BROWN SHOE CO INC
AMENDED & RESTATED CREDIT AGREEMENT
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>bws8k072204exh10_1.htm
<DESCRIPTION>AMENDED & RESTATED CREDIT AGREEMENT
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<div align=right>Exhibit 10.1</div>

<br>&nbsp;
<center>
<p>AMENDED AND RESTATED CREDIT AGREEMENT
<p>dated as of
<br>July 21, 2004
<p>among
<p>BROWN SHOE COMPANY, INC.,
<br>as Lead Borrower for:
<p>BROWN SHOE COMPANY, INC.
<br>SIDNEY RICH ASSOCIATES, INC.
<br>BROWN GROUP RETAIL, INC.
<br>BROWN SHOE INTERNATIONAL, LLC.
<br>and
<br>BUSTER BROWN &amp; CO.
<p>BROWN SHOE COMPANY OF CANADA LTD
<br>as a Loan Party
<p>The LENDERS Party Hereto,
<p>BANK OF AMERICA, N.A.
<br>as Lead Issuing Bank
<p>BANK OF AMERICA, N.A.
<br>as Lead Arranger, Administrative Agent and Collateral Agent,
<p>and
<p>LASALLE BANK, NATIONAL ASSOCIATION,
<br>as Syndication Agent
<p>and
<p>WELLS FARGO FOOTHILL, LLC
<br>as Documentation Agent
<p>_________________________________________________
<p>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%">
<p><b>TABLE OF CONTENTS</b></center>

<p><tt>1. <u>DEFINITIONS.</u>....................................................................................2</tt>
<dir><tt>1.1 <u>Defined Terms</u>.............................................................................2</tt>
<br><tt>1.2 <u>Terms Generally</u>..........................................................................42</tt>
<br><tt>1.3 <u>Accounting Terms</u>.........................................................................42</tt></dir>
<tt>2. <u>AMOUNT AND TERMS OF CREDIT</u>.....................................................................42</tt>
<dir><tt>2.1 <u>Commitment of the Lenders</u>................................................................42</tt>
<br><tt>2.2 <u>Increase in Total Commitments</u>............................................................43</tt>
<br><tt>2.3 <u>Reserves; Changes to Reserves</u>............................................................45</tt>
<br><tt>2.4 <u>Making of Loans</u>..........................................................................46</tt>
<br><tt>2.5 <u>Overadvances</u>.............................................................................47</tt>
<br><tt>2.6 <u>Swingline Loans</u>..........................................................................47</tt>
<br><tt>2.7 <u>Letters of Credit and Acceptances</u>........................................................48</tt>
<br><tt>2.8 <u>Settlements Amongst Lenders</u>..............................................................54</tt>
<br><tt>2.9 <u>Notes; Repayment of Loans</u>................................................................55</tt>
<br><tt>2.10 <u>Interest on Loans</u>.......................................................................56</tt>
<br><tt>2.11 <u>Default Interest</u>........................................................................57</tt>
<br><tt>2.12 <u>Certain Fees</u>............................................................................57</tt>
<br><tt>2.13 <u>Commitment Fee</u>..........................................................................57</tt>
<br><tt>2.14 <u>Letter of Credit Fees</u>...................................................................58</tt>
<br><tt>2.15 <u>Acceptance Fee</u>..........................................................................58</tt>
<br><tt>2.16 <u>Nature of Fees</u>..........................................................................59</tt>
<br><tt>2.17 <u>Termination or Reduction of Commitments</u>.................................................59</tt>
<br><tt>2.18 <u>Alternate Rate of Interest</u>..............................................................59</tt>
<br><tt>2.19 <u>Conversion and Continuation of Loans</u>....................................................60</tt>
<br><tt>2.20 <u>Mandatory Prepayment; Cash Collateral; Commitment Termination</u>...........................61</tt>
<br><tt>2.21 <u>Optional Prepayment of Loans; Reimbursement of Lenders</u>..................................62</tt>
<br><tt>2.22 <u>Maintenance of Loan Account; Statements of Account</u>......................................64</tt>
<br><tt>2.23 <u>Cash Receipts</u>...........................................................................64</tt>
<br><tt>2.24 <u>Application of Payments</u>. (a)............................................................68</tt>
<br><tt>2.25 <u>Increased Costs</u>.........................................................................69</tt>
<br><tt>2.26 <u>Change in Legality</u>......................................................................70</tt>
<br><tt>2.27 <u>Payments; Sharing of Setoff</u>.............................................................70</tt>
<br><tt>2.28 <u>Taxes</u>...................................................................................72</tt>
<br><tt>2.29 <u>Security Interests in Collateral</u>........................................................74</tt>
<br><tt>2.30 <u>Mitigation Obligations; Replacement of Lenders</u>..........................................74</tt></dir>
<tt>3. <u>REPRESENTATIONS AND WARRANTIES</u>.................................................................75</tt>
<dir><tt>3.1 <u>Organization; Powers</u>.....................................................................75</tt>
<br><tt>3.2 <u>Authorization; Enforceability</u>............................................................76</tt>
<br><tt>3.3 <u>Governmental Approvals; No Conflicts</u>.....................................................76</tt>
<br><tt>3.4 <u>Financial Condition</u>......................................................................76</tt></dir>

<center><tt>(ii)</tt>
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<dir><tt>3.5 <u>Properties</u>..............................................................................76</tt>
<br><tt>3.6 <u>Litigation and Environmental Matters.</u>...................................................77</tt>
<br><tt>3.7 <u>Compliance with Laws and Agreements</u>.....................................................78</tt>
<br><tt>3.8 <u>Investment and Holding Company Status</u>...................................................78</tt>
<br><tt>3.9 <u>Taxes</u>...................................................................................78</tt>
<br><tt>3.10 <u>ERISA; Foreign Plans</u>...................................................................78</tt>
<br><tt>3.11 <u>Common Enterprise</u>......................................................................79</tt>
<br><tt>3.12 <u>Disclosure</u>.............................................................................79</tt>
<br><tt>3.13 <u>Subsidiaries</u>...........................................................................79</tt>
<br><tt>3.14 <u>Insurance</u>..............................................................................80</tt>
<br><tt>3.15 <u>Labor Matters</u>..........................................................................80</tt>
<br><tt>3.16 <u>Certain Transactions</u>...................................................................80</tt>
<br><tt>3.17 <u>Restrictions on the Loan Parties</u>.......................................................80</tt>
<br><tt>3.18 <u>Security Documents</u>.....................................................................80</tt>
<br><tt>3.19 <u>Federal Reserve Regulations</u>............................................................81</tt>
<br><tt>3.20 <u>Solvency</u>...............................................................................81</tt>
<br><tt>3.21 <u>Franchises, Patents, Copyrights, Etc</u>...................................................81</tt>
<br><tt>3.22 <u>DDAs, Credit Card Arrangements, Etc</u>....................................................81</tt></dir>
<tt>4. <u>CONDITIONS</u>....................................................................................81</tt>
<dir><tt>4.1 <u>Closing Date</u>............................................................................81</tt>
<br><tt>4.2 <u>Conditions Precedent to Each Loan and Each Letter of Credit
and Each Acceptance</u>.........84</tt></dir>
<tt>5. <u>AFFIRMATIVE COVENANTS</u>.........................................................................85</tt>
<dir><tt>5.1 <u>Financial Statements and Other Information</u>..............................................85</tt>
<br><tt>5.2 <u>Notices of Material Events</u>..............................................................89</tt>
<br><tt>5.3 <u>Information Regarding Collateral</u>........................................................90</tt>
<br><tt>5.4 <u>Existence; Conduct of Business</u>..........................................................90</tt>
<br><tt>5.5 <u>Payment of Obligations</u>..................................................................91</tt>
<br><tt>5.6 <u>Maintenance of Properties</u>...............................................................91</tt>
<br><tt>5.7 <u>Insurance</u>...............................................................................91</tt>
<br><tt>5.8 <u>Revisions or Updates to Schedules</u>.......................................................93</tt>
<br><tt>5.9 <u>Books and Records; Inspection and Audit Rights</u>..........................................93</tt>
<br><tt>5.10 <u>Fiscal Year</u>............................................................................94</tt>
<br><tt>5.11 <u>Physical Inventories</u>...................................................................94</tt>
<br><tt>5.12 <u>Compliance with Laws</u>...................................................................95</tt>
<br><tt>5.13 <u>Use of Proceeds and Letters of Credit and Acceptances</u>..................................95</tt>
<br><tt>5.14 <u>Additional Subsidiaries</u>................................................................95</tt>
<br><tt>5.15 <u>Further Assurances</u>.....................................................................95</tt>
<br><tt>5.16 <u>Proceeds from Surplus Cash Deposits</u>....................................................96</tt></dir>
<tt>6. <u>NEGATIVE COVENANTS</u>............................................................................96</tt>
<dir><tt>6.1 <u>Indebtedness and Other Obligations</u>......................................................96</tt>
<br><tt>6.2 <u>Liens</u>...................................................................................98</tt></dir>

<center><tt>(iii)</tt>
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<dir><tt>6.3 <u>Fundamental Changes</u>.....................................................................99</tt>
<br><tt>6.4 <u>Investments, Loans, Advances, Guarantees and Acquisitions</u>..............................100</tt>
<br><tt>6.5 <u>Asset Sales</u>............................................................................101</tt>
<br><tt>6.6 <u>Restrictive Agreements</u>.................................................................102</tt>
<br><tt>6.7 <u>Restricted Payments; Certain Payments of Indebtedness</u>..................................102</tt>
<br><tt>6.8 <u>Transactions with Affiliates</u>...........................................................103</tt>
<br><tt>6.9 <u>Additional Subsidiaries</u>................................................................103</tt>
<br><tt>6.10 <u>Amendment of Material Documents</u>.......................................................104</tt>
<br><tt>6.11 <u>Environmental Laws</u>....................................................................104</tt>
<br><tt>6.12 <u>Fiscal Year</u>...........................................................................104</tt>
<br><tt>6.13 <u>Maximum Capital Expenditures</u>..........................................................104</tt>
<br><tt>6.14 <u>Minimum Fixed Charge Coverage Ratio</u>...................................................104</tt></dir>
<tt>7. <u>EVENTS OF DEFAULT</u>............................................................................104</tt>
<dir><tt>7.1 <u>Events of Default</u>......................................................................104</tt>
<br><tt>7.2 <u>Remedies on Default</u>....................................................................108</tt>
<br><tt>7.3 <u>Application of Proceeds</u>................................................................108</tt></dir>
<tt>8. <u>THE AGENTS</u>...................................................................................108</tt>
<dir><tt>8.1 <u>Administration by Administrative Agent</u>.................................................108</tt>
<br><tt>8.2 <u>Appointment and Duties of Collateral Agent</u>.............................................108</tt>
<br><tt>8.3 <u>Sharing of Excess Payments</u>.............................................................109</tt>
<br><tt>8.4 <u>Agreement of Applicable Lenders</u>........................................................110</tt>
<br><tt>8.5 <u>Liability of Agents</u>....................................................................110</tt>
<br><tt>8.6 <u>Notice of Default</u>......................................................................112</tt>
<br><tt>8.7 <u>Lenders' Credit Decisions</u>..............................................................112</tt>
<br><tt>8.8 <u>Reimbursement and Indemnification</u>......................................................112</tt>
<br><tt>8.9 <u>Rights of Agents</u>.......................................................................113</tt>
<br><tt>8.10 <u>Notice of Transfer</u>....................................................................113</tt>
<br><tt>8.11 <u>Successor Agent</u>.......................................................................113</tt>
<br><tt>8.12 <u>Reports and Financial Statements</u>......................................................114</tt>
<br><tt>8.13 <u>Delinquent Lender</u>.....................................................................114</tt>
<br><tt>8.14 <u>Agency for Perfection</u>.................................................................115</tt>
<br><tt>8.15 <u>Relation Among the Lenders</u>............................................................115</tt>
<br><tt>8.16 <u>Syndication Agent, Documentation Agent, and Arranger</u>..................................116</tt></dir>
<tt>9. <u>MISCELLANEOUS</u>................................................................................116</tt>
<dir><tt>9.1 <u>Notices</u>................................................................................116</tt>
<br><tt>9.2 <u>Waivers; Amendments</u>....................................................................116</tt>
<br><tt>9.3 <u>Expenses; Indemnity; Damage Waiver</u>.....................................................118</tt>
<br><tt>9.4 <u>Designation of Lead Borrower as Borrowers' Agent</u>.......................................120</tt>
<br><tt>9.5 <u>Successors and Assigns</u>.................................................................122</tt>
<br><tt>9.6 <u>Survival</u>...............................................................................124</tt>
<br><tt>9.7 <u>Counterparts; Integration; Effectiveness</u>...............................................125</tt></dir>

<center><tt>(iv)</tt>
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<dir><tt>9.8 <u>Severability</u>...........................................................................125</tt>
<br><tt>9.9 <u>Right of Setoff</u>........................................................................125</tt>
<br><tt>9.10 <u>Governing Law; Jurisdiction; Consent to Service of Process</u>............................126</tt>
<br><tt>9.11 <u>WAIVER OF JURY TRIAL</u>..................................................................126</tt>
<br><tt>9.12 <u>Press Releases and Related Matters</u>....................................................127</tt>
<br><tt>9.13 <u>Headings</u>..............................................................................127</tt>
<br><tt>9.14 <u>Interest Rate Limitation</u>..............................................................127</tt>
<br><tt>9.15 <u>Additional Waivers</u>....................................................................127</tt>
<br><tt>9.16 <u>Confidentiality</u>.......................................................................129</tt>
<br><tt>9.17 <u>Conflicts with other Loan Documents</u>...................................................129</tt>
<br><tt>9.18 <u>Judgment Currency</u>.....................................................................129</tt>
<br><tt>9.19 <u>Existing Credit Agreement Amended and Restated</u>........................................130</tt></dir>

<center><tt>(v)</tt>
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%">
<p><b><u>EXHIBITS</u></b></center>

<p><tt>A&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assignment and Acceptance</tt>
<br><tt>B-1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revolving Note</tt>
<br><tt>B-2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Swingline Note</tt>
<br><tt>C&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Opinion of Special
United States Counsel to Borrowers</tt>
<br><tt>C-1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Opinion of Special Ontario Counsel
to Brown Canada</tt>
<br><tt>C-2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Opinion of Special Quebec Counsel
to Brown Canada</tt>
<br><tt>C-3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Opinion of Special Pennsylvania
Counsel to Brown Retail</tt>
<br><tt>D&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowing Base Certificate</tt>
<br><tt>E&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Compliance Certificate</tt>
<br><tt>F&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notice of Borrowing</tt>
<br><tt>G&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form of Credit Card
Notification</tt>
<center>
<p>(vi)
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%">
<p><b><u>SCHEDULES</u></b></center>

<p><tt>1.1&nbsp;&nbsp;&nbsp;&nbsp; Lenders and Commitments</tt>
<br><tt>3.1&nbsp;&nbsp;&nbsp;&nbsp; Organizational Information</tt>
<br><tt>3.5(b)&nbsp; Title to Properties; Real Estate</tt>
<br><tt>3.6&nbsp;&nbsp;&nbsp;&nbsp; Disclosed Matters</tt>
<br><tt>3.10&nbsp;&nbsp;&nbsp; ERISA</tt>
<br><tt>3.13&nbsp;&nbsp;&nbsp; Subsidiaries</tt>
<br><tt>3.14&nbsp;&nbsp;&nbsp; Insurance</tt>
<br><tt>3.15&nbsp;&nbsp;&nbsp; Labor Matters</tt>
<br><tt>3.16&nbsp;&nbsp;&nbsp; Affiliate Transactions</tt>
<br><tt>3.21&nbsp;&nbsp;&nbsp; Intellectual Property</tt>
<br><tt>3.22&nbsp;&nbsp;&nbsp; Credit Card Arrangements, Blocked Account
Agreements and Disbursement Accounts</tt>
<br><tt>5.1(h)&nbsp; Financial Reporting Requirements</tt>
<br><tt>6.1&nbsp;&nbsp;&nbsp;&nbsp; Indebtedness</tt>
<br><tt>6.2&nbsp;&nbsp;&nbsp;&nbsp; Liens</tt>
<br><tt>6.4&nbsp;&nbsp;&nbsp;&nbsp; Investments</tt>
<br><tt>6.6&nbsp;&nbsp;&nbsp;&nbsp; Restrictive Agreements</tt>
<center>
<p>(vii)
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AMENDED
AND RESTATED<b> </b>CREDIT AGREEMENT dated as of July 21, 2004 (this "<u>Agreement</u>")
among
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BROWN
SHOE COMPANY, INC., a corporation organized under the laws of the State
of New York having a place of business at 8300 Maryland Avenue, St. Louis,
Missouri 63105, as Lead Borrower for the Borrowers, being
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; said
BROWN SHOE COMPANY, INC.,
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SIDNEY
RICH ASSOCIATES, INC., a corporation organized under the laws of the State
of Missouri having a place of business at 8300 Maryland Avenue, St. Louis,
Missouri 63105 ("Sidney Rich"),
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BROWN
GROUP RETAIL, INC., a corporation organized under the laws of the Commonwealth
of Pennsylvania having a place of business at 8300 Maryland Avenue, St.
Louis, Missouri 63105 ("Brown Retail"),
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BROWN
SHOE INTERNATIONAL, LLC, a limited liability company organized under the
laws of the State of Delaware having a place of business at 8300 Maryland
Avenue, St. Louis, Missouri 63105 ("Brown International"), and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BUSTER
BROWN &amp; CO., a corporation organized under the laws of the State of
Missouri having a place of business at 8300 Maryland Avenue, St. Louis,
Missouri 63105 ("Buster Brown");
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BROWN
SHOE COMPANY OF CANADA LTD, a Canadian corporation having a place of business
at 1857 Rodgers Road, Perth, Ontario, Canada K7H 3E8, as a Loan Party but
not as a Borrower ("Brown Canada");
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the
LENDERS party hereto; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BANK
OF AMERICA, N.A., as Lead Issuing Bank, a national banking association
having a place of business at 100 Federal Street, Boston, Massachusetts
02110; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BANK
OF AMERICA, N.A., as Administrative Agent and Collateral Agent for the
Secured Parties, a national banking association, with an office at c/o
Fleet Retail Group, Inc., 40 Broad Street, Boston, Massachusetts 02109;
and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LASALLE
BANK NATIONAL ASSOCIATION, as Syndication Agent; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WELLS
FARGO FOOTHILL, LLC, as Documentation Agent;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; in
consideration of the mutual covenants herein contained and benefits to
be derived herefrom.
<br>&nbsp;
<br>&nbsp;
<br>
<center>
<p>1
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%">
<p><u>W</u> <u>I</u> <u>T</u> <u>N</u> <u>E</u> <u>S</u> <u>S</u> <u>ETH</u>:</center>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHEREAS,
the Lead Borrower, Sidney Rich, Brown Retail, Brown Group International,
Inc., Clayton License, Inc., Pagoda Trading Company, Inc. and Brown Shoe
Company of Canada Ltd have entered into a Credit Agreement dated as of
December 20, 2001 with the "Lenders" as defined therein, Bank of America
National Association, as "Administrative Agent" and Fleet Retail Group,
Inc. (f/k/a Fleet Retail Finance Inc.) as "Syndication Agent" as defined
therein (as amended and in effect, the "<u>Existing Credit Agreement</u>");
and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHEREAS,
Clayton License, Inc. was merged with and into the Lead Borrower on February
8, 2002, Pagoda Trading Company, Inc. was merged with and into the Lead
Borrower on August 4, 2002, and Brown Group International, Inc. converted
to a limited liability company and changed its name to Brown Shoe International,
LLC on February 8, 2002; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHEREAS,
Buster Brown is becoming a Borrower hereunder; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHEREAS,
certain of the Lenders under the Existing Credit Agreement have assigned
their rights and obligations thereunder to Persons who are, or shall become,
Lenders under this Agreement; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHEREAS,
the Commitments of certain Persons who are Lenders under the Existing Credit
Agreement and are continuing as Lenders under this Agreement are being
modified as provided herein; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WHEREAS,
the Borrowers, the Administrative Agent and the Lenders hereunder desire
to amend and restate the Existing Credit Agreement as provided herein.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOW,
THEREFORE, in consideration of the mutual conditions and agreements set
forth in this Agreement, and for good and valuable consideration, the receipt
of which is hereby acknowledged, the Lenders, the Agents, and the Borrowers
hereby agree that the Existing Credit Agreement shall be amended and restated,
without novation, in its entirety to read as follows:
<ol>
<ol>
<li>
<u>DEFINITIONS. Defined Terms</u>. . As used in this Agreement, the following
terms have the meanings specified below:</li>
</ol>
</ol>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>ACH</u>"
shall mean the automated clearing house transfers of funds for the account
of any Loan Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Acceptance</u>"
means a time draft or bill of exchange relating to a Commercial Letter
of Credit which has been accepted by any Acceptance Lender in its absolute
discretion.
<center>
<p>2
<br>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Acceptance
Fees</u>" means the fees payable in respect of Acceptances pursuant to
Section 2.15.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Acceptance
Fee Percentage</u>" means:
<br>&nbsp;
<center><table BORDER CELLPADDING=8 WIDTH="432" BORDERCOLOR="#000000" >
<tr>
<td VALIGN=TOP WIDTH="56%">Average Excess Availability</td>

<td VALIGN=TOP WIDTH="44%">Applicable Percentage</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="56%">Less than or equal to $50,000,000</td>

<td VALIGN=TOP WIDTH="44%">0.70%</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="56%">Greater than $50,000,000 but less or equal to
$75,000,000</td>

<td VALIGN=TOP WIDTH="44%">0.60%</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="56%">Greater than $75,000,000 but less or equal to
$150,000,000</td>

<td VALIGN=TOP WIDTH="44%">0.50%</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="56%">Greater than $150,000,000</td>

<td VALIGN=TOP WIDTH="44%">0.40%</td>
</tr>
</table></center>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From
the Closing Date through July 31, 2004, the Acceptance Fee Percentage shall
be 0.50% per annum. The Acceptance Fee Percentage shall be adjusted quarterly
upon the Administrative Agent's furnishing the Lead Borrower with a calculation
of Average Excess Availability for the immediately preceding Fiscal Quarter,
which calculation shall be furnished within four (4) Business Days after
the end of each Fiscal Quarter. Any such adjustment shall become effective
prospectively on and after the sixth Business Day after the end of each
Fiscal Quarter. If a Default or Event of Default exists at the time any
reduction in the Acceptance Fee Percentage is to be implemented, such reduction
shall not occur until the first day of the first calendar month following
the date on which such Default or Event of Default is waived or cured.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Acceptance
Lender</u>" means any Lender in its capacity as an "acceptance lender"
of Acceptances hereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Acceptance
Reimbursement Obligations</u>" means, at any time and without duplication,
the aggregate indebtedness, liabilities, and obligations of the Borrowers
to pay to any Acceptance Lender (or reimburse any Acceptance Lender for)
any amount due under any Acceptance at maturity.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Account</u>"
shall mean "accounts" as defined in the UCC, including, without limitation,
all: accounts, accounts receivable, and rights to payment (whether or not
earned by performance) for: property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of; services rendered or to be
rendered; a policy of insurance issued or to be issued; a secondary obligation
incurred or to be incurred; arising out of the use of a credit or charge
card or information contained on or used with that card.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Additional
Commitment Lender</u>" as defined in Section 2.2(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Adjusted
LIBO Rate</u>" means, with respect to any LIBO Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period divided
by (b) a percentage equal to 100% minus the Statutory Reserve Rate.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Adjusted
Net Earnings from Operations</u>" means, with respect to any fiscal period
of the Lead Borrower, the Lead Borrower's and its Subsidiaries' net income
after provision for income taxes for such fiscal period, excluding any
and all of the following included in such net income: determined on a Consolidated
basis in accordance with GAAP: (a) gain or loss arising from the sale of
any capital assets, (b) gain or loss arising from any write-up or write-down
in the book value of any fixed or intangible assets, (c) earnings or losses
of any Person, substantially all of the assets of which have been acquired
by the Lead Borrower or any of its Subsidiaries in any manner, to the extent
realized by such Person prior to the date of acquisition, (d) earnings
or losses of any Person (other than a Subsidiary of the Lead Borrower)
in which the Lead Borrower or any consolidated Subsidiary of the Lead Borrower
has an ownership interest unless (and only to the extent) any such earnings
shall actually have been received by the Lead Borrower or such consolidated
Subsidiary in the form of cash distributions, (e) gains or losses arising
from the acquisition of debt or equity securities of the Lead Borrower
or any of its Subsidiaries or from the cancellation or forgiveness of Indebtedness,
(f) gains or losses arising from extraordinary items as determined in accordance
with GAAP, (g) gains or losses arising from any non-recurring non-cash
transactions, (h) cash losses during the 2004 and 2005 Fiscal Years in
an aggregate amount not in excess of $10,000,000 after taxes arising from
the implementation of a store rationalization program, (i) gains or losses
arising from any non-recurring cash transactions up to $3,000,000 after
taxes in the aggregate in any Fiscal Year, <u>provided</u>, <u>however</u>,
such $3,000,000 amount shall be reduced (but not below zero) in the 2004
and 2005 Fiscal Years, as applicable, to the extent that a cash loss described
in clause (h) above is excluded from net income for such Fiscal Year; and
(j) gains and losses from the recording of share based compensation, including,
without limitation, stock option expense; <u>provided</u> that nothing
in this definition of Adjusted Net Earnings from Operations shall be deemed
to permit any acquisition that is prohibited by this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Administrative
Agent</u>" means Bank of America, N.A., in its capacity as administrative
agent for the Secured Parties hereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Affiliate</u>"
means, with respect to a specified Person, (i) any other Person Controlling,
Controlled by or under direct or indirect common Control with that Person,
(ii) any other Person directly or indirectly holding 5% or more of any
class of the Capital Stock or other equity interests (including options,
warrants, convertible securities and similar rights) of that Person, (iii)
any other Person 5% or more of any class of whose Capital Stock or other
equity interests (including options, warrants, convertible securities and
similar rights) is held directly or
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<p>indirectly by that Person, and (iv) any other Person that possesses,
directly or indirectly, power to direct or cause the direction of management
or policies (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise) of that Person.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Agents</u>"
shall mean collectively, the Administrative Agent and the Collateral Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Agreement</u>"
means this Amended and Restated<b> </b>Credit Agreement, as modified, amended,
supplemented or restated, and in effect from time to time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Applicable
Law</u>" means as to any Person: (i) all statutes, rules, regulations,
orders, or other requirements having the force of law and (ii) all court
orders, judgments and injunctions, and/or similar rulings, in each instance
((i) and (ii)) of or by any Governmental Authority, or court, or tribunal
which are applicable to such Person, or any property of such Person.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Applicable
Lenders</u>" means the Required Lenders or all Lenders, as applicable.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Applicable
Margin</u>" means initially, the rates for Prime Rate Loans and LIBO Loans
set forth in Level III, below:
<br>&nbsp;
<center><table BORDER CELLSPACING=2 CELLPADDING=8 WIDTH="456" BORDERCOLOR="#000000" >
<tr>
<td VALIGN=TOP WIDTH="15%"><font size=-1>Level</font></td>

<td VALIGN=TOP WIDTH="28%"><font size=-1>Average Excess Availability</font></td>

<td VALIGN=TOP WIDTH="27%"><font size=-1>Prime Rate Loans</font></td>

<td VALIGN=TOP WIDTH="30%"><font size=-1>LIBO Loans</font></td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="15%"><font size=-1>I</font></td>

<td VALIGN=TOP WIDTH="28%">
<center><font size=-1>Less than or equal to $50,000,000</font></center>
</td>

<td VALIGN=TOP WIDTH="27%"><font size=-1>0.25%</font></td>

<td VALIGN=TOP WIDTH="30%"><font size=-1>2.00%</font></td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="15%"><font size=-1>II</font></td>

<td VALIGN=TOP WIDTH="28%"><font size=-1>Greater than $50,000,000 but less
than or equal to $75,000,000</font></td>

<td VALIGN=TOP WIDTH="27%"><font size=-1>0%</font></td>

<td VALIGN=TOP WIDTH="30%"><font size=-1>1.75%</font></td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="15%"><font size=-1>III</font></td>

<td VALIGN=TOP WIDTH="28%"><font size=-1>Greater than $75,000,000 but less
than or equal to $150,000,000</font></td>

<td VALIGN=TOP WIDTH="27%"><font size=-1>0%</font></td>

<td VALIGN=TOP WIDTH="30%"><font size=-1>1.50%</font></td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="15%"><font size=-1>IV</font></td>

<td VALIGN=TOP WIDTH="28%"><font size=-1>Greater than $150,000,000</font></td>

<td VALIGN=TOP WIDTH="27%"><font size=-1>0%</font></td>

<td VALIGN=TOP WIDTH="30%"><font size=-1>1.25%</font></td>
</tr>
</table></center>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except
as provided in the following sentence, the Applicable Margin shall be adjusted
upon the Administrative Agent's furnishing the Lead Borrower with a calculation
of Average Excess Availability for the immediately preceding Fiscal Quarter,
which calculation shall be furnished within four (4) Business Days after
the end of each Fiscal Quarter. Any such adjustment shall become effective
prospectively on and after the sixth Business Day after the end of each
Fiscal Quarter. Notwithstanding the foregoing, the Applicable Margin shall
be based on
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<p>Level III through the end of Fiscal Year 2004 (ending January 29, 2005).
Upon the occurrence and during the continuance of an Event of Default,
at the option of the Administrative Agent or at the direction of the Required
Lenders, interest shall accrue at Level I and shall be determined in the
manner set forth in Section 2.11.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Appraisal
Percentage</u>" shall mean 85%.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Appraised
Value</u>" means with respect to Inventory of any Loan Party, the orderly
liquidation value thereof (expressed as a percentage of the Cost of such
Inventory) as determined from time to time (and updated at least once in
each calendar year) in a manner acceptable to the Administrative Agent
by an experienced and reputable independent appraiser acceptable to the
Administrative Agent, net of all costs of liquidation thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Assignment
and Acceptance</u>" means an assignment and acceptance entered into by
a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 9.5), and accepted by the Administrative
Agent, in the form of <u>Exhibit A</u> or any other form approved by the
Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Availability
Reserves</u>" means such reserves as the Administrative Agent from time
to time determines in the Administrative Agent's Permitted Discretion (after
consultation with the Lead Borrower (whose consent to any Availability
Reserve shall not be required)) as being appropriate to reflect the impediments
to the Agents' ability to realize upon the Collateral. Without limiting
the generality of the foregoing, Availability Reserves may include (but
are not limited to) (i) reserves for rent at leased locations subject to
statutory or contractual landlord's Liens; (ii) reserves based on Customer
Credit Liabilities; (iii) reserves for customs, duties, and other costs
to release Inventory which is being imported into the United States of
America; (iv) reserves for outstanding taxes and other governmental charges,
including, ad valorem, real estate, personal property, and other taxes
which might have priority over the interests of the Collateral Agent in
the Collateral; (v) reserves for accrued, unpaid interest on the Obligations;
(vi) reserves for salaries, wages and benefits due to employees of any
Borrower which might have priority over the interests of the Collateral
Agent in the Collateral; (vii) reserves for warehouseman's or bailee's
charges; and (viii) reserves for amounts secured by any Liens, choate or
inchoate, which rank or are capable of ranking in priority to the Collateral
Agent's and/or Lenders' Liens and/or for amounts which may represent costs
relating to the enforcement of the Collateral Agent's Liens including,
without limitation, in the good faith credit discretion of the Administrative
Agent, any such amounts due and not paid for vacation pay, amounts due
and not paid under any legislation relating to workers' compensation or
to employment insurance, all amounts deducted or withheld and not paid
and remitted when due under the <i>Income Tax Act </i>(Canada), amounts
currently or past due and not paid for realty, municipal or similar taxes
(to the extent impacting personal or moveable property) and all amounts
currently or past due and not contributed, remitted or paid to any Plan
or under the Canada Pension Plan, the <i>Pension Benefits Act </i>(Ontario)
or any similar statutes. Availability Reserves shall be established and
calculated in a
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<p>manner and methodology consistent with the Administrative Agent's practices
as of the Closing Date with other similarly situated borrowers.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Average
Excess Availability</u>" shall mean, the average daily Excess Availability
for the immediately preceding Fiscal Quarter. The Administrative Agent
shall provide the Lead Borrower with a calculation of Average Excess Availability
on the fourth Business Day of each Fiscal Quarter for the immediately preceding
Fiscal Quarter upon request of the Lead Borrower, or alternatively, give
the Lead Borrower electronic access to the Administrative Agent's systems
to the extent necessary to provide such information.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Bank
of America</u>" means Bank of America, N.A., a national banking association.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Bank
Products</u>" means any one or more of the following types or services
or facilities provided to any Loan Party by any Lender or any of its Affiliates:
(a) credit cards, (b) ACH transactions, (c) cash management, including,
without limitation, controlled disbursement services, and (d) Hedging Agreements.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Bankruptcy
Code</u>" means Title 11 of the United States Code (11 U.S.C. Section 101
et seq.) as now or hereafter in effect, or any successor thereto and (ii)
the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement
Act (Canada) and the Winding-up Act (Canada), as now or hereafter in effect,
or any successor thereto.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Blocked
Account Agreements</u>" shall mean agency agreements with the banks maintaining
deposit accounts of any of the Loan Parties where funds from one or more
DDAs are concentrated, which agreements shall be in form and substance
reasonably satisfactory to the Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Blocked
Account Banks</u>" shall mean (i) B of A, and (ii) each bank with whom
the Loan Parties have entered into Blocked Account Agreements.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Blocked
Accounts</u>" shall mean each deposit account of the Loan Parties which
is the subject of a Blocked Account Agreement or is maintained with B of
A.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Board</u>"
means the Board of Governors of the Federal Reserve System of the United
States of America.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>B
of A Concentration Account</u>" has the meaning provided therefor in Section
2.23(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Borrowers</u>"
means, individually and collectively, the Lead Borrower, Sidney Rich, Brown
Retail, Brown International, Buster Brown, and any other Person which becomes
a "Borrower" in accordance with the provisions of this Agreement.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Borrowing</u>"
shall mean (a) the incurrence of Loans of a single Type, on a single date
and having, in the case of LIBO Loans, a single Interest Period, or (b)
a Swingline Loan.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Borrowing
Base</u>" means, at any time of calculation, an amount equal to:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)
the lesser of (i) (A) the Appraisal Percentage <i>multiplied by</i> (B)(1)
the Appraised Value of Eligible Inventory, minus (2) Inventory Reserves,
or (ii) (A) the Inventory Advance Rate <i>multiplied by </i>(B)(1) the
Cost of Eligible Inventory, minus (2) Inventory Reserves; <u>plus</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)
eighty-five percent (85%) of the Net Amount of Eligible Accounts; <u>minus</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)
the then amount of all Availability Reserves.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Borrowing
Base Certificate</u>" has the meaning assigned to such term in Section
5.1(f).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Borrowing
Request</u>" means a request by the Lead Borrower on behalf of the Borrowers
for a Borrowing in accordance with Section 2.4.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Borrower
Security Agreement</u>" means the Amended and Restated Security Agreement
dated as of the date hereof and executed and delivered by the Borrowers
to the Collateral Agent for the benefit of the Secured Parties, as amended
and in effect from time to time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Breakage
Costs</u>" shall have the meaning set forth in Section 2.21(b).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Brown
Canada</u>" has the meaning provided therefor in the Recitals.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Brown
International</u>" has the meaning provided therefor in the Recitals.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Brown
Retail</u>" has the meaning provided therefor in the Recitals.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Business
Day</u>" means any day that is not a Saturday, Sunday or other day on which
commercial banks in Boston, Massachusetts are authorized or required by
law to remain closed, <u>provided</u> that, when used in connection with
a LIBO Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Buster
Brown</u>" has the meaning provided therefor in the Recitals.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Canadian
Guaranty</u>" means the Amended and Restated Canadian Facility Guaranty,
dated as of the date hereof and executed and delivered by Brown Canada
to the Collateral Agent for the benefit of the Secured Parties, as amended
and in effect from time to time.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Canadian
Pension Plans</u>" means collectively, (i) The Pension Plan for the Salaried
Staff and Salespersons of Brown Shoe Company of Canada Ltd and (ii) The
Pension Plan for the Designated Employees of Brown Shoe Company of Canada
Ltd.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Canadian
Security Agreements</u>" means the Amended and Restated Canadian Security
Agreement and the Amended and Restated Deed of Moveable Hypothec, each
dated as of the date hereof and executed and delivered by Brown Canada
to the Collateral Agent for the benefit of the Secured Parties, as amended
and in effect from time to time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Canadian
Subsidiary</u>" means any Subsidiary that is organized under the laws of
Canada or any province thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Capital
Expenditures</u>" means, with respect to any Person for any period, (a)
all expenditures made (whether made in the form of cash or other property)
or costs incurred for the acquisition, improvement or repair of fixed or
capital assets of such Person (but excluding any asset acquired (x) in
connection with a Permitted Acquisition, or (y) with the proceeds of insurance
or condemnation awards), in each case that are (or should be) set forth
as capital expenditures in a Consolidated statement of cash flows of such
Person for such period, in each case prepared in accordance with GAAP,
and (b) Capital Lease Obligations incurred by a Person during such period
to the extent capitalized in accordance with GAAP.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Capital
Lease Obligations</u>" of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Capital
Stock</u>" means any and all corporate stock, units, shares, partnership
interests, membership interests, equity interests, rights, securities,
or other equivalent evidences of ownership (howsoever designated) issued
by any Person.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Cash
Collateral Account</u>" shall mean an interest-bearing account established
by the Borrowers with the Collateral Agent at Bank of America under the
sole and exclusive dominion and control of the Collateral Agent designated
as the "Brown Shoe Cash Collateral Account".
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Cash
Dominion Event</u>" means either (i) the occurrence and continuance of
any Event of Default, or (ii) the failure of the Borrowers to maintain
Excess Availability of at least $35,000,000 for three (3) consecutive Business
Days. For purposes of this Agreement, the occurrence of a Cash Dominion
Event shall be deemed continuing (i) so long as such Event of Default has
not been cured or waived, and/or (ii) if the Cash Dominion Event arises
as a result of the Borrowers' failure to maintain Excess Availability as
required hereunder, until Excess
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<p>Availability has exceeded $35,000,000.00 for thirty (30) consecutive
days, in which case a Cash Dominion Event shall no longer be deemed to
be continuing for purposes of this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Cash
Receipts</u>" has the meaning provided therefor in Section 2.23(b).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>CERCLA</u>"
means the Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. &sect; 9601 et seq.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Change
in Control</u>" means, at any time, (a) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Lead Borrower
by Persons who were neither (i) nominated by the board of directors of
the Lead Borrower nor (ii) appointed by directors so nominated; or (b)
any person (within the meaning of the Securities and Exchange Act of 1934,
as amended), is or becomes the beneficial owner (within the meaning of
Rule 13d-3 and 13d-5 of the Securities and Exchange Act of 1934, as amended)
directly or indirectly of fifty percent (50%) or more of the total voting
power of the Voting Stock of the Lead Borrower on a fully diluted basis,
whether as a result of the issuance of securities of the Lead Borrower,
any merger, consolidation, sale, or distribution, or otherwise, or (c)
the failure of the Lead Borrower to own, directly or indirectly, 100% (or
such lesser percentage as may be owned directly or indirectly, as of the
Closing Date or as of the later acquisition thereof) of the Capital Stock
or ownership interest, as applicable, of all other Loan Parties (other
than Shoes.com in the event that Shoes.com becomes a Loan Party hereunder
with the consent of the Lenders), except where such failure is as a result
of a transaction permitted by the Loan Documents; or (d) if at any time
Shoes.com becomes a Loan Party, the failure of the Lead Borrower to own,
directly or indirectly, 80% of the Capital Stock or ownership interest,
as applicable, of Shoes.com, except where such failure is as a result of
a transaction permitted by the Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Change
in Law</u>" means (a) the adoption of any law, rule or regulation after
the Relevant Date, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority
after the Relevant Date or (c) compliance by any Lender, Issuing Bank or
Acceptance Lender (or, for purposes of Section 2.25, by any lending office
of such Lender, Issuing Bank or Acceptance Lender or by such Lender's,
Issuing Bank's or Acceptance Lender's holding company, if any) with any
request, guideline or directive (whether or not having the force of law)
of any Governmental Authority made or issued after the Relevant Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Charges</u>"
has the meaning provided therefor in Section 9.14.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Charter
Document</u>" means as to any Person, its partnership agreement, certificate
or articles of incorporation, operating agreement, membership agreement
or similar constitutive document or agreement, its by-laws and all shareholder
or other equity holder agreements, voting trusts and similar arrangements
to which such Person is a party or which is applicable to its
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<p>Capital Stock, its partnership interests, membership interests or other
equity interests and all other arrangements relating to the Control or
management of such Person.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Civil
Code</u>" means the Civil Code of Quebec and all regulations thereunder,
as amended from time to time, and any successor statutes.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Closing
Date</u>" means the date on which the conditions specified in Section 4.1
are satisfied (or waived by the Agents).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Code</u>"
means the Internal Revenue Code of 1986 and the rules and regulations promulgated
thereunder, as amended from time to time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Collateral</u>"
means any and all "Collateral" as defined in any applicable Security Document.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Collateral
Agent</u>" means Bank of America, N.A., in its capacity as collateral agent
under the Security Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Commercial
Letter of Credit</u>" means any Letter of Credit issued for the purpose
of providing the primary payment mechanism in connection with the purchase
of any materials, goods or services by a Borrower in the ordinary course
of business of such Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Commercial
Letter of Credit Fee</u>" means with respect to any Commercial Letter of
Credit issued hereunder and the Existing Letters of Credit which are Commercial
Letters of Credit, 0.50% in each case subject to adjustment from time to
time thereafter to the applicable percentage specified corresponding to
the Average Excess Availability, as set forth below, respectively:
<br>&nbsp;
<center><table BORDER CELLPADDING=7 WIDTH="384" >
<tr>
<td VALIGN=TOP WIDTH="64%">Average Excess Availability</td>

<td VALIGN=TOP WIDTH="36%">
<center>Fee</center>
</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="64%">Less than or equal to $50,000,000</td>

<td VALIGN=TOP WIDTH="36%">0.70%</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="64%">Greater than $50,000,000 but less or equal to
$75,000,000</td>

<td VALIGN=TOP WIDTH="36%">0.60%</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="64%">Greater than $75,000,000 but less or equal to
$150,000,000</td>

<td VALIGN=TOP WIDTH="36%">0.50%</td>
</tr>

<tr>
<td VALIGN=TOP WIDTH="64%">Greater than $150,000,000</td>

<td VALIGN=TOP WIDTH="36%">0.40%</td>
</tr>
</table></center>

<p>From the Closing Date through July 31, 2004, the Commercial Letter of
Credit Fee shall be shall be 0.50% per annum. The Commercial Letter of
Credit Fee Percentage shall be adjusted
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<p>11
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<p>quarterly upon the Administrative Agent's furnishing the Lead Borrower
with a calculation of Average Excess Availability for the immediately preceding
Fiscal Quarter, which calculation shall be furnished within four (4) Business
Days after the end of each Fiscal Quarter. Any such adjustment shall become
effective prospectively on and after the sixth Business Day after the end
of each Fiscal Quarter. If a Default or Event of Default exists at the
time any reduction in the Commercial Letter of Credit Fee is to be implemented,
such reduction shall not occur until the first day of the first calendar
month following the date on which such Default or Event of Default is waived
or cured.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Commitment</u>"
shall mean, with respect to each Lender, the commitment of such Lender
hereunder in the amount set forth opposite its name on <u>Schedule 1.1</u>
hereto or as may subsequently be set forth in the Register from time to
time, as the same may be either (i) reduced from time to time pursuant
to Section 2.17 hereof, or (ii) increased from time to time pursuant to
Section 2.2 hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Commitment
Fee</u>" has the meaning provided therefor in Section 2.13.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Commitment
Increase</u>" has the meaning provided therefor in Section 2.2(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Commitment
Percentage</u>" shall mean, with respect to each Lender, that percentage
of the Commitments of all Lenders hereunder in the amount set forth opposite
its name on <u>Schedule 1.1</u> hereto or as may subsequently be set forth
in the Register from time to time, as the same may be either (i) reduced
from time to time pursuant to Section 2.17 hereof, or (ii) increased or
reduced from time to time pursuant to Section 2.2 hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Compliance
Certificate</u>" has the meaning provided in Section 5.01(d).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Consolidated</u>"
means, when used to modify a financial term, test, statement, or report
of a Person, refers to the application or preparation of such term, test,
statement or report (as applicable) based upon the consolidation, in accordance
with GAAP, of the financial condition or operating results of such Person
and its Subsidiaries.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Consolidated
EBITDA</u>" means with respect to any Fiscal Period of the Lead Borrower,
the result for such period of (i) Adjusted Net Earnings from Operations,
<u>plus</u>
(ii) depreciation, amortization and all other non-cash charges that were
deducted in the calculation of Adjusted Net Earnings from Operations for
such period <u>plus</u> (iii) federal, state, local and foreign income
taxes that were deducted in the calculation of Adjusted Net Earnings from
Operations for such period, <u>plus</u> (iv) Consolidated Interest Expense
to the extent deducted in the calculation of Adjusted Net Earnings from
Operations for such period, in each case determined on a Consolidated basis
in accordance with GAAP.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Consolidated
Interest Expense</u>" means, for any period for any Person, interest expense
of such Person for such period, determined on a Consolidated basis in accordance
with GAAP.
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<p>12
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Control</u>"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
The terms "<u>Controlling</u>" and "<u>Controlled</u>" have meanings correlative
thereto.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Cost</u>"
means, with respect to Inventory, the lower of cost (on a first-in, first-out
basis) or market value, as reported on the Borrowers' inventory records
and in a manner consistent with current practice.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Credit
Card Notifications</u>" has the meaning provided therefor in Section 2.23(d).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Credit
Extensions</u>" as of any day, shall be equal to the sum of (a) the principal
balance of all Loans then outstanding, (b) the then amount of the Letter
of Credit Outstandings and (c) the aggregate amount of any unpaid Acceptance
Reimbursement Obligations, whether or not then due.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Customer
Credit Liabilities</u>" means, at any time, the aggregate face value at
such time of (a) outstanding gift certificates and gift cards of the Loan
Parties entitling the holder thereof to use all or a portion of the certificate
to pay all or a portion of the purchase price for any Inventory, and (b)
outstanding merchandise credits and customer deposits of the Loan Parties.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>DDAs</u>"
means any checking or other demand deposit account maintained by any Loan
Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Default</u>"
means any event or condition that constitutes an Event of Default or that
upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Delinquent
Lender</u>" has the meaning given that term in Section 8.13.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Delinquent
Lender's Future Commitment</u>" as defined in Section 8.13.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Designated
Disposition</u>" means the sale, transfer, lease or other disposition by
a Loan Party of any one or more of the following: (i) any item of Real
Estate owned by a Loan Party and located in Canada as identified on Schedule
3.5 hereto, and (ii) the Real Estate owned by the Lead Borrower located
in Sikeston, Missouri and Fredericktown, Missouri and used as warehouses.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Disbursement
Accounts</u>" has the meaning provided therefor in Section 2.23(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Disqualified
Capital Stock</u>" means any Capital Stock of any Person that, by its terms
(or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder thereof), or upon the happening
of any event, matures or is mandatorily
<center>
<p>13
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<p>redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part, in
each case prior to the Termination Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Dollar
Equivalent</u>" of an amount denominated in currency other than Dollars
shall mean, at any time for the determination thereof, the amount of Dollars
which could be purchased with the amount of such other currency involved
in such computation at the spot exchange rate therefor as quoted by the
Agent as of 11:00 A.M. (Boston time) on the date two Business Days prior
to the date of any determination thereof for purchase on such date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Dollars</u>"
or "<u>$</u>" refers to lawful money of the United States of America.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Domestic
Subsidiary</u>" means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>EDGAR</u>"
means the Electronic Data Gathering, Analysis and Retrieval system maintained
by the Securities and Exchange Commission.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Eligible
Accounts</u>" means Accounts due to a Loan Party as arise in the ordinary
course of business, which have been earned by performance, and are deemed
by the Administrative Agent in its reasonable discretion to be eligible
for inclusion in the calculation of the Borrowing Base. Without limiting
the foregoing, unless otherwise approved in writing by the Administrative
Agent, none of the following shall be deemed to be Eligible Accounts:
<dir>
<dir>(a) Accounts that have been outstanding for more than ninety (90)
days past the invoice date or that are more than sixty (60) days past due;
<u>provided</u>
that Eligible Accounts may include up to $3,000,000 of Accounts for which
more than ninety (90) days but less than one hundred twenty (120) days
have elapsed since the date of the original invoice therefor, but which
are less than sixty (60) days past due, in the ordinary course of the Loan
Parties' business and <u>provided</u> further that Eligible Accounts may
include Accounts of major department stores, including, without limitation,
May Company, Federated Department Stores, Dillards and Nordstroms, for
which more than one hundred twenty (120) days but less than one hundred
forty-five days (145) have elapsed since the date of the original invoice
therefor, but which are less than sixty (60) days past due, in the ordinary
course of the Loan Parties' business;
<p>(b) Accounts due from any Person to the extent that fifty percent (50%)
or more of all Accounts from such Person are not Eligible Accounts pursuant
to the other provisions of this definition;
<p>(c) Accounts with respect to which a Loan Party does not have good,
valid and marketable title thereto, free and clear of any Lien (other than
(i) Liens granted to the
<center>
<p>14</center>
</dir>
</dir>

<center>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<dir>
<dir>Collateral Agent, for its benefit and the ratable benefit of the Secured
Parties, pursuant to the Security Documents);
<p>(d) Accounts that are not subject to a first priority security interest
in favor of the Collateral Agent, for the benefit of itself and the Secured
Parties;
<p>(e) Accounts with respect to which any of the representations, warranties,
covenants and agreements contained in any Loan Document are incorrect or
have been breached;
<p>(f) Accounts with respect to which a check, promissory note, draft,
trade acceptance, or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason;
<p>(g) Accounts which represent a progress billing or as to which the applicable
Loan Party has extended the time for payment without the consent of the
Administrative Agent (for the purposes hereof, "progress billing" means
any invoice for goods sold or leased or services rendered under a contract
or agreement pursuant to such the obligation to pay such invoice is conditioned
upon such Loan Party's completion of any further performance under such
contract or agreement);
<p>(h) Accounts with respect to which any one or more of the following
events has occurred to the account debtor on such Account: (i) death or
judicial declaration of incompetency of such account debtor who is a natural
person; (ii) the filing by or against such account debtor of a request,
proposal or petition for liquidation, reorganization, arrangement, adjustment
of debts, adjudication as a bankrupt, winding-up, or other relief under
the Bankruptcy Code or other similar Applicable Law of any jurisdiction
or any other bankruptcy, insolvency, or similar laws of the United States
of America, any state or territory thereof, or any foreign jurisdiction,
now or hereafter in effect; (iii) the making of any general assignment
by such account debtor for the benefit of creditors; (iv) the appointment
of a receiver or trustee for such account debtor or for any of the assets
of the account debtor, including, without limitation, the appointment of
or taking possession by a "custodian," as defined in the Bankruptcy Code;
(v) the institution by or against such account debtor of any other type
of insolvency proceeding (under the Bankruptcy Code or other similar Applicable
Law of any jurisdiction or otherwise) or of any formal or informal proceeding
for the dissolution or liquidation of, settlement of claims against, or
winding up of affairs of, such account debtor; (vi) the sale, assignment,
or transfer of all or any material part of the assets of such account debtor;
(vii) the nonpayment generally by such account debtor of its debts as they
become due; or (viii) the cessation of the business of such account debtor
as a going concern;
<p>(i) Accounts owed by a Person which (i) does not maintain its chief
executive office in the United States of America or Canada, (ii) is not
organized under the laws of the United States of America or Canada or any
political subdivision, state, or province
<center>
<p>15</center>
</dir>
</dir>

<center>
<hr ALIGN=RIGHT NOSHADE WIDTH="100%"></center>

<dir>
<dir>thereof, or (iii) is the government of any foreign country or sovereign
state, or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other instrumentality
thereof, except to the extent that such Account is secured or payable by
a letter of credit or acceptance satisfactory to the Administrative Agent
in its discretion;
<p>(j) Accounts owed by a Person which is an Affiliate, director, officer,
or employee of such Loan Party;
<p>(k) Accounts with respect to which either the perfection, enforceability,
or validity of the Collateral Agent's Liens in such Account, or the Collateral
Agent's right or ability to obtain direct payment to the Collateral Agent
of the proceeds of such Account, is governed by any federal, state, or
local statutory requirements other than those of the UCC, PPSA, Civil Code,
or the Mortgages Act (Ontario) (except as provided in <u>clause (m)</u>
following);
<p>(l) Accounts owed by a Person to which a Loan Party, is indebted in
any way, or which is subject to any right of setoff or recoupment by such
Person, unless such Person has entered into an agreement reasonably acceptable
to the Administrative Agent to waive setoff rights, or if such Person has
disputed liability or made any claim with respect to any other Account
due from such Person, but in each such case only to the extent of such
indebtedness, setoff, recoupment, dispute, or claim;
<p>(m) Accounts owed by the government of the United States of America
or Canada, or any department, agency, public corporation, or other instrumentality
thereof, unless, in the case of the United States of America, the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C. 3727 et seq.),
and any other steps necessary to perfect the Agent's Liens therein, have
been complied with to the Administrative Agent's satisfaction with respect
to such Account;
<p>(n) Accounts owed by any state, province, municipality, or other political
subdivision of the United States of America or any other government, country
or jurisdiction, or any department, agency, public corporation, or other
instrumentality thereof and as to which the Administrative Agent determines
that its Lien therein is not or cannot be perfected;
<p>(o) Accounts which represents a sale on a bill-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other repurchase
or return (excluding sales subject to returns of defective merchandise
returned in the ordinary course of business) basis;
<p>(p) Accounts which are evidenced by a promissory note or other instrument
or by chattel paper;
<p>(q) Accounts with respect to which the Administrative Agent believes,
in the exercise of its reasonable judgment, that the prospect of collection
of such Account is impaired
<center>
<p>16</center>
</dir>
</dir>

<center>
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<dir>
<dir>or that such Account may not be paid by reason of the account debtor's
financial inability to pay;
<p>(r) Accounts with respect to which the account debtor is located in
any state requiring the filing of a Notice of Business Activities Report
or similar report in order to permit such Loan Party to seek judicial enforcement
in such state of payment of such Account, unless such Loan Party has qualified
to do business in such state or has filed a Notice of Business Activities
Report or equivalent report for the then current year;
<p>(s) Accounts which arise out of a sale not made in the ordinary course
of such Loan Party's business;
<p>(t) Accounts with respect to which the goods giving rise to such Account
have not been shipped and delivered to and accepted by, or have been rejected
or objected to by, the account debtor or the services giving rise to such
Account have not been performed by such Loan Party, and, if applicable,
accepted by the account debtor, or the account debtor revokes its acceptance
of such goods or services;
<p>(u) Accounts owed by a Person, or group of affiliated Persons, which
is obligated to the Loan Parties respecting Accounts the aggregate unpaid
balance of which exceeds twenty percent (20.0%) of the aggregate unpaid
balance of all Accounts owed to the Loan Parties at such time by all of
the Loan Parties' account debtors, but only to the extent of such excess;
<p>(v) Accounts with respect to which such Loan Party or the Agent has
deemed such Account as uncollectible or has any reason to believe that
such Account is uncollectible; and
<p>(w) Accounts which the Administrative Agent determines in its reasonable
credit judgment is ineligible for any other reason.</dir>
</dir>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If any
Account at any time ceases to be an Eligible Account, then such Account
shall promptly be excluded from the calculation of the Borrowing Base.
Notwithstanding the foregoing, the Agent and the Borrower acknowledge that,
subject to the Agent's verification from time to time of the adequacy of
the General Reserve (and adjustment thereto, if necessary), Accounts described
in clauses (b), (f), (h), (i), (j), (l), (m), (r), and (s), the provisos
to clause (a) and accounts due from account debtors in West Virginia shall
be ineligible only to the extent of the General Reserve.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Eligible
Assignee</u>" means (a) a commercial bank, commercial finance company,
or other asset based lender having total assets in excess of $1,000,000,000,
(b) any Lender listed on the signature pages of this Agreement, (c) any
Affiliate of any Lender, and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Administrative Agent
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Eligible
In-Transit Inventory</u>" shall mean, as of the date of determination thereof,
without duplication of other Eligible Inventory, Inventory:
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<p>17
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)
(i) which has been shipped from a location within the United States of
America or Canada for receipt by a Loan Party within ninety (90) days of
the date of determination, but which has not yet delivered to such Loan
Party, (ii) for which title has passed to such Loan Party, (iii) for which
the bill of lading or other document of title reflects a Loan Party as
consignee, (iv) which is insured to the reasonable satisfaction of the
Collateral Agent, and (v) which otherwise would constitute Eligible Inventory.
and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)
(i) which has been shipped from a location (other than one within the United
States of America or Canada) for receipt by a Loan Party within ninety
(90) days of the date of determination, but which has not yet delivered
to such Loan Party, (ii) for which title has passed to such Loan Party,
(iii) for which the bill of lading or other document of title reflects
a Loan Party as consignee (along with delivery to such Loan Party or its
customs broker of the documents of title with respect thereto, (iv) as
to which the Collateral Agent has control over a set of documents of title
which evidence ownership of the subject Inventory (such as, if requested
by the Collateral Agent, by the delivery of a customs broker agency agreement,
satisfactory to the Collateral Agent), (v) which is insured to the reasonable
satisfaction of the Collateral Agent, and (vi) which otherwise would constitute
Eligible Inventory.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Eligible
Inventory</u>" shall mean, as of the date of determination thereof, (a)
Eligible In-Transit Inventory, (b) Eligible L/C Inventory, and (c) items
of Inventory of the Loan Parties that are finished goods, merchantable
and readily saleable to the public in the ordinary course or subject to
the provisions of this definition, that consist of raw materials, in each
case deemed by the Administrative Agent in its reasonable discretion to
be eligible for inclusion in the calculation of the Borrowing Base. Without
limiting the foregoing, unless otherwise approved in writing by the Administrative
Agent, none of the following shall be deemed to be Eligible Inventory:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)
Inventory that is not owned solely by a Loan Party, or is leased or on
consignment, or such Loan Party does not have good and valid title thereto;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)
Inventory (including any portion thereof in transit from vendors, other
than Eligible In-Transit Inventory and Eligible L/C Inventory) that is
not located at a warehouse facility or store that is owned or leased by
a Loan Party;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)
Inventory that represents (i) goods damaged, defective or otherwise unmerchantable,
(ii) goods that do not conform in all material respects to the representations
and warranties contained in this Agreement or any of the Security Documents,
or (iii) goods that are obsolete, slow moving, stale, or not usable or
saleable at prices approximating at least Cost; in the normal course of
such Loan Party's business, in each case, to the extent any of the foregoing
((i) through (iii)) is not factored into the calculation of Appraised Value;
<center>
<p>18
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)
Inventory that is not located in the United States of America (excluding
territories and possessions thereof) or Canada other than Eligible In-Transit
Inventory and Eligible L/C Inventory;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)
Inventory (other than Inventory subject to Permitted Encumbrances described
in clause (ii) of the definition thereof) that is not subject to a perfected
first priority security interest in favor of the Collateral Agent for the
benefit of the Secured Parties;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)
Inventory which consists of work-in-process, chemicals, samples, protoypes,
shopping bags and similar supplies which are not intended for sale in the
ordinary course of business (but specifically excluding purses, satchels,
backpacks and similar finished goods which are merchantable and readily
saleable to the public in the ordinary course) packing and shipping materials
and other similar non-merchandise categories;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)
Inventory as to which insurance in compliance with the provisions of Section
5.7 hereof is not in effect;
<p>(h) Inventory which has been sold but not yet delivered or as to which
any Loan Party has accepted a deposit;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)
Inventory which is acquired in a Permitted Acquisition unless the Collateral
Agent, in its Permitted Discretion, agrees that such Inventory shall temporarily
be deemed Eligible Inventory, <i>provided, however that</i> if the Collateral
Agent so agrees, the Inventory Advance Rate for such Inventory shall not
exceed 50% and such Inventory shall be deemed Eligible Inventory for no
more than ninety (90) days except as set forth in the following proviso,
and <i>provided further that</i>, during such ninety (90) day period referred
to above, the Collateral Agent shall cause an appraisal of such Inventory
to be completed, shall establish a final Inventory Advance Rate and Inventory
Reserves (if applicable) therefor, and shall otherwise determine whether
such Inventory shall be deemed Eligible Inventory;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)
Inventory that does not consist of finished goods;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)
Eligible In-Transit Inventory to the extent such Inventory exceeds 15%
of total Inventory as shown on the Consolidated financial statements of
the Lead Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (l)
Inventory that that is not reflected in the details of a current perpetual
inventory report (unless reflected in a report to the Administrative Agent
as "in-transit" Inventory)
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (m)
Inventory that contains or bears any proprietary rights licensed to a Loan
Party by any Person, if the Administrative Agent is not satisfied that
it may sell or otherwise dispose of such Inventory in accordance with the
terms of the Security Documents without infringing the rights of the licensor
of such proprietary rights or violating any contract with such licensor
(and without payment of any royalties other than any royalties due with
respect to the sale or
<center>
<p>19
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<p>disposition of such Inventory pursuant to the existing license agreement),
unless either (i) the licensor has entered into a consent or sublicense
agreement with the Agents in form and substance reasonably acceptable to
the Agents, (ii) the Fixed Charge Coverage Ratio is greater than 1.25:
1.00, or (iii) if the Fixed Charge Coverage Ratio is less than 1.25:1.00,
(A) such Inventory (other than Inventory of the Famous Footwear Division
of the Loan Parties) from a licensor shall be deemed Eligible Inventory
only to the extent that the value of such Inventory does not exceed $3,000,000,
and (B) licensed Inventory in the Famous Footwear Division of the Loan
Parties shall be deemed Eligible Inventory only to the extent that the
value of such Inventory does not exceed $3,000,000 (excluding Dr. Scholls
Inventory); or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (n)
Inventory that is located in a public warehouse or in possession of a bailee
or in a facility leased by such Loan Party, if the applicable warehouseman,
bailee, or lessor has not delivered to the Collateral Agent, if requested
by the Collateral Agent, a subordination agreement or cession of rank in
form and substance reasonably satisfactory to the Collateral Agent or if
a Reserve for rents or storage charges has not been established for Inventory
at that location.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Eligible
L/C Inventory</u>" shall mean, as of the date of determination thereof,
without duplication of other Eligible Inventory, Inventory (a) not yet
delivered to the Loan Parties, (b) the purchase of which is supported by
a Commercial Letter of Credit having an expiry within ninety (90) days
of such date of determination, (c) which has been consigned to a Loan Party
as consignee (along with delivery to a Loan Party of the documents of title
with respect thereto), (d) as to which the Collateral Agent has control
over the documents of title which evidence ownership of the subject Inventory
(such as, if requested by the Collateral Agent, by the delivery of a customs
broker agency agreement, satisfactory to the Collateral Agent), and (e)
which otherwise would constitute Eligible Inventory. Notwithstanding the
limitations otherwise set forth in clauses (c) and (d) of this definition,
Eligible L/C Inventory shall, without duplication but subject to the Administrative
Agent's Permitted Discretion, include Inventory that has not been shipped
to a Loan Party and for which payment has been guaranteed pursuant to a
Commercial Letter of Credit issued for the account of a Loan Party under
this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Environmental
Laws</u>" means all Applicable Laws issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, handling, treatment,
storage, disposal, Release or threatened Release of any Hazardous Material
or to health and safety matters.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Environmental
Liability</u>" means any liability, contingent or otherwise (including
any liability for damages, natural resource damage, costs of environmental
remediation, administrative oversight costs, fines, penalties or indemnities),
of any Person directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any
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<p>Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>ERISA</u>"
means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>ERISA
Affiliate</u>" means any trade or business (whether or not incorporated)
that, together with any Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>ERISA
Event</u>" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by a Borrower or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect
to the termination of any Plan; (e) the receipt by a Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by a Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by a
Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer
Plan from a Borrower or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Event
of Default</u>" has the meaning assigned to such term in Section 7.1. An
"Event of Default" shall be deemed to have occurred and to be continuing
unless and until that Event of Default has been duly waived in writing
or cured, in each case as provided in this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Excess
Availability</u>" means, as of any date of determination, the excess, if
any, of (a) the lesser of the then Total Commitments or the Borrowing Base,
over (b) the outstanding Credit Extensions.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Excluded
Taxes</u>" means, with respect to the Agents, any Lender, any Issuing Bank,
any Acceptance Lender or any other recipient of any payment to be made
by or on account of any obligation of the Borrowers hereunder, (a) income
or franchise taxes imposed on (or measured by) its gross or net income
by the United States of America, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any
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<p>Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which any Borrower is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to
a request by a Borrower under Section 2.30(b)), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender's failure to comply with Section
2.28, except to the extent that such Foreign Lender (or its assignor, if
any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrowers with respect
to such withholding tax pursuant to Section 2.28(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Existing
Acceptances</u>" means each of the acceptances issued under the Existing
Credit Agreement prior to the date hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Existing
Credit Agreement</u>" shall have the meaning set forth in the Preamble
to the Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Existing
Letters of Credit</u>" means each of the letters of credit issued under
the Existing Credit Agreement prior to the date hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Facility
Guaranty</u>" means collectively, the Canadian Guaranty and the Amended
and Restated Domestic Guaranty in each case in form and substance satisfactory
to the Administrative Agent, executed by the applicable Facility Guarantors
in favor of the Agents, the Issuing Banks, Acceptance Lender, the Lenders
and the other Secured Parties.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Facility
Guarantors</u>" means each Borrower and Brown Canada.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Facility
Guarantors' Collateral Documents</u>" means all security agreements, pledge
agreements, and other instruments, documents or agreements executed and/or
amended and delivered by the Facility Guarantors to secure the Facility
Guaranty and/or the Obligations.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Federal
Funds Effective Rate</u>" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the quotations for such day for
such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fee
Letter</u>" means the letter entitled "Fee Letter" among the Borrowers
and the Administrative Agent dated as of July 21, 2004, as such letter
may from time to time be amended.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Financial
Officer</u>" means, with respect to any Borrower, the chief financial officer,
chief accounting officer, treasurer, controller or assistant controller
of such Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fiscal
Period</u>" means one of the three Fiscal Periods in a Fiscal Quarter each
of which is approximately one month in duration. There are twelve (12)
Fiscal Periods in each Fiscal Year.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fiscal
Quarter</u>" means one of four thirteen (13) week or, if applicable, fourteen
(14) week quarters in a Fiscal Year, with the first of such quarters beginning
on the first day of a Fiscal Year and ending on Saturday of the thirteenth
(or fourteenth, if applicable) week in such quarter.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fiscal
Year</u>" means, with respect to the Lead Borrower, the Lead Borrower's
Fiscal Year for financial accounting purposes. The current Fiscal Year
of the Lead Borrower will end on January 29, 2005.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fixed
Charge Coverage Measurement Date</u>" means the last day of any Fiscal
Quarter of the Lead Borrower immediately preceding a measurement event.
As used in this definition, "measurement event" means any failure of the
Loan Parties to maintain Excess Availability equal to or in excess of $25,000,000
on any day.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fixed
Charge Coverage Ratio</u>" means, as of the last day of any Fiscal Quarter
of the Lead Borrower, for the preceding four Fiscal Quarters then ended,
the ratio of (a) Consolidated EBITDA for such period, to (b) Fixed Charges
for such period.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Fixed
Charges</u>" means, for any period, as determined for the Lead Borrower
and its Subsidiaries on a Consolidated basis, without duplication, the
sum of (a) Consolidated Interest Expense during such period, (b) Capital
Expenditures (excluding Capital Expenditures funded with Indebtedness other
than Revolving Loans) during such period, (c) scheduled principal payments
of Indebtedness payable over the course of the preceding four (4) Fiscal
Quarters, (d) federal, state, local, and foreign income taxes, to the extent
any such taxes are paid in cash during such period (excluding taxes paid
to repatriate foreign earnings for fiscal periods which are more than twelve
months prior to the date of determination of Fixed Charges for any period),
and (e) Restricted Payments during such period, excluding any Restricted
Payments (x) consisting of dividends or distributions made in Capital Stock
under <u>clause (a)</u> of the definition thereof and (y) permitted under
Section 6.7(a)(iii).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Foreign
Lender</u>" means any Lender that is organized under the laws of a jurisdiction
other than the United States of America or any State thereof or the District
of Columbia.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Foreign
Plan</u>" means any benefit plan established or maintained outside of the
United States of America which a Loan Party maintains, sponsors, or to
which such Person has any obligation or liability and which provides or
otherwise makes available retirement or deferred benefits of any kind whatsoever
to employees.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>GAAP</u>"
means accounting principles which are (a) consistent with those promulgated
or adopted by the Financial Accounting Standards Board and its predecessors
(or successors) in effect and applicable to that accounting period in respect
of which reference to GAAP is being made, and (b) consistently applied
with past financial statements of the Lead Borrower and its Subsidiaries
on a Consolidated basis adopting the same principles.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>General
Reserve</u>" means a reserve in an amount equal to three percent (3%) (or
such greater percentage as the Administrative Agent in its reasonable judgment
may require) of the Loan Parties Accounts (net of reserves for past due
accounts, contra Accounts and intercompany Accounts).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Governmental
Authority</u>" means the government of the United States of America or
Canada or any other nation or any political subdivision thereof, whether
state, provincial or local, and any agency, authority, instrumentality,
regulatory body, department, agency, board, commission, tribunal, committee,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Guarantee</u>"
of or by any Person (the "<u>guarantor</u>") means any obligation, contingent
or otherwise, of the guarantor guaranteeing or having the economic effect
of guaranteeing any Indebtedness or other obligation of any other Person
(the "<u>primary obligor</u>") in any manner, whether directly or indirectly,
and including any obligation of the guarantor, direct or indirect, (a)
to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance
or supply funds for the purchase of) any security for the payment thereof,
(b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or acceptance or
letter of guaranty issued to support such Indebtedness or obligation, <u>provided</u>
that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Hazardous
Materials</u>" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes, mold
and other fungi, bacteria, and all other substances or wastes
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<p>of any nature regulated pursuant to any Environmental Law, including
any material listed as a hazardous substance under Section 101(14) of CERCLA.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Hedging
Agreement</u>" means any interest rate protection agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
foreign currency exchange agreement, commodity price protection agreement,
or other interest or currency exchange rate or commodity price hedging
arrangement designed to hedge against fluctuations in interest rates or
foreign exchange rates.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Indebtedness</u>"
of any Person means, without duplication, (a) all obligations of such Person
for borrowed money (including any obligations for borrowed money which
are without recourse to the credit of such Person, provided that (i) such
obligations are secured by a Lien on property of such Person and (ii) such
obligations shall be included in Indebtedness only to the extent of the
value of such property subject to such Lien), (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable incurred
in the ordinary course of business), (f) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby
has been assumed, (g) all Guarantees by such Person of Indebtedness of
others, (h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty, (j) all obligations, contingent
or otherwise, of such Person in respect of bankers' acceptances, (k) the
net termination obligations of all Hedging Agreements, and (l) the present
value (discounted at the Prime Rate) of the principal and interest portions
of all rental obligations of such Person under any Synthetic Lease, tax
retention operating lease, off-balance sheet loan or similar off-balance
sheet financing where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an operating lease in accordance
with GAAP. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is
a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Indemnified
Taxes</u>" means Taxes other than Excluded Taxes.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Indemnitee</u>"
has the meaning provided therefor in Section 9.3(b).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Interest
Payment Date</u>" means (a) with respect to any Prime Rate Loan (including
a Swingline Loan), the first day of each January, April, July and October,
and (b) with respect to
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<p>any LIBO Loan, on the last day of the Interest Period applicable to
the Borrowing of which such Loan is a part, and, in addition, if such LIBO
Loan has an Interest Period of greater than 90 days, on the last day of
the third, sixth and ninth months of such Interest Period, as applicable.
Except as otherwise provided herein, if any day on which a payment is due
is not a Business Day, then the payment shall be due on the next day following
which is a Business Day and such extension of time shall be included in
computing interest and fees in connection with such payment.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Interest
Period</u>" means, with respect to any LIBO Borrowing, the period commencing
on the date of such Borrowing and ending seven days, fourteen days or twenty-one
days or one, two, three or six months thereafter, and, if available from
all of the Lenders, nine months or twelve months thereafter, as the Lead
Borrower may elect by notice to the Administrative Agent in accordance
with the provisions of this Agreement, <u>provided</u> that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such
next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business
Day, and (b) any Interest Period that commences on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month during which such Interest Period ends)
shall end on the last Business Day of the calendar month of such Interest
Period, and (c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date. For purposes hereof,
the date of a Borrowing initially shall be the date on which such Borrowing
is made and thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Inventory</u>"
has the meaning assigned to such term in the Security Agreements.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Inventory
Advance Rate</u>" means 75%.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Inventory
Reserves</u>" means such reserves as may be established from time to time
by the Administrative Agent in the Administrative Agent's Permitted Discretion
(after consultation with the Lead Borrower (whose consent to any Inventory
Reserves shall not be required)) with respect to the determination of the
saleability, at retail, of the Eligible Inventory or which reflect such
other factors as affect the appraised value of the Eligible Inventory.
Without limiting the generality of the foregoing, Inventory Reserves may
include (but are not limited to) reserves based on (i) Shrink; (ii) capitalized
freight and internal profit reserves used in the Borrowers' calculation
of cost of goods sold; and (iii) retail markdowns and markups inconsistent
with prior period practice and performance; industry standards; current
business plans; or advertising calendar and planned advertising events.
Inventory Reserves shall be established and calculated in a manner and
methodology consistent with the Administrative Agent's practices as of
the Closing Date with other similarly situated borrowers.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Investment</u>"
has the meaning provided therefor in Section 6.4.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Issuing
Bank</u>" means, collectively, the Lead Issuing Bank and, solely during
the period during which a Letter of Credit issued by a Lender (other than
the Lead Issuing Bank) is outstanding and either undrawn (in whole or in
part) or with respect to which there is an unreimbursed L/C Disbursement,
such other Lender. Any Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank, in which case during the period during which any such Letter of Credit
is outstanding and either undrawn (in whole or in part) or with respect
to which there is an unreimbursed L/C Disbursement, during such period
the term "Issuing Bank" shall include any such Affiliate with respect to
such Letters of Credit.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>L/C
Disbursement</u>" means a payment made by an Issuing Bank pursuant to a
Letter of Credit.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Lead
Borrower</u>" means Brown Shoe Company, Inc.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Lead
Issuing Bank</u>" means Bank of America, in its capacity as such and any
successor in such capacity.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Lenders</u>"
shall mean the Persons identified on <u>Schedule 1.1</u> and each assignee
that becomes a party to this Agreement as set forth in Section 9.5(b),
or each Person that becomes an Additional Commitment Lender as set forth
in Section 2.2(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Letter
of Credit</u>" shall mean a letter of credit that is (i) issued pursuant
to this Agreement for the account of any Borrower or any Facility Guarantor
(excluding Brown Canada) or for the joint account of any Borrower or any
Facility Guarantor (excluding Brown Canada) and any Loan Party or any of
its Subsidiaries, (ii) a Standby Letter of Credit or Commercial Letter
of Credit, (iii) issued in connection with the purchase of Inventory by
any Borrower or any Facility Guarantor, or in support of an obligation
of any Loan Party or any of its Subsidiaries incurred in the ordinary course
of business, or for any other purpose that is reasonably acceptable to
the Administrative Agent, and (iv) in form and substance reasonably satisfactory
to the Lead Issuing Bank and, if applicable, the Issuing Bank issuing such
Letter of Credit. Without limiting the foregoing, the Existing Letters
of Credit shall be deemed Letters of Credit issued under this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Letter
of Credit Fees</u>" shall mean the fees payable in respect of Letters of
Credit pursuant to Section 2.14.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Letter
of Credit Outstandings</u>" shall mean, at any time, the sum of (a) with
respect to Letters of Credit outstanding at such time, the aggregate maximum
amount that then is or at any time thereafter may become available for
drawing or payment thereunder <u>plus</u> (b) all amounts theretofore drawn
or paid under Letters of Credit for which the applicable Issuing Bank has
not then been reimbursed.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>LIBO
Borrowing</u>" shall mean a Borrowing comprised of LIBO Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>LIBO
Loan</u>" shall mean any Loan bearing interest at a rate determined by
reference to the Adjusted LIBO Rate in accordance with the provisions of
Section 2.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>LIBO
Rate</u>" means, with respect to any LIBO Borrowing for any Interest Period,
a rate <u>per</u> <u>annum</u> as determined on the basis of the offered
rates for deposits in Dollars, for a period of time comparable to such
Interest Period which appears on the Telerate page 3750 (or any successor
or substitute page of such service, or any successor to or substitute for
such service, providing rate quotations comparable to those currently provided
on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) as of 11:00
a.m. (London time) on the day that is two Business Days preceding the first
day of such Interest Period; <u>provided</u>, <u>however</u>, if the rate
described above does not appear on Telerate page 3750 (or on any successor
or substitute page or any successor to, or substitute for, such service)
on any applicable interest determination date, the LIBO Rate shall be the
rate (rounded upwards, if necessary, to the nearest one hundred thousandth
of a percentage point) determined on the basis of the offered rates for
deposits in Dollars for a period of time comparable to such Interest Period
which are offered to the Administrative Agent by four major banks in the
London interbank market at approximately 11:00 a.m. (London time), on the
day that is two Business Days preceding the first day of such Interest
Period as selected by the Administrative Agent. The principal London office
of each of the four major London banks will be requested to provide a quotation
of its Dollar deposit offered rate to the Administrative Agent. If at least
two such quotations are provided, the rate for that date will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as requested,
the rate for that date will be determined on the basis of the rates quoted
by those major London banks that provide such quotes.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Lien</u>"
means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on
or of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset (c) any other lien, charge, privilege, secured claim,
title retention, garnishment right, deemed trust, encumbrance or other
right affecting assets, choate or inchoate, arising by any statute, act
of law of any jurisdiction at common law or in equity or by agreement;
and (d) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Line
Fee</u>" means, with respect to each Lender, a fee equal to 0.30% per annum
(on the basis of actual days elapsed in a year of 360 days) of the average
daily balance of the difference between (x) such Lender's Commitment and
(y) the sum of (i) such Lender's Commitment Percentage multiplied by the
principal amount of Revolving Loans then outstanding, and (ii)
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<p>such Lender's Commitment Percentage multiplied by the then Letter of
Credit Outstandings for each day commencing on the date hereof and ending
on but excluding the Termination Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Loan
Account</u>" has the meaning assigned to such term in Section 2.22(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Loan
Documents</u>" means this Agreement, the Notes, the Letters of Credit,
the Fee Letter, all Borrowing Base Certificates, the Blocked Account Agreements,
the Credit Card Notifications, the Security Documents, the Facility Guaranty,
and any other instrument or agreement now or hereafter executed and delivered
in connection herewith or therewith, or in connection with any Bank Product
provided by the Administrative Agent, the Collateral Agent or any of their
respective Affiliates, each as amended and in effect from time to time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Loan
Party</u>" means each Borrower and each Facility Guarantor.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Loans</u>"
shall mean all loans (including, without limitation, Revolving Loans and
Swingline Loans) at any time made to the Borrowers or for account of the
Borrowers pursuant to this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Margin
Stock</u>" has the meaning assigned to such term in Regulation U.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Material
Adverse Effect</u>" means a material adverse effect on (a) the business,
operations, property, assets, or condition, financial or otherwise, of
the Loan Parties, taken as a whole, (b) the ability of the Loan Parties,
taken as a whole, to perform any material obligation or to pay any Obligations
under this Agreement or any of the other Loan Documents, or (c) the validity
or enforceability of this Agreement or any of the other Loan Documents
or any of the material rights or remedies of the Administrative Agent,
the Collateral Agent or the Lenders hereunder or thereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Material
Indebtedness</u>" means Indebtedness (other than the Loans and Letters
of Credit) of any one or more of the Loan Parties in an aggregate principal
amount exceeding $5,000,000.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Material
Subsidiary</u>" means each Domestic Subsidiary (other than Shoes.com unless
the Lead Borrower requests that Shoes.com becomes a Loan Party and the
Lenders consent thereto) or Canadian Subsidiary of a Loan Party which,
as of the last day of any Fiscal Quarter, satisfied any one or more of
the following tests:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)
such Subsidiary owns property that would constitute Collateral valued in
excess of $10,000,000; or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)
such Subsidiary has revenues in any Fiscal Year in excess of $50,000,000;
or
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)
such Subsidiary, and all other Subsidiaries which are not Loan Parties
own property that would constitute Collateral valued in excess of $25,000,000,
then all such Subsidiaries shall be deemed Material Subsidiaries; or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)
such Subsidiary and all other Subsidiaries which are not Loan Parties have
revenues in any Fiscal Year in excess of $100,000,000, then all such Subsidiaries
shall be deemed Material Subsidiaries.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Maturity
Date</u>" means July 21, 2009.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Maximum
Rate</u>" has the meaning provided therefor in Section 9.14.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Minority
Lenders</u>" has the meaning provided therefor in Section 9.2(c).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Moody's</u>"
means Moody's Investors Service, Inc.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Multiemployer
Plan</u>" means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Net
Amount of Eligible Accounts</u>" means, at any time, the gross amount of
Eligible Accounts less, without duplication, (a) sales, excise, or similar
taxes, and (b) with respect to Eligible Accounts, returns, discounts, claims,
credits, allowances, accrued rebates, offsets, deductions, counterclaims,
disputes, and other defenses of any nature at any time issued, owing, granted,
outstanding, available, or claimed, in each case calculated and determined
in Dollars.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Noncompliance
Notice</u>" has the meaning provided therefor in Section 2.6(b).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Notes</u>"
shall mean (i) the promissory notes of the Borrowers substantially in the
form of Exhibit B-1, each payable to the order of a Lender, evidencing
the Revolving Loans, and (ii) the promissory note of the Borrowers substantially
in the form of Exhibit B-2, payable to the Swingline Lender, evidencing
the Swingline Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Obligations</u>"
means (a) the due and punctual payment by the Borrowers of (i) the principal
of, and interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Borrower under any federal
or state bankruptcy, insolvency, receivership or similar law, whether or
not allowed in such case or proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Borrowers under
the Credit Agreement in respect of any Letter of Credit or Acceptance,
when and as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral and (iii) all
other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise, of
the Borrowers to the Secured Parties under the Credit Agreement and the
other Loan Documents, (b)
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<p>The due and punctual payment and performance of all covenants, agreements,
obligations and liabilities of the Borrowers under or pursuant to this
Agreement and the other Loan Documents, and (c) solely to the extent that
there is sufficient Collateral following satisfaction of the Obligations
described in clause (a) of this definition, the payment and performance
under any transaction with any Lender or any of its Affiliates, which arises
out of any Bank Products.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Other
Taxes</u>" means any and all current or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, any Loan Document.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Overadvance</u>"
means, at any time of calculation, a circumstance in which the Credit Extensions
exceed the lesser of (a) the Total Commitments or (b) the Borrowing Base.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Participant</u>"
has the meaning provided therefor in Section 9.5(e).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>PBGC</u>"
means the Pension Benefit Guaranty Corporation referred to and defined
in ERISA and any successor entity performing similar functions.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Perfection
Certificate</u>" means a certificate in the form of Annex 1 to the Security
Agreements or any other form approved by the Collateral Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Permitted
Acquisition</u>" means an Investment in, a purchase of the Capital Stock
in, or the acquisition of all or a substantial portion of the assets or
properties of, any Person or of any business unit or division of any Person,
the entering into any exchange of securities with any Person, or the entering
into any transaction, merger or consolidation of any Person, or any acquisition
of any retail store locations of any Person (each of the foregoing an "Acquisition")
in each case which satisfies each of the following conditions:
<dir>
<dir>(i) The Acquisition is of a business permitted to be conducted by
the Borrowers pursuant to Section 6.3(b) hereof;
<p>(ii) Prior to and after giving effect to the Acquisition, no Default
or Event of Default will exist or will arise therefrom;
<p>(iii) The Borrowers shall have furnished the Administrative Agent with
the information required under Section 5.1(i) of this Agreement;
<p>(iv) If the Acquisition is of the Capital Stock of any Person, the Acquisition
is structured so that the Person shall become a wholly owned Subsidiary
of the Lead Borrower and such Person will become a Borrower or Facility
Guarantor if required in accordance with Section 5.14 hereof and if such
Person is required to become a Borrower or Facility Guarantor, the Borrowers
(including such Person)
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</dir>
</dir>

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<dir>
<ol>shall take such steps as are necessary to grant to the Collateral Agent,
for the benefit of the Secured Parties, a legal, valid and enforceable
first priority security interest (except as provided in Section 6.2 hereof)
in all of the assets (that would otherwise constitute Collateral) acquired
in connection with such Acquisition;
<p>(v) If a Borrower shall merge with such other Person, such Borrower
shall be the surviving party of such merger;
<p>(vi) such acquisition shall not be a hostile or contested acquisition;
<p>(vii) If the total consideration paid or payable in connection with
the Acquisition (whether in cash, property or securities) is greater than
or equal to $2,000,000, (A) each of the Pro Forma Conditions shall have
been satisfied, and (B) the Pro Forma Fixed Charge Coverage Ratio shall
be greater than 1.0: 1.0; and.
<p>(viii) no Loan Party shall, as a result of or in connection with any
such acquisition, assume or incur any direct or contingent liabilities
(whether relating to environmental, tax, litigation, or other matters)
that could reasonably be expected, as of the date of such acquisition,
to result in the existence or occurrence of a Material Adverse Effect.</ol>
</dir>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Permitted
Discretion</u>" means the Administrative Agent's good faith credit judgment
based upon any factor or circumstance which it reasonably believes in good
faith: (i) will or could reasonably be expected to adversely affect the
value of the Collateral, the enforceability or priority of the Collateral
Agent's Liens thereon in favor of the Secured Parties or the amount which
the Collateral Agent and the Secured Parties would likely receive (after
giving consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral; (ii) suggests that any collateral report
or financial information delivered to the Administrative Agent by or on
behalf of the Loan Parties is incomplete, inaccurate or misleading in any
material respect; (iii) could reasonably be expected to materially increase
the likelihood of a bankruptcy, reorganization or other insolvency proceeding
involving any Loan Party; or (iv) creates or reasonably could be expected
to create a Default or Event of Default. In exercising such judgment, the
Administrative Agent may consider such factors or circumstances already
included in or tested by the definition of Eligible Accounts, Eligible
in-Transit Inventory, Eligible Inventory, or Eligible L/C Inventory, as
well as any of the following: (A) the financial and business climate and
prospects of any Loan Party's industry and general macroeconomic conditions;
(B) changes in demand for and pricing of Inventory; (C) changes in any
concentration of risk with respect to Inventory; (D) any other factors
or circumstances that will or could reasonably be expected to have a Material
Adverse Effect; (E) audits of books and records by third parties, history
of chargebacks or other credit adjustments; and (F) any other factors that
change or could reasonably be expected
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<p>to change the credit risk of lending to the Borrowers on the security
of the Accounts and Inventory. Notwithstanding the foregoing, it shall
not be within Permitted Discretion for the Administrative Agent to establish
Reserves which are duplicative of each other whether or not such reserves
fall under more than one reserve category.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Permitted
Encumbrances</u>" means:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)
Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.5;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.5, <u>provided, however</u>, that
the aggregate amount of such Liens, may not at any time exceed $500,000
from and after the Closing Date;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)
pledges and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance, old-age pension and
other social security laws or regulations;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)
deposits to secure the performance of bids, trade contracts, leases, contracts
(other than for the repayment of borrowed money), statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)
judgment Liens in respect of judgments that do not constitute an Event
of Default under Section 7.1(l);
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)
easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract
from the value of the affected property or interfere with the ordinary
conduct of business of any Loan Party;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vii)
Possessory Liens in favor of brokers and dealers arising in connection
with the acquisition or disposition of Investments owned as of the date
hereof and Permitted Investments, <u>provided</u> that such Liens (a) attach
only to such Investments and (b) secure only obligations incurred in the
ordinary course and arising in connection with the acquisition or disposition
of such Investments and not any obligation in connection with margin financing;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vii)
Landlords' and lessors' Liens in respect of rent not in default; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ix)
Liens in favor of a financial institution encumbering deposits (including
the right of setoff) held by such financial institution in the ordinary
course of its business to secure
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<p>Indebtedness permitted hereunder and which are within the general parameters
customary in the banking industry
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>provided</u>
that, except as provided in any one or more of clauses (i) through (vi)
above, the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Permitted
Investments</u>" means each of the following:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)
Investments in direct obligations of the United States of America (or any
agency thereof or any obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)
Investments in commercial paper maturing within 90 days from the date of
acquisition thereof and having, at such date of acquisition, a credit rating
of at least A-2 or P-2 from S&amp;P or from Moody's;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)
Investments in certificates of deposit maturing within one year from the
date of acquisition, banker's acceptances, Eurodollar bank deposits, and
overnight bank deposits, in each case issued by or created by, or with,
a Lender, an Affiliate of a Lender or a bank or trust company organized
under the laws of the United States of America or Canada or any state,
province or territory thereof, having capital and surplus aggregating at
least $100,000,000, and other bank deposits to the extent such deposits
are insured by a Governmental Authority or pursuant to any governmental
deposit insurance program or are in the process of collection and transfer
in the ordinary course of business to any deposit account which is maintained
in the name of the Collateral Agent or the Administrative Agent or any
Loan Party, or any of them, as the Administrative Agent may determine,
on terms acceptable to the Administrative Agent;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)
Investments in mutual funds substantially all of the assets of which are
securities of the type described in clauses (i), (ii) and (iii) of this
definition;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)
Investments by the Loan Parties in deposit accounts in the ordinary course
of business with financial institutions (A) located in the United States
of America and Canada, and (B) located in a jurisdiction other than the
United States of America and Canada in an amount not in excess of $4,000,000
in the aggregate; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)
fully collateralized repurchase obligations of any commercial bank organized
under the laws of the United States of America or any state thereof, having
capital and surplus aggregating at least $100,000,000, having a term of
not more than thirty (30) days, with respect to securities issued or fully
guaranteed or insured by the government of the United States of America;
<p><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
provided that</i>, notwithstanding the foregoing, after the occurrence
and during the continuance of a Cash Dominion Event, no such Investments
shall be permitted by a Borrower
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<p>unless (i) either (A) no Loans are then outstanding, or (B) the Investment
is a temporary Investment pending expiration of an Interest Period for
a LIBO Loan, the proceeds of which Investment will be applied to the Obligations
after the expiration of such Interest Period, and (ii) such Investments
are pledged by the applicable Borrower to the Administrative Agent as additional
collateral for the Obligations pursuant to such agreements as may be reasonably
required by the Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Permitted
Overadvance</u>" means an Overadvance determined by the Administrative
Agent, in its reasonable discretion, (a) which is made to maintain, protect
or preserve the Collateral and/or the Lenders' rights under the Loan Documents,
or (b) which is otherwise in the Lenders' interests; <u>provided that</u>
Permitted Overadvances shall not (i) exceed five percent of the then Borrowing
Base in the aggregate outstanding at any time or (ii) remain outstanding
for more than thirty consecutive Business Days, unless in case of clause
(ii) the Required Lenders otherwise agree; and <u>provided further</u>
that the foregoing shall not (1) modify or abrogate any of the provisions
of Section 2.7(h) regarding the Lenders' obligations with respect to L/C
Disbursements, or (2) result in any claim or liability against the Administrative
Agent (regardless of the amount of any Overadvance) for "inadvertent Overadvances"
(i.e. where an Overadvance results from changed circumstances beyond the
control of the Administrative Agent (such as a reduction in the collateral
value)), and <u>further provided that</u> in no event shall the Administrative
Agent make an Overadvance, if after giving effect thereto, the principal
amount of the Credit Extensions (including any Overadvance or proposed
Overadvance) would exceed the Total Commitments.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Permitted
Stock Repurchase</u>" means a purchase by the Lead Borrower of Capital
Stock of the Lead Borrower; <u>provided</u> that at the time of making
such purchase and after giving effect thereto (a) the Pro Forma Conditions
are satisfied, and (b) the aggregate of all such purchases shall not exceed
$35,000,000 in any Fiscal Year unless, with respect to the first such purchase
in a Fiscal Year which, together with all other purchases during such Fiscal
Year, exceeds $35,000,000 in the aggregate and with respect to each subsequent
purchase made in excess of such aggregate amount, the Administrative Agent
shall have received a solvency opinion from an independent Person reasonably
acceptable to the Administrative Agent, the scope and conclusions of which
are reasonably satisfactory to the Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Person</u>"
means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority
or other entity.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Plan</u>"
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which a Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>PPSA</u>"
means the <i>Personal Property Security Act</i> (Ontario) ( or any successor
statute) or similar legislation of any other Canadian jurisdiction, the
laws of which are required by such legislation to be applied in connection
with the issue, perfection, enforcement, opposability, validity or effect
of security interests.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Prime
Rate</u>" shall mean, for any day, the higher of (a) the annual rate of
interest then most recently announced by Bank of America at its head office
in Charlotte, North Carolina as its "Prime Rate" and (b) the Federal Funds
Effective Rate in effect on such day plus &frac12; of 1% (0.50%) per annum.
The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations thereof in
accordance with the terms hereof, the Prime Rate shall be determined without
regard to clause (b) of the first sentence of this definition, until the
circumstances giving rise to such inability no longer exist. Any change
in the Prime Rate due to a change in Bank of America's Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of
such change in Bank of America's Prime Rate or the Federal Funds Effective
Rate, respectively.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Prime
Rate Loan</u>" shall mean any Loan bearing interest at a rate determined
by reference to the Prime Rate in accordance with the provisions of Section
2.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Pro
Forma Conditions</u>" means, at the time of determination, that (a) no
Default or Event of Default then exists or would arise as a result of the
making such payment, and (b) the Administrative Agent has determined that
Excess Availability, immediately after giving effect to such payment or
acquisition and as projected on a pro-forma basis as of the last day of
each month for the twelve months following such payment or acquisition,
will be equal to or greater than $35,000,000.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Pro
Forma Fixed Charge Coverage Ratio</u>" means, at any date of determination,
the ratio of (a) projected Consolidated EBITDA for the period of the next
succeeding twelve consecutive months, to (b) projected Fixed Charges for
such period. Where any item of interest varies or depends upon a variable
rate of interest (or other rate of interest which is not fixed for such
entire four fiscal quarter period), such rate, for purposes of calculating
the Pro Forma Fixed Charge Coverage Ratio, shall be assumed to equal the
Prime Rate plus the Applicable Margin in effect on the date of such calculation,
or, if such rate is a LIBO Rate, the applicable LIBO Rate plus the Applicable
Margin in effect on the date of such calculation.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Real
Estate</u>" means all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned or leased
by any Loan Party, including all easements, rights-of-way, and similar
rights relating thereto and all leases, tenancies, and occupancies thereof.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Register</u>"
has the meaning set forth in Section 9.5(c).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Regulation
U</u>" means Regulation U of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Regulation
X</u>" means Regulation X of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Related
Parties</u>" means, with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Release</u>"
has the meaning set forth in Section 101(22) of CERCLA.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Relevant
Date</u>" means (i) in the case of each Lender signatory hereto on the
Closing Date, the Closing Date, and (ii) in the case of each other Lender,
the effective date of the Assignment and Acceptance or other document pursuant
to which it becomes a Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Required
Lenders</u>" shall mean, at any time, Lenders having Commitments greater
than 50% of the Total Commitments, or if the Commitments have been terminated,
Lenders whose percentage of the outstanding Loans and Letters of Credit
aggregate greater than 50% of all such Loans and Letters of Credit Outstanding.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Reserves</u>"
means the Inventory Reserves and Availability Reserves.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Responsible
Officer</u>" means with respect to any Borrower, the chief executive officer
or the president or any Financial Officer.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Restricted
Payment</u>" means, with respect to any Person (other than a natural person):
(a) the payment or making of any dividend or other distribution of property
in respect of such Person's Capital Stock (or any options or warrants for,
or other rights with respect to, such Capital Stock) of such Person, other
than distributions solely in such Person's Capital Stock (or any options
or warrants for, or other rights with respect to, such Capital Stock) of
the same class; or (b) the redemption or other acquisition by such Person
of any Capital Stock (or any options or warrants for, or other rights with
respect to, such Capital Stock) of such Person (including without limitation,
any payment (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares
of Capital Stock); <u>provided</u> that (x) the issuance or redemption
of the Lead Borrower's Capital Stock to or by any employee of any Subsidiary
in the ordinary course of the Lead Borrower's business (including, without
limitation, in the ordinary operation of the Lead Borrower's employee benefit
plans or in connection with directors' plans or compensation), (y) the
issuance to holders of Capital Stock of the Lead Borrower of rights to
acquire additional Capital Stock on the occurrence of any specified event
or circumstance, and
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<p>(z) any redemption of rights to acquire additional stock under the Lead
Borrower's current "poison pill" rights agreement (as such agreement may
be amended or replaced) but only if the redemption price thereunder is
not in excess of the redemption price existing under such agreement as
of the Closing Date, shall not constitute a distribution hereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Revolving
Loans</u>" means all Loans at any time made by a Lender pursuant to Section
2.1.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>S&amp;P</u>"
means Standard &amp; Poor's Rating Services, a division of the McGraw-Hill
Companies, Inc.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Secured
Parties</u>" has the meaning assigned to such term in the Security Agreements.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Security
Agreements</u>" means, collectively, the Borrower Security Agreement and
the Canadian Security Agreements.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Security
Documents</u>" means the Security Agreements, the Facility Guaranty, the
Facility Guarantors' Collateral Documents, and each other security agreement,
guaranty or other instrument or document executed and delivered pursuant
to Section 5.15 or any other provision hereof or any other Loan Document,
to secure any of the Obligations.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Settlement
Date</u>" has the meaning provided in Section 2.8(b) .
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Shrink</u>"
means Inventory which has been lost, misplaced, stolen, or is otherwise
unaccounted for.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Shoes.com</u>"
means Shoes.com, Inc., a Delaware corporation.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Sidney
Rich</u>" has the meaning provided therefor in the Recitals.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Solvent</u>"
means, with respect to any Person on a particular date, that on such date
(a) at fair valuations, all of the properties and assets of such Person
are greater than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair saleable value of the properties and
assets of such Person is not less than the amount that would be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person is able to realize upon its properties
and assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business,
(d) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person's ability to pay as such debts mature, and
(e) such Person is not engaged in a business or a transaction, and is not
about to engage in a business or transaction, for which such Person's properties
and assets would constitute unreasonably small capital after giving due
consideration to the prevailing practices in the industry in which such
Person is engaged.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Standby
Letter of Credit</u>" means any Letter of Credit other than a Commercial
Letter of Credit.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Statutory
Reserve Rate</u>" means, for any Interest Period, the rate (expressed as
a decimal) applicable to the Administrative Agent during such Interest
Period under regulations issued from time to time by the Board of Governors
of the Federal Reserve System for determining the maximum reserve requirement
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent
is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant
to such Regulation D. LIBO Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit
of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Subordinated
Debt</u>" means unsecured Indebtedness of any Loan Party entered into after
the Closing Date (including any such Indebtedness that is convertible into
Capital Stock (other than Disqualified Stock)) which is subordinated to
payment of the Obligations on terms and conditions reasonably acceptable
to the Administrative Agent, and any amendments, renewals, restatements,
or other modifications thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Subsidiary</u>"
means, with respect to any Person (the "<u>parent</u>") at any date, any
corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent
in the parent's consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power
or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, directly or indirectly owned, controlled
or held, or (b) that is, as of such date, otherwise directly or indirectly
Controlled, by the parent and/or one or more subsidiaries of the parent.
Unless the context otherwise requires, all references in the Loan Documents
to "Subsidiaries" shall be deemed to refer to Subsidiaries of the Lead
Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Swingline
Lender</u>" means Bank of America, N.A., in its capacity as lender of Swingline
Loans hereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Swingline
Loan</u>" shall mean a Loan made by the Swingline Lender to the Borrowers
pursuant to Section 2.6 hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Synthetic
Lease</u>" means any lease or other agreement for the use or possession
of property creating obligations which does not appear as Indebtedness
on the balance sheet of the
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<p>lessee thereunder but which, upon the insolvency or bankruptcy of such
Person, would be characterized as Indebtedness of such lessee without regard
to the accounting treatment.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Taxes</u>"
means any and all current or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Termination
Date</u>" shall mean the earliest to occur of (i) the Maturity Date, (ii)
the date on which the maturity of the Loans are accelerated and the Commitments
are terminated in accordance with Section 7.1, or (iii) the date of the
occurrence of any Event of Default pursuant to Section 7.1(i) or 7.1(j).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Termination
Event</u>" means (a) the whole or partial withdrawal of a Facility Guarantor
from a Foreign Plan during a plan year; or (b) the filing of a notice of
interest to terminate in whole or in part a Foreign Plan or the treatment
of a Foreign Plan amendment as a termination of partial termination; or
(c) the institution of proceedings by any Governmental Authority to terminate
in whole or in part or have a trustee appointed to administer a Foreign
Plan; or (d) any other event or condition which might constitute grounds
for the termination of, winding up or partial termination of winding up
or the appointment of trustee to administer, any Foreign Plan. Notwithstanding
the foregoing, the partial wind-up of the Canadian Pension Plans currently
in process or contemplated to begin within a reasonable period of time
after the Closing Date shall not be deemed to be a Termination Event.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Total
Commitments</u>" shall mean, at any time, the sum of the Commitments at
such time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Type</u>",
when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing,
is determined by reference to the Adjusted LIBO Rate or the Prime Rate.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>UCC</u>"
shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Unused
Commitment</u>" shall mean, on any day, (a) the then Total Commitments
<u>minus</u>
(b) the sum of (i) the principal amount of Loans then outstanding (including
the principal amount of Swingline Loans then outstanding), and (ii) the
then Letter of Credit Outstandings and unreimbursed Acceptances.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "<u>Voting
Stock</u>" means, with respect to any corporation, the outstanding stock
of all classes (or equivalent interests) which ordinarily, in the absence
of contingencies, entitles holders thereof to vote for the election of
directors (or Persons performing similar functions) of such corporation,
even though the right so to vote has been suspended by the happening of
such contingency.
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<p>"<u>Withdrawal Liability</u>" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of
ERISA.
<br>&nbsp;
<br>&nbsp;
<br>
<br>
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.2&nbsp;

<u>Terms Generally</u>. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference
to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time
to time amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modifications set forth herein), (b)
any reference herein to any Person shall be construed to include such Person's
successors and assigns or, for natural persons, such Person's successors,
heirs, executors, administrators and other legal representatives, (c) the
words "herein", "hereof" and "hereunder", and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Sections,
Exhibits and Schedules shall be construed to refer to Sections of, and
Exhibits and Schedules to, this Agreement, (e) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, (f) all financial statements
and other financial information provided by the Loan Parties to the Administrative
Agent or any Lender shall be provided with reference to Dollars, and (g)
this Agreement and the other Loan Documents are the result of negotiation
among, and have been reviewed by counsel to, among others, the Loan Parties
and the Administrative Agent and are the product of discussions and negotiations
among all parties. Accordingly, this Agreement and the other Loan Documents
are not intended to be construed against the Administrative Agent or any
of the Lenders merely on account of the Administrative Agent's or any Lender's
involvement in the preparation of such documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.3&nbsp;

<u>Accounting Terms</u>. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect on the Closing Date, on a basis consistent with
the financial statements referred to in Section 4.1(g) of this Agreement,
provided that, if the Borrowers request an amendment to any provision hereof
to reflect the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or
if the Administrative Agent notifies the Borrowers that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless
of whether any such notice is given before or after such change in GAAP
or in the application thereof, then such provision shall be interpreted
on the basis of GAAP as in effect and applied immediately before such change
shall have become effective until such provision shall have been amended
in accordance herewith.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.&nbsp;

<u>AMOUNT AND TERMS OF CREDIT.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.1&nbsp;

<u>Commitment of the Lenders.</u>
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Each Lender severally and not jointly with any other
Lender, agrees, upon the terms and subject to the conditions herein set
forth, to extend credit to the Borrowers on a revolving basis, in the form
of Revolving Loans, participations in Swingline Loans, and Letters of Credit
and in an amount not to exceed the lesser of such Lender's Commitment or
such Lender's Commitment Percentage of the lesser of (x) the Borrowing
Base or (y) the Total Commitments, subject to the following limitations:
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; The aggregate outstanding amount of the Credit Extensions
shall not at any time exceed the lower of (i) (x) $350,000,000, or (y)
such greater amount or lesser amount to which the Total Commitments have
then been increased or decreased by the Borrowers pursuant to Sections
2.2 and/ or 2.17 hereof, or (ii) the then amount of the Borrowing Base
plus any Permitted Overadvances.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
No Lender (other than the applicable Issuing Bank) shall be obligated to
issue any Letter of Credit, and Letters of Credit shall be available from
the Issuing Banks, subject to the ratable participation of all Lenders,
as set forth in Section 2.7. The aggregate Letter of Credit Outstandings
shall not at any time exceed $100,000,000.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;
Subject to all of the other provisions of this Agreement, Revolving Loans
that are repaid may be reborrowed prior to the Termination Date. No new
Credit Extension, however, shall be made to the Borrowers after the Termination
Date.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Each Borrowing of Revolving Loans (other than Swingline
Loans) shall be made by the Lenders <u>pro</u> <u>rata</u> in accordance
with their respective Commitments. The failure of any Lender to make any
Loan shall neither relieve any other Lender of its obligation to fund its
Loan in accordance with the provisions of this Agreement nor increase the
obligation of any such other Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2&nbsp;

<u>Increase in Total Commitments</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; So long as no Default or Event of Default exists
or would arise therefrom, the Lead Borrower shall have the right at any
time, and from time to time, to request an increase of the Total Commitments
to an amount not to exceed $425,000,000. Any such requested increase shall
be first made to all existing Lenders on a pro rata basis. To the extent
that the existing Lenders decline to increase their Commitments, or decline
to increase their Commitments to the amount requested by the Lead Borrower,
the Administrative Agent, in consultation with the Lead Borrower, will
use its reasonable efforts to arrange for other Persons to become a Lender
hereunder and to issue commitments in an amount equal to the amount of
the increase in the Total Commitments requested by the Lead Borrower and
not accepted by the
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<p>existing Lenders (each such increase by either means, a "Commitment
Increase," and each Person issuing, or Lender increasing, its Commitment,
an "Additional Commitment Lender"), <i>provided, however,</i> that (i)
no Lender shall be obligated to provide a Commitment Increase as a result
of any such request by the Borrowers, (ii) any Additional Commitment Lender
which is not an existing Lender shall be subject to the approval of the
Administrative Agent, each Issuing Bank and the Lead Borrower (which approval
shall not be unreasonably withheld), and (iii) each Commitment Increase
shall be in integral multiples of $1,000,000.00, <u>provided that</u> without
the consent of the Administrative Agent, at no time shall the Commitment
of any Additional Commitment Lender which is not an existing Lender be
less than $7,000,000.00.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; No Commitment Increase shall become effective unless
and until each of the following conditions have been satisfied:
<blockquote>
<blockquote>
<blockquote>(i)&nbsp;&nbsp;&nbsp; If an Additional Commitment Lender is
not an existing Lender, the Borrowers, the Administrative Agent, and any
Additional Commitment Lender shall have executed and delivered a joinder
to the Loan Documents in such form as the Administrative Agent shall reasonably
require;
<p>(ii)&nbsp;&nbsp;&nbsp; The Borrowers shall have paid such fees and other
compensation to the Additional Commitment Lenders as the Lead Borrower
and such Additional Commitment Lenders shall agree;
<p>(iii)&nbsp;&nbsp;&nbsp; The Borrowers shall have paid such arrangement
fees to the Administrative Agent as the Borrower and the Administrative
Agent may agree;
<p>(iv)&nbsp;&nbsp;&nbsp; The Borrowers shall deliver to the Administrative
Agent and the Lenders certificates of the Secretary of Assistant Secretary
of each Borrower attaching a true, complete and correct copy of the resolutions
of such Borrower authorizing the borrowing under the Commitment Increase
and certifying that such resolution is in full force and effect, it being
understood and agreed that such resolutions may be adopted at any time
and provide for borrowings under Commitment Increases from time to time
requested;
<p>(v)&nbsp;&nbsp;&nbsp; A Note will be issued at the Borrowers' expense,
to each such Additional Commitment Lender, to be in conformity with requirements
of Section 2.9 hereof (with appropriate modification) to the extent necessary
to reflect the new Commitment of such Additional Commitment Lender; and
<p>(vi)&nbsp;&nbsp;&nbsp; The Borrowers and the Additional Commitment Lender
shall have delivered such other instruments, documents and agreements as
the Administrative Agent may reasonably have requested, including, without
limitation, in the case of an Additional Commitment Lender which is a Foreign
<br>&nbsp;</blockquote>
</blockquote>
</blockquote>

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<blockquote>
<blockquote>
<blockquote>Lender, such documents as are set forth in Section 2.28 hereof
to evidence an exemption form withholding tax with respect to payments
made to such Additional Commitment Lender.</blockquote>
</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; The Administrative Agent shall promptly notify each
Lender as to the effectiveness of each Commitment Increase (with each date
of such effectiveness being referred to herein as a "Commitment Increase
Date"), and at such time (i) the Total Commitments under, and for all purposes
of, this Agreement shall be increased by the aggregate amount of such Commitment
Increases, (ii)
<u>Schedule 1.1</u> shall be deemed modified, without further
action, to reflect the revised Commitments and Commitment Percentages of
the Lenders, and (iii) this Agreement shall be deemed amended, without
further action, to the extent necessary to reflect such increased Total
Commitments (including, without limitation, Section 2.1(a)(i)).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; In connection with Commitment Increases hereunder,
the Lenders and the Borrowers agree that, notwithstanding anything to the
contrary in this Agreement, (i) the Borrowers shall, in coordination with
the Administrative Agent, (x) repay outstanding Loans of certain Lenders,
and obtain Loans from certain other Lenders (including the Additional Commitment
Lenders), or (y) take such other actions as reasonably may be required
by the Administrative Agent, in each case to the extent necessary so that
all of the Lenders effectively participate in each of the outstanding Loans
pro rata on the basis of their Commitment Percentages (determined after
giving effect to any increase in the Total Commitments pursuant to this
Section 2.2), and (ii) the Borrowers shall pay to the Lenders any costs
of the type referred to in Section 2.21 in connection with any repayment
and/or Loans required pursuant to preceding clause (i). Without limiting
the Obligations of the Borrowers provided for in this Section 2.2, the
Administrative Agent and the Lenders agree that they will use their best
efforts to attempt to minimize the costs of the type referred to in Section
2.21 which the Borrowers would otherwise occur in connection with the implementation
of an increase in the Total Commitments.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.3&nbsp;

<u>Reserves; Changes to Reserves.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The initial Inventory Reserves and Availability Reserves
as of the Closing Date shall be substantially the same as those in effect
under the Existing Credit Agreement immediately prior to the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Administrative Agent may hereafter, on five (5)
Business Days written notice to the Lead Borrower, establish additional
Reserves or change any of the foregoing Reserves, in the exercise of Permitted
Discretion of the Administrative Agent, <i>provided, however</i>, that
in no event shall the Administrative Agent establish new Reserves in any
thirty day period in an aggregate amount in excess of ten percent (10%)
of the Borrowing Base (as set forth in the most recent Borrowing Base Certificate
delivered to the Administrative Agent under Section 5.1(f) of this Agreement);
and <i>provided further</i> that the Administrative Agent shall
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<p>not modify the methodology in which Reserves described in Section 2.3(a)
hereof are determined from time to time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.4&nbsp;

<u>Making of Loans</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Except as set forth in Sections 2.18 and 2.26, Loans
(other than Swingline Loans) by the Lenders shall be either Prime Rate
Loans or LIBO Loans as the Lead Borrower on behalf of the Borrowers may
request subject to and in accordance with this Section 2.4, provided that
all Swingline Loans shall be only Prime Rate Loans. All Loans made pursuant
to the same Borrowing shall, unless otherwise specifically provided herein,
be Loans of the same Type. Each Lender may fulfill its Commitment with
respect to any Loan by causing any lending office of such Lender to make
such Loan; but any such use of a lending office shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of the
applicable Note. Each Lender shall, subject to its overall policy considerations,
use reasonable efforts (but shall not be obligated) to select a lending
office (or transfer its Loans to another lending office) which will not
result in the payment of increased costs by the Borrowers pursuant to Section
2.25. Subject to the other provisions of this Section 2.4 and the provisions
of Section 2.26, Borrowings of Loans of more than one Type may be incurred
at the same time, but no more than fifteen (15) Borrowings of LIBO Loans
may be outstanding at any time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Lead Borrower shall give the Administrative Agent
(i) in the case of each LIBO Borrowing, at least three (3) Business Days',
and (ii) in the case of each Borrowing of Prime Rate Loans on the date
of the requested Borrowing, prior irrevocable written notice of borrowing
(which may be by electronic transmission) delivered to the Administrative
Agent in the form attached hereto as <u>Exhibit F</u> Any such notice,
to be effective, must be received by the Administrative Agent not later
than 12:00 noon., Boston time, on the third Business Day in the case of
LIBO Loans prior to the date, and on the same Business Day in the case
of Prime Rate Loans, on which such Borrowing is to be made. Such notice
shall be irrevocable and shall specify the amount of the proposed Borrowing
(which shall be in an integral multiple of $1,000,000, but not less than
$5,000,000 in the case of LIBO Loans) and the date thereof (which shall
be a Business Day). Unless otherwise directed in such notice and so long
as no Cash Dominion Event has occurred and is continuing, the proceeds
of Loans shall be credited to Account No. 5045183372 maintained by the
Borrowers with Bank of America. Such notice shall specify whether the Borrowing
then being requested is to be a Borrowing of Prime Rate Loans or LIBO Loans
and, if LIBO Loans, the Interest Period with respect thereto. If no election
of Interest Period is specified in any such notice for a Borrowing of LIBO
Loans, such notice shall be deemed a request for an Interest Period of
one month. If no election is made as to the Type of Loan, such notice shall
be deemed a request for a Borrowing of Prime Rate Loans. The Administrative
Agent shall promptly notify each Lender of its proportionate share of such
Borrowing, the date of such Borrowing, the Type of Borrowing being requested
and the Interest Period or Interest Periods applicable thereto, as appropriate.
On the borrowing date specified in such notice, each Lender shall make
its share of the Borrowing available at the office of the
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<p>Administrative Agent at 40 Broad Street, Boston, Massachusetts 02109,
no later than 3:00 p.m., Boston time, in immediately available funds. Unless
the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with this Section and may, in reliance upon
such assumption, make available to the Borrowers a corresponding amount.
In such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender
and the Borrowers severally agree to pay to the Administrative Agent forthwith
on demand such corresponding amount with interest thereon, for each day
from and including the date such amount is made available to the Borrowers
to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the Federal Funds Effective Rate or (ii) in
the case of the Borrowers, the interest rate applicable to Prime Rate Loans.
If such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
Upon receipt of the funds made available by the Lenders to fund any Borrowing
hereunder, the Administrative Agent shall disburse such funds in the manner
specified in the notice of borrowing delivered by the Lead Borrower and
shall use reasonable efforts to make the funds so received from the Lenders
available to the Borrowers no later than 3:00 p.m., Boston time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; The Administrative Agent, without the request of
the Lead Borrower, may, to the extent not timely paid, advance any interest,
fee, service charge, or other payment to which any Agent or their Affiliates
or any Lender is entitled from any Borrower pursuant hereto or any other
Loan Document and may charge the same to the Loan Account notwithstanding
that an Overadvance may result thereby. The Administrative Agent shall
advise the Lead Borrower in writing of any such advance or charge promptly
after the making thereof. Such action on the part of the Administrative
Agent shall not constitute a waiver of the Administrative Agent's rights
and each Borrower's obligations under Section 2.4(a). Any amount which
is added to the principal balance of the Loan Account as provided in this
Section 2.4(c) shall bear interest at the interest rate then and thereafter
applicable to Prime Rate Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.5&nbsp;

<u>Overadvances</u>. The Agents and the Lenders have no obligation to
make any Loan or to provide any Letter of Credit or Acceptance if an Overadvance
would result. The Administrative Agent may, in its discretion, make Permitted
Overadvances without the consent of the Lenders and each Lender shall be
bound thereby. Any Permitted Overadvances may constitute Swingline Loans.
The making of any Permitted Overadvance is for the benefit of the Borrowers;
such Permitted Overadvances constitute Revolving Loans and Obligations.
The making of any such Permitted Overadvances on any one occasion shall
not obligate the Administrative Agent or any Lender to make or permit any
Permitted Overadvances on any other occasion or to permit such Permitted
Overadvances to remain outstanding.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.6&nbsp;

<u>Swingline Loans</u>.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The Swingline Lender is authorized by the Lenders
and shall, subject to the provisions of this Section, make Swingline Loans
up to $35,000,000 in the aggregate outstanding at any time (which requests
for Borrowings of Swingline Loans shall be in minimum integrals of $500,000)
consisting only of Prime Rate Loans, upon a notice of Borrowing received
by the Administrative Agent and the Swingline Lender (which notice, at
the Swingline Lender's discretion, may be submitted prior to 1:00 p.m.,
Boston time, on the Business Day on which such Swingline Loan is requested).
Swingline Loans shall be subject to periodic settlement with the Lenders
under Section 2.8 below.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Swingline Loans may be made only in the following
circumstances: (A) for administrative convenience, the Swingline Lender
shall, at the Lead Borrower's request, make Swingline Loans in reliance
upon the Borrowers' actual or deemed representations under Section 4.2,
that the applicable conditions for borrowing are satisfied or (B) for Permitted
Overadvances. If the conditions for borrowing under Section 4.2 cannot
be fulfilled at the time of a requested Swingline Loan, the Lead Borrower
shall give immediate notice thereof to the Administrative Agent and the
Swingline Lender (a "<u>Noncompliance Notice</u>"), and the Administrative
Agent shall promptly provide each Lender with a copy of the Noncompliance
Notice. If the conditions for borrowing under Section 4.2 cannot be fulfilled,
the Required Lenders may direct the Swingline Lender to, and the Swingline
Lender thereupon shall, cease making Swingline Loans (other than Permitted
Overadvances) until such conditions can be satisfied or are waived in accordance
with Section 9.2. Unless the Required Lenders so direct the Swingline Lender,
the Swingline Lender may, but is not obligated to, continue to make Swingline
Loans beginning one Business Day after the Non-Compliance Notice is furnished
to the Lenders. Notwithstanding the foregoing, no Swingline Loans shall
be made pursuant to this subsection (b) (other than Permitted Overadvances)
if the aggregate outstanding amount of the Credit Extensions would exceed
the lower of (i)(x) $350,000,000, or (y) such greater amount or lesser
amount to which the Total Commitments have then been increased or decreased
by the Borrowers pursuant to Sections 2.2 and/or 2.17 hereof, or (ii) the
then amount of the Borroing Base.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.7&nbsp;

<u>Letters of Credit</u> and Acceptances.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; <u>Letters of Credit Issued and Acceptances Created</u>.
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; <u>Letters of Credit Issued and Acceptances Created
by the Lead Issuing Bank</u>. Subject to the terms and conditions of this
Agreement, if requested by the Lead Borrower on behalf of the Borrowers,
the Lead Issuing Bank agrees to issue one or more Commercial Letters of
Credit or Standby Letters of Credit and one or more Acceptances, in each
case denominated in Dollars, Canadian Dollars or Euros<b> </b>(it being
agreed and understood that an Acceptance may be rejected for payment by
the Lead Issuing Bank as an Acceptance Lender if it is not in compliance
with any underlying application, agreement, or Letter of</blockquote>
</blockquote>

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<blockquote>
<blockquote>Credit relating thereto) for the account of any of the Borrowers
(whether one or more) or in support of an obligation of any Loan Party
or any of the Borrowers' Subsidiaries which are not Loan Parties, in each
case at any time and from time to time after the date hereof and prior
to the Termination Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;

<u>Letters of Credit Issued and Acceptances Created by other Issuing Banks</u>.
Subject to the terms and conditions of this Agreement, if requested by
the Lead Borrower on behalf of the Borrowers, any other Issuing Bank and
Acceptance Lender selected by the Lead Borrower may in its discretion issue
one or more Commercial Letters of Credit or Standby Letters of Credit and
one or more Acceptances (it being agreed and understood that an Acceptance
may be rejected for payment by an Acceptance Lender if it is not in compliance
with any underlying application, agreement, or Letter of Credit relating
thereto) denominated in any currency as may be requested by the Lead Borrower
for the account of any of the Borrowers (whether one or more) or in support
of an obligation of any Loan Party or any of the Borrowers' Subsidiaries
which are not Loan Parties, in each case at any time and from time to time
after the date hereof and prior to the Termination Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;

<u>In General</u>. No Letter of Credit or Acceptance shall be issued if
after giving effect to such issuance (A) the aggregate Letter of Credit
Outstandings shall exceed $100,000,000, or (B) the aggregate Credit Extensions
would exceed the limitation set forth in Section 2.1(a)(i); and <u>provided</u>,
<u>further</u>,
that no Letter of Credit or Acceptance shall be issued if the applicable
Issuing Bank or Acceptance Lender shall have received notice from the Administrative
Agent or the Required Lenders that the conditions to such issuance have
not been met. Any Issuing Bank or Acceptance Lender (in each case, other
than the Lead Issuing Bank or any of its Affiliates) shall notify the Administrative
Agent in writing on each Business Day of all Letters of Credit and Acceptances
issued on the prior Business Day by such Issuing Bank or Acceptance Lender,
as the case may be.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Each Standby Letter of Credit shall expire no later
than the close of business on the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension)
and (ii) the date that is ten (10) Business Days prior to the Maturity
Date, <u>provided</u> that each Letter of Credit may, upon the request
of the applicable Borrower, include a provision whereby such Letter of
Credit shall be renewed automatically for additional consecutive periods
of twelve (12) months or less (but not beyond the date that is ten (10)
Business Days prior to the Maturity Date) unless the applicable Issuing
Bank notifies the beneficiary thereof at least thirty (30) days prior to
the then-applicable expiration date that such Letter of Credit will not
be renewed.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Each Commercial Letter of Credit shall expire no
later than the close of business on the earlier of (i) the date 180 days
after the date of the issuance of such Commercial Letter of Credit and
(ii) the date that is ten (10) Business Days prior to the Maturity Date;
<u>provided
that</u> the applicable Borrower may request that the applicable Issuing
Bank issue a Commercial Letter of Credit with an expiration date after
the Maturity Date, <u>provided further that</u> with respect to any such
Commercial Letter of Credit, the Borrowers shall deposit in the Cash Collateral
Account an amount in cash equal to 105% of each such Letter of Credit Outstandings
thirty (30) days prior to the Maturity Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Each Acceptance shall expire no later than the close
of business on the earlier of (i) the date 180 days after the date of the
issuance of such Acceptance and (ii) the date that is five (5) Business
Days prior to the Maturity Date; <u>provided that</u> the applicable Borrower
may request that the Acceptance Lender issue an Acceptance with an expiration
date after the Maturity Date, <u>provided further that</u> with respect
to any such Acceptance, the Borrowers shall deposit in the Cash Collateral
Account an amount in cash equal to 105% of each such Acceptance Letter
of Credit Outstandings thirty (30) days prior to the Maturity Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Drafts drawn under any Letter of Credit or Acceptance
shall be reimbursed by the Borrowers by paying to the Administrative Agent
an amount equal to such drawing (together with interest as provided in
Section 2.7(g)) not later than 1:00 p.m., Boston time, on the Business
Day immediately following the day that the Lead Borrower receives notice
of such drawing, <u>provided</u> that the Lead Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with
Section 2.4 that such payment be financed with a Revolving Loan consisting
of a Prime Rate Loan, or a Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrowers' obligation to make such payment
shall be discharged and replaced by the resulting Prime Rate Loan or Swingline
Loan. The applicable Issuing Bank or Acceptance Lender, as applicable,
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit or an Acceptance.
The applicable Issuing Bank or Acceptance Lender, as applicable, shall
promptly notify the Administrative Agent and the Lead Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing
Bank or Acceptance Lender, as applicable, has made or will make payment
thereunder, <u>provided</u> that any failure to give or delay in giving
such notice shall not relieve the Borrowers of their obligation to reimburse
such Issuing Bank or Acceptance Lender and the Lenders with respect to
any such payment.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; If an Issuing Bank shall make any L/C Disbursement
or an Acceptance Lender shall make any disbursement pursuant to an Acceptance,
then, unless the Borrowers shall reimburse such Issuing Bank or Acceptance
Lender, as applicable, in full on the date such payment is made, the unpaid
amount thereof shall bear interest, for each day from the including the
date such payment is made to but excluding the date that the Borrowers
reimburse such Issuing Bank or Acceptance Lender, as applicable, therefor,
at the rate per annum then applicable to Prime Rate Loans, provided that
if the Borrowers fail to reimburse such Issuing Bank or Acceptance Lender,
as applicable, when due pursuant to paragraph (e) of this Section, then
Section 2.11 shall apply. Interest accrued pursuant to this paragraph shall
be for the account of such Issuing
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<p>Bank or Acceptance Lender, as applicable, except that interest accrued
on and after the date of payment by any Lender pursuant to paragraph (h)
of this Section to reimburse such Issuing Bank or Acceptance Lender, as
applicable, shall be for the account of such Lender to the extent of such
payment.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; Immediately upon the issuance of any Letter of Credit
by an Issuing Bank (or the amendment of a Letter of Credit increasing the
amount thereof) or the issuance of any Acceptance by an Acceptance Lender
(or the amendment of an Acceptance increasing the amount thereof), and
without any further action on the part of such Issuing Bank or Acceptance
Lender, such Issuing Bank or Acceptance Lender, as applicable, shall be
deemed to have sold to each Lender, and each such Lender shall be deemed
unconditionally and irrevocably to have purchased from such Issuing Bank
or Acceptance Lender, without recourse or warranty, an undivided interest
and participation, to the extent of such Lender's Commitment Percentage,
in such Letter of Credit or Acceptance, each drawing thereunder and the
obligations of the Borrowers under this Agreement and the other Loan Documents
with respect thereto. Upon any change in the Commitments pursuant to Section
2.2, 2.17, and/or 9.5, it is hereby agreed that with respect to all Letter
of Credit Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Commitment Percentages of the assigning
and assignee Lenders and any Additional Commitment Lender. Any action taken
or omitted by such Issuing Bank or Acceptance Lender under or in connection
with a Letter of Credit or Acceptance, if taken or omitted in the absence
of gross negligence, bad faith or willful misconduct, shall not create
for such Issuing Bank or Acceptance Lender, as applicable, any resulting
liability to any Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; In the event that an Issuing Bank makes any L/C Disbursement
or an Acceptance Lender makes any disbursement pursuant to an Acceptance,
and the Borrowers shall not have reimbursed such amount in full to such
Issuing Bank or Acceptance Lender, as applicable, pursuant to Section 2.7(e),
such Issuing Bank or Acceptance Lender, as applicable, shall promptly notify
the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuing Bank or Acceptance
Lender, as applicable, the amount of such Lender's Commitment Percentage
of such unreimbursed payment and in same day funds. If such Issuing Bank
or Acceptance Lender, as applicable, so notifies the Administrative Agent,
and the Administrative Agent so notifies the Lenders prior to 12:00 noon,
Boston time, on any Business Day, each such Lender shall make available
to such Issuing Bank or Acceptance Lender, as applicable, such Lender's
Commitment Percentage of the amount of such payment on such Business Day
in same day funds (or if such notice is received by the Lenders after 12:00
noon., Boston time on the day of receipt, payment shall be made on the
immediately following Business Day). If and to the extent such Lender shall
not have so made its Commitment Percentage of the amount of such payment
available to such Issuing Bank or Acceptance Lender, as applicable,
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<p>such Lender agrees to pay to such Issuing Bank or Acceptance Lender,
as applicable, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such Issuing Bank or Acceptance
Lender, as applicable, at the Federal Funds Effective Rate. Each Lender
agrees to fund its Commitment Percentage of such unreimbursed payment notwithstanding
a failure to satisfy any applicable lending conditions or the provisions
of Sections 2.1 or 2.7, or the occurrence of the Termination Date. The
failure of any Lender to make available to such Issuing Bank or Acceptance
Lender, as applicable, its Commitment Percentage of any payment under any
Letter of Credit or Acceptance shall neither relieve any Lender of its
obligation hereunder to make available to such Issuing Bank or Acceptance
Lender, as applicable, its Commitment Percentage of any payment under any
Letter of Credit or Acceptance on the date required, as specified above,
nor increase the obligation of such other Lender. Whenever any Lender has
made payments to any Issuing Bank or Acceptance Lender, as applicable,
in respect of any reimbursement obligation for any Letter of Credit or
Acceptance, such Lender shall be entitled to share ratably, based on its
Commitment Percentage, in all payments and collections thereafter received
on account of such reimbursement obligation.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; Whenever the Borrowers desire that an Issuing Bank
issue a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit) or that an Acceptance Lender issue an Acceptance
(or the amendment, renewal or extension of an outstanding Acceptance),
the Lead Borrower shall give to such Issuing Bank or Acceptance Lender,
as applicable, and the Administrative Agent at least three (3) Business
Days' prior written (including telegraphic, telex, facsimile or cable communication)
notice (or such shorter period as may be agreed upon in writing by such
Issuing Bank or Acceptance Lender, as applicable and Lead Borrower) specifying
the date on which the proposed Letter of Credit or Acceptance is to be
issued, amended, renewed or extended (which shall be a Business Day), the
stated amount of the Letter of Credit or Acceptance so requested, the expiration
date of such Letter of Credit or Acceptance, the name and address of the
beneficiary thereof, and the provisions thereof. If requested by such Issuing
Bank or Acceptance Lender, as applicable, the Borrowers shall also submit
a letter of credit application on such Issuing Bank's or Acceptance Lender's,
as applicable, standard form in connection with any request for the issuance,
amendment, renewal or extension of a Letter of Credit or Acceptance.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; The obligations of the Borrowers to reimburse the
applicable Issuing Bank for any L/C Disbursement and the applicable Acceptance
Lender for any disbursement pursuant to an Acceptance shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms
of this Agreement under all circumstances, including, without limitation:
(i) any lack of validity or enforceability of any Letter of Credit or Acceptance;
(ii) the existence of any claim, setoff, defense or other right which the
Borrowers may have at any time against a beneficiary of any Letter of Credit
or Acceptance or against such Issuing Bank or Acceptance Lender, as applicable,
or any of the Lenders, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (iii) any
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<p>draft, demand, certificate or other document presented under any Letter
of Credit or Acceptance proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iv) payment by such Issuing Bank or Acceptance Lender, as applicable,
of any Letter of Credit or Acceptance against presentation of a demand,
draft or certificate or other document which does not comply with the terms
of such Letter of Credit or Acceptance; (v) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, that might,
but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrowers' obligations
hereunder; or (vi) the fact that any Event of Default shall have occurred
and be continuing. None of the Administrative Agent, the Lenders, the Issuing
Banks, the Acceptance Lenders or any of their Affiliates shall have any
liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or Acceptance or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit or Acceptance (including
any document required to make a drawing thereunder), any error in interpretation
of technical terms or any consequence arising from causes beyond the control
of the applicable Issuing Bank or Acceptance Lender, <u>provided</u> that
the foregoing shall not be construed to excuse such Issuing Bank or Acceptance
Lender, as applicable, from liability to the Borrowers to the extent of
any direct damages (as opposed to consequential damages, claims in respect
of which are hereby waived by the Borrowers to the extent permitted by
Applicable Law) suffered by the Borrowers that are caused by such Issuing
Bank's or Acceptance Lender's, as applicable, failure to exercise care
when determining whether drafts and other documents presented under a Letter
of Credit or Acceptance comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence, bad faith or
willful misconduct on the part of any Issuing Bank or Acceptance Lender,
as applicable (as finally determined by a court of competent jurisdiction),
such Issuing Bank or Acceptance Lender, as applicable, shall be deemed
to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to
be in compliance with the terms of a Letter of Credit or Acceptance, the
applicable Issuing Bank or Acceptance Lender, as applicable, may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or information
to the contrary, or refuse to accept and make payment upon such documents
if such documents are not in strict compliance with the terms of such Letter
of Credit or Acceptance.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(k)&nbsp;&nbsp;&nbsp; If any Event of Default shall occur and be continuing,
on the Business Day that the Lead Borrower receives notice from the Administrative
Agent or the Required Lenders demanding the deposit of cash collateral
pursuant to this paragraph, the Borrowers shall deposit in the Cash Collateral
Account an amount in cash equal to 105% of the Letter of Credit Outstandings
as of such date plus any accrued and unpaid interest thereon. Each such
deposit shall be held by the Collateral Agent as collateral for the payment
and performance
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<p>of the Obligations of the Borrowers under this Agreement. The Collateral
Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such Cash Collateral Account. Other than any
interest earned on the investment of such deposits, which investments shall
be made at the option and sole discretion of the Collateral Agent at the
request of the Lead Borrower and at the Borrowers' risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such Cash Collateral
Account shall be applied by the Collateral Agent to reimburse the applicable
Issuing Bank for payments on account of drawings under Letters of Credit
for which it has not been reimbursed and, to the extent not so applied,
shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the Letter of Credit Outstandings at such time or, if
the Loans have matured or the maturity of the Loans has been accelerated,
be applied to satisfy other Obligations of the Borrowers under this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(l)&nbsp;&nbsp;&nbsp; The Borrowers, the Administrative Agent and the Lenders
agree that the Existing Letters of Credit shall be deemed Letters of Credit
hereunder as if issued by the Issuing Bank, and the Existing Acceptances
shall be deemed Acceptances hereunder as if issued by an Acceptance Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(m)&nbsp;&nbsp;&nbsp; For purposes of calculating the outstanding Credit
Extensions, the Administrative Agent shall, monthly or more frequently
in the Administrative Agent's sole discretion, make the necessary exchange
rate calculations for any Letters of Credit denominated in currency other
than Dollars, to determine whether any such excess exists on such date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(n)&nbsp;&nbsp;&nbsp; All reimbursements to be made by the Loan Parties
with respect to Letters of Credit shall be made in Dollars or in such other
currency as the Letter of Credit is denominated. All participations in
Letters of Credit by the Lenders shall be made in such currency as the
Letter of Credit is denominated or in the Dollar Equivalent thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.8&nbsp;

<u>Settlements Amongst Lenders</u>. The Swingline Lender may (but shall
not be obligated to), at any time, on behalf of the Borrowers (which hereby
authorize the Swingline Lender to act in their behalf in that regard) request
the Administrative Agent to cause the Lenders to make a Revolving Loan
(which shall be a Prime Rate Loan) in an amount equal to such Lender's
Commitment Percentage of the outstanding amount of Swingline Loans made
in accordance with Section 2.6, which request may be made regardless of
whether the conditions set forth in Section 4 have been satisfied. Upon
such request, each Lender shall make available to the Administrative Agent
the proceeds of such Revolving Loan for the account of the Swingline Lender.
If the Swingline Lender requires a Revolving Loan to be made by the Lenders
and the request therefor is received at or prior to 1:00 p.m., Boston time,
on a Business Day, such transfers shall be made in immediately available
funds no later than 3:00 p.m., Boston time, that day; and, if the request
therefor is received after 1:00 p.m., Boston time, then no later than 3:00
p.m., Boston time, on the next Business Day. The obligation of each Lender
to transfer such funds is irrevocable, unconditional and without recourse
to or warranty by the Administrative
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<p>Agent or the Swingline Lender. If and to the extent any Lender shall
not have so made its transfer to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date
such amount is paid to the Administrative Agent at the Federal Funds Effective
Rate.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The amount of each Lender's Commitment Percentage
of outstanding Revolving Loans shall be computed weekly (or more frequently
in the Administrative Agent's discretion) and shall be adjusted upward
or downward based on all Revolving Loans and repayments of Revolving Loans
received by the Administrative Agent as of 3:00 p.m., Boston time, on the
first Business Day following the end of the period specified by the Administrative
Agent (such date, the "<u>Settlement Date</u>").
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; The Administrative Agent shall deliver to each of
the Lenders promptly after the Settlement Date a summary statement of the
amount of outstanding Revolving Loans for the period and the amount of
repayments received for the period. As reflected on the summary statement:
each Lender shall transfer to the Administrative Agent (as provided below),
or the Administrative Agent shall transfer to each Lender, such amounts
as are necessary to insure that, after giving effect to all such transfers,
the amount of Revolving Loans made by each Lender shall be equal to such
Lender's applicable Commitment Percentage of Revolving Loans outstanding
as of such Settlement Date. If the summary statement requires transfers
to be made to the Administrative Agent by the Lenders and is received at
or prior to 1:00 p.m., Boston time, on a Business Day, such transfers shall
be made in immediately available funds no later than 3:00 p.m., Boston
time, that day; and, if received after 1:00 p.m., Boston time, then no
later than 3:00 p.m., Boston time, on the next Business Day. The obligation
of each Lender to transfer such funds is irrevocable, unconditional and
without recourse to or warranty by the Administrative Agent. If and to
the extent any Lender shall not have so made its transfer to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent, forthwith
on demand such amount, together with interest thereon, for each day from
such date until the date such amount is paid to the Administrative Agent
at the Federal Funds Effective Rate.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.9&nbsp;

<u>Notes; Repayment of Loans.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The Loans made by each Lender (and to the Swingline
Lender, with respect to Swingline Loans) shall be evidenced by a Note duly
executed on behalf of the Borrowers, dated the Closing Date, in substantially
the form attached hereto as <u>Exhibit B-1</u> or <u>Exhibit B-2</u>, as
applicable, payable to the order of each such Lender (or the Swingline
Lender, as applicable) in an aggregate principal amount equal to such Lender's
Commitment (or, in the case of the Note evidencing the Swingline Loans,
$35,000,000).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) Each Lender is hereby authorized by the Borrower to endorse on a schedule
attached to each Note delivered to such Lender (or on a continuation of
such schedule
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<p>attached to such Note and made a part thereof), or otherwise to record
in such Lender's internal records, an appropriate notation evidencing the
date and amount of each Loan from such Lender, each payment and prepayment
of principal of any such Loan, each payment of interest on any such Loan
and the other information provided for on such schedule; <u>provided</u>,
<u>however</u>,
that the failure of any Lender to make such a notation or any error therein
shall not affect the obligation of the Borrowers to repay the Loans made
by such Lender in accordance with the terms of this Agreement and the applicable
Notes.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Upon receipt of an affidavit of a Lender as to the
loss, theft, destruction or mutilation of such Lender's Note and an indemnity
in form and substance reasonably satisfactory to the Lead Borrower, and
upon cancellation of such Note, the Borrowers will issue, in lieu thereof,
a replacement Note in favor of such Lender, in the same principal amount
thereof and otherwise of like tenor.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.10&nbsp;

<u>Interest on Loans</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Subject to Section 2.11, each Prime Rate Loan shall
bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as applicable) at a rate per annum that
shall be equal to the then Prime Rate, <u>plus</u> the Applicable Margin
for Prime Rate Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Subject to Section 2.11, each LIBO Loan shall bear
interest (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as applicable) at a rate per annum equal, during
each Interest Period applicable thereto, to the Adjusted LIBO Rate for
such Interest Period,
<u>plus</u> the Applicable Margin for LIBO Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Accrued interest on all Loans shall be payable in
arrears on each Interest Payment Date applicable thereto, on the Termination
Date, after the Termination Date on demand and (with respect to LIBO Loans)
upon any repayment or prepayment thereof (on the amount prepaid).
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.11&nbsp;

<u>Default Interest. </u>Effective upon the occurrence of any Event of
Default and at all times thereafter while such Event of Default is continuing,
at the option of the Administrative Agent or upon the direction of the
Required Lenders, interest shall accrue on all outstanding Loans (including
Swingline Loans) (after as well as before judgment, as and to the extent
permitted by law) at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 365/366 days) equal to the rate (including
the Applicable Margin for Loans) in effect from time to time <u>plus</u>
2.00% per annum, and such interest shall be payable on demand.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.12&nbsp;

<u>Certain Fees</u>. The Borrowers shall pay to the Administrative Agent,
for the account of the Administrative Agent, the fees set forth in the
Fee Letter as and when payment of such fees is due as therein set forth.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.13&nbsp;

<u>Commitment Fee.</u> Each Lender shall be paid the Line Fee at the times
and in the manner set forth below. The Borrowers shall pay to the Administrative
Agent for the account of the Lenders, a commitment fee (the "<u>Commitment
Fee</u>") computed at a rate of 0.30% per annum (on the basis of actual
days elapsed in a year of 365/366 days), of the average daily balance of
the Unused Commitment for each day commencing on and including the Closing
Date and ending on but excluding the Termination Date:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Commitment Fee so accrued in any calendar quarter shall be payable on the
first day of each January, April, July, and October, in arrears, commencing
October 1, 2004, except that all Commitment Fees so accrued as of the Termination
Date shall be payable on the Termination Date. If the Commitment Fee actually
paid by the Borrower is insufficient to pay the Line Fee due the Lenders,
the deficiency shall be paid to the Lenders by the Swingline Lender from
its own funds (and the Borrower shall have no liability with respect thereto).
The Administrative Agent shall pay the Commitment Fee (and any amounts
payable by the Swingline Lender hereunder) to the Lenders based upon their
Commitment Percentages of the aggregate Line Fee due to all Lenders; <u>provided
that</u> for purposes of calculating the share of any Person which is both
the Swingline Lender and a Lender, such Person's share shall be equal to
the difference between (i) such Person's Commitment, and (ii) the sum of
(A) such Person's Commitment Percentage of the principal amount of Revolving
Loans then outstanding (including the principal amount of Swingline Loans
then outstanding), and (B) such Person's Commitment Percentage of the then
Letter of Credit Outstandings.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.14&nbsp;

<u>Letter of Credit Fees</u> The Borrowers shall pay the Administrative
Agent, for the account of the Lenders in accordance with their respective
Commitment Percentages, on the first day of each January, April, July and
October, in arrears, a fee (each, a "<u>Letter of Credit Fee</u>") equal
to the following per annum percentages multiplied by the face amount of
each of the following categories of Letters of Credit outstanding during
the subject quarter:
<blockquote>
<blockquote>
<blockquote>(i)&nbsp;&nbsp;&nbsp; Each Standby Letter of Credit: At the
then Applicable Margin per annum for LIBO Loans.
<p>(ii)&nbsp;&nbsp;&nbsp; Each Commercial Letter of Credit: At the then
Applicable Commercial Letter of Credit Fee.
<p>(iii)&nbsp;&nbsp;&nbsp; After the occurrence and during the continuance
of an Event of Default, at the option of the Administrative Agent or upon
the direction of the Required Lenders, the Letter of Credit Fee set forth
in clauses (i) and (ii) above, shall be increased by an amount equal to
two percent (2%) per annum.</blockquote>
</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Borrowers shall pay to the applicable Issuing
Bank, in addition to the Letter of Credit Fees otherwise provided for hereunder,
fees and charges in connection with the issuance, negotiation, settlement,
amendment and processing of each Letter of Credit issued by such Issuing
Bank in the amounts as such Issuing Bank and the Lead Borrower may agree.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; All Letter of Credit Fees shall be calculated on
the basis of a 365/366-day year and actual days elapsed.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.15&nbsp;

<u>Acceptance Fee</u>. Subject to Section 9.14, the Borrowers agree to
pay to the Administrative Agent, for the account of the Lenders, in accordance
with their respective Commitment Percentages, for each Acceptance, a fee
(the "<u>Acceptance Fee</u>") equal to the Acceptance Fee Percentage, multiplied
by the face amount of each Acceptance, <u>plus</u> all reasonable out-of-pocket
costs, fees, and expenses incurred by the Acceptance Lender in connection
with the application for, processing of, issuance of, or amendment to any
Acceptance. The Acceptance Fee shall be payable in arrears on the first
day of each January, April, July, and October and on the Termination Date
for any three (3) month period, or shorter period if calculated for the
period beginning on the Closing Date or for such period ending on the Termination
Date, in which an Acceptance was issued and/or in which an Acceptance remained
outstanding. After the occurrence and during the continuance of an Event
of Default, at the option of the Administrative Agent or upon the direction
of the Required Lenders, the Acceptance Fee shall be increased by an amount
equal to two percent (2%) per annum Subject to Section 9.14, the Acceptance
Fee shall be computed on the basis of a 365/366 day year (as applicable)
for the actual number of days elapsed.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.16&nbsp;

<u>Nature of Fees</u>. All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent, for the respective accounts
of the Administrative Agent, the Issuing Banks, the Acceptance Lenders
and the Lenders, as provided herein. All fees shall be fully earned on
the date when due and shall not be refundable under any circumstances.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.17&nbsp;

<u>Termination or Reduction of Commitments</u>. Upon at least ten (10)
Business Days' prior written notice to the Administrative Agent, the Lead
Borrower may at any time in whole permanently terminate the Total Commitments.
In addition, upon at least five (5) Business Days' prior written notice
to the Administrative Agent, the Lead Borrower may at any time in part
permanently reduce the Total Commitments. Each such reduction shall be
in the principal amount of $5,000,000 or any multiple of $5,000,000, provided
that the Total Commitments may in no event be reduced to less than $200,000,000.
Each such reduction or termination shall (i) be applied ratably to the
Commitment of each Lender and (ii) be irrevocable when given. At the effective
time of each such reduction or termination, the Borrowers shall pay to
the Administrative Agent for application as provided herein (i) all Commitment
Fees accrued on the amount of the Total Commitments so terminated or reduced
through the date thereof, (ii) any amount by which the Credit Extensions
outstanding on such date exceed the amount to which the Total Commitments
are to be reduced effective on such date, in each case <u>pro</u> <u>rata</u>
based on the amount prepaid, and (iii) any Breakage Costs, if applicable.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.18&nbsp;

<u>Alternate Rate of Interest.</u> If prior to the commencement of any
Interest Period for a LIBO Borrowing:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such Interest
Period; or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
<p>then the Administrative Agent shall give notice thereof to the Lead
Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter (but in any event, within two (2) Business Days) and, until
the Administrative Agent notifies the Lead Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Borrowing
Request that requests the conversion of any Borrowing to, or continuation
of any Borrowing as, a LIBO Borrowing shall be ineffective and (ii) if
any Borrowing Request requests a LIBO Borrowing, such Borrowing shall be
made as a Borrowing of Prime Rate Loans.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.19&nbsp;

<u>Conversion and Continuation of Loans.</u> The Lead Borrower on behalf
of the Borrowers shall have the right at any time,
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; on three (3) Business Days' prior irrevocable notice
to the Administrative Agent (which notice, to be effective, must be received
by the Administrative Agent not later than 12:00 noon, Boston time, on
the third Business Day preceding the date of any conversion), (x) to convert
any outstanding Borrowings of Prime Rate Loans (but in no event Swingline
Loans) to Borrowings of LIBO Loans, or (y) to continue an outstanding Borrowing
of LIBO Loans for an additional Interest Period,
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; on one Business Day's irrevocable notice to the Administrative
Agent (which notice, to be effective, must be received by the Administrative
Agent not later than 12:00 noon, Boston time, on the date of any conversion),
to convert any outstanding Borrowings of LIBO Loans to a Borrowing of Prime
Rate Loans,
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; subject
to the following:
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; without the consent of the Required Lenders, no Borrowing
of Loans may be converted into, or continued as, LIBO Loans at any time
when an Event of Default has occurred and is continuing;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
if less than a full Borrowing of Loans is converted, such conversion shall
be made <u>pro</u> <u>rata</u> among the Lenders, as applicable, in accordance
with the respective principal amounts of the Loans comprising such Borrowing
held by such Lenders immediately prior to such conversion;
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp; the aggregate principal amount of Loans being converted
into or continued as LIBO Loans shall be in an integral of $1,000,000 and
at least $5,000,000;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp;&nbsp;&nbsp;
each Lender shall effect each conversion by applying the proceeds of its
new LIBO Loan or Prime Rate Loan, as the case may be, to its Loan being
so converted;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)&nbsp;&nbsp;&nbsp;
the Interest Period with respect to a Borrowing of LIBO Loans effected
by a conversion or in respect to the Borrowing of LIBO Loans being continued
as LIBO Loans shall commence on the date of conversion or the expiration
of the current Interest Period applicable to such continued Borrowing,
as the case may be;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)&nbsp;&nbsp;&nbsp;
a Borrowing of LIBO Loans may be converted only on the last day of an Interest
Period applicable thereto;
<br>&nbsp;</blockquote>
</blockquote>

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<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vii)&nbsp;&nbsp;&nbsp; each request for a conversion or continuation of
a Borrowing of LIBO Loans which fails to state an applicable Interest Period
shall be deemed to be a request for an Interest Period of one month; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (viii)&nbsp;&nbsp;&nbsp;
no more than fifteen (15) Borrowings of LIBO Loans may be outstanding at
any time.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the
Lead Borrower does not give notice to convert any Borrowing of Prime Rate
Loans, or does not give notice to continue, or does not have the right
to continue, any Borrowing as LIBO Loans, in each case as provided above,
such Borrowing shall automatically be converted to, or continued as, as
applicable, a Borrowing of Prime Rate Loans at the expiration of the then
current Interest Period. The Administrative Agent shall, after it receives
notice from the Borrower, promptly give each Lender notice of any conversion,
in whole or part, of any Loan made by such Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.20&nbsp;

<u>Mandatory Prepayment; Cash Collateral; Commitment Termination.</u>
The outstanding Obligations shall be subject to mandatory prepayment as
follows:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; If at any time the amount of the Credit Extensions
exceeds the lower of (i) the then amount of the Total Commitments, and
(ii) the then amount of the Borrowing Base, the Borrowers will immediately
upon notice from the Administrative Agent (which may be given by the Administrative
Agent in its discretion and shall be given by the Administrative Agent
upon the request of the Required Lenders) (A) prepay the Loans in an amount
necessary to eliminate such excess, and (B) if, after giving effect to
the prepayment in full of all outstanding Loans such excess has not been
eliminated, deposit cash into the Cash Collateral Account in an amount
equal to 105% of the Letters of Credit Outstanding. Without in any way
limiting the foregoing, the Administrative Agent shall, weekly or more
frequently in the Administrative Agent's Permitted Discretion, make the
necessary exchange rate calculations with respect to Letters of Credit
denominated in a currency other than Dollars, to determine whether any
excess exists on such date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; To the extent required pursuant to Section 2.23,
the Revolving Loans shall be repaid daily in accordance with the provisions
of said Section 2.23.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Subject to the foregoing, outstanding Prime Rate
Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each
partial prepayment of LIBO Loans shall be in an integral multiple of $1,000,000.
No prepayment of LIBO Loans shall be permitted pursuant to this Section
2.20 other than on the last day of an Interest Period applicable thereto,
unless the Borrowers simultaneously reimburse the Lenders for all "Breakage
Costs" (as defined below) associated therewith. In order to avoid such
Breakage Costs, as long as no Event of Default has occurred and is continuing,
the Administrative Agent shall hold all amounts required to be applied
to LIBO Loans in the Cash Collateral Account and will apply such funds
to the
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<p>applicable LIBO Loans at the end of the then pending Interest Period
therefor and such LIBO Loans shall continue to bear interest at the rate
set forth in Section 2.10 until the amounts in the Cash Collateral Account
have been so applied (provided that the foregoing shall in no way limit
or restrict the Agents' rights upon the subsequent occurrence of an Event
of Default). No partial prepayment of a Borrowing of LIBO Loans shall result
in the aggregate principal amount of the LIBOLoans remaining outstanding
pursuant to such Borrowing being less than $5,000,000 (unless all such
outstanding LIBO Loans are being prepaid in full). Any prepayment of the
Revolving Loans shall not permanently reduce the Commitments.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; All amounts required to be applied to all Loans hereunder
(other than Swingline Loans) shall be applied ratably in accordance with
each Lender's Commitment Percentage.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Upon the Termination Date, the Commitments and the
credit facility provided hereunder shall be terminated in full and the
Borrowers shall pay, in full and in cash, all outstanding Loans and all
other outstanding Obligations.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.21&nbsp;

<u>Optional Prepayment of Loans; Reimbursement of Lenders.</u> The Borrowers
shall have the right at any time and from time to time to prepay outstanding
Loans in whole or in part, (x) with respect to LIBO Loans, upon at least
two Business Days' prior written, telex or facsimile notice to the Administrative
Agent prior to 12:00 noon, Boston time, and (y) with respect to Prime Rate
Loans, upon written, telex or facsimile notice to the Administrative Agent
prior to 12:00 noon, Boston time, on the date of prepayment, subject to
the following limitations:
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; All prepayments under this Section 2.21 shall be
paid to the Administrative Agent for application, <u>first</u>, to the
prepayment of outstanding Swingline Loans, <u>second</u>, to the prepayment
of other outstanding Loans ratably in accordance with each Lender's Commitment
Percentage, and <u>third</u>, to the funding of a cash collateral deposit
in the Cash Collateral Account in an amount equal to 105% of all Letter
of Credit Outstandings.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
Subject to the foregoing, outstanding Prime Rate Loans shall be prepaid
before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO
Loans shall be in an integral multiple of $1,000,000. No prepayment of
LIBO Loans shall be permitted pursuant to this Section 2.21 other than
on the last day of an Interest Period applicable thereto, unless the Borrowers
simultaneously reimburse the Lenders for all "Breakage Costs" (as defined
below) associated therewith. No partial prepayment of a Borrowing of LIBO
Loans shall result in the aggregate principal amount of the LIBO Loans
remaining outstanding pursuant to such Borrowing being less than $5,000,000
(unless all such outstanding LIBO Loans are being prepaid in full).
<br>&nbsp;</blockquote>
</blockquote>

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<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp; Each notice of prepayment shall specify the prepayment
date, the principal amount and Type of the Loans to be prepaid and, in
the case of LIBO Loans, the Borrowing or Borrowings pursuant to which such
Loans were made. Each notice of prepayment shall be irrevocable and shall
commit the Borrowers to prepay such Loan by the amount and on the date
stated therein. The Administrative Agent shall, promptly after receiving
notice from the Lead Borrower hereunder, notify each Lender of the principal
amount and Type of the Loans held by such Lender which are to be prepaid,
the prepayment date and the manner of application of the prepayment.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Borrowers shall reimburse each Lender on demand
for any loss incurred or to be incurred by it in the reemployment of the
funds released (i) resulting from any prepayment (for any reason whatsoever,
including, without limitation, conversion to Prime Rate Loans or acceleration
by virtue of, and after, the occurrence of an Event of Default) of any
LIBO Loan required or permitted under this Agreement, if such Loan is prepaid
other than on the last day of the Interest Period for such Loan or (ii)
in the event that after the Lead Borrower delivers a notice of borrowing
under Section 2.4 in respect of LIBO Loans, such Loans are not borrowed
on the first day of the Interest Period specified in such notice of borrowing
for any reason. Such loss shall be the amount as reasonably determined
by such Lender as the excess, if any, of (A) the amount of interest which
would have accrued to such Lender on the amount so paid or not borrowed
at a rate of interest equal to the Adjusted LIBO Rate for such Loan, for
the period from the date of such payment or failure to borrow to the last
day (x) in the case of a payment or refinancing of a LIBO Loan other than
on the last day of the Interest Period for such Loan, of the then current
Interest Period for such Loan or (y) in the case of such failure to borrow,
of the Interest Period for such LIBO Loan which would have commenced on
the date of such failure to borrow, over (B) the amount of interest which
would have accrued to such Lender on such amount by placing such amount
on deposit for a comparable period with leading banks in the London interbank
market (collectively, "<u>Breakage Costs</u>"). Any Lender demanding reimbursement
for such loss shall deliver to the Lead Borrower from time to time one
or more certificates setting forth the amount of such loss as determined
by such Lender and setting forth in reasonable detail the manner in which
such amount was determined.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; In the event the Borrowers fail to prepay any Loan
on the date specified in any prepayment notice delivered pursuant to Section
2.21(a), the Borrowers on demand by any Lender shall pay to the Administrative
Agent for the account of such Lender any amounts required to compensate
such Lender for any actual loss incurred by such Lender as a result of
such failure to prepay, including, without limitation, any loss, cost or
expenses incurred by reason of the acquisition of deposits or other funds
by such Lender to fulfill deposit obligations incurred in anticipation
of such prepayment. Any Lender demanding such payment shall deliver to
the Lead Borrower from time to time one or more certificates setting forth
the amount of such loss as determined by such Lender and setting forth
in reasonable detail the manner in which such amount was determined.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Whenever any partial prepayment of Loans are to be
applied to LIBO Loans, such LIBO Loans shall be prepaid in the chronological
order of their Interest Payment Dates.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.22&nbsp;

<u>Maintenance of Loan Account; Statements of Account</u>. The Administrative
Agent shall maintain an account on its books in the name of the Borrowers
(the "<u>Loan Account</u>") which will reflect (i) all Loans and other
advances made by the Lenders to the Borrowers or for the Borrowers' account,
(ii) all L/C Disbursements, fees and interest that have become payable
as herein set forth, and (iii) any and all other monetary Obligations that
have become payable.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Loan Account will be credited with all amounts
received by the Administrative Agent from the Borrowers or otherwise for
the Borrowers' account, including all amounts received in the B of A Concentration
Account from the Blocked Account Banks, and the amounts so credited shall
be applied as set forth in Section 2.24(a).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; After the end of each month, (i) each Lender shall
furnish a written statement to the Administrative Agent and the Lead Borrower
setting forth the amount of obligations due to such Lender or its Affiliate
(other than customary fees and expenses charged in the ordinary course)
on account of Bank Products as of such month end, and (ii) the Administrative
Agent shall send to the Lead Borrower a statement accounting for the charges,
loans, advances and other transactions occurring among and between the
Administrative Agent, the Lenders and the Borrowers during that month (other
than on account of Bank Products). The monthly statements shall, absent
manifest error, be an account stated, which is presumptively correct unless
the Lead Borrower provides the Administrative Agent with a written objection
to any such statement within twenty (20) days of receipt of such statement,
which written objection shall state with particularity the reason for such
objection.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.23&nbsp;

<u>Cash Receipts</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The Collateral Agent shall maintain account number
5045183372<b> </b>at Bank of America (the "<u>B of A Concentration Account</u>").
Subject to the rights of the Loan Parties set forth below during any period
during which no Cash Dominion Event has occurred and is continuing, the
B of A Concentration Account is and shall remain, under the sole dominion
and control of the Collateral Agent. The Loan Parties may maintain one
or more disbursement accounts (the "<u>Disbursement Accounts</u>") to be
used by the Loan Parties for disbursements and payments (including payroll)
in the ordinary course of business or as otherwise permitted hereunder.
Notwithstanding anything in any Loan Document to the contrary, so long
as the Obligations have not been accelerated, no Disbursement Accounts,
DDAs maintained by any Loan Party in Canada nor credit card processing
accounts maintained by any Loan Party in Canada shall be subject to a Blocked
Account Agreement or subject to the dominion and control of the Administrative
Agent.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; All cash receipts and other proceeds from the sale
or disposition of any Collateral relating to the Loan Parties' operations
in the United States of America, including, without limitation, the proceeds
of all credit card charges (all such cash receipts and proceeds, "<u>Cash
Receipts</u>") shall be deposited into one or more DDAs established for
the account of the applicable Loan Party in the United States of America.
Notwithstanding the foregoing, Cash Receipts from the Loan Parties' wholesale
operations in the United States of America (whether received in a lockbox
or otherwise) shall, promptly on receipt, be deposited directly in or transferred
by ACH or wire transfer to the B of A Concentration Account or a Blocked
Account.
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; Except as otherwise provided in subsection (e) below
(relating to Canadian Cash Receipts), so long as no Cash Dominion Event
has occurred and is continuing:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
the Loan Parties may direct, and shall have sole control over, the manner
of disposition of its funds in the DDA Accounts, the Blocked Accounts,
the B of A Concentration Account and each Disbursement Account and may
close or change the services provided in respect of DDA Accounts, Blocked
Accounts and Disbursement Accounts, <u>provided</u> that in the case of
a closure of a Blocked Account, the funds on deposit therein shall be transferred
to another Blocked Account or the B of A Concentration Account; and the
Loan Parties shall cause the ACH or wire transfer of all available and
collected Cash Receipts in each such DDA to a Blocked Account or the B
of A Concentration Account not less frequently than each Business Day,
provided that (A) to the extent that on any Business Day technical problems
prevent any such ACH or wire, such funds shall be transferred on the next
following Business Day on which technical problems do not prevent such
transfer and (B) notwithstanding the foregoing, the Loan Parties need not
cause the ACH or wire transfer from a DDA to a Blocked Account or the B
of A Concentration Account such reasonable amount (based upon prior business
practices of the Borrowers but in no event to exceed $50,000.00 or such
higher amount as the Administrative Agent in its Permitted Discretion determines)
as is necessary or appropriate to cover dishonored checks, credit card
chargebacks, bank fees and similar charges, in each case in the ordinary
course of business.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Except as otherwise provided in subsection (e) below
(relating to Canadian Cash Receipts), after the occurrence and during the
continuation of a Cash Dominion Event:
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; at the request of Administrative Agent, the Loan
Parties shall deliver to the Administrative Agent (A) a list of all present
DDAs maintained by the Loan Parties, which list includes, with respect
to each depository (1) the name and address of that depository; (2) the
account number(s)</blockquote>
</blockquote>

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<blockquote>
<blockquote>maintained with such depository; and (3) to the extent known,
a contact person at such depository (the "DDA List"), and (B) deliver to
the Administrative Agent notifications (the "<u>Credit Card Notifications</u>")
substantially in the form of Exhibit G hereto (or such other form as may
be reasonably satisfactory to the Administrative Agent) executed on behalf
of the Loan Parties with each of the Loan Parties' major credit card processors;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
(x) no Borrower shall have any access to or right of withdrawal from the
B of A Concentration Account, (y) upon notice to a Blocked Account Bank,
no Borrower shall have any access to or right of withdrawal from the Blocked
Accounts maintained with such Blocked Account Bank, and (z) the funds on
deposit in the B of A Concentration Account shall continue to be collateral
security for all of the Obligations and shall be applied as provided in
Section 2.24;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;
upon the Administrative Agent's instruction, the Loan Parties shall cause
the ACH or wire transfer to any Blocked Account or the B of A Concentration
Account (whether or not there is then an outstanding balance in the Loan
Account, unless the Commitments have been terminated hereunder and the
Obligations have been paid in full) of all available and collected Cash
Receipts in each such DDA, <u>provided</u> that (i) the Administrative
Agent shall not require more than one such transfer each day, (ii) to the
extent that on any Business Day technical problems prevent any such ACH
or wire, such funds shall be transferred on the next following Business
Day on which technical problems do not prevent such transfer and (iii)
notwithstanding the foregoing, the Loan Parties need not cause the ACH
or wire transfer from a DDA to a Blocked Account or the B of A Concentration
Account such reasonable amount (based upon prior business practices of
the Borrowers but in no event to exceed $50,000.00 or such higher amount
as the Administrative Agent in its Permitted Discretion determines) as
is necessary or appropriate to cover dishonored checks, credit card chargebacks,
bank fees and similar charges, in each case in the ordinary course of business;
and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;&nbsp; in the event that, notwithstanding the provisions
of this Section 2.23, the Loan Parties receive or otherwise have dominion
and control of any such proceeds or collections, such proceeds and collections
shall be held in trust by the Loan Parties for the Administrative Agent
and shall not be commingled with any of the Loan Parties' other funds or
deposited in any account of any Loan Party other than as instructed by
the Administrative Agent.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; The provisions of this subsection (e) shall apply
to Cash Receipts from Canadian operations and DDAs and Blocked Accounts
maintained by the Loan Parties in
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<p>Canada and subsections (a) through (d) hereof (other than subsection
(d)(i)) shall not apply to such Canadian Cash Receipts, DDAs and Blocked
Accounts.
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; All Cash Receipts relating to the Loan Parties' operations
in Canada shall be deposited into one or more DDAs established for the
account of the applicable Loan Party in Canada, <u>provided</u> that Cash
Receipts from the Loan Parties' wholesale operations in the Canada (whether
received in a lockbox or otherwise) shall, promptly on receipt, be deposited
directly in or transferred by ACH or wire transfer to the Blocked Account
of the Loan Parties maintained in Canada.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
Subject to Section 5.16, so long as the Obligations have not been accelerated:
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(A)&nbsp;&nbsp;&nbsp; the Loan Parties may direct, and shall have sole
control over, the manner of disposition of its funds in the Canadian DDA
Accounts, the Canadian Blocked Accounts and each Canadian Disbursement
Account; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (B)&nbsp;&nbsp;&nbsp;
the Loan Parties shall cause the wire transfer of all available and collected
Canadian Cash Receipts in each such Canadian DDA to a Canadian Blocked
Account not less frequently than once each week (or with such greater frequency
as the Administrative Agent in its Permitted Discretion may require), <u>provided</u>
that (i) to the extent that on any Business Day technical problems prevent
any such ACH or wire, such funds shall be transferred on the next following
Business Day on which technical problems do not prevent such transfer and
(ii) notwithstanding the foregoing, the Loan Parties need not cause the
wire transfer from a Canadian DDA to a Canadian Blocked Account such reasonable
amount (based upon prior business practices of the Borrowers but in no
event to exceed $50,000.00 or such higher amount as the Administrative
Agent in its Permitted Discretion determines) as is necessary or appropriate
to cover dishonored checks, credit card chargebacks, bank fees and similar
charges, in each case in the ordinary course of business.</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;
Subject to Section 5.16, on and after the date on which the Obligations
have been accelerated:
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(A)&nbsp;&nbsp;&nbsp; upon notice to a Canadian Blocked Account Bank (which
the Agents agree not to give unless the Obligations have been accelerated),
no Loan Party shall have any access to or right of withdrawal from</blockquote>
</blockquote>
</blockquote>

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<blockquote>
<blockquote>
<blockquote>the Canadian Blocked Accounts maintained with such Canadian
Blocked Account Bank; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (B)&nbsp;&nbsp;&nbsp;&nbsp;
in the event that, notwithstanding the provisions of this Section 2.23(e),
the Loan Parties receive or otherwise have dominion and control of any
such proceeds or collections, such proceeds and collections shall be held
in trust by the Loan Parties for the Administrative Agent and shall not
be commingled with any of the Loan Parties' other funds or deposited in
any account of any Loan Party other than as instructed by the Administrative
Agent.</blockquote>
</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.24&nbsp;

<u>Application of Payments</u>. (a) Upon either (i) the occurrence of
a Cash Dominion Event or (ii) the occurrence of an Event of Default and
acceleration of the time for payment of the Obligations, all amounts received
in the B of A Concentration Account from any source, including the Blocked
Account Banks, and other amounts received by the Administrative Agent,
shall be applied, on the day of receipt, in the following order: <u>first</u>,
to pay fees and expense reimbursements and indemnification then due and
payable to the Administrative Agent, the Issuing Banks, the Acceptance
Lenders and the Collateral Agent (other than those relating solely to Bank
Products);
<u>second</u>, to pay interest due and payable on Credit Extensions;
<u>third</u>,
to repay outstanding Swingline Loans; <u>fourth</u>, to repay other outstanding
Revolving Loans that are Prime Rate Loans and all outstanding reimbursement
obligations under Letters of Credit and Acceptances; <u>fifth</u>, to repay
outstanding Revolving Loans that are LIBO Loans and all Breakage Costs
due in respect of such repayment pursuant to Section 2.21(b) or, at the
Lead Borrower's option, to fund a cash collateral deposit to the Cash Collateral
Account sufficient to pay, and with direction to pay, all such outstanding
LIBO Loans on the last day of the then-pending Interest Period therefor;
<u>sixth</u>,
if an Event of Default then exists and is continuing, to fund a cash collateral
deposit in the Cash Collateral Account in an amount equal to 105% of all
Letter of Credit Outstandings; <u>seventh</u>, to pay all other Obligations
that are then outstanding and then due and payable, including without limitation,
all Obligations arising out of any Bank Products provided by any Lender
or its Affiliate. If all amounts set forth in clauses
<u>first</u> through
and including <u>seventh</u> above are paid, any excess amounts shall be
deposited in a separate cash collateral account, and shall promptly be
released to the Borrowers upon the request of the Lead Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;
All credits against the Obligations shall be effective on the day of receipt
thereof, and shall be conditioned upon final payment to the Administrative
Agent of the items giving rise to such credits. If any item credited to
the Loan Account is dishonored or returned unpaid for any reason, whether
or not such return is rightful or timely, the Administrative Agent shall
have the right to reverse such credit and charge the amount of such item
to the Loan Account and the Borrowers shall indemnify the Administrative
Agent, the Collateral Agent, the Issuing Banks, the Acceptance Lenders
and the Lenders against all claims and losses resulting from such dishonor
or return.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.25&nbsp;

<u>Increased Costs</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; If any Change in Law shall:
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender or any holding company
of any Lender (except any such reserve requirement reflected in the Adjusted
LIBO Rate) or any Issuing Bank or Acceptance Lender; or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
impose on any Lender or any Issuing Bank or Acceptance Lender or the London
interbank market any other condition affecting this Agreement or LIBO Loans
made by such Lender or any Letter of Credit or Acceptance or participation
therein;</blockquote>
</blockquote>
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any LIBO Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender,
Issuing Bank or Acceptance Lender of participating in, issuing or maintaining
any Letter of Credit or Acceptance or to reduce the amount of any sum received
or receivable by such Lender or Issuing Bank or Acceptance Lender hereunder
(whether of principal, interest or otherwise) other than Taxes, which shall
be governed by Section 2.28 hereof, then the Borrowers will pay to such
Lender, Issuing Bank or Acceptance Lender, as the case may be, such additional
amount or amounts as will compensate such Lender, Issuing Bank or Acceptance
Lender, as the case may be, for such additional costs incurred or reduction
suffered.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; If any Lender, Issuing Bank or Acceptance Lender
determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender's,
Issuing Bank's or Acceptance Lender's capital or on the capital of such
Lender's, Issuing Bank's or Acceptance Lender's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations
in Letters of Credit or Acceptances held by, such Lender, or the Letters
of Credit issued by such Issuing Bank, or the Acceptances issued by such
Acceptance Lender, to a level below that which such Lender, Issuing Bank
or Acceptance Lender or such Lender's, Issuing Bank's or Acceptance Lender's
holding company could have achieved but for such Change in Law (taking
into consideration such Lender's, Issuing Bank's or Acceptance Lender's
policies and the policies of such Lender's, Issuing Bank's or Acceptance
Lender's holding company with respect to capital adequacy), then from time
to time the Borrowers will pay to such Lender, Issuing Bank or Acceptance
Lender, as the case may be, such additional amount or amounts as will compensate
such Lender, Issuing Bank or Acceptance Lender or such Lender's, Issuing
Bank's or Acceptance Lender's holding company for any such reduction suffered.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; A certificate of a Lender, Issuing Bank or Acceptance
Lender setting forth the amount or amounts necessary to compensate such
Lender, Issuing Bank or Acceptance Lender or its holding company, as the
case may be, as specified in paragraph (a) or (b) of this Section and setting
forth in reasonable detail the manner in which such amount or amounts were
determined shall be delivered to the Lead Borrower and shall be conclusive
absent manifest error. The Borrowers shall pay such Lender, Issuing Bank
or the Acceptance Lender, as the case may be, the amount shown as due on
any such certificate within ten (10) Business Days after receipt thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Failure or delay on the part of any Lender, Issuing
Bank or Acceptance Lender to demand compensation pursuant to this Section
within ninety (90) days of the effective date of the relevant Change in
Law shall constitute a waiver of such Lender's, Issuing Bank's or Acceptance
Lender's right to demand such compensation.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.26&nbsp;

<u>Change in Legality</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (x) any Change in Law shall make it unlawful
for a Lender to make or maintain a LIBO Loan or to give effect to its obligations
as contemplated hereby with respect to a LIBO Loan or (y) at any time any
Lender determines that the making or continuance of any of its LIBO Loans
has become impracticable as a result of a contingency occurring after the
date hereof which adversely affects the London interbank market or the
position of such Lender in the London interbank market, then, by written
notice to the Lead Borrower, such Lender may (i) declare that LIBO Loans
will not thereafter be made by such Lender hereunder, whereupon any request
by the Borrowers for a LIBO Borrowing shall, as to such Lender only, be
deemed a request for a Prime Rate Loan unless such declaration shall be
subsequently withdrawn; and (ii) require that all outstanding LIBO Loans
made by it be converted to Prime Rate Loans, in which event all such LIBO
Loans shall be automatically converted to Prime Rate Loans as of the effective
date of such notice as provided in paragraph (b) below. In the event any
Lender shall exercise its rights under clause (i) or (ii) of this paragraph
(a), all payments and prepayments of principal which would otherwise have
been applied to repay the LIBO Loans that would have been made by such
Lender or the converted LIBO Loans of such Lender shall instead be applied
to repay the Prime Rate Loans made by such Lender in lieu of, or resulting
from the conversion of, such LIBO Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; or purposes of this Section 2.26, a notice to the
Lead Borrower by any Lender pursuant to paragraph (a) above shall be effective,
and if any LIBO Loans shall then be outstanding, on the last day of the
then-current Interest Period; and otherwise such notice shall be effective
on the date of receipt by the Lead Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.27&nbsp;

<u>Payments; Sharing of Setoff.</u> The Borrowers shall make each payment
required to be made by it hereunder or under any other Loan Document (whether
of principal, interest,
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<p>fees or reimbursement of drawings under Letters of Credit or Acceptances,
or of amounts payable under Sections 2.21(b), 2.25 or 2.28, or otherwise)
prior to 2:00 p.m., Boston time, on the date when due, in immediately available
funds, without setoff or counterclaim. Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 40 Broad Street, Boston, Massachusetts,
except payments to be made directly to the applicable Issuing Bank or Acceptance
Lender or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.21(b), 2.25, 2.28 or 9.3 shall be made
directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account
of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment under any Loan Document (other than payments with
respect to LIBO Borrowings) shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business
Day, and, if any payment due with respect to LIBO Borrowings shall be due
on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, unless that succeeding Business Day
is in the next calendar month, in which event, the date of such payment
shall be on the last Business Day of subject calendar month, and, in the
case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments under each Loan Document
shall be made in Dollars (except that drawings under Letters of Credit
shall be reimbursed in the same currency as such Letter of Credit was denominated).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; If at any time insufficient funds are received by
and available to the Administrative Agent to pay fully all Obligations
then due hereunder, such funds shall be applied ratably among the parties
entitled thereto in accordance with the provisions of Section 2.24(a) hereof
or Section 6.2 of the Security Agreement, as applicable.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in drawings under
Letters of Credit, Acceptances or Swingline Loans resulting in such Lender's
receiving payment of a greater proportion of the aggregate amount of its
Loans and participations in drawings under Letters of Credit, Acceptances
and Swingline Loans and accrued interest thereon than the proportion received
by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and
participations in drawings under Letters of Credit, Acceptances and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Loans and participations in drawings under Letters of Credit, Acceptances
and Swingline Loans, <u>provided</u> that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto
is recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and
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<p>(ii) the provisions of this paragraph shall not be construed to apply
to any payment made by the Borrowers pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any
of its Loans or participations in drawings under Letters of Credit or Acceptances
to any assignee or participant, other than to the Borrowers or any Affiliate
thereof (as to which the provisions of this paragraph shall apply). The
Borrowers consent to the foregoing and agree, to the extent they may effectively
do so under Applicable Law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrowers rights
of setoff and counterclaim with respect to such participation as fully
as if such Lender were a direct creditor of the Borrowers in the amount
of such participation.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Unless the Administrative Agent shall have received
notice from the Lead Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or an Issuing
Bank or Acceptance Lender hereunder that the Borrowers will not make such
payment, the Administrative Agent may assume that the Borrowers have made
such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the applicable Issuing Bank
or Acceptance Lender, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders
or the applicable Issuing Bank or Acceptance Lender, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or Issuing Bank or Acceptance
Lender, with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to
the Administrative Agent, at the Federal Funds Effective Rate.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; If any Lender shall fail to make any payment required
to be made by it pursuant to this Agreement, then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender's obligations under this
Agreement until all such unsatisfied obligations are fully paid.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.28&nbsp;
<u>Taxes.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Any and all payments by or on account of any obligation
of the Borrowers hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any Indemnified Taxes or Other
Taxes, <u>provided</u> that if the Borrowers shall be required to deduct
any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section) the Agents, any Lender, Issuing Bank or Acceptance
Lender (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrowers shall
make such deductions, and (iii) the Borrowers shall pay the full amount
deducted to the relevant Governmental Authority in accordance with Applicable
Law.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; In addition, the Borrowers shall pay any Other Taxes
to the relevant Governmental Authority in accordance with Applicable Law.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; The Borrowers shall indemnify the Agents, each Lender,
each Issuing Bank and each Acceptance Lender, within ten (10) Business
Days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes paid by such Agent, such Lender, Issuing Bank, or
Acceptance Lender, as the case may be, on or with respect to any payment
by or on account of any obligation of the Borrowers hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed
or asserted on or attributable to amounts payable under this Section) and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to
the Borrowers by a Lender, such Issuing Bank, an Acceptance Lender, or
by any Agent on its own behalf or on behalf of a Lender, an Issuing Bank
or an Acceptance Lender setting forth in reasonable detail the manner in
which such amount was determined, shall be conclusive absent manifest error.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrowers to a Governmental Authority, the
Borrowers shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence
of such payment reasonably satisfactory to the Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Any Foreign Lender that is entitled to an exemption
from or reduction in withholding tax shall deliver to the Lead Borrower
and the Administrative Agent two copies of either United States Internal
Revenue Service Form W-8BEN or Form W-8ECI, or any subsequent versions
thereof or successors thereto, or, in the case of a Foreign Lender's claiming
exemption from or reduction in U.S. Federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio interest",
a Form W-8BEN, or any subsequent versions thereof or successors thereto
(and, if such Foreign Lender delivers a Form W-8BEN, a certificate representing
that such Foreign Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrowers and is not a controlled foreign
corporation related to the Borrowers (within the meaning of Section 864(d)(4)
of the Code)), properly completed and duly executed by such Foreign Lender
claiming complete exemption from or reduced rate of, United States federal
withholding tax on payments by the Borrowers under this Agreement and the
other Loan Documents, or in the case of a Foreign Lender claiming exemption
for "portfolio interest" certifying that it is not a foreign corporation,
partnership, estate or trust. Such forms shall be delivered by each Foreign
Lender on or before the date it becomes a party to this Agreement (or,
in the case of a transferee that is a participation holder, on or before
the date such participation holder becomes a transferee hereunder) and
on or before the date, if any, such Foreign Lender changes its applicable
lending office by designating a different lending office (a "
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<p>New Lending Office"). In addition, each Foreign Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Foreign Lender. Notwithstanding any other provision of
this Section 2.28(e), a Foreign Lender shall not be required to deliver
any form pursuant to this 2.28(e) that such Foreign Lender is not legally
able to deliver.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; The Borrowers shall not be required to indemnify
any Foreign Lender or to pay any additional amounts to any Foreign Lender
in respect of United States federal withholding tax pursuant to paragraph
(a) or (c) above to the extent that the obligation to pay such additional
amounts would not have arisen but for a failure by such Foreign Lender
to comply with the provisions of paragraph (e) above. Should a Lender become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrowers shall, at such Lender's expense, take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.29&nbsp;&nbsp;
<u>Security Interests in Collateral</u>. . To secure their Obligations
under this Agreement and the other Loan Documents, the Borrowers shall
grant, and shall cause each Facility Guarantor to grant to the Collateral
Agent, for its benefit and the ratable benefit of the other Secured Parties,
a first-priority security interest in all of the Collateral pursuant hereto
and to the Security Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.30&nbsp;&nbsp;
<u>Mitigation Obligations; Replacement of Lenders</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; If any Lender requests compensation under Section
2.25, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.28, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another
of its offices, branches or affiliates, if, in the reasonable judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Sections 2.25 or 2.28, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender.
The Borrowers hereby agree to pay all reasonable costs and expenses incurred
by any Lender in connection with any such designation or assignment; <u>provided</u>,
<u>however</u>,
that the Borrowers shall not be liable for such costs and expenses of a
Lender requesting compensation if (i) such Lender becomes a party to this
Agreement on a date after the Closing Date and (ii) the relevant Change
in Law occurs on a date prior to the date such Lender becomes a party hereto.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; If any Lender requests compensation under Section
2.25, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.28, or if any Lender defaults in its obligation to
fund Loans hereunder, then the Borrowers may, at their sole expense and
effort,
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<p>upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.5), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts
such assignment), <u>provided</u> that (i) except in the case of an assignment
to another Lender, the Borrowers shall have received the prior written
consent of the Administrative Agent, the Lead Issuing Bank, each other
Lender which is then an Issuing Bank, and the Swingline Lender, which consent
shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in unreimbursed drawings under Letters of Credit, Acceptances
and Swingline Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.25 or payments
required to be made pursuant to Section 2.28, such assignment will result
in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto,
as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrowers to require such assignment and delegation cease
to apply.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.&nbsp;&nbsp;
<u>REPRESENTATIONS AND WARRANTIES</u>. . Each Loan Party, jointly and severally,
represents and warrants to the Agents and the Lenders that:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.1&nbsp;&nbsp;
<u>Organization; Powers</u>, . Each Loan Party is, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, and each such Person has all requisite power and authority
to carry on its business as now conducted, and, except where the failure
to do so, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification
is required. Schedule 3.1 sets forth, as of the Closing Date, each Loan
Party's legal name as it appears in the official filings in its state of
organization, its state of organization, organization type, organization
number, if any issued by its state of organization, and its federal employer
identification number.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.2&nbsp;&nbsp;
<u>Authorization; Enforceability</u>. The transactions contemplated hereby
and by the other Loan Documents to be entered into by each Loan Party are
within such Loan Party's corporate or limited liability company powers
and have been duly authorized by all necessary corporate, membership and
other action. This Agreement and the other Loan Documents have been duly
executed and delivered by each Loan Party which is a party thereto and
constitutes a legal, valid and binding obligation of such Loan Party, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.3&nbsp;&nbsp;
<u>Governmental Approvals; No Conflicts.</u> . The transactions to be entered
into contemplated by the Loan Documents (a) do not require any consent
or approval of, registration or filing with, or any other action by, any
Governmental Authority, except (i) for such as have been obtained or made
and are in full force and effect, (ii) for those which could not be reasonably
be expected to have a Material Adverse Effect, and (iii) for filings and
recordings necessary to perfect Liens created under the Loan Documents,
(b) will not violate any Applicable Law or regulation or the Charter Documents
of any Loan Party or any order of any Governmental Authority, except for
such violation which could not reasonably be expected to have a Material
Adverse Effect, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Loan Party or their respective
assets, except for such violation or default which could not reasonably
be expected to have a Material Adverse Effect, or give rise to a right
thereunder to require any payment to be made by any Loan Party in excess
of $5,000,000, and (d) will not result in the creation or imposition of
any Lien on any asset of any Loan Party, except Liens created under the
Loan Documents or otherwise permitted hereby or thereby.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.4&nbsp;&nbsp;
<u>Financial Condition.</u> The Lead Borrower has heretofore furnished
to the Lenders (a) its Form 10-K containing the Consolidated balance sheet,
and statements of earnings, shareholders' equity, and cash flows for the
Lead Borrower and its Subsidiaries as of and for the Fiscal Year ending
January 31, 2004, and (b) its Form 10-Q containing the Consolidated balance
sheet, and statements of earnings, and cash flows for the Lead Borrower
and its Subsidiaries as of and for the Fiscal Quarter ending May 1, 2004.
Such financial statements present fairly, in all material respects, the
financial position, results of operations and cash flows of the Lead Borrower
and its Subsidiaries, in each case, as of such dates and for such periods
on a Consolidated basis in accordance with GAAP, subject, in the case of
the Fiscal Quarter financial statements, to year end audit adjustments
and the absence of footnotes. Since January 31, 2004, there have been no
changes in the assets, liabilities, financial condition or business of
the Lead Borrower and its Subsidiaries which has had a Material Adverse
Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.5&nbsp;&nbsp;
<u>Properties</u>.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Each Loan Party has good title to, or valid leasehold
interests in, all of such Person's real and personal, moveable and immoveable,
property material to its business, except for defects which could not reasonably
be expected to have a Material Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; <u>Schedule 3.5(b)</u> sets forth, as of May 29,
2004 (or any later date on which such Schedule is updated pursuant to Section
5.8 and such updated schedule is accepted pursuant to such Section) a complete
and correct list of the address of all Real Estate that is owned by each
Loan Party , all leases and subleases of real property by each Loan Party
as lessee or sublessee, and all leases and subleases of real property by
each Loan Party as lessor or sublessor. Each of the leases and subleases
is valid and enforceable in accordance with its terms, and is in full force
and effect and no default by any party to any such lease or sublease exists,
except as could not reasonably be expected to result in a Material Adverse
Effect. As of May 29, 2004 (or any later date on which such Schedule is
updated pursuant to Section 5.8 and such updated schedule is accepted pursuant
to such Section), each Loan Party has good and marketable title in fee
simple to the Real Estate identified on Schedule 3.5(b) as owned by such
Loan Party, or valid leasehold interests in all Real Estate designated
therein as "leased" by such Loan Party, and each Loan Party has good and
merchantable title or valid leasehold interests to all of its other property
reflected on the most recent financial statements delivered to the Administrative
Agent and the Lenders, except as disposed of in the ordinary course of
business since the date thereof, free of all Liens except those permitted
pursuant to Section 6.2 hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.6&nbsp;&nbsp;
<u>Litigation and Environmental Matters.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to
the knowledge of any Loan Party, threatened against or affecting any such
Person (i)&nbsp; as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect
(other than those set forth on <u>Schedule 3.6</u>) or (ii) that involve
any of the Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Except for the matters set forth on <u>Schedule 3.6</u>,
and except as could not reasonably be expected to have a Material Adverse
Effect, no Loan Party (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has, to the knowledge of any
Loan Party become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv)
knows of any basis for any Environmental Liability.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Since the date of this Agreement, there has been
no change in the status of the matters set forth on <u>Schedule 3.6</u>
that, individually or in the aggregate, has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.7&nbsp;&nbsp;
<u>Compliance with Laws and Agreements</u>, . Each Loan Party is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
such Person or its property and all indentures, material agreements and
other instruments binding upon it or its property, except where the failure
to do so, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect. No Default has occurred and is
continuing.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.8&nbsp;&nbsp;
<u>Investment and Holding Company Status</u>. . No Loan Party is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in,
or subject to regulation under, the Public Utility Holding Company Act
of 1935.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.9&nbsp;&nbsp;
<u>Taxes,</u> . Each Loan Party has timely filed or caused to be filed
all tax returns and reports required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except (a)
taxes that are being contested in good faith by appropriate proceedings,
for which such Person has set aside on its books adequate reserves, and
as to which no Lien in excess of $5,000,000 has arisen, or (b) to the extent
that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.19&nbsp;&nbsp;
<u>ERISA; Foreign Plans.</u> Except as set forth on Schedule 3.10, no Loan
Party is party to a Plan. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87)
did not, as of the date of the most recent financial statements of the
Lead Borrower and its Subsidiaries on a Consolidated basis reflecting such
amounts, exceed the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements of the Lead Borrower and its Subsidiaries on a Consolidated
basis reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; No Termination Event has occurred or is reasonably
expected to occur. Each Foreign Plan is in compliance in all material respects
with the laws and regulations applicable to such Foreign Plan and each
Loan Party has satisfied all contribution obligations in all material respects
with respect to such Foreign Plan (to the extent applicable). Each Foreign
Plan and related funding arrangement that is intended to qualify for tax-favored
status has been reviewed and approved for such status by the appropriate
Governmental Authority (or has been submitted for such review and approval
within the applicable time period),
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<p>and nothing has occurred and no condition exists that is likely to cause
the loss or denial of such tax-favored status. No Foreign Plan has any
liabilities in any material respect in excess of the current value of such
Foreign Plan's assets, determined in accordance with the assumptions used
for funding such Foreign Plan pursuant to reasonable accounting standards
in accordance with applicable law. No Loan Party has incurred or reasonably
expects to incur any material liability as a result of the termination
or other insolvency of any Foreign Plan or any material liability which
is not otherwise funded or satisfied with readily available assets set
aside with respect to such Foreign Plan.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,11&nbsp;&nbsp;
<u>Common Enterprise</u>. . The successful operation and condition of each
of the Loan Parties is dependent upon the continued successful performance
of the functions of the group of Loan Parties as a whole and the successful
operation of each Loan Party is dependent upon the successful performance
and operation of each other Loan Party. Each of the Loan Parties expects
to derive benefit (and its board of directors or other governing body has
determined that it may reasonably be expected to derive benefit) directly
and indirectly from successful operations of the Lead Borrower and each
of the other Loan Parties. Each Loan Party expects to derive benefit (and
its board of directors or other governing body has determined that it may
reasonably be expected to derive benefit) directly and indirectly from
the credit extended by the Lenders, the Issuing Banks and the Acceptance
Lenders to the Loan Parties hereunder, both inn their separate capacities
and as members of the group of companies. Each Loan Party has determined
that the execution, delivery and performance of this Agreement and any
other Loan Document to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its
best interests.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.12&nbsp;&nbsp;
<u>Disclosure</u>.&nbsp; The Loan Parties have disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which
any Loan Party is subject, and all other matters known to any such Person,
that, individually or in the aggregate, in each case, could reasonably
be expected to result in a Material Adverse Effect. None of the reports,
financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document
or delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.13&nbsp;&nbsp;
<u>Subsidiaries</u>,&nbsp; On and as of July 3, 2004, the authorized Capital
Stock or other equity, and the number of issued and outstanding shares
of Capital Stock or other equity, of the Borrowers and each other Loan
Party is as described in Schedule 3.13. All such outstanding shares of
Capital Stock or other equity of the Borrowers and each other Loan Party
have been duly and validly issued, in compliance with all legal requirements
relating to the authorization and issuance of shares of Capital Stock or
other equity, and are fully paid and non-assessable.
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<p>There is no other Capital Stock or ownership interest of any class outstanding
of the Borrowers or of any other Loan Party. Except as set forth on Schedule
3.13 or as otherwise permitted under this Agreement, none of the Loan Parties
is party to any joint venture, general or limited partnership, or limited
liability company, agreements or any other business ventures or entities.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.14&nbsp;&nbsp;
<u>Insurance</u>. . Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties as of the Closing Date.
Each of such policies is in full force and effect. As of the Closing Date,
all premiums in respect of such insurance that are due and payable have
been paid.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.15&nbsp;&nbsp;
<u>Labor Matters</u>. Except as set forth on Schedule 3.15, as of the Closing
Date, (a) there is no collective bargaining agreement or other labor contract
covering employees of any Loan Party, (b) no such collective bargaining
agreement or other labor contract is scheduled to expire during the term
of this Agreement, (c) to the knowledge of the Loan Parties, no union or
other labor organization is seeking to organize, or to be recognized as,
a collective bargaining unit of employees of any Loan Party or for any
similar purpose except as could not reasonably be expected to result in
a Material Adverse Effect, and (d) there is no pending or (to the best
of any Loan Party's knowledge) threatened, strike, work stoppage, material
unfair labor practice claim, or other material labor dispute against or
affecting any Loan Party or its employees except as could not reasonably
be expected to result in a Material Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.16&nbsp;&nbsp;
<u>Certain Transactions</u>.&nbsp; Except as set forth on <u>Schedule 3.16</u>,
none of the officers, partners, directors, or employees of any Loan Party
is presently a party to any transaction with any other Loan Party or any
Affiliate, officer or director that would be prohibited by Section 6.8.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.17&nbsp;&nbsp;
<u>Restrictions on the Loan Parties</u>, . No Loan Party is a party to
or bound by any contract, agreement or instrument, or subject to any charter
or other corporate restriction, that has or could reasonably be expected
to have a Material Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.18&nbsp;&nbsp;
<u>Security Documents</u>. . The Security Documents create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest and hypothec in the Collateral
described therein as security for the Obligations to the extent that a
legal, valid, binding and enforceable security interest in such Collateral
may be created under any Applicable Law of the United States of America
and any states thereof, including, without limitation, the applicable Uniform
Commercial Code, and under any Applicable Law of Canada and any provinces
thereof, including, without limitation, the PPSA and the Civil Code, and
the Security Documents constitute, or will upon the filing of financing
statements and the obtaining of "control", in each case, as applicable,
with respect to the relevant Collateral as required under the applicable
Uniform Commercial Code, PPSA or Civil Code, the creation of a fully perfected
first priority Lien on, and security interest and hypothec in, all right,
title and interest of the Borrowers and each Facility Guarantor thereunder
in such Collateral, in each case prior and superior in right to any other
Person (other than Permitted Encumbrances
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<p>having priority under Applicable Law), except as permitted hereunder
or under any other Loan Document, in each case to the extent that a security
interest may be perfected by the filing of a financing statement or hypothec
under the applicable Uniform Commercial Code, PPSA or Civil Code, or by
obtaining "control".
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.19&nbsp;&nbsp;
<u>Federal Reserve Regulations</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; No Loan Party is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose
of buying or carrying Margin Stock.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; No part of the proceeds of any Loan or any Letter
of Credit or Acceptance will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to buy or carry Margin
Stock or to extend credit to others for the purpose of buying or carrying
Margin Stock or to refund indebtedness originally incurred for such purpose
or (ii) for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation
U or X.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.20&nbsp;&nbsp;
<u>Solvency</u>. . The Loan Parties, taken as a whole, are Solvent. No
transfer of property is being made by any Loan Party and no obligation
is being incurred by any Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent
to hinder, delay, or defraud either present or future creditors of any
Loan Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.21&nbsp;&nbsp;
<u>Franchises, Patents, Copyrights, Etc.</u> . Except as otherwise set
forth on Schedule 3.21 hereto, each Loan Party owns, or is licensed to
use, all franchises, patents, copyrights, trademarks, tradenames, service
marks, licenses and permits, and other intellectual property and rights
in respect of the foregoing, necessary for the conduct of its business
as substantially now conducted without known conflict or infringement with
any rights of any other Person and, in each case, free of any Lien that
is not a Permitted Encumbrance.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.22&nbsp;&nbsp;
<u>DDAs, Credit Card Arrangements, Etc.</u> . <u>Schedule 3.22</u> sets
forth, as of the Closing Date, a list of all (i) arrangements to which
any Loan Party is a party with respect to the payment to any Borrower of
the proceeds of all credit card charges for sales by such Loan Party in
the United States of America and specifying whether a Credit Card Notification
(or similar agreement entered into pursuant to the Existing Credit Agreement)
with respect thereto is in effect on the Closing Date, (ii) Blocked Account
Agreements entered into by a Loan Party (or similar agreements entered
into pursuant to the Existing Credit Agreement) which are in effect on
the Closing Date and (iii) Disbursement Accounts maintained by the Loan
Parties as of the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.&nbsp;&nbsp;
<u>CONDITIONS.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.1&nbsp;&nbsp;
<u>Closing Date</u>.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
obligation of the Lenders to make the initial Loans and of the Issuing
Banks to issue the initial Letters of Credit and of the Acceptance Lenders
to issue the initial Acceptances is subject to the following conditions
precedent:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The Agents (or their counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement and all
other Loan Documents (including, without limitation, the Security Documents)
signed on behalf of such party or (ii) written evidence satisfactory to
the Agents (which may include telecopy transmission of a signed signature
page of this Agreement) that such party has signed a counterpart of this
Agreement and all other Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Agents shall have received a favorable written
opinion (addressed to each Agent and the Lenders on the Closing Date and
dated the Closing Date) of each of (i) Bryan Cave LLP, special United States
counsel to the Loan Parties, (ii) Lang Michener LLP, special Ontario counsel
to Brown Canada, (iii) Deveau Lavoie, Bourgeois, Lalande &amp; Associates,
special Quebec counsel to Brown Canada, and (iv) Wolf, Block, Schorr and
Solis-Cohen LLP, special Pennsylvania counsel to Brown Retail, substantially
in the forms of <u>Exhibit C</u>, <u>Exhibit C-1</u>, <u>Exhibit C-2</u>,
and <u>Exhibit C-3</u>, respectively, covering such matters relating to
the Loan Parties, the Loan Documents or the transactions contemplated thereby
as the Required Lenders shall reasonably request. The Borrowers hereby
request such counsel to deliver such opinion.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
( c)&nbsp;&nbsp;&nbsp; The Agents shall have received such documents and
certificates as the Agents or their counsel may reasonably request relating
to the organization, existence and good standing of each Loan Party (it
being understood and agreed that each Loan Party will be required to deliver
a good standing certificate from its jurisdiction of organization or formation,
as well as a good standing certificate for each foreign jurisdiction where
such Loan Party has qualified to do business since the closing of the Existing
Credit Agreement), the authorization of the transactions contemplated by
the Loan Documents and any other legal matters relating to the Loan Parties,
the Loan Documents or the transactions contemplated thereby, all in form
and substance reasonably satisfactory to the Agents and their counsel.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; The Agents shall have received a Borrowing Base Certificate
dated the Closing Date, relating to the month ended on May 29, 2004, and
executed by a Financial Officer of the Lead Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; The Agents shall have received a certificate, reasonably
satisfactory in form and substance to the Agents, (i) with respect to the
solvency of the Loan Parties on a Consolidated basis, as of the Closing
Date, and (ii) certifying that, as of the Closing Date, the representations
and warranties made by the Borrowers in the Loan Documents are true and
complete (other than representations and warranties that relate solely
to an earlier date) and
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<p>that no event has occurred (or failed to occur) which is or which, solely
with the giving of notice or passage of time (or both) would be a Default
or an Event of default.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; All necessary consents and approvals to the transactions
contemplated hereby shall have been obtained and shall be reasonably satisfactory
to the Agents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; The Agents shall be reasonably satisfied that any
financial statements delivered to them fairly present the business and
financial condition of the Loan Parties, and that there has been no material
adverse change in the assets, business, operation, financial or other condition,
or income of the Loan Parties, taken as a whole, since the date of the
most recent financial information delivered to the Agents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; Except as set forth on <u>Schedule 3.6</u>, there
shall not be pending any litigation or other proceeding, which, if adversely
determined, (and a reasonable possibility of such adverse determination
reasonably exists), could reasonably be expected to have a Material Adverse
Effect on the Loan Parties, taken as a whole.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; There shall not have occurred any default, nor shall
any event exist which is, or solely with the passage of time, the giving
of notice or both, would be a default under any Material Indebtedness of
any Loan Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; The Collateral Agent shall have received all documents
and instruments, including Uniform Commercial Code financing statements,
required by law or reasonably requested by the Collateral Agent to be filed,
registered or recorded to create or perfect the first priority Liens intended
to be created under the Loan Documents and all such documents and instruments
shall have been so filed, registered or recorded to the satisfaction of
the Collateral Agent and with respect to any Loan Party located in or organized
under the laws of Canada, all filings and recordations required by Requirements
of Law of Canada (including, without limitation, under the PPSA and the
Civil Code) in all jurisdictions that the Collateral Agent may deem necessary
or desirable in order to perfect the Collateral Agent's Lien in any Collateral
located in Canada.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(k)&nbsp;&nbsp;&nbsp; The Collateral Agent shall have received Blocked
Account Agreements with the Blocked Account Banks (other than B of A) on
or before the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(l)&nbsp;&nbsp;&nbsp; All fees due at or immediately after the Closing
Date and all reasonable costs and expenses incurred by the Agents in connection
with the establishment of the credit facility contemplated hereby (including
the reasonable fees and expenses of counsel to the Agents) shall have been
paid in full, except that the fees and expenses of such counsel shall be
paid on the earlier of the Closing Date or within three (3) Business Day
after receipt of invoice therefor.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(m)&nbsp;&nbsp;&nbsp; The consummation of the transactions contemplated
hereby shall not (a) violate any Applicable Law, or (b) conflict with,
or result in a default or event of default under, any material agreement
of Borrowers or any other Loan Party, taken as a whole. No event shall
exist which is, or solely with the passage of time, the giving of notice
or both, would be a default under any material agreement of any Loan Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(n)&nbsp;&nbsp;&nbsp; No material changes in governmental regulations or
policies affecting the Borrowers, the Agents or any Lender involved in
this transaction shall have occurred prior to the Closing Date which could,
individually or in the aggregate, materially adversely effect the transaction
contemplated by this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(o)&nbsp;&nbsp;&nbsp; There shall be no Default or Event of Default on
the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(p)&nbsp;&nbsp;&nbsp; The Collateral Agent shall have received, and be
satisfied with, evidence of the Borrowers' insurance, together with such
endorsements as are required by the Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(q)&nbsp;&nbsp;&nbsp; The Borrowers shall have paid all accrued and unpaid
interest, fees, and expenses due under the Existing Credit Agreement to
the Persons entitled thereto.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(r)&nbsp;&nbsp;&nbsp; Assignments amongst the Lenders party to the Existing
Credit Agreement and the Lenders party to this Agreement shall have been
executed and delivered to the Administrative Agent to the extent deemed
necessary by the Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(s)&nbsp;&nbsp;&nbsp; There shall not have occurred any disruption or material
adverse change in the financial or capital markets in general that would,
in the reasonable opinion of the Agents, have a material adverse effect
on the market for loan syndications or adversely affecting the syndication
of the Loans.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(t)&nbsp;&nbsp;&nbsp; There shall have been delivered to the Administrative
Agent such additional instruments and documents as the Agents or counsel
to the Agents reasonably may require or request.
<p>The Administrative Agent shall notify the Lead Borrower and the Lenders
of the Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the
Issuing Banks to issue Letters of Credit and the Acceptance Lenders to
issue Acceptances hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.2) at
or prior to 5:00 p.m., Boston time, on July 31, 2004, (and, in the event
such conditions are not so satisfied or waived, this Agreement shall terminate
at such time).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.2&nbsp;&nbsp;
<u>Conditions Precedent to Each Loan and Each Letter of Credit and Each
Acceptance</u>. . In addition to those conditions described in Section
4.1, the obligation of the
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<p>Lenders to make each Loan and of the Issuing Banks to issue each Letter
of Credit and of the Acceptance Lenders to issue each Acceptance, is subject
to the following conditions precedent:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; <u>Notice</u>. The Administrative Agent shall have
received a notice with respect to such Borrowing or issuance, as the case
may be, as required by Section 2.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; <u>Representations and Warranties</u>. All representations
and warranties contained in this Agreement and the other Loan Documents
or otherwise made in writing in connection herewith or therewith shall
be true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit or Acceptance hereunder
with the same effect as if made on and as of such date, other than representations
and warranties that relate solely to an earlier date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; <u>No Default</u>. On the date of, and after giving
effect to, each Borrowing hereunder and the issuance of each Letter of
Credit or Acceptance, the Borrowers shall be in compliance with all of
the terms and provisions set forth herein and in the other Loan Documents
to be observed or performed and no Default or Event of Default shall have
occurred and be continuing.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; <u>Borrowing Base Certificate</u>. The Administrative
Agent shall have received the most recently required Borrowing Base Certificate,
with each such Borrowing Base Certificate including schedules as required
by the Administrative Agent.
<p>The request by the Borrowers for, and the acceptance by the Borrowers
of, each extension of credit hereunder shall be deemed to be a representation
and warranty by the Borrowers that the conditions specified in this Section
4.2 have been satisfied at that time and that after giving effect to such
extension of credit the Borrowers shall continue to be in compliance with
the Borrowing Base. The conditions set forth in this Section 4.2 are for
the sole benefit of the Administrative Agent and each Lender and may be
waived by the Administrative Agent in whole or in part without prejudice
to the Administrative Agent or any Lender, including, without limitation,
without prejudice to the Required Lenders' rights under Section 7.1 and
9.2 hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,&nbsp;&nbsp;
<u>AFFIRMATIVE COVENANTS</u>, . Until the Commitments have expired or been
terminated and the principal of and interest on each Loan and all fees
and other Obligations payable hereunder and under the other Loan Documents
shall have been paid in full and all Letters of Credit and Acceptances
shall have expired or terminated and all L/C Disbursements shall have been
reimbursed, each Loan Party covenants and agrees with the Agents and the
Lenders that:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.1&nbsp;&nbsp;
<u>Financial Statements and Other Information</u>, . The Lead Borrower
will furnish to the Agents for delivery to the Lenders, each of the following,
provided that the Lead Borrower need not furnish copies of information
referred to in subsections (a), (b), (g) or (m) if on or
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<p>before the applicable day set forth below, such information is available
either on EDGAR or on the Lead Borrower's web site:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; within ninety-five (95) days after the end of each
Fiscal Year of the Lead Borrower and its Subsidiaries, a copy of its Form
10-K containing the Consolidated balance sheet and related statements of
earnings, shareholders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous Fiscal Year, all audited and reported on by Ernst &amp; Young,
LLP or another independent public accountant of recognized national standing
(without a "going concern" or like qualification or exception and without
a qualification or exception as to the scope of such audit) to the effect
that such Consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the Lead
Borrower and its Subsidiaries on a Consolidated basis in accordance with
GAAP consistently applied, and a written statement by such accountants
to the effect that such accountants have reviewed this Agreement and that
in auditing such Consolidated financial statements, nothing came to their
attention to cause them to believe that the Loan Parties had failed to
comply with the terms, covenants, provisions or conditions of this Agreement
insofar as they relate to accounting matters, except for those described
in reasonable detail in such statement;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; within fifty (50) days after the end of each of the
first three Fiscal Quarters of each Fiscal Year, its Form 10-Q containing
the Consolidated balance sheet and related statements of earnings, and
cash flows of the Lead Borrower and its Subsidiaries, as of the end of
and for such Fiscal Quarter and the elapsed portion of the Fiscal Year,
with comparative results to the same Fiscal Periods of the prior Fiscal
Year, all certified by a Financial Officer of the Lead Borrower as presenting
in all material respects the financial condition and results of operations
of the Lead Borrower and its Subsidiaries in accordance with GAAP consistently
applied, subject to normal year end audit adjustments and the absence of
footnotes;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; within thirty (30) days after the end of each of
fiscal month of the Lead Borrower and its Subsidiaries, if so requested
by the Administrative Agent, Consolidated and consolidating balance sheet
and related statements of operations, stockholders' equity and cash flows
of the Lead Borrower and its Subsidiaries, as of the end of and for such
month and the elapsed portion of the Fiscal Year, with comparative results
to the same Fiscal Periods of the prior Fiscal Year and to the Lead Borrower's
and its Subsidiaries' budget for such Fiscal Year furnished pursuant to
Section 5.1(e) hereof;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; (i) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Lead Borrower in the form of <u>Exhibit E</u> (a "Compliance Certificate")
(i) certifying as to whether a Default or Event of Default has occurred
and, if a Default or Event of Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably
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<p>detailed calculations with respect to the Fixed Charge Coverage Ratio
and Capital Expenditures for such period (whether or not such are then
required to be tested hereunder), and (iii) certifying that such financial
statements present in all material respects the financial condition and
results of operations of the Lead Borrower and its Subsidiaries in accordance
with GAAP consistently applied for such period, subject, in the case of
the quarterly statements, to normal year end audit adjustments and the
absence of footnotes, and (iv) stating whether any change in GAAP or in
the application thereof has occurred since the date of the Lead Borrower's
and its Subsidiaries' audited financial statements referred to in Section
3.4 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such Compliance Certificate;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; no sooner than sixty (60) days and not less than
thirty (30) days prior to the commencement of each Fiscal Year of the Loan
Parties, a detailed preliminary Consolidated and consolidating budget by
month for such Fiscal Year (including a projected Consolidated and consolidating
balance sheet and related statements of projected operations and cash flow
as of the end of and for such Fiscal Year) and, within forty-five (45)
days after the commencement of each such Fiscal Year, a final Consolidated
and consolidating budget by month for such Fiscal Year;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; within seventeen (17) days after the end of each
month, a certificate in the form of <u>Exhibit D</u> (a "<u>Borrowing Base
Certificate</u>") showing the Borrowing Base as of the close of business
on the last day of the immediately preceding month, each such Borrowing
Base Certificate to be certified as complete and correct on behalf of the
Loan Parties by a Financial Officer of the Lead Borrower, <i>provided,
however</i>, if and so long as a Cash Dominion Event exists, Administrative
Agent may require that Borrowers furnish such Borrowing Base Certificate
(showing the Borrowing Base as of the close of business on the last day
of the immediately preceding week) weekly on Wednesday of each week ;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Lead Borrower or any other Loan Party with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any
or all of the functions of said Commission, or with any national securities
exchange, as the case may be;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; the financial and collateral reports described on
Schedule 5.1(h) hereto, at the times set forth in such Schedule;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; with respect to each Permitted Acquisition, to the
extent permitted by Applicable Law, as soon as available, but not less
than ten (10) Business Days prior to the consummation of a Permitted Acquisition,
written notice to the Administrative Agent of such Permitted Acquisition
together with a copy of all business and financial information reasonably
requested by the Administrative Agent and a certificate of a Financial
Officer of the Lead
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<p>Borrower certifying (and showing the calculations therefor in reasonable
detail) that the Pro Forma Fixed Charge Coverage Ratio is greater than
1.0:1.0 and the Pro Forma Conditions will be satisfied, and (ii) as soon
as available the information provided to the board of directors of the
Lead Borrower with respect to such Permitted Acquisition;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; with respect to each Permitted Acquisition, to the
extent permitted by Applicable Law, as soon as available, (i) copies of
the most recent audited (if available), and if later, unaudited Consolidated
financial statements of the Person which is the subject of the Permitted
Acquisition, (ii) a description of the proposed Permitted Acquisition in
such detail as the Administrative Agent may reasonably request, including
copies of letters of intent and purchase and sale agreements or other acquisition
documents executed in connection with the proposed Permitted Acquisition,
(iii) an unaudited <u>pro</u> <u>forma</u> Consolidated balance sheet and
income statement of the Loan Parties as of the end of the most recently
completed fiscal quarter but prepared as though the Permitted Acquisition
had occurred on such date and related <u>pro</u> <u>forma</u> calculations
of Excess Availability (as of the last day of each Fiscal Quarter) and
the Fixed Charge Coverage Ratio for the subsequent four fiscal quarters
period, and (iv) unaudited projections of balance sheets and income statements
and related calculations for the following four fiscal quarters, assuming
the Permitted Acquisition has closed;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(k)&nbsp;&nbsp;&nbsp; notice of any intended (i) sale or other disposition
of assets of any Loan Party permitted under Section 6.5(c), (d) and (e)
hereof at least three (3) Business Days prior to the date of consummation
such sale or disposition or (ii) incurrence of any Indebtedness permitted
hereunder promptly following the incurrence of such Indebtedness;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(l)&nbsp;&nbsp;&nbsp; within fifteen (15) days after receipt thereof, copies
of all final (as distinguished from a preliminary or discussion draft)
reports submitted to the Lead Borrower or any other Loan Party by independent
certified public accountants in connection with each annual, interim or
special audit of the books of the Loan Parties made by such accountants,
including any management letter commenting on the Borrowers' internal controls
submitted by such accountants to management in connection with their annual
audit;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(m)&nbsp;&nbsp;&nbsp; promptly after their preparation, copies of any and
all proxy statements, financial statements (other than those described
in subsections (a) and (b) hereof), and reports which the Lead Borrower
makes available to its shareholders or any holder of any Indebtedness;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(n)&nbsp;&nbsp;&nbsp; if requested by the Administrative Agent, promptly
after filing with the IRS or any other applicable Governmental Authority,
a copy of each tax return filed by any Loan Party;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(o)&nbsp;&nbsp;&nbsp; within seventeen (17) days of the end of each fiscal
month (unless specifically indicated otherwise), or more frequently if
requested by the Administrative Agent, as
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<p>of the preceding fiscal month end, in form reasonably satisfactory to
the Administrative Agent: (a) a schedule of each Loan Party's Accounts
created since the last such schedule; (b) an aging of each Loan Party's
Accounts together with a reconciliation to the previous fiscal month end's
accounts receivable balance of such Loan Party's Accounts and to its general
ledger; (c) a summary aging by payee of each Loan Party's accounts payable;
and (d) upon the Agent's request, a statement of the balance of each of
the intercompany accounts of the Loan Parties; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(p)&nbsp;&nbsp;&nbsp; promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Lead Borrower or any other Loan Party, or compliance with the terms
of any Loan Document, as the Agents or any Lender may reasonably request.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.2&nbsp;&nbsp;
<u>Notices of Material Events</u>.&nbsp; The Borrowers will, and will cause
each other Loan Party to furnish to the Administrative Agent, the Lead
Issuing Bank, the Acceptance Lenders, the Collateral Agent, and each Lender
prompt written (except as provided in clause (e) below) notice of the following:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; the occurrence of any Default or Event of Default,
specifying the nature and extent thereof and the action (if any) which
is proposed to be taken with respect thereto;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against
or affecting any Loan Party that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; the occurrence of any ERISA Event or Termination
Event that, alone or together with any other ERISA Events or Termination
Events, as applicable, that have occurred, could reasonably be expected
to result in a Material Adverse Effect;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; telephonic notice of any change of the chief executive
officer or chief financial officer of the Lead Borrower;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; any pending or threatened (in writing) strike, work
stoppage, unfair labor practice claim, or other labor dispute affecting
any Loan Party which could reasonably be expected to have, or has resulted
in, a Material Adverse Effect;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; the filing of any Lien for unpaid taxes in excess
of $5,000,000 against any Loan Party;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; any casualty or other insured damage to any material
portion of the Collateral or the commencement of any action or proceeding
for the taking of any material portion of the Collateral or any part thereof
or interest therein under power of eminent domain or by condemnation or
similar proceeding;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; the discharge by any Loan Party of its present independent
accountants or any withdrawal or resignation by such independent accountants;
and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; any material adverse change in the business, operations,
or financial affairs of the Loan Parties taken as a whole.
<p>Each notice delivered under this Section shall be accompanied by a statement
of a Financial Officer or other executive officer of the Lead Borrower
setting forth the details of the event or development requiring such notice
and, if applicable, any action taken or proposed to be taken with respect
thereto.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.3&nbsp;&nbsp;
<u>Information Regarding Collateral.</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The Lead Borrower will furnish to the Administrative
Agent at least thirty (30) days' prior written notice of any change (i)
in any Loan Party's corporate name or in any trade name used to identify
it in the conduct of its business or in the ownership of its properties,
(ii) in the location of any Loan Party's chief executive office, its principal
place of business, any office in which it maintains books or records relating
to Collateral owned by it or any office or facility at which Collateral
owned by it is located (including the establishment of any such new office
or facility), (iii) in any Loan Party's identity or organizational structure
or (iv) in any Loan Party's jurisdiction of incorporation, Federal Taxpayer
Identification Number or organizational identification number assigned
to it by its state of organization.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Each year, at the time of delivery of annual financial
statements with respect to the preceding Fiscal Year pursuant to Section
5.1(a), the Lead Borrower shall deliver to the Agents a certificate of
a Financial Officer of the Lead Borrower setting forth the information
required pursuant to Section 2 of the Perfection Certificate or confirming
that there has been no change in such information since the date of the
Perfection Certificate delivered on the Closing Date or the date of the
most recent Perfection Certificate delivered pursuant to this Section.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.4&nbsp;&nbsp;
<u>Existence; Conduct of Business</u>,&nbsp; Each Borrower will, and will
cause each other Loan Party to, do or cause to be done all things necessary
to comply with its respective Charter Documents, and to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its business, provided that the foregoing
shall not prohibit any merger,
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<p>amalgamation, consolidation, liquidation, or dissolution permitted under
Section 6.3 or any sale, lease, transfer or other disposition permitted
under Section 6.5.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.5.&nbsp;&nbsp;
<u>Payment of Obligations</u>. Each Borrower will, and will cause each
other Loan Party to, pay its Indebtedness and other obligations, including
tax liabilities, before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good
faith by appropriate proceedings, (b) such Borrower or such other Loan
Party has set aside on its books adequate reserves with respect thereto
in accordance with GAAP, (c) such contest effectively suspends collection
of the contested obligation, (d) no Lien secures such obligation (other
than tax Liens in an amount not to exceed $5,000,000), and (e) the failure
to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect. Nothing contained herein shall be
deemed to limit the rights of the Administrative Agent under Section 2.3(b).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.6&nbsp;&nbsp;
<u>Maintenance of Properties.</u> Each Borrower will, and will cause each
other Loan Party to, keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and
tear excepted.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.7&nbsp;&nbsp;
<u>Insurance</u>,
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Each Borrower will, and will cause each other Loan
Party to, (i) maintain insurance with financially sound and reputable insurers
reasonably acceptable to the Administrative Agent (or, to the extent consistent
with prudent business practice, a program of self-insurance approved by
the Administrative Agent, such approval not to be unreasonably withheld)
on such of its property and in at least such amounts and against at least
such risks as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability
insurance against claims for personal injury or death occurring upon, in
or about or in connection with the use of any properties owned, occupied
or controlled by it (including the insurance required pursuant to the Security
Documents); (ii) maintain such other insurance as may be required by law;
and (iii) furnish to the Administrative Agent, upon written request, full
information as to the insurance carried. The Administrative Agent shall
not, by the fact of approving, disapproving, accepting, obtaining or failing
to obtain any such insurance, incur liability for the form or legal sufficiency
of insurance contracts, solvency of insurance companies or payment of lawsuits,
and each Loan Party hereby expressly assumes full responsibility therefor
and liability, if any, thereunder. The Borrowers shall, and shall cause
each other Loan Party to, furnish to the Administrative Agent certificates
or other evidence satisfactory to the Administrative Agent of compliance
with the foregoing insurance provisions. The Lead Borrower shall promptly
notify the Administrative Agent with respect to any claim relating in whole
or in part to the Collateral in excess of $3,000,000. So long as no Cash
Dominion Event has occurred and is continuing, the Loan Parties shall have
the right to negotiate and/or settle insurance claims without the consent
or approval of the Administrative Agent. After the occurrence of a Cash
Dominion Event and during the continuance thereof,
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<p>the Loan Parties will not settle any insurance claim with a value in
excess of $3,000,000 without the consent of the Administrative Agent, which
consent will not be unreasonably withheld or delayed.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; For each of the insurance policies covering Collateral,
each Loan Party shall cause the Collateral Agent to be named as a loss
payee or additional insured, as applicable, in a manner acceptable to the
Administrative Agent. Each all risk property insurance policy covering
Collateral shall contain (i) a clause or endorsement requiring the insurer
to give not less than thirty (30) days prior written notice to the Collateral
Agent in the event of cancellation or non-renewal of such policy for any
reason whatsoever except non-payment of premium and a clause or endorsement
requiring the insurer to give not less than ten (10) days prior written
notice to the Collateral Agent in the event of cancellation of such policy
for non-payment of premium (giving the Collateral Agent the right to cure
defaults in the payment of premiums), (ii) to the extent available from
the applicable insurer, a clause or endorsement stating that the interest
of the Collateral Agent shall not be impaired or invalidated by any act
or neglect of the insured Person or the owner of any premises, including,
without limitation, as a result of the use of any such premises for purposes
more hazardous than are permitted by such policy, and (iii) to the extent
available from the applicable insurer, a clause or endorsement stating
that none of the Loan Parties, the Administrative Agent, the Collateral
Agent, or any other party shall be a coinsurer. Each commercial general
liability policy shall contain (1) a clause or endorsement requiring the
insurer to give not less than thirty (30) days prior written notice to
the Collateral Agent in the event of cancellation or non-renewal of such
policy for any reason whatsoever except non-payment of premium and a clause
or endorsement requiring the insurer to give not less than ten (10) days
prior written notice to the Collateral Agent in the event of cancellation
of such policy for non-payment of premium (giving the Collateral Agent
the right to cure defaults in the payment of premiums), and (2) a clause
or endorsement stating that the Agents and the Lenders shall be named as
additional insured parties, mortgagee or assignee, as applicable. All premiums
for such required insurance shall be paid by the Loan Parties when due,
and certificates of insurance shall be sent to the appropriate Loan Parties
and the Collateral Agent, and if requested by the Collateral Agent, photocopies
of the policies, shall be delivered to the Collateral Agent. The Loan Parties
shall deliver to the Collateral Agent, prior to the cancellation or non-renewal
of any such policy of insurance, a copy of a renewal or replacement policy
(or other evidence of renewal of a policy previously delivered to the Collateral
Agent). To the extent requested by the Collateral Agent, the Loan Parties
shall deliver to the Collateral Agent evidence satisfactory to the Collateral
Agent of payment of the applicable portion of the annual premium then due
and payable. If any Loan Party fails to procure (or cause to be procured)
such insurance or to pay the premiums therefor when due, the Agents may,
without waiving any Event of Default occasioned thereby, obtain such insurance
and pay such premiums at the expense of the Loan Parties. All proceeds
of any insurance claim relating to Collateral shall be promptly deposited
by the applicable Loan Party to a Blocked Account or the B of A Concentration
Account, and such proceeds until so deposited shall be held in trust for
the
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<p>Collateral Agent by the applicable Loan Party. The Agents shall apply
any proceeds received in accordance with Section 2.24 hereof or Section
6.2 of the Security Agreement, as applicable.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; None of the Agents or other Secured Parties, or their
agents or employees shall be liable for any loss or damage insured by the
insurance policies required to be maintained under this Section 5.7. Each
Loan Party shall look solely to its insurance companies or any other parties
other than the Credit Parties for the recovery of such loss or damage and
such insurance companies shall have no rights of subrogation against any
Agent or Secured Party or its agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against such parties,
as required above, then the Loan Parties hereby agree, to the extent permitted
by law, to waive their right of recovery, if any, against the Agents and
the other Secured Parties and their agents and employees. The designation
of any form, type or amount of insurance coverage by any Agent or Secured
Party under this Section 5.7 shall in no event be deemed a representation,
warranty or advice by such Agent or Secured Party that such insurance is
adequate for the purposes of the business of the Loan Parties or the protection
of their properties.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; So long as no Cash Dominion Event has occurred and
is continuing, the Lead Borrower shall respond to requests from the Collateral
Agent for information relating to insurance within ten (10) Business Days
of the Lead Borrower's receipt of such request. To the extent that the
Lead Borrower fails to reasonably satisfy such request within such period,
the Lead Borrower will permit any representatives that are designated by
the Collateral Agent to inspect the insurance policies maintained by or
on behalf of the Loan Parties and to inspect books and records related
thereto and any properties covered thereby. The Loan Parties shall pay
the reasonable fees and expenses of any representatives retained by the
Collateral Agent to conduct any such inspection.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.8&nbsp;&nbsp;
<u>Revisions or Updates to Schedules</u>,&nbsp; Should any of the information
or disclosures provided on any of the schedules originally attached hereto
become outdated or incorrect in any material respect, the Loan Parties
shall deliver to the Administrative Agent, such revisions or updates to
such schedule(s) whereupon such schedules shall be deemed to be amended
by such revisions or updates, as may be necessary or appropriate to update
or correct such schedule(s), <u>provided</u> that, notwithstanding the
foregoing, no such revisions or updates shall be deemed to have amended,
modified, or superseded any such schedules as originally attached hereto,
or to have cured any breach of warranty or representation resulting from
the inaccuracy or incompleteness of any such schedules, unless and until
the Administrative Agent and the Required Lenders shall have accepted in
writing such revisions or updates to any such schedules.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.9&nbsp;&nbsp;&nbsp; <u>Books
and Records; Inspection and Audit Rights</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Each Borrower will, and will cause each other Loan
Party to, keep proper books of record and account in which full, true and
correct entries in all material respects
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<p>are made of all dealings and transactions in relation to its business
and activities. Each Borrower will permit any representatives designated
by any Agent, upon reasonable prior notice (unless an Event of Default
has occurred and is continuing in which event no such notice shall be required),
to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition
with its officers, all on reasonable advance notice to the Lead Borrower
(unless an Event of Default then exists) and at such reasonable times during
normal business hours and as often as reasonably requested.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Each Borrower will, and will cause each other Loan
Party to, from time to time upon the reasonable request and reasonable
prior notice of the Collateral Agent or the Required Lenders through the
Administrative Agent, permit any Agent or professionals (including consultants,
accountants, lawyers and appraisers) retained by the Agents to conduct
appraisals, commercial finance examinations and other evaluations, including,
without limitation, of (i) the Borrowers' practices in the computation
of the Borrowing Base and (ii) the assets included in the Borrowing Base
and related financial information such as, but not limited to, sales, gross
margins, payables, accruals and reserves, and pay the reasonable fees and
expenses of the Agents or such professionals with respect to such evaluations
and appraisals. Without limiting the foregoing, the Agents intend to undertake
a minimum of one appraisal and two commercial finance examinations in any
Fiscal Year (but may undertake such additional appraisals and commercial
finance examinations, at the Loan Parties' expense, as they in their discretion
deem necessary or appropriate).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; The Borrowers shall, at all times, retain independent
certified public accountants who are reasonably satisfactory to the Administrative
Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.10&nbsp;&nbsp;
<u>Fiscal Year</u>. Each Loan Party shall have a fiscal year of a 52 or
53 week period ending on the Saturday nearest to January 31st and shall
notify the Administrative Agent of any change in such fiscal year.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.11&nbsp;&nbsp;
<u>Physical Inventories</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; The Collateral Agent, at the expense of the Loan
Parties, may participate in and/or observe each physical count and/or inventory
of so much of the Collateral as consists of Inventory which is undertaken
on behalf of the Loan Parties so long as such participation does not disrupt
the normal inventory schedule or process.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Loan Parties, at their own expense, shall undertake
physical inventories and cycle counts to be undertaken at the times, using
practices, and in the manner consistent with their practices in effect
on the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Upon the request of the Collateral Agent, the Loan
Parties shall provide the Collateral Agent with a reconciliation of the
results of each such physical inventory
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<p>or cycle count. The Loan Parties shall post the results of each such
physical inventory to the Loan Parties' stock ledger and general ledger,
as applicable.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; The Collateral Agent, in its discretion, if any Event
of Default exists, m
<br>ay cause such additional inventories to be taken as the Collateral
Agent determines (each, at the expense of the Loan Parties). The Collateral
Agent shall use its best efforts to schedule any such inventories so as
to not unreasonably disrupt the operation of the Loan Parties' business.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.12&nbsp;&nbsp;&nbsp; <u>Compliance
with Laws</u>. Each Borrower will, and will cause each other Loan Party
to, comply in all material respects with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.13&nbsp;&nbsp;
<u>Use of Proceeds and Letters of Credit</u> and Acceptances. The proceeds
of Loans made hereunder and Letters of Credit and Acceptances issued hereunder
will be used only (a) for Restricted Payments and Permitted Acquisitions,
(b) to finance the acquisition of working capital assets of the Loan Parties,
including the purchase of inventory and equipment, in each case in the
ordinary course of business, (c) to finance Capital Expenditures of the
Borrowers, and (d) for general corporate purposes, all to the extent permitted
herein. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.14&nbsp;&nbsp;
<u>Additional Subsidiaries</u>.&nbsp; If any additional Material Subsidiary
of any Loan Party is formed or acquired after the Closing Date or if any
Subsidiary becomes a Material Subsidiary, the Lead Borrower will notify
the Agents and the Lenders thereof and the Loan Parties will cause such
Material Subsidiary to become a Borrower or Facility Guarantor hereunder,
as the Administrative Agent may request, and under each applicable Security
Document in the manner provided therein within fifteen (15) days after
such Material Subsidiary is formed or acquired or becomes a Material Subsidiary
and promptly take such actions to create and perfect Liens on such Material
Subsidiary's assets that would otherwise constitute Collateral to secure
the Obligations as any Agent shall reasonably request.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.15&nbsp;&nbsp;
<u>Further Assurances</u>. (a) Each Loan Party will execute any and all
further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements and other documents), that may be required under any Applicable
Law, or which any Agent or the Required Lenders may reasonably request,
to effectuate the transactions contemplated by the Loan Documents or to
grant, preserve, protect or perfect the Liens created or intended to be
created by the Security Documents or the validity or priority of any such
Lien, all at the expense of the Loan Parties. The Loan Parties also agree
to provide to the Agents, from time to time upon request, evidence
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<p>reasonably satisfactory to the Agents as to the perfection and priority
of the Liens created or intended to be created by the Security Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) If any material assets which would otherwise constitute Collateral
are acquired by any Loan Party after the Closing Date (other than assets
constituting Collateral under the applicable Security Agreement that become
subject to the Lien of such Security Agreement upon acquisition thereof),
the Lead Borrower will notify the Agents and the Lenders thereof, and will
cause such assets to be subjected to a Lien securing the Obligations and
will take such actions as shall be necessary or reasonably requested by
any Agent to grant and perfect such Liens, including actions described
in paragraph (a) of this Section, all at the expense of the Loan Parties.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) Upon the request of the Administrative Agent, the Loan Parties shall
cause each of their customs brokers and/or warehouses that have not already
done so to deliver an agreement to the Administrative Agent covering such
matters and in form substantially similar to the agreements with customs
brokers and/or warehouse in effect on the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.16&nbsp;&nbsp;
<u>Proceeds from Surplus Cash Deposits</u>. During the continuance of any
Cash Dominion Event, the Loan Parties organized under the Applicable Law
of Canada (or any province or territory thereof) will not allow more than
$10,000,000 in the aggregate to be on deposit at any time during the continuance
of such Cash Dominion Event in all bank or investment accounts of such
Loan Parties.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>NEGATIVE COVENANTS</u>. Until the Commitments have expired or terminated
and the principal of and interest on each Loan and all fees and other Obligations
payable hereunder and under the other Loan Documents have been paid in
full and all Letters of Credit and Acceptances have expired or terminated
and all L/C Disbursements shall have been reimbursed, each Loan Party covenants
and agrees with the Agents and the Lenders that:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.1&nbsp;&nbsp;
<u>Indebtedness and Other Obligations</u>. . The Borrowers will not, and
will not permit any other Loan Party to, create, incur, assume or permit
to exist any Indebtedness, except, as long as no Event of Default exists
at the time of incurrence of such Indebtedness or would arise therefrom:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Indebtedness created under the Loan Documents;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Indebtedness set forth in <u>Schedule 6.1</u> and
extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Indebtedness of any Loan Party to any other Loan
Party;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Indebtedness of the Loan Parties to finance the acquisition
of any fixed or capital assets, including Capital Lease Obligations and
any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof or result
in an earlier maturity date or decreased weighted average life thereof,
provided that the aggregate principal amount of Indebtedness permitted
by this clause (d) shall not exceed $35,000,000 at any time outstanding
unless, at the time of incurrence of any Indebtedness which would result
in such amount being exceeded, the Pro Forma Conditions shall have been
satisfied;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Indebtedness incurred to finance any Real Estate
now or hereafter owned by any Borrower or incurred in connection with any
sale-leaseback transaction;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; Indebtedness under Hedging Agreements, other than
for speculative purposes, entered into in the ordinary course of business;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; Contingent liabilities under surety bonds or similar
instruments incurred in the ordinary course of business in connection with
the construction or improvement of stores;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; In addition to amounts reflected on <u>Schedule 6.1</u>,
unsecured Indebtedness of a Loan Party to Brown Group Dublin Limited in
an aggregate principal amount at any one time outstanding not in excess
of $50,000,000;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; Subordinated Debt having a maturity after the Maturity
Date, <u>provided that</u> after giving effect to the incurrence thereof,
the Pro Forma Conditions are satisfied;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; Subordinated Debt (other than Indebtedness described
in subsection (i) above or subsection (k) below) having a maturity on or
prior to the Maturity Date <u>provided that</u> (A) after giving effect
to the incurrence thereof, the Pro Forma Conditions are satisfied, (B)
no more than $10,000,000 of such Subordinated Debt is incurred in any Fiscal
Year (excluding any convertible Subordinated Debt which is converted in
the Fiscal Year of its issuance), and (C) no more than $30,000,000 in the
aggregate of such Subordinated Debt is incurred after the Closing Date;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(k)&nbsp;&nbsp;&nbsp; Subordinated Debt (other than Indebtedness described
in subsections (i) or (j) above) having a maturity on or prior to the Maturity
Date <u>provided that</u> (A) after giving effect to the incurrence thereof,
the Pro Forma Conditions are satisfied, (B) constitutes a bridge loan pending
the consummation of a debt or equity issuance, and (C) the principal of
which will not be repaid (other than from the proceeds of such debt or
equity issuance) until all Obligations have been paid in full and all Commitments
terminated;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(l)&nbsp;&nbsp;&nbsp; Indebtedness represented by letters of credit or
acceptances issued in any currency other than Dollars which any Issuing
Bank or Acceptance Lender, as applicable, was unable or unwilling to issue
according to the terms hereof backed by Dollar denominated Letters of Credit
or Acceptances;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(m)&nbsp;&nbsp;&nbsp; Guarantees of Indebtedness otherwise allowed under
this Section 6.1 and Section 6.4 hereof and other obligations of any other
Loan Party which do not constitute Indebtedness,
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(n)&nbsp;&nbsp;&nbsp; Guarantees of lease obligations for retail and other
business locations sold by a Loan Party in connection with any sale permitted
pursuant to Section 6.5 hereof but only to the extent of any such lease
obligation as of the date of sale of such location;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(o)&nbsp;&nbsp;&nbsp; Other unsecured Guarantees of Indebtedness and other
obligations of any Subsidiary which is not a Loan Party, <u>provided</u>
that the aggregate amount of all such Guaranties pursuant to this clause
(o) shall not exceed $10,000,000;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(p)&nbsp;&nbsp;&nbsp; In addition to Indebtedness permitted under subsection
(h) above, Indebtedness (i) owing by a Loan Party to any other Subsidiary
of the Lead Borrower which is not a Loan Party, subject to the Dollar limitations
set forth in clause (r) hereof, and (ii) Indebtedness of a Subsidiary of
the Lead Borrower which is not a Loan Party to another such Subsidiary
which is not a Loan Party;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(q)&nbsp;&nbsp;&nbsp; Indebtedness assumed by a Loan Party or a Subsidiary
of a Loan Party (or Indebtedness secured by a Lien in effect prior to any
such acquisition on property acquired in connection with such acquisition,
which property would not be of a type included in the Borrowing Base) in
connection with a Permitted Acquisition, provided that the aggregate principal
amount of Indebtedness permitted by this clause (q) shall not exceed $35,000,000
at any time outstanding unless, at the time of incurrence of any Indebtedness
which would result in such amount being exceeded, the Pro Forma Conditions
shall have been satisfied;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(r)&nbsp;&nbsp;&nbsp; other unsecured Indebtedness in an aggregate principal
amount not to exceed $20,000,000 at any time outstanding, provided that
the terms of such Indebtedness are reasonably acceptable to the Administrative
Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.2&nbsp;&nbsp;
<u>Liens</u>. The Borrowers will not, and will not permit any other Loan
Party to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income
or revenues (including Accounts) or rights in respect of any thereof, except
as long as no Event of Default exists at the time of creation or incurrence
of such Lien or would arise therefrom:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Liens created under the Loan Documents;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Permitted Encumbrances;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; any Lien on any property or asset of any Borrower
or other Loan Party set forth in <u>Schedule 6.2</u>, <u>provided</u> that
(i) such Lien shall not apply to any other property or asset of such Person
and (ii) such Lien shall secure only those obligations that it secures
as of the Closing Date, and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Liens on fixed or capital assets acquired by any
Loan Party, <u>provided</u> that (i) such Liens secure Indebtedness permitted
by Section 6.1(d), (ii) the Indebtedness secured thereby does not exceed
100% of the cost of acquiring such fixed or capital assets and (iii) such
Liens shall not apply to any other property or assets of the Borrowers
or other Loan Party;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Liens to secure Indebtedness permitted by Section
6.1(e) <u>provided that</u> such Liens shall not apply to any property
or assets of the Loan Parties other than the Real Estate so financed or
which is the subject of a sale-leaseback transaction, and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; Liens to secure Indebtedness permitted by Section
6.1(q), <u>provided</u> that (i) such Lien shall not apply to any other
property or asset of such Person, (ii) such Lien shall not have been incurred
in contemplation of, or in connection with, such Permitted Acquisition,
(iii) shall secure only those obligations that it secures as of the date
of the Permitted Acquisition, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof,
and (iv) shall not apply to any Collateral.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.3&nbsp;&nbsp;
<u>Fundamental Changes</u>. The Borrowers shall not, and shall not permit
any other Loan Party to, liquidate, merge, amalgamate, or consolidate into
or with any other Person or enter into or undertake any plan or agreement
of liquidation, merger, amalgamation, or consolidation with any other Person,
provided that (i) a Loan Party may merge or amalgamate with another Person
in connection with a Permitted Acquisition if such Loan Party is the surviving
company, (ii) any wholly-owned Subsidiary of any Borrower may merge, amalgamate,
or consolidate into or with such Borrower or any other wholly-owned Subsidiary
of such Borrower if no Default or Event of Default has occurred and is
continuing or would result from such merger and if such Borrower, a Loan
Party (if such Loan Party is a party to such merger) or such Subsidiary
is the surviving company, (iii) a Subsidiary of any Borrower may merge
or amalgamate into another entity in connection with a Permitted Acquisition
if, upon consummation of such merger or amalgamation, the surviving entity
shall be a direct or indirect wholly-owned Subsidiary of such Borrower
and becomes a Borrower or Facility Guarantor and a party to the Security
Documents, (iv) any Domestic Subsidiary may merge into any other Domestic
Subsidiary, <u>provided that</u> if a Loan Party is a party to such merger,
either such Loan Party shall be the surviving company or the surviving
company shall become a Loan Party, and (v) the Lead Borrower may merge
with a newly formed shell corporation, the sole purpose and
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<p>effect of which merger is to reincorporate the Lead Borrower in a state
of the United States of America other than the State of New York and where
the surviving corporation in such merger has complied with its obligations
under Section 5.14 hereof simultaneously with such merger.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Borrowers shall not, and shall not permit any
other Loan Party to, engage to any material extent in any business other
than businesses of the type conducted by the Loan Parties on the date of
execution of this Agreement and businesses reasonably related thereto,
except that any Loan Party may withdraw from any business activity which
such Loan Party reasonably deems unprofitable or unsound, <u>provided</u>
that promptly after such withdrawal, the Lead Borrower shall provide the
Administrative Agent with written notice thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.4&nbsp;&nbsp;
<u>Investments, Loans, Advances, Guarantees and Acquisitions</u>. The Borrowers
shall not, and shall not permit any other Loan Party to, purchase, hold
or acquire (including pursuant to any merger or amalgamation with any Person
that was not a wholly owned Subsidiary prior to such merger or amalgamation)
any Capital Stock, evidences of indebtedness or other securities (including
any option, warrant or other right to acquire any of the foregoing) of,
make or permit to exist any loans or advances to, guarantee any Indebtedness
of, or make or permit to exist any Investment or any other interest in,
any other Person, or purchase or otherwise acquire (in one transaction
or a series of transactions) any assets of any other Person constituting
a business unit (each of the foregoing, an "Investment"), except for:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Permitted Acquisitions;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Permitted Investments;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Investments existing on the Closing Date, and set
forth on <u>Schedule 6.4</u>, to the extent such investments would not
be permitted under any other clause of this Section;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Investments received in connection with the bankruptcy
or reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of business;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; nvestments in Hedging Agreements other than for speculative
purposes, entered into in the ordinary course of business;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; Permitted Stock Repurchases, as long as no Event
of Default exists at the time of making of such Permitted Stock Repurchase
or would arise therefrom;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; Investments by a Loan Party in a Subsidiary which
is not a Loan Party not in excess of $5,000,000 after the Closing Date;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; Investments by a Loan Party Borrower in another Loan
Party;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; Commissions, loans or advances to employees for the
purpose of travel, entertainment or relocation in the ordinary course of
business and consistent with past practices, provided that the aggregate
amount thereof outstanding at any one time shall not, if not repaid, be
reasonably expected to have a Material Adverse Effect;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; Additional Investments by the Loan Parties in Shoes.com
(i) not in excess of $8,000,000 in the aggregate from the Closing Date
through January 28, 2006, (ii) amounts in excess of $8,000,000 in the aggregate
from the Closing Date through January 28, 2006 provided that the Pro Forma
Conditions are satisfied, and (iii) thereafter if the Pro Forma Conditions
are satisfied; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(k)&nbsp;&nbsp;&nbsp; other Investments in an aggregate amount not to exceed
$5,000,000 after the Closing Date.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.5&nbsp;&nbsp;
<u>Asset Sales</u>. The Borrowers will not, and will not permit any other
Loan Party to, sell, transfer, lease or otherwise dispose of any asset,
including any Capital Stock, nor will the Loan Parties issue any additional
shares of its Capital Stock or other ownership interests in such Loan Party,
or issue any shares of Disqualified Stock, except as long as no Event of
Default would arise therefrom:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; (i) sales of Inventory, or (ii) used, obsolete or
surplus property, or (iii) Permitted Investments, in each case in the ordinary
course of business;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; sales, transfers and dispositions among the Loan
Parties;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; the sale of the Real Estate which comprises the Loan
Parties' headquarters and other Real Estate located adjacent thereto including
the Real Estate located at 8300 Maryland Avenue, St. Louis, Missouri;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; the sale and leaseback of any other of the Loan Parties'
Real Estate or other fixed assets;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; the Designated Dispositions;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; other sales, transfers, or dispositions of assets
not in the ordinary course of business (including retail store locations)
<i>provided
that</i> (x) no Default or Event of Default then exists or would arise
therefrom and (y) if the fair market value of all such other sales, transfers
and dispositions exceeds $35,000,000 for the Loan Parties in the aggregate
during any Fiscal Year (net of the related sales costs, if any, of such
other property), all of the proceeds of such sale, transfer or disposition
(net of the related sales costs, if any, of such other property) in excess
of $35,000,000 shall be paid to the Administrative Agent (whether or not
a Cash Dominion Event has occurred and is then continuing) for application
to the Obligations; and
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; the issuance of additional shares of Capital Stock
or other ownership interests in a Loan Party (other than Disqualified Stock)
as long as no Change in Control results therefrom;
<p><u>provided</u> that all sales, transfers, leases and other dispositions
permitted hereby (other than sales, transfers and other disposition permitted
under clauses (a)(ii), (b) and (g)) shall be made at arm's length and for
fair value and solely for cash consideration; and <u>further provided that</u>
the authority granted hereunder may be terminated in whole or in part by
the Agents upon the occurrence and during the continuance of any Event
of Default.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.6&nbsp;&nbsp;&nbsp; <u>Restrictive
Agreements</u>. The Borrowers will not, and will not permit any other Loan
Party to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of any Loan Party to create, incur or
permit to exist any Lien upon any of its property or assets (other than
on its fixed assets, including Real Estate and equipment), or (b) the ability
of any Loan Party to pay dividends or other distributions with respect
to any shares of its Capital Stock or to make or repay loans or advances
to any Loan Party or to guarantee Indebtedness of any Loan Party,
<u>provided
that</u> (i) the foregoing shall not apply to restrictions and conditions
imposed by Applicable Law or by the Loan Documents, and (ii) the foregoing
shall not apply to restrictions and conditions existing on the Closing
Date identified on Schedule 6.6 hereto (but shall apply to any extension
or renewal of, or any amendment or modification expanding the scope of,
any such restriction or condition); (iii) the foregoing shall not apply
to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided that such restrictions
and conditions apply only to the Subsidiary that is to be sold and such
sale is permitted hereunder, (iv) clause (a) of this Section shall not
apply to restrictions of conditions imposed by any agreement relating to
secured Indebtedness permitted hereunder if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, and (v)
clause (a) of this Section shall not apply to customary provisions in leases
or licenses or other agreements, including, without limitation, those relating
to franchises, patents, copyrights, trademarks, tradenames, service marks,
licenses and permits, and other intellectual property restricting the assignment
thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.7&nbsp;&nbsp;
<u>Restricted Payments; Certain Payments of Indebtedness</u>.&nbsp; (a)
The Borrowers will not, and will not permit any other Loan Party to, declare
or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except as long as no Default or Event of Default exists or would
arise therefrom (i) the Lead Borrower may declare and pay dividends quarterly
with respect to its Capital Stock (A) in an amount not to exceed $15,000,000
in any Fiscal Year, (B) in an amount in excess of $15,000,000 but less
than $35,000,000 in any Fiscal Year if the Pro Forma Conditions are satisfied,
and (C) in an amount in excess of $35,000,000 in any Fiscal Year if the
Pro Forma Conditions are satisfied and the Lead Borrower has provided the
Administrative Agent with a solvency opinion from an independent Person
reasonably acceptable to the Administrative Agent, the scope and conclusions
of which are reasonable
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<p>satisfactory to the Administrative Agent, (ii) the Lead Borrower may
declare dividends payable solely in additional shares of its common stock,
(iii) the Subsidiaries of the Lead Borrower may declare and pay cash dividends
with respect to their Capital Stock, and (iv) the Lead Borrower may make
Permitted Stock Repurchases.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) The Borrowers will not at any time, and will not permit any other Loan
Party to make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash securities or other property) of
or in respect of principal of or interest on any Indebtedness, or any payment
or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any
Indebtedness, except:
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; payment of mandatory interest and principal payments
as and when due in respect of any Indebtedness permitted under Section
6.1;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
except as provided in clause (iii) below, voluntary prepayments of Indebtedness
other than Subordinated Debt, as long as the Pro Forma Conditions are satisfied;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;
payment of Subordinated Indebtedness incurred, and to the extent permitted,
under Section 6.1(k); and
<br>&nbsp;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp;&nbsp;&nbsp;
refinancings of Indebtedness described in clauses (i), (ii), and (iii),
above, to the extent permitted by Section 6.1.</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.8&nbsp;&nbsp;
<u>Transactions with Affiliates</u>. Except as set forth on <u>Schedule
3.16</u> and Restricted Payments and other transactions expressly permitted
under the terms of this Agreement, the Loan Parties will not at any time
sell, lease or otherwise transfer any property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage
in any other transactions with, any of its Affiliates, officers or directors,
except (a) transactions in the ordinary course of business that are at
prices and on terms and conditions not less favorable to the Loan Parties
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Loan Parties not involving any of
its Affiliates, officers or directors which would not otherwise violate
the provisions of the Loan Documents, and (c) advances for commissions,
travel and other similar purposes in the ordinary course of business to
directors, officers and employees.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.9&nbsp;&nbsp;
<u>Additional Subsidiaries</u>. The Borrowers will not, and will not permit
any other Loan Party to, create any additional Subsidiary unless no Default
or Event of Default would arise therefrom and the requirements of Section
5.14, to the extent applicable, are satisfied.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.10&nbsp;&nbsp;
<u>Amendment of Material Documents</u>. The Borrowers will not, and will
not permit any other Loan Party to, amend, modify or waive any of its rights
under (a) its Charter Documents, or (b) any other Material Indebtedness
or material agreements, in each case to the extent that such amendment,
modification or waiver could reasonably likely to result in a Material
Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.11&nbsp;&nbsp;
<u>Environmental Laws</u>.&nbsp; The Loan Parties shall not (a) fail to
comply with any Environmental Law or to obtain, maintain or comply with
any permit, license or other approval required under any Environmental
Law, or (b) become subject to any Environmental Liability, in each case
which is reasonably likely to have a Material Adverse Effect.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.12&nbsp;&nbsp;
<u>Fiscal Year</u>. The Loan Parties shall not change their Fiscal Year
without the prior written consent of the Administrative Agent, which consent
shall not be unreasonably withheld.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.13&nbsp;&nbsp;
<u>Maximum Capital Expenditures</u>. If the Fixed Charge Coverage Ratio
during any Fiscal Year is less than 1.0: 1.0, the Loan Parties shall not
make any Capital Expenditures during such Fiscal Year in excess of 115%
of the amounts reflected in the final budget for such Fiscal Year delivered
to the Administrative Agent pursuant to Section 5.1(e) hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.14&nbsp;&nbsp;
<u>Minimum Fixed Charge Coverage Ratio</u>. If Excess Availability is less
than $25,000,000 at any time, the Loan Parties shall maintain a Fixed Charge
Coverage Ratio, calculated on a trailing four Fiscal Quarters basis in
excess of 1.0: 1.0. Such Fixed Charge Coverage Ratio shall be first tested
as of the Fiscal Quarter ending immediately prior to the date that Excess
Availability is first less than $25,000,000 and shall continue to be tested
until Excess Availability has exceeded $25,000,000 on each day for two
consecutive Fiscal Quarters.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.&nbsp;&nbsp;
<u>EVENTS OF DEFAULT</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.1&nbsp;&nbsp;
<u>Events of Default</u>. If any of the following events ("Events of Default")
shall occur:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Any Loan Party shall fail to pay any principal or
interest with respect to any Loan or any reimbursement obligation in respect
of any L/C Disbursement when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof
or otherwise;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Any Loan Party shall fail to pay any fees or other
amounts due under this Agreement or any other Loan Document (other than
an amount referred to in clause (a) of this Section), within three (3)
Business Days of the date when same shall become due and payable;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; any representation or warranty made or deemed made
by or on behalf of any Loan Party in or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, or in any
report, certificate, financial statement or other document furnished pursuant
to or in connection with any Loan Document or any amendment or
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<p>modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; the Loan Parties shall fail to observe or perform
any covenant, condition or agreement contained in Sections 2.23, 5.1(a),
5.1(b), 5.1(d), 5.1(e), 5.1(f), 5.2, 5.4, 5.7, 5.9, 5.13, 5.14 or in Section
6;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b), (c), or (d) of this Section),
and such failure shall continue unremedied for a period of 15 days after
notice thereof from the Administrative Agent to the Lead Borrower;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; any Borrower shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness when and as the same shall become due and payable (after giving
effect to the expiration of any grace or cure period set forth therein);
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; any Loan Party shall fail to perform any material
covenant or condition contained in any material contract or agreement to
which it is party as and when such performance is required (after giving
effect to the expiration of any grace or cure period set forth therein);
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;&nbsp; any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any such Material Indebtedness or
any trustee or agent on its or their behalf to cause any such Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of any Loan Party or its debts or which seeks
to stay or has the effect of staying any creditor, or of a substantial
part of its assets, under any federal, state or provincial bankruptcy,
insolvency, receivership, liquidation, winding up, corporate or similar
law now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator, administrator, monitor, or similar
official for any Loan Party or for a substantial part of its assets, and,
in any such case, either (x) such proceeding or petition shall continue
undismissed for 30 days or an order or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect for
60 days, or (y) a Material Adverse Effect shall have occurred;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;&nbsp; any Loan Party shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any federal, state or provincial bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to
the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (i) of this Section, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator, administrator, monitor, or similar official
for any Loan Party or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(k)&nbsp;&nbsp;&nbsp; any Loan Party shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(l)&nbsp;&nbsp;&nbsp; one or more uninsured judgments for the payment of
money in an aggregate amount in excess of $5,000,000 shall be rendered
against any Loan Party or any combination thereof and the same shall remain
undischarged for a period of thirty (30) consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any material assets
of any Loan Party to enforce any such judgment;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(m)&nbsp;&nbsp;&nbsp; (i) any challenge by or on behalf of any Loan Party
or other Person to the validity of any Loan Document or the applicability
or enforceability of any Loan Document strictly in accordance with the
subject Loan Document's terms or which seeks to void, avoid, limit, or
otherwise adversely affect any security interest created by or in any Loan
Document or any payment made pursuant thereto;
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) any Lien purported
to be created under any Security Document shall cease to be, or shall be
asserted by any Loan Party or other Person not to be, a valid and perfected
Lien on any Collateral, with the priority required by the applicable Security
Document;</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(n)&nbsp;&nbsp;&nbsp; a Change in Control shall occur;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(o)&nbsp;&nbsp;&nbsp; an ERISA Event or Termination Event shall have occurred
that, in the opinion of the Required Lenders, when taken together with
all other ERISA Events or Termination Events that have occurred, could
reasonably be expected to result in liability of the Borrowers in an aggregate
amount exceeding $5,000,000;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(p)&nbsp;&nbsp;&nbsp; the occurrence of any uninsured loss (exclusive of
any deductible retained by the Borrowers under its insurance policies)
to any material portion of the Collateral;
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(q)&nbsp;&nbsp;&nbsp; the indictment of, or institution of any legal process
or proceeding against, any Loan Party, under any federal, state, provincial,
municipal, and other civil or criminal statute, rule, regulation, order,
or other requirement having the force of law where the relief, penalties,
or remedies sought or available include the forfeiture of any material
portion of the Collateral;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(r)&nbsp;&nbsp;&nbsp; there is filed against any Loan Party any action,
suit, or proceeding under any federal, state, or provincial racketeering
statute (including the Racketeer Influenced and Corrupt Organization Act
of 1970), which action, suit, or proceeding (i) is not dismissed within
one hundred twenty (120) days and (ii) could reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(s)&nbsp;&nbsp;&nbsp; the imposition of any stay or other order, the effect
of which could reasonably be to restrain in any material way the conduct
by the Loan Parties, taken as a whole, of their business in the ordinary
course; or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(t)&nbsp;&nbsp;&nbsp; except as otherwise permitted hereunder, the determination
by any Loan Party, whether by vote of such Person's board of directors
or otherwise to: suspend the operation of such Person's business in the
ordinary course, liquidate all or a material portion of such Person's assets
or store locations, or employ an agent or other third party to conduct
any so-called store closing, store liquidation or "Going-Out-Of-Business"
sales.
<p>then, and in every such event (other than an event with respect to each
Loan Party described in clause (h) or (i) of this Section), and at any
time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice
to the Lead Borrower, take any of the following actions, at the same or
different times: (i) reduce the Total Commitments, or the advance rates
against Eligible Accounts and/or Eligible Inventory used in computing the
Borrowing Base, or reduce one or more of the other elements used in computing
the Borrowing Base or increase any Reserves thereunder; (ii) restrict the
amount of or refuse to make Revolving Loans; (iii) restrict or refuse to
provide Letters of Credit or Acceptances, (iv) terminate the Commitments,
and thereupon the Commitments shall terminate immediately, and (v) declare
the Loans and other Obligations then outstanding to be due and payable,
and thereupon the principal of the Loans and Obligations so declared to
be due and payable, together with accrued interest thereon and all fees
and other obligations of the Borrowers accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrowers; and
(vi) require the Borrowers to furnish cash collateral in an amount equal
to 105% of the Letter of Credit Outstandings, (to be applied in accordance
with the provisions of Section 2.7(k) hereof) and in case of any event
with respect to any Borrower described in clause (h) or (i) of this Section,
the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Loan
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<p>Parties accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Loan Parties.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.2&nbsp;&nbsp;
<u>Remedies on Default</u>. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the maturity
of the Loans and other Obligations shall have been accelerated pursuant
hereto, the Administrative Agent may, and at the direction of the Required
Lenders shall, proceed to protect and enforce its rights and remedies under
this Agreement or any of the other Loan Documents by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance
of any covenant or agreement contained in this Agreement and the other
Loan Documents or any instrument pursuant to which the Obligations are
evidenced, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Agents or the Lenders. No remedy herein is intended
to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute or any other
provision of law.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.3&nbsp;&nbsp;
<u>Application of Proceeds</u>. After the occurrence of an Event of Default
and acceleration of the Obligations, all proceeds realized from any Borrower
or on account of any Collateral shall be applied in the manner set forth
in Section 6.2 of the Borrower Security Agreement. All amounts required
to be applied to Loans hereunder (other than Swingline Loans) shall be
applied ratably in accordance with each Lender's Commitment Percentage.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.&nbsp;&nbsp;
<u>THE AGENTS</u>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.1&nbsp;&nbsp;
<u>Administration by Administrative Agent</u>. Each Lender, the Collateral
Agent, the Issuing Banks, the Acceptance Lenders and each Secured Party
hereby irrevocably designate Bank of America, N.A. as Administrative Agent
under this Agreement and the other Loan Documents. The general administration
of the Loan Documents shall be by the Administrative Agent. The Lenders,
the Collateral Agent, the Issuing Banks, the Acceptance Lenders and the
Secured Parties each hereby irrevocably authorizes the Administrative Agent
(i) to enter into the Loan Documents to which it is a party and (ii) at
its discretion, to take or refrain from taking such actions as agent on
its behalf and to exercise or refrain from exercising such powers under
the Loan Documents as are delegated by the terms hereof or thereof, as
appropriate, together with all powers reasonably incidental thereto. The
Administrative Agent shall have no duties or responsibilities except as
set forth in this Agreement and the other Loan Documents, nor shall it
have any fiduciary relationship with any Lender, and no implied covenants,
responsibilities, duties, obligations, or liabilities shall be read into
the Loan Documents or otherwise exist against the Administrative Agent.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.2&nbsp;&nbsp;
<u>Appointment and Duties of Collateral Agent</u>. Each Lender, the Administrative
Agent, the Issuing Banks, the Acceptance Lenders and each Secured Party
hereby irrevocably (i)
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<p>designate Bank of America, N.A. as Collateral Agent under this Agreement
and the other Loan Documents, (ii) authorize the Collateral Agent to enter
into the Security Documents and the other Loan Documents to which it is
a party and to perform its duties and obligations thereunder, together
with all powers reasonably incidental thereto, and (iii) agree and consent
to all of the provisions of the Security Documents. All Collateral shall
be held or administered by the Collateral Agent (or its duly-appointed
agent) for its benefit and for the ratable benefit of the other Secured
Parties. Any proceeds received by the Collateral Agent from the foreclosure,
sale, lease or other disposition of any of the Collateral and any other
proceeds received pursuant to the terms of the Security Documents or the
other Loan Documents shall be paid over to the Administrative Agent for
application as provided in Sections 2.20, 2.24, or 7.3, as applicable.
The Collateral Agent shall have no duties or responsibilities except as
set forth in this Agreement and the other Loan Documents, nor shall it
have any fiduciary relationship with any Lender, and no implied covenants,
responsibilities, duties, obligations, or liabilities shall be read into
the Loan Documents or otherwise exist against the Collateral Agent.
<p>Without limiting the generality of the foregoing, for the purposes of
creating a <i>solidarite? active</i> in accordance with Article 1541 of
the Civil Code of Quebec, between each Secured Party, taken individually,
and the Collateral Agent, each Loan Party and each Secured Party (on its
own behalf) acknowledges and agrees with the Collateral Agent that such
Secured Party and the Collateral Agent are conferred the legal status of
solidary creditors of each Loan Party in respect of all Obligations, present
and future, owed by each Loan Party to each Secured Party and the Agents
hereunder and under the other Loan Documents (collectively, the "<u>Solidary
Claim</u>"). Accordingly, but subject (for the avoidance of doubt) to Article
1542 of the Civil Code of Quebec, each Loan Party is irrevocably bound
to the Collateral Agent and each other Secured Party in respect of the
entire Solidary Claim of the Collateral Agent and such Secured Party. As
a result of the foregoing, the parties hereto acknowledge that the Collateral
Agent and each other Secured Party shall at all times have a valid and
effective right of action for the entire Solidary Claim of the Collateral
Agent and such other Secured Party and the right to give full acquittance
for it and that, accordingly, without limiting the generality of the foregoing,
the Collateral Agent, as solidary creditor for itself and each other Secured
Party, shall, at all times have a valid and effective right of action in
respect of all Obligations, present and future, owed by each Loan Party
to the Collateral Agent and to the other Secured Parties or any of them
under this Agreement and the other Loan Documents and the right to give
a full acquittance for the same. The parties further agree and acknowledge
that the Collateral Agent's Liens on the Collateral shall be granted to
the Collateral Agent, for its own benefit and for the benefit of the other
Secured Parties and as solidary creditor as hereinabove set frrth.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.3&nbsp;&nbsp;
<u>Sharing of Excess Payments</u>. Each of the Lenders, the Agents, the
Issuing Banks and Acceptance Lenders agrees that if it shall, through the
exercise of a right of banker's lien, setoff or counterclaim against the
Borrowers, including, but not limited to, a secured claim under Section
506 of the Bankruptcy Code or other security or interest arising from,
or in lieu of, such secured claim and received by such Lender, Agent, Issuing
Bank or Acceptance Lender under
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<p>any applicable bankruptcy, insolvency or other similar law, or otherwise,
obtain payment in respect of the Obligations owed it (an "<u>excess payment</u>")
as a result of which such Lender, Agent, Issuing Bank or Acceptance Lender
has received payment of any Loans or other Obligations outstanding to it
in excess of the amount that it would have received if all payments at
any time applied to the Loans and other Obligations had been applied in
the order of priority set forth in Section 7.3, then such Lender, Agent,
Issuing Bank or Acceptance Lender shall promptly purchase at par (and shall
be deemed to have thereupon purchased) from the other Lenders, such Agent,
the Issuing Banks and Acceptance Lenders, as applicable, a participation
in the Loans and Obligations outstanding to such other Persons, in an amount
determined by the Administrative Agent in good faith as the amount necessary
to ensure that the economic benefit of such excess payment is reallocated
in such manner as to cause such excess payment and all other payments at
any time applied to the Loans and other Obligations to be effectively applied
in the order of priority set forth in Section 7.3 <u>pro</u> <u>rata</u>
in proportion to its Commitment Percentage; <u>provided</u>, that if any
such excess payment is thereafter recovered or otherwise set aside such
purchase of participations shall be correspondingly rescinded (without
interest). The Borrowers expressly consent to the foregoing arrangements
and agree that any Lender, any Agent, Issuing Bank, or Acceptance Lender
holding (or deemed to be holding) a participation in any Loan or other
Obligation may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by such Borrower
to such Lender, Agent, Issuing Bank or Acceptance Lender as fully as if
such Lender, Agent, Issuing Bank, or Acceptance Lender held a Note and
was the original obligee thereon, in the amount of such participation.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.4&nbsp;&nbsp;
<u>Agreement of Applicable Lenders</u>. Upon any occasion requiring or
permitting an approval, consent, waiver, election or other action on the
part of the Applicable Lenders, action shall be taken by the Agents for
and on behalf or for the benefit of all Lenders upon the direction of the
Applicable Lenders, and any such action shall be binding on all Lenders.
No amendment, modification, consent, or waiver shall be effective except
in accordance with the provisions of Section 9.2.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.5&nbsp;&nbsp;
<u>Liability of Agents</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Each of the Agents, when acting on behalf of the
Lenders, the Issuing Banks and Acceptance Lenders, may execute any of its
respective duties under this Agreement by or through any of its respective
officers, agents and employees, and none of the Agents nor their respective
directors, officers, agents or employees shall be liable to the Lenders,
Issuing Banks or Acceptance Lenders or any of them for any action taken
or omitted to be taken in good faith, or be responsible to the Lenders,
Issuing Banks or Acceptance Lenders or to any of them for the consequences
of any oversight or error of judgment, or for any loss, except to the extent
of any liability imposed by law by reason of such Agent's own gross negligence
or willful misconduct. The Agents and their respective directors, officers,
agents and employees shall in no event be liable to the Lenders, Issuing
Banks or Acceptance Lenders or to any of them for any
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<p>action taken or omitted to be taken by them pursuant to instructions
received by them from the Applicable Lenders or in reliance upon the advice
of counsel selected by it. Without limiting the foregoing, none of the
Agents, nor any of their respective directors, officers, employees, or
agents (A) shall be responsible to any Lender, Issuing Bank or Acceptance
Lender for the due execution, validity, genuineness, effectiveness, sufficiency,
or enforceability of, or for any recital, statement, warranty or representation
in, this Agreement, any Loan Document or any related agreement, document
or order, or (B) shall be required to ascertain or to make any inquiry
concerning the performance or observance by any Loan Party of any of the
terms, conditions, covenants, or agreements of this Agreement or any of
the Loan Documents, or (C) shall be responsible to any Lender, Issuing
Bank or Acceptance Lender for the state or condition of any properties
of the Loan Parties or any other obligor hereunder constituting Collateral
for the Obligations of the Loan Parties hereunder or under any of the other
Loan Documents, or any information contained in the books or records of
the Loan Parties; or (D) shall be responsible to any Lender, Issuing Bank
or Acceptance Lender for the validity, enforceability, collectibility,
effectiveness or genuineness of this Agreement or any other Loan Document
or any other certificate, document or instrument furnished in connection
therewith; or (E) shall be responsible to any Lender, Issuing Bank or Acceptance
Lender for the validity, priority or perfection of any Lien securing or
purporting to secure the Obligations or the value or sufficiency of any
of the Collateral.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Agents may execute any of their duties under
this Agreement or any other Loan Document by or through their agents or
attorneys-in-fact, and shall be entitled to the advice of counsel concerning
all matters pertaining to their rights and duties hereunder or under the
Loan Documents. The Agents shall not be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by them with
reasonable care.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; None of the Agents nor any of their respective directors,
officers, employees, or agents shall have any responsibility to the Borrowers
on account of the failure or delay in performance or breach by any Lender
(other than by any Agent in its capacity as a Lender), Issuing Bank or
Acceptance Lender of any of their respective obligations under this Agreement
or any of the other Loan Documents or in connection herewith or therewith.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; The Agents shall be entitled to rely, and shall be
fully protected in relying, upon any notice, consent, certificate, affidavit,
or other document or writing believed by them to be genuine and correct
and to have been signed, sent or made by the proper person or persons,
and upon the advice and statements of legal counsel (including, without,
limitation, counsel to the Loan Parties), independent accountants and other
experts selected by the Agents. The Agents shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless they shall first receive such advice or concurrence
of the Applicable Lenders as they deem appropriate or they shall first
be indemnified to their satisfaction by the Lenders against any and all
liability and expense which may be incurred by them by reason of the taking
or failing to take any such action.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.6&nbsp;&nbsp;
<u>Notice of Default</u>. The Agents shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the
Agents have actual knowledge of the same or has received notice from a
Lender or the Lead Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Agents obtain such actual knowledge or
receives such a notice, the Agents shall give prompt notice thereof to
each of the Lenders. The Agents shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Applicable Lenders. Unless and until the Agents shall have received such
direction, the Agents may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to any such Default or
Event of Default as they shall deem advisable in the best interest of the
Lenders. In no event shall the Agents be required to comply with any such
directions to the extent that the Agents believe that the Agents' compliance
with such directions would be unlawful.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.7&nbsp;&nbsp;
<u>Lenders' Credit Decisions</u>. Each Lender acknowledges that it has,
independently and without reliance upon the Agents or any other Lender,
and based on the financial statements prepared by the Loan Parties and
such other documents and information as it has deemed appropriate, made
its own credit analysis and investigation into the business, assets, operations,
property, and financial and other condition of the Loan Parties and has
made its own decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon the Agents or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in determining whether or not conditions precedent to closing
any Loan hereunder have been satisfied and in taking or not taking any
action under this Agreement and the other Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.8&nbsp;&nbsp;
<u>Reimbursement and Indemnification</u>. Each Lender agrees (i) to reimburse
(x) each Agent for such Lender's Commitment Percentage of any expenses
and fees incurred by such Agent for the benefit of the Lenders, Issuing
Banks or Acceptance Lenders under this Agreement and any of the other Loan
Documents, including, without limitation, counsel fees and compensation
of agents and employees paid for services rendered on behalf of the Lenders,
Issuing Banks or Acceptance Lenders, and any other expense incurred in
connection with the operations or enforcement thereof not reimbursed by
the Loan Parties and (y) each Agent for such Lender's Commitment Percentage
of any expenses of such Agent incurred for the benefit of the Lenders,
Issuing Banks or Acceptance Lenders that the Loan Parties have agreed to
reimburse pursuant to Section 9.3 of this Agreement or pursuant to any
other Loan Document and has failed to so reimburse and (ii) to indemnify
and hold harmless the Agents and any of their directors, officers, employees,
or agents, on demand, in the amount of such Lender's Commitment Percentage,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against it or any of them in any way relating to or arising
out of this Agreement or any of the Loan Documents or any action taken
or omitted by it or any of them under this Agreement or any of the other
Loan Documents
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<p>to the extent not reimbursed by the Borrowers (except such as shall
result from their respective gross negligence or willful misconduct). The
provisions of this Section 8.8 shall survive the repayment of the Obligations
and the termination of the Commitments.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.9&nbsp;&nbsp;
<u>Rights of Agents</u>. It is understood and agreed that the Agents shall
have the same rights and powers hereunder (including the right to give
such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with the
Loan Parties, as though it were not the Administrative Agent or the Collateral
Agent, respectively, of the Lenders under this Agreement. Without limiting
the foregoing, the Agents and their Affiliates may accept deposits from,
lend money to, and generally engage in any kind of commercial or investment
banking, trust, advisory or other business with the Loan Parties and their
Subsidiaries and Affiliates as if they were not the Agents hereunder.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.10&nbsp;&nbsp;
<u>Notice of Transfer</u>. The Agents may deem and treat a Lender party
to this Agreement as the owner of such Lender's portion of the Obligations
for all purposes, unless and until, and except to the extent, an Assignment
and Acceptance shall have become effective as set forth in Section 9.5(b).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.11&nbsp;&nbsp;
<u>Successor Agent</u>. Any Agent may resign at any time by giving five
(5) Business Days' written notice thereof to the Lenders, the Issuing Banks,
the Acceptance Lenders, the other Agents and the Lead Borrower. Upon any
such resignation of any Agent, the Required Lenders shall have the right
to appoint a successor Agent, which so long as there is no Default or Event
of Default shall be reasonably satisfactory to the Lead Borrower (whose
consent shall not be unreasonably withheld or delayed). If no successor
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation, the retiring Agent may, on behalf of the Lenders,
the other Agents, the Issuing Banks and the Acceptance Lenders, appoint
a successor Agent which shall be (i) a commercial bank (or affiliate thereof)
organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of a least $100,000,000,
(ii) or a Person capable of complying with all of the duties of such Agent
(and the Issuing Banks), hereunder (in the opinion of the retiring Agent
and as certified to the Lenders in writing by such successor Agent) which,
in the case of (i) and (ii) above, so long as there is no Default or Event
of Default shall be reasonably satisfactory to the Lead Borrower (whose
consent shall not be unreasonably withheld or delayed). Upon the acceptance
of any appointment as Agent by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall
be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation hereunder as such Agent, the provisions
of this Section 8 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was such Agent under this Agreement.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.12&nbsp;&nbsp;&nbsp; <u>Reports
and Financial Statements</u>. Promptly after receipt thereof from the Borrowers,
the Administrative Agent shall remit to each Lender and the Collateral
Agent copies of all financial statements required to be delivered by the
Borrowers hereunder and all commercial finance examinations and appraisals
of the Collateral received by the Administrative Agent (collectively, the
"Reports") . Each Lender
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; expressly agrees and acknowledges that the Administrative
Agent makes no representation or warranty as to the accuracy of the Reports,
and (ii) shall not be liable for any information contained in any Report;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp; expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that the Administrative Agent
or any other Person performing any audit or examination will inspect only
specific information regarding the Loan Parties and will rely significantly
upon the Loan Parties' books and records, as well as on representations
of the Loan Parties' personnel;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp; subject to the provisions of Section 9.16, if applicable,
agrees to keep all Reports confidential and strictly for its internal use,
and not to distribute except to its Participants, or use any Report in
any other manner; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;&nbsp; without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agents and
any such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw
from any Report in connection with any Credit Extensions that the indemnifying
Lender has made or may make to the Loan Parties, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a Loan or Loans
of the Borrowers; and (ii) to pay and protect, and indemnify, defend, and
hold the Agents and any such other Lender preparing a Report harmless from
and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including attorney costs) incurred by the Agents and
any such other Lender preparing a Report as the direct or indirect result
of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.13&nbsp;&nbsp;&nbsp; <u>Delinquent
Lender</u>. If for any reason any Lender shall fail or refuse to abide
by its obligations under this Agreement, including without limitation its
obligation to make available to Administrative Agent its Commitment Percentage
of any Revolving Loans, expenses or setoff or purchase its <u>pro rata</u>
share of a participation interest in the Swingline Loans (a "Delinquent
Lender") and such failure is not cured within ten (10) days of receipt
from the Administrative Agent of written notice thereof, then, in addition
to the rights and remedies that may be available to Agents, other Lenders,
the Loan Parties or any other party at law or in equity, and not at limitation
thereof, (i) such Delinquent Lender's right to participate in the administration
of, or decision-making rights related to, the Loans, this Agreement or
the other Loan Documents shall be suspended during the pendency of such
failure or refusal, and (ii) a
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<p>Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Loan Parties, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining non-delinquent Lenders for
application to, and reduction of, their proportionate shares of all outstanding
Obligations until, as a result of application of such assigned payments
the Lenders' respective Commitment Percentages of all outstanding Obligations
shall have returned to those in effect immediately prior to such delinquency
and without giving effect to the nonpayment causing such delinquency. The
Delinquent Lender's decision-making and participation rights and rights
to payments as set forth in clauses (i) and (ii) hereinabove shall be restored
only upon the payment by the Delinquent Lender of its Commitment Percentage
of any Obligations, any participation obligation, or expenses as to which
it is delinquent, together with interest thereon at the rate set forth
in Section 2.11 hereof from the date when originally due until the date
upon which any such amounts are actually paid.
<p>The non-delinquent Lenders shall also have the right, but not the obligation,
in their respective, sole and absolute discretion, to acquire for no cash
consideration, (<u>pro</u> <u>rata</u>, based on the respective Commitments
of those Lenders electing to exercise such right) the Delinquent Lender's
Commitment to fund future Loans (the "<u>Delinquent Lender's Future Commitment</u>").
Upon any such purchase of the Commitment Percentage of any Delinquent Lender's
Future Commitment, the Delinquent Lender's share in future Loans and its
rights under the Loan Documents with respect thereto shall terminate on
the date of purchase, and the Delinquent Lender shall promptly execute
all documents reasonably requested to surrender and transfer such interest,
including, if so requested, an Assignment and Acceptance. Each Delinquent
Lender shall indemnify the Agents and each non-delinquent Lender from and
against any and all loss, damage or expenses, including but not limited
to reasonable attorneys' fees and funds advanced by any Agent or by any
non-delinquent Lender, on account of a Delinquent Lender's failure to timely
fund its <u>pro</u> <u>rata</u> share of a Loan or to otherwise perform
its obligations under the Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.14&nbsp;&nbsp;
<u>Agency for Perfection</u>. Each Lender hereby appoints each other Lender
as agent for the purpose of perfecting Liens, for the benefit of the Agents
and the Secured Parties, in assets which, in accordance with Article 9
of the UCC or any other Applicable Law of the United States of America
or Canada under the PPSA or otherwise can be perfected only by possession.
Should any Lender (other than the Agents) obtain possession of any such
Collateral, such Lender shall notify the Agents thereof, and, promptly
upon the Agents' request therefor shall deliver such Collateral to the
Agents or otherwise deal with such Collateral in accordance with the Agents'
instructions.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.15&nbsp;&nbsp;
<u>Relation Among the Lenders</u>.&nbsp; The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of,
or (except as otherwise set forth herein in case of the Agents) authorized
to act for, any other Lender.
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<hr ALIGN=RIGHT NOSHADE WIDTH="100%">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.16&nbsp;&nbsp;
<u>Syndication Agent, Documentation Agent, and Arranger</u>. Notwithstanding
the provisions of this Agreement or any of the other Loan Documents, the
Syndication Agent and the Documentation Agent shall have no powers, rights,
duties, responsibilities or liabilities with respect to this Agreement
and the other Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>MISCELLANEOUS</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.1&nbsp;&nbsp;
<u>Notices</u>. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) if to any Loan Party, to it at Brown Shoe Company, Inc.., 8300 Maryland
Avenue, St. Louis, Missouri 63105, Attention: Chief Financial Officer (Telecopy
No. (314) 854-2152), with a copies to Bryan Cave LLP, One Metropolitan
Square, 211 North Broadway, St. Louis, Missouri 63102, Attention: William
Seabaugh, Esquire (Telecopy No. (314) 259-2020) and Bryan Cave LLP 1290
Avenue of the Americas, New York, New York 10104, Attention: Jeffrey S.
Chavkin, Esquire (Telecopy No. (212) 904-0501);
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; if to the Administrative Agent or the Collateral
Agent, to Bank of America, N.A., c/o Bank of America Retail Group, Inc.,
40 Broad Street, Boston, Massachusetts 02109, Attention: Jaime Ward (Telecopy
No. (617) 434-4312), with a copy to Riemer &amp; Braunstein LLP, Three
Center Plaza, Boston, Massachusetts 02108, Attention: David S. Berman,
Esquire (Telecopy No. (617) 880-3456);
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; if to any other Lender, to it at its address (or
telecopy number) set forth on the signature pages hereto or on any Assignment
and Acceptance for such Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given
three days after mailing or otherwise on the date of receipt.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.2&nbsp;&nbsp;
<u>Waivers; Amendments</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; No failure or delay by the Agents, the Issuing Banks,
the Acceptance Lenders or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Banks,
the Acceptance Lenders and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of
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<p>any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan
Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit or Acceptance shall not be
construed as a waiver of any Default or Event of Default, regardless of
whether the Agents, any Lender, Issuing Bank or Acceptance Lender may have
had notice or knowledge of such Default or Event of Default at the time.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Neither this Agreement nor any other Loan Document
nor any provision hereof or thereof may be waived, amended or modified
except, in the case of this Agreement, pursuant to an agreement or agreements
in writing entered into by the Loan Parties and the Required Lenders or,
in the case of any other Loan Document, pursuant to an agreement or agreements
in writing entered into by the Agents and the Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders, <u>provided</u>
that no such agreement shall (i) increase the Commitment of any Lender
without such Lender's prior consent, (ii) except as provided in Section
2.2, increase the Total Commitments without the written consent of all
of the Lenders, (iii) reduce the principal amount of any Loan or L/C Disbursement
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iv) postpone
the scheduled date of payment of the principal amount of any Loan or L/C
Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of the Commitments or the Maturity Date, without
the written consent of each Lender affected thereby, (v) change Sections
2.8(b), 2.8(c), 2.20, 2.23, or 2.24 or Section 6.2 of the Security Agreements,
without the written consent of each Lender, (vi) change any of the provisions
of this Section 9.2 or the definition of the term "Required Lenders", "Minority
Lenders" or any other provision of any Loan Document specifying the number
or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vii) release any Loan Party from its
obligations under any Loan Document, or limit its liability in respect
of such Loan Document (except to the extent permitted in the Loan Documents),
without the written consent of each Lender, (viii) except for sales described
in Section 6.5 or as permitted in the Security Documents, release any material
portion of the Collateral from the Liens of the Security Documents, without
the written consent of each Lender, (ix) change the definition of the term
"Borrowing Base" or any component definition thereof if as a result thereof
the amounts available to be borrowed by the Borrowers would be increased,
without the written consent of each Lender, <i>provided that</i> the foregoing
shall not limit the discretion of the Administrative Agent to change, establish
or eliminate any Reserves, (x) increase the Permitted Overadvance, without
the written consent of each Lender, (xi) subordinate the Obligations hereunder,
or the Liens granted hereunder or under the other Loan Documents, to any
other Indebtedness or Lien, as the case may be without the prior written
consent of each Lender, or (xii) increase the amount available as Swingline
Loans without the prior written consent of each Lender, and <u>provided</u>
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<p><u>further</u> that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Agents, the Issuing Bank or the Acceptance
Lender without the prior written consent of the Agents, the Issuing Bank
or the Acceptance Lender, as the case may be.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Notwithstanding anything to the contrary contained
in this Section 9.2, in the event that the Lead Borrower requests that
this Agreement or any other Loan Document be modified, amended or waived
in a manner which would require the consent of the Lenders pursuant to
Section 9.2(b) and such amendment is approved by the Required Lenders,
but not by the requisite percentage of the Lenders, the Borrowers, and
the Required Lenders shall be permitted to amend this Agreement without
the consent of the Lender or Lenders which did not agree to the modification
or amendment requested by the Lead Borrower (such Lender or Lenders, collectively
the "<u>Minority Lenders</u>") subject to providing for (w) the termination
of the Commitment of each of the Minority Lenders, (x) the addition to
this Agreement of one or more other financial institutions which would
qualify as an Eligible Assignee (subject to the approval of the Administrative
Agent, which approval shall not be unreasonably withheld), or an increase
in the Commitment of one or more of the Required Lenders, so that the Total
Commitments after giving effect to such amendment shall be in the same
amount as the Total Commitments immediately before giving effect to such
amendment, (y) if any Loans are outstanding at the time of such amendment,
the making of such additional Loans by such new or increasing Lender or
Lenders, as the case may be, as may be necessary to repay in full the outstanding
Loans (including principal, interest, and fees) of the Minority Lenders
immediately before giving effect to such amendment and (z) such other modifications
to this Agreement or the Loan Documents as may be appropriate and incidental
to the foregoing.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; No notice to or demand on any Loan Party shall entitle
any Loan Party to any other or further notice or demand in the same, similar
or other circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether
or not a Note shall have been marked to indicate such amendment, modification,
waiver or consent and any consent by a Lender, or any holder of a Note,
shall bind any Person subsequently acquiring a Note, whether or not a Note
is so marked. No amendment to this Agreement shall be effective against
any Loan Party unless signed by the applicable Loan Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.3&nbsp;&nbsp;
<u>Expenses; Indemnity; Damage Waiver</u>. The Loan Parties shall jointly
and severally pay (i) all reasonable out-of-pocket expenses incurred by
the Agents and their Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Agents, outside consultants for the
Agents, appraisers, and for commercial finance examinations, in connection
with the arrangement of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by any Issuing Bank or Acceptance
Lender in connection with the issuance, amendment, renewal or extension
of any
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<p>Letter of Credit or Acceptance or any demand for payment thereunder,
and (iii) all reasonable out-of-pocket expenses incurred by the Agents,
the Issuing Bank, the Acceptance Lender or any Lender, including the reasonable
fees, charges and disbursements of any counsel and any outside consultants
for the Agents, or any Issuing Bank, Acceptance Lender or Lender, for appraisers,
commercial finance examinations, and environmental site assessments, in
connection with the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit or Acceptances issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters
of Credit or Acceptances; <i>provided that</i> the Lenders who are not
the Agents, the Issuing Banks or the Acceptance Lenders shall be entitled
to reimbursement for no more than one counsel representing all such Lenders
(absent a conflict of interest in which case the Lenders may engage and
be reimbursed for additional counsel).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The Loan Parties shall jointly and severally indemnify
the Agents, the Issuing Banks, the Acceptance Lenders and each Lender,
and each Related Party of any of the foregoing Persons (each such Person
being called an "<u>Indemnitee</u>") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution
or delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the transactions contemplated
by the Loan Documents or any other transactions contemplated hereby, (ii)
any Loan or Letter of Credit or Acceptance or the use of the proceeds therefrom
(including any refusal by any Issuing Bank or Acceptance Lender to honor
a demand for payment under a Letter of Credit or Acceptance if the documents
presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit or Acceptance), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property currently
or formerly owned or operated by any Loan Party, or any Environmental Liability
of any Loan Party, (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory and regardless of whether any Indemnitee is a
party thereto, or (v) any documentary taxes, assessments or similar charges
made by any Governmental Authority by reason of the execution and delivery
of this Agreement or any other Loan Document, <u>provided</u> that such
indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses resulted
from the gross negligence, bad faith or willful misconduct of such Indemnitee
or any Affiliate of such Indemnitee (or of any officer, director, employee,
advisor or agent of such Indemnitee or any such Indemnitee's Affiliates).
In connection with any indemnified claim hereunder, the Indemnitee shall
be entitled to select its own counsel and the Loan Parties shall promptly
pay the reasonable fees and expenses of such counsel.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; To the extent that any Borrower fails to pay any
amount required to be paid by it to the Agents, the Issuing Banks or Acceptance
Lenders under paragraph (a) or (b) of this Section, each Lender severally
agrees to pay to the Agents, the Issuing Banks or the Acceptance Lenders,
as the case may be, such Lender's Commitment Percentage of such unpaid
amount, <u>provided</u> that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Agents, the Issuing Banks or the Acceptance
Lenders.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; To the extent permitted by Applicable Law, no Loan
Party shall assert, and each Loan Party hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or thereby,
the transactions contemplated by the Loan Documents, any Loan or Letter
of Credit or Acceptance or the use of the proceeds thereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; All amounts due under this Section shall be payable
promptly after written demand therefor, which demand shall include calculations
of the amount claimed in reasonable detail.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.4&nbsp;&nbsp;
<u>Designation of Lead Borrower as Borrowers' Agent</u>.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; Each Borrower hereby irrevocably designates and appoints
the Lead Borrower as that Borrower's agent to obtain Loans and Letters
of Credit or Acceptances hereunder, the proceeds of which shall be available
to each Borrower for those uses as those set forth herein. As the disclosed
principal for its agent, each Borrower shall be obligated to the Agents
and each Lender on account of Loans so made and Letters of Credit and Acceptances
so issued hereunder as if made directly by the Lenders to that Borrower,
notwithstanding the manner by which such Loans and Letters of Credit and
Acceptances are recorded on the books and records of the Lead Borrower
and of any Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Each Borrower recognizes that credit available to
it hereunder is in excess of and on better terms than it otherwise could
obtain on and for its own account and that one of the reasons therefor
is its joining in the credit facility contemplated herein with all other
Borrowers. Consequently, each Borrower hereby assumes, guarantees, and
agrees to discharge all Obligations of all other Borrowers as if the Borrower
so assuming and guarantying were each other Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; Subject to Section 2.7, the Lead Borrower shall act
as a conduit for each Borrower (including itself, as a "Borrower") on whose
behalf the Lead Borrower has requested a Loan.
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<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; The Lead Borrower shall cause the transfer of the
proceeds of each Loan to the (those) Borrower(s) on whose behalf such Loan
was obtained. Neither the Agents nor any Lender shall have any obligation
to see to the application of such proceeds.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
If, for any reason, and at any time during the term of this Agreement,
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(A) any Borrower, including the Lead Borrower, as agent for the Borrowers,
shall be unable to, or prohibited from carrying out the terms and conditions
of this Agreement; or
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (B)
the Administrative Agent deems it inexpedient (in the Administrative Agent's
sole and absolute discretion) to continue making Loans and cause Letters
of Credit and Acceptances to be issued to or for the account of any particular
Borrower, or to channel such Loans and Letters of Credit and Acceptances
through the Lead Borrower,
<p>then the Lenders may make Loans directly to, and cause the issuance
of Letters of Credit and Acceptances directly for the account of such of
the Borrowers as the Administrative Agent determines to be expedient, which
Loans may be made without regard to the procedures otherwise included herein.</blockquote>
</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; In the event that the Administrative Agent determines
to forgo the procedures included herein pursuant to which Loans and Letters
of Credit and Acceptances are to be channeled through the Lead Borrower,
then the Administrative Agent may designate one or more of the Borrowers
to fulfill the financial and other reporting requirements otherwise imposed
herein upon the Lead Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Each of the Borrowers shall remain jointly and severally
liable to the Agents and the Lenders for the payment and performance of
all Obligations (which payment and performance shall continue to be secured
by all Collateral granted by each of the Borrowers) notwithstanding any
determination by the Administrative Agent to cease making Loans or causing
Letters of Credit or Acceptances to be issued to or for the benefit of
any Borrower.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; The authority of the Lead Borrower to request Loans
on behalf of, and to bind, the Borrowers, shall continue unless and until
the Administrative Agent acts as provided in subparagraph (c), above, or
the Administrative Agent actually receives
<br>&nbsp;
<blockquote>
<blockquote>
<blockquote>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp; written notice of: (i) the termination of such authority,
and (ii) the subsequent appointment of a successor Lead Borrower, which
notice is</blockquote>
</blockquote>
</blockquote>

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<p><br>
<blockquote>
<blockquote>
<blockquote>signed by the respective Presidents of each Borrower (other
than the President of the Lead Borrower being replaced) then eligible for
borrowing under this Agreement; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
written notice from such successive Lead Borrower (i) accepting such appointment;
(ii) acknowledging that such removal and appointment has been effected
by the respective Presidents of such Borrowers eligible for borrowing under
this Agreement; and (iii) acknowledging that from and after the date of
such appointment, the newly appointed Lead Borrower shall be bound by the
terms hereof, and that as used herein, the term "Lead Borrower" shall mean
and include the newly appointed Lead Borrower.</blockquote>
</blockquote>
</blockquote>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.5&nbsp;&nbsp;
<u>Successors and Assigns</u>. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of the
Issuing Bank or Acceptance Lender that issues any Letter of Credit or Acceptance),
except that no Loan Party may assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender
(and any such attempted assignment or transfer without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank or Acceptance Lender that issues any Letter
of Credit or Acceptance) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agents, the Issuing Bank, the Acceptance
Lender and the Lenders) any legal or equitable right, remedy or claim under
or by reason of this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; Any Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it),
<u>provided</u>
that (i) except in the case of an assignment to a Lender or an Affiliate
of a Lender, each of the Lead Borrower (but only if no Event of Default
then exists), the Agents and the Lenders that are then Issuing Banks must
give their prior written consent to such assignment (which consent shall
not be unreasonably withheld or delayed), (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of
the entire remaining amount of the assigning Lender's Commitment or Loans,
the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000 (and in $2,500,000 integral multiples
in excess thereof) unless the Administrative Agent otherwise consents,
(iii) unless a Lender has assigned and delegated all of its rights and
obligations under the Loan Documents, no such assignment and/or delegation
shall be permitted unless, after giving effect thereto, such Lender retains
a Commitment in a minimum amount of $5,000,000, (iv) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations, and (v) the parties to each assignment
shall execute and deliver
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<p>to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $5,000. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Acceptance the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Section 9.3). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section. The Loan
Parties hereby acknowledge and agree that any assignment shall give rise
to a direct obligation of the Loan Parties to the assignee and that the
assignee shall be considered to be a "Lender" for all purposes under this
Agreement and the other Loan Documents
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; The Administrative Agent, acting for this purpose
as an agent of the Loan Parties, shall maintain at one of its offices in
Boston, Massachusetts a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and
L/C Disbursements owing to, each Lender pursuant to the terms hereof from
time to time (the "<u>Register</u>"). The entries in the Register shall
be conclusive absent manifest error and the Loan Parties, the Administrative
Agent, the Issuing Banks, the Acceptance Lenders and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection
by the Lead Borrower, the Issuing Banks, the Acceptance Lenders and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the processing
and recordation fee referred to in paragraph (b) of this Section and any
written consent to such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and Acceptance and
record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;&nbsp; Any Lender may, without the consent of the Loan Parties,
the Agents, and any Issuing Bank or Acceptance Lender, sell participations
to one or more banks or other entities (a "<u>Participant</u>") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it),
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<p><u>provided</u> that (i) such Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Loan Parties, the Agents, the Issuing
Banks, the Acceptance Lenders and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement. Any agreement or instrument pursuant
to which a Lender sells a participation in the Commitments, the Loans,
the Letters of Credit Outstandings and the Acceptance Reimbursement Obligations
shall provide that such Lender shall retain the sole right to enforce the
Loan Documents and to approve any amendment, modification or waiver of
any provision of the Loan Documents, <u>provided</u> that such agreement
or instrument may provide that such Lender will not, without the consent
of the Participant, agree to any amendment, modification or waiver described
in the first proviso to Section 9.2(b) that affects such Participant. Subject
to paragraph (f) of this Section, the Borrowers agree that each Participant
shall be entitled to the benefits of Sections 2.25, 2.27, and 2.28 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.9
as though it were a Lender, <u>provided</u> such Participant agrees to
be subject to Section 2.27(c) as though it were a Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;&nbsp; A Participant shall not be entitled to receive any
greater payment under Sections 2.25, 2.27 and 2.28 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Lead Borrower's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled
to the benefits of Section 2.28 unless (i) the Lead Borrower is notified
of the participation sold to such Participant and such Participant agrees,
for the benefit of the Loan Parties, to comply with Section 2.28(e) as
though it were a Lender and (ii) such Participant is eligible for exemption
from the withholding tax referred to therein, following compliance with
Section 2.28(e).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;&nbsp; Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest, <u>provided</u>
that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.6&nbsp;&nbsp;
<u>Survival</u>.&nbsp; All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement
or any other Loan Document shall be considered to have been relied upon
by the other parties hereto and shall survive the execution and delivery
of the Loan Documents and the making of any Loans and issuance of any Letters
of Credit or Acceptances, regardless of any investigation made by any such
other party or on its behalf and
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<p>notwithstanding that the Agents, the Issuing Banks, the Acceptance Lenders
or any Lender may have had notice or knowledge of any Default or Event
of Default or incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any fee or any
other Obligation is outstanding and unpaid or any Letter of Credit or Acceptance
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.25, 2.28, and 9.3 and Section 8 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and Acceptances and the Commitments
or the termination of this Agreement or any provision hereof.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.7&nbsp;&nbsp;
<u>Counterparts; Integration; Effectiveness</u>. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect
to fees payable to the Agents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.1, this Agreement
shall become effective when it shall have been executed by the Agents and
the Lenders and when the Administrative Agent shall have received counterparts
hereof that, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. Delivery
of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.8&nbsp;&nbsp;
<u>Severability</u>. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.9&nbsp;&nbsp;
<u>Right of Setoff</u>.&nbsp; In addition to any rights or remedies of
the Lenders provided by Applicable Law, if an Event of Default exists or
the Revolving Credit Loans have been accelerated, each Lender is hereby
authorized at any time and from time to time, without prior notice to the
Loan Parties, any such notice being waived by the Loan Parties to the fullest
extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender or any Affiliate
of such Lender to or for the credit or the account of the Loan Parties
against any and all Obligations owing to such Lender, now or hereafter
existing, irrespective of whether or not the Agent or such Lender shall
have made demand under this Agreement or any other Loan Documents and although
such Obligations may be contingent or unmatured or otherwise fully secured
and regardless of the adequacy of the Collateral. Each Lender agrees to
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<p>promptly notify the Loan Parties and the Agent after any such setoff
and application made by such Lender;
<u>provided</u>, however, the failure
to give such notice shall not affect the validity of such setoff and application..
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SETOFF,
BANKER'S LIEN OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY
LOAN PARTY HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN
CONSENT OF THE REQUIRED LENDERS.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.10&nbsp;&nbsp;
<u>Governing Law; Jurisdiction; Consent to Service of Process</u>.&nbsp;
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO ITS PRINCIPLES RELATING
TO CHOICE AND CONFLICTS OF LAW), BUT INCLUDING SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) The Loan Parties agree that any suit for the enforcement of this Agreement
or any other Loan Document may be brought in any New York state or federal
court sitting in the Borough of Manhattan as the Administrative Agent may
elect in its sole discretion and consent to the non-exclusive jurisdiction
of such courts. The Borrowers hereby waive any objection which they may
now or hereafter have to the venue of any such suit or any such court or
that such suit is brought in an inconvenient forum. The Borrowers agree
that any action commenced by any Borrower asserting any claim or counterclaim
arising under or in connection with this Agreement or any other Loan Document
shall be brought solely in any New York state or federal court sitting
in the Borough of Manhattan as the Administrative Agent may elect in its
sole discretion and consent to the exclusive jurisdiction of such courts
with respect to any such action.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.1. Nothing in this Agreement
or any other Loan Document will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.11&nbsp;&nbsp;
<u>WAIVER OF JURY TRIAL</u>.&nbsp; EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY,
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<p>AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.12&nbsp;&nbsp;
<u>Press Releases and Related Matters</u>. Each Loan Party hereby consents
that the Agents and each Lender may issue and disseminate to the public
general information describing the credit accommodation entered into pursuant
to this Agreement, including the name and address of the Loan Parties and
a general description of the Loan Parties' business and may, with the Lead
Borrower's prior written consent, use each Loan Party's name in advertising
and other promotional material.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.13&nbsp;&nbsp;
<u>Headings</u>. Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.14&nbsp;&nbsp;
<u>Interest Rate Limitation</u>.&nbsp; Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under Applicable Law (collectively the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with Applicable Law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were
not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other
Loans or periods shall be increased (but not above the Maximum Rate therefor)
until such cumulated amount, together with interest thereon at the Federal
Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.15&nbsp;&nbsp;
<u>Additional Waivers</u>. The Obligations are the joint and several obligations
of each Loan Party. To the fullest extent permitted by Applicable Law,
the obligations of the Loan Parties hereunder shall not be affected by
(i) the failure of any Agent or any other Secured Party to assert any claim
or demand or to enforce or exercise any right or remedy against any other
Loan Party under the provisions of this Agreement, any other Loan Document
or otherwise, (ii) any rescission, waiver, amendment or modification of,
or any release from any of the terms or provisions of, this Agreement,
any other Loan Document, or any other agreement, including with respect
to any other Borrower of the Obligations under this Agreement, or (iii)
the failure to perfect any security interest in, or the release of, the
Collateral or any other the security held by or on behalf of the Collateral
Agent or any other Secured Party.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp; The obligations of each Loan Party hereunder shall
not be subject to any reduction, limitation, impairment or termination
for any reason (other than the payment in full in cash of the Obligations),
including any claim of waiver, release, surrender, alteration or
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<p>compromise of any of the Obligations, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality or unenforceability of the Obligations
or otherwise. Without limiting the generality of the foregoing, the obligations
of each Loan Party hereunder shall not be discharged or impaired or otherwise
affected by the failure of any Agent or any other Secured Party to assert
any claim or demand or to enforce any remedy under this Agreement, any
other Loan Document or any other agreement, by any waiver or modification
of any provision of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations, or by any other act
or omission that may or might in any manner or to any extent vary the risk
of any Borrower or that would otherwise operate as a discharge of any Loan
Party as a matter of law or equity (other than the payment in full in cash
of all the Obligations).
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; To the fullest extent permitted by Applicable Law,
each Loan Party waives any defense based on or arising out of any defense
of any other Loan Party or the unenforceability of the Obligations or any
part thereof from any cause, or the cessation from any cause of the liability
of any other Loan Party, other than the payment in full in cash of all
the Obligations. The Collateral Agent and the other Secured Parties may,
at their election, foreclose on any security held by one or more of them
by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of
the Obligations, make any other accommodation with any other Loan Party,
or exercise any other right or remedy available to them against any other
Loan Party, without affecting or impairing in any way the liability of
any Loan Party hereunder except to the extent that all the Obligations
have been paid in full in cash. Pursuant to Applicable Law, each Loan Party
waives any defense arising out of any such election even though such election
operates, pursuant to Applicable Law, to impair or to extinguish any right
of reimbursement or subrogation or other right or remedy of such Loan Party
against any other Loan Party, as the case may be, or any security.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp; Upon payment by any Loan Party of any Obligations,
all rights of such Loan Party against any other Loan Party arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior
in right of payment to the prior payment in full in cash of all the Obligations.
In addition, any indebtedness of any Loan Party now or hereafter held by
any other Loan Party is hereby subordinated in right of payment to the
prior payment in full of the Obligations. None of the Loan Parties will
demand, sue for, or otherwise attempt to collect any such indebtedness.
If any amount shall erroneously be paid to any Loan Party on account of
(a) such subrogation, contribution, reimbursement, indemnity or similar
right or (b) any such indebtedness of any Loan Party, such amount shall
be held in trust for the benefit of the Secured Parties and shall forthwith
be paid to the Collateral Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms
of the Loan Documents.
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.16&nbsp;&nbsp;
<u>Confidentiality</u>. Each of the Agents, Issuing Banks, Acceptance Lenders
and the Lenders agrees that it will use its best efforts not to disclose
without the prior written consent of the Lead Borrower (other than to its
employees, auditors, counsel or other professional advisors, to Affiliates
or to another Lender if the Lender or such Lender's holding or parent company
in its sole discretion determines that any such party needs access to such
information, which party shall be informed of the confidential nature thereof)
any information with respect to any Loan Party which is furnished pursuant
to this Agreement and which either is financial information or is designated
by the Lead Borrower to the Administrative Agent in writing as confidential,
provided that any Lender may disclose any such information (a) as has become
generally available to the public, (b) as was available to any Lender on
a non-confidential basis prior to its disclosure by such Lender, (c) as
becomes available to any Lender on a non-confidential basis from a Person
other than a Loan Party who, to the best knowledge of such Lender, is not
otherwise bound by a confidentiality agreement with any Loan Party or is
not otherwise prohibited from transmitting the information to such Lender,
(d) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve
Board or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States of America or elsewhere) or their successors,
(e) as may be required or appropriate in response to any summons or subpoena
or in connection with any litigation,
<u>provided that</u> if the Lender
is able to do so prior to complying with the summons or subpoena, such
Lender shall provide the Lead Borrower with prompt notice of such requested
disclosure so that the Borrowers may seek a protective order or other appropriate
remedy (nothing contained herein however shall result in such Lender's
non-compliance with Applicable Law), (f) in order to comply with any law,
order, regulation or ruling applicable to such Lender, (g) in connection
with the enforcement of remedies under this Agreement and the other Loan
Documents, and (h) to any prospective transferee in connection with any
contemplated transfer of any of the Loans or Notes or any interest therein
by such Lender provided that such prospective transferee agrees to be bound
by the provisions of this Section. The Borrowers hereby agree that the
failure of a Lender to comply with the provisions of this Section 9.16
shall not relieve the Borrowers of any of their obligations to such Lender
under this Agreement and the other Loan Documents.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.17&nbsp;&nbsp;
<u>Conflicts with other Loan Documents</u>. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific reference
to the applicable provision contained in this Agreement), if any provision
contained in this Agreement conflicts with any provision of any other Loan
Document, the provision contained in this Agreement shall govern and control.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.18&nbsp;&nbsp;
<u>Judgment Currency</u>. If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency
in which it is due (the "<u>Original Currency</u>") into another currency
(the "<u>Second Currency</u>"), the rate of exchange applied shall be that
at which, in accordance with normal banking procedures, the Administrative
Agent could purchase in the Boston foreign exchange market, the Original
Currency with the Second
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<p>Currency on the date two (2) Business Days preceding that on which judgment
is given. Each Borrower agrees that its obligation in respect of any Original
Currency due from it hereunder shall, notwithstanding any judgment or payment
in such other currency, be discharged only to the extent that, on the Business
Day following the date the Administrative Agent receives payment of any
sum so adjudged to be due hereunder in the Second Currency, the Administrative
Agent may, in accordance with normal banking procedures, purchase, in the
Boston foreign exchange market, the Original Currency with the amount of
the Second Currency so paid; and if the amount of the Original Currency
so purchased or could have been so purchased is less than the amount originally
due in the Original Currency, each Borrower agrees as a separate obligation
and notwithstanding any such payment or judgment to indemnify the Administrative
Agent against such loss. The term "rate of exchange" in this <u>Section
9.18</u> means the spot rate at which the Administrative Agent, in accordance
with normal practices, is able on the relevant date to purchase the Original
Currency with the Second Currency, and includes any premium and costs of
exchange payable in connection with such purchase.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.19&nbsp;&nbsp;
<u>Patriot Act</u>. Each Lender hereby notifies the Borrowers that pursuant
to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "<u>Act</u>"), it is required
to obtain, verify and record information that identifies the Borrowers,
which information includes the name and address of each Borrower and other
information that will allow such Lender to identify such Borrower in accordance
with the Act.
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.20&nbsp;&nbsp;
<u>Foreign Asset Control Regulations</u><b>.
</b>Neither of the advance
of the Revolving Loans nor the use of the proceeds of any thereof will
violate the Trading With the Enemy Act (50 U.S.C. &sect; 1 et seq., as
amended) (the "<u>Trading With the Enemy Act</u>") or any of the foreign
assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) (the "<u>Foreign Assets Control
Regulations</u>") 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 "<u>Executive
Order</u>") and (b) the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Public Law 107-56)). Furthermore, none of the Borrowers or their Affiliates
(a) is or will become a "blocked person" as described in the Executive
Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations
or (b) engages or will engage in any dealings or transactions, or be otherwise
associated, with any such "blocked person".
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.21&nbsp;&nbsp;
<u>Existing Credit Agreement Amended and Restated</u>.&nbsp; This Agreement
shall amend and restate the Existing Credit Agreement in its entirety,
with the parties hereby agreeing that there is no novation of the Existing
Credit Agreement. On the Closing Date, the rights and obligations of the
parties under the Existing Credit Agreement shall be subsumed within and
be governed by this Agreement; provided, however, that each of the "Loans"
(as such term is defined in the Existing Credit Agreement) outstanding
under the Existing Credit Agreement on
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<p>the Closing Date shall, for purposes of this Agreement, be included
as Loans hereunder and each of the "Letters of Credit" and "Acceptances"
(as defined in the Existing Credit Agreement) outstanding under the Existing
Credit Agreement on the Closing Date shall be Letters of Credit and Acceptances
hereunder.
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<p><br>
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as a sealed instrument
as of the day and year first above written.
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<dir>BROWN SHOE COMPANY, INC.
<br>SIDNEY RICH ASSOCIATES, INC.
<br>BROWN GROUP RETAIL, INC.
<br>BUSTER BROWN &amp; CO.
<br>as to each of the foregoing
<p>By: <u>/s/ Andrew M. Rosen</u>
<br>Name: Andrew M. Rosen
<br>Title: Senior Vice President, Chief
<br>Financial Officer and Treasurer</dir>
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<dir>BROWN SHOE INTERNATIONAL, LLC
<br>By; Brown Shoe Company, Inc.,
<br>Sole Member
<p>By: <u>/s/ Andrew M. Rosen</u>
<br>Name: Andrew M. Rosen
<br>Title: Senior Vice President, Chief
<br>Financial Officer and Treasurer</dir>
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<dir>BROWN SHOE COMPANY OF CANADA LTD
<br>By: <u>/s/ Andrew M. Rosen</u>
<br>Name: Andrew M. Rosen
<br>Title: Senior Vice President, Chief
<br>Financial Officer and Treasurer</dir>
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<dir>BANK OF AMERICA, N.A.,
<br>as Administrative Agent, as
<br>Collateral Agent, as Lead Issuing
<br>Bank and as Lender
<p>By: : <u>/s/ Stephen J. Garvin</u>
<p>Name: Stephen J. Garvin
<p>Title: Managing Director
<p>Address:
<br>c/o Bank of America Retail Group, Inc.
<br>40 Broad Street, 10th Floor
<br>Boston, Massachusetts 02109
<br>Attn: Mr. Jaime Ward
<br>Telephone: (617) 434-4018
<br>Telecopy: (617) 434-4312
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<dir>LASALLE BANK NATIONAL
<br>ASSOCIATION,
<br>as Syndication Agent, as Issuing
<br>Bank and as Lender
<br>By: : <u>/s/ Margaret C. Dierkes</u>
<p>Name: Margaret C. Dierkes
<p>Title: Vice President
<p>Address:
<br>One N. Brentwood, Suite 950
<br>Clayton, Missouri 63105
<br>Attn: Meg Dierkes
<br>Telephone: (314) 613-1916
<br>Telecopy: (314) 621-1612
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<dir>WELLS FARGO FOOTHILL, LLC,
<br>as Documentation Agent, and as
<br>Lender
<p>By: <u>/s/ Maged Ghebrial</u>
<p>Name: Maged Ghebrial
<p>Title: Assistant Loan Portfolio
<br>Manager and Vice President
<p>Address:
<br>2450 Colorado Avenue, Suite 300 West
<br>Santa Monica, California 90404\
<br>Attn: Brad Engel
<br>Telephone: (310) 453-7295
<br>Telecopy: (310) 453-7446</dir>
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CONGRESS FINANCIAL
<br>CORPORATION (CENTRAL), as Lender
<p>By: <u>/s/ Brian Hynds</u>
<p>Name: Brian Hynds
<p>Title: Vice President
<p>Address:
<br>150 S. Wacker Drive, Suite 2200
<br>Chicago, Illinois 60606
<br>Attn: Brian Hynds
<br>Telephone: (312) 332-0420
<br>Telecopy: (312) 332-0424
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GMAC COMMERCIAL FINANCE
<br>LLC, as Lender
<p>By: <u>/s/ Thomas Brent</u>
<p>Name: Thomas Brent
<p>Title: Vice President
<p>Address:
<br>444 South Flower Street, Suite 4500
<br>Los Angeles, California 90071
<br>Attn: Dave Grabosky
<br>Telephone: (213) 284-3675
<br>Telecopy: (213) 284-3612
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CIT BUSINESS CREDIT, INC., as Lender
<p>By: <u>/s/ Mike Richman</u>
<p>Name: Mike Richman
<p>Title: Vice President
<p>Address:
<br>300 S. Grand Ave. 3<sup>rd</sup> Floor
<br>Los Angeles, California 90071
<br>Attn: Mike Richman
<br>Telephone: (213) 613-2515
<br>Telecopy: (213) 613-2599
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<dir>NATIONAL CITY BUSINESS
<br>CREDIT, INC., as Lender
<p>By: <u>/s/ Kathryn C. Ellero</u>
<p>Name: Kathryn C. Ellero
<p>Title: Vice President
<p>Address:
<br>1965 E. 6<sup>th</sup> St., Suite #400
<br>Cleveland, Ohio 44114
<br>Attn: Kathryn C. Ellero
<br>Telephone: (216) 222-3261
<br>Telecopy: (216) 222-9555
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<dir>PNC BANK, NATIONAL
<br>ASSOCIATION, as Lender
<p>By: <u>/s/ Sherry Winick</u>
<p>Name: Sherry Winick
<p>Title: Vice President
<p>Address:
<br>One South Wacker Drive
<br>Suite 2980
<br>Chicago, IL 60606
<br>Attn: Sherry Winick
<br>Telephone: 312-338-5630
<br>Telecopy: 312-338-5618
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TRANSAMERICA BUSINESS
<br>CAPITAL CORPORATION, as Lender
<p>By:<u> /s/ Craig Winslow</u>
<p>Name: Craig Winslow
<p>Title: Duly Authorized Signatory
<p>Address:
<br>201 Merritt 7
<br>P.O. Box 5201
<br>Norwalk, CT 06856-5201
<br>Attn: Michelle Handy
<br>Telephone: 203-956-4117
<br>Telecopy: 203-956-4002
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<dir>AMSOUTH BANK, as Lender
<p>By:<u> /s/ Kevin R. Rogers</u>
<p>Name: Kevin R. Rogers
<p>Title: Attorney-In-Fact
<p>Address:
<br>599 Lexington Avenue, 45<sup>th</sup> Floor
<br>New York, New York 10022
<br>Attn: Kevin R. Rogers
<br>Telephone: (212) 935 2237
<br>Telecopy: (212) 935-7458
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SUN TRUST BANK, as Lender
<p>By:<u> /s/ Lauren P. Carrigan</u>
<p>Name: Lauren P. Carrigan
<p>Title: Vice President
<p>Address:
<br>303 Peachtree Street, NE, 3<sup>rd</sup> Floor
<br>Atlanta, Georgia 30308
<br>Attn: Lauren P. Carrigan
<br>Telephone: (404) 588-7082
<br>Telecopy: (404) 575-2693
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<dir>WEBSTER BUSINESS CREDIT
<br>CORPORATION, as Lender
<p>By:<u> /s/ Bradford Mitch</u>
<p>Name: Bradford Mitch
<p>Title: Vice President
<p>Address:
<br>One State Street, 4<sup>th</sup> Floor
<br>New York, New York 10004
<br>Attn: Bradford Mitch
<br>Telephone: (212) 806-4523
<br>Telecopy: (212) 806-4530
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<center>144
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<dir>SIEMENS FINANCIAL
<br>SERVICES, INC., as Lender
<p>By:<u> /s/ Frank Amodio</u>
<p>Name: Frank Amodio
<p>Title: Vice President
<p>Address:
<br>200 Somerset Corporate Boulevard
<br>Bridgewater, New Jersey 08807- 2843
<br>Attn: __________________
<br>Telephone: _____________
<br>Telecopy: _______________
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<center>145
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<dir>FIRST BANK, as Lender
<p>By:<u> /s/ Traci L. Dodson</u>
<p>Name: Traci L. Dodson
<p>Title: Vice President
<p>Address:
<br>135 N. Meramec
<br>St. Louis, Missouri 63105
<br>Attn: Traci L. Dodson
<br>Telephone: (314) 854-5428
<br>Telecopy: (314) 854-5454
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<center>146
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<dir>RZB FINANCE LLC, as Lender
<p>By:<u> /s/ Christopher Hoedl</u>
<p>Name: Christopher Hoedl
<p>Title: Vice President
<p>By:<u> /s/ John A. Valiska</u>
<p>Name: John A. Valiska
<p>Title: Group Vice President
<p>Address:
<br>24 Grassy Plain Street
<br>Bethel, Connecticut 06801
<br>Attn: Christopher Hoedl
<br>Telephone: (203) 207-7727
<br>Telecopy: (203) 744-6474
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<center>147</center>

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<dir>THE GOVERNOR &amp; COMPANY
<br>OF THE BANK OF IRELAND, as Lender
<p>By:<u> /s/ Sorka Kelly</u>
<p>Name: Sorka Kelly
<p>Title: Authorized Signatory
<p>By:<u> /s/ Geraldine Hannon</u>
<p>Name: Geraldine Hannon
<p>Title: Authorized Signatory
<p>Address:
<br>Bank of Ireland Corporate
<br>4<sup>th</sup> Floor, La Touche House
<br>IFSC
<br>Dublin 1
<br>Ireland
<br>Attn: Sorka Kelly
<br>Telephone: 00353 1 6115368 / 6115316
<br>Telecopy: 00 353 1 829012
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