
      Borrowers.

     

    “Investment”
means,
      with respect to any Person, any investment by such Person in any other Person
      (including Affiliates) in the form of loans, guarantees, advances, or capital
      contributions (excluding (a) commission, travel, and similar advances to
      officers and employees of such Person made in the ordinary course of business,
      and (b) bona fide Accounts arising in the ordinary course of business consistent
      with past practice), purchases or other acquisitions of Indebtedness, Stock,
      or
      all or substantially all of the assets of such other Person (or of any division
      or business line of such other Person), and any other items that are or would
      be
      classified as investments on a balance sheet prepared in accordance with
      GAAP.

     

    “IP
      Ancillary Rights”
means,
      with respect to any other Intellectual Property, as applicable, all foreign
      counterparts to, and all divisionals, reversions, continuations,
      continuations-in-part, reissues, reexaminations, renewals and extensions of,
      such Intellectual Property and all income, royalties, proceeds and Liabilities
      at any time due or payable or asserted under or with respect to any of the
      foregoing or otherwise with respect to such Intellectual Property, including
      all
      rights to sue or recover at law or in equity for any past, present or future
      infringement, misappropriation, dilution, violation or other impairment thereof,
      and, in each case, all rights to obtain any other IP Ancillary
      Right.

     

    “IP
      License”
means
      all Contractual Obligations (and all related IP Ancillary Rights), whether
      written or oral, granting any right title and interest in or relating to any
      Intellectual Property.

     

    “IRS”
means
      the Internal Revenue Service of the United States and any successor
      thereto.

     

    
      
        
        

      

      
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    “Issue”
means,
      with respect to any Letter of Credit, to issue, extend the expiration date
      of,
      renew (including by failure to object to any automatic renewal on the last
      day
      such objection is permitted), increase the face amount of, or reduce or
      eliminate any scheduled decrease in the face amount of, such Letter of Credit,
      or to cause any Person to do any of the foregoing. The terms “Issued”
and
      “Issuance”
have
      correlative meanings.

     

    “ITA”
means
      the Income
      Tax Act
      (Canada).

     

    “L/C
      Cash Collateral Account”
means
      any Cash Collateral Account (a) specifically designated as such by the Borrower
      in a notice to the Administrative Agent and (b) from and after the effectiveness
      of such notice, not containing any funds other than those required under the
      Loan Documents to be placed therein.

     

    “L/C
      Issuer”
means
      (a) GE Capital or any of its Affiliates and (b) each Person that hereafter
      becomes an L/C Issuer with the approval of, and pursuant to an agreement with
      and in form and substance satisfactory to, the Administrative Agent and the
      Borrower, in each case in their capacity as L/C Issuers hereunder and together
      with their successors.

     

    “L/C
      Obligations”
means,
      for any Letter of Credit at any time, the sum of, each expressed in Dollars,
      (a)
      the L/C Reimbursement Obligations at such time for such Letter of Credit and
      (b)
      the aggregate maximum undrawn face amount of such Letter of Credit outstanding
      at such time.

     

    “L/C
      Reimbursement Agreement”
has
      the
      meaning specified in Section 2.4(a).

     

    “L/C
      Reimbursement Date”
has
      the
      meaning specified in Section 2.4(e).

     

    “L/C
      Reimbursement Obligation”
means,
      for any Letter of Credit, the obligation of the Borrower to the L/C Issuer
      thereof, as and when matured, to pay all amounts drawn under such Letter of
      Credit in Dollars or other applicable currency.

     

    “L/C
      Request”
has
      the
      meaning specified in Section 2.4(b).

     

    “L/C
      Sublimit”
means
      $75,000,000.

     

    “L/C
      Undertaking”
means
      the L/C Issuer’s commitment to issue Letters of Credit for the account of U.S.
      Borrowers under Section
      2.4(a)
      or to
      acquire participations under Section
      2.4(c).

     

    “Lender”
means,
      collectively, the Swingline Lender, the Canadian Swingline Lender and any other
      financial institution or other Person that (a) is listed on the signature
      pages hereof as a “Lender”
or
      (b)
      from time to time becomes a party hereto by execution of an Assignment, in
      each
      case together with its successors.

     

    “Lender
      Group”
means,
      individually and collectively, each Lender, the Canadian Agent and the
      Administrative Agent.

     

    “Letter
      of Credit”
means
      any letter of credit Issued pursuant to Section 2.4.

     

    “Liabilities”
means
      all claims, actions, suits, judgments, damages, losses, liabilities,
      obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes,
      commissions, charges, disbursements and expenses, in each case of any kind
      or
      nature (including interest accrued thereon or as a result thereto and fees,
      charges and disbursements of financial, legal and other advisors and
      consultants), whether joint or several, whether or not indirect, contingent,
      consequential, actual, punitive, treble or otherwise.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

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

     

    “Loan”
means
      any loan made or deemed made by any Lender hereunder.

     

    “Loan
      Account”
means
      the account identified in Section
      2.13.

     

    “Loan
      Documents”
means,
      collectively, this Agreement, any Notes, the Guaranty and Security Agreement,
      the Mortgages, the Control Agreements, the Canadian Security Documents, the
      Fee
      Letter, the L/C Reimbursement Agreements, any Perfection Certificates and,
      when executed, each document executed by a Loan Party and delivered to the
      Administrative Agent, any Lender or any L/C Issuer in connection with or
      pursuant to any of the foregoing or the Obligations, together with any
      modification of any term, or any waiver with respect to, any of the
      foregoing.

     

    “Loan
      Party”
means
      each Borrower and each Guarantor.

     

    “Material
      Adverse Effect”
means
      (a) a material adverse change in the business, operations, results of
      operations, assets, liabilities or financial condition of the Group Members
      taken as a whole, (b) a material impairment of a Borrower’s ability to perform
      its obligations under the Loan Documents to which it is a party or of the
      Secured Parties ability to enforce the Obligations or realize upon the
      Collateral or (c) a material impairment of the validity, enforceability,
      attachment, perfection or priority of Agents’ Liens with respect to the
      Collateral.

     

    “Material
      Environmental Liabilities”
means
      Environmental Liabilities exceeding $7,000,000 in the aggregate.

     

    “Maximum
      Canadian Revolver Amount”
means
      the aggregate amount of all Canadian Revolving Loans and Canadian Swing Loans
      that may be borrowed by or made to Bombay Canada under this Agreement;
provided,
      however,
      that
      the Maximum Canadian Revolver Amount shall in no event exceed
      $18,000,000.

     

    “Maximum
      Revolver Amount”
means
      the aggregate amount of all Loans that may be borrowed by or made to, and
      Letters of Credit that may be issued for the account of, any Borrower under
      this
      Agreement; provided,
      however,
      that
      the Maximum Revolver Amount shall in no event exceed $125,000,000.

     

    “Minimum
      Availability Amount”
means,
      as of any date of determination, 7.5% of the Aggregate Borrowing
      Base.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc., or its successor.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    “Mortgage”
means
      any mortgage, deed of trust or other document executed or required herein to
      be
      executed by any Loan Party and granting a Lien over Eligible Real Property
      in
      favor of the Administrative Agent as security for the Obligations.

     

    “Mortgage
      Supporting Documents”
means,
      with respect to any Mortgage, each document (including title policies or
      marked-up unconditional insurance binders (in each case, together with copies
      of
      all documents referred to therein), maps, ALTA (or TLTA, if applicable) as-built
      surveys (in form and as to a date that is sufficiently acceptable to the title
      insurer issuing title insurance to the Administrative Agent for such title
      insurer to deliver endorsements to such title insurance as reasonably requested
      by the Administrative Agent), environmental assessments and reports and evidence
      regarding recording and payment of fees, insurance premium and taxes) that
      the
      Administrative Agent may reasonably request, to create, register, perfect,
      maintain, evidence the existence, substance, form or validity of or enforce
      a
      valid Lien on the Eligible Real Property in favor of the Administrative Agent
      for the benefit of the Secured Parties, subject only to such Permitted
      Liens.

     

    “Multiemployer
      Plan”
means
      any multiemployer plan within the meaning of §3(37) of ERISA maintained or
      contributed to by any Borrower or any ERISA Affiliate.

     

    “Net
      Cash Proceeds”
means
      proceeds received in cash from (a) any Sale of, or Property Loss Event with
      respect to, property, net of (i) the customary out-of-pocket cash costs, fees
      and expenses paid or required to be paid in connection therewith, (ii) taxes
      paid or reasonably estimated to be payable as a result thereof and
      (iii) any amount required to be paid or prepaid on Indebtedness (other than
      the Obligations and Indebtedness owing to any Group Member) secured by the
      property subject thereto or (b) any sale or issuance of Stock or incurrence
      of
      Indebtedness, in each case net of brokers’, advisors’ and investment banking
      fees and other customary out-of-pocket underwriting discounts, commissions
      and
      other customary out-of-pocket cash costs, fees and expenses, in each case
      incurred in connection with such transaction; provided,
      however,
      that
      any such proceeds received by any Subsidiary of the Borrower that is not a
      Wholly Owned Subsidiary of the Borrower shall constitute “Net
      Cash Proceeds”
only
      to
      the extent of the aggregate direct and indirect beneficial ownership interest
      of
      the Borrower therein.

     

    “Net
      Liquidation Percentage”
means,
      at any date of determination, the percentage of the Cost value of the Borrowers’
Eligible Inventory that is estimated to be recoverable in an orderly liquidation
      of such Eligible Inventory, net of liquidation expenses, such percentage to
      be
      as determined from time to time by the Administrative Agent, in its Permitted
      Discretion, or by a qualified appraisal company selected by the Administrative
      Agent.

     

    “Net
      Retail Liquidation Value”
means,
      at any date of determination, the result (expressed in Dollars) of the Net
      Liquidation Percentage times
      the Cost
      value of Eligible Inventory as of such date.

     

    “Non-Funding
      Lender”
means
      a
      U.S. Non-Funding Lender and/or a Canadian Non-Funding Lender, as the case may
      be.

     

    “Note”
means
      a
      promissory note of the Borrower, in substantially the form of Exhibit B, payable
      to the order of a Lender in any Facility in a principal amount equal to the
      amount of such Lender’s Commitment under such Facility.

     

    “Notice
      of Borrowing”
has
      the
      meaning specified in Section 2.2.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    “Notice
      of Conversion or Continuation”
has
      the
      meaning specified in Section 2.10.

     

    “Obligations”
means,
      with respect to any Loan Party, all amounts, obligations, liabilities, covenants
      and duties of every type and description owing by such Loan Party to the
      Administrative Agent, the Canadian Agent, any Lender, any L/C Issuer, any other
      Indemnitee, any participant, whether direct or indirect (regardless of whether
      acquired by assignment), absolute or contingent, due or to become due, whether
      liquidated or not, now existing or hereafter arising and however acquired,
      and
      whether or not evidenced by any instrument or for the payment of money,
      including, without duplication, (a) if such Loan Party is the Borrower, all
      Loans and L/C Obligations, (b) all interest, whether or not accruing after
      the
      filing of any petition in bankruptcy or the commencement of any insolvency,
      reorganization or similar proceeding, whether or not a claim for post-filing
      or
      post-petition interest is allowed in such proceeding, and (c) all other fees,
      expenses (including fees, charges and disbursement of counsel), interest,
      commissions, charges, costs, disbursements, indemnities and reimbursement of
      amounts paid and other sums chargeable to such Loan Party under any Loan
      Document (including those payable to L/C Issuers as described in Section 2.11).

     

    “Overadvances”
has
      the
      meaning specified in Section 2.1A(c).

     

    “Parent”
has
      the
      meaning specified in the preamble.

     

    “Patents”
means
      all rights, title and interests (and all related IP Ancillary Rights) arising
      under any Requirement of Law in or relating to letters patent and applications
      therefor.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation created by §4002 of ERISA and any
      successor entity or entities having similar responsibilities.

     

    “Perfection
      Certificate”
means,
      collectively, (a) the Perfection Certificate submitted by Parent to the
      Administrative Agent with respect to each Group Member, together with the U.S.
      Borrowers’ completed responses to the inquiries set forth therein, and (b) the
      Perfection Certificate submitted by Bombay Canada to the Administrative Agent
      with respect to Bombay Canada, together with Bombay Canada’s completed responses
      to the inquiries set forth therein, the form and substance of each such
      responses to be satisfactory to the Administrative Agent, in each case, together
      with any amendments, modifications or supplements thereto.

     

    “Permitted
      Acquisition”
means
      acquisitions of all or substantially all of the assets of a Person in or of
      any
      division or business line of a Person or Stock of a Person; provided,
      (a) the
      Administrative Agent shall receive at least 3 Business Days prior written notice
      of such acquisition, which notice shall include a reasonably detailed
      description of such acquisition, (b) such assets are located in the United
      States or Canada (except that such location requirement shall not apply to
      acquisitions of assets or stores from a licensee or franchisee of any Group
      Member) and are those assets of a business that would comply with Section 6.2(d),
      and
      which business would not subject any Agent or any Lender to regulatory or third
      party approvals in connection with the exercise of its rights and remedies
      under
      this Agreement or any Loan Documents, (c) no Default or Event of Default exists
      prior to or immediately after giving effect to such acquisition, (d) the
      Administrative Agent is granted a valid first priority perfected Lien in the
      assets so acquired to the extent and in the manner contemplated by the Loan
      Documents (subject to any Permitted Liens) and the applicable Group Member
      shall
      have delivered to the Administrative Agent evidence reasonably satisfactory
      to
      the Administrative Agent that all Liens with respect to the assets so acquired,
      other than Permitted Liens, have been discharged in full, (e) the seller of
      such
      assets or Stock is not an Affiliate of any Group Member, (f) the terms of such
      acquisition are on an arms length basis, (g) Section
      6.11
      is
      complied with at the time of consummation of such acquisition (or concurrently
      therewith), (h) the board of directors and (if required by applicable law)
      the
      shareholders, or the equivalent thereof, of the business to be acquired has
      approved such acquisition, (i) the applicable Group Member shall have delivered
      to Administrative Agent evidence satisfactory to the Administrative Agent that
      such Group Member has completed such acquisition in accordance with the terms
      of
      the contracts and agreements entered into by such Person in connection with
      such
      acquisition, and (ii) certified copies of all such documents shall have been
      delivered to the Administrative Agent, (i) no additional Indebtedness,
      contingent obligations or other liabilities shall be incurred assumed or
      otherwise be reflected on a consolidated balance sheet of the Borrowers after
      giving effect to such acquisition, except, (i) Loans made or Letters of Credit
      issued hereunder, (ii)
      ordinary course trade payables, accrued expenses and unsecured Indebtedness
      of
      the Borrowers and (iii) Indebtedness otherwise permitted under Section
      7.1,
      and (j)
      after giving effect to any such acquisition, Availability shall not be less
      than
      $25,000,000 and the Parent shall have delivered to the Administrative Agent
      a
      Compliance Certificate and Projections demonstrating that the Borrowers shall
      have Availability of at least $25,000,000 at all times for the 2 Fiscal Quarters
      immediately succeeding such acquisition.

     

    
      
        
        

      

      
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    “Permitted
      Discretion”
means
      a
      determination made in good faith and in the exercise of reasonable (from the
      perspective of a secured asset-based lender) business judgment.

     

    “Permitted
      Dispositions”
means
      (a) sales or other dispositions by any Group Member of Equipment that is
      substantially worn, damaged, or obsolete in the ordinary course of business,
      (b)
      sales by any Group Member of inventory to buyers in the ordinary course of
      business, (c) the use or transfer of money or Cash Equivalents by any Group
      Member in a manner that is not prohibited by the terms of this Agreement or
      the
      other Loan Documents, (d) the licensing by any Group Member, on a non-exclusive
      basis, of Intellectual Property in the ordinary course of business, (e) a
      disposition between the Borrowers, (f) the surrender or waiver of contract
      rights or the disposition, settlement, release or surrender of contract, tort
      or
      other claims of any kind in the ordinary course of business, (g) any disposition
      of defaulted receivables that arose in the ordinary course of business for
      collection, (h) the entering into of real property leases in respect of any
      portion of the Bombay Office Complex in the ordinary course of business and
      (i)
      the sale of the Eligible Real Property, so long as the Net Cash Proceeds are
      applied in accordance with Section
      2.8(a).

     

    “Permitted
      Investments”
means
      (a) Investments in cash and Cash Equivalents, (b) Investments in negotiable
      instruments for collection, (c) advances made in connection with purchases
      of
      goods or services in the ordinary course of business, (d) Investments received
      in settlement of amounts due to any Group Member effected in the ordinary course
      of business or owing to a Group Member as a result of Insolvency Proceedings
      involving an Account Debtor or upon the foreclosure or enforcement of any Lien
      in favor of any Group Member, (e) (i) Investments in a Borrower, (ii)
      Investments in a Subsidiary of a Borrower, and (iii) to the extent otherwise
      permitted hereunder, Investments in any Person who, simultaneously with such
      Investment, becomes a Subsidiary of Parent and complies with Section
      6.11
      hereof;
provided,
      however,
      that
      after giving effect to any such Permitted Investments pursuant to clauses
      (e) (ii)
      and
(iii)
      above,
      Availability shall not be less than $25,000,000 and the Parent shall have
      delivered to the Administrative Agent a Compliance Certificate and Projections
      demonstrating that Borrowers shall have Availability of at least $25,000,000
      at
      all times for the 2 Fiscal Quarters immediately succeeding such Permitted
      Investments, (f) Investments in The Bombay Furniture Company, Inc. in an amount
      not to exceed $5,000,000 in any Fiscal Year; (g) Investments the net aggregate
      book value of which does not at any time exceed the amount of $1,000,000 and
      (h)
      so long as the U.S. Revolving Credit Outstandings and Canadian Revolving Credit
      Outstandings are equal to $0, investments in (i) commercial notes and bonds
      or
      variable rate demand notes, issued by any commercial institution with a rating
      of not less than A, as determined by S&P or Moody’s, (ii) Eurodollar
      deposits, and (iii) money market or other mutual funds substantially all of
      whose assets comprise securities of the types described in the definition of
      “Cash Equivalents” or clause
      (h)
      hereof;
provided,
      that
      notwithstanding the foregoing, no such Investments shall be permitted (i) after
      the occurrence of a Default or Event of Default, and (ii) unless such
      Investments are pledged to the Administrative Agent as additional Collateral
      for
      the Obligations pursuant to such agreements as may be required by the
      Administrative Agent in its Permitted Discretion.

     

    
      
        
        

      

      
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    “Permitted
      Liens”
means
      (a) Liens held by the Administrative Agent or Canadian Agent for the benefit
      of
      the Administrative Agent, the Canadian Agent and Lenders, as applicable
      (b) Liens for unpaid taxes that either (i) are not yet delinquent, or
      (ii) do not constitute an Event of Default hereunder and are the subject of
      Permitted Protests, (c) Liens set forth on Schedule
      7.2,
      (d) the
      interests of lessors under operating leases, (e) purchase money Liens or the
      interests of lessors under Capital Leases to the extent that such Liens or
      interests secure Permitted Purchase Money Indebtedness and so long as such
      Lien
      attaches only to the asset purchased or acquired and the proceeds thereof,
      (f)
      Liens arising by operation of law including those in favor of warehousemen,
      landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred
      in
      the ordinary course of the Borrowers’ business and not in connection with the
      borrowing of money, and which Liens either (i) are for sums not yet
      delinquent, or (ii) are the subject of Permitted Protests, (g) Liens
      arising from deposits made in connection with obtaining worker’s compensation or
      other unemployment insurance, (h) Liens or deposits to secure performance of
      bids, tenders, or leases incurred in the ordinary course of business and not
      in
      connection with the borrowing of money, (i) Liens granted as security for surety
      or appeal bonds in connection with obtaining such bonds in the ordinary course
      of business, (j) Liens resulting from any judgment or award that is not an
      Event
      of Default hereunder, (k) with respect to any Real Property, easements, rights
      of way, minor encroachments, and zoning restrictions that do not materially
      interfere with or impair the use or operation thereof, (l) Liens in favor of
      customs and revenue authorities arising as a matter of law to secure payment
      of
      customs duties in connection with the importation of goods, (m) Liens resulting
      from the filing of precautionary UCC financing statements, PPSA registration
      statements or registrations in Quebec, Canada relating to operating leases
      of
      any Loan Party which are entered into in the ordinary course of business and
      which are limited solely to the assets subject thereto, and (n) Liens securing
      Permitted Office Building Indebtedness so long as such Lien attaches only to
      the
      Bombay Office Complex and the proceeds thereof (including insurance proceeds)
      and Liens on money placed in an escrow account in connection with sale leaseback
      transactions permitted by Section
      7.5.

     

    “Permitted
      Office Building Indebtedness”
means,
      following the release of the Eligible Real Property in accordance with
Section
      6.19,
      Indebtedness incurred by a U.S. Borrower or any of its Subsidiaries in an
      aggregate principal amount at any time outstanding not to exceed 90% of the
      appraised value (based upon an independent third-party appraisal) of the portion
      of the Bombay Office Complex securing such Indebtedness on terms reasonably
      acceptable to the Administrative Agent. 

     

    “Permitted
      Protest”
means
      the right of Parent or any of its Subsidiaries, as applicable, to protest any
      Lien (other than any such Lien that secures the Obligations), taxes (other
      than
      payroll taxes or taxes that are the subject of a United States federal tax
      lien), or rental payment; provided
      that (a)
      a reserve with respect to such obligation is established on the Books in such
      amount as is required under GAAP, (b) any such protest is instituted promptly
      and prosecuted diligently by Parent or any of its Subsidiaries, as applicable,
      in good faith, and (c) the Administrative Agent is satisfied that, while any
      such protest is pending, there will be no impairment of the enforceability,
      validity, perfection or priority of any of the Administrative Agent’s
      Liens.

     

    
      
        
        

      

      
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    “Permitted
      Purchase Money Indebtedness”
means,
      as of any date of determination, Purchase Money Indebtedness incurred after
      the
      Closing Date in an aggregate amount outstanding at any one time not in excess
      of
      $2,000,000. In no event shall Permitted Purchase Money Indebtedness include
      Indebtedness incurred for the purpose of financing all or any part of the
      acquisition Cost of any inventory.

     

    “Person”
means
      any individual, partnership, corporation (including a business trust and a
      public benefit corporation), joint stock company, estate, association, firm,
      enterprise, trust, limited liability company, unincorporated association, joint
      venture and any other entity or Governmental Authority.

     

    “PPSA”
means
      the Personal Property Security Act (Ontario), or, where the context requires,
      the legislation of other provinces or territories in Canada relating to security
      in personal property generally, including Accounts and inventory, as adopted
      by
      and in effect from time to time in such provinces or territories in Canada,
      as
      applicable.

     

    “Projections”
means,
      collectively, the Initial Projections and any document delivered pursuant to
      Section 5.3(c).

     

    “Property
      Loss Event”
means,
      with respect to any property, any loss of or damage to such property or any
      taking of such property or condemnation thereof.

     

    “Pro
      Rata Outstandings”,
      of any
      Lender at any time, means the sum of (i) the outstanding principal amount of
      Revolving Loans owing to such Lender and (ii) the amount of the participation
      of
      such Lender in the L/C Obligations outstanding with respect to all Letters
      of
      Credit.

     

    “Pro
      Rata Share”
means,
      with respect to any Lender and any Facility or Facilities at any time, the
      percentage obtained by dividing (a) the sum of the Commitments (or, if such
      Commitments in any such Facility are terminated, the Pro Rata Outstandings
      therein) of such Lender then in effect under such Facilities by (b) the sum
      of
      the Commitments (or, if such Commitments in any such Facility are terminated,
      the Pro Rata Outstandings therein) of all Lenders then in effect under such
      Facilities; provided,
      however,
      that,
      if there are no Commitments and no Pro Rata Outstandings in any of such
      Facilities, such Lender’s Pro Rata Share in such Facilities shall be determined
      based on the Pro Rata Share in such Facilities most recently in effect, after
      giving effect to any subsequent assignment and any subsequent non-pro rata
      payments of any Lender pursuant to Section 2.18.

     

    “Purchase
      Money Indebtedness”
means
      Indebtedness (other than the Obligations, but including obligations in respect
      of Capital Leases), incurred at the time of, or within 20 days after, the
      acquisition of any fixed assets, including, without limitation, software, for
      the purpose of financing all or any part of the acquisition cost thereof,
      together with any refinancings thereof under Section
      7.1(c).

     

    
      
        
        

      

      
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    “Qualified
      Import Letter of Credit”
means
      a
      Letter of Credit that (a) is issued to facilitate the purchase by a U.S.
      Borrower of Eligible Inventory, (b) is in form and substance acceptable to
      the
      Administrative Agent, and (c) is issued to support an Underlying Letter of
      Credit that only is drawable by the beneficiary thereof by the presentation
      of,
      among other documents, a negotiable document of title that (x) is in the name
      of
      the Administrative Agent, a U.S. Borrower or an Approved Customs Broker and
      has
      not been consigned to any third parties other than to the Administrative Agent,
      a U.S. Borrower or an Approved Customs Broker (either directly or by means
      of
      endorsements), and (y) was issued by the carrier or consolidator respecting
      the
      subject inventory.

     

    “Real
      Property”
means
      any estates or interests in real property now owned or hereafter acquired by
      any
      Borrower or a Subsidiary of any Borrower and the improvements
      thereto.

     

    “Record”
means
      information that is inscribed on a tangible medium or which is stored in an
      electronic or other medium and is retrievable in perceivable form.

     

    “Register”
has
      the
      meaning specified in Section 2.14(b).

     

    “Related
      Person”
means,
      with respect to any Person, each Affiliate of such Person and each director,
      officer, employee, consultant, agent, trustee, representative, attorney,
      accountant and each insurance, environmental, legal, financial and other advisor
      (including those retained in connection with the satisfaction or attempted
      satisfaction of any condition set forth in Article III)
      of or
      to such Person or any of its Affiliates, together with, if such Person is the
      Administrative Agent, each other Person or individual designated, nominated
      or
      otherwise mandated by or helping the Administrative Agent pursuant to and in
      accordance with Section 9.4
      or any
      comparable provision of any Loan Document.

     

    “Related
      Transactions”
means
      the refinancing of the Existing Credit Agreement and the payment of all related
      fees, costs and expenses.

     

    “Remedial
      Action”
means
      all actions taken to (a) clean up, remove, remediate, contain, treat, monitor,
      assess, evaluate, or in any way address Hazardous Materials in the indoor or
      outdoor environment, (b) prevent or minimize a release or threatened release
      of
      Hazardous Materials so they do not migrate or endanger or threaten to endanger
      public health or welfare or the indoor or outdoor environment, (c) perform
      any
      pre-remedial studies, investigations, or post-remedial operation and maintenance
      activities, or (d) conduct any other actions authorized by 42 USC
§9601.

     

    “Required
      Lenders”
means,
      at any time, Lenders having at such time in excess of 50% of the sum of the
      aggregate Revolving Credit Commitments (or, if such Commitments are terminated,
      the sum of the amounts of the participations in Swing Loans, the principal
      amount of unparticipated portions of the Swing Loans and the Pro Rata
      Outstandings in the Facilities) then in effect, ignoring, in such calculation,
      the amounts held by any Non-Funding Lender.

     

    “Requirements
      of Law”
means,
      with respect to any Person, collectively, the common law and all federal, state,
      provincial, local, foreign, multinational or international laws, statutes,
      codes, treaties, standards, rules and regulations, guidelines, ordinances,
      orders, judgments, writs, injunctions, decrees (including administrative or
      judicial precedents or authorities) and the interpretation or administration
      thereof by, and other determinations, directives, requirements or requests
      of,
      any Governmental Authority, in each case whether or not having the force of
      law
      and that are applicable to or binding upon such Person or any of its property
      or
      to which such Person or any of its property is subject.

     

    
      
        
        

      

      
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    “Reserves”
means
      such reserves as the Administrative Agent, from time to time determines in
      its
      Permitted Discretion as being appropriate to reflect impediments to the Secured
      Parties’ ability to realize upon the Collateral, including, without limitation
      Canadian Priority Payables and Inventory Reserves.

     

    “Responsible
      Officer”
means,
      with respect to any Person, any of the president, chief executive officer,
      chief
      financial officer, treasurer, assistant treasurer, controller, managing member
      or general partner of such Person but, in any event, with respect to financial
      matters, any such officer that is responsible for preparing the Financial
      Statements delivered hereunder and, with respect to the Corporate Chart and
      other documents delivered pursuant to Section 5.3(h),
      documents delivered on the Closing Date and documents delivered pursuant to
      Section 6.10,
      the
      secretary or assistant secretary of such Person or any other officer responsible
      for maintaining the corporate and similar records of such Person.

     

    “Revolving
      Credit Commitment”
means
      the U.S. Revolving Credit Commitment and/or the Canadian Revolving Credit
      Agreement, as the case may be.

     

    “Revolving
      Credit Termination Date”
shall
      mean the earliest of (a) the Scheduled Maturity Date, (b) the date of
      termination of the Revolving Credit Commitments pursuant to Section 2.5
      or
8.2 and
      (c)
      the date on which the Obligations become due and payable pursuant to
Section 8.2.

     

    “Revolving
      Loan”
means
      the U.S. Revolving Loan and/or the Canadian Revolving Loan, as the case may
      be.

     

    “S&P”
means
      Standard & Poor’s Rating Services, or its successor.

     

    “Seasonal
      Period”
means
      the period commencing on September 1 through and including December 15 of each
      Fiscal Year.

     

    “Scheduled
      Maturity Date”
means
      the 5th
      anniversary of the Closing Date.

     

    “SEC”
means
      the United States Securities and Exchange Commission and any successor
      thereto.

     

    “Secured
      Parties”
means
      the Lenders, the L/C Issuers, the Administrative Agent, each other Indemnitee
      and any other holder of any Obligation of any Loan Party.

     

    “Security”
means
      all Stock, Stock Equivalents, voting trust certificates, bonds, debentures,
      instruments and other evidence of Indebtedness, whether or not secured,
      convertible or subordinated, all certificates of interest, share or
      participation in, all certificates for the acquisition of, and all warrants,
      options and other rights to acquire, any Security.

     

    “Sell”
means,
      with respect to any property, to sell, convey, transfer, assign, license, lease
      or otherwise dispose of, any interest therein or to permit any Person to acquire
      any such interest, including, in each case, through a sale and leaseback
      transaction or through a sale, factoring at maturity, collection of or other
      disposal, with or without recourse, of any notes or accounts receivable.
      Conjugated forms thereof and the noun “Sale”
have
      correlative meanings.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    “Solvent”
means,
      with respect to any Person (a) as of any date of determination, that, as of
      such
      date, (i) the value of the assets of such Person (both at fair value and present
      fair saleable value) is greater than the total amount of liabilities (including
      contingent and unliquidated liabilities) of such Person, and (ii) such Person
      is
      able to pay all liabilities of such Person as such liabilities mature and (b)
      that, as of the Closing Date, such Person does not have unreasonably small
      capital. In computing the amount of contingent or unliquidated liabilities
      at
      any time, such liabilities shall be computed at the amount that, in light of
      all
      the facts and circumstances existing at such time, represents the amount that
      can reasonably be expected to become an actual or matured
      liability.

     

    “Standby
      Letter of Credit”
means
      any Letter of Credit that is not a Documentary Letter of Credit.

     

    “Stock”
means
      all shares of capital stock (whether denominated as common stock or preferred
      stock), equity interests, beneficial, partnership or membership interests,
      joint
      venture interests, participations or other ownership or profit interests in
      or
      equivalents (regardless of how designated) of or in a Person (other than an
      individual), whether voting or non-voting.

     

    “Stock
      Equivalents”
means
      all securities convertible into or exchangeable for Stock or any other Stock
      Equivalent and all warrants, options or other rights to purchase, subscribe
      for
      or otherwise acquire any Stock or any other Stock Equivalent, whether or not
      presently convertible, exchangeable or exercisable.

     

    “Store
      Accounts”
means
      an account designated as such on Schedule
      8
      of the
      Perfection Certificate.

     

    “Subsidiary”
means,
      with respect to any Person, any corporation, partnership, joint venture, limited
      liability company, association or other entity, the management of which is,
      directly or indirectly, controlled by, or of which an aggregate of more than
      50%
      of the outstanding Voting Stock is, at the time, owned or controlled directly
      or
      indirectly by, such Person or one or more Subsidiaries of such
      Person.

     

    “Substitute
      Lender”
has
      the
      meaning specified in Section 2.18(b).

     

    “Swingline
      Commitment”
means
      $15,000,000.

     

    “Swingline
      Lender”
means,
      each in its capacity as Swingline Lender hereunder, GE Capital or, upon the
      resignation of GE Capital as the Administrative Agent hereunder, any U.S. Lender
      (or Affiliate or Approved Fund of any U.S. Lender) that agrees, with the
      approval of the Administrative Agent (or, if there is no such successor the
      Administrative Agent, the Required Lenders) and the Parent, to act as the
      Swingline Lender hereunder.

     

    “Swingline
      Request”
has
      the
      meaning specified in Section 2.3A(b).

     

    “Swing
      Loan”
has
      the
      meaning specified in Section 2.3A(a).

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    “Synthetic
      Lease”
means
      any lease of goods or other property, whether real or personal, which is treated
      as an operating lease under GAAP and as a loan or financing for United States
      income tax purposes.

     

    “Taxes”
has
      the
      meaning specified in Section 2.17.

     

    “Title
      IV Plan”
means
      a
      pension plan subject to Title IV of ERISA, other than a Multiemployer Plan,
      to
      which any ERISA Affiliate incurs or otherwise has any obligation or liability,
      contingent or otherwise.

     

    “Trademarks”
means
      all rights, title and interests (and all related IP Ancillary Rights) arising
      under any Requirement of Law in or relating to trademarks, trade names,
      corporate names, company names, business names, fictitious business names,
      trade
      styles, service marks, logos and other source or business identifiers and,
      in
      each case, all goodwill associated therewith, all registrations and recordations
      thereof and all applications in connection therewith.

     

    “Trade
      Secrets”
means
      all right, title and interest (and all related IP Ancillary Rights) arising
      under any Requirement of Law in or relating to trade secrets.

     

    “UCC”
means
      the Uniform Commercial Code of any applicable jurisdiction and, if the
      applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform
      Commercial Code as in effect in the State of New York.

     

    “Underlying
      Issuer”
means
      a
      third Person which is the beneficiary of an L/C Undertaking and which has issued
      a letter of credit at the request of the L/C Issuer for the account of any
      U.S.
      Borrowers, and in the case of a proposed Qualified Import Letter of Credit,
      has
      agreed, in writing, to hold documents of title as agent for the Administrative
      Agent.

     

    “Underlying
      Letter of Credit”
means
      a
      letter of credit that has been issued by an Underlying Issuer.

     

    “United
      States”
means
      the United States of America.

     

    “Unused
      Commitment Fee”
has
      the
      meaning specified in Section 2.11.

     

    “U.S.
      Borrowers”
means
      Borrowers other than Bombay Canada.

     

    “U.S.
      Borrowing Base”
means,
      as of any date of determination, an amount equal to:

     

    (a) 92.5%
      of
      the Net Retail Liquidation Value of Eligible Inventory owned by the U.S.
      Borrowers; provided,
      however,
      that
 during the Seasonal Period, the advance rate shall be of 97.5% of the Net
      Retail Liquidation Value of Eligible Inventory owned by the U.S. Borrowers,
      plus

     

    (b) 90%
      of
      the face amount of Eligible Accounts of the U.S. Borrower, plus

     

    (c) 90%
      of
      the face amount of Eligible Credit Card Receivables of the U.S. Borrowers,
      plus

     

    (d) 75
      % of
      the Appraised Value of Eligible Real Property of the U.S. Borrowers,
minus

     

    (e) the
      aggregate of such Reserves as may have been established by the Administrative
      Agent.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    “U.S.
      Eligible In-Transit Inventory”
means
      inventory of the U.S. Borrowers that does not qualify as Eligible Inventory
      under clause
      (b)
      of the
      definition of Eligible Inventory solely because it is not at a location in
      the
      United States set forth on Schedule
      4(b)
      of the
      Perfection Certificate or in transit among such locations in the United States
      and that meets the following criteria, which criteria may be revised by the
      Administrative Agent in its Permitted Discretion from time to time after the
      Closing Date:

     

    (a) the
      inventory was the subject of a Qualified Import Letter of Credit, or was paid
      for in full by a U.S. Borrower;

     

    (b) such
      inventory currently is in transit (whether by vessel, air, or land) to a
      location set forth on Schedule
      4(b)
      of the
      Perfection Certificate 
      in the
      United States that is the subject of a Bailee Acknowledgment or a Collateral
      Access Agreement;

     

    (c) title
      to
      such inventory has passed to the applicable U.S. Borrower;

     

    (d) such
      inventory is insured against types of loss, damage, hazards, and risks, and
      in
      amounts, satisfactory to the Administrative Agent in its Permitted
      Discretion;

     

    (e) the
      Parent has provided a certificate to the Administrative Agent that certifies
      that, to the best knowledge of the Borrowers, such inventory meets all of the
      Borrowers’ representations and warranties contained in the Loan Documents
      concerning Eligible Inventory, that the Borrowers know of no reason why such
      inventory would not be accepted by the applicable Borrower when it arrives
      in
      the United States, and that the shipment as evidenced by the documents conforms
      to the related order documents; and

     

    (f) if
      subject to a Qualified Import Letter of Credit, the Underlying Letter of Credit
      has been drawn upon and the Underlying Issuer has honored such drawing and
      the
      Administrative Agent has honored its obligations to the Underlying Issuer under
      the applicable Qualified Import Letter of Credit.

     

    “U.S.
      Lender”
means
      each Lender that has a U.S. Revolving Credit Commitment, holds a U.S. Revolving
      Loan or participates in any Swing Loan or Letter of Credit.

     

    “U.S.
      Lender Party”
means
      each of the Administrative Agent, each Lender, each L/C Issuer and each
      participant, in each case that is a Domestic Person.

     

    “U.S.
      Non-Funding Lender”
has
      the
      meaning specified in Section 2.2A(c).

     

    “U.S.
      Revolving Credit Commitment”
means,
      with respect to each U.S. Lender, the commitment of such Lender to make U.S.
      Revolving Loans and acquire interests in other U.S. Revolving Credit
      Outstandings, which commitment is in the amount set forth opposite such U.S.
      Lender’s name on Schedule I
      under
      the caption “U.S.
      Revolving Credit Commitment”,
      as
      amended to reflect Assignments and as such amount may be reduced pursuant to
      this Agreement. The aggregate amount of the U.S. Revolving Credit Commitments
      on
      the date hereof equals $125,000,000.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    “U.S.
      Revolving Credit Facility”
means
      the U.S. Revolving Credit Commitments and the provisions herein related to
      the
      U.S. Revolving Loans, Swing Loans and Letters of Credit.

     

    “U.S.
      Revolving Credit Outstandings”
means,
      at any time, the sum of, in each case to the extent outstanding at such time,
      (a) the aggregate principal amount of the U.S. Revolving Loans and Swing Loans
      and (b) the L/C Obligations for all Letters of Credit.

     

    “U.S.
      Revolving Loan”
has
      the
      meaning specified in Section 2.1A(a).

     

    “Voting
      Stock”
means
      Stock of any Person having ordinary power to vote in the election of members
      of
      the board of directors, managers, trustees or other controlling Persons, of
      such
      Person (irrespective of whether, at the time, Stock of any other class or
      classes of such entity shall have or might have voting power by reason of the
      occurrence of any contingency).

     

    “Wholesale”
means
      Bombay International, Inc.

     

    “Wholly
      Owned Subsidiary”
of
      any
      Person means any Subsidiary of such Person, all of the Stock of which (other
      than nominal holdings and director’s qualifying shares) is owned by such Person,
      either directly or through one or more Wholly Owned Subsidiaries of such
      Person.

     

    Section 1.2  UCC
      Terms.
      The
      following terms have the meanings given to them in the applicable UCC:
“commodity
      account”,
      “commodity
      contract”,
      “commodity
      intermediary”,
      “deposit
      account”,
      “entitlement
      holder”,
      “entitlement
      order”,
      “equipment”,
      “financial
      asset”,
      “general
      intangible”,
      “goods”,
      “instruments”,
      “inventory”,
      “securities
      account”,
      “securities
      intermediary”,
      “security
      entitlement”
and
      “supporting
      obligations”.

     

    Section 1.3  Accounting
      Terms and Principles.
      

     

    (a)  GAAP.
      If any
      change in any accounting practice is required by GAAP (or any successor of
      the
      foregoing) in order for such principle or practice to continue as a generally
      accepted accounting principle or practice, all reports and financial statements
      required hereunder or in connection herewith may be prepared in accordance
      with
      such change, but all calculations and determinations to be made hereunder may
      be
      made in accordance with such change only after notice of such change is given
      to
      each Lender, and the Borrowers, the Required Lenders and the Administrative
      Agent agree to such change. All accounting terms not specifically defined herein
      shall be construed in accordance with GAAP applied on a consistent basis by
      the
      accounting entity to which they refer. When used herein, the term “financial
      statements” shall include the notes and schedules thereto. Whenever the term
“Borrowers” or the term “Parent” is used in respect of a financial covenant or a
      related definition, it shall be understood to mean Parent and its Subsidiaries
      on a consolidated basis unless the context clearly requires otherwise. Unless
      otherwise expressly provided herein or unless Required Lenders otherwise
      consent, all financial statements and reports furnished to any Agent or any
      Lender hereunder shall be prepared, all financial computations and
      determinations pursuant hereto shall be made, and all terms of an accounting
      or
      financial nature shall be construed, in accordance with GAAP.

     

    
      
        
        

      

      
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    (b)  Permitted
      Acquisitions.
      Notwithstanding anything to the contrary contained herein, the assets of any
      Person acquired in a Permitted Acquisition shall not be included in the
      Borrowing Base unless such Person shall comply with its obligations under
Section
      6.11,
      as
      applicable, and the Administrative Agent shall have received an appraisal and
      audit in form and substance satisfactory to it.

     

    Section 1.4  Interpretation.
      

     

    (a)  Certain
      Terms.
      Except
      as set forth in any Loan Document, all accounting terms not specifically defined
      herein shall be construed in accordance with GAAP. The terms “herein”,
      “hereof”
and
      similar terms refer to this Agreement as a whole. In the computation of periods
      of time from a specified date to a later specified date in any Loan Document,
      the terms “from”
means
      “from and including” and the words “to”
and
      “until”
each
      mean “to but excluding” and the word “through”
means
      “to and including.” In any other case, the term “including”
when
      used in any Loan Document means “including without limitation.” The term
“documents”
means
      all writings, however evidenced and whether in physical or electronic form,
      including all documents, instruments, agreements, notices, demands,
      certificates, forms, financial statements, opinions and reports. The term
“incur”
means
      incur, create, make, issue, assume or otherwise become directly or indirectly
      liable in respect of or responsible for, in each case whether directly or
      indirectly, and the terms “incurrence” and “incurred” and similar derivatives
      shall have correlative meanings.

     

    (b)  Certain
      References.
      Unless
      otherwise expressly indicated, references (i) in this Agreement to an
      Exhibit, Schedule, Article, Section or clause refer to the appropriate Exhibit
      or Schedule to, or Article, Section or clause in, this Agreement and (ii) in
      any
      Loan Document, to (A) any agreement shall include, without limitation, all
      exhibits, schedules, appendixes and annexes to such agreement and, unless the
      prior consent of any Secured Party required therefor is not obtained, any
      amendment, restatement, amendment and restatement or other modification of
      such
      agreement, (B) any statute shall be to such statute as amended or otherwise
      modified from time to time and to any successor legislation thereto, in each
      case as in effect at the time any such reference is operative and (C) any
      time of day shall be a reference to New York time. Titles of articles, sections,
      clauses, exhibits, schedules and annexes contained in any Loan Document are
      without substantive meaning or content of any kind whatsoever and are not a
      part
      of the agreement between the parties hereto. Unless otherwise expressly
      indicated, the meaning of any term defined (including by reference) in any
      Loan
      Document shall be equally applicable to both the singular and plural forms
      of
      such term.

     

    ARTICLE
      II  

     

    

     

    THE
      FACILITIES

     

    Section 2.1  Revolving
      Credit Commitments.

     

    Section
      2.1A U.S.
      Revolver Loans.
      (a) On
      the terms and subject to the conditions contained in this Agreement, each U.S.
      Lender severally, but not jointly, agrees to make loans in Dollars (each a
      “U.S.
      Revolving Loan”)
      to the
      U.S. Borrowers from time to time on any Business Day during the period from
      the
      date hereof until the Revolving Credit Termination Date in an aggregate
      principal amount at any time outstanding for all such Loans by such U.S. Lender
      not to exceed such U.S. Lender’s Pro Rata Share of an amount equal to the lesser
      of (i) the Maximum Revolver Amount, minus the sum of (x) U.S. Revolving Credit
      Outstandings, (y) Canadian Revolving Credit Outstandings, and (z) the Minimum
      Availability Amount or (ii) except for Overadvances, the U.S. Borrowing Base
      less U.S. Revolving Credit Outstandings less the Minimum Availability Amount.
      Within the limits set forth in the first sentence of this clause
      (a),
      amounts
      of U.S. Revolving Loans repaid may be reborrowed under this Section
      2.1A.

     

    
      
        
        

      

      
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    (b)
      Anything to the contrary in this Section
      2.1A
      notwithstanding, the Administrative Agent shall have the right without declaring
      an Event of Default, to reduce its inventory advance rates or establish Reserves
      in such amounts, and with respect to such matters, as the Administrative Agent
      in its Permitted Discretion shall deem necessary or appropriate, against the
      U.S. Borrowing Base, including Reserves with respect to (i) sums that the U.S.
      Borrowers are required to pay (such as taxes, assessments, insurance premiums,
      or, in the case of leased assets, rents or other amounts payable under such
      leases) and has failed to pay under any Section of this Agreement or any other
      Loan Document, (ii) amounts as determined by the Administrative Agent in its
      Permitted Discretion based on noncompliance with the covenants set forth in
      Articles
      6 and 7
      (without
      duplication as to the Canadian Borrowing Base), and (iii) amounts owing by
      the
      U.S. Borrowers or their Subsidiaries to any Person to the extent secured by
      a
      Lien on, or trust over, any of the Collateral (other than any existing Permitted
      Lien set forth on Schedule
      7.2
      which is
      specifically identified thereon as entitled to have priority over the
      Administrative Agent’s Liens), which Lien or trust, in the Permitted Discretion
      of the Administrative Agent likely would have a priority superior to the
      Administrative Agent’s Liens (such as Liens or trusts in favor of landlords,
      warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
      Liens
      or trusts for ad valorem, excise, sales, or other taxes where given priority
      under applicable law) in and to such item of the Collateral.

     

    (c)
      Anything in this Agreement to the contrary notwithstanding, in its discretion
      the Administrative Agent may (or may authorize the Swingline Lender to) or
      may
      cause the Canadian Agent or the Canadian Swingline Lender to, but shall have
      absolutely no obligation to, make Loans to the U.S. Borrowers on behalf of
      U.S.
      Lenders or to Bombay Canada on behalf of the Canadian Lenders in amounts that
      cause the U.S. Revolving Credit Outstandings to exceed the U.S. Borrowing Base
      less the Minimum Availability Amount or the Canadian Revolving Credit
      Outstandings to exceed the Canadian Borrowing Base (any such excess Revolving
      Loans are herein referred to collectively as “Overadvances”);
      provided,
      that
      (i) no such event or occurrence shall cause or constitute a waiver of the
      Administrative Agent’s, the Swingline Lender’s, U.S. Lenders’, the Canadian
      Agent’s or the Canadian Lenders’ right to refuse to make any further
      Overadvances, Swing Loans, U.S. Revolving Loans, Canadian Revolving Loans or
      Canadian Swing Loans, or incur any L/C Obligations, as the case may be, at
      any
      time that an Overadvance exists, and (ii) no Overadvance shall result in a
      Default or Event of Default based on the Borrowers’ failure to comply with
Section
      2.8(b)
      for so
      long as the Administrative Agent permits such Overadvance to be outstanding,
      but
      solely with respect to the amount of such Overadvance. In addition, Overadvances
      may be made even if the conditions to lending set forth in Section
      3.2
      have not
      been met. All Overadvances shall constitute Base Rate Loans, shall bear interest
      at the rate set forth in Section
      2.9(c)
      and
      shall be payable on the earlier of demand or the Revolving Credit Termination
      Date. The authority of the Administrative Agent to make, or to cause the
      Canadian Agent, the Swingline Lender or the Canadian Swingline Lender to make,
      Overadvances is limited to an aggregate amount not to exceed ten percent (10%)
      of the Aggregate Borrowing Base (exclusive of amounts charged to the Loans
      for
      interest, fees or expenses due to the Agents, the Lenders or the L/C Issuer
      or
      any Indemnified Person under the terms of this Agreement) and shall not cause
      the aggregate U.S. Revolving Credit Outstandings and the Canadian Revolving
      Credit Outstandings to exceed the Maximum Revolver Amount less the Minimum
      Availability Amount. In the event that the Administrative Agent or Swingline
      Lender makes an Overadvance to the U.S. Borrowers or the Canadian Agent or
      the
      Canadian Swingline Lender makes an Overadvance to Bombay Canada, irrespective
      of
      whether the conditions to lending set forth in Section
      3.2
      have
      been met, the U.S. Lenders and/or the Canadian Lenders, as the case may be,
      agree to reimburse the Administrative Agent or the Canadian Agent, as
      applicable, or to purchase a participation therein, in accordance with such
      Lender’s Pro Rata Share of the Overadvance as if such Overadvance were a Swing
      Loan or Canadian Swing Loan.

     

    
      
        
        

      

      
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    Section
      2.1B Canadian
      Revolver Loans.
      (a) On
      the terms and subject to the conditions contained in this Agreement, each
      Canadian Lender severally, but not jointly, agrees to make loans in Dollars
      (each a “Canadian
      Revolving Loan”)
      to
      Bombay Canada from time to time on any Business Day during the period from
      the
      date hereof until the Revolving Credit Termination Date in an aggregate
      principal amount at any time outstanding for all such Loans by such Canadian
      Lender not to exceed an amount equal to the lesser of (i) the Maximum Canadian
      Revolver Amount less Canadian Revolving Credit Outstandings, or (ii) the
      Canadian Borrowing Base less Canadian Revolving Credit Outstandings or (iii)
      the
      Maximum Revolver Amount minus the sum of U.S. Revolving Credit Outstandings,
      Canadian Revolving Credit Outstandings and the Minimum Availability Amount.
      Within the limits set forth in the first sentence of this clause
      (a),
      amounts
      of Canadian Revolving Loans repaid may be reborrowed under this Section
      2.1B.

     

    (b)
      Anything to the contrary in this Section
      2.1B
      notwithstanding, the Administrative Agent shall have the right without declaring
      an Event of Default, to reduce its inventory advance rates or establish Reserves
      in such amounts, and with respect to such matters, as the Administrative Agent
      in its Permitted Discretion shall deem necessary or appropriate, against the
      Canadian Borrowing Base, including Reserves with respect to (i) sums that Bombay
      Canada is required to pay (such as taxes, assessments, insurance premiums,
      or,
      in the case of leased assets, rents or other amounts payable under such leases)
      and has failed to pay under any Section of this Agreement or any other Loan
      Document, (ii) amounts as determined by the Administrative Agent in its
      Permitted Discretion based on noncompliance with the covenants set forth in
      Articles
      6 and 7
      (without
      duplication as to the U.S. Borrowing Base), and (iii) Canadian Priority
      Payables, and (iv) amounts owing by Bombay Canada to any Person to the extent
      secured by a Lien on, or trust over, any of the Collateral (other than any
      existing Permitted Lien set forth on Schedule
      7.2
      which is
      specifically identified thereon as entitled to have priority over the
      Administrative Agent’s Liens), which Lien or trust, in the Permitted Discretion
      of the Administrative Agent likely would have a priority superior to the
      Administrative Agent’s Liens (such as Liens or trusts in favor of landlords,
      warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
      Liens
      or trusts for ad valorem, excise, sales, or other taxes where given priority
      under applicable law) in and to such item of the Collateral.

     

    Section 2.2  Borrowing
      Procedures

     

    Section
      2.2A U.S.
      Borrowing Procedures.
      

     

    (a)  Notice
      From the U.S. Borrower.
      Each
      Borrowing of a U.S. Revolving Loan shall be made on notice given by the Parent
      to the Administrative Agent not later than 1:00 p.m. on (i) the date of the
      proposed Borrowing if such date is a Business Day (or the next succeeding
      Business Day if such date is not a Business Day), in the case of a Borrowing
      of
      Base Rate Loans and (ii) the third Business Day prior to the date of the
      proposed Borrowing, in the case of a Borrowing of Eurodollar Rate Loans. Each
      such notice may be made in a writing substantially in the form of Exhibit
      C
      (a
“Notice
      of Borrowing”)
      duly
      completed or by telephone if confirmed promptly, but in any event within one
      Business Day and prior to such Borrowing, with such a Notice of Borrowing.
      Loans
      shall be made as Base Rate Loans unless, outside of a suspension period pursuant
      to Section
      2.15,
      the
      Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar
      Rate Loans. Each Borrowing of Eurodollar Rate Loans shall be in an aggregate
      amount that is an integral multiple of $1,000,000.

     

    
      
        
        

      

      
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    (b)  Notice
      to Each U.S. Lender.
      The
      Administrative Agent shall give to each U.S. Lender prompt notice of the
      Administrative Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate
      Loans are properly requested in such Notice of Borrowing, prompt notice of
      the
      applicable interest rate. Each U.S. Lender shall, before 2:00 p.m. on the date
      of the proposed Borrowing, make available to the Administrative Agent at its
      address referred to in Section
      10.11,
      such
      U.S. Lender’s Pro Rata Share of such proposed Borrowing. Upon fulfillment or due
      waiver (i) on the Closing Date, of the applicable conditions set forth in
Section
      3.1
      and (ii)
      on the Closing Date and any time thereafter, of the applicable conditions set
      forth in Section
      3.2,
      the
      Administrative Agent shall make such funds available to the U.S.
      Borrower.

     

    (c)  Non-Funding
      Lenders.
      Unless
      the Administrative Agent shall have received notice from any U.S. Lender prior
      to the date such U.S. Lender is required to make any payment hereunder with
      respect to any U.S. Revolving Loan or any participation in any Swing Loan or
      Letter of Credit that such U.S. Lender will not make such payment (or any
      portion thereof) available to the Administrative Agent, the Administrative
      Agent
      may assume that such U.S. Lender has made such payment available to the
      Administrative Agent on the date such payment is required to be made in
      accordance with this Article
      II
      and the
      Administrative Agent may, in reliance upon such assumption, make available
      to
      the U.S. Borrower on such date a corresponding amount. The U.S. Borrower agrees
      to repay to the Administrative Agent on demand such amount (until repaid by
      such
      U.S. Lender) with interest thereon for each day from the date such amount is
      made available to the U.S. Borrower until the date such amount is repaid to
      the
      Administrative Agent, at the interest rate applicable to the Obligation that
      would have been created when the Administrative Agent made available such amount
      to the U.S. Borrower had such U.S. Lender made a corresponding payment
      available; provided,
      however,
      that
      such payment shall not relieve such U.S. Lender of any obligation it may have
      to
      the U.S. Borrower, the Swingline Lender or any L/C Issuer and any payment by
      the
      U.S. Borrower shall be without prejudice to any claim the U.S. Borrower may
      have
      against a U.S. Non-Funding Lender (as defined below). In addition, any U.S.
      Lender that shall not have made available to the Administrative Agent any
      portion of any payment described above (any such U.S. Lender, a “U.S.
      Non-Funding Lender”)
      agrees
      to pay such amount to the Administrative Agent on demand together with interest
      thereon, for each day from the date such amount is made available to the U.S.
      Borrower until the date such amount is repaid to the Administrative Agent,
      at
      the Federal Funds Rate for the first Business Day and thereafter (i) in the
      case
      of a payment in respect of a U.S. Revolving Loan, at the interest rate
      applicable at the time to such U.S. Revolving Loan and (ii) otherwise, at the
      interest rate applicable to Base Rate Loans under the U.S. Revolving Credit
      Facility. Such repayment shall then constitute the funding of the corresponding
      Loan (including any Loan deemed to have been made hereunder with such payment)
      or participation. The existence of any U.S. Non-Funding Lender shall not relieve
      any other U.S. Lender of its obligations under any Loan Document, but no other
      U.S. Lender shall be responsible for the failure of any U.S. Non-Funding Lender
      to make any payment required under any Loan Document. If the U.S. Borrower
      and
      such U.S. Non-Funding Lender shall pay such interest to the Administrative
      Agent
      for the same or an overlapping period, the Administrative Agent shall promptly
      remit to the U.S. Borrower the amount of any excess paid by the U.S. Borrower
      for such period.

     

    
      
        
        

      

      
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    (d)  Joint
      and Several Liability.
      

     

    (i)  Notwithstanding
      any provision to the contrary in any Loan Document, all Obligations of the
      U.S.
      Borrowers under this Agreement are joint and several Obligations of the U.S.
      Borrowers in consideration of the financial accommodations to be provided by
      the
      Administrative Agent and Lenders under this Agreement, for the mutual benefit,
      directly and indirectly, of each Borrower (including Bombay Canada) and in
      consideration of the undertakings of the other U.S. Borrowers to accept joint
      and several liability for the Obligations. 

     

    (ii)  Each
      U.S.
      Borrower, jointly and severally, hereby irrevocably and unconditionally accepts,
      not merely as a surety but also as a co-debtor, joint and several liability
      with
      the other U.S. Borrowers, with respect to the payment and performance of all
      of
      the Obligations (including, without limitation, any Obligations arising under
      this Section 2.2(A)(d)),
      it
      being the intention of U.S. Borrowers that all the Obligations (including those
      of Bombay Canada) shall be the joint and several obligations of U.S. Borrowers
      without preferences or distinction among them.

     

    (iii)  If
      and to
      the extent that any of Borrowers shall fail to make any payment with respect
      to
      any of the Obligations as and when due or to perform any of the Obligations
      in
      accordance with the terms thereof, then in each such event, the other U.S.
      Borrowers will make such payment with respect to, or perform, such
      Obligation.

     

    (iv)  The
      provisions of Sections
      2.2
      through
Section
      2.7
      of the
      Guaranty and Security Agreement are hereby incorporated except that Subsidiary
      Guarantor shall mean U.S. Borrowers which are Subsidiaries of the Parents,
      Guarantor shall refer to the U.S. Borrowers, Guaranteed Obligations shall refer
      to the Obligations, and Guaranty shall refer to this Section
      2.2(A)(d) mutatis
      mutandis.

     

    (v)  The
      provisions of this Section 2.2(A)(d)
      are made
      for the benefit of the Secured Parties, and assigns, and may be enforced by
      it
      or them from time to time against any or all U.S. Borrowers as often as occasion
      therefore may arise and without requirement on the part of any such Secured
      Parties first to marshal any of its or their claims or to exercise any of its
      or
      their rights against any of the other U.S. Borrowers or to exhaust any remedies
      available to it or them against any of the other Borrowers or to resort to
      any
      other source or means of obtaining payment of any of the Obligations hereunder
      or to elect any other remedy. The provisions of this Section 2.2(A)(d)
      shall
      remain in effect until all of the Obligations shall have been paid in full
      or
      otherwise fully satisfied. If at any time, any payment or any part thereof,
      made
      in respect of any of the Obligations, is rescinded or must otherwise be restored
      or returned by Secured Party upon the insolvency, bankruptcy or reorganization
      of any of Borrowers, or otherwise, the provisions of this Section 2.2(A)(d)
      will
      forthwith be reinstated in effect, as though such payment had not been
      made.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (vi)  Each
      U.S.
      Borrower hereby agrees that it will not enforce any of its rights of
      contribution or subrogation against the Borrowers with respect to any liability
      incurred by it hereunder or under any of the other Loan Documents, any payments
      made by it to any Secured Party with respect to any of the Obligations or any
      collateral security therefore until such time as all of the Obligations have
      been paid in full in cash. Any claim which any Borrower may have against any
      other Borrower with respect to any payments to any Secured Party hereunder
      or
      under any other Loan Documents are hereby expressly made subordinate and junior
      in right of payment, without limitation as to any increases in the Obligations
      arising hereunder or thereunder, to the prior payment in full in cash of the
      Obligations and, in the event of any insolvency, bankruptcy, receivership,
      liquidation, reorganization or other similar proceeding under the laws of any
      jurisdiction relating to any Borrower, its debts or its assets, whether
      voluntary or involuntary, all such Obligations shall be paid in full in cash
      before any payment or distribution of any character, whether in cash, securities
      or other property, shall be made to any other Borrower therefor.

     

    (vii)  Each
      U.S.
      Borrower hereby agrees that, after the occurrence and during the continuance
      of
      any Default or Event of Default, the payment of any amounts due with respect
      to
      the indebtedness owing by any Borrower to any other Borrower is hereby
      subordinated to the prior payment in full in cash of the Obligations. Each
      Borrower hereby agrees that after the occurrence and during the continuance
      of
      any Default or Event of Default, such Borrower will not demand, sue for or
      otherwise attempt to collect any indebtedness of any other Borrower owing to
      such Borrower until the Obligations shall have been paid in full in cash. If,
      notwithstanding the foregoing sentence, such Borrower shall collect, enforce
      or
      receive any amounts in respect of such indebtedness, such amounts shall be
      collected, enforced and received by such Borrower as trustee for Agent, and
      such
      Borrower shall deliver any such amounts to Agent for application to the
      Obligations in accordance with Section 2.3(b)

     

    Section
      2.2B Canadian
      Borrowing Procedures.
      

     

    (a) Notice
      From Bombay Canada.
      Each
      Borrowing of a Canadian Revolving Loan shall be made on notice given by Bombay
      Canada to the Canadian Agent, with a copy to the Administrative Agent, not
      later
      than 1:00 p.m. on (i) the date of the proposed Borrowing if such date is a
      Business Day (or the next succeeding Business Day if such date is not a Business
      Day), in the case of a Borrowing of Base Rate Loans and (ii) the third Business
      Day prior to the date of the proposed Borrowing, in the case of a Borrowing
      of
      Eurodollar Rate Loans. Each such notice may be made in a written Notice of
      Borrowing duly completed or by telephone if confirmed promptly, but in any
      event
      within one Business Day and prior to such Borrowing, with such a Notice of
      Borrowing. Loans shall be made as Base Rate Loans unless, outside of a
      suspension period pursuant to Section
      2.15,
      the
      Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar
      Rate Loans. Each Borrowing of Eurodollar Rate Loans shall be in an aggregate
      amount that is an integral multiple of $1,000,000.

     

    (b) Notice
      to Each Canadian Lender.
      The
      Canadian Agent shall give to each Canadian Lender prompt notice of the Canadian
      Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate Loans are
      properly requested in such Notice of Borrowing, prompt notice of the applicable
      interest rate. Each Canadian Lender shall, before 2:00 p.m. on the date of
      the
      proposed Borrowing, make available to the Canadian Agent at its address referred
      to in Section
      10.11,
      such
      Canadian Lender’s Pro Rata Share of such proposed Borrowing. Upon fulfillment or
      due waiver (i) on the Closing Date, of the applicable conditions set forth
      in
Section
      3.1
      and (ii)
      on the Closing Date and any time thereafter, of the applicable conditions set
      forth in Section
      3.2,
      the
      Canadian Agent shall make such funds available to the Bombay
      Canada.

     

    
      
        
        

      

      
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    (c) Non-Funding
      Lenders.
      Unless
      the Canadian Agent shall have received notice from any Canadian Lender prior
      to
      the date such Canadian Lender is required to make any payment hereunder with
      respect to any Canadian Revolving Loan or any participation in any Canadian
      Swing Loan that such Canadian Lender will not make such payment (or any portion
      thereof) available to the Canadian Agent, the Canadian Agent may assume that
      such Canadian Lender has made such payment available to the Canadian Agent
      on
      the date such payment is required to be made in accordance with this
Article
      II
      and the
      Canadian Agent may, in reliance upon such assumption, make available to Bombay
      Canada on such date a corresponding amount. Bombay Canada agrees to repay to
      the
      Canadian Agent on demand such amount (until repaid by such Canadian Lender)
      with
      interest thereon for each day from the date such amount is made available to
      Bombay Canada until the date such amount is repaid to the Canadian Agent, at
      the
      interest rate applicable to the Obligation that would have been created when
      the
      Canadian Agent made available such amount to Bombay Canada had such Canadian
      Lender made a corresponding payment available; provided,
      however,
      that
      such payment shall not relieve such Canadian Lender of any obligation it may
      have to Bombay Canada or the Canadian Swingline Lender. In addition, any
      Canadian Lender that shall not have made available to the Canadian Agent any
      portion of any payment described above (any such Canadian Lender, a
“Canadian
      Non-Funding Lender”)
      agrees
      to pay such amount to the Canadian Agent on demand together with interest
      thereon, for each day from the date such amount is made available to Bombay
      Canada until the date such amount is repaid to the Canadian Agent, at the
      Federal Funds Rate for the first Business Day and thereafter (i) in the case
      of
      a payment in respect of a Canadian Revolving Loan, at the interest rate
      applicable at the time to such Canadian Revolving Loan and (ii) otherwise,
      at
      the interest rate applicable to Base Rate Loans under the Canadian Revolving
      Credit Facility. Such repayment shall then constitute the funding of the
      corresponding Canadian Revolving Loan (including any Canadian Revolving Loan
      deemed to have been made hereunder with such payment) or participation. The
      existence of any Canadian Non-Funding Lender shall not relieve any other
      Canadian Lender of its obligations under any Loan Document, but no other
      Canadian Lender shall be responsible for the failure of any Canadian Non-Funding
      Lender to make any payment required under any Loan Document.

     

    (d) Separate
      Obligations of Bombay Canada.
      Notwithstanding any provision to the contrary in any Loan Document, (i) all
      Obligations of Bombay Canada under this Agreement and the other Loan Documents
      are separate and individual Obligations of Bombay Canada from the Obligations
      of
      the U.S. Borrowers, (ii) Bombay Canada shall not have any liabilities in respect
      of U.S. Revolving Loans, Swing Loans or L/C Obligations made by the U.S. Lenders
      to the U.S. Borrowers or in respect of any other Obligations, including without
      limitation any indemnity liabilities or liabilities for costs or protective
      advances, of the U.S. Borrowers to Agent or Lenders arising from or related
      to
      U.S. Revolving Loan, Swing Loans or L/C Obligations, and (iii) the assets of
      Bombay Canada shall not serve at any time, directly or indirectly, as security
      for the payment and performance of the Obligations of the U.S. Borrowers under
      the Loan Documents. 

     

    
      
        
        

      

      
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    Section 2.3  Swing
      Loans.
      

     

    Section
      2.3A Swing
      Loans
      (a)
Availability.
      On the
      terms and subject to the conditions contained in this Agreement, the Swingline
      Lender may, in its sole discretion, make loans in Dollars (each a “Swing
      Loan”)
      available to the U.S. Borrower under the U.S. Revolving Credit Facility from
      time to time on any Business Day during the period from the date hereof until
      the Revolving Credit Termination Date in an aggregate principal amount at any
      time outstanding not to exceed its Swingline Commitment; provided,
      however,
      that
      the Swingline Lender may not make any Swing Loan (i) to the extent that after
      giving effect to such Swing Loan, the aggregate U.S. Revolving Credit
      Outstandings would exceed the lesser of (x) aggregate U.S. Revolving Credit
      Commitments minus the Minimum Availability Amount and (y) except for
      Overadvances, the U.S. Borrowing Base minus the Minimum Availability Amount
      and
      (ii) in the period commencing on the first Business Day after it receives notice
      from the Administrative Agent or the Required Lenders that one or more of the
      conditions precedent contained in Section
      3.2
      are not
      satisfied and ending when such conditions are satisfied or duly waived. In
      connection with the making of any Swing Loan, the Swingline Lender may but
      shall
      not be required to determine that, or take notice whether, the conditions
      precedent set forth in Section
      3.2
      have
      been satisfied or waived. Each Swing Loan shall be a Base Rate Loan and must
      be
      repaid in full on the earliest of (i) the funding date of any Borrowing of
      U.S.
      Revolving Loans and (ii) the Revolving Credit Termination Date. Within the
      limits set forth in the first sentence of this clause
      (a),
      amounts
      of Swing Loans repaid may be reborrowed under this clause
      (a).

     

    (b) Borrowing
      Procedures.
      In order
      to request a Swing Loan, the U.S. Borrowers shall give to the Administrative
      Agent a notice to be received not later than 1:00 p.m. on the day of the
      proposed borrowing, which may be made in a writing substantially in the form
      of
Exhibit
      D
      duly
      completed (a “Swingline
      Request”)
      or by
      telephone if confirmed promptly but, in any event, prior to such borrowing,
      with
      such a Swingline Request. In addition, if any Notice of Borrowing requests
      a
      Borrowing of Base Rate Loans, the Swingline Lender may, notwithstanding anything
      else to the contrary in Section
      2.2A,
      make a
      Swing Loan available to the U.S. Borrowers in an aggregate amount not to exceed
      such proposed Borrowing, and the aggregate amount of the corresponding proposed
      Borrowing shall be reduced accordingly by the principal amount of such Swing
      Loan. The Administrative Agent shall promptly notify the Swingline Lender of
      the
      details of the requested Swing Loan. Upon receipt of such notice and subject
      to
      the terms of this Agreement, the Swingline Lender may make a Swing Loan
      available to the U.S. Borrowers by making the proceeds thereof available to
      the
      Administrative Agent and, in turn, the Administrative Agent shall make such
      proceeds available to the U.S. Borrowers on the date set forth in the relevant
      Swingline Request.

     

    (c
      ) Refinancing
      Swing Loans.
      The
      Swingline Lender may at any time forward a demand to the Administrative Agent
      (which the Administrative Agent shall, upon receipt, forward to each U.S.
      Lender) that each U.S. Lender pay to the Administrative Agent, for the account
      of the Swingline Lender, such U.S. Lender’s Pro Rata Share of all or a portion
      of the outstanding Swing Loans. Each U.S. Lender shall pay such Pro Rata Share
      to the Administrative Agent for the account of the Swingline Lender. Upon
      receipt by the Administrative Agent of such payment (other than during the
      continuation of any Event of Default under Section
      8.1(e)),
      such
      U.S. Lender shall be deemed to have made a U.S. Revolving Loan to the U.S.
      Borrowers, which, upon receipt of such payment by the Swingline Lender from
      the
      Administrative Agent, the U.S. Borrowers shall be deemed to have used in whole
      to refinance such Swing Loan. In addition, regardless of whether any such demand
      is made, upon the occurrence of any Event of Default under Section
      8.1(e),
      each
      U.S. Lender shall be deemed to have acquired, without recourse or warranty,
      an
      undivided interest and participation in each Swing Loan in an amount equal
      to
      such U.S. Lender’s Pro Rata Share of such Swing Loan. If any payment made by any
      U.S. Lender as a result of any such demand is not deemed a U.S. Revolving Loan,
      such payment shall be deemed a funding by such U.S. Lender of such
      participation. Such participation shall not be otherwise required to be funded.
      Upon receipt by the Swingline Lender as a U.S. Lender of any payment from any
      U.S. Lender pursuant to this clause
      (c)
      with
      respect to any portion of any Swing Loan, the Swingline Lender shall as a U.S.
      Lender promptly pay over to such U.S. Lender all payments of principal (to
      the
      extent received after such payment by such U.S. Lender) and interest (to the
      extent accrued with respect to periods after such payment) received by the
      Swingline Lender as a U.S. Lender with respect to such portion.

     

    (d) Obligation
      to Fund Absolute.
      Each
      U.S. Lender’s obligations pursuant to clause
      (c)
      above
      shall be absolute, unconditional and irrevocable and shall be performed strictly
      in accordance with the terms of this Agreement under any and all circumstances
      whatsoever, including (A) the existence of any setoff, claim, abatement,
      recoupment, defense or other right that such U.S. Lender, any Affiliate thereof
      or any other Person may have against the Swingline Lender as a U.S. Lender,
      any
      other Secured Party or any other Person, (B) the failure of any condition
      precedent set forth in Section
      3.2
      to be
      satisfied or the failure of the U.S. Borrowers to deliver any notice set forth
      in Section
      2.2A(a)
      (each of
      which requirements the U.S. Lenders hereby irrevocably waive) and (C) any
      adverse change in the condition (financial or otherwise) of any Loan
      Party.

     

    Section
      2.3B Canadian
      Swing Loans
      (a)
Availability.
      On the
      terms and subject to the conditions contained in this Agreement, the Canadian
      Swingline Lender may, in its sole discretion, make loans in Dollars (each a
      “Canadian
      Swing Loan”)
      available to Bombay Canada under the Canadian Revolving Credit Facility from
      time to time on any Business Day during the period from the date hereof until
      the Revolving Credit Termination Date in an aggregate principal amount at any
      time outstanding not to exceed its Canadian Swingline Commitment; provided,
      however,
      that
      the Canadian Swingline Lender may not make any Canadian Swing Loan (x) to the
      extent that after giving effect to such Canadian Swing Loan, the aggregate
      Canadian Revolving Credit Outstandings would exceed the lesser of (1) the
      aggregate Canadian Revolving Credit Commitments and (2) the Canadian Borrowing
      Base and (y) in the period commencing on the first Business Day after it
      receives notice from the Administrative Agent or the Required Lenders that
      one
      or more of the conditions precedent contained in Section
      3.2
      are not
      satisfied and ending when such conditions are satisfied or duly waived. In
      connection with the making of any Canadian Swing Loan, the Canadian Swingline
      Lender may but shall not be required to determine that, or take notice whether,
      the conditions precedent set forth in Section
      3.2
      have
      been satisfied or waived. Each Canadian Swing Loan shall be a Base Rate Loan
      and
      must be repaid in full on the earliest of (i) the funding date of any Borrowing
      of Canadian Revolving Loans and (ii) the Revolving Credit Termination Date.
      Within the limits set forth in the first sentence of this clause
      (a),
      amounts
      of Canadian Swing Loans repaid may be reborrowed under this clause
      (a).

     

    (b) Borrowing
      Procedures.
      In
      order to request a Canadian Swing Loan, Bombay Canada shall give to the Canadian
      Agent a duly completed Swingline Request to be received not later than 1:00
      p.m.
      on the day of the proposed borrowing or by telephone if confirmed promptly
      but,
      in any event, prior to such borrowing, with such a Swingline Request. In
      addition, if any Notice of Borrowing requests a Borrowing of Canadian Revolving
      Loans as Base Rate Loans, the Canadian Swingline Lender may, notwithstanding
      anything else to the contrary in Section
      2.2,
      make a
      Canadian Swing Loan available to Bombay Canada in an aggregate amount not to
      exceed such proposed Borrowing, and the aggregate amount of the corresponding
      proposed Borrowing shall be reduced accordingly by the principal amount of
      such
      Canadian Swing Loan. The Canadian Agent shall promptly notify the Canadian
      Swingline Lender of the details of the requested Canadian Swing Loan. Upon
      receipt of such notice and subject to the terms of this Agreement, the Canadian
      Swingline Lender may make a Canadian Swing Loan available to Bombay Canada
      by
      making the proceeds thereof available to the Canadian Agent and, in turn, the
      Canadian Agent shall make such proceeds available to Bombay Canada on the date
      set forth in the relevant Swingline Request.

     

    
      
        
        

      

      
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    (c) Refinancing
      Swing Loans.
      The
      Canadian Swingline Lender may at any time forward a demand to the Canadian
      Agent
      (which the Canadian Agent shall, upon receipt, forward to each Canadian Lender)
      that each Canadian Lender pay to the Canadian Agent, for the account of the
      Canadian Swingline Lender, such Canadian Lender’s Pro Rata Share of all or a
      portion of the outstanding Canadian Swing Loans. Each Canadian Lender shall
      pay
      such Pro Rata Share to the Canadian Agent for the account of the Canadian
      Swingline Lender. Upon receipt by the Canadian Agent of such payment (other
      than
      during the continuation of any Event of Default under Section
      8.1(e)),
      such
      Canadian Lender shall be deemed to have made a Canadian Revolving Loan to Bombay
      Canada, which, upon receipt of such payment by the Canadian Swingline Lender
      from the Canadian Agent, Bombay Canada shall be deemed to have used in whole
      to
      refinance such Canadian Swing Loan. In addition, regardless of whether any
      such
      demand is made, upon the occurrence of any Event of Default under Section
      8.1(e),
      each
      Canadian Lender shall be deemed to have acquired, without recourse or warranty,
      an undivided interest and participation in each Canadian Swing Loan in an amount
      equal to such Canadian Lender’s Pro Rata Share of such Canadian Swing Loan. If
      any payment made by any Canadian Lender as a result of any such demand is not
      deemed a Canadian Revolving Loan, such payment shall be deemed a funding by
      such
      Canadian Lender of such participation. Such participation shall not be otherwise
      required to be funded. Upon receipt by the Canadian Swingline Lender of any
      payment from any Canadian Lender pursuant to this clause
      (c)
      with
      respect to any portion of any Canadian Swing Loan, the Canadian Swingline Lender
      shall promptly pay over to such Canadian Lender all payments of principal (to
      the extent received after such payment by such Lender) and interest (to the
      extent accrued with respect to periods after such payment) received by the
      Canadian Swingline Lender with respect to such portion.

     

    (d) Obligation
      to Fund Absolute.
      Each
      Canadian Lender’s obligations pursuant to clause
      (c)
      above
      shall be absolute, unconditional and irrevocable and shall be performed strictly
      in accordance with the terms of this Agreement under any and all circumstances
      whatsoever, including (A) the existence of any setoff, claim, abatement,
      recoupment, defense or other right that such Canadian Lender, any Affiliate
      thereof or any other Person may have against the Canadian Swingline Lender,
      any
      other Secured Party or any other Person, (B) the failure of any condition
      precedent set forth in Section
      3.2
      to be
      satisfied or the failure of Bombay Canada to deliver any notice set forth in
      Section
      2.2B(a)
      (each of
      which requirements the Canadian Lenders hereby irrevocably waive) and (C) any
      adverse change in the condition (financial or otherwise) of any Loan
      Party.

     

    Section 2.4  Letters
      of Credit.
      (a) Commitment
      and Conditions.
      On the
      terms and subject to the conditions contained herein, each L/C Issuer agrees
      to
      Issue, or cause to be Issued, at the request of the Parent, in accordance with
      such L/C Issuer’s usual and customary business practices, and for the account of
      the U.S. Borrowers (or, as long as the U.S. Borrowers remain responsible for
      the
      payment in full of all amounts drawn thereunder and related fees, costs and
      expenses, for the account of any Group Member) Letters of Credit from time
      to
      time on any Business Day during the period from the Closing Date through the
      earlier of the Revolving Credit Termination Date and seven days prior to the
      Scheduled Maturity Date; provided,
      however,
      that
      such L/C Issuer shall not be under any obligation to Issue any Letter of Credit
      upon the occurrence of any of the following, after giving effect to such
      Issuance:

     

    (i)  (x)
      the
      U.S. Revolving Credit Outstandings would exceed the lesser of (1) aggregate
      U.S. Revolving Credit Commitments minus the Minimum Availability Amount or
      (2) the U.S. Borrowing Base minus the Minimum Availability Amount or (y)
      the L/C Obligations for all Letters of Credit would exceed the L/C
      Sublimit;

     

    
      
        
        

      

      
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    (ii)  the
      expiration date of such Letter of Credit (x) is not a Business Day, (y) is
      more
      than one year after the date of issuance thereof or (z) is later than
      7 days prior to the Scheduled Maturity Date; provided,
      however,
      that
      any Letter of Credit with a term not exceeding one year may provide for its
      renewal for additional periods not exceeding one year as long as (1) each of
      the
      U.S. Borrowers and such L/C Issuer have the option to prevent such renewal
      before the expiration of such term or any such period and (2) neither such
      L/C
      Issuer nor the U.S. Borrowers shall permit any such renewal to extend such
      expiration date beyond the date set forth in this clause
      (a);
      or

     

    (iii)  (x)
      any
      fee due in connection with, and on or prior to, such Issuance has not been
      paid,
      (y) such Letter of Credit is requested to be Issued in a form that is not
      acceptable to such L/C Issuer or (z) such L/C Issuer shall not have received,
      each in form and substance reasonably acceptable to it and duly executed by
      the
      U.S. Borrowers (and, if such Letter of Credit is issued for the account of
      any
      other Group Member, such Group Member), the documents that such L/C Issuer
      generally uses in the ordinary course of its business for the Issuance of
      letters of credit of the type of such Letter of Credit (collectively, the
“L/C
      Reimbursement Agreement”).

     

    For
      each
      such Issuance, the applicable L/C Issuer may, but shall not be required to,
      determine that, or take notice whether, the conditions precedent set forth
      in
Section 3.2
      have
      been satisfied or waived in connection with the Issuance of any Letter of
      Credit; provided,
      however,
      that no
      Letter of Credit shall be Issued during the period starting on the first
      Business Day after the receipt by such L/C Issuer of notice from the
      Administrative Agent or the Required Lenders that any condition precedent
      contained in Section 3.2
      is not
      satisfied and ending on the date all such conditions are satisfied or duly
      waived.

     

    (b)  Notice
      of Issuance.
      The
      U.S. Borrowers shall give the relevant L/C Issuer and the Administrative Agent
      a
      notice of any requested Issuance of any Letter of Credit, which shall be
      effective only if received by such L/C Issuer and the Administrative Agent
      not
      later than 11:00 a.m. on the third Business Day prior to the date of such
      requested Issuance. Such notice may be made in a writing substantially the
      form
      of Exhibit E
      duly
      completed or in a writing in any other form acceptable to such L/C Issuer or
      by
      electronic means agreed among the L/C Issuer, the Administrative Agent and
      the
      Parent (an “L/C
      Request”)
      or by
      telephone if confirmed promptly, but in any event within one Business Day and
      prior to such Issuance, with such an L/C Request.

     

    (c)  Reporting
      Obligations of L/C Issuers.
      Each
      L/C Issuer agrees to provide the Administrative Agent (which, after receipt,
      the
      Administrative Agent shall provide to each U.S. Lender), in form and substance
      satisfactory to the Administrative Agent, each of the following on the following
      dates: (i) on or prior to (x) any Issuance of any Letter of Credit by such
      L/C
      Issuer, (y) any drawing under any such Letter of Credit or (z) any payment
      (or
      failure to pay when due) by the U.S. Borrowers of any related L/C Reimbursement
      Obligation, notice thereof, which shall contain a reasonably detailed
      description of such Issuance, drawing or payment, (ii) upon the request of
      the
      Administrative Agent (or any U.S. Lender through the Administrative Agent),
      copies of any Letter of Credit Issued by such L/C Issuer and any related L/C
      Reimbursement Agreement and such other documents and information as may
      reasonably be requested by the Administrative Agent and (iii) on the first
      Business Day of each calendar week, a schedule of the Letters of Credit Issued
      by such L/C Issuer, in form and substance reasonably satisfactory to the
      Administrative Agent, setting forth, as of the last Business Day of the previous
      calendar week, the L/C Obligations for all such Letters of Credit, listing
      separately the L/C Obligations for each Documentary Letter of Credit and Standby
      Letter of Credit.

     

    
      
        
        

      

      
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    (d)  Acquisition
      of Participations.
      Upon
      any Issuance of a Letter of Credit in accordance with the terms of this
      Agreement resulting in any increase in the L/C Obligations, each U.S. Lender
      shall be deemed to have acquired, without recourse or warranty, an undivided
      interest and participation in such Letter of Credit and the related L/C
      Obligations in an amount equal to such U.S. Lender’s Pro Rata Share of such L/C
      Obligations.

     

    (e)  Reimbursement
      Obligations of the U.S. Borrowers.
      The L/C
      Issuer shall promptly notify the Administrative Agent of the incurrence by
      the
      L/C Issuer of an L/C Reimbursement Obligation. Upon the incurrence by the L/C
      Issuer of an L/C Reimbursement Obligation, the L/C Reimbursement Obligation
      shall be payable on demand by the U.S. Borrowers with interest thereon computed
      (i) from the date on which such L/C Reimbursement Obligation arose to the first
      Business Day after the Parent receives notice from the L/C Issuer that payment
      has been made under such Letter of Credit or that such L/C Reimbursement
      Obligation is otherwise due (the “L/C
      Reimbursement Date”),
      at
      the interest rate applicable during such period to U.S. Revolving Loans that
      are
      Base Rate Loans and (ii) thereafter until payment in full, at the interest
      rate
      applicable during such period to past due U.S. Revolving Loans that are Base
      Rate Loans. The Administrative Agent shall forward a copy of the notice
      described in this clause
      (e)
      above to
      each U.S. Lender.

     

    (f)  Reimbursement
      Obligations of the U.S. Lenders.
      Upon
      receipt of the notice described in clause
      (e)
      above
      from the Administrative Agent, each U.S. Lender shall pay to the Administrative
      Agent for the account of such L/C Issuer its Pro Rata Share of such L/C
      Reimbursement Obligation. By making such payment (other than during the
      continuation of an Event of Default under Section 8.1(e)),
      such
      Lender shall be deemed to have made a U.S. Revolving Loan to the U.S. Borrowers,
      which, upon receipt thereof by such L/C Issuer, the U.S. Borrowers shall be
      deemed to have used in whole to repay such L/C Reimbursement Obligation. Any
      such payment that is not deemed a U.S. Revolving Loan shall be deemed a funding
      by such U.S. Lender of its participation in the applicable Letter of Credit
      and
      the related L/C Obligations. Such participation shall not otherwise be required
      to be funded. Upon receipt by any L/C Issuer of any payment from any U.S. Lender
      pursuant to this clause
      (f)
      with
      respect to any portion of any L/C Reimbursement Obligation, such L/C Issuer
      shall promptly pay over to such U.S. Lender all payments received after such
      payment by such L/C Issuer with respect to such portion.

     

    (g)  Obligations
      Absolute.
      The
      obligations of the U.S. Borrowers and the U.S. Lenders pursuant to clauses
      (d),
      (e)
      and
(f)
      above
      shall be absolute, unconditional and irrevocable and performed strictly in
      accordance with the terms of this Agreement irrespective of (i) (x) the
      invalidity or unenforceability of any term or provision in any Letter of Credit,
      any document transferring or purporting to transfer a Letter of Credit, any
      Loan
      Document (including the sufficiency of any such instrument), or any modification
      to any provision of any of the foregoing, (y) any document presented under
      a
      Letter of Credit being forged, fraudulent, invalid, insufficient or inaccurate
      in any respect or failing to comply with the terms of such Letter of Credit
      or
      (z) any loss or delay, including in the transmission of any document, (ii)
      the
      existence of any setoff, claim, abatement, recoupment, defense or other right
      that any Person (including any Group Member) may have against the beneficiary
      of
      any Letter of Credit or any other Person, whether in connection with any Loan
      Document or any other Contractual Obligation or transaction, or the existence
      of
      any other withholding, abatement or reduction, (iii) in the case of the
      obligations of any U.S. Lender, (x) the failure of any condition precedent
      set
      forth in Section 3.2
      to be
      satisfied (each of which conditions precedent the U.S. Lenders hereby
      irrevocably waive) or (y) any adverse change in the condition (financial or
      otherwise) of any Loan Party and (iv) any other act or omission to act or delay
      of any kind of any Secured Party or any other Person or any other event or
      circumstance whatsoever, whether or not similar to any of the foregoing, that
      might, but for the provisions of this Section 2.4,
      constitute a legal or equitable discharge of any obligation of the Borrowers
      or
      any U.S. Lender hereunder.

     

    
      
        
        

      

      
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    (h)  Limitation
      of L/C Issuer’s Liability.
      No
      action taken or omitted to be taken by the relevant L/C Issuer under or in
      connection with any Letter of Credit, none of the circumstances set forth in
      clause
      (g)
      above
      and no other circumstance shall result in any liability of such L/C Issuer
      to
      any Group Member or any other Secured Party in the absence of gross negligence
      or willful misconduct by such L/C Issuer. In determining whether documents
      presented under a Letter of Credit comply with the terms thereof, the L/C Issuer
      may accept documents that appear on their face to be in order, without
      responsibility for further investigation, regardless of any notice or
      information to the contrary. In making any payment under any Letter of Credit,
      the L/C Issuer may rely exclusively on the documents presented to it under
      such
      Letter of Credit as to any and all matters set forth therein, and any
      noncompliance in any immaterial respect of the documents presented under such
      Letter of Credit with the terms thereof shall, in each case, be deemed not
      to
      constitute willful misconduct or gross negligence of the L/C
      Issuer.

     

    (i)  Applicable
      Rules.
      Unless
      otherwise expressly agreed by the applicable L/C Issuer and the Borrowers,
      (i)
      the rules of the “International Standby Practices 1998” published by the
      Institute of International Banking Law and Practice (or such later version
      thereof as may be in effect at the time of determination) shall apply to each
      standby Letter of Credit and (ii) the rules of the Uniform Customs and Practices
      for Documentary Credits (UCP500), as most recently published by the
      International Chamber of Commerce at the time of determination and together
      with
      supplements and revisions thereto published by the International Chamber of
      Commerce from time to time, shall apply to each documentary Letter of
      Credit.

     

    (j)  Conflicts.
      In the
      event of a conflict between the terms of any L/C Reimbursement Agreement and
      this Agreement, the terms of this Agreement shall govern.

     

    Section 2.5  Reduction
      and Termination of the Commitments.
      

     

    (a)  Optional.
      The
      U.S. Borrowers may, upon notice to the Administrative Agent, terminate in whole
      or reduce in part ratably any unused portion of the U.S. Revolving Credit
      Commitments; provided,
      however,
      that
      each partial reduction shall be in an aggregate amount that is an integral
      multiple of $1,000,000. Bombay Canada may, upon notice to the Canadian Agent,
      terminate in whole or reduce in part ratably any unused portion of the Canadian
      Revolving Credit Commitments; provided,
      however,
      that
      each partial reduction shall be in an aggregate amount that is an integral
      multiple of $1,000,000.

     

    
      
        
        

      

      
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    (b)  Mandatory.
      All
      outstanding Commitments shall terminate on the Scheduled Maturity
      Date.

     

    Section 2.6  Repayment
      of Loans.
      The
      U.S. Borrowers promise to repay the entire unpaid principal amount of the U.S.
      Revolving Loans and the Swing Loans and Bombay Canada promises to repay the
      entire unpaid principal amount of the Canadian Revolving Loans and the Canadian
      Swing Loans on the Scheduled Maturity Date.

     

    Section 2.7  Optional
      Prepayments.
      The
      Borrowers may prepay the outstanding principal amount of any Loan in whole
      or in
      part at any time (together with any breakage costs that may be owing pursuant
      to
Section 2.16(a)
      after
      giving effect to such prepayment).

     

    Section 2.8  Mandatory
      Prepayments.
      

     

    (a)  Asset
      Sales and Property Loss Events.
      Upon
      receipt on or after the Closing Date by any Loan Party or any of its
      Subsidiaries of Net Cash Proceeds arising from (i) any Sale of the Eligible
      Real Property or (ii) any Property Loss Event with respect to the Eligible
      Real
      Property, the U.S. Borrowers shall immediately pay or cause to be paid to the
      Administrative Agent an amount such that the U.S. Revolving Credit Outstandings
      shall be equal to or less than the amount of the U.S. Borrowing Base (without
      regard to the Eligible Real Property) minus the Minimum Availability Amount;
      provided,
      however,
      that in
      the event of a partial Property Loss Event, (i) the U.S. Borrowers shall
      immediately pay or cause to be paid the insurance proceeds associated with
      such
      loss to a segregated account over which the Administrative Agent has a valid
      perfected Lien for use by the Borrowers solely to repair such loss or damage
      to
      property and (ii) the Borrowers shall not be required to pay or cause such
      proceeds to be paid to the Administrative Agent to the extent (A) the Borrowers
      reinvest or commit to reinvest such proceeds within 9 months of the occurrence
      of the partial Property Loss Event and (B) as long as the Borrower is diligently
      pursuing to repair the loss or damage to such Eligible Real Property. The
      Borrowers shall deliver to the Administrative Agent within 21 days of such
      partial Property Loss Event an updated appraisal with respect to such Eligible
      Real Property. 

     

    (b)  Excess
      Outstandings.
      On any
      date on which (i) the aggregate principal amount of U.S. Revolving Credit
      Outstandings exceeds the lesser of (x) aggregate U.S. Revolving Credit
      Commitments at such time minus the Minimum Availability Amount and (y) the
      U.S. Borrowing Base minus the Minimum Availability Amount or (ii) the L/C
      Obligations for all Letters of Credit exceeds the L/C Sublimit, the U.S.
      Borrowers shall pay to the Administrative Agent an amount equal to such excess.
      On any date on which the aggregate principal amount of Canadian Revolving Credit
      Outstandings exceeds the lesser of (x) the aggregate Canadian Revolving
      Credit Commitments at such time and (y) the Canadian Borrowing Base, Bombay
      Canada shall pay to the Canadian Agent an amount equal to such excess.
      Notwithstanding the foregoing, any Overadvance made in accordance with
Section
      2.1A(c)
      shall be
      repaid in accordance with such Section
      2.1A(c).

     

    
      
        
        

      

      
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    (c)  Application
      of Payments.
      Any
      payments made to the Administrative Agent and/or the Canadian Agent pursuant
      to
      this Section 2.8
      shall be
      applied to the Obligations in accordance with Section 2.12(b).

     

    Section 2.9  Interest.
      (a) Rate.
      All
      Loans and the outstanding amount of all other Obligations shall bear interest,
      in the case of Loans, on the unpaid principal amount thereof from the date
      such
      Loans are made and, in the case of such other Obligations, from the date such
      other Obligations are due and payable until, in all cases, paid in full, except
      as otherwise provided in clause
      (c)
      below,
      as follows: (i) in the case of Base Rate Loans, at a rate per annum equal to
      the
      sum of the Base Rate and the Applicable Margin, each as in effect from time
      to
      time, (ii) in the case of Eurodollar Rate Loans, at a rate per annum equal
      to
      the sum of the Eurodollar Rate and the Applicable Margin, each as in effect
      for
      the applicable Interest Period and (iii) in the case of other Obligations,
      at a
      rate per annum equal to the sum of the Base Rate and the Applicable Margin
      for
      Revolving Loans that are Base Rate Loans, each as in effect from time to
      time.

     

    (b)  Payments.
      Interest accrued shall be payable in arrears (i) if accrued on the principal
      amount of any Loan, (A) at maturity (whether by acceleration or otherwise),
      and
      (B)(1) if such Loan is a Base Rate Loan (including a Swing Loan or a Canadian
      Swing Loan), on the last day of each calendar month commencing on the first
      such
      day following the making of such Loan, (2) if such Loan is a Eurodollar Rate
      Loan, on the last day of each Interest Period applicable to such Loan and,
      if
      applicable, on each date during such Interest Period occurring every 3 months
      from the first day of such Interest Period and (ii) if accrued on any other
      Obligation, on demand from and after the time such Obligation is due and payable
      (whether by acceleration or otherwise).

     

    (c)  Default
      Interest.
      Notwithstanding the rates of interest specified in clause (a)
      above or
      elsewhere in any Loan Document, effective immediately upon (i) the occurrence
      of
      any Event of Default under Section 8.1(a)
      or 8.1(e)(ii)
      or (ii)
      the delivery of a notice by the Administrative Agent or the Required Lenders
      to
      the Borrowers during the continuance of any other Event of Default and, in
      each
      case, for as long as such Event of Default shall be continuing, the principal
      balance of all Obligations (including any Obligation that bears interest by
      reference to the rate applicable to any other Obligation) then due and payable
      shall, subject to the Interest
      Act (Canada),
      bear interest at a rate that is 2% per annum in excess of the interest rate
      applicable to such Obligations from time to time, payable on demand or, in
      the
      absence of demand, on the date that would otherwise be applicable.

     

    (d)  Limitation
      on Interest.
      If any
      provision of this Agreement or of any of the other Loan Documents would obligate
      any Borrower or any other Loan Party to make any payment of interest or other
      amount payable to any Lender in an amount or calculated at a rate which would
      be
      prohibited by law or would result in a receipt by such Lender of interest at
      a
      criminal rate (as such terms are construed under the Criminal
      Code
      (Canada)) then, notwithstanding such provisions, such amount or rate shall
      be
      deemed to have been adjusted with retroactive effect to the maximum amount
      or
      rate of interest, as the case may be, as would not be so prohibited by law
      or so
      result in a receipt by such Lender of interest at a criminal rate, such
      adjustment to be effected, to the extent necessary, as follows: (1) firstly,
      by
      reducing the amount or rate of interest required to be paid to such Lender
      under
      this Section
      2.9,
      and (2)
      thereafter, by reducing any fees, commissions, premiums and other amounts
      required to be paid to such Lender which would constitute “interest”
for
      purposes of Section 347 of the Criminal
      Code (Canada).
      Notwithstanding the foregoing, and after giving effect to all adjustments
      contemplated thereby, if a Lender shall have received an amount in excess of
      the
      maximum permitted by that section of the Criminal
      Code
      (Canada), such Borrower shall be entitled, by notice in writing to such Lender,
      to obtain reimbursement from such Lender in an amount equal to such excess
      and,
      pending such reimbursement, such amount shall be deemed to be an amount payable
      by such Lender to such Borrower. Any amount or rate of interest referred to
      in
      this Section
      2.9(d)
      shall be
      determined in accordance with generally accepted actuarial practices and
      principles as an effective annual rate of interest over the term that the
      applicable Loan remains outstanding on the assumption that any charges, fees
      or
      expenses that fall within the meaning of “interest”
(as
      defined in the Criminal
      Code
      (Canada)) shall, if they relate to a specific period of time, be pro-rated
      over
      that period of time and otherwise be pro-rated over the period from the Closing
      Date to the Revolving Credit Termination Date and, in the event of a dispute,
      a
      certificate of a Fellow of the Canadian Institute of Actuaries appointed by
      Agent shall be conclusive for the purposes of such determination.

     

    
      
         

      

      
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    (e)  Interest
      Act
      (Canada).
      For
      purposes of disclosure pursuant to the Interest
      Act
      (Canada), the annual rates of interest or fees to which the rates of interest
      or
      fees provided in this Agreement and the other Loan Documents (and stated herein
      or therein, as applicable, to be computed on the basis of a 360 day year or
      any
      other period of time less than a calendar year) are equivalent are the rates
      so
      determined multiplied by the actual number of days in the applicable calendar
      year and divided by 360 or such other period of time, respectively.

     

    Section 2.10  Conversion
      and Continuation Options.
      (a) Option.
      The
      Borrowers may elect (i) in the case of any Eurodollar Rate Loan, (A) to continue
      such Eurodollar Rate Loan or any portion thereof for an additional Interest
      Period on the last day of the Interest Period applicable thereto and (B) to
      convert such Eurodollar Rate Loan or any portion thereof into a Base Rate Loan
      at any time on any Business Day, subject to the payment of any breakage costs
      required by Section 2.16(a),
      and
      (ii) in the case of Base Rate Loans (other than Swing Loans or Canadian Swing
      Loans), to convert such Base Rate Loans or any portion thereof into Eurodollar
      Rate Loans at any time on any Business Day upon 3 Business Days’ prior notice;
provided,
      however,
      that,
      (A) for each Interest Period, the aggregate amount of Eurodollar Rate Loans
      having such Interest Period must be an integral multiple of $1,000,000 and
      (B)
      no conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans
      and no continuation in whole or in part of Eurodollar Rate Loans shall be
      permitted at any time at which (1) an Event of Default shall be continuing
      and
      the Administrative Agent or the Required Lenders shall have determined in their
      sole discretion not to permit such conversions or continuations or (2) such
      continuation or conversion would be made during a suspension imposed by
Section 2.15.

     

    (b)  Procedure.
      Each
      such election shall be made by giving the Administrative Agent or the Canadian
      Agent, as applicable, at least 3 Business Days’ prior notice in substantially
      the form of Exhibit F
      (a
“Notice
      of Conversion or Continuation”)
      duly
      completed. The Administrative Agent or the Canadian Agent in respect of Canadian
      Lenders shall promptly notify each Lender of its receipt of a Notice of
      Conversion or Continuation and of the options selected therein. If the
      Administrative Agent or Canadian Agent does not receive a timely Notice of
      Conversion or Continuation from the Borrowers containing a permitted election
      to
      continue or convert any Eurodollar Rate Loan, then, upon the expiration of
      the
      applicable Interest Period, such Loan shall be automatically converted to a
      Base
      Rate Loan. Each partial conversion or continuation shall be allocated ratably
      among the Lenders in the applicable Facility in accordance with their Pro Rata
      Share.

     

    
      
         

      

      
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    Section 2.11  Fees.
      (a) Unused
      Commitment Fee.
      The
      Borrowers agree to pay to each Lender a commitment fee on the actual daily
      amount by which the Revolving Credit Commitment of such Lender exceeds its
      Pro
      Rata Share of the sum of (i) the aggregate outstanding principal amount of
      Revolving Loans and (ii) in the case of the U.S. Lenders, the outstanding amount
      of the L/C Obligations for all Letters of Credit (the “Unused
      Commitment Fee”)
      from
      the date hereof through the Revolving Credit Termination Date at a rate per
      annum equal to the Applicable Margin Unused Commitment Fee, payable in arrears
      (x) on the last day of each calendar month and (y) on the Revolving Credit
      Termination Date.

     

    (b)  Letter
      of Credit Fees.
      The
      U.S. Borrowers agree to pay, with respect to all Documentary Letters of Credit
      and Standby Letters of Credit issued by any L/C Issuer, (i) to such L/C Issuer,
      certain fees, documentary and processing charges as separately agreed between
      the U.S. Borrowers and such L/C Issuer or otherwise in accordance with such
      L/C
      Issuer’s standard schedule in effect at the time of determination thereof and
      (ii) to the Administrative Agent, for the benefit of the U.S. Lenders according
      to their Pro Rata Shares, a fee accruing at a rate per annum equal to the
      Applicable Margin for Revolving Loans that are Eurodollar Rate Loans on the
      Dollar Equivalent on the maximum undrawn face amount of such Letters of Credit,
      payable in arrears (A) on the last day of each calendar month, ending after
      the
      issuance of such Letter of Credit and (B) on the Revolving Credit Termination
      Date; provided,
      however,
      that
      the fee payable under this clause
      (ii)
      shall be
      increased by two percent per annum and shall be payable, in addition to being
      payable on any date it is otherwise required to be paid hereunder, on demand
      effective immediately upon (A) the occurrence of any Event of Default under
      Section 8.1(a)
      or 8.1(e)(ii)
      or (B)
      the delivery of a notice by the Administrative Agent or the Required Lenders
      to
      the Borrowers during the continuance of any other Event of Default and, in
      each
      case, for as long as such Event of Default shall be continuing.

     

    (c)  Additional
      Fees.
      The
      Borrowers shall pay to the Administrative Agent or Canadian Agent, as
      applicable, and their Related Persons the fees described in the Fee
      Letter.

     

    Section 2.12  Application
      of Payments.
      (a) Application
      of Voluntary Prepayments.
      Unless
      otherwise provided in this Section 2.12
      or
      elsewhere in any Loan Document, (i) all payments and any other amounts received
      by the Administrative Agent from or for the benefit of the U.S. Borrowers shall
      be applied to repay the Obligations as the U.S. Borrowers designate, and (ii)
      all payments and other amounts received by the Canadian Agent from or for the
      benefit of Bombay Canada shall be applied to repay the Obligations as Bombay
      Canada designates.

     

    (b)  Application
      of Mandatory Prepayments.
      Subject
      to the provisions of clause
      (c)
      below
      with respect to the application of payments during the continuance of an Event
      of Default, (i) in the case of a payment pursuant to Section
      2.8(a),
      first
      to the
      Swing Loans, second
      to the
      U.S. Revolving Loans and third
      to
      provide cash collateral to the extent and in the manner contemplated by
Section
      8.3
      and (ii)
      in all other cases, any payment made by the U.S. Borrowers to the Administrative
      Agent or by Bombay Canada to the Canadian Agent pursuant to Section 2.8
      or any
      other prepayment of the Obligations required to be applied in accordance with
      this clause
      (b)
      shall be
      applied (A) in the case of payments by the Canadian Borrower, first,
      to
      repay the outstanding principal balance of the Canadian Swing Loans,
second,
      to
      repay the outstanding principal balance of the Canadian Revolving Loans and,
      then,
      any
      excess shall be retained by the Canadian Borrower and (B) in the case of the
      U.S. Borrowers, first,
      to
      repay the outstanding principal balance of the Swing Loans, second,
      to
      repay the outstanding principal balance of the U.S. Revolving Loans,
third,
      to
      provide cash collateral to the extent and in the manner in Section 8.3
      and,
then,
      any
      excess shall be retained by the U.S. Borrowers. 

     

    
      
         

      

      
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    (c)  Application
      of Payments During an Event of Default.
      (i) The
      U.S. Borrowers hereby irrevocably waive, and, subject to Section
      2.2B(d),
      agree
      to cause each Loan Party and each other Group Member (which shall not include
      Bombay Canada) to waive, the right to direct the application during the
      continuance of an Event of Default of any and all payments in respect of any
      of
      their Obligations and any proceeds of their Collateral and agree that,
      notwithstanding the provisions of clause (a)
      above,
      the Administrative Agent may, and, upon either (A) the direction of the Required
      Lenders or (B) the termination of any U.S. Revolving Credit Commitment or the
      acceleration of any of their Obligations pursuant to Section 8.2,
      shall,
      apply all payments in respect of any of their Obligations, all funds on deposit
      in any Cash Collateral Account and all other proceeds of their Collateral (i)
      first,
      to pay
      Obligations in respect of any cost or expense reimbursements, fees or
      indemnities then due to the Administrative Agent, (ii) second,
      to pay
      Obligations in respect of any cost or expense reimbursements, fees or
      indemnities then due to the U.S. Lenders and the L/C Issuers, (iii) third,
      to pay
      interest then due and payable in respect of the U.S. Revolving Loans and L/C
      Reimbursement Obligations, (vi) fourth,
      to
      repay the outstanding principal amounts of the U.S. Revolving Loans and L/C
      Reimbursement Obligations, to provide cash collateral for Letters of Credit
      in
      the manner and to the extent described in Section 8.3
      and
      (vii) fifth,
      to the
      ratable payment of all other of their Obligations. 

     

    (ii)
      Subject to Section
      2.2B(d),
      Bombay
      Canada hereby irrevocably waives the right to direct the application during
      the
      continuance of an Event of Default of any and all payments in respect of any
      of
      its Obligations and any proceeds of its Collateral and agree that,
      notwithstanding the provisions of clause (a)
      above,
      the Canadian Agent may, and, upon either (A) the direction of the Required
      Lenders or (B) the termination of any Canadian Revolving Credit Commitment
      or
      the acceleration of any of its Obligations pursuant to Section 8.2,
      shall,
      apply all payments in respect of any of its Obligations, all funds on deposit
      in
      any Cash Collateral Account and all other proceeds of its Collateral (i)
first,
      to pay
      Obligations in respect of any cost or expense reimbursements, fees or
      indemnities then due to the Canadian Agent, (ii) second,
      to pay
      Obligations in respect of any cost or expense reimbursements, fees or
      indemnities then due to the Canadian Lenders, (iii) third,
      to pay
      interest then due and payable in respect of Canadian Revolving Loans and
      Canadian Swing Loans, (iv) fourth,
      to
      repay the outstanding principal amounts of the Canadian Revolving Loans and
      Canadian Swing Loans, and (v) fifth,
      to the
      ratable payment of all other of its Obligations.

     

    (d)  Application
      of Payments Generally.
      All
      repayments of any Revolving Loans shall be applied first,
      to
      repay such Loans outstanding as Base Rate Loans and then,
      to
      repay such Loans outstanding as Eurodollar Rate Loans, with those Eurodollar
      Rate Loans having earlier expiring Interest Periods being repaid prior to those
      having later expiring Interest Periods. If sufficient amounts are not available
      to repay all outstanding Obligations described in any priority level set forth
      in this Section 2.12,
      the
      available amounts shall be applied, unless otherwise expressly specified herein,
      to such Obligations ratably based on the proportion of the Secured Parties’
interest in such Obligations expressed in Dollars. Any priority level set forth
      in this Section 2.12
      that
      includes interest shall include all such interest, whether or not accruing
      after
      the filing of any petition in bankruptcy or the commencement of any insolvency,
      reorganization or similar proceeding, and whether or not a claim for post-filing
      or post-petition interest is allowed in any such proceeding.

     

    
      
         

      

      
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    Section 2.13  Payments
      and Computations.
      (a) Procedure.
      (i) The
      U.S. Borrowers shall make each payment under any Loan Document not later than
      1:00 p.m. on the day when due to the Administrative Agent by wire transfer
      to the following account (the “Loan
      Account”)
      (or at
      such other account or by such other means to such other address as the
      Administrative Agent shall have notified the U.S. Borrowers in writing within
      a
      reasonable time prior to such payment) in immediately available Dollars and
      without setoff or counterclaim:

     

    ABA
      No.:
      021-001-033 

     

    Account
      No.: 50279513 

     

    Deutsche
      Bank Trust Company Americas, New York, New York

     

    Account
      Name: GECC CFS CIF Collection Account, 

     

    Reference:
      Bombay Company, Inc. - CFN9184

     

    The
      Administrative Agent shall promptly thereafter cause to be distributed
      immediately available funds relating to the payment of principal, interest
      or
      fees to the U.S. Lenders, in accordance with the application of payments set
      forth in Section 2.12.
      The
      U.S. Lenders shall make any payment under any Loan Document in immediately
      available Dollars and without setoff or counterclaim. Each U.S. Lender shall
      make each payment for the account of any L/C Issuer or Swingline Lender required
      pursuant to Section 2.3
      or
2.4
      (A) if
      the notice or demand therefor was received by such Lender prior to
      1:00 p.m. on any Business Day, on such Business Day and (B) otherwise,
      on the Business Day following such receipt. Payments received by the
      Administrative Agent after 1:00 p.m. shall be deemed to be received on the
      next Business Day.

     

    (ii)
      Bombay Canada shall make each payment under any Loan Document not later than
      1:00 p.m. on the day when due to the Canadian Agent by wire transfer to the
      following account (or at such other account or by such other means to such
      other
      address as the Canadian Agent shall have notified Bombay Canada in writing
      within a reasonable time prior to such payment) in immediately available Dollars
      and without setoff or counterclaim:

     

    SWIFT
      Code: ROYCCAT2

     

    Account
      No.: 120-932-9

     

    Royal
      Bank of Canada, 200 Bay Street, Main Branch, Toronto, Ontario 

     

    Reference: Bombay
      Company Inc. CND1052

     

    Branch
      No. 00002 

     

    Bank
      No.
      00003 

     

    The
      Canadian Agent shall promptly thereafter cause to be distributed immediately
      available funds relating to the payment of principal, interest or fees to the
      Canadian Lenders, in accordance with the application of payments set forth
      in
Section 2.12.
      The
      Canadian Lenders shall make any payment under any Loan Document in immediately
      available Dollars and without setoff or counterclaim. Each Canadian Lender
      shall
      make payment for the account of the Canadian Swingline Lender required hereunder
      pursuant to Section
      2.3
      (A) if
      the notice of demand therefore was received by such Lender prior to 11:00 a.m.
      on any Business Day, on such Business Day and (B) otherwise, on the Business
      Day
      following such receipt. Payments received by the Canadian Agent after
      1:00 p.m. shall be deemed to be received on the next Business
      Day.

     

    
      
         

      

      
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    (b)  Computations
      of Interests and Fees.
      All
      computations of interest and of fees shall be made by the Administrative Agent
      and the Canadian Agent on the basis of a year of 360 days (or, in the case
      of
      Base Rate Loans whose interest rate is calculated based on the rate set forth
      in
clause
      (a)
      of the
      definition of “Base Rate”, 365/366 days), in each case for the actual number of
      days (including the first day but excluding the last day) occurring in the
      period for which such interest and fees are payable. Each determination of
      an
      interest rate or the amount of a fee hereunder shall be made by the
      Administrative Agent and the Canadian Agent (including determinations of a
      Eurodollar Rate or Base Rate in accordance with the definitions of “Eurodollar
      Rate” and “Base Rate”, respectively) and shall be conclusive, binding and final
      for all purposes, absent manifest error.

     

    (c)  Payment
      Dates.
      Whenever any payment hereunder shall be stated to be due on a day other than
      a
      Business Day, the due date for such payment shall be extended to the next
      succeeding Business Day without any increase in such payment as a result of
      additional interest or fees; provided,
      however,
      that
      such interest and fees shall continue accruing as a result of such extension
      of
      time.

     

    (d)  Advancing
      Payments.
      (i)
      Unless the Administrative Agent shall have received notice from the U.S.
      Borrowers to the U.S. Lenders prior to the date on which any payment is due
      hereunder that the U.S. Borrowers will not make such payment in full, the
      Administrative Agent may assume that the U.S. Borrowers has made such payment
      in
      full to the Administrative Agent on such date and the Administrative Agent
      may,
      in reliance upon such assumption, cause to be distributed to each U.S. Lender
      on
      such due date an amount equal to the amount then due such U.S. Lender. If and
      to
      the extent that the U.S. Borrowers shall not have made such payment in full
      to
      the Administrative Agent, each U.S. Lender shall repay to the Administrative
      Agent on demand such amount distributed to such U.S. Lender together with
      interest thereon (at the Federal Funds Rate for the first Business Day and
      thereafter, at the rate applicable to Base Rate Loans under the applicable
      Facility) for each day from the date such amount is distributed to such U.S.
      Lender until the date such U.S. Lender repays such amount to the Administrative
      Agent.

     

    (ii)
      Unless the Canadian Agent shall have received notice from Bombay Canada to
      the
      Canadian Lenders prior to the date on which any payment is due hereunder that
      Bombay Canada will not make such payment in full, the Canadian Agent may assume
      that Bombay Canada has made such payment in full to the Canadian Agent on such
      date and the Canadian Agent may, in reliance upon such assumption, cause to
      be
      distributed to each Canadian Lender on such due date an amount equal to the
      amount then due such Canadian Lender. If and to the extent that Bombay Canada
      shall not have made such payment in full to the Canadian Agent, each Canadian
      Lender shall repay to the Canadian Agent on demand such amount distributed
      to
      such Canadian Lender together with interest thereon (at the Federal Funds Rate
      for the first Business Day and thereafter, at the rate applicable to Base Rate
      Loans under the applicable Facility) for each day from the date such amount
      is
      distributed to such Canadian Lender until the date such Canadian Lender repays
      such amount to the Canadian Agent.

     

    (e)  The
      Administrative Agent is authorized to, and in its sole discretion may, make
      Loans (or cause the Canadian Agent to make Loans) on behalf of each Borrower
      which the Administrative Agent, in its Permitted Discretion, deems necessary
      or
      desirable (i) to preserve or protect the Collateral, (ii) to enhance the
      likelihood of repayment of the Obligations, (iii) pay any other amount due
      under
      this Agreement or the other Loan Documents including all fees, costs, charges,
      expenses and interest owing by the Borrowers under this Agreement and the other
      Loan Documents if and to the extent the Borrowers fail to pay promptly such
      amounts as and when due, in each case even if the amount of such charges would
      exceed cause the U.S. Revolving Credit Outstanding to exceed the U.S. Borrowing
      Base, the Canadian Revolving Credit Outstandings to exceed the Canadian
      Borrowing Base or the sum of the U.S. Revolving Outstandings and the Canadian
      Revolving Credit Outstandings to exceed to the Aggregate Borrowing Base, after
      giving effect to such charges. Amounts advanced under this Section
      2.13(e)
      are
      payable on demand by the Administrative Agent to the Parent.

     

    
      
         

      

      
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    Section 2.14  Evidence
      of Debt.
      (a) Records
      of Lenders.
      Each
      Lender shall maintain in accordance with its usual practice accounts evidencing
      Indebtedness of the Borrowers to such Lender resulting from each Loan of such
      Lender from time to time, including the amounts of principal and interest
      payable and paid to such Lender from time to time under this Agreement. In
      addition, each Lender having sold a participation in any of its Obligations,
      acting as agent of the Borrowers solely for this purpose and solely for tax
      purposes, shall establish and maintain at its address referred to in
Section 10.11
      (or at
      such other address as such Lender shall notify the Parent) a record of
      ownership, in which such Lender shall register by book entry (i) the name and
      address of each such participant (and each change thereto, whether by assignment
      or otherwise) and (ii) the rights, interest or obligation of each such
      participant in any Obligation, in any Commitment and in any right to receive
      any
      payment hereunder.

     

    (b)  Records
      of the Administrative Agent.
      The
      Administrative Agent, acting as agent of the U.S. Borrowers and the Canadian
      Agent, acting as agent of Bombay Canada, solely for tax purposes and solely
      with
      respect to the actions described in this Section 2.14,
      shall
      establish and maintain at its address referred to in Section 10.11
      (or at
      such other address as such Agent may notify the Borrowers) (i) a record of
      ownership (the “Register”)
      in
      which such Agent agrees to register by book entry the interests (including
      any
      rights to receive payment hereunder) of such Agent, each relevant Lender and
      each L/C Issuer in the U.S. Revolving Credit Outstandings or the Canadian
      Revolving Credit Outstandings, each of their obligations under this Agreement
      to
      participate in each Loan, Letter of Credit and L/C Reimbursement
      Obligation, and any assignment of any such interest, obligation or right and
      (ii) accounts in the Register in accordance with its usual practice in
      which it shall record (A) the names and addresses of the relevant Lenders and
      the L/C Issuers (and each change thereto pursuant to Section 2.18
      and
Section 10.2),
      (B)
      the Commitments of each relevant Lender, (C) the amount of each relevant
      Loan and each funding of any participation described in clause
      (i)
      above,
      for Eurodollar Rate Loans, the Interest Period applicable thereto, (D) the
      amount of any principal or interest due and payable or paid, (E) the amount
      of
      the L/C Reimbursement Obligations due and payable or paid and (F) any other
      payment received by such Agent from the relevant Borrowers and its application
      to the Obligations.

     

    (c)  Registered
      Obligations.
      Notwithstanding anything to the contrary contained in this Agreement, the Loans
      (including any Notes evidencing such Loans and, in the case of U.S. Revolving
      Loans, the corresponding obligations to participate in L/C Obligations and
      Swing
      Loans and in the case of Canadian Revolving Loans, the corresponding obligations
      to participate in Canadian Swing Loans) and the L/C Reimbursement Obligations
      are registered obligations, the right, title and interest of the Lenders and
      the
      L/C Issuers and their assignees in and to such Loans or L/C Reimbursement
      Obligations, as the case may be, shall be transferable only upon notation of
      such transfer in the Register and no assignment thereof shall be effective
      until
      recorded therein. This Section 2.14
      and
Section 10.2
      shall be
      construed so that the Loans and L/C Reimbursement Obligations are at all times
      maintained in “registered
      form”
within
      the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any
      related regulations (and any successor provisions).

     

    
      
         

      

      
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    (d)  Prima
      Facie Evidence.
      The
      entries made in the Register and in the accounts maintained pursuant to
clauses
      (a)
      and
(b)
      above
      shall, to the extent permitted by applicable Requirements of Law, be prima
      facie
      evidence of the existence and amounts of the obligations recorded therein;
      provided,
      however,
      that no
      error in such account and no failure of any Lender or the Administrative Agent
      or the Canadian Agent to maintain any such account shall affect the obligations
      of any Loan Party to repay the Loans in accordance with their terms. In
      addition, the Loan Parties, the Administrative Agent, the Canadian Agent, the
      Lenders and the L/C Issuers shall treat each Person whose name is recorded
      in
      the Register as a Lender or L/C Issuer, as applicable, for all purposes of
      this
      Agreement. Information contained in the Register with respect to any Lender
      or
      any L/C Issuer shall be available for access by the Borrowers, the
      Administrative Agent, the Canadian Agent, such Lender or such L/C Issuer at
      any reasonable time and from time to time upon reasonable prior notice. No
      Lender or L/C Issuer shall, in such capacity, have access to or be otherwise
      permitted to review any information in the Register other than information
      with
      respect to such Lender or L/C Issuer unless otherwise agreed by the
      Administrative Agent.

     

    (e)  Notes.
      Upon
      any Lender’s request, the Borrowers shall promptly execute and deliver Notes to
      such Lender evidencing the Loans of such Lender in a Facility and substantially
      in the form of Exhibit B;
      provided,
      however,
      that
      only one Note for each Facility shall be issued to each Lender, except (i)
      to an
      existing Lender exchanging existing Notes to reflect changes in the Register
      relating to such Lender, in which case the new Notes delivered to such Lender
      shall be dated the date of the original Notes and (ii) in the case of loss,
      destruction or mutilation of existing Notes and similar circumstances. Each
      Note, if issued, shall only be issued as means to evidence the right, title
      or
      interest of a Lender or a registered assignee in and to the related Loan, as
      set
      forth in the Register, and in no event shall any Note be considered a bearer
      instrument or obligation.

     

    Section 2.15  Suspension
      of Eurodollar Rate Option.
      Notwithstanding any provision to the contrary in this Article II,
      the
      following shall apply:

     

    (a)  Interest
      Rate Unascertainable, Inadequate or Unfair.
      In the
      event that (A) the Administrative Agent determines that adequate and fair means
      do not exist for ascertaining the applicable interest rates by reference to
      which the Eurodollar Rate is determined or (B) the Required Lenders, as
      applicable, notify the Administrative Agent that the Eurodollar Rate for any
      Interest Period will not adequately reflect the cost to the Lenders of making
      or
      maintaining such Loans for such Interest Period, the Administrative Agent shall
      promptly so notify the Parent and the Lenders, whereupon the obligation of
      each
      Lender to make or to continue Eurodollar Rate Loans shall be suspended as
      provided in clause
      (c)
      below
      until the Administrative Agent shall notify the Parent that the Required
      Lenders, as applicable, have determined that the circumstances causing such
      suspension no longer exist.

     

    (b)  Illegality.
      If any
      Lender determines that the introduction of, or any change in or in the
      interpretation of, any Requirement of Law after the date of this Agreement
      shall
      make it unlawful, or any Governmental Authority shall assert that it is
      unlawful, for any Lender or its applicable lending office to make Eurodollar
      Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then,
      on
      notice thereof and demand therefor by such Lender to the Parent through the
      Administrative Agent, the obligation of such Lender to make or to continue
      Eurodollar Rate Loans shall be suspended as provided in clause
      (c)
      below
      until such Lender shall, through the Administrative Agent, notify the Parent
      that it has determined that it may lawfully make Eurodollar Rate
      Loans.

     

    
      
         

      

      
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    (c)  Effect
      of Suspension.
      If the
      obligation of any Lender to make or to continue Eurodollar Rate Loans is
      suspended, (A) the obligation of such Lender to convert Base Rate Loans into
      Eurodollar Rate Loans shall be suspended, (B) such Lender shall make a Base
      Rate
      Loan at any time such Lender would otherwise be obligated to make a Eurodollar
      Rate Loan, (C) the Parent may revoke any pending Notice of Borrowing or Notice
      of Conversion or Continuation to make or continue any Eurodollar Rate Loan
      or to
      convert any Base Rate Loan into a Eurodollar Rate Loan and (D) each Eurodollar
      Rate Loan of such Lender shall automatically and immediately (or, in the case
      of
      any suspension pursuant to clause
      (a)
      above,
      on the last day of the current Interest Period thereof) be converted into a
      Base
      Rate Loan.

     

    Section 2.16  Breakage
      Costs; Increased Costs; Capital Requirements.
      (a) Breakage
      Costs.
      The
      Borrowers shall compensate each Lender, upon demand from such Lender to Parent
      (with copy to the Administrative Agent), for all Liabilities (including, in
      each
      case, those incurred by reason of the liquidation or reemployment of deposits
      or
      other funds acquired by such Lender to prepare to fund, to fund or to maintain
      the Eurodollar Rate Loans of such Lender to such Borrower but excluding any
      loss
      of the Applicable Margin on the relevant Loans) that such Lender may incur
      (A)
      to the extent, for any reason other than solely by reason of such Lender being
      a
      Non-Funding Lender, a proposed Borrowing, conversion into or continuation of
      Eurodollar Rate Loans does not occur on a date specified therefor in a Notice
      of
      Borrowing or a Notice of Conversion or Continuation or in a similar request
      made
      by telephone by the Parent, (B) to the extent any Eurodollar Rate Loan is paid
      (whether through a scheduled, optional or mandatory prepayment) or converted
      to
      a Base Rate Loan (including because of Section 2.15)
      on a
      date that is not the last day of the applicable Interest Period or (C) as a
      consequence of any failure by the each relevant Borrower to repay Eurodollar
      Rate Loans when required by the terms hereof. For purposes of this clause
      (a),
      each
      Lender shall be deemed to have funded each Eurodollar Rate Loan made by it
      using
      a matching deposit or other borrowing in the London interbank
      market.

     

    (b)  Increased
      Costs.
      If at
      any time any Lender or L/C Issuer determines that, after the date hereof, the
      adoption of, or any change in or in the interpretation, application or
      administration of, or compliance with, any Requirement of Law (other than any
      imposition or increase of Eurodollar Reserve Requirements) from any Governmental
      Authority shall have the effect of (i) increasing the cost to such Lender of
      making, funding or maintaining any Eurodollar Rate Loan or to agree to do so
      or
      of participating, or agreeing to participate, in extensions of credit, (ii)
      increasing the cost to such L/C Issuer of Issuing or maintaining any Letter
      of
      Credit or of agreeing to do so or (iii) imposing any other cost to such Lender
      or L/C Issuer with respect to compliance with its obligations under any Loan
      Document, then, upon demand by such Lender or L/C Issuer (with copy to the
      Administrative Agent), the Borrowers shall pay to the Administrative Agent
      for
      the account of such Lender or L/C Issuer amounts sufficient to compensate such
      Lender or L/C Issuer for such increased cost.

     

    
      
         

      

      
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    (c)  Increased
      Capital Requirements.
      If at
      any time any Lender or L/C Issuer determines that, after the date hereof, the
      adoption of, or any change in or in the interpretation, application or
      administration of, or compliance with, any Requirement of Law (other than any
      imposition or increase of Eurodollar Reserve Requirements) from any Governmental
      Authority regarding capital adequacy, reserves, special deposits, compulsory
      loans, insurance charges against property of, deposits with or for the account
      of, Obligations owing to, or other credit extended or participated in by, any
      Lender or L/C Issuer or any similar requirement (in each case other than any
      imposition or increase of Eurodollar Reserve Requirements) shall have the effect
      of reducing the rate of return on the capital of such Lender’s or L/C Issuer (or
      any corporation controlling such Lender or L/C Issuer) as a consequence of
      its
      obligations under or with respect to any Loan Document or Letter of Credit
      to a
      level below that which, taking into account the capital adequacy policies of
      such Lender, L/C Issuer or corporation, such Lender, L/C Issuer or corporation
      could have achieved but for such adoption or change, then, upon demand from
      time
      to time by such Lender or L/C Issuer (with a copy of such demand to the relevant
      Agent), the Borrowers shall pay to the relevant Agent for the account of such
      Lender amounts sufficient to compensate such Lender for such
      reduction.

     

    (d)  Compensation
      Certificate.
      Each
      demand for compensation under this Section 2.16
      shall be
      accompanied by a certificate of the Lender or L/C Issuer claiming such
      compensation, setting forth the amounts to be paid hereunder, which certificate
      shall be conclusive, binding and final for all purposes, absent manifest error.
      In determining such amount, such Lender or L/C Issuer may use any reasonable
      averaging and attribution methods. The Borrower shall pay such Lender or L/C
      Issuer, as the case may be, the amount shown due on any such certificate within
      10 days after receipt thereof.

     

    Section 2.17  Taxes.

     

    (a)  Except
      as
      otherwise provided herein, all payments made by the Borrowers hereunder or
      under
      any Note or other Loan Document will be made free and clear of, and without
      deduction or withholding for, any present or future taxes, levies, imposts,
      duties, assessments and all interest, penalties or similar obligations with
      respect thereto, but excluding any tax imposed by any jurisdiction or by any
      political subdivision or taxing authority thereof or therein measured by or
      based on the net income or net profits of a Lender (including branch profits
      taxes) and franchise taxes imposed in lieu of net income taxes, imposed on
      any
      Lender as a result of a present or former connection between such Lender and
      the
      jurisdiction of the Governmental Authority imposing such tax or any political
      subdivision or taxing authority thereof or therein (other than such connection
      arising solely from any Lender having executed, delivered or performed its
      obligations or received a payment under, or enforced, any Loan Document) and
      all
      interest, penalties or similar liabilities with respect to such excluded taxes
      (all such non-excluded taxes, levies, imposts, duties, assessments or other
      charges being referred to collectively as “Taxes”).
      If
      any Taxes are so levied or imposed, each Borrower agrees to pay the full amount
      of such Taxes, and such additional amounts as may be necessary so that every
      payment of all amounts due under this Agreement or under any Note, including
      any
      amount paid pursuant to this Section
      2.17(a)
      after
      withholding or deduction for or on account of any Taxes, will not be less than
      the amount provided for herein; provided,
      however,
      that
      the Borrowers shall not be required to increase any such amounts, but only
      to
      the extent in excess of the amount that would have been withheld had the Lender
      delivered the forms required by clause
      (c)
      of this
Section
      2.17,
      payable
      to the Administrative Agent or any Lender that is not organized under the laws
      of the United States, if such Person fails to comply with the other requirements
      of this Section
      2.17;
      provided,
      further,
      that
      this proviso shall not apply to (i) the Canadian Agent, any Canadian Lender
      or
      the Canadian Swingline Lender or (ii) Taxes that are imposed on amounts payable
      to a Lender or Secured Party at the time such Lender or Secured Party becomes
      a
      party hereto (or designates a new lending office), except to the extent that
      such Lender or Secured Party (or its respective assignor, if any) was entitled,
      at the time of designation of a new lending office (or assignment), to receive
      additional amounts from the Borrower with respect to such withholding tax
      pursuant to Section 2.17. After a party hereto learns of the imposition of
      Taxes, such party will act in good faith to promptly notify the other parties
      hereto of their respective obligations hereunder. The Borrowers will furnish
      to
      the Administrative Agent as promptly as possible after the date the payment
      of
      any Taxes are due pursuant to applicable law original or certified copies of
      tax
      receipts evidencing such payment by the Borrowers. 

     

    
      
         

      

      
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    (b)  If
      any
      Taxes shall be required by law to be deducted or withheld from or in respect
      of
      any amount payable under any Loan Document to any Secured Party (i) such amount
      shall be increased as necessary to ensure that, after all required deductions
      or
      withholdings for Taxes are made (including deductions applicable to any
      increases to any amount under this Section 2.17),
      such
      Secured Party receives the amount it would have received had no such deductions
      or withholdings been made, (ii) the relevant Loan Party shall make such
      deductions or withholdings, (iii) the relevant Loan Party shall timely pay
      the
      full amount deducted or withheld to the relevant taxing authority or other
      authority in accordance with applicable Requirements of Law and (iv) within
      30 days after such payment is made, the relevant Loan Party shall deliver to
      the
      Administrative Agent an original or certified copy of a receipt evidencing
      such
      payment; provided,
      however,
      the
      amount payable shall not be increased hereunder if the Secured Party fails
      to
      comply with the other requirements of this Section
      2.17,
      but
      only to the extent in excess of the amount that would have been withheld had
      the
      Lender delivered the forms required by clause
      (c)
      of this
Section
      2.17.

     

    (c)  If
      any
      Lender having a U.S. Revolving Credit Commitment claims exemption from, or
      a
      reduction of, U.S. withholding tax, such Lender agrees with and in favor of
      the
      Administrative Agent and the Borrowers, to deliver to the Administrative Agent
      and the Parent:

     

    (i)  if
      such
      Lender claims an exemption from withholding tax pursuant to its portfolio
      interest exception, (A) a statement of Lender, signed under penalty of perjury,
      that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the Code,
      (II) a 10% shareholder of a Borrower (within the meaning of Section 871(h)(3)(B)
      of the Code), or (III) a controlled foreign corporation related to a Borrower
      within the meaning of Section 864(d)(4) of the Code, and (B) two properly
      completed and executed copies of IRS Form W-8BEN (or successor form), before
      the
      first payment of any interest under this Agreement and at any other time
      reasonably requested by the Administrative Agent or the Parent;

     

    (ii)  if
      such
      Lender claims an exemption from, or a reduction of, withholding tax under a
      United States tax treaty, two properly completed and executed copies of IRS
      Form
      W-8BEN (or successor form) before the first payment of any interest under this
      Agreement and at any other time reasonably requested by the Administrative
      Agent
      or the Parent;

     

    (iii)  if
      such
      Lender claims that interest paid under this Agreement is exempt from United
      States withholding tax because it is effectively connected with a United States
      trade or business of such Lender, two properly completed and executed copies
      of
      IRS Form W-8ECI (or successor form) before the first payment of any interest
      is
      due under this Agreement and at any other time reasonably requested by the
      Administrative Agent or the Parent;

     

    
      
         

      

      
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    (iv)  if
      such
      Lender claims exemption from backup withholding under the Code, two properly
      completed and executed copies of IRS Form W-9 (or successor form) before the
      first payment under this Agreement and at any other time reasonably requested
      by
      the Administrative Agent or the Parent;

     

    (v)  such
      other form or forms as may be required under the Code or other laws of the
      United States as a condition to exemption from, or reduction of, United States
      withholding tax.

     

    Such
      Lender agrees promptly to notify the Administrative Agent and the Parent of
      any
      change in circumstances which would modify or render invalid any claimed
      exemption or reduction. Each Lender having sold, assigned, granted or otherwise
      transferred a participation in any of its Obligations shall collect from such
      participant the documents described in this clause
      (c)
      and
      provide them to the Borrowers and the Administrative Agent.

     

    (d)  If
      any
      Lender claims exemption from, or reduction of, withholding tax under a United
      States tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns,
      grants a participation in, or otherwise transfers all or part of the Obligations
      of the Borrowers to such Lender, such Lender agrees to notify the Administrative
      Agent of the percentage amount in which it is no longer the beneficial owner
      of
      Obligations of the Borrowers to such Lender. To the extent of such percentage
      amount, the Administrative Agent will treat such Lender’s IRS Form W-8BEN as no
      longer valid.

     

    (e)  If
      any
      Lender is entitled to a reduction in the applicable withholding tax, the
      Administrative Agent may withhold from any interest payment to such Lender
      an
      amount equivalent to the applicable withholding tax after taking into account
      such reduction. If the forms or other documentation required by clause
      (c)
      of this
Section
      2.17
      are not
      delivered to the Administrative Agent, then the Administrative Agent may
      withhold from any interest payment to such Lender not providing such forms
      or
      other documentation an amount equivalent to the applicable withholding tax,
      and
      neither the Administrative Agent nor any Borrower shall have a duty under this
      Section
      2.17
      to
      indemnify the Lender in respect of the Taxes so withheld to the extent that
      they
      exceed the amount that would have been withheld had the Lender delivered the
      forms required by clause
      (c)
      of this
Section
      2.17.

     

    (f)  The
      Borrowers shall reimburse and indemnify, within 30 days after receipt of demand
      therefor (with copy to the Administrative Agent), each Lender for all Taxes
      (including any imposed by any jurisdiction on amounts payable under this
Section 2.17)
      paid by
      such Lender and any Liabilities arising therefrom or with respect thereto,
      whether or not such Taxes were correctly or legally asserted. A certificate
      of
      the Lender (or of the Administrative Agent on behalf of such Lender) claiming
      any compensation under this clause
      (f),
      setting
      forth the amounts to be paid thereunder and delivered to the Parent with copy
      to
      the Administrative Agent shall be conclusive, binding and final for all
      purposes, absent manifest error. In determining such amount, the Administrative
      Agent and such Lender may use any reasonable averaging and attribution
      methods.

     

    
      
         

      

      
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    (g)  If
      the
      IRS or any other Governmental Authority of the United States or other
      jurisdiction asserts a claim that the Administrative Agent did not properly
      withhold tax from amounts paid to or for the account of any Lender (because
      the
      appropriate form was not delivered, was not properly executed, or because such
      Lender failed to notify the Administrative Agent of a change in circumstances
      which rendered the exemption from, or reduction of, withholding tax ineffective,
      or for any other reason) such Lender shall indemnify and hold the Administrative
      Agent harmless for all amounts paid, directly or indirectly, by the
      Administrative Agent as tax or otherwise, including penalties and interest,
      and
      including any taxes imposed by any jurisdiction on the amounts payable to the
      Administrative Agent under this Section
      2.17,
      together with all costs and expenses (including attorneys fees and expenses).
      The obligation of the Lenders under this subsection shall survive the payment
      of
      all Obligations and the resignation or replacement of the Administrative Agent.
      No Borrower shall be liable under this Section
      2.17
      for
      amounts paid by Lender pursuant to this clause
      (g).

     

    (h)  Mitigation.
      Any
      Lender claiming any additional amounts payable pursuant to this Section 2.17
      shall
      use its reasonable efforts (consistent in its sole discretion with its internal
      policies and Requirements of Law) to change the jurisdiction of its lending
      office if such a change would reduce any such additional amounts (or any similar
      amount that may thereafter accrue) and would not, in the sole determination
      of
      such Lender, be otherwise disadvantageous to such Lender.

     

    Section 2.18  Substitution
      of Lenders.
      (a) Designation
      of a Different Lending Office. if any Lender requests compensation under clause
      (b) or (c) of Section 2.16, or requires the Borrower to pay any additional
      amount to any Lender or any Governmental Authority for the account of any Lender
      pursuant to Section
      2.17,
      then
      such Lender shall use reasonable efforts to designate a different lending office
      for funding or booking its Loans hereunder or to assign its rights and
      obligations hereunder to another of its offices, branches or affiliates, if,
      in
      the judgment of such Lender, such designation or assignment (i) would eliminate
      or reduce amounts payable pursuant to clause
      (b)
      or
(c)
      of
Section
      2.16
      or
      Section 2.17, as the case may be, in the future and (ii) would not subject
      such
      Lender to any unreimbursed cost or expense and would not otherwise be
      disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
      costs and expenses incurred by any Lender in connection with any such
      designation or assignment.

     

    (b)  Substitution
      Right.
      In the
      event that any Lender in any Facility that is not the Administrative Agent
      or an
      Affiliate of the Administrative Agent (an “Affected
      Lender”),
      (i)
      makes a claim under clause
      (b)
      or
(c)
      of
Section 2.16,
      (ii)
      notifies the Borrowers pursuant to Section 2.15(b)
      that it
      becomes illegal for such Lender to continue to fund or make any Eurodollar
      Rate
      Loan in such Facility, (iii) makes a claim for payment pursuant to Section 2.17,
      (iv)
      becomes a Non-Funding Lender with respect to such Facility or (v) does not
      consent to any amendment, waiver or consent to any Loan Document for which
      the
      consent of the Required Lenders is obtained but that requires the consent of
      other Lenders in such Facility, the Borrowers may either pay in full such
      Affected Lender with respect to amounts due in such Facility with the consent
      of
      the Administrative Agent or substitute for such Affected Lender in such Facility
      any Lender or any Affiliate or Approved Fund of any Lender or any other Person
      acceptable (which acceptance shall not be unreasonably withheld or delayed)
      to
      the Administrative Agent (in each case, a “Substitute
      Lender”).

     

    
      
         

      

      
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    (c)  Procedure.
      To
      substitute such Affected Lender or pay in full the Obligations owed to such
      Affected Lender under such Facility, the Parent shall deliver a notice to the
      Administrative Agent, or if pertaining to a Canadian Lender, the Canadian Agent,
      and such Affected Lender. The effectiveness of such payment or substitution
      shall be subject to the delivery to the relevant Agent by the Borrowers (or,
      as
      may be applicable in the case of a substitution, by the Substitute Lender)
      of
      (i) payment for the account of such Affected Lender, of, to the extent accrued
      through, and outstanding on, the effective date for such payment or
      substitution, all Obligations owing to such Affected Lender with respect to
      such
      Facility (including those that will be owed because of such payment and all
      Obligations that would be owed to such Lender if it was solely a Lender in
      such
      Facility), (ii) in the case of a payment in full of the Obligations owing to
      such Affected Lender in the Revolving Credit Facility, payment of any amount
      that, after giving effect to the termination of the Commitment of such Affected
      Lender, is required to be paid pursuant to Section 2.8(b)
      and
      (iii) in the case of a substitution, (A) payment of the assignment fee set
      forth
      in Section 10.2(c)
      and (B)
      an assumption agreement in form and substance satisfactory to the relevant
      Agent
      whereby the Substitute Lender shall, among other things, agree to be bound
      by
      the terms of the Loan Documents and assume the Commitment of the Affected Lender
      under such Facility.

     

    (d)  Effectiveness.
      Upon
      satisfaction of the conditions set forth in clause
      (b)
      above,
      the Administrative Agent shall record such substitution or payment in the
      Register, whereupon (i) in the case of any payment in full in any Facility,
      such
      Affected Lender’s Commitments in such Facility shall be terminated and (ii) in
      the case of any substitution in any Facility, (A) the Affected Lender shall
      sell
      and be relieved of, and the Substitute Lender shall purchase and assume, all
      rights and claims of such Affected Lender under the Loan Documents with respect
      to such Facility, except that the Affected Lender shall retain such rights
      expressly providing that they survive the repayment of the Obligations and
      the
      termination of the Commitments, (B) the Substitute Lender shall become a
“Lender”
      hereunder having a Commitment in such Facility in the amount of such Affected
      Lender’s Commitment in such Facility and (C) the Affected Lender shall execute
      and deliver to the Administrative Agent an Assignment to evidence such
      substitution and deliver any Note in its possession with respect to such
      Facility; provided,
      however,
      that
      the failure of any Affected Lender to execute any such Assignment or deliver
      any
      such Note shall not render such sale and purchase (or the corresponding
      assignment) invalid.

     

    ARTICLE
      III  

     

    

     

    CONDITIONS
      TO LOANS AND LETTERS OF CREDIT

     

    Section 3.1  Conditions
      Precedent to Initial Loans and Letters of Credit.
      The
      obligation of each Lender to make any Loan on the Closing Date and the
      obligation of each L/C Issuer to Issue any Letter of Credit on the Closing
      Date is subject to the satisfaction or due waiver of each of the following
      conditions precedent on or before November 30, 2006:

     

    (a)  Certain
      Documents.
      The
      Administrative Agent shall have received on or prior to the Closing Date each
      of
      the following, each dated the Closing Date unless otherwise agreed by each
      Agent, in form and substance satisfactory to each Agent and each
      Lender:

     

    (i)  this
      Agreement duly executed by the Borrowers and, for the account of each Lender
      having requested the same by notice to the relevant Agent and the Parent
      received by each at least 3 Business Days prior to the Closing Date (or such
      later date as may be agreed by the Parent), Notes in each applicable Facility
      conforming to the requirements set forth in Section 2.14(e);

     

    
      
         

      

      
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    (ii)  the
      Guaranty and Security Agreement and Canadian Security Documents, duly executed
      by each Borrower and Guarantor party thereto, together with (A) copies of UCC,
      PPSA and other appropriate search reports and of all effective prior filings
      listed therein, together with evidence of the termination of such prior filings
      and other documents with respect to the priority of the security interest of
      the
      Administrative Agent in the Collateral, in each case as may be reasonably
      requested by the Administrative Agent, and (B) all Control Agreements that,
      in
      the reasonable judgment of the Administrative Agent, are required for the Loan
      Parties to comply with the Loan Documents as of the Closing Date, each duly
      executed by, in addition to the applicable Loan Party, the applicable financial
      institution; 

     

    (iii)  a
      Mortgage for the Eligible Real Property, together with all Mortgage Supporting
      Documents relating thereto;

     

    (iv)  duly
      executed favorable opinions of counsel to the Loan Parties from (a) Michael
      J.
      Veitenheimer, general counsel to the Parent, (b) Thompson & Knight LLP,
      special U.S. counsel to the Group Members, and (c) Fraser
      Milner Casgrain LLP,
      special
      Canadian counsel to the Group Members, each addressed to the Agents, the L/C
      Issuers and the Lenders and addressing such matters as the Administrative Agent
      may reasonably request;

     

    (v)  a
      copy of
      each Governing Document of each Loan Party that is on file with any Governmental
      Authority in any jurisdiction, certified as of a recent date by such
      Governmental Authority, together with, if applicable, certificates attesting
      to
      the good standing of such Loan Party in such jurisdiction and each other
      jurisdiction where such Loan Party is qualified to do business as a foreign
      entity or where such qualification is necessary (and, if appropriate in any
      such
      jurisdiction, related tax certificates);

     

    (vi)  a
      certificate of the secretary or other Responsible Officer of each Loan Party
      in
      charge of maintaining Books and records of such Loan Party certifying as to
      (A)
      the names and signatures of each officer of such Loan Party authorized to
      execute and deliver any Loan Document, (B) the Governing Documents of such
      Loan
      Party attached to such certificate are complete and correct copies of such
      Governing Documents as in effect on the date of such certification (or, for
      any
      such Governing Document delivered pursuant to clause
      (v)
      above,
      that there have been no changes from such Governing Document so delivered)
      and
      (C) the resolutions of such Loan Party’s board of directors or other appropriate
      governing body approving and authorizing the execution, delivery and performance
      of each Loan Document to which such Loan Party is a party;

     

    (vii)  a
      certificate of a Responsible Officer of the Parent to the effect that (A) each
      condition set forth in Section 3.2(b)
      has been
      satisfied and (B) both the Loan Parties taken as a whole and the Borrowers
      are Solvent after giving effect to the initial Loans and Letters of Credit,
      the
      consummation of the Related Transactions, the application of the proceeds
      thereof in accordance with Section 7.14
      and the
      payment of all estimated legal, accounting and other fees and expenses related
      hereto and;

     

    
      
         

      

      
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    (viii)  insurance
      certificates in form and substance satisfactory to the Administrative Agent
      demonstrating that the insurance policies required by Section 6.4
      are in
      full force and effect and have all endorsements required by such Section 6.4;
      

     

    (ix)  the
      Corporate Chart;

     

    (x)  the
      Perfection Certificate; and

     

    (xi)  such
      other documents and information as any Lender through the Administrative Agent
      or the Canadian Agent may reasonably request.

     

    (b)  Fee
      and Expenses.
      There
      shall have been paid to the Administrative Agent, for the account of the
      Administrative Agent, its Related Persons, any L/C Issuer or any Lender, as
      the
      case may be, all fees and all reimbursements of costs or expenses, in each
      case
      due and payable under any Loan Document on or before the Closing
      Date.

     

    (c)  Consents.
      Each
      Group Member shall have received all consents and authorizations required
      pursuant to any material Contractual Obligation with any other Person and shall
      have obtained all Permits of, and effected all notices to and filings with,
      any
      Governmental Authority, in each case, as may be necessary in connection with
      the
      consummation of the transactions contemplated in any Loan Document or Related
      Document (including the Related Transactions).

     

    (d)  Cash
      Management.
      The
      Administrative Agent shall have received evidence that, as of the Closing Date,
      the procedures with respect to cash management required by the Loan Documents
      have been established and are currently being maintained by each Loan Party,
      together with Control Agreements executed by such Loan Party in connection
      therewith.

     

    (e)  Refinancing
      of Existing Credit Agreement.
      (i) All obligations under the Existing Credit Agreement shall have been
      repaid in full, (ii) the Existing Credit Agreement and all Loan Documents
      (as defined therein) shall have been terminated on terms satisfactory to the
      Administrative Agent and (iii) the Administrative Agent shall have received
      a payoff letter duly executed and delivered by the Borrowers and the Existing
      Agent or other evidence of such termination in each case in form and substance
      satisfactory to the Administrative Agent.

     

    (f)  Adjusted
      Availability Requirement.
      The
      Borrowers shall have Adjusted Availability of not less than
      $30,000,000.

     

    (g)  Initial
      Appraisals.
      The
      Administrative Agent shall have received appraisals, conducted by appraisers
      retained by the Administrative Agent, of all inventory of the Borrowers and
      the
      Eligible Real Property, each in form and substance satisfactory to the
      Administrative Agent.

     

    Section 3.2  Conditions
      Precedent to Each Loan and Letter of Credit.
      The
      obligation of each Lender on any date (including the Closing Date) to make
      any
      Loan and of each L/C Issuer on any date (including the Closing Date) to Issue
      any Letter of Credit is subject to the satisfaction of each of the following
      conditions precedent:

     

    
      
         

      

      
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    (a)  Request.
      The
      relevant Agent (and, in the case of any Issuance, the relevant L/C Issuer)
      shall
      have received, to the extent required by Article II,
      a
      written, timely and duly executed and completed Notice of Borrowing, Swingline
      Request or, as the case may be, L/C Request.

     

    (b)  Representations
      and Warranties; No Defaults.
      The
      following statements shall be true on such date, both before and after giving
      effect to such Loan or, as applicable, such Issuance: (i) the representations
      and warranties set forth in any Loan Document shall be true and correct in
      all
      material respects on and as of such date or, to the extent such representations
      and warranties expressly relate to an earlier date, on and as of such earlier
      date and (ii) no Default shall be continuing.

     

    The
      representations and warranties set forth in any Notice of Borrowing, Swingline
      Request or L/C Request (or any certificate delivered in connection therewith)
      shall be deemed to be made again on and as of the date of the relevant Loan
      or
      Issuance and the acceptance of the proceeds thereof or of the delivery of the
      relevant Letter of Credit.

     

    Section 3.3  Determinations
      of Initial Borrowing Conditions.
      For
      purposes of determining compliance with the conditions specified in Section 3.1,
      each
      Lender shall be deemed to be satisfied with each document and each other matter
      required to be satisfactory to such Lender unless, prior to the Closing Date,
      the Administrative Agent receives notice from such Lender specifying such
      Lender’s objections and such Lender has not made available its Pro Rata Share of
      any Borrowing scheduled to be made on the Closing Date.

     

    ARTICLE
      IV  

     

     

    REPRESENTATIONS
      AND WARRANTIES

     

    To
      induce
      the Lenders, the L/C Issuers and the Administrative Agent to enter into the
      Loan
      Documents, each Borrower (and, to the extent set forth in any other Loan
      Document, each other Loan Party) represents and warrants, in all material
      respects, to each of them each of the following on and as of each date
      applicable pursuant to Section
      3.2:

     

    Section 4.1  No
      Encumbrances.
      Each
      Group Member (a) has good and valid title to its personal property assets and
      good and marketable title to its owned Real Property (subject to exceptions
      that
      do not, in the aggregate, materially impair the use of the personal property
      and
      Real Property of Borrowers taken as a whole), and in the case of the Collateral,
      free and clear of Liens except for Permitted Liens. All other information set
      forth on the Perfection Certificates pertaining to the Collateral is accurate
      and complete. There has been no change in any of such information since the
      date
      on which the Perfection Certificates were signed by Borrowers except as
      otherwise permitted under this Agreement.

     

    Section 4.2  Accounts.
      The
      Eligible Accounts are bona fide existing payment obligations of Account Debtors
      created by the sale and delivery of inventory or the rendition of services
      to
      such Account Debtors in the ordinary course of Borrowers’ business, owed to
      Borrowers without any known defenses, disputes, offsets, counterclaims, or
      rights of return or cancellation (other than contingent customer rights of
      return arising in the ordinary course of business). As to each Account that
      is
      identified by Parent as an Eligible Credit Card Receivable in a Borrowing Base
      Certificate submitted to the Administrative Agent, such Account is not excluded
      as ineligible by virtue of one or more of the excluding criteria set forth
      in
      the definition of Eligible Credit Card Receivable.

     

    
      
         

      

      
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    Section 4.3  Eligible
      Inventory.
      All
      Eligible Inventory is of good and merchantable quality, free from known defects
      (other than saleable clearance goods arising in the ordinary course of business
      consistent with past practice). As to each item of inventory that is identified
      by Parent as Eligible Inventory in a Borrowing Base Certificate submitted to
      the
      Administrative Agent, such inventory is not excluded as ineligible by virtue
      of
      one or more of the excluding criteria set forth in the definition of Eligible
      Inventory.

     

    Section 4.4  Location
      of Inventory.
      The
      inventory of each Group Member is stored or located only at, or in-transit
      between, the locations identified on Schedule
      4(a)
      of the
      Perfection Certificates or is stored with a bailee, warehouseman, or similar
      party, subject to a Bailee Acknowledgement or Collateral Access Agreement,
      except as otherwise permitted pursuant to Section
      6.5
      from
      September 1 to December 31 of any Fiscal Year. Other than with respect to
      Eligible In-Transit Inventory, all of the Eligible Inventory of each Group
      Member is used or held for use in such Group Member’s business and is fit for
      such purposes.

     

    Section 4.5  Inventory
      Records.
      Each
      Borrower keeps correct and accurate records itemizing and describing the type,
      quality, and quantity of its and its Subsidiaries’ inventory and the book value
      thereof.

     

    Section 4.6  Name,
      Jurisdiction of Incorporation; Location of Chief Executive Office; FEIN;
      Organizational ID Number.
      (a)
      The
      legal name and jurisdiction of organization of each Group Member is set forth
      on
      the Perfection Certificate.

     

    (b)  The
      chief
      executive office of each Group Member is located at the address indicated on
      the
      Perfection Certificate.

     

    (c)  Each
      Group Member’s FEIN and organizational identification number, if any, are
      identified on the Perfection Certificate.

     

    (d)  Each
      Borrower has previously delivered to the Administrative Agent a Perfection
      Certificate. Each Borrower represents and warrants to the Lender Group that:
      (i)
      such Borrower’s exact legal name is that indicated on the applicable Perfection
      Certificate and on the signature page hereof; (ii) such Borrower is an
      organization of the type, and is organized in the jurisdiction, set forth in
      the
      applicable Perfection Certificate; (iii) the applicable Perfection Certificate
      accurately sets forth such Borrower’s organizational identification number or
      accurately states that such Borrower has none; (iv) the applicable Perfection
      Certificate accurately sets forth such Borrower’s place of business or, if more
      than one, its chief executive office, as well as such Borrower’s mailing
      address, if different; (v) all other information set forth on the applicable
      Perfection Certificate pertaining to such Borrower is accurate and complete
      as
      of the date hereof; and (vi) there has been no change in any of such information
      since the date on which the applicable Perfection Certificate was signed by
      such
      Borrower.

     

    
      
         

      

      
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    Section 4.7  Due
      Organization and Qualification; Subsidiaries.
      (a)
      Each
      Borrower is (i) duly organized and existing and in good standing under the
      laws
      of the jurisdiction of its organization and (ii) has all requisite corporate
      (or
      the equivalent company) power to own its property and conduct its business
      as
      now conducted and as presently contemplated and (iii) qualified to do business
      in any state or province where the failure to be so qualified reasonably could
      be expected to cause a Material Adverse Effect.

     

    (b)  Set
      forth
      on Schedule
      4.7
      (as such
      Schedule may be updated with the written consent of the Administrative Agent),
      is a complete and accurate description of the authorized capital Stock of each
      Borrower, by class, and, as of the Closing Date, a description of the number
      of
      shares of each such class that are issued and outstanding and, other than with
      respect to Parent, the owner of such Stock. Other than as described on
Schedule
      4.7
      and
      except for employee and director stock options and deferred director units
      there
      are no subscriptions, options, warrants, or calls relating to any shares of
      each
      Borrower’s capital Stock, including any right of conversion or exchange under
      any outstanding security or other instrument. No Borrower is subject to any
      obligation (contingent or otherwise) to repurchase or otherwise acquire or
      retire any shares of its capital Stock or any security convertible into or
      exchangeable for any of its capital Stock.

     

    (c)  Set
      forth
      on Schedule
      4.7
      (as such
      Schedule may be updated with the written consent of the Administrative Agent),
      is a complete and accurate list of each Borrower’s direct and indirect
      Subsidiaries, showing: (i) the jurisdiction of their organization; (ii) the
      number of shares of each class of common and preferred Stock authorized for
      each
      of such Subsidiaries; and (iii) the number and the percentage of the outstanding
      shares of each such class owned directly or indirectly by the applicable
      Borrower. All of the outstanding capital Stock of each such Subsidiary has
      been
      validly issued and is fully paid and non-assessable.

     

    (d)  Except
      as
      set forth on Schedule
      4.7,
      there
      are no subscriptions, options, warrants, or calls relating to any shares of
      any
      Borrower’s Subsidiaries’ capital Stock, including any right of conversion or
      exchange under any outstanding security or other instrument. No Group Member
      is
      subject to any obligation (contingent or otherwise) to repurchase or otherwise
      acquire or retire any shares of any Borrower’s Subsidiaries’ capital Stock or
      any security convertible into or exchangeable for any such capital
      Stock.

     

    Section 4.8  Due
      Authorization; No Conflict.
      (a)
      As to
      each Borrower, the execution, delivery, and performance by such Borrower of
      this
      Agreement and the other Loan Documents to which it is a party and the
      transactions contemplated hereby and thereby are within the corporate (or the
      equivalent) authority of such Borrower and have been duly authorized by all
      necessary action on the part of such Borrower.

     

    (b)  As
      to
      each Borrower, the execution, delivery, and performance by such Borrower of
      this
      Agreement and the other Loan Documents to which it is a party do not and will
      not (i) violate any provision of federal, state, or local, statute, law, rule
      or
      regulation applicable to any Borrower or any order, judgment, decree, writ,
      injunction, license or permit of any court or other Governmental Authority
      binding on any Borrower unless such violation could not reasonably be expected
      to cause a Material Adverse Effect, (ii) violate any provision of the Governing
      Documents of any Borrower or require any approval of any Borrower’s interest
      holder, (iii) conflict with, result in a breach of, or constitute (with due
      notice or lapse of time or both) a default under any material Contractual
      Obligation of any Borrower unless such violation could not reasonably be
      expected to cause a Material Adverse Effect or the termination of such contract,
      (iv) result in or require the creation or imposition of any Lien of any nature
      whatsoever upon any properties or assets of any Borrower, other than Permitted
      Liens unless the imposition of such Lien could not reasonably be expected to
      cause a Material Adverse Effect, or (v) require any approval of any Person
      under
      any material Contractual Obligation of any Borrower, other than consents or
      approvals that have been obtained and that are still in force and
      effect.

     

    
      
         

      

      
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    (c)  Other
      than the filing of UCC financing statements, PPSA registration statements and
      registrations in Quebec, Canada, the execution, delivery, and performance by
      each Borrower of this Agreement and the other Loan Documents to which such
      Borrower is a party do not and will not require any registration with, consent,
      or approval of, or notice to, or other action with or by, any Governmental
      Authority, other than consents or approvals that have been obtained and that
      are
      still in force and effect.

     

    (d)  As
      to
      each Borrower, this Agreement and the other Loan Documents to which such
      Borrower is a party, and all other documents contemplated hereby and thereby,
      when executed and delivered by such Borrower will be the legally valid and
      binding obligations of such Borrower, enforceable against such Borrower in
      accordance with their respective terms, except as enforcement may be limited
      by
      equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
      or similar laws relating to or limiting creditors’ rights
      generally.

     

    (e)  The
      Administrative Agent’s Liens are validly created, perfected and first priority
      Liens, subject only to Permitted Liens.

     

    Section 4.9  Litigation.
      (a)
      Other
      than those matters disclosed on Schedule
      4.9
      and
      immaterial matters where the amount in controversy is less than $250,000, there
      are no actions, suits, or proceedings or investigations pending or, to the
      best
      knowledge of Borrowers, threatened against any Group Member, except for (a)
      matters that are fully covered by insurance (subject to customary deductibles),
      and (b) matters arising after the Closing Date, reasonably could not be expected
      to result in a Material Adverse Effect.

     

    (b)  There
      are
      no actions, suits, proceedings or investigations pending or, to the best
      knowledge of the Borrowers, threatened against any Group Member that question
      the validity or enforceability of this Agreement or any other Loan Document
      or
      any action taken or to be taken by the Borrowers in connection
      therewith.

     

    Section 4.10  No
      Material Adverse Effect.
      All
      financial statements relating to any Group Member that have been delivered
      by
      the Borrowers to the Lender Group have been prepared in accordance with GAAP
      (except, in the case of unaudited financial statements, for the lack of
      footnotes and being subject to year-end audit adjustments) and present fairly
      in
      all material respects, each Group Member’s financial condition as of the date
      thereof and results of operations for the period then ended. There has not
      been
      a Material Adverse Effect with respect to any Group Member since the date of
      the
      latest financial statements submitted to the Lender Group on or before the
      Closing Date.

     

    Section 4.11  Fraudulent
      Transfer.
      (a)
      The
      Group Members, taken as a whole, are Solvent.

     

    (b)  No
      transfer of property is being made by any Group Member and no obligation is
      being incurred by any Group Member in connection with the transactions
      contemplated by this Agreement or the other Loan Documents with the intent
      to
      hinder, delay, or defraud either present or future creditors of any such Group
      Member.

     

    
      
         

      

      
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    Section 4.12  Canadian
      Benefit Plans and Canadian Pension Plans.
      Bombay
      Canada does not maintain or contribute to any Canadian Benefit Plan or Canadian
      Pension Plan.

     

    Section 4.13  ERISA.
      None of
      the Group Members or any of their ERISA Affiliates maintains or contributes,
      or
      in the prior six years has maintained or contributed, to any Benefit
      Plan.

     

    Section 4.14  Environmental
      Condition.
      Except
      as set forth on Schedule
      4.14
      and
      except for other matters that could not reasonably be expected to result in
      a
      Material Adverse Effect, (a) to the Borrowers’ knowledge, none of the Group
      Members’ properties or assets has ever been used by any Group Member, or by
      previous owners or operators in the disposal of, or to produce, store, handle,
      treat, release, or transport, any Hazardous Materials, where such production,
      storage, handling, treatment, release or transport was in violation of any
      applicable Environmental Law, (b) to the Borrowers’ knowledge, none of the Group
      Members’ owned Real Property has ever been designated or identified in any
      manner pursuant to any environmental protection statute as a Hazardous Materials
      disposal site, (c) no Group Member has received notice that a Lien arising
      under
      any Environmental Law has attached to any revenues or to any Real Property
      owned
      or operated by any Group Member, and (d) no Group Member has received a summons,
      citation, notice, or directive from the Environmental Protection Agency or
      any
      other federal, state or provincial governmental agency concerning any action
      or
      omission by any Group Member resulting in the releasing or disposing of
      Hazardous Materials into the environment in violation of any applicable
      Environmental Law.

     

    Section 4.15  Brokerage
      Fees.
      No
      Group Member has utilized the services of any broker or finder in connection
      with obtaining financing from the Lender Group under this Agreement and no
      brokerage commission or finders fee is payable by any Group Member in connection
      herewith.

     

    Section 4.16  Intellectual
      Property.
      Each
      Group Member owns, or holds licenses in, all Intellectual Property that is
      necessary to the conduct of its business as currently conducted, except where
      the failure to do so, in the aggregate, would not result in a Material Adverse
      Effect.

     

    Section 4.17  Leases.
      Except
      where the failure to do so would not cause a Material Adverse Effect, the Group
      Members enjoy peaceful and undisturbed possession under all leases (including
      Capital Leases) material to their business and to which they are a party or
      under which they are operating. Except to the extent that such default would
      not
      cause a Material Adverse Effect, each of such leases is valid and subsisting
      and
      no material default by any Group Member exists under such lease.

     

    Section 4.18  Deposit
      Accounts.
      Set
      forth on Schedule
      8
      to the
      Perfection Certificate are all deposit accounts and securities accounts of
      each
      Group Member, including, with respect to each bank or securities intermediary
      (i) the name and address of such Person, (ii) the account numbers of the deposit
      accounts or securities accounts maintained with such Person and (iii) whether
      such account is a “Store Account”, a “Concentration Account” or another account
      and if such account is another account, setting forth the purpose of such
      account.

     

    Section 4.19  Complete
      Disclosure.
      All
      factual information (taken as a whole) furnished by or on behalf of any Group
      Member in writing to the Administrative Agent or any Lender (including all
      information contained in the Schedules hereto or in the other Loan Documents)
      for purposes of or in connection with this Agreement, the other Loan Documents
      or any transaction contemplated herein or therein is, and all other such factual
      information (taken as a whole) hereafter furnished by or on behalf of any Group
      Member in writing to the Administrative Agent or any Lender will be, true and
      accurate in all material respects on the date as of which such information
      is
      dated or certified and not incomplete by omitting to state any fact necessary
      to
      make such information (taken as a whole) not misleading in any material respect
      (other than industry-wide risks normally associated with the types of businesses
      conducted by the Group Members) at such time in light of the circumstances
      under
      which such information was provided. On the Closing Date, the Projections
      represent, and as of the date on which any other Projections are delivered
      to
      the Administrative Agent, such additional Projections represent the Borrowers’
good faith reasonable estimate of the Group Members’ future performance for the
      periods covered thereby it being understood that such Projections as to future
      events are not to be viewed as facts and that actual results during the period
      or period covered by Projections may differ from the projected results and
      no
      assurance can be given that the Projections will be realized.

     

    
      
         

      

      
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    Section 4.20  Credit
      Card Receipts.
      Schedule
      4.20
      sets
      forth each of the Borrowers’ Credit Card Issuers, Credit Card Processors and all
      arrangements to which the Borrowers are a party with respect to the payment
      to
      the Borrowers of the proceeds of all credit card charges for sales by the
      Borrowers, including a description of each Credit Card Agreement.

     

    Section 4.21  Holding
      Company and Investment Company Acts.
      No
      Group Member is a “holding
      company”,
      or a
“subsidiary
      company”
of
      a
“holding
      company,
      or an
“affiliate”
of
      a
“holding
      company”,
      as
      such terms are defined in the Public Utility Holding Company Act of 1935; nor
      is
      it an “investment
      company”,
      or an
“affiliated
      company”
or
      a
“principal
      underwriter”
of
      an
“investment
      company”,
      as
      such terms are defined in the Investment Company Act of 1940.

     

    Section 4.22  Absence
      of Financing Statements, etc.
      Except
      with respect to Permitted Liens, there is no financing statement, security
      agreement, chattel mortgage, real estate mortgage or other document filed or
      recorded with any filing records, registry or other public office, that purports
      to cover, affect or give notice of any present or possible future Lien on any
      Collateral.

     

    Section 4.23  Certain
      Transactions.
      None of
      the officers, directors, or employees of any Group Member is presently a party
      to any transaction with any Group Member (other than for services as employees,
      officers and directors), including any contract, agreement or other arrangement
      providing for the furnishing of services to or by, providing for rental of
      real
      or personal property to or from, or otherwise requiring payments to or from
      any
      officer, director or such employee or, to the knowledge of the Borrowers, any
      corporation, partnership, trust or other entity in which any officer, director,
      or any such employee has a substantial interest or is an officer, director,
      trustee or partner.

     

    Section 4.24  Regulations
      U and X.
      No
      Group Member is engaged in principally, or as one of its important activities
      in, and no portion of the proceeds of any Borrowing of any Loan is to be used,
      and no portion of any Letter of Credit is to be obtained, for the purpose of
      purchasing or carrying any “margin
      security”
or
      “margin
      stock”
as
      such
      terms are used in Regulations U and X of the Board of Governors of the Federal
      Reserve System, 12 C.F.R. Parts 221 and 224.

     

    Section 4.25  Labor
      Relations.
      No
      Borrower has been or is presently a party to any collective bargaining or other
      labor contract. No event has occurred or circumstance exists which is likely
      to
      provide the basis for any work stoppage or other labor dispute. The Borrowers
      have complied in all material respects with all applicable laws, decrees,
      orders, judgments, statutes, laws, rules and regulations relating to employment,
      equal employment opportunity, nondiscrimination, immigration, wages, hours,
      benefits, collective bargaining, the payment of social security and similar
      taxes, occupational safety and health, and plant closing including all
      applicable provisions of the federal Fair Labor Standards Act, as amended.
      There
      is not presently pending and, to the Borrowers’ knowledge, there is not
      threatened any of the following:

     

    
      
         

      

      
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    (a)  any
      strike, slowdown, picketing, or work stoppage;

     

    (b)  any
      proceeding against or affecting the Borrowers relating to the alleged violation
      of any applicable law, decree, order, judgment, statute, law, rule or regulation
      pertaining to labor relations or before National Labor Relations Board, the
      Equal Employment Opportunity Commission, or any comparable governmental body,
      organizational activity, or other labor or employment dispute against or
      affecting the Borrowers, which, if determined adversely to the Borrowers would
      cause a Material Adverse Effect;

     

    (c)  any
      lockout of any employees by the Borrowers (and no such action is contemplated
      by
      the Borrowers); or

     

    (d)  any
      application for the certification of a collective bargaining agent.

     

    Section 4.26  Indebtedness.
      Set
      forth on Schedule
      7.1
      is a
      true and complete list of all Indebtedness of each Borrower outstanding
      immediately prior to the Closing Date that is to remain outstanding after the
      Closing Date and such Schedule accurately reflects the aggregate principal
      amount of such Indebtedness.

     

    Section 4.27  Payment
      of Taxes.
      All tax
      returns, reports and declarations required to be filed by the Borrowers by
      any
      jurisdiction to which any of them is subject have been timely filed, except
      where the failure to so file could not reasonably be expected to have a Material
      Adverse Effect. All taxes and other governmental assessments and charges upon
      the Borrowers or their properties, assets, income and franchises (including
      real
      property taxes and payroll taxes) but not subject of a Permitted Protest have
      been paid prior to delinquency except where the failure to so pay could not
      reasonably be expected to have a Material Adverse Effect. The Borrowers have
      set
      aside on their books provisions reasonably adequate for the payment of all
      taxes
      for periods subsequent to the periods to which such returns, reports or
      declarations apply. There are no unpaid taxes in any material amount claimed
      to
      be due by the taxing authority of any jurisdiction, and none of the officers
      of
      any Borrower know of any basis for any such claim. The Borrowers do not intend
      to treat any Loans, Letters of Credit and/or related transactions hereunder
      as
      being a “reportable transaction” (within the meaning of Treasury Regulation
      Section 1.6011-4).

     

    Section 4.28  Foreign
      Assets Control Regulations, Etc.
      None of
      the requesting or borrowing of the Loans, the requesting or issuance, extension
      or renewal of any Credit Instrument or the use of the proceeds of any thereof
      will violate the Trading With the Enemy Act (50 USC §1 et seq., as amended) (the
“Trading
      With the Enemy Act”)
      or any
      of the foreign assets control regulations of the United States Treasury
      Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign
      Assets Control Regulations”)
      or any
      enabling legislation or executive order relating thereto (which for the
      avoidance of doubt shall include, but shall not be limited to (a) Executive
      Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
      With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
      Reg.
      49079 (2001)) (the “Executive
      Order”)
      and
      (b) the Uniting and Strengthening America by Providing Appropriate Tools
      Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).
      Furthermore, none of Group Members or any of their Affiliates (a) is or will
      become a “blocked person” as described in the Executive Order, the Trading With
      the Enemy Act or the Foreign Assets Control Regulations or (b) engages or will
      engage in any dealings or transactions, or be otherwise associated, with any
      such “blocked person.”

     

    
      
         

      

      
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    Section 4.29  No
      Burdensome Obligations; No Defaults.
      No
      Group Member is a party to any Contractual Obligation, no Group Member has
      Governing Documents containing obligations, and, to the knowledge of any Group
      Member, there are no applicable Requirements of Law, in each case the compliance
      with which would have, in the aggregate, a Material Adverse Effect. No Group
      Member (and, to the knowledge of each Group Member, no other party thereto)
      is
      in default under or with respect to any Contractual Obligation of any Group
      Member, other than those that would not, in the aggregate, have a Material
      Adverse Effect.

     

    ARTICLE
      V  

     

     

    REPORTING
      COVENANTS

     

    Each
      Borrower (and, to the extent set forth in any other Loan Document, each other
      Loan Party) agrees with the Lenders, the L/C Issuers and the Agents to each
      of
      the following, as long as any Obligation or any Commitment remains outstanding,
      the Borrowers shall and shall cause each of their respective Subsidiaries to
      do
      all of the following:

     

    Section 5.1  Accounting
      System; Access.
      Maintain a system of accounting that enables the Borrowers to produce financial
      statements in accordance with GAAP and maintain records pertaining to the
      Collateral that contain information as from time to time reasonably may be
      requested by the Administrative Agent. The Borrowers also shall keep an
      inventory reporting system that shows all additions, sales, claims, returns,
      and
      allowances with respect to the inventory. The Borrowers shall further
(a)
      maintain
      adequate accounts and reserves for all taxes (including income taxes),
      depreciation, depletion, obsolescence and amortization of its properties and
      the
      properties of its Subsidiaries, contingencies and other reserves and
(b)
      at all
      times engage independent certified public accountants satisfactory to the
      Administrative Agent as the independent certified public accountants of the
      Parent and its Subsidiaries and will not permit more than 90 days to elapse
      between the cessation of such firm’s (or any successor firm’s) engagement as the
      independent certified public accountants of the Parent and its Subsidiaries
      and
      the appointment in such capacity of a successor firm registered with the Public
      Company Accounting Oversight Board.

     

    Section 5.2  Collateral
      Reporting.
      

     

    (a)  Provide
      the Administrative Agent (and if so requested by the Administrative Agent,
      with
      copies for each Lender) the documents set forth on Schedule
      5.2
      in
      accordance with the delivery schedule set forth thereon; and

     

    (b)  concurrently
      with each delivery of a Compliance Certificate pursuant to Section
      5.3(a)(iii),
      provide
      the Administrative Agent (and if so requested by the Administrative Agent,
      with
      copies for each Lender) with an updated Perfection Certificate illustrating
      all
      changes to the information set forth in the Perfection Certificate previously
      delivered pursuant to Section
      3.1(a)(x)
      or this
Section
      5.2(b)
      (including such updates and amendments required by Section
      4.4,
      4.6,
      4.18,
      6.5
      or
6.18
      of this
      Agreement or the Guaranty and Security Agreement or any other provision of
      any
      Loan Document, except if such information is otherwise required to be provided
      under this Agreement); provided,
      that
      delivery of an updated Perfection Certificate shall not cure any Default or
      Event of Default occurring as a result of failure of the Group Members to give
      any prior notice or obtain any consent required under this
      Agreement.

     

    
      
         

      

      
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    Section 5.3  Financial
      Statements, Reports, Certificates.
      Deliver
      to the Administrative Agent, with copies to each Lender:

     

    (a)  as
      soon
      as available, but in any event within 45 days after the end of each of the
      11
      Fiscal Periods during each of Parent’s Fiscal Years,

     

    (i)  a
      company
      prepared consolidated balance sheet, income statement, and statement of cash
      flow covering Parent’s and its Subsidiaries’ operations during such period, in
      each case setting forth in comparative form the figures for the corresponding
      period in the prior Fiscal Year;

     

    (ii)  a
      certificate signed by the chief financial officer of Parent to the effect
      that:

     

    (A)  the
      financial statements delivered hereunder have been prepared in accordance with
      GAAP (except for the lack of footnotes and being subject to year-end audit
      adjustments) and fairly present in all material respects the financial condition
      of Parent and its Subsidiaries;

     

    (B)  the
      representations and warranties of the Borrowers contained in this Agreement
      and
      the other Loan Documents are true and correct in all material respects on and
      as
      of the date of such certificate, as though made on and as of such date (except
      to the extent that such representations and warranties relate solely to an
      earlier date); and

     

    (C)  there
      does not exist any condition or event that constitutes a Default or Event of
      Default (or, to the extent of any non-compliance, describing such non-compliance
      as to which he or she may have knowledge and what action the Borrowers have
      taken, are taking, or propose to take with respect thereto).

     

    (iii)  a
      Compliance Certificate.

     

    (b)  As
      soon
      as available, but in any event within 90 days after the end of each of Parent’s
      Fiscal Years, consolidated financial statements of Parent and its Subsidiaries
      for each such Fiscal Year, audited by independent certified public accountants
      reasonably acceptable to the Administrative Agent and certified by such
      accountants to have been prepared in accordance with GAAP (such audited
      financial statements to include a balance sheet, income statement, and statement
      of cash flow and, a copy of any “final” management letter delivered to Parent,
      its board of directors or any committees thereof), together with a certificate
      signed by the chief financial officer of Parent certifying as to the matters
      set
      forth in Section
      5.3(a)(ii)(A)-(C)
      and a
      Compliance Certificate; 

     

    
      
         

      

      
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    (c)  as
      soon
      as available, but in any event within 90 days after the end of each of Parent’s
      Fiscal Years, copies of the Borrowers’ Projections, in form and substance
      (including as to scope and underlying assumptions) satisfactory to the
      Administrative Agent, in its sole discretion, for the forthcoming Fiscal Year,
      on a month by month basis, certified by the chief financial officer of Parent
      as
      being such officer’s good faith reasonable estimate of the financial performance
      of Parent and its Subsidiaries during the period covered thereby, it being
      understood that such Projections as to future events are not to be viewed as
      facts and that actual results during the period or periods covered by any
      Projections may differ from the projected results and no assurance can be given
      that the Projections will be realized;

     

    (d)  if
      and
      when filed by any Borrower,

     

    (i)  Form
      10-Q
      quarterly reports, Form 10-K annual reports, and Form 8-K current
      reports;

     

    (ii)  any
      other
      filings made by any Borrower with the SEC;

     

    (iii)  upon
      request by the Administrative Agent, in its Permitted Discretion, copies of
      the
      Borrowers’ federal income tax returns, and any amendments thereto, filed with
      the Internal Revenue Service; and

     

    (iv)  any
      other
      information that is provided by Parent to its shareholders
      generally;

     

    provided,
      that
      for purposes of this clause (d), any information to be delivered hereunder
      shall
      be deemed to have been delivered when posted on the Parent’s website or
      otherwise made available on the website of the SEC;

    

    (e)  as
      soon
      as a Borrower has knowledge of any event or condition that constitutes a Default
      or an Event of Default, notice thereof together with a reasonably detailed
      description thereof and a statement of the curative action that the Borrowers
      propose to take with respect thereto;

     

    (f)  promptly
      after the commencement thereof, but in any event within 10 Business Days after
      the service of process with respect thereto on any Group Member, notice of
      all
      actions, suits, or proceedings brought by or against any Group Member before
      any
      Governmental Authority which, if determined adversely to such Group Member,
      reasonably could be expected to result in a Material Adverse Effect;

     

    (g)  upon
      the
      request of the Administrative Agent in its Permitted Discretion, any other
      report reasonably requested relating to the financial condition of any Group
      Member; provided,
      that
      such reports shall not be overly burdensome for any Borrower to prepare;
      and

     

    (h)  as
      part
      of the Compliance Certificate delivered pursuant to clause (a)(iii) above,
      each
      in form and substance satisfactory to the Administrative Agent, a certificate
      by
      the Responsible Officer of the Parent certifying that (i) the Corporate Chart
      attached thereto (or the last Corporate Chart delivered pursuant to this
clause
      (h))
      is
      correct and complete as of the date of such Compliance Certificate, (ii) the
      Loan Parties have delivered all documents (including an updated Perfection
      Certificate as to locations of Collateral) they are required to deliver pursuant
      to any Loan Document on or prior to the date of delivery of such Compliance
      Certificate and (iii) complete and correct copies of all documents
      modifying any term of any Governing Document of any Group Member or any
      Subsidiary or joint venture thereof on or prior to the date of delivery of
      such
      Compliance Certificate have been delivered to the Administrative Agent or are
      attached to such certificate.

     

    
      
         

      

      
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    In
      addition to the financial statements referred to above, the Borrowers agree
      to
      deliver financial statements prepared on both a consolidated and consolidating
      basis; provided,
      that
      (a) only Parent’s consolidated financial statements shall be audited, (b)
      consolidating financial statements shall be prepared without footnotes, and
      (c)
      the Borrowers shall only be required to deliver balance sheets and income
      statements on a consolidating basis. Parent agrees to cooperate with the
      Administrative Agent to allow the Administrative Agent to consult with its
      independent certified public accountants if the Administrative Agent reasonably
      requests the right to do so (and the Administrative Agent shall notify Parent
      as
      to the timing of such consultation and permit Parent to be present thereat
      or to
      otherwise participate therein) and that, in such connection, their independent
      certified public accountants are authorized to communicate with the
      Administrative Agent and to release to the Administrative Agent whatever
      financial information concerning any Group Member that the Administrative Agent
      reasonably may request.

     

    Section 5.4  Right
      to Inspect; Inventories, Appraisals Audits and Assessments.
      

     

    (a)  The
      Administrative Agent (through any of its affiliates or any its or their
      respective officers, employees, or agents) shall have the right, from time
      to
      time hereafter (which shall be at reasonable times following reasonable notice
      to Parent, prior to the occurrence of and during the continuation of an Event
      of
      Default) to (i)
      visit
      and inspect the property of each Borrower and examine the Books and make copies
      or abstracts thereof and to check, test, and appraise the Collateral in order
      to
      verify the Borrowers’ financial condition or the amount, quality, value,
      condition of, or any other matter relating to, the Collateral; (ii)
      discuss
      the affairs, finances and accounts of each Borrower with the Chief Financial
      Officer, the Treasurer or any Assistant Treasurer or any other Persons
      designated by such officers and (iii)
      communicate directly with any registered certified public accountants (including
      the Borrowers’ accountants) of any Borrower, and such accountants shall be
      authorized to communicate directly with the Administrative Agent, the Lenders,
      the L/C Issuers and their respective affiliates and to disclose to the
      Administrative Agent, the Lenders, the L/C Issuers or their respective
      affiliates, all financial statements and other documents and information as
      they
      might have and the Administrative Agent or any Lender or any L/C Issuer
      reasonably requests with respect to any Borrower. 

     

    (b)  Without
      limiting the generality of the foregoing:

     

    (i)  At
      the
      Borrowers’ expense, an Approved Inventory Servicer shall conduct physical
      inventories at, at least 95% of the Borrowers’ store locations 1 time per Fiscal
      Year, and at each of the Borrowers’ distribution centers at least 1 time per
      Fiscal Year at such times as shall be determined by the Borrowers with notice
      to
      the Administrative Agent. The Administrative Agent, at the expense of the
      Borrowers, may participate in and/or observe each physical count and/or
      inventory of so much of the Collateral as consists of inventory which is
      undertaken on behalf of the Borrowers at each of the Borrowers’ distribution
      centers and at not more than 10% of the Borrowers’ store locations. The Parent
      shall provide the Administrative Agent with the preliminary inventory levels
      at
      each store of each Borrower within 15 Business Days following the completion
      of
      such inventory. The Parent, within 45 days following the completion of each
      such
      physical inventory, in the aggregate, shall provide the Administrative Agent
      with an aggregate reconciliation of the results of such inventory and shall
      post
      such results to Borrowers’ stock ledger and general ledger, as applicable. The
      Administrative Agent, in its Permitted Discretion, if Adjusted Availability
      is
      less than 10% of the Aggregate Borrowing Base, may, and shall at the Required
      Lender’s direction, cause 1 additional inventory per Fiscal Year to be taken (at
      the expense of Borrowers).

     

    
      
         

      

      
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    (ii)  At
      the
      Borrowers’ expense, upon the request of the Administrative Agent from time to
      time, the Borrowers will obtain and deliver to the Administrative Agent, or,
      if
      the Administrative Agent so elects, will cooperate with the Administrative
      Agent
      in the Administrative Agent’s obtaining, a report of an independent collateral
      auditor satisfactory to the Administrative Agent (which may be affiliated with
      one of Lenders) with respect to the Books and Accounts and inventory components
      included in the Aggregate Borrowing Base, which report shall indicate whether
      or
      not the information set forth in the Borrowing Base Certificate most recently
      delivered is accurate and complete in all material respects based upon a review
      by such auditors of the Accounts (including verification with respect to the
      amount, aging, identity and credit of the respective account debtors and the
      billing practices of the Borrowers) and inventory (including verification as
      to
      the value, location and respective types); provided,
      however,
      that
      the Borrowers shall not be obligated to pay for more than 2 commercial finance
      exams in any 12 month period unless Adjusted Availability is less than 10%
      of
      the Aggregate Borrowing Base, in which case, the Borrowers shall be obligated
      to
      pay for 4 commercial finance exams in such 12 month period; provided,
      further,
      that
      the Borrower shall be obligated to pay for any additional commercial finance
      exams conducted in connection with the Borrowers request to add Eligible
      Accounts of Wholesale, Accounts with respect to private label credit cards,
      or
      Accounts with respect to Permitted Acquisitions to the U.S. Borrowing Base.
      

     

    (iii)  The
      Administrative Agent may from time to time obtain inventory appraisals conducted
      by such appraisers as are satisfactory to the Administrative Agent or conduct
      inventory appraisals (in all events, at the Borrowers’ expense). If the
      Administrative Agent determines that there have been changes in markdowns,
      inventory mix and composition, accounting methods or any other factors affecting
      the value of the Collateral, the Administrative Agent may in its Permitted
      Discretion have the inventory reappraised by a qualified appraisal company
      selected by the Administrative Agent from time to time after the Closing Date
      for the purpose of redetermining the Net Liquidation Percentage of the Eligible
      Inventory portion of the Collateral and, as a result, redetermining the
      Aggregate Borrowing Base; provided,
      however,
      that
      the Borrowers shall not be obligated to pay for more than 2 inventory appraisals
      in any 12 month period unless the Adjusted Availability is less than 10% of
      the
      Aggregate Borrowing Base, in which case, the Borrowers shall be obligated to
      pay
      for 4 inventory appraisals in such 12 month period; provided,
      further,
      that
      the Borrowers shall be obligated to pay for any additional inventory appraisals
      (A)
      conducted in connection with the Borrowers request to add inventory with respect
      to Permitted Acquisitions to the U.S. Borrowing Base and (B)
      with
      respect to inventory at a port of entry in a State of the United States or
      from
      a third party location to a location set forth on Schedule
      4(b)
      of the
      Perfection Certificate. 

     

    
      
         

      

      
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    (iv)  At
      the
      Borrowers’ expense, upon the request of the Administrative Agent, the Borrowers
      will obtain and deliver to the Administrative Agent, or, if the Administrative
      Agent so elects, will cooperate with the Administrative Agent in the
      Administrative Agent’s obtaining, 1 real property appraisal in any 12 month
      period from an independent real estate appraiser satisfactory to the
      Administrative Agent (which may be affiliated with one of Lenders) with respect
      to the Eligible Real Property; provided,
      however,
      that if
      the Adjusted Availability is less than 10% of the Aggregate Borrowing Base,
      the
      Borrowers shall be obligated to pay for 1 “desktop” review of the most recent
      real property appraisal; provided,
      further,
      that
      (A) the Borrowers shall be obligated to pay for any real property appraisals
      conducted in connection with the Borrowers request to add Eligible Real
      Property, or Real Property acquired pursuant to Permitted Acquisitions, to
      the
      Borrowing Base and (B) any real property appraisal obtained in accordance with
      Section
      2.8(a)
      shall
      not be subject to this clause
      (iv).
      

     

    (v)  Upon
      the
      request of the Administrative Agent from time to time, the Borrowers shall
      furnish statements and schedules further identifying and describing the
      Collateral and such other documents in connection with the Collateral as the
      Administrative Agent may reasonably request, all in reasonable detail and in
      form and reasonably satisfactory to the Administrative Agent. 

     

    ARTICLE
      VI  

     

     

    AFFIRMATIVE
      COVENANTS

     

    Each
      Borrower (and, to the extent set forth in any other Loan Document, each other
      Loan Party) agrees with the Lenders, the L/C Issuers and the Agents, as long
      as
      any Obligation or any Commitment remains outstanding, the Borrowers shall and
      shall cause each of their respective Subsidiaries to do each of the
      following:

     

    Section 6.1  Returns.
      Account
      for returns of inventory and customer credits and record the effects thereof
      on
      the general ledger on the same basis and in accordance with the usual and
      customary practices of the applicable Borrower, as they exist at the time of
      the
      execution and delivery of this Agreement except where failure to do so could
      not
      reasonably be expected to result in a Material Adverse Effect.

     

    Section 6.2  Maintenance
      of Properties.
      

     

    (a)  At
      all
      times preserve and keep in full force and effect each Borrower’s valid existence
      and good standing and any rights and franchises material to the Borrowers’
business;

     

    (b)  Maintain
      and preserve all of their properties which are necessary or useful in the proper
      conduct to their business in good working order and condition, ordinary wear
      and
      tear excepted;

     

    (c)  Cause
      to
      be made all necessary repairs, renewals, replacements, betterments and
      improvements thereof, all as in the judgment of the Borrowers may be necessary
      so that the business carried on in connection therewith may be properly and
      advantageously conducted at all times;

     

    (d)  Continue
      to engage in the businesses of selling home furnishings at the retail and
      wholesale level, and related businesses; and

     

    
      
         

      

      
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    (e)  Comply
      at
      all times with the provisions of all leases to which it is a party as lessee,
      so
      as to prevent any loss or forfeiture thereof or thereunder;

     

    provided,
      that
      nothing in this Section
      6.2
      shall
      prevent the Borrowers from discontinuing the operation and maintenance of any
      of
      their properties or any of those of its Subsidiaries if such discontinuance
      is,
      in the judgment of the relevant Borrower, desirable in the conduct of its or
      their business and that do not in the aggregate cause a Material Adverse
      Effect.

    

    Section 6.3  Taxes.
      Cause
      all assessments and taxes, whether real, personal, or otherwise, due or payable
      by, or imposed, levied, or assessed against the Group Members, or any of their
      respective assets to be paid in full, before delinquency or before the
      expiration of any extension period, as well as all claims for labor materials
      or
      supplies that if unpaid might by law become a Lien or charge upon its property,
      except to the extent that the validity of such assessment or tax shall be the
      subject of a Permitted Protest. The Borrowers will and will cause their
      Subsidiaries to make timely payment or deposit of all tax payments and
      withholding taxes required of them by applicable laws, including those laws
      concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
      income taxes, and will, upon request, furnish the Administrative Agent with
      proof satisfactory to the Administrative Agent indicating that the applicable
      Group Member has made such payments or deposits.

     

    Section 6.4  Insurance.
      At the
      Borrowers’ expense, maintain in full force and effect all policies of insurance
      respecting the Group Members’ assets wherever located, covering loss or damage
      by fire, theft, explosion, and other hazards and risks and also shall maintain
      business interruption, public liability, product liability, property damage,
      other casualty, workers’ compensation insurance, as well as insurance against
      larceny, embezzlement, and criminal misappropriation, all as ordinarily are
      insured against by other Persons engaged in the same or similar business and
      with financially sound and reputable insurance companies or associations. All
      such policies of insurance shall be in such amounts which are customary for
      Persons engaged in the same or similar business and with nationally recognized
      insurance companies. The Borrowers shall deliver copies of all such policies
      to
      the Administrative Agent with a satisfactory lender’s loss payable endorsement
      naming the relevant Agent as loss payee (with respect to the Collateral) or
      additional insured, as appropriate. Each such policy of insurance or endorsement
      shall contain a clause requiring the insurer to give not less than 30 days
      prior
      written notice to the Administrative Agent in the event of cancellation of
      the
      policy for any reason whatsoever.

     

    Section 6.5  Location
      of Inventory.
      Keep
      each Group Member’s inventory (other than Eligible In-Transit Inventory) only at
      the locations identified on Schedule
      4(b)
      of the
      Perfection Certificate and their chief executive offices only at the locations
      identified on Section
      2(b)
      of the
      Perfection Certificate; provided,
      however,
      that
      (a) Parent may amend Section
      2(b)
      and
Schedule
      4(b)
      of the
      Perfection Certificate so long as such amendment occurs by written notice to
      the
      Administrative Agent not less than 30 days prior to the date on which such
      inventory is moved to such new location or such chief executive office is
      relocated, so long as such new location is within the United States or Canada
      (other than Eligible In-Transit Inventory), which amendment shall be included
      in
      any Perfection Certificate delivered pursuant to Section
      5.2,
      and so
      long as, at the time of such written notification, the applicable Borrower
      provides any financing statements or other documents necessary to perfect and
      continue the Administrative Agent’s Liens on such assets and also provides a
      Collateral Access Agreement with respect thereto if such location is a
      warehouse, distribution center, fulfillment center, contract warehouse or other
      real property (other than a retail store location) leased by a Borrower, and
      (b)
      each Group Member may keep inventory during the period from September 1 to
      December 31 of each year at warehouses leased by such Persons or in a
      fulfillment center or contract warehouse, in each case without a Collateral
      Access Agreement, in an aggregate amount not to exceed 5% of the Cost of
      Eligible Inventory.

     

    
      
         

      

      
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    Section 6.6  Compliance
      with Laws, Etc.
      Comply
      with all Requirements of Law, and orders of any Governmental Authority, and
      make
      all necessary filings with, and give all appropriate notices to, Governmental
      Authorities, including the Fair Labor Standards Act and the Americans With
      Disabilities Act, and with all Contractual Obligations and Permits, other than
      laws, rules, regulations, orders, Contractual Obligations and Permits the
      non-compliance with which, individually or in the aggregate, could not
      reasonably be expected to result in a Material Adverse Effect.

     

    Section 6.7  Leases.
      Pay
      when due all rents and other amounts payable under any leases to which any
      Group
      Member is a party or by which any Group Member’s properties and assets are
      bound, unless such payments are the subject of a Permitted Protest or unless
      nonpayment of such rents and other amounts individually or in the aggregate
      could not reasonably be expected to result in a Material Adverse
      Effect.

     

    Section 6.8  Existence.
      At all
      times preserve and keep in full force and effect each Group Member’s valid
      existence and good standing and any rights and franchises material to their
      businesses except as otherwise permitted pursuant to Section
      7.4.

     

    Section 6.9  Environmental.
      Except
      for such Environmental Liens, failures to comply, releases, Environmental
      Actions, notices, citations or orders which individually or in the aggregate
      could not reasonably be expected to result in a Material Adverse Effect (a)
      keep
      any property either owned or operated by any Group Member free of any
      Environmental Liens or post bonds or other financial assurances sufficient
      to
      satisfy the obligations or liability evidenced by such Environmental Liens,
      (b)
      comply with all applicable Environmental Laws and provide to the Administrative
      Agent documentation of such compliance which Agent reasonably requests, (c)
      promptly notify the Administrative Agent of any release of a Hazardous Material
      of any reportable quantity from or onto property owned or operated by any Group
      Member and take any Remedial Actions required to abate said release or otherwise
      to come into compliance with applicable Environmental Law, and (d) promptly,
      but
      in any event within 5 days of its receipt thereof, provide the Administrative
      Agent with written notice of any of the following: (i) notice that an
      Environmental Lien has been filed against any of the real or personal property
      of any Group Member, (ii) commencement of any Environmental Action or notice
      that an Environmental Action will be filed against any Group Member, and (iii)
      notice of a violation, citation, or other administrative order which reasonably
      could be expected to result in a Material Adverse Effect.

     

    Section 6.10  Disclosure
      Updates.
      Promptly and in no event later than 5 Business Days after obtaining knowledge
      thereof, notify the Administrative Agent if any written information, exhibit,
      or
      report furnished to the Lender Group contained any untrue statement of a
      material fact or omitted to state any material fact necessary to make the
      statements contained therein not misleading in any material respect (other
      than
      industry-wide risks normally associated with the types of businesses conducted
      by the Group Members) in light of the circumstances in which made; provided,
      that
      Projections, Perfection Certificates and Schedules furnished to the Lender
      Group
      shall be deemed to be updated as and when delivered pursuant to and in
      accordance with the terms hereof. The foregoing to the contrary notwithstanding,
      any notification pursuant to the foregoing provision will not cure or remedy
      the
      effect of the prior untrue statement of a material fact or omission of any
      material fact nor shall any such notification have the affect of amending or
      modifying this Agreement, any Perfection Certificate or any of the Schedules
      hereto.

     

    
      
         

      

      
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    Section 6.11  Formation
      of Subsidiaries; Further Assurances.
      (a)
      At the
      time that any Borrower forms any direct or indirect Subsidiary or acquires
      any
      direct or indirect Subsidiary after the Closing Date, such Borrower shall (i)
      cause such new Subsidiary to provide to the Administrative Agent a joinder
      to
      this Agreement and the Guaranty and Security Agreement or the Canadian Security
      Documents, as applicable, allonges to Notes, and other security documents,
      as
      well as appropriate UCC-1 financing statements, PPSA or other relevant filings
      in such jurisdictions as may be required by the Loan Documents or applicable
      Requirements of Law or as the Administrative Agent may otherwise reasonably
      request, all in form and substance satisfactory to the Administrative Agent
      (including being sufficient to grant the Administrative Agent a first priority
      Lien (subject to Permitted Liens) in and to the assets of such newly formed
      or
      acquired Subsidiary in scope similar to the collateral granted hereunder);
      and
      (ii) provide to the Administrative Agent all other documentation, including
      one
      or more opinions of counsel satisfactory to the Administrative Agent, which
      in
      its opinion is appropriate with respect to the execution and delivery of the
      applicable documentation referred to above. (b)
      The
      Borrower shall take all other actions necessary or advisable to ensure the
      validity or continuing validity of any guaranty for any Obligation or any Lien
      securing any Obligation, to perfect, maintain, evidence or enforce any Lien
      securing any Obligation or to ensure such Liens have the same priority as that
      of the Liens on similar Collateral set forth in the Loan Documents executed
      on
      the Closing Date (or, for Collateral located outside the United States, a
      similar priority acceptable to the Administrative Agent). Any document,
      agreement, or instrument executed or issued pursuant to this Section
      6.11
      shall be
      a Loan Document.

     

    Section 6.12  Additional
      Collateral Covenants.
      Except
      for Permitted Liens, be the owners of the Collateral free from any right or
      claim of any other Person or any Lien, and shall defend the same against all
      claims and demands of all Persons at any time claiming the same or any interests
      therein adverse to the Administrative Agent or any Lender. The Borrowers may
      grant such allowances, discounts or other adjustments to the Borrowers’ Account
      Debtors as the Borrowers may reasonably deem to accord with sound business
      practice pursuant to past practices.

     

    Section 6.13  Investment
      Proceeds, Etc.
      The
      proceeds of any funds received by any Borrower whether or not from ordinary
      course business operations (including, without limitation, tax refunds, damage
      awards, or insurance or condemnation proceeds) with respect to the Collateral
      shall be deposited directly into the Cash Collateral Account to be applied
      on
      account of the Obligations in accordance with Section
      2.12
      if a
      Cash Dominion Event has occurred and is continuing.

     

    Section 6.14  Immediate
      Notice to the Administrative Agent.

     

    (a)  The
      Parent shall provide the Administrative Agent with written notice promptly
      upon
      the occurrence of any of the following events, which written notice shall state
      with reasonable particularity the facts and circumstances of the event for
      which
      such notice is being given:

     

    
      
         

      

      
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    (i)  The
      completion of any physical count of all or a material portion of the Borrowers’
inventory (together with a copy of the results thereof certified by the
      Parent);

     

    (ii)  Any
      failure by the Borrowers to pay rent on a timely basis at 20% or more of any
      of
      the Borrowers’ locations, and as and when such rent payment is due;

     

    (iii)  Any
      Material Adverse Effect;

     

    (iv)  The
      occurrence of any Default or Event of Default;

     

    (v)  Any
      setoff, claims, withholdings or other defenses to which any of the Collateral,
      or the Administrative Agent’s rights with respect to the Collateral, are
      subject; or

     

    
      
         

      

      
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    (vi)  The
      obtaining of an organization identification number by any Borrower which did
      not
      have one on the Closing Date, together with such number.

     

    (b)  The
      Parent shall:

     

    (i)  Provide
      the Administrative Agent, when so distributed, with copies of any materials
      distributed to the shareholders of any Borrower (provided,
      that
      for purposes of this clause (i), any materials to be delivered hereunder shall
      be deemed to have been delivered when posted on the Parent’s website or
      otherwise made available on the website of the SEC);

     

    (ii)  Add
      the
      Administrative Agent as an addressee on all mailing lists maintained by or
      for
      Borrowers;

     

    (iii)  At
      the
      reasonable request of the Administrative Agent, from time to time, provide
      the
      Administrative Agent with copies of all requested advertising (including copies
      of all print advertising and duplicate tapes of all requested video and radio
      advertising);

     

    (iv)  At
      the
      request of the Administrative Agent, provide the Administrative Agent, following
      review by the Audit and Finance Committee of the Parent’s Board of Directors,
      with a copy of any management letter or similar communications from any
      accountant of the Borrowers; and

     

    (v)  Provide
      the Administrative Agent with details of all credit card arrangements to which
      any Group Member is from time to time a party, including details relating to
      such Group Member’s compliance with the terms of payment to the applicable the
      Cash Collateral Account of the proceeds of all credit card charges for sales
      by
      such Group Member.

     

    (vi)  The
      Parent shall provide the Administrative Agent with (a) prior written notice
      of
      any entity’s becoming or ceasing to be a Subsidiary and (b) prompt written
      notice of any entity’s becoming or ceasing to be an Affiliate (other than a
      Subsidiary).

     

    Section 6.15  Certain
      Subsidiaries.
      The
      Parent shall not permit Bailey Street Trading Company and BMAJ, Inc. to engage
      in any trade or business or own any assets or incur any Indebtedness to any
      Person.
      The
      Bombay Furniture Company, Inc. shall not engage in any business or activity
      other than managing the foreign offices of the Group Members and holding
      immaterial assets incidental thereto.

     

    Section 6.16  Further
      Assurances.
      Cooperate with Lenders and the Administrative Agent and execute such further
      instruments and documents as Lenders or the Administrative Agent shall
      reasonably request to carry out to their satisfaction the transactions
      contemplated by this Agreement and the other Loan Documents.

     

    Section 6.17  Governing
      Documents.
      Deliver
      to the Administrative Agent complete and correct copies of all documents
      modifying any term of any Governing Document of any Group Member or joint
      venture thereof on or prior to the date of delivery of any Compliance
      Certificate delivered pursuant to Section
      5.3(a)(iii).
      

     

    Section 6.18  Deposit
      Accounts; Securities Accounts and Cash Collateral Accounts.
      

     

    (a)  The
      Borrowers shall (i) establish and maintain cash management services of a type
      and on terms satisfactory to the Administrative Agent at one or more of the
      banks (a “Cash
      Management Bank”)
      set
      forth on Schedule 8
      of the
      Perfection Certificate, (ii) promptly, and in any event no later than the first
      Business Day after the date of receipt thereof, cause all Collections of
      Borrowers or cash proceeds of Accounts of Borrowers to be deposited only into
      Store Accounts or Concentration Accounts, each set forth on Schedule 8
      of the
      Perfection Certificate and (iii) direct all Cash Management Banks with Store
      Accounts to (A) so long as no Cash Dominion Event has occurred and is
      continuing, cause all Collections of Borrowers in an amount greater than $50,000
      to be transferred no less frequently than twice each week, to and only to,
      a
      Concentration Account or a Cash Collateral Account, and (B) after the occurrence
      and during the continuance of a Cash Dominion Event cause all Collections of
      Borrowers in an amount greater than $10,000 then held in each such Store Account
      to be transferred no less frequently than once each day to, and only to, a
      Concentration Account or a Cash Collateral Account. If, notwithstanding the
      provisions of this Section 6.18,
      after
      the occurrence and during the continuance of a Cash Dominion Event, any Borrower
      receives or otherwise has dominion over or control of any Collections, such
      Borrower shall hold such Collections in trust for the Administrative Agent
      or
      the Canadian Agent, as the case may be, and shall not commingle such Collections
      with any of Borrowers’ other funds or deposit such Collections in any account of
      Borrowers except as instructed by the Administrative Agent or the Canadian
      Agent, as the case may be.

     

    (b)  Borrowers
      shall establish and maintain Control Agreements with the Administrative Agent
      or
      the Canadian Agent, as applicable, and each Cash Management Bank with respect
      to
      each Concentration Account. Each such Control Agreement shall provide, among
      other things, that after the occurrence and during the continuance of a Cash
      Dominion Event, (i) upon notice from the Administrative Agent or the Canadian
      Agent, as applicable, the Cash Management Bank will comply with instructions
      of
      the Administrative Agent or the Canadian Agent, as applicable, directing the
      disposition of funds in the Concentration Account without further consent by
      Borrowers, (ii) the Cash Management Bank has no rights of setoff or recoupment
      or any other claim against the applicable Concentration Account, other than
      for
      payment of its service fees and other charges directly related to the
      administration of such Concentration Account and for returned checks or other
      items of payment, and (iii) it immediately will forward by daily sweep all
      amounts in the applicable Concentration Accounts to a Cash Collateral Account
      designated by the Administrative Agent or the Canadian Agent, as
      applicable.

     

    
      
         

      

      
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    (c)  Borrowers
      shall establish and maintain Credit Card Agreements with the Administrative
      Agent or the Canadian Agent, as applicable, and each Credit Card Processor.
      Each
      such Credit Card Agreement shall provide, among other things, that each such
      Credit Card Processor shall transfer all proceeds due with respect to credit
      card charges for sales (net of expenses and chargebacks of the Credit Card
      Issuer or Credit Card Processor) by Borrowers received by it (or other amounts
      payable by such Credit Card Processor) into a designated Concentration Account
      on a daily basis. Borrowers shall not attempt to change any direction or
      designation set forth in the Credit Card Agreements regarding payment of charges
      without the prior written consent of the Administrative Agent or the Canadian
      Agent, as applicable. 

     

    (d)  So
      long
      as no Cash Dominion Event has occurred and is continuing, the Parent may amend
      Schedule 8
      of the
      Perfection Certificate to add or replace a Cash Management Bank or deposit
      account; provided,
      however,
      that
      (i) such prospective Cash Management Bank shall be satisfactory to the
      Administrative Agent and the Administrative Agent shall have consented in
      writing in advance to the opening of such deposit account with the prospective
      Cash Management Bank, and (ii) prior to the time of the opening of any
      Concentration Account, Borrowers and such prospective Cash Management Bank
      shall
      have executed and delivered to the Administrative Agent or the Canadian Agent,
      as applicable, a Control Agreement in accordance with clause
      (b)
      above.
      Borrowers shall close any of their deposit accounts (and establish replacement
      cash management accounts in accordance with the foregoing sentence) promptly
      and
      in any event within 30 days of notice from the Administrative Agent or the
      Canadian Agent, as applicable, that the creditworthiness of any Cash Management
      Bank is no longer acceptable in the Administrative Agent’s or the Canadian
      Agent’s reasonable judgment, or as promptly as practicable and in any event
      within 60 days of notice from the Administrative Agent or the Canadian Agent,
      as
      applicable, that the operating performance, funds transfer, or availability
      procedures or performance of the Cash Management Bank with respect to
      Concentration Accounts or the Administrative Agent’s or the Canadian Agent’s
      liability under any Control Agreement with such Cash Management Bank is no
      longer acceptable in the Administrative Agent’s or the Canadian Agent’s
      reasonable judgment. If, notwithstanding the provisions of this Section 6.18,
      after
      the occurrence and during the continuance of a Cash Dominion Event, any Borrower
      receives or otherwise has dominion over or control of any Collections, such
      Borrower shall hold such Collections in trust for the Administrative Agent
      or
      the Canadian Agent, as applicable, and shall not commingle such Collections
      with
      any of the Borrowers’ other funds or deposit such Collections in any account of
      the Borrowers except as instructed by the Administrative Agent or the Canadian
      Agent, as applicable.

     

    
      
         

      

      
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    (e)  After
      the
      occurrence and during the continuance of a Cash Dominion Event, the deposit
      accounts shall be cash collateral accounts, with all cash, checks and similar
      items of payment in such accounts securing payment of the Obligations, and
      in
      which Borrowers have granted a Lien on each deposit account to the
      Administrative Agent or the Canadian Agent pursuant to the Loan
      Documents.

     

    (f)  Following
      the occurrence of a Cash Dominion Event, the Borrowers agree that they will
      not,
      and will not permit their Subsidiaries to, transfer assets out of any of their
      deposit accounts or securities accounts. Following the occurrence of a Cash
      Dominion Event, the Borrowers agree that they will and will cause their
      Subsidiaries to take any or all reasonable steps that the Administrative Agent
      requests in order for the Administrative Agent to obtain control in accordance
      with the UCC with respect to any of its or their securities accounts, deposit
      accounts, electronic chattel paper, investment property, and letter-of-credit
      rights. No arrangement contemplated hereby or by any Control Agreement in
      respect of any deposit accounts, securities accounts or other investment
      property shall be modified by Borrowers without the prior written consent of
      the
      Administrative Agent. Upon the occurrence and during the continuance of a
      Default or Event of Default, the Administrative Agent may notify any bank or
      securities intermediary to liquidate the applicable deposit account or
      securities account or any related investment property maintained or held thereby
      and remit the proceeds thereof to a Cash Collateral Account identified by the
      Administrative Agent.1

     

    (g)  Neither
      the Administrative Agent nor the Canadian Agent shall have any responsibility
      for, or bear any risk of loss of, any investment or income of any funds in
      any
      deposit account. From time to time after funds are deposited in any Cash
      Collateral Account, the Administrative Agent or the Canadian Agent, as
      applicable, may apply funds then held in such Cash Collateral Account to the
      payment of Obligations in accordance with Section 2.12.
      No
      Group Member and no Person claiming on behalf of or through any Group Member
      shall have any right to demand payment of any funds held in any Cash Collateral
      Account at any time prior to the termination of all Commitments and the payment
      in full of all Obligations and, in the case of L/C Cash Collateral Accounts,
      the
      termination of all outstanding Letters of Credit.

     

    Section 6.19  Release
      of Eligible Real Property.
      On or
      after the date that is 6 months after the Closing Date, following the Parent’s
      written request therefor, the Administrative Agent shall release its Lien upon
      the Eligible Real Property, at the expense of the Borrowers, so long as (a)
      Borrowers shall have provided the Administrative Agent with fifteen (15)
      Business Days’ prior notice thereof; (b) Borrowers shall have complied with
Section
      2.8(a),
      if
      applicable; (c) at the time of such request and after giving effect thereto
      no
      Default or Event of Default shall have occurred and be continuing and (d)
      Adjusted Availability at the time of such request and after giving effect
      thereto shall be not less than 20% of the Aggregate Borrowing Base on such
      date
      and for the next two Fiscal Periods succeeding the Fiscal Period in which such
      release shall occur.

     

    Section 6.20  [Reserved].
      

     

    
      
         

      

      
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    Section 6.21  Grant
      of Non-Exclusive License.
      For the
      purpose of enabling the Administrative Agent to exercise the Administrative
      Agent’s rights and remedies under Section
      8
      of this
      Agreement and Section
      6.1
      of the
      Guaranty and Security Agreement (including, without limitation, in order to
      take
      possession of, hold, preserve, process, assemble, prepare for sale, market
      for
      sale, sell or otherwise dispose of the Collateral) at such time as the
      Administrative Agent shall be lawfully entitled to exercise such rights and
      remedies under Section
      8
      of this
      Agreement and Section
      6.1
      of the
      Guaranty and Security Agreement, each U.S. Borrower hereby (a) grants to the
      Administrative Agent and its agents, for the benefit of each Secured Party,
      a
      royalty free, non-exclusive, irrevocable worldwide license, such license being
      with respect to the Administrative Agent’s exercise of its rights and remedies
      under Section 8
      of this
      Agreement and Section
      6.1
      of the
      Guaranty and Security Agreement including, without limitation, in connection
      with any completion of the manufacture of inventory or any sale or other
      disposition of inventory (i) to use, apply, and affix any trademark, trade
      name,
      logo, or the like in which any U.S. Borrower now or hereafter has rights, (ii)
      to use, license or sublicense any Intellectual Property or computer software
      now
      owned, held or hereafter acquired by such U.S. Borrower, including in such
      license access to all media such and to the extent to which any of the licensed
      items may be recorded or stored and to all computer software programs such
      and
      to the extent used for the compilation or print out thereof; provided,
      that
      each Agent’s use of the property described in clauses
      (i)
      and
(ii)
      above
      will comply with all Requirements of Law, and (iii) to use any and all
      furniture, fixtures and equipment contained in any premises owned or occupied
      by
      any U.S. Borrower in connection with the exercise of each Agent’s rights and
      remedies under Section
      8
      of this
      Agreement and Section
      6.1
      of the
      Guaranty and Security Agreement, and (b) agrees to provide the Administrative
      Agent and/or its agents with access to, and the right to use, any such premises
      owned or occupied by any U.S. Borrower.

     

    Section 6.22  Post-Closing
      Covenants.
      (a) The
      Borrowers shall, within 45 days after the Closing Date (or such later date
      as
      shall be acceptable to the Administrative Agent in its sole discretion), deliver
      such Collateral Access Agreements as the Administrative Agent shall request
      in
      its Permitted Discretion.

     

    (b)
      The
      Borrowers shall, no later than February 3, 2007 (or such later date as shall
      be
      acceptable to the Administrative Agent in its Permitted Discretion), deliver
      to
      the Administrative Agent evidence that (i) the bank account number 978328656215
      at the Bank of Nova Scotia has been rendered inactive, (ii) the bank account
      number 978320144911 at the Bank of Nova Scotia either (A) has been rendered
      inactive or (B) is functioning solely as a Store Account and all amounts therein
      are swept into an account over which there is a Control Agreement and (iii)
      all
      payments from credit cards and Canadian Store Accounts are swept on a daily
      basis into an account at the Royal Bank of Canada over which the Canadian Agent
      has a valid perfected Lien pursuant to a Control Agreement.

     

    
      
         

      

      
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    ARTICLE
      VII  

     

     

    NEGATIVE
      COVENANTS

     

    Each
      Borrower (and, to the extent set forth in any other Loan Document, each other
      Loan Party) agrees with the Lenders, the L/C Issuers and the Agents, as long
      as
      any Obligation or any Commitment remains outstanding, no Borrower shall, nor
      shall it permit any Group Member to:

     

    Section 7.1  Indebtedness.
      Create,
      incur, assume, suffer to exist, guarantee, or otherwise become or remain,
      directly or indirectly, liable with respect to any Indebtedness,
      except:

     

    (a)  the
      Obligations;

     

    (b)  Indebtedness
      set forth on Schedule
      7.1;

     

    (c)  Permitted
      Purchase Money Indebtedness;

     

    (d)  refinancings,
      renewals, or extensions of Indebtedness permitted under clauses
      (b)
      and
(c)
      of this
Section
      7.1
      (and
      continuance or renewal of any Permitted Liens associated therewith) so long
      as:
      (i) the terms and conditions of such refinancings, renewals, or extensions
      do
      not, in the Administrative Agent’s Permitted Discretion, materially impair the
      prospects of repayment of the Obligations by the Borrowers or materially impair
      the Borrowers’ creditworthiness, (ii) such refinancings, renewals, or extensions
      do not result in an increase in the then extant principal amount of, or interest
      rate with respect to, the Indebtedness so refinanced, renewed, or extended
      or
      add one or more Borrower as liable with respect thereto if such additional
      Borrowers were not liable with respect to the original Indebtedness, (iii)
      such
      refinancings, renewals, or extensions do not result in a shortening of the
      average weighted maturity of the Indebtedness so refinanced, renewed, or
      extended, nor are they on terms or conditions, that, taken as a whole, are
      materially more burdensome or restrictive to the applicable Borrower, (iv)
      if
      the Indebtedness that is refinanced, renewed, or extended was subordinated
      in
      right of payment to the Obligations, then the terms and conditions of the
      refinancing, renewal, or extension Indebtedness must include subordination
      terms
      and conditions that are at least as favorable to the Lender Group as those
      that
      were applicable to the refinanced, renewed, or extended Indebtedness, and (v)
      the Indebtedness that is refinanced, renewed, or extended is not recourse to
      any
      Person that is liable on account of the Obligations other than those Persons
      which were obligated with respect to the Indebtedness that was refinanced,
      renewed, or extended;

     

    (e)  at
      any
      time following the release of the Eligible Real Property in accordance with
      Section
      6.19,
      Permitted Office Building Indebtedness and all refinancings, renewals, or
      extensions thereof (and continuance or renewal or any Permitted Liens associated
      therewith);

     

    (f)  endorsement
      of instruments or other payment items for deposit;

     

    (g)  Indebtedness
      composing Permitted Investments;

     

    (h)  Indebtedness
      of a Borrower to another Borrower;

     

    
      
         

      

      
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    (i)  Indebtedness
      of a Group Member in respect of Hedging Agreements entered into by such Person
      with the purpose and effect of fixing interest rates on a principal amount
      of
      Indebtedness of such Person that is accruing interest at a variable rate;
provided,
      that
      each such contract is with a counterparty or has a guarantor of the obligation
      of the counterparty who at the time the contract is made has long-term
      obligations rated A or Aa3 or better, respectively, by S&P and Moody’s;
      and

     

    (j)  other
      unsecured Indebtedness of any Group Member, in an aggregate amount not to exceed
      at any time $2,000,000.

     

    Section 7.2  Liens.
      Create,
      incur, assume, or suffer to exist, directly or indirectly, any Lien on or with
      respect to any of its assets, of any kind, whether now owned or hereafter
      acquired, or any income or profits therefrom, except for Permitted Liens
      (including Liens that are replacements of Permitted Liens to the extent that
      the
      original Indebtedness is refinanced, renewed, or extended under Section
      7.1(d) or (e)
      and so
      long as the replacement Liens only encumber those assets that secured the
      refinanced, renewed, or extended Indebtedness).

     

    Section 7.3  Restrictions
      on Negative Pledges and Upstream Limitation.

     

    (a)  Enter
      into or permit to exist any arrangement or agreement (excluding this Agreement
      and the other Loan Documents) which directly or indirectly prohibits any Group
      Member from creating, assuming or incurring any Lien upon its properties,
      revenues or assets or those of any of their Subsidiaries whether now owned
      or
      hereafter acquired; or

     

    (b)  Enter
      into any agreement, contract or arrangement (excluding this Agreement and the
      other Loan Documents) restricting the ability of any Subsidiary of any Borrower
      to pay or make dividends or distributions in cash or kind to the Borrowers,
      to
      make loans, advances or other payments of whatsoever nature to the Borrowers,
      or
      to make transfers or distributions of all or any part of its assets to the
      Borrowers;

     

    in
      each
      case other than (i) restrictions on specific assets which assets are the subject
      of Permitted Purchase Money Indebtedness or at any time following the release
      of
      the Eligible Real Property in accordance with Section
      6.19,
      Permitted Office Building Indebtedness, (ii) customary anti-assignment
      provisions contained in leases and licensing agreements entered into by such
      Group Member in the ordinary course of its business and (iii) customary
      restrictions contained in asset sale agreements limiting the transfer of such
      assets pending the closing of such sale.

    

    Section 7.4  Restrictions
      on Fundamental Changes.
      (a)
      Enter into any merger or consolidation, (b) liquidate, wind up, or dissolve
      itself (or suffer any liquidation or dissolution), or (c) convey, sell, lease,
      license, assign, transfer, or otherwise dispose of, in one transaction or a
      series of transactions, all or any substantial part of its assets,
      except:

     

    (i)  any
      Borrower may be merged with or into another Borrower, or be liquidated, wound
      up
      or dissolved, or all or any part of its business, property or assets may be
      conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
      or a series of transactions, to any Borrower; provided,
      that
      (A) at the time of any such event, no Event of Default shall exist or shall
      result from such event and (B) in the case of such an event, a Borrower shall
      be
      the continuing or surviving Person;

     

    
      
         

      

      
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    (ii)  (A)
      any
      Subsidiary of a Borrower that is a Domestic Person may be merged with or into
      another Subsidiary of a Borrower that is a Domestic Person, or be liquidated,
      wound up or dissolved, or all or any part of its business, property or assets
      may be conveyed, sold, leased, transferred or otherwise disposed of, in one
      transaction or a series of transactions, to any Subsidiary of a Borrower that
      is
      a Domestic Person; provided,
      that at
      the time of any such event no Event of Default shall exist or shall result
      from
      such event, and (B) any Subsidiary of a Borrower that is a Domestic Person
      may
      be merged with and into a Borrower, or be liquidated, wound up or dissolved,
      or
      all or any part of its business, property or assets may be conveyed, sold,
      leased, transferred or otherwise disposed of, in one transaction or a series
      of
      transactions, to any Borrower; provided,
      that
      (1) at the time of any such event, no Event of Default shall exist or shall
      result from such event, (2) a Borrower shall be the continuing or surviving
      Person, and (3) the Borrowers shall have obtained the Administrative Agent’s
      prior written consent;

     

    (iii)  in
      connection with (A) sales or closures of stores or distribution centers in
      the
      normal course of business, and (B) dispositions of inventory and other assets
      located at such locations (or used in connection with the operation thereof)
      and
      related non-depreciated leasehold interests related thereto, in each case on
      reasonable terms consistent with such Person’s usual practice in connection with
      such sales or closures; provided,
      that
      the proceeds of such sales and dispositions of inventory closures are used
      to
      repay or prepay the Obligations pursuant to Section
      2.8;

     

    (iv)  the
      sale,
      in one transaction or a series of transactions, of the Bombay Office
      Complex;

     

    (v)  dispositions
      permitted by Section
      7.5;
      and

     

    (vi)  any
      other
      disposition of assets in any Fiscal Year for full and fair consideration as
      long
      as the value of such assets does not exceed $1,000,000.

     

    Section 7.5  Disposal
      of Assets; Sale and Leaseback.
      Other
      than Permitted Dispositions, and dispositions permitted by Section
      7.4,
      convey,
      sell, lease, license, assign, transfer, or otherwise dispose of any of the
      assets of any Group Member. The Borrowers will not, and will not permit any
      of
      their Subsidiaries to, enter into any arrangement, directly or indirectly,
      whereby any Group Member shall sell or transfer any property owned by it in
      order then or thereafter to lease such property or lease other property that
      any
      Group Member intends to use for substantially the same purpose as the property
      being sold or transferred other than (a) sale leaseback transactions (in one
      transaction or a series of transactions) in respect of the Bombay Office Complex
      and (b) other sale leaseback transactions not to exceed $2,500,000 in the
      aggregate at any time.

     

    Section 7.6  Change
      Name; Change Governing Documents.
      (a)
      Change any Group Member’s name, FEIN, organizational identification number, type
      of organization, jurisdiction of organization or other legal structure or
      relocate any Group Member’s chief executive office to a new location, without
      the consent of the Administrative Agent (not to be unreasonably withheld so
      long
      as, at the time of such request for consent, such Group Member provides any
      financing statements necessary to perfect and continue perfected the
      Administrative Agent’s Liens or any constitutive documents resulting from such
      change); provided,
      however,
      that a
      Group Member may change its name or chief executive office location upon at
      least 30 days prior written notice by Parent to the Administrative Agent of
      such
      change and so long as, at the time of such written notification, such Group
      Member provides any financing statements necessary to perfect and continue
      perfected the Administrative Agent’s Liens; provided,
      further,
      that no
      Group Member shall change its name, identity or corporate or organizational
      structure in any manner that might make any financing statement filed in
      connection herewith or any other Loan Document materially misleading within
      the
      meaning of section 46(4) of the PPSA (or any comparable provision then in
      effect) except upon prior written notice to the Administrative Agent and after
      the Administrative Agent’s written acknowledgement that any reasonable action
      requested by the Administrative Agent in connection therewith, including to
      continue the perfection of any Liens in favor of the Administrative Agent,
      on
      behalf of the Lenders; or

     

    
      
         

      

      
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    (b)
      Change, waive or otherwise modify any Governing Document of, or otherwise change
      the capital structure of, any Group Member (including the terms of any of their
      outstanding Stock or Stock Equivalents), in each case except for those
      modifications and waivers that (i) do not elect, or permit the election, to
      treat the Stock Equivalents of any limited liability company (or similar entity)
      as certificated and (ii) do not materially affect the rights and privileges
      of
      any Group Member and do not materially affect the interests of any Secured
      Party
      under the Loan Documents or in the Collateral.

     

    Section 7.7  Prepayments
      and Amendments.
      Except
      in connection with a refinancing permitted by Section
      7.1(d),

     

    (a)  prepay,
      redeem, defease, purchase, or otherwise acquire any Indebtedness of any Group
      Member, other than the Obligations in accordance with this Agreement;
      or

     

    (b)  directly
      or indirectly, amend, modify, alter, increase, or change any of the terms or
      conditions of any agreement, instrument, document, indenture, or other writing
      evidencing or concerning Indebtedness permitted under Section
      7.1(b)
      or
(c).

     

    Section 7.8  Consignments.
      Consign
      any of their inventory or sell any of their inventory on bill and hold, sale
      or
      return, sale on approval, or other conditional terms of sale, except for (a)
      consignments of inventory not to exceed the aggregate Cost amount of $1,000,000
      at any time, and (b) rights of purchasers to return inventory pursuant to any
      Group Member’s return policy.

     

    Section 7.9  Distributions.
      Other
      than distributions or declaration and payment of dividends by a Borrower to
      another Borrower, make any distribution or declare or pay any dividends (in
      cash
      or other property, other than common Stock or options or rights with respect
      to
      common Stock) on, or purchase, acquire, redeem, or retire any of any Borrower’s
      Stock, of any class, whether now or hereafter outstanding; provided,
      however,
      that
      (a) the Borrowers may purchase, acquire, redeem or retire any of the Borrowers’
Stock or may pay cash dividends on any Borrowers’ Stock so long as (i) at the
      time of such purchase, acquisition redemption, retirement, payment and after
      giving effect thereto, no Default or Event of Default shall have occurred and
      be
      continuing and (ii) immediately after giving effect thereto, Availability shall
      be at least equal to $25,000,000 and the Parent shall have delivered to the
      Administrative Agent a Compliance Certificate and Projections evidencing the
      maintenance of Availability of at least $25,000,000 for the 2 Fiscal Quarters
      then ended immediately prior to such purchase, acquisition, redemption or
      retirement of any Borrower’s Stock and (b) Borrowers may make distributions or
      declare and pay any dividends on and may purchase, acquire, redeem, or retire
      any Borrower’s Stock in a substantially contemporaneous exchange for common
      Stock or other common equity interests of such Borrower (including as a result
      of new issuances of common Stock or common equity interests).

     

    
      
         

      

      
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    Section 7.10  Accounting
      Methods.
      Modify
      or change their Fiscal Year or their method of accounting (other than as may
      be
      required to conform to GAAP).

     

    Section 7.11  Investments,
      Acquisitions.
      Except
      for Permitted Investments and Permitted Acquisitions, directly or indirectly,
      make or acquire any Investment, or incur any liabilities (including contingent
      obligations) for or in connection with any Investment; provided,
      however,
      that
      such Investments will be considered Investments permitted by this Section
      7.11
      only if
      all actions have been taken to the satisfaction of the Administrative Agent
      to
      provide to the Administrative Agent, for the benefit of Lenders and the
      Administrative Agent, a first priority perfected security interest in all of
      such Investments free of all Liens other than Permitted Liens.

     

    Section 7.12  Transactions
      with Affiliates.
      Engage
      in any transaction with any Affiliate (other than for services as employees,
      officers and directors), including any contract, agreement or other arrangement
      providing for the furnishing of services to or by, providing for rental of
      real
      or personal property to or from, or otherwise requiring payments to or from
      any
      such Affiliate or, to the knowledge of the Borrowers, any corporation,
      partnership, trust or other entity in which any such Affiliate has a substantial
      interest or is an officer, director, trustee or partner, on terms more favorable
      to such Person than would have been obtainable on an arm’s-length basis in the
      ordinary course of business except (a) reasonable and customary fees and other
      consideration paid to members of the board of directors of Parent and (b)
      compensation and benefit arrangements for officers and other employees of any
      Group Member entered into in the ordinary course of business and (c)
      transactions among Parent and its wholly-owned Subsidiaries in the ordinary
      course of business consistent with past practices. Each Affiliate of the
      Borrowers is listed on Schedule
      7.12
      (as such
      Schedule may be updated from time to time).

     

    Section 7.13  Suspension.
      Suspend
      or go out of a substantial portion of their business, other than in relation
      to
      Permitted Dispositions or transactions expressly permitted by Sections
      7.4
      and
7.5.

     

    Section 7.14  Use
      of
      Proceeds.
      Use the
      proceeds of the Loans for any purpose other than (a) on the Closing Date, (i)
      to
      repay in full the outstanding principal, accrued interest, and accrued fees
      and
      expenses owing to the lenders under the Existing Credit Agreement, and (ii)
      to
      pay transactional fees, costs, and expenses incurred in connection with this
      Agreement, the other Loan Documents, and the transactions contemplated hereby
      and thereby, and (b) thereafter, consistent with the terms and conditions
      hereof, for its lawful and permitted purposes.

     

    Section 7.15  Inventory
      with Bailees.
      Unless
      the Administrative Agent has granted its prior written consent and the Borrowers
      have delivered to the Administrative Agent a Bailee Acknowledgment with respect
      to the applicable inventory, no inventory shall at any time now or hereafter
      be
      stored with a bailee, warehouseman, or similar party (other than inventory
      located at retail locations).

     

    
      
         

      

      
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    Section 7.16  Store
      Openings and Closings.
      Other
      than in respect of the store closings set forth on Schedule
      7.16,
      open or
      close any location at which the Borrowers maintain, offer for sale or store
      any
      of the Collateral unless the Borrowers have provided the Administrative Agent
      at
      least 30 days’ prior written notice of such opening or closing and (a) in the
      case of any such opening, such opening results in no more than a 24 store
      difference in the projected store openings set forth in the Projections or
      (b)
      in the case of any such closing, such closing results in no more than a 24
      store
      difference in the projected store openings set forth in the
      Projections.

     

    Section 7.17  Securities
      Accounts.
      Establish or maintain any securities account unless the Administrative Agent
      shall have received a Control Agreement in respect of such securities account
      in
      compliance with Section
      6.18.
      No
      Borrower shall transfer assets out of any securities account; provided,
      however,
      that,
      so long as no Cash Dominion Event has occurred and is continuing or would result
      therefrom, the Borrowers may use such assets (and the proceeds thereof) to
      the
      extent not prohibited by this Agreement.

     

    Section 7.18  Deposit
      Accounts, Credit Card Agreements, etc.
      (a)
      Establish any bank accounts, credit card clearinghouse or processors, other
      than
      those deposit accounts, securities accounts, Credit Card Agreements and other
      accounts, all listed on Schedule 8
      of the
      Perfection Certificate or Schedule 4.20,
      without
      providing advance written notice to the Administrative Agent, provided that,
      in
      the case of securities accounts and deposit accounts, the Borrowers shall
      provide the Administrative Agent with Control Agreements simultaneously with
      the
      opening of such new accounts, (b) violate directly or indirectly any Control
      Agreement with respect to a Controlled Deposit Account or a Controlled
      Securities Account or other bank agency or lock box agreement in favor of the
      Administrative Agent for the benefit of the Lender Group with respect to such
      account, (c) deposit into any of the payroll accounts listed on Schedule 8
      of the
      Perfection Certificate any amounts in excess of amounts necessary to pay current
      payroll obligations from such accounts or (d) change any direction or
      designation relating to any Credit Card Processor.

     

    Section 7.19  Employee
      Benefit Plans.

     

    (a)  Engage
      in
      any “prohibited transaction”
within
      the meaning of §406 of ERISA or §4975 of the Code which could reasonably be
      expected to result in a Material Adverse Effect; or 

     

    (b)  permit
      any Guaranteed Pension Plan to incur an “accumulated funding deficiency”,
      as
      such term is defined in §302 of ERISA, whether or not such deficiency is or may
      be waived; or

     

    (c)  fail
      to
      contribute to any Guaranteed Pension Plan to an extent which, or terminate
      any
      Guaranteed Pension Plan in a manner which, could result in the imposition of
      a
      lien or encumbrance on the assets of any Group Member pursuant to §302(f) or
§4068 of ERISA; or

     

    (d)  amend
      any
      Guaranteed Pension Plan in circumstances requiring the posting of security
      pursuant to §307 of ERISA or §401(a)(29) of the Code; or

     

    
      
         

      

      
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    (e)  establish,
      maintain, contribute to, or have any obligation or liability, contingent or
      otherwise, with respect to a Benefit Plan, Canadian Benefit Plan or Canadian
      Pension Plan; or

     

    (f)  permit
      or
      take any action which would result in the aggregate benefit liabilities (with
      the meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding the
      value of the aggregate assets of such Plans, disregarding for this purpose
      the
      benefit liabilities and assets of any such Plan with assets in excess of benefit
      liabilities, by more than $250,000.

     

    Section 7.20  Margin
      Regulations.
      Use all
      or any portion of the proceeds of any credit extended hereunder to purchase
      or
      carry margin stock (within the meaning of Regulation U of the Federal Reserve
      Board) in contravention of Regulation U of the Federal Reserve Board.

     

    ARTICLE
      VIII  

     

    EVENTS
      OF
      DEFAULT

     

    Section 8.1  Definition.
      Each of
      the following shall be an Event of Default:

     

    (a)  any
      Borrower shall fail to pay (i) when due any installment of principal whether
      at
      the stated date of maturity or any accelerated date of maturity or at any other
      date fixed for payment of the Obligations, (ii) when due any L/C Reimbursement
      Obligation payable to any L/C Issuer, and (iii) any interest (including any
      interest which, but for the provisions of the Bankruptcy Code, would have
      accrued on such amounts), fees under any Loan Document or any other Obligation
      not set forth in the preceding clauses (i) or (ii) herein (x) so long as any
      Cash Dominion Event shall not have occurred, within 5 days after the date due,
      and (y) when the same shall be due and payable at any time any Cash Dominion
      Event shall have occurred;

     

    (b)  (i)
      any
      Group Member shall fail to comply with any of the provisions contained in
Sections 5.2
      (with
      respect to delivery of the Borrowing Base Certificate), 6.8,
      6.14(a)(iii),
      6.14(a)(iv),
      6.18,
      or
Article
      VII;
      (ii)
      any Group Member shall fail to comply with any of the provisions contained
      in
Sections
      5.2
      (other
      than with respect to delivery of the Borrowing Base Certificate) or 6.4
      for 5
      Business Days, (iii) any Group Member shall fail to perform any term, covenant
      or agreement contained herein or in any of the other Loan Documents (other
      than
      those specified elsewhere in this Article VIII)
      for 20
      days after written notice of such failure has been given to the Parent by the
      Administrative Agent; and (iv) any representation or warranty of any Group
      Member in this Agreement or any of the other Loan Documents or any Record or
      in
      any other document or instrument delivered pursuant to or in connection with
      this Agreement shall prove to have been false in any material respect upon
      the
      date when made or deemed to have been made or repeated;

     

    (c)  if
      any
      material portion of any Group Member’s assets is attached, seized, subject to a
      writ or distress warrant, levied upon, or comes into the possession of any
      third
      Person and the same is not discharged for 30 days or more;

     

    (d)  if
      an
      Insolvency Proceeding is commenced by any Group Member;

     

    
      
         

      

      
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    (e)  if
      an
      Insolvency Proceeding is commenced against any Group Member, and any of the
      following events occur: (i) the applicable Group Member consents to the
      institution of the Insolvency Proceeding against it, (ii) the petition
      commencing the Insolvency Proceeding is not timely controverted; provided,
      however,
      that,
      during the pendency of such period, each Lender and the L/C Issuer shall be
      relieved of its obligations to extend credit hereunder, (iii) the petition
      commencing the Insolvency Proceeding is not dismissed within 60 calendar days
      of
      the date of the filing thereof; provided,
      however,
      that,
      during the pendency of such period, each Lender and each L/C Issuer shall be
      relieved of its obligation to extend credit hereunder, (iv) a trustee,
      custodian, liquidator, monitor, receiver or receiver manager is appointed to
      take possession of all or any substantial portion of the properties or assets
      of, or to operate all or any substantial portion of the business of, any Group
      Member, (v) an order for relief shall have been entered therein, (vi) any Group
      Member shall generally not pay its debts as such debts become due, shall admit
      in writing its inability to pay its debts generally or shall make a general
      assignment for the benefit of creditors or (vii) any Group Member shall take
      any
      corporate or similar action or any other action to authorize any action
      described in clause
      (i)
      or
      (vi)
      above;

     

    (f)  if
      any
      Group Member is enjoined, restrained, or in any way prevented by court order
      from continuing to conduct all or any material part of its business
      affairs;

     

    (g)  if
      a
      notice of Lien, levy, or assessment is filed of record with respect to any
      Group
      Member’s assets by any Governmental Authority, or if any taxes or debts owing at
      any time hereafter to any one or more of such entities becomes a Lien, whether
      choate or otherwise, upon any Group Member’s assets and the same is not paid
      prior to becoming delinquent;

     

    (h)  if
      any
      Group Member suffers the entry against it of a final judgment for the payment
      of
      money in excess of $1,000,000 (not covered by insurance) and such judgment
      is
      unstayed and undischarged for a period of thirty consecutive days after the
      date
      of entry thereof;

     

    (i)  if
      there
      is a default in any material agreement
      to which any Group Member is a party relative to such Person’s Indebtedness
      involving an aggregate amount of $10,000,000, or more, and such default (i)
      occurs at the final maturity of the obligations thereunder, or (ii) results
      in a
      right by the other party thereto, irrespective of whether exercised, to
      accelerate the maturity of the applicable Group Member’s obligations thereunder,
      or to terminate such agreement;

     

    (j)  if
      any
      Group Member makes any payment on account of Indebtedness that has been
      contractually subordinated in right of payment to the payment of the
      Obligations, except to the extent such payment is permitted by the terms of
      the
      subordination provisions application to such Indebtedness;

     

    (k)  if
      any of
      the Loan Documents shall be cancelled, terminated, revoked or rescinded or
      Agents’ Liens the Collateral with a value in excess of $5,000,000 shall cease to
      be perfected, or shall cease to have the priority contemplated by the Loan
      Documents, in each case otherwise than in accordance with the terms thereof
      or
      with the express prior written agreement, consent or approval of the Lenders,
      or
      any action at law, suit or in equity or other legal proceeding to cancel, revoke
      or rescind any of the Loan Documents shall be commenced by or on behalf of
      any
      Group Member or any of their respective stockholders, or any court or any other
      governmental or regulatory authority or agency of competent jurisdiction shall
      make a determination that, or issue a judgment, order, decree or ruling to
      the
      effect that, any one or more of the Loan Documents is illegal, invalid or
      unenforceable in accordance with the terms thereof;

     

    
      
         

      

      
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    (l)  any
      Borrower or any ERISA Affiliate incurs any liability to the PBGC or a Guaranteed
      Pension Plan pursuant to Title IV of ERISA in an aggregate amount exceeding
      $1,000,000, or any Borrower or any ERISA Affiliate is assessed withdrawal
      liability pursuant to Title IV of ERISA by a Multiemployer Plan requiring
      aggregate annual payments exceeding $1,000,000, or any of the following occurs
      with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, or
      a
      failure to make a required installment or other payment (within the meaning
      of
§ 302(f)(1) of ERISA), provided
      that the
      Administrative Agent determines in its Permitted Discretion that such event
      (x)
      could be expected to result in liability of any Borrower or any of its
      Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount
      exceeding $1,000,000 and (y) could constitute grounds for the termination
      of such Guaranteed Pension Plan by the PBGC, for the appointment by the
      appropriate United States District Court of a trustee to administer such
      Guaranteed Pension Plan or for the imposition of a lien in favor of such
      Guaranteed Pension Plan; or (ii) the appointment by a United States District
      Court of a trustee to administer such Guaranteed Pension Plan; or (iii) the
      institution by the PBGC of proceedings to terminate such Guaranteed Pension
      Plan;

     

    (m)  any
      Group
      Member shall be indicted for a state or federal crime, or any civil or criminal
      action shall otherwise have been brought or threatened against any Group Member,
      a punishment for which in any such case could include the forfeiture of any
      assets of such Group Member not included in the Aggregate Borrowing Base or
      any
      assets of such Group Member not included in the Aggregate Borrowing Base but
      having a fair market value in excess of $5,000,000; or

     

    (n)  a
      Change
      of Control shall occur.

     

    Section 8.2  Remedies.
      During
      the continuance of any Event of Default, the Administrative Agent may, and,
      at
      the request of the Required Lenders, shall, in each case by notice to the
      Borrowers and in addition to any other right or remedy provided under any Loan
      Document or by any applicable Requirement of Law, do each of the following:
      (a)
      declare all or any portion of the Commitments terminated, whereupon the
      Commitments shall immediately be reduced by such portion or, in the case of
      a
      termination in whole, shall terminate together with any obligation any Lender
      may have hereunder to make any Loan and any L/C Issuer may have hereunder to
      Issue any Letter of Credit or (b) declare immediately due and payable all or
      part of any Obligation (including any accrued but unpaid interest thereon),
      whereupon the same shall become immediately due and payable, without
      presentment, demand, protest or further notice or other requirements of any
      kind, all of which are hereby expressly waived by Parent and the Borrowers
      (and,
      to the extent provided in any other Loan Document, other Loan Parties);
provided,
      however,
      that,
      effective immediately upon the occurrence of the Events of Default specified
      in
Section 8.1(e)(ii),
      (x) the
      Commitments of each Lender to make Loans and the commitment of each L/C Issuer
      to Issue Letters of Credit shall each automatically be terminated and (y) each
      Obligation (including in each case any accrued all accrued but unpaid interest
      thereon) shall automatically become and be due and payable, without presentment,
      demand, protest or further notice or other requirement of any kind, all of
      which
      are hereby expressly waived by the Borrowers (and, to the extent provided in
      any
      other Loan Document, any other Loan Party).

     

    
      
         

      

      
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    Section 8.3  Actions
      in Respect of Letters of Credit.
      At any
      time (a) upon the Revolving Credit Termination Date, (b) after the Revolving
      Credit Termination Date when the aggregate funds on deposit in L/C Cash
      Collateral Accounts shall be less than 103% of the L/C Obligations for all
      Letters of Credit at such time and (c) as required by Section 2.12(c),
      the
      U.S. Borrowers shall pay to the Administrative Agent in immediately available
      funds at the Administrative Agent’s office referred to in Section 10.11,
      for
      deposit in a L/C Cash Collateral Account, the amount required so that, after
      such payment, the aggregate funds on deposit in the L/C Cash Collateral Accounts
      equals or exceeds 103% of the L/C Obligations for all Letters of Credit at
      such
      time (not to exceed, in the case of clause
      (c)
      above,
      the payment to be applied pursuant to Section 2.12(c)
      to
      provide cash collateral for Letters of Credit).

     

    ARTICLE
      IX  

     

    THE
      ADMINISTRATIVE AGENT

     

    Section 9.1  Appointment
      and Duties.
      (a) Appointment
      of Agents.
      Each
      Lender and each L/C Issuer hereby appoints GE Capital (together with any
      successor Administrative Agent pursuant to Section 9.9)
      as the
      Administrative Agent hereunder and authorizes the Administrative Agent to (i)
      execute and deliver the Loan Documents and accept delivery thereof on its behalf
      from any Group Member, (ii) take such action on its behalf and to exercise
      all
      rights, powers and remedies and perform the duties as are expressly delegated
      to
      the Administrative Agent under such Loan Documents and (iii) exercise such
      powers as are reasonably incidental thereto. Each Lender hereby appoints GE
      Canada Finance Holding Company (together
      with any successor Canadian Agent pursuant to Section 9.9)
      as the
      Canadian Agent hereunder and authorizes the Canadian Agent to (i) execute and
      deliver the Loan Documents and accept delivery thereof on its behalf from any
      Group Member, (ii) take such action on its behalf and to exercise all rights,
      powers and remedies and perform the duties as are expressly delegated to the
      Canadian Agent under such Loan Documents and (iii) exercise such powers as
      are
      reasonably incidental thereto.

     

    (b)  Duties
      as Collateral and Disbursing Agent.
      Without
      limiting the generality of clause
      (a)
      above,
      the Agents shall have the sole and exclusive right and authority (to the
      exclusion of the Lenders and L/C Issuers), and are hereby authorized, to
      (i) act as the disbursing and collecting agent for the Lenders and the L/C
      Issuers with respect to all payments and collections arising in connection
      with
      the Loan Documents (including in any Insolvency Proceeding described in
Section 8.1(e)(ii)
      or any
      other bankruptcy, insolvency or similar proceeding), and each Person making
      any
      payment in connection with any Loan Document to any Secured Party is hereby
      authorized to make such payment to the Administrative Agent, in the case of
      an
      obligation of the U.S. Borrowers, and the Canadian Agent, in the case of an
      obligation of Bombay Canada, (ii) file and prove claims and file other documents
      necessary or desirable to allow the claims of the Secured Parties with respect
      to any Obligation in any proceeding described in Section 8.1(e)(ii)
      or any
      other bankruptcy, insolvency or similar proceeding (but not to vote, consent
      or
      otherwise act on behalf of such Secured Party), (iii) act as collateral agent
      for each Secured Party for purposes of the perfection of all Liens created
      by
      such agreements and all other purposes stated therein, (iv) manage, supervise
      and otherwise deal with the Collateral, (v) take such other action as is
      necessary or desirable to maintain the perfection and priority of the Liens
      created or purported to be created by the Loan Documents, (vi) except as may
      be
      otherwise specified in any Loan Document, exercise all remedies given to the
      Administrative Agent, the Canadian Agent and the other Secured Parties with
      respect to the Collateral, whether under the Loan Documents, applicable
      Requirements of Law or otherwise and (vii) execute any amendment, consent or
      waiver under the Loan Documents on behalf of any Lender that has consented
      in
      writing to such amendment, consent or waiver; provided,
      however,
      that
      the Administrative Agent and the Canadian Agent hereby appoint, authorize and
      direct each other, each Lender and L/C Issuer to act as collateral sub-agent
      for
      the Administrative Agent, the Canadian Agent, the Lenders and the L/C Issuers
      for purposes of the perfection of all Liens with respect to the Collateral,
      including any deposit account maintained by a Loan Party with, and cash and
      Cash
      Equivalents held by, such Lender or L/C Issuer, and may further authorize and
      direct each other, the Lenders and the L/C Issuers to take further actions
      as
      collateral sub-agents for purposes of enforcing such Liens or otherwise to
      transfer the Collateral subject thereto to the Administrative Agent or the
      Canadian Agent, as applicable, and each Lender and L/C Issuer hereby agrees
      to
      take such further actions to the extent, and only to the extent, so authorized
      and directed.

     

    
      
         

      

      
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    (c)  Limited
      Duties.
      Under
      the Loan Documents, the Administrative Agent and the Canadian Agent (i) is
      acting solely on behalf of the Lenders and the L/C Issuers (except to the
      limited extent provided in Section 2.14(b)
      with
      respect to the Register and in Section 9.11),
      with
      duties that are entirely administrative in nature, notwithstanding the use
      of
      the defined term “Administrative Agent”, “Canadian Agent” and Agent” the terms
“agent”, “administrative agent” “Canadian agent”, and “collateral agent” and
      similar terms in any Loan Document to refer to the Administrative Agent, which
      terms are used for title purposes only, (ii) is not assuming any obligation
      under any Loan Document other than as expressly set forth therein or any role
      as
      agent, fiduciary or trustee of or for any Lender, L/C Issuer or any other
      Secured Party and (iii) shall have no implied functions, responsibilities,
      duties, obligations or other liabilities under any Loan Document, and each
      Lender and L/C Issuer hereby waives and agrees not to assert any claim against
      the Administrative Agent or the Canadian Agent based on the roles, duties and
      legal relationships expressly disclaimed in clauses
      (i)
      through
(iii)
      above.

     

    Section 9.2  Binding
      Effect.
      Each
      Lender and each L/C Issuer agrees that (i) any action taken by the
      Administrative Agent, the Canadian Agent, or the Required Lenders (or, if
      expressly required hereby, a greater proportion of the Lenders) in accordance
      with the provisions of the Loan Documents, (ii) any action taken by the
      Administrative Agent or Canadian Agent in reliance upon the instructions of
      the
      Required Lenders (or, where so required, such greater proportion) and (iii)
      the
      exercise by the Administrative Agent the Canadian Agent or the Required Lenders
      (or, where so required, such greater proportion) of the powers set forth herein
      or therein, together with such other powers as are reasonably incidental
      thereto, shall be authorized and binding upon all of the Secured
      Parties.

     

    Section 9.3  Use
      of
      Discretion.
      (a) No
      Action without Instructions.
      Neither
      the Administrative Agent nor the Canadian Agent shall be required to exercise
      any discretion or take, or to omit to take, any action, including with respect
      to enforcement or collection, except any action it is required to take or omit
      to take (i) under any Loan Document or (ii) pursuant to instructions from
      the Required Lenders.

     

    (b)  Right
      Not to Follow Certain Instructions.
      Notwithstanding clause
      (a)
      above,
      neither the Administrative Agent nor the Canadian Agent shall be required to
      take, or to omit to take, any action (i) unless, upon demand, the
      requesting Agent receives an indemnification satisfactory to it from the Lenders
      (or, to the extent applicable and acceptable to such Agent, any other Secured
      Party) against all Liabilities that, by reason of such action or omission,
      may
      be imposed on, incurred by or asserted against Agent or any of its Related
      Person thereof or (ii) that is, in the opinion of such Agent or its counsel,
      contrary to any Loan Document or applicable Requirement of Law.

     

    
      
         

      

      
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    Section 9.4  Delegation
      of Rights and Duties.
      The
      Agents may, upon any term or condition it specifies, delegate or exercise any
      of
      its rights, powers and remedies under, and delegate or perform any of its duties
      or any other action with respect to, any Loan Document by or through any
      trustee, co-agent, employee, attorney-in-fact and any other Person (including
      any Secured Party). Any such Person shall benefit from this Article IX
      to the
      extent provided by such Agent.

     

    Section 9.5  Reliance
      and Liability.
      (a)
      The
      Agents may, without incurring any liability hereunder, (i) treat the payee
      of
      any Note as its holder until such Note has been assigned in accordance with
      Section 10.2(e),
      (ii)
      rely on the Register to the extent set forth in Section 2.14,
      (iii)
      consult with any of its Related Persons and, whether or not selected by it,
      any
      other advisors, accountants and other experts (including advisors to, and
      accountants and experts engaged by, any Loan Party) and (iv) rely and act upon
      any document and information (including those transmitted by Electronic
      Transmission) and any telephone message or conversation, in each case believed
      by it to be genuine and transmitted, signed or otherwise authenticated by the
      appropriate parties.

     

    (b)  None
      of
      the Agents and their Related Persons shall be liable for any action taken or
      omitted to be taken by any of them under or in connection with any Loan
      Document, and each Lender, L/C Issuer, and the Borrowers hereby waive and shall
      not assert (and each of the Borrowers shall cause each other Loan Party to
      waive
      and agree not to assert) any right, claim or cause of action based thereon,
      except to the extent of liabilities resulting primarily from the gross
      negligence or willful misconduct of the relevant Agent or, as the case may
      be,
      such Related Person (each as determined in a final, non-appealable judgment
      by a
      court of competent jurisdiction) in connection with the duties expressly set
      forth herein. Without limiting the foregoing, the Agents:

     

    (i)  shall
      not
      be responsible or otherwise incur liability for any action or omission taken
      in
      reliance upon the instructions of the Required Lenders or for the actions or
      omissions of any of its Related Persons selected with reasonable care (other
      than employees, officers and directors of such Agent, when acting on behalf
      of
      such Agent); 

     

    (ii)  shall
      not
      be responsible to any Secured Party for the due execution, legality, validity,
      enforceability, effectiveness, genuineness, sufficiency or value of, or the
      attachment, perfection or priority of any Lien created or purported to be
      created under or in connection with, any Loan Document;

     

    (iii)  makes
      no
      warranty or representation, and shall not be responsible, to any Secured Party
      for any statement, document, information, representation or warranty made or
      furnished by or on behalf of any Loan Party or any Loan Party’s Related Person
      in connection with any Loan Document or any transaction contemplated therein
      or
      any other document or information with respect to any Loan Party, whether or
      not
      transmitted or (except for documents expressly required under any Loan Document
      to be transmitted to the Lenders) omitted to be transmitted by the relevant
      Agent, including as to completeness, accuracy, scope or adequacy thereof, or
      for
      the scope, nature or results of any due diligence performed by the Agents in
      connection with the Loan Documents; and

     

    
      
         

      

      
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    (iv)  shall
      not
      have any duty to ascertain or to inquire as to the performance or observance
      of
      any provision of any Loan Document, whether any condition set forth in any
      Loan
      Document is satisfied or waived, as to the financial condition of any Loan
      Party
      or as to the existence or continuation or possible occurrence or continuation
      of
      any Default or Event of Default and shall not be deemed to have notice or
      knowledge of such occurrence or continuation unless it has received a notice
      from the Borrower, any Lender or L/C Issuer describing such Default or Event
      of
      Default clearly labeled “notice of default” (in which case the relevant Agent
      shall promptly give notice of such receipt to all Lenders);

     

    and,
      for
      each of the items set forth in clauses (i) through (iv) above, each Lender,
      L/C
      Issuer and the Borrowers hereby waives and agrees not to assert (and each of
      the
      Borrowers shall cause each other Loan Party to waive and agree not to assert)
      any right, claim or cause of action it might have against the Agents based
      thereon.

    

    Section 9.6  Agent
      Individually.
      The
      Agents and their Affiliates may make loans and other extensions of credit to,
      acquire Stock and Stock Equivalents of, engage in any kind of business with,
      any
      Loan Party or Affiliate thereof as though it were not acting as an Agent and
      may
      receive separate fees and other payments therefor. To the extent the Agents
      or
      any of their Affiliates makes any Loan or otherwise becomes a Lender hereunder,
      it shall have and may exercise the same rights and powers hereunder and shall
      be
      subject to the same obligations and liabilities as any other Lender and the
      terms “Lender”, “Canadian Lender”, “U.S. Lender”, “Required Lender” and any
      similar terms shall, except where otherwise expressly provided in any Loan
      Document, include, without limitation, the relevant Agent or such Affiliate,
      as
      the case may be, in its individual capacity as Lender, Canadian Lender or U.S.
      Lender or as one of the Required Lenders, respectively.

     

    Section 9.7  Lender
      Credit Decision.
      Each
      Lender and each L/C Issuer acknowledges that it shall, independently and without
      reliance upon the Agents, any Lender or L/C Issuer or any of their Related
      Persons or upon any document (including the Disclosure Documents) solely or
      in
      part because such document was transmitted by any Agent or any of its Related
      Persons, conduct its own independent investigation of the financial condition
      and affairs of each Loan Party and make and continue to make its own credit
      decisions in connection with entering into, and taking or not taking any action
      under, any Loan Document or with respect to any transaction contemplated in
      any
      Loan Document, in each case based on such documents and information as it shall
      deem appropriate. Except for documents expressly required by any Loan Document
      to be transmitted by any Agent to the Lenders or L/C Issuers, the Agents shall
      not have any duty or responsibility to provide any Lender or L/C Issuer with
      any
      credit or other information concerning the business, prospects, operations,
      property, financial and other condition or creditworthiness of any Loan Party
      or
      any Affiliate of any Loan Party that may come in to the possession of either
      Agent or any of its Related Persons.

     

    Section 9.8  Expenses;
      Indemnities.
      (a)
      Each
      Lender agrees to reimburse the Agents and each of its Related Persons (to the
      extent not reimbursed by any Loan Party) promptly upon demand for such Lender’s
      Pro Rata Share with respect to the Facilities of any costs and expenses
      (including fees, charges and disbursements of financial, legal and other
      advisors and Taxes paid in the name of, or on behalf of, any Loan Party) that
      may be incurred by the Agents or any of their Related Persons in connection
      with
      the preparation, syndication, execution, delivery, administration, modification,
      consent, waiver or enforcement (whether through negotiations, through any
      work-out, bankruptcy, restructuring or other legal or other proceeding or
      otherwise) of, or legal advice in respect of its rights or responsibilities
      under, any Loan Document.

     

    
      
         

      

      
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    (b)  Each
      Lender further agrees to indemnify the Agents and each of their Related Persons
      (to the extent not reimbursed by any Loan Party), from and against such Lender’s
      aggregate Pro Rata Share with respect to the Facilities of the Liabilities
      (including taxes, interests and penalties imposed for not properly withholding
      or backup withholding on payments made to on or for the account of any Lender)
      that may be imposed on, incurred by or asserted against the Agents or any of
      their Related Persons in any matter relating to or arising out of, in connection
      with or as a result of any Loan Document, any Related Document or any other
      act,
      event or transaction related, contemplated in or attendant to any such document,
      or, in each case, any action taken or omitted to be taken by any Agent or any
      of
      its Related Persons under or with respect to any of the foregoing; provided,
      however,
      that no
      Lender shall be liable to any Agent or any of its Related Persons to the extent
      such liability has resulted from the gross negligence or willful misconduct
      of
      such Agent or, as the case may be, such Related Person.

     

    Section 9.9  Resignation
      of Administrative Agent or L/C Issuer.
      

     

    (a)  Either
      Agent may resign at any time by delivering notice of such resignation to the
      Lenders and the Parent, effective on the date set forth in such notice (or
      provided such effective date is at least 30 days after the date of such notice).
      If an Agent delivers any such notice, the Required Lenders shall have the right
      to appoint a successor Administrative Agent or Canadian Agent. If, within 30
      days after the retiring Agent has given notice of resignation, no successor
      Administrative Agent or Canadian Agent has been appointed by such Lenders that
      has accepted such appointment, then the retiring Agent may, on behalf of the
      Lenders, appoint a successor Administrative Agent or Canadian Agent, as
      applicable from among the relevant Lenders. Each appointment under this
clause
      (a)
      shall be
      subject to the prior consent of the Parent, which may not be unreasonably
      withheld but shall not be required during the continuance of a
      Default.

     

    (b)  Effective
      immediately upon its resignation, (i) the retiring Agent shall be discharged
      from its duties and obligations under the Loan Documents, (ii) the relevant
      Lenders shall assume and perform all of the duties of such Agent until a
      successor Agent shall have accepted a valid appointment hereunder, (iii) the
      retiring Agent and its Related Persons shall no longer have the benefit of
      any
      provision of any Loan Document other than with respect to any actions taken
      or
      omitted to be taken while such retiring Agent was, or because such Agent had
      been, validly acting as Administrative Agent or Canadian Agent, as the case
      may
      be, under the Loan Documents and (iv) subject to its rights under Section 9.3,
      the
      retiring Administrative Agent shall take such action as may be reasonably
      necessary to assign to the successor Administrative Agent its rights as
      Administrative Agent under the Loan Documents. Effective immediately upon its
      acceptance of a valid appointment as Administrative Agent or Canadian Agent,
      as
      the case may be, a successor Administrative Agent or Canadian Agent shall
      succeed to, and become vested with, all the rights, powers, privileges and
      duties of the retiring Administrative Agent or Canadian Agent under the Loan
      Documents.

     

    
      
         

      

      
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    (c)  Any
      L/C
      Issuer may resign at any time by delivering notice of such resignation to the
      Administrative Agent, effective on the date set forth in such notice or, if
      no
      such date is set forth therein, on the date such notice shall be effective.
      Upon
      such resignation, the L/C Issuer shall remain an L/C Issuer and shall retain
      its
      rights and obligations in its capacity as such (other than any obligation to
      Issue Letters of Credit but including the right to receive fees or to have
      Lenders participate in any L/C Reimbursement Obligation thereof) with respect
      to
      Letters of Credit issued by such L/C Issuer prior to the date of such
      resignation and shall otherwise be discharged from all other duties and
      obligations under the Loan Documents.

     

    Section 9.10  Release
      of Collateral or Guarantors.
      Each
      Lender and L/C Issuer hereby consents to the release and hereby directs the
      Administrative Agent and the Canadian Agent, as applicable, to release (or,
      in
      the case of clause
      (b)(ii)
      below,
      release or subordinate) the following:

     

    (a)  any
      Subsidiary of a Borrower from its guaranty of any Obligation of any Loan Party
      or any Borrower (other than Parent) if all of the Securities of such Person
      owned by any Group Member are Sold in a Sale permitted under the Loan Documents
      (including pursuant to a waiver or consent), to the extent that, after giving
      effect to such Sale, such Person would not be required to guaranty any
      Obligations pursuant to Section 6.11
      or be a Borrower hereunder;
      and

     

    (b)  any
      Lien
      held by an Agent for the benefit of the Secured Parties against (i) any
      Collateral that is Sold by a Loan Party in a Sale permitted by the Loan
      Documents (including pursuant to a valid waiver or consent), to the extent
      all
      Liens required to be granted in such Collateral pursuant to Section 6.11
      after
      giving effect to such Sale have been granted, (ii) any property subject to
      a
      Lien permitted hereunder in reliance upon Section
      7.2
      and
      (iii) all of the Collateral and all Loan Parties, upon (A) termination of the
      Commitments, (B) payment and satisfaction in full of all Loans, all L/C
      Reimbursement Obligations and all other Obligations that the Agents have been
      notified in writing are then due and payable, (C) deposit of cash collateral
      with respect to all contingent Obligations (or, in the case of any L/C
      Obligation, a back-up letter of credit has been issued), in amounts and on
      terms
      and conditions and with parties satisfactory to the Agents and each Indemnitee
      that is owed such Obligations and (D) to the extent requested by the Agents,
      receipt by the Secured Parties of liability releases from the Loan Parties
      each
      in form and substance acceptable to the Agent.

     

    Each
      Lender and L/C Issuer hereby directs the Agents, and the Agents hereby agree,
      upon receipt of reasonable advance notice from the Parent, to execute and
      deliver or file such documents and to perform other actions reasonably necessary
      to release the guaranties and Liens when and as directed in this Section 9.10.

     

    
      
         

      

      
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    Section 9.11  Additional
      Secured Parties.
      The
      benefit of the provisions of the Loan Documents directly relating to the
      Collateral or any Lien granted thereunder shall extend to and be available
      to
      any Secured Party that is not a Lender or L/C Issuer as long as, by accepting
      such benefits, such Secured Party agrees, as among the Administrative Agent
      or
      the Canadian Agent, as applicable, and all other Secured Parties, that such
      Secured Party is bound by (and, if requested by the relevant Agent, shall
      confirm such agreement in a writing in form and substance acceptable to the
      relevant Agent) this Article IX,
      Section 10.8
      (Right
      of Setoff),
      Section 10.9
      (Sharing
      of Payments)
      and
Section 10.20
      (Confidentiality)
      and the
      decisions and actions of the relevant Agent and the Required Lenders to the
      same
      extent a Lender is bound; provided,
      however,
      that,
      notwithstanding the foregoing, (a) such Secured Party shall be bound by
Section 9.8
      only to
      the extent of Liabilities, costs and expenses with respect to or otherwise
      relating to the Collateral held for the benefit of such Secured Party, in which
      case the obligations of such Secured Party thereunder shall not be limited
      by
      any concept of Pro Rata Share or similar concept, (b) each of the Agents, the
      Lenders and the L/C Issuers shall be entitled to act at its sole discretion,
      without regard to the interest of such Secured Party, regardless of whether
      any
      Obligation to such Secured Party thereafter remains outstanding, is deprived
      of
      the benefit of the Collateral, becomes unsecured or is otherwise affected or
      put
      in jeopardy thereby, and without any duty or liability to such Secured Party
      or
      any such Obligation and (c) such Secured Party shall not have any right to
      be
      notified of, consent to, direct, require or be heard with respect to, any action
      taken or omitted in respect of the Collateral or under any Loan
      Document.

     

    ARTICLE
      X  

     

    MISCELLANEOUS

     

    Section 10.1  Amendments,
      Waivers, Etc.
      (a)
      No
      amendment or waiver of any provision of any Loan Document (other than the Fee
      Letter, the Control Agreements and the L/C Reimbursement Agreement) and no
      consent to any departure by any Loan Party therefrom shall be effective unless
      the same shall be in writing and signed (i) in the case of an amendment, consent
      or waiver to cure any ambiguity, omission, defect or inconsistency or granting
      a
      new Lien for the benefit of the Secured Parties or extending an existing Lien
      over additional property, by the Administrative Agent and the Parent, (ii)
      in
      the case of any other waiver, or consent, by the Required Lenders (or by the
      Administrative Agent with the consent of the Required Lenders) and (3) in the
      case of any other amendment, by the Required Lenders (or by the Administrative
      Agent with the consent of the Required Lenders) and the Borrowers; provided,
      however,
      that no
      amendment, consent or waiver described in clauses (2)
      or
(3)
      above
      shall, unless in writing and signed by each Lender directly affected thereby
      (or
      by the Administrative Agent with the consent of such Lender), in addition to
      any
      other Person the signature of which is otherwise required pursuant to any Loan
      Document, do any of the following: 

     

    (i)  waive
      any
      condition specified in Section 3.1,
      except
      any condition referring to any other provision of any Loan
      Document;

     

    (ii)  increase
      the Commitment of such Lender or subject such Lender to any additional
      obligation;

     

    (iii)  reduce
      (including through release, forgiveness, assignment or otherwise) (A) the
      principal amount of, the interest rate on, or any obligation of the Borrower
      to
      repay (whether or not on a fixed date), any outstanding Loan owing to such
      Lender, (B) any fee or accrued interest payable to such Lender or (C) if
      such Lender is a Revolving Credit Lender, any L/C Reimbursement Obligation
      or
      any obligation of the Borrowers to repay (whether or not on a fixed date) any
      L/C Reimbursement Obligation; provided,
      however,
      that
      this clause
      (iii)
      does not
      apply to (x) any change to any provision increasing any interest rate or
      fee during the continuance of an Event of Default or to any payment of any
      such
      increase, (y) any modification to the definition of Adjusted Availability or
      principally used therein or (z) any reduction occurring as a result of a
      conversion of any Obligation to a different currency or a change in the manner
      or timing of such conversion;

     

    
      
         

      

      
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    (iv)  waive
      or
      postpone any scheduled maturity date or other scheduled date fixed for the
      payment, in whole or in part, of principal of or interest on any Loan or fee
      owing to such Lender or for the reduction of such Lender’s Commitment;
provided,
      however,
      that
      this clause
      (iv)
      does not
      apply to any change to mandatory prepayments, including those required under
      Section 2.8,
      or to
      the application of any payment, including as set forth in Section 2.12;

     

    (v)  except
      as
      provided in Section 10.9,2
      release
      all or substantially all of the Collateral or any Borrower or any Guarantor
      from
      its guaranty of any Obligation of the Borrowers; 

     

    (vi)  reduce
      or
      increase the proportion of Lenders required for the Lenders (or any subset
      thereof) to take any action hereunder or change the definition of the terms
      “Required Lenders”, “Pro Rata Share” or “Pro Rata Outstandings”; or

     

    (vii)  amend
      Section 9.10,
      Section 10.9
      or this
Section 10.1;

     

    and
      provided,
      further,
      that
      (x) no amendment, waiver or consent shall affect the rights or duties under
      any
      Loan Document of, or any payment to, any Agent (or otherwise modify any
      provision of Article IX
      or the
      application thereof), the Swingline Lender, the Canadian Swingline Lender,
      any
      L/C Issuer that has been granted an option pursuant to Section 10.2(f)
      unless
      in writing and signed by the affected Agent, the Swingline Lender, the Canadian
      Swingline Lender, such L/C Issuer or, as the case may be, in addition to any
      signature otherwise required and (y) the consent of the Borrowers shall not
      be
      required to change any order of priority set forth in Section 2.12.

    

    (b)  Each
      waiver or consent under any Loan Document shall be effective only in the
      specific instance and for the specific purpose for which it was given. No notice
      to or demand on any Loan Party shall entitle any Loan Party to any notice or
      demand in the same, similar or other circumstances. No failure on the part
      of
      any Secured Party to exercise, and no delay in exercising, any right hereunder
      shall operate as a waiver thereof, nor shall any single or partial exercise
      of
      any such right preclude any other or further exercise thereof or the exercise
      of
      any other right.

     

    Section 10.2  Assignments
      and Participations; Binding Effect.
      (a) Binding
      Effect.
      This
      Agreement shall become effective when it shall have been executed by the
      Borrowers, the Canadian Agent and the Administrative Agent and when the relevant
      Agent shall have been notified by each Lender and L/C Issuer that such Lender
      or
      L/C Issuer has executed it. Thereafter, it shall be binding upon and inure
      to
      the benefit of the Borrowers (in each case except for Article IX),
      the
      Administrative Agent, the Canadian Agent, each Lender and L/C Issuer and, to
      the
      extent provided in Section 9.11,
      each
      other Indemnitee and Secured Party and, in each case, their respective
      successors and permitted assigns. None of the Borrowers, the Canadian Agent,
      any
      L/C Issuer or the Agents (except to a successor Administrative Agent named
      pursuant to Section 9.10
      or
      otherwise to facilitate the transaction contemplated in such Section 9.10)
      shall
      have the right to assign any rights or obligations hereunder or any interest
      herein.

     

    
      
         

      

      
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    (b)  Right
      to Assign.
      Each
      Lender may sell, transfer, negotiate or assign all or a portion of its rights
      and obligations hereunder (including all or a portion of its Commitments and
      its
      rights and obligations with respect to Loans and Letters of Credit) to (i)
      in
      the case of the U.S. Lenders, any existing U.S. Lender, (ii) any Affiliate
      or
      Approved Fund of any such Lender or (iii) any other Person acceptable (which
      acceptance shall not be unreasonably withheld or delayed) to the Administrative
      Agent (in the case of the U.S. Lenders) or the Canadian Agent (in the case
      of
      the Canadian Lenders) and, as long as no Event of Default is continuing, the
      Parent; provided,
      however,
      that
      (x) such Sales do not have to be ratable between the Facilities but must be
      ratable among the obligations owing to and owed by such Lender with respect
      to a
      Facility and (y) for each Facility, the aggregate outstanding principal amount
      (determined as of the effective date of the applicable Assignment) of the Loans,
      Commitments and L/C Obligations subject to any such Sale shall be an integral
      multiple of $1,000,000, unless such Sale is made to an existing Lender or an
      Affiliate or Approved Fund of any existing Lender, is of the assignor’s
      (together with its Affiliates and Approved Funds) entire interest in such
      Facility or is made with the prior consent of the Borrowers and the
      Administrative Agent; provided
      further,
      that in
      the case of an assignment by a Canadian Lender under this Section
      10.2(b),
      the
      assignee shall have, to the extent of such assignment, the same rights, benefits
      and obligations as all other Lenders hereunder; provided,
      that
      prior to the occurrence of an Event of Default that is continuing, if such
      assignee is a non-resident of Canada for purposes of Part XIII of the ITA in
      respect of any payment that may be made by a Loan Party under any Loan Document,
      such assignee shall not be entitled to any gross-up payment or indemnification
      pursuant to Section
      2.17
      (Taxes)
      from any Loan Party on account of any Canadian withholding taxes (including
      interest and penalties in respect thereof) exigible on any such
      payment.

     

    (c)  Procedure.
      The
      parties to each Sale made in reliance on clause
      (b)
      above
      (other than those described in clause
      (e)
      or
(f)
      below)
      shall execute and deliver to the Administrative Agent or the Canadian Agent,
      as
      the case may be, (which shall keep a copy thereof) an Assignment, together
      with
      any existing Note subject to such Sale (or any affidavit of loss therefor
      acceptable to the relevant Agent), any tax forms required to be delivered
      pursuant to Section 2.17(a)
      and
      payment by the assignee of an assignment fee in the amount of $3,500. Upon
      receipt of all the foregoing, and conditioned upon such receipt and upon the
      relevant Agent consenting to such Assignment, from and after the effective
      date
      specified in such Assignment, the Agents shall record or cause to be recorded
      in
      the Register the information contained in such Assignment.

     

    (d)  Effectiveness.
      Effective upon the entry of such record in the Register, (i) such assignee
      shall become a party hereto and, to the extent that rights and obligations
      under
      the Loan Documents have been assigned to such assignee pursuant to such
      Assignment, shall have the rights and obligations of a Lender, (ii) any
      applicable Note shall be transferred to such assignee through such entry and
      (iii) the assignor thereunder shall, to the extent that rights and obligations
      under this Agreement have been assigned by it pursuant to such Assignment,
      relinquish its rights (except for those surviving the termination of the
      Commitments and the payment in full of the Obligations) and be released from
      its
      obligations under the Loan Documents, other than those relating to events or
      circumstances occurring prior to such assignment (and, in the case of an
      Assignment covering all or the remaining portion of an assigning Lender’s rights
      and obligations under the Loan Documents, such Lender shall cease to be a party
      hereto except that each Lender agrees to remain bound by Article IX,
      Section 10.8
      and
Section 10.9
      to the
      extent provided in Section 9.11).

     

    
      
         

      

      
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    (e)  Grant
      of Security Interests.
      In
      addition to the other rights provided in this Section 10.2,
      each
      Lender may grant a security interest in, or otherwise assign as collateral,
      any
      of its rights under this Agreement, whether now owned or hereafter acquired
      (including rights to payments of principal or interest on the Loans), to (A)
      any
      federal reserve bank (pursuant to Regulation A of the Federal Reserve Board),
      without notice to the Administrative Agent or (B) any holder of, or trustee
      for the benefit of the holders of, such Lender’s Securities by notice to the
      Administrative Agent; provided,
      however,
      that no
      such holder or trustee, whether because of such grant or assignment or any
      foreclosure thereon (unless such foreclosure is made through an assignment
      in
      accordance with clause
      (b)
      above),
      shall be entitled to any rights of such Lender hereunder and no such Lender
      shall be relieved of any of its obligations hereunder.

     

    (f)  Participants.
      In
      addition to the other rights provided in this Section 10.2,
      each
      Lender may without notice to or consent from the Agents or the Borrowers,
      sell participations to one or more Persons in or to all or a portion of its
      rights and obligations under the Loan Documents (including all its rights and
      obligations with respect to the, Revolving Loans and Letters of Credit);
provided,
      however,
      that,
      whether as a result of any term of any Loan Document or of such grant or
      participation, (i) no such participant shall have a commitment, or be deemed
      to
      have made an offer to commit, to make Loans hereunder, and, except as provided
      in the applicable option agreement, none shall be liable for any obligation
      of
      such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights
      and obligations of the Loan Parties and the Secured Parties towards such Lender,
      under any Loan Document shall remain unchanged and each other party hereto
      shall
      continue to deal solely with such Lender, which shall remain the holder of
      the
      Obligations in the Register, except that (A) each such participant shall be
      entitled to the benefit of Sections 2.16
      and
2.17,
      but
      only to the extent (x) such participant delivers the tax forms such Lender
      is
      required to collect pursuant to Section 2.17(a)
      and then
      only to the extent of any amount to which such Lender would be entitled in
      the
      absence of any such grant or participation and (y) that prior to an Event of
      Default, each such participant in the Canadian Revolving Credit Commitment
      that
      it is a non-resident of Canada in respect of any payment made by Bombay Canada
      to such participant under the Loan Documents for the purposes of Part XIII
      of
      the ITA shall not be entitled to any payment of any additional amount or
      indemnification pursuant to Section
      2.17
      from any
      Loan Party on account of any Canadian withholding taxes (including interest
      and
      penalties in respect thereof) exigible on any such payment; provided,
      however,
      that in
      no case shall participant have the right to enforce any of the terms of any
      Loan
      Document, and (iii) the consent of such participant shall not be required
      (either directly, as a restraint on such Lender’s ability to consent hereunder
      or otherwise) for any amendments, waivers or consents with respect to any Loan
      Document or to exercise or refrain from exercising any powers or rights such
      Lender may have under or in respect of the Loan Documents (including the right
      to enforce or direct enforcement of the Obligations), except for those described
      in clauses (iii)
      and
(iv)
      of
Section 10.1(a)
      with
      respect to amounts, or dates fixed for payment of amounts, to which such
      participant would otherwise be entitled and, except for those described in
      Section 10.1(a)(v)
      (or
      amendments, consents and waivers with respect to Section 9.10
      to
      release all or substantially all of the Collateral). 

     

    
      
         

      

      
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    Section 10.3  Costs
      and Expenses.
      Any
      action taken by any Loan Party under or with respect to any Loan Document,
      even
      if required under any Loan Document or at the request of any Secured Party,
      shall be at the expense of such Loan Party, and no Secured Party shall be
      required under any Loan Document to reimburse any Loan Party or Group Member
      therefor except as expressly provided therein. In addition, the Borrowers agree
      to pay or reimburse upon demand (a) the Agents for all reasonable out-of-pocket
      costs and expenses incurred by it or any of its Related Persons in connection
      with the investigation, development, preparation, negotiation, syndication,
      execution, interpretation or administration of, any modification of any term
      of
      or termination of, any Loan Document, any commitment or proposal letter
      therefor, any other document prepared in connection therewith or the
      consummation and administration of any transaction contemplated therein
      (including periodic audits in connection therewith and environmental audits
      and
      assessments), in each case including the reasonable fees, charges and
      disbursements of legal counsel to the Agents or such Related Persons, fees,
      costs and expenses incurred in connection with Intralinks®
      or any
      other E-System and allocated to the Facilities by the Agents in its sole
      discretion and fees, charges and disbursements of the auditors, appraisers,
      printers and other of their Related Persons retained by or on behalf of any
      of
      them or any of their Related Persons, (b) the Agents for all reasonable costs
      and expenses incurred by it or any of its Related Persons in connection with
      internal audit reviews, field examinations and Collateral examinations (which
      shall be reimbursed, in addition to the out-of-pocket costs and expenses of
      such
      examiners, at the per diem rate per individual charged by the Agents for its
      examiners) and (c) each of the Agents, its Related Persons, and each Lender
      and
      L/C Issuer for all costs and expenses incurred in connection with (i) any
      refinancing or restructuring of the credit arrangements provided hereunder
      in
      the nature of a “work-out”, (ii) the enforcement or preservation of any right or
      remedy under any Loan Document, any Obligation, with respect to the Collateral
      or any other related right or remedy or (iii) the commencement, defense, conduct
      of, intervention in, or the taking of any other action with respect to, any
      proceeding (including any bankruptcy or insolvency proceeding) related to any
      Group Member, Loan Document, Obligation or Related Transaction (or the response
      to and preparation for any subpoena or request for document production relating
      thereto), including reasonable fees and disbursements of counsel (including
      allocated costs of internal counsel).

     

    Section 10.4  Indemnities.
      (a)
      The
      Borrowers agree to indemnify, hold harmless and defend the Agents, each Lender,
      each L/C Issuer, each Person that each L/C Issuer causes to Issue Letters of
      Credit hereunder and each of their respective Related Persons (each such Person
      being an “Indemnitee”)
      from
      and against all Liabilities (including brokerage commissions, fees and other
      compensation) that may be imposed on, incurred by or asserted against any such
      Indemnitee in any matter relating to or arising out of, in connection with
      or as
      a result of (i) any Loan Document, any Related Document, any Disclosure
      Document, any Obligation (or the repayment thereof), any Letter of Credit,
      the
      use or intended use of the proceeds of any Loan or the use of any Letter of
      Credit, any Related Transaction, or any securities filing of, or with respect
      to, any Group Member, (ii) any commitment letter, proposal letter or term sheet
      with any Person or any Contractual Obligation, arrangement or understanding
      with
      any broker, finder or consultant, in each case entered into by or on behalf
      of
      the Borrowers, any Group Member or any Affiliate of any of them in connection
      with any of the foregoing and any Contractual Obligation entered into in
      connection with any E-Systems or other Electronic Transmissions, (iii) any
      actual or prospective investigation, litigation or other proceeding, whether
      or
      not brought by any such Indemnitee or any of its Related Persons, any holders
      of
      Securities or creditors (and including attorneys’ fees in any case), whether or
      not any such Indemnitee, Related Person, holder or creditor is a party thereto,
      and whether or not based on any securities or commercial law or regulation
      or
      any other Requirement of Law or theory thereof, including common law, equity,
      contract, tort or otherwise, or (iv) any other act, event or transaction
      related, contemplated in or attendant to any of the foregoing (collectively,
      the
“Indemnified
      Matters”);
      provided,
      however,
      that
      the Borrowers shall not have any liability under this Section 10.4
      to any
      Indemnitee with respect to any Indemnified Matter, and no Indemnitee shall
      have
      any liability with respect to any Indemnified Matter other than (to the extent
      otherwise liable), to the extent such liability has resulted from the gross
      negligence or willful misconduct of such Indemnitee, as determined by a court
      of
      competent jurisdiction in a final non-appealable judgment or order. Furthermore,
      each Borrower waives and agrees not to assert against any Indemnitee, and shall
      cause each other Loan Party to waive and not assert against any Indemnitee,
      any
      right of contribution with respect to any Liabilities that may be imposed on,
      incurred by or asserted against any Related Person.

     

    
      
         

      

      
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    (b)  Without
      limiting the foregoing, “Indemnified
      Matters”
      includes all Environmental Liabilities, including those arising from, or
      otherwise involving, any property of any Related Person or any actual, alleged
      or prospective damage to property or natural resources or harm or injury alleged
      to have resulted from any release of Hazardous Materials on, upon or into such
      property or natural resource or any property on or contiguous to any real
      property of any Related Person, whether or not, with respect to any such
      Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any
      leasehold mortgage, a mortgagee in possession, the successor-in-interest to
      any
      Related Person or the owner, lessee or operator of any property of any Related
      Person through any foreclosure action, in each case except to the extent such
      Environmental Liabilities (i) are incurred solely following foreclosure by
      any
      Secured Party or following any Secured Party having become the
      successor-in-interest to any Loan Party and (ii) are attributable solely to
      acts of such Indemnitee.

     

    Section 10.5  Survival.
      Any
      indemnification or other protection provided to any Indemnitee pursuant to
      any
      Loan Document (including pursuant to Section 2.17,
      Section 2.16,
      Article IX,
      Section 10.3,
      Section 10.4
      or this
Section 10.5)
      and all
      representations and warranties made in any Loan Document shall (A) survive
      the termination of the Commitments and the payment in full of other Obligations
      and (B) inure to the benefit of any Person that at any time held a right
      thereunder (as an Indemnitee or otherwise) and, thereafter, its successors
      and
      permitted assigns.

     

    Section 10.6  Limitation
      of Liability for Certain Damages.
      In no
      event shall any Indemnitee be liable on any theory of liability for any special,
      indirect, consequential or punitive damages (including any loss of profits,
      business or anticipated savings). Each Borrower hereby waives, releases and
      agrees (and shall cause each other Loan Party to waive, release and agree)
      not
      to sue upon any such claim for any special, indirect, consequential or punitive
      damages, whether or not accrued and whether or not known or suspected to exist
      in its favor.

     

    Section 10.7  Lender-Creditor
      Relationship.
      The
      relationship between the Lenders, the L/C Issuers and the Agents, on the one
      hand, and the Loan Parties, on the other hand, is solely that of lender and
      creditor. No Secured Party has any fiduciary relationship or duty to any Loan
      Party arising out of or in connection with, and there is no agency, tenancy
      or
      joint venture relationship between the Secured Parties and the Loan Parties
      by
      virtue of, any Loan Document or any transaction contemplated
      therein.

     

    
      
         

      

      
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    Section 10.8  Right
      of Setoff.
      Each
      Agent, each Lender, each L/C Issuer and each Affiliate (including each branch
      office thereof) of any of them is hereby authorized, without notice or demand
      (each of which is hereby waived by each Borrower), at any time and from time
      to
      time during the continuance of any Event of Default and to the fullest extent
      permitted by applicable Requirements of Law, to set off and apply any and all
      deposits (whether general or special, time or demand, provisional or final)
      at
      any time held and other Indebtedness, claims or other obligations at any time
      owing by the relevant Agent, such Lender, such L/C Issuer or any of their
      respective Affiliates to or for the credit or the account of any Borrower
      against any Obligation of any Loan Party now or hereafter existing, whether
      or
      not any demand was made under any Loan Document with respect to such Obligation
      and even though such Obligation may be unmatured. Each Agent, each Lender and
      each L/C Issuer agrees promptly to notify the Borrowers and the Agents after
      any
      such setoff and application made by such Lender or its Affiliates; provided,
      however,
      that
      the failure to give such notice shall not affect the validity of such setoff
      and
      application. The rights under this Section 10.8
      are in
      addition to any other rights and remedies (including other rights of setoff)
      that the Agents, the Lenders and the L/C Issuers and their Affiliates and other
      Secured Parties may have.

     

    Section 10.9  Sharing
      of Payments, Etc.
      If any
      Lender, directly or through an Affiliate or branch office thereof, obtains
      any
      payment of any Obligation of any Loan Party (whether voluntary, involuntary
      or
      through the exercise of any right of setoff or the receipt of any Collateral
      or
“proceeds”
(as
      defined under the applicable UCC) of Collateral) other than pursuant to
Sections 2.16,
      2.17
      and
2.18
      and such
      payment exceeds the amount such Lender would have been entitled to receive
      if
      all payments had gone to, and been distributed by, the Agents in accordance
      with
      the provisions of the Loan Documents, such Lender shall purchase for cash from
      other Secured Parties such participations in their Obligations as necessary
      for
      such Lender to share such excess payment with such Secured Parties to ensure
      such payment is applied as though it had been received by the Agents and applied
      in accordance with this Agreement (or, if such application would then be at
      the
      discretion of the Borrowers, applied to repay the Obligations in accordance
      herewith); provided,
      however,
      that
      (a) if such payment is rescinded or otherwise recovered from such Lender or
      L/C
      Issuer in whole or in part, such purchase shall be rescinded and the purchase
      price therefor shall be returned to such Lender or L/C Issuer without interest
      and (b) such Lender shall, to the fullest extent permitted by applicable
      Requirements of Law, be able to exercise all its rights of payment (including
      the right of setoff) with respect to such participation as fully as if such
      Lender were the direct creditor of the Borrowers in the amount of such
      participation.

     

    Section 10.10  Marshaling;
      Payments Set Aside.
      No
      Secured Party shall be under any obligation to marshal any property in favor
      of
      any Loan Party or any other party or against or in payment of any Obligation.
      To
      the extent that any Secured Party receives a payment from the Borrowers, from
      the proceeds of the Collateral, from the exercise of its rights of setoff,
      any
      enforcement action or otherwise, and such payment is subsequently, in whole
      or
      in part, invalidated, declared to be fraudulent or preferential, set aside
      or
      required to be repaid to a trustee, receiver or any other party, then to the
      extent of such recovery, the obligation or part thereof originally intended
      to
      be satisfied, and all Liens, rights and remedies therefor, shall be revived
      and
      continued in full force and effect as if such payment had not
      occurred.

     

    
      
         

      

      
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    Section 10.11  Notices.
      (a) Addresses.
      All
      notices, demands, requests, directions and other communications required or
      expressly authorized to be made by this Agreement shall, whether or not
      specified to be in writing but unless otherwise expressly specified to be given
      by any other means, be given (i)
      in
      writing and addressed to: 

     

    (A)  if
      to
      Parent or any Borrower, to:

     

    The
      Bombay Company, Inc.

    550
      Bailey Avenue

    Suite
      700

    Fort
      Worth, TX 76107

    Attention:
      Elaine D. Crowley

    Fax:
      (817) 332-7066

    

    with
      copy
      to:

     

    Thompson
      & Knight LLP

    1700
      Pacific Ave, Suite 3300

    Dallas,
      Texas 75201

    Attention:
      Fred W. Fulton, Esq.

    Fax:
      (214) 880-3155

     

    (B)  if
      to the
      Administrative Agent or the Swingline Lender, to: 

     

    General
      Electric Capital Corporation

    401
      Merritt 7

    P.O.
      Box
      5201

    Norwalk,
      Connecticut 06856-5201

    Attention:
      Bombay Account Manager

    Tel:
      (203) 956-4406

    Fax:
      (203) 956-4009

     

    with
      copy
      to:

     

    General
      Electric Capital Corporation

    500
      West
      Monroe Street, 12th Floor

    Chicago,
      Illinois 60661

    Attention:
      Bombay Account Manager

    Tel:
      (312) 463-2251

    Fax:
      (312) 441-6817

     

    and:

     

    Weil,
      Gotshal & Manges LLP

    200
      Crescent Court, Suite 300

    Dallas,
      Texas 75201

    Attention:
      Angela L. Fontana, Esq.

    Tel:
      (214) 746-7895

    Fax:
      (214) 746-7777

     

    
      
         

      

      
        106

        
          

        

      

      
         

      

    

    (C)  if
      to the
      Canadian Agent or the Canadian Swingline Lender, to: 

     

    GE
      Canada
      Finance Holding Company

    123
      Front
      Street West, Suite 1400

    Toronto,
      Ontario 

    Attention:
      Bombay
      Account Manager

    Tel:
      (416)
      202.6219

    Fax:
      (416)
      202.6226

     

    with
      copy
      to:

     

    Weil,
      Gotshal & Manges LLP

    200
      Crescent Court, Suite 300

    Dallas,
      Texas 75201

    Attention:
      Angela L. Fontana, Esq.

    Tel:
      (214) 746-7895

    Fax:
      (214) 746-7777

     

    otherwise
      to the party to be notified at its address specified on the signature page
      of
      any applicable Assignment, (ii) posted to Intralinks®
      (to
      the
      extent such system is available and set up by or at the direction of the
      Administrative Agent prior to posting) in an appropriate location by uploading
      such notice, demand, request, direction or other communication to
      www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded
      fax
      coversheet or using such other means of posting to Intralinks®
      as may
      be available and reasonably acceptable to the Administrative Agent prior to
      such
      posting, (iii) posted to any other E-System set up by or at the direction of
      the
      Administrative Agent in an appropriate location or (iv) addressed to such other
      address as shall be notified in writing (A) in the case of the Borrowers, the
      Agents, the Swingline Lender and the Canadian Swingline Lender, to the other
      parties hereto and (B) in the case of all other parties, to the Borrowers and
      the Administrative Agent. Transmission by electronic mail (including E-Fax,
      even
      if transmitted to the fax numbers set forth in clause
      (i)
      above)
      shall not be sufficient or effective to transmit any such notice under this
      clause
      (a)
      unless
      such transmission is an available means to post to any E-System.

     

    (b)  Effectiveness.
      All
      communications described in clause
      (a)
      above
      and all other notices, demands, requests and other communications made in
      connection with this Agreement shall be effective and be deemed to have been
      received (i) if delivered by hand, upon personal delivery, (ii) if delivered
      by
      overnight courier service, one Business Day after delivery to such courier
      service, (iii) if delivered by mail, when deposited in the mails, (iv) if
      delivered by facsimile (other than to post to an E-System pursuant to
clause
      (a)(ii)
      or
(a)(iii)
      above),
      upon sender’s receipt of confirmation of proper transmission, and (v) if
      delivered by posting to any E-System, on the later of the date of such posting
      in an appropriate location and the date access to such posting is given to
      the
      recipient thereof in accordance with the standard procedures applicable to
      such
      E-System; provided,
      however,
      that no
      communications to any Agent pursuant to Article II
      or
Article IX
      shall be
      effective until received by such Agent.

     

    Section 10.12  Electronic
      Transmissions.
      (a) Authorization.
      Subject
      to the provisions of Section 10.11(a),
      each
      Agent, the Borrowers, the Lenders, the L/C Issuers and each of their Related
      Persons is authorized (but not required) to transmit, post or otherwise make
      or
      communicate, in its sole discretion, Electronic Transmissions in connection
      with
      any Loan Document and the transactions contemplated therein. Each Borrower
      and
      each Secured Party hereby acknowledges and agrees, and each Borrower shall
      cause
      each other Group Member to acknowledge and agree, that the use of Electronic
      Transmissions is not necessarily secure and that there are risks associated
      with
      such use, including risks of interception, disclosure and abuse and each
      indicates it assumes and accepts such risks by hereby authorizing the
      transmission of Electronic Transmissions.

     

    
      
         

      

      
        107

        
          

        

      

      
         

      

    

    (b)  Signatures.
      Subject
      to the provisions of Section 10.11(a),
      (i)(A)
      no posting to any E-System shall be denied legal effect merely because it is
      made electronically, (B) each E-Signature on any such posting shall be
      deemed sufficient to satisfy any requirement for a “signature” and (C) each
      such posting shall be deemed sufficient to satisfy any requirement for a
“writing”, in each case including pursuant to any Loan Document, any applicable
      provision of any UCC, the federal Uniform Electronic Transactions Act, the
      Electronic Signatures in Global and National Commerce Act and any substantive
      or
      procedural Requirement of Law governing such subject matter, (ii) each such
      posting that is not readily capable of bearing either a signature or a
      reproduction of a signature may be signed, and shall be deemed signed, by
      attaching to, or logically associating with such posting, an E-Signature, upon
      which each Secured Party and Loan Party may rely and assume the authenticity
      thereof, (iii) each such posting containing a signature, a reproduction of
      a
      signature or an E-Signature shall, for all intents and purposes, have the same
      effect and weight as a signed paper original and (iv) each party hereto or
      beneficiary hereto agrees not to contest the validity or enforceability of
      any
      posting on any E-System or E-Signature on any such posting under the provisions
      of any applicable Requirement of Law requiring certain documents to be in
      writing or signed; provided,
      however,
      that
      nothing herein shall limit such party’s or beneficiary’s right to contest
      whether any posting to any E-System or E-Signature has been altered after
      transmission.

     

    (c)  Separate
      Agreements.
      All
      uses of an E-System shall be governed by and subject to, in addition to
Section 10.11
      and this
Section 10.12,
      separate terms and conditions posted or referenced in such E-System and related
      Contractual Obligations executed by Secured Parties and Group Members in
      connection with the use of such E-System.

     

    (d)  Limitation
      of Liability.
      All
      E-Systems and Electronic Transmissions shall be provided “as is” and “as
      available”. None of the Agents nor any of their respective Related Persons
      warrants the accuracy, adequacy or completeness of any E-Systems or Electronic
      Transmission, and each disclaims all liability for errors or omissions therein.
      No Warranty of any kind is made by the Agents nor any of their respective
      Related Persons in connection with any E-Systems or Electronic Communication,
      including any warranty of merchantability, fitness for a particular purpose,
      non-infringement of third-party rights or freedom from viruses or other code
      defects. 
      Each
      Borrower and each Secured Party agrees (and Borrower shall cause each other
      Loan
      Party to agree) that the Agents have no responsibility for maintaining or
      providing any equipment, software, services or any testing required in
      connection with any Electronic Transmission or otherwise required for any
      E-System.

     

    Section 10.13  Governing
      Law.
      This
      Agreement, each other Loan Document that does not expressly set forth its
      applicable law, and the rights and obligations of the parties hereto and thereto
      shall be governed by, and construed and interpreted in accordance with, the
      law
      of the State of New York.

     

    
      
         

      

      
        108

        
          

        

      

      
         

      

    

    Section 10.14  Jurisdiction.
      (a) Submission
      to Jurisdiction.
      Any
      legal action or proceeding with respect to any Loan Document may be brought
      in
      the courts of the State of New York located in the City of New York, Borough
      of
      Manhattan, or of the United States of America for the Southern District of
      New
      York and, by execution and delivery of this Agreement, each Borrower hereby
      accepts for itself and in respect of its property, generally and
      unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
      (and, to the extent set forth in any other Loan Document, each other Loan Party)
      hereby irrevocably waive any objection, including any objection to the laying
      of
      venue or based on the grounds of forum
      non conveniens,
      that
      any of them may now or hereafter have to the bringing of any such action or
      proceeding in such jurisdictions.

     

    (b)  Service
      of Process.
      Each
      Borrower (and, to the extent set forth in any other Loan Document, each other
      Loan Party) hereby irrevocably waives personal service of any and all legal
      process, summons, notices and other documents and other service of process
      of
      any kind and consents to such service in any suit, action or proceeding brought
      in the United States of America with respect to or otherwise arising out of
      or
      in connection with any Loan Document by any means permitted by applicable
      Requirements of Law, including by the mailing thereof (by registered or
      certified mail, postage prepaid) to the address of each Borrower specified
      in
Section 10.11
      (and
      shall be effective when such mailing shall be effective, as provided therein).
      Each Borrower (and, to the extent set forth in any other Loan Document, each
      other Loan Party) agrees that a final judgment in any such action or proceeding
      shall be conclusive and may be enforced in other jurisdictions by suit on the
      judgment or in any other manner provided by law. Bombay Canada hereby
      irrevocably appoints CT Corporation System, in New York, New York (the
“Process
      Agent”),
      with
      an office on the date hereof at 111 8th Avenue, 13th Floor, New York, NY 10011,
      as its agent and true and lawful attorney-in-fact in its name, place and stead
      to accept on behalf of Bombay Canada and its property service of copies of
      the
      summons and complaint and any other process which may be served in any such
      suit, action or proceeding brought in the State of New York. Such appointment
      shall be irrevocable as long as the Loans are outstanding, except that if for
      any reason the Process Agent appointed hereby ceases to act as such, Bombay
      Canada will, by an instrument reasonably satisfactory to the Administrative
      Agent, appoint another Person in the Borough of Manhattan, New York as such
      Process Agent subject to the approval of the Administrative Agent (not to be
      unreasonably withheld). Bombay Canada hereby further irrevocably consents to
      the
      service of process in any suit, action or proceeding in said courts by the
      mailing thereof by any Agent or any Lender by registered or certified mail,
      postage prepaid, at its address set forth beneath its signature hereto. Bombay
      Canada covenants and agrees that it shall take any and all reasonable action,
      including the execution and filing of any and all documents, that may be
      necessary to continue the designation of a Process Agent pursuant to this
Section
      10.14(b)
      in full
      force and effect and to cause the Process Agent to act as such. 

     

    (c)  Non-Exclusive
      Jurisdiction.
      Nothing
      contained in this Section 10.14
      shall
      affect the right of the Agents or any Lender to serve process in any other
      manner permitted by applicable Requirements of Law or commence legal proceedings
      or otherwise proceed against any Loan Party in any other
      jurisdiction.

     

    Section 10.15  Waiver
      of Jury Trial.
      Each
      party hereto hereby irrevocably waives trial by jury in any suit, action or
      proceeding with respect to, or directly or indirectly arising out of, under
      or
      in connection with, any Loan Document or the transactions contemplated therein
      or related thereto (whether founded in contract, tort or any other theory).
      Each
      party hereto (A) certifies that no other party and no Related Person of any
      other party has represented, expressly or otherwise, that such other party
      would
      not, in the event of litigation, seek to enforce the foregoing waiver and
      (B) acknowledges that it and the other parties hereto have been induced to
      enter into the Loan Documents, as applicable, by the mutual waivers and
      certifications in this Section 10.15.

     

    
      
         

      

      
        109

        
          

        

      

      
         

      

    

    Section 10.16  Severability.
      Any
      provision of any Loan Document being held illegal, invalid or unenforceable
      in
      any jurisdiction shall not affect any part of such provision not held illegal,
      invalid or unenforceable, any other provision of any Loan Document or any part
      of such provision in any other jurisdiction.

     

    Section 10.17  Execution
      in Counterparts.
      This
      Agreement may be executed in any number of counterparts and by different parties
      in separate counterparts, each of which when so executed shall be deemed to
      be
      an original and all of which taken together shall constitute one and the same
      agreement. Signature pages may be detached from multiple separate counterparts
      and attached to a single counterpart. Delivery of an executed signature page
      of
      this Agreement by facsimile transmission or Electronic Transmission shall be
      as
      effective as delivery of a manually executed counterpart hereof.

     

    Section 10.18  Entire
      Agreement.
      The
      Loan Documents embody the entire agreement of the parties and supersede all
      prior agreements and understandings relating to the subject matter thereof
      and
      any prior letter of interest, commitment letter, fee letter, confidentiality
      and
      similar agreements involving any Loan Party and any of the Agents, any Lender
      or
      any L/C Issuer or any of their respective Affiliates relating to a financing
      of
      substantially similar form, purpose or effect. In the event of any conflict
      between the terms of this Agreement and any other Loan Document, the terms
      of
      this Agreement shall govern (unless such terms of such other Loan Documents
      are
      necessary to comply with applicable Requirements of Law, in which case such
      terms shall govern to the extent necessary to comply therewith).

     

    Section 10.19  Use
      of
      Name.
      Each
      Borrower agrees, and shall cause each other Loan Party to agree, that it shall
      not, and none of its Affiliates shall, issue any press release or other public
      disclosure (other than any document filed with any Governmental Authority
      relating to a public offering of the Securities of any Loan Party) using the
      name, logo or otherwise referring to GE Capital or of any of its Affiliates,
      the
      Loan Documents or any transaction contemplated therein to which the Secured
      Parties are party without at least 2 Business Days’ prior notice to GE
      Capital and without the prior consent of GE Capital except to the extent
      required to do so under applicable Requirements of Law and then, only after
      consulting with GE Capital prior thereto.3

     

    Section 10.20  Non-Public
      Information; Confidentiality.
      (a)
      Each
      Lender and L/C Issuer acknowledges and agrees that it may receive material
      non-public information hereunder concerning the Loan Parties and their
      Affiliates and Securities and agrees to use such information in compliance
      with
      all relevant policies, procedures and Contractual Obligations and applicable
      Requirements of Laws (including United States federal and state security laws
      and regulations).

     

    
      
         

      

      
        110

        
          

        

      

      
         

      

    

    (b)  Each
      Lender, L/C Issuer and Agent agrees to use all reasonable efforts to maintain,
      in accordance with its customary practices, the confidentiality of information
      obtained by it pursuant to any Loan Document and designated in writing by any
      Loan Party as confidential, except that such information may be disclosed (i)
      with the Borrowers’ consent, (ii) to Related Persons of such Lender, L/C Issuer
      or Agent, as the case may be, or to any Person that any L/C Issuer causes to
      Issue Letters of Credit hereunder, that are advised of the confidential nature
      of such information and are instructed to keep such information confidential,
      (iii) to the extent such information presently is or hereafter becomes available
      to such Lender, L/C Issuer or Agent, as the case may be, on a non-confidential
      basis from a source other than any Loan Party, (iv) to the extent disclosure
      is
      required by applicable Requirements of Law or other legal process or requested
      or demanded by any Governmental Authority, (v) to the extent necessary or
      customary for inclusion in league table measurements or in any tombstone or
      other advertising materials (and the Loan Parties consent to the publication
      of
      such tombstone or other advertising materials by the Agents, any Lender, any
      L/C
      Issuer or any of their Related Persons), (vi) to the National Association
      of Insurance Commissioners or any similar organization, any examiner or any
      nationally recognized rating agency or otherwise to the extent consisting of
      general portfolio information that does not identify borrowers, (vii) to current
      or prospective assignees, grantees of any option described in Section 10.2(f)
      or
      participants, direct or contractual counterparties to any Hedging Agreement
      permitted hereunder and to their respective Related Persons, in each case to
      the
      extent such assignees, participants, counterparties or Related Persons agree
      to
      be bound by provisions substantially similar to the provisions of this
Section 10.20
      and
      (viii) in connection with the exercise of any remedy under any Loan Document.
      In
      the event of any conflict between the terms of this Section 10.20
      and
      those of any other Contractual Obligation entered into with any Loan Party
      (whether or not a Loan Document), the terms of this Section 10.20
      shall
      govern.

     

    Section 10.21  Judgment
      Currency.
      If for
      the purpose of obtaining judgment in any court it is necessary to convert a
      sum
      due hereunder in Dollars into another currency (in this Section 10.21
      called
      the “judgment
      currency”),
      the
      rate of exchange that shall be applied shall be that at which in accordance
      with
      normal banking procedures the Agents could purchase such Dollars in New York,
      New York with the judgment currency on the Business Day next preceding the
      day
      on which such judgment is rendered. The obligation of the Borrowers in respect
      of any such sum due from it to the Agents or any Lender hereunder (in this
      Section 10.21
      called
      an “Entitled
      Person”)
      shall,
      notwithstanding the rate of exchange actually applied in rendering such
      judgment, be discharged only to the extent that on the Business Day following
      receipt by such Entitled Person of any sum adjudged to be due hereunder in
      the
      judgment currency, such Entitled Person may in accordance with normal banking
      procedures purchase and transfer Dollars to New York, New York with the amount
      of the judgment currency so adjudged to be due; and the Borrowers hereby, as
      a
      separate obligation and notwithstanding any such judgment, agrees, to the
      fullest extent that it may effectively do so to indemnify such Entitled Person
      against, and to pay such Entitled Person on demand, in Dollars, the amount
      (if
      any) by which the sum originally due to such Entitled Person in Dollars
      hereunder exceeds the amount of the Dollars so purchased and transferred. If
      the
      amount of Dollars so purchased exceeds the sum originally due to the Entitled
      Person, such Entitled Person shall remit such excess to the
      Borrowers.

     

    
      
         

      

      
        111

        
          

        

      

      
         

      

    

    Section 10.22  Patriot
      Act Notice.
      Each
      Lender subject to the USA Patriot Act of 2001 (31 U.S.C. 5318 et seq.) hereby
      notifies the Borrowers that, pursuant to Section 326 thereof, it is required
      to
      obtain, verify and record information that identifies the Borrowers, including
      the name and address of the Borrowers and other information allowing such Lender
      to identify the Borrowers in accordance with such act.

     

    [SIGNATURE
      PAGES FOLLOW]

    

     

    
      
         

      

      
        112

        
          

        

      

      
         

      

    

    

      
        1
          Canadian
          counsel to provide language for perfection in Canada.

         

      

      
        2
          Add any
          section in any Loan Document that could provide for release of substantially
          all
          of the Collateral, if any.

         

      

      
        3
          Reciprocal provision re: use of name of the Borrowers to come.

         

      

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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 above
      written.

     

    THE
      BOMBAY COMPANY, INC.

     

    as
      Parent
      and a Borrower

     

    
      	 	
              By:

            	
              /s/
                Elaine D. Crowley

            	 

    

     

    Name:
      Elaine D. Crowley

     

    Title:
      Senior Vice President, Chief Financial Officer and Treasurer

     

    BBA
      HOLDINGS, INC.

     

    as
      a
      Borrower

     

    
      	 	
              By:

            	
              /s/
                Jeffrey J. Walker

            	 

    

     

    Name:
      Jeffrey J. Walker

     

    Title:
      President

     

    BOMBAY
      INTERNATIONAL, INC.

     

    as
      a
      Borrower

     

    
      	 	
              By:

            	
              /s/
                Elaine D. Crowley

            	 

    

     

    Name:
      Elaine D. Crowley

     

    Title:
      Vice President

     

    

     

    THE
      BOMBAY FURNITURE COMPANY OF CANADA INC.

     

    as
      a
      Borrower

     

    
      	
            	
              By:

            	
              /s/
                Elaine D. Crowley

            

    

     

    Name:
      Elaine D. Crowley

     

    Title:
      Vice President

     

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    GENERAL
      ELECTRIC CAPITAL CORPORATION

     

    as
      Administrative Agent, L/C Issuer, Swingline Lender and Lender

     

    
      	 	
              By:

            	
              /s/
                Kristina M. Miller

            	 

    

     

    Name:
      Kristina M. Miller

     

    Title:
      Duly Authorized Signatory

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    GE
      CANADA
      FINANCE HOLDING COMPANY

     

    as
      Canadian Agent and as Canadian Lender

     

    By:/s/
      Jack Morrone

     

    Name:
      Jack Morrone

     

    Title:
      Senior Vice President

     

    

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            

          

        

      

    

    

     

    SCHEDULE
      I

    Commitments

    

    

    

    U.S.
      Revolving Credit Commitment:

    

    General
      Electric Capital Corporation   $125,000,000

    

    

    Canadian
      Revolving Credit Commitment:

    

    GE
      Canada
      Finance Holding Company  $18,000,000

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
      4.7

    Subsidiaries

    

    See
      attached

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
      4.9

    Litigation

    

    See
      attached

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
      4.14

    Environmental
      Condition

    

    See
      attached

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    SCHEDULE
      4.20

    Credit
      Card Receipts

    

    See
      attached

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
      5.2

    Collateral
      Reporting

    

    Borrowers
      shall provide Administrative Agent (and if so requested by Administrative Agent,
      with copies for each Lender) with the following documents at the following
      times
      in form satisfactory to Administrative Agent:

     

    (a)  Weekly
      Reports.

     

    (i)  Borrowing
      Base Certificate.
      If, at
      any time, Adjusted Availability is less than 20% of the Aggregate Borrowing
      Base, Parent shall provide to Administrative Agent, on Wednesday of each week,
      a
      signed Borrowing Base Certificate (in the form of Exhibit
      I,
      as such
      form may be revised from time to time by Administrative Agent); provided,
      however,
      that
      Parent, may, in its discretion, provide to Administrative Agent a Borrowing
      Base
      Certificate more frequently than as set forth herein. Such Certificate may
      be
      sent to Administrative Agent electronically (with an electronic signature)
      or by
      facsimile transmission; provided,
      further,
      that in
      each case, upon request by Administrative Agent, the original thereof is
      forwarded to Administrative Agent on the date of such transmission. No
      adjustments to the Borrowing Base Certificate may be made without supporting
      documentation and such other documentation as may be reasonably requested by
      Administrative Agent from time to time. 

     

    (ii)  If,
      at
      any time, Adjusted Availability is less than 20% of the Aggregate Borrowing
      Base, a collateral activity summary or “roll forward” inventory
      report.

     

    (b)  Monthly
      Reports.
      Monthly, Parent shall provide to Administrative Agent original counterparts
      of
      (each in such form as Agent from time to time may specify):

     

    (i)  Within
      15
      days of the end of each Fiscal Period for the immediately preceding Fiscal
      Period or on the next Business Day, in the event the 15th day does not fall
      on a
      Business Day:

     

    (A)  at
      all
      times other than as set forth in clause (a)(i) above, a Borrowing Base
      Certificate (in the form of Exhibit
      I,
      as such
      form may be revised from time to time by Agent); provided,
      however,
      that
      Parent, may, in its discretion, provide to Administrative Agent a Borrowing
      Base
      Certificate more frequently than as set forth herein. Such Borrowing Base
      Certificate may be sent to Administrative Agent electronically (with an
      electronic signature) or by facsimile transmission; provided,
      that in
      each case, upon request by Administrative Agent, the original thereof is
      forwarded to Administrative Agent on the date of such transmission. No
      adjustments to the Borrowing Base Certificate may be made without supporting
      documentation and such other documentation as may be reasonably requested by
      Administrative Agent from time to time;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (B)  Top
      10
      Vendor Purchases report;

     

    (C)  sales
      audit report and inventory summary by location and merchandise
      class;

     

    (D)  inventory
      certificate;

     

    (E)  state
      of
      store activity; and

     

    (F)  a
      collateral activity summary or “roll forward” inventory report.

     

    (ii)  Within
      45
      days of the end of each Fiscal Period for the immediately preceding Fiscal
      Period or on the next Business Day, in the event the 45th day does not fall
      on a
      Business Day:

     

    (A)  reconciliation
      of the stock ledger to the general ledger and the calculation of Availability;
      and

     

    (B)  rent,
      tax
      and insurance compliance certificate.

     

    (iii)  For
      purposes of items(c)(i) and (c)(ii) above, the first “preceding month” in
      respect of which the items required by that Section shall be provided shall
      be
      October, 2006.

     

    In
      addition, each Borrower agrees to use its commercially reasonable efforts to
      assist Administrative Agent with the facilitation and implementation of a system
      of electronic collateral reporting in order to provide electronic reporting
      of
      each of the items set forth above.

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
      7.1

    Existing
      Indebtedness

    

    See
      attached

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    SCHEDULE
      7.2

     

    Existing
      Liens

    

    See
      attached

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
      7.13

    Affiliates

    

    See
      attached

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
      7.16

    Scheduled
      Store Closings

    

    See
      attached

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]