S-1

As filed with the Securities and Exchange Commission on February 16, 2010

No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

Express Parent LLC*

(Exact name of registrant as specified in its charter)

Delaware	5600	26-2828128
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

One Limited Parkway

Columbus, Ohio 43230

(614) 415-4000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Matthew C. Moellering

Executive Vice President, Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary

Express Parent LLC

One Limited Parkway

Columbus, Ohio 43230

(614) 415-4000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Robert M. Hayward, P.C. William R. Burke Kirkland & Ellis LLP 300 North LaSalle Chicago, Illinois 60654 (312) 862-2000 Marc D. Jaffe Latham & Watkins LLP 885 Third Avenue Suite 1000 New York, NY 10022 (212) 906-1200

Approximate date of commencement of proposed sale to the public:    As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:  ¨    

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨    

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities act registration statement number of the earlier effective registration statement for the same offering.   ¨     

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer  ¨	Accelerated filer  ¨	Non-accelerated filer  x	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)		Amount of Registration Fee(2)
Common Stock, $0.01 par value per share	$	200,000,000	$	14,260

(1) Includes shares of common stock that the underwriters may purchase (including pursuant to the option to purchase additional shares) from us and the selling stockholders.

(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

* Prior to the effectiveness of this Registration Statement, a reorganization will be effected and the issuer of the common stock to be registered pursuant to this registration statement will be a Delaware corporation named Express, Inc.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion.

Preliminary Prospectus dated February 16, 2010.

PROSPECTUS

                     Shares

Express, Inc.

Common Stock

This is an initial public offering of shares of common stock of Express, Inc.

Express is offering              of the shares to be sold in the offering. The selling stockholders identified in this prospectus are offering an additional              shares. Express will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $              and $            . Express intends to apply to list the common stock on the              under the symbol “EXPR.”

Investing in the common stock involves risks that are described in the “Risk Factors” section beginning on page 12 of this prospectus.

	Per Share	Total
Public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to Express, Inc.	$	$
Proceeds, before expenses, to the selling stockholders	$	$

To the extent that the underwriters sell more than              shares of common stock, the underwriters have the option to purchase up to an additional              shares from the selling stockholders at the initial public offering price less the underwriting discount. Express will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The shares will be ready for delivery on or about                     , 2010.

BofA Merrill Lynch Goldman, Sachs & Co.

The date of this prospectus is                     , 2010.

TABLE OF CONTENTS

	Page
Basis of Presentation	ii
Market and Industry Data	iii
Trademarks and Tradenames	iii
Prospectus Summary	1
Risk Factors	12
Forward-Looking Statements	28
Use of Proceeds	30
Dividend Policy	31
Capitalization	32
Dilution	34
Unaudited Pro Forma Condensed Consolidated Financial Data	36
Selected Historical Consolidated Financial and Operating Data	42
Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Business	71
Management	83
Executive Compensation	88
Security Ownership of Certain Beneficial Owners	109
Certain Relationships and Related Party Transactions	111
Description of Certain Indebtedness	117
Description of Capital Stock	124
Shares Eligible for Future Sale	127
Material U.S. Federal Income Tax Considerations to Non-U.S. Holders	129
Underwriting	132
Legal Matters	137
Experts	138
Where You Can Find More Information	139
Index To Consolidated Financial Statements	F-1

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

i

BASIS OF PRESENTATION

We use a 52-53 week fiscal year ending on the Saturday closest to January 31. Fiscal years are identified in this prospectus according to the calendar year prior to the calendar year in which they end. For example, references to “2008,” “fiscal 2008,” “fiscal year 2008” or similar references refer to the fiscal year ended January 31, 2009.

On July 6, 2007, investment funds managed by Golden Gate Private Equity, Inc. (“Golden Gate”) acquired 75% of the equity interests in our business from Limited Brands, Inc. (“Limited Brands”). As a result of the acquisition (the “Golden Gate Acquisition”), a new basis of accounting was created beginning July 7, 2007. The periods prior to the Golden Gate Acquisition are referred to as the “Predecessor” periods and the periods after the Golden Gate Acquisition are referred to as the “Successor” periods in this prospectus. The Predecessor periods presented in this prospectus include the period from February 4, 2007 through July 6, 2007, reflecting 22 weeks of operations, and the Successor periods presented in this prospectus include the period from July 7, 2007 through February 2, 2008, reflecting 30 weeks of operations. Due to the Golden Gate Acquisition, the financial statements for the Successor periods are not comparable to those of the Predecessor periods presented in this prospectus. Prior to the Golden Gate Acquisition, our consolidated financial statements were prepared on a carve-out basis from Limited Brands. The carve-out consolidated financial statements include allocations of certain costs of Limited Brands. In the Successor periods we no longer incur these allocated costs, but do incur certain expenses as a standalone company for similar functions, including for certain support services provided by Limited Brands under the Limited Brands Transition Services Agreements, which are discussed further in the section entitled “Certain Relationships and Related Party Transactions.” These allocated costs were based upon various assumptions and estimates and actual results may differ from these allocated costs, assumptions and estimates. Accordingly, the carve-out consolidated financial statements should not be relied upon as being representative of our financial position, results of operations or cash flows had we operated on a standalone basis. See “Risk Factors—We have a limited operating history as a standalone company, which may make it difficult to compare our current operating results to prior periods.”

In the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we have presented pro forma consolidated financial data for the fiscal year ended February 2, 2008, which gives effect to the Golden Gate Acquisition as if such transaction had occurred on February 4, 2007, in addition to the Predecessor and Successor periods. We believe that presenting the discussion and analysis of the results of operations in this manner promotes the overall usefulness of the comparison given the complexities involved with comparing two significantly different periods.

The selected historical consolidated financial and operating data provided in the section of this prospectus entitled “Selected Historical Consolidated Financial and Operating Data” does not contain data for fiscal year 2005. We anticipate that the five years of selected historical consolidated financial and operating data will be included in this prospectus prior to the registration statement being declared effective.

We have restated our financial statements for the 2007 Successor period and fiscal 2008 as a result of the identification of certain accounting errors. See Note 3 to our consolidated financial statements for the fiscal year ended January 31, 2009, which are included elsewhere in this prospectus, for a complete discussion of the restatement. See “Risk Factors—If we fail to establish and maintain adequate internal controls over financial reporting, we may not be able to report our financial results in a timely and reliable manner, which could harm our business and impact the value of our securities” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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MARKET AND INDUSTRY DATA

We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate, neither such research nor these definitions have been verified by any independent source. Certain industry, market and competitive position data presented in this prospectus was obtained from a third-party study commissioned by Golden Gate prior to the Golden Gate Acquisition in connection with their evaluation of our business. We refer to this study throughout this prospectus as the “2007 Study.”

TRADEMARKS AND TRADE NAMES

This prospectus includes our trademarks such as “Express,” which are protected under applicable intellectual property laws and are the property of Express Parent LLC or its subsidiaries. This prospectus also contains trademarks, service marks, trade names and copyrights, of other companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ^® or ^TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and trade names.

iii

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider in making your investment decision. You should read the following summary together with the entire prospectus, including the more detailed information regarding our company, the common stock being sold in this offering and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. You should carefully consider, among other things, our consolidated financial statements and the related notes thereto included elsewhere in this prospectus and the matters discussed in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus before deciding to invest in our common stock. Some of the statements in this prospectus constitute forward-looking statements. See “Forward-Looking Statements.”

Except where the context otherwise requires or where otherwise indicated, the terms “Express,” “we,” “us,” “our,” “our company” and “our business” refer, prior to the Reorganization discussed below, to Express Parent LLC and, after the Reorganization, to Express, Inc., in each case together with its consolidated subsidiaries as a combined entity. The term “Express Parent” refers, prior to the Reorganization, to Express Parent LLC and, after the Reorganization, to Express, Inc. The term “Express Topco” refers to Express Topco LLC and “Express Holding” refers to Express Holding, LLC, each of which is a wholly-owned subsidiary of Express Parent, and in each case not to any of their subsidiaries.

Company Overview

Express is the sixth largest specialty retail apparel brand in the United States. With 30 years of experience offering a distinct combination of style and quality at an attractive value, we believe we are a core shopping destination for our customers and that we have developed strong brand awareness and credibility with them. We target an attractive and growing demographic of women and men between 20 and 30 years old. We offer our customers an edited assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of their lifestyles, including work, casual and going-out occasions. Since we became an independent company in 2007, we have made several significant changes to our business model, including completing the conversion of our stores to a dual-gender format, re-designing our go-to-market strategy and launching our e-commerce platform, all of which we believe have improved our operating profits and positioned us well for future growth and profitability.

As of January 30, 2010, we operated 573 stores. Our stores are located primarily in high-traffic shopping malls, lifestyle centers and street locations across the United States, and average approximately 8,700 square feet. We also sell our products through our e-commerce website, express.com. Our stores and website are designed to create an exciting shopping environment that reflects the sexy, sophisticated and social brand image that we seek to project. Our product offering includes both women’s and men’s apparel and accessories, of which women’s represented 68% of our net sales and men’s represented 32% of our net sales during fiscal 2008. Our product assortment is a mix of core styles balanced with the latest fashions, a combination we believe our customers look for and value from our brand. For fiscal 2008, we generated net sales, net loss and Adjusted EBITDA of $1.7 billion, $29.0 million and $137.2 million, respectively. Our Adjusted EBITDA increased 60% from $85.9 million in fiscal 2006 to $137.2 million in fiscal 2008. See “—Summary Historical and Pro Forma Consolidated Financial and Operating Data” for a discussion of Adjusted EBITDA, an accompanying presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between Adjusted EBITDA and the most directly comparable GAAP financial measure, net income.

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Company History and Recent Accomplishments

We opened our first store in 1980, in Chicago, Illinois as a division of Limited Brands, Inc., and launched our men’s apparel line in 1987, which we rebranded under the name Structure in 1989. In the mid 1990s, we experienced a period of rapid expansion, resulting in our operation of over 1,000 stores by 2000, including in many cases a women’s and men’s store in the same shopping center. In 2001, we began to consolidate our separate women’s and men’s stores into combined dual-gender stores. In 2007, we began to operate as a standalone company and have since implemented and completed numerous initiatives to strengthen our business, including:

• Transitioned to Standalone Company. As a standalone company, we have made a number of changes to improve our organization, reinvest in our business and align incentives with our performance. Among these, we rehired Michael Weiss as our President and CEO in July 2007. We have also worked to build depth in our organization, including by strengthening our merchandising and design teams and improving the processes by which we make product decisions.

• Completed Dual-Gender Store Conversion. During the last nine years, we have significantly improved the efficiency of our store base by consolidating separate women’s and men’s stores that were located in the same shopping center into combined dual-gender stores. Over this time period, this conversion has allowed us to reduce our total gross square footage by approximately 30%. We believe our converted store model has resulted in higher store productivity and lower store expenses, leading to increased profitability.

• Redesigned Go-To-Market Strategy. Since 2007, we have revised the process by which we design, source and merchandise our product assortment. We now design a greater number of styles, colors and fits of key items for each season and test approximately three-quarters of our product early in each season at a select group of stores before ordering for our broader store base. We believe the results of these changes are higher product margins from reduced markdowns, lower inventory risk and a more relevant product offering for our customers.

• Reinvested in Our Business to Support Growth. Over the past three years, we have expanded several of our key functional departments and shifted our marketing focus to better position our company for long-term growth. In addition, we have placed increased focus on long-term brand-building initiatives.

• Launched Express.com. We launched our e-commerce website, express.com, in July 2008, offering our customers a new channel to access our products. We believe our e-commerce platform has improved the efficiency of our business by allowing us to monitor real-time customer feedback, enhancing our product testing capabilities, expanding our advertising reach and providing us with a merchandise clearance channel.

Competitive Strengths

We attribute our success to the following competitive strengths:

Established Lifestyle Brand. With 30 years of brand heritage, we have developed a distinct and widely recognized brand that we believe fosters loyalty and credibility among our customers who look to us to provide the latest fashions and quality at an attractive value. We are the sixth largest specialty retail apparel brand in the United States in terms of 2008 sales and we believe we are the largest specialty lifestyle brand focused on the 20 to 30 year old customer demographic.

2

Attractive Market and Customer Demographic. According to The NPD Group (“NPD Group”), in the twelve months ended June 30, 2009, our brand represented approximately 5% of the $20 billion upscale specialty apparel market for 18 to 30 year old women and men in the United States. Our customer demographic is a growing segment of the United States population, and we believe that the Express brand appeals to a particularly attractive subset of this group.

Sophisticated Design, Sourcing and Merchandising Model. We believe that we have an efficient, diversified and flexible supply chain that allows us to quickly identify and respond to trends and to bring a tested assortment of products to our stores. We believe our model allows us to better meet customer needs and enables us to reduce inventory risk and improve product margins from reduced markdowns. Our product testing processes early in the season allow us to test approximately three-quarters of our merchandise in select stores before placing orders for our broader store base. In addition, we assess sales data and new product development on a weekly basis in order to make in-season inventory adjustments where possible and to allow us to respond to the latest trends.

Optimized Real Estate Portfolio. During the last nine years we have completed the conversion of our store base into dual-gender stores from separate women’s and men’s stores, which has contributed to improved per store sales and profitability. We believe that over this period, this conversion has brought our average store size in-line with other specialty retailers, has contributed to improved per store sales and profitability and has positioned us to drive improvement in our share of sales and margins.

Proven and Experienced Team. Michael Weiss, our President and Chief Executive Officer, has more than 40 years of experience in the fashion industry and has served as our President for over 20 years. In addition, our senior management team has an average of 25 years of experience across a broad range of disciplines in the specialty retail industry, including design, sourcing, merchandising and real estate. Experience and tenure with Express extends deep into our organization. For example, our district managers and store managers have been with Express for an average of ten years and seven years, respectively.

Business Strategy

Key elements of our business and growth strategies include the following:

Improve Productivity of Our Retail Stores. We believe that the efforts we have taken over the last several years to optimize our store base through conversion to dual-gender stores and to improve our go-to-market strategy have positioned us well for future growth. We seek to grow our comparable store sales and operating margins by executing the following initiatives:

• Continuing to Refine Our Go-to-Market Strategy. As we increase testing and refine our go-to-market strategy, we believe our in-store product assortment will be more appealing to our customers and will help us to decrease markdowns and to increase sales and product margins;

• Recapture Market Share in Our Core Product Categories. Based on our historical peak sales levels across product categories, we believe there is opportunity for us to recapture sales as our customers re-discover Express in certain product categories. We believe our efforts to deliver a clear and consistent brand message provides us with additional opportunities to increase sales in core categories that will allow us to return to historical volumes; and

• Improve Profit Margins. We believe we have the opportunity to continue to improve margins through further efficiencies in sourcing and continued refinement of our merchandising strategy. We plan to leverage our infrastructure, corporate overhead and fixed costs through our converted dual-gender store format.

3

Expand Our Store Base. While there has been significant growth in retail shopping centers during the last decade, we have focused on converting our existing store base to a dual-gender format and have opened few new stores over this time period. As a result, we believe there are numerous attractive, high-traffic locations that present opportunities for us to expand our store base. We currently plan to open an average of 30 new stores across the United States and Canada over each of the next five years, representing annual store growth of approximately 5%.

Expand Our e-Commerce Platform. In July 2008, we launched our e-commerce platform at express.com, providing us with a direct-to-consumer sales channel. In the third quarter of fiscal year 2009, our e-commerce sales increased 130% relative to the third quarter of fiscal year 2008 but still only represented approximately 5% of our net sales in the thirty-nine weeks ended October 31, 2009, compared to approximately 10% to 15% for our peers.

International Expansion with Development Partners. We believe Express has the potential to be a successful global brand. There are currently four Express stores in the Middle East, which were constructed through a development agreement with Alshaya Trading Co. Over the next five years, we believe there are additional opportunities to expand the Express brand internationally through additional low capital development arrangements.

Summary Risk Factors

We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. You should carefully consider these risks, including the risks discussed in the section entitled “Risk Factors,” before investing in our common stock. Risks relating to our business include, among others:

• our business is sensitive to consumer spending and general economic conditions;

• our business is highly dependent upon our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors;

• our sales, net sales and inventory levels fluctuate on a seasonal basis and due to store events, promotions and a variety of other factors;

• we could face increased competition from other retailers;

• our ability to attract customers to our stores that are located in malls or other shopping centers depends heavily on the success of these malls and shopping centers;

• we do not own or operate any manufacturing facilities and therefore depend upon independent third parties for the manufacture of all of our merchandise; and

• we have a limited operating history as a standalone company.

Reorganization as a Corporation

Prior to the effectiveness of the registration statement for this offering, we intend to reorganize our existing corporate structure so that the issuer of our common stock is a Delaware corporation named Express, Inc. The form of the reorganization will be determined in light of all relevant factors, including tax considerations. In all events, the terms of our common stock following the Reorganization will reflect the description thereof set forth in the section entitled “Description of Capital Stock.” In this prospectus, we refer to this reorganization as our “Reorganization.”

4

Our Equity Sponsor

Golden Gate Private Equity, Inc. is a San Francisco-based private equity investment firm with approximately $8 billion of assets under management. Golden Gate is dedicated to partnering with world class management teams and targets investments in situations where there is a demonstrable opportunity to significantly enhance a company’s value. The principals of Golden Gate have a long history of investing with management partners across a wide range of industries and transaction types, including leveraged buyouts and recapitalizations, corporate divestitures and spin-offs, build-ups and venture stage investing. Over the last five years, Golden Gate has invested in numerous brands in the specialty retail and apparel sectors, including Eddie Bauer, J. Jill and Orchard Brands, a multi-brand direct marketer which owns brands such as Appleseed’s, Blair, Draper’s and Damon’s, Haband and Norm Thompson.

Corporate Information

Express, Inc., the issuer of the common stock in this offering, will be a Delaware corporation. Our corporate headquarters is located at One Limited Parkway, Columbus, Ohio 43230. Our telephone number is (614) 415-4000. Our website address is express.com. The information on our website is not deemed to be part of this prospectus.

5

The Offering

Common stock offered by us              shares

Common stock offered by the selling stockholders              shares

             shares if the underwriters exercise their option to purchase additional shares in full

Common stock to be outstanding immediately after this offering              shares

Use of proceeds We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $             million, assuming the shares are offered at $             per share, the midpoint of the price range set forth on the cover of this prospectus.

We will not receive any proceeds from the sale of shares by the selling stockholders.

We intend to use the net proceeds from the sale of common stock by us in this offering to prepay $             of the Term B Loans and $             of the Term C Loans outstanding under the Topco credit facility, to pay accrued and unpaid interest and prepayment penalties, and to pay other fees and expenses incurred in connection with this offering. We will use any remaining net proceeds from this offering for general corporate purposes. See “Use of Proceeds.”

Dividend policy We currently expect to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness and therefore we do not anticipate paying any cash dividends in the foreseeable future. Our ability to pay dividends on our common stock is limited by our existing credit agreements, and may be further restricted by the terms of any of our future debt or preferred securities. See “Dividend Policy.”

Risk Factors Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed symbol for trading on                                  “EXPR”

Unless otherwise indicated, all information in this prospectus:

• excludes              shares of common stock reserved for future grants under our equity compensation plan, which we plan to adopt in connection with this offering;

6

• assumes (1) no exercise by the underwriters of their option to purchase up to              additional shares from the selling stockholders and (2) an initial public offering price of $             per share, the midpoint of the initial public offering price range indicated on the cover of this prospectus; and

• assumes the completion of the Reorganization occurred prior to the effectiveness of this registration statement as described in the section entitled “—Reorganization as a Corporation.”

7

Summary Historical and Pro Forma Consolidated Financial and Operating Data

The following tables summarize our consolidated financial and operating data as of the dates and for the periods indicated. We have derived the summary consolidated financial data for the fiscal years or periods, as applicable, ended February 3, 2007, July 6, 2007 and February 2, 2008 from our consolidated financial statements for such fiscal years or periods, which were audited by Ernst & Young LLP, an independent registered public accounting firm. Ernst & Young LLP’s report on the consolidated financial statements for the fiscal period ended February 2, 2008, which appears elsewhere herein, includes an explanatory paragraph relating to our restatement of our financial statements as of February 2, 2008 and for the period from July 7, 2007 to February 2, 2008. We have derived the summary consolidated financial data for the fiscal year ended January 31, 2009 from our consolidated financial statements as of and for such fiscal year, which were audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. The report of PricewaterhouseCoopers LLP included in this prospectus regarding our audited financial statements as of and for the fiscal year ended January 31, 2009 contains an explanatory paragraph relating to our restatement of our financial statements. We have derived the unaudited summary consolidated financial data as of October 31, 2009 and for the thirty-nine weeks ended November 1, 2008 and October 31, 2009 from our unaudited interim consolidated financial statements which include all adjustments, consisting of normal and recurring adjustments, that we consider necessary for a fair presentation of the financial position and results of operations for such periods. Operating results for the thirty-nine week periods are not necessarily indicative of results for a full fiscal year, or for any other period. Our audited consolidated financial statements for the fiscal years or periods, as applicable, ended February 3, 2007, July 6, 2007, February 2, 2008 and January 31, 2009 and our unaudited interim consolidated financial statements as of October 31, 2009 and for the thirty-nine week periods ended November 1, 2008 and October 31, 2009 have been included in this prospectus.

On July 6, 2007, investment funds managed by Golden Gate acquired 75% of the interest in our business from Limited Brands. As a result of the Golden Gate Acquisition, a new basis of accounting was created beginning July 7, 2007 for the Successor periods ending after such date. Prior to the Golden Gate Acquisition, our consolidated financial statements were prepared on a carve-out basis from Limited Brands. The carve-out consolidated financial statements include allocations of certain costs of Limited Brands. In the Successor periods we no longer incur these allocated costs, but do incur certain expenses as a standalone company for similar functions, including support services provided by Limited Brands under the Limited Brands Transition Services Agreements, which are discussed in the section entitled “Certain Relationships and Related Party Transactions.” These allocated costs were based on various assumptions and estimates and actual results may differ from these allocated costs, assumptions and estimates. Accordingly, the carve-out consolidated financial information should not be relied upon as being representative of our financial position, results of operations or cash flows had we operated on a standalone basis. See “Risk Factors—We have a limited operating history as a standalone company, which may make it difficult to compare our current operating results to prior periods.”

8

The summary historical and pro forma consolidated data presented below should be read in conjunction with the sections entitled “Risk Factors,” “Selected Historical Consolidated Financial and Operating Data,” “Unaudited Pro Forma Condensed Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes thereto and other financial data included elsewhere in this prospectus.

	Predecessor						Successor
	Year Ended February 3, 2007			Period from February 4, 2007 through July 6, 2007			Period from July 7, 2007 through February 2, 2008(1)			Year Ended January 31, 2009(1)
													Thirty-Nine Weeks Ended
													November 1, 2008			October 31, 2009
							(restated)			(restated)			(unaudited)
	(dollars in thousands, excluding net sales per gross square foot data)
Statement of Operations Data:
Net sales	$	1,748,873		$	659,019		$	1,137,327		$	1,737,010		$	1,231,644		$	1,174,227
Cost of goods sold, buying and occupancy costs		1,254,762			451,514			890,063			1,280,018			870,308			813,998
Gross profit		494,111			207,505			247,264			456,992			361,336			360,229
General, administrative and store operating expenses		470,117			170,100			275,150			447,071			340,197			285,259
Other operating expense, net		—			302			5,526			6,007			5,067			6,514
Operating income (loss)	$	23,994		$	37,103		$	(33,412	)	$	3,914		$	16,072		$	68,456
Interest expense		—			—			6,978			36,531			22,391			40,204
Interest income		—			—			(5,190	)		(3,527	)		(3,401	)		(403	)
Other expense (income), net		—			—			4,712			(300	)		(1,116	)		(1,578	)
Income (loss) before income taxes	$	23,994		$	37,103		$	(39,912	)	$	(28,790	)	$	(1,802	)	$	30,233
Provision for income taxes		6,525			7,161			487			246			86			923
Net income (loss)	$	17,469		$	29,942		$	(40,399	)	$	(29,036	)	$	(1,888	)	$	29,310
Pro forma net income (loss) per share(2):
Basic
Diluted
Pro forma basic and diluted weighted average shares(2)
Basic
Diluted
Statement of Cash Flows Data:
Net cash provided by (used in):
Operating activities	$	84,913		$	45,912		$	282,192		$	35,234		$	(15,234	)	$	87,284
Investing activities		(53,867	)		(22,888	)		(15,258	)		(51,801	)		(32,359	)		(22,883	)
Financing activities		(24,130	)		(29,939	)		39,361			(127,347	)		(202,032	)		(82,121	)
Other Financial and Operating Data:
Comparable store sales change(3)		(1	)%		6	%		12	%		(3	)%		5	%		(10	)%
Net sales per gross square foot(4)	$	282		$	118		$	213		$	337		$	241		$	221
Total gross square feet (in thousands) (average)		6,195			5,604			5,348			5,060			5,059			5,032
Number of stores (at period end)		658			622			587			581			585			581
Capital expenditures		53,867			22,888			15,258			50,551			32,359			22,883
EBITDA(5)		85,915			62,154			10,071			83,514			75,967			123,502
Adjusted EBITDA(5)		85,915			62,154			115,272			137,198			111,479			145,129
											As of October 31, 2009
											Actual			Pro Forma(7)			Pro Forma As Adjusted(7)
														(unaudited)
Balance Sheet Data (at end of period):
Cash and cash equivalents										$	158,395
Working capital (excluding cash and cash equivalents)(6)											(22,502	)
Total assets											861,537
Total debt (including current portion)											416,921
Total members’/stockholders’ equity											127,916

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(1) Our consolidated financial statements for the Successor period from July 7, 2007 through February 2, 2008 and fiscal 2008 have been restated. See Note 3 to our consolidated financial statements for the fiscal year ended January 31, 2009, which are included elsewhere in this prospectus, for a complete discussion of the restatement.

(2) Our weighted average shares outstanding and our net income (loss) per share are only presented for the Successor periods because such results are not meaningful for the Predecessor periods, as we operated as a wholly-owned division of Limited Brands and did not have a defined capital structure. Unaudited pro forma net income (loss) per share gives effect to the Reorganization and also includes              shares expected to be issued in this offering, whose proceeds will be used to prepay a portion of the Term B Loans and Term C Loans plus accrued and unpaid interest and prepayment penalties. See “Unaudited Pro Forma Condensed Consolidated Financial Data.”

(3) Comparable store sales have been calculated based upon stores that were open at least thirteen full fiscal months as of the end of the reporting period. For the year ended February 3, 2007, which was a fifty-three week year, sales from the first week of fiscal 2006 were excluded from the calculation to present comparable periods.

(4) Net sales per gross square foot is calculated by dividing net sales for the applicable period by the average gross square footage during such period. For the purpose of calculating net sales per gross square foot, e-commerce sales and other revenues are excluded from net sales.

(5) EBITDA and Adjusted EBITDA have been presented in this prospectus and are supplemental measures of financial performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). EBITDA is defined as consolidated net income (loss) before depreciation and amortization, interest expense (net) and amortization of debt issuance costs and discounts and provision for income taxes. Adjusted EBITDA is calculated in accordance with our existing credit agreements, and is defined as EBITDA adjusted to exclude the items set forth in the table below.

EBITDA is included in this prospectus because it is a key metric used by management to assess our operating performance. Adjusted EBITDA is included in this prospectus because it is a measure by which our lenders evaluate our covenant compliance. The Topco credit facility contains a leverage ratio covenant and an interest coverage ratio covenant that are calculated based on our Adjusted EBITDA. The Opco term loan contains a leverage ratio covenant and the Opco revolving credit facility contains a fixed charge coverage ratio covenant that we must meet if we do not meet the excess availability requirement under the Opco revolving credit facility, and are calculated based on Adjusted EBITDA, without the adjustment for management bonuses paid in connection with our distribution to equity holders in 2008. See “Certain Relationships and Related Party Transactions—2008 Corporate Reorganization.” Non-compliance with the financial ratio covenants contained in the Opco term loan and the Opco revolving credit facility could result in the acceleration of our obligations to repay all amounts outstanding under those agreements. The applicable interest rates on the Opco term loan and the Opco revolving credit facility are also based in part on our leverage ratio and excess availability, respectively. In addition, the Opco term loan and the Opco revolving credit facility contain covenants that restrict, subject to certain exceptions, our ability to incur additional indebtedness or make restricted payments, such as dividends, based, in some cases, on our ability to meet leverage ratios or fixed charge coverage ratios. Adjusted EBITDA is a material component of these ratios.

EBITDA and Adjusted EBITDA are not measures of our financial performance or liquidity under GAAP and should not be considered as alternatives to net income as a measure of operating performance, cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements. EBITDA and Adjusted EBITDA contain certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized, and exclude certain non-recurring charges that may recur in the future. Management compensates for these limitations by relying primarily on our GAAP results and by using EBITDA and Adjusted EBITDA only supplementally. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

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The following table sets forth a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to EBITDA and Adjusted EBITDA.

	Predecessor				Successor
	Year Ended February 3, 2007		Period from February 4, 2007 through July 6, 2007		Period from July 7, 2007 through February 2, 2008			Year Ended January 31, 2009			Thirty-Nine Weeks Ended
											November 1, 2008			October 31, 2009
					(restated)			(restated)			(unaudited)
					(dollars in thousands)
Net income/(loss)	$	17,469	$	29,942	$	(40,399	)	$	(29,036	)	$	(1,888	)	$	29,310
Depreciation and amortization		61,921		25,051		48,195			79,105			58,586			53,470
Interest expense (net)(a)		—		—		1,788			33,199			19,183			39,799
Provision for income taxes		6,525		7,161		487			246			86			923
EBITDA	$	85,915	$	62,154	$	10,071		$	83,514		$	75,967		$	123,502
Non-cash deductions, losses, charges(b)						9,780			21,112			9,616			8,794
Non-recurring expenses(c)						86,886			18,660			15,460			3,807
Transaction expenses(d)						766			3,596			2,496			1,443
Permitted advisory agreement fees and expenses(e)						3,882			4,238			3,007			4,725
Non-cash expense related to equity incentives						1,233			2,069			1,534			1,510
Other adjustments allowable under our existing credit agreements(f)						2,654			4,009			3,399			1,348
Adjusted EBITDA	$	85,915	$	62,154	$	115,272		$	137,198		$	111,479		$	145,129

(a) Includes interest income at Express Parent in the year ended January 31, 2009 and the thirty-nine weeks ended November 1, 2008, and also includes the amortization of debt issuance costs and amortization of debt discount.

(b) Adjustments made to reflect the net impact of non-cash expense items such as non-cash rent and expense associated with the change in the fair value of our interest rate swap.

(c) Primarily includes an $86.9 million non-cash cost of goods sold charge associated with the allocation of purchase price adjustments to inventory in the 30 weeks ended February 2, 2008, a one-time management bonus paid in the first quarter of fiscal 2008 and expenses related to the development of standalone IT systems in anticipation of the termination of our transition services agreement with Limited Brands.

(d) Represents costs incurred related to items such as the issuance of stock, recapitalizations and the incurrence of permitted indebtedness.

(e) Golden Gate provides us with on-going consulting and management services pursuant to the advisory agreement entered into in connection with the Golden Gate Acquisition. See “Certain Relationships and Related Party Transactions—Golden Gate Advisory Agreement.”

(f) Reflects adjustments permitted under our existing credit agreements, including advisory fees paid to Limited Brands.

(6) Working capital is defined as current assets, less cash and cash equivalents, less current liabilities excluding the current portion of long-term debt.

(7) Pro forma balance sheet data reflects (A) our Reorganization, as described under “—Reorganization as a Corporation,” (B) the use of $         of the proceeds of this offering from the sale of shares to prepay a portion of the Term B Loans and Term C Loans outstanding under our Topco credit facility plus accrued and unpaid interest and prepayment penalties and (C) the use of $             of the proceeds of this offering from the sale of shares to pay other fees and expenses incurred in connection with this offering, including payments to Golden Gate and Limited Brands. Pro forma as adjusted balance sheet data reflects the use of the remaining proceeds of this offering for general corporate purposes. See, “Use of Proceeds” and “Unaudited Pro Forma Condensed Consolidated Financial Data.”

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RISK FACTORS

This offering and an investment in our common stock involve a high degree of risk. You should carefully consider the risks described below, together with the financial and other information contained in this prospectus, before you decide to purchase shares of our common stock. If any of the following risks actually occurs, our business, financial condition, results of operations, cash flow and prospects could be materially and adversely affected. As a result, the trading price of our common stock could decline and you could lose all or part of your investment in our common stock.

Risks Related to Our Business

Our business is sensitive to consumer spending and general economic conditions, and a continued or further economic slowdown could adversely affect our financial performance.

Consumer purchases of discretionary retail items, including our products, generally decline during recessionary periods and other periods where disposable income is adversely affected. Our performance is subject to factors that affect domestic and worldwide economic conditions, including employment, consumer debt, reductions in net worth based on recent severe market declines, residential real estate and mortgage markets, taxation, fuel and energy prices, interest rates, consumer confidence, value of the United States dollar versus foreign currencies and other macroeconomic factors. For example, our net sales declined by 5% in the thirty-nine weeks ended October 31, 2009 as compared to the prior year period, primarily due to the global economic recession. Further deterioration in economic conditions or increasing unemployment levels, may continue to reduce the level of consumer spending and inhibit consumers’ use of credit, which may continue to adversely affect our revenues and profits. In recessionary periods, we may have to increase the number of promotional sales or otherwise dispose of inventory for which we have previously paid to manufacture, which could further adversely affect our profitability. Our financial performance is particularly susceptible to economic and other conditions in regions or states where we have a significant number of stores. Current economic conditions and further slowdown in the economy could further adversely affect shopping center traffic and new shopping center development and could materially adversely affect us.

In addition, the current economic environment and future recessionary periods may exacerbate some of the risks noted below, including consumer demand, strain on available resources, store growth, interruption of the flow of merchandise from key vendors and foreign exchange rate fluctuations. The risks could be exacerbated individually or collectively.

Our business is highly dependent upon our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors, and our inability to identify and respond to these new trends may lead to inventory markdowns and writeoffs, which could adversely affect us and our brand image.

Our focus on fashion conscious young women and men means that we have a target market of customers whose preferences cannot be predicted with certainty and are subject to change. Our success depends in large part upon our ability to effectively identify and respond to changing fashion trends and consumer demands, and to translate market trends into appropriate, saleable product offerings. Our failure to identify and react appropriately to new and changing fashion trends or tastes or to accurately forecast demand for certain product offerings could lead to, among other things, excess inventories, markdowns and write-offs, which could materially adversely affect our business and our brand image. Because our success depends significantly on our brand image, damage to our brand image as a result of our failure to respond to changing fashion trends could have a negative impact on us.

We often enter into agreements for the manufacture and purchase of merchandise well ahead of the season in which that merchandise will be sold. Therefore we are vulnerable to changes in consumer preference and demand between the time we design and order our merchandise and the season in which this merchandise will

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be sold. There can be no assurance that our new product offerings will have the same level of acceptance as our product offerings in the past or that we will be able to adequately and timely respond to the preferences of our customers. The failure of any new product offerings to appeal to our customers could have a material adverse effect on our business, results of operations and financial condition.

Our sales and profitability fluctuate on a seasonal basis and are affected by a variety of other factors.

Our sales and results of operations are affected by a variety of factors, including fashion trends, changes in our merchandise mix, the effectiveness of our inventory management, actions of competitors or mall anchor tenants, holiday or seasonal periods, changes in general economic conditions and consumer spending patterns, the timing of promotional events and weather conditions. As a result, our results of operations fluctuate on a quarterly basis and relative to corresponding periods in prior years, and any of these factors could adversely affect our business and could cause our results of operations to decline. For example, our third and fourth quarter net sales are impacted by early fall shopping trends and the holiday season. Likewise, we typically experience lower net sales in the first fiscal quarter relative to other quarters. Any significant decrease in net sales during the early fall selling period or the holiday season would have a material adverse effect on us. In addition, in order to prepare for these seasons, we must order and keep in stock significantly more merchandise than we carry during other parts of the year. This inventory build-up may require us to expend cash faster than we generate by our operations during this period. Any unanticipated decrease in demand for our products during these peak shopping seasons could require us to sell excess inventory at a substantial markdown, which could have a material adverse effect on our business, profitability, ability to repay any indebtedness and our brand image with customers.

We could face increased competition from other retailers that could adversely affect our ability to generate higher net sales and our ability to obtain favorable store locations.

We face substantial competition in the specialty retail apparel industry. We compete on the basis of a combination of factors, including among others, price, breadth, quality and style of merchandise offered, in-store experience, level of customer service, ability to identify and offer new and emerging fashion trends and brand image. We compete with a wide variety of large and small retailers for customers, vendors, suitable store locations and personnel. We face competition from major specialty retailers that offer their own private label assortment, department stores, regional retail chains, web-based retail stores and other direct retailers that engage in the retail sale of apparel accessories, footwear and similar merchandise to fashion-conscious young women and men.

Some of our competitors have greater financial, marketing and other resources available. In many cases, our competitors sell their products in stores that are located in the same shopping malls or lifestyle centers as our stores. In addition to competing for sales, we compete for favorable site locations and lease terms in shopping malls and lifestyle centers and our competitors may be able to secure more favorable locations than us as a result of their relationships with, or appeal to, landlords. Our competitors may also sell substantially similar products at reduced prices through the Internet or through outlet centers or discount stores, increasing the competitive pricing pressure for those products. We cannot assure you that we will continue to be able to compete successfully against existing or future competitors. Our expansion into markets served by our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on us.

Our ability to attract customers to our stores that are located in malls or other shopping centers depends heavily on the success of these malls and shopping centers, and any decrease in customer traffic in these malls or shopping centers could cause our net sales to be less than expected.

A significant number of our stores are located in malls and other shopping centers. Sales at these stores are dependent, to a significant degree, upon the volume of traffic in those shopping centers and the surrounding area. Our stores benefit from the ability of a shopping center’s other tenants, particularly anchor stores, such as department stores, to generate consumer traffic in the vicinity of our stores and the continuing popularity of the

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shopping center as a shopping destination. Our sales volume and traffic generally may be adversely affected by, among other things, a decrease in popularity of malls or other shopping centers in which our stores are located, the closing of anchor stores important to our business, a decline in popularity of other stores in the malls or other shopping centers in which our stores are located or a deterioration in the financial condition of shopping center operators or developers which could, for example, limit their ability to finance tenant improvements for us and other retailers. A reduction in consumer traffic as a result of these or any other factors, or our inability to obtain or maintain favorable store locations within malls or other shopping centers could have a material adverse effect on us. Although we do not have specific information with respect to the malls and other shopping centers in which we locate or plan to locate our stores, we believe mall and other shopping center vacancy rates have been rising and mall and other shopping center traffic has been decreasing nationally, as a result of the current economic downturn which could reduce traffic to our stores.

We do not own or operate any manufacturing facilities and therefore depend upon independent third parties for the manufacture of all of our merchandise, and any inability of a manufacturer to ship goods to our specifications or to operate in compliance with applicable laws could negatively impact our business.

We do not own or operate any manufacturing facilities. As a result, we are dependent upon our timely receipt of quality merchandise from third-party manufacturers. A manufacturer’s inability to ship orders to us in a timely manner or meet our quality standards could cause delays in responding to consumer demands and negatively affect consumer confidence in the quality and value of our brand or negatively impact our competitive position, all of which could have a material adverse effect on our financial condition or results of operations. Furthermore, we are susceptible to increases in sourcing costs, which we may not be able to pass on to customers, and changes in payment terms from manufacturers, which could adversely affect our financial condition or results of operations.

Failure by our manufacturers to comply with our guidelines also exposes us to various risks, including with respect to use of acceptable labor practices and compliance with applicable laws. We do not independently investigate whether our vendors and manufacturers use acceptable labor practices and comply with applicable laws, such as child labor and other labor laws, and instead rely on audits performed by several unrelated third party auditors. Our business may be negatively impacted should any of our manufacturers experience an interruption in operations, including due to labor disputes and failure to comply with laws, and our business may suffer from negative publicity for using manufacturers that do not engage in acceptable labor practices and comply with applicable law. Any of these results could harm our brand image and have a material adverse effect on our business and growth.

The interruption of the flow of merchandise from international manufacturers could disrupt our supply chain.

We purchase the majority of our merchandise outside of the United States through arrangements with approximately 90 vendors, utilizing approximately 350 foreign manufacturing facilities located throughout the world, primarily in Asia and Central and South America. Political, social or economic instability in Asia, Central or South America, or in other regions in which our manufacturers are located, could cause disruptions in trade, including exports to the United States. Other events that could also cause disruptions to exports to the United States include:

• the imposition of additional trade law provisions or regulations;

• the imposition of additional duties, tariffs and other charges on imports and exports;

• quotas imposed by bilateral textile agreements;

• foreign currency fluctuations;

• restrictions on the transfer of funds;

• the financial instability or bankruptcy of manufacturers; and

• significant labor disputes, such as dock strikes.

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We cannot predict whether the countries in which our merchandise is manufactured, or may be manufactured in the future, will be subject to new or additional trade restrictions imposed by the United States or other foreign governments, including the likelihood, type or effect of any such restrictions. Trade restrictions, including new or increased tariffs or quotas, embargos, safeguards and customs restrictions against apparel items, as well as United States or foreign labor strikes and work stoppages or boycotts, could increase the cost or reduce the supply of apparel available to us and adversely affect our business, financial condition or results of operations.

If we encounter difficulties associated with our distribution facilities or if they were to shut down for any reason, we could face shortages of inventory, delayed shipments to our online customers and harm to our reputation. Any of these issues could have a material adverse effect on our business operations.

Our distribution facilities are operated by third parties. Our Columbus, Ohio facility operates as our central distribution facility and supports our entire business, as all of our merchandise is shipped to the central distribution facility from our vendors, and is then packaged and shipped to our stores or our e-commerce distribution facility for further distribution to our online customers. The success of our stores and the satisfaction of our online customers depend on their timely receipt of merchandise. The efficient flow of our merchandise requires that the third parties who operate our facilities have adequate capacity in both of our distribution facilities to support our current level of operations, and any anticipated increased levels that may follow from the growth of our business. If we encounter difficulties associated with our distribution facilities or in our relationships with the third parties who operate our facilities or if either facility were to shut down for any reason, including as a result of fire or other natural disaster, we could face shortages of inventory, resulting in “out of stock” conditions in our stores, incur significantly higher costs and longer lead times associated with distributing our products to both our stores and online customers and experience dissatisfaction from our customers. We expect that in the Fall of 2010, our e-commerce distribution facility will be moved from Warren, Pennsylvania to a facility located in Groveport, Ohio, and we may encounter difficulties and unanticipated costs in transitioning our e-commerce fulfillment operations to this facility. Any of these issues could have a material adverse effect on our business and harm our reputation.

We rely upon independent third-party transportation providers for substantially all of our product shipments and are subject to increased shipping costs as well as the potential inability of our third-party transportation providers to deliver on a timely basis.

We currently rely upon independent third-party transportation providers for substantially all of our product shipments, including shipments to and from all of our stores. Our utilization of these delivery services for shipments is subject to risks, including increases in fuel prices, which would increase our shipping costs, and employee strikes and inclement weather which may impact a shipping company’s ability to provide delivery services that adequately meet our shipping needs. If we change the shipping companies we use, we could face logistical difficulties that could adversely affect deliveries and we would incur costs and expend resources in connection with such change. Moreover, we may not be able to obtain terms as favorable as those received from independent third-party transportation providers which in turn would increase our costs.

Our growth strategy, including our international expansion plan, is dependent on a number of factors, any of which could strain our resources or delay or prevent the successful penetration into new markets.

Our growth strategy is partially dependent on opening new stores across North America, remodeling existing stores in a timely manner and operating them profitably. Additional factors required for the successful implementation of our growth strategy include, but are not limited to, obtaining desirable store locations, negotiating acceptable leases, completing projects on budget, supplying proper levels of merchandise and successfully hiring and training store managers and sales associates. In order to optimize profitability for new stores, we must secure desirable retail lease space when opening stores in new and existing markets. We must choose store sites, execute favorable real estate transactions on terms that are acceptable to us, hire competent personnel and effectively open and operate these new stores. We historically have received landlord allowances for store build outs, which offset certain capital expenditures we must make to open a new store. If landlord allowances cease to be

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available to us in the future or are decreased, opening new stores would require more capital outlay, which could adversely affect our ability to continue opening new stores.

To the extent we open new stores in markets where we have existing stores, our existing stores in those markets may experience reduced net sales. Our planned growth will also require additional infrastructure for the development, maintenance and monitoring of those stores. In addition, if our current management systems and information systems are insufficient to support this expansion, our ability to open new stores and to manage our existing stores would be adversely affected. If we fail to continue to improve our infrastructure, we may be unable to implement our growth strategy or maintain current levels of operating performance in our existing stores.

Additionally, we plan to expand outside of North America through development agreements with third parties and these plans could be negatively impacted by a variety of factors. We may be unable to find acceptable partners with whom we can enter into joint development agreements, negotiate acceptable terms for franchise and development agreements and gain acceptance from consumers outside of North America. Our planned usage of development agreements outside of North America also creates the inherent risk brought about by allowing third parties to both effectively operate the businesses and appropriately project our brand image in their respective markets. Ineffective or inappropriate operation of our partners’ businesses or projection of our brand image could create difficulties in the execution of our international expansion plans.

Our domestic growth plans and our international expansion plan will place increased demands on our financial, operational, managerial and administrative resources. These increased demands may cause us to operate our business less efficiently, which in turn could cause deterioration in the performance of our existing stores. Furthermore, relating to our international expansion, our ability to conduct business in international markets may be affected by legal, regulatory, political and economic risks, including our unfamiliarity with local business and legal environments in other areas of the world. Our international expansion strategy and success could also be adversely impacted by the global economy, as well as by fluctuations in the value of the dollar against foreign currencies.

Our business depends in part on a strong brand image, and if we are not able to maintain and enhance our brand, particularly in new markets where we have limited brand recognition, we may be unable to attract sufficient numbers of customers to our stores or sell sufficient quantities of our products.

Our ability to maintain our reputation is critical to our brand image. Our reputation could be jeopardized if we fail to maintain high standards for merchandise quality and integrity. Any negative publicity about these types of concerns may reduce demand for our merchandise. Failure to maintain high ethical, social and environmental standards for all of our operations and activities or adverse publicity regarding our responses to these concerns could also jeopardize our reputation. Failure to comply with local laws and regulations, to maintain an effective system of internal controls or to provide accurate and timely financial statement information could also hurt our reputation. Damage to our reputation or loss of consumer confidence for any of these reasons could have a material adverse effect on our business, financial condition and results of operations, as well as require additional resources to rebuild our reputation.

We are subject to risks associated with leasing substantial amounts of space, including future increases in occupancy costs.

We lease all of our store locations, our corporate headquarters and our central distribution facility. We typically occupy our stores under operating leases with terms of ten years, with options to renew for additional multi-year periods thereafter. In the future, we may not be able to negotiate favorable lease terms. Our inability to do so may cause our occupancy costs to be higher in future years or may force us to close stores in desirable locations.

Some of our leases have early cancellation clauses, which permit the lease to be terminated by us or the landlord if certain sales levels are not met in specific periods or if the center does not meet specified occupancy

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standards. In addition to future minimum lease payments, some of our store leases provide for additional rental payments based on a percentage of net sales, or “percentage rent,” if sales at the respective stores exceed specified levels, as well as the payment of common area maintenance charges, real property insurance and real estate taxes. Many of our lease agreements have defined escalating rent provisions over the initial term and any extensions. As we expand our store base, our lease expense and our cash outlays for rent under the lease terms will increase.

We depend on cash flow from operations to pay our lease expenses. If our business does not generate sufficient cash flow from operating activities to fund these expenses, we may not be able to service our lease expenses, which could materially harm our business.

If an existing or future store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term. Moreover, even if a lease has an early cancellation clause, we may not satisfy the contractual requirements for early cancellation under that lease. Our inability to enter into new leases or renew existing leases on terms acceptable to us or be released from our obligations under leases for stores that we close could materially adversely affect us.

Our failure to find store employees that reflect our brand image and embody our culture could adversely affect our business.

Our success depends in part upon our ability to attract, motivate and retain a sufficient number of store employees, including store managers, who understand and appreciate our corporate culture and customers, and are able to adequately and effectively represent this culture and establish credibility with our customers. The store employee turnover rate in the retail industry is generally high. Excessive store employee turnover will result in higher employee costs associated with finding, hiring and training new store employees. If we are unable to hire and retain store personnel capable of consistently providing a high level of customer service, as demonstrated by their enthusiasm for our culture, understanding of our customers and knowledge of the merchandise we offer, our ability to open new stores may be impaired, the performance of our existing and new stores could be materially adversely affected and our brand image may be negatively impacted. Competition for such qualified individuals could require us to pay higher wages to attract a sufficient number of employees. Additionally, our labor costs are subject to many external factors, including unemployment levels, prevailing wage rates, minimum wage laws, potential collective bargaining arrangements, health insurance costs and other insurance costs and changes in employment and labor legislation or other workplace regulation (including changes in entitlement programs such as health insurance and paid leave programs). Such increase in labor costs may adversely impact our profitability, or if we fail to pay such higher wages we could suffer increased employee turnover.

We are also dependent upon temporary personnel to adequately staff our stores and distribution facilities, with heightened dependence during busy periods such as the holiday season and when multiple new stores are opening. There can be no assurance that we will receive adequate assistance from our temporary personnel, or that there will be sufficient sources of suitable temporary personnel to meet our demand. Any such failure to meet our staffing needs or any material increases in employee turnover rates could have a material adverse effect on our business or results of operations.

We depend on key executive management and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business.

We depend on the leadership and experience of our key executive management. The loss of the services of any of our executive management members could have a material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased costs, or at all. We believe that our future success will depend greatly on our continued ability to attract

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and retain highly skilled and qualified personnel. There is a high level of competition for experienced, successful personnel in the retail industry. Our inability to meet our staffing requirements in the future could impair our growth and harm our business.

We work with Limited Brands to provide us with certain key services for our business. If Limited Brands fails to perform its obligations to us or if we do not find appropriate replacement services, we may be unable to provide these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us.

Limited Brands, our former parent and a current equity holder, provides certain services to us under various agreements. These services include technology and in-bound and out-bound logistics support. If Limited Brands fails to perform its obligations under either the transition services agreement or other agreements such as our headquarters lease and logistics agreements, we may be unable to obtain substitute arrangements in a timely and cost-effective manner. See “Certain Relationships and Related Party Transactions.”

We rely significantly on information systems and any failure, inadequacy, interruption or security failure of those systems could harm our ability to effectively operate our business.

Our ability to effectively manage and maintain our inventory, and to ship products to our stores and our customers on a timely basis, depends significantly on our information systems. To manage the growth of our operations, personnel and real estate portfolio, we will need to continue to improve and expand our operational and financial systems, real estate management systems, transaction processing, internal controls and business processes; in doing so, we could encounter implementation issues and incur substantial additional expenses. The failure of our information systems to operate effectively, problems with transitioning to upgraded or replacement systems or expanding them into new stores, or a breach in security of these systems could adversely impact the promptness and accuracy of our merchandise distribution, transaction processing, financial accounting and reporting, the efficiency of our operations and our ability to properly forecast earnings and cash requirements. We could be required to make significant additional expenditures to remediate any such failure, problem or breach. Such events may have a material adverse effect on us.

We sell merchandise over the Internet through our website, express.com. Our Internet operations may be affected by our reliance on third-party hardware and software providers, technology changes, risks related to the failure of computer systems that operate the Internet business, telecommunications failures, electronic break-ins and similar disruptions. Furthermore, our ability to conduct business on the Internet may be affected by liability for on-line content and state and federal privacy laws.

In addition, we may now and in the future implement new systems to increase efficiencies and profitability. To manage growth of our operations and personnel, we will need to continue to improve and expand our operational and financial systems, transaction processing, internal controls and business processes. When implementing or changing existing processes, we may encounter transitional issues and incur substantial additional expenses.

System security risk issues could disrupt our internal operations or information technology services, and any such disruption could harm our net sales, increase our expenses and harm our reputation.

Experienced computer programmers and hackers, or even internal users, may be able to penetrate our network security and misappropriate our confidential information or that of third parties, including our customers, create system disruptions or cause shutdowns. In addition, employee error, malfeasance or other errors in the storage, use or transmission of any such information could result in a disclosure to third parties outside of our network. As a result, we could incur significant expenses addressing problems created by any such inadvertent disclosure or any security breaches of our network. This risk is heightened because we collect and store customer information, including credit card information, and use certain customer information for

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marketing purposes. Any compromise of customer information could subject us to customer or government litigation and harm our reputation, which could adversely affect our business and growth. Moreover, we could incur significant expenses or disruptions of our operations in connection with system failures or breaches. In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the systems. The costs to us to eliminate or alleviate security problems, viruses and bugs, or any problems associated with the outsourced services, could be significant, and the efforts to address these problems could result in interruptions, delays or cessation of service that may impede our sales, distribution or other critical functions.

There are claims made against us from time to time that can result in litigation or regulatory proceedings which could distract management from our business activities and result in significant liability.

We face the risk of litigation and other claims against us. Litigation and other claims may arise in the ordinary course of our business and include commercial disputes, intellectual property issues, product-oriented allegations and slip and fall claims. In addition, we could face a wide variety of employee claims against us, including general discrimination, privacy, labor and employment, ERISA and disability claims. For example, Express, LLC is named as a defendant in a purported class action lawsuit alleging various California state labor law violations. See “Business—Legal Proceedings.” Any claims could result in litigation against us and could also result in regulatory proceedings being brought against us by various federal and state agencies that regulate our business, including the U.S. Equal Employment Opportunity Commission. Often these cases raise complex factual and legal issues, which are subject to risks and uncertainties and which could require significant management time. Litigation and other claims and regulatory proceedings against us could result in unexpected expenses and liability, and could also materially adversely affect our operations and our reputation.

In addition, we may be subject to liability if we infringe the trademarks or other intellectual property rights of third parties. If we were to be found liable for any such infringement, we could be required to pay substantial damages and could be subject to injunctions preventing further infringement. Such infringement claims could subject us to boycotts by our customers and harm to our brand image. In addition, any payments we are required to make and any injunctions we are required to comply with as a result of such infringement actions could adversely affect our financial results.

Changes in laws, including employment laws and laws related to our merchandise, could make conducting our business more expensive or otherwise change the way we do business.

We are subject to numerous regulations, including labor and employment, customs, truth-in-advertising, consumer protection and zoning and occupancy laws and ordinances that regulate retailers generally and/or govern the importation, promotion and sale of merchandise and the operation of stores and warehouse facilities. If these regulations were to change or were violated by our management, employees, vendors, buying agents or trading companies, the costs of certain goods could increase, or we could experience delays in shipments of our goods, be subject to fines or penalties, or suffer reputational harm, which could reduce demand for our merchandise and hurt our business and results of operations.

In addition to increased regulatory compliance requirements, changes in laws could make ordinary conduct of our business more expensive or require us to change the way we do business. For example, changes in federal and state minimum wage laws could raise the wage requirements for certain of our employees, which would likely cause us to reexamine our entire wage structure for stores. Other laws related to employee benefits and treatment of employees, including laws related to limitations on employee hours, supervisory status, leaves of absence, mandated health benefits or overtime pay, could also negatively impact us, such as by increasing compensation and benefits costs for overtime and medical expenses.

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Moreover, changes in product safety or other consumer protection laws could lead to increased costs to us for certain merchandise, or additional labor costs associated with readying merchandise for sale. It is often difficult for us to plan and prepare for potential changes to applicable laws and future actions or payments related to such changes could be material to us.

We may be unable to protect our trademarks or other intellectual property rights, which could harm our business.

We rely on certain trademark registrations and common law trademark rights to protect the distinctiveness of our brand. However, there can be no assurance that the actions we have taken to establish and protect our trademarks will be adequate to prevent imitation of our trademarks by others or to prevent others from claiming that sales of our products infringe, dilute or otherwise violate third party trademarks or other proprietary rights in order to block sales of our products.

The laws of certain foreign countries may not protect the use of unregistered trademarks to the same extent as do the laws of the United States. As a result, international protection of our brand image may be limited and our right to use our trademarks outside the United States could be impaired. Other persons or entities may have rights to trademarks that contain portions of our marks or may have registered similar or competing marks for apparel and/or accessories in foreign countries in which our vendors source our merchandise. There may also be other prior registrations of trademarks identical or similar to our trademarks in other foreign countries of which we are not aware. Accordingly, it may be possible for others to prevent the manufacture of our branded goods in certain foreign countries or the sale or exportation of our branded goods from certain foreign countries to the United States. If we were unable to reach a licensing arrangement with these parties, our vendors may be unable to manufacture our products in those countries. Our inability to register our trademarks or purchase or license the right to use the relevant trademarks or logos in these jurisdictions could limit our ability to obtain supplies from less costly markets or penetrate new markets in jurisdictions outside the United States.

Litigation may be necessary to protect our trademarks and other intellectual property rights, to enforce these rights or to defend against claims by third parties alleging that we infringe, dilute or violate third party trademark or other intellectual property rights. Any litigation or claims brought by or against us, whether with or without merit, or whether successful or not, could result in substantial costs and diversion of our resources, which could have a material adverse effect on our business, financial condition, results of operations or cash flows. Any intellectual property litigation or claims against us could result in the loss or compromise of our intellectual property rights, could subject us to significant liabilities, require us to seek licenses on unfavorable terms, if available at all, prevent us from manufacturing or selling certain products and/or require us to redesign or relabel our products or rename our brand, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

We have a limited operating history as a standalone company, which may make it difficult to compare our current operating results to prior periods.

On July 6, 2007, investment funds managed by Golden Gate acquired 75% of the equity interest in our business from Limited Brands. As a result of the Golden Gate Acquisition, a new basis of accounting was created beginning July 7, 2007 for the Successor periods ending after such date. Prior to the Golden Gate Acquisition, our consolidated financial statements were prepared on a carve-out basis from Limited Brands. The carve-out consolidated financial statements include allocations of certain costs of Limited Brands. In the Successor periods we no longer incur these allocated costs, but do incur certain expenses as a standalone company for similar functions, including for certain support services provided by Limited Brands under the Limited Brands Transition Services Agreements, which are discussed further in the section entitled “Certain Relationships and Related Party Transactions.” These allocated costs were based upon various assumptions and estimates and actual results may differ from these allocated costs, assumptions and estimates. Accordingly, the carve-out consolidated financial statements should not be relied upon as being representative of our financial position, results of operations or cash flows had we operated on a standalone basis.

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Our substantial indebtedness and lease obligations could adversely affect our financial flexibility and our competitive position.

We have, and we will continue to have a significant amount of indebtedness. As of October 31, 2009, we had approximately $416.9 million of outstanding indebtedness (net of unamortized original issue discounts of $5.3 million). As of October 31, 2009, we had no borrowings outstanding and $187.9 million available under our revolving credit facility. On a pro forma as adjusted basis giving effect to the use of proceeds from this offering, we had approximately $         million of outstanding indebtedness (net of unamortized original issue discounts of $         million) as of October 31, 2009. Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. We also have, and will continue to have, significant lease obligations. As of October 31, 2009, our minimum annual rental obligations under long-term operating leases for fiscal 2010 and 2011 are $122.2 million and $111.4 million, respectively. Our substantial indebtedness and lease obligations could have other important consequences to you and significant effects on our business. For example, it could:

• increase our vulnerability to adverse changes in general economic, industry and competitive conditions;

• require us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness and leases, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• restrict us from exploiting business opportunities;

• make it more difficult to satisfy our financial obligations, including payments on our indebtedness;

• place us at a disadvantage compared to our competitors that have less debt and lease obligations; and

• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other general corporate purposes.

In addition, the agreements governing our existing credit agreements contain, and the agreements evidencing or governing other future indebtedness may contain, restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness.

Our indebtedness may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.

Agreements governing our indebtedness contain financial restrictions on us and our restricted subsidiaries, including restrictions on our or our restricted subsidiaries’ ability to, among other things:

• place liens on our or our restricted subsidiaries’ assets;

• make investments other than permitted investments;

• incur additional indebtedness;

• prepay or redeem certain indebtedness;

• merge, consolidate or dissolve;

• sell assets;

• engage in transactions with affiliates;

• change the nature of our business;

• change our or our subsidiaries’ fiscal year or organizational documents; and

• make restricted payments (including certain equity issuances).

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A failure by us or our subsidiaries to comply with the covenants or to maintain the required financial ratios contained in the agreements governing our indebtedness could result in an event of default under such indebtedness, which could adversely affect our ability to respond to changes in our business and manage our operations. Upon the occurrence of an event of default under any of the agreements governing our indebtedness, the lenders could elect to declare all amounts outstanding to be due and payable and exercise other remedies as set forth in the agreements. If any of our indebtedness were to be accelerated, there can be no assurance that our assets would be sufficient to repay this indebtedness in full, which could have a material adverse effect on our ability to continue to operate as a going concern. See “Description of Certain Indebtedness.”

Our results may be adversely affected by fluctuations in energy costs.

Energy costs have fluctuated dramatically in the past. These fluctuations may result in an increase in our transportation costs for distribution, utility costs for our retail stores and costs to purchase product from our manufacturers. A continual rise in energy costs could adversely affect consumer spending and demand for our products and increase our operating costs, both of which could have a material adverse effect on our financial condition and results of operations.

Changes in taxation requirements or the results of tax audits could adversely affect our financial results.

Upon completion of the Reorganization, we will be treated as a corporation under Subchapter C of Chapter 1 of the Internal Revenue Code which will subject us to additional taxes and risks, including tax on our income. As a result of the Reorganization, we will record net deferred tax liabilities and a one-time, non-cash tax expense of $26.2 million. Dividends, if any, distributed in respect of our common stock will be subject to double taxation after the election. In addition, we may be subject to periodic audits by the Internal Revenue Service and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocations of taxable income to the various jurisdictions. These additional taxes and the results of any tax audits could adversely affect our financial results.

In addition, we are subject to income tax in numerous jurisdictions, and in the future as a result of our expansion we may be subject to additional jurisdictions, including international and domestic locations. Our products are subject to import and excise duties and/or sales or value-added taxes in many jurisdictions. Fluctuations in tax rates and duties could have a material adverse effect on our financial condition, results of operations or cash flows.

We may recognize impairment on long-lived assets.

Our long-lived assets, primarily stores and intangible assets, are subject to periodic testing for impairment. Store assets are reviewed using factors including, but not limited to, our future operating plans and projected future cash flows. Failure to achieve our future operating plans or generate sufficient levels of cash flow at our stores could result in impairment charges on long-lived assets, which could have a material adverse effect on our financial condition or results of operations.

If we fail to establish and maintain adequate internal controls over financial reporting, we may not be able to report our financial results in a timely and reliable manner, which could harm our business and impact the value of our securities.

We depend on our ability to produce accurate and timely financial statements in order to run our business. If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the accuracy of our financial statements and effectiveness of our internal controls.

We restated our 2007 Successor and fiscal 2008 financial statements, as described in Note 3 to those financial statements, after certain accounting errors were identified that we determined to be material. In the

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identification of these errors and the related evaluation of our internal controls over financial reporting, management identified control deficiencies in its internal controls associated with accounting for (1) deferred taxes and (2) complex agreements arising from transactions unrelated to company’s core business operations. Each of these deficiencies constitute a material weakness in our internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

We have remediated the material weakness associated with accounting for deferred taxes as a result of expanding our senior level resources in our tax, accounting and financial reporting groups in fiscal 2008. We are in the process of remediating the material weakness associated with accounting for complex agreements arising from transactions unrelated to the company’s core business operations. We have developed and are implementing a plan to remediate this material weakness by, among other things, establishing an internal committee of accounting, legal and internal audit personnel to review our policies and accounting treatment of all complex agreements and monitor ongoing compliance with such agreements.

If we fail to fully remediate this material weakness or to maintain effective internal controls in the future, it could result in a material misstatement of our financial statements in the future that would not be prevented or detected on a timely basis, which could cause investors to lose confidence in our financial information or cause our stock price to decline.

Risks Related to this Offering and Ownership of Our Common Stock

An active public market for our common stock may not develop following this offering, which could limit your ability to sell your shares of our common stock at an attractive price, or at all.

Prior to this offering, there has been no public market for our common stock. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market in our common stock or how liquid that market might become. An active public market for our common stock may not develop or be sustained after the offering. If an active public market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at a price that is attractive to you, or at all.

We are a “controlled company,” controlled by investment funds managed by Golden Gate Private Equity, Inc., whose interests in our business may be different from yours.

Upon completion of this offering, Golden Gate will own approximately              shares, or             %, of our outstanding common stock. Golden Gate will, for the foreseeable future, have significant influence over our reporting and corporate management and affairs, and will be able to control virtually all matters requiring stockholder approval. Golden Gate is able to, subject to applicable law, designate a majority of the members of our board of directors and control actions to be taken by us and our board of directors, including amendments to our certificate of incorporation and bylaws and approval of significant corporate transactions, including mergers and sales of substantially all of our assets. The directors so elected will have the authority, subject to the terms of our indebtedness and the rules and regulations of the             , to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions. Because of the equity ownership of Golden Gate, we are considered a “controlled company” for the purposes of the              listing requirements. As such, we would be exempt from the              corporate governance requirements that our board of directors, our Corporate Compensation and our Nominating and Corporate Governance Committee meet the standard of independence established by those corporate governance requirements. The              independence standards are intended to ensure that directors who meet the independence standard are free of any conflicting interest that could influence their actions as directors. It is possible that the interests of Golden Gate may in some circumstances conflict with our interests and the interests of our other stockholders, including you.

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Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

After this offering, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:

• quarterly variations in our operating results compared to market expectations;

• changes in preferences of our customers;

• announcements of new products or significant price reductions by us or our competitors;

• size of the public float;

• stock price performance of our competitors;

• fluctuations in stock market prices and volumes;

• default on our indebtedness or foreclosure of our properties;

• actions by competitors or other shopping center tenants;

• changes in senior management or key personnel;

• changes in financial estimates by securities analysts;

• negative earnings or other announcements by us or other retail apparel companies;

• downgrades in our credit ratings or the credit ratings of our competitors;

• issuances of capital stock; and

• global economic, legal and regulatory factors unrelated to our performance.

Numerous factors affect our business and cause variations in our operating results and affect our net sales and comparable store sales, including consumer preferences, buying trends and overall economic trends; our ability to identify and respond effectively to fashion trends and customer preferences; actions by competitors and other shopping center tenants; changes in our merchandise mix; pricing; the timing of our releases of new merchandise and promotional events; the level of customer service that we provide in our stores; changes in sales mix among sales channels; our ability to source and distribute products effectively; inventory shrinkage, weather conditions, particularly during the holiday season; and the number of stores we open, close and convert in any period.

The initial public offering price of our common stock will be determined by negotiations between us and the underwriters based upon a number of factors and may not be indicative of prices that will prevail following the consummation of this offering. Volatility in the market price of our common stock may prevent investors from being able to sell their common stock at or above the initial public offering price. As a result, you may suffer a loss on your investment.

In addition, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many retail companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

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Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, we will have              shares of common stock outstanding. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act, except for any shares of our common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

We, each of our officers and directors and the selling stockholders have agreed, subject to certain exceptions, with the underwriters not to dispose of or hedge any of the shares of common stock or securities convertible into or exchangeable for, or that represent the right to receive, shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. See “Underwriting.”

All of our shares of common stock outstanding as of the date of this prospectus may be sold in the public market by existing stockholders 180 days after the date of this prospectus, subject to applicable limitations imposed under federal securities laws. See “Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling shares of our common stock after this offering.

In the future, we may also issue our securities if we need to raise capital in connection with a capital raise or acquisitions. The amount of shares of our common stock issued in connection with a capital raise or acquisition could constitute a material portion of our then-outstanding shares of our common stock.

Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.

Our certificate of incorporation and bylaws will contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors. These provisions:

• establish a classified board of directors so that not all members of our board of directors are elected at one time;

• authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;

• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

• provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and

• establish advance notice requirements for nominations for elections to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

Our certificate of incorporation will also contain a provision that provides us with protections similar to Section 203 of the Delaware General Corporate Law, and will prevent us from engaging in a business combination with a person who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless board or stockholder approval is obtained prior to the acquisition. These anti-takeover provisions and other provisions under Delaware law could discourage, delay or

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prevent a transaction involving a change in control of our company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.

If you purchase shares of common stock sold in this offering, you will incur immediate and substantial dilution.

If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $             per share, because the initial public offering price of $             is substantially higher than the pro forma net tangible book value per share of our outstanding common stock. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares. In addition, you may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our employees, consultants and directors under our stock option and equity incentive plans. See “Dilution.”

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

We do not expect to pay any cash dividends for the foreseeable future.

The continued operation and expansion of our business will require substantial funding. Accordingly, we do not anticipate that we will pay any cash dividends on shares of our common stock for the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant. Additionally, our operating subsidiaries are currently restricted from paying cash dividends by the agreements governing their indebtedness, and we expect these restrictions to continue in the future. Accordingly, if you purchase shares in this offering, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our common stock.

We will incur increased costs as a result of becoming a public company.

As a public company, we will incur significant legal, accounting, insurance and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act of 2002 and related rules implemented by the Securities and Exchange Commission (“SEC”) and             . The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors,

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our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

Compliance with Section 404 of the Sarbanes-Oxley Act of 2002 will require significant expenditures and effort by management, and if our independent registered public accounting firm is unable to provide an unqualified attestation report on our internal controls, our stock price could be adversely affected.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and related rules and regulations and beginning with our Annual Report on Form 10-K for the year ending January 28, 2012, our management will be required to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. We are currently in the process of reviewing, documenting and testing our internal control over financial reporting. We may encounter problems or delays in completing the implementation of any changes necessary to make a favorable assessment of our internal control over financial reporting. In addition, in connection with the attestation process by our independent registered public accounting firm, we may encounter problems or delays in completing the implementation of any requested improvements and receiving a favorable attestation. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified attestation report on our internal controls, investors could lose confidence in our financial information and our stock price could decline.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this prospectus are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies, our Reorganization or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

• changes in consumer spending and general economic conditions;

• our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors;

• fluctuations in our sales and results of operations on a seasonal basis and due to store events, promotions and a variety of other factors;

• increased competition from other retailers;

• the success of the malls and shopping centers in which our stores are located;

• our dependence upon independent third parties for the manufacture of all of our merchandise;

• interruptions of the flow of our merchandise from international manufacturers causing disruptions in our supply chain;

• shortages of inventory, delayed shipments to our online customers and harm to our reputation due to difficulties or shut-down of our distribution facilities;

• our reliance upon independent third-party transportation providers for substantially all of our product shipments;

• our growth strategy, including our international expansion plan;

• our dependence on a strong brand image;

• our leasing substantial amounts of space;

• the failure to find store employees that reflect our brand image and embody our culture;

• our dependence upon key executive management;

• our reliance on Limited Brands to provide us with certain key services for our business;

• our reliance on information systems;

• system security risk issues that could disrupt our internal operations or information technology services;

• changes in laws and regulations applicable to our business;

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• our inability to protect our trademarks or other intellectual property rights;

• our limited operating history as a standalone company;

• fluctuations in energy costs;

• changes in taxation requirements or the results of tax audits;

• claims made against us resulting in litigation;

• our substantial indebtedness and lease obligations;

• restrictions imposed by our indebtedness on our current and future operations;

• increased costs as a result of being a public company; and

• our failure to maintain adequate internal controls.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this prospectus in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this prospectus are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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USE OF PROCEEDS

We estimate based upon an assumed initial public offering price of $             per share, the midpoint of the range set forth on the cover of this prospectus, we will receive net proceeds from the offering of approximately $             million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders, including any shares sold by the selling stockholders in connection with the exercise of the underwriters’ option to purchase additional shares.

We intend to use a portion of our net proceeds from this offering to prepay $             of the Term B Loans and $             of the Term C Loans outstanding under the Topco credit facility, to pay accrued and unpaid interest and prepayment penalties and to pay other fees and expenses incurred in connection with this offering, including payments to Golden Gate and Limited Brands. See “Certain Relationships and Related Party Transactions.” We will use any remaining net proceeds from this offering for general corporate purposes.

As of October 31, 2009, we had $150.0 million aggregate principal amount of indebtedness outstanding ($147.4 million net of unamortized original issue discount) under the Term B Loans and $150.0 million aggregate principal amount of indebtedness outstanding ($147.4 million net of unamortized original issue discount) under the Term C Loans under our Topco credit facility. These Term B Loans and Term C Loans have a maturity date of June 26, 2015. Borrowings under our Term B Loans and Term C Loans bear interest at a rate of 13.5% and 14.5%, respectively, per annum and we expect to incur a prepayment penalty associated with the prepayment of a portion of the Term B Loans and Term C Loans. See “Description of Certain Indebtedness.” GGC Unlevered Credit Opportunities, LLC, an investment fund managed by Golden Gate, is a lender under the Topco credit facility and holds $50 million in principal amount of Term B Loans and $50 million in principal amount of Term C Loans.

A $1.00 increase or decrease in the assumed initial public offering price of $             per share would increase or decrease the net proceeds we receive from this offering by approximately $             million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same.

30

DIVIDEND POLICY

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness, and therefore we do not anticipate paying any cash dividends in the foreseeable future. Additionally, because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our indebtedness. See “Description of Certain Indebtedness.” Any future determination to pay dividends will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our results of operations, financial condition, capital requirements and other factors that our board of directors deems relevant.

Pursuant to our limited liability company agreement, we paid cash distributions to our equity holders to fund their tax obligations in respect of their equity interests on March 25, 2008, April 18, 2008, December 22, 2009 and January 26, 2010 in aggregate amounts of approximately $26.0 million, $7.6 million, $15.0 million and $18.0 million, respectively. See “Certain Relationships and Related Party Transactions—LLC Agreement.” In addition, in April 2008 we made a special distribution to our equity holders in an aggregate amount of approximately $168.0 million, and in June 2008 we made a special distribution to our equity holders in an aggregate amount of $289.5 million.

31

CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of October 31, 2009 on:

• an actual basis;

• on a pro forma basis to give effect to the following:

• the Reorganization as described under the section entitled “Prospectus Summary—Reorganization as a Corporation;”

• the use of $                     of the proceeds to us in this offering from the sale of              shares to prepay $             of the Term B Loans and $             of the Term C Loans plus accrued and unpaid interest and prepayment penalties in connection with the prepayment of the Term B Loans and Term C Loans; and

• the use of $             to pay other fees and expenses incurred in connection with this offering, including payments to Golden Gate and Limited Brands.

• on a pro forma as adjusted basis to give effect to the use of any remaining proceeds of this offering for general corporate purposes.

You should read the following table in conjunction with the sections entitled “Use of Proceeds,” “Selected Historical Consolidated Financial and Operating Data,” “Unaudited Pro Forma Condensed Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

32

	As of October 31, 2009
	Actual			Pro Forma(1)	Pro Forma As Adjusted
	(unaudited) (dollars in thousands, except per share data)
Cash and cash equivalents(2)	$	158,395		$	$
Debt, including current portion:
Opco long-term liabilities:
Opco revolving credit facility(2)	$	—		$	$
Opco term loan		122,188
Topco long-term liabilities:
Term B Loans(3)		147,360
Term C Loans(3)		147,373
Total long term liabilities, including current portion		416,921
Members’/Stockholders’ equity:
Members’ Units		173,674
Common stock, $             par value per share, authorized;              shares issued and outstanding, on a pro forma basis;              shares issued and outstanding, on a pro forma as adjusted basis
Additional paid-in capital
Accumulated deficit		(40,125	)
Notes receivable		(5,633	)
Total members’/stockholders’ equity		127,916
Total capitalization	$	544,837		$	$

(1) A $1.00 increase or decrease in the assumed initial public offering price of $             per share, the midpoint of the range set forth on the cover page of this prospectus, would increase or decrease the net proceeds from this offering available to us to prepay the Term B Loans and Term C Loans and correspondingly increase or decrease the amount of additional paid-in capital, total stockholders’ equity and total capitalization by approximately $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. See “Use of Proceeds.”

(2) As of January 2, 2010, we had $297.0 million of cash and cash equivalents and we had $146.6 million of availability and no borrowings outstanding under the Opco revolving credit facility.

(3) GGC Unlevered Credit Opportunities, LLC, an investment fund managed by Golden Gate, is a lender under the Topco credit facility and holds $50 million in principal amount of Term B Loans and $50 million in the principal amount of Term C Loans. See “Certain Relationships and Related Party Transactions.” As of October 31, 2009, the principal balances of the Term B Loans and Term C Loans reflect $2.6 million and $2.6 million, respectively, of unamortized original issue discount.

The information set forth above excludes                  shares of common stock reserved for future grants under our equity compensation plan, which we plan to adopt in connection with this offering.

33

DILUTION

Our pro forma net tangible book value as of October 31, 2009, before giving effect to the sale of              shares of common stock offered in this offering, but assuming the completion of the Reorganization, was approximately $             million, or approximately $             per share. Pro forma net tangible book value (deficit) per share represents the amount of our total tangible assets less the amount of our total liabilities, divided by the number of shares of common stock outstanding at October 31, 2009, prior to the sale of              shares of common stock offered in this offering, but assuming the completion of our Reorganization. Dilution in pro forma net tangible book value (deficit) per share represents the difference between the amount per share paid by investors in this offering and the net tangible book value (deficit) per share of our common stock outstanding immediately after this offering.

After giving effect to the completion of the Reorganization and the sale of              shares of common stock in this offering, based upon an assumed initial public offering price of $             per share, the midpoint of the range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions, a non-cash charge for the early extinguishment of debt and estimated expenses payable by us in connection with this offering, our pro forma as adjusted net tangible book value as of October 31, 2009 would have been approximately $             million, or $             per share of common stock. This represents an immediate decrease in pro forma net tangible book value of $             per share to existing stockholders and immediate dilution of $             per share to new investors purchasing shares of common stock in this offering at the initial public offering price.

The following table illustrates this dilution in pro forma as adjusted net tangible book value to new investors:

Assumed initial public offering price per share		$
Pro forma net tangible book value per share as of October 31, 2009 (after giving effect to the Reorganization)	$
Pro forma net tangible book value per share as of October 31, 2009 (after giving effect to the Reorganization and this offering)
Increase in pro forma tangible book value per share to existing shareholders attributable to this offering
Dilution per share to new investors		$

The following table summarizes, as of October 31, 2009, on a pro forma as adjusted basis, the number of shares of our common stock purchased from us, the aggregate cash consideration paid to us and the average price per share paid to us by existing stockholders and to be paid by new investors purchasing shares of our common stock from us in this offering. The table assumes an initial public offering price of $             per share, the midpoint of the range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us in connection with this offering:

	Shares Purchased			Total Consideration			Average Price Per Share
	Number	Percentage		Amount	Percentage
Existing stockholders			%	$		%	$
New investors
Total		100	%	$	100	%

34

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) the total consideration paid by investors participating in this offering by $             million, or increase (decrease) the percent of total consideration paid by investors participating in this offering by         %, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters’ option to purchase additional shares, no exercise of any outstanding options and no sale of common stock by the selling stockholders. The sale of              shares of common stock to be sold by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to             , or         % of the total shares outstanding, and will increase the number of shares held by investors participating in this offering to             , or         % of the total shares outstanding. In addition, if the underwriters’ option to purchase additional shares is exercised in full, the number of shares of common stock held by existing stockholders will be further reduced to             , or         % of the total number of shares of common stock to be outstanding upon the closing of this offering, and the number of shares of common stock held by investors participating in this offering will be further increased to              shares or         % of the total number of shares of common stock to be outstanding upon the closing of this offering.

The tables and calculations above are based on              shares of common stock issued and outstanding as of October 31, 2009, on a pro forma basis to give effect to the Reorganization, and excludes an aggregate of              shares of common stock reserved for issuance under our equity compensation plan, which we plan to adopt in connection with this offering.

To the extent that any outstanding options are exercised, new investors will experience further dilution.

35

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

The following unaudited pro forma condensed consolidated data sets forth our unaudited pro forma and historical consolidated statements of operations for the year ended January 31, 2009 and for the thirty-nine weeks ended October 31, 2009 and our unaudited pro forma balance sheet at October 31, 2009. Such information is based on the audited and unaudited consolidated financial statements of Express Parent appearing elsewhere in this prospectus.

The unaudited pro forma condensed consolidated balance sheet at October 31, 2009, and the unaudited pro forma condensed consolidated statements of operations for the year ended January 31, 2009 and the thirty-nine weeks ended October 31, 2009, give effect to (1) the Reorganization and (2) the expected issuance of              shares of common stock in this offering and the use of proceeds from this offering as if each had occurred on October 31, 2009 for the unaudited pro forma condensed consolidated balance sheet and on February 3, 2008 for the unaudited pro forma condensed consolidated statements of operations. The unaudited pro forma condensed consolidated statements of operations do not reflect the following items due to their non-recurring nature: (1) transaction fees payable to Golden Gate pursuant to our advisory agreement with them of $             million related to this offering and a fee to terminate this advisory agreement in the amount of $             million, (2) a fee payable to Limited Brands of $             million in connection with the termination of the Golden Gate advisory agreement and (3) the recognition of net deferred tax liabilities of $             million upon our change in tax status. See “Certain Relationships and Related Party Transactions.”

The unaudited pro forma adjustments are based on available information and certain assumptions that we believe are reasonable. The unaudited pro forma condensed consolidated financial information was prepared on a basis consistent with that used in preparing our audited consolidated financial statements and includes all adjustments, consisting of normal and recurring items, that we consider necessary for a fair presentation of our financial position and results of operations for the unaudited periods.

The unaudited pro forma condensed consolidated financial information should be read in conjunction with the sections of this prospectus entitled “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our historical consolidated financial statements and related notes thereto included elsewhere in this prospectus. The unaudited pro forma condensed consolidated financial information is for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial position that we would have reported had the structuring transactions and this offering been completed on the dates indicated and should not be taken as representative of our future consolidated results of operations or financial position.

36

EXPRESS PARENT LLC

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AT OCTOBER 31, 2009

	Historical			Pro Forma Adjustments			Pro Forma
	(unaudited)
	(dollars in thousands)
Assets
Current assets
Cash and cash equivalents	$	158,395		$	(A	)	$
					(J	)
Receivables, net		3,179
Inventories		225,697
Prepaid minimum rent		21,005
Other		7,835
Total current assets		416,111
Property and equipment, net		225,824			—
Tradename/Domain Name		197,394			—
Other assets		22,208			(B	)
Total assets	$	861,537		$			$
Liabilities and members’ equity
Current liabilities
Accounts payable	$	54,641		$	—		$
Short-term borrowings		0			—
Deferred revenue		14,309			—
Accrued expenses		84,689			(C	)
					(D	)
Accounts payable and accrued expenses—related parties		127,829			—
Total current liabilities		281,468
Long-term debt		415,671			(E	)
					(F	)
Deferred taxes		—			(D	)
Other long-term liabilities		36,482			—
Members’ interests		133,549			(G	)
Stockholders’ equity					(B	)
					(D	)
					(E	)
					(F	)
					(G	)
					(H	)
					(I	)
Notes receivable		(5,633	)		(J	)
Total members’/stockholders’ equity		127,916
Total liabilities and members’ interests/stockholders’ equity	$	861,537		$			$

37

EXPRESS PARENT LLC

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED JANUARY 31, 2009

	Express Parent LLC			Pro Forma Adjustments			Pro Forma
	(unaudited)
	(dollars and units in thousands, except per unit and per share data)
Net sales	$	1,737,010		$	—		$
Cost of goods sold, buying and occupancy costs		1,280,018			—
Gross profit		456,992			—
General, administrative and store operating expenses		447,071			—
Other operating expense, net		6,007			—
Operating income (loss)		3,914			—
Interest expense		36,531			(K	)
Interest income		(3,527	)		(J	)
Other expense (income), net		(300	)		—
Income (loss) before income taxes		(28,790	)
Provision (benefit) for income taxes		246			(L	)
Net income (loss)	$	(29,036	)	$			$
Class L:
Basic and diluted net loss per unit	$	(0.25	)		(M	)		—
Basic and diluted weighted average units outstanding		101,742			(M	)		—
Class A:
Basic and diluted net loss per unit	$	(2.08	)		(M	)		—
Basic and diluted weighted average units outstanding		1,295			(M	)		—
Class C:
Basic and diluted net loss per unit	$	(1.00	)		(M	)		—
Basic and diluted weighted average units outstanding		607			(M	)		—
Pro forma net income (loss) per share
Basic					(M	)	$	—
Diluted					(M	)	$	—
Pro forma basic and diluted weighted average shares outstanding
Basic					(M	)		—
Diluted					(M	)		—

38

EXPRESS PARENT LLC

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED OCTOBER 31, 2009

	Express Parent LLC			Pro Forma Adjustments			Pro Forma
	(unaudited)
	(dollars and units in thousands, except share and per share data)
Net sales	$	1,174,227		$	—		$
Cost of goods sold, buying and occupancy costs		813,998			—
Gross profit		360,229			—
General, administrative and store operating expenses		285,259			—
Other operating expense, net		6,514			—
Operating income (loss)		68,456			—
Interest expense		40,204			(K	)
Interest income		(403	)		(J	)
Other expense (income), net		(1,578	)
Income (loss) before income taxes		30,233
Provision (benefit) for income taxes		923			(L	)
Net income (loss)	$	29,310		$			$
Class L:
Basic and diluted net income per unit	$	0.29			(M	)		—
Basic and diluted weighted average units outstanding		101,742			(M	)		—
Class A:
Basic and diluted net income per unit	$	0.00			(M	)		—
Basic weighted average units outstanding		3,415			(M	)		—
Diluted weighted average units outstanding		7,488			(M	)		—
Class C:
Basic and diluted net income per unit	$	0.00			(M	)		—
Basic weighted average units outstanding		1,700			(M	)		—
Diluted weighted average units outstanding		4,111			(M	)		—
Pro forma net income (loss) per share
Basic					(M	)	$	—
Diluted					(M	)	$	—
Pro forma basic and diluted weighted average shares outstanding
Basic					(M	)		—
Diluted					(M	)		—

39

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

A. Reflects the use of $             to pay other fees and expenses incurred in connection with this offering.

B. Represents the net effect of the write-off of $             million of deferred debt financing associated with the Term B Loans and Term C Loans under the Topco credit facility.

C. Represents the payment of accrued and unpaid interest associated with the Term B Loans and Term C Loans upon prepayment of a portion of those loans.

D. Reflects an increase to our net current and non-current deferred tax liabilities of approximately $              million and $              million, respectively, due to our Reorganization. The deferred tax balances are primarily associated with temporary differences between IRS tax regulations and GAAP financial accounting.

E. Represents the prepayment of $             of the $150.0 million principal amount of the Term C Loans under the Topco credit facility, and the recognition of $             million of unamortized original issue discount.

F. Represents the prepayment of $             of the $150.0 million principal amount of the Term B Loans under the Topco credit facility, and the recognition of $             million of unamortized original issue discount.

G. Represents the conversion of member units to common stock and the sale of              shares of our common stock in this offering, whose net proceeds equals the funds required for prepayment of $             of Term B Loans and $             of Term C Loans outstanding under our Topco credit facility plus accrued and unpaid interest and prepayment penalties in connection with the prepayment of the Term B Loans and Term C Loans, assuming an initial public offering price of $             per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

H. Golden Gate will be paid $             million in consideration to terminate our advisory agreement with them. In connection with this agreement, Limited Brands receives an amount equal to a percentage of the advisory fees paid to Golden Gate. We have recorded an adjustment in our unaudited pro forma consolidated balance sheet as of October 31, 2009, to reflect a $             million charge to retained earnings. However no pro forma adjustment for this amount is included in the unaudited pro forma consolidated statements of operations because it does not have a continuing impact on our operations.

I. Pursuant to the credit agreement governing the Term B Loans and Term C Loans under our Topco credit facility, the pro forma consolidated balance sheet as of October 31, 2009 gives effect to prepayment penalties of $             million. We have recorded adjustments in our unaudited pro forma consolidated balance sheet as of October 31, 2009, to reflect a $             million charge to retained earnings; however no pro forma adjustment for this amount is included in the unaudited pro forma consolidated statements of operations because it does not have a continuing impact on our operations.

J. Represents the repayment in full by each member of management, effective as of February 9, 2010, of loans made to management participants in our equity incentive plan in conjunction with their 2007 purchase of Class L Common Units, and removal of interest income associated with these loans.

40

K. Gives effect to (1) the prepayment of $         million in outstanding Term B Loans under our existing Topco credit facility and (2) the prepayment of $         million in outstanding Term C Loans under our existing Topco credit facility.

	Year Ended January 31, 2009	Thirty-Nine Weeks Ended October 31, 2009
Elimination of Net Interest Expense on Term B Loans
Elimination of Net Interest Expense on Term C Loans
Total adjustment

L. As a limited liability company we were subject to taxes only in certain state and local tax jurisdictions. This adjustment reflects our conversion to a corporation subject to federal tax obligations and the tax effect of the pro forma adjustments at an assumed applicable tax rate of 39.5% which represents a federal statutory rate of 35% and a state statutory rate of 4.5%.

M. Represents the conversion of all of our outstanding Class L Common Units, Class A Common Units, Class B Common Units and Class C Common Units into shares of our common stock based on the equity value for our company based on an assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

41

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

The following tables set forth our selected historical consolidated financial and operating data as of the dates and for the periods indicated. We have derived the selected historical consolidated financial data for the fiscal year ended February 3, 2007, and for the fiscal years or periods, as applicable, ended July 6, 2007 and February 2, 2008, and as of February 2, 2008, from our consolidated financial statements as of and for such fiscal years or periods, as applicable, which were audited by Ernst & Young LLP, an independent registered public accounting firm. Ernst & Young LLP’s report on the consolidated financial statements as of and for the fiscal period ended February 2, 2008, which appears elsewhere herein, includes an explanatory paragraph relating to our restatement of our financial statements as of February 2, 2008 and for the period from July 7, 2007 to February 2, 2008. We have derived the selected unaudited historical consolidated financial and operating data as of and for the year ended January 28, 2006, from our unaudited consolidated financial statements, which include all adjustments, consisting of normal and recurring adjustments, that we consider necessary for a fair presentation of the financial position and results of operations for such year. We have derived the selected historical consolidated financial and operating data as of and for the fiscal year ended January 31, 2009 from our consolidated financial statements as of and for such fiscal year, which were audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. The report of PricewaterhouseCoopers LLP included in this prospectus regarding our audited financial statements as of and for the fiscal year ended January 31, 2009 contains an explanatory paragraph relating to our restatement of our financial statements. We have derived the selected historical consolidated financial and operating data for the thirty-nine weeks ended November 1, 2008 and October 31, 2009 from our unaudited interim consolidated financial statements, which include all adjustments, consisting of normal and recurring adjustments, that we consider necessary for a fair presentation of the financial position and results of operations for such periods. Operating results for the thirty-nine week periods are not necessarily indicative of results for a full fiscal year, or for any other period. Our audited consolidated financial statements as of February 2, 2008 and January 31, 2009 and for the fiscal years or periods, as applicable, ended February 3, 2007, July 6, 2007, February 2, 2008 and January 31, 2009 and our unaudited interim consolidated financial statements as of October 31, 2009 and for the thirty-nine weeks ended November 1, 2008 and October 31, 2009 have been included in this prospectus.

On July 6, 2007, investment funds managed by Golden Gate acquired 75% of the interest in our business from Limited Brands. As a result of the Golden Gate Acquisition, a new basis of accounting was created beginning July 7, 2007 for the Successor periods ending after such date. Prior to the Golden Gate Acquisition, our consolidated financial statements were prepared on a carve-out basis from Limited Brands. The carve-out consolidated financial statements include allocations of certain costs of Limited Brands. In the Successor periods we no longer incur these allocated costs, but do incur certain expenses as a standalone company for similar functions, including for certain support services provided by Limited Brands under the Limited Brands Transition Services Agreements, which is discussed further in the section entitled “Certain Relationships and Related Party Transactions.” These allocated costs were based upon various assumptions and estimates and actual results may differ from these allocated costs, assumptions and estimates. Accordingly, the carve-out consolidated financial statements should not be relied upon as being representative of our financial position, results of operations or cash flows had we operated on a standalone basis. See “Risk Factors—We have a limited operating history as a standalone company, which may make it difficult to compare our current operating results to prior periods.”

42

The selected historical consolidated data presented below should be read in conjunction with the sections entitled “Risk Factors,” “Unaudited Pro Forma Condensed Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements and related notes thereto and other financial data included elsewhere in this prospectus.

	Predecessor									Successor
	Year Ended						February 4, 2007 through July 6, 2007			July 7, 2007 through February 2, 2008(1)			Year Ended January 31, 2009(1)			Thirty-Nine Weeks Ended
	January 28, 2006			February 3, 2007												November 1, 2008			October 31, 2009
	(unaudited)									(restated)			(restated)			(unaudited)
	(dollars in thousands, excluding net sales per gross square foot data)
Statement of Operations Data:
Net sales	$	1,793,963		$	1,748,873		$	659,019		$	1,137,327		$	1,737,010		$	1,231,644		$	1,174,227
Cost of goods sold, buying and occupancy costs		1,435,343			1,254,762			451,514			890,063			1,280,018			870,308			813,998
Gross profit		358,620			494,111			207,505			247,264			456,992			361,336			360,229
General, administrative and store operating expenses		461,847			470,117			170,100			275,150			447,071			340,197			285,259
Other operating expense, net		—			—			302			5,526			6,007			5,067			6,514
Operating income (loss)	$	(103,227	)	$	23,994		$	37,103		$	(33,412	)	$	3,914		$	16,072		$	68,456
Interest expense		—			—			—			6,978			36,531			22,391			40,204
Interest income		—			—			—			(5,190	)		(3,527	)		(3,401	)		(403	)
Other expense (income), net		—			—			—			4,712			(300	)		(1,116	)		(1,578	)
Income (loss) before income taxes	$	(103,227	)	$	23,994		$	37,103		$	(39,912	)	$	(28,790	)	$	(1,802	)	$	30,233
Provision for income taxes		(41,154	)		6,525			7,161			487			246			86			923
Net income (loss)	$	(62,073	)	$	17,469		$	29,942		$	(40,399	)	$	(29,036	)	$	(1,888	)	$	29,310
Pro forma net income (loss) per share(2)
Basic
Diluted
Pro forma weighted average shares(2)
Basic
Diluted
Statement of Cash Flows Data:
Net cash provided by (used in):
Operating activities	$	39,040		$	84,913		$	45,912		$	282,192		$	35,234		$	(15,234	)	$	87,284
Investing activities		(72,184	)		(53,867	)		(22,888	)		(15,258	)		(51,801	)		(32,359	)		(22,883	)
Financing activities		32,636			(24,130	)		(29,939	)		39,361			(127,347	)		(202,032	)		(82,121	)
Other Financial and Operating Data:
Comparable store sales change(3)		(8	)%		(1	)%		6	%		12	%		(3	)%		5	%		(10	)%
Net sales per gross square foot(4)	$	263		$	282		$	118		$	213		$	337		$	241		$	221
Total gross square feet (in thousands) (average)		6,822			6,195			5,604			5,348			5,060			5,059			5,032
Number of stores (at period end)		743			658			622			587			581			585			581
Capital expenditures		72,184			53,867			22,888			15,258			50,551			32,359			22,883
Balance Sheet Data (at period end):
Cash and cash equivalents	$	13,733		$	20,649			—		$	320,029		$	176,115		$	70,404		$	158,395
Working capital (excluding cash and cash equivalents)(5)		60,253			60,455			—			(63,308	)		(28,317	)		18,377			(22,502	)
Total assets		483,346			479,184			—			1,025,817			860,413			857,970			861,537
Total debt (including current portion)		—			—			—			124,375			498,478			417,724			416,921
Total members’ equity	$	270,855		$	265,849			—		$	615,290		$	97,099		$	123,712		$	127,916

(1) Our consolidated financial statements for the Successor period from July 7, 2007 through February 2, 2008 and fiscal 2008 have been restated. See Note 3 to our audited consolidated financial statements for the year ended January 31, 2009, which are included elsewhere in this prospectus, for a complete discussion of this restatement.

(2) Unaudited pro forma net income (loss) per share gives effect to the Reorganization and also includes              shares expected to be issued in this offering, whose proceeds will be used to prepay $         of the Term B Loans and $         of the Term C Loans, plus accrued and unpaid interest and prepayment penalties. See “Unaudited Pro Forma Condensed Consolidated Financial Data.”

(3) Comparable store sales have been calculated based upon stores that were open at least thirteen full fiscal months as of the end of the reporting period. For the year ended February 3, 2007, which was a fifty-three week year, sales from the fifty-third week were excluded from the calculation to present comparable periods.

(4) Net sales per gross square foot is calculated by dividing net sales for the applicable period by the average gross square footage during such period. For the purpose of calculating net sales per gross square foot, e-commerce sales and other revenues are excluded from net sales.

(5) Working capital is defined as current assets, less cash and cash equivalents, less current liabilities excluding the current portion of long-term debt.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly in the section entitled “Risk Factors.”

Overview

Express is the sixth largest specialty retail apparel brand in the United States. With 30 years of experience offering a distinct combination of style and quality at an attractive value, we believe we are a core shopping destination for our customers and that we have developed strong brand awareness and credibility with them. We target an attractive and growing demographic of women and men between 20 and 30 years old. We offer our customers an edited assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of their lifestyles, including work, casual and going-out occasions. Since we became an independent company in 2007, we have made several significant changes to our business model, including completing the conversion of our stores to a dual-gender format, re-designing our go-to-market strategy and launching our e-commerce platform, all of which we believe have improved our operating profits and positioned us well for future growth and profitability.

As of January 30, 2010, we operated 573 stores. Our stores are located primarily in high-traffic shopping malls, lifestyle centers and street locations across the United States, and average approximately 8,700 square feet. We also sell our products through our e-commerce website, express.com. Our stores and website are designed to create an exciting shopping environment that reflects the sexy, sophisticated and social brand image that we seek to project. Our product offering includes both women’s and men’s apparel and accessories, of which women’s represented 68% of our net sales and men’s represented 32% of our net sales during fiscal 2008. Our product assortment is a mix of core styles balanced with the latest fashions, a combination we believe our customers look for and value from our brand. For fiscal 2008, we generated net sales, net loss and Adjusted EBITDA of $1.7 billion, $29.0 million and $137.2 million, respectively. Our Adjusted EBITDA increased 60% from $85.9 million in fiscal 2006 to $137.2 million in fiscal 2008. See “Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial and Operating Data” for a discussion of Adjusted EBITDA, an accompanying presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between Adjusted EBITDA and the most directly comparable GAAP financial measure, net income.

Factors Affecting Our Operating Results

Various factors affect our operating results during each period, including:

Overall economic trends. Consumer purchases of clothing are generally consistent or increase during stable economic periods and decline during recessionary periods and other periods where disposable income is adversely affected. As a result, our results of operations during any given period are often impacted by the overall economic conditions in the markets in which we operate.

Consumer preferences and fashion trends. Our ability to maintain our appeal to our customers and to appeal to new customers depends on our ability to anticipate fashion trends. Periods in which we have successfully anticipated fashion trends generally have had more favorable results. If we misjudge the market for our products, we may be faced with significant excess inventories for some products and be required to mark down those

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products in order to sell them or we may be required to discard those products, either of which would impact our gross profit. In recent periods we have managed timing on purchases and production to reduce our exposure to specific styles.

Competition. The retail industry is highly competitive, and retailers compete based on a variety of factors, including price, breadth of offerings, quality and style of merchandise offered. Levels of competition and the ability of our competitors to more accurately predict fashion trends and otherwise attract customers through competitive pricing or other factors impact our results of operations.

Pricing and Changes in Our Merchandise Mix. Our fashion offerings change from period to period, so the prices at which goods are sold and the margins we are able to earn from those goods also change. For example, if an item with a high price and/or a high margin is popular with our customers, then our results will be positively impacted. The levels at which we are able to price our merchandise are influenced by a variety of factors, including the cost of production for those products, the prices at which our competitors are selling similar items and the willingness of our customers to pay for higher priced items. During certain periods we often reduce prices or put items on sale if we determine that we need to do so in order to sell inventory before fashion preferences change. In some cases, we have increased prices for specific items if it is supported by customer demand.

The Timing of Our Releases of New Merchandise and Promotional Events. We generally incur expenditures relating to planning and production when we are releasing new merchandise. If a release is successful, this new merchandise will have a positive impact on our sales until consumer preferences change or until those items are replaced in our stores by new items. Promotional events are intended to generate increased consumer awareness of our products and to increase sales in later periods. These may result in increased expenses in the periods in which the promotions are taking place, with the intent of increasing sales in later periods.

Seasonality. Our business is seasonal. As a result, our net sales fluctuate from quarter to quarter. Net sales are historically higher in the third and fourth fiscal quarters due primarily to early fall selling patterns and the impact of the holiday season.

Changes in Sales Mix Among Sales Channels. Our results of operations may vary according to the amount of products we sell in our stores versus the amount of products we sell through e-commerce. Most of our store operating costs are fixed for the short term, with the exceptions of incentive compensation for our employees and discretionary spending, while our e-commerce operating model has a larger variable cost component and depends in large part on the amount of goods sold.

Our Ability to Source and Distribute Products Effectively. Our costs of sales are impacted by our ability to find third parties who can manufacture our products at favorable costs while maintaining the levels of quality that we desire to deliver to our customers. Our costs of distribution are affected by a number of items, such as the cost of fuel and the amount of products generally being transported though similar distribution networks in the markets in which we operate which affects our ability to obtain more favorable pricing with our providers.

The Number of Stores We Open, Close and Convert to a Dual-Gender Format in Any Period. During any period in which we are constructing additional stores, we will incur capital expenditures as a result of that expansion. In the past, when we converted stores to a dual-gender format, we incurred capital expenditures. Because our dual-gender store conversion efforts are complete, store conversions are not expected to have a significant impact on our results going forward. The number of stores that we operate in any period will impact our net results for that period.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. These key measures include net sales and comparable store sales and other individual store performance factors, gross profit and general, administrative and store operating expenses. We also review other metrics such as EBITDA and Adjusted EBITDA.

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Net Sales. Net sales reflects our revenues from the sale of our merchandise less returns and discounts, as well as shipping and handling revenue received related to e-commerce and royalties received from our international development agreements.

Comparable Store Sales and Other Individual Store Performance Factors. Comparable store sales have been calculated based upon stores that were open at least thirteen full fiscal months as of the end of the reporting period. A store is not considered a part of the comparable store sales base if the square footage of the store changed by more than 20% due to remodel or relocation activities. As we continue to increase our number of stores, we expect that non-comparable store sales will contribute to our total net sales. We also review sales per gross square foot, average unit retail price, units per transaction, dollars per transaction, traffic and conversion, among other things, in order to evaluate the performance of individual stores.

Gross Profit. Gross profit is equal to our net sales minus cost of goods sold, buying and occupancy costs. Gross margin measures gross profit as a percentage of our net sales. Costs of goods sold, buying and occupancy costs includes the direct cost of purchased merchandise, inventory shrinkage, inventory write-downs, inbound freight, all freight costs to get merchandise to our stores, design, buying, allocation and production costs, occupancy costs related to store operations, such as rent and common area maintenance, utilities and depreciation on assets, and all logistics costs associated with our e-commerce business.

Our cost of goods sold, buying and occupancy costs increase in higher volume quarters because we purchase more merchandise for sale. Buying and occupancy costs are largely fixed and do not necessarily increase as volume increases. Changes in the mix of our products, such as changes in the proportion of accessories, which are higher margin, may also impact our overall cost of goods sold, buying and occupancy costs. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and generally use markdowns to clear that merchandise. The timing and level of markdowns are driven primarily by customer acceptance of our merchandise. We use a third party vendor to dispose of marked-out-of-stock merchandise which, in turn, is sold to third party discounters. The primary drivers of the costs of individual goods are the raw materials, labor in the countries where we source our merchandise and logistics costs.

General, Administrative and Store Operating Expenses. General, administrative and store operating expenses include all operating costs not included in cost of goods sold, buying and occupancy costs. These expenses include payroll and other expenses related to operations at our headquarters, store expenses, other than occupancy, and marketing expense, which primarily includes production, mailing and print advertising costs. These expenses generally do not vary proportionally with net sales. As a result, general, administrative and store operating expenses as a percentage of net sales is usually higher in lower volume quarters and lower in higher volume quarters.

Other Operating Expense, net. Other operating expense, net includes advisory fees paid to Golden Gate under the terms of our advisory agreement with them and to Limited Brands under the terms of our limited liability company agreement. See “Certain Relationships and Related Party Transactions.” Changes in other operating expense, net relates primarily to changes in the advisory fees which are calculated as a percent of Adjusted EBITDA.

Other Factors Affecting Our Results

Certain important factors impacted the results presented in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including (1) the Golden Gate Acquisition, (2) our transition from a division of Limited Brands to a standalone private company and (3) our tax structure. In the future, our results will be impacted by costs we incur as a public company and our change in tax status as a result of the Reorganization.

Purchase Accounting Impact of Golden Gate Acquisition. On July 6, 2007, we were acquired by investment funds managed by Golden Gate through a transaction that was accounted for under SFAS 141, “Business

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Combinations.” The purchase price was allocated to state our assets and liabilities at fair value. The allocation of the purchase price had the effect of increasing the carrying amount of inventory by $86.9 million, property and equipment by $38.5 million and amortizable intangible assets by $24.5 million. The $86.9 million increase in inventory value had the effect of reducing gross margin during pro forma fiscal 2007 and the 2007 Successor period. We have depreciated the $38.5 million increase in property and equipment over the useful life of each asset, which has had the effect of reducing gross margin in all periods subsequent to the Golden Gate Acquisition in 2007. The $24.5 million increase in amortizable intangible assets is being amortized over the remaining life of each asset and has reduced gross margin in all periods subsequent to the 2007 Golden Gate Acquisition.

Standalone Private and Public Company Costs. During our transition from a division of Limited Brands, a public company, to a standalone private company, we incurred one-time costs related to the establishment of infrastructure associated with information technology, tax, risk management, internal audit, treasury, real estate and benefits administration. Following the completion of this initial public offering, we will incur additional legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with the Sarbanes-Oxley Act as well as other rules implemented by the SEC, and applicable stock exchange rules. We expect these rules and regulations to substantially increase our legal and financial compliance costs and to make certain financial reporting and other activities more time-consuming and costly.

Tax Structure. During the Predecessor periods, taxable income resulting from our operations was included in the consolidated income tax returns of Limited Brands. For the Predecessor period ended February 3, 2007, and through July 6, 2007, we operated as a division of Limited Brands, and reported income taxes on a separate company basis as if we were taxable as a corporation. As part of the Golden Gate Acquisition, Limited Brands, as the legal obligor, has retained income tax liabilities and related income tax contingencies and reserves arising out of our operations for any Predecessor periods.

Since the Golden Gate Acquisition, we have been treated as a partnership for tax purposes and therefore have not been subject to federal and state income tax (subject to exceptions in a limited number of state and local jurisdictions). Instead, our equity holders have been subject to income tax on their distributive share of our earnings and we have made distributions to them to fund their tax obligations.

Prior to the effectiveness of the registration statement for this offering, we intend to reorganize our existing holding company structure. See “Summary—Reorganization as a Corporation.” Upon completion of the Reorganization, we will be treated as a corporation under Subchapter C of Chapter 1 of the Internal Revenue Code and we will be subject to federal and state income tax expense. In connection with the Reorganization, we will record net deferred tax liabilities and a one-time, non-cash tax expense of $26.2 million.

The effective tax rate for the year ended February 3, 2007 and twenty-two weeks ended July 6, 2007 was 27.2% and 19.3%, respectively. The effective tax rate for the thirty-week period ended February 2, 2008, the fiscal year ended January 31, 2009, and the thirty-nine weeks ended November 1, 2008 and October 31, 2009 was 1.2%, 0.9%, 4.8% and 3.1%, respectively. The difference in the effective tax rate for the year ended February 3, 2007 and the United States federal statutory rate of 35% is primarily attributable to the favorable impact related to the release of state income tax reserves. The difference in the effective tax rate for the twenty-two week period ended July 6, 2007 and the United States federal statutory rate of 35% is primarily attributable to the favorable impact of us becoming recognized as a partnership for federal income tax purposes effective May 7, 2007. The difference in the effective tax rate for the periods ended February 2, 2008, January 31, 2009, and quarter ended October 31, 2009 and the United States federal statutory rate of 35% is primarily attributable to the our status as a partnership for federal income tax purposes.

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Basis of Presentation and Results of Operations

The following discussion contains references to years 2008, 2007 and 2006, which represent our fiscal years ended January 31, 2009, February 2, 2008 and February 3, 2007, respectively. Our fiscal year ends each year on the Saturday closest to January 31. Fiscal years 2008 and 2007 were fifty-two week accounting periods and fiscal year 2006 was a fifty-three week accounting period. Our business was acquired by investment funds managed by Golden Gate on July 6, 2007 and, as such, we have Predecessor and Successor periods in fiscal 2007. The twenty-two week Predecessor period is from February 4, 2007 through July 6, 2007 and is referred to as our “2007 Predecessor period,” and the thirty week Successor period is from July 7, 2007 through February 2, 2008 and is referred to as our “2007 Successor period.”

Due to the Golden Gate Acquisition, the financial statements for all Successor periods are not comparable to that of the Predecessor periods presented in the accompanying table. Prior to the Golden Gate Acquisition, our consolidated financial statements were prepared on a carve-out basis from Limited Brands. The carve-out consolidated financial statements include allocations of certain costs of Limited Brands. In the Successor period we no longer incur these charges, but do incur certain expenses as a standalone company for the same functions, including for certain support services provided by Limited Brands under the Limited Brands Transition Services Agreements. See “Certain Relationships and Related Party Transactions.” These allocations were based upon various assumptions and estimates and actual results may differ from these allocations, assumptions and estimates. Accordingly, the carve-out consolidated financial statements should not be relied upon as being representative of our financial position, results of operations or cash flows had we operated on a standalone basis.

The summary unaudited pro forma condensed consolidated financial data for the fiscal year ended February 2, 2008 presented in the table below has been prepared to give effect to the Golden Gate Acquisition as if such transaction had occurred on February 4, 2007. We have presented in the table below and in the accompanying discussions of our results, comparisons of fiscal 2008 and fiscal 2006 to our pro forma fiscal 2007 results, in addition to the 2007 Predecessor and 2007 Successor periods. We believe that presenting the discussion and analysis of the results of operations in this manner promotes the overall usefulness of the comparison given the complexities involved with comparing two significantly different periods. The information contained in the table below should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus.

	Predecessor				Successor			Pro Forma			Successor
	Year Ended February 3, 2007		Period from February 4, 2007 through July 6, 2007		Period from July 7, 2007 through February 2, 2008			Year Ended February 2, 2008			Year Ended January 31, 2009			Thirty-Nine Weeks Ended
														November 1, 2008			October 31, 2009
					(restated)			(unaudited)			(restated)			(unaudited)
	(dollars in thousands)
Statement of Operations Data:
Net sales	$	1,748,873	$	659,019	$	1,137,327		$	1,796,346		$	1,737,010		$	1,231,644		$	1,174,227
Cost of goods sold, buying and occupancy costs		1,254,762		451,514		890,063			1,352,151			1,280,018			870,308			813,998
Gross profit		494,111		207,505		247,264			444,195			456,992			361,336			360,229
General, administrative and store operating expenses		470,117		170,100		275,150			448,137			447,071			340,197			285,259
Other operating expense, net		—		302		5,526			7,488			6,007			5,067			6,514
Operating income (loss)	$	23,994	$	37,103	$	(33,412	)	$	(11,430	)	$	3,914		$	16,072		$	68,456
Interest expense		—		—		6,978			12,064			36,531			22,391			40,204
Interest income		—		—		(5,190	)		(5,304	)		(3,527	)		(3,401	)		(403	)
Other expense (income), net		—		—		4,712			4,712			(300	)		(1,116	)		(1,578	)
Income (loss) before income taxes	$	23,994	$	37,103	$	(39,912	)	$	(22,902	)	$	(28,790	)	$	(1,802	)	$	30,233
Provision for income taxes		6,525		7,161		487			1,583			246			86			923
Net income (loss)	$	17,469	$	29,942	$	(40,399	)	$	(24,485	)	$	(29,036	)	$	(1,888	)	$	29,310

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The following table sets forth, for the periods presented, our consolidated statements of operations as a percentage of total revenues.

	Predecessor				Successor		Pro Forma		Successor
	Year Ended February 3, 2007		Period from February 4, 2007 through July 6, 2007		Period from July 7, 2007 through February 2, 2008		Year Ended February 2, 2008		Year Ended January 31, 2009		Thirty- Nine Weeks Ended
											November 1, 2008		October 31, 2009
					(restated)		(unaudited)		(restated)		(unaudited)
Statement of Operations Data:
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold, buying and occupancy costs	71.7	%	68.5	%	78.3	%	75.3	%	73.7	%	70.7	%	69.3	%
Gross profit	28.3	%	31.5	%	21.7	%	24.7	%	26.3	%	29.3	%	30.7	%
General, administrative and store operating expenses	26.9	%	25.8	%	24.2	%	24.9	%	25.7	%	27.6	%	24.3	%
Other operating expense, net	—		—		0.5	%	0.4	%	0.3	%	0.4	%	0.6	%
Operating income (loss)	1.4	%	5.6	%	(2.9	)%	(0.6	)%	0.2	%	1.3	%	5.8	%
Interest expense	—		—		0.6	%	0.7	%	2.1	%	1.8	%	3.4	%
Interest income	—		—		(0.5	)%	(0.3	)%	(0.2	)%	(0.3	)%	(0.0	)%
Other expense (income), net	—		—		0.4	%	0.3	%	(0.0	)%	(0.1	)%	(0.1	)%
Income (loss) before income taxes	1.4	%	5.6	%	(3.5	)%	(1.3	)%	(1.7	)%	(0.1	)%	2.6	%
Provision for income taxes	0.4	%	1.1	%	0.0	%	0.1	%	0.0	%	0.0	%	0.1	%
Net income (loss)	1.0	%	4.5	%	(3.6	)%	(1.4	)%	(1.7	)%	(0.2	)%	2.5	%

Unaudited Pro Forma Condensed Consolidated Financial Information

The supplemental unaudited pro forma condensed consolidated statements of operations data set forth below for pro forma 2007 has been derived by applying pro forma adjustments to our historical consolidated statements of operations. We were acquired by investment funds managed by Golden Gate on July 6, 2007. The accompanying unaudited pro forma condensed consolidated financial information is presented for the Predecessor and Successor periods, respectively. As a result of the Golden Gate Acquisition, we applied purchase accounting standards and a new basis of accounting effective July 7, 2007. The unaudited pro forma condensed consolidated statements of operations for the year ended February 2, 2008 gives effect to the Golden Gate Acquisition as if it had occurred on February 4, 2007. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma condensed consolidated financial information.

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The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial information is presented for supplemental informational purposes only. The unaudited pro forma condensed consolidated financial information does not purport to represent what our results of operations would have been had the Golden Gate Acquisition and related transactions actually occurred on the date indicated, and they do not purport to project our results of operations or financial condition for any future period. The unaudited pro forma condensed consolidated statements of operations should be read in conjunction with other sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as “Selected Historical Consolidated Financial and Operating Data” and our audited consolidated financial statements and related notes thereto appearing elsewhere in this prospectus.

	Predecessor		Successor			Total Adjustments				Pro Forma
	Period from February 4, 2007 through July 6, 2007		Period From July 7, 2007 through February 2, 2008							Year Ended February 2, 2008
			(restated)							(unaudited)
	(dollars in thousands)
Net sales	$	659,019	$	1,137,327		$	—			$	1,796,346
Costs of goods sold, buying and occupancy costs		451,514		890,063			10,574		(a) (b) (c) (d) (e)		1,352,151
Gross profit		207,505		247,264			(10,574	)			444,195
General, administrative and store operating expenses		170,100		275,150			2,887		(c)(d)		448,137
Other operating expense, net		302		5,526			1,660		(f)		7,488
Operating income (loss)	$	37,103	$	(33,412	)	$	(15,121	)		$	(11,430)
Interest expense		—		6,978			5,086		(g)		12,064
Interest income		—		(5,190	)		(114	)	(d)		(5,304	)
Other expense (income), net		—		4,712			—				4,712
Income (loss) before income taxes	$	37,103	$	(39,912	)	$	(20,093	)		$	(22,902)
Provision (benefit) for income taxes		7,161		487			(6,065	)	(h)		1,583
Net income (loss)	$	29,942	$	(40,399	)	$	(14,028	)		$	(24,485)

(a) As a result of the Golden Gate Acquisition, we recorded intangible assets at fair value, including a credit card relationship, our customer list and certain favorable lease obligations based on purchase accounting standards at a total amount of $24.5 million. These assets amortize over varying periods and the pro forma financials have been adjusted to reflect these costs over the full fiscal year.

(b) As a result of the Golden Gate Acquisition, we adjusted property and equipment to reflect a fair value increase equal to $38.5 million. These assets depreciate over various periods greater than two years and the pro forma financials have been adjusted to reflect this additional depreciation expense over the full fiscal year.

(c) In connection with the Golden Gate Acquisition, we entered into a transition services agreement with Limited Brands to provide ongoing services at an agreed upon rate which includes a margin on Limited Brands’ cost to provide the services. See “Certain Relationships and Related Party Transactions.” Prior to the Golden Gate Acquisition, we were billed for these services at cost. The pro forma financials have been adjusted to reflect this change as if we had entered into the transition services agreement on February 4, 2007.

(d) In December 2007, we implemented an incentive equity plan with retroactive vesting to the date of the Golden Gate Acquisition. The pro forma financials have been adjusted to account for the grants as though they had been made at the beginning of the fiscal year. Certain participants in the plan purchased certain of our equity interests (directly and indirectly), partially funded by $5.6 million of principal amount of promissory notes payable to Express Holding. The interest on these notes is recorded as interest income, which has been adjusted in the pro forma financials.

(e) We have leases that contain pre-determined fixed escalations of minimum rents. The related rent expense is recognized on a straight-line basis. The pro forma financials have been adjusted to reflect an effective straight-line reset date of February 4, 2007.

(f) In connection with the Golden Gate Acquisition, we entered into an advisory agreement with Golden Gate to provide services to us in exchange for an annual advisory fee. Under the terms of our limited liability company agreement, Limited Brands is also paid a fee calculated as a percentage of the Golden Gate advisory fee. See “Certain Relationships and Related Party Transactions.” The pro forma financials have been adjusted to reflect this fee for the full fiscal year.

(g) In connection with the Golden Gate Acquisition, on July 6, 2007, the company entered into the $125.0 million Opco term loan and the $200.0 million Opco revolving credit facility. The pro forma financials have been adjusted to reflect the interest expense, scheduled amortization of principal, and amortization of debt financing costs related to the borrowings as if we had entered into the Opco revolving credit facility and Opco term loan on February 4, 2007. See “—Existing Credit Facilities.”

(h) For the Predecessor periods, we operated as a division of Limited Brands and recorded a tax provision based on a separate-return methodology. For the period from May 6 through July 6, 2007 and subsequent to the Golden Gate Acquisition, we were treated as a partnership for tax purposes and therefore did not record a provision for income taxes. The pro forma financials have been adjusted to reflect our tax status as a partnership for the full fiscal year.

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Thirty-Nine Weeks Ended October 31, 2009 Compared to Thirty-Nine Weeks Ended November 1, 2008

Net Sales

Net sales were $1,174.2 million for the thirty-nine weeks ended October 31, 2009, a decrease of $57.4 million, or 4.7%, compared to $1,231.6 million for the thirty-nine weeks ended November 1, 2008. We had 581 and 585 stores open as of the end of the thirty-nine weeks ended October 31, 2009 and November 1, 2008, respectively. During the thirty-nine weeks ended October 31, 2009 we opened six new stores, closed two non-productive stores and converted the women’s and men’s stores in four malls to single stores with dual-gender formats. Comparable store sales declined by 10% in the thirty-nine weeks ended October 31, 2009 compared to the thirty-nine weeks ended November 1, 2008, as a result of a decrease in the number of transactions, due primarily to the decline in general economic conditions, which was partially offset by an increase in the average dollars spent per transaction. Net sales generated through e-commerce were $55.1 million, compared to $10.2 million in the thirty-nine weeks ended November 1, 2008, an increase of $44.8 million, primarily resulting from increased traffic to our website since its launch in July 2008, and the fact that our website was only operational for part of the thirty-nine weeks ended November 1, 2008. Other revenue was $7.8 million for the thirty-nine weeks ended October 31, 2009, an increase of $5.2 million compared to other revenue of $2.6 million for the thirty-nine weeks ended November 1, 2008.

Gross Profit

Gross profit was $360.2 million, or 30.7% of our net sales, for the thirty-nine weeks ended October 31, 2009, a decrease of $1.1 million, or 0.3%, from $361.3 million, or 29.3% of our net sales, for the thirty-nine weeks ended November 1, 2008. Gross profit was impacted by purchase accounting related to the Golden Gate Acquisition which had the effect of increasing the carrying amount of property and equipment by $38.5 million which is being depreciated over the remaining useful life of each asset. The impact of purchase accounting had the effect of reducing gross profit by $14.2 million and $20.4 million for the thirty-nine weeks ended October 31, 2009 and November 1, 2008, respectively.

The improvement in gross margin rate was primarily a result of an increase in product margin (product price less product cost). This improvement primarily reflects our efforts to reduce markdowns by conducting increased product testing. This was partially offset by a decrease in gross margin rate related to buying and occupancy expenses, which are largely fixed in the short term, resulting from the decline in comparable store sales.

General, Administrative and Store Operating Expenses

General, administrative and store operating expenses were $285.3 million, or 24.3% of net sales, for the thirty-nine weeks ended October 31, 2009, a decrease of $54.9 million, or 16.1%, compared to $340.2 million, or 27.6% of net sales, for the thirty-nine weeks ended November 1, 2008. The reduction in general, administrative and store operating expenses as a percentage of net sales was primarily due to our efforts to lower our store related payroll costs and increase efficiency. The remaining reduction in general, administrative and store operating expenses was driven by lower expenses associated with operations at our headquarters, resulting primarily from savings realized as part of our transition to a standalone business in areas such as benefits and payroll administration. These improvements were partially offset by investments in home office headcount to support our e-commerce growth strategy.

Other Operating Expense, net

Other operating expense, net was $6.5 million for the thirty-nine weeks ended October 31, 2009, an increase of $1.5 million, or 28.6%, compared to $5.1 million for the thirty-nine week period ended November 1, 2008. Changes in other operating expense, net relate primarily to changes in advisory fees which are calculated as a percent of Adjusted EBITDA.

Interest Expense

Interest expense was $40.2 million for the thirty-nine weeks ended October 31, 2009, an increase of $17.8 million, or 79.6%, compared to $22.4 million for the thirty-nine weeks ended November 1, 2008. This increase resulted primarily from our entering into the $300.0 million Topco credit facility June 26, 2008, and therefore interest expense for the thirty-nine weeks ended November 1, 2008 only reflects eighteen weeks of interest

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relating to this facility. This was offset slightly by lower interest expense related to our Opco term loan, which had a lower interest rate during the thirty-nine weeks ended October 31, 2009 and accrued interest on a lower outstanding principal balance.

Interest Income

Interest income was $0.4 million for the thirty-nine weeks ended October 31, 2009, a decrease of $3.0 million as compared to $3.4 million for the thirty-nine weeks ended November 1, 2008. The decrease in interest income resulted primarily from a reduction in interest rates on investments in overnight treasury securities and a decline in the average amount of cash and cash equivalents on hand.

Other Income (Expense)

Other income was $1.6 million for the thirty-nine weeks ended October 31, 2009, an increase of $0.5 million, or 41.4%, compared to $1.1 million for the thirty-nine weeks ended November 1, 2008. Other income (expense) was primarily composed of changes in the fair market value of our interest rate swap.

Provision for Income Taxes

Provision for income taxes was $0.9 million for the thirty-nine weeks ended October 31, 2009, an increase of $0.8 million, compared to $0.1 million for the thirty-nine weeks ended November 1, 2008. See “—Other Factors Affecting Our Results” for additional information related to our tax structure.

2008 Compared to Pro Forma 2007 and the 2007 Successor period

Net Sales

Net sales were $1,737.0 million in fiscal 2008, a decrease of $59.3 million, or 3.3%, compared to $1,796.3 million for pro forma fiscal 2007, and were $1,137.3 million in the 2007 Successor period. We had 581 and 587 stores open at the end of fiscal 2008 and fiscal 2007, respectively. During fiscal 2008, we opened nine new stores, closed nine non-productive stores and converted the women’s and men’s stores in six malls to single dual-gender stores. Comparable store sales declined by 3% in fiscal 2008 compared to pro forma fiscal 2007, due primarily to a decrease in transaction volumes resulting from an overall decline in consumer spending, late in the third quarter and throughout the fourth quarter of 2008. This decrease was partially offset by an increase in the first and second quarter comparable store sales which were up 13% and 6%, respectively, due to growth in transactions. Net sales generated through e-commerce were $28.1 million, which represents sales from our website launch in July 2008 through the fiscal year end. Fiscal 2008 net sales were up $599.7 million over the thirty-week 2007 Successor period. Other revenue for fiscal 2008 was $4.8 million and was related primarily to shipping and handling revenue on e-commerce sales.

Gross Profit

Gross profit was $457.0 million, or 26.3% of net sales for fiscal 2008, an increase of $12.8 million, or 2.9%, compared to $444.2 million, or 24.7% of net sales for pro forma fiscal 2007. For the 2007 Successor period, gross profit was $247.3 million, or 21.7% of net sales. Gross profit was impacted by purchase accounting related to the Golden Gate Acquisition, which increased the carrying amount of inventories by $86.9 million during pro forma fiscal 2007 and property and equipment by $38.5 million, which is being depreciated over the remaining useful life of each asset. The entire impact of the $86.9 million purchase accounting inventory adjustment was reflected in gross profit for pro forma fiscal 2007 and the 2007 Successor period, while the property and equipment adjustment impacted fiscal 2008, pro forma fiscal 2007 and the 2007 Successor period.

The increase in gross margin for fiscal 2008 compared to pro forma 2007 was driven primarily by the purchase accounting adjustments in pro forma 2007 compared to fiscal 2008. We also experienced a decrease in gross margin due to decreased consumer spending on discretionary items during the recessionary period in fiscal 2008.

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The increase in gross margin for fiscal 2008 compared to the 2007 Successor period was also driven primarily by the inventory related purchase accounting adjustment that reduced the gross margin during the 2007 Successor period. The increase in gross margin compared to the 2007 Successor period was partially offset by a decrease in product margin, driven primarily by the disproportionately higher markdowns on excess inventory during the late third quarter and all of the fourth quarter of fiscal 2008, primarily due to the challenging economic environment.

General, Administrative and Store Operating Expenses

General, administrative and store operating expenses were $447.1 million, or 25.7% of net sales, for fiscal 2008, a decrease of $1.1 million, or 0.2%, compared to $448.1 million, or 24.9% of net sales, for pro forma fiscal 2007. For the 2007 Successor period, general, administrative and store operating expenses were $275.2 million, or 24.2% of net sales.

The increase in general, administrative and store operating expenses as a percentage of net sales in fiscal 2008 compared to pro forma 2007 and fiscal 2008 as compared to the 2007 Successor period was driven primarily by an increase in expenses associated with operations at our headquarters, partially offset by a decrease in store selling expenses due to our efforts to reduce our costs and increase efficiency, including reductions in store related payroll.

Other Operating Expense, net

Other operating expense, net was $6.0 million in fiscal 2008, a decrease of $1.5 million, or 19.8%, compared to $7.5 million in pro forma 2007 and $5.5 million in the 2007 Successor period. Changes in other operating expense, net relate primarily to changes in advisory fees which are calculated as a percent of Adjusted EBITDA.

Interest Expense

Interest expense was $36.5 million in fiscal 2008, an increase of $24.5 million, or 203%, compared to $12.1 million in pro forma fiscal 2007 and was $7.0 million in the 2007 Successor period. This increase resulted primarily from our entering into the $300.0 million Topco credit facility June 26, 2008. This increase was offset slightly by lower interest expense related to our Opco term loan which had a lower interest rate during fiscal 2008 and accrued interest on a lower outstanding principal balance.

Interest Income

Interest income was $3.5 million in fiscal 2008, a decrease of $1.8 million, or 33.5%, compared to $5.3 million in pro forma fiscal 2007 and was $5.2 million in the 2007 Successor period. The decrease in interest income during fiscal 2008 was due primarily to a reduction in interest rates on investments in overnight treasury securities and a decline in the average amount of cash and cash equivalents on hand.

Other Income (Expense)

Other income was $0.3 million in fiscal 2008, compared to expense of $4.7 million in pro forma fiscal 2007 and expense of $4.7 million in the 2007 Successor period. Other income (expense) is primarily composed of changes in the fair market value of our interest rate swap and the proceeds from the settlement of insurance claims. Other expense in pro forma 2007 and the 2007 Successor period was due primarily to an increase in liability related to our interest rate swap.

Provision for Income Taxes

Provision for income taxes was $0.2 million in fiscal 2008 compared to $1.6 million in pro forma fiscal 2007 and $0.5 million in the 2007 Successor period. See the discussion above in “—Other Factors Affecting Our Results” for additional information related to our tax structure.

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Pro Forma 2007 and the 2007 Predecessor Period Compared to Fiscal 2006

Net Sales

Net sales were $1,796.3 million for pro forma fiscal 2007, an increase of $47.5 million, or 2.7%, compared to $1,748.9 million in fiscal 2006. Net sales were $659.0 million for the 2007 Predecessor period. We had 587 and 658 stores open as of the end of fiscal 2007 and fiscal 2006, respectively. During pro forma fiscal 2007, we opened two new stores, closed 43 non-productive stores and converted the separate women’s and men’s stores in 30 malls to single dual-gender stores. Comparable stores sales increased 9% in pro forma fiscal 2007 as compared to fiscal 2006. In fiscal 2006, approximately $26.0 million of our net sales resulted from the impact of the fifty-third week in that period. The increase in net sales in pro forma fiscal 2007 resulted primarily from an increase in the average dollars spent per transaction, partially offset by a decrease in the number of transactions. The increase in average dollars spent per transaction resulted from an increase in average unit sales which reflected our efforts to minimize discounting and promotional activity and was not attributable to a strategy of simply raising prices.

The net sales increase in pro forma fiscal 2007 primarily reflects comparable store sales increases of 12% for the 2007 Successor period and 6% for the 2007 Predecessor period compared to the same periods in fiscal 2006. We had 587 stores at the end of the 2007 Successor period, as two new stores opened, 22 non-productive stores closed and 15 separate women’s and men’s stores were converted into dual-gender stores during the 2007 Successor period. The increase in net sales during the 2007 Successor period reflects an increase in the average dollars spent per transaction offset by a slight decline in transaction volume. We had 622 stores at the end of the 2007 Predecessor period and no new stores opened, 21 non-productive stores closed and 15 separate women’s and men’s stores were converted into dual-gender stores during the 2007 Predecessor period. The increase in net sales during the 2007 Predecessor period reflects an increase in the average dollars spent per transaction offset by a decline in transactions.

Gross Profit

Gross profit was $444.2 million, or 24.7% of net sales for pro forma fiscal 2007, a decrease of $49.9 million, or 10.1%, compared to $494.1 million, or 28.3% of net sales, for fiscal 2006. For the 2007 Predecessor period, gross profit was $207.5 million, or 31.5% of net sales. Gross profit was also impacted by purchase accounting related to the Golden Gate Acquisition, which had the effect on the balance sheet of increasing the carrying amount of inventories by $86.9 million and property and equipment by $38.5 million, which is being depreciated over the remaining useful life of each asset. The entire impact of the $86.9 million purchase accounting inventory adjustment was reflected in gross profit for pro forma fiscal 2007. The impact of purchase accounting had the effect of reducing gross profit by $104.8 million in pro forma fiscal 2007.

The pro forma fiscal 2007 decrease in gross margin rate was due primarily to the impact of purchase accounting which had the effect of decreasing gross margin by 4.8% for the inventory adjustment and 1.8% for the property and equipment adjustment, in addition to an increase in expense related to inventory shrinkage. These declines were partially offset by an increase in product margin. In addition, we had an increase in gross margin rate related to leverage of buying and occupancy expenses, which are largely fixed, driven by the increase in net sales.

The 2007 Predecessor period increase in gross margin rate compared to fiscal 2006 was driven primarily by a lack of comparability in the composition of the months being compared. The 2007 Predecessor period includes February through June 2007, which excludes our primary inventory liquidation months of July and January. As such, product margin was higher for the 2007 Predecessor period. This was offset somewhat by a decrease in gross margin rate related to buying and occupancy expenses, which are largely fixed. Our sales are generally higher during the third and fourth quarters, which are both excluded from the 2007 Predecessor period. As such, the gross margin rate during the 2007 Predecessor period declined with the largely fixed cost base de-leveraging over a lower sales volume.

General, Administrative and Store Operating Expenses

General, administrative and store operating expenses were $448.1 million, or 24.9% of net sales, for pro forma fiscal 2007, a decrease of $22.0 million, or 4.7%, compared to $470.1 million, or 26.9% of net sales, in

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fiscal 2006. For the 2007 Predecessor period, general, administrative and store operating expenses were $170.1 million, or 25.8% of net sales.

The decrease in general, administrative and store operating expenses as a percentage of net sales in pro forma 2007 compared to fiscal 2006 was due primarily to a decline in store operations expense, driven primarily by the increase in net sales, a reduction in costs as a result of closing 43 non-productive store locations during 2007 and the elimination of corporate expenses allocated to us by Limited Brands in the Predecessor periods. The decrease in the general, administrative and store operating expense as a percentage of net sales in the 2007 Predecessor period compared to fiscal 2006 was due primarily to a reduction in the expenses associated with our headquarters operations and lower corporate expense allocations from Limited Brands.

Other Operating Expense, net

Other operating expense, net was $7.5 million in pro forma fiscal 2007 compared to zero in fiscal 2006 and $0.3 million in the 2007 Predecessor period. The pro forma fiscal 2007 amount relates primarily to advisory fees resulting from the Golden Gate Acquisition.

Interest Expense

Interest expense was $12.1 million in pro forma fiscal 2007 compared to zero in fiscal 2006 and in the 2007 Predecessor period. We incurred interest expense in pro forma 2007 as a result of the Opco term loan entered into in connection with the Golden Gate Acquisition. Prior to that time, interest expense was not charged to our business by Limited Brands, as we had no specific financing or borrowing arrangements with Limited Brands.

Interest Income

Interest income was $5.3 million in pro forma fiscal 2007 compared to zero in fiscal 2006 and the 2007 Predecessor period. Prior to the Golden Gate Acquisition, we did not earn interest income because cash was held by Limited Brands.

Other Income (Expense)

Other expense was $4.7 million in pro forma fiscal 2007 compared to zero in fiscal 2006 and in the 2007 Predecessor period. Other income (expense) is primarily composed of changes in the fair market value of our interest rate swap and the proceeds from the settlement of insurance claims. The occurrence of other income (expense) is a result of the Golden Gate Acquisition. Prior to that, expense items such as this were accounted for by Limited Brands. The expense in pro forma 2007 was due primarily to an increase in liability related to our interest rate swap, which did not exist in the 2007 Predecessor period.

Provision for Income Taxes

The provision for income taxes was $1.6 million in pro forma fiscal 2007 compared to $6.5 million in fiscal 2006 and $7.2 million in the 2007 Predecessor period. See the discussion above in “—Other Factors Affecting Our Results” for additional information related to our tax structure.

Quarterly Results and Seasonality

The following table sets forth our historical unaudited quarterly consolidated statements of income for each of the last seven fiscal quarters ended October 31, 2009. This unaudited quarterly information has been prepared on the same basis as our annual audited financial statements appearing elsewhere in this prospectus, and includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary to present fairly the financial information for the fiscal quarters presented.

Our business is seasonal and, historically, we have realized a higher portion of our net sales and net income in the third and fourth fiscal quarters due primarily to early Fall selling patterns as well as the impact of the holiday season. Generally, the annual sales split is 47% for the Spring season (February through July) and 53% for the Fall season (August through January). Operating cash flows are typically higher in the second and fourth

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fiscal quarters due to inventory related working capital requirements in the first and third fiscal quarters. Our business is also subject, at certain times, to calendar shifts, which may occur during key selling periods close to holidays such as Easter, Thanksgiving, and Christmas and regional fluctuations for events such as sales tax holidays. As such, results of a period shorter than a full year may not be indicative of results expected for the entire year. Furthermore, the seasonal nature of our business may affect comparisons between periods.

The quarterly data should be read in conjunction with our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus.

Quarterly Results of Operations

	Fiscal 2008												Fiscal 2009
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter
	(unaudited)
	(dollars in thousands)
Net sales	$	422,696		$	399,066		$	409,882		$	505,366		$	374,358		$	373,823		$	426,046
Cost of goods sold, buying and occupancy costs		289,461			285,729			295,118			409,710			262,274			271,024			280,700
Gross profit		133,235			113,337			114,764			95,656			112,084			102,799			145,346
General, administrative and store operating expenses		116,471			111,420			112,306			106,874			89,524			94,716			101,019
Other operating expense, net		3,768			1,282			17			940			1,617			1,827			3,070
Operating income (loss)	$	12,996		$	635		$	2,441		$	(12,158	)	$	20,943		$	6,256		$	41,257
Interest expense		2,737			6,029			13,625			14,140			13,649			13,198			13,357
Interest Income		(2,131	)		(870	)		(400	)		(126	)		(76	)		(98	)		(229	)
Other expense (income), net		(1,155	)		(576	)		615			816			(443	)		(467	)		(668	)
Income (loss) before income taxes		13,545			(3,948	)		(11,399	)		(26,988	)		7,813			(6,377	)		28,797
Provisions (benefit) for income taxes		199			(76	)		(37	)		160			214			379			330
Net income (loss)	$	13,346		$	(3,872	)	$	(11,362	)	$	(27,148	)	$	7,599		$	(6,756	)	$	28,467
Adjusted EBITDA		53,949			25,557			31,973			25,719			45,150			33,564			66,415
Comparable store sales(1)		13	%		6	%		(4	)%		(17	)%		(17	)%		(12	)%		(1	)%

(1) Comparable store sales have been calculated based upon stores that were open at least thirteen full fiscal months as of the end of the reporting period.

The following table presents a reconciliation of the differences between EBITDA and Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, for the periods indicated below. See note (5) to the table included in “Summary Historical and Pro Forma Consolidated Financial and Operating Data.”

	Fiscal 2008											Fiscal 2009
	First Quarter		Second Quarter			Third Quarter			Fourth Quarter			First Quarter		Second Quarter			Third Quarter
	(unaudited)
	(dollars in thousands)
Net income (loss)	$	13,346	$	(3,872	)	$	(11,362	)	$	(27,148	)	$	7,599	$	(6,756	)	$	28,467
Depreciation and amortization		19,376		19,458			19,752			20,519			18,796		18,356			16,318
Interest expense (net)		607		5,350			13,226			14,016			13,573		13,099			13,127
Provision for income taxes		199		(76	)		(37	)		160			214		379			330
EBITDA		33,528		20,860			21,579			7,547			40,182		25,078			58,242
Non-cash deductions, losses, charges		2,254		1,101			6,261			11,496			922		3,647			4,225
Non-recurring expenses		13,926		386			1,148			3,200			1,100		1,580			1,127
Transaction expenses		567		1,103			826			1,100			674		533			236
Permitted advisory agreement fees and expenses		1,716		1,320			(29	)		1,231			1,193		1,253			2,279
Non-cash expense related to equity incentives		499		532			503			535			503		501			506
Other adjustments allowable under our existing credit agreements		1,459		255			1,685			610			576		972			(200	)
Adjusted EBITDA	$	53,949	$	25,557		$	31,973		$	25,719		$	45,150	$	33,564		$	66,415

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Liquidity and Capital Resources

General

Our business relies on cash flows from operations as our primary source of liquidity. We do, however, have access to additional liquidity, if needed, through borrowings under our existing Opco revolving credit facility. Our primary cash needs are for merchandise inventories, payroll, store rent, capital expenditures associated with opening new stores and updating existing stores and information technology. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, accounts payable and other current liabilities. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within a few days of the related sale, and we have up to 75 days to pay merchandise vendors and 45 days to pay non-merchandise vendors. We believe that cash generated from operations and the availability of borrowings under our credit facilities or other financing arrangements will be sufficient to meet working capital requirements, anticipated capital expenditures and scheduled debt payments for at least the next twelve months.

Cash Flow Analysis

A summary of operating, investing, and financing activities are shown in the following table:

	Predecessor						Successor
	Year Ended February 3, 2007			Period from February 4, 2007 through July 6, 2007			Period from July 7, 2007 through February 2, 2008			Year Ended January 31, 2009			Thirty-Nine Weeks Ended
													November 1, 2008			October 31, 2009
							(restated)			(restated)			(unaudited)
							(dollars in thousands)
Provided by (used in) operating activities	$	84,913		$	45,912		$	282,192		$	35,234		$	(15,234	)	$	87,284
Used in investing activities		(53,867	)		(22,888	)		(15,258	)		(51,801	)		(32,359	)		(22,883	)
Provided by (used in) financing activities		(24,130	)		(29,939	)		39,361			(127,347	)		(202,032	)		(82,121	)
Increase (decrease) in cash and cash equivalents		6,916			(6,915	)		306,295			(143,914	)		(249,625	)		(17,720	)
Cash and cash equivalents at end of period	$	20,649		$	13,734		$	320,029		$	176,115		$	70,404		$	158,395

Net Cash Provided By (Used in) Operating Activities

Operating activities consist primarily of net income adjusted for non-cash items, including depreciation and amortization, the effect of working capital changes, and tenant allowances received from landlords.

Net cash provided by operating activities was $87.3 million for the thirty-nine weeks ended October 31, 2009, compared to a use of $15.2 million for the thirty-nine weeks ended November 1, 2008. The $102.5 million increase during the thirty-nine weeks ended October 31, 2009 was primarily due to a $31.2 million increase in net income and a $76.5 million increase related to changes in assets and liabilities, partially offset by a $5.2 million decline in depreciation and amortization. The increase in cash related to changes in working capital was due primarily to a reduction in merchandise inventory and an increase in accrued expenses and other current liabilities.

Net cash provided by operating activities was $35.2 million for fiscal year 2008 compared to $282.2 million in the 2007 Successor period. The cash provided by operating activities in the 2007 successor period was impacted by our transition to a standalone company and establishing working capital accounts with our third

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party vendors. The $247.0 million decrease in cash provided by operating activities was due primarily to a $290.6 million decrease related to changes in working capital. This decrease resulted primarily from a $59.9 million use of cash related to inventory and accounts payable and accrued expenses for related parties in fiscal 2008 compared to a $230.6 million source of cash during the 2007 Successor period. These decreases in cash were partially offset by a $11.4 million increase in net income and a $32.2 million increase in depreciation and amortization expense. Both of these decreases are primarily the result of the comparison of fiscal 2008 to a partial year period in 2007.

Net cash provided by operating activities was $45.9 million for the 2007 Predecessor period compared to $84.9 million in fiscal 2006. The $39.0 million decline realized during the 2007 Predecessor period was due primarily to a $36.9 million decrease related to depreciation and amortization expense. This decrease was driven primarily by the comparison to a partial year period.

Net Cash Used in Investing Activities

Investing activities consist primarily of capital expenditures for growth (new store openings), store maintenance (remodels, conversions to a dual gender format, visual, fixtures, heating, ventilation and air conditioning improvements and gates), and non-store maintenance (information technology and expenses associated with operations at our headquarters).

Capital expenditures for the thirty-nine weeks ended October 31, 2009 and November 1, 2008 were $22.9 million and $32.4 million, respectively. Capital expenditures, gross of landlord allowances, for the opening of six new stores, four store remodels and six store conversions to a dual gender format were $8.8 million in the thirty-nine weeks ended October 31, 2009 and $14.2 million for six new stores, six store remodels, and four store conversions to a dual gender format for the thirty-nine weeks ended November 1, 2008. The remaining capital expenditures in both periods relates primarily to investments in store visual and fixtures, heating, ventilation and air conditioning improvements, gates, information technology and investments in the operations at our headquarters.

Capital expenditures were $50.6 million in fiscal 2008, $15.3 million in the 2007 Successor period, $22.9 million in the 2007 Predecessor period, and $53.9 million in fiscal 2006. Capital expenditures, gross of landlord allowances, for the opening of new stores, store remodels, and store conversions to a dual gender format were $29.5 million in fiscal 2008, $14.9 million for the 2007 Successor period, $17.2 million in the 2007 Predecessor period, and $46.9 million in fiscal 2006. The remaining capital expenditures in each period relates primarily to investments in store visual and fixtures, heating, ventilation and air conditioning improvements, gates, information technology and investments in the operations at our headquarters.

We expect capital expenditures of approximately $30 million, including landlord allowances, for fiscal 2009, comprised primarily of approximately $6 million for seven new store openings, approximately $13 million for five store remodels, nine store conversions, and visual and fixture investments, and approximately $11 million for investments in information technology primarily related to our transition to a standalone business. Landlord allowances related to fiscal 2009 capital expenditures are expected to be approximately $7 to $10 million. Management expects capital expenditures for fiscal 2010 to be approximately $50 million, including landlord allowances, with the increase compared to fiscal 2009 resulting primarily from new store openings and the final phase of our information technology transition which relates primarily to point-of-sale and customer marketing database investments. Landlord allowances related to fiscal 2010 capital expenditures are expected to be approximately $7 to $10 million.

Net Cash Provided By (Used in) Financing Activities

Financing activities consist primarily of borrowings and repayments related to the Opco term loan, the Topco credit facility and our Opco revolving credit facility, as well as distributions to our equity holders and fees and expenses paid in connection with our credit facilities.

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Net cash used by financing activities was $82.1 million for the thirty-nine weeks ended October 31, 2009. This use of cash included $75.0 million of repayments of borrowings under our Opco revolving credit facility and $7.1 million of repayments of borrowings under our Opco term loan and our Topco credit facility. This compares to net cash used by financing activities of $202.0 million for the thirty-nine weeks ended November 1, 2008. This included borrowings of $294.0 million under our Topco credit facility in the thirty-nine weeks ended November 1, 2008, offset by a distribution to our equity holders of $491.2 million.

Net cash used by financing activities was $127.3 million for fiscal 2008. This reflected a source of cash related to borrowings of $294.0 million under the Topco credit facility and $75.0 million in borrowings under our Opco revolving credit facility, offset by a distribution to equity holders of $491.2 million as well as $3.9 million in expenses paid in connection with the Topco credit facility, and $1.3 million in repayments related to the Opco term loan. This compares to $39.4 million in net cash provided by financing activities for the 2007 Successor period. This source of cash was primarily from cash equity contributions by our equity holders.

Net cash used by financing activities was $29.9 million for the 2007 Predecessor period and $24.1 million for fiscal 2006. These declines resulted from lower net cash investments in the business by Limited Brands during each respective period.

Existing Credit Facilities

Opco Revolving Credit Facility

On July 6, 2007, Express Holding and Express, LLC entered into a $200.0 million secured Asset-Based Loan Credit Agreement. The Opco revolving credit facility is available to be used for working capital and other general corporate purposes and is scheduled to expire on July 6, 2012. The Opco revolving credit facility, as amended, allows for swing line advances of up to $30.0 million and up to $45.0 million to be available in the form of letters of credit.

Borrowings under the Opco revolving credit facility bear interest at a rate equal to LIBOR plus an applicable margin rate or the higher of The Wall Street Journal’s prime lending rate and 0.50% per annum above the federal funds rate, plus an applicable margin rate. The applicable margin rate is determined based on excess availability as determined with reference to our borrowing base. The applicable margin rate for LIBOR-based advances is 1.25% per annum or 1.00% if excess availability is $100.0 million or greater, and for base rate-based advances is 0.25% per annum or 0.00% if excess availability is $100.0 million or greater. The borrowing base components are 90% of credit card receivables plus 85% of the liquidation value of eligible inventory, less certain reserves. At the end of fiscal 2008, we borrowed $75.0 million under the Opco revolving credit facility, which was reflected as a current liability on our balance sheet. This amount was paid in full during the first quarter of fiscal 2009. We had no borrowings outstanding and $146.6 million available under the Opco revolving credit facility as of January 2, 2010.

Unused line fees payable under the Opco revolving credit facility are based on 0.25% of the average daily unused revolving commitment during each quarter payable quarterly in arrears. As a result of the amendment described below, effective upon a qualified offering of unsecured debt, unused line fees payable under the Opco revolving credit facility will be based on 0.50% of the average daily unused revolving commitment during each quarter payable quarterly in arrears.

As a result of the amendment described below, effective upon a qualified offering of unsecured debt, the applicable margin rate for LIBOR-based advances will be 2.25% per annum or 2.00% if excess availability is $100.0 million or greater, and for base rate-based advances will be 1.25% per annum or 1.00% if excess availability is $100.0 million or greater.

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Interest payments under the Opco revolving credit facility are due quarterly on the last day of each April, July, October and January for base rate-based advances and on the last day of the interest period for LIBOR-based advances for interest periods of one, two, three months and six months (or if available to all lenders, nine or twelve months), and additionally every three months after the first day of the interest period for LIBOR-based advances for interest periods of greater than three months.

The Opco revolving credit facility contains customary covenants and restrictions on Express Holding and its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness; liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt; distributions, dividends and the repurchase of capital stock; transactions with affiliates; the ability to change the nature of our business or our fiscal year; the ability to amend the terms of the Opco term loan and the advisory agreement; and permitted activities of Express Holding. All obligations under the Opco revolving credit facility are guaranteed by Express Holding and its subsidiaries and secured by a lien on substantially all of the assets of Express Holding and its subsidiaries; provided that the liens on certain assets of Express Holding and its subsidiaries shall be junior in priority to the liens securing the Opco term loan facility.

The Opco revolving credit facility requires us to maintain a fixed charge coverage ratio of 1.00:1.00 if excess availability plus eligible cash collateral is less than $20.0 million. Our excess availability was $187.9 million as of October 31, 2009. We were not subject to this covenant as of October 31, 2009 because excess availability plus eligible cash collateral was greater than $20.0 million. As a result of the amendment described below, effective upon a qualified offering of unsecured debt, the Opco revolving credit facility will require Express, LLC to maintain a fixed charge coverage ratio of 1.00:1.00 if excess availability plus eligible cash collateral is less than $30.0 million.

On February 5, 2010, Express Holding and Express, LLC entered into an amendment to the Opco revolving credit facility. The amendment provides that effective upon a qualified offering of unsecured debt, the Opco revolving credit facility will be amended to, among other things, (1) permit the issuance of unsecured debt and the guarantees thereof by Express Holding and its subsidiaries, (2) increase the applicable interest rate margins and unused line fee thereon, (3) permit, subject to the satisfaction of certain minimum liquidity tests, a distribution by Express, LLC to Express Holding of a portion of the net cash proceeds of a qualified offering of unsecured debt, which Express Holding may subsequently distribute to its equity holders so long as such distribution is used to prepay the Term C Loans in their entirety (plus any applicable prepayment premium and accrued and unpaid interest thereon), (4) permit, subject to the satisfaction of certain minimum liquidity tests, additional cash distributions by Express, LLC to Express Holding which may ultimately be distributed to Express Parent’s equity holders, (5) permit Express, LLC to pay distributions to Express Holding so that Express Holding may distribute such amounts to Express Topco to permit Express Topco to make regularly scheduled interest payments on the Term B Loans and (6) permit Express Holding to own the equity interests of a newly formed co-issuer of such unsecured debt. We will pay customary amendment fees to consenting lenders in connection with the amendment.

Opco Term Loan Facility

On July 6, 2007, Express Holding and Express, LLC, entered into a $125.0 million secured term loan. The proceeds of these borrowings were used to finance, in part, the Golden Gate Acquisition and to pay transaction fees and expenses related to the Golden Gate Acquisition. Borrowings under the Opco term loan bear interest at a rate equal to LIBOR plus an applicable margin rate or the higher of The Wall Street Journal’s prime lending rate and 0.50% per annum above the federal funds rate, plus an applicable margin rate.

The applicable margin rate is determined by Express Holding’s leverage ratio of consolidated debt for borrowed money (net of cash and cash equivalents provided that, after giving effect to the amendment described below, no more than $75.0 million of cash and cash equivalents may be netted against consolidated debt for borrowed money for this purpose), including amounts drawn under letters of credit and any synthetic debt, to Adjusted EBITDA (“Leverage Ratio”), in effect on the first day of each interest period with respect to LIBOR-based advances and by the Leverage Ratio in effect from time to time with respect to base rate-based

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advances. The applicable margin rate for LIBOR-based advances is 2.75% per annum or 2.50% if the Leverage Ratio is less than 1.00 to 1.00, and for base rate-based advances is 1.75% per annum or 1.50% if the Leverage Ratio is less than 1.00 to 1.00. As a result of the amendment described below, effective upon the completion of a qualified offering of unsecured debt, the applicable margin rate for LIBOR-based advances will be 4.25% per annum or 4.00% if the Leverage Ratio is less than 1.00 to 1.00, and for base rate-based advances will be 3.25% per annum or 3.00% if the Leverage Ratio is less than 1.00 to 1.00; additionally, these rates may be further increased by 0.50% per annum in the event that Express, LLC fails to maintain, at the time of determination, a corporate family rating of B2 or better by Moody’s and a corporate credit rating of B or better by Standard & Poor’s. As of February 1, 2010, the interest rate under the Opco term loan was 2.75%.

Interest payments under the Opco term loan are due quarterly on the last day of each April, July, October and January for base rate-based advances and on the last day of the applicable interest period for LIBOR-based advances for interest periods of one, two, three and six months (or if available to all lenders, nine or twelve months), and additionally every three months after the first day of the interest period for LIBOR-based advances for interest periods of greater than three months. Principal payments under the Opco term loan are due quarterly on the last business day of each April, July, October and January through July 6, 2013, in equal installments of 0.25% of the initial principal balance with the balance of principal due on July 6, 2014.

The agreement governing the Opco term loan requires that annual prepayments of principal be made within five business days after the 120th calendar day following the end of each fiscal year in the amount by which an applicable percentage of “excess cash flow” (as defined in the agreement) that corresponds to Express Holding Leverage Ratio, exceeds any voluntary prepayments of the Opco term loan over the fiscal year.

The Opco term loan contains customary covenants and restrictions on Express Holding, and its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness; liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt; distributions, dividends and the repurchase of capital stock; transactions with affiliates; the ability to change the nature of Express, LLC’s businesses or fiscal year; the ability to amend the terms of the Opco revolving credit facility and the advisory agreement; and permitted activities of Express Holding. All obligations under the Opco term loan are guaranteed by Express Holding and its subsidiaries and secured by a lien on substantially all of the assets of Express Holding and its subsidiaries; provided that the liens on certain assets of Express Holding and its subsidiaries shall be junior in priority to the liens securing the Opco revolving credit facility.

The Opco term loan also requires that Express Holding maintains a Leverage Ratio for the most recently completed reporting period (last four consecutive fiscal quarters as of the end of each quarter) of not more than 2.25 to 1.00 at the end of the fourth quarter of fiscal year 2009; 2.00 to 1:00 at the end of the first and second fiscal quarters of 2010; and 1.75 to 1:00 thereafter. Express Holding was in compliance with the covenant requirement as of October 31, 2009.

Effective July 6, 2007, Express, LLC entered into a receive variable/pay fixed interest rate swap agreement to mitigate exposure to interest rate fluctuations on a notional principal amount of $75.0 million of the $125.0 million variable-rate Opco term loan. The interest rate swap agreement terminates on August 6, 2010. The fair value of the interest rate swap was a liability of $2.8 million as of October 31, 2009. The Opco term loan requires that Express, LLC maintain interest rate hedge agreements on a notional amount of at least 50% of the term commitments of lenders under the Opco term loan for at least three years.

On February 5, 2010, Express Holding and Express, LLC entered into an amendment to the Opco term loan. The amendment provides that effective upon a qualified offering of unsecured debt, the Opco term loan will be amended to, among other things, (1) permit the issuance of the unsecured debt and the guarantees thereof by Express Holding and its subsidiaries, (2) increase the applicable interest rate margins thereon (subject to a further increase in the event Express, LLC’s corporate family rating is not B2 or better by Moody’s and Express, LLC’s corporate credit rating is not B or better by Standard & Poor’s), (3) permit, subject to the satisfaction of

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certain minimum liquidity tests, a distribution by Express, LLC to Express Holding of a portion of the net cash proceeds of a qualified offering of unsecured debt, which Express Holding may subsequently distribute to its equity holders so long as such distribution is used to prepay the Term C Loans in their entirety (plus any applicable prepayment premium and accrued and unpaid interest thereon), (4) permit, subject to the satisfaction of certain minimum liquidity tests, additional cash distributions, on or about the date of consummation of a qualified offering of unsecured debt by Express, LLC to Express Holding, which may ultimately be distributed through our corporate structure to Express Parent’s equity holders, (5) permit Express, LLC to pay distributions to Express Holding so that Express Holding may distribute such amounts to Express Topco to permit Express Topco to make regularly scheduled interest payments on the Term B Loans and (6) permit Express Holding to own the equity interests of a newly formed co-issuer of such unsecured debt. We will pay customary fees to consenting lenders in connection with the amendment.

Topco Credit Facility

On June 26, 2008, Express Topco, as borrower, entered into a $300.0 million secured term loan facility. The proceeds of the Topco credit facility were used to finance distributions to Express Parent’s equity holders and to pay related fees, costs and expenses. The Topco credit facility is scheduled to mature on June 26, 2015 and is comprised of $150.0 million of Term B Loans and $150.0 million of Term C Loans. An affiliate of Golden Gate, GGC Unlevered Credit Opportunities, LLC, is a lender under the Topco credit facility and as of January 31, 2010 was owed approximately $50.0 million of the Term B Loans and $50.0 million of the Term C Loans.

The Topco credit facility is not guaranteed by any of Express Topco’s subsidiaries. All obligations under the Topco credit facility are secured by a lien on all outstanding equity interests in Express Holding owned by Express Topco, any distributions, dividends or other property received in respect of or in exchange for such interests and all proceeds of the foregoing.

The Term B Loans bear interest at 13.5% per annum. Interest payments for the Term B Loans are due semi-annually, in cash, on the last day of each January and July, with a final payment due upon the maturity of the Topco credit facility. Term C Loans bear interest at 14.5% per annum. Interest payments for the Term C Loans are due on the last day of each January, April, July and October, with a final payment due upon the maturity of the Topco credit facility. Interest payments on Term C Loans may be paid in cash, or upon five business days’ notice to the lenders, may be paid in kind and added to the unpaid principal amount of the Term C Loans. Term C Loans for which interest is paid in kind bear interest at 16.0% per annum for the interest period ending on the applicable payment date. Amounts representing payment in kind interest are treated as and bear interest as Term C Loans under the Topco credit facility. For fiscal year 2009, Express Topco accumulated $6.2 million of in-kind interest on the Term C Loans which has since been paid in cash.

The Topco credit facility also requires that 50% of the proceeds of the first underwritten public offering of Express Parent’s or any of the subsidiaries’ equity securities, net of customary costs incurred in connection with such offering, be used to prepay loans outstanding under the Topco credit facility at the then-applicable redemption prices applicable to voluntary prepayments of such loans described below.

Voluntary prepayments are permitted in whole or in part, subject to certain minimum prepayment requirements and payment of the applicable premium described below. Prepayments of Term B Loans may be made at the following percentages of the outstanding principal amount prepaid: 107% on or after December 26, 2009, but prior to June 26, 2010; 104% on or after June 26, 2010, but prior to June 26, 2011; 102% on or after December 26, 2011, but prior to June 26, 2012; and 100% on or after June 26, 2012. Prepayments of Term C Loans may be made at the following percentages of the outstanding principal amount prepaid (excluding any portion of such loans representing PIK interest): 102% prior to June 26, 2010; 101% on or after June 26, 2010, but prior to June 26, 2011; and 100% on or after June 26, 2011.

The Topco credit facility contains customary covenants and restrictions on Express Topco’s, and in some cases its subsidiaries, activities, including, but not limited to, limitations on the incurrence of additional

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indebtedness; liens on the equity interests of Express Holding and proceeds thereof and negative pledges on the equity interests of Express Holding securing the Topco credit facility; guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt; distributions, dividends, the repurchase of equity interests and payments made pursuant to equity incentive and similar plans; transactions with affiliates; the ability to change the nature of our businesses or fiscal year; and the ability of Express Topco to conduct business or hold any properties or liabilities, other than equity interests in Express Holding, indebtedness permitted by the Topco credit facility, and activities incidental thereto.

The Topco credit facility also requires compliance with certain financial covenants. Express Topco must maintain, for the most recently completed reporting period (last four consecutive fiscal quarters as of the end of each quarter), a leverage ratio of consolidated debt for borrowed money (net of cash and cash equivalents), including amounts drawn under letters of credit and any synthetic debt, to Adjusted EBITDA of not more than 5.00 to 1.00.

Express Topco must also maintain for the most recently completed reporting period (last four consecutive fiscal quarters as of the end of each quarter), an interest coverage ratio of not less than 1.50 to 1.00. The interest coverage ratio is determined by the ratio of Adjusted EBITDA to consolidated interest expense. We were in compliance with these covenant requirements as of October 31, 2009.

On February 5, 2010, Express Topco entered into an amendment to the Topco credit facility. The amendment provides that effective upon a qualified offering of unsecured debt, the Topco credit facility will be amended to, among other things, permit (1) the issuance of the unsecured debt and the guarantee thereof by Express Topco and each of its subsidiaries so long as net proceeds from the issuance of the unsecured debt are used to prepay the Term C Loans in full and (2) subject to the satisfaction of certain minimum liquidity tests and so long as Express Topco shall have concurrently prepaid the Term C Loans in their entirety (including all principal, redemption premium and accrued and unpaid interest thereon), payment of cash dividends by Express Topco to Express Parent.

Contractual Obligations

We enter into long term contractual obligations and commitments in the normal course of business, primarily debt obligations and non cancelable operating leases. As of January 31, 2009, our contractual cash obligations over the next several periods are set forth below.

	Payments Due by Period
Contractual Obligations:	Total		<1 Year		2-3 Years		4-5 Years		Thereafter
	(dollars in millions)
Existing Debt Facilities(1)(2)	$	498.5	$	76.3	$	2.5	$	2.8	$	416.9
Other Long Term Obligations(3)		199.1		49.8		66.5		55.2		27.6
Operating Leases(4)		749.9		138.2		234.1		194.0		183.6
Letters of Credit		43.7		20.6		10.6		3.6		8.9
Purchase Obligations(5)		154.9		154.9		—		—		—
Total	$	1,646.1	$	439.8	$	313.7	$	255.6	$	637.0

(1) As of January 31, 2009, we had the following amounts outstanding under our existing credit facilities: $75.0 million under the revolving credit facility; $123.4 million under the Opco term loan; $150.0 million under the Term B Loans; and $150.0 million under the Term C Loans. The revolving credit facility matures on July 6, 2012, the Opco term loan matures on July 6, 2014 and the Term B Loans and Term C Loans mature on June 26, 2015. See “—Existing Credit Facilities.”

(2) Excludes estimated interest under existing debt facilities of $307.5 million. Interest costs for the Opco term loan and revolving credit facility have been estimated based on interest rates in effect for such indebtedness as of January 31, 2009.

(3) Other long-term obligations consist of self insurance liabilities, severance agreements, transitional services agreement with Limited Brands and Golden Gate advisory fees.

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(4) We enter into operating leases in the normal course of business. Most lease arrangements provide us with the option to renew the leases at defined terms. The future operating lease obligations would change if we were to exercise these options, or if we were to enter into additional new operating leases.

(5) Purchase obligations are made up of merchandise purchase orders, unreserved fabric commitments and liabilities to our third party travel administrator.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues, and expenses, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates its accounting policies, estimates, and judgments on an on-going basis. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

Management evaluated the development and selection of its critical accounting policies and estimates and believes that the following involve a higher degree of judgment or complexity and are most significant to reporting its results of operations and financial position, and are therefore discussed as critical. The following critical accounting policies reflect the significant estimates and judgments used in the preparation of our consolidated financial statements. With respect to critical accounting policies, even a relatively minor variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on subsequent results of operations. More information on all of our significant accounting policies can be found in Note 1, “Summary of Significant Accounting Policies,” to the consolidated financial statements.

Revenue Recognition

We recognize sales at the time the customer takes possession of the merchandise which, for e-commerce revenues, reflects an estimate of shipments that have not yet been received by the customer. This estimate is based on shipping terms and historical delivery times. Amounts related to shipping and handling revenues billed to customers in an e-commerce sale transaction are classified as net sales, and the related shipping and handling costs are classified as cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations. Associate discounts are classified as a reduction of net sales in the Consolidated Statements of Operations. Net sales exclude sales tax collected from customers which is ultimately remitted to governmental authorities.

Additionally, we earn royalties on a development agreement with an unaffiliated franchisee for stores operating in the Middle East. Under this agreement, the third party operates stores that sell Express branded apparel and accessories purchased from us. We recognize royalty revenue when sales entitling us to royalty revenue occur at each of the franchisee locations, and receive payment for these royalties one month in arrears. Royalties are included in net sales in the Consolidated Statements of Operations.

We reserve for projected merchandise returns based on historical experience and various other assumptions that we believe to be reasonable. Merchandise returns are often resaleable merchandise and are refunded by issuing the same payment tender of the original purchase. Merchandise exchanges of the same product and price are not considered merchandise returns and, therefore, are not included in the population when calculating the sales returns reserve.

We sell gift cards in our retail stores and through our e-commerce website and third parties, which do not expire or lose value over periods of inactivity. We account for gift cards by recognizing a liability at the time a gift card is sold. We recognize income from gift cards when they are redeemed by the customer. In addition, income on unredeemed gift cards is recognized when it can be determined that the likelihood of the gift card being redeemed is remote and there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions (gift card breakage). The gift card breakage rate is based on historical redemption patterns.

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Inventories

Inventories are principally valued at the lower of cost or market on a weighted-average cost basis. We record a lower of cost or market adjustment to our inventories, which is reflected in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations, if the cost of specific inventory items on hand exceeds the amount we expect to realize from the ultimate sale or disposal of the inventory. The lower of cost or market adjustment calculation requires management to make assumptions and estimates, which are based on factors such as merchandise seasonality, historical trends, and estimated inventory levels, including sell-through of remaining units.

We also record an inventory shrinkage reserve calculated as a percentage of cost of sales for estimated merchandise losses for the period between the last physical inventory count and the balance sheet date. These estimates are based on historical percentages and can be affected by changes in merchandise mix and/or changes in shrinkage trends. We perform physical inventory counts twice a year (once each season) for the entire chain of stores and adjust the shrinkage reserve accordingly. If actual physical inventory losses differ significantly from the estimate, our results of operations could be adversely impacted. The shrinkage reserve reduces the value of total inventory and is a component of inventories on the Consolidated Balance Sheets.

Business Combinations

We account for business combinations under the purchase accounting method. The cost of an acquired company is assigned to the tangible and intangible assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets and liabilities acquired requires us to make estimates and use valuation techniques when market value is not readily available. Any excess of purchase price over fair value of the tangible and intangible assets acquired, if any, is allocated to goodwill. On July 6, 2007, we were subject to a business combination in which Limited Brands sold a 75% interest in our company to investment funds managed by Golden Gate in exchange for cash. As a result, the purchase price paid to effect the Golden Gate Acquisition was allocated to state the assets acquired and liabilities assumed at their fair value.

Valuation of Long-lived Assets

Property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In evaluating an asset for recoverability, we estimate the future cash flow expected to result from the use of the asset at the store level, the lowest identifiable level of cash flow, if applicable. If the sum of the estimated undiscounted future cash flows related to the asset are less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis of the asset. Factors used in the valuation of long-lived and intangible assets with finite lives include, but are not limited to, management’s plans for future operations, brand initiatives, recent operating results, and projected future cash flows. Impairment charges are included in cost of goods sold, buying and occupancy costs in the Consolidated Statement of Operations.

Intangible assets with indefinite lives, primarily trade names, are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. The impairment review is performed by comparing the carrying value to the estimated fair value, usually determined using a discounted cash flow methodology. Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, management’s plans for future operations, brand initiatives, recent operating results, and projected future cash flows.

The discounted cash flow models used to estimate the applicable fair values involve numerous estimates and assumptions that are highly subjective. Changes to these estimates and assumptions could materially impact the

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fair value estimates. The estimates and assumptions critical to the overall fair value estimates include: (1) estimated future cash flow generated at the store level; and (2) discount rates used to derive the present value factors used in determining the fair values. These and other estimates and assumptions are impacted by economic conditions and expectations of management and may change in the future based on period-specific facts and circumstances. If economic conditions were to deteriorate, future impairment charges may be required.

Claims and Contingencies

We are subject to various claims and contingencies related to legal, regulatory, and other matters arising out of the normal course of business. Our determination of the treatment of claims and contingencies in the consolidated financial statements is based on management’s view of the expected outcome of the applicable claim or contingency. Management may also use outside legal advice on matters related to litigation to assist in the estimating process. We accrue a liability if the likelihood of an adverse outcome is probable and the amount is estimable. If the likelihood of an adverse outcome is only reasonably possible, or if an estimate is not determinable, disclosure of a material claim or contingency is disclosed in the Notes to the Consolidated Financial Statements. We re-evaluate these assessments on a quarterly basis or as new and significant information becomes available to determine whether a liability should be established or if any existing liability should be adjusted. However, the ultimate outcome of various legal issues could be different than management’s estimates and, as a result, adjustments may be required.

Income Taxes

Effective May 7, 2007, we reorganized as a partnership for federal income tax purposes. As such, with the exception of a limited number of state and local jurisdictions, we are no longer subject to income taxes. The members of the company, and not the company itself, are subject to income tax on their distributive share of our earnings from May 7, 2007 forward. We pay distributions to the members to fund their tax obligations attributable to taxable income of our company.

We account for income taxes using the asset and liability method. Under this method, the amount of taxes currently payable or refundable are accrued and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our assets and liabilities. For periods up to the effective date of our reorganization as a partnership for federal income tax purposes, deferred taxes were recognized on a separate company basis because we were taxable as a corporation until then. As a partnership, our deferred taxes for periods ending after May 7, 2007 are related to a limited number of state and local jurisdictions.

Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future.

In July 2006, the FASB issued Financial Interpretation (“FIN”) 48, “Accounting for Uncertainty in Income Taxes,” (codified primarily in ASC 740) which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS 109, “Accounting for Income Taxes” (codified primarily in ASC 740). FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more- likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

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We recognize tax liabilities in accordance with ASC 740 and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense and the effective tax rate in the period in which the new information becomes available.

We adopted FIN 48 effective February 4, 2007. As a result of the implementation of FIN 48, we recognized an increase of $0.7 million in our liability for unrecognized tax benefits, which was accounted for as a reduction to the February 4, 2007 retained earnings balance. Including this adjustment, we had $9.7 million of unrecognized tax benefits at February 4, 2007. Limited Brands retained the amount of FIN 48 liability for unrecognized tax benefits for any Predecessor period up to and including the date of the Golden Gate Acquisition.

We recognize interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying Consolidated Statement of Operations. Accrued interest and penalties are included within the related tax liability line on the Consolidated Balance Sheets.

We may be subject to periodic audits by the Internal Revenue Service and other taxing authorities. These audits may challenge certain of our tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions.

Share-Based Payments

We recognize share-based compensation expense over the requisite service period expected to vest for stock awards issued to members of management based upon fair values at the grant date. We granted our first stock awards in December 2007 as a standalone company.

We use the Black-Scholes option pricing model to estimate the fair value of share-based payment awards on the grant date. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the valuation of stock awards, which affects compensation expense related to these awards. These assumptions include an estimate of the fair market value of our common stock, expected term of the award, volatility of our stock price and risk free rate over the expected term of the award. Other factors involving judgments that affect the expensing of share-based payments include estimated forfeiture rates of share-based awards. These assumptions represent our best estimates. These estimates involve inherent uncertainties and the application of management judgment. If any of the assumptions used in the Black-Scholes model change significantly, share-based compensation for future awards may differ materially from the awards previously granted.

In the absence of a public trading market, management considered numerous objective and subjective factors, including information provided by an outside valuation firm to determine its best estimate of the fair value of our common stock as of each valuation date. Valuations are performed annually, around the end of the third quarter or in the fourth quarter. We use the most recent valuation closest to the date shares are granted, and evaluate the results of the next valuation to determine if adjustments to the grant date fair value are required. In valuing Express Parent’s Class A and Class C Units, we first determine a business enterprise value by taking an average of the values calculated under two valuation approaches, the Income Approach and the Market Approach.

The Income Approach indicates the fair value of total invested capital based on the value of cash flows that the business can be expected to generate in the future. This approach is typically estimated through a discounted cash flow method using our weighted average cost of capital, which is calculated by weighting the required return on interest-bearing debt and common and preferred equity capital in proportion to their estimated percentages in an expected capital structure and is comprised of four steps: estimate future cash flows for a

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certain discrete projection period; discount these cash flows to present value at a rate of return that considers the relative risk of achieving the cash flows and the time value of money; estimate the residual value of normalized cash flows subsequent to the discrete projection period; and combine the present value of the residual cash flows with the discrete projection period cash flows to indicate the fair value of a marketable controlling interest in the business.

The Market Approach indicates the fair value of total invested capital based on a comparison of our company to comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction as well as prior company transactions. This approach can be estimated through the market comparable method, which compares our company to publicly traded companies in similar lines of business. The conditions and prospects of companies in similar lines of business depend on common factors such as overall demand for their products and services. An analysis of the market multiples of companies engaged in similar businesses yields insight into investor perceptions and, therefore, the value of our company. After identifying and selecting the comparable publicly traded companies, their business and financial profiles are analyzed for relative similarity. Consideration for factors such as size, growth, profitability, risk, and return on investment are also analyzed and compared to the comparable businesses. Once these differences and similarities are determined and proper adjustments are made, multiples of the publicly traded companies are calculated and applied to our operating results to estimate a marketable, minority interest value, to which a control premium is applied, as appropriate, to indicate a marketable, controlling interest value.

The amount of share-based compensation expense we recognize during a period is based on the portion of the awards that are ultimately expected to vest. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates.

Recently Issued Accounting Pronouncements

Accounting Standard Codification (“Codification”) and the Hierarchy of GAAP

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Subtopic 105, Generally Accepted Accounting Principles, which reorganizes the thousands of United States GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. This standard establishes two levels of GAAP, authoritative and non-authoritative. The Codification is the source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. This standard is effective for financial statements for interim or annual reporting periods ending after September 15, 2009. Effective February 1, 2009, we changed our historical United States GAAP references to comply with the Codification. The adoption of this guidance did not impact our results of operations, financial condition, or liquidity since the Codification is not intended to change or alter existing United States GAAP.

Non-controlling Interests in Consolidated Financial Statements

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”), which has not yet been incorporated into the Codification. This standard amends FASB Interpretation No. 46(R) to replace the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity. This standard also requires ongoing reassessment of whether an enterprise is the primary beneficiary of a variable interest entity, and requires additional disclosures about an enterprise’s involvement in variable interest entities. This standard is effective for financial statements for annual reporting periods beginning after November 15, 2009, for interim periods within that first annual reporting period and thereafter. Adoption of SFAS 167 is not expected to have a material impact on our consolidated financial statements.

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Subsequent Events

In May 2009, the FASB issued authoritative guidance included in ASC Subtopic 855, Subsequent Events, which incorporates guidance on subsequent events into authoritative accounting literature and clarifies the time following the balance sheet date that must be considered for subsequent events disclosures in the financial statements. We adopted this guidance effective February 1, 2009, and there was no material impact on our consolidated financial statements.

Fair Value Measurements

In April 2009, the FASB issued authoritative guidance included in ASC Subtopic 825, Financial Instruments, intended to provide additional accounting guidance and enhanced disclosures of fair values of certain financial instruments in interim and annual financial statements. We adopted this guidance effective February 1, 2009, and there was no material impact on our consolidated financial statements.

Intangibles—Goodwill and Other

In April 2008, the FASB issued authoritative guidance included in ASC Subtopic 350 Intangibles—Goodwill and Other, which is intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We adopted this guidance effective February 1, 2009, and there was no material impact on its consolidated financial statements.

Fair Value Measurements

In September 2006, the FASB issued authoritative guidance included in ASC Subtopic 820, Fair Value Measurements and Disclosures, which provides guidance for fair value measurement of assets and liabilities and instruments measured at fair value that are classified in shareholders’ equity. This guidance defines fair value, establishes a fair value measurement framework and expands fair value disclosures. It emphasizes that fair value is market-based with the highest measurement hierarchy level being market prices in active markets. This guidance requires fair value measurements be disclosed by hierarchy level, an entity to include its own credit standing in the measurement of its liabilities and modifies the transaction price presumption. In February 2008, the FASB delayed the effective date for this guidance to fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Accordingly, as of February 3, 2008, we adopted the authoritative guidance for financial assets and liabilities only on a prospective basis. As of February 1, 2009, we adopted the remaining provisions. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

Quantitative and Qualitative Disclosure of Market Risks

Interest Rate Risk

We are subject to interest rate risk in connection with borrowings under our Opco credit facilities, which bear interest at variable rates. Borrowings under the Topco credit facility bear interest at fixed rates. For fixed rate debt, interest rate changes affect the fair market value of such debt, but do not impact earnings or cash flow.

We utilize interest rate swaps to hedge our interest rate risk. Effective July 6, 2007, Express, LLC entered into a receive variable/pay fixed interest rate swap agreement to mitigate exposure to interest rate fluctuations on a notional principal amount of $75.0 million of the $125.0 million variable-rate Opco term loan. The interest rate swap agreement terminates on August 6, 2010. The fair value of the interest rate swap was a liability of $2.8 million as of October 31, 2009. At October 31, 2009, the weighted-average interest rate on the outstanding

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balance of our Opco term loan and Opco revolving loan was 3.7%. The Opco term loan requires that Express, LLC maintain interest rate hedge agreements on a notional amount of at least 50% of the term commitments of lenders under the Opco term loan for at least 3 years. As of October 31, 2009, a 1% change in interest rates would have resulted in an incremental $0.6 million gain or loss related to this contract.

Impact of Inflation

Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition have been immaterial.

Internal Control Over Financial Reporting

We restated our 2007 Successor and fiscal 2008 financial statements, as described in Note 3 to those financial statements, after certain accounting errors were identified that we determined to be material. In the identification of these errors and the related evaluation of internal controls over financial reporting, management identified control deficiencies in its internal controls associated with accounting for (1) deferred taxes and (2) complex agreements arising from transactions unrelated to the Company’s core business operations. Each of these deficiencies constitute a material weakness in our internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

We have remediated the material weakness associated with accounting for deferred taxes as a result of expanding our senior level resources in our tax, accounting and financial reporting groups in fiscal 2008. We are in the process of remediating the material weakness associated with accounting for complex agreements arising from transactions unrelated to the company’s core business operations. We have developed and are implementing a plan to remediate this material weakness by, among other things, establishing an internal committee of accounting, legal and internal audit personnel to review our policies and accounting treatment of all complex agreements and monitor ongoing compliance with such agreements. See Note 3 to our consolidated financial statements for the fiscal year ended January 31, 2009, which are included elsewhere in this prospectus for a complete discussion of the restatement.

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BUSINESS

Our Company

Express is the sixth largest specialty retail apparel brand in the United States. With 30 years of experience offering a distinct combination of style and quality at an attractive value, we believe we are a core shopping destination for our customers and that we have developed strong brand awareness and credibility with them. We target an attractive and growing demographic of women and men between 20 and 30 years old. We offer our customers an edited assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of their lifestyles, including work, casual and going-out occasions. Since we became an independent company in 2007, we have made several significant changes to our business model, including completing the conversion of our stores to a dual-gender format, re-designing our go-to-market strategy and launching our e-commerce platform, all of which we believe have improved our operating profits and positioned us well for future growth and profitability.

As of January 30, 2010, we operated 573 stores. Our stores are located primarily in high-traffic shopping malls, lifestyle centers and street locations across the United States, and average approximately 8,700 square feet. We also sell our products through our e-commerce website, express.com. Our stores and website are designed to create an exciting shopping environment that reflects the sexy, sophisticated and social brand image that we seek to project. Our product offering includes both women’s and men’s apparel and accessories, of which women’s represented 68% of our net sales and men’s represented 32% of our net sales during fiscal 2008. Our product assortment is a mix of core styles balanced with the latest fashions, a combination we believe our customers look for and value from our brand. For fiscal 2008, we generated net sales, net loss and Adjusted EBITDA of $1.7 billion, $29.0 million and $137.2 million, respectively. Our Adjusted EBITDA increased 60% from $85.9 million in fiscal 2006 to $137.2 million in fiscal 2008. See “Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial and Operating Data” for a discussion of Adjusted EBITDA, an accompanying presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between Adjusted EBITDA and the most directly comparable GAAP financial measure, net income.

History and Recent Accomplishments

We opened our first store in 1980, in Chicago, Illinois as a division of Limited Brands, Inc., and launched our men’s apparel line in 1987, which we rebranded under the name Structure in 1989. In the mid 1990’s, we experienced a period of rapid expansion, resulting in the operation of over 1,000 stores by 2000, including in many cases a women’s and men’s store in the same shopping center. In 2001, we began to consolidate our separate women’s and men’s stores into combined dual-gender stores. In 2007, we began to operate as a standalone company and have since implemented and completed numerous initiatives to strengthen our business, including:

• Transitioned to Standalone Company. As a standalone company, we have made a number of changes to improve our organization, reinvest in our business and align incentives with our performance. Among these, we rehired Michael Weiss as our President and CEO in July 2007. Mr. Weiss has been President of Express for over 20 years and has more than 40 years of experience in our industry. We have also worked to build depth in our organization, including by strengthening our merchandising and design teams and improving the processes by which we make product decisions. In addition, we have transitioned our corporate structure and team to be more entrepreneurial and focus decisions on profitability and return on investment instead of sales volume maximization.

• Completed Dual-Gender Store Conversion. During the last nine years, we have significantly improved the efficiency of our store base by consolidating separate women’s and men’s stores that were located in the same shopping center into combined dual-gender stores. Over this time period, this conversion has allowed us to reduce our total gross square footage by approximately 30%. In shopping centers where

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conversions took place, we reduced our square footage per center from approximately 13,500 square feet to approximately 8,700 square feet. We believe our converted store model has resulted in higher store productivity and lower store expenses, leading to increased profitability.

• Redesigned Go-To-Market Strategy. Since 2007, we have revised the process by which we design, source and merchandise our product assortment. We now design a greater number of styles, colors and fits of key items for each season and test approximately three-quarters of our product early in each season at a select group of stores before ordering for our broader store base. Based on the data gathered from product testing, our merchants are able to refine and narrow the items ordered for each season. We have also worked with our vendors to reduce our lead times, allowing us to make buying decisions closer to each selling season. We believe the results of these changes are higher product margins from reduced markdowns, lower inventory risk and a more relevant product offering for our customers.

• Reinvested in Our Business to Support Growth. Over the past three years, we have expanded several of our key functional departments and shifted our marketing focus to better position our company for long-term growth. For example, we have increased the number of merchants by 50%, allowing our merchandising organization to focus on specific sub-categories and lines to ensure we have consistent quality and design offered across our broad range of fashion products. In addition, we have placed increased focus on long-term brand-building initiatives.

• Launched Express.com. We launched our e-commerce website, express.com, in July 2008, offering our customers a new channel to access our products. We believe our e-commerce platform has improved the efficiency of our business by allowing us to monitor real-time customer feedback, enhancing our product testing capabilities, expanding our advertising reach and providing us with a merchandise clearance channel. In the third quarter of fiscal year 2009, our e-commerce sales increased 130% relative to the third quarter of fiscal year 2008 but still only represent approximately 5% of our net sales in the thirty-nine weeks ended October 31, 2009 compared to approximately 10% to 15% for our peers.

Competitive Strengths

We attribute our success to the following competitive strengths:

Established Lifestyle Brand. With 30 years of brand heritage, we have developed a distinct and widely recognized brand that we believe fosters loyalty and credibility among our customers who look to us to provide the latest fashions and quality at an attractive value. We are the sixth largest specialty retail apparel brand in the

United States in terms of 2008 sales and we believe we are the largest specialty lifestyle brand focused on the 20 to 30 year old customer demographic. According to the 2007 Study, we have more than 90% aided brand awareness among our core customer demographic. We believe that our brand awareness and product offering makes our stores a compelling and frequent destination for our customers.

Attractive Market and Customer Demographic. According to the NPD Group, in the twelve months ended June 30, 2009, our brand represented approximately 5% of the $20 billion specialty apparel market for 18 to 30 year old women and men in the United States. During that period, this upscale specialty apparel market accounted for 42% of the $46 billion total apparel market for 18 to 30 year old women and men in the United States. Our customer demographic is a growing segment of the United States population, and we believe that the Express brand appeals to a particularly attractive subset of this group. Based on the 2007 Study, our customers are frequent, fashion-conscious shoppers who spend a higher percentage of their budget on fashion compared to the broader population and shop for clothing at least once every few weeks, and our female customers spend approximately $1,700 on clothing annually, nearly 50% more than the average female specialty retail shopper.

Sophisticated Design, Sourcing and Merchandising Model. We believe that we have an efficient, diversified and flexible supply chain that allows us to quickly identify and respond to trends and to bring a tested assortment of products to our stores. We believe our model allows us to better meet customer needs and enables us to reduce inventory risk and improve product margins from reduced markdowns. We design our entire product assortment in

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our New York City design studio based on an extensive review of fashion trends, styles, fabrics, colors and fits for the upcoming season. Our product testing processes early in the season allow us to test approximately three-quarters of our merchandise in select stores before placing orders for our broader store base. In addition, we assess sales data and new product development on a weekly basis in order to make in-season inventory adjustments where possible and to allow us to respond to the latest trends. We utilize a diversified network of third-party manufacturers located throughout the world that we believe allows us to source the high quality products that our customers demand at competitive prices.

Optimized Real Estate Portfolio. Our stores are located in high-traffic shopping malls, lifestyle centers and street locations in 47 states across the United States, and are diversified across all regions. During the last nine years we have completed the conversion of our store base into dual-gender stores from separate women’s and men’s stores, which has reduced our total square footage by approximately 30%. We believe that over this period, this conversion has brought our average store size in-line with other dual-gender specialty retailers, has contributed to improved per store sales and profitability and has positioned us to continue to drive improvement in store sales and margins. We believe we also benefit from 30 years of operating experience identifying and opening new stores. As a result of our strong brand and established presence, we have been able to acquire high-traffic locations in most retail centers in which we operate.

Proven and Experienced Team. Michael Weiss, our President and Chief Executive Officer, has more than 40 years of experience in the fashion industry and has served as our President for over 20 years. In addition, our senior management team has an average of 25 years of experience across a broad range of disciplines in the specialty retail industry, including design, sourcing, merchandising and real estate. Experience and tenure with Express extends deep into our organization. For example, our district managers and store managers have been with Express for an average of ten years and seven years, respectively.

Business Strategy

Key elements of our business and growth strategies include the following:

Improve Productivity of Our Retail Stores. We believe that the efforts we have taken over the last several years to optimize our store base through conversion to dual-gender stores and to improve our go-to-market strategy have positioned us well for future growth. We seek to grow our comparable store sales and operating margins by executing the following initiatives:

• Continuing to Refine Our Go-to-Market Strategy. As we increase testing and refine our go-to-market strategy, we believe our in-store product assortment will be more appealing to our customers and will help us to decrease markdowns and increase sales and product margins;

• Recapture Market Share in Our Core Product Categories. Based on our historical peak sales levels across product categories, we believe there is opportunity for us to recapture sales as our customers re-discover Express in certain product categories. We believe our efforts to deliver a clear and consistent brand message provides us with additional opportunities to increase sales in core categories that will allow us to return to historical volumes; and

• Improve Profit Margins. We believe we have the opportunity to continue to improve margins through further efficiencies in sourcing and continued refinement of our merchandising strategy. We plan to leverage our infrastructure, corporate overhead and fixed costs through our converted dual-gender store format.

Expand Our Store Base. While there has been significant growth in retail shopping centers during the last decade, we have focused on converting our existing store base to a dual-gender format and have opened few new stores over this time period. As a result, we believe there are numerous attractive, high-traffic locations that present opportunities for us to expand our store base. We currently plan to open an average of 30 new stores across the United States and Canada over each of the next five years, representing annual store growth of approximately 5%.

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Expand Our e-Commerce Platform. In July 2008, we launched our e-commerce platform at express.com, providing us with a direct-to-consumer sales channel. In the third quarter of fiscal year 2009, our e-commerce sales increased 130% relative to the third quarter of fiscal year 2008 but still only represented approximately 5% of our net sales in the thirty-nine weeks ended October 31, 2009, compared to approximately 10% to 15% for our peers. We believe that our target customer regularly shops online, and we see continued opportunity to grow our e-commerce business by providing our customers with a seamless retailing experience. In addition, we believe our multi-channel platform will allow us to continue to improve overall profit margins as our e-commerce business becomes an increased percentage of our sales.

International Expansion with Development Partners. We believe Express has the potential to be a successful global brand. We recently have begun to bolster our brand image and awareness outside of the United States. There are currently four Express stores in the Middle East, which were constructed through a development agreement with Alshaya Trading Co. Through our development agreement, we earn royalty payments from these stores with no capital investment or inventory risk. The agreement allows us to control our brand image, store design and the product assortment offered in these stores. Over the next five years, we believe there are additional opportunities to expand the Express brand internationally through additional low capital development arrangements.

Our Industry

According to the NPD Group, a leading provider of global market information, retail sales of domestic apparel totaled $159 billion in the United States in the twelve months ended June 2009. We operate primarily in the specialty retail distribution channel of this market, which represented 32.7% of the total industry, or $53.5 billion in retail sales, in 2008. According to the United States Census Bureau, the specialty retail channel has grown 37% from 2000 to 2007 and continues to gain share from the department store channel. Our core customer demographic within this segment is 20 to 30 year old women and men. According to United States Census Bureau, this segment of the population is growing, with steady growth projected through 2015.

Our Products

We offer our customers an edited assortment of fashionable merchandise to address multiple aspects of their lifestyle, including work, casual and going-out occasions. Our products are created by our in-house design team and range from core styles to the latest fashions. We believe we have developed a portfolio of products that have significant brand value, including the Editor pant, of which we have sold approximately 16 million over the last seven years, Essential and 1MX shirts, and our Stella, Zelda and Eva lines of denim. We believe our products offer our customer an attractive value. We focus on providing our customers with items made from high-quality materials that are designed to last for several seasons, and we believe our customers have come to expect durability from our brand. For fiscal 2008, approximately 68% of our net sales were from women’s apparel and accessories and 32% were from men’s apparel and accessories.

We design our products and display them in our stores in a coordinated manner to encourage our customers to purchase multi-item outfits as opposed to individual items. We believe this allows us to better meet our customers’ shopping objectives while differentiating our product line from competitors. On average, our customers purchase two to three items per transaction. In season, we monitor cross-selling trends in order to optimize our in-store and online product assortment and collection recommendations.

Design and Merchandising

Our internal design and merchandising team designs high-quality products that reinforce our brand image. Our products are designed to reflect the latest fashions and colors, and we seek to incorporate high-quality fabrics and construction as well as consistent fits and detailing. We have strategically located our design studio on

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5th Avenue in New York City to ensure that our staff of over fifty designers are immersed in the heart of New York City’s fashion community and have easy access to inspiration from other high-fashion markets in Europe and abroad. We believe our dual offices in New York City and Columbus, Ohio provide us a balanced design and merchandising perspective.

We develop four seasonal collections per year and then subdivide them so that we have monthly product introductions in our stores. The seasonal design process begins approximately 45 weeks in advance of store delivery with a collaborative planning effort between our designers, merchandisers and finance staff. Each season is carefully planned based on a number of inputs, including the previous year’s sales, recent fashion trends and customer feedback. Over the course of the design process, the seasonal assortment is refined based on in-store tests and continual review of fashion trends. We engage in early season testing across all product categories and test approximately three-quarters of our merchandise in select stores before placing orders for our company-wide store base. In addition, our designers establish contingency plans in the event that a particular product performs differently than anticipated. We assess sales data on a weekly basis in order to make in-season inventory adjustments where possible and to allow us to respond to the latest trends. We utilize a broad base of manufacturers located throughout the world that we believe produce goods at the levels of quality that our customers demand, and we are able to use manufacturers from this base that can supply products to us on a timely basis at competitive prices relative to our other providers. We conduct extensive post-season reviews of our products to identify areas in which our merchandising process can be improved. We believe that each of these components of our merchandising model helps us to maximize our sales and margins and reduce our inventory risk. As a result, a greater percentage of our products are sold at full-price, and we have experienced a 30% reduction in markdowns since 2007.

Sourcing

Our Sourcing Strategy

Our sourcing approach is focused on optimizing quality, speed of production and cost of our merchandise and is a key element of our success. To accomplish this, we have established collaborative relationships with our third-party vendors and agents. We believe our sourcing strategy maximizes our speed to market and allows us to respond quickly to customers’ preferences. We have weekly calls with many of our vendors to optimize the use of fabric and supplies to meet the needs of our customers. We have the ability in our supply chain to place and receive orders within eight to twelve weeks, and also have the ability to track popular items and place refill orders and re-stock merchandise at our distribution center within five to eight weeks.

Our Sourcing Methods

We do not own or operate any manufacturing facilities and as a result contract with third-party vendors for production of our merchandise. We purchase apparel and accessories both from importers, including through intermediaries, and directly from manufacturers. Our relationships with our direct manufacturers are sometimes supported by intermediaries, who help coordinate our purchasing requirements with the factories. In exchange for a commission, these buying agents identify suitable vendors and coordinate our purchasing requirements with vendors by placing orders for merchandise on our behalf, ensuring the timely delivery of goods to us, obtaining samples of merchandise produced in factories, inspecting finished merchandise and carrying out administrative communications on our behalf. We purchase the majority of our merchandise outside of the United States through arrangements with approximately 90 vendors utilizing approximately 350 foreign manufacturing facilities located throughout the world, primarily in Asia and Central and South America. Our top ten manufacturers, based on cost, supplied 34% of our merchandise in the thirty-nine weeks ended October 31, 2009. Our unit volumes, long-established vendor relationships and our knowledge of fabric and production costs, combined with a flexible, diversified sourcing base, enable us to buy high-quality, low cost goods. We source from over 25 countries and are not subject to long-term production contracts with any of our vendors, manufacturers or buying agents.

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Quality Assurance and Compliance Monitoring

Regardless of the sourcing method used, each factory, subcontractor, supplier and agent that manufactures our merchandise is required to adhere to our Code of Vendor Conduct, contained within our Master Sourcing Agreement, which is designed to ensure that each of our suppliers’ operations are conducted in a legal, ethical and responsible manner. Our Code of Vendor Conduct requires that each of our suppliers operates in compliance with applicable wage, benefit, working hours and other local laws, and it forbids the use of practices such as child labor or forced labor. We monitor compliance through the use of third parties who conduct regular factory audits.

Distribution

We centrally distribute finished products from third-party distribution centers in Columbus, Ohio and Warren, Pennsylvania. The Columbus, Ohio facility is approximately 418,000 square feet and is operated under a long-term contract with an affiliate of Limited Brands. All of our merchandise is received, inspected, processed, warehoused and distributed through the Columbus distribution facility. Merchandise is typically shipped to our stores and to the Warren distribution facility via third-party delivery services multiple times per week, providing them with a steady flow of new inventory.

Our facility in Warren, Pennsylvania is used both to fulfill all orders placed through our website and to perform call center operations. This facility is operated by an affiliate of Golden Gate. Merchandise at this facility is received from our Columbus, Ohio distribution facility and is sent directly to customers via third-party delivery services.

In Fall of 2010 we plan to transition our fulfillment operations to a facility in Groveport, Ohio. We believe that this transition will provide several benefits including faster replenishment of out-of-stock inventory, more efficient trucking lanes to our customers, reduced delivery costs, and ease of oversight and management of our third party provider.

We believe our customer call center, order fulfillment and distribution operations are designed to handle customer orders and distribute merchandise to stores in a customer-friendly, efficient and cost-effective manner. We believe that these facilities are sufficient to accommodate our expected growth over the next several years.

For additional information on our third-party distribution relationships, see “Certain Relationships and Related Party Transactions.”

Our Stores

As of January 30, 2010, we operated 573 stores in 47 states throughout the United States, including 525 dual-gender stores, 29 women’s stores and 19 men’s stores. Our retail stores are located in high-traffic shopping malls, lifestyle centers and street locations. Over the last several years, we have actively consolidated our presence in most of our shopping centers into one dual-gender store from separate women’s and men’s stores. We believe this consolidation allows us to compete more effectively with other dual-gender specialty retailers and has significantly improved our productivity, contributing to in an increase in net sales per gross square foot from $260 in 2001 to $337 in 2008.

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Our average retail store is approximately 8,700 square feet and generates sales of approximately $2.9 million per year. The first table below indicates certain historical information regarding the number of stores by type of location, the total gross square footage (which includes retail selling, storage and back-office space) of all stores and the average gross square footage of our stores as of the end of the fiscal year indicated. The second table below indicates certain historical information regarding the number of women’s stores, men’s stores and dual-gender stores as of the end of the fiscal year indicated.

	2004		2005		2006		2007		2008		2009
Mall	760		627		551		490		480		473
Lifestyle Center	71		73		69		68		74		75
Street	53		43		38		29		27		25
Total	884		743		658		587		581		573
Total gross square footage (in thousands)	6,867		6,477		5,777		5,142		5,032		4,995
Average gross square footage	7,768		8,718		8,780		8,760		8,661		8,716
	2004		2005		2006		2007		2008		2009
Women’s stores	467		326		195		67		42		29
Men’s stores	223		113		69		34		26		19
Dual-gender stores	194		304		394		486		513		525
Total stores	884		743		658		587		581		573
Percentage of total stores that are dual-gender stores	22	%	41	%	60	%	83	%	88	%	92	%

Store Locations

The following store list shows the number of stores we operated as of January 30, 2010:

State	Count	State	Count	State	Count
Alabama	9	Louisiana	7	Oklahoma	5
Arizona	8	Maine	1	Oregon	4
Arkansas	2	Maryland	10	Pennsylvania	24
California	71	Massachusetts	18	Rhode Island	3
Colorado	11	Michigan	20	South Carolina	9
Connecticut	9	Minnesota	14	South Dakota	1
Delaware	2	Mississippi	2	Tennessee	10
District of Columbia	2	Missouri	11	Texas	52
Florida	39	Nebraska	3	Utah	5
Georgia	18	Nevada	7	Vermont	1
Hawaii	1	New Hampshire	4	Virginia	17
Idaho	1	New Jersey	21	Washington	7
Illinois	32	New Mexico	3	West Virginia	1
Indiana	9	New York	38	Wisconsin	8
Iowa	8	North Carolina	15	Total	573
Kansas	4	North Dakota	1
Kentucky	5	Ohio	20

Store Design and Environment. We design our stores to create a distinctive and engaging shopping environment that we believe resonates with our customers. Our stores feature a vibrant and youthful look, bright signage and popular music. Our stores are constructed and finished to allow us to efficiently shift merchandise displays throughout the year as seasons dictate. To further enhance our customers’ experience, we seek to attract

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enthusiastic store associates who are knowledgeable about our products and are able to offer superior customer service and expertise. We believe that our store atmosphere enhances our brand as a provider of the latest fashions.

North American Store Growth

Now that we have completed our transition to a dual-gender store base, we plan to open an average of 30 new stores per year in the United States and Canada in each of the next five years. Our new store strategy is to open stores of the same size, location type and productivity as in our current fleet. Based on our new stores opened since July 2008, opening new stores has consistently been an attractive use of capital by generating an average pretax cash return on investment of approximately 50%. Our average net investment to open a new store during the last three fiscal years was approximately $0.6 million.

We intend to focus on opening stores in high-traffic malls, lifestyle centers and street locations. We plan to utilize our in-house real estate team to identify attractive locations, negotiate leases and manage the construction costs for our new stores. In selecting shopping centers in which to locate a new store, we target locations with demographics that resemble those of our current locations, including a large 18 to 30 year old customer base, and favorable lease terms. We generally seek to locate our stores in malls in which similar fashion retailers have performed well. Within the shopping centers in which we seek to locate stores, we target locations in high-traffic areas of the shopping center and near other popular retailers that cater to our customers. We also focus on evaluating the market and mall-specific competitive environment for potential new store locations. We seek to diversify our store locations regionally and by caliber of mall. We have currently identified approximately 300 potential sites for new stores with appropriate market characteristics.

International Stores

In 2009, we entered into a development agreement in the Middle East with Alshaya Trading Co. under which the Alshaya Trading Co. constructs and operates Express stores, and we charge a royalty based on monthly sales volume. As of January 30, 2010, the Alshaya Trading Co. operated four Express stores located in Saudi Arabia, Kuwait, and the United Arab Emirates under this arrangement. Beyond North America, we intend to continue to pursue development agreements to expand our global presence in the Middle East and other select regions internationally. We believe that partnering with companies and individuals that have significant experience and proven success in the target country is to our advantage because it allows us to leverage our partners’ knowledge of local markets to improve our probability of success and reduce capital investment and risk.

Properties

We do not own any real property. Our 161,000 square foot principal executive office and 418,000 square foot distribution facility are located in Columbus Ohio and are leased from Limited Brands. Our Columbus, Ohio distribution facility is also operated by Limited Brands. Our lease for both facilities expires in 2016. For additional information on these arrangements with Limited Brands, see “Certain Relationships and Related Party Transactions—Logistics Services Agreement.” We also lease office space for our design and merchandising functions in New York City at 111 Fifth Avenue under a lease agreement that expires in July 2014.

All of our stores are leased from third parties, including nine subleases from Limited Brands, and the leases typically have terms of ten years with options to renew for additional multi-year periods thereafter. Some of our leases have early cancellation clauses, which permit the lease to be terminated by us or the landlord if certain sales levels are not met in specific periods or if a shopping center does not meet specified occupancy standards. In addition to future minimum lease payments, most of our store leases provide for additional rental payments based on a percentage of net sales if sales at the respective stores exceed specified levels, as well as the payment of common area maintenance charges, real property insurance and real estate taxes. Many of our lease agreements have defined escalating rent provisions over the initial term and any extensions.

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We believe that our facilities are generally adequate for current and anticipated future use, although we may from time to time lease new facilities or vacate existing facilities as our operations require.

Internet Website

Since 2008, our customers have been able to purchase our merchandise over the Internet at our website, express.com. In the third quarter of fiscal 2009, our e-commerce sales increased 130% relative to the third quarter of fiscal 2008, but still only represented approximately 5% of our net sales in the thirty-nine weeks ended October 31, 2009, compared to approximately 10% to 15% for our peers. We design and operate our website using an in-house technical staff. Our website emphasizes simplicity and ease of customer use while integrating the Express brand’s fashion-oriented imagery used in our stores. We update our website periodically throughout the day to accurately reflect product availability and to determine where on the website a particular product generates the best sales. In addition to selling our regular merchandise on our website, we also use our website as a means to sell marked-down merchandise.

Our current fulfillment operation is located in Warren, Pennsylvania and is owned and operated by an affiliate of Golden Gate. In Fall of 2010 we plan to transition our fulfillment operations to facilities in Groveport, Ohio. We believe that this transition will provide several benefits including faster replenishment of out-of-stock inventory, more efficient trucking lanes to our store locations, reduced delivery costs, and ease of oversight and management of our third party provider.

Store Management and Training

We believe that our store managers and associates are key to our success. Each of our retail stores is led by a store manager and, depending on the volume of the store, one or two co-managers as well as part-time management associates. We believe that our managers and associates are committed to our customers and are passionate about our brand. On average, our store managers have been with Express for seven years. The number of store associates we employ generally increases during peak selling seasons, particularly the early fall shopping trends as well as the winter holiday seasons, and will increase to the extent that we open new stores.

We empower our managers and associates to deliver a superior shopping experience through training, fostering a culture of accountability and providing them with sales data that helps them to optimize their own store. While general guidelines for our merchandise assortments, store layouts and in-store visuals are provided by our home office, we give our store managers and district managers substantial discretion to tailor their stores to the individual market and empower them to make store-level business decisions. Our comprehensive training programs are offered at the store, regional and national levels. Our programs allow managers from all geographic locations to interact with each other and to exchange ideas to better operate stores. Our regional, district and store managers are compensated in part based on the sales volume of the store or stores they manage.

Through our training, evaluation and incentive programs, we seek to enhance the productivity of our store associates. Our store associates receive extensive training from their managers to improve their product expertise and selling skills. We evaluate our store associates on measures such as sales per associate hour, items per transaction and dollars per transaction to ensure consistent productivity, to reward top performers and to identify potential training opportunities. We bring our top managers to a conference each year in order to reward them for their performance and provide them with additional management training.

Marketing and Advertising

We use a variety of marketing vehicles to increase customer traffic and build brand loyalty. These include direct mail offers, e-mail communications, in-store promotions and magazine, web-based banner and search advertising and social networking sites, such as Facebook and Twitter. We use our proprietary database, which includes the purchasing habits, fashion preferences and other key information on over 12 million customers who

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have made purchases within the last twelve months, to tailor our marketing efforts to our customers. We have begun testing new media channels to increase our exposure to our customers in order to increase our brand value.

The success of our products also results in frequent placement and promotion of our products and brand in the mainstream media, including editorial print and television credits. We also actively work to expose our products by encouraging celebrities to wear our fashions and regularly receive press coverage of our products as a result of celebrities who wear Express clothing. In 2009, Express was referenced in approximately 500 editorial and television credits through outlets such as Lucky, Cosmopolitan, Glamour, Elle, Marie Claire, InStyle, GQ and Vogue. We believe such references reinforce our brand image and we have an in-house public relations group that works to maximize such opportunities.

We offer a private-label credit card through an agreement with World Financial Network National Bank, under which World Financial Network National Bank owns the credit card accounts and Alliance Data Systems Corporation provides services to our private-label credit card customers. All of our proprietary credit cards carry the Express brand. We believe that our credit card rewards program encourages frequent store and website visits and promotes multiple-item purchases, thereby cultivating customer loyalty to the Express brand and increasing sales.

Management Information Systems

Our management information systems provide a full range of business process support and information to our store, merchandising, financial and real estate business teams. We believe the combination of our business processes and systems provide us with improved operational efficiencies, scalability, increased management control and timely reporting that allow us to identify and respond to trends in our business. We utilize a combination of customized and industry standard software systems to provide various functions related to:

• point-of-sales;

• inventory management;

• design;

• planning and distribution; and

• financial reporting.

We believe our management information systems benefit us through enhanced customer service, more efficient operations and increased control over our business.

Over the last few years, we have substantially completed a transition to standalone information technology platforms from sharing many parts of our information systems and hardware with our former parent, Limited Brands. We expect to complete our transition by mid-2010 after working with our existing point of sale equipment vendor to upgrade certain elements of our existing system.

Competition

The specialty apparel retail market is highly competitive. We compete primarily with other specialty retailers, higher-end department stores and Internet businesses that engage in the retail sale of women’s and men’s apparel, accessories and similar merchandise targeting customers aged 18 to 30. We believe the principal basis upon which we compete are design, quality, price and customer service. We believe that our primary competitive advantages are consumer recognition of the Express brand name, strong real estate locations and a passionate employee sales force that creates a customer focused shopping experience. We believe that we also differentiate ourselves from competitors on the basis of our consistent look by our in-house product design team, our ability to offer a balanced assortment of core styles and the latest fashions, our focus on the quality of our product offerings and the attractive value we offer to our customers.

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Our success also depends in substantial part on our ability to originate and define product and fashion trends so that we can anticipate, gauge and react to changing consumer demands on a timely basis. While we do not believe that any retailer directly competes with us on all of these attributes, we believe our competitors include other specialty retailers and department stores, including Aéropostale, American Eagle Outfitters, Banana Republic, Bebe, Forever21, Gap, Guess?, J. Crew, Macy’s and Zara. Further, we may face new competitors and increased competition from existing competitors as we expand into new markets and increase our presence in existing markets.

Intellectual Property

The Express trademark and certain variations thereon, such as Express Fashion, are registered or are subject to pending trademark applications with the United States Patent and Trademark Office and with the registries of many foreign countries. In addition, we own domain names, including express.com, for our primary trademarks. We believe our material trademarks have significant value and we vigorously protect them against infringement.

Regulation and Legislation

We are subject to labor and employment laws, including minimum wage requirements, laws governing advertising and promotions, privacy laws, safety regulations and other laws, such as consumer protection regulations that govern product standards and regulations with respect to the operation of our stores and warehouse facilities. We monitor changes in these laws and believe that we are in material compliance with applicable laws.

A substantial portion of our products are manufactured outside the United States. These products are imported and are subject to United States customs laws, which impose tariffs as well as import quota restrictions for textiles and apparel. Some of our imported products are eligible for duty-advantaged programs. While importation of goods from foreign countries from which we buy our products may be subject to embargo by United States customs authorities if shipments exceed quota limits, we closely monitor import quotas and believe we have a diversified sourcing network to allow us to efficiently shift production to factories located in countries with a similar manufacturing base if necessary.

Employees

As of January 30, 2010, we had over 17,000 employees of which approximately 14,000 were part-time employees. Of this total number, approximately 500 employees were based at our corporate headquarters, approximately 100 regional and district managers were employed in the field, approximately 1,500 store managers and co-managers and approximately 15,000 sales associates were located in our stores. None of our employees are represented by a union and we have had no labor-related work stoppages. We believe our relations with our employees are good.

Seasonality

Our business is seasonal and, historically, we have realized a higher portion of our net sales and net income in the third and fourth fiscal quarters due primarily to early fall selling patterns as well as the impact of the holiday season. In fiscal year 2008, 53% of our net sales were generated in the third and fourth fiscal quarters, while 47% were generated in the first and second fiscal quarters. Operating cash flows are typically higher in the second and fourth fiscal quarters due to inventory related working capital requirements in the first and third fiscal quarters. Our business is also subject, at certain times, to calendar shifts, which may occur during key selling periods close to holidays such as Easter, Thanksgiving and Christmas and regional fluctuations for events such as sales tax holidays.

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Legal Proceedings

In addition to the matter described below, we are subject to various other legal claims and proceedings which arise in the ordinary course of our business, including employment related claims, involving routine claims incidental to our business. Although the outcome of these routine claims cannot be predicted with certainty, we do not believe that the ultimate resolution of these claims will have a material adverse effect on our results of operations, financial condition or cash flows.

In February 2009, Express, LLC was named as a defendant in a purported class action lawsuit in a complaint filed in the Superior Court of California in the County of Santa Clara. The complaint alleges claims concerning the failure by Express, LLC to provide meal and rest periods to its employees and various related claims. See Note 13 to our unaudited consolidated financial statements as of October 31, 2009 included elsewhere in this prospectus.

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MANAGEMENT

Below is a list of the names and ages (as of January 30, 2010) of our directors and executive officers and a brief account of the business experience of each of them.

Name	Age	Position
Michael A. Weiss	68	President and Chief Executive Officer, Director
Matthew C. Moellering	43	Executive Vice President—Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary
Colin Campbell	50	Executive Vice President—Sourcing and Production
Lisa A. Gavales	46	Executive Vice President—Chief Marketing Officer
Fran Horowitz-Bonadies	46	Executive Vice President—Women’s Merchandising and Design
David G. Kornberg	42	Executive Vice President—Men’s Merchandising and Design
John J. (“Jack”) Rafferty	57	Executive Vice President—Planning and Allocation
Jeanne L. St. Pierre	50	Executive Vice President—Stores
Douglas H. Tilson	51	Executive Vice President—Real Estate
Elliott R. Tobias	49	Executive Vice President—Human Resources
David C. Dominik	53	Director
Timothy J. Faber	48	Director
Stefan L. Kaluzny	43	Director
Jennie W. Wilson	46	Director

Executive Officers

Michael A. Weiss has served as our President and Chief Executive Officer and a member of our board of directors since returning to our company in July 2007. From 2004 to July 2007 he was retired, but returned to our company in connection with the Golden Gate Acquisition. He previously served as our President and Chief Executive Officer from 1997 to 2004. Prior to that, he served as the Vice Chairman of Limited Brands from 1993 to 1997. He served as our President from 1982 to 1993 and prior to that served with Express when it was founded, starting as a merchandise manager for what was then an eight store experimental division of Limited Brands. In addition to his prior service as a director at Borders Group, Inc., Chico’s FAS, Inc. and Pacific Sunwear of California Inc., Mr. Weiss currently serves as a director at Collective Brands, Inc., a position he has held since 2005, and is a member of its governance and compensation committees.

Matthew C. Moellering has served as our Executive Vice President, Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary since October 2009. Prior to that, he served as our Senior Vice President, Chief Financial Officer, Treasurer and Secretary from July 2007 to October 2009 and our Vice President of Finance from September 2006 to July 2007. Prior to that, he served in various roles with Limited Brands from February 2003 to September 2006, most recently as Vice President of Financial Planning. He started with Limited Brands as a Finance Director from 2003 until 2004. Prior to that, Mr. Moellering served in various roles with Procter and Gamble where he was employed from July 1995 until February 2003 and prior to that as an officer in the United States Army.

Colin Campbell has served as our Executive Vice President of Sourcing and Production since June 2005. Prior to that, from March 1997 to June 2005, Mr. Campbell held a number of leadership positions for various divisions of Limited Brands including Cacique and Limited Stores and was an Executive Vice President of Western Hemisphere Operations at MAST from 2003 to 2005. Prior to that, from 1985 to 1997, Mr. Campbell was Vice President of Operations for the dress division of Liz Claiborne. He has also worked in production leadership positions with Bentwood Brothers LTD in England and Daks-Simpson LTD in Scotland.

Lisa A. Gavales has served as our Executive Vice President and Chief Marketing Officer since January 2008. Prior to that, she worked with Bloomingdale’s for 13 years in a number of merchandising and marketing roles, most recently as Senior Vice President of Marketing from 2000 to 2007. Ms. Gavales has also worked for Pricewaterhouse and Habberstad International. She began her career in the training program at R. H. Macy’s & Co.

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Fran Horowitz-Bonadies has served as our Executive Vice President of Women’s Merchandising and Design since December 2007. Prior to that, she served as our Senior Vice President and General Merchandise Manager from December 2005 to December 2007. Prior to that, she served as our Vice President and Merchandise Manager from March 2005 to December 2005. Prior to that, she worked at Bloomingdale’s for 13 years in various merchandising roles. Ms. Horowitz-Bonadies also worked early in her career in buying positions at Bergdorf Goodman, Bonwit Teller and Saks Fifth Avenue.

David G. Kornberg has served as our Executive Vice President of Men’s Merchandising and Design since December 2007. He served as our Senior Vice President and General Merchandise Manager from 2003 to December 2007. Prior to that, he was a Vice President of Business Development with Disney Stores. Mr. Kornberg spent the first ten years of his career with Marks & Spencer PLC in the United Kingdom.

John J. (“Jack”) Rafferty has served as our Executive Vice President of Planning and Allocation since 1999 after joining Express as Vice President of Planning and Allocation in 1998. Prior to Express, Mr. Rafferty held a number of planning and allocation leadership roles with Limited Brands. These roles include Vice President of Planning and Allocation for Lerner from 1990 to 1998, Vice President of Lane Bryant from 1988 until 1990 and Director of Planning and Allocation for Sizes Unlimited from 1984 to 1986. Mr. Rafferty started his career in various planning and allocation roles with Korvettes, Casual Corner and Brooks Fashion.

Jeanne L. St. Pierre has served as our Executive Vice President of Stores since March 2004. Prior to that, she was the Zone Vice President for Bath & Body Works from November 1998 until March 2004. Prior to that, she served as both a Regional Vice President and a District Manager with Ann Taylor. Ms. St. Pierre was also a District Manager for Abercrombie & Fitch, a Training Store Manager for Talbots and an Allocator for Express earlier in her career.

Douglas H. Tilson has served as our Executive Vice President of Real Estate since October 2009. Prior to that, he served as our Senior Vice President of Real Estate from October 2007 to October 2009. Prior to that, he was with Steiner & Associates as Senior Vice President of Leasing from April 2005 until October 2007. Prior to that, Mr. Tilson was Senior Vice President of Real Estate for Tween Brands from July 1999 until April 2005 and served in a number of senior Real Estate positions with Limited Brands from January 1987 until July 1999. Prior to that he was a labor attorney with the Columbus, Ohio-based law firm Porter, Wright, Morris & Arthur LLP from June 1984 until January 1987.

Elliott R. Tobias has served as our Executive Vice President of Human Resources since October 2009. He joined Express as our head of Human Resources in March 2006 and was promoted to Senior Vice President in March 2007. Prior to that, Mr. Tobias held numerous human resources leadership roles with Limited Brands from October 2001 to March 2006 and with Macy’s Department Stores from November 1986 to October 2001. Prior to that, Mr. Tobias started his career in human resources in various roles with Modell’s Sporting Goods and Fortunoff’s.

Directors

David C. Dominik has served as a member of our board of directors since July 2007. Mr. Dominik has been a Managing Director of Golden Gate Capital since 2000, when he co-founded the firm. Mr. Dominik previously spent ten years as a Managing Director at Bain Capital. Mr. Dominik managed Information Partners, a specialized fund within Bain Capital, that focused on opportunities in the information services and software markets and also served on the investment committee of Brookside, Bain Capital’s public equity hedge fund. Mr. Dominik has a J.D. from Harvard Law School and an A.B. from Harvard College. Mr. Dominik is also a member of the board of directors of Infor Global Solutions, Aspect Communications, Lantiq, Escalate Retail and Orchard Brands.

Timothy J. Faber has served as a member of our board of directors since July 2007. Since April 2006 he has served as Senior Vice President, Treasury, for Limited Brands. From January 2000 to April 2006 he was Vice

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President of Treasury/Mergers & Acquisitions. Prior to Limited Brands, Mr. Faber served in a number of positions with GE Capital Services from September 1996 until January 2000. His last position held was Managing Director, Business Development. Prior to that, he spent over seven years in a number of key positions in General Electric’s treasury operation and investment management businesses, including experience in Asia. Mr. Faber started his career in the Treasury Group at Avon Products, where he served from June 1986 to June 1989.

Stefan L. Kaluzny has served as a member of our board of directors since July 2007. Mr. Kaluzny is a Managing Director of Golden Gate Capital and has been with the firm since its inception in 2000. Prior to Golden Gate Capital, Mr. Kaluzny was co-founder and CEO of Delray Farms, a Hispanic specialty food company. Mr. Kaluzny has also held positions at consulting firms Bain & Company and LEK. He has an M.B.A. from Harvard Business School and a B.A. from Yale University. Mr. Kaluzny serves on the Yale University Investment Committee and is also a member of the board of directors of Apogee Retail, Eddie Bauer, J. Jill, Romano’s Macaroni Grill and Orchard Brands.

Jennie W. Wilson has served as a member of our board of directors since November 2008. Since 2007, Ms. Wilson has served as Senior Vice President of Finance for Limited Brands Inc. Prior to that, Ms. Wilson served as Chief Financial Officer for the Victoria’s Secret Megabrand from 2006 until 2007. She joined Limited Brands in 2004 as Senior Vice President of Finance and also served as the Chief Financial Officer and Vice President for the real estate and store design and construction divisions. Prior to that, Ms. Wilson spent 12 years with Dunkin’ Brands. Her last position held with Dunkin’ Brands was Senior Vice President and Chief Financial Officer. Prior to that, Ms. Wilson spent five years at Ernst & Young LLP between 1986 and 1992. Ms. Wilson is also a member of the board of directors of MAP Furniture Bank.

Family Relationships

There are no family relationships between any of our executive officers or directors.

Corporate Governance

Board Composition

Our certificate of incorporation, which will be in effect prior to the completion of this offering, will provide that our board of directors shall consist of such number of directors as determined from time to time by resolution adopted by a majority of the total number of directors then in office. Initially, our board of directors will consist of              members. Any additional directorships resulting from an increase in the number of directors may only be filled by the directors then in office. The term of office for each director will be until the earlier of his or her death, resignation or removal. Shareholders will elect directors each year at our annual meeting.

Our board of directors will be divided into three classes, with each director serving a three-year term, and one class being elected at each year’s annual meeting of stockholders.              will serve as Class I directors with an initial term expiring on 2011.              and              will serve as Class II directors with an initial term expiring in 2012.              and              will serve as Class III directors with an initial term expiring in 2013. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors.

Upon completion of this offering, Golden Gate will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a “controlled company” under the                      corporate governance standards. As a controlled company, exemptions under the standards will free us from the obligation to comply with certain corporate governance requirements, including the requirements:

• that a majority of our board of directors consists of “independent directors,” as defined under the rules of                     ;

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• that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

• that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

• for an annual performance evaluation of the nominating and governance committees and compensation committee.

These exemptions do not modify the independence requirements for our audit committee, and we intend to comply with the applicable requirements of the Sarbanes-Oxley Act and rules with respect to our audit committee within the applicable time frame.

Board Committees

Our board of directors currently has an Audit Committee and a Compensation Committee. Prior to the completion of this offering, our board of directors will establish a Nominating and Corporate Governance Committee. The composition, duties and responsibilities of these committees is as set forth below. In the future, our board may establish other committees, as it deems appropriate, to assist it with its responsibilities.

Audit Committee

The Audit Committee is responsible for, among other matters: (1) appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; (2) discussing with our independent registered public accounting firm their independence from management; (3) reviewing with our independent registered public accounting firm the scope and results of their audit; (4) approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; (5) overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the Securities and Exchange Commission; (6) reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; (7) establish procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; and (8) reviewing and approving related person transactions.

Upon completion of this offering, our Audit Committee will consist of             ,              and             . Our board of directors has determined that              will qualify as an “audit committee financial expert,” as such term is defined in Item 401(h) of Regulation S-K. Our board of directors will adopt a new written charter for the Audit Committee, which will be available on our corporate website at express.com upon the completion of this offering. Our website is not part of this prospectus.

Compensation Committee

The Compensation Committee is responsible for, among other matters: (1) reviewing key employee compensation goals, policies, plans and programs; (2) reviewing and approving the compensation of our directors, chief executive officer and other executive officers; (3) reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and (4) administration of stock plans and other incentive compensation plans.

Upon completion of this offering, our Compensation Committee will consist of             ,              and              . Our board of directors will adopt a new written charter for the Compensation Committee, which will be available on our corporate website at express.com upon the completion of this offering. Our website is not part of this prospectus.

Corporate Governance and Nominating Committee

Our Corporate Governance and Nominating Committee will be responsible for, among other matters: (1) identifying individuals qualified to become members of our board of directors, consistent with criteria

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approved by our board of directors; (2) overseeing the organization of our board of directors to discharge the board’s duties and responsibilities properly and efficiently; (3) identifying best practices and recommending corporate governance principles; and (4) developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to us.

Upon completion of this offering, our Corporate Governance and Nominating Committee will consist of             ,              and             . Our board of directors will adopt a written charter for the Corporate Governance and Nominating Committee, which will be available on our corporate website at express.com upon the completion of this offering. Our website is not part of this prospectus.

Compensation Committee Interlocks and Insider Participation

For fiscal year 2009, the members of the compensation committee of the board of directors were Mr. Dominik, Mr. Kaluzny and Mr. Faber. Neither Mr. Dominik, Mr. Kaluzny nor Mr. Faber is an officer or employee, or former officer or employee, of us or any of our subsidiaries. Mr. Dominik and Mr. Kaluzny are Managing Directors of Golden Gate and Mr. Faber is Senior Vice President, Treasury, for Limited Brands. Golden Gate provides advisory and consulting services to us.

No interlocking relationships exist between the members of our board of directors or compensation committee and the board of directors or compensation committee of any other company.

Code of Ethics

We will adopt a code of business conduct and ethics applicable to our principal executive, financial and accounting officers and all persons performing similar functions. A copy of that code will be available on our corporate website at express.com upon completion of this offering. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our website. Our website is not part of this prospectus.

Director Compensation

None of the five directors serving on our board of directors as of January 30, 2010 received compensation as a director during fiscal year 2009. All directors receive reimbursement for reasonable out-of-pocket expenses incurred in connection with meetings of the board.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis describes the compensation arrangements we have with our named executive officers as required under the rules of the SEC. The SEC rules require disclosure for the principal executive officer (our Chief Executive Officer) and principal financial officer (our Chief Financial Officer), regardless of compensation level, and the three most highly compensated executive officers in our last completed fiscal year, other than the CEO and CFO. All of these executive officers are referred to in this Compensation Discussion and Analysis as our “NEOs.”

Our NEOs are:

Name	Title
Michael A. Weiss	President and Chief Executive Officer, Director
Matthew C. Moellering	Executive Vice President—Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary
Fran Horowitz-Bonadies	Executive Vice President—Women’s Merchandising and Design
Colin Campbell	Executive Vice President—Sourcing and Production
John J. (“Jack”) Rafferty	Executive Vice President—Planning and Allocation

Our business previously operated as a division of Limited Brands, Inc. and was acquired in July 2007 by investment funds managed by Golden Gate Private Equity, Inc. All of our current NEOs, other than Mr. Weiss, were executives of Limited Brands at the time of the acquisition of our business by Golden Gate. With respect to these NEOs, our board that was put in place upon completion of the Golden Gate Acquisition resolved to maintain the same compensation levels and similar compensation plans as were in place prior to the Golden Gate Acquisition in order to maintain continuity with our senior leadership team. Subsequent to July 6, 2007, as part of our compensation program, our NEOs made equity contributions to us and acquired co-invest and incentive equity units, which are described later in this Compensation Discussion and Analysis. Mr. Weiss, who had retired in 2004 after leading our business for 22 years, was recruited by Golden Gate to return to the business in connection with the Golden Gate Acquisition.

In connection with the Golden Gate Acquisition, our board of directors established a compensation committee comprised of Mr. Dominik, Mr. Kaluzny and Mr. Faber (the “Compensation Committee”). To date the Compensation Committee has been responsible for the oversight, implementation and administration of all of our executive compensation plans and programs. The Compensation Committee determined all of the components of compensation of the CEO, and, in consultation with the CEO, the compensation of the remaining executive officers.

We expect that, upon completion of this offering, our Compensation Committee will consist of             ,              and             , and will undertake a substantial review of our existing compensation programs, objectives and philosophy and determine whether such programs, objectives, and philosophy are appropriate given that we have become a public company. In addition, as we gain experience as a public company, we expect that the specific direction, emphasis and components of our executive compensation program will continue to evolve.

Executive Compensation Objectives and Philosophy

The key objectives of our executive compensation programs are (1) to attract, motivate, reward and retain superior executive officers with the skills necessary to successfully lead and manage our business, (2) to achieve accountability for performance by linking annual cash incentive compensation to the achievement of measurable performance objectives, and (3) to align the interests of the executive officers and our equity holders through

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short and long-term incentive compensation programs. For our NEOs, these short- and long-term incentives are designed to accomplish these objectives by providing a significant financial correlation between our financial results and their total compensation.

A significant portion of the compensation of the NEOs has historically consisted of equity compensation and/or cash incentive compensation contingent upon the achievement of financial performance metrics. We expect to continue to provide our NEOs with a majority of their compensation in this manner. These two elements of executive compensation are aligned with the interests of our stockholders because the amount of compensation ultimately received will vary with our company’s financial performance. Equity compensation derives its value from our equity value, which is likely to fluctuate based on our financial performance. Payment of cash incentives is dependent on our achievement of pre-determined financial objectives.

We seek to apply a consistent philosophy to compensation for all executive officers. Our compensation philosophy is based on the following core principles:

To Pay-for-Performance

Individuals in leadership roles are compensated based on a combination of total company and individual performance factors. Total company performance is evaluated primarily based on the degree to which pre-established financial objectives are met. Individual performance is evaluated based upon several individualized leadership factors, including:

• attaining specific financial objectives;

• building and developing individual skills and a strong leadership team; and

• developing an effective infrastructure to support business growth and profitability.

A significant portion of total compensation is delivered in the form of equity-based award opportunities to directly link compensation with stockholder value.

To Pay Competitively

We are committed to providing a total compensation program designed to retain our high-caliber performers and attract superior leaders to our company. To achieve this goal, we annually compare our pay practices and overall pay levels with other leading specialty retail organizations, and, where appropriate, with non-specialty retail organizations when establishing our pay guidelines.

To Pay Equitably

We believe that it is important to apply generally consistent guidelines for all executive officer compensation programs. In order to deliver equitable pay levels, the Compensation Committee considers depth and scope of accountability, complexity of responsibility, qualifications and executive performance, both individually and collectively as a team.

In addition to short- and long-term compensation, we have found it important to provide our executive officers with competitive post-employment compensation. Post-employment compensation consists of two main types — qualified and nonqualified defined contribution retirement plan benefits and termination benefits. We believe that retirement plan benefits and termination benefits are important components in a well-structured executive officer compensation package, and have sought to ensure that the combined package is competitive at the time the package is negotiated with the executive officer.

Compensation Committee Review of Compensation

We expect that following this offering, the Compensation Committee will review compensation elements and amounts for NEOs on an annual basis, at the time of a promotion or other change in level of responsibilities,

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as well as when competitive circumstances or business needs may require. We may, but do not currently, use a third party consultant to assist us with determining compensation levels. We expect that each year our head of human resources will compile a report of benchmark data for executive positions for similar companies, including summaries of base salary, annual cash incentive plan opportunities and awards and long-term incentive award values. The Compensation Committee has not yet finalized the companies that we will benchmark our compensation packages against, but we expect that they will determine this list shortly after completion of this offering and will compare our pay practices and overall pay levels with other leading retail organizations, and, where appropriate, with non-retail organizations when establishing our pay guidelines.

We expect that the CEO will provide compensation recommendations to the Compensation Committee for executives other than himself based on this data and the other considerations mentioned in this Compensation Discussion and Analysis. We expect that the Compensation Committee will recommend a compensation package that is consistent with our compensation philosophy strategically positioned above the median of the peer group and competitive with other leading retail organizations. The Compensation Committee will then discuss these recommendations with the CEO and the head of human resources and will make a recommendation to the board, which the board will consider and approve, if appropriate.

We expect that the Compensation Committee will consider input from our CEO and CFO when setting financial objectives for our incentive plans. We also expect that the Compensation Committee will consider input from our CEO, with the assistance of our head of human resources (for officers other than himself), regarding benchmarking and recommendations for base salary, annual incentive targets and other compensation awards. The Compensation Committee will likely give significant weight to our CEO’s judgment when assessing each of the other officer’s performance and determining appropriate compensation levels and incentive awards.

Elements of Compensation

As discussed throughout this Compensation Discussion and Analysis, the compensation policies applicable to our NEOs are reflective of our pay-for-performance philosophy, whereby a significant portion of both cash and equity compensation is contingent upon achievement of measurable financial objectives and enhanced equity value, as opposed to current cash compensation and perquisites not directly linked to objective financial performance. This compensation mix is consistent with our performance-based philosophy that the role of executive officers is to enhance equity holder value over the long term.

The elements of our compensation program are:

• base salary;

• performance-based cash incentives;

• equity incentives; and

• certain additional executive benefits and perquisites.

Base salary, performance-based cash incentives and long-term equity-based incentives are the most significant elements of our executive compensation program and, on an aggregate basis, they are intended to substantially satisfy our program’s overall objectives. Typically, the Compensation Committee seeks to set each of these elements of compensation at the same time to enable the Compensation Committee to simultaneously consider all of the significant elements and their impact on total compensation; and, the extent to which the determinations made will reflect the principles of the compensation philosophy and related guidelines with respect to allocation of compensation among certain of these elements and total compensation. We strive to achieve an appropriate mix between the various elements of our compensation program to meet our compensation objectives and philosophy; however, we do not apply any rigid allocation formula in setting our executive compensation, and we may make adjustments to this approach for various positions after giving due consideration to prevailing circumstances.

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Base Salary

We provide a base salary to our executive officers to compensate them for their services during the year and to provide them with a stable source of income. The base salaries for our NEOs in 2008 were established by our board of directors, based in large part on the salaries established for these persons when they were with Limited Brands and our Compensation Committee’s review of other factors, including:

• the individual’s performance, results, qualifications and tenure;

• the job’s responsibilities, pay mix (base salary, annual cash incentives, equity incentives, perquisites and other executive benefits) and compensation practices in our markets; and

• our ability to replace the individual.

In setting base salaries, our Compensation Committee considered the factors described above. However, the Compensation Committee was primarily concerned with the continued impact of global economic conditions and their effect on our company and our markets. Consequently, the 2009 base salaries of our NEOs remained unchanged and identical to their 2008 annual base salaries. This conscientious decision was made despite the fact that our NEOs continued to meet and exceed the expectations of our board of directors and equity holders. Mr. Moellering was promoted from Senior Vice President, Chief Financial Officer, Treasurer and Secretary to Executive Vice President, Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary on October 4, 2009. In consideration of establishing a new compensation level with this promotion, the Compensation Committee reviewed several factors including Mr. Moellering’s new level of responsibility, the compensation levels of other Express executive officers, practices in the marketplace for similar roles and Mr. Moellering’s performance and qualifications. As a result, his annual base salary was increased from $400,000 to $500,000 in late 2009.

The annual base salaries in effect for each of our NEOs as of January 30, 2010 are as follows:

Name	Annual Salary
Michael A. Weiss	$	750,000	(1)
Matthew C. Moellering	$	500,000
Fran Horowitz-Bonadies	$	500,000
Colin Campbell	$	485,000
John J. (“Jack”) Rafferty	$	430,000

(1) In January 2010, the board of directors reviewed competitive market practices for CEO compensation levels, as well as the performance and qualifications of Mr. Weiss. As a result, effective February 1, 2010, the board of directors increased the annual base salary for Mr. Weiss from $750,000 to $1,000,000.

In the future, we expect that salaries for executive officers will be reviewed annually, as well as at the time of a promotion or other change in level of responsibilities, or when competitive circumstances or business needs may require. As noted above, we expect that the Compensation Committee will recommend a compensation package that is consistent with our compensation philosophy strategically positioned above the median of our to be determined peer group.

Performance-Based Cash Incentives

We pay performance-based cash incentives in order to align the compensation of our NEOs with our short- term operational and performance goals and to provide near-term rewards for our NEOs to meet these goals. Our short-term, performance-based cash incentive plan provides for incentive payments for each six-month operating season for our NEOs. These incentive payments are based on the attainment of pre-established objective financial goals and are intended to motivate executives to work effectively to achieve financial performance objectives and reward them when objectives are met and results are certified by the Compensation Committee. Using short-term

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incentives tied to the traditional retail selling seasons of Spring (February through July) and Fall (August through January) allows us to establish appropriately aggressive performance expectations that align business performance expectations to the prevailing market and economic conditions. In connection with the rehiring of Mr. Weiss, his employment agreement was structured with an annual incentive plan. This was consistent with other executive agreements familiar to our board and as a result his compensation in previous periods has been based on this annual plan. However, the Compensation Committee has determined that beginning in 2010, the CEO will be moving to the same six-month seasonal incentive plan as all other executives and that this change will better align the incentives of the CEO with other executives within our company as well as our company’s seasonal business cycle. In addition to this incentive period change and in connection with the review of the CEO’s compensation by the Compensation Committee noted under the Base Salary section above, the Compensation Committee determined that beginning with fiscal year 2010, the annual performance-based incentive compensation plan target payout for Mr. Weiss will remain at 100%, however, his maximum payout opportunity will change from 300% to 200%. This change will result in his short-term incentive opportunity ranging from zero to double his incentive target, which is consistent with other NEOs.

The pre-established objective financial incentive target goal under this plan is based on operating income (including expense relating to this incentive plan) plus depreciation and amortization, which we refer to herein as the “Incentive Measure.” We use the Incentive Measure because it measures performance over the periods which executives can have significant impact. The Incentive Measure is also directly linked to our long-term growth plan. Our board of directors sets the Incentive Measure at the beginning of each six-month season based on an analysis of (1) historical performance; (2) income, expense and margin expectations; (3) financial results of other comparable businesses; (4) economic conditions and (5) progress toward achieving our strategic plan.

Although this Incentive Measure was used as the financial measure for fiscal years 2009 and 2010, in the future the Compensation Committee may use other objective financial performance indicators for the plan, including, without limitation, the price of our common stock, shareholder return, return on equity, return on investment, return on capital, sales productivity, comparable store sales growth, economic profit, economic value added, net income, operating income, gross margin, sales, free cash flow, earnings per share, operating company contribution, EBITDA (or any derivative thereof) or market share.

The target cash incentive compensation opportunity for each eligible executive is set at a percentage of base salary. For fiscal year 2009, the amount of performance-based cash incentive opportunity for participating executives, other than the CEO, ranged from zero to double their incentive target and for the CEO the amount of performance-based incentive compensation opportunity ranged from zero to triple his incentive target (see table below), based upon the extent to which the pre-established financial goals are achieved or exceeded.

As a result of the uncertain business climate, in 2009, we made a one-year change to our short-term performance-based cash incentive plan for 2009. In 2009, the Compensation Committee set targets that reflected the challenging economic environment, recognizing that historical growth rates were no longer appropriate considering the significant downturn in the retail environment. We also made the decision to change the plan payout timing and Spring season eligibility requirements to an annual schedule versus our historical practice of paying short-term performance-based compensation seasonally. Effective in 2009, the cash incentive earned in Spring would be earned only if we achieved the Fall season “threshold” and would actually be paid in conjunction with the Fall 2009 cash incentive to remaining participants. We believe that these short-term changes led to long-term preservation of stockholder value in an economic downturn and did not encourage our executive officers to take unnecessary and excessive risks.

The threshold, target and maximum short-term performance-based cash incentive payout opportunities of our NEOs for fiscal year 2009 are set forth in the “Grants of Plan-Based Awards” table below.

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The following tables show each NEO’s performance-based cash incentive targets and actual payout as a percentage of base salary and the Incentive Measure used to determine the incentive payment for fiscal year 2009.

Michael Weiss

For fiscal year 2009, Mr. Weiss was on an annual incentive plan, while the other executives were on a seasonal incentive plan. However, beginning with fiscal year 2010, Mr. Weiss and the other executives will be on the same seasonal incentive plan.

	Fiscal Year 2009
	Percentage of Base Salary (February 2009 thru January 2010)
Name	Threshold Payout			Target Payout			Maximum Payout			Actual Payout
Michael A. Weiss		20.0	%		100.0	%		300.0	%	(1	)
Performance Goal	Goal for Threshold Payout			Goal for Target Payout			Goal for Maximum Payout			Actual Achieved
Incentive Measure (in millions)	$	107.0		$	142.0		$	182.7		(1	)

(1) Because the audited financial statements are not yet available, we cannot report final numbers at this time. However, based on preliminary information we anticipate Mr. Weiss will receive the maximum payout.

All Other NEOs

	Spring 2009
	Percentage of Base Salary (February 2009 through July 2009)
Name	Threshold Payout			Target Payout			Maximum Payout			Actual Payout
Matthew C. Moellering		4.0	%		20.0	%		40.0	%		40.0	%
Fran Horowitz-Bonadies		4.4	%		22.0	%		44.0	%		44.0	%
Colin Campbell		4.0	%		20.0	%		40.0	%		40.0	%
John J. (“Jack”) Rafferty		4.8	%		24.0	%		48.0	%		48.0	%
Performance Goal	Goal for Threshold Payout			Goal for Target Payout			Goal for Maximum Payout			Actual Achieved
Incentive Measure (in millions)	$	50.0		$	58.0		$	68.0		$	68.7

	Fall 2009
	Percentage of Base Salary (August 2009 through January 2010)
Name	Threshold Payout			Target Payout			Maximum Payout			Actual Payout
Matthew C. Moellering(1)		7.2	%		36.0	%		72.0	%	(2	)
Fran Horowitz-Bonadies		6.6	%		33.0	%		66.0	%	(2	)
Colin Campbell		6.0	%		30.0	%		60.0	%	(2	)
John J. (“Jack”) Rafferty		7.2	%		36.0	%		72.0	%	(2	)
Performance Goal	Goal for Threshold Payout			Goal for Target Payout			Goal for Maximum Payout			Actual Achieved
Incentive Measure (in millions)	$	57.0		$	84.0		$	104.0		(2	)

(1) In connection with Mr. Moellering’s promotion in October 2009 (See “—Base Salary”), his Spring and Fall performance-based cash incentive targets were increased by 4% and 6% respectively.

(2) Because the audited financial statements are not yet available, we cannot report final numbers at this time. However, based on preliminary information we anticipate that the NEOs will receive the maximum payout.

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The following table shows each NEO’s performance-based cash incentive targets as a percentage of base salary for fiscal year 2010. We do not believe that disclosure of our 2010 Incentive Measures is relevant to an understanding of compensation for our 2009 fiscal year. In addition, because the components of our Incentive Measures for 2010 contain highly sensitive data such as targeted operating income, we do not disclose specific future measures and targets because we believe that such disclosure would result in serious competitive harm and be detrimental to our operating performance. Our 2010 Incentive Measures are intended to be realistic and reasonable, but challenging, in order to drive performance on an individual basis.

	Spring 2010						Fall 2010
	Percentage of Base Salary (February 2010 through July 2010)						Percentage of Base Salary (August 2010 through January 2011)
Name	Threshold Payout		Target Payout		Maximum Payout		Threshold Payout		Target Payout		Maximum Payout
Michael A. Weiss	8.0	%	40.0	%	80.0	%	12.0	%	60.0	%	120.0	%
Matthew C. Moellering	4.8	%	24.0	%	48.0	%	7.2	%	36.0	%	72.0	%
Fran Horowitz-Bonadies	4.4	%	22.0	%	44.0	%	6.6	%	33.0	%	66.0	%
Colin Campbell	4.0	%	20.0	%	40.0	%	6.0	%	30.0	%	60.0	%
John J. (“Jack”) Rafferty	4.8	%	24.0	%	48.0	%	7.2	%	36.0	%	72.0	%

Equity Incentives—Summary of our Current Plan

In November 2007, we implemented our employee equity incentive program, which provides members of our management team (referred to as management participants) the opportunity to acquire units and participate in the equity appreciation of the company. We formed Express Management Investors LLC for the sole purpose of indirectly holding units (through another holding company named Express Management Investors Blocker, Inc.) on behalf of our employees other than Mr. Weiss. In lieu of issuing units directly to our employees, we issue Units to Express Management Investors Blocker, Inc., which in turn issues equity interests in Express Management Investors Blocker, Inc. to Express Management Investors LLC, which in turn issues equity interests in Express Management Investors LLC to our employees having substantially the same terms and economic value as the Units we issued to Express Management Investors Blocker, Inc. on their behalf. Currently, 742,460 Class L Units of Express Management Investors LLC, 3,330,000 Class A Units of Express Management Investors LLC, and 4,705,000 Class C Units of Express Management Investors LLC have been purchased by management participants. Our President and Chief Executive Officer, Mr. Weiss, has purchased units of Express Parent, the terms of which are summarized below.

Our long-term equity incentive awards are generally intended to accomplish the following main objectives: create a direct correlation between our financial and equity value performance and compensation paid to the NEOs, long-term retention of the NEOs, assist in building equity ownership of the NEOs to increase alignment with long-term stockholder interests, attract and motivate key employees, reward participants for performance in relation to the creation of stockholder value, and deliver competitive levels of compensation consistent with our compensation philosophy.

The Class L Units of Express Management Investors LLC were purchased by management participants at a purchase price per unit of $6.47, which is the same purchase price per unit paid by Golden Gate for Class L Units of Express Parent in connection with the Golden Gate Acquisition. Management participants were allowed to purchase the Class L Units of Express Management Investors LLC with a promissory note in favor of Express Holding for 50% of the purchase price, with the remainder of the purchase price paid in cash. The promissory note provides for an annual cash interest payment of 4.39%, and is due in full on the seventh anniversary of the note, except that a mandatory prepayment is due if the management participant ceases to be employed by us, we liquidate, the management participant becomes bankrupt, such prepayment is required pursuant to applicable law (including pursuant to Section 402 of the Sarbanes-Oxley Act) or the management participant receives cash in connection with his or her ownership of us. Each management participant that made a promissory note was required to pledge all of his or her units in Express Management Investors LLC (whether held currently or

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acquired in the future) as security to us to secure the repayment of his or her promissory note. Each of the aforementioned promissory notes was repaid by each management participant in full effective as of February 9, 2010. The Class A Units and Class C Units of Express Management Investors LLC were purchased by management participants with cash for a nominal price per unit of $0.01 and $0.0025, respectively. In general, the number Class A Units and Class C Units issued to our NEOs is determined at the discretion of our board. The board considers the value the executive brings to us based on their expertise and leadership capabilities, the size of his or her total compensation package and his or her position with us. No formal benchmarking efforts are currently made by our board or Compensation Committee.

Class L Units of Express Management Investors LLC are fully vested. The Class A Units of Express Management Investors LLC and Class C Units of Express Management Investors LLC generally vest over four years on an anniversary date set forth in the management participant’s purchase agreement. The anniversary date is generally based on the employee’s start date or the unit grant date, provided, that units granted in November 2007 vest based upon the anniversary date of the Golden Gate Acquisition. On the first anniversary date, 25% of the Class A Units and 25% of the Class C Units purchased by a management participant vest, with quarterly vesting of the Class A Units and Class C Units thereafter.

All classes of units of Express Management Investors LLC (including Class L Units) are subject to repurchase by us if an employee ceases to be employed by us on or prior to July 6, 2011. We may repurchase units at (1) the lower of original cost or fair market value with respect to units that are unvested or all units if the management participant was terminated for cause or participates in a competitive activity and (2) at fair market value if the management participant was terminated for any other reason. No employee may transfer his or her units in Express Management Investors LLC without our prior written consent. The decision whether or not to make a repurchase is approved by the board of managers of Express Parent prior to Express Management Blocker Inc. exercising its right to repurchase a manager’s equity interests (through Express Management Investors LLC).

On July 24, 2007, our President and Chief Executive Officer, Mr. Weiss, purchased (1) 1,000,000 of our Class L Units at a purchase price per unit of $6.47, which is the same purchase price per unit paid by Golden Gate for our Class L Units in connection with the Golden Gate Acquisition and (2) 4,000,000 of our Class A Units for a nominal price per unit of $0.01. Mr. Weiss paid cash for such Class A Units, and purchased such Class L Units with a promissory note in favor of Express Holding for 50% of the purchase price, with the remainder of the purchase price paid in cash. The promissory note provides for an annual cash interest payment of 4.95%, and is due in full on the seventh anniversary of the note, except that a mandatory prepayment is due if we liquidate, Mr. Weiss becomes bankrupt, such prepayment is required pursuant to applicable law (including pursuant to Section 402 of the Sarbanes-Oxley Act) or Mr. Weiss receives cash in connection with his ownership of us. Mr. Weiss was required to pledge all of his units in us (whether held currently or acquired in the future) as security to us to secure the repayment of his promissory note. Mr. Weiss’ promissory note was repaid in full by him effective as of February 9, 2010 and, as a result, all such units were released from the aforementioned pledge. Effective March 13, 2008, Mr. Weiss transferred an aggregate of 333,338 of our Class L Units and an aggregate of 1,333,338 of our Class A Units to certain of Mr. Weiss’ family trusts and his spouse. All of the Units held by Mr. Weiss, his wife and Mr. Weiss’ family trusts are fully vested.

Equity Incentives—Express 2010 Long-Term Omnibus Equity Incentive Plan

Effective upon the completion of this offering, we will implement the Express, Inc. 2010 Omnibus Incentive Plan (“2010 Plan”), in connection with this offering. The 2010 Plan will provide for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. Directors, officers and other employees of us and our subsidiaries, as well as others performing consulting or advisory services for us, will be eligible for grants under the 2010 Plan. The purpose of the 2010 Plan is to provide incentives that will attract, retain and motivate high performing officers, directors, employees and consultants by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. The following is a summary

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of the material terms of the 2010 Plan, but does not include all of the provisions of the 2010 Plan. For further information about the 2010 Plan, we refer you to the complete copy of the 2010 Plan, which we will file as an exhibit to the registration statement, of which this prospectus is a part.

Administration

The 2010 Plan is administered by the Compensation Committee designated by our board of directors. Among the committee’s powers are to determine the form, amount and other terms and conditions of awards, clarify, construe or resolve any ambiguity in any provision of the 2010 Plan or any award agreement, amend the terms of outstanding awards and adopt such rules, forms, instruments and guidelines for administering the 2010 Plan as it deems necessary or proper. All actions, interpretations and determinations by the committee or by our board of directors are final and binding.

The Compensation Committee has full authority to administer and interpret the 2010 Plan, to grant discretionary awards under the 2010 Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award and to make all other determinations in connection with the 2010 Plan and the awards thereunder as the Compensation Committee, in its sole discretion, deems necessary or desirable.

Available Shares

The aggregate number of shares of common stock which may be issued or used for reference purposes under the 2010 Plan or with respect to which awards may be granted may not exceed                  shares, which may be either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the 2010 Plan are for any reason cancelled, or expire or terminate unexercised, the shares covered by such awards will again be available for the grant of awards under the 2010 Plan.

Eligibility for Participation

Members of our board of directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates are eligible to receive awards under the 2010 Plan. The selection of participants is within the sole discretion of the Compensation Committee.

Award Agreement

Awards granted under the 2010 Plan shall be evidenced by award agreements, which need not be identical, that provide additional terms, conditions, restrictions and/or limitations covering the grant of the award, including, without limitation, additional terms providing for the acceleration of exercisability or vesting of awards in the event of a change of control or conditions regarding the participant’s employment, as determined by the committee in its sole discretion.

Stock Options

The committee may grant nonqualified stock options and incentive stock options to purchase shares of our common stock only to eligible employees. The Compensation Committee will determine the number of shares of our common stock subject to each option, the term of each option, which may not exceed ten years, or five years in the case of an incentive stock option granted to a 10.0% stockholder, the exercise price, the vesting schedule, if any, and the other material terms of each option. No incentive stock option or nonqualified stock option may have an exercise price less than the fair market value of a share of our common stock at the time of grant or, in the case of an incentive stock option granted to a 10.0% stockholder, 110.0% of such share’s fair market value. Options will be exercisable at such time or times and subject to such terms and conditions as determined by the committee at grant and the exercisability of such options may be accelerated by the committee in its sole discretion.

Stock Appreciation Rights

The Compensation Committee may grant stock appreciation rights, which we refer to as SARs, either with a stock option, which may be exercised only at such times and to the extent the related option is exercisable, which

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we refer to as a Tandem SAR, or independent of a stock option, which we refer to as a Non-Tandem SAR. A SAR is a right to receive a payment in shares of our common stock or cash, as determined by the Compensation Committee, equal in value to the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The term of each SAR may not exceed ten years. The exercise price per share covered by an SAR will be the exercise price per share of the related option in the case of a Tandem SAR and will be the fair market value of our common stock on the date of grant in the case of a Non-Tandem SAR. The Compensation Committee may also grant limited SARs, either as Tandem SARs or Non-Tandem SARs, which may become exercisable only upon the occurrence of a change in control, as defined in the 2010 Plan, or such other event as the Compensation Committee may, in its sole discretion, designate at the time of grant or thereafter.

Restricted Stock

The Compensation Committee may award shares of restricted stock. Except as otherwise provided by the Compensation Committee upon the award of restricted stock, the recipient generally has the rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted stock and, conditioned upon full vesting of shares of restricted stock, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted stock or specifically set forth in the recipient’s restricted stock agreement. The committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period.

Recipients of restricted stock are required to enter into a restricted stock agreement with us that states the restrictions to which the shares are subject, which may include satisfaction of pre-established performance goals, and the criteria or date or dates on which such restrictions will lapse.

If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of performance goals, the committee will establish for each recipient the applicable performance goals, formulae or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulae or standards while the outcome of the performance goals are substantially uncertain. Such performance goals may incorporate provisions for disregarding, or adjusting for, changes in accounting methods, corporate transactions, including, without limitation, dispositions and acquisitions, and other similar events or circumstances. Section 162(m) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, requires that performance awards be based upon objective performance measures. The performance goals for performance-based restricted stock will be based on one or more of the objective criteria set forth on Exhibit A to the 2010 Plan and are discussed in general below.

Other Stock-Based Awards

The Compensation Committee may, subject to limitations under applicable law, make a grant of such other stock-based awards, including, without limitation, performance units, dividend equivalent units, stock equivalent units, restricted stock units and deferred stock units under the 2010 Plan that are payable in cash or denominated or payable in or valued by shares of our common stock or factors that influence the value of such shares. The Compensation Committee shall determine the terms and conditions of any such other awards, which may include the achievement of certain minimum performance goals for purposes of compliance with Section 162(m) of the Code and/or a minimum vesting period. The performance goals for performance-based other stock-based awards will be based on one or more of the objective criteria set forth on Exhibit A to the 2010 Plan and discussed in general below.

Other Cash-Based Awards

The Compensation Committee may grant awards payable in cash. Cash-based awards shall be in such form, and dependent on such conditions, as the committee shall determine, including, without limitation, being subject to the satisfaction of vesting conditions or awarded purely as a bonus and not subject to restrictions or conditions. If a cash-based award is subject to vesting conditions, the committee may accelerate the vesting of such award in its discretion.

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Performance Awards

The Compensation Committee may grant a performance award to a participant payable upon the attainment of specific performance goals. The Compensation Committee may grant performance awards that are intended to qualify as performance-based compensation under Section 162(m) of the Code as well as performance awards that are not intended to qualify as performance-based compensation under Section 162(m) of the Code. If the performance award is payable in cash, it may be paid upon the attainment of the relevant performance goals either in cash or in shares of restricted stock, based on the then current fair market value of such shares, as determined by the Compensation Committee, in its sole discretion. Based on service, performance and/or such other factors or criteria, if any, as the Compensation Committee may determine, the Compensation Committee may, at or after grant, accelerate the vesting of all or any part of any performance award.

Performance Goals

The Compensation Committee may grant awards of restricted stock, performance awards, and other stock-based awards that are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Code. These awards may be granted, vest and be paid based on attainment of specified performance goals established by the committee. These performance goals will be based on the attainment of a certain target level of, or a specified increase or decrease in, one or more of the following measures selected by the committee: (1) earnings per share; (2) operating income; (3) gross income; (4) net income (before or after taxes); (5) cash flow; (6) gross profit; (7) gross profit return on investment; (8) gross margin return on investment; (9) gross margin; (10) operating margin; (11) working capital; (12) earnings before interest and taxes; (13) earnings before interest, tax, depreciation and amortization; (14) return on equity; (15) return on assets; (16) return on capital; (17) return on invested capital; (18) net revenues; (19) gross revenues; (20) revenue growth; (21) annual recurring revenues; (22) recurring revenues; (23) license revenues; (24) sales or market share; (25) total shareholder return; (26) economic value added; (27) specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the committee in its sole discretion; (28) the fair market value of the a share of common stock; (29) the growth in the value of an investment in the common stock assuming the reinvestment of dividends; or (30) reduction in operating expenses.

To the extent permitted by law, the Compensation Committee may also exclude the impact of an event or occurrence which the committee determines should be appropriately excluded, including: (1) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring charges; (2) an event either not directly related to our operations or not within the reasonable control of management; or (3) a change in accounting standards required by generally accepted accounting principles.

Performance goals may also be based on an individual participant’s performance goals, as determined by the Compensation Committee, in its sole discretion.

In addition, all performance goals may be based upon the attainment of specified levels of our performance, or subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations. The Compensation Committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.

Change in Control

In connection with a change in control, as defined in the 2010 Plan, the Compensation Committee may accelerate vesting of outstanding awards under the 2010 Plan. In addition, such awards will be, in the discretion of the committee, (1) assumed and continued or substituted in accordance with applicable law, (2) purchased by us for an amount equal to the excess of the price of a share of our common stock paid in a change in control over the exercise price of the award(s), or (3) cancelled if the price of a share of our common stock paid in a change in control is less than the exercise price of the award. The Compensation Committee may also, in its sole discretion, provide for accelerated vesting or lapse of restrictions of an award at any time.

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Stockholder Rights

Except as otherwise provided in the applicable award agreement, and with respect to an award of restricted stock a participant has no rights as a stockholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.

Amendment and Termination

Notwithstanding any other provision of the 2010 Plan, our board of directors may at any time amend any or all of the provisions of the 2010 Plan, or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided in the 2010 Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination may not be adversely affected without the consent of such participant.

Transferability

Awards granted under the 2010 Plan are generally nontransferable (other than by will or the laws of descent and distribution), except that the committee may provide for the transferability of nonqualified stock options at the time of grant or thereafter to certain family members.

Effective Date

The 2010 Plan will be adopted in connection with this offering.

Additional Executive Benefits and Perquisites

We provide our executive officers with executive benefits and perquisites that the Compensation Committee believes are reasonable and in the best interests of the company and its stockholders. Consistent with our compensation philosophy, we intend to continue to maintain our current benefits for our executive officers, including retirement plans, executive medical benefits, life insurance benefits, housing relocation benefits, paid vacation and other perquisites described below. The Compensation Committee, in its discretion, may revise, amend or add to an officer’s executive benefits if it deems it advisable. We believe these benefits are generally equivalent to benefits provided by comparable companies. We have no current plans to change the levels of benefits provided thereunder.

Retirement Plan Benefits

The company does not sponsor a defined benefit retirement plan as we do not believe that such a plan best serves the needs of our employees or the business at this time. The company sponsors a tax-qualified defined contribution retirement plan and a nonqualified defined contribution retirement plan. Participation in the qualified plan is available to employees who meet certain age and service requirements. Participation in the nonqualified plan is made available to employees who meet certain age, service, and job level requirements. Our executive officers participate in these plans based on these requirements.

Qualified Retirement Plan. The qualified plan is available to all eligible employees, including executive officers, and allows them to elect to make contributions up to the maximum limits allowable under the Internal Revenue Code. The company matches employees’ contributions according to a predetermined formula and contributes additional discretionary contribution amounts based on a percentage of the employees’ eligible annual compensation and years of service. Employees’ contributions and company matching contributions vest immediately. Additional company contributions and the related investment earnings are subject to vesting based on years of service.

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As a result of the uncertain business climate, in 2009 we made the decision to not make the 2008 discretionary annual contribution to the qualified retirement plan and suspended the 401(k) match for 2009. However in light of improved market and business conditions, at the end of 2009, we made the decision to provide all eligible and active employees with a lump sum bonus equivalent to what their 2008 retirement contribution would have been had we made it. At the end of 2009, we also made the decision to reinstate the 401(k) match beginning in 2010.

Nonqualified Deferred Compensation Plan. The nonqualified deferred compensation plan is available to certain director-level employees and above and certain employees who were participants in a prior supplemental retirement plan sponsored by us, and is an unfunded plan which provides benefits beyond the Internal Revenue Code limits for qualified defined contribution plans. The plan permits participating employees to elect contributions up to a maximum percentage of eligible compensation. The company matches employees’ contributions according to a predetermined formula and credits additional amounts equal to a percentage of the employees’ eligible compensation beyond the compensation taken into account under the Internal Revenue Code limits for qualified defined contribution plans based on years of service. The plan also permits employees to defer additional compensation up to a maximum amount which the company does not match. Employees’ accounts are credited with interest using a rate determined annually based on related factors or indices, including but not limited to, the company’s cost of funds or cost of borrowing. The interest rate for the 2009 plan year was 7.7%. Employees’ contributions and the related interest vest immediately. Company contributions and credits and the related interest are subject to vesting based on years of service. Employees generally may elect in-service distributions for the unmatched deferred compensation component only. The remaining vested portion of employees’ accounts in the plan will be distributed upon termination of employment in either a lump sum or in equal annual installments over a specified period of up to ten years as elected by the participant.

Health and Welfare Benefits

Executive Medical. In addition to the group health plans eligible to all full-time employees, the Executive Medical Program provides benefits to reimburse executives for certain out-of-pocket healthcare-related expenses. This program reimburses 100% of eligible expenses up to a total of $10,000 per family per calendar year. All executive officers are eligible for the Executive Medical Program.

Executive Life Insurance. We provide all executives officers with executive life insurance that offers a benefit equal to two times their annual base salary up to a maximum of one million dollars.

Executive Disability Insurance. We also provide all executive officers with disability coverage that provides a benefit of 100% base salary continuation for up to 365 days and then 60% of the executive’s base salary plus the annual average of the last three years of incentive cash compensation, up to a maximum benefit of $25,000 per month.

Perquisites

Personal Use of Airplane. For security and personal safety reasons, we require Mr. Weiss to use a private aircraft for both business and personal travel (up to 100 hours of personal use). Use of the corporate aircraft for business and personal reasons also allows Mr. Weiss to be more productive and efficient when he is required to travel. We provide Mr. Weiss with a tax gross-up payment on the income associated with his use of such private aircraft for personal use.

Housing Allowance. We provide Mr. Weiss and Mr. Campbell with reimbursement allowances for the business use of their private residences in the New York metropolitan area, which they use when required to be at our New York design studio or otherwise required by us to be in the New York City area, along with a tax gross-up payment to Mr. Weiss on the income associated therewith.

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Accounting and Tax Considerations

In determining which elements of compensation are to be paid, and how they are weighted, we also take into account whether a particular form of compensation will be deductible under Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Section 162(m) generally limits the deductibility of compensation paid to our NEOs to $1 million during any fiscal year unless such compensation is “performance-based” under Section 162(m). However, under a Section 162(m) transition rule for compensation plans or agreements of corporations which are privately held and which become publicly held in an initial public offering, compensation paid under a plan or agreement that existed prior to the initial public offering will not be subject to Section 162(m) until the earlier of (1) the expiration of the plan or agreement, (2) a material modification of the plan or agreement, (3) the issuance of all employer stock and other compensation that has been allocated under the plan, or (4) the first meeting of stockholders at which directors are to be elected that occurs after the close of the third calendar year following the year of the initial public offering (the “Transition Date”). After the Transition Date, rights or awards granted under the plan, other than options and stock appreciation rights, will not qualify as “performance-based compensation” for purposes of Section 162(m) unless such rights or awards are granted or vest upon pre-established objective performance goals, the material terms of which are disclosed to and approved by our stockholders.

Our compensation program is intended to maximize the deductibility of the compensation paid to our NEOs to the extent that we determine it is in our best interests. Consequently, we may rely on the exemption from Section 162(m) afforded to us by the transition rule described above for compensation paid pursuant to our pre-existing plans.

Many other Code provisions, SEC regulations and accounting rules affect the payment of executive compensation and are generally taken into consideration as programs are developed. Our goal is to create and maintain plans that are efficient, effective and in full compliance with these requirements.

Compensation Tables

The purpose of the following tables is to provide information regarding the compensation earned during our most recently completed fiscal year by our NEOs.

Summary Compensation Table

The following table shows the compensation earned by our NEOs during the fiscal year ended January 30, 2010, referred to as fiscal year 2009.

Name and Principal Position	Year	Salary ($)	Bonus ($)(1)	Stock Awards ($)		Option Awards ($)	Non-Equity Incentive Plan Compensation ($)(2)	Nonqualified Deferred Compensation Earnings ($)(3)	All Other Compensation ($)(5)	Total ($)
Michael A. Weiss President and CEO	2009	750,000	209,768	—		—	2,250,000	—	510,159	3,719,927
Matthew C. Moellering Executive Vice President—Chief Administrative Officer, CFO, Treasurer & Secretary	2009	432,692	25,295	126,000	(4)	—	520,000	4,809	75,323	1,184,119
Fran Horowitz-Bonadies Executive Vice President—Women’s Merchandising & Design	2009	500,000	21,715	—		—	550,000	8,619	80,549	1,160,883
Colin Campbell Executive Vice President—Sourcing & Production	2009	485,000	27,490	—		—	485,000	29,142	110,089	1,136,721
John J. (“Jack”) Rafferty Executive Vice President—Planning & Allocation	2009	430,000	36,270	—		—	516,000	69,812	83,284	1,135,366

(1) Special discretionary bonus paid to reimburse our NEOs for the interest payable on their promissory notes, which were repaid in full effective February 9, 2010. Also includes for each NEO, except Mr. Weiss, a special bonus equivalent to what their 2008 annual company contribution under the qualified retirement plan would have been had we made it in 2008. For Mr. Weiss, also includes payment to reimburse him for his expenses related to employer Medicare and Social Security taxes.

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(2) Represents amounts paid under our performance-based cash incentive plan. Refer to the “—Compensation Discussion and Analysis— Performance-Based Cash Incentives” section for more details. Although audited financial statements are not yet available for fiscal 2009, based on preliminary information we anticipate that these executive officers will receive the performance-based cash incentive plan maximum payout. This anticipated payout has been included in this figure.

(3) We do not sponsor any tax-qualified or nonqualified defined benefit retirement plans. For fiscal year 2009, the amounts shown represent the amount by which earnings of 7.7% on each NEO’s nonqualified deferred compensation account balance exceeded 120% of the applicable federal long-term rate.

(4) Reflects the aggregate grant date fair value of the grant made in fiscal 2009, computed in accordance with applicable accounting guidelines.

(5) The following table details All Other Compensation paid to each NEO during fiscal year 2009:

							Qualified Retirement Plan(f)		Nonqualified Supplemental Retirement Plan(g)
Name	Tax Payments ($)(a)	Executive Health Benefits ($)(b)	Executive Life and Disability Insurance ($)(c)	Personal Aircraft Usage ($)(d)	Housing Allowance ($)(e)	Relocation Benefits ($)	401(k) Company Match ($)	Annual Company Contribution ($)	Company Match ($)	Annual Company Contribution ($)
Michael A. Weiss	224,585	10,192	1,674	263,208	10,500	—	*	*	*	*
Matthew C. Moellering	7,469	15,975	1,158	—	—	—	3,385	15,328	11,608	20,400
Fran Horowitz-Bonadies	8,058	15,107	1,356	—	—	—	3,846	15,328	16,454	20,400
Colin Campbell	9,164	12,294	1,334	—	6,500	19,669	3,731	15,328	15,519	26,550
John J. (“Jack”) Rafferty	14,100	15,051	1,255	—	—	—	3,308	15,328	12,092	22,150

* Per his employment agreement, Mr. Weiss was not eligible for company retirement plans in 2009, but will be eligible to participate in 2010.

(a) For all NEOs, except for Mr. Weiss, this column represents the gross-up amount on Medicare and the city tax for company contributions into the nonqualified deferred compensation plan and gross-up for a special discretionary bonus paid to reimburse our NEOs for the interest payable on their promissory notes, which were repaid in full effective February 9, 2009. For Mr. Weiss, this column includes (1) gross-up for personal aircraft usage in the amount of $48,376, (2) gross-up for housing allowance in the amount of $8,548 and (3) gross-up for employee Medicare and Social Security taxes in the amount of $40,014; and (4) gross-up for special discretionary bonus paid to reimburse Mr. Weiss for the interest payable on his promissory note in the amount of $127,647.

(b) Amounts represent the annual premiums paid by the company for the Employee Medical Plan, Employee Dental Plan, Executive Medical Plan and expenses for the Executive Physical Program.

(c) Amounts represent the annual premiums paid by the company for executive life insurance, and executive disability insurance.

(d) This represents the expense for use of purchased aircraft time for personal private aircraft usage for Mr. Weiss.

(e) Amounts include payments to Mr. Weiss and Mr. Campbell for nights stayed at their New York apartments while on business in New York at a nightly rate approximately equivalent to a nightly rate at a hotel.

(f) See “—Compensation Discussion and Analysis—Retirement Plan Benefits—Qualified Retirement Plan” for additional information.

(g) See “—Compensation Discussion and Analysis—Retirement Plan Benefits—Nonqualified Deferred Compensation Plan” for additional information.

Grants of Plan-Based Awards

During fiscal year 2009, each of our NEOs participated in our performance-based cash incentive plan in which each officer was eligible for awards set forth under “Estimated Potential Payouts Under Non-Equity Incentive Plan Awards” below. The actual payout for the NEOs is set forth above under the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For a detailed discussion of our performance-based cash incentive plan, refer to “—Compensation Discussion and Analysis—Performance-Based Cash Incentives.”

We did not make any equity awards to our NEOs in fiscal year 2009, other than to Mr. Moellering in connection with his promotion in October 2009.

		Estimated Potential Payouts Under Non-Equity Incentive Plan Awards			Estimated Potential Payouts Under Equity Incentive Plan Awards			All Other Stock Awards: Number of Shares or Stock Units (#)	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($/Sh)	Grant Date Fair Value of Stock and Award Options ($)
Name	Grant Date	Threshold ($)	Target ($)	Maximum ($)	Threshold ($)	Target ($)	Maximum ($)
Michael A. Weiss	—	150,000	750,000	2,250,000	—	—	—	—	—	—	—
Matthew C. Moellering	11/2/09	52,000	260,000	520,000	—	—	—	200,000	—	—	126,000
Fran Horowitz-Bonadies	—	55,000	275,000	550,000	—	—	—	—	—	—	—
Colin Campbell	—	48,500	242,500	485,000	—	—	—	—	—	—	—
John J. (“Jack”) Rafferty	—	51,600	258,000	516,000	—	—	—	—	—	—	—

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Outstanding Equity Awards at Fiscal Year-End

The table below sets forth certain information regarding the outstanding equity awards held by our NEOs as of January 30, 2010.

	Option Awards						Stock Awards
Name	Number Of Securities Underlying Unexercised Options (#) Exercisable	Number Of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number Of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Grant Date(1)	Unit Class(2)	Number Of Shares Or Units Of Stock That Have Not Vested (#)	Market Value Of Shares Or Units Of Stock That Have Not Vested ($)(3)	Equity Incentive Plan Awards: Number Of Unearned Shares, Units Or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market Or Payout Value Of Unearned Shares, Units Or Other Rights That Have Not Vested (#)
Michael A. Weiss	—	—	—	—	—	7/24/2007	A	1,500,000	4,245,000	—	—
Matthew C. Moellering	— —	— —	— —	— —	— —	12/14/2007 12/14/2007	A C	93,750 93,750	265,313 59,063	— —	— —
	—	—	—	—	—	11/2/2009	C	200,000	126,000
Fran Horowitz-Bonadies	— —	— —	— —	— —	— —	12/14/2007 12/14/2007	A C	131,250 131,250	371,438 82,688	— —	— —
Colin Campbell	— —	— —	— —	— —	— —	12/14/2007 12/14/2007	A C	75,000 75,000	212,250 47,250	— —	— —
John J. (“Jack”) Rafferty	— —	— —	— —	— —	— —	12/14/2007 12/14/2007	A C	131,250 131,250	371,438 82,688	— —	— —

(1) Mr. Moellering was awarded 200,000 additional Class C Units in connection with his promotion in October 2009.

(2) These Class A Units and Class C Units vest incrementally over a four-year period as described in “—Compensation Discussion and Analysis—Equity Incentives—Summary of our Current Plan” section, except the Units for Mr. Weiss, which are fully vested as of February 2010.

(3) In the absence of a public trading market, management, in conjunction with a third party valuation firm, considered numerous objective and subjective factors to determine its best estimate of the fair value of our common stock as of each valuation date. Valuations are performed annually, in either our third quarter or in the fourth quarter. We use the most recent valuation closest to the date shares are granted, and evaluate the results of the next valuation to determine if adjustments to the grant date fair value are required.

Option Exercises and Stock Vested

The following table provides information relating to the Stock Awards vested during the fiscal year 2009. There were no Option Awards exercised during fiscal year 2009.

	Option Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)	Unit Class	Number of Units Acquired on Vesting ($)	Value Realized on Vesting(1) ($)
Michael A. Weiss	—	—	A	1,000,000	1,895,000
Matthew C. Moellering	—	—	A	62,500	118,438
	—	—	C	62,500	32,188
Fran Horowitz Bonadies	—	—	A	87,500	165,813
	—	—	C	87,500	45,063
Colin Campbell	—	—	A	50,000	94,750
	—	—	C	50,000	25,750
John J. (“Jack”) Rafferty	—	—	A	87,500	165,813
	—	—	C	87,500	45,063

(1) In the absence of a public trading market, management, in conjunction with a third-party valuation firm, considered numerous objective and subjective factors to determine its best estimate of the fair value of our common stock as of each valuation date. Valuations are performed annually, in either our third quarter or in the fourth quarter. We use the most recent valuation closest to the date shares are granted, and evaluate the results of the next valuation to determine if adjustments to the grant date fair value are required.

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Pension Benefits

Our NEOs did not participate in or have account balances in any qualified or nonqualified defined benefit plans sponsored by us. Our board of directors or Compensation Committee may elect to adopt qualified or nonqualified benefit plans in the future if it determines that doing so is in our best interest.

Deferred Compensation

We provide a nonqualified deferred compensation plan for our executive officers. See “—Compensation Discussion and Analysis—Retirement Plan Benefits—Nonqualified Deferred Compensation Plan” for additional information. The following table provides the figures related to our Nonqualified Deferred Compensation Plan for fiscal year 2009.

Name	Executive Contributions In Last Fiscal Year ($)	Registrant Company Contributions In Last Fiscal Year ($)(2)	Aggregate Earnings in Last Fiscal Year ($)(3)	Aggregate Withdrawals / Distributions ($)	Aggregate Balance At Last Fiscal Year ($)
Michael A. Weiss(1)	—	—	—	—	—
Matthew C. Moellering	5,804	32,008	13,205	—	200,555
Fran Horowitz-Bonadies	8,227	36,854	23,669	—	348,802
Colin Campbell	7,760	42,069	80,027	—	1,111,835
John J. (“Jack”) Rafferty	6,046	34,242	191,709	—	2,624,003

(1) Under his employment agreement, Mr. Weiss was not eligible for the company’s nonqualified deferred compensation plan in 2009, but will be eligible to participate in 2010.

(2) These amounts were included in the All Other Compensation column of the Summary Compensation Table.

(3) The above-market portion of these earnings was included in the Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table.

Employment and Other Agreements

The Compensation Committee believes that our current severance arrangements protect stockholder interests by retaining management should periods of uncertainty arise. Because our severance arrangements are structured to serve the above purposes and because severance agreements represent a contractual obligation of our company, decisions relating to other elements of compensation have minimal effect on decisions relating to existing severance agreements.

These agreements generally provide that, if we fail to extend the executive’s agreement or terminate the executive’s employment without cause, or if the executive terminates the executive’s employment for good reason, the executive will continue to receive the executive’s base salary and medical and dental benefits for one year after the termination date. If the executive agrees to execute a general release of claims against our company, the executive will also be entitled to receive the amount of the incentive compensation that the executive would have otherwise received during the first year after termination.

Michael A. Weiss

We are party to an employment agreement with Mr. Weiss, our President and Chief Executive Officer. Under the terms of his employment agreement, effective February 1, 2010, Mr. Weiss is entitled to an annual base salary of $1,000,000, subject to annual review thereof by our Compensation Committee for potential increase. Mr. Weiss is also eligible to earn a short-term, performance-based cash incentive payment for each six-month operating season. The target payout for Mr. Weiss is 100% of his annual base salary, with a maximum annual payout opportunity of 200% of his annual base salary.

Mr. Weiss is also eligible to receive benefits in accordance with the standard benefit plans we provide to our other senior executives. In addition, we provide Mr. Weiss with the use of a private jet for his business-related

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travel (necessitated primarily by his frequent trips to our New York design studio) and for up to 100 hours of his personal travel, along with a tax gross-up payment to Mr. Weiss on the income associated therewith. Mr. Weiss is also entitled to up to four weeks of paid time off and reimbursement for all business travel, entertainment and other business expenses, including a reasonable daily reimbursement allowance for the business use of his private residence in New York, New York, which he uses when required to be at our New York design studio, along with a tax gross-up payment to Mr. Weiss on the income associated therewith.

Mr. Weiss’ employment continues until the earlier of his resignation (with or without good reason), death or disability, or termination by us (with or without cause). If we terminate Mr. Weiss’ employment without cause or Mr. Weiss resigns for good reason, Mr. Weiss is entitled to receive severance equal to (1) twelve months of his then-current base salary payable within sixty days and continuation of his medical and dental benefits, (2) a guaranteed bonus payment equal to 100% of his then-current base salary, and (3) the bonus described in the first paragraph of this section for the season in which Mr. Weiss’ employment was terminated if Mr. Weiss would have otherwise been entitled to receive such bonus (prorated based on the number of days Mr. Weiss was employed during the season in which any such termination may occur). The foregoing amounts are payable at such times as Mr. Weiss would have otherwise been entitled to receive them had his employment not been terminated. Mr. Weiss’ receipt of severance is contingent upon execution of a general release of any and all claims arising out of or related to his employment with us and the termination of his employment.

Mr. Weiss has also agreed to customary restrictions with respect to the use of our confidential information, and has agreed that all intellectual property developed or conceived by Mr. Weiss while he is employed by us which relates to our business is our property. During the term of Mr. Weiss’ employment with us and during the twelve month period immediately thereafter, Mr. Weiss has agreed not to (1) solicit or hire any of our employees, (2) induce or attempt to induce any supplier, licensee, licensor or other material business relation of ours to cease doing business with us, or (3) participate (whether as an officer, director, employee or otherwise) in any competitive business (subject to Mr. Weiss’ ability to serve as a member of the board of directors of certain agreed upon public companies). During any period in which Mr. Weiss has breached the above restrictions, we have no obligations to pay Mr. Weiss any severance described above.

If any payment by us to Mr. Weiss under his employment agreement or the lapse or termination of any vesting restriction with respect to the units held by Mr. Weiss, his family trusts or his spouse would be subject to the excise tax imposed by Internal Revenue Code Section 4999 by reason of being “contingent on a change in ownership or control” within the meaning of Internal Revenue Code Section 280G, then Mr. Weiss shall be entitled to receive a gross-up payment from us in an amount such that after payment by Mr. Weiss of all taxes (including any penalties or interest with respect thereto) and excise tax imposed on such gross-up payment, Mr. Weiss is entitled to retain an amount of such gross-up payment equal to the excise tax imposed on any such payment under his employment agreement or the lapse or termination of any vesting restriction with respect to the units held by Mr. Weiss, his family trusts or his spouse determined to be subject to the excise tax imposed by Internal Revenue Code Section 4999.

We have agreed to indemnify and hold Mr. Weiss harmless in any and all actions resulting from the good faith performance of his duties and obligations with us.

All Other NEOs

We have entered into the below described employment agreements with all other NEOs. The term of each of these employment agreements is five years with automatic renewals thereafter on a year-to-year basis unless we or the applicable executive provides prior written notice of non-renewal. Notwithstanding the foregoing, the employment agreements may be terminated in the case of the applicable executive’s resignation, death or disability or termination by us.

Each such employment agreement provides for an annual base salary that is subject to annual review by us for potential increase, as well as short-term, performance-based cash incentive payment opportunities for each

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six-month operating season based on a percentage of the applicable executive’s base salary. See “—Compensation Discussion and Analysis—Performance-Based Cash Incentives” for more information. In addition, each such employment agreement provides that the applicable executive is eligible for equity-based compensation awards that are commensurate with his or her performance and position. Each such executive is also entitled to participate in all employee benefit plans that we maintain and make available to our senior executives and is entitled to paid time off in accordance with our policies as in effect from time to time.

Each such employment agreement provides that, if we fail to extend the executive’s agreement or terminate the executive’s employment without cause, or if the executive terminates the executive’s employment for good reason, the executive will continue to receive one year of his or her then-current base salary and (subject to certain exceptions) medical and dental benefits during the one year period following such termination. If the executive agrees to execute a general release of claims against our company, the executive will also be entitled to receive the amount of the cash incentive compensation that the executive would have otherwise received during the first year after termination.

Potential Payments Upon Termination and Change in Control

The information below describes and quantifies certain compensation that would become payable under employment agreements with the following NEOs if, as of January 30, 2010, his/her employment with us had been terminated. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event. Further, the information below does not incorporate the terms of any agreement entered into after January 30, 2010.

Michael A. Weiss

			Involuntary without Cause or Voluntary with Good Reason				Involuntary without Cause following Change in Control		Disability(4)		Retirement
Component	Voluntary Resignation		Without Signed Release		With Signed Release
Base Salary	$	—	$	—	$	750,000	$	750,000	$	750,000	$	—
Bonus(1)		—		—		3,000,000		3,000,000		—		—
Total Cash Severance	$	—	$	—	$	3,750,000	$	3,750,000	$	750,000	$	—
Value of Accelerated Equity(2)		—		—		—		—		—		—
Benefits and Perquisites(3)		—		—		10,192		10,192		8,900		—
Total Severance	$	—	$	—	$	3,760,192	$	3,760,192	$	758,900	$	—

(1) This amount includes a guaranteed bonus payment of $750,000 and the fiscal year 2009 performance-based cash compensation plan payout of $2,250,000 which has been earned but not yet paid.

(2) Equity is fully vested as of February 2010.

(3) Estimates for benefits and perquisites include the continuation of medical and dental.

(4) If Mr. Weiss became permanently and totally disabled on January 30, 2010, he would receive 12 months of salary continuation from us and 9 months of benefits continuation. Additional eligible disability compensation would be provided by a third-party insurance company and not paid by us.

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Matthew C. Moellering

	Voluntary Resignation		Involuntary without Cause or Voluntary with Good Reason				Involuntary w/out Cause following Change in Control
Component			Without Signed Release		With Signed Release				Disability (2)		Retirement
Base Salary	$	—	$	500,000	$	500,000	$	500,000	$	500,000	$	—
Bonus		—		—		300,000		300,000		—		—
Total Cash Severance	$	—	$	500,000	$	800,000	$	800,000	$	500,000	$	—
Value of Accelerated Equity		—		—		—		—		—		—
Benefits and Perquisites(1)		—		12,294		12,294		12,294		10,089		—
Total Severance	$	—	$	512,294	$	812,294	$	812,294	$	510,089	$	—

(1) Estimates for benefits and perquisites include the continuation of medical and dental, as well as the value of unvested qualified and nonqualified retirement plan balances that would become vested.

(2) If Mr. Moellering became permanently and totally disabled on January 30, 2010, he would receive 12 months of salary continuation from us and 9 months of benefits continuation. Additional eligible disability compensation would be provided by a third-party insurance company and not paid by us.

Fran Horowitz-Bonadies

	Voluntary Resignation		Involuntary without Cause or Voluntary with Good Reason				Involuntary w/out Cause following Change in Control		Disability (2)		Retirement
Component			Without Signed Release		With Signed Release
Base Salary	$	—	$	500,000	$	500,000	$	500,000	$	500,000	$	—
Bonus		—		—		275,000		275,000		—		—
Total Cash Severance	$	—	$	500,000	$	775,000	$	775,000	$	500,000	$	—
Value of Accelerated Equity		—		—		—		—		—		—
Benefits and Perquisites(1)		—		12,294		12,294		12,294		10,238		—
Total Severance	$	—	$	512,294	$	787,294	$	787,294	$	510,238	$	—

(1) Estimates for benefits and perquisites include the continuation of medical and dental, as well as the value of unvested qualified and nonqualified retirement plan balances that would become vested.

(2) If Ms. Horowitz-Bonadies became permanently and totally disabled on January 30, 2010, she would receive 12 months of salary continuation from us and 9 months of benefits continuation. Additional eligible disability compensation would be provided by a third-party insurance company and not paid by us.

Colin Campbell

	Voluntary Resignation		Involuntary without Cause or Voluntary with Good Reason				Involuntary w/out Cause following Change in Control		Disability (2)		Retirement
Component			Without Signed Release		With Signed Release
Base Salary	$	—	$	485,000	$	485,000	$	485,000	$	485,000	$	—
Bonus		—		—		242,500		242,500		—		—
Total Cash Severance	$	—	$	485,000	$	727,500	$	727,500	$	485,000	$	—
Value of Accelerated Equity		—		—		—		—		—		—
Benefits and Perquisites(1)		—		12,294		12,294		12,294		10,221		—
Total Severance	$	—	$	497,294	$	739,794	$	739,794	$	495,221	$	—

(1) Estimates for benefits and perquisites include the continuation of medical and dental, as well as the value of unvested qualified and nonqualified retirement plan balances that would become vested.

(2) If Mr. Campbell became permanently and totally disabled on January 30, 2010, he would receive 12 months of salary continuation from us and 9 months of benefits continuation. Additional eligible disability compensation would be provided by a third-party insurance company and not paid by us.

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John J. (“Jack”) Rafferty

	Voluntary Resignation		Involuntary without Cause or Voluntary with Good Reason				Involuntary w/out Cause following Change in Control		Disability (2)		Retirement
Component			Without Signed Release		With Signed Release
Base Salary	$	—	$	430,000	$	430,000	$	430,000	$	430,000	$	—
Bonus		—		—		258,000		258,000		—		—
Total Cash Severance	$	—	$	430,000	$	688,000	$	688,000	$	430,000	$	—
Value of Accelerated Equity		—		—		—		—		—		—
Benefits and Perquisites(1)		—		12,294		12,294		12,294		10,162		—
Total Severance	$	—	$	442,294	$	700,294	$	700,294	$	440,162	$	—

(1) Estimates for benefits and perquisites include the continuation of medical and dental, as well as the value of unvested qualified and nonqualified retirement plan balances that would become vested.

(2) If Mr. Rafferty became permanently and totally disabled on January 30, 2010, he would receive 12 months of salary continuation from us and 9 months of benefits continuation. Additional eligible disability compensation would be provided by a third-party insurance company and not paid by us.

Director Compensation

See “Management—Corporate Governance—Director Compensation.”

Director and Officer Indemnification and Limitation of Liability

Our certificate of incorporation and bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware General Corporation Law. In addition, our certificate of incorporation will provide that our directors will not be liable for monetary damages for breach of fiduciary duty.

In addition, prior to the completion of this offering, we will enter into indemnification agreements with each of our executive officers and directors. The indemnification agreements will provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the Delaware General Corporation Law. We will also enter into an indemnification priority agreement with Golden Gate to clarify the priority of advancement of expenses and indemnification obligations among us, our subsidiaries and any of our directors appointed by Golden Gate and other related matters.

There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information as of             , 2010 regarding the beneficial ownership of our common stock (1) immediately prior to and (2) as adjusted to give effect to this offering, in each case giving effect to the Reorganization, by:

• each person or group who is known by us to own beneficially more than 5% of our outstanding shares of our common stock;

• each of our named executive officers;

• each of our directors and each director nominee;

• all of our executive officers and directors as a group; and

• each selling stockholder.

For further information regarding material transactions between us and certain of our stockholders, see “Certain Relationships and Related Party Transactions.”

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable within 60 days of             , 2010 are deemed to be outstanding and beneficially owned by the person holding the options. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Percentage of beneficial ownership is based on              shares of common stock outstanding after giving effect to our Reorganization, and              shares of common stock to be outstanding after the completion of this offering, assuming no exercise of the option to purchase additional shares, or              shares, assuming full exercise of the option to purchase additional shares. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder. Unless otherwise indicated in the table or footnotes below, the address for each beneficial owner is c/o Express, Inc., One Limited Parkway, Columbus, Ohio 43230.

	Shares Beneficially Owned Prior to This Offering		Shares To Be Sold in This Offering Assuming No Exercise of Overallotment	Shares To Be Sold In This Offering Assuming Full Exercise of Overallotment Option	Shares Beneficially Owned After This Offering Assuming No Exercise of Overallotment Option		Shares Beneficially Owned After This Offering Assuming Full Exercise of Overallotment Option
Name	Number	Percent	Number	Number	Number	Percent	Number	Percent
5% Stockholders:
Funds managed by Golden Gate Private Equity, Inc.(1)
Limited Brands, Inc.(2)
Executive Officers and Directors:
Michael A. Weiss
David C. Dominik(1)
Stefan L. Kaluzny(1)
Jennie W. Wilson(3)
Timothy J. Faber(3)
Matthew C. Moellering
Fran Horowitz-Bonadies
John J. Rafferty
Colin Campbell
All executive officers and directors as a group (9 persons)
Other Selling Stockholders:

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* Represents beneficial ownership of less than one percent (1%) of our outstanding common stock.

(1) Includes shares of common stock that will be held directly following the Reorganization by Multi-Channel Retail Holdings—Series G, a Delaware limited liability company, and the following number of shares of common stock held indirectly (through their respective ownership in Multi-Channel Retail Holdings) by (a) Golden Gate Capital Investment Fund II, L.P., (b) Golden Gate Capital Investment Fund II-A, L.P., (c) Golden Gate Capital Investment Annex Fund II, L.P., (d) Golden Gate Capital Investment Fund II (AI), L.P., (e) Golden Gate Capital Investment Fund II-A (AI), L.P., (f) Golden Gate Capital Investment Annex Fund II (AI), L.P., (g) Golden Gate Capital Associates II-QP, L.L.C., (h) Golden Gate Capital Associates II-AI, L.L.C., (i) CCG AV, L.L.C.—Series C, (j) CCG AV, L.L.C.—Series I and (k) CCG AV, L.L.C.—Series L (the entities listed in clauses (a) through (k) above, the “Golden Gate Entities”), each of which are funds managed by Golden Gate. Golden Gate may be deemed to be the beneficial owner of the shares owned by Multi-Channel Retail Holdings and the Golden Gate Entities, but disclaims beneficial ownership pursuant to the rules under the Securities Exchange Act of 1934, as amended. Each of Mr. Dominik and Mr. Kaluzny is a managing director of Golden Gate,, and each may be deemed to be the beneficial owners of shares owned by Multi-Channel Retail Holdings and the Golden Gate Entities. Each of Mr. Dominik and Mr. Kaluzny disclaim beneficial ownership of any securities owned by Multi-Channel Retail Holdings or the Golden Gate Entities, except, in each case, to the extent of their pecuniary interest therein. The address for Golden Gate, Multi-Channel Retail Holdings, the Golden Gate funds described above and Mr. Dominik and Mr. Kaluzny is c/o Golden Gate Private Equity, Inc., One Embarcadero Center, 39th Floor, San Francisco, California 94111.

(2) Represents             shares of common stock held by Limited Brands Store Operations, Inc. and             shares of common stock held by EXP Investments, Inc., each of which are direct or indirect subsidiaries of, and controlled by, Limited Brands, Inc., c/o Limited Brands, Inc., Three Limited Parkway, Columbus, Ohio 43230.

(3) The address for Ms. Wilson and Mr. Faber is c/o Limited Brands, Inc., Three Limited Parkway, Columbus, Ohio 43230.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In connection with this offering, we will adopt a written statement of policy with respect to related party transactions, which is administered by our                 . Under our related party transaction policy, a “Related Party Transaction” is any transaction, arrangement or relationship between us or any of our subsidiaries and a Related Person not including any transactions involving less than $                 when aggregated with all similar transactions, or transactions that have received pre-approval of our audit committee. A “Related Person” is any of our executive officers, directors or director nominees, any stockholder beneficially owning in excess of 5% of our stock or securities exchangeable for our stock, any immediate family member of any of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is an executive officer, a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest in such entity.

Pursuant to our related party transaction policy, a Related Party Transaction may only be consummated or may only continue if:

• our                  approves or ratifies such transaction in accordance with the terms of the policy; or

• the chair of our                  pre-approves or ratifies such transaction and the amount involved in the transaction is less than $            , provided that for the Related Party Transaction to continue it must be approved by our audit committee at its next regularly scheduled meeting.

If advance approval of a Related Party Transaction is not feasible, then that Related Party Transaction will be considered and, if our              determines it to be appropriate, ratified, at its next regularly scheduled meeting. If we decide to proceed with a Related Party Transaction without advance approval, then the terms of such Related Party Transaction must permit termination by us without further material obligation in the event our              ratification is not forthcoming at our              next regularly scheduled meeting.

Transactions with Related Persons, though not classified as Related Party Transactions by our related party transaction policy and thus not subject to its review and approval requirements, may still need to be disclosed if required by the applicable securities laws, rules and regulations.

Other than compensation agreements and other arrangements which are described under “Executive Compensation,” and the transactions described below, since February 4, 2007, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities or any member of the immediate family of the foregoing persons had or will have a direct or indirect material interest.

Purchase Agreement

Pursuant to the Unit Purchase Agreement, dated May 15, 2007 (as amended, the “Purchase Agreement”), an affiliate of Limited Brands sold 75% of the equity interests in Express Holding, LLC to Express Investment Corp. for a cash payment of $484.9 million. In addition, on the closing of the Golden Gate Acquisition, we distributed to an affiliate of Limited Brands $117.0 million in loan proceeds (which amount includes the expense reimbursement paid to Limited Brands described below) from a $125.0 million term loan facility entered into with Morgan Stanley Senior Funding, Inc. as administrative agent and certain other lenders. See “Description of Certain Indebtedness—Opco Term Loan Facility.” The Purchase Agreement also required us to pay up to $14.0 million and $7.0 million, respectively, of the reasonable out-of-pocket costs and expenses incurred by Express Investment Corp. and Limited Brands, respectively, in connection with Golden Gate Acquisition. The expense reimbursement to which Limited Brands was entitled under the Purchase Agreement was included in the aforementioned amounts paid to it at the closing of the Golden Gate Acquisition. The purchase price for the equity interests in Express Holding was also subject to a customary adjustment following the closing of the Golden Gate Acquisition based on the amount of our net tangible assets as of the closing. Limited Brands paid Golden Gate $1.9 million in connection with this adjustment.

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The Purchase Agreement contains negotiated representations and warranties and covenants of each of Express Investment Corp. and Limited Brands and provides for indemnification in the event of a breach of these covenants and certain of these representations and warranties. None of the representations and warranties survived the closing of the Golden Gate Acquisition, except for claims with respect to (1) a breach of certain fundamental representations (including those made by a party as to its corporate existence, authority to enter into the Purchase Agreement, and capitalization) (the time period to bring a claim for any such breach survives until the latest date permitted by law), and (2) a breach of representations regarding financial statements and sufficiency of assets (the time period to bring a claim for any such breach expired on July 6, 2008). Covenants of the parties continue in full force and effect indefinitely or for the shorter period specified in the Purchase Agreement. Neither party has brought an indemnification claim against the other party as of the date of this prospectus.

2008 Corporate Reorganization

On June 26, 2008, we completed a corporate reorganization. In connection with the 2008 reorganization, on June 26, 2008, Express Topco entered into the $300.0 million Topco credit facility. See “Description of Certain Indebtedness—Topco Credit Facility.”

On June 26, 2008, Express Topco borrowed $200.0 million under the Topco credit facility. On or about July 15, 2008, Express Topco borrowed an additional $100.0 million under the Topco credit facility. Total proceeds from the borrowings were $300.0 million, less an original issue discount of $6.0 million and fees and expenses of $4.5 million, resulting in net proceeds of $289.5 million. On or about July 15, 2008, Express Topco made a distribution to Express Parent of $289.5 million with the net proceeds of the foregoing borrowings. Immediately following its receipt of such proceeds, Express Parent made a distribution of $289.5 million to its equity holders in accordance with the provisions of the LLC Agreement. See “—LLC Agreement.” An affiliate of Golden Gate is a lender under our Topco credit facility and as of January 31, 2010 was owed approximately $50 million in principal amount of the Term B Loans and $50 million in principal amount of the Term C Loans.

Limited Brands Transition Services Agreements

In connection with the Golden Gate Acquisition, we entered into a transition services agreement pursuant to which Limited Brands has agreed to provide us support services in various operational areas including, among other things, human resources, real estate, tax, marketing, logistics, technology and merchandising sourcing. The length of time these services are to be provided vary and generally range in duration from 3 months to 36 months. The provision of services under the transition services agreement will expire in July 2010. We incurred $188.2 million in charges from Limited Brands for various transition services during fiscal 2009. Our outstanding liability, including accounts payable and accrued expenses, for transition services as of October 31, 2009 was $11.0 million. The amounts we pay for the services provided pursuant to the transition services agreement vary depending on the applicable service and, in some instances, include a specified overhead charge. We are generally invoiced by Limited Brands monthly for these amounts and are generally required to pay within 30 days of invoice. Since the Golden Gate Acquisition, we have made investments in our business so that we can operate as a standalone business and do not expect the expiration of these services to have an adverse impact on our business.

MAST Services Agreements

An affiliate of Limited Brands, MAST Industries, Inc. (“MAST”) currently provides us with certain support services relating to our product production and sourcing. These services include providing us support in connection with our product costing and specifications, assisting us with vendor certification, compliance and auditing, purchase order initiation and tracking, and product delivery services, including customs and other regulatory compliance and logistics services.

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For the twelve month period ending July 6, 2010, we are obligated to purchase a minimum of 60% of our requirements for certain of our products, and related services, through MAST. After July 6, 2010, we may obtain all of our products, and related services, on the open market. However, we are required to obtain certain customs, labor and related compliance services through Limited Brands in connection with all products sourced by us through non-Limited Brands entities for so long as Limited Brands holds at least 20% of our outstanding equity. We paid Limited Brands an aggregate of $480.7 million in fiscal 2009 with respect to the aforementioned support services provided by MAST. Our outstanding liability, including accounts payable and accrued expenses, for merchandise sourcing as of October 31, 2009 was $103.2 million.

Logistics Services Agreement

In October 2009, we negotiated a new logistics services agreement with an affiliate of Limited Brands to replace the logistics services provided to us by Limited Brands under the transition services agreement. The term of the agreement commenced on February 1, 2010 and ends on April 30, 2016 and will continue thereafter unless it is terminated by either party on no less than 24 months’ prior notice. Notwithstanding the foregoing, we have the right to terminate the agreement on 24 months’ prior notice, which may be given any time after February 1, 2011.

Under the logistics services agreement, Limited Brands has agreed to provide us certain inbound and outbound transportation and delivery services, distribution services, and customs and brokerage services. This agreement also provides for the rental of approximately 418,000 square feet of warehouse/distribution space located in Columbus, Ohio commencing February 1, 2010, which lease will replace our current lease of 403,620 square feet in this warehouse/distribution space from an affiliate of Limited Brands. We have the option to convert up to 30,000 square feet of the warehouse/distribution facility into office space. If we elect to exercise this option, our rent and operating expenses will be reduced by an amount specified in the logistic services agreement.

Lease Agreement for Office Space

We and an affiliate of Limited Brands entered into an agreement for us to lease 160,519 square feet of office space located in Columbus, Ohio in October 2009. This lease agreement replaces and supersedes a lease agreement we entered into at the closing of the Golden Gate Acquisition, which provided for the lease by us of the aforementioned office space. The lease agreement became effective on February 1, 2010 and has an initial term ending April 30, 2016. We also have the right to exercise a renewal option for five additional years.

Master Sublease and Store Leases Agreement

In connection with the Golden Gate Acquisition, on July 6, 2007 we entered into a Master Sublease, a Store Leases Agreement and certain related agreements with Limited Brands and certain of its affiliates. The Master Sublease provides for Limited Brands or one of its affiliates to sublease us the space for approximately nine of our retail stores, as well as our design center in New York, New York. Limited Brands has guaranteed for the benefit of the applicable landlord our performance of our obligations under each of the prime leases for these sites, including the obligation to pay rent. Under the Master Sublease, Limited Brands has agreed to cooperate with us so that we have the right and power to control all decisions in connection with the exercise or election not to exercise any and all rights of the tenant under the applicable lease agreement.

The Store Leases Agreement provides for the sublease (with us as either the subtenant or sublandlord party) of certain retail space shared by Limited Brands or one of its affiliates and us, including the retail space for certain of our stores, as well as the retail space for certain stores operated by Limited Brands or one of its affiliates. Depending on whether we or an affiliate of Limited Brands is the tenant under applicable lease agreement, either we or an affiliate of Limited Brands are primarily responsible for the obligations under the applicable lease.

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In general, the subleases effectuated pursuant to the terms of the Master Sublease and Store Leases Agreement commenced on July 6, 2007 and expire on the day immediately preceding the day of expiration of the current term of the underlying lease agreement for the applicable retail store. In addition, the other arrangements provided for in the Master Sublease and Store Leases Agreement (including the payment of rent and monetary expenses) mirror the terms of the underlying lease agreement with the landlord for the applicable site.

Golden Gate Advisory Agreement

In connection with the Golden Gate Acquisition, we entered into an advisory agreement with Golden Gate that expires in July 2017, with automatic one-year extensions unless either we or Golden Gate provides a termination notice to the other at least 90 days prior to the expiration of the initial or any extension term. Under this agreement, Golden Gate provides us with consulting and advisory services, including general executive and management services, support and analysis with respect to financing alternatives and finance marketing and human resources services. Under the advisory agreement, we reimburse Golden Gate for reasonable out-of-pocket expenses incurred in connection with providing us consulting and advisory services and also pay an annual advisory fee equal to the greater of (1) $2.0 million per fiscal year and (2) 3% of our Adjusted EBITDA. These advisory fees are payable quarterly in advance. We incurred advisory fees of $5.5 million in the forty-eight weeks ended January 2, 2010 and $1.3 million in the remaining four weeks of fiscal year 2009. In fiscal year 2008, we incurred advisory fees of $3.8 million. These expenses are recorded as other operating expenses. Upon the consummation of each transaction that results in a change of control of Express Parent or its subsidiaries or an acquisition, divestiture or incremental financing (above and beyond the existing amount of funded debt being replaced, whether by debt or equity financing) by or involving Express Parent or its subsidiaries (including the issuance of our common stock contemplated hereby), we are also required to pay Golden Gate a transaction fee in an amount equal to 1% of the aggregate value of any such transaction. In addition, under the LLC Agreement described below, so long as Limited Brands owns any of Express Parent’s equity interests, we are obligated to make a cash payment to it equal to a portion of the periodic quarterly advisory fees paid to Golden Gate under the advisory agreement, which payment will be determined based on the amount of Express Parent’s equity interests it holds relative to that held by Golden Gate. In connection with this initial public offering, we plan to pay Golden Gate $             in connection with terminating this agreement and we will pay $             in transaction advisory fees. See “Use of Proceeds.”

Other Golden Gate Transactions

From time to time we enter into various transactions with affiliates of Golden Gate. Our LLC Agreement requires that, prior to entering into transactions with affiliated parties, our board determine that the terms of the transaction are substantially similar to those that would be obtained with an unaffiliated third party. We are party to an agreement with Appleseeds Intermediate Holdings (“Appleseeds”), an affiliate of Golden Gate, under which Appleseeds provides us with services related to our e-commerce business, including warehouse and fulfillment services. During 2008, we incurred charges in the amount of $7.8 million for services rendered under this agreement. In addition, we purchased software licenses, consulting and software maintenance services from affiliates of Golden Gate in the amount of $0.6 million during 2008. Our outstanding liability, included in accounts payable and accrued expenses, for services rendered by affiliates of Golden Gate (excluding the advisory agreement) was $2.2 million as of October 31, 2009. An affiliate of Golden Gate is a lender under our Topco credit facility. In addition, we provide certain real estate services, including assistance with lease negotiations and site identification, to certain affiliates of Golden Gate. We expect to continue to operate in the ordinary course of business, including with respect to our transactions with affiliates of Golden Gate, after completing this offering.

LLC Agreement

On June 26, 2008, as part of the corporate reorganization described above, each member of Express Parent (including an affiliate of Limited Brands) entered into a limited liability company agreement with Express Parent (the “LLC Agreement”). This agreement governs the management of Express Parent, and the ownership and transfer of equity interests of Express Parent, which are referred to as “units.”

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Under the LLC Agreement, each member must take all actions (including voting its units) to cause the membership of Express Parent’s board of managers to be comprised of five managers. Limited Brands (through its affiliates) has the right to designate two managers as long as it owns at least 50% of the units it acquired in the Golden Gate Acquisition and one manager as long as it owns at least 25% of the units it acquired in the Golden Gate Acquisition. Golden Gate has the right to designate three managers as long as it owns at least 50% of the units it acquired in the Golden Gate Acquisition and two managers as long as its owns at least 25% of the units it acquired in the Golden Gate Acquisition. In the event our chief executive officer has not been designated as a manager by either Limited Brands or Golden Gate, he or she will be an ex-officio, non-voting member of the board of managers.

The LLC Agreement provides that until the earlier of such time as (1) Express Parent or any of its subsidiaries have consummated an initial public offering of at least 15% of its outstanding equity interests after giving effect to the initial public offering which yields gross proceeds of at least $200.0 million (a “Qualified IPO”) and (2) the first date when Limited Brands owns less than 20% of Express Parent’s outstanding equity interests, we may not take certain actions without Limited Brands’ prior written approval, including changing the size of the board, the designation of any subcommittee of the board, changing Express Parent’s or any of its subsidiaries’ organizational documents, the transfer of less than all of the equity interests of any subsidiary of Express Parent, changing our fiscal year, selecting or removing our principal auditors (unless certain named auditors are selected following such removal), certain issuances of securities, filing for insolvency or winding up or dissolving Express Parent or its subsidiaries, effecting an initial public offering that is not a Qualified IPO, certain mergers and similar transactions, certain sales of all or substantially all of Express Parent’s or any of its subsidiaries’ assets or equity, entering into certain transactions with Express Parent’s equity holders or their affiliates and changing our line of business.

Under the LLC Agreement certain of our equity holders have registration rights. At any time following the earlier of (1) 180 days after the effective date of the registration statement for our proposed initial public offering and (2) the expiration of any lock-up period in connection with our proposed initial public offering, each of Golden Gate, Limited Brands and our President and Chief Executive Officer, Michael A. Weiss, Mr. Weiss’ spouse and certain of Mr. Weiss’ family trusts (collectively, the “Weiss Holders”) and other holders of our Class L Units may demand that we register under the Securities Act the shares of our common stock held by them. We are required to use our reasonable best efforts to effect and maintain the registration of the securities requested to be registered by Golden Gate, Limited Brands, the Weiss Holders and/or such holders, as applicable, as well as any securities we may elect to register. Each of Golden Gate, Limited Brands, the Weiss Holders and such holders are entitled to no more than three long-form demand registrations and an unlimited number of short-form demand registrations. The aforementioned registration rights are subject to standard underwriter cutbacks and other customary limitations.

In addition, following the completion of our proposed initial public offering, if we propose to file a registration statement in connection with a public offering of our common stock, then, subject to certain limited exceptions, each of Golden Gate, Limited Brands, the Weiss Holders and other holders of our Class L Units have piggyback registration rights pursuant to which we are required to use our reasonable best efforts to register such number of securities as they request. These registration rights are also subject to customary cutbacks and other limitations.

We are required to pay all fees and expenses incurred in connection with the aforementioned registrations, except that we are not required to pay any underwriting discounts or commissions or transfer taxes relating to the transfer of securities by any persons other than us. In addition, in connection with the aforementioned registrations, each of Golden Gate, Limited Brands, the Weiss Holders and other holders of our Class L Units must consent and comply with any lock-up restrictions that may be reasonably requested by the managing underwriters of such offering, regardless of whether such person’s securities are included in such registration. In connection with the grant of these registration rights, we, Golden Gate, Limited Brands, the Weiss Holders and other holders of our Class L Units have entered into customary cross-indemnification and contribution agreements with respect to the registration of our common stock.

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Furthermore, under the LLC Agreement, Limited Brands is entitled to receive a cash payment (at the same time payments are made under the advisory agreement with Golden Gate) equal to the product of (i) the amount of the advisory fees actually paid in cash by us and our subsidiaries under the advisory agreement and (ii) the quotient of the number of units held by Limited Brands over the number of units held by Golden Gate at the time of payment of such fees. In connection with this initial public offering, we plan to pay Limited Brands $         in connection with terminating this agreement.

Employment Agreements

We have entered into employment agreements with Michael Weiss, our President and Chief Executive Officer and our other named executive officers. For more information regarding this agreement, see “Executive Compensation—Employment and Other Agreements.”

Equity Incentive Program

We have entered into equity purchase agreements with various members of our senior management, including with Michael Weiss, our President and Chief Executive Officer, in connection with our equity incentive program. In addition, members of our senior management executed promissory notes in favor of Express Holding to satisfy a portion of the purchase price for the equity, each of which was repaid in full by each member of management effective as of February 9, 2010. See “Executive Compensation—Compensation Discussion and Analysis—Equity Incentives—Summary of our Current Plan.”

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DESCRIPTION OF CERTAIN INDEBTEDNESS

Opco Revolving Credit Facility

On July 6, 2007, Express Holding and Express, LLC entered into a $200.0 million secured Asset-Based Loan Credit Agreement with Wells Fargo Retail Finance, LLC, as administrative agent, and certain other lenders. The Opco revolving credit facility is available to be used for working capital and other general corporate purposes and is scheduled to expire on July 6, 2012. The Opco revolving credit facility, as amended, allows for swing line advances of up to $30.0 million and up to $45.0 million to be available in the form of letters of credit. At any time that the foregoing conditions to borrowings are not met, or after the occurrence and during the continuance of an event of default, the administrative agent and collateral agent are authorized to make protective advances to us to (1) preserve or protect the value of the collateral securing the revolving credit facility, (2) enhance the likelihood or maximize the amount of repayment under the revolving credit facility or (3) pay certain amounts payable by us pursuant to the revolving credit facility, provided that such protective advances shall not exceed at any time the lesser of $20.0 million and 10% of the borrowing base if made pursuant to clauses (1) and (2).

Borrowings under the Opco revolving credit facility bear interest at a rate equal to LIBOR plus an applicable margin rate or the higher of The Wall Street Journal’s prime lending rate and 0.50% per annum above the federal funds rate, plus an applicable margin rate. The applicable margin rate is determined based on excess availability as determined with reference to our borrowing base. The applicable margin rate for LIBOR-based advances is 1.25% per annum or 1.00% if excess availability is $100.0 million or greater, and for base rate-based advances is 0.25% per annum or 0.00% if excess availability is $100.0 million or greater. The borrowing base components are 90% of credit card receivables plus 85% of the liquidation value of eligible inventory, less certain reserves. At the end of fiscal 2008, we borrowed $75.0 million under the Opco revolving credit facility, which was reflected as a current liability on our balance sheet. This amount was paid in full in fiscal 2009. We had no borrowings outstanding and $146.6 million available under the Opco revolving credit facility as of January 2, 2010. As a result of the amendment described below, effective upon a qualified offering of unsecured debt, the applicable margin rate for LIBOR-based advances will be 2.25% per annum or 2.00% if excess availability is $100.0 million or greater, and for base rate-based advances will be 1.25% per annum or 1.00% if excess availability is $100.0 million or greater. The borrowing base components are 90% of credit card receivables plus 85% of the liquidation value of eligible inventory, less certain reserves.

Unused line fees payable under the Opco revolving credit facility are based on 0.25% of the average daily unused revolving commitment during each quarter payable quarterly in arrears. As a result of the amendment described below, effective upon a qualified offering of unsecured debt, unused line fees payable under the Opco revolving credit facility will be based on 0.50% of the average daily unused revolving commitment during each quarter payable quarterly in arrears. Additionally, fees for outstanding letter of credit balances are at the applicable margin rate for LIBOR-based advances based on the average daily aggregate amount during the quarter of all letters of credit outstanding, payable quarterly in arrears. There is also a fronting fee payable quarterly in arrears of 0.125% based on the average daily aggregate available amount during the quarter of all letters of credit outstanding.

Interest payments under the Opco revolving credit facility are due quarterly on the last day of each April, July, October and January for base rate-based advances and on the last day of the interest period for LIBOR-based advances interest periods of one, two, three and six months (or if available to all lenders, nine or twelve months), and additionally every three months after the first day of the interest period for LIBOR-based advances for interest periods of greater than three months.

Voluntary prepayments are permitted in whole or in part, without premium or penalty, subject to certain minimum prepayment requirements and payment of costs and expenses incurred by the lenders in connection with prepayment of LIBOR-based borrowings prior to the end of the applicable interest period for such borrowings.

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Express, LLC may terminate in whole or reduce in certain multiples the amount of commitments under the revolving credit facility upon five business days notice to the lender.

Borrowings under the Opco revolving credit facility are subject to the accuracy of representations and warranties in all material respects and the absence of any defaults.

The Opco revolving credit facility contains customary covenants and restrictions on Express Holding, and its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness; liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt; distributions, dividends and the repurchase of capital stock; transactions with affiliates; the ability to change the nature of our business or our fiscal year; the ability to amend the terms of the Opco term loan and the advisory agreement; and permitted activities of Express Holding.

The Opco revolving credit facility requires us to maintain a fixed charge coverage ratio of 1.00:1.00 if excess availability plus eligible cash collateral is less than $20.0 million. Our excess availability was $187.9 million as of October 31, 2009. We were not subject to this covenant as of October 31, 2009 because excess availability plus eligible cash collateral was greater than $20.0 million. As a result of the amendment described below, the Opco revolving credit facility will require Express Holding to maintain a fixed charge coverage ratio of 1.00:1.00 if excess availability plus eligible cash collateral is less than $30.0 million.

Events of default under the Opco revolving credit facility include, but are not limited to, (1) Express, LLC’s failure to pay principal, interest, fees or other amounts under the Opco revolving credit facility when due taking into account any applicable grace period; (2) any representation or warranty proving to have been incorrect in any material respect when made; (3) failure to perform or observe covenants or other terms of the revolving credit facility subject to certain grace periods; (4) a cross default or failure to pay certain other debt; (5) bankruptcy events; (6) unsatisfied final judgments over a threshold; (7) a change of control; (8) certain defaults under the Employee Retirement Income Security Act of 1974; and (9) the invalidity or impairment of any loan document or any security interest.

All obligations under the Opco revolving credit facility are guaranteed by Express Holding and its subsidiaries and secured by a lien on substantially all of the assets of Express Holding and its subsidiaries, including owned real property; all fixtures and equipment; all intellectual property; all equity interests in Express, LLC and other subsidiaries of Express Holding; general intangibles; all of our intercompany indebtedness; all proceeds of insurance; all books and records; and all other proceeds. The lien of the Opco revolving credit facility lenders is first in priority with respect to the following: all accounts arising from the sale or other disposition of goods or services; all inventory; to the extent evidencing, governing, securing or otherwise related to the foregoing accounts and inventory, all general intangibles, chattel paper, instruments, documents, letter of credit rights and supporting obligations; all collection accounts, deposit accounts, commodity accounts, security accounts and any cash, cash equivalents or other assets in any such accounts (excluding any net cash proceeds from the sale or other disposition of any collateral as to which the Opco term loan lenders have first priority); all books, property and records related to the foregoing; and all products and proceeds of the foregoing.

On February 5, 2010, Express Holding and Express, LLC entered into an amendment to the Opco revolving credit facility. The amendment provides that effective upon a qualified offering of unsecured debt, the Opco revolving credit facility will be amended to, among other things, (1) permit the issuance of such unsecured debt and the guarantees thereof by Express Holding and its subsidiaries, (2) increase the applicable interest rate margins and unused line fee thereon, (3) permit, subject to the satisfaction of certain minimum liquidity tests, a distribution by Express, LLC to Express Holding of a portion of the net cash proceeds of a qualified offering of unsecured debt, which Express Holding may subsequently distribute to its equity holders so long as such distribution is used to prepay the Term C loans in their entirety (plus any applicable prepayment premium and accrued and unpaid interest thereon), (4) permit, subject to the satisfaction of certain minimum liquidity tests, additional cash distributions by Express, LLC to Express Holding which may ultimately be distributed to Express

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Parent’s equity holders, (5) permit Express, LLC to pay distributions to Express Holding so that Express Holding may distribute such amounts to Express Topco to permit Express Topco to make regularly scheduled interest payments on the Term B Loans and (6) permit Express Holding to own the equity interests of a newly-formed co-issuer of such unsecured debt. We will pay customary amendment fees to consenting lenders in connection with the amendment.

Opco Term Loan Facility

On July 6, 2007, Express Holding and Express, LLC, entered into a $125.0 million secured term loan. The proceeds of these borrowings were used to finance, in part, the Golden Gate Acquisition and to pay transaction fees and expenses related to the Golden Gate Acquisition. Borrowings under the Opco term loan bear interest at a rate equal to LIBOR plus an applicable margin rate or the higher of The Wall Street Journal’s prime lending rate and 0.50% per annum above the federal funds rate, plus an applicable margin rate.

The applicable margin rate is determined by Express Holding’s leverage ratio of consolidated debt for borrowed money (net of cash and cash equivalents, provided that after giving effect to the amendment described below, no more than $75.0 million of cash and cash equivalents may be netted against consolidated debt for borrowed money for this purpose), including amounts drawn under letters of credit and any synthetic debt, to Adjusted EBITDA, in effect on the first day of each interest period with respect to LIBOR based advances and by the Leverage Ratio in effect from time to time with respect to base rate based advances. The applicable margin rate for LIBOR-based advances is 2.75% per annum or 2.50% if the Leverage Ratio is less than 1.00 to 1.00, and for base rate based advances is 1.75% per annum or 1.50% if the Leverage Ratio is less than 1.00 to 1.00. As a result of the amendment described below, effective upon the completion of a qualified offering of unsecured debt, the applicable margin rate for LIBOR-based advances will be 4.25% per annum or 4.00% if the Leverage Ratio is less than 1.00 to 1.00, and for base rate-based advances will be 3.25% per annum or 3.00% if the Leverage Ratio is less than 1.00 to 1.00; additionally, these rates may be further increased by 0.50% per annum in the event that Express, LLC fails to maintain at the time of determination, a corporate family rating of B2 or better by Moody’s and a corporate credit rating of B or better by Standard & Poor’s. As of February 1, 2010, the interest rate under the Opco term loan was 2.75%.

Interest payments under the Opco term loan are due quarterly on the last day of each April, July, October and January for base rate-based advances and on the last day of the applicable interest period for LIBOR-based advances for interest periods of one, two, three and six months (or if available to all lenders, nine or twelve months), and additionally every three months after the first day of the interest period for LIBOR-based advances for interest periods of greater than three months. Principal payments under the Opco term loan are due quarterly on the last business day of each April, July, October and January through July 6, 2013, in equal installments of 0.25% of the initial principal balance with the balance of principal due on July 6, 2014.

The agreement governing the Opco term loan requires that annual prepayments of principal be made within five business days after the 120th calendar day following the end of each fiscal year in the amount by which an applicable percentage of “excess cash flow” (as defined in the agreement) that corresponds to Express Holding’s Leverage Ratio, exceeds any voluntary prepayments of the Opco term loan over the fiscal year.

The Opco term loan also requires prepayments of principal with respect to (1) 100% of certain asset transfers in excess of $1.0 million per fiscal year, (2) 100% of certain debt issuances, and (3) 100% of certain other extraordinary receipts pertaining to casualty insurance and condemnation awards.

Voluntary prepayments are permitted in whole or in part, without premium or penalty, subject to certain minimum prepayment requirements and payment of costs and expenses incurred by the lenders in connection with prepayment of LIBOR-based borrowings prior to the end of the applicable interest period for such borrowings.

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The Opco term loan contains customary covenants and restrictions on Express Holding, and its subsidiaries’ activities, including, but not limited, to limitations on: the incurrence of additional indebtedness; liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt; distributions, dividends and the repurchase of capital stock; transactions with affiliates; the ability to change the nature of our businesses or fiscal year; the ability to amend the terms of the purchase agreement pertaining to the Golden Gate Acquisition, the revolving credit facility loan documents and the advisory agreement with Golden Gate; and permitted activities of Express Holding. Express Holding is also required to use commercially reasonable efforts to maintain corporate family credit and corporate family ratings with Standard & Poor’s and Moody’s Investors Services, Inc.

The Opco term loan also requires that Express, LLC maintain a Leverage Ratio for the most recently completed reporting period (last four consecutive fiscal quarters as of the end of each quarter) of not more than 2.25 to 1.00 at the end of the fourth quarter of fiscal year 2009; 2.00 to 1:00 at the end of the first and second fiscal quarters of 2010; and 1.75 to 1:00 thereafter. Express Holding was in compliance with the covenant requirement as of October 31, 2009.

Events of default under the Opco term loan include, but are not limited to, (1) Express, LLC’s failure to pay principal, interest, fees or other amounts under the Opco term loan when due, taking into account any applicable grace period; (2) any representation or warranty proving to have been incorrect in any material respect when made; (3) failure to perform or observe covenants or other terms of the Opco term loan subject to certain grace periods; (4) a cross default or failure to pay certain other debt; (5) bankruptcy events; (6) unsatisfied final judgments over a threshold; (7) a change of control; (8) certain defaults under the Employee Retirement Income Security Act of 1974 and (9) the invalidity or impairment of any loan document or any security interest.

Effective July 6, 2007, Express, LLC entered into a receive variable/pay fixed interest rate swap agreement to mitigate exposure to interest rate fluctuations on a notional principal amount of $75.0 million of the $125.0 million variable-rate Opco term loan. The interest rate swap agreement terminates on August 6, 2010. The fair value of the interest rate swap was a liability of $2.8 million as of October 31, 2009. The Opco term loan requires that Express, LLC maintain interest rate hedge agreements on a notional amount of at least 50% of the term commitments of lenders under the Opco term loan for at least three years.

All obligations under the Opco term loan are guaranteed by Express Holding and its subsidiaries and secured by a lien on substantially all of the assets of Express Holding and its subsidiaries, including owned real property; all fixtures and equipment; all intellectual property; all equity interests in Express, LLC and other subsidiaries of Express Holding; general intangibles; all of our intercompany indebtedness; all proceeds of insurance; all books and records; and all other proceeds. The lien of the Opco term loan lenders is first in priority with respect to the following: owned real property, fixtures and equipment; intellectual property; equity interests in Express, LLC and its subsidiaries; general intangibles, chattel paper, instruments and documents (other than any of those which are first lien collateral for the Opco revolving credit facility described below); payment intangibles that relate to real property, fixtures or equipment; intercompany debt; permits and licenses, and proceeds of insurance related to the foregoing; books and records related to the foregoing and not constituting first lien collateral for the Opco revolving credit facility described below; other collateral which is not first lien collateral for the Opco revolving credit facility described above; and all products and proceeds of the foregoing.

On February 5, 2010, Express Holding and Express, LLC entered into an amendment to the Opco term loan. The amendment provides that effective upon a qualified offering of unsecured debt, the Opco term loan will be amended to, among other things, (1) permit the issuance of a qualified offering of unsecured debt and the guarantees thereof by Express Holding and its subsidiaries, (2) increase the applicable interest rate margins thereon (subject to a further increase in the event Express, LLC’s corporate rating is not B2 or better by Moody’s and Express, LLC’s corporate credit rating is not B or better by Standard & Poor’s), (3) permit, subject to the satisfaction of certain minimum liquidity tests, a distribution by Express, LLC to Express Holding of a portion of the net cash proceeds of a qualified offering of unsecured debt, which Express Holding may subsequently distribute to its equity holders so long as such distribution is used to prepay the Term C Loans in their entirety

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(plus any applicable prepayment premium and accrued and unpaid interest thereon), (4) permit, subject to the satisfaction of certain minimum liquidity tests, additional distributions by Express, LLC to Express Holding which may ultimately be distributed through our corporate structure to Express Parent’s equity holders, (5) permit Express, LLC to pay distributions to Express Holding so that Express Holding may distribute such amounts to Express Topco to permit Express Topco to make regularly scheduled interest payments on the Term B Loans and (6) permit Express Holding to own the equity interests of a newly-formed co-issuer of such unsecured debt. The amendment also increased the applicable margin rates on advances as described above. We will pay customary amendment fees to consenting lenders in connection with the amendment.

Topco Credit Facility

On June 26, 2008, Express Topco, as borrower, entered into a $300.0 million secured term loan facility with KKR SCF Loan Administration, LLC, as administrative agent, and certain other lenders. The proceeds of the Topco credit facility were used to finance distributions to Express Parent’s equity holders and to pay related fees, costs and expenses. The Topco credit facility is scheduled to mature on June 26, 2015 and is comprised of $150.0 million of Term B Loans and $150.0 million Term C Loans. An affiliate of Golden Gate, GGC Unlevered Credit Opportunities, LLC, is a lender under our Topco credit facility and as of January 31, 2010 was owed approximately $50 million of the Term B Loans and $50 million of the Term C Loans.

The Topco credit facility is not guaranteed by any of Express Topco’s subsidiaries. All obligations under the Topco credit facility are secured by a lien on all outstanding equity interests in Express Holding owned by Express Topco, any distributions, dividends or other property received in respect of or in exchange for such interests and all proceeds of the foregoing.

The Term B Loans bear interest at 13.5% per annum. Interest payments for the Term B Loans are due semi- annually, in cash, on the last day of each January and July, with a final payment due upon the maturity of the Topco credit facility. Term C Loans bear interest at 14.5% per annum. Interest payments for the Term C Loans are due on the last day of each January, April, July and October, with a final payment due upon the maturity of the Topco credit facility. Interest payments on Term C Loans may be paid in cash, or upon five business days’ notice to the lenders, may be paid in kind and added to the unpaid principal amount of the Term C Loans. Term C Loans for which interest is paid in kind bear interest at 16.0% per annum for the interest period ending on the applicable payment date. Amounts representing payment in kind interest are treated as and bear interest as Term C Loans under the Topco credit facility. For fiscal year 2009, Express Topco accumulated $6.2 million of in-kind interest on the Term C Loans which has since been paid in cash.

Provisions of the Topco credit facility require that certain prepayments of principal be offered to the lenders with respect to (1) 100% of certain asset transfers in excess of $1.0 million per fiscal year, (2) 100% of certain debt issuances and (3) 100% of certain other extraordinary receipts pertaining to casualty insurance and condemnation awards. Such prepayments are not required until the sum of the amounts described in clauses (1), (2) and (3) of the previous sentence equals or exceeds $0.5 million. Lenders may opt out of such repayment amounts and any amount for which a lender opts out will be offered to other lenders.

Additionally, in the event of a “change in control” (as defined in the Topco credit facility and described in the following sentence) all loans outstanding under the Topco credit facility must be prepaid at the then applicable redemption prices applicable to voluntary prepayments of such loans described below. “Change in control” under the Topco credit facility means (1) at any time prior to the consummation of an initial public offering of equity interests of any of Express Parent, Express Topco or Express Holding, Golden Gate ceases to directly or indirectly own at least 50% of the voting interests of Express Parent; (2) at any time after the consummation of an initial public offering of equity interests of any of Express Parent, Express Topco or Express Holding, any person or entity or two or more persons or entities acting in concert other than Golden Gate acquire beneficial ownership, directly or indirectly, of voting interests (or securities convertible into voting interests) representing 35% or more of the combined voting power of all voting interests of Parent, unless Golden Gate owns voting interests representing a greater percentage; (3) at any time after the consummation of an initial

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public offering of equity interests of any of Parent, Express Topco or Express Holding, during any period of up to 24 consecutive months, the continuing directors of Express Topco fail to constitute a majority of the board of directors of Express Topco, (4) at any time, Express Parent ceases to beneficially own and control 100% of the economic and voting interest in the equity interests of Express Topco, (5) at any time, Express Topco ceases to beneficially own and control 100% of the economic and voting interest in the equity interests of Express Holding or (6) at any time, Express Holding ceases to own and control 100% of the economic and voting interest in the equity interests of Express, LLC.

The Topco credit facility also requires that 50% of the proceeds of the first underwritten public offering of Express Parent’s (or its direct or indirect parent) or any of the subsidiaries’ equity securities, net of customary costs incurred in connection with such offering, be used to prepay loans outstanding under the Topco credit facility at the then-applicable redemption prices applicable to voluntary prepayments of such loans described below.

Voluntary prepayments are permitted in whole or in part, subject to certain minimum prepayment requirements and payment of the applicable premium described below. Prepayments of Term B Loans may be made at the following percentages of the outstanding principal amount prepaid: 107% on or after December 26, 2009, but prior to June 26, 2010; 104% on or after June 26, 2010, but prior to June 26, 2011; 102% on or after December 26, 2011, but prior to June 26, 2012; and 100% on or after June 26, 2012. Prepayments of Term C Loans may be made at the following percentages of the outstanding principal amount prepaid (excluding any portion of such loans representing PIK interest): 102% prior to June 26, 2010; 101% on or after June 26, 2010, but prior to June 26, 2011; and 100% on or after June 26, 2011.

The Topco credit facility contains customary covenants and restrictions on Express Topco, and in some cases its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness; liens on the equity interests of Express Holding and proceeds thereof and negative pledges on the equity interests of Express Holding securing the Topco credit facility; guarantees, investments, loans, asset sales, mergers, acquisitions and prepayment of other debt; distributions, dividends, the repurchase of equity interests and payments made pursuant to equity incentive and similar plans; transactions with affiliates; the ability to change the nature of our businesses or fiscal year; and the ability of Express Topco to conduct business or hold any properties or liabilities, other than equity interests in Express Holding, indebtedness permitted by the Topco credit facility, and activities incidental thereto. Express Topco is also required to use commercially reasonable efforts to maintain monitored ratings of the Term B Loans and Term C Loans with Standard & Poor’s and Moody’s Investors Services, Inc.

The Topco credit facility also requires compliance with certain financial covenants. Express Topco must maintain, for the most recently completed reporting period (last four consecutive fiscal quarters as of the end of each quarter), a leverage ratio of consolidated debt for borrowed money (net of cash and cash equivalents), including amounts drawn under letters of credit and any synthetic debt, to Adjusted EBITDA of not more than 5.00 to 1.00.

Express Topco must also maintain for the most recently completed reporting period (last four consecutive fiscal quarters as of the end of each quarter), an interest coverage ratio of not less than 1.50 to 1.00. The interest coverage ratio is determined by the ratio of Adjusted EBITDA to consolidated interest expense. We were in compliance with these covenant requirements as of October 31, 2009.

Events of default under the Topco credit facility include, but are not limited to, (1) failure to pay principal, interest, fees or other amounts under the Topco credit facility when due, taking into account any applicable grace period; (2) any representation or warranty proving to have been incorrect in any material respect when made; (3) failure to perform or observe covenants or other terms of the Topco credit facility subject to certain grace periods; (4) certain cross defaults or the failure to pay certain other debt; (5) bankruptcy events; (6) unsatisfied final judgments over a threshold; and (7) the invalidity or impairment of any loan document or any security interest.

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On February 5, 2010, Express Topco entered into an amendment to the Topco credit facility. The amendment provides that effective upon a qualified offering of unsecured debt, the Topco credit facility will be amended to, among other things, permit (1) the issuance of such unsecured debt and the guarantee thereof by Express Topco and each of its subsidiaries so long as net proceeds from the issuance of a qualified offering of unsecured debt are used to prepay the Term C Loans in full, and (2) subject to the satisfaction of certain minimum liquidity tests and so long as Express Topco shall have concurrently prepaid the Term C Loans in their entirety (including all principal, redemption premium and accrued and unpaid interest thereon), payment of cash dividends by Express Topco to Express Parent.

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DESCRIPTION OF CAPITAL STOCK

Prior to the effectiveness of the registration statement for this offering, we intend to reorganize our existing holding company structure so that the issuer of our common stock is a Delaware corporation named Express, Inc. Unless otherwise indicated, all information in this section assumes that the Reorganization has been completed prior to the effectiveness of the registration statement. The following is a description of the material terms of our certificate of incorporation and bylaws as they will be in effect upon our Reorganization and completion of this offering. The following description may not contain all of the information that is important to you. To understand them fully, you should read our certificate of incorporation and bylaws, copies of which are or will be filed with the SEC as exhibits to the registration statement, of which this prospectus is a part.

Authorized Capitalization

Our authorized capital stock consists of              shares of common stock, par value $0.01 per share, and              shares of preferred stock, par value $0.01 per share. On              2010, there were              shares of our common stock outstanding, held of record by approximately              stockholders. Based upon (1)              shares of our common stock outstanding as of              and (2) the issuance of              shares of common stock in this offering, there will be              shares of our common stock outstanding upon completion of this offering, and shares of preferred stock will be outstanding.

As of                  2010, there were                  shares of our common stock subject to outstanding options.

Common stock

Voting Rights

Each share of common stock entitles the holder to one vote with respect to each matter presented to our stockholders on which the holders of common stock are entitled to vote. Our common stock votes as a single class on all matters relating to the election and removal of directors on our board of directors and as provided by law. Holders of our common stock will not have cumulative voting rights. Except in respect of matters relating to the election and removal of directors on our board of directors and as otherwise provided in our certificate of incorporation or required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. In the case of election of directors, all matters to be voted on by our stockholders must be approved by a plurality of the votes entitled to be cast by all shares of common stock.

Dividend Rights

Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of our outstanding shares of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. Because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our indebtedness. See “Description of Certain Indebtedness.” See also “Dividend Policy.”

Liquidation Rights

In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock would be entitled to share ratably in our assets that are legally available for distribution to stockholders after payment of our debts and other liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our common stock.

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Other Rights

Our stockholders have no preemptive, conversion or other rights to subscribe for additional shares. All outstanding shares are, and all shares offered by this prospectus will be, when sold, validly issued, fully paid and nonassessable. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

Listing

We intend to apply to have our common stock approved for listing on                  under the symbol “EXPR.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be                     .

Preferred Stock

Our certificate of incorporation will authorize our board of directors to provide for the issuance of shares of preferred stock in one or more series and to fix the preferences, powers and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including the dividend rate, conversion rights, voting rights, redemption rights and liquidation preference and to fix the number of shares to be included in any such series without any further vote or action by our stockholders. Any preferred stock so issued may rank senior to our common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up, or both. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others. At present, we have no plans to issue any of the preferred stock.

Corporate Opportunity

Our global certificate of incorporation will provide that the doctrine of “corporate opportunity” will not apply against Golden Gate, or any of our directors who are employees of, or affiliated with, Golden Gate, in a manner that would prohibit them from investing in competing businesses or doing business with our clients or customers. See “Risk Factors—We are a “controlled company,” controlled by investment funds managed by Golden Gate Private Equity, Inc. whose interests in our business may be different from yours.”

Antitakeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws

Our certificate of incorporation and bylaws will also contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board of directors the power to discourage acquisitions that some stockholders may favor.

Undesignated Preferred Stock

The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us. These and other provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

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Classified Board of Directors

Our certificate of incorporation will provide that our board of directors will be divided into three classes, with each class serving three-year staggered terms. In addition, under the General Corporation Law of the State of Delaware, directors serving on a classified board of directors may only be removed from the board of directors with cause and by an affirmative vote of the majority of our common stock. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals

Our bylaws provide that special meetings of the stockholders may be called only upon the request of not less than a majority of the combined voting power of the voting stock, upon the request of a majority of the board, or upon the request of the chief executive officer. Our bylaws prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

Stockholder Action by Written Consent

Pursuant to Section 228 of the DGCL, any action required to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless the company’s certificate of incorporation provides otherwise. Our certificate of incorporation provides that any action required or permitted to be taken by our stockholders may be effected at a duly called annual or special meeting of our stockholders and may not be effected by consent in writing by such stockholders, unless such action is recommended by all directors then in office.

Business Combinations with Interested Stockholders

We will elect in our certificate of incorporation not to be subject to Section 203 of the DGCL, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we will not be subject to any anti-takeover effects of Section 203. However, our certificate of incorporation will contain provisions that have the same effect as Section 203, except that they will provide that any persons to whom Golden Gate sells their common stock will be deemed to have been approved by our board of directors, and thereby not subject to the restrictions set forth in Section 203.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of our common stock in the public market, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock. No prediction can be made as to the effect, if any, future sales of shares, or the availability of shares for future sales, will have on the market price of our common stock prevailing from time to time. The sale of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common stock.

Sale of Restricted Shares

Upon completion of this offering, we will have              shares of common stock outstanding. Of these shares of common stock, the              shares of common stock being sold in this offering, plus any shares sold by the selling stockholders upon exercise of the underwriters’ option to purchase additional shares, will be freely tradable without restriction under the Securities Act, except for any such shares which may be held or acquired by an “affiliate” of ours, as that term is defined in Rule 144 promulgated under the Securities Act, which shares will be subject to the volume limitations and other restrictions of Rule 144 described below. The remaining              shares of common stock held by our existing stockholders upon completion of this offering will be “restricted securities,” as that phrase is defined in Rule 144, and may be resold only after registration under the Securities Act or pursuant to an exemption from such registration, including, among others, the exemptions provided by Rule 144 and 701 under the Securities Act, which rules are summarized below. These remaining shares of common stock held by our existing stockholders upon completion of this offering will be available for sale in the public market after the expiration of the lock-up agreements described in “Underwriting,” taking into account the provisions of Rules 144 and 701 under the Securities Act.

Rule 144

The SEC adopted amendments to Rule 144 which became effective on February 15, 2008. Under these amendments, persons who became the beneficial owner of shares of our common stock prior to the completion of this offering may not sell their shares until the earlier of (1) the expiration of a six-month holding period, if we have been subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and have filed all required reports for at least 90 days prior to the date of the sale, or (2) a one-year holding period.

At the expiration of the six-month holding period, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an unlimited number of shares of our common stock provided current public information about us is available, and a person who was one of our affiliates at any time during the three months preceding a sale would be entitled to sell within any three-month period only a number of shares of common stock that does not exceed the greater of either of the following:

• 1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering, based on the number of shares of our common stock outstanding as of             ; or

• the average weekly trading volume of our common stock on          during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

At the expiration of the one-year holding period, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an unlimited number of shares of our common stock without restriction. A person who was one of our affiliates at any time during the three months preceding a sale would remain subject to the volume restrictions described above.

Sales under Rule 144 by our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

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Rule 701

In general, under Rule 701, any of our employees, directors, officers, consultants or advisors who purchased shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering, or who purchased shares from us after that date upon the exercise of options granted before that date, are eligible to resell such shares in reliance upon Rule 144 beginning 90 days after the date of this prospectus. If such person is not an affiliate, the sale may be made subject only to the manner-of-sale restrictions of Rule 144. If such a person is an affiliate, the sale may be made under Rule 144 without compliance with its one-year minimum holding period, but subject to the other Rule 144 restrictions.

Stock Plans

We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock issued or reserved for issuance under the 2010 Plan. The first such registration statement is expected to be filed soon after the date of this prospectus and will automatically become effective upon filing with the SEC. Accordingly, shares registered under such registration statement will be available for sale in the open market following the effective date, unless such shares are subject to vesting restrictions with us, Rule 144 restrictions applicable to our affiliates or the lock-up restrictions described below.

Lock-Up Agreements

We, each of our officers and directors and the selling stockholders have agreed, subject to certain exceptions, with the underwriters not to dispose of or hedge any of the shares of common stock or securities convertible into or exchangeable for, or that represent the right to receive, shares of common stock during the period from the date of the underwriting agreement to be executed by us in connection with this offering continuing through the date that is 180 days after the date of the underwriting agreement, except with the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. See “Underwriting.”

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS

The following is a summary of material U.S. federal income tax consequences of the purchase, ownership and disposition of our common stock to a non-U.S. holder that purchases shares of our common stock in this offering. For purposes of this summary, a “non-U.S. holder” means a beneficial owner of our common stock that is, for U.S. federal income tax purposes:

• a nonresident alien individual;

• a foreign corporation (or entity treated as a foreign corporation for U.S. federal income tax purposes); or

• a foreign estate or foreign trust.

In the case of a holder that is classified as a partnership for U.S. federal income tax purposes, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partner and the partnership. If you are a partner in a partnership holding our common stock, then you should consult your own tax advisor.

This summary is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. We cannot assure you that a change in law, possibly with retroactive application, will not alter significantly the tax considerations that we describe in this summary. We have not sought and do not plan to seek any ruling from the U.S. Internal Revenue Service, which we refer to as the IRS, with respect to statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will agree with our statements and conclusions.

This summary does not address all aspects of U.S. federal income taxes that may be relevant to non-U.S. holders in light of their personal circumstances, and does not deal with federal taxes other than the U.S. federal income tax or with non-U.S., state or local tax considerations. Special rules, not discussed here, may apply to certain non-U.S. holders, including:

• U.S. expatriates;

• controlled foreign corporations;

• passive foreign investment companies; and

• investors in pass-through entities that are subject to special treatment under the Code.

Such non-U.S. holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.

This summary applies only to a non-U.S. holder that holds our common stock as a capital asset (within the meaning of Section 1221 of the Code).

If you are considering the purchase of our common stock, you should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of our common stock, as well as the consequences to you arising under U.S. tax laws other than the federal income tax law or under the laws of any other taxing jurisdiction.

Dividends

As discussed under the section entitled “Dividend Policy” above, we do not currently anticipate paying dividends. In the event that we do make a distribution of cash or property (other than certain stock distributions) with respect to our common stock (or certain redemptions that are treated as distributions with respect to

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common stock), any such distributions will be treated as a dividend for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Dividends paid to you generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by you within the United States and, where a tax treaty applies, are generally attributable to a United States permanent establishment, are not subject to the withholding tax, but instead are subject to United States federal income tax on a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements including delivery of a properly executed IRS Form W-8ECI must be satisfied for effectively connected income to be exempt from withholding. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

If the amount of a distribution paid on our common stock exceeds our current and accumulated earnings and profits, such excess will be allocated ratably among each share of common stock with respect to which the distribution is paid and treated first as a tax-free return of capital to the extent of your adjusted tax basis in each such share, and thereafter as capital gain from a sale or other disposition of such share of common stock that is taxed to you as described below under the heading “Gain on Disposition of Common Stock.” Your adjusted tax basis is generally the purchase price of such shares, reduced by the amount of any such tax-free returns of capital.

If you wish to claim the benefit of an applicable treaty rate to avoid or reduce withholding of U.S. federal income tax for dividends, then you must (a) provide the withholding agent with a properly completed IRS Form W-8BEN (or other applicable form) and certify under penalties of perjury that you are not a U.S. person and are eligible for treaty benefits, or (b) if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that act as intermediaries (including partnerships).

If you are eligible for a reduced rate of U.S. federal income tax pursuant to an income tax treaty, then you may obtain a refund or credit of any excess amounts withheld by filing timely an appropriate claim with the IRS.

Gain on Disposition of Common Stock

You generally will not be subject to U.S. federal income tax with respect to gain realized on the sale or other taxable disposition of our common stock, unless:

• the gain is effectively connected with a trade or business you conduct in the United States, and, in cases in which certain tax treaties apply, is attributable to a United States permanent establishment;

• if you are an individual, you are present in the United States for 183 days or more in the taxable year of the sale or other taxable disposition, and you have a “tax home” (as defined in the Code) in the United States; or

• we are or have been during a specified testing period a “U.S. real property holding corporation” for U.S. federal income tax purposes, and certain other conditions are met.

We believe that we have not been and are not, and we do not anticipate becoming, a “U.S. real property holding corporation” for U.S. federal income tax purposes. If you are an individual described in the first bullet point above, you will be subject to tax on the net gain derived from the sale under regular graduated United States federal income tax rates. If you are an individual described in the second bullet point above, you will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by United States source capital losses (even though you are not considered a resident of the United States) but may not be offset by any capital loss carryovers. If you are a foreign corporation described in the first bullet point above, you will be subject to tax on your gain under regular graduated United States federal income tax rates and, in addition, may be subject to the branch profits tax equal to 30% of your effectively connected earnings and profits or at such lower rate as may be specified by an applicable income tax treaty.

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Information Reporting and Backup Withholding Tax

We must report annually to the IRS and to you the amount of dividends paid to you and the amount of tax, if any, withheld with respect to such dividends. The IRS may make this information available to the tax authorities in the country in which you are resident.

In addition, you may be subject to information reporting requirements and backup withholding tax (currently at a rate of 28%) with respect to dividends paid on, and the proceeds of disposition of, shares of our common stock, unless, generally, you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption. Additional rules relating to information reporting requirements and backup withholding tax with respect to payments of the proceeds from the disposition of shares of our common stock are as follows:

• If the proceeds are paid to or through the U.S. office of a broker, the proceeds generally will be subject to backup withholding tax and information reporting, unless you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.

• If the proceeds are paid to or through a non-U.S. office of a broker that is not a U.S. person and is not a foreign person with certain specified U.S. connections (a “U.S.-related person”), information reporting and backup withholding tax generally will not apply.

• If the proceeds are paid to or through a non-U.S. office of a broker that is a U.S. person or a U.S.-related person, the proceeds generally will be subject to information reporting (but not to backup withholding tax), unless you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.

Any amounts withheld under the backup withholding tax rules may be allowed as a refund or a credit against your U.S. federal income tax liability, provided the required information is timely furnished by you to the IRS.

Proposed Legislation Relating to Foreign Accounts

Legislation has been introduced into the U.S. Congress that would impose withholding taxes on certain types of payments made to “foreign financial institutions” and certain other non-U.S. entities. If this legislation or other similar legislation is enacted, the failure to comply with additional certification, information reporting and other specified requirements could result in withholding tax being imposed on payments of dividends and sales proceeds to foreign intermediaries and certain non-U.S. holders. Any such legislation could substantially change some of the rules discussed above relating to certification requirements, information reporting and withholding. No assurances can be given whether, or in what form, this legislation will be enacted. Prospective investors should consult their own tax advisers regarding this legislation and similar proposals.

THE SUMMARY OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES ABOVE IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. POTENTIAL PURCHASERS OF OUR COMMON STOCK ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSIDERATIONS OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON STOCK.

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UNDERWRITING

The company, the selling stockholders and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table.

Underwriters	Number of Shares
Merrill Lynch, Pierce, Fenner & Smith                  Incorporated
Goldman, Sachs & Co.
Total

The underwriting agreement provides that the obligations of the underwriters to purchase the shares being offered are subject to certain conditions. The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an additional shares from the selling stockholders. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by the company and the selling stockholders. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

	Per Share	Without Option	With Option
Public offering price	$	$	$
Underwriting discount	$	$	$
Proceeds, before expenses, to Express, Inc.	$	$	$
Proceeds, before expenses, to the selling stockholders	$	$	$

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $             per share from the initial public offering price. If all the shares are not sold at the initial public offering price, the underwriters may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

The company and its officers, directors and selling stockholders, have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for, or that represent the right to receive, shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the underwriters. This agreement does not apply to any existing employee stock option plans. See “Shares Eligible for Future Sale” for a discussion of certain transfer restrictions. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

• offer, pledge, sell or contract to sell any common stock;

• sell any option or contract to purchase any common stock;

• purchase any option or contract to sell any common stock;

• grant any option, right or warrant for the sale of any common stock;

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• make any short sale of any common stock;

• lend or otherwise dispose of or transfer any common stock;

• file, request or demand that we file a registration statement related to the common stock; or

• enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock,

whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period the company issues an earnings release or announces material news or a material event; or (2) prior to the expiration of the 180-day restricted period, the company announces that it will release earnings results during the 15-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will be automatically extended until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event, as applicable, unless Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. waive, in writing, such extension.

Prior to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among the company and the underwriters. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be the company’s historical performance, estimates of the business potential and earnings prospects of the company, an assessment of the company’s management and the consideration of the above factors in relation to market valuation of companies in related businesses. An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial offering price.

The company intends to apply to list the common stock on the              under the symbol “EXPR.”

In connection with the offering, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares from the selling stockholders in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option granted to them. “Naked” short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because Merrill Lynch, Pierce, Fenner & Smith, Incorporated has repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the company’s stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise

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affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on the             , in the over-the-counter market or otherwise.

The underwriters do not expect sales to discretionary accounts to exceed in the aggregate five percent of the total number of shares offered. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated will not confirm initial sales to any accounts over which it exercises discretionary authority without the prior approval of the customer.

The company and the selling stockholders estimate that their share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $            .

The company and the selling stockholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act and to contribute to payments that the underwriters may be required to make for these liabilities.

Notice to Prospective Investors in the EEA

In relation to each Member State of the European Economic Area (the “EEA”) which has implemented the Prospectus Directive (each, a Relevant Member State), an offer of any shares to the public which are the subject of the offering contemplated by this prospectus may not be made in that Relevant Member State in accordance with the Prospectus Directive, except that an offer of any shares to the public in that Relevant Member State may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) by the underwriters to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the underwriters for any such offer; or

(d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares shall result in a requirement for the publication by us or any of the underwriters of a prospectus pursuant to Article 3 of the Prospectus Directive.

Any person making or intending to make any offer within the EEA of shares which are the subject of the offering contemplated in this prospectus should only do so in circumstances in which no obligation arises for us or any of the underwriters to produce a prospectus for such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of shares through any financial intermediary, other than offers made by the underwriters which constitute the final offering of shares contemplated in this prospectus.

For the purposes of this provision, and your representation below, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

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Each person in a Relevant Member State who receives any communication in respect of, or who acquires any shares which are the subject of the offering contemplated by this prospectus under, the offers contemplated in this prospectus will be deemed to have represented, warranted and agreed to and with us and each underwriter that:

(a) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and

(b) in the case of any shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the shares acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than “qualified investors” as defined in the Prospectus Directive, or in circumstances in which the prior consent of the underwriters has been given to the offer or resale; or (ii) where shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those shares to it is not treated under the Prospectus Directive as having been made to such persons.

Notice to Prospective Investors in Hong Kong

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to Prospective Investors in Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

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Notice to Prospective Investors in Japan

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Notice to Prospective Investors in Switzerland

This document, as well as any other material relating to the shares which are the subject of the offering contemplated by this prospectus, do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of Obligations. The shares will not be listed on the SIX Swiss Exchange and, therefore, the documents relating to the shares, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange. The shares are being offered in Switzerland by way of a private placement, i.e., to a small number of selected investors only, without any public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The investors will be individually approached by us from time to time. This document, as well as any other material relating to the shares, is personal and confidential and does not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Notice to Prospective Investors in the Dubai International Financial Centre

This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The shares which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered pursuant to this prospectus should conduct their own due diligence on such shares. If you do not understand the contents of this document you should consult an authorized financial adviser.

Other Relationships

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the issuer, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the issuer.

136

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us by Kirkland & Ellis LLP, Chicago, Illinois. Certain partners of Kirkland & Ellis LLP are members of a limited partnership that is an investor in one or more investment funds affiliated with Golden Gate. Kirkland & Ellis LLP represents entities affiliated with Golden Gate and its affiliates in connection with legal matters. Certain legal matters will be passed upon for the underwriters by Latham & Watkins LLP, New York, New York.

137

EXPERTS

The financial statements of Express Parent LLC as of January 31, 2009 and for the fiscal year ended January 31, 2009 included in this prospectus have been so included in reliance on the report (which contains an explanatory paragraph relating to the Company’s restatement of its financial statements as described in Note 3 to the financial statements), of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The consolidated financial statements of Express Parent LLC as of February 2, 2008 (Successor) and for the period from July 7, 2007 to February 2, 2008 (Successor), the period from February 4, 2007 to July 6, 2007 (Predecessor), and the fiscal year ended February 3, 2007 (Predecessor), appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph related to Express Parent LLC’s restatement of its financial statements as of February 2, 2008 and for the period from July 7, 2007 to February 2, 2008 as described in Note 3 to the consolidated financial statements) appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

138

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act that registers the shares of our common stock to be sold in this offering. The registration statement, including the attached exhibits, contains additional relevant information about us and our common stock. The rules and regulations of the SEC allow us to omit from this document certain information included in the registration statement.

You may read and copy the reports and other information we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of this information by mail from the public reference section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. You may obtain information regarding the operation of the public reference room by calling 1-800-SEC-0330. The SEC also maintains a website that contains reports, proxy statements and other information about issuers, like us, who file electronically with the SEC. The address of that website is http://www.sec.gov. This reference to the SEC’s website is an inactive textual reference only and is not a hyperlink.

Upon completion of this offering, we will become subject to the reporting, proxy and information requirements of the Exchange Act, and as a result will be required to file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the SEC’s public reference room and the website of the SEC referred to above, as well as on our website, www.express.com. This reference to our website is an inactive textual reference only and is not a hyperlink. The contents of our website are not part of this prospectus, and you should not consider the contents of our website in making an investment decision with respect to our common stock.

We intend to furnish our stockholders with annual reports containing audited financial statements and make available to our stockholders quarterly reports for the first three quarters of each fiscal year containing unaudited interim financial information.

139

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page Number
Report of PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm	F-2
Report of Ernst & Young, LLP, an Independent Registered Public Accounting Firm	F-3
Audited Consolidated Financial Statements
Consolidated Balance Sheets as of February 2, 2008 (Successor Basis) and January 31, 2009	F-4
Consolidated Statements of Operations for the fiscal year ended February  3, 2007, the period from February 4, 2007 through July 6, 2007 (Predecessor Basis), the period from July 7, 2007 through February 2, 2008 (Successor Basis) and the fiscal year ended January 31, 2009	F-5
Consolidated Statements of Changes in Members’ Equity for the fiscal year ended February  3, 2007, the period from February 4, 2007 through July 6, 2007 (Predecessor Basis), the period from July 7, 2007 through February 2, 2008 (Successor Basis) and the fiscal year ended January 31, 2009	F-6
Consolidated Statements of Cash Flows for the fiscal year ended February  3, 2007, the period from February 4, 2007 through July 6, 2007 (Predecessor Basis), the period from July 7, 2007 through February 2, 2008 (Successor Basis) and the fiscal year ended January 31, 2009	F-7
Notes to Consolidated Financial Statements	F-8
Unaudited Consolidated Financial Statements
Consolidated Balance Sheet as of October 31, 2009	F-41
Consolidated Statements of Operations for the thirty-nine weeks ended October  31, 2009 and November 1, 2008	F-42
Consolidated Statements of Cash Flows for the thirty-nine weeks ended October  31, 2009 and November 1, 2008	F-43
Notes to Consolidated Financial Statements	F-44

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Managers and Members of Express Parent LLC:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of changes in members’ equity, and of cash flows present fairly, in all material respects, the financial position of Express Parent LLC and its subsidiaries at January 31, 2009, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As discussed in Note 3, the Company has restated its consolidated financial statements as of, and for the year ended January 31, 2009.

/s/ PricewaterhouseCoopers LLP

Columbus, Ohio

May 31, 2009, except with respect to our opinion on the consolidated financial statements as it relates to the effects of the change in accounting for uncertain tax positions and the effects of segment reporting discussed in Note 1, the effects of earnings per unit discussed in Note 12 and the effects of the restatement discussed in Note 3, as to which the date is February 15, 2010.

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Managers and Members of Express Parent LLC:

We have audited the accompanying consolidated balance sheet of Express Parent LLC and subsidiaries as of February 2, 2008, and the related consolidated statements of operations, changes in members’ equity, and cash flows for the period from July 7, 2007 to February 2, 2008, the period from February 4, 2007 to July 6, 2007, and the fiscal year ended February 3, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Express Parent LLC and subsidiaries at February 2, 2008, and the consolidated results of their operations and their cash flows for the period from July 7, 2007 to February 2, 2008, the period from February 4, 2007 to July 6, 2007, and the fiscal year ended February 3, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 3 to the consolidated financial statements, the Company has restated its financial statements as of February 2, 2008 and for the period from July 7, 2007 to February 2, 2008.

/s/    Ernst & Young LLP

Columbus, Ohio

May 2, 2008, except for Note 1 (as it pertains to segment disclosure and the impact of the recapitalization of the Company) and Notes 3, 8 and 12, as to which the date is February 15, 2010.

F-3

EXPRESS PARENT LLC

CONSOLIDATED BALANCE SHEETS

(dollars and units in thousands)

	Successor
	February 2, 2008			January 31, 2009
	(Restated)			(Restated)
Assets
Current assets
Cash and cash equivalents	$	320,029		$	176,115
Receivables, net		5,931			6,563
Inventories		164,649			170,202
Prepaid minimum rent		21,999			20,868
Other		6,080			7,269
Total current assets		518,688			381,017
Property and equipment, net		279,729			253,482
Tradename/domain name		196,144			197,394
Other assets		31,256			28,520
Total assets	$	1,025,817		$	860,413
Liabilities and members’ equity
Current liabilities
Accounts payable	$	26,674		$	47,426
Line of credit		—			75,000
Deferred revenue		22,934			21,601
Accrued expenses		59,295			65,430
Accounts payable and accrued expenses—related parties		154,314			100,012
Total current liabilities		263,217			309,469
Long-term debt		123,125			422,228
Other long-term liabilities		24,185			31,617
Total liabilities		410,527			763,314
Commitments and Contingencies (Note 15)
Members’ equity
Common units (Class L)—no par value; 101,746 and 101,742 issued and outstanding on February 2, 2008 and January 31, 2009, respectively	$	660,099		$	168,866
Common units (Class A)—no par value; 7,855 and 7,540 issued and outstanding on February 2, 2008 and January 31, 2009, respectively		1,008			2,691
Common Units (Class B)—no par value; none issued and outstanding		—			—
Common Units (Class C)—no par value; 3,855 and 4,155 issued and outstanding on February 2, 2008 and January 31, 2009, respectively		225			610
Accumulated deficit		(40,399	)		(69,435	)
Notes receivable		(5,643	)		(5,633	)
Total members’ equity		615,290			97,099
Total liabilities and members’ equity	$	1,025,817		$	860,413

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-4

EXPRESS PARENT LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit amounts)

	Predecessor				Successor
	Year Ended February 3, 2007		Twenty-Two Weeks Ended July 6, 2007		Thirty Weeks Ended February 2, 2008			Year Ended January 31, 2009
					(Restated)			(Restated)
Net sales	$	1,748,873	$	659,019	$	1,137,327		$	1,737,010
Costs of goods sold, buying and occupancy costs		1,254,762		451,514		890,063			1,280,018
Gross profit		494,111		207,505		247,264			456,992
General, administrative, and store operating expenses		470,117		170,100		275,150			447,071
Other operating expense, net		—		302		5,526			6,007
Operating income (loss)		23,994		37,103		(33,412	)		3,914
Interest expense		—		—		6,978			36,531
Interest income		—		—		(5,190	)		(3,527	)
Other expense (income), net		—		—		4,712			(300	)
Income (loss) before income taxes		23,994		37,103		(39,912	)		(28,790	)
Provision for income taxes		6,525		7,161		487			246
Net income (loss)	$	17,469	$	29,942	$	(40,399	)	$	(29,036	)
Class L:
Basic and diluted net loss per unit					$	(0.40	)	$	(0.25	)
Basic and diluted weighted average units outstanding						101,746			101,742
Class A:
Basic and diluted net loss per unit								$	(2.08	)
Basic and diluted weighted average units outstanding									1,295
Class C:
Basic and diluted net loss per unit								$	(1.00	)
Basic and diluted weighted average units outstanding									607
Pro forma basic and diluted net loss per share—(Note 13, unaudited)
Basic
Diluted
Pro forma basic and diluted weighted average shares outstanding (unaudited)
Basic
Diluted

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-5

EXPRESS PARENT LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

(dollars in thousands)

	Class L Units			Class A Units			Class B Units		Class C Units			Accumulated Deficit			Notes Receivable			Total Members’ Equity
Predecessor balances, January 28, 2006	$	—		$	—		$	—	$	—		$	—		$	—		$	270,855
Changes in Limited Brands, Inc. net investment		—			—			—		—			—			—			(24,130	)
Share based compensation expense		—			—			—		—			—			—			1,655
Net income		—			—			—		—			—			—			17,469
Predecessor balances, February 3, 2007	$	—		$	—		$	—	$	—		$	—		$	—		$	265,849
Adoption of FIN 48		—			—			—		—			—			—			(702	)
Changes in Limited Brands, Inc. net investment		—			—			—		—			—			—			12,423
Share based compensation expense		—			—			—		—			—			—			545
Net income		—			—			—		—			—			—			29,942
Elimination of Predecessor equity in connection with sale		—			—			—		—			—			—			(308,057	)
Predecessor balances, July 6, 2007	$	—		$	—		$	—	$	—		$	—		$	—		$	—
Successor capital contribution, net		660,099			—			—		—			—			—			660,099
Issuance of notes receivable		—			—			—		—			—			(5,643	)		(5,643	)
Share-based compensation expense		—			1,008			—		225			—			—			1,233
Net loss (Restated)		—			—			—		—			(40,399	)		—			(40,399	)
Successor balances, February 2, 2008 (Restated)	$	660,099		$	1,008		$	—	$	225		$	(40,399	)	$	(5,643	)	$	615,290
Distributions		(491,213	)		—			—		—			—			—			(491,213	)
Repurchase of equity units		(20	)		(3	)		—		(1	)		—			—			(24	)
Repayment of notes receivable		—			—			—		—			—			10			10
Share-based compensation expense		—			1,686			—		386			—			—			2,072
Net loss (Restated)		—			—			—		—			(29,036	)		—			(29,036	)
Successor balances, January 31, 2009 (Restated)	$	168,866		$	2,691		$	—	$	610		$	(69,435	)	$	(5,633	)	$	97,099

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6

EXPRESS PARENT LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	Predecessor						Successor
	Year Ended February 3, 2007			Twenty-Two Weeks Ended July 6, 2007			Thirty Weeks Ended February 2, 2008			Year Ended January 31, 2009
							(Restated)			(Restated)
Operating Activities
Net income (loss)	$	17,469		$	29,942		$	(40,399	)	$	(29,036	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		61,921			25,051			49,247			81,410
Non-cash interest expense		—			—			—			6,049
Loss on disposal of property and equipment		1,453			—			410			1,732
Impairment charges		—			—			484			2,442
Bad debt expense		—			—			—			1,230
Change in fair value of interest rate swap		—			—			4,712			(300	)
Share-based compensation		1,655			545			1,233			2,072
Deferred taxes		1,281			(5,023	)		(381	)		(234	)
Change in assets and liabilities:
Receivables, net		5,166			(9,951	)		11,075			3,195
Inventories		(16,221	)		(4,970	)		76,245			(5,553	)
Accounts payable, deferred revenue, and accrued expenses		(857	)		2,285			18,271			22,775
Accounts payable and accrued expenses—related parties		(1,398	)		8,064			154,314			(54,302	)
Other assets and liabilities		14,444			(31	)		6,981			3,754
Net cash provided by operating activities		84,913			45,912			282,192			35,234
Investing Activities
Capital expenditures		(53,867	)		(22,888	)		(15,258	)		(50,551	)
Purchase of intangible asset					—			—			(1,250	)
Net cash used in investing activities		(53,867	)		(22,888	)		(15,258	)		(51,801	)
Financing Activities
Borrowings under line of credit arrangement		—			—			—			75,000
Borrowings under long-term debt arrangements		—			—			—			294,000
Cost incurred in connection with debt arrangements		—			—			—			(3,870	)
Repayments of long-term debt		—			—			(625	)		(1,250	)
Cash equity contributions by members		—			—			39,986			—
Decrease in Limited Brands, Inc. net investment		(24,130	)		(29,939	)		—			—
Distributions paid to members		—			—			—			(491,213	)
Repurchase of equity units		—			—			—			(24	)
Repayment of notes receivable		—			—			—			10
Net cash (used in) provided by financing activities		(24,130	)		(29,939	)		39,361			(127,347	)
Net increase (decrease) in cash and cash equivalents		6,916			(6,915	)		306,295			(143,914	)
Cash and cash equivalents, beginning of period		13,733			20,649			13,734			320,029
Cash and cash equivalents, end of period	$	20,649		$	13,734		$	320,029		$	176,115

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-7

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies

Basis of Presentation

Express Parent LLC, a Delaware limited liability company (“LLC”) (the “Company”), was formed on June 10, 2008 and acquired all of the outstanding equity interest in Express Topco LLC, a Delaware LLC (“Topco”) which owns all of the outstanding equity interest in Express Holding, LLC, a Delaware LLC (“Holding”), on June 26, 2008. Holding owns all of the outstanding equity interest in Express, LLC (“Express”), which previously operated as a division of Limited Brands, Inc., a Delaware corporation (“LBI”). The Company is a holding company without any assets except its investment in Topco. Express is a wholly-owned subsidiary of Holding and conducts the operations of the Company.

On June 26, 2008, the Company entered into an exchange agreement with Holding, Topco, and other security holders, whereby the members of Holding contributed, transferred, assigned, and delivered all issued and outstanding equity interests of Holding to the Company in exchange for issuance by the Company to each Holding member an equivalent number of identical equity interests of the Company (the “Recapitalization”). Upon consummation of the exchange agreement, the Company and Topco entered into a contribution agreement, pursuant to which the Company contributed all of its equity interest in Holding to Topco as a contribution to Topco’s capital. Immediately following the consummation of these transactions, Topco entered into the Second Amended and Restated LLC Agreement (“Amended LLC Agreement”) of Holding in order to recapitalize the membership interests of Holding into a single class of membership units. Following the Recapitalization, the Company owned 100% of the membership interests of Topco, and Topco owned 100% of the membership interests of Holding. Because the Recapitalization represented a transfer of equity interests between entities under common control, the Company recognized the assets and liabilities transferred at their historical carrying amounts, similar to the pooling-of-interests method.

Members of the Company are not obligated for any debt, obligations, or liabilities of the Company solely by reason of being a member. Members of the Company shall not act as agents for one another or incur debts, obligations, or liabilities on behalf of other members.

Due to the Golden Gate Capital Acquisition (“GGC Acquisition”) (see Note 2) on July 7, 2007, the Company applied purchase accounting and began a new basis of accounting. As a result, the financial reporting periods presented are as follows:

• The 2006 presentation reflects the results of operations of Express for the fiscal year ended February 3, 2007 (a “Predecessor” period).

• The 2007 periods presented reflect the twenty-two weeks of operating results of Express from February 4, 2007 through July 6, 2007 (the “2007 Predecessor period”) and the thirty weeks of operating results of Holding and its subsidiary from July 7, 2007 through February 2, 2008 (the “2007 Successor period”), which includes the effects of purchase accounting as a result of the GGC Acquisition.

• The 2008 presentation reflects the operating results of Holding and its subsidiary from February 3, 2008 through June 25, 2008 and the consolidated operating results of Holding, Topco, and the Company from June 26, 2008 (date of formation) through January 31, 2009 (a “Successor” period).

The Consolidated Financial Statements for the Predecessor periods have been prepared using the historical basis of accounting. As a result of purchase accounting, the Predecessor and Successor Consolidated Financial Statements are not comparable.

F-8

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

The Consolidated Financial Statements for the fiscal year ended February 3, 2007 and for the 2007 Predecessor period have been prepared on a stand-alone basis and are derived from the Consolidated Financial Statements and accounting records of LBI. These Consolidated Financial Statements include all costs historically allocated to the Company by LBI as well as income taxes as if the Company had been a stand-alone entity. Management believes the assumptions underlying the Consolidated Statements of Operations, Changes in Members’ Equity, and Cash Flows are reasonable. However, these Consolidated Statements of Operations, Changes in Members’ Equity, and Cash Flows for the respective periods may not be indicative of the Company’s results of operations and cash flows on a stand-alone basis, and future results may differ materially. In the Successor periods, we no longer incur these allocated costs, but do incur certain expenses as a stand-alone company for similar functions, including certain support services provided by LBI under the LBI Transition Services Agreements (“TSAs”) (See Note 7).

Business Description

Express is a specialty retailer of women’s and men’s apparel, offering woven and knit tops, sweaters, pants, denim, intimate apparel, and accessories to a youthful clientele. Express merchandise is sold through retail stores and its website. Express operated 581 primarily mall-based stores in the United States as of January 31, 2009.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its subsidiary. All intercompany transactions and balances have been eliminated in consolidation.

Fiscal Year

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are designated in the Consolidated Financial Statements and Notes by the calendar year in which the fiscal year commences. References to 2006 and 2008 represent the fiscal years ended February 3, 2007 and January 31, 2009, respectively.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements. Actual results may differ from those estimates. The Company revises its estimates and assumptions as new information becomes available.

Restatement of Consolidated Financial Statements

As discussed in Note 3, the Company is restating its Consolidated Financial Statements and related disclosures for the opening balance sheet at the date of the GGC Acquisition, the 2007 Successor period, and 2008.

F-9

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

Segment Reporting

The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that its Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker and there is one operating segment, and therefore reports as a single segment, which includes the operation of its Express brick and mortar retail stores and the Express.com e-commerce site.

	Predecessor				Successor
	2006		Twenty-Two Weeks Ended July 6, 2007		Thirty Weeks Ended February 2, 2008		2008
Classes:
Apparel	$	1,634,802	$	620,204	$	1,057,453	$	1,592,468
Accessories and other		113,058		38,308		78,569		139,703
Other revenue		1,013		507		1,305		4,839
Total net sales	$	1,748,873	$	659,019	$	1,137,327	$	1,737,010
	Predecessor				Successor
	2006		Twenty-Two Weeks Ended July 6, 2007		Thirty Weeks Ended February 2, 2008		2008
Channels:
Stores	$	1,747,860	$	658,512	$	1,136,022	$	1,704,376
E-commerce		—		—		—		27,795
Other revenue		1,013		507		1,305		4,839
Total net sales	$	1,748,873	$	659,019	$	1,137,327	$	1,737,010

Other revenue consists primarily of shipping and handling revenue and gift card breakage.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits with financial institutions, treasury security investments, and overnight money market investments with an original maturity of three months or less. As of February 2, 2008, cash held primarily in money market investments was $300,502. As of January 31, 2009, cash held primarily in treasury securities was $159,236.

Payments due from banks for third-party credit card and debit card transactions for up to five days of sales, classified as cash and cash equivalents, totaled approximately $11,724 and $10,586 as of February 2, 2008 and January 31, 2009, respectively.

Outstanding checks not yet presented for payment amounted to $10,702 and $12,901 as of February 2, 2008 and January 31, 2009, respectively, and are included in accounts payable on the Consolidated Balance Sheets.

Fair Value of Financial Assets and Liabilities

Effective February 3, 2008, the Company adopted Statement of Financial Accounting Standards (“SFAS”) 157, “Fair Value Measurements” for financial assets and liabilities and any other assets or liabilities measured at

F-10

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

fair value on a recurring basis. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands fair value disclosures. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Assets and liabilities measured at fair value are classified using the following hierarchy prescribed by SFAS 157, which is based upon the transparency of inputs to the valuation as of the measurement date.

Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

To comply with the provisions of SFAS 157, the Company incorporates credit valuation adjustments (“CVAs”) to appropriately reflect its non-performance risk and the respective counterparty’s non-performance risk in its fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives, such as forward interest rates, and the Company’s and counterparty’s credit ratings, fall within Level 2 of the fair value hierarchy, the CVAs associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparty. However, as of February 2, 2008 and January 31, 2009, the Company has assessed the significance of the impact of the CVAs on the overall valuation of its derivative positions and has determined that the CVAs are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of February 2, 2008 and January 31, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall.

	As of February 2, 2008
	Level 1		Level 2		Level 3
Money market investments	$	300,502	$	—	$	—
Interest rate swap	$	—	$	4,712	$	—
	As of January 31, 2009
	Level 1		Level 2		Level 3
Treasury securities	$	159,236	$	—	$	—
Interest rate swap	$	—	$	4,412	$	—

The carrying amounts reflected on the Consolidated Balance Sheets for cash, cash equivalents, receivables, prepaid expenses, and payables approximated their fair values.

F-11

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

Concentration of Credit Risk

The Company maintains cash and cash equivalents with various major financial institutions. The Company monitors the relative credit standing of these financial institutions and other entities and limits the amount of credit exposure with any one entity. The Company also monitors the creditworthiness of the entities to which it grants credit terms in the normal course of business.

Receivables, Net

Receivables consist primarily of tenant allowances from landlords and miscellaneous trade receivables, which are continuously reviewed for collectability. The Company held a reserve for uncollectible accounts receivable of $0 and $1,230 as of February 2, 2008 and January 31, 2009, respectively.

Inventories

Inventories are principally valued at the lower of cost or market on a weighted-average cost basis. The Company records a lower of cost or market adjustment on its inventory, which is reflected in costs of goods sold, buying and occupancy costs in the Consolidated Statements of Operations, if the cost of specific inventory items on hand exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future demand and market conditions and analysis of historical experience. The lower of cost or market reserve was $11,306 and $14,639 as of February 2, 2008 and January 31, 2009, respectively.

The Company also records an inventory shrink reserve for estimated merchandise inventory losses for the period between the last physical inventory and the balance sheet date. These estimates are based on management’s analysis of historical results. The shrink reserve was $14,326 and $17,611 as of February 2, 2008 and January 31, 2009, respectively.

Advertising

Advertising production costs are expensed at the time the promotion first appears in media, store, or on the website. Costs to publish or broadcast the promotion are expensed when incurred. Total advertising expense was $47,292 in 2006, $14,825 in the 2007 Predecessor period, $30,052 in the 2007 Successor period, and $57,551 in 2008. Advertising costs are included in general, administrative, and store operating expenses in the Consolidated Statements of Operations.

Private Label Credit Card Rewards

The Company has a credit card agreement (the “Card Agreement”) with a third party to provide customers with private label credit cards (“credit card(s)”). Each credit card bears the logo of the Express brand and can be used at any of the Company’s retail store locations or website. A third-party financing company is the sole owner of the accounts issued under the credit card program and absorbs the losses associated with non-payment by the card holders and a portion of any fraudulent usage of the accounts. The Company receives reimbursement for expenses incurred from the third-party financing company in accordance with the Card Agreement based on usage of the credit cards. Income is recognized when the amounts are fixed or determinable and collectability is reasonably assured, which is generally at the time that the actual usage of the credit cards or specified transaction occurs. In accordance with EITF 02-16, the income is classified in general, administrative, and store operating expenses in the Consolidated Statements of Operations.

F-12

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

Card holders earn reward certificates that result in discounts on future purchases. Upon reaching the target-earned threshold, the card holders receive reward certificates for these discounts which expire within three months of issuance, at which time the certificate is forfeited. The Company accrues the anticipated redemptions of the discount earned at the time of the initial purchase. To estimate this expense, the Company makes assumptions related to card holder redemption rates, which are based on historical experience, and margin rates. The accrued liability as of February 2, 2008 and January 31, 2009 was $5,234 and $3,842, respectively, and is included in accrued expenses on the Consolidated Balance Sheets.

Property and Equipment, Net

All property and equipment are stated at cost. Depreciation of property and equipment is computed on a straight–line basis, using the following useful lives:

Category of Property and Equipment	Depreciable Life Range
Software, including software developed for internal use	3 years
Store related assets and other property and equipment	3 – 10 years
Leasehold improvements	Shorter of lease term or 10 years

When a decision has been made to dispose of property and equipment prior to the end of the previously estimated useful life, depreciation estimates are revised to reflect the use of the asset over the shortened estimated useful life. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in other operating expense, net in the Consolidated Statements of Operations. Maintenance and repairs are charged to expense as incurred. Major renewals and betterments that extend useful lives are capitalized.

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The reviews are conducted at the store asset level, the lowest identifiable level of cash flow. If the estimated undiscounted future cash flows related to the property and equipment are less than the carrying value, the Company recognizes a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis of the asset. Factors used to assess the fair value of property and equipment include, but are not limited to, management’s plans for future operations, brand initiatives, recent operating results, and projected future cash flows. The Company recorded impairment charges of approximately $0 in 2006, $0 in the 2007 Predecessor period, $484 in the 2007 Successor period, and $2,442 in 2008, related to store leasehold improvements. These impairment charges are included in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations.

Intangible Assets

The Company has intangible assets, primarily its tradename resulting from the GGC Acquisition, and internet domain name purchased during 2008. Intangible assets with finite lives are amortized on a basis reflecting when the economic benefits of the assets are consumed or otherwise used up over their respective estimated useful lives. Intangible assets with finite lives are reviewed for impairment when events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If the estimated undiscounted future cash flows related to the asset are less than the carrying value, the Company recognizes a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted future cash flows of the asset.

F-13

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

Intangible assets with indefinite lives, primarily tradenames, are reviewed for impairment annually in the fourth quarter, or more frequently if indicators of impairment are present, by comparing the carrying value to the estimated fair value, usually determined using a discounted cash flow methodology. Factors used in the valuation of all intangible assets include, but are not limited to, management’s plans for future operations, brand initiatives, recent operating results, and projected future cash flows.

The Company did not have any intangible assets in 2006 or the 2007 Predecessor period, and did not incur any impairment charges on intangible assets in the 2007 Successor period or 2008.

Leases and Leasehold Improvements

The Company has leases that contain pre-determined fixed escalations of minimum rentals and/or rent abatements subsequent to taking possession of the leased property. The related rent expense is recognized on a straight-line basis commencing upon possession date. The Company records the difference between the recognized rent expense and amounts payable under the leases as deferred lease credits. The obligations for pre-determined fixed escalations of minimum rent and/or rent abatements were $2,698 and $7,968 as of February 2, 2008 and January 31, 2009, respectively, and are included in other long-term liabilities on the Consolidated Balance Sheets.

The Company receives allowances from landlords related to its retail stores. These allowances are generally comprised of cash amounts received from landlords as part of negotiated lease terms. Cash received from landlords was $11,630 in 2006, $398 in the 2007 Predecessor period, $4,160 in the 2007 Successor period, and $5,057 in 2008. The Company records a receivable and a landlord allowance upon satisfaction of the provisions for receiving the allowance. The landlord allowance is amortized on a straight-line basis as a reduction to rent expense over the term of the lease (including the pre-opening build-out period). The receivable is reduced as allowance amounts are received from landlords. The reduction to rent expense was $8,444 in 2006, $3,320 in the 2007 Predecessor period, $201 in the 2007 Successor period, and $697 in 2008, and is included in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations. The unamortized portion of landlord allowances totaled $3,959 and $9,670 as of February 2, 2008 and January 31, 2009, respectively, and is included in other long-term liabilities on the Consolidated Balance Sheets.

Certain leases provide for contingent rents which are based on a percentage of gross sales in excess of predetermined levels and are not measured at inception. These amounts are excluded from minimum rent and are included in the determination of rent expense when it is probable that the expense has been incurred and the amount is reasonably estimable.

The Company also has leasehold improvements which are amortized over the shorter of their estimated useful lives or the period from the date the assets are placed in service to the end of the initial lease term, including renewal periods, if reasonably assured. Leasehold improvements made after the inception of the initial lease term are depreciated over the shorter of their estimated useful lives or the remaining lease term, including renewal periods, if reasonably assured.

Debt Issuance Costs and Discount

Fees and costs incurred in connection with the Company’s borrowings are capitalized and included in other assets on the Consolidated Balance Sheets. Debt issuance costs and debt discounts are amortized to interest expense over the term of the respective loan agreements. Debt issuance costs were recorded as a result of the

F-14

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

GGC Acquisition. As of February 2, 2008 and January 31, 2009, debt issuance costs totaled $10,671 and $11,488, respectively, and are included in other assets on the Consolidated Balance Sheets. The Company recorded amortization expense related to debt issuance costs of $0 for 2006, $0 for the 2007 Predecessor period, $1,052 for the 2007 Successor period, and $2,001 for 2008. The Company recorded amortization expense for debt discounts of $0 for 2006, $0 for the 2007 Predecessor period, $0 for the 2007 Successor period, and $304 for 2008. Both the amortization of debt issuance costs and debt discounts are included in interest expense in the Consolidated Statements of Operations.

Derivative Financial Instruments

The Company uses derivative financial instruments to manage its exposure to interest rates. The Company does not use derivative financial instruments to manage exposure to foreign currency exchange rates or for trading purposes. Derivative financial instruments are required to be recorded on the Consolidated Balance Sheets at fair value. The Company did not seek cash flow hedge accounting and, therefore, records the impact of the change in fair value of its derivative in other expense (income), net in the Consolidated Statements of Operations.

Income Taxes

Effective May 7, 2007, the Company became recognized as a partnership for federal income tax purposes. As such, with the exception of a limited number of state and local jurisdictions, the Company is no longer subject to income taxes. The members of the Company, and not the Company itself, are subject to income tax on their distributive share of the Company’s earnings from May 7, 2007 forward. The Company pays distributions to members to fund their tax obligations.

The Company accounts for income taxes using the asset and liability method. Under this method, the amount of taxes currently payable or refundable are accrued and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of the Company’s assets and liabilities. For periods up to the effective date of the Company’s recognition as a partnership for federal income tax purposes, deferred taxes were recognized on a separate company basis as if the Company were taxable as a corporation. As a partnership, the deferred taxes for periods ending after May 7, 2007 were related to a limited number of state and local jurisdictions.

Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect of a change in tax rates on deferred taxes is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. The Company is not aware of any such changes that would have a material effect on its results of operations, cash flows, or financial position.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation (“FIN”) 48, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS 109, “Accounting for Income Taxes”. FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on its technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

F-15

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

The Company recognizes tax liabilities in accordance with FIN 48 and adjusts these liabilities when judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases in income tax expense and the effective tax rate in the period in which the new information becomes available.

The Company adopted FIN 48 effective February 4, 2007. As a result of the implementation of FIN 48, the Company recognized an additional liability of $702 for unrecognized tax benefits, which was accounted for as a reduction to the February 4, 2007 retained earnings balance. LBI retained the entire FIN 48 liability of $9,673 for unrecognized tax benefits for any Predecessor period up to and including the date of the GGC Acquisition. For the Successor periods, the Company recognized no liability for unrecognized tax benefits and, therefore, there was no effect on the Company’s financial condition or results of operations for any Successor period.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations. Accrued interest and penalties are included within the related tax liability line on the Consolidated Balance Sheets.

The Company may be subject to periodic audits by the Internal Revenue Service (“IRS”) and other taxing authorities. These audits may challenge certain of the Company’s tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions.

Self Insurance

The Company is self-insured for medical, workers’ compensation, and general liability benefits up to certain stop-loss limits. Such costs are accrued based on known claims and an estimate of incurred but not reported (“IBNR”) claims. IBNR claims are estimated using historical claim information and actuarial estimates. The accrued liability for self insurance as of February 2, 2008 and January 31, 2009 was $3,255 and $10,108, respectively and is included in accrued expenses on the Consolidated Balance Sheets.

Revenue Recognition

The Company recognizes sales at the time the customer takes possession of the merchandise, which for e-commerce revenues, reflects an estimate of shipments that have not yet been received by the customer. The estimate is based on shipping terms and historical delivery times. Associate discounts are classified as a reduction of net sales. Net sales exclude sales tax collected from customers and remitted to governmental authorities. Amounts related to shipping and handling revenues billed to customers in an e-commerce sale transaction are classified as net sales, and the related shipping and handling cost are classified as cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations. The Company’s shipping and handling revenues were $2,728 in 2008. The Company launched its e-commerce business in June 2008, and therefore did not receive or record shipping and handling revenues for the 2006, 2007 Predecessor, or 2007 Successor periods.

The Company provides a reserve for projected merchandise returns based on prior experience. Merchandise returns are often resalable merchandise and are refunded by issuing the same payment tender of the original purchase. Merchandise exchanges of the same product and price, typically due to size or color preferences, are not considered merchandise returns. The sales returns reserve was $3,773 and $2,284 as of February 2, 2008 and January 31, 2009, respectively, and is included in accrued expenses on the Consolidated Balance Sheets.

F-16

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

The Company sells gift cards in its retail stores and through its e-commerce website and third parties, which do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a liability at the time a gift card is sold. As of February 2, 2008 and January 31, 2009, gift card liabilities of $22,934 and $20,481, respectively, are included in deferred revenue on the Consolidated Balance Sheets. The Company recognizes income from gift cards when they are redeemed by the customer. In addition, income on unredeemed gift cards is recognized when it can be determined that the likelihood of the gift card being redeemed is remote and that there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions (gift card breakage). The gift card breakage rate is based on historical redemption patterns. Gift card breakage of $2,560 in 2006, $1,199 in the 2007 Predecessor period, $1,366 in the 2007 Successor period, and $2,428 in 2008, was recorded by the Company and is included in net sales in the Consolidated Statements of Operations.

Share-Based Compensation

The Company accounts for share-based employee compensation in accordance with SFAS 123(R), “Share-Based Payments.” SFAS 123(R) requires the fair value of share-based payments to employees to be recognized in the financial statements as compensation cost over the requisite service period. Compensation expense for equity units is recognized, net of forfeitures, on a straight-line basis over the requisite service period for the fair value of awards that actually vest.

Cost of Goods Sold, Buying and Occupancy Costs

Cost of goods sold, buying and occupancy costs includes merchandise costs, net of discounts and allowances, freight, inventory shrinkage, and other gross margin related expenses. Buying and occupancy expenses primarily include payroll, benefit costs, and other operating expenses for the buying departments (merchandising, design, manufacturing, and planning and allocation) and distribution network, fulfillment, rent, common area maintenance, real estate taxes, utilities, maintenance, and depreciation for stores.

General, Administrative, and Store Operating Expenses

General, administrative, and store operating expenses primarily include payroll, benefit costs, and other operating expenses for store-selling and administrative departments, store marketing, and advertising expenses.

Other Operating Expense, Net

Other operating expense, net consists of GGC advisory fees, LBI LLC fees, gain/loss on disposal of assets, and excess proceeds from the settlement of insurance claims.

Other Expense (Income), Net

Other expense (income), net consists primarily of the change in fair market value of the interest rate swap.

Recently Issued Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. GAAP. SFAS 162 will be effective sixty days following the Securities and Exchange Commission’s (“SEC”) approval of Public Company Accounting Oversight Board amendments to AU

F-17

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” The Company is currently evaluating the potential impact, if any, of the adoption of SFAS 162 on its Consolidated Financial Statements.

In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS 161 requires additional disclosures about the objectives and strategies for using derivative instruments. SFAS 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008. The Company will report the required disclosures in fiscal year ended January 30, 2010.

In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2 “Effective Date of FASB Statement No. 157” which delays the effective date of SFAS 157 to fiscal years beginning after November 15, 2008 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. The adoption of FSP FAS 157-2 in fiscal year ended January 30, 2010 for non-financial assets and liabilities is not expected to have a significant impact on the Company’s results of operations.

In April 2008, the FASB issued FSP 142-3, “Determination of the Useful Life of Intangible Assets.” The guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS 142, “Goodwill and Other Intangible Assets,” and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R), and other guidance under U.S. GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of FSP 142-3 in fiscal year ended January 30, 2010 is not expected to have a material effect on the Consolidated Financial Statements of the Company.

2. The GGC Acquisition

Holding was formed pursuant to the Unit Purchase Agreement (the “Purchase Agreement”) on May 15, 2007 (amended July 6, 2007) as a result of the GGC Acquisition, whereby Limited Brands Store Operations, Inc., a Delaware corporation and a wholly-owned subsidiary of LBI, sold 75% of Holding to Express Investment Corp., a Delaware corporation (“EIC”). EIC is an affiliate of Golden Gate Capital (“GGC”). Holding became a newly formed LLC that was incorporated on May 9, 2007 and commenced operations on July 7, 2007. The combined cash and equity contributed by LBI and GGC was approximately $648,838, including $26,874 in transaction costs. Additionally, Holding issued $125,000 of debt to finance the GGC Acquisition. Pursuant to the Amended and Restated LLC Agreement (“LLC Agreement”) dated July 6, 2007, 75,000 and 25,000 Class L equity ownership units of Holding were held by GGC through EIC, and LBI, through its subsidiaries, respectively. LBI received an aggregate of $601,875 in cash upon consummation of the GGC Acquisition. In connection with the GGC Acquisition, EIC made a cash equity contribution of $431,000 on July 6, 2007 for 66 ²/3% ownership units of Holding and a subsequent cash equity contribution of $53,875 on July 31, 2007 for an additional 8 ¹/3% ownership units of Holding. After completion of the GGC Acquisition, LBI through its subsidiaries, owned 25% of the aggregate units and remains an equity investor.

Subsequent to July 6, 2007, certain executive management members of Holding made equity contributions of $11,285, partially funded by $5,643 of promissory notes payable to Holding, in exchange for 1,700 Class L equity ownership units, representing 1.7% ownership interest in Holding. These additional Class L equity ownership units purchased by certain executive management members resulted in dilution to the original ownership percentage of EIC and the subsidiaries of LBI to 73.7% and 24.6%, respectively. The accompanying Consolidated Financial Statements are presented for the Predecessor and Successor relating to the periods preceding and succeeding the GGC Acquisition, respectively.

F-18

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

2. The GGC Acquisition (continued)

Holding accounted for the GGC Acquisition in accordance with the provisions of SFAS 141, “Business Combinations” whereby the purchase price paid to effect the GGC Acquisition was allocated to state the acquired assets and liabilities at fair value. Holding was created and used to effect the GGC Acquisition, which included cash and a share exchange equivalent to the fair value of the business, accompanied by a change in control.

The allocation of the purchase price is as follows:

	(Restated)
Cash and cash equivalents	$	48,077
Receivables, net		11,709
Inventories		241,894
Other current assets		25,500
Property and equipment		309,744
Intangible assets (primarily tradename)		220,660
Other assets		11,736
Total assets acquired		869,320
Accounts payable		36,197
Accrued expenses		50,856
Other long-term liabilities		8,429
Total liabilities assumed		95,482
Net assets acquired at fair value	$	773,838

The fair value of the acquired net assets exceeded the purchase price paid by GGC. In connection with the GGC Acquisition allocation, Holding increased the carrying amount of its inventories by $86,887, its property and equipment by $38,529, and recorded $220,660 of intangible assets. Intangible asset detail is included in Note 6.

3. Restatement of Consolidated Financial Statements

Certain errors were identified in the 2007 Successor period and in 2008 periods following the GGC Acquisition, certain of which affect the opening balance sheet as of July 7, 2007. The Company assessed the materiality of these errors on the 2007 Successor and 2008 Consolidated Financial Statements and concluded that the effect of these errors was material to its previously issued Consolidated Financial Statements. As a result, the Company has restated its Consolidated Financial Statements for the 2007 Successor period and in 2008 to correct the errors described below.

(1) Accrued expense recorded for real estate charges was determined to be overstated due to payments made by the Company which were not reflected as a reduction to the liability for real estate charges. This resulted in an overstatement of cost of goods sold, buying and occupancy costs of $23 and $370 in the 2007 Successor period and in 2008, respectively.

(2) The Company prematurely recognized as a liability the expense for costs related to employee relocation before the costs were actually incurred. This resulted in an overstatement of general, administrative, and store operating expenses of $595 and $265 in the 2007 Successor period and in 2008, respectively.

(3) The Company incorrectly calculated certain property tax liabilities which resulted in an overstatement of $343 and an understatement of $360 of general, administrative, and store operating expenses in the 2007 Successor period and in 2008, respectively.

F-19

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

3. Restatement of Consolidated Financial Statements (continued)

(4) The Company incorrectly recorded deferred income tax expense in the 2007 Successor period and in 2008. The Company recorded a deferred tax liability and corresponding deferred income tax expense for the difference between the book and tax basis of intangible assets acquired in the GGC Acquisition. This deferred tax liability should have been recorded in the opening balance sheet (see below). In addition, current income tax expense was incorrectly recorded in the 2007 Successor period and in 2008. As a result, income tax expense was overstated by $1,109 and $198 in the 2007 Successor period and in 2008, respectively.

(5) The Company did not recognize a liability for fees owed to LBI in accordance with the LLC Agreement (see Note 7) which resulted in an understatement in accounts payable and accrued expenses—related parties and an understatement of other operating expense, net of $1,152 and $1,262 in the 2007 Successor period and in 2008, respectively.

(6) The Company understated its advisory fee payable to GGC and, as a result, accounts payable and accrued expenses-related parties and other operating expense, net was understated by $458 and $1,789 in the 2007 Successor period and in 2008, respectively.

(7) The Company identified other miscellaneous errors which resulted in an understatement of $128 and an overstatement of $291 in general, administrative, and store operating expenses in the 2007 Successor period and in 2008, respectively, and an understatement of $161 in cost of goods sold, buying and occupancy costs in 2008.

(8) The Company identified errors related to the classification of items in the Consolidated Statements of Operations:

a. gain (loss) on disposal of long-lived assets was incorrectly classified, resulting in an understatement of costs of goods sold, buying, and occupancy costs and an overstatement in general, administrative, and store operating expenses of $208 in the 2007 Successor period,

b. income tax expense was incorrectly classified, resulting in an overstatement of general, administrative, and store operating expenses and an understatement of income tax expense of $531 in the 2007 Successor period;

c. a portion of management bonus was incorrectly classified, resulting in an overstatement of general, administrative, and store operating expenses and an understatement of costs of goods sold, buying and occupancy costs of $1,736 in 2008, and

d. excess insurance proceeds were incorrectly classified, resulting in an understatement of other operating expense, net and an overstatement of other expense (income) of $1,192 in 2008.

(9) The Company changed its policy for classifying certain e-commerce costs, which resulted in an understatement of costs of goods, buying, and occupancy costs and an overstatement of general, administrative, and store operating expenses of $3,082 in 2008.

(10) In addition to affecting the results of operations for the 2007 Successor and 2008 periods, some of the errors noted above also affected the initial purchase price allocation for the GGC Acquisition. As the GGC Acquisition was a bargain purchase, the correction of the errors in the opening balance sheet resulted in a further reduction in the values allocated to the long-lived assets (property and equipment and trade name/domain name). This required an adjustment to reduce depreciation expense recorded in

F-20

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

3. Restatement of Consolidated Financial Statements (continued)

cost of goods sold, buying and occupancy costs by $189 and $360 in the 2007 Successor period and in 2008, respectively. As the trade name/domain name was determined to have an indefinite life, the change in the valuation did not impact amortization expense and the results of operations for any period. The correction of these errors affected the opening balance sheet as follows:

	As of July 7, 2007
Property and equipment, net	$	(1,828	)
Tradename/domain name		(1,184	)
Other assets		1,000
Total assets	$	(2,012	)
Accrued liabilities		(3,112	)
Total current liabilities		(3,112	)
Deferred tax liability		1,100
Total liabilities	$	(2,012	)
Retained earnings		—
Total members’ equity	$	—
Total members’ equity and liabilities	$	(2,012	)

The Consolidated Statements of Operations for the 2007 Successor period and in 2008 have been restated as follows:

	2007 Successor Period						2008
	As Reported			As Restated			As Reported			As Restated
Gross profit	$	247,260		$	247,264		$	461,160		$	456,990
Operating (loss) income		(33,356	)		(33,412	)		5,011			3,914
Loss before income taxes		(39,856	)		(39,912	)		(26,503	)		(28,790	)
Net loss	$	(40,921	)	$	(40,399	)	$	(26,947	)	$	(29,036	)

There was not a material effect to the Consolidated Statements of Cash Flows for the 2007 Successor period or in 2008.

The Consolidated Balance Sheets as of February 2, 2008 and as of January 31, 2009 have been restated as follows:

	As of February 2, 2008						As of January 31, 2009
	As Reported			As Restated			As Reported			As Restated
Total current assets	$	517,688		$	518,688		$	380,017		$	381,017
Total assets		1,027,768			1,025,817			862,056			860,413
Total current liabilities		265,858			263,217			307,114			309,469
Total liabilities		413,000			410,527			763,391			763,314
Accumulated deficit	$	(40,921	)	$	(40,399	)	$	(67,868	)	$	(69,435	)

F-21

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

4. Property and Equipment, Net

Property and equipment, net, consisted of:

	Successor
	February 2, 2008			January 31, 2009
	(Restated)			(Restated)
Building improvements	$	2,793		$	2,817
Furniture, fixtures and equipment, software		144,555			167,914
Leaseholds and improvements		175,461			188,911
Construction in process		1,367			9,649
Total		324,176			369,291
Less: accumulated depreciation		(44,447	)		(115,809	)
Property and equipment, net	$	279,729		$	253,482

Depreciation expense totaled $61,921 in 2006, $25,051 in the 2007 Predecessor period, $44,347 in the 2007 Successor period, and $72,853 in 2008.

5. Leased Facilities and Commitments

On July 6, 2007, the Company entered into a lease agreement (the “Lease”) with LBI, a related party, for its corporate home office and distribution center facility in Columbus, OH. The Lease is for a six year period that expires on July 31, 2013 and requires annual minimum rent payments of approximately $3,800 in year one and $3,300 thereafter, subject to periodic adjustments each July based on the change in the Consumer Price Index over the twelve month period ending two months prior to each July. Either party can elect to terminate the Lease prior to July 31, 2013 with written notice. On February 20, 2009, the parties amended the Lease to provide that each party’s right to terminate the Lease prior to July 31, 2013 may not be exercised by either party until April 30, 2011.

Annual store rent consists of a fixed minimum amount and/or contingent rent based on a percentage of sales exceeding a stipulated amount. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheets and the corresponding rent expense in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable.

Rent expense is summarized as follows:

	Predecessor				Successor
	2006		Twenty-Two Weeks Ended July 6, 2007		Thirty Weeks Ended February 2, 2008		2008
Store rent
Fixed minimum	$	159,983	$	60,118	$	98,319	$	151,381
Contingent		7,292		3,112		5,540		6,832
Total store rent		167,275		63,230		103,859		158,213
Home office, distribution center and other		8,525		2,911		5,540		8,965
Total rent expense	$	175,800	$	66,141	$	109,399	$	167,178

F-22

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

5. Leased Facilities and Commitments (continued)

As of January 31, 2009, the Company was committed to noncancelable leases with remaining terms generally from one to ten years. A substantial portion of these commitments consist of store leases generally with an initial term of ten years. Store lease terms generally require additional payments covering real estate taxes, common area maintenance costs, and certain other expenses. The obligations for these additional payments are excluded from the table that follows.

Minimum rent commitments under noncancelable leases are as follows:

2009	$	155,810
2010		135,155
2011		119,949
2012		110,658
2013		95,979
Thereafter		178,053

The Company’s future sublease income under noncancelable subleases was $13,977 as of January 31, 2009.

On April 28, 2008, the Company issued an irrevocable stand-by letter of credit (“LBI stand-by LC”) to LBI for $34,170, which related to certain pre-existing store leases guaranteed by LBI that could not be assigned to the Company at or subsequent to the GGC Acquisition. LBI can draw from the LBI stand-by LC if the Company were to default on any of the guaranteed leases. The LBI stand-by LC is reduced through the September 30, 2010 expiration date with the overall reduction in guaranteed lease payments. The available balance of the LBI stand-by LC was $18,708 as of January 31, 2009. LBI had no outstanding draws on the LBI stand-by LC as of January 31, 2009.

6. Intangible Assets

The following table provides the significant components of intangible assets:

	February 2, 2008, Successor
	Cost		Accumulated Amortization		Ending Net Balance
	(Restated)		(Restated)		(Restated)
Tradename	$	196,144	$	—	$	196,144
Net favorable lease obligations		19,750		3,124		16,626
Credit card relationships & customer lists		4,766		1,036		3,730
	$	220,660	$	4,160	$	216,500

	January 31, 2009, Successor
	Cost		Accumulated Amortization		Ending Net Balance
	(Restated)		(Restated)		(Restated)
Tradename	$	196,144	$	—	$	196,144
Internet domain name		1,250		—		1,250
Net favorable lease obligations		19,750		7,197		12,553
Credit card relationships & customer lists		4,766		2,929		1,837
	$	221,910	$	10,126	$	211,784

F-23

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

6. Intangible Assets (continued)

The Company’s tradename and internet domain name have indefinite lives. Net favorable lease obligations, credit card relationships, and customer lists have finite lives and are amortized over a period of up to seven years, four years, and two years, respectively, and are included in other assets on the Consolidated Balance Sheets. Amortization expense totaled $0 in 2006, $0 in the 2007 Predecessor period, $4,160 in the 2007 Successor period and $5,966 in 2008.

Estimated future amortization expense will approximate the following:

2009	$	5,004
2010		3,636
2011		2,274
2012		1,537
2013		1,221
Thereafter		718
Total	$	14,390

7. Related Party Transactions

Transactions with LBI

Predecessor

Prior to the GGC Acquisition, transactions between the Company and LBI and their wholly-owned subsidiaries occurred primarily in the ordinary course of business. Costs relating to these transactions were charged or allocated to the Company using the following methodologies:

Direct Costs—costs incurred by LBI and its subsidiaries on behalf of the Company were charged directly to the Company;

Allocated Costs—administrative and other shared costs incurred by a shared service provided were allocated to the Company using activity drivers or other allocation methodologies that approximate the level of effort required to provide the service.

Costs were allocated by LBI to the Company for certain functions provided by LBI including, but not limited to, general corporate expenses related to accounting, finance, legal, employee benefits and incentives, real estate and store operations, store design and construction, logistics services, technology services, LBI shared services, loss prevention, customer marketing, and human resources.

F-24

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

7. Related Party Transactions (continued)

The Company believes the allocation methodologies described above are fair and reasonable. However, the allocated costs are not necessarily indicative of the amounts that would have been or that will be incurred by the Company on a stand-alone basis.

	2006			Twenty-Two Weeks Ended July 7, 2007
Beginning balance	$	270,855		$	265,849
Charges from LBI and its wholly owned subsidiaries		1,266,985			407,277
Net cash transferred to LBI		(1,289,460	)		(394,309	)
Adoption of FIN 48		—			(702	)
Net income		17,469			29,942
Ending balance	$	265,849		$	308,057

Successor

On July 6, 2007, in conjunction with the GGC Acquisition, the Company entered into TSAs whereby LBI provides support in various operational areas including, among other things, logistics, technology and merchandising sourcing. The terms of these TSAs vary and range from three months to thirty-nine months. The Company is obligated to purchase a minimum of 90% of its merchandise products from LBI during the first year after the GGC Acquisition, 80% during the second year, and 60% during the third year. The Company is liable to LBI in the event of a breach of this provision in the amount of a margin rate defined in the merchandise sourcing TSA, applied to the cost of products for which the Company was otherwise required to source through LBI.

The Company incurred charges from LBI for various transaction services, included in general, administrative, and store operating expenses and merchandising sourcing, included in cost of goods sold, buying and occupancy costs, respectively, as follows:

	Thirty Weeks Ended February 2, 2008		2008
Transaction Services	$	337,571	$	188,216
Merchandising Sourcing	$	471,378	$	584,527

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheets, for transaction services and merchandising sourcing was as follows:

	February 2, 2008		January 31, 2009
Transaction Services	$	41,258	$	12,358
Merchandising Sourcing	$	111,447	$	79,636

Furthermore, under the LLC Agreement, LBI is entitled to receive a cash payment (at the same time payments are made under the GGC Advisory Agreement (“Advisory Agreement”)) equal to the product of (i) the amount of the fees actually paid in cash under the Advisory Agreement and (ii) the quotient of the number of units held by LBI over the number of units held by GGC at the time of payment of such fees.

F-25

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

7. Related Party Transactions (continued)

	Thirty Weeks Ended February 2, 2008		2008
	(Restated)		(Restated)
LBI LLC Fee	$	1,152	$	1,262

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheets, was $1,152 and $2,414 as of February 2, 2008 and January 31, 2009, respectively.

Transactions with GGC

In connection with the GGC Acquisition, the Company entered into the Advisory Agreement with GGC that expires in July 2017. In exchange for on-going consulting and management advisory services provided by GGC, the Company reimburses GGC for reasonable out-of-pocket expenses incurred in connection with providing on-going services and an annual management fee equal to the greater of (i) $2,000 per fiscal year or (ii) 3% of EBITDA of Holding as defined in the term loan agreement.

The Company incurred advisory fees and out-of-pocket expenses, which are included in other operating expense, net in the Consolidated Statements of Operations, as follows:

	Thirty Weeks Ended February 2, 2008		2008
	(Restated)		(Restated)
Advisory fees and out-of-pocket expenses	$	3,625	$	4,206

Transactions with Other GGC Affiliates

The Company also transacts with affiliates of GGC for the software license purchases, consulting and software maintenance services, and e-commerce warehouse and fulfillment services. The Company incurred the following charges:

	Thirty Weeks Ended February 2, 2008		2008
Software licenses and maintenance, and consulting	$	0	$	576
E-commerce warehouse and fulfillment	$	0	$	7,846

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheets, was $0 and $3,092 as of February 2, 2008 and January 31, 2009, respectively.

F-26

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

8. Income Taxes

For the Predecessor period through May 6, 2007, the Company provided for income taxes on a separate company basis as if the Company was taxable as a corporation. Effective May 7, 2007, the Company became recognized as a partnership for federal income tax purposes. With limited exception as noted below, the Company recognizes no federal, state, or local income taxes for periods subsequent to May 7, 2007, as the members of the Company, and not the Company itself, are subject to income tax on their distributive share of the Company’s earnings from May 7, 2007 forward. The Company pays distributions to members to fund their tax obligations.

There are a limited number of state and local jurisdictions that subject the Company to income tax even though it is recognized as a partnership for federal income tax purposes. The Company provides for income taxes related to these jurisdictions for periods ending subsequent to May 7, 2007. LBI has retained current income tax liabilities and related income tax contingencies and reserves for any Predecessor period up to and including the date of the GGC Acquisition.

The provision for income taxes consists of the following:

	Predecessor					Successor
	2006		Twenty-Two Weeks Ended July 6, 2007			Thirty Weeks Ended February 2, 2008			2008
						(Restated)			(Restated)
Current:
U.S. federal	$	4,518	$	10,730		$	0		$	0
U.S. state and local		726		1,454			868			480
Total:		5,244		12,184			868			480
Deferred:
U.S. federal		1,151		(4,665	)		0			0
U.S. state and local		130		(358	)		(381	)		(234	)
Total:		1,281		(5,023	)		(381	)		(234	)
Provision for income taxes	$	6,525	$	7,161		$	487		$	246

The following table provides the reconciliation between the statutory federal income tax rate and the effective tax rate:

	Predecessor				Successor
	2006		Twenty-Two Weeks Ended July 6, 2007		Thirty Weeks Ended February 2, 2008		2008
Federal income tax rate	35.00	%	35.00	%	0.00	%	0.00	%
State income taxes, net of federal income tax effect	2.32	%	1.93	%	1.22	%	0.85	%
State reserve release	(9.69	)%	0.00	%	0.00	%	0.00	%
Entity status change to partnership	0.00	%	(18.04	)%	0.00	%	0.00	%
Other items, net	(0.43	)%	0.41	%	0.00	%	0.00	%
Effective tax rate	27.20	%	19.30	%	1.22	%	0.85	%

F-27

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

8. Income Taxes (continued)

The following table provides the effect of temporary differences that created deferred income taxes as of February 2, 2008 and January 31, 2009. Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carry forwards at the end of the respective periods.

	Successor
	February 2, 2008		January 31, 2009
	(Restated)		(Restated)
Deferred tax assets:
Accrued expenses and deferred compensation	$	117	$	114
Other		0		74
Total deferred tax assets		117		188
Deferred tax liabilities:
Intangible assets		652		676
Property and equipment		319		164
Other		71		39
Total deferred tax liabilities		1,042		879
Net deferred tax liabilities	$	925	$	691

The Company had a net current deferred tax assets balance of $12 and $83 as of February 2, 2008 and January 31, 2009, respectively, which are included in other current assets on the Consolidated Balance Sheets. The Company also recorded a net receivable for state and local income taxes of approximately $201 as of January 31, 2009, primarily related to the estimated amount of tax overpayments, which is included in receivables, net on the Consolidated Balance Sheets. State and local income tax payments were $345 during 2008.

Uncertain Tax Positions

The Company adopted FIN 48 effective February 4, 2007. As a result of the implementation of FIN 48, the Company recognized an additional liability of $702 for unrecognized tax benefits, which was accounted for as a reduction to the February 4, 2007 retained earnings balance. Including this adjustment, the Company had $9,673 of unrecognized tax benefits as of February 4, 2007. LBI retained the amount of FIN 48 liability for unrecognized tax benefits for any Predecessor period up to and including the date of the GGC Acquisition. For the Successor periods, the Company has recognized no liability for unrecognized tax benefits and, therefore, there has been no effect on the Company’s financial condition or results of operations for any Successor period.

The Company believes the increase or decrease in the liability for uncertain tax positions will not be significant within the next twelve months. However, changes could result from examinations, the expiration of the statute of limitations or other circumstances. Thus, an estimate of the range of the reasonably possible change cannot be made.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations. Accrued interest and penalties are included within the related tax liability line, which is included within accrued expenses on the Consolidated Balance Sheets.

F-28

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

8. Income Taxes (continued)

The Company files a partnership income tax return for federal purposes and in most state and local jurisdictions. The Company may be subject to periodic audits by the IRS and other taxing authorities. These audits may challenge certain of the Company’s tax positions, such as the timing and amount of deductions and allocation of taxable income to the various jurisdictions. As of January 31, 2009, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2007 forward.

The Company is currently not under examination by the IRS or state taxing authorities.

9. Long-Term Debt and Credit Facility

Credit Facility

On July 6, 2007, the Company entered into a $200,000 secured Asset-Based Loan Credit Facility (“Credit Facility”) with a different lender. The Credit Facility is available to be used for working capital and other general corporate purposes and expires on July 6, 2012. The Credit Facility borrowing rate is equal to LIBOR plus an applicable margin rate or the higher of the Wall Street Journal’s prime lending rate or 0.5% per annum above the Federal Funds Rate, plus an applicable margin rate. The applicable margin rate is determined based on the Company’s most recent Borrowing Base Certificate equal to 90% (credit card advance rate) of credit card receivables plus 90% (inventory advance rate) of the liquidation value of eligible inventory during year one (through July 6, 2008) and 85% thereafter, less certain reserves. During 2008, the Company borrowed $75,000 under the Credit Facility, which is reflected as a current liability on the Consolidated Balance Sheets as of January 31, 2009. As of January 31, 2009, the weighted average borrowing rate was 3.25%. The $75,000 Credit Facility outstanding balance was repaid by the Company in the first quarter of fiscal year ended January 30, 2010.

Fees payable under the Credit Facility are based on 0.25% of the average daily unused balance during each quarter payable quarterly in arrears. Additionally, fees for outstanding letter of credit balances are 0.125% based on the average daily aggregate available amount during the quarter of all letters of credit outstanding payable quarterly in arrears. The Credit Facility requires the Company to maintain an agreed upon fixed charge coverage ratio if excess availability plus eligible cash collateral is less than $20,000. The Company’s excess availability was $48,673 as of January 31, 2009. The Company was not subject to this covenant as of January 31, 2009 because excess availability plus eligible cash collateral was greater than $20,000 as of January 31, 2009.

All obligations under the Credit Facility are guaranteed and secured by substantially all the assets of Holding and its subsidiary, including: all accounts arising from the sale or other disposition of goods or services; all inventory; letter-of-credit rights and supporting obligations related to the accounts arising from the sale or other disposition of goods or services and inventory; all collection accounts, deposit accounts, commodity accounts, security accounts and any cash, cash equivalents or other assets in any such accounts (excluding any net cash proceeds from the sale or other disposition of any Holding Term Loan first lien collateral); all books, property, and records (including, without limitation, ledgers, customer lists, credit files, printouts, computer software, data processing and other records); and all products and proceeds, including proceeds of insurance and claims against third parties.

Letters of Credit

The Company periodically enters into various trade letters of credit (“trade LCs”) for certain beneficiary vendors to secure merchandise goods. These trade LCs are issued for a defined period of time and for specific

F-29

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

9. Long-Term Debt and Credit Facility (continued)

shipments and generally expire three weeks after the date of merchandise shipment. As of February 2, 2008 and January 31, 2009, outstanding trade LCs totaled $1,063 and $145, respectively. Additionally, the Company enters into stand-by letters of credit (“stand-by LCs”) on an as-need basis. As of February 2, 2008 and January 31, 2009, outstanding stand-by LCs totaled $31,106 and $20,489, respectively.

Holding Term Loan

On July 6, 2007, the Company entered into a $125,000 secured term loan (“Holding Term Loan”) with a lender. The proceeds of these borrowings were used to finance, in part, the GGC Acquisition and pay transaction fees and expenses related to the GGC Acquisition. The Holding Term Loan borrowing rate is equal to LIBOR plus an applicable margin rate or the higher of the Wall Street Journal’s prime lending rate or 0.5% per annum above the Federal Funds Rate, plus an applicable margin rate. The applicable margin rate is determined by the leverage ratio in effect on the first day of each interest period.

Principal payments under the Holding Term Loan are due in equal quarterly installments of 0.25% of the initial principal balance through the maturity date on July 6, 2014. The Holding Term Loan also requires the Company to maintain a certain leverage ratio of consolidated debt, including letters of credit (net of cash and cash equivalents) to consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted for certain items such as non-cash deductions and non-recurring expenses) for the most recently completed reporting period (last twelve months as of the end of each quarter). The Holding Term Loan contains various customary covenants, including certain restrictions on the Company’s ability and the ability of its subsidiary to pay distributions.

Effective July 6, 2007, the Company entered into a receive variable/pay fixed interest rate swap agreement to mitigate exposure to interest rate fluctuations on a notional amount of $75,000 of the Company’s $125,000 variable-rate Holding Term Loan. The Company did not seek cash flow hedge accounting and, therefore, records the impact of the change in fair value of the swap in other expense (income), net in the Consolidated Statements of Operations. The interest rate swap agreement terminates on August 6, 2010. The fair value of the interest rate swap was a liability of $4,712 and $4,412 as of February 2, 2008 and January 31, 2009, respectively. The short term portion of the fair value of interest rate swap is included in accrued expenses, and the long term portion is included in other long-term liabilities on the Consolidated Balance Sheets.

All obligations under the Holding Term Loan are guaranteed and secured by substantially all the assets of the Company and its subsidiaries, including: owned real property, all fixtures and equipment; all intellectual property; all equity interests in Holding and its subsidiary; all intercompany indebtedness of Holding and its subsidiary; all permits and licenses related to ownership or operation of real property, fixtures or equipment; all proceeds of insurance; all books and records not constituting the Credit Facility first lien collateral; all other collateral not constituting the Credit Facility first lien collateral; and all product and proceeds.

Topco Term Loan

On June 26, 2008, the Company entered into a $300,000 Term Loan (“Topco Term Loan”) with a related-party lender. The proceeds of these borrowings were used to pay a distribution to members and related transaction fees and expenses related to the Recapitalization. The Topco Term Loan was issued at 98% with the face value due at maturity on June 26, 2015. Interest on $150,000 of the borrowings is due semi-annually, on the

F-30

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

9. Long-Term Debt and Credit Facility (continued)

last calendar day of each January and July, at a rate of 13.5% per annum. Interest on the remaining $150,000 of borrowings is due quarterly, on the last calendar day of each January, April, July, and October, at a rate of 14.5% per annum. The Company may elect to pay in kind (“PIK”) all or any portion of this quarterly interest at a rate of 16.0% per annum. The Company elected to pay the quarterly interest due on January 31, 2009 for $150,000 of the borrowings as PIK interest. Accordingly, the Company recognized accrued PIK interest of $6,049 at January 31, 2009, which is included in long-term debt on the Consolidated Balance Sheets.

The Topco Term Loan requires the Company to maintain a certain leverage ratio of consolidated debt, including letters of credit (net of cash and cash equivalents) to consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted for certain items such as non-cash deductions and non-recurring expenses) for the most recently completed reporting period (last twelve months as of the end of each quarter). The Topco Term Loan also requires the Company to maintain a certain interest coverage ratio of consolidated adjusted EBITDA to interest expense for the most recently completed twelve months. The Topco Term Loan contains various customary covenants, including certain restrictions on the Company’s ability and the ability of its subsidiary to pay distributions.

The Company is required to make mandatory prepayments on the Topco Term Loan upon the occurrence of certain events defined in the Topco Term Loan agreement. The Company may, at its option, prepay all or any portion of the Topco Term Loan principal amount plus accrued interest at redemption prices set forth in the loan agreement. The Topco Term Loan is collateralized by 100% of the membership interests in Holding, but is not guaranteed by any of Express Topco’s subsidiaries.

Borrowings outstanding consisted of the following:

	February 2, 2008			January 31, 2009
Holding Term Loan	$	124,375		$	123,125
Topco Term Loan, including PIK interest		—			306,049
Debt discount on Topco Term Loan		—			(5,696	)
Total	$	124,375		$	423,478
Less: current portion		(1,250	)		(1,250	)
Total long-term debt	$	123,125		$	422,228

Annual maturities of long-term debt on the Holding Term Loan and Topco Term Loan are as follows over the next five years and thereafter:

2009	$	1,250
2010		1,250
2011		1,250
2012		1,250
2013		1,250
Thereafter		415,978
Total	$	422,228

F-31

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

9. Long-Term Debt and Credit Facility (continued)

The fair value of the Company’s variable rate debt was estimated using quoted market prices for similar debt issues. As of February 2, 2008, the estimated fair value of the Holding Term Loan was $124,375. As of January 31, 2009, the estimated fair value of the Holding Term Loan and Topco Term Loan was $115,378 and $261,540, respectively.

The Company incurred interest expense of $0 in 2006, $0 in the 2007 Predecessor period, $6,978 in the 2007 Successor period, and $36,531 in 2008. Cash paid for interest was $0 in 2006, $0 in the 2007 Predecessor period, $5,198 in the 2007 Successor period, and $16,349 in 2008.

10. Members’ Equity

Certain executive management members were provided the opportunity to purchase Class L equity ownership units for a combination of cash and promissory notes payable to Holding. These seven-year promissory notes are fully-recourse to the employee, accrue interest on an arm’s length rate basis and are secured by a pledge of all equity interests of Holding by the executive management member. The promissory notes require mandatory prepayments upon certain events defined in the agreements, including upon receipt of any cash proceeds received by the executive management members in connection with their membership interests. The promissory notes will be repaid at maturity, unless the mandatory prepayment is triggered or the executive management member elects to prepay. Pursuant to the Recapitalization, the executive management members contributed their Class L equity ownership units of Holding in exchange for an equivalent number of Class L equity ownership units of the Company. Notes receivable of $5,643 and $5,633 related to the purchase of executive management membership interest in the Company are reflected as a reduction of members’ equity as of February 2, 2008 and January 31, 2009, respectively. During the 2007 Successor period and 2008, the Company received $0 and $266 of interest income, respectively on the notes receivable, which is included in interest income in the Consolidated Statements of Operations.

The Company owns 100% of the membership interests of Topco, and Topco owns 100% of the membership interests of Holding. The Company is authorized to issue an unlimited number of units. The following equity units of the Company were issued and outstanding as of the respective periods:

	Successor
Outstanding Units	February 2, 2008	January 31, 2009
Class L	101,746	101,742
Class A	7,855	7,540
Class B	—	—
Class C	3,855	4,155
Total	113,456	113,437

Class L units accumulate a non-cash compounded yield of 10% per annum and have a distribution preference over Class A, B, and C units. Class L unit holders are entitled to participate in all distributions, including recapitalizations, dividends, and other liquidity events. Such events have the following priority; (a) Class L units first receive their preferred return on their cost basis per unit plus the accumulated yield; (b) Class L units then receive an amount equal to their aggregate unreturned capital; (c) Class L and A units then, as a group, ratably based upon the number of vested units held by each at the time of such event, receive 100% until the amount reaches one and half times such holder’s aggregate investment in such units; (d) Class L, A, and B units then, as a group, ratably based upon the number of vested units held by each at the time of such event,

F-32

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

10. Members’ Equity (continued)

receive 100% until the amount reaches two times such holder’s aggregate investment in such units; and (e) Class L, A, B, and C units, as a group, ratably upon the number of vested units held by each at the time of such event, receive 100% of the remaining amount. Class A, B, and C units are equity incentive units.

During 2008, the Company repurchased certain Class L, A, and C units at cost from associates who were separated from the Company. As of January 31, 2009, approximately 3 Class L units, 315 Class A, and 350 Class C units were included in treasury stock.

In addition to $33,610 of tax distributions, the Company declared and approved $168,074 of other distributions to its members during 2008. In July 2008, the Company distributed $289,529 to members from the proceeds of the Topco Term Loan. The Company waived the promissory note mandatory prepayment requirement in connection with the distributions to members during 2008.

11. Equity Units and Share-Based Compensation

Predecessor

Prior to the GGC Acquisition, officers and key employees were granted share-based awards to participate in the LBI 1993 Stock Option and Performance Incentive Plan as amended (the “LBI Stock Plan”). The LBI Stock Plan provided for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance-based restricted stock, performance units, and unrestricted shares. LBI grants stock options at a price equal to the fair market value of the stock on the date of the grant. Stock options generally vested over four years with 25% vesting each year. Restricted stock generally vests (the restrictions lapse) over a two or three year period.

Stock options of 144 and 51 were granted during 2006 and the 2007 Predecessor period, respectively; at a weighted average option price per share of $24.77 and $26.12, respectively.

Restricted stock shares of 174 and 137 were granted during 2006 and the 2007 Predecessor period, respectively; at a weighted average grant date fair value of $25.09 and $24.66, respectively.

Intrinsic value for stock options is the difference between the current market value of LBI’s stock as of July 6, 2007 and the option strike price. The total intrinsic value of options exercised in 2006 and in the 2007 Predecessor period was $9,345 and $651, respectively. The total intrinsic value of restricted stock vested in 2006 and the 2007 Predecessor period $2,903 and $4,197, respectively.

Valuation Methodology

LBI used the Black-Scholes option pricing model for valuations of options granted to employees and directors. The weighted average estimated fair value of stock options granted in 2006 and the 2007 Predecessor Period was $7.39 and $7.03, respectively, based on the following weighted-average assumptions.

	2006		2007 Predecessor Period
Risk-free interest rate	4.8	%	3.2	%
Expected volatility	35	%	45	%
Dividend yield	3.0	%	3.0	%
Expected life	5.5		5.3

F-33

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

11. Equity Units and Share-Based Compensation (continued)

The risk-free interest rate assumption is based upon the average daily closing rates during the period for U.S. treasury notes that have a life which approximates the expected life of the option. The expected volatility assumption is based on LBI’s analysis of historical volatility of LBI’s stock. The dividend yield assumption is based on LBI’s history and expectation of dividend payouts. The expected life of employee stock options represent the weighted-average period the stock options are expected to remain outstanding. Fair value of restricted stock awards is based on the market value of an unrestricted share on the grant date adjusted for anticipated dividend yields.

Compensation expense for stock options was recognized, net of forfeitures, over the requisite service period on a straight-line basis, using a single option approach (each option is valued as one grant, irrespective of the number of vesting tranches). Restricted stock expense was recognized, net of forfeitures over the requisite service period on a straight-line basis.

Successor

In December 2007, the Board of Directors (the “Board”) approved, and the Company implemented, a management equity program (the “Equity Program”). The Equity Program authorizes Class A, B, and C equity incentive units to be granted to certain management employees upon the approval of the Board. Pursuant to the Recapitalization, the management members contributed their Class A and C equity incentive units of Holding in exchange for an equivalent number of Class A and C equity incentive units of the Company. At the time of the Recapitalization, there were no Class B equity incentive units outstanding. As of January 31, 2009, approximately 2,818 Class A and 1,290 Class C equity incentive units were vested. Under the Equity Program, as of January 31, 2009, approximately 9,400 and 5,000 Class A and C equity incentive units, respectively, are authorized to be granted and approximately 1,860 and 845 Class A and C equity incentive units, respectively, were available for grant.

Class A and C equity incentive unit grants vest over four years in equal 25% increments each year and have pro-rata vesting for each quarter elapsed since the prior annual vesting date. These units have no exercise price.

The Company recognized compensation expense related to Class A and C equity incentive units of $1,233 in the 2007 Successor period, and $2,072 in 2008. As of January 31, 2009, there was $5,083 of total unrecognized compensation expense related to unvested Class A and C equity incentive units. That cost is expected to be recognized over a weighted-average period of two and a half years.

Valuation Methodology

Fair value of the shares is determined using the Black-Scholes pricing model. This model assumes asset volatility for comparable company’s equity volatility and leverage, and a marketability discount to reflect the lack of liquidity and ready market.

The following table illustrates the assumptions used in the Black-Scholes pricing model:

	February 2, 2008	January 31, 2009
Risk-free interest rate	3.15%	1.69%
Asset volatility	35%	40%
Time to liquidity event	3.0 years	2.0-3.0 years
Marketability discount	25%	34%

F-34

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

11. Equity Units and Share-Based Compensation (continued)

Risk-free interest rate—This is an interpolated rate from the U.S. constant maturity treasury rate for a term corresponding to the time to liquidity event, as described below. An increase in the risk-free interest rate will increase compensation expense.

Asset volatility—This is a measure of the amount by which the price of various comparable companies common stock has fluctuated or is expected to fluctuate, as the Company’s common stock is not publicly traded. An increase in the expected volatility will increase compensation expense.

Time to liquidity event—This is the period of time over which the units granted are expected to remain outstanding. An increase in the expected term will increase compensation expense.

Marketability discount—This is a measure of the amount by which the value of the units is reduced as the value of privately-held shares is not directly comparable to the value of publicly-traded shares of similar common stock. An increase in the marketability discount will decrease compensation expense.

Equity Incentive Unit Activity

The Company’s activity with respect to Class A and C equity incentive units for the 2007 Successor period and 2008 was as follows:

(in thousands, except per unit amounts)	Number of Class A Units		Class A Unit Grant Date Weighted Average Fair Value			Number of Class C Units		Class C Unit Grant Date Weighted Average Fair Value
Unvested, July 6, 2007	—		$	—		—		$	—
Granted	7,855			0.88		3,855			0.40
Vested	—			—		—			—
Repurchased	—			—		—			—
Unvested, February 2, 2008	7,855		$	0.88		3,855		$	0.40
Granted	—			—		650			0.40
Vested	(2,818	)		0.88		(1,318	)		0.40
Repurchased	(315	)		(0.01	)	(350	)		(0.0025	)
Unvested, January 31, 2009	4,722		$	0.88		2,837		$	0.40

F-35

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

12. Earnings Per Unit

Basic net income (loss) per unit (“EPU”) is computed for each class of common units outstanding during the period by dividing net income (loss) allocated to each class by the weighted average number of common units outstanding during the period. Net income (loss) for the period is allocated to each class of common units based on the terms and preferences of the respective class of common units as prescribed by the Company’s LLC agreement. Diluted EPU assumes the conversion, exercise, or issuance of all potential common unit equivalents, unless the effect of inclusion would result in the reduction of a loss or the increase in income per unit. For purposes of this calculation unvested units under the Equity Program are considered to be potential common units and are only included in the calculation of diluted EPU when the effect is dilutive.

Due to the GGC Acquisition, the Company’s capital structure for the periods before and after the GGC Acquisition are not comparable. Prior to the GGC Acquisition, Express operated as a division of LBI without a defined capital structure or designated member units. As a result, EPU is presented only for periods subsequent to the GGC Acquisition.

According to the LLC agreement, common units absorb losses only to the extent of the respective classes’ capital accounts. All Class A and Class C equity incentive units have been issued in exchange for services and their capital accounts reflect only amortization of share-based compensation expense. Any losses in excess of accumulated share-based compensation expenses are allocated to the Class L equity ownership units, as follows:

	Successor
	Thirty Weeks Ended February 2, 2008			2008
Net loss attributable to the Company	$	(40,399	)	$	(29,036	)
Loss allocated to Class L units		(40,399	)		(25,735	)
Loss allocated to Class A units		—			(2,691	)
Loss allocated to Class C units		—			(610	)

Diluted net loss per common unit is the same as basic net loss per unit for the 2007 Successor period and 2008, since the effect of any potentially dilutive units was excluded, as they were anti-dilutive due to the net loss attributable to all classes of common units.

The following potentially dilutive units were excluded from the calculation of diluted net loss per unit:

	Successor
	Thirty Weeks Ended February 2, 2008	2008
Unvested Class A Units:	7,855	6,281
Unvested Class C Units:	3,855	3,172

F-36

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

13. Pro forma Earnings Per Share (unaudited)

Pro forma basic and diluted net loss per share of common stock (unaudited) has been computed to give effect to the pro forma adjustments discussed below, including the assumed conversion of the common units into common stock, as follows:

	Common Units	Exchange Ratio	Common Shares
Class L units
Class A units
Class C units
Total shares

The pro forma net loss applied in computing the unaudited pro forma loss per unit for the year ended January 31, 2009 is based upon the Company’s historical net loss as adjusted to reflect:

• The elimination of the annual management fee to GGC and LBI LLC fee totaling $            ,

• The effect on interest expense of $            , including amortization of issuance costs and debt discounts, arising from the partial prepayment of the Topco credit facility with the proceeds from this initial public offering of the Company’s common stock,

• The conversion of the Company to a corporation. Prior to such conversion, the Company was a partnership and generally not subject to income taxes. The pro forma net loss therefore also includes adjustments for income tax expense as if the Company had been a corporation at an assumed combined federal, state, and local income tax rate of             %.

14. Retirement Benefits

The employees of the Company, if eligible, participate in a qualified defined contribution retirement plan (the “Qualified Plan”) and a non-qualified supplemental retirement plan (the “Non-Qualified Plan”) sponsored by the Company.

Participation in the Company’s Qualified Plan is available to employees who meet certain age and service requirements. The Qualified Plan permits employees to elect contributions up to the maximum limits allowable under the Internal Revenue Code (“IRC”). The Company matches employee contributions according to a pre-determined formula and contributes additional amounts based on a percentage of the employees’ eligible annual compensation and years of service. Employee contributions and Company matching contributions vest immediately.

Additional Company contributions and the related investment earnings are subject to vesting based on years of service. Total expense recognized related to the Qualified Plan was $5,521 in 2006, $879 in the 2007 Predecessor period, $3,552 in the 2007 Successor period, and $2,508 in 2008. The Company elected not to fund an additional amount to the Qualified Plan for 2008. Additionally, the Company elected to suspend the employer matching contribution to the Qualified Plan effective March 6, 2009.

Participation in the Non-Qualified Plan is made available to employees who meet certain age, service, job level and compensation requirements. The Non-Qualified Plan is an unfunded plan which provides benefits

F-37

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

14. Retirement Benefits (continued)

beyond the IRC limits for qualified defined contribution plans. The plan permits employees to elect contributions up to a maximum percentage of eligible compensation. The Company matches employee contributions according to a predetermined formula and credits additional amounts based on a percentage of the employees’ eligible compensation and years of service. The Non-Qualified Plan also permits employees to defer additional compensation up to a maximum amount. The Company does not match the contributions for additional deferred compensation. Employees’ accounts are credited with interest using a rate determined annually by the Retirement Plan Committee using a methodology consistent with historical practices. Employee contributions and the related interest vest immediately. Company contributions and the related interest are subject to vesting based on years of service. Employees may elect an in-service distribution for the additional deferred compensation component only. Employees are not permitted to take a withdrawal from any other portion of the Non-Qualified Plan while actively employed with the Company. The remaining vested portion of employees’ accounts in the Non-Qualified Plan will be distributed upon termination of employment in either a lump sum or in equal annual installments over a specified period of up to 10 years. Total expense recognized related to the Non-Qualified Plan was $1,584 in 2006, $471 in the 2007 Predecessor period, $831 in the 2007 Successor period, and $2,241 in 2008.

The Company elected to account for this cash balance plan based on the participant account balances, excluding actuarial considerations as permitted by the applicable authoritative guidance.

The annual activity for the Company’s Non-Qualified Plan and the year-end liability, which is included in other long-term liabilities on the Consolidated Balance Sheets, was as follows:

	Successor
	Thirty Weeks Ended February 2, 2008			2008
Balance, beginning of period	$	8,137		$	7,208
Contributions:
Employee		487			1,209
Company		301			2,226
Interest		285			680
Distributions		(1,998	)		(191	)
Forfeitures		(4	)		(13	)
Balance, end of period	$	7,208		$	11,119

15. Commitments and Contingencies

The Company is subject to various claims and contingencies related to lawsuits and pending action arising out of the normal course of business. Management believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse effect on the Company’s results of operations, financial condition, or cash flows.

F-38

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars and units in thousands)

F-39

16. Subsequent Events

On February 2, 2009 and April 30, 2009, the Company made interest payments of $10,319 and $5,398, respectively, on the Topco Term Loan.

During 2008, the Company entered into a development agreement in which the Company agreed to enter into separate license agreements for the construction and operation of Express stores, subject to certain restrictions, located within the Middle East. The development agreement expires on March 31, 2014 and is subject to an automatic five year extension period followed by an optional five-year renewal term. The Company will earn royalties on revenues generated by the franchised stores. The first franchised store commenced operations on March 25, 2009.

Unaudited Consolidated Financial Statements

F-40

EXPRESS PARENT LLC

CONSOLIDATED BALANCE SHEET

(unaudited, dollars and units in thousands)

	October 31, 2009
Assets
Current assets
Cash and cash equivalents	$	158,395
Receivables, net		3,179
Inventories		225,697
Prepaid minimum rent		21,005
Other		7,835
Total current assets		416,111
Property and equipment, net		225,824
Tradename/domain name		197,394
Other assets		22,208
Total assets	$	861,537
Liabilities and members’ equity
Current liabilities
Accounts payable	$	54,641
Deferred revenue		14,309
Accrued expenses		84,689
Accounts payable and accrued expenses—related parties		127,829
Total current liabilities		281,468
Long-term debt		415,671
Other long-term liabilities		36,482
Total liabilities		733,621
Commitments and Contingencies (Note 13)
Members’ equity
Common units (Class L)—no par value; 101,742 issued and outstanding on October 31, 2009		168,866
Common units (Class A)—no par value; 7,330 issued and outstanding on October 31, 2009		3,900
Common Units (Class B)—no par value; none issued and outstanding		—
Common Units (Class C)—no par value; 3,985 issued and outstanding on October 31, 2009		908
Accumulated deficit		(40,125	)
Notes receivable		(5,633	)
Total members’ equity		127,916
Total liabilities and members’ equity	$	861,537

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-41

EXPRESS PARENT LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per unit amounts)

	Thirty-Nine Weeks Ended
	November 1, 2008			October 31, 2009
Net sales	$	1,231,644		$	1,174,227
Costs of goods sold, buying and occupancy costs		870,308			813,998
Gross profit		361,336			360,229
General, administrative and store operating expenses		340,197			285,259
Other operating expense, net		5,067			6,514
Operating income		16,072			68,456
Interest expense		22,391			40,204
Interest income		(3,401	)		(403	)
Other income, net		(1,116	)		(1,578	)
(Loss) income before income taxes		(1,802	)		30,233
Provision for income taxes		86			923
Net (loss) income	$	(1,888	)	$	29,310
Class L units:
Basic and diluted net (loss) income per unit:	$	—		$	0.29
Basic and diluted weighted average units outstanding:		101,743			101,742
Class A units:
Basic and diluted net (loss) income per unit:	$	(1.58	)	$	0.00
Basic weighted average units outstanding:		890			3,415
Diluted weighted average units outstanding:		890			4,293
Class C units:
Basic and diluted net (loss) income per unit:	$	(1.15	)	$	0.00
Basic weighted average units outstanding:		418			1,700
Diluted weighted average units outstanding:		418			2,038
Pro forma basic and diluted net loss per share—(Note 13, unaudited)
Basic
Diluted
Pro forma basic and diluted weighted average shares outstanding (unaudited)
Basic
Diluted

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-42

EXPRESS PARENT LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, dollars in thousands)

	Thirty-Nine Weeks Ended
	November 1, 2008			October 31, 2009
Operating Activities
Net (loss) income	$	(1,888	)	$	29,310
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		60,410			55,531
Loss on disposal of property and equipment		1,313			307
Impairment charge		2,167			947
Bad debt expense		—			2,261
Non-cash interest expense		—			132
Change in fair value of interest rate swap		(1,115	)		(1,577	)
Share-based compensation		1,535			1,510
Change in assets and liabilities:
Receivables, net		(5,449	)		5,995
Inventories		(97,888	)		(55,495	)
Accounts payable, deferred revenue, and accrued expenses		19,441			18,203
Accounts payable and accrued expenses—related parties		1,966			27,817
Other assets and liabilities		4,274			2,343
Net cash provided by (used in) operating activities		(15,234	)		87,284
Investing Activities
Capital expenditures		(32,359	)		(22,883	)
Net cash used in investing activities		(32,359	)		(22,883	)
Financing Activities
Borrowings under long-term debt arrangements		294,000			—
Costs incurred in connection with credit agreements		(3,870	)		—
Repayments of line of credit arrangement		—			(75,000	)
Repayments of long-term debt		(937	)		(7,118	)
Distributions paid to members		(491,213	)		—
Grants of equity units		2			—
Repurchase of equity units		(24	)		(3	)
Repayment of notes receivable		10			—
Net cash used in financing activities		(202,032	)		(82,121	)
Net decrease in cash and cash equivalents		(249,625	)		(17,720	)
Cash and cash equivalents, beginning of period		320,029			176,115
Cash and cash equivalents, end of period	$	70,404		$	158,395

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-43

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

1. Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

Express Parent LLC, a Delaware limited liability company (“LLC”) (the “Company”), was formed on June 10, 2008 and acquired all of the outstanding equity interest in Express Topco LLC, a Delaware LLC (“Topco”) which owns all of the outstanding equity interest in Express Holding, LLC, a Delaware LLC (“Holding”), on June 26, 2008. Holding owns all of the outstanding equity interest in Express, LLC (“Express”), which previously operated as a division of Limited Brands, Inc., a Delaware corporation (“LBI”). The Company is a holding company without any assets except its investment in Topco. Express is a wholly-owned subsidiary of Holding and conducts the operations of the Company.

On June 26, 2008, the Company entered into an exchange agreement with Holding, Topco, and other security holders, whereby the members of Holding contributed, transferred, assigned, and delivered all issued and outstanding equity interests of Holding to the Company in exchange for issuance by the Company to each Holding member an equivalent number of identical equity interests of the Company (the “Recapitalization”). Upon consummation of the exchange agreement, the Company and Topco entered into a contribution agreement, pursuant to which the Company contributed all of its equity interest in Holding to Topco as a contribution to Topco’s capital. Immediately following the consummation of these transactions, Topco entered into the Second Amended and Restated LLC Agreement (“Amendment Agreement”) of Holding in order to recapitalize the membership interests of Holding into a single class of membership units. Following the Recapitalization, the Company owned 100% of the membership interests of Topco, and Topco owned 100% of the membership interests of Holding. Because the Recapitalization represented a transfer of equity interests between entities under common control, the Company recognized the assets and liabilities transferred at their historical carrying amounts, similar to the pooling-of-interests method.

As of October 31, 2009, the Company is owned 73.7% by Express Investment Corp., a Delaware corporation (“EIC”) and affiliate of Golden Gate Capital (“GGC”), 24.6% by LBI, and 1.7% by certain executive management members.

Express is a specialty retailer of women’s and men’s apparel, offering woven and knit tops, sweaters, pants, denim, intimate apparel, and accessories to a youthful clientele. Express merchandise is sold through retail stores and its website. As of October 31, 2009 and January 31, 2009, respectively, the Company operated 582 and 581 primarily mall-based stores in the United States. Additionally, the Company earns royalties on a development agreement with an unaffiliated franchisee for four stores operating in the Middle East. Under this agreement, the third party operates stores that sell Express branded apparel and accessories purchased from the Company.

The Consolidated Financial Statements include the accounts of the Company and its subsidiary. All intercompany transactions and balances have been eliminated. In the opinion of management, the accompanying Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the interim period. These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the 52-week fiscal period ended January 31, 2009. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”).

F-44

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

Segment Reporting

The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that its Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker and there is one operating segment, and therefore reports as a single segment, which includes the operation of its Express brick and mortar retail stores and the Express.com e-commerce site.

	Thirty-Nine Weeks Ended
	November 1, 2008		October 31, 2009
Classes:
Apparel	$	1,138,548	$	1,071,700
Accessories and other		90,516		94,693
Other revenue		2,580		7,834
Total net sales	$	1,231,644	$	1,174,227

	Thirty-Nine Weeks Ended
	November 1, 2008		October 31, 2009
Channels:
Stores	$	1,218,850	$	1,111,331
E-commerce		10,214		55,062
Other revenue		2,580		7,834
Total net sales	$	1,231,644	$	1,174,227

Other revenue consists primarily of shipping and handling revenue, gift card breakage, and franchise royalties.

Fair Value of Financial Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date.

Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The Company incorporates credit valuation adjustments (“CVAs”) to appropriately reflect its nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to

F-45

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

value its derivatives, such as forward interest rates, and the Company’s and the counterparty’s credit ratings, fall within Level 2 of the fair value hierarchy, the CVAs associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparty. However, as of October 31, 2009, the Company has assessed the significance of the impact of the CVAs on the overall valuation of its derivative positions and has determined that the CVAs are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of October 31, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall.

	October 31, 2009
	Level 1		Level 2		Level 3
Treasury securities	$	138,232	$	—	$	—
Interest rate swap	$	—	$	2,835	$	—

The carrying amounts reflected on the Consolidated Balance Sheet for cash, cash equivalents, receivables, prepaid expenses, and payables approximated their fair values as of October 31, 2009.

Non-financial assets and liabilities measured at fair value on a non-recurring basis as of October 31, 2009 consisted of the following:

	Level 1		Level 2		Level 3
Long-lived assets to be held and used	$	—	$	—	$	179

Long-lived assets to be held and used with a carrying amount of $1,126 were written down to their fair value of $179, resulting in an impairment charge of $947, which was included in cost of goods sold, buying and occupancy costs for the thirty-nine weeks ended October 31, 2009.

Receivables, Net

During the thirty-nine weeks ended October 31, 2009, the Company recorded bad debt expense of $2,261 related to a receivable for sell-off merchandise that is considered uncollectible. The allowance for doubtful accounts, included in receivables, net on the Consolidated Balance Sheet as of October 31, 2009 was $3,491.

Property and Equipment, Net

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the store level assets may not be recoverable. If the estimated undiscounted future cash flows related to the property and equipment are less than the carrying value, the Company recognizes a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flows analysis of the asset. Factors used to assess the fair value of property and equipment include, but are not limited to, management’s plans for future operations, brand initiatives, recent operating results, and projected future cash flows. The Company recorded impairment charges of $1,987 related to store leasehold improvements during the thirteen weeks ended November 1, 2008. As a result of poor performing

F-46

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

markets, the Company recorded impairment charges of $947 related to store leasehold improvements during the thirteen weeks ended October 31, 2009. These impairment charges were included in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations.

Income Taxes

Effective May 7, 2007, the Company became recognized as a partnership for federal income tax purposes. As such, with the exception of a limited number of state and local jurisdictions, the Company is no longer subject to income taxes. The members of the Company, and not the Company itself, are subject to income tax on their distributive share of the Company’s earnings from May 7, 2007 forward. The Company pays distributions to members to fund their tax obligations.

In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes, the Company accounts for income taxes using the asset and liability method. Under this method, the amount of taxes currently payable or refundable are accrued and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of the Company’s assets and liabilities. For periods up to the effective date of the Company’s recognition as a partnership for federal income tax purposes, deferred taxes were recognized on a separate company basis as if the Company were taxable as a corporation. As a partnership, the deferred taxes for periods ending after May 7, 2007 are related to a limited number of state and local jurisdictions.

Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows, or financial position.

The Company recognizes tax liabilities in accordance with ASC 740, Income Taxes, and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. These differences will be reflected as increases or decreases in income tax expense and the effective tax rate in the period in which the new information becomes available.

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued ASC 105, GAAP. This standard establishes two levels of GAAP, authoritative and non-authoritative. The FASB ASC (the “Codification”) will become the source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the Securities and Exchange Commission (“SEC”), which are sources of authoritative GAAP for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. This standard is effective for financial statements for interim or annual reporting periods ending after September 15, 2009. Effective February 1, 2009, the Company has adopted ASC 105 which changed its historical U.S. GAAP references to comply with the Codification.

F-47

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

1. Summary of Significant Accounting Policies (continued)

In May 2009, the FASB issued authoritative guidance included in ASC 855, Subsequent Events. This standard is intended to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued. The Company has adopted this guidance, and there was no material impact on its Consolidated Financial Statements. Refer to Note 14.

In April 2009, the FASB issued authoritative guidance included in ASC 825, Financial Instruments, intended to provide additional accounting guidance and enhanced disclosures of fair values of certain financial instruments in interim and annual financial statements. The Company has adopted this guidance, and there was no material impact on its Consolidated Financial Statements.

In April 2008, the FASB issued authoritative guidance included in ASC 350, Intangibles—Goodwill and Other, which is intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company has adopted this guidance effective February 1, 2009, and there was no material impact on its Consolidated Financial Statements.

In March 2008, the FASB issued authoritative guidance included in ASC 815, Derivatives and Hedging. This guidance requires additional disclosures about the objectives and strategies for using derivative instruments and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. The Company has adopted this guidance effective February 1, 2009, the results of which are included in Note 7.

In September 2006, the FASB issued authoritative guidance included in ASC 820, Fair Value Measurements and Disclosures, which provides guidance for fair value measurement of assets and liabilities and instruments measured at fair value that are classified in members’ equity. This guidance defines fair value, establishes a fair value measurement framework and expands fair value disclosures. It emphasizes that fair value is market-based with the highest measurement hierarchy level being market prices in active markets. This guidance requires fair value measurements be disclosed by hierarchy level, an entity to include its own credit standing in the measurement of its liabilities and modifies the transaction price presumption. In February 2008, the FASB delayed the effective date for this guidance to fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Accordingly, as of February 3, 2008, the Company adopted the authoritative guidance for financial assets and liabilities only on a prospective basis. As of February 1, 2009, the Company adopted the remaining provisions. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

2. Leased Facilities and Commitments

On July 6, 2007, the Company entered into a lease agreement (the “Lease”) with LBI, a related party, for its corporate home office and distribution center facility in Columbus, OH. The Lease is for a six year period that expires on July 31, 2013 and requires annual minimum market rent payments of approximately $3,800 in year one and $3,300 thereafter, subject to periodic adjustments each July based on the change in the Consumer Price Index over the twelve month period ending two months prior to each July. Either party can elect to terminate the Lease prior to July 31, 2013 with written notice. On February 20, 2009, the parties amended the Lease to provide that each party’s right to terminate the Lease prior to July 31, 2013 may not be exercised by either party until April 30, 2011.

F-48

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

2. Leased Facilities and Commitments (continued)

On October 5, 2009, the Company and LBI entered into a new lease agreement (the “New Lease”) for the corporate home office and distribution center facility in Columbus, OH. The New Lease is for a 75 month period that commences February 1, 2010 and expires on April 30, 2016 and requires annual minimum market rent payments of approximately $1,284 for the first five years and $1,413 thereafter. The New Lease contains a renewal option for one period of five years by written notice 365 days prior to the expiration of the New Lease term, and a construction allowance of $8,000.

Annual store rent consists of a fixed minimum amount and/or contingent rent based on a percentage of sales exceeding a stipulated amount. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheets and the corresponding rent expense in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Operations when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable.

On April 28, 2008, the Company issued an irrevocable standby letter of credit (“LBI stand-by LC”) to LBI for $34,170, which related to certain store leases guaranteed by LBI that could not be assigned to the Company at or subsequent to the purchase of the Company by GGC (the “GGC Acquisition”). LBI can draw from the LBI stand-by LC if the Company were to default on any of the guaranteed leases. The LBI stand-by LC is reduced through the September 30, 2010 expiration date with the overall reduction in guaranteed lease payments. The outstanding balance of the LBI stand-by LC was $9,888 as of October 31, 2009.

3. Intangible Assets

The following table provides the significant components of intangible assets:

	October 31, 2009
	Cost		Accumulated Amortization		Ending Net Balance
Tradename	$	196,144	$	—	$	196,144
Internet domain name		1,250		—		1,250
Net favorable lease obligations		19,750		10,252		9,498
Credit card relationships & customer lists		4,766		3,643		1,123
	$	221,910	$	13,895	$	208,015

The Company’s tradename and internet domain name have indefinite lives. Net favorable lease obligations, credit card relationships and customer lists have finite lives that are amortized over a period of up to seven years, four years, and two years, respectively, and are included in other assets on the Consolidated Balance Sheet. Amortization expense totaled $4,474 and $3,769 during the thirty-nine week periods ended November 1, 2008 and October 31, 2009, respectively.

The Company capitalizes intangible asset extension or renewal costs in the period incurred. During the thirty-nine week periods ended November 1, 2008 and October 31, 2009, it was not necessary to extend or renew any of the pre-existing intangible assets, therefore no costs were incurred.

F-49

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

4. Related Party Transactions

Transactions with LBI

On July 6, 2007, in conjunction with the GGC Acquisition, the Company entered into transition services agreements (“TSA”) whereby LBI provides support to the Company in various operational areas including, among other things, logistics, technology and merchandising sourcing. The terms of these TSAs vary and range from three months to thirty-nine months. The Company is obligated to purchase a minimum of 90% of its merchandise products from LBI during the first year after the GGC Acquisition, 80% during the second year, and 60% during the third year. The Company is liable to LBI in the event of a breach of this provision in the amount of a margin rate defined in the merchandise sourcing TSA, applied to the cost of products for which the Company was otherwise required to source through LBI.

The Company incurred charges from LBI for various transaction services, included in general, administrative and store operating expenses, and merchandising sourcing, included in cost of goods sold, occupancy and buying costs, respectively, as follows:

	Thirty-Nine Weeks Ended
	November 1, 2008		October 31, 2009
Transaction Services	$	167,350	$	49,792
Merchandising Sourcing	$	461,114	$	350,822

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheet, for transaction services and merchandising sourcing was as follows:

	October 31, 2009
Transaction Services	$	11,285
Merchandising Sourcing	$	103,238

On October 5, 2009, the parties entered into a new logistics services agreement (the “Logistics Agreement”) which terminates the logistics services portion of the TSA described above. The Logistics Agreement defines that the Company will receive logistic services from LBI in exchange for approximately $13,207 annually.

Furthermore, under the LLC Agreement, LBI is entitled to receive a cash payment (at the same time payments are made under the GGC Advisory Agreement (“Advisory Agreement”)) equal to the product of (i) the amount of the fees actually paid in cash under the Advisory Agreement and (ii) the quotient of the number of units held by LBI over the number of units held by GGC at the time of payment of such fees. The Company incurred the following charges from LBI related to this fee, which is included in other operating expense, net.

	Thirty-Nine Weeks Ended
	November 1, 2008		October 31, 2009
LBI LLC Fees	$	952	$	1,499

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheet, was $6,159 as of October 31, 2009.

F-50

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

4. Related Party Transactions (continued)

Transactions with GGC

In connection with the GGC Acquisition, the Company entered into an Advisory Agreement (“the Advisory Agreement”) with GGC that expires in July 2017. In exchange for on-going consulting and management advisory services provided by GGC, the Company reimburses GGC for reasonable out-of-pocket expenses incurred in connection with providing on-going services and an annual management fee equal to the greater of (i) $2,000 per fiscal year or (ii) 3% of adjusted EBITDA of Holding as defined in the term loan agreement.

The Company incurred advisory fees and out-of-pocket expenses, which are included in other operating expense, net in the Consolidated Statements of Operations, as follows:

	Thirty-Nine Weeks Ended
	November 1, 2008		October 31, 2009
Advisory fees and out-of-pocket expenses	$	3,008	$	4,724

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheet, was $4,989 as of October 31, 2009.

Transactions with Other GGC Affiliates

The Company also transacts with affiliates of GGC for the software license purchases, consulting and software maintenance services, and e-commerce warehouse and fulfillment services. The Company incurred the following charges:

	Thirty-Nine Weeks Ended
	November 1, 2008		October 31, 2009
Software licenses and maintenance, and consulting	$	304	$	205
E-commerce warehouse and fulfillment	$	4,124	$	10,153

The Company’s outstanding liability, included in accounts payable and accrued expenses—related parties on the Consolidated Balance Sheet was $2,157 as of October 31, 2009.

5. Income Taxes

There are a limited number of state and local jurisdictions that subject the Company to income tax even though it is recognized as a partnership for federal income tax purposes. The Company’s provisions for income taxes for interim reporting periods are based on estimates of the annual effective tax rate for the full fiscal year. The computation of the annual effective tax rate includes a forecast of the Company’s estimated “ordinary” income (loss), which is the annual income (loss) from operations before tax, excluding unusual or infrequently occurring (or discrete) items. Significant management judgment is required in the projection of ordinary income (loss) in order to determine the estimated annual effective tax rate.

F-51

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

5. Income Taxes (continued)

The Company evaluates tax positions using a more-likely-than-not recognition criterion and did not record a liability for uncertain tax positions in the Successor periods. As of October 31, 2009, the Company had $0 liability for uncertain tax positions.

The Company is currently not under examination by the Internal Revenue Service or state taxing authorities.

The Company believes the increase in the liability for uncertain tax positions will not be significant within the next twelve months. However, changes could result from examinations or other circumstances. Thus, an estimate of the range of the reasonably possible change cannot be made.

6. Long-Term Debt and Credit Facility

Credit Facility

On July 6, 2007, the Company entered into a $200,000 Asset-Based Loan Credit Facility (“Credit Facility”) with a different lender. The Credit Facility is available to be used for working capital and other general corporate purposes and expires on July 6, 2012. The Credit Facility borrowing rate is equal to LIBOR plus an applicable margin rate or the higher of the Wall Street Journal’s prime lending rate or 0.5% per annum above the Federal Funds Rate, plus an applicable margin rate. The applicable margin rate is determined based on the Company’s most recent Borrowing Base Certificate equal to 90% (credit card advance rate) of credit card receivables plus 90% (inventory advance rate) of the liquidation value of eligible inventory during year one (through July 6, 2008) and 85% thereafter, less certain reserves. In December 2008, the Company borrowed $75,000 under the Credit Facility. The $75,000 Credit Facility outstanding balance was repaid by the Company in the first quarter of fiscal year ended January 30, 2010.

Fees payable under the Credit Facility are based on 0.25% of the average daily unused balance during each quarter payable quarterly in arrears. Additionally, fees for outstanding letter of credit balances are 0.125% based on the average daily aggregate available amount during the quarter of all letters of credit outstanding payable quarterly in arrears. The Credit Facility requires the Company to maintain an agreed upon fixed charge coverage ratio if excess availability plus eligible cash collateral is less than $20,000. The Company’s excess availability was $187,893 as of October 31, 2009. The Company was not subject to this covenant as of October 31, 2009 because excess availability plus eligible cash collateral was greater than $20,000.

All obligations under the Credit Facility are guaranteed and secured by substantially all the assets of the Company and its subsidiary, including: all accounts arising from the sale or other disposition of goods or services; all inventory, letter-of-credit rights and supporting obligations related to the accounts arising from the sale or other disposition of goods or services and inventory; all collection accounts, deposit accounts, commodity accounts, security accounts and any cash, cash equivalents or other assets in any such accounts (excluding any net cash proceeds from the sale or other disposition of any Holding Term Loan first lien collateral); all books, property, and records (including, without limitation, ledgers, customer lists, credit files, printouts, computer software, data processing and other records); and all products and proceeds, including proceeds of insurance and claims against third parties.

The Company incurred interest expense of $21,037 and $38,841 for the thirty-nine week periods ended November 1, 2008 and October 31, 2009, respectively. Cash paid for interest was $14,108 and $43,930 for the thirty-nine week periods ended November 1, 2008 and October 31, 2009, respectively.

F-52

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

6. Long-Term Debt and Credit Facility (continued)

The fair value of the Company’s variable rate debt was estimated using quoted market prices for similar debt issues. As of October 31, 2009, the estimated fair value of the Topco Term Loan was $304,131 and the estimated fair value of the Holding Term Loan was $137,793.

Letters of Credit

The Company periodically enters into various trade letters of credit (“trade LCs”) for certain beneficiary vendors to secure merchandise goods. These trade LCs are issued for a defined period of time and for specific shipments and generally expire three weeks after the date of merchandise shipment. As of October 31, 2009, outstanding trade LCs totaled $438. Additionally, the Company enters into stand-by letters of credit (“standby LCs”) on an as-need basis. As of October 31, 2009, outstanding stand-by LCs totaled $11,669.

Holding Term Loan

On July 6, 2007, the Company entered into a $125,000 secured term loan (“Holding Term Loan”) with a lender. The proceeds of these borrowings were used to finance, in part, the GGC Acquisition and pay transaction fees and expenses related to the GGC Acquisition. The Holding Term Loan borrowing rate is equal to LIBOR plus an applicable margin rate or the higher of the Wall Street Journal’s prime lending rate or 0.5% per annum above the Federal Funds Rate, plus an applicable margin rate. The applicable margin rate is determined by the leverage ratio in effect on the first day of each interest period.

Principal payments under the Holding Term Loan are due in equal quarterly installments of 0.25% of the initial principal balance through the maturity date on July 6, 2014. The Holding Term Loan also requires the Company to maintain a certain leverage ratio of consolidated debt, including letters of credit (net of cash and cash equivalents) to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted for certain items such as non-cash deductions and non-recurring expenses) for the most recently completed reporting period (last twelve months as of the end of each quarter). The Holding Term Loan contains various customary covenants, including certain restrictions on the Company’s ability and the ability of its subsidiary to pay distributions.

All obligations under the Holding Term Loan are guaranteed and secured by substantially all the assets of the Company and its subsidiary, including: owned real property, all fixtures and equipment; all intellectual property; all equity interests in the Company and its subsidiary; all intercompany indebtedness of the Company and its subsidiary; all permits and licenses related to ownership or operation of real property, fixtures or equipment; all proceeds of insurance; all books and records not constituting the Credit Facility first lien collateral; all other collateral not constituting the Credit Facility first lien collateral; and all product and proceeds.

Topco Term Loan

On June 26, 2008, the Company entered into a $300,000 Term Loan (“Topco Term Loan”) with a related-party lender. The proceeds of these borrowings were used to pay a distribution to members and related transaction fees and expenses related to the Recapitalization. The Topco Term Loan was issued at 98% with the face value due at maturity on June 26, 2015. Interest on $150,000 of the borrowings is due semi-annually, on the last calendar day of January and July, at a rate of 13.5% per annum. Interest on the remaining $150,000 of borrowings is due quarterly, on the last calendar day of each January, April, July and October, at a rate of 14.5% per annum. The Company may elect to pay in kind (“PIK”) all or any portion of this quarterly interest at a rate of 16.0% per annum.

F-53

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

6. Long-Term Debt and Credit Facility (continued)

The Topco Term Loan requires the Company to maintain a certain leverage ratio of consolidated debt, including letters of credit (net of cash and cash equivalents) to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted for certain items such as non-cash deductions and non-recurring expenses) for the most recently completed reporting period (last twelve months as of the end of each quarter). The Topco Term Loan also requires the Company to maintain a certain interest coverage ratio of consolidated EBITDA to interest expense for the most recently completed twelve months. The Topco Term Loan contains various customary covenants, including certain restrictions on the Company’s ability and the ability of its subsidiary to pay distributions.

The Company is required to make mandatory prepayments on the Topco Term Loan upon the occurrence of certain events defined in the Topco Term Loan agreement. The Company may, at its option, prepay all or any portion of the Topco Term Loan principal amount plus accrued interest at redemption prices set forth in the loan agreement. The Topco Term Loan is collateralized by 100% of the membership interests in Holding.

7. Derivative Instrument

Effective July 6, 2007, the Company entered into a receive variable/pay fixed interest rate swap agreement to mitigate exposure to interest rate fluctuations on a notional amount of $75,000 of the Company’s $125,000 variable-rate Holding Term Loan. The Company did not seek cash flow hedge accounting and, therefore, records the impact of the change in fair market value of the swap in other income, net in the Consolidated Statements of Operations. The interest rate swap agreement terminates on August 6, 2010.

The Company has recorded the interest rate swap at fair value as follows:

	October 31, 2009
Derivative Instrument	Balance Sheet Location	Fair Value
Interest rate swap agreement—short term	Accrued expenses	$	2,835
Interest rate swap agreement—long term	Other long-term liabilities		—
Total derivative instruments		$	2,835

The effect of the derivative instrument on other income, net in the Consolidated Statements of Operations was as follows:

	Thirty-Nine Weeks Ended
Derivative Instrument	November 1, 2008			October 31, 2009
Interest rate swap agreement	$	(1,115	)	$	(1,577	)
Total derivative instruments	$	(1,115	)	$	(1,577	)

F-54

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

8. Members’ Equity

Certain executive management members were provided the opportunity to purchase Class L ownership equity units for a combination of cash and promissory notes payable to Holding. These seven-year promissory notes are fully-recourse to the employee, accrue interest on an arm’s length rate basis and are secured by a pledge of all equity interests of Holding by the executive management member. The promissory notes require mandatory prepayments upon certain events defined in the agreements, including upon receipt of any cash proceeds received by the executive management members in connection with their membership interests. The promissory notes will be repaid at maturity, unless the mandatory prepayment is triggered or the executive management member elects to prepay. Pursuant to the Recapitalization, the executive management members contributed their Class L equity ownership units of Holding in exchange for an equivalent number of Class L equity ownership units of the Company. Notes receivable of $5,633 related to the purchase of executive management membership interest in the Company are reflected as a reduction of members’ equity as of October 31, 2009.

The Company owns 100% of the membership interests of Topco, and Topco owns 100% of the membership interests of Holding. As of October 31, 2009, the following equity units were issued and outstanding:

Outstanding Units	October 31, 2009
Class L	101,742
Class A	7,330
Class B	—
Class C	3,985
Total	113,057

Class L units accumulate a non-cash compounded yield of 10% per annum and have a distribution preference over Class A, B, and C units. Class L unit holders are entitled to participate in all distributions, including recapitalizations, dividends, and other liquidity events. Such events have the following priority; (a) Class L units first receive their preferred return on their cost basis per unit plus the accumulated yield; (b) Class L units then receive an amount equal to their aggregate unreturned capital; (c) Class L and A units then, as a group, ratably based upon the number of vested units held by each at the time of such event, receive 100% until the amount reaches one and half times such holder’s aggregate investment in such units; (d) Class L, A, and B units then, as a group, ratably based upon the number of vested units held by each at the time of such event, receive 100% until the amount reaches two times such holder’s aggregate investment in such units; and (e) Class L, A, B, and C units, as a group, ratably upon the number of vested units held by each at the time of such event, receive 100% of the remaining amount. Class A, B, and C units are incentive equity units (see Note 10). During the thirty-nine week period ended November 1, 2008, Class L unit holders received $491,213 in distributions for the 10% accumulated yield, return of capital, and taxes. In connection with these distributions, the Company waived the mandatory prepayment requirement of the Class L unit holders with outstanding promissory notes.

Periodically, the Company repurchases certain Class L, C, and A units from associates who were separated from the Company. As of October 31, 2009, approximately 3 Class L units, 525 Class A units, and 560 Class C units were included in treasury stock by the Company.

F-55

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

9. Share-Based Compensation

In December 2007, the Board of Directors (the “Board”) approved and the Company implemented a management equity program (the “Equity Program”). The Equity Program authorizes Class A, B and C equity incentive units to be granted to certain management employees upon the approval of the Board. Pursuant to the Recapitalization, the management members contributed their Class A and C equity incentive units of Holding in exchange for an equivalent number of Class A and C equity incentive units of the Company. At the time of the Recapitalization, there were no Class B equity incentive units outstanding. As of October 31, 2009, approximately 4,123 Class A and 2,077 Class C equity incentive units were vested. Under the Equity Program, as of October 31, 2009, approximately 9,400 and 5,000 Class A and C equity incentive units, respectively, are authorized to be granted and approximately 2,070 and 1,015 Class A and C equity incentive units, respectively, were available for grant.

Class A and C equity incentive unit grants vest over four years in equal 25% increments each year and have pro-rata vesting for each quarter elapsed since the prior annual vesting date. These units have no exercise price.

The Company recognized approximately $1,535 and $1,510 of compensation expense during the thirty-nine week periods ended November 1, 2008 and October 31, 2009, respectively, related to Class A and C equity incentive units. As of November 1, 2008 and October 31, 2009, there was $5,695 and $3,405, respectively, of total unrecognized compensation expense related to unvested Class A and C equity incentive units. That remaining cost is expected to be recognized over a weighted-average period of 1.75 years.

Fair value of the shares is determined using the Black-Scholes pricing model. This model assumes asset volatility for comparable companies’ equity volatility and leverage, and a marketability discount to reflect the lack of liquidity and ready market.

The following table illustrates the assumptions used in the Black-Scholes pricing model.

	November 1, 2008
Risk-free interest rate	1.69%
Asset volatility	40%
Time to liquidity event	2.0-3.0 years
Marketability discount	34%

Risk-free interest rate—This is an interpolated rate from the U.S. constant maturity treasury rate for a term corresponding to the Time to liquidity event, as described below. An increase in the risk-free interest rate will increase compensation expense.

Asset volatility—This is a measure of the amount by which the price of various comparable companies common stock has fluctuated or is expected to fluctuate, as the Company’s common stock is not publicly traded. An increase in the expected volatility will increase compensation expense.

Time to liquidity event—This is the period of time over which the units granted are expected to remain outstanding. An increase in the expected term will increase compensation expense.

Marketability discount—This is a measure of the amount by which the value of the units is reduced as the value of privately-held shares is not directly comparable to the value of publicly-traded shares of similar common stock.

F-56

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

9. Share-Based Compensation (continued)

The Company’s activity with respect to Class A and C equity incentive units for the thirty-nine week periods ended November 1, 2008 and October 31, 2009 was as follows:

(Thousands, except per unit amounts)	Number of Class A Units		Class A Unit Grant Date Weighted Average Fair Value			Number of Class C Units		Class C Unit Grant Date Weighted Average Fair Value
Unvested, February 2, 2008	7,855		$	0.88		3,855		$	0.40
Granted	—			—		630			(0.0025	)
Vested	(2,354	)		0.88		(1,104	)		0.40
Repurchased	(315	)		(0.01	)	(350	)		(0.0025	)
Unvested, November 1, 2008	5,186		$	0.88		3,031		$	0.40

(Thousands, except per unit amounts)	Number of Class A Units		Class A Unit Grant Date Weighted Average Fair Value			Number of Class C Units		Class C Unit Grant Date Weighted Average Fair Value
Unvested, January 31, 2009	4,722		$	0.88		2,837		$	0.40
Granted	—			—		40			—
Vested	(1,305	)		0.88		(759	)		0.40
Repurchased	(210	)		(0.01	)	(210	)		(0.0025	)
Unvested, October 31, 2009	3,207		$	0.88		1,908		$	0.40

10. Earnings Per Unit

Basic net income (loss) per unit (“EPU”) is computed for each class of common units outstanding during the period by dividing net income (loss) allocated to each class by the weighted average number of common units outstanding during the period. Net income (loss) for the period is allocated to each class of common units based on the terms and preferences of the respective class of common units as prescribed by the Company’s LLC agreement. Diluted EPU assumes the conversion, exercise, or issuance of all potential common unit equivalents, unless the effect of inclusion would result in the reduction of a loss or the increase in income per unit. For purposes of this calculation unvested units under the Equity Program are considered to be potential common units and are only included in the calculation of diluted EPU when the effect is dilutive.

According to the LLC agreement, common units absorb losses only to the extent of the respective classes’ capital accounts. All Class A and Class C equity incentive units have been issued in exchange for services and their capital accounts reflect only amortization of share-based compensation expense. Any losses in excess of share-based compensation expenses are allocated to the Class L ownership units as follows:

	Thirty-Nine Weeks Ended November 1, 2008
Net loss attributable to the Company	$	(1,888	)
Losses allocated to Class L units		—
Losses allocated to Class A units		(1,406	)
Losses allocated to Class C units		(482	)

F-57

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

10. Earnings Per Unit (continued)

The following potentially dilutive units were excluded from the calculation of diluted net loss per unit:

	Thirty-Nine Weeks Ended November 1, 2008
Unvested Class A Units:	6,698
Unvested Class C Units:	3,236

Diluted net loss per unit is the same as basic net loss per unit for the thirty-nine week period ended November 1, 2008, since the effect of any potentially dilutive units was excluded as they were anti-dilutive due to the net loss attributable to all classes of common units.

Common units absorb net income, or distributions, in accordance with the LLC Agreement distribution preference as outlined in Note 8, as follows:

	Thirty-Nine Weeks Ended October 31, 2009
Net income attributable to the Company	$	29,310
Income allocated to Class L units		29,310
Income allocated to Class A units		—
Income allocated to Class C units		—

11. Pro Forma Earning per Share (unaudited)

Pro forma basic and diluted net loss per share of common stock (unaudited) has been computed to give effect to the pro forma adjustments discussed below, including the assumed conversion of the common units into common stock, as follows:

	Common Units	Exchange Ratio	Common Shares
Class L units
Class A units
Class C units
Total shares

The pro forma net loss applied in computing the unaudited pro forma loss per unit for the thirty-nine weeks ended October 31, 2009 is based upon the Company’s historical net loss as adjusted to reflect:

• The elimination of the annual management fee to GGC and LBI LLC fee totaling $            ,

• The effect on interest expense of $             including amortization of issuance costs and debt discounts, arising from the partial prepayment of the Topco credit facility with the proceeds from this initial public offering of the Company’s common stock,

F-58

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

11. Pro Forma Earnings Per Share (unaudited) (continued)

• The conversion of the Company to a corporation. Prior to such conversion, the Company was a partnership and generally not subject to income taxes. The pro forma net loss therefore also includes adjustments for income tax expense as if the Company had been a corporation at an assumed combined federal, state, and local income tax rate of             %.

12. Retirement Benefits

The associates of the Company, if eligible, participate in a qualified defined contribution retirement plan (the “Qualified Plan”) and a non-qualified supplemental retirement plan (the “Non-Qualified Plan”) sponsored by the Company.

Participation in the Company’s Qualified Plan is available to associates who meet certain age and service requirements. The qualified plan permits associates to elect contributions up to the maximum limits allowable under the Internal Revenue Code. The Company matches associate contributions according to a pre-determined formula and contributes additional amounts based on a percentage of the associates’ eligible annual compensation and years of service. Associate contributions and Company matching contributions vest immediately.

Additional Company contributions and the related investment earnings are subject to vesting based on years of service. Total expense recognized related to the Qualified Plan was $540 and $1,925 for the thirteen week and thirty-nine week periods ended November 1, 2008, respectively; and $4 and $210 for the thirteen week and thirty-nine week periods ended October 31, 2009, respectively. The Company elected not to fund an additional amount to the qualified plan for 2009. Additionally, the Company elected to suspend the employer matching contribution to the Qualified Plan effective March 6, 2009. During the fourth quarter of fiscal year 2009, the Company elected to reinstate the employer matching contribution to the Qualified Plan effective January 1, 2010.

Participation in the Non-Qualified Plan is made available to associates who meet certain age, service, job level and compensation requirements. The Non-Qualified Plan is an unfunded plan which provides benefits beyond the Internal Revenue Code limits for qualified defined contribution plans. The plan permits associates to elect contributions up to a maximum percentage of eligible compensation. The Company matches associate contributions according to a predetermined formula and credits additional amounts based on a percentage of the associates’ eligible compensation and years of service. The Non-Qualified Plan also permits associates to defer additional compensation up to a maximum amount. The Company does not match the contributions for additional deferred compensation. Associates’ accounts are credited with interest using a rate determined annually by the Retirement Plan Committee using a methodology consistent with historical practices. Associate contributions and the related interest vest immediately. Company contributions and the related interest are subject to vesting based on years of service. Associates may elect an in-service distribution for the additional deferred compensation component only. Associates are not permitted to take a withdrawal from any other portion of the Non-Qualified Plan while actively employed with the Company. The remaining vested portion of associates’ accounts in the Non-Qualified Plan will be distributed upon termination of employment in either a lump sum or in equal annual installments over a specified period of up to ten years. Total expense recognized related to the Non-Qualified Plan was $1,669 for the thirty-nine week period ended November 1, 2008; and $1,373 for the thirty-nine week period ended October 31, 2009.

The Company elected to account for this cash balance plan based on the participant account balances, excluding actuarial considerations as permitted by the applicable authoritative guidance.

F-59

EXPRESS PARENT LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, dollars and units in thousands)

13. Commitments and Contingencies

Express is named as a defendant in a purported class action lawsuit action alleging various California state labor law violations. The complaint was originally filed on February 18, 2009, and an amended complaint was filed on March 18, 2009. The amended complaint contains six counts: (1) failure to provide required meal breaks to the class members and failure to pay the class members for missed meal breaks, including premium payments required by California law; (2) failure to provide required rest breaks to the class members and failure to pay the class members for missed rest breaks, including premium payments required by California law; (3) failure to pay wages in a timely manner to employees who were terminated or quit; (4) failure to pay overtime or premium payments in a timely manner; (5) failure to provide accurate wage statements; and (6) violations of Section 17200 of the California Business and Professions Code. The Company estimated that the potential exposure for losses related to this lawsuit, ranges from approximately $1,900 to approximately $3,400 and has accrued an amount on the October 31, 2009 Consolidated Balance Sheet to reflect its best estimate of this risk. As the situation develops and more information becomes available, the amount of the reserve may increase or decrease accordingly. The amount of any such change may be material to the Company’s results of operations or financial condition.

The Company is subject to various claims and contingencies related to lawsuits and pending action arising out of the normal course of business. Management believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

14. Subsequent Events

Management has evaluated all events and transactions that occurred after October 31, 2009 and through February 15, 2010, the date the Company’s Consolidated Financial Statements were issued.

On November 2, 2009, the Company made interest payments of $5,798 on the Topco Term Loan. On December 21, 2009 and January 26, 2010, the Company made tax distributions to members of $15,000 and $18,000, respectively.

On February 9, 2010, the management promissory notes totaling $5,633 were repaid in full by each member of management.

As of February 2010, all of the Chief Executive Officer’s equity units were vested.

F-60

Through and including             , 2010 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

             Shares

Express, Inc.

Common Stock

PROSPECTUS

BofA Merrill Lynch

Goldman, Sachs & Co.

                         , 2010

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution.

The following table sets forth all costs and expenses, other than the underwriting discounts and commissions payable by us, in connection with the offer and sale of the securities being registered. All amounts shown are estimates except for the SEC registration fee and the Financial Industry Regulatory Authority, Inc., or FINRA, filing fee.

SEC registration fee	$	14,260
FINRA filing fee	$	20,500
listing fee		*
Printing expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Miscellaneous expenses		*
Total expenses	$	*

* To be provided by amendment.

Item 14.    Indemnification of Directors and Officers.

Prior to the effectiveness of this registration statement we intend to reorganize our existing corporate structure so that the issuer of our common stock is a Delaware corporation named Express, Inc. Upon completion of this reorganization, we will be subject to the Delaware General Corporate Law, or DGCL.

Section 102(b)(7) of the DGCL allows a corporation to provide in its certificate of incorporation that a director of the corporation will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our certificate of incorporation will provide for this limitation of liability.

Section 145 of the DGCL, or Section 145, provides that a Delaware corporation may indemnify any person who was, is or is threatened to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer or director is successful

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on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred.

Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.

Our certificate of incorporation will provide that we must indemnify our directors and officers to the fullest extent authorized by the DGCL and must also pay expenses incurred in defending any such proceeding in advance of its final disposition upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be indemnified under this section or otherwise.

We intend to enter into indemnification agreements with each of our current directors and executive officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our certificate of incorporation, our bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

We expect to maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (2) to us with respect to indemnification payments that we may make to such directors and officers.

The proposed form of Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement provides for indemnification to our directors and officers by the underwriters against certain liabilities.

Item 15.    Recent Sales of Unregistered Securities.

Set forth below is information regarding shares of our common stock issued, and equity awards granted, by us within the past three years that were not registered under the Securities Act. Also included is the consideration, if any, received by us for such shares or equity awards and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed.

In connection with the Golden Gate Acquisition described in the prospectus which is a part of this registration statement, our employees were offered the opportunity to purchase equity of us. In connection with such opportunity, (1) on July 24, 2007 our President and Chief Executive Officer, Michael Weiss, purchased 1,000,000 of our Class L Units at a purchase price per unit of $6.47 and 4,000,000 of our Class A Units for a nominal price per unit of $0.01, and (2) between November and December 2007, (a) ten of our executive officers purchased 745,554 Class L Units of Express Management Investors LLC at a purchase price of $6.47 and (b) sixty-one of our employees purchased 3,855,000 Class A Units of Express Management Investors LLC at a nominal price per unit of $0.01 and 3,855,000 Class C Units of Express Management Investors LLC at a nominal price per unit of $0.0025. We subsequently offered certain other employees a similar investment opportunity to purchase equity of us. As a result, between September 12, 2008 and December 16, 2009, we sold 1,410,000 Class C Units of Express Management Investors LLC at a nominal price per unit of $0.0025. See “Executive Compensation—Compensation Discussion and Analysis—Equity Incentives — Summary of Current Plan” in the prospectus which is a part of this registration statement.

The offers, sales and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance upon Rule 701 promulgated under the Securities Act or Section 4(2) of the Securities Act. The offers, sales and issuances of the securities that were deemed to be exempt

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in reliance on Rule 701 were transactions under compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The offers, sales and issuances of the securities that were deemed to be exempt in reliance upon Section 4(2) of the Securities Act were each transactions not involving any public offering, and all recipients of these securities were accredited investors within the meaning of Rule 501 of Regulation D under the Securities Act. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us.

Item 16.    Exhibits and Financial Statement Schedules.

(a) Exhibits

The exhibit index attached hereto is incorporated herein by reference.

(b) Financial Statement Schedules

No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.

Item 17.    Undertakings.

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the purchase agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referenced in Item 14 of this registration statement or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Columbus, Ohio on February 16, 2010.

Express Parent LLC
By:	/S/    MATTHEW C. MOELLERING
Name:	Matthew C. Moellering
Title:	Executive Vice President—Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each officer and director of Express Parent LLC whose signature appears below constitutes and appoints Stefan L. Kaluzny and Matthew C. Moellering, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for him or her and in his or her name, place and stead, in any and all capacities, to execute any or all amendments including any post-effective amendments and supplements to this Registration Statement, and any additional Registration Statement filed pursuant to Rule 462(b), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

* * * *

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on the date indicated below:

Signature	Title	Date
/S/    MICHAEL A. WEISS Michael A. Weiss	President, Chief Executive Officer and Director (principal executive officer)	February 16, 2010
/S/    MATTHEW C. MOELLERING Matthew C. Moellering	Executive Vice President— Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary (principal financial officer and principal accounting officer)	February 16, 2010
/S/    DAVID C. DOMINIK David C. Dominik	Director	February 16, 2010
/S/    STEFAN L. KALUZNY Stefan L. Kaluzny	Director	February 16, 2010
/S/    JENNIE W. WILSON Jennie W. Wilson	Director	February 16, 2010
/S/    TIMOTHY J. FABER Timothy J. Faber	Director	February 16, 2010

II-4

EXHIBIT INDEX

Exhibit Number	Description
1.1*	Form of Underwriting Agreement.
3.1*	Form of Certificate of Incorporation of Express Inc., to be effective upon the completion of this offering.
3.2*	Form of Bylaws of Express, Inc., to be effective upon the completion of this offering.
4.1*	Specimen Common Stock Certificate.
5.1*	Form of Opinion of Kirkland & Ellis LLP.
10.1	Asset-Based Loan Credit Agreement, dated as of July 6, 2007, among Express Holding, LLC, as Parent, Express, LLC, as Borrower, the Initial Lenders, the Initial Issuing Bank, the Swing Line Bank, Wells Fargo Retail Finance, LLC, as Administrative Agent and Collateral Agent, Morgan Stanley Senior Funding, Inc., as Syndication Agent, The CIT Group/Business Credit, Inc. and Wachovia Capital Finance Corporation (Central), as Co-Documentation Agents, and Morgan Stanley Senior Funding, Inc., as Sole Lead Arranger and Sole Bookrunner (the “Asset-Based Loan Credit Agreement”).
10.2	Amendment No. 1 to Asset-Based Loan Credit Agreement, dated as of June 3, 2008.
10.3*	Amendment No. 2 to Asset-Based Loan Credit Agreement, dated as of February 5, 2010.
10.4	Term Loan Credit Agreement, dated as of July 6, 2007, among Express Holding, LLC, as Parent, Express, LLC, as Borrower, the Initial Lenders, Morgan Stanley & Co. Incorporated, as Collateral Agent, and Morgan Stanley Senior Funding, Inc., as Administrative Agent, Syndication Agent, Sole Lead Arranger and Sole Bookrunner (the “Term Loan Credit Agreement”).
10.5*	Amendment to Term Loan Credit Agreement, dated as of February 5, 2010.
10.6	Credit Agreement, dated as of June 26, 2008, among Express Topco LLC, as Borrower, the Lenders party thereto and KKR SCF Loan Administration, LLC, as Administrative Agent (“Topco Credit Agreement”).
10.7*	Amendment to Topco Credit Agreement, dated as of February 5, 2010.
10.8*+	Employment Agreement, dated as of February 12, 2010, by and among Express, LLC, Express Parent LLC and Michael A. Weiss.
10.9*+	Form of Employment Agreement.
10.10	Unit Purchase Agreement, dated as of May 15, 2007, among Express Investment Corp., Limited Brands Store Operations, Inc., Express Holding, LLC and Limited Brands, Inc. (“Unit Purchase Agreement).
10.11	Amendment No. 1 to Unit Purchase Agreement, dated as of July 6, 2007.
10.12	Master Sublease, dated as of July 6, 2007, between Limited Brands, Inc. and Express, LLC.
10.13	Services Agreement, dated as of July 6, 2007, between Express, LLC and Limited Brands, Inc.
10.14	Store Leases Agreement, dated as of July 6, 2007, by and among Limited Stores, LLC, Bath & Body Works, LLC, Victoria’s Secret Stores, LLC, Diva US, LLC, Express, LLC and Limited Brands, Inc.
10.15	Logistics Services Agreement, dated October 5, 2009, by and between Express, LLC and Limited Logistics Services, Inc.
10.16	Exchange Agreement, dated June 26, 2008, by and among Express Parent LLC, Express Topco LLC, Express Holding, LLC and the securityholders listed thereto (the “Exchange Agreement”).
21.1*	List of subsidiaries of Express Parent LLC.
23.1	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.

Exhibit Number	Description
23.2	Consent of Ernst & Young LLP, independent registered public accounting firm.
23.3*	Consent of Kirkland & Ellis LLP (included in Exhibit 5.1).
24.1	Powers of Attorney (included on signature page).

* To be filed by amendment.

+ Indicates a management contract or compensatory plan or arrangement.

EX-10.1

Exhibit 10.1

$200,000,000 ASSET-BASED LOAN CREDIT AGREEMENT

Dated as of July 6, 2007

Among

EXPRESS HOLDING, LLC,

as Parent

EXPRESS, LLC,

as Borrower

and

THE INITIAL LENDERS, INITIAL ISSUING BANK AND

SWING LINE BANK NAMED HEREIN,

as Initial Lenders, Initial Issuing Bank and Swing Line Bank

and

WELLS FARGO RETAIL FINANCE, LLC,

as Administrative Agent and Collateral Agent

and

MORGAN STANLEY SENIOR FUNDING, INC.,

as Syndication Agent

and

THE CIT GROUP/BUSINESS CREDIT, INC. and WACHOVIA CAPITAL FINANCE

CORPORATION (CENTRAL),

as Co-Documentation Agents

MORGAN STANLEY SENIOR FUNDING, INC.,

as Sole Lead Arranger and Sole Bookrunner

T A B L E   O F   C O N T E N T S

Section		Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01.	Certain Defined Terms	2
SECTION 1.02.	Computation of Time Periods; Other Definitional Provisions	31
SECTION 1.03.	Accounting Terms	31
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01.	The Advances and the Letters of Credit	32
SECTION 2.02.	Making the Advances	34
SECTION 2.03.	Issuance of and Drawings and Reimbursement Under Letters of Credit	36
SECTION 2.04.	Repayment of Advances	37
SECTION 2.05.	Termination or Reduction of the Commitments	39
SECTION 2.06.	Prepayments	39
SECTION 2.07.	Interest	40
SECTION 2.08.	Fees	41
SECTION 2.09.	Conversion of Advances	41
SECTION 2.10.	Increased Costs, Etc.	42
SECTION 2.11.	Payments and Computations	43
SECTION 2.12.	Taxes	47
SECTION 2.13.	Sharing of Payments, Etc.	49
SECTION 2.14.	Use of Proceeds	50
SECTION 2.15.	Defaulting Lenders	50
SECTION 2.16.	Evidence of Debt	52
SECTION 2.17.	Reserves	52
SECTION 2.18.	Increase in Commitments	53
ARTICLE III CONDITIONS TO EFFECTIVENESS AND OF LENDING
SECTION 3.01.	Conditions Precedent	54
SECTION 3.02.	Conditions Precedent to Each Borrowing and Issuance	57
SECTION 3.03.	Determinations Under Section 3.01	57
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01.	Representations and Warranties	57

Express – Asset-Based Loan Credit Agreement

ARTICLE V COVENANTS OF THE PARENT
SECTION 5.01.	Affirmative Covenants	63
SECTION 5.02.	Negative Covenants	68
SECTION 5.03.	Reporting Requirements	77
SECTION 5.04.	Holding Company Status of Parent	79
SECTION 5.05.	Financial Covenant	80
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01.	Events of Default	80
SECTION 6.02.	Actions in Respect of the Letters of Credit upon Default	83
ARTICLE VII THE AGENTS
SECTION 7.01.	Authorization and Action	83
SECTION 7.02.	Agents’ Reliance, Etc.	84
SECTION 7.03.	WFR and Affiliates	85
SECTION 7.04.	Lender Party Credit Decision	85
SECTION 7.05.	Indemnification	85
SECTION 7.06.	Successor Agents	86
SECTION 7.07.	Intercreditor Agreement	87
ARTICLE VIII GUARANTY
SECTION 8.01.	Guaranty; Limitation of Liability	87
SECTION 8.02.	Guaranty Absolute	88
SECTION 8.03.	Waivers and Acknowledgments	89
SECTION 8.04.	Subrogation	90
SECTION 8.05.	Guaranty Supplements	90
SECTION 8.06.	Subordination	91
SECTION 8.07.	Continuing Guaranty; Assignments	91
ARTICLE IX MISCELLANEOUS
SECTION 9.01.	Amendments, Etc.	92
SECTION 9.02.	Notices, Etc.	93
SECTION 9.03.	No Waiver; Remedies	94
SECTION 9.04.	Costs and Expenses	94
SECTION 9.05.	Right of Set-off	96
SECTION 9.06.	Binding Effect	96

Express – Asset-Based Loan Credit Agreement

ii

SECTION 9.07.	Assignments and Participations	96
SECTION 9.08.	Execution in Counterparts	99
SECTION 9.09.	No Liability of the Issuing Bank	100
SECTION 9.10.	Confidentiality	100
SECTION 9.11.	Release of Collateral	100
SECTION 9.12.	Replacement of Holdout Lender	101
SECTION 9.13.	Patriot Act Notice	101
SECTION 9.14.	Jurisdiction, Etc.	101
SECTION 9.15.	Governing Law	102
SECTION 9.16.	Waiver of Jury Trial	102

Express – Asset-Based Loan Credit Agreement

iii

SCHEDULES TO THE CREDIT AGREEMENT

Schedule I	-	Commitments and Applicable Lending Offices
Schedule II	-	Subsidiary Guarantors
Schedule III	-	EBITDA
Schedule 4.01(b)	-	Loan Parties
Schedule 4.01(c)	-	Subsidiaries and Other Equity Investments
Schedule 4.01(e)	-	Governmental Authorizations
Schedule 4.01(g)	-	Litigation
Schedule 4.01(q)	-	Certain Employee Benefits Plans
Schedule 4.01(s)	-	Tax Returns
Schedule 4.01(t)	-	Existing Debt
Schedule 4.01(u)	-	Surviving Debt
Schedule 4.01(v)	-	Liens
Schedule 4.01(z)	-	Intellectual Property
Schedule 5.02(f)	-	Investments
Schedule 5.02(l)	-	Negative Pledge
Schedule 5.02(h)	-	Limited Liability Company Agreements
Schedule 5.03(m)	-	Collateral Reporting

EXHIBITS

Exhibit A	-	Form of Revolving Credit Note
Exhibit B	-	Form of Notice of Borrowing
Exhibit C	-	Form of Assignment and Assumption
Exhibit D	-	Form of ABL Security Agreement
Exhibit E	-	Form of Guaranty Supplement
Exhibit F	-	Form of Opinion of Counsel to the Loan Parties
Exhibit G	-	Form of Solvency Certificate
Exhibit H	-	Form of Intercreditor Agreement
Exhibit I	-	Form of Borrowing Base Certificate

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ASSET-BASED LOAN CREDIT AGREEMENT

ASSET-BASED LOAN CREDIT AGREEMENT dated as of July 6, 2007 among EXPRESS HOLDING, LLC, a Delaware limited liability company (the “Parent”), EXPRESS, LLC, a Delaware limited liability company (the “Borrower”), the Subsidiary Guarantors (as hereinafter defined), the Lenders (as hereinafter defined), the Issuing Bank (as hereinafter defined), the Swing Line Bank (as hereinafter defined), WELLS FARGO RETAIL FINANCE, LLC (“WFR”), as collateral agent (together with any successor collateral agent appointed pursuant to Article VII, the “Collateral Agent”) for the Secured Parties (as hereinafter defined), and MORGAN STANLEY SENIOR FUNDING, INC. (“MSSF”), as syndication agent, THE CIT GROUP/BUSINESS CREDIT, INC. and WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), as co-documentation agents (the “Documentation Agents”), and WFR, as administrative agent (together with any successor administrative agent appointed pursuant to Article VII, the “Administrative Agent” and, together with the Collateral Agent, the “Agents”) for the Lender Parties (as hereinafter defined).

PRELIMINARY STATEMENTS:

(1) Express Investment Corp., a Delaware corporation (“Express”), has entered into that certain Unit Purchase Agreement dated as of May 15, 2007, as amended, supplemented or otherwise modified in accordance with its terms, to the extent permitted hereunder (the “Purchase Agreement”), with Limited Brands Store Operations, Inc., a Delaware corporation (the “Seller”), Limited Brands, Inc., a Delaware corporation, and the Parent for the purposes of acquiring (the “Acquisition”) from the Seller 75% of the issued and outstanding limited liability company interests (the “Units”) of the Parent.

(2) The Borrower has requested that, substantially simultaneously with the consummation of the Acquisition, (a) the Lender Parties (as hereinafter defined) provide to the Borrower a Revolving Credit Facility (as hereinafter defined) in an aggregate amount of $200,000,000 and (b) the Lender Parties (as defined in the Term Loan Facility Credit Agreement (as hereinafter defined)) lend $125,000,000 under the Term Facility (as hereinafter defined).

(3) The Sponsor (as hereinafter defined) and certain co-investors will indirectly purchase for cash equity of the Parent in an aggregate amount of not less than $484,875,000 (the “Equity Contribution”) and, upon consummation of the Acquisition, Express will own 75% of the Units of the Parent, and the Parent will own, directly or indirectly, all of the Units of the Borrower.

(4) The proceeds of the Revolving Credit Facility (as hereinafter defined) are to be used to pay transaction fees and expenses relating to the Transaction (as hereinafter defined), fund the working capital adjustments, if any, required by the Purchase Agreement and, from time to time, to be used for working capital and other general corporate purposes (including Capital Expenditures and Permitted Acquisitions) of the Parent and its Subsidiaries.

(5) The Lender Parties have indicated their willingness to agree to lend such amounts on the terms and conditions of this Agreement.

Express – Asset-Based Loan Credit Agreement

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ABL First Lien Collateral” shall have the meaning specified in the Intercreditor Agreement.

“ABL Security Agreement” has the meaning specified in Section 3.01(a)(ii).

“Account(s)” means “accounts” as defined in the UCC and also means a right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, or (c) arising out of the use of a credit or charge card or information contained on or for use with the card or in connection with the sale or transfer of Accounts arising out of the use of a credit or charge card or information contained on or for use with the card. The term “Account” does not include (a) rights to payment evidenced by chattel paper or an instrument, (b) commercial tort claims, (c) deposit accounts, (d) investment property, or (e) letter-of-credit rights or letters of credit.

“Account Debtor” means the Person obligated on an Account.

“Acquisition” has the meaning specified in the preliminary statements to this Agreement.

“Additional Commitments Effective Date” has the meaning specified in Section 2.18(b).

“Additional Guarantor” has the meaning specified in Section 8.05.

“Additional Revolving Credit Commitment Amendment” has the meaning specified in Section 2.18(b).

“Additional Revolving Credit Advances” means any loans made in respect of any Additional Revolving Credit Commitments that shall have been added pursuant to Section 2.18.

“Additional Revolving Credit Commitments” means the commitments of the Additional Revolving Credit Lenders to make Additional Revolving Credit Advances pursuant to Section 2.18.

“Additional Revolving Credit Lenders” means the lenders providing the Additional Revolving Credit Advances.

“Administrative Agent” has the meaning specified in the recital of parties to this Agreement.

“Administrative Agent’s Account” means the account of the Administrative Agent specified by the Administrative Agent in writing to the Lender Parties from time to time.

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“Advance” means a Revolving Credit Advance, a Swing Line Advance, a Letter of Credit Advance, a Protective Advance or an Additional Revolving Credit Advance.

“Advisory Agreement” means the advisory agreement dated as of the date hereof among the Parent, the Borrower and GGC, as amended to the extent permitted under this Agreement.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person by contract or other agreement.

“Agents” has the meaning specified in the recital of parties to this Agreement.

“Aggregate Commitments” means the Commitments of all of the Lenders.

“Agreement Value” means, for each Hedge Agreement, on any date of determination, an amount, if any, determined by the counterparty of the Hedge Agreement that is not a Loan Party or a Subsidiary of such Loan Party that would be payable by such Loan Party or Subsidiary that is a party to such Hedge Agreement to its counterparty to such Hedge Agreement in accordance with its terms, as if (i) such Hedge Agreement was being terminated early on such date of determination, (ii) such Loan Party or Subsidiary was the sole “Affected Party” and (iii) such counterparty was the sole party determining such payment amount.

“Applicable Lending Office” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“Applicable Margin” means (a) in respect of the Revolving Credit Facility, (i) for the first six (6) months following the Effective Date, 0.25% per annum for Base Rate Advances and 1.25% per annum for Eurodollar Rate Advances and (ii) thereafter, a percentage per annum determined by reference to the amount of Excess Availability as set forth below:

Excess Availability	Base Rate Advances		Eurodollar Rate Advances
Level I less than $100,000,000	0.25	%	1.25	%
Level II $100,000,000 or greater	0.00	%	1.00	%

and (b) in respect of the Swing Line Facility, (i) for the first six (6) months following the Effective Date, 0.25% per annum and (ii) thereafter a percentage per annum determined by reference to the amount of Excess Availability as set forth above for Base Rate Advances.

The Applicable Margin for each Base Rate Advance shall be determined by reference to the average monthly amount of Excess Availability calculated by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.03(n) and the Applicable Margin for each Eurodollar Rate Advance shall be determined by reference to the average monthly amount of Excess Availability calculated by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.03(n) prior to the first day of each Interest Period for such Advance; provided, however, that the Applicable Margin shall be at Level I for so long as the Borrower has not submitted to the Administrative Agent the Borrowing Base Certificate at the times required to be delivered hereunder.

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“Appropriate Lender” means, at any time, with respect to (a) the Revolving Credit Facility, a Lender that has a Revolving Credit Commitment at such time, (b) the Letter of Credit Facility, (i) the Issuing Bank and (ii) if the other Revolving Credit Lenders have made Letter of Credit Advances pursuant to Section 2.03(c) that are outstanding at such time, each such other Revolving Credit Lender and (c) the Swing Line Facility, (i) the Swing Line Bank and (ii) if the other Revolving Credit Lenders have made Swing Line Advances pursuant to Section 2.02(b) that are outstanding at such time, each such other Revolving Credit Lender.

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

“Assignment and Assumption” means an assignment and assumption entered into by a Lender Party and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.07 or by the definition of “Eligible Assignee”), and accepted by the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit C hereto or any other form approved by the Administrative Agent and the Borrower.

“Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

“Bankruptcy Law” means Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

“Base Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of:

(a) the rate of interest published by the Wall Street Journal from time to time, as the prime lending rate; and

(b)  ¹/2 of 1% per annum above the Federal Funds Rate.

“Base Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(i).

“Borrower” has the meaning specified in the recital of parties to this Agreement.

“Borrower’s Account” means the account of the Borrower specified by the Borrower in writing to the Administrative Agent from time to time.

“Borrowing” means a Revolving Credit Borrowing or a Swing Line Borrowing.

“Borrowing Base” means, at any time, the sum of

(a) the product of the Inventory Advance Rate at such time and the Net Orderly Liquidation Value of the Eligible Inventory of the Loan Parties at such time, and

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(b) the product of the Credit Card Advance Rate at such time and the face amount of Eligible Credit Card Receivables of the Loan Parties at such time, minus

(c) the aggregate amount of all Reserves at such time.

“Borrowing Base Certificate” means a certificate of the Borrower on behalf of the Loan Parties, signed by a Responsible Officer of the Borrower, in the form of Exhibit I (or another form which is mutually acceptable to the Collateral Agent and the Borrower).

“Business Day” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

“Capital Expenditures” means, for any Person for any period, without duplication, all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during such period for equipment, fixed assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP, reflected as additions to property, plant or equipment on a Consolidated balance sheet of such Person. For purposes of this definition, “Capital Expenditures” shall not include expenditures (i) made to restore, replace, rebuild, develop, maintain, improve or upgrade property, to the extent such expenditure is made with, or subsequently reimbursed out of, insurance proceeds, indemnity payments, condemnation awards (or payments in lieu thereof) or damage recovery proceeds or other settlements relating to any damage, loss, destruction or condemnation of such property, (ii) constituting reinvestment of the net proceeds of any Transfer, to the extent permitted hereunder, (iii) made by the Parent or any of its Subsidiaries as payment of the consideration for Permitted Acquisitions, (iv) made by Parent or any of its Subsidiaries to effect leasehold improvements to any property leased by Parent or any of its Subsidiaries as lessee, to the extent that such expenses have been reimbursed in cash by the landlord, (v) actually paid for by a third party (excluding any Loan Party) and for which no Loan Party has provided or is required to provide or incur, directly or indirectly, any consideration or monetary obligation to such third party or any other person (whether before, during or after such period), or (vi) made with the cash proceeds from the sale or issuance of Qualified Capital Stock of Parent.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Cash Equivalents” means any of the following, to the extent owned by the Parent or any of its Subsidiaries free and clear of all Liens other than Permitted Liens and Liens created under the Collateral Documents and, in each case, having a maturity of not greater than one year from the date of issuance thereof: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) readily marketable direct obligations of any member of the European Economic Area, Switzerland or Japan, or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of such country, and, at the time of acquisition thereof having a credit rating of at least AA- (or the equivalent grade) by Moody’s or Aa3 by S&P, (c) marketable general obligations issued by any state of the United States or any political subdivision thereof or any or any instrumentality thereof that is guaranteed by the full faith and credit of such state and, at the time of acquisition thereof having a credit rating of at least AA- (or the equivalent grade) by Moody’s or Aa3 by S&P, (d) insured certificates of deposit, time deposits, eurodollar time deposits or overnight time deposits with any commercial bank that is organized under the laws of the United States or any

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State thereof, any member of the European Economic Area, Switzerland or Japan and has combined capital and surplus of at least $500 million, (e) commercial paper issued by any Lender or any corporation organized under the laws of any State of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P, (f) repurchase agreements and reverse repurchase agreements with a duration of not more than 30 days for underlying securities of the types set forth in clauses (a) through (e) entered into with any financial institution meeting the specifications in clause (d) above, (g) auction rate securities or (h) Investments in money market funds, of which at least 95% of the portfolios are limited solely to Investments of the character, quality and maturity described in clauses (a) through (f) of this definition. With respect to any Foreign Subsidiary, “Cash Equivalents” shall also include any Investment substantially comparable to the foregoing but in the currency of the jurisdiction of organization of such Subsidiary, Euros or U.S. Dollars.

“Cash Management Reserves” means the amount of reserves as the Administrative Agent determines in its Permitted Discretion as being appropriate to reflect the reasonably anticipated credit exposure of the Loan Parties with respect to Cash Management Services then provided or outstanding; provided that, in order to qualify as Cash Management Reserves, the method of calculation of such reserves must be established on or substantially contemporaneously on the date that any Lender or any of its respective Affiliates provides the applicable Cash Management Service.

“Cash Management Bank” means any Person that is a Lender or an Affiliate of a Lender and that enters into a Secured Cash Management Agreement.

“Cash Management Services” means each and any of the following bank services, if any, provided to the Borrower and its Subsidiaries by any Lender or any of its respective Affiliates: (i) commercial credit cards, (ii) store credit cards and (iii) treasury management services (including, without limitation, controlled disbursements, automated clearinghouse transactions, return items, overdrafts and interstate depositary network services).

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

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

“CFC” means an entity that is a controlled foreign corporation of the Borrower under Section 957 of the Internal Revenue Code.

“Change of Control” means the occurrence of any of the following: (a) at any time prior to the consummation of an IPO of the Equity Interests of the Parent, the Sponsor shall cease to own at least 50% (directly or indirectly) of the Voting Interests in the Parent; or (b) at any time after the consummation of an IPO of the Equity Interests of the Parent, any Person or two or more Persons acting in concert other than the Sponsor shall have acquired beneficial ownership (within the meaning of Rule 13(d)-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests (or other securities convertible into such Voting Interests) representing 35% or more of the combined voting power of all Voting Interests of the Parent, unless the Sponsor owns Voting Interests representing a greater percentage; or (c) at any time after the consummation of an IPO of the Equity Interests of the Parent, during any period of up to 24 consecutive months, Continuing Directors shall cease for any reason to constitute a majority of the board of directors of the Parent.

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“Collateral” means all “Collateral” referred to in the Collateral Documents and all other property that is or is intended to be subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

“Collateral Access Agreement” has the meaning assigned to such term in the ABL Security Agreement.

“Collateral Account” has the meaning specified in the ABL Security Agreement.

“Collateral Agent” has the meaning specified in the recital of parties to this Agreement.

“Collateral Documents” means the ABL Security Agreement, the Intellectual Property ABL Security Agreement, the Intercreditor Agreement, each of the collateral documents, instruments and agreements delivered pursuant to Section 5.01(j), and each other agreement that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

“Commitment” means a Revolving Credit Commitment or a Letter of Credit Commitment.

“Confidential Information” means information that any Loan Party or its Subsidiaries furnishes to any Agent or any Lender Party, but does not include any such information that is or becomes generally available to the public other than as a result of a breach by such Agent or any Lender Party of its obligations hereunder or that is or becomes available to such Agent or such Lender Party from a source other than the Loan Parties who is not subject to any legally binding obligation to any Loan Party or its Subsidiaries to keep such information confidential.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Continuing Directors” means in the case of the Parent and, with respect to any period, the directors of the Parent on the first day of such period and each other director if, in each case, such other director’s nomination for election to the board of directors of the Parent is recommended by at least a majority of the then Continuing Directors.

“Conversion,” “Convert” and “Converted” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.09 or 2.10.

“Credit Card Advance Rate” means 90%.

“Customer Credit Liabilities” means, at any time, the aggregate remaining balance reflected on the books and records of the Loan Parties 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 gift certificate or gift card 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.

“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than (1) trade payables not overdue by more than 90 days, deferred compensation and straight line rent and landlord allowance in each case incurred in the ordinary course of such Person’s business and (2) purchase price adjustments under the Purchase Agreement), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments,

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(d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person with respect to Disqualified Stock, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all Guaranteed Debt and Synthetic Debt of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations; but limited in amount to the lesser of (i) the fair market value of such property or (ii) the amount of such indebtedness or other payment obligations.

Notwithstanding anything to the contrary contained herein, Debt shall not include (i) any amounts relating to preferred equity (other than Disqualified Stock), employee consulting arrangements, accrued expenses, deferred rent (other than Capitalized Leases), deferred taxes, obligations under employment agreements, unredeemed gift card deferred revenue and deferred compensation, or (ii) in connection with the existing letters of credit or any Permitted Acquisition or other acquisition otherwise permitted hereunder or consented to by the Lenders or consummated prior to the Effective Date, (A) reimbursement obligations in respect of such existing letters of credit or any letter of credit assumed in such Permitted Acquisition or other acquisition the payment of which is either fully (x) backed by a letter of credit or (y) cash collateralized, or (B) post-closing purchase price adjustments, earn-outs or similar obligations that are dependent upon the performance of the acquisition target after such closing to which the seller in such Permitted Acquisition or acquisition may become entitled.

“Debt for Borrowed Money” of any Person means, at any date of determination, the sum of (a) the outstanding principal amount of all Debt of the type referred to in clauses (a), (c) and (e) of the definition of “Debt”, (b) all reimbursement Obligations at such date of such Person under acceptance, letter of credit or similar facilities at such date for amounts that have been drawn under such facilities and (c) all Synthetic Debt of such Person at such date; provided, however, for purposes of calculating Debt for Borrowed Money, the amount of the Revolving Credit Advances included therein shall (i) for any date that is within twelve (12) months after the date of this Agreement, be equal to $33,000,000, and (ii) for any date thereafter, be equal to the average daily outstanding balance of such Revolving Credit Advances during the twelve (12) month period ended on such date.

“Default” means any Event of Default or any event that would constitute an Event of Default but for the passage of time or the requirement that notice be given or both.

“Default Interest” has the meaning set forth in Section 2.07(b).

“Defaulted Advance” means, with respect to any Lender Party at any time, the portion of any Advance required to be made by such Lender Party to the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time that has not been made by such Lender Party or by the Administrative Agent for the account of such Lender Party pursuant to Section 2.02(e) as of such time. In the event that a portion of a Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the remaining portion of such Defaulted Advance shall be considered a Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed made in part.

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“Defaulted Amount” means, with respect to any Lender Party at any time, any amount required to be paid by such Lender Party to any Agent or any other Lender Party hereunder or under any other Loan Document at or prior to such time that has not been so paid by such Lender Party as of such time, including, without limitation, any amount required to be paid by such Lender Party to (a) the Swing Line Bank pursuant to Section 2.02(b) to purchase a portion of a Swing Line Advance made by the Swing Line Bank, (b) the Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a Letter of Credit Advance made by the Issuing Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to reimburse the Administrative Agent for the amount of any Advance made by the Administrative Agent for the account of such Lender Party, (d) any other Lender Party pursuant to Section 2.13 to purchase any participation in Advances owing to such other Lender Party and (e) any Agent or the Issuing Bank pursuant to Section 7.05 to reimburse such Agent or the Issuing Bank for such Lender Party’s ratable share of any amount required to be paid by the Lender Parties to such Agent or the Issuing Bank as provided therein. In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be paid hereunder or under any other Loan Document on the same date as the Defaulted Amount so deemed paid in part.

“Defaulting Lender” means, at any time, any Lender Party that, at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of any action or proceeding of a type described in Section 6.01(f).

“Disqualified Stock” means any Equity Interest that, by its terms, matures or is Redeemable, in whole or in part, on or prior to the date that is 91 days after the Termination Date. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement shall be the maximum amount that the Loan Parties may become obligated to pay upon such maturity of, or pursuant to such Redeemable provisions in respect of, such Disqualified Stock.

“Documentation Agents” has the meaning specified in the recital to this Agreement.

“Domestic Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“EBITDA” means, for any period and with respect to any Person, Consolidated Net Income of such Person for such period, plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income (except with respect to item (xiv)), the sum of (i) Consolidated interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Debt (including the Advances hereunder and the Term Facility) of such Person for such period, (ii) Consolidated income tax (and franchise tax in the nature of income tax) (including federal, state, local and foreign income tax) expense and foreign withholding tax expense, in each case for such period, and any state single business unitary or similar tax of such Person for such period, (iii) depreciation and amortization expense (including amortization or impairment of intangibles (including goodwill) and organization costs) for such period (excluding amortization expense attributable to a prepaid cash item (except for deferred finance charges) that was paid in a prior period) of such Person for such period, (iv) any other non-cash deductions, losses, charges or expenses made in the ordinary course of business in determining Consolidated Net Income (but

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excluding any such non-cash charge in respect of an item that increased Consolidated Net Income in a prior period (to the extent of such increase) of such Person for such period, (v) any extraordinary losses and unusual or non-recurring expenses or charges, incurred in such period, (vi) any Transaction Expenses paid in such period, (vii) costs and expenses incurred in the ordinary course of business in connection with acquisitions permitted under Section 5.02(f), Excluded Issuances, recapitalizations, Transfers or incurrence of Debt permitted under Article V hereunder (for the purposes of this definition, each a “Permitted Item”), (viii) any payments made or accrued pursuant to the Advisory Agreement (as in effect on the Effective Date or as permitted to be amended hereby) and of reimbursement of ordinary course out-of-pocket costs and expenses payable to GGC or its Affiliates pursuant to the Advisory Agreement, (ix) foreign exchange losses recorded in “other income”, (x) expenses in connection with earn-out obligations, (xi) any one-time payments made related to any Permitted Item, including, without limitation, one-time compensation charges, stay bonuses paid to existing management and severance cost, (xii) expenses incurred to the extent reimbursable by third parties pursuant to indemnification provisions and either so collected or reasonably expected to be so collected, (xiii) all losses during such period resulting from the sale or disposition of any asset of Parent or any Subsidiary outside the ordinary course of business, (xiv) proceeds received from business interruption insurance, in each case, with respect to such measurement period, (xv) non-cash expenses resulting from the grant or periodic remeasurement of stock options or other equity-related incentives (and, for the avoidance of doubt, including any non-cash expenses related to any stock option or other equity-related incentives resulting from the acceleration of vesting in the event of a change in control) to any director, officer, employee, former employee or consultant of Parent or any Subsidiary pursuant to a written plan or agreement approved by the board of directors of Parent, (xvi) salary, benefit and other direct savings resulting from workforce reductions implemented or reasonably expected to be implemented within the following twelve months and severance related thereto in connection with the Permitted Acquisitions, (xvii) losses in respect of post-retirement benefits, as a result of the application of FASB 106, (xviii) losses during such period in connection with the extinguishment, retirement or write-off of Debt and (xix) the amount of any loss from stores which have been closed or identified to be closed, and minus (b) without duplication and to the extent included in determining such Consolidated Net Income of such Person, any non-cash gains included in Consolidated Net Income of such Person for such period (other than any gains which represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period), minus (c) without duplication and to the extent included in determining such Consolidated Net Income of such Person, any extraordinary gains and unusual or non-recurring gains for such period, all determined on a Consolidated basis in accordance with GAAP, minus (d) without duplication and to the extent included in determining such Consolidated Net Income of such Person, foreign exchange gains recorded in “other income”, minus (e) without duplication and to the extent included in determining such Consolidated Net Income of such Person, all gains during such period resulting from the sale or disposition of any asset of Parent or any Subsidiary outside the ordinary course of business, minus (f) without duplication and to the extent included in determining such Consolidated Net Income of such Person, the amount of any gain in respect of post-retirement benefits as a result of the application of FASB 106; provided that, for the purpose of determining EBITDA for the first four fiscal quarters after the Effective Date, EBITDA shall be determined in accordance with the pro forma adjustments set forth on Schedule III hereto, to the extent applicable.

The historical EBITDA for any Measurement Period of entities (A) that are acquired by the Parent or any of its Subsidiaries after the Effective Date as permitted under the Loan Documents will be included in the calculation of EBITDA and (B) that are disposed of by the Parent or any of its Subsidiaries after the Effective Date will be excluded in the calculation of EBITDA; provided that, in the case of entities that are acquired by the Parent or any of its Subsidiaries after

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the Effective Date, the Administrative Agent shall be furnished with audited financial statements, or if audited financial statements are not available, other financial statements reasonably acceptable to the Administrative Agent, of such entities (or if the acquisition is of a division or branch of a larger business or a group of businesses, the audited financial statements, or if audited financial statements are not available, other financial statements reasonably acceptable to the Administrative Agent of such larger business or group of businesses, so long as the individual activities of the acquired entity are clearly reflected in such financial statements, together with a certificate certifying that the Parent has reviewed the historical financial statements of the division or branch and that they reflect proper divisional accounting in relation to the large business or group of businesses in all material respects), reasonably satisfactory to the Administrative Agent in all material respects, confirming such historical results. In addition, EBITDA for any Measurement Period will be determined after giving effect to any identifiable cost savings resulting from any acquisition consummated during such Measurement Period and expected to be realized within 12 months following the closing thereof on a pro forma basis, in each case to the extent calculated on terms reasonably satisfactory to the Administrative Agent and certified by a Responsible Officer of the Parent.

“Effective Date” has the meaning specified in Section 3.01.

“Eligible Assignee” means (a) a Lender Party; (b) an Affiliate of a Lender Party; (c) an Approved Fund; and (d) any other Person (other than an individual) approved by the Administrative Agent, (x) the Issuing Bank, (y) the Swing Line Bank and (z) unless an Event of Default under Section 6.01(a) and (f) has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided, however, that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

“Eligible Cash Collateral” means only such cash and Cash Equivalents that are unrestricted and that are in an account in which the Collateral Agent has a valid and perfected first priority lien (except to the extent of Permitted Liens and other Liens created or permitted by the Loan Documents) or first priority security interest (except to the extent of Permitted Liens and other Liens created or permitted by the Loan Documents) for the benefit of the Secured Parties securing the Secured Obligations, to the extent such a Lien is required to be granted under the Loan Documents.

“Eligible Credit Card Receivables” means, as of any date of determination, Accounts due to a Loan Party from major credit card and debit card processors (including, but not limited to, VISA, Mastercard, Diners Club, American Express and DiscoverCard) as arise in the ordinary course of business and which have been earned by performance and that are not excluded as ineligible by virtue of one or more of the criteria set forth below (without duplication of any Reserves established by the Administrative Agent) and that are reflected in the most recent Borrowing Base Certificate delivered to the Administrative Agent. None of the following shall be deemed to be Eligible Credit Card Receivables:

(a) Accounts due from major credit card and debit card processors that have been outstanding for more than five (5) Business Days from the date of sale, or for such longer period(s) as may be approved by the Administrative Agent in its Permitted Discretion;

(b) Accounts due from major credit card and debit card processors with respect to which a Loan Party does not have good, valid and marketable title thereto, free and clear of any Lien (other than Liens granted to the Collateral Agent for its own benefit and the benefit of the other Secured Parties pursuant to the Collateral Documents, Liens in favor of the agent under the Term Facility, and Permitted Liens (other than any Liens under clauses (i) or (j) of the definition of “Permitted Liens”));

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(c) Accounts due from major credit card and debit card processors that are not subject to a first priority (except as provided in clauses (b) and (d)) security interest in favor of the Collateral Agent for its own benefit and the benefit of the other Secured Parties (the foregoing not being intended to limit the discretion of the Administrative Agent to change, establish or eliminate any Reserves on account of any such Liens to the extent permitted hereunder);

(d) Accounts due from major credit card and debit card processors which are disputed, or with respect to which a claim, counterclaim, offset or chargeback (other than chargebacks in the ordinary course by the credit card processors) has been asserted, by the related credit card processor (but only to the extent of such dispute, counterclaim, offset or chargeback);

(e) Except as otherwise approved by the Administrative Agent, Accounts due from major credit card and debit card processors as to which the credit card processor or debit card processor has the right under certain circumstances to require a Loan Party to repurchase the Accounts from such credit card or debit card processor;

(f) Except as otherwise approved by the Administrative Agent in an aggregate amount not to exceed $10,000,000 (such approval not to be unreasonably withheld), Accounts arising from any private label credit card program of the Loan Parties;

(g) Accounts due from major credit card and debit card processors (other than Visa, Mastercard, Diners Club, American Express and DiscoverCard) which the Administrative Agent determines in its Permitted Discretion to be unlikely to be collected; and

(h) Accounts that are not subject to a perfected first priority security interest in favor of the Collateral Agent for its own benefit and the benefit of the other Secured Parties (subject only to Permitted Liens having priority by operation of applicable law (with respect to which Permitted Liens the Administrative Agent may establish Reserves in the exercise of its Permitted Discretion pursuant to Section 2.17)).

“Eligible Inventory” means, as of any date of determination, without duplication, items of Inventory of a Loan Party in each case that are not excluded as ineligible by virtue of one or more of the criteria set forth below (without duplication of any Reserves established by the Administrative Agent) and that are reflected in the most recent Borrowing Base Certificate delivered to the Administrative Agent. Notwithstanding anything contained herein to the contrary, Inventory classified as “in-transit” shall be deemed Eligible Inventory. None of the following shall be deemed to be Eligible Inventory:

(a) Inventory with respect to which a Loan Party does not have good, valid and marketable title thereto, free and clear of any Lien (other than Liens granted to the Collateral Agent for its own benefit and the benefit of the other Secured Parties pursuant to the Collateral Documents, Liens in favor of the agent under the Term Facility, and Permitted Liens (other than any Liens under clauses (i) or (j) of the definition of “Permitted Liens”)), or is leased by or is on consignment to a Loan Party, or that is not solely owned by a Loan Party;

(b) Inventory that (i) is not located in the United States of America or (ii) is stored at a leased or rented location (other than a retail store location) where the aggregate value of Inventory exceeds $250,000, unless the Administrative Agent has given its prior consent thereto

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or unless either (x) a Collateral Access Agreement in respect of such location has been delivered to the Administrative Agent or (y) Reserves reasonably satisfactory to the Administrative Agent have been established with respect thereto (provided that the Loan Parties shall use commercially reasonable efforts to ensure that the aggregate value of all Inventory stored at such leased or rented location and not deemed “Eligible Inventory” shall not exceed $5,000,000 at any one time outstanding), (iii) is stored with a bailee or warehouseman where the aggregate value of Inventory exceeds $250,000, unless either (x) an acknowledged bailee waiver letter which is in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent has been received by the Administrative Agent or (y) Reserves reasonably satisfactory to the Administrative Agent have been established with respect thereto (provided that the Loan Parties shall use commercially reasonable efforts to ensure that the aggregate value of all Inventory stored with a bailee or warehouseman and not deemed “Eligible Inventory” shall not exceed $5,000,000 at any one time outstanding),

(c) Inventory that represents goods which (i) are damaged, defective, or otherwise unmerchantable, (ii) are to be returned to the vendor and which is no longer reflected in the Loan Parties’ stock ledger, (iii) are special-order items, work in process, raw materials, or that constitute spare parts, shipping materials or supplies used or consumed in a Borrower’s business, or (iv) are bill and hold goods;

(d) Except as otherwise agreed by the Administrative Agent, Inventory that represents goods that do not conform in all material respects to the representations and warranties contained in this Agreement or any of the Collateral Documents;

(e) Inventory that is not subject to a perfected first priority security interest in favor of the Collateral Agent for its own benefit and the benefit of the other Secured Parties (subject only to Permitted Liens having priority by operation of applicable law (with respect to which Permitted Liens the Administrative Agent may establish Reserves in the exercise of its Permitted Discretion pursuant to Section 2.17));

(f) Inventory which consists of samples, labels, bags (other than handbags), packaging materials, and other similar non-merchandise categories;

(g) Inventory which has been sold but not yet delivered or Inventory to the extent that any Loan Party has accepted a deposit therefor and which is no longer reflected in the Loan Parties’ stock ledger; and

(h) Inventory acquired pursuant to Section 5.02(f), unless the Administrative Agent shall have received or conducted (A) appraisals, from appraisers reasonably satisfactory to the Administrative Agent, of such Inventory to be acquired in such Acquisition and (B) such other due diligence as the Administrative Agent may reasonably require, all of the results of the foregoing to be reasonably satisfactory to the Administrative Agent. As long as the Administrative Agent has received reasonable prior notice of such acquisitions under Section 5.02(f) and the Loan Parties reasonably cooperate (and cause the Person being acquired to reasonably cooperate) with the Administrative Agent, the Administrative Agent shall use reasonable best efforts to complete such due diligence and a related appraisal on or prior to the closing date of such acquisition under Section 5.02(f).

“Environmental Action” means any action, suit, demand, demand letter, claim, notice of non compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any violation of, or liability under, any

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Environmental Law, or an Environmental Permit or arising from an alleged injury or threat to the environment, or to health and safety with regard to exposure to Hazardous Materials, including, without limitation, and to the extent arising from the foregoing, by any governmental or regulatory authority or third party for enforcement, cleanup, removal, response, remedial or other actions, damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“Environmental Law” means any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction or decree relating to pollution or protection of the environment, natural resources or exposure of any individual to Hazardous Material, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized on any date of determination.

“Equity Investor” means the Sponsor, the Seller and EXP Investments, Inc., a Delaware corporation.

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

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 4001(a)(14) of ERISA.

“ERISA Event” means (a)(i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30 day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of

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proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan.

“Escrow Bank” has the meaning specified in Section 2.15(c).

“Eurodollar Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period equal to such Interest Period (provided that, if for any reason such rate is not available, the term “Eurodollar Rate” shall mean, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.

“Eurodollar Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(ii).

“Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

“Events of Default” has the meaning specified in Section 6.01.

“Excess Availability” means, at any time, the amount, if any, by which (a) the Borrowing Base at such time (determined by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.03) exceeds (b) the aggregate amount of Used Revolving Credit Commitments at such time.

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“Excluded Issuance” shall mean (i) an issuance and sale of Qualified Capital Stock of the Parent or Subordinated Debt to the Equity Investor (or any other stockholder exercising preemptive rights triggered by such issuance), to the extent such Qualified Capital Stock or Subordinated Debt is used, or the net cash proceeds thereof shall be, within 90 days of the consummation of such issuance and sale, used or committed to be used (and so used within 180 days of consummation), without duplication, to finance Capital Expenditures or one or more permitted Investments permitted under Section 5.02(f) and (ii) an issuance and sale of Qualified Capital Stock to satisfy legal requirements regarding the issuance of a de minimis amount of shares.

“Excluded Subsidiary” means (i) any CFC or (ii) any Subsidiary of the Parent that is organized under the laws of a jurisdiction located inside the United States that is not a Material Subsidiary; provided that all Excluded Subsidiaries covered by this clause (ii) shall not represent, in the aggregate, more than 5% of Consolidated EBITDA or 5% of Consolidated tangible assets of the Parent and its Subsidiaries and the Parent shall be obligated to designate one or more Subsidiaries that would otherwise qualify as Excluded Subsidiaries covered by this clause (ii) as Material Subsidiaries in order to comply with the terms of this proviso.

“Existing Debt” means such Debt set forth on Schedule 4.01(t).

“Extraordinary Receipt” means any cash amount actually received by any Loan Party (net of all out of pocket fees, costs, legal fees, court costs, taxes and other expenses incurred by any Loan Party in connection with the collection, litigation, adjudication, arbitration, receipt or recovery of any such Extraordinary Receipt, in each case to the extent such amounts are not deducted in calculating Consolidated Net Income) that is not received in the ordinary course of business and which is received as a result of proceeds of casualty insurance and condemnation awards (and payments in lieu thereof); provided, however, that an Extraordinary Receipt shall not include cash receipts received from proceeds of insurance or condemnation awards (or payments in lieu thereof) to the extent that such proceeds or awards are received by any Person in respect of any third party claim against such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and expenses of such Person with respect thereto.

“Facility” means the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility, as the context may require.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding 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 of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letter” means, collectively, (i) the fee letter dated July 6, 2007 between the Borrower and the Lead Arranger, as amended and (ii) the fee letter dated July 6, 2007 between the Borrower and the Administrative Agent, as amended.

“Fiscal Quarter” means a quarter ending on the last day of April, July, October or January.

“Fiscal Year” means a fiscal year of the Parent and its Consolidated Subsidiaries ending on the Saturday closest to January 31 in any calendar year.

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“Fixed Charges” means, with reference to any period, without duplication, cash Interest Expense, plus scheduled principal payment on Debt for Borrowed Money, plus expense for taxes paid in cash (net of any cash refund in respect of income taxes actually received during such period), plus interest payment obligations in respect of Capitalized Leases, all calculated for the Parent and its Subsidiaries on a Consolidated basis.

“Fixed Charge Coverage Ratio” means the ratio, determined as of the end of a Fiscal Quarter for the most recently completed Measurement Period, of (i) EBITDA minus the unfinanced portion of Capital Expenditures to (ii) Fixed Charges, all calculated for the Parent and its Subsidiaries on a Consolidated basis.

“Foreign Subsidiary” means a Subsidiary of the Parent that is organized under the laws of a jurisdiction located outside of the United States.

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

“GAAP” has the meaning specified in Section 1.03.

“GGC” means GGC Administration, LLC.

“Governmental Authority” means any nation or government, any state, province, city, municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board, bureau or similar body, whether federal, state, provincial, territorial, local or foreign.

“Governmental Authorization” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Governmental Authority.

“Guaranteed Debt” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Guaranteed Debt” shall not include any product warranties or other ordinary course contingent obligations incurred in the ordinary course of business, including indemnities. The amount of any Guaranteed Debt shall be deemed to be an amount equal to the

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stated or determinable amount of the primary obligation in respect of which such Guaranteed Debt is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Guaranteed Debt) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Guaranteed Obligations” has the meaning specified in Section 8.01.

“Guaranties” means the Parent Guaranty and the Subsidiary Guaranty.

“Guarantors” means the Parent and the Subsidiary Guarantors.

“Guaranty Supplement” has the meaning specified in Section 8.05.

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls, radon gas and toxic mold and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

“Hedge Agreements” means interest rate, currency exchange rate or commodity price swap, cap or collar agreements, future or option contracts and other hedging agreements; provided that such Hedge Bank shall be required to be a Lender Party or an Affiliate of a Lender Party only at the time that such Hedge Bank enters into such Secured Hedge Agreement.

“Hedge Bank” means any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Secured Hedge Agreement.

“Indemnified Party” has the meaning specified in Section 9.04(b).

“Intercreditor Agreement” has the meaning specified in Section 3.01(a)(iii).

“Initial Extension of Credit” means the earlier to occur of the initial Borrowing and the initial issuance of a Letter of Credit hereunder.

“Initial Issuing Bank” means the bank listed on the signature pages hereof as the Initial Issuing Bank.

“Initial Lender Parties” means the Initial Issuing Bank, the Initial Lenders and the Initial Swing Line Bank.

“Initial Lenders” means the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the Initial Lenders.

“Initial Pledged Debt” has the meaning specified in the ABL Security Agreement.

“Initial Pledged Equity” has the meaning specified in the ABL Security Agreement.

“Initial Swing Line Bank” means the bank listed on the signature pages hereof as the Initial Swing Line Bank.

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“Insufficiency” means, with respect to any Plan, the amount, if any, of a Plan’s accumulated benefit obligation (determined in accordance with GAAP) in excess of the Plan’s fair value of assets.

“Intellectual Property ABL Security Agreement” has the meaning specified in the ABL Security Agreement.

“Interest Expense” means, for any Measurement Period, the Consolidated cash interest expense (which, for the avoidance of doubt, excludes (i) amortization expenses of capitalized finance costs and debt discounts and (ii) any fees (including underwriting fees) and expenses paid in connection with the consummation of the Transactions) of the Parent and its Subsidiaries with respect to all outstanding Debt of the Parent and its Subsidiaries, in each case for or during such Measurement Period.

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months (or, until the completion of the primary syndication, two weeks or one month, provided that such period shall end on the 30^th day after the date hereof (or such earlier date as shall be specified in its sole discretion by the Administrative Agent in a written notice to the Borrower and the Lenders that such primary syndication has been achieved)), as the Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select (or, if available to all Lenders under the applicable Facility, nine or twelve months thereafter, as selected by the Borrower in its Notice of Borrowing or conversion); provided, however, that:

(a) the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after any principal repayment installment date for such Facility unless, after giving effect to such selection, the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to such principal repayment installment date for such Facility shall be at least equal to the aggregate principal amount of Advances under such Facility due and payable on or prior to such date;

(b) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

(c) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

(d) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

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“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Inventory” means all Inventory referred to in Section 1(b) of the ABL Security Agreement.

“Inventory Advance Rate” means (i) from the Effective Date to the first anniversary thereof, 90% and (ii) thereafter, 85%.

“Inventory Reserves” means such reserves as may be established from time to time by the Administrative Agent acting in its Permitted Discretion, with respect to changes in the determination of the saleability, at retail, of the Eligible Inventory or which reflect such other factors as negatively affect the market value of the Eligible Inventory.

“Investment” in any Person means any loan or advance to such Person (other than (a) third-party trade receivables or (b) intercompany trade receivables, in each case incurred in the ordinary course of such Person’s business), any purchase or other acquisition of any Equity Interests or Debt or the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or any other direct or indirect investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation (or similar transaction) and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (i) or (j) of the definition of “Debt” in respect of such Person.

“IPO” means, with respect to any Person, a registered initial public offering of the capital stock of such Person (other than on Form S-8).

“Issuing Bank” means the Initial Issuing Bank and any Eligible Assignee to which the Letter of Credit Commitment hereunder has been assigned pursuant to Section 9.07.

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

“L/C Related Documents” has the meaning specified in Section 2.04(d)(ii)(A).

“Lead Arranger” means Morgan Stanley Senior Funding, Inc.

“Lender Party” means any Lender, the Issuing Bank or the Swing Line Bank.

“Lenders” means the Initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 9.07 for so long as such Initial Lender or Person, as the case may be, shall be a party to this Agreement.

“Letter of Credit Advance” means an advance made by the Issuing Bank or any Revolving Credit Lender pursuant to Section 2.03(c).

“Letter of Credit Agreement” has the meaning specified in Section 2.03(a).

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“Letter of Credit Commitment” means, with respect to the Issuing Bank at any time, the obligation to issue Letters of Credit up to an aggregate Available Amount of $40,000,000 at any one time outstanding or, if the Issuing Bank has entered into an Assignment and Assumptions, set forth for the Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as the Issuing Bank’s “Letter of Credit Commitment,” as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Letter of Credit Facility” means, at any time, an amount equal to the Issuing Bank’s Letter of Credit Commitment at such time, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Letters of Credit” has the meaning specified in Section 2.01(c).

“Leverage Ratio” means, at any date of determination, the ratio of Consolidated Debt for Borrowed Money (net of cash and Cash Equivalents) at such date to Consolidated EBITDA, in each case of the Parent and its Subsidiaries for the most recently completed Measurement Period.

“Lien” means any lien, security interest, pledge or other charge or encumbrance of any kind, or any other type of preferential arrangement intended for security, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“Loan Documents” means (i) this Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) the Fee Letter and (v) the Intercreditor Agreement.

“Loan Parties” means the Borrower and the Guarantors.

“Margin Stock” has the meaning specified in Regulation U.

“Material Adverse Effect” means a material adverse effect on (a) the business, financial condition, operations, performance or properties of the Parent and its Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party under any Loan Document or (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is a party.

“Material Subsidiary” means, at any time, (i) any Subsidiary of the Parent that represents more than 5% of Consolidated EBITDA and more than 5% of Consolidated tangible assets of the Parent and its Subsidiaries, determined at the end of the most recently completed financial quarter of the Parent based on the financial statements of the Parent delivered pursuant to Section 5.03(b) or (c) or (ii) any Subsidiary of the Parent designated by notice in writing given by the Parent to the Administrative Agent to be a “Material Subsidiary; provided that, any such Subsidiary so designated as a Material Subsidiary shall at all times thereafter remain a Material Subsidiary for the purposes of this Agreement unless otherwise agreed to by the Borrower and the Required Lenders.

“Measurement Period” means each period of four consecutive fiscal quarters of the Parent.

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

“MS&Co” has the meaning specified in the recital of parties to this Agreement.

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“MSSF” has the meaning specified in the recital of parties to this Agreement.

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or with respect to which any Loan Party has any liability.

“Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA and subject to Title IV of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

“Net Income” means, for any period, the net income or loss of the Parent and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) unrealized gains and losses with respect to Hedge Agreements during such period and (b) the impact of purchase accounting or similar adjustments required or permitted by GAAP in connection with the Acquisition or any Permitted Acquisition (including the reduction of revenue from any write down of deferred revenue).

“Net Orderly Liquidation Value” means, with respect to Inventory of any Person, the orderly liquidation value thereof as set forth in the most recently delivered or conducted appraisal (as required or permitted hereby) by an appraiser reasonably acceptable to the Administrative Agent.

“Note” means a Revolving Credit Note.

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

“Notice of Issuance” has the meaning specified in Section 2.03(a).

“Notice of Renewal” has the meaning specified in Section 2.01(c).

“Notice of Swing Line Borrowing” has the meaning specified in Section 2.02(b).

“Notice of Termination” has the meaning specified in Section 2.01(c).

“NPL” means the National Priorities List under CERCLA.

“Obligation” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party, to the extent permitted by the Loan Documents.

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“Other Taxes” has the meaning specified in Section 2.12(b).

“Parent” has the meaning specified in the recital of parties to this Agreement.

“Parent Guaranty” means the guaranty of the Parent set forth in Article VIII.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

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

“Permitted Distributions” shall mean (i) a payment by the Borrower or its Subsidiaries to or on behalf of Parent (and any subsequent payment by Parent) for fees, costs and expenses paid to GGC or any of its Affiliates in accordance with the Advisory Agreement (as in effect on the Effective Date or as amended as permitted hereby); provided that nothing herein shall prohibit the accrual of any such fees under the terms of the Advisory Agreement; (ii) payments by the Borrower or its Subsidiaries to or on behalf of Parent for franchise taxes and other fees required to maintain the legal existence of Parent or to pay the out-of-pocket legal, accounting and other fees and expenses in the nature of overhead in the ordinary course of business of Parent, including without limitation payment of fees and reimbursement of expenses of the board of directors and (iii) any payments to Parent in order for Parent to make tax distributions to its members pursuant to Section 4.2 of that certain Amended and Restated Limited Liability Company Agreement, dated July 6, 2007, by and between Limited Brands Store Operations, Inc., a Delaware corporation, EXP Investments, Inc., a Delaware corporation and Express Investment Corp., a Delaware corporation; provided that the amount of such payment shall not exceed the amount that the Borrower would be required to pay in respect of federal, state, local or non-US taxes were the Borrower a corporation filing a consolidated return with each of its domestic Subsidiaries since immediately before the closing date of the Acquisition.

“Permitted Liens” means: (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b) and Liens for taxes, assessments or governmental charges or levies, which are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (b) Liens imposed by contract or law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) in the aggregate do not materially adversely affect the use of the property to which they relate and (ii) are being contested in good faith and for which adequate reserves have been established in accordance with GAAP; (c) Liens in the ordinary course of business to secure obligations under workers’ compensation laws, unemployment insurance, social security or similar legislation or to secure public or statutory obligations; (d) deposits to secure the performance of bids, trade contracts and leases (other than Debt), contracts for the purchase of property otherwise permitted by this Agreement, statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) Liens securing judgments (or the payment of money) not constituting an Event of Default under Section 6.01(g) or securing appeal or other surety bonds related to such judgments, (f) easements, rights of way, restrictions, and other

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encumbrances on title to real property that do not materially adversely affect the use of such property for its present purposes; (g) statutory, common law or contractual Liens of landlords, creditor depository institutions or institutions holding securities accounts (including rights of set-off or similar rights and remedies), (h) any interest or title of a lessor or sublessor under any lease of real estate or licensor or sublicensor of intellectual property not prohibited hereby, (i) Liens on the property of a Person existing at the time such Person becomes a Subsidiary of the Borrower; provided that, any such Lien may not extend to any other Property of the Borrower or any other Subsidiary that is not a direct Subsidiary of such Person; and provided further that, any such Lien was not created in anticipation of or in connection with the transaction or series of transactions pursuant to which such Person became a Subsidiary of the Borrower; (j) Liens on property at the time the Borrower or any Subsidiary acquired such property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Borrower or any of its Subsidiaries; provided that, such Lien may not extend to any other property of the Borrower or any of its Subsidiaries; provided further that, such Liens shall not have been created in anticipation of or in connection with the transaction or series of transactions pursuant to which such property was acquired by the Borrower or any Subsidiary; (k) Liens on specific items of inventory or other goods and the proceeds thereof (and each of the following relating thereto: documents, instruments, accounts, chattel paper, letter of credit rights, general intangibles, supporting obligations, and claims under insurance policies) securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or credited for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods; (l) Liens arising under conditional sale, title retention, consignment or similar arrangements for the sale of goods in the ordinary course of business; (m) Liens on insurance proceeds securing the payment of financed insurance premiums; (n) leases or subleases and licenses or sublicenses granted to others in the ordinary course of business; (o) customary Liens granted in favor of a trustee to secure fees and other amounts owing to such trustee under an indenture or other agreement pursuant to which Debt permitted by Section 5.02(b) is issued; (p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods; (q) the filing of precautionary financing statements in connection with operating leases, consignment, Transfers permitted under Section 5.02(e) and similar matters; (r) Liens on proceeds of sales of assets held in escrow pending resolution of indemnity or purchase price reduction claims; (s) other Liens on assets, securing Debt or other obligations not prohibited hereunder in an aggregate amount not to exceed $7,500,000 at any time outstanding; (t) Liens granted pursuant to the Collateral Documents; (u) Liens under the Term Facility Loan Documents and any Lien in existence on the Effective Date and set forth on Schedule 4.01(v); (v) replacement, extension and renewal of any Lien permitted hereby (provided, however, that (1) no such Lien shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced and (2) the aggregate amount secured shall not exceed the amount permitted to be secured prior to such extension, renewal or replacement); (w) Liens securing Debt incurred pursuant to Section 5.02(b)(ii), provided that any such Liens attach only to the property being financed pursuant to such Indebtedness and do not encumber any other property of any Loan Party; (x) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Loan Party, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements, provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Debt; (y) purchase money Liens upon or in real property or equipment acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the

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acquisition of any such property or equipment to be subject to such Liens, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that do not secure the purchase price), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any property other than the property or equipment being acquired, and (z) Liens on assets of Foreign Subsidiaries securing Debt of Foreign Subsidiaries permitted pursuant to Section 5.02(b)(viii).

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

“Pledged Debt” has the meaning specified in the Term Loan Security Agreement.

“Post Petition Interest” has the meaning specified in Section 8.06.

“Priority Payable Reserves” means reserves established in the Permitted Discretion of the Administrative Agent for amounts secured by any Liens, choate or inchoate, which rank or are capable of ranking in priority to the Agents’ and/or Lenders’ Liens and/or for amounts which may represent costs relating to the enforcement of the Agent’s Liens including, without limitation, in the Permitted 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.

“Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitments of such Lender under the applicable Facility or Facilities at such time and the denominator of which is the amount of the Aggregate Commitments under the applicable Facility or Facilities at such time; provided that if such Commitments have been terminated, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

“Protective Advance” has the meaning specified in Section 2.01(d).

“Qualified Capital Stock” of any person shall mean any Equity Interests of such person that are not Disqualified Stock.

“Redeemable” means, with respect to any Equity Interest, any such Equity Interest that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

“Register” has the meaning specified in Section 9.07(d).

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

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“Related Documents” means the Purchase Agreement and related documents, the Term Loan Facility Loan Documents, and the Advisory Agreement.

“Required Lenders” means, at any time, Lenders owed or holding at least a majority in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time and (c) the aggregate Unused Revolving Credit Commitments at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time and (C) the Unused Revolving Credit Commitment of such Lender at such time. For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to the Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments.

“Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to maintain against the Borrowing Base to reflect any impediments to the realization on the Collateral included in the Borrowing Base which may be instituted by the Administrative Agent upon five Business Days’ prior notice to the Borrower (including, without limitation, Inventory Reserves, Priority Payable Reserves, Cash Management Reserves, reserves for Customer Credit Liabilities (not to exceed 50% of such liability)); provided, however, that (i) rent Reserves for locations leased by any Loan Party (A) shall not be taken for leased retail stores or for leased locations covered by a Collateral Access Agreement and (B) for all other leased locations, shall be limited to (x) in the case of the Borrowers’ corporate headquarters, one month’s rent and (y) in all other cases, three months’ rent but in any event shall not exceed the total value of Eligible Inventory at any such other location, (ii) Reserves for consignee’s, warehousemen’s and bailee’s charges (A) shall not be taken for locations covered by an acknowledged bailee waiver letter and (B) for all other such locations, shall be limited to three months’ charges but in any event shall not exceed the total value of Eligible Inventory at any such other location, (iii) all Reserves (including the amount of such Reserve) shall bear a reasonable relationship to the events, conditions or circumstances that are the basis for such Reserve and (iv) the amount of any Reserve shall not be duplicative of the amount of any other Reserve imposed hereunder with respect to the same events, conditions or circumstances. In the event that the Administrative Agent determines in its Permitted Discretion that (a) the events, conditions or circumstances underlying the maintenance of any Reserve shall cease to exist or (b) the liability that is the basis for any Reserve has been reduced, then such Reserve shall be rescinded or reduced in an amount as determined in Administrative Agent’s Permitted Discretion, as applicable, at the request of the Borrower.

“Responsible Officer” means the Chief Executive Officer, Chief Financial Officer and Treasurer of the Parent or the Borrower, as applicable.

“Restricted Payment” has the meaning specified in Section 5.02(g).

“Revolving Credit Advance” has the meaning specified in Section 2.01(a)

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.

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“Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Revolving Credit Commitment” or, if such Lender has entered into one or more Assignment and Assumptions, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Revolving Credit Commitment,” as such amount may be reduced at or prior to such time pursuant to Section 2.05 or increased at or prior to such time pursuant to Section 2.18.

“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Lender” means any Lender that has a Revolving Credit Commitment.

“Revolving Credit Note” means a promissory note of the Borrower payable to the order of any Revolving Credit Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances made by such Lender, as amended.

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

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

“Secured Cash Management Agreement” means any agreement that is entered into by and between the Borrower or any of its Subsidiaries and any Lender or any of its Affiliates in connection with Cash Management Services provided by such Lender or Affiliate.

“Secured Hedge Agreement” means any Hedge Agreement required or permitted under Article V that is entered into by and between the Borrower and any Hedge Bank.

“Secured Obligations” has the meaning specified in Section 2 of the ABL Security Agreement.

“Secured Parties” means the Agents, the Lender Parties, the Hedge Banks and the Cash Management Banks.

“Significant Guarantor” means, at any date of determination, any (i) Subsidiary Guarantor of the Borrower that individually has or (ii) group of Subsidiary Guarantors of the Borrower, that in the aggregate has, in either case, revenues, assets or earnings in an amount equal to at least 5% of (a) the consolidated revenues of the Parent and its Subsidiaries for the most recently completed fiscal quarter for which the Lenders have received financial statements of the Parent and its Subsidiaries pursuant to Section 5.03(b) or (c), (b) the consolidated assets of the Parent and its Subsidiaries as of the last day of the most recently completed fiscal quarter for which the Lenders have received financial statements of the Parent and its Subsidiaries pursuant to Section 5.03(b) or (c), or (c) the consolidated net earnings of the Parent and its Subsidiaries for the most recently completed fiscal quarter for which the Lenders have received financial statements of the Parent and its Subsidiaries pursuant to Section 5.03(b) or (c), in each case determined in accordance with GAAP for such period.

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“Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA and subject to Title IV of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

“Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Specified Equity Contribution” has the meaning specified in Section 5.05(b).

“Specified Representations” means (a) such of the representations made by the Seller in the Purchase Agreement as are material to the interests of the Lenders, but only to the extent that the Parent has the right to terminate its obligations under the Purchase Agreement as a result of a breach of such representations in the Purchase Agreement and (b) the representations and warranties made by the Borrower in Sections 4.01(a) (excluding the last sentence thereof), (d) (only as to the Loan Documents (excluding clauses (iii) and (iv) therein and the last sentence thereof)), (f), (l), (m) and (n) (excluding the last sentence thereof) of this Agreement.

“Sponsor” means Golden Gate Private Equity, Inc., a Delaware corporation and each investment fund managed by it.

“Subordinated Debt” means any Debt of any Loan Party that is subordinated to the Obligations of such Loan Party under the Loan Documents on and that otherwise contains, terms and conditions reasonably satisfactory to the Administrative Agent.

“Subordinated Obligations” has the meaning specified in Section 8.06.

“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is, in the case of clauses (a), (b) and (c), at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

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“Subsidiary Guarantors” means the Subsidiaries of the Parent listed on Schedule II hereto and each other Subsidiary of the Parent that shall be required to execute and deliver a guaranty pursuant to Section 5.01(j).

“Subsidiary Guaranty” means the guaranty of the Subsidiary Guarantors set forth in Article VIII, together with each other guaranty and guaranty supplement delivered pursuant to Section 5.01(j), in each case as amended, amended and restated, modified or otherwise supplemented.

“Supermajority Lenders” means, at any time, Lenders owed or holding at least 66 ²/3% of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time and (c) the aggregate Unused Revolving Credit Commitments at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Supermajority Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time and (C) the Unused Revolving Credit Commitment of such Lender at such time. For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to the Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments.

“Supplemental Collateral Agent” has the meaning specified in Section 7.01(c).

“Surviving Debt” means (i) Debt of each Loan Party and its Subsidiaries outstanding immediately before and after giving effect to the Initial Extension of Credit and (ii) Debt incurred under credit facilities existing immediately before and after giving effect to the Initial Extension of Credit, in each case listed on Schedule 4.01(u) to this Agreement.

“Swing Line Advance” means an advance made by (a) the Swing Line Bank pursuant to Section 2.01(b) or (b) any Revolving Credit Lender pursuant to Section 2.02(b).

“Swing Line Bank” means the Initial Swing Line Bank and any Eligible Assignee to which the Swing Line Commitment hereunder has been assigned pursuant to Section 9.07.

“Swing Line Borrowing” means a borrowing consisting of a Swing Line Advance made by the Swing Line Bank pursuant to Section 2.01(b) or the Revolving Credit Lenders pursuant to Section 2.02(b).

“Swing Line Commitment” means, with respect to the Swing Line Bank at any time, the obligation to make a Swing Line Advance up to a maximum principal amount of $30,000,000 at any one time outstanding or, if the Swing Line Bank has entered into an Assignment and Assumption, set forth for the Swing Line Bank in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as the Swing Line Bank’s “Swing Line Commitment,” as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Swing Line Facility” means, at any time, an amount equal to the Swing Line Bank’s Swing Line Commitment at such time, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

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“Synthetic Debt” means, with respect to any Person, without duplication of any clause within the definition of “Debt,” all (a) Obligations of such Person under any lease that is treated as an operating lease for financial accounting purposes and a financing lease for tax purposes (i.e., a “synthetic lease”) and (b) Obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including, without limitation, any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Debt” or as a liability on a Consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

“Taxes” has the meaning specified in Section 2.12(a).

“Term Loan Facility” means the senior secured term loan facility to be provided to the Borrower substantially simultaneously with the Acquisition pursuant to the Term Loan Facility Credit Agreement.

“Term Loan Facility Credit Agreement” means the term loan credit agreement of even date herewith among the Borrower, the Parent, the Subsidiary Guarantors, the Administrative Agent (as defined therein), the Collateral Agent (as defined therein) and the lenders party thereto, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

“Term Loan Facility Loan Documents” means those documents that are specified as “Loan Documents” in the Term Loan Facility Credit Agreement.

“Termination Date” means the earlier of (a) the date of termination in whole of the Revolving Credit Commitments, the Letter of Credit Commitment and the Swing Line Commitment, pursuant to Section 2.05 or 6.01 and (b) July 6, 2012.

“Transaction” means the Acquisition and the other transactions contemplated by the Transaction Documents.

“Transaction Documents” means, collectively, the Loan Documents and the Related Documents.

“Transaction Expenses” means costs and expenses incurred in connection with the Transaction, dividend payments to any director, officer or employee in connection with the Transaction deemed to be an expense in accordance with GAAP and retention bonuses paid to employees in an aggregate amount not to exceed $35,000,000 from the Effective Date through the anniversary of the Effective Date.

“Transfer” has the meaning set forth in Section 5.02(e).

“Type” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

“Unmatured Surviving Obligations” means Obligations under this Agreement and the other Loan Documents that by their terms survive the termination of this Agreement or the other Loan Documents but are not, as of the date of determination, due and payable and for which no outstanding claim has been made.

“UCC” has the meaning specified in the ABL Security Agreement.

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“Unused Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time plus, without duplication, (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Bank pursuant to Section 2.03(d) and outstanding at such time and (C) the aggregate principal amount of all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(b) and outstanding at such time.

“Used Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, the sum of (a) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time and, without duplication, (b) such Lender’s Pro Rata Share of (i) the aggregate Available Amount of all Letters of Credit outstanding at such time, (ii) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Bank pursuant to Section 2.03(d) and outstanding at such time and (iii) the aggregate principal amount of all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(b) and outstanding at such time.

“Voting Interests” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“Welfare Plan” means a welfare benefit plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in respect of which any Loan Party could have liability.

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.” References in the Loan Documents to any agreement or contract “as amended” shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles as in effect from time to time in the United States (“GAAP”).

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ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT

SECTION 2.01. The Advances and the Letters of Credit. (a) The Revolving Credit Advances. Subject to the terms and conditions set forth herein, (i) each Revolving Credit Lender severally agrees to make revolving credit loans denominated in Dollars to the Borrower pursuant to Section 2.02 (a “Revolving Credit Advance”) from time to time, on any Business Day until the Termination Date, in an aggregate principal amount of $1,000,000 or an integral multiple of $100,000 in excess thereof (other than a Borrowing the proceeds of which shall be used solely to repay or prepay in full outstanding Swing Line Advances or outstanding Letter of Credit Advances) and shall consist of Revolving Credit Advances made simultaneously by the Revolving Credit Lenders ratably according to their Revolving Credit Commitments; provided, however, that the aggregate principal amount of all such Revolving Credit Advances (together with the aggregate principal amount of all Swing Line Advances then outstanding plus the aggregate Available Amount of all Letters of Credit outstanding at such time) shall not exceed the lesser of (x) the Revolving Credit Facility at such time or (y) the Borrowing Base then in effect, subject to the Administrative Agent’s authority, in its sole discretion to make Protective Advances pursuant to the terms of Section 2.01(d). Within the limits of each Revolving Credit Lender’s Unused Revolving Credit Commitment in effect from time to time, the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).

(b) The Swing Line Advances. The Swing Line Bank agrees on the terms and conditions hereinafter set forth, to make Swing Line Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date (i) in an aggregate amount not to exceed at any time outstanding $30,000,000 at such time and (ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate of the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time; provided, however, that the aggregate principal amount of all such Swing Line Advances (together with the aggregate principal amount of all Revolving Credit Advances then outstanding plus the aggregate Available Amount of all Letters of Credit outstanding at such time) shall not exceed the Borrowing Base then in effect. No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance. Each Swing Line Borrowing shall be in an amount of $1,000,000 or an integral multiple of $100,000 in excess thereof and shall be made as a Base Rate Advance. Within the limits of the Swing Line Facility and within the limits referred to in clause (ii) above, the Borrower may borrow under this Section 2.01(b), repay pursuant to Section 2.04(b) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(b). Immediately upon the making of a Swing Line Advance, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Bank a risk participation in such Swing Line Advance in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Swing Line Advance.

(c) The Letters of Credit. The Issuing Bank agrees, on the terms and conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit (the “Letters of Credit”) in Dollars for the account of the Borrower from time to time on any Business Day during the period from the Effective Date until 5 Business Days before the Termination Date in an aggregate Available Amount (i) for all Letters of Credit not to exceed at any time $40,000,000 at such time and (ii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time; provided, however, that the aggregate Available Amount of all Letters of Credit outstanding at such time (together with the aggregate principal amount of all Revolving Credit Advances and the aggregate principal amount of all Swing Line Advances then outstanding) shall not exceed the Borrowing Base then in effect. No Letter of Credit shall have an

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expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than the earlier of 5 Business Days before the Termination Date (unless cash collateral is provided for the full face amount of the Letter of Credit prior to such date) and one year after the date of issuance thereof, but may by its terms be renewable annually upon notice (a “Notice of Renewal”) given to the Issuing Bank and the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business Days prior to the date of the proposed renewal of such Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless the Issuing Bank has notified the Borrower (with a copy to the Administrative Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least 30 Business Days prior to the date of automatic renewal of its election not to renew such Letter of Credit (a “Notice of Termination”); provided that the terms of each Letter of Credit that is automatically renewable annually shall (x) require the Issuing Bank that issued such Letter of Credit to give the beneficiary named in such Letter of Credit notice of any Notice of Termination, (y) permit such beneficiary, upon receipt of such notice, to draw under such Letter of Credit prior to the date such Letter of Credit otherwise would have been automatically renewed and (z) not permit the expiration date (after giving effect to any renewal) of such Letter of Credit in any event to be extended to a date later than 5 Business Days before the Termination Date (unless cash collateral is provided for the full face amount of the Letter of Credit prior to such date). If either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by the Issuing Bank pursuant to the immediately preceding sentence, such Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement. Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of Credit under this Section 2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.04(d) and request the issuance of additional Letters of Credit under this Section 2.01(c).

(d) Protective Advances. Any provision of this Agreement to the contrary notwithstanding, (i) subject to the limitations set forth below, the Administrative Agent and the Collateral Agent are authorized by the Borrower and the Lenders, from time to time in each of their sole discretion (but shall have absolutely no obligation to), to make Advances to the Borrower, on behalf of all Lenders, which the Administrative Agent or the Collateral Agent, in such Person’s reasonable discretion, deems necessary or desirable (A) after the occurrence and during the continuance of an Event of Default or (B) at any time that any of the other applicable conditions precedent set forth in Section 3.02 are not satisfied (x) to preserve or protect the Collateral, or any portion thereof, (y) to enhance the likelihood of, or maximize the amount of, repayment of the Advances and other Obligations under the Loan Documents or (z) to pay any other amount chargeable to or required to be paid by the Borrower pursuant to the terms of this Agreement, including payments of principal, interest, L/C Disbursements, fees, reimbursable expenses (including costs, fees and expenses as described in Section 9.04) and other sums payable under the Loan Documents (any of such Advance are herein referred to as “Protective Advances”); provided that no Protective Advance shall cause the sum of the aggregate principal amount of all Swing Line Advances and Revolving Credit Advances then outstanding (together with the aggregate Available Amount of all Letters of Credit outstanding at such time) to exceed the Revolving Credit Commitment; provided, further, that the aggregate amount of Protective Advances outstanding at any time, which were made pursuant to clauses (x) and (y) above, shall not at any time exceed the lesser of (1) $20,000,000 and (2) 10% of the Borrowing Base. Protective Advances shall be secured by Liens in favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances shall be Base Rate Advances. The Administrative Agent’s and the Collateral Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders. Any such revocation must be in writing and shall become effective prospectively upon the Administrative

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Agent’s receipt thereof. At any time that there is sufficient Excess Availability and the conditions set forth in Section 3.02 have been satisfied, the Administrative Agent or the Collateral Agent may request the Revolving Credit Lenders to make a Revolving Credit Advances to repay a Protective Advance. At any other time, the Administrative Agent or the Collateral Agent may require the Lenders to fund their risk participations as described in clause (ii).

(ii) Upon the making of a Protective Advance by the Administrative Agent or the Collateral Agent (whether before or after the occurrence of an Event of Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent or the Collateral Agent, as applicable, without recourse or warranty, an undivided interest and participation in any Protective Advance in proportion to its Pro Rata Share of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Protective Advance.

SECTION 2.02. Making the Advances. (a) Except as otherwise provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or the first Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances by the Borrower to the Administrative Agent, which shall give to each Appropriate Lender prompt notice thereof by telecopier or electronic communication. Each such notice of a Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately in writing, or by telecopier or electronic communication, in substantially the form of Exhibit B hereto, specifying therein the requested (1) date of such Borrowing, (2) Facility under which such Borrowing is to be made, (3) Type of Advances comprising such Borrowing, (4) aggregate amount of such Borrowing and (5) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Appropriate Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Commitments under the applicable Facility of such Lender and the other Appropriate Lenders. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s Account; provided, however, that, in the case of any Revolving Credit Borrowing, the Administrative Agent shall first apply such funds to prepay ratably the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances outstanding at such time, together with interest accrued and unpaid thereon to and as of such date.

(b) (i) Each Swing Line Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the date of the proposed Swing Line Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent. Each such notice of a Swing Line Borrowing (a “Notice of Swing Line Borrowing”) shall be by telephone, confirmed promptly in writing, or by telecopier or electronic communication, specifying therein the requested (i) date of such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing). The Swing Line Bank will make the amount of the requested Swing Line Advances available to the Administrative Agent at the Administrative Agent’s Account, in same day funds. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s Account.

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(ii) The Swing Line Bank may, at any time in its sole and absolute discretion, request on behalf of the Borrower (and the Borrower hereby irrevocably authorizes the Swing Line Bank to so request on its behalf) that each Revolving Credit Lender make a Base Rate Advance in an amount equal to such Lender’s Pro Rata Share of the amount of Swing Line Advances then outstanding. Such request shall be deemed to be a Notice of Borrowing for purposes hereof and shall be made in accordance with the provisions of Section 2.02(a) without regard solely to the minimum amounts specified in Section 2.01(b) but subject to the satisfaction of the conditions set forth in Section 3.02. The Swing Line Bank shall furnish the Borrower with a copy of the applicable Notice of Borrowing promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Notice of Borrowing available for the account of its Applicable Lending Office to the Administrative Agent for the account of the Swing Line Bank, by deposit to the Administrative Agent’s Account, in same day funds, not later than 11:00 A.M. on the day specified in such Notice of Borrowing.

(iii) If for any reason any Swing Line Advance cannot be refinanced by a Revolving Credit Borrowing as contemplated by Section 2.02(b)(ii), the request for Base Rate Advances submitted by the Swing Line Bank as set forth in Section 2.02(b)(ii) shall be deemed to be a request by the Swing Line Bank that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Advance and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Bank pursuant to Section 2.02(b)(ii) shall be deemed payment in respect of such participation.

(iv) If and to the extent that any Revolving Credit Lender shall not have made the amount of its Pro Rata Share of such Swing Line Advance available to the Administrative Agent in accordance with the provisions of Section 2.02(b)(ii), such Revolving Credit Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of the applicable Notice of Borrowing delivered by the Swing Line Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate.

(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Advances or to purchase and fund risk participations in Swing Line Advance pursuant to this Section 2.02(b) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Bank, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Advances pursuant to this Section 2.02(b) is subject to satisfaction of the conditions set forth in Section 3.02. No funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Advances, together with interest as provided herein.

(c) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may only select Eurodollar Rate Advances with an Interest Period of two weeks or one month for the period from the date hereof for so long as is required by the Lead Arranger to achieve primary syndication; provided that such period shall end on the 30^th day after the date hereof (or such earlier date as shall be specified in its sole discretion by the Administrative Agent in a written notice to the Borrower and the Lenders that such primary syndication has been achieved), (ii) the Borrower may not select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $1,000,000 or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (iii) the Eurodollar Rate Advances may not be outstanding as part of more than 15 separate Borrowings.

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(d) Each Notice of Borrowing and each Notice of Swing Line Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Appropriate Lender against any loss, cost or expense incurred by such Lender (as set forth in a written notice delivered by such Lender or the Administrative Agent to the Borrower) as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

(e) Unless the Administrative Agent shall have received notice from an Appropriate Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower or Swing Line Bank or Issuing Bank, as applicable, on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender, the Borrower or Swing Line Bank or Issuing Bank, as applicable, severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to the Borrower or Swing Line Bank or Issuing Bank, as applicable, until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender, or Swing Line Bank or Issuing Bank, as applicable, the Federal Funds Rate. If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes.

(f) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York City time) on the second Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to the Issuing Bank, which shall give to the Administrative Agent and each Revolving Credit Lender prompt notice thereof by telecopier or electronic communication. Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”) shall be by telephone, confirmed promptly in writing, or by telecopier or electronic communication, specifying therein the requested (A) date of such issuance (which shall be a Business Day), (B) Available Amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied by such application and agreement for letter of credit as the Issuing Bank may specify to the Borrower for use in connection with such requested Letter of Credit (a “Letter of Credit Agreement”). If the requested form of such Letter of Credit is acceptable to the Issuing Bank in its sole discretion, the Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to the Borrower at its office referred to in Section 9.02 or as otherwise agreed with the Borrower in connection with such issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

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(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to the Administrative Agent on the first Business Day of each week a written report summarizing issuance and expiration dates of Letters of Credit issued during the previous week and drawings during such week under all Letters of Credit, (B) to each Revolving Credit Lender on the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit issued during the preceding month and drawings during such month under all Letters of Credit and (C) to the Administrative Agent and each Revolving Credit Lender on the first Business Day of each calendar quarter a written report setting forth the average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit.

(c) Participations in Letters of Credit. Upon the issuance of a Letter of Credit by the Issuing Bank under Section 2.03(a), the Issuing Bank shall be deemed, without further action by any party hereto, to have sold to each Revolving Credit Lender, and each Revolving Credit Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Bank, a participation in such Letter of Credit in an amount for each Revolving Credit Lender equal to such Revolving Credit Lender’s Pro Rata Share of the Available Amount of such Letter of Credit, effective upon the issuance of such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay such Revolving Credit Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrower forthwith on the date due as provided in Section 2.04(d) by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of the Issuing Bank by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to such Revolving Credit Lender’s Pro Rata Share of such L/C Disbursement. Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Section 2.03(c) in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default or the termination of the Commitments, and that each such payment shall be made without any off-set, abatement, withholding or reduction whatsoever. If and to the extent that any Revolving Credit Lender shall not have so made the amount of such L/C Disbursement available to the Administrative Agent, such Revolving Credit Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date such L/C Disbursement is due pursuant to Section 2.04(d) until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for its account or the account of the Issuing Bank, as applicable. If such Lender shall pay to the Administrative Agent such amount for the account of the Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Letter of Credit Advance made by the Issuing Bank shall be reduced by such amount on such Business Day.

(d) Drawing and Reimbursement. The payment by the Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by the Issuing Bank of a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft.

(e) Failure to Make Letter of Credit Advances. The failure of any Lender to make the Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date.

SECTION 2.04. Repayment of Advances. (a) Revolving Credit Advances. The Borrower shall repay to the Administrative Agent for the ratable account of the Revolving Credit Lenders on the Termination Date the aggregate principal amount of the Revolving Credit Advances then outstanding.

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(b) Swing Line Advances. The Borrower shall repay to the Administrative Agent for the account of the Swing Line Bank and each other Revolving Credit Lender that has made a Swing Line Advance the outstanding principal amount of each Swing Line Advance made by each of them on the earlier of the maturity date specified in the applicable Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing) and the Termination Date.

(c) Protective Advances. The Borrower shall repay to the Administrative Agent for the ratable account of the Revolving Credit Lenders that have made a Protective Advance the outstanding principal amount of each Protective Advance made by each of them on the earlier of demand and the Termination Date.

(d) Letter of Credit Advances. (i) The Borrower shall repay to the Administrative Agent for the account of the Issuing Bank and each other Revolving Credit Lender that has made a Letter of Credit Advance on the earlier of demand and the Termination Date the outstanding principal amount of each Letter of Credit Advance made by each of them; provided that, so long as the conditions precedent under Section 3.02 have been satisfied, the Borrower may repay such outstanding principal amount with a Revolving Credit Advance requested pursuant to Section 2.02(a).

(ii) The Obligations of the Borrower under this Agreement to repay Letter of Credit Advances under Section 2.04(d) or to reimburse drawn Letters of Credit under any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances:

(A) any lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “L/C Related Documents”);

(B) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents in each case in accordance with its terms;

(C) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

(D) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(E) payment by the Issuing Bank under a Letter of Credit against presentation of a draft, certificate or other document that does not strictly comply with the terms of such Letter of Credit;

(F) any exchange, release or non perfection of any Collateral or other collateral, or any release or amendment or waiver of or consent to departure from the Guaranties or any other guarantee, for all or any of the Obligations of the Borrower in respect of the L/C Related Documents; or

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(G) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor.

provided, that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Borrower for damages suffered by the Borrower that are caused by the Issuing Bank failing to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof.

SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional. The Borrower may, upon at least five Business Days’ notice to the Administrative Agent, terminate in whole or reduce in part the Revolving Credit Commitment; provided, however, that each partial reduction of the Revolving Credit Commitment (i) shall be in an aggregate amount of $1,000,000 or an integral multiple of $500,000 in excess thereof and (ii) shall be made ratably among the Appropriate Lenders in accordance with their Pro Rata Share of the Revolving Credit Commitments.

(b) Mandatory. (i) The Letter of Credit Facility shall be permanently reduced from time to time on the date of each permanent reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such permanent reduction of the Revolving Credit Facility.

(ii) The Swing Line Facility shall be permanently reduced from time to time on the date of each permanent reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect to such permanent reduction of the Revolving Credit Facility.

SECTION 2.06. Prepayments. (a) Optional. With regards to the prepayment of any Revolving Credit Advance, the Borrower may, upon at least one Business Day’s notice in the case of Base Rate Advances and three Business Days’ notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the Borrower shall prepay the outstanding aggregate principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid without premium or penalty; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $1,000,000 or an integral multiple of $500,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period for such Advance, the Borrower shall also pay any amounts owing pursuant to Section 9.04(c). Notwithstanding anything to the contrary contained in this Agreement, the Borrower may rescind any notice of prepayment under this Section 2.06(a) if such prepayment would have resulted from a refinancing of a Facility, which refinancing shall not be consummated or shall otherwise be delayed.

(b) Mandatory. (i) The Borrower shall, subject to Section 2.17, on each Business Day (commencing with the Fiscal Year ended February 2, 2008), prepay an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Letter of Credit Advances and the Swing Line Advances and deposit an amount in the Collateral Account in an amount equal to the amount by which (A) the sum of the aggregate principal amount of the Advances then outstanding plus the aggregate Available Amount of all Letters of Credit then outstanding exceeds (B) the lesser of the Revolving Credit Facility and the Borrowing Base on such Business Day.

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(ii) The Borrower shall, on each Business Day, pay to the Administrative Agent for deposit in the Collateral Account an amount sufficient to cause the aggregate amount on deposit in the Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such Business Day.

(iii) Prepayments of the Revolving Credit Facility made pursuant to clause (i) above shall be made to each of the Revolving Credit Lenders on a pro rata basis to be first applied to prepay Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Swing Line Advances then outstanding until such Advances are paid in full, third applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such Advances are paid in full and fourth deposited in the Collateral Account to cash collateralize 102.5% of the Available Amount of the Letters of Credit then outstanding. Upon the drawing of any Letter of Credit for which funds are on deposit in the Collateral Account, such funds shall be applied to reimburse the Issuing Bank or Revolving Credit Lenders, as applicable.

(iv) All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid, together with any amounts owing pursuant to Section 9.04(c).

SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(i) Base Rate Advances. During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each April, July, October and January during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

(ii) Eurodollar Rate Advances. During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b) Default Interest. Upon the occurrence and during the continuation of an Event of Default under Section 6.01(a) or (f), the Administrative Agent may, and upon the request of the Required Lenders shall, require that the Borrower pay interest (“Default Interest”) on (A) any overdue principal amount, payable in arrears on the dates referred to in clause (i) or (ii) of Section 2.07(a), as applicable, and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such principal amount pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and (B) to the fullest extent permitted by applicable law, the amount of any interest, fee or other amount payable (other than any principal of any Advance) under this Agreement or any other Loan Document to any Agent or any Lender Party that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (i) of Section 2.07(a).

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(c) Notice of Interest Period and Interest Rate. Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period,” the Administrative Agent shall give notice to the Borrower and each Appropriate Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of the Revolving Credit Lenders a commitment fee, from the date hereof in the case of each Initial Lender and from the effective date specified in the Assignment and Assumption pursuant to which it became a Lender in the case of each other Lender until the Termination Date, payable in arrears quarterly on the last day of each April, July, October and January, and on the Termination Date (pro rated for the number of days elapsed in such quarter), at the rate of 1/4 of 1% per annum on the sum of the average daily Unused Revolving Credit Commitment of such Lender during such quarter plus its Pro Rata Share of the average daily outstanding Swing Line Advances during such quarter; provided, however, that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

(b) Letter of Credit Fees, Etc. The Borrower shall pay to (i) the Administrative Agent for the account of each Revolving Credit Lender a commission, payable in arrears quarterly on the last day of each April, July, October and January, commencing October 31, 2007, and on the Termination Date (pro rated for the number of days elapsed in such quarter), on such Lender’s Pro Rata Share of the average daily aggregate Available Amount during such quarter of all Letters of Credit outstanding from time to time at the rate of the Applicable Margin for Eurodollar Rate Advances under the Revolving Credit Facility and (ii) the applicable Issuing Bank, a fronting fee, payable in arrears quarterly on the last day of each April, July, October and January, equal to 1/8 of 1% on such Lender’s Pro Rata Share of the average daily aggregate Available Amount during such quarter of all Letters of Credit outstanding from time to time. Upon the occurrence and during the continuation of an Event of Default under Section 6.01(a) or (f), the amount of commission payable by the Borrower under clause (b)(i) above shall be increased by 2% per annum if the Default Interest is imposed pursuant to Section 2.07(b).

(c) Agents’ Fees. The Borrower shall pay to each Agent for its own account such fees as may from time to time be agreed between the Borrower and such Agent.

SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Section 2.10, Convert all or any portion of the Advances of one Type comprising the same Borrowing into Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than $1,000,000, no Conversion of any Advances shall result in more than 15 Interest Periods in effect and each Conversion of Advances comprising part of the same Borrowing under any Facility shall be made ratably among the Appropriate Lenders in accordance with their Commitments under such Facility. Each such notice of Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances. Each notice of Conversion shall be irrevocable and binding on the Borrower.

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(b) Mandatory. (i) If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify the Borrower and the Appropriate Lenders, whereupon with respect to each such Eurodollar Rate Advance, on the last day of the then existing Interest Period therefor, Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(ii) Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent and the Required Lenders may require, by notice to the Borrower, that (x) at the end of the then existing applicable Interest Period each Eurodollar Rate Advance be Converted into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation by a central bank or governmental authority or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances or, in the case of any Revolving Credit Lender, of agreeing to issue or of issuing or maintaining or participating in Letters of Credit or of agreeing to make or of making or maintaining Letter of Credit Advances (excluding, for purposes of this Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of imposition, or the rate, of any taxes, levies, imposts, deductions, charges, withholdings or liabilities that are excluded from the definition of Taxes), then the Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party additional amounts sufficient to compensate such Lender Party for such increased cost. A certificate as to the amount of such increased cost, submitted to the Borrower by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding anything contained herein to the contrary, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.10(a) for any such increased cost incurred more than one-hundred-eighty (180) days prior to the date that such Lender demands compensation therefor; provided that, if the circumstance giving rise to such increased cost is retroactive, then such 180 day period shall be extended to include the period of retroactive effect thereof.

(b) If any Lender Party determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender Party or any corporation controlling such Lender Party and that the amount of such capital is increased by or based upon the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder, then, upon demand by such Lender Party or such corporation (with a copy of such demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit. A certificate as to such amounts submitted to the Borrower by such Lender Party shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding anything contained herein to the contrary, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.10(b) for any such increased cost incurred more than one-hundred-eighty (180) days prior to the date that such Lender demands compensation therefor; provided that, if the circumstance giving rise to such increased cost is retroactive, then such 180 day period shall be extended to include the period of retroactive effect thereof.

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(c) If, with respect to any Eurodollar Rate Advances under any Facility, Lenders owed at least a majority of the then aggregate unpaid principal amount thereof notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrower and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance under such Facility will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lenders have determined that the circumstances causing such suspension no longer exist.

(d) Notwithstanding any other provision of this Agreement, if the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each Eurodollar Rate Advance under each Facility under which such Lender has a Commitment will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist; provided, however, that, before making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 2.11. Payments and Computations. (a) The Borrower shall make each payment hereunder and under the other Loan Documents, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.15), not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day funds, with payments being received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the other Loan Documents to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Assumption and recording of the information contained therein in the Register pursuant to Section 9.07(d), from and after the effective date of such Assignment and Assumption, the Administrative Agent shall make all payments hereunder and under the other Loan Documents in respect of the interest assigned thereby to the assignee thereunder, and the parties to such Assignment and Assumption shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b) INTENTIONALLY OMITTED.

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(c) All computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate and of fees shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable. Each determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error.

(d) Whenever any payment hereunder or under the other Loan Documents shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commitment or letter of credit fee or commission, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the preceding Business Day.

(e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to any Lender Party hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each such Lender Party on such due date an amount equal to the amount then due such Lender Party. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, each such Lender Party shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender Party together with interest thereon, for each day from the date such amount is distributed to such Lender Party until the date such Lender Party repays such amount to the Administrative Agent, at the Federal Funds Rate.

(f) Whenever any payment received by the Administrative Agent from the Borrower under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Agents and the Lender Parties by the Borrower under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Agents and the Lender Parties in the following order of priority (x) upon the occurrence and during the continuance of an Event of Default or (y) at any other time that the Administrative Agent receives a payment from the Borrower without direction as to the application of such payment:

(i) first, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the Agents (solely in their respective capacities as Agents) under or in respect of this Agreement and the other Loan Documents on such date by the Borrower, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Agents on such date;

(ii) second, to the payment of all of the fees, indemnification payments other than indemnification payments as set forth in clause (iii) below, costs and expenses that are due and payable to the applicable Issuing Bank and the applicable Lenders under or in respect of this Agreement and the other Loan Documents on such date by the Borrower, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the applicable Issuing Bank and the applicable Lenders on such date;

(iii) third, to the payment of all of the indemnification payments, costs and expenses that are due and payable to the Lenders under Sections 9.04 hereof, Section 22 of the ABL Security Agreement and any similar Section of any other Loan Documents on such date by the Borrower, ratably based upon the respective aggregate amounts of all such indemnification payments, costs and expenses owing to the applicable Lenders on such date;

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(iv) fourth, to the payment of all of the amounts that are due and payable to the Administrative Agent and the Lender Parties under Sections 2.10 and 2.12 hereof on such date by the Borrower, ratably based upon the respective aggregate amounts thereof owing to the Administrative Agent and the Lender Parties on such date;

(v) fifth, to the payment of all of the fees that are due and payable to the Appropriate Lenders under Section 2.08(a) on such date by the Borrower, ratably based upon the respective applicable undrawn aggregate Commitments of the Lenders under the applicable Facilities on such date;

(vi) sixth, to the payment of all of the accrued and unpaid interest on the Obligations of the Borrower under or in respect of the Loan Documents that is due and payable to the Agents and the applicable Lender Parties under Section 2.07(b) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Agents and the applicable Lender Parties on such date;

(vii) seventh, to the payment of all of the accrued and unpaid interest on the applicable Advances that is due and payable to the applicable Lender Parties under Section 2.07(a) on such date, ratably based upon the respective aggregate amounts of all such interest owing to such applicable Lender Parties on such date;

(viii) eighth, to the payment of the principal amount of all of the outstanding applicable Advances that is due and payable to the Agents and the applicable Lender Parties on such date by the Borrower, ratably based upon the respective aggregate amounts of all such principal owing to the Agents and the applicable Lender Parties on such date; and

(ix) ninth, to the payment of all other Obligations owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent and the other Secured Parties on such date by the Borrower, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date.

(g) Whenever any cash proceeds are received by the Administrative Agent from any sale of, collection from, or other realization upon all or any part of the Collateral pursuant to Section 21(b) of the ABL Security Agreement or, if applicable, Section 3 of the Intercreditor Agreement, such cash proceeds shall be distributed by the Administrative Agent and applied by the Agents and the Lender Parties and Hedge Banks in the following order of priority upon the occurrence and during the continuance of an Event of Default:

(i) first, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the Agents (solely in their respective capacities as Agents) under or in respect of this Agreement and the other Loan Documents on such date by the Borrower, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Agents on such date;

(ii) second, to the payment of all of the fees, indemnification payments (other than indemnification payments as set forth in clause (iii) below), costs and expenses that are due and payable to the applicable Issuing Bank and the applicable Lenders under or in respect of this

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Agreement and the other Loan Documents and the applicable Hedge Banks under or in respect of the Secured Hedge Agreements, in each case on such date by the Borrower, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the applicable Issuing Bank, the applicable Lenders and the applicable Hedge Banks on such date;

(iii) third, to the payment of all of the indemnification payments, costs and expenses that are due and payable to the Lenders under Sections 9.04 hereof, Section 22 of the ABL Security Agreement and any similar section of any other Loan Documents on such date by the Borrower, ratably based upon the respective aggregate amounts of all such indemnification payments, costs and expenses owing to the applicable Lenders on such date;

(iv) fourth, to the payment of all of the amounts that are due and payable to the Administrative Agent and the Lender Parties under Sections 2.10 and 2.12 hereof on such date by the Borrower, ratably based upon the respective aggregate amounts thereof owing to the Administrative Agent and the Lender Parties on such date;

(v) fifth, to the payment of all of the fees that are due and payable to the Appropriate Lenders under Section 2.08(a) on such date by the Borrower, ratably based upon the respective applicable undrawn aggregate Commitments of the Lenders under the applicable Facilities on such date;

(vi) sixth, to the payment of all of the accrued and unpaid interest on the Obligations of the Borrower under or in respect of the Loan Documents that is due and payable to the Agents and the applicable Lender Parties under Section 2.07(b) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Agents and the applicable Lender Parties on such date;

(vii) seventh, to the payment of all of the accrued and unpaid interest on the applicable Advances that is due and payable to the applicable Lender Parties under Section 2.07(a) on such date, ratably based upon the respective aggregate amounts of all such interest owing to such applicable Lender Parties on such date;

(viii) eighth, to the payment of the principal amount of all of the outstanding applicable Advances that is due and payable to the Agents and the applicable Lender Parties on such date by the Borrower, ratably based upon the respective aggregate amounts of all such principal owing to the Agents and the applicable Lender Parties on such date (which, for the avoidance of doubt, shall include payment to the Administrative Agent, for the account of the Issuing Bank, to cash collateralize 102.5% of the Available Amount of the Letters of Credit then outstanding); and

(ix) ninth, to the payment of all amounts due under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Hedge Banks and the Cash Management Banks in proportion to the respective aggregate amount owing to such Hedge Banks and Cash Management Banks; and

(x) tenth, to the payment of all other Obligations owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent and the other Secured Parties on such date by the Borrower, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date.

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SECTION 2.12. Taxes. (a) Any and all payments by any Loan Party to or for the account of any Lender Party or any Agent hereunder or under any other Loan Document shall be made, in accordance with Section 2.11 or the applicable provisions of such other Loan Document, if any, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender Party and each Agent, taxes that are imposed on its overall net income by the United States (including franchise taxes imposed in lieu thereof and branch profits taxes) and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof and branch profits taxes) by the state or foreign jurisdiction under the laws of which such Lender Party or such Agent, as the case may be, is organized, or in which its principal office is located, or any political subdivision thereof and, in the case of each Lender Party, taxes that are imposed on its overall net income (including franchise taxes imposed in lieu thereof and branch profits taxes) by the state or foreign jurisdiction of such Lender Party’s Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under any other Loan Document being hereinafter referred to as “Taxes”). If any Loan Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan Document to any Lender Party or any Agent, (i) the sum payable by such Loan Party shall be increased as may be necessary so that after such Loan Party and the Administrative Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Lender Party or such Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make all such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, each Loan Party shall pay any present or future stamp, documentary, excise, property, intangible, mortgage recording or similar taxes, charges or levies that arise from any payment made by such Loan Party hereunder or under any other Loan Documents or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or the other Loan Documents (hereinafter referred to as “Other Taxes”).

(c) The Loan Parties shall indemnify each Lender Party and each Agent for and hold them harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed or asserted by any jurisdiction on amounts payable under this Section 2.12, imposed on or paid by such Lender Party or such Agent (as the case may be) and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender Party or such Agent (as the case may be) makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender Party (with a copy to the Administrative Agent) or by the Agents on their own behalf or on behalf of a Lender Party shall be conclusive absent manifest error.

(d) Within 30 days after the date of any payment of Taxes, the appropriate Loan Party shall furnish to the Administrative Agent, at its address referred to in Section 9.02, the original or a certified copy of a receipt evidencing such payment, to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Administrative Agent. For purposes of subsections (d) and (e) of this Section 2.12, the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.

(e) (I) Each Lender Party organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender Party and on the date of the Assignment and Assumption pursuant to which it becomes a Lender Party in the case of each other Lender Party, and from time to time thereafter as reasonably requested in writing by the Borrower (but only so long thereafter as such Lender Party remains

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lawfully able to do so), provide each of the Administrative Agent and the Borrower with two original Internal Revenue Service Forms W-8BEN or W-8ECI or (in the case of a Lender Party that has certified in writing to the Administrative Agent that it is not (i) a “bank” as defined in Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of any Loan Party or (iii) a controlled foreign corporation related to any Loan Party (within the meaning of Section 864(d)(4) of the Internal Revenue Code), Internal Revenue Service Form W-8BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or any other Loan Document or, in the case of a Lender Party that has certified that it is not a “bank” as described above, certifying that such Lender Party is a foreign corporation, partnership, estate or trust. If, at the time such Lender Party first becomes a party to this Agreement payments pursuant to this Agreement or any other Loan Document are subject to withholding tax rate at a rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms; provided, however, that if, at the effective date of the Assignment and Assumption pursuant to which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to payments under subsection (a) of this Section 2.12 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future as a result of a change in law after the date that a Lender becomes a party to this Agreement or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender Party assignee on such date.

(II) Each Lender Party that is a “United States person” shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender Party fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable backup withholding tax imposed by the Code, without reduction, and such amount shall be excluded from Taxes.

(f) For any period with respect to which a Lender Party has failed to provide the Borrower with the appropriate form, certificate or other document described in subsection (e) above (other than if such failure is due to a change in law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided), such Lender Party shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender Party become subject to Taxes because of its failure to deliver a form, certificate or other document required hereunder, the Loan Parties shall take such steps as such Lender Party shall reasonably request to assist such Lender Party to recover such Taxes.

(g) INTENTIONALLY OMITTED.

(h) If the Administrative Agent or a Lender Party determines that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Loan Parties or with respect to which the Loan Parties have paid additional amounts pursuant to this Section, it shall pay to the Loan Parties an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Loan Parties under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender Party, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Parties, upon the request of the Administrative Agent or such Lender Party, agrees to repay the amount paid over to the Loan Parties

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(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender Party in the event the Administrative Agent or such Lender Party is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender Party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Loan Parties or any other Person.

(i) If any Lender Party requests compensation under Section 2.10 or requires the Borrower to pay any additional amount to any Lender Party or any Governmental Authority for the account of any Lender Party pursuant to this Section 2.12, then such Lender Party shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates or to file any certificate or document reasonably requested by the Borrower, if, in the judgment of such Lender Party, such designation, assignment or filing would (x) eliminate or reduce amounts payable pursuant to Section 2.10 or 2.12, as the case may be, in the future and (y) would not subject such Lender Party to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender Party. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender Party in connection with any such designation or assignment. A certificate setting forth such costs and expenses submitted by such Lender Party to the Borrower shall be conclusive absent manifest error.

SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, other than as a result of an assignment pursuant to Section 9.07) (a) on account of Obligations due and payable to such Lender Party hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender Party at such time to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lender Parties hereunder and under the other Loan Documents at such time obtained by all the Lender Parties at such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing to such Lender Party at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the other Loan Documents at such time) of payments on account of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the other Loan Documents at such time obtained by all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party’s ratable share (according to the proportion of (i) the purchase price paid to such Lender Party to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other Lender Party’s required repayment to (ii) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by the purchasing Lender Party in respect of the total amount so recovered. The Loan Parties agree that any Lender Party so purchasing an interest or participating interest from another Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest or participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of the Loan Parties in the amount of such interest or participating interest, as the case may be.

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SECTION 2.14. Use of Proceeds. The proceeds of the Revolving Credit Facility shall be available (and the Borrower agrees that it shall use such proceeds), in part, to pay transaction fees and expenses relating to the Transaction, any working capital adjustment required to be paid under the Purchase Agreement and to finance working capital for the Parent and its Subsidiaries and for their other general corporate purposes (including Permitted Acquisitions and Capital Expenditures).

SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower shall be required to make any payment hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then the Borrower may, so long as no Default shall occur or be continuing at such time and to the fullest extent permitted by applicable law, set off and otherwise apply the Obligation of the Borrower to make such payment to or for the account of such Defaulting Lender against the obligation of such Defaulting Lender to make such Defaulted Advance. In the event that, on any date, the Borrower shall so set off and otherwise apply its obligation to make any such payment against the obligation of such Defaulting Lender to make any such Defaulted Advance on or prior to such date, the amount so set off and otherwise applied by the Borrower shall constitute for all purposes of this Agreement and the other Loan Documents an Advance by such Defaulting Lender made on the date of such setoff under the Facility pursuant to which such Defaulted Advance was originally required to have been made pursuant to Section 2.01. Such Advance shall be considered, for all purposes of this Agreement, to comprise part of the Borrowing in connection with which such Defaulted Advance was originally required to have been made pursuant to Section 2.01, even if the other Advances comprising such Borrowing shall be Eurodollar Rate Advances on the date such Advance is deemed to be made pursuant to this subsection (a). The Borrower shall notify the Administrative Agent at any time the Borrower exercises its right of set-off pursuant to this subsection (a) and shall set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Advance required to be made by such Defaulting Lender and (B) the amount set off and otherwise applied in respect of such Defaulted Advance pursuant to this subsection (a). Any portion of such payment otherwise required to be made by the Borrower to or for the account of such Defaulting Lender which is paid by the Borrower, after giving effect to the amount set off and otherwise applied by the Borrower pursuant to this subsection (a), shall be applied by the Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.

(b) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to any Agent or any of the other Lender Parties and (iii) the Borrower shall make any payment hereunder or under any other Loan Document to the Administrative Agent for the account of such Defaulting Lender, then the Administrative Agent may, on its behalf or on behalf of such other Agents or such other Lender Parties and to the fullest extent permitted by applicable law, apply at such time the amount so paid by the Borrower to or for the account of such Defaulting Lender to the payment of each such Defaulted Amount to the extent required to pay such Defaulted Amount. In the event that the Administrative Agent shall so apply any such amount to the payment of any such Defaulted Amount on any date, the amount so applied by the Administrative Agent shall constitute for all purposes of this Agreement and the other Loan Documents payment, to such extent, of such Defaulted Amount on such date. Any such amount so applied by the Administrative Agent shall be retained by the Administrative Agent or distributed by the Administrative Agent to such other Agents or such other Lender Parties in the following order of priority:

(i) first, to the Agents for any Defaulted Amounts then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to the Agents;

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(ii) second, to the Issuing Bank and the Swing Line Bank for any Defaulted Amounts then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to the Issuing Bank and the Swing Line Bank; and

(iii) third, to any other Lender Parties for any Defaulted Amounts then owing to such other Lender Parties, ratably in accordance with such respective Defaulted Amounts then owing to such other Lender Parties.

Any portion of such amount paid by the Borrower for the account of such Defaulting Lender remaining after giving effect to the amount applied by the Administrative Agent pursuant to this subsection (b) shall be applied by the Administrative Agent as specified in subsection (c) of this Section 2.15.

(c) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance or a Defaulted Amount and (iii) the Borrower, any Agent or any other Lender Party shall be required to pay or distribute any amount hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then the Borrower or such Agent or such other Lender Party shall pay such amount to the Administrative Agent to be held by the Administrative Agent, to the fullest extent permitted by applicable law, in escrow or the Administrative Agent shall, to the fullest extent permitted by applicable law, hold in escrow such amount otherwise held by it. Any funds held by the Administrative Agent in escrow under this subsection (c) shall be deposited by the Administrative Agent in an account with a commercial bank selected by the Administrative Agent (the “Escrow Bank”), in the name and under the control of the Administrative Agent, but subject to the provisions of this subsection (c). The terms applicable to such account, including the rate of interest payable with respect to the credit balance of such account from time to time, shall be the Escrow Bank’s standard terms applicable to escrow accounts maintained with it. Any interest credited to such account from time to time shall be held by the Administrative Agent in escrow under, and applied by the Administrative Agent from time to time in accordance with the provisions of, this subsection (c). The Administrative Agent shall, to the fullest extent permitted by applicable law, apply all funds so held in escrow from time to time to the extent necessary to make any Advances required to be made by such Defaulting Lender and to pay any amount payable by such Defaulting Lender hereunder and under the other Loan Documents to the Administrative Agent or any other Lender Party, as and when such Advances or amounts are required to be made or paid and, if the amount so held in escrow shall at any time be insufficient to make and pay all such Advances and amounts required to be made or paid at such time, in the following order of priority:

(i) first, to the Agents for any amounts then due and payable by such Defaulting Lender to them hereunder, in their capacities as such, ratably in accordance with such respective amounts then due and payable to the Agents;

(ii) second, to the Issuing Bank and the Swing Line Bank for any amounts then due and payable to them hereunder, in their capacities as such, by such Defaulting Lender, ratably in accordance with such respective amounts then due and payable to the Issuing Bank and the Swing Line Bank;

(iii) third, to any other Lender Parties for any amount then due and payable by such Defaulting Lender to such other Lender Parties hereunder, ratably in accordance with such respective amounts then due and payable to such other Lender Parties; and

(iv) fourth, to the Borrower for any Advance then required to be made by such Defaulting Lender pursuant to a Commitment of such Defaulting Lender.

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In the event that any Lender Party that is a Defaulting Lender shall, at any time, cease to be a Defaulting Lender, any funds held by the Administrative Agent in escrow at such time with respect to such Lender Party shall be distributed by the Administrative Agent to such Lender Party and applied by such Lender Party to the Obligations owing to such Lender Party at such time under this Agreement and the other Loan Documents ratably in accordance with the respective amounts of such Obligations outstanding at such time.

(d) The rights and remedies against a Defaulting Lender under this Section 2.15 are in addition to other rights and remedies that the Borrower may have against such Defaulting Lender with respect to any Defaulted Advance and that any Agent or any Lender Party may have against such Defaulting Lender with respect to any Defaulted Amount.

SECTION 2.16. Evidence of Debt. (a) Each Lender Party shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender Party resulting from each Advance owing to such Lender Party from time to time, including the amounts of principal and interest payable and paid to such Lender Party from time to time hereunder. The Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy of such notice to the Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, the Borrower shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a Revolving Credit Note, in substantially the form of Exhibit A hereto payable to the order of such Lender Party in a principal amount equal to the Revolving Credit Commitment of such Lender Party. All references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder.

(b) The Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall include a control account, and a subsidiary account for each Lender Party, in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and Assumption delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender Party hereunder and (iv) the amount of any sum received by the Administrative Agent from the Borrower hereunder and each Lender Party’s share thereof.

(c) Entries made in good faith by the Administrative Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest error; provided, however, that the failure of the Administrative Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement.

SECTION 2.17. Reserves. The Administrative Agent may hereafter establish Reserves or change any of the Reserves in its Permitted Discretion; provided that such Reserves shall not be established or changed except upon not less than five (5) Business Days’ notice to the Borrower (during which period the Administrative Agent shall be available to discuss any such proposed Reserve with the Borrower and the Borrower may take such action as may be required so that the event, condition or matter that is the basis for such Reserve no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent); provided, further, that if, as a result of such adjustment or modification, the aggregate principal amount of the Revolving Credit Advances and Swing Line

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Advances then outstanding (together with the Available Amount of the Letters of Credit outstanding at such time) exceeds the Borrowing Base then in effect, then the Borrower shall have three (3) Business Days following the date on which such adjustment or modification becomes effective to repay the amount of such excess.

SECTION 2.18. Increase in Commitments. (a) Upon notice to the Administrative Agent, at any time after the Effective Date, the Borrower may request that Additional Revolving Credit Commitments be provided by Additional Revolving Credit Lenders (which may include Persons meeting the definition of an Eligible Assignee) on terms agreed to by the Borrower and such Additional Revolving Credit Lenders; provided that (i) after giving effect to any such Additional Revolving Credit Commitments, the aggregate amount of Additional Revolving Credit Commitments that have been added pursuant to this Section 2.18 shall not exceed $50,000,000 and (ii) the final maturity date and the Applicable Margin of any Additional Revolving Credit Advances shall be equal respectively to Termination Date and the Applicable Margin of the Revolving Credit Advances, effective upon the providing of the Additional Revolving Credit Advances. Notwithstanding anything contained herein to the contrary, the Lender Parties shall not be obligated to commit to the Additional Revolving Credit Commitments.

(b) Any Additional Revolving Credit Commitments to provide Additional Revolving Credit Advances under this Section 2.18 shall be added to this Agreement pursuant to an amendment (the “Additional Revolving Credit Commitment Amendment”) among the Parent, the Borrower, the Administrative Agent and the Additional Revolving Credit Lenders. As a condition precedent to the effectiveness of the Additional Revolving Credit Commitment Amendment, the Borrower shall deliver to the Administrative Agent a certificate on behalf of the Borrower dated as of the effective date (the “Additional Commitments Effective Date”) signed by a Responsible Officer of the Borrower certifying that, before and after giving effect to such increase, (i) the representations and warranties of the Loan Parties contained in Article IV and the other Loan Documents are true and correct in all material respects on and as of the Additional Commitments Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, (ii) no Default or Event of Default exists immediately before or immediately after giving effect to such addition, (iii) the Borrower and its Subsidiaries shall be in compliance with the covenants set forth in Section 5.05 as of (A) the Additional Commitments Effective Date and (B) the last day of the most recently ended determination period after giving pro forma effect to such Additional Revolving Credit Commitment, the making of Additional Revolving Credit Advances in respect thereof and any Investment to be consummated in connection therewith. On each Additional Commitments Effective Date, each applicable Lender, Eligible Assignee or other Person which is providing an Additional Revolving Credit Commitment (i) shall become a “Revolving Credit Lender” for all purposes of this Agreement and the other Loan Documents and (ii) in the case of any Additional Revolving Credit Commitment, shall make an Additional Revolving Credit Advance to the Company in a principal amount equal to such Additional Revolving Credit Commitment, and such Additional Revolving Credit Advance shall be a “Revolving Credit Advance” for all purposes of this Agreement and the other Loan Documents.

(c) Any Additional Revolving Credit Commitment Amendment and any related documentation may, without the consent of any Lenders (other than Additional Revolving Credit Lenders that are party to such Additional Revolving Credit Commitment Amendment), effect such amendments to this Agreement and the other Loan Documents as may be reasonably necessary, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.18. Any Additional Revolving Credit Advances made pursuant to this Section 2.18 shall be evidenced by one or more entries in the Register maintained by the Administrative Agent in accordance with the provisions set forth in Section 9.07(d).

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(d) This Section 2.18 shall supersede any provisions in Section 9.01 to the contrary. Notwithstanding any other provision of any Loan Document, the Loan Documents may be amended by the Administrative Agent and the Loan Parties, if necessary, to provide for terms applicable to each Additional Revolving Credit Commitment.

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND OF LENDING

SECTION 3.01. Conditions Precedent. Section 2.01 of this Agreement shall become effective on and as of the first date on or before July 6, 2007 (the “Effective Date”) on which the following conditions precedent have been satisfied (and the obligation of each Lender to make an Advance on the occasion of the Initial Extension of Credit hereunder is subject to the satisfaction of such conditions precedent before or concurrently with the Effective Date):

(a) The Administrative Agent shall have received on or before the Effective Date the following, each dated such day (unless otherwise specified), in form and substance reasonably satisfactory to the Administrative Agent (unless otherwise specified):

(i) The Notes payable to the order of the Lenders to the extent requested by the Lenders pursuant to the terms of Section 2.16.

(ii) A security agreement in substantially the form of Exhibit D hereto (the “ABL Security Agreement”), duly executed by each Loan Party, together with:

(A) subject to the Intercreditor Agreement, certificates representing the Initial Pledged Equity referred to therein, to the extent certificated, accompanied by undated stock powers executed in blank and instruments evidencing the Initial Pledged Debt referred to therein, indorsed in blank; provided, however, that if the delivery of such certificates may not be accomplished prior to the Effective Date without undue burden or expense, then the delivery of such certificates shall not constitute a condition precedent to the Initial Extension of Credit and the applicable Loan Party shall agree to deliver or cause to be delivered such certificates within a reasonable period of time after the Effective Date (or such later date as may be agreed to by the Administrative Agent);

(B) proper financing statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent may deem necessary in the reasonable opinion of the Administrative Agent, in order to perfect and protect the liens and security interests created under the Term Loan Security Agreement and the required priority thereof, covering the Collateral described in the Term Loan Security Agreement,

(C) the Intellectual Property ABL Security Agreement duly executed by each Loan Party,

(D) INTENTIONALLY OMITTED,

(E) evidence of the insurance required by the terms of the ABL Security Agreement,

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(F) INTENTIONALLY OMITTED,

(G) INTENTIONALLY OMITTED and

(H) evidence that all other action that the Administrative Agent may deem necessary in order to perfect and protect the liens and security interests created under the ABL Security Agreement and the required priority thereof has been taken (including, without limitation, receipt of duly executed payoff letters and UCC-3 termination statements).

(iii) An intercreditor agreement in substantially the form of Exhibit H hereto (the “Intercreditor Agreement”), duly executed by the Administrative Agent, the administrative agent for the Term Facility and each Loan Party.

(iv) Certified copies of the resolutions of the board of directors of each Loan Party approving each Loan Document to which it is or is to be a party.

(v) A copy of a certificate of the Secretary of State of the jurisdiction of incorporation or formation of each Loan Party, dated reasonably near the Effective Date certifying (A) as to a true and correct copy of the charter of such Loan Party and each amendment thereto on file in such Secretary’s office and (B) that (1) such amendments are the only amendments to such Loan Party’s charter on file in such Secretary’s office, (2) (to the extent customary for such jurisdiction’s Secretary of State’s certificate) such Loan Party has paid all franchise taxes to the date of such certificate and (3) such Loan Party is duly incorporated and in good standing or presently subsisting under the laws of the State of the jurisdiction of its incorporation or formation.

(vi) A certificate of each Loan Party signed on behalf of such Loan Party by its Chief Executive Officer or a Vice President, dated the Effective Date (the statements made in which certificate shall be true on and as of the Effective Date), certifying as to (A) the absence of any proceeding for the dissolution or liquidation of such Loan Party and (B) the truth in all material respects of the Specified Representations, as though made on and as of the Effective Date, other than any Specified Representations that, by their terms, refer to a specific date other than the Effective Date, in which case as of such specific date.

(vii) A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying as to (A) the absence of any amendments to the charter of such Loan Party since the date of the Secretary of State’s certificate referred to in Section 3.01(a)(v), (B) a true and correct copy of the bylaws or operating agreement of such Loan Party as in effect on the date on which the resolutions referred to in Section 3.01(a)(iv) were adopted and on the Effective Date, (C) the due incorporation and good standing or valid existence of such Loan Party as a corporation organized under the laws of the jurisdiction of its incorporation or formation and (D) the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

(viii) INTENTIONALLY OMITTED.

(ix) Unaudited combined statements of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses for the Parent for the Fiscal Year ended February 3, 2007; provided that the Lead Arranger acknowledges that it is reasonably satisfied with such statements provided on June 14, 2007.

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(x) Unaudited combined statement of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses for the Parent for the first quarter of the Fiscal Year 2007.

(xi) A pro forma Consolidated combined statement of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses as of and for the three-month period ending at the end of the Parent’s first fiscal quarter for Fiscal Year 2007 after giving effect to the Transaction as if the Transaction had occurred as of such date (which statement would not reflect final purchase accounting and normal year-end audit adjustments) (in the case of such statement of assets acquired and liabilities assumed) or at the beginning of such period (in the case of such other financial statements).

(xii) A certificate, in substantially the form of Exhibit G, attesting to the Solvency of the Loan Parties, taken as a whole, before and after giving effect to the Transaction, from its Chief Financial Officer.

(xiii) Certified copies of the Advisory Agreement, duly executed by the parties thereto and in form and substance satisfactory to the Lender Parties.

(xiv) A favorable opinion of Kirkland & Ellis LLP, counsel for the Loan Parties, in substantially the form of Exhibit F hereto.

(b) The Lender Parties shall be satisfied that all Existing Debt, other than Surviving Debt, has been prepaid, redeemed or defeased in full or otherwise satisfied and extinguished and all commitments relating thereto terminated and that all Surviving Debt shall be on terms and conditions satisfactory to the Lender Parties.

(c) Substantially concurrently with the funding of the Initial Extension of Credit, the Borrower shall have made arrangements to pay, to the extent reasonably invoiced in advance, all accrued fees of the Agents, the Lead Arranger and the Lender Parties and all accrued expenses of the Agents and the Lead Arranger (including the accrued fees and expenses of counsel to the Lead Arranger payable by the Borrower hereunder).

(d) The Administrative Agent shall have received confirmation that the Acquisition will be consummated in accordance with the terms of the Purchase Agreement, without any waiver or amendment of any term, provision or condition set forth therein that is materially adverse to the Lenders and that has not been consented to by the Administrative Agent.

(e) The Administrative Agent shall have received confirmation that the sum of cash and Cash Equivalents to be paid to Limited Brands, Inc. and its Affiliates in connection with the Equity Contribution shall be equal to at least $431,000,000.

(f) The Lead Arranger shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.

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SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The obligation of each Lender to make an Advance on the occasion of each Borrowing (including the initial Borrowing, except that the statement in clause (ii) shall not be applicable in respect of the initial Borrowing) shall be subject to the further conditions precedent that on the date of such Borrowing the following statements shall be true (and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true):

(i) (x) in the case of any Advance made on the Effective Date or any Letter of Credit issued on the Effective Date, the Specified Representations are correct in all material respects on and as of the Effective Date immediately before and immediately after giving effect to such Borrowing or issuance or renewal and to the application of the proceeds therefrom, as though made on and as of such date, other than any such Specified Representations that, by their terms, refer to a specific date other than the Effective Date, in which case as of such specific date and (y) in any other case, the representations and warranties of the Loan Parties contained in each Loan Document are correct in all material respects on and as of such date, immediately before and immediately after giving effect to such Borrowing or issuance or renewal and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations or warranties that, by their terms, refer to a specific date other than the date of such Borrowing or issuance or renewal, in which case as of such specific date; and

(ii) no Default has occurred and is continuing, or would result immediately after giving effect to such Borrowing or issuance or renewal or from the application of the proceeds therefrom.

SECTION 3.03. Determinations Under Section 3.01. For purposes of determining compliance with the conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender Parties unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender Party prior to the Effective Date specifying its objection thereto and, if the Initial Extension of Credit consists of a Borrowing, such Lender Party shall not have made available to the Administrative Agent such Lender Party’s ratable portion of such Borrowing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties. Subject to Section 3.02, each Loan Party represents and warrants as follows:

(a) Each Loan Party and each of its Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (ii) is duly qualified and in good standing (to the extent applicable in the relevant jurisdiction) in each other jurisdiction in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed could not be reasonably expected to have a Material Adverse Effect and (iii) has all requisite power and authority (including, without limitation, all Governmental Authorizations) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted except where the failure to have such power and authority could not be reasonably expected to have a Material Adverse Effect. All of

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the outstanding Equity Interests in the Borrower have been validly issued, are fully paid and non-assessable and, other than those Equity Interests in respect of stock options that have not been tendered pursuant to the Purchase Agreement, are owned by the Parent free and clear of all Liens, except those created under the Collateral Documents, the Term Loan Facility Loan Documents and Permitted Liens.

(b) Set forth on Schedule 4.01(b) is a complete and accurate list of all Loan Parties, showing as of the date hereof (as to each Loan Party) the jurisdiction of its incorporation or formation, the address of its principal place of business and its U.S. taxpayer identification number or, in the case of any non-U.S. Loan Party that does not have a U.S. taxpayer identification number, its unique identification number issued to it by the jurisdiction of its incorporation or formation.

(c) Set forth on Schedule 4.01(c) is a complete and accurate list of all Subsidiaries of each Loan Party as of the date hereof, showing as of the date hereof (as to each such Subsidiary) the jurisdiction of its formation, the number of shares, membership interests or partnership interests (as applicable) of each class of its Equity Interests authorized, and the number outstanding, on the date hereof and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such Loan Party and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the date hereof. All of the outstanding Equity Interests in each Loan Party’s Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens, except those created under the Collateral Documents, the Term Loan Facility Loan Documents and Permitted Liens.

(d) The execution, delivery and performance by each Loan Party of each Transaction Document to which it is or is to be a party, and the consummation of the Transaction, are within such Loan Party’s powers, have been duly authorized by all necessary action, and do not (i) contravene such Loan Party’s charter, bylaws, limited liability company agreement, partnership agreement or other constituent documents, (ii) violate any law, rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, except for violations that (either individually or in the aggregate) could not reasonably be expected to have a Material Adverse Effect, (iii) conflict with or result in the breach of, or constitute a default or require any payment to be made under, any material contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties, except for violations, defaults or the creation of such rights that could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect,- or (iv) except for the Liens created under the Loan Documents, Term Loan Facility Loan Documents and Permitted Liens, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. Each Loan Party and each of its Subsidiaries is in compliance with all applicable laws, rules and regulations, except to the extent that failure to do so could not be reasonably expected to have a Material Adverse Effect.

(e) No Governmental Authorization, and no notice to or filing with, any Governmental Authority or any other third party is required for (i) the due execution, delivery or performance by any Loan Party of any Transaction Document to which it is or is to be a party, or for the consummation of the Transaction, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature and second priority nature

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thereof) or (iv) the exercise by any Agent or any Lender Party of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (w) the authorizations, approvals, actions, notices and filings contemplated by the Collateral Documents and those listed on Schedule 4.01(e), (x) those authorizations, approvals, actions, notices and filings, the failure of which to obtain, take, give or make could not be reasonably expected to have a Material Adverse Effect, (y) notices and filings which customarily are required in connection with the exercise of remedies in respect of the Collateral and (z) landlord consents and waivers. The Acquisition has been consummated in all material respects in accordance with the Purchase Agreement (without any waiver or amendment of any term, provision or condition set forth therein that is materially adverse to the Lenders and that has not been consented to by the Administrative Agent).

(f) This Agreement has been, and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto. This Agreement is, and each other Loan Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought in equity or at law).

(g) Except as set forth in Schedule 4.01(g), there is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries, including any Environmental Action, pending or threatened before any Governmental Authority or arbitrator that (i) could be reasonably expected to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the Transaction.

(h) The unaudited combined statements of assets acquired and liabilities assumed delivered to the Administrative Agent pursuant to Section 3.01(a)(ix) and (x), and the related combined statement of revenues and direct and allocated expenses for the period or periods then ended, (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and except for the exceptions set forth in Section 3.08 of the Purchase Agreement, and (ii) fairly present in all material respects the financial condition of the Parent as of the date thereof and their results of operations for the period covered thereby, other than the exceptions set forth in Section 3.08 of the Purchase Agreement and as expressly noted therein (except in the case of Section 3.01(a)(x), such statements would not reflect the normal year-end audit adjustments).

(i) The Consolidated pro forma combined statement of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses of the Parent and its Subsidiaries as at May 5, 2007, copies of which have been furnished to the Administrative Agent, fairly present the Consolidated pro forma financial condition of the Parent and its Subsidiaries as at such date and the Consolidated pro forma results of operations of the Parent and its Subsidiaries for the period ended on such date, in each case giving effect to the Transaction, all in accordance with GAAP other than the exceptions set forth in Section 3.08 of the Purchase Agreement and as expressly noted therein (except that such statement would not reflect final purchase accounting and normal year-end audit adjustments).

(j) The Consolidated forecasted balance sheets, statements of income and statement of cash flows of the Borrower and the Parent and their respective Subsidiaries delivered to the Administrative Agent pursuant to Section 5.03 were prepared in good faith on the basis of the

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assumptions believed to be reasonable (it being understood that (i) such Consolidated forecasted balance sheets, statements of income and statement of cash flows are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, (ii) no assurance can be given that such Consolidated forecasted balance sheets, statements of income and statement of cash flows will be realized, (iii) actual results may differ and (iv) such differences may be material).

(k) INTENTIONALLY OMITTED.

(l) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System.

(m) Neither any Loan Party nor any of its Subsidiaries is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(n) The Collateral Documents create in favor of the Collateral Agent for the benefit of the Secured Parties a valid security interest in the Collateral, securing the payment of the Obligations under the Loan Documents, and when (i) financing statements and other filings, including, without limitation, filings with the United States Patent and Trademark Office or the United States Copyright Office, in appropriate form are filed in the offices specified on Schedule III to the ABL Security Agreement and (ii) upon the taking of possession or control by the Collateral Agent of the Collateral with respect to which a security interest may be perfected only by possession or control, the Liens created by the ABL Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors in the Collateral (other than such Collateral in which a security interest cannot be perfected by such action under the UCC as in effect at the relevant time in the relevant jurisdiction), in each case subject to no Liens other than Permitted Liens and other Liens created or permitted by the Loan Documents. The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for Permitted Liens.

(o) The Borrower and each Guarantor, taken as a whole, are Solvent.

(p) No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

(q) (i) Set forth on Schedule 4.01(q) is a complete and accurate list of all Plans, Multiemployer Plans and Welfare Plans as of the Effective Date.

(ii) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to result in a material liability of any Loan Party or any ERISA Affiliate.

(iii) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service and made available to the Administrative Agent, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.

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(iv) Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.

(v) Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.

(r) Except as would not reasonably be expected to result in a Material Adverse Effect (which representations are, along with clause (g) above, the sole representations of the Loan Parties in respect of environmental matters):

(i) the operations and properties of each Loan Party and each of its Subsidiaries comply with all applicable Environmental Laws and Environmental Permits and all past non-compliance with such Environmental Laws and Environmental Permits has been resolved without ongoing obligations or costs;

(ii) no circumstances exist that would be reasonably likely to (A) form the basis of an Environmental Action against any Loan Party or any of its Subsidiaries or any of their properties or (B) cause any such property to be subject to any restrictions on ownership, occupancy, transferability or use under any Environmental Law;

(iii) none of the properties currently or, to the best of its knowledge, formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list;

(iv) there are no underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the best of its knowledge, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries;

(v) Hazardous Materials have not been released, discharged or disposed of on any property currently or, to the best of its knowledge, formerly owned or operated by any Loan Party or any of its Subsidiaries;

(vi) neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any governmental or regulatory authority or the requirements of any Environmental Law; and

(vii) all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or, to the best of its knowledge, formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result in liability to any Loan Party or any of its Subsidiaries.

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(s) Except as set forth on Schedule 4.01(s):

(i) Neither any Loan Party nor any of its Subsidiaries is party to any tax sharing agreement.

(ii) Each Loan Party and each of its Subsidiaries (A) has filed, has caused to be filed or has been included in all material tax returns (Federal, state, local and foreign) required to be filed and such tax returns are true and correct in all material respects and (B) has paid all taxes shown thereon to be due, together with applicable interest and penalties or adequate provision therefor has been made in accordance with GAAP except for taxes (x) that are being contested in good faith by appropriate proceedings and for which such Loan Party has set aside on its books adequate reserves in accordance with GAAP and (y) that could not (individually or in the aggregate) have a Material Adverse Effect.

(iii) No issues have been raised in writing by any tax authorities that, in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(t) Set forth on Schedule 4.01(t) is a complete and accurate list of all Existing Debt (other than (i) Surviving Debt, (ii) Debt of Subsidiaries to Parent or another Subsidiary of Parent and (iii) Debt consisting of trade payables more than 90 days past due), showing as of the date hereof the obligor and the principal amount outstanding thereunder.

(u) Set forth on Schedule 4.01(u) is a complete and accurate list of all Surviving Debt (other than in respect of Debt of Subsidiaries to Parent or another Subsidiary of Parent), showing as of the date hereof the obligor and the principal amount outstanding.

(v) Set forth on Schedule 4.01(v) is a complete and accurate list of all Liens on the property or assets of any Loan Party or any of its Subsidiaries, showing as of the date hereof the lienholder thereof and the principal amount of the obligations secured thereby (other than Permitted Liens described in clauses (a), (b), (c), (d), (f), (g), (h), (l), (n), (p), (r) and (x) of the definition thereof).

(w) INTENTIONALLY OMITTED.

(x) INTENTIONALLY OMITTED.

(i) INTENTIONALLY OMITTED.

(y) INTENTIONALLY OMITTED.

(z) Except as set forth on Schedule 4.01(z) or as could not be expected to have a Material Adverse Effect, the Parent and each of its Subsidiaries own, or possess the right to use, or could obtain the right to use all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person, and Schedule 4.01(z) sets forth a complete and accurate list of all registrations (or applications for registrations) for all such IP Rights owned by the Parent and each of its Subsidiaries. To the best knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Parent or any of its Subsidiaries infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

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ARTICLE V

COVENANTS OF THE PARENT

SECTION 5.01. Affirmative Covenants. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid (other than Unmatured Surviving Obligations) or any Lender Party shall have any Commitment hereunder, each Loan Party will (unless Required Lenders consent):

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all material lawful claims that, if unpaid, might by law become a Lien upon its property; provided, however, that neither the Parent nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors; provided, further, that neither the Parent nor any of its Subsidiaries shall be required to pay and discharge any such tax, assessment, charge or claim where failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c) Compliance with Environmental Laws. Comply, and cause each of its Subsidiaries to use commercially reasonable efforts to comply, with all applicable Environmental Laws and Environmental Permits; obtain and renew, and cause each of its Subsidiaries to obtain and renew, all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws, except, in each case, to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided, however, that neither the Parent nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances or to undertake such actions where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance (as deemed to be reasonably prudent in the good faith judgment of the Responsible Officers of such Loan Party or its Subsidiaries) (including, without limitation, business interruption insurance) with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas and with similar risk factors in which the Parent or such Subsidiary operates.

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(e) Preservation of Corporate Existence, Etc. Except as permitted under Section 5.02(d) or 5.02(e)(viii), preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its existence, rights (charter and statutory), permits, licenses, approvals, privileges and franchises; provided that neither the Parent nor any of its Subsidiaries shall be required to preserve or maintain any right, permit, license, approval, privilege or franchise if the failure to do so could not reasonably be expected to have a Material Adverse Effect. Nothing contained in this Section 5.01(e) shall be deemed to prohibit any Subsidiary or the parent entity of such Subsidiary from reorganizing or changing the entity form of such Subsidiary upon prior notice to the Administrative Agent and provided that such reorganization or change is not materially adverse to the Lenders.

(f) Visitation Rights. (i) At any reasonable time and from time to time, upon reasonable prior notice at any mutually agreeable reasonable time, permit any of the Agents or any of the Lender Parties, or any agents or representatives thereof, to examine and make copies of and abstracts from the financial records and books of account of, and visit the properties of, the Parent and any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Parent and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants (subject to the consent of such accountants); provided, that, so long as no Event of Default has occurred and is continuing, the Agents and the Lender Parties shall coordinate the exercise of such rights through the Administrative Agent and shall not be entitled to exercise the foregoing rights more than once in any calendar year at the expense of the Borrower, on a collective basis; provided, however, that a representative of the Borrower shall be given the opportunity to be present for any communication with the independent accountants.

(ii) Upon reasonable prior notice and at any mutually agreeable reasonable time during normal business hours and from time to time, permit the Collateral Agent and/or any representatives designated by the Collateral Agent (including any consultants, accountants and lawyers retained by the Collateral Agent) to visit the properties of the Loan Parties to conduct periodic commercial finance exams and inventory appraisals at the Borrower’s expense; provided, however, that if no Event of Default has occurred and is continuing, only two such field examinations and appraisals per Fiscal Year shall be permitted.

(g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries in all material respects shall be made of all financial transactions and the assets and business of the Parent and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.

(h) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent the failure to do so could reasonably be expected not to have a Material Adverse Effect.

(i) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates on terms that are no less favorable to the Parent or such Subsidiary than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate; provided, the foregoing restriction shall not apply to (a) transactions between or among Loan Parties or transactions between or among Subsidiaries of the Parent that are not Loan Parties or transactions between a Loan Party and a Subsidiary that is not a Loan Party so long as the terms of such transaction are no less favorable to the Loan Party than it would obtain in a comparable arm’s length transaction

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with a Person not an Affiliate; (b) Restricted Payments permitted to be made pursuant to Section 5.02(g) and Investments permitted under Section 5.02(f) and permitted intercompany Debt and asset transfers; (c) reasonable and customary fees paid to and indemnification of members of the board of directors (or similar governing body) of Parent and its Subsidiaries; (d) compensation and indemnity arrangements and benefit plans for officers and other employees of the Parent and its Subsidiaries entered into or maintained or established in the ordinary course of business; (e) sales of Equity Interests of Parent to Affiliates of Loan Parties or contributions to the equity capital of Parent by Equity Investors or any of its Affiliates not otherwise prohibited by the Loan Documents and the granting of registration and other customary rights in connection therewith; (f) any transaction with an Affiliate where the only consideration paid is Equity Interests of Parent; (g) the transactions contemplated in connection with the Transaction Documents and all related documents; (h) the existence of, and the performance by the Parent (or the Borrower on behalf of the Parent) and the Borrower of their respective obligations under the Advisory Agreement, any limited liability company, limited partnership or other constitutive document or security holders agreement (including any registration rights agreement or purchase agreement related thereto); any other agreement containing agreements among Parent and its Subsidiaries and their Affiliates that is in effect as of the Effective Date and has been disclosed to the Administrative Agent as of the Effective Date and similar agreements entered into after the Effective Date that (i) are not more adverse to the interest of the Lenders than those that exist as of the Effective Date taken as a whole, or (ii) which have been disclosed to and consented to by the Administrative Agent and the Required Lenders.

(j) Covenant to Guarantee Obligations and Give Security. Upon (x) the request of the Collateral Agent following the occurrence and during the continuance of an Event of Default, (y) the formation or acquisition of any new direct or indirect Subsidiaries (other than Excluded Subsidiaries) by any Loan Party or upon any Subsidiary (that is not a CFC) of a Loan Party being designated as a Material Subsidiary or (z) the acquisition of any property by any Loan Party, (1) that is of similar nature to the property of the Loan Parties that is subject to the Liens created by the Collateral Documents or (2) in the case of fee-owned real estate that has a fair market value of at least $250,000 and such property, in the judgment of the Collateral Agent, shall not already be subject to a perfected (subject to Permitted Liens and other Liens created or permitted by the Loan Documents and the Term Facility Loan Documents) security interest in favor of the Collateral Agent for the benefit of the Secured Parties, then in each case at the Borrower’s expense:

(i) in connection with the formation or acquisition by a Loan Party of a Subsidiary that is not an Excluded Subsidiary or upon any Subsidiary (that is not a CFC) of a Loan Party being designated as a Material Subsidiary, within 30 days after such formation, acquisition or designation, cause each such Subsidiary, and cause each direct and indirect parent (that is not a CFC) of such Subsidiary (if it has not already done so), to duly execute and deliver to the Collateral Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Collateral Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents; provided that any Subsidiary of a CFC shall not be required to execute such guaranty or guaranty supplement,

(ii) INTENTIONALLY OMITTED.

(iii) within 45 days after (A) such request or acquisition of property by any Loan Party, duly execute and deliver, and cause each Loan Party to duly execute and deliver, to the Collateral Agent such additional mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and other

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security agreements as specified by, and in form and substance reasonably satisfactory to the Collateral Agent, securing payment of all the Obligations of such Loan Party under the Loan Documents and constituting Liens on all such properties and (B) such formation or acquisition of any new Subsidiary (other than an Excluded Subsidiary) or the designation of any Subsidiary (that is not a CFC) of a Loan Party as a Material Subsidiary, duly execute and deliver and cause such Subsidiary and each Loan Party acquiring Equity Interests in such Subsidiary to duly execute and deliver to the Collateral Agent mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and other security agreements as specified by, and in form and substance reasonably satisfactory to, the Collateral Agent, securing payment of all of the obligations of such Subsidiary or Loan Party, respectively, under the Loan Documents; provided that (A) the Equity Interests of any Subsidiary held by a CFC shall not be required to be pledged and (B) if such new property is Equity Interests in a CFC held by a Loan Party, no more than 65% of the Equity Interests in such CFC shall be pledged in favor of the Secured Parties,

(iv) within 45 days after such request, formation, acquisition or designation, take, and cause each Loan Party and each newly acquired or newly formed Subsidiary (other than an Excluded Subsidiary or a Subsidiary that is a CFC) to take, all reasonable actions (including, without limitation, the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) as may be necessary or advisable in the opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and security agreements delivered pursuant to this Section 5.01(j), enforceable against all third parties in accordance with their terms,

(v) within 60 days after such request, formation, acquisition or designation, deliver to the Collateral Agent, upon the request of the Collateral Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Collateral Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Collateral Agent as to such other matters as the Collateral Agent may reasonably request,

(vi) as promptly as practicable after such request, formation or acquisition, deliver, following the occurrence of and during an Event of Default, upon the reasonable request of the Collateral Agent, to the Collateral Agent with respect to each parcel of real property that has a fair market value equal to or more than $250,000 and that is owned or held by each Loan Party and each newly acquired or newly formed Subsidiary (other than (x) any Subsidiary that is a CFC or an Excluded Subsidiary and (y) any leased real property) title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Collateral Agent, provided, however, that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Collateral Agent, and

(vii) at any time and from time to time, promptly execute and deliver, and cause each Loan Party and each newly acquired or newly formed Subsidiary to execute and deliver, any and all further instruments and documents and take, and cause each Loan

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Party and each newly acquired or newly formed Subsidiary to take, all such other action as the Collateral Agent may deem reasonably necessary in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and security agreements.

Notwithstanding anything in Section 4.01(j) to the contrary, the Loan Parties shall have no obligation to prefect the Collateral Agent’s or other Secured Parties’ interests in intellectual property outside of the United States. The Collateral Agent may in its discretion lengthen the foregoing time periods and otherwise modify (with the Borrower’s consent) the foregoing requirements to the extent it deems it reasonable and prudent to do so and may waive the foregoing requirements to the extent that the cost of obtaining a security interest in the foregoing Collateral is excessive (as reasonably determined by the Collateral Agent) in relation to the benefits to the Lender Parties.

(k) Further Assurances. (i) Promptly upon the reasonable request by any Agent, or any Lender Party through the Administrative Agent, correct, and cause each of its Subsidiaries promptly to correct, any matter that the parties mutually agree is a material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and

(ii) Promptly upon request by any Agent, or any Lender Party through the Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any document or instrument supplemental to or confirmatory of the Collateral Documents as any Agent, or any Lender Party through the Administrative Agent, may reasonably require from time to time in order to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder.

(l) INTENTIONALLY OMITTED.

(m) INTENTIONALLY OMITTED.

(n) Ratings. The Borrower shall use commercially reasonable efforts to maintain corporate family credit and corporate family ratings with S&P and Moody’s, respectively.

(o) Conditions Subsequent. Within 45 days after the Initial Extension of Credit (or, upon the request of the Borrower, such later date as the Administrative Agent shall approve in its reasonable discretion (such approval not to be unreasonably withheld or delayed) so long as the Borrower shall have used commercially reasonable efforts to satisfy the conditions set forth below within such 45-day period), furnish to the Administrative Agent:

(i) the Deposit Account Control Agreements referred to in the ABL Security Agreement, duly executed by the applicable Loan Parties and each Pledged Account Bank referred to in the ABL Security Agreement, and

(ii) the Securities Account Control Agreement referred to in the ABL Security Agreement, duly executed by the applicable Loan Party and the applicable securities intermediary.

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SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid (other than Unmatured Surviving Obligations), or any Lender Party shall have any Commitment hereunder, unless the Required Lenders shall otherwise consent in writing, no Loan Party will, at any time:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a financing statement that names the Parent or any of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, except for Permitted Liens and Transfers permitted by Section 5.02(e).

(b) Debt. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:

(i) Debt under the Loan Documents or the Term Loan Facility Loan Documents;

(ii) Capitalized Leases and Debt secured by Liens described in clause (w) of the definition of “Permitted Liens” not to exceed in the aggregate $10,000,000 at any one time outstanding;

(iii) the Surviving Debt and any Debt extending the maturity of, or refunding or refinancing, in whole or in part, any Surviving Debt and guarantees of the Surviving Debt or the extension, refunding or refinancing of such Surviving Debt; provided that (A) the amount of such extending, refunding or refinancing Debt does not result in an increase in the aggregate principal or facility amount thereof (plus the amount of any premium paid in respect of such Debt in connection with any such extension, refunding or refinancing and plus the amount of reasonable expenses incurred by Parent and its Subsidiaries in connection therewith), (B) such Debt (if it is term debt) does not have a weighted average life to maturity that is less than the weighted average life to maturity of the Debt being extended, refunded or refinanced, (C) such Debt (if it is term debt) does not have a final maturity earlier than the final maturity of the Debt being extended, refunded or refinanced, (D) the direct and contingent obligors therefor shall not be changed (unless any contingent obligor is released), as a result of or in connection with such extension, refunding or refinancing and (E) if the Debt being extended, refunded or refinanced is subordinate or junior to the Advances and any Guaranty thereof, then the Debt incurred to extend, refund or refinance such Debt shall be subordinate to the Advances and any Guaranty, as the case may be, at least to the same extent and in the same manner as the Debt being extended, refunded or refinanced;

(iv) Debt in respect of Hedge Agreements designed to hedge against fluctuations in interest rates, commodity prices or currency exchange rates incurred in the ordinary course of business and consistent with prudent business practice;

(v) Debt owed to the Borrower or a wholly owned Subsidiary of the Borrower, which Debt shall (x) in the case of Debt owed to a Loan Party by a Loan Party, constitute Pledged Debt and (y) be otherwise permitted under the provisions of Section 5.02(f);

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(vi) To the extent it constitutes Debt, Debt incurred by the Borrower or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of the Borrower or any such Subsidiary pursuant to such agreements, in connection with acquisitions permitted by Section 5.02(f) or Transfers permitted by Section 5.02(e); provided that, in respect of any Debt incurred hereunder pursuant to agreements providing for indemnification in connection with Transfers permitted by Section 5.02(e), such Debt shall not exceed the amount of net cash proceeds received from such Transfers;

(vii) Debt which may be deemed to exist pursuant to any guaranties, performance, surety, statutory, appeal, completion guarantees, export or import indemnities, customs and revenue bonds or similar instruments, workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of any Loan Party in the ordinary course of business, including guarantees or obligations of any Loan Party with respect to letters of credit supporting such bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed) or similar obligations incurred in the ordinary course of business;

(viii) Debt of Foreign Subsidiaries not to exceed $10,000,000 at any time outstanding and unsecured guarantees of such Debt;

(ix) Debt of a Subsidiary outstanding on the date such Subsidiary was acquired by the Borrower or any of its Subsidiaries or assumed in connection with the acquisition of assets from a Person (other than Debt incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Subsidiary became a Subsidiary of the Borrower or was otherwise acquired by the Borrower) in an acquisition permitted by Section 5.02(f); and

(x) Debt consisting of the deferred purchase price of acquisitions permitted under Section 5.02(f);

(xi) other unsecured Debt of the Borrower and its Subsidiaries in an aggregate principal amount not to exceed at any time $25,000,000 outstanding at any time;

(xii) other Debt of the Borrower and its Subsidiaries that is subordinated to the Obligations under the Loan Documents on terms reasonably acceptable to the Administrative Agent, so long as, after giving effect to the incurrence or issuance of such Debt, the Leverage Ratio, on a pro forma basis, is not greater than 2.5:1.0.

(xiii) Guaranteed Debt of any Loan Party in respect of Debt otherwise permitted under this Section 5.02;

(xiv) Debt arising in connection with endorsement of instruments for collection or deposit in the ordinary course of business;

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(xv) Debt arising from the existing letters of credit so long as such existing letters of credit are secured by a letter of credit or cash collateral reasonably acceptable to Agents;

(xvi) Debt consisting of deferred purchase price or notes issued to officers, directors and employees to purchase equity interests (or options or warrants or similar instruments) of Parent in an aggregate amount not to exceed $5,000,000 outstanding at any time;

(xvii) Debt incurred in connection with the financing of insurance premiums in an amount not to exceed the annual premiums in respect thereof at any one time outstanding; and

(xviii) the Transactions as contemplated by the Transaction Documents.

(c) Change in Nature of Business. Make, or permit any of its Subsidiaries to conduct any business other than the businesses as carried on at the date hereof and other businesses substantially related, incidental thereto or complementary thereto or are reasonable extensions thereof).

(d) Mergers, Etc. Merge into or consolidate with any Person or permit any Person to merge into it, or permit any of its Subsidiaries to do so, except that:

(i) any Subsidiary of the Borrower may merge into or consolidate with any other Subsidiary of the Borrower or with the Borrower; provided that, in the case of any such merger or consolidation, the Person formed by such merger or consolidation shall be a wholly owned Subsidiary of the Borrower or the Borrower; and provided further that, in the case of any such merger or consolidation to which a Subsidiary Guarantor is a party, the Person formed by such merger or consolidation shall be a Subsidiary Guarantor or the Borrower;

(ii) as part of any acquisition permitted under Section 5.02(f), any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that the Person surviving such merger shall be a wholly owned Subsidiary of the Borrower; and provided further that, in the case of any merger or consolidation to which a Subsidiary Guarantor is a party, the Person formed by such merger or consolidation shall be a Subsidiary Guarantor;

(iii) as part of any Transfer permitted under Section 5.02(e), any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it;

(iv) any Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up, as applicable, could not reasonably be expected to have a Material Adverse Effect;

(v) the Transactions as contemplated by the Transaction Documents may be consummated; and

(vi) Retail Factoring, LLC may be dissolved.

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(e) Sales, Etc. of Assets. Sell, lease, transfer, assign, exchange, convey or otherwise dispose of (each a “Transfer”), or permit any of its Subsidiaries to Transfer, any assets, except:

(i) (A) Transfers of Inventory (including unusable, excess or slow-moving Inventory) and delinquent accounts receivables in the ordinary course of its business and Transfers of accounts receivables in connection with the private label credit card programs in the ordinary course of business, (B) the granting of any option or other right to purchase, lease or otherwise acquire Inventory and delinquent accounts receivables in the ordinary course of its business; and (C) dispositions of cash and Cash Equivalents in the ordinary course of business;

(ii) (A) Transfers of assets among Loan Parties; (B) Transfers of assets among Subsidiaries that are not Loan Parties; (C) Transfers of assets from Subsidiaries that are not Loan Parties to Loan Parties; and (D) Transfers of assets from Loan Parties to Subsidiaries that are not Loan Parties in a transaction that would be permitted under clause (i) of Section 5.02(f) if such Transfer had been a transaction involving cash; provided that, for purposes of determining the application of each of clauses (A) through (D) above in connection with any Transfer made in connection with reorganizing or restructuring of Subsidiaries, any Transfer or series of related Transfers between Loan Parties and/or Subsidiaries shall be deemed to be a Transfer solely between the initial and the ultimate holder of any such assets transferred without regard to any intermediate holder of such assets;

(iii) Transfers of unneeded, used, worn out, obsolete or damaged equipment and trade-ins and exchanges of equipment in the ordinary course of business and the abandonment or other disposition of Intellectual Property that is, in the reasonable judgment of Loan Parties, no longer economically practicable or commercially desirable to maintain or useful in the conduct of the business of the Loan Parties taken as a whole;

(iv) Transfers in connection with any transaction in which there is an Extraordinary Receipt;

(v) Transfers for fair value, the proceeds of which are less than $2,000,000 for any such single transaction and the proceeds of which when aggregated with all other such Transactions during a fiscal year are less than $10,000,000;

(vi) Leases and subleases, licenses and sublicenses of real or personal property in the ordinary course of business;

(vii) Licensing of intellectual property on a non-exclusive basis or on an exclusive basis so long as such exclusive licensing is limited to geographic areas, particular fields of use, customized products for customers or limited time periods;

(viii) Any liquidation or dissolution of a Subsidiary so long as its immediate parent becomes the owner of its assets;

(ix) Transfers of assets consisting of accounts receivable in a transaction involving Foreign Subsidiaries that would be permitted under clause (viii) of Section 5.02(b) if such Transfer had been a transaction involving Debt;

(x) the Transactions as contemplated by the Transaction Documents;

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(xi) mergers, amalgamations, consolidations and dissolutions in compliance with Section 5.02(d);

(xii) Investments in compliance with Section 5.02(f);

(xiii) discounts or forgiveness of accounts receivable in the ordinary course of business or in connection with collection or compromise thereof; and

(xiv) Permitted Liens.

(f) Investments in Other Persons. Make or hold, or permit any of its Subsidiaries to make or hold, any Investment in any Person, except:

(i) (A) Investments by the Parent and its Subsidiaries in their Subsidiaries outstanding on the date hereof, (B) additional Investments by the Parent and its Subsidiaries in Loan Parties, (C) additional Investments by Subsidiaries of the Borrower that are not Loan Parties in other Subsidiaries that are not Loan Parties, and (D) additional Investments by the Loan Parties in Subsidiaries that are not Loan Parties (including Subsidiaries that are Excluded Subsidiaries) in an aggregate amount invested from the date hereof not to exceed $10,000,000 at the time such Investment is made;

(ii) loans and advances to employees in the ordinary course of the business of the Borrower and its Subsidiaries as presently conducted in an aggregate principal amount not to exceed $2,000,000 at any time outstanding;

(iii) loans to directors, officers and employees to purchase Equity Interests of Parent;

(iv) Investments by the Borrower and its Subsidiaries in bank deposits in the ordinary course of business or Cash Equivalents;

(v) Investments existing on the date hereof and described on Schedule 5.02(f);

(vi) Investments in Hedge Agreements permitted under Section 5.02(b)(iv);

(vii) the purchase or other acquisition of all or substantially all of the Equity Interests in any Person that, upon the consummation thereof, will be wholly owned directly by the Borrower or one or more of its wholly owned Subsidiaries (including, without limitation, as a result of a merger or consolidation) and the purchase or other acquisition by the Borrower or one or more of its wholly-owned Subsidiaries of all or substantially all of the property and assets of any Person (collectively, a “Permitted Acquisition”); provided that, with respect to each purchase or other acquisition made pursuant to this clause (vii):

(A) the Loan Parties and any such newly created or acquired Subsidiary shall comply with the requirements of Section 5.01(j);

(B) the lines of business of the Person to be (or the property and assets of which are to be) so purchased or otherwise acquired shall be permitted by Section 5.02(c);

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(C) such purchase or other acquisition shall not include or result in any contingent liabilities that could reasonably be expected to have a Material Adverse Effect on the Borrower and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or the persons performing similar functions) of the Borrower, if the board of directors is otherwise approving such transaction, or, in each other case, by the Responsible Officer of the Borrower);

(D) the total cash consideration (including, without limitation, all indemnities, earnouts reasonably anticipated by the Borrower to have to be paid and other contingent payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers of such Person or assets, and all assumptions of debt, liabilities and other obligations in connection therewith permitted by Section 5.02(b)(ix) but excluding the portion paid with proceeds of any Equity Issuance to or contribution from directly or indirectly the Equity Investors) paid by or on behalf of the Borrower and its Subsidiaries for any such purchase or other acquisition, shall not exceed, when aggregated with the total cash and noncash consideration paid by or on behalf of the Borrower and its Subsidiaries for all other purchases and other acquisitions made by the Borrower and its Subsidiaries pursuant to this clause (vii), $100,000,000 at the time any such purchase or other acquisition is made;

(E) (1) immediately before and immediately after giving effect to any such purchase or other acquisition, no Event of Default shall have occurred and be continuing and (2) immediately after giving effect to such purchase or other acquisition, the Parent and its Subsidiaries shall be in pro forma compliance with a Leverage Ratio equal to at least 2.5:1.0, such compliance to be determined as of the last day of the most recently then ended Measurement Period; and

(F) the Borrower shall have delivered to the Administrative Agent, on behalf of the Lender Parties, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (vii) have been satisfied or will be satisfied in all material respects on or prior to the consummation of such purchase or other acquisition;

(G) immediately before and immediately after giving effect to such purchase or other acquisition, the Parent and its Subsidiaries shall have a Fixed Charge Coverage Ratio equal to at least 1.0:1.0 and the Excess Availability plus Eligible Cash Collateral shall be not less than $20,000,000 (calculated on a pro forma basis both before and after giving effect to such purchase or other acquisition), such compliance to be determined (x) as of the last day of the most recently ended fiscal quarter as though such purchase or other acquisition had been consummated as of the first day of the four fiscal quarter period then ended or (y) in such other manner as may be reasonably determined by the Administrative Agent and the Borrower;

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(viii) Investments (A) received in satisfaction or partial satisfaction of accounts from financially troubled account debtors (whether in connection with a foreclosure, bankruptcy, workout or otherwise) and (B) consisting of deposits, prepayments and other credits to suppliers made in the ordinary course of business consistent with the past practices of the Borrower and its Subsidiaries;

(ix) guaranties in the ordinary course of business of obligations owed to or of landlords, suppliers, customers, franchisees and licensees of the Borrower and its Subsidiaries or otherwise permitted hereunder;

(x) other Investments in an aggregate amount not to exceed at any time the sum of (A) $15,000,000 (B) net proceeds received from Investments permitted under this Section 5.02(f) and (C) any proceeds of Excluded Issuances used to make Investments;

(xi) the Loan Parties may (A) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (B) invest in, acquire and hold cash and Cash Equivalents, (C) endorse negotiable instruments held for collection in the ordinary course of business or (D) make lease, utility and other similar deposits in the ordinary course of business;

(xii) the Loan Parties may sell or transfer amounts and acquire assets to the extent permitted by Section 5.02(e);

(xiii) any Loan Party may hold Investments to the extent such Investments reflect an increase in the value of Investments already made; and

(xiv) the Loan Parties may perform the Transactions as contemplated by the Transaction Documents.

For purposes of determining compliance with the provisions of this Section 5.02(f), Investments made by the Borrower or any of its Subsidiaries (the “investor”) in any Subsidiary that are effected pursuant to one or more Investments made contemporaneously or in prompt succession by the investor and/or any of its Subsidiaries shall be deemed one Investment by the investor.

(g) Restricted Payments. Declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to Parent’s stockholders, partners or members (or the equivalent Persons thereof) as such, or permit any of its Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in the Borrower (any of the foregoing, a “Restricted Payment”), except that:

(i) the Parent may (A) declare and pay dividends and distributions payable only in Equity Interests of the Parent and (B) purchase, redeem, retire, defease or otherwise acquire Equity Interests with the proceeds received contemporaneously from the issuance of Equity Interests with equal or inferior voting powers, designations, preferences and rights, so long as no Event of Default shall have occurred and be continuing at the time of such purchase, redemption, retirement, defeasance or acquisition or would result therefrom;

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(ii) each of the Parent and the Borrower may, at any time when the Leverage Ratio (calculated on a pro forma basis both before and after giving effect to such cash dividends) shall be less than 1.0:1.0, declare and pay cash dividends to Parent’s equity holders and purchase, redeem, retire or otherwise acquire Parent’s Equity Interests for cash in an aggregate amount not to exceed an amount equal to 75% of the portion of Excess Cash Flow not required to prepay the Facility (as defined in the Term Loan Facility Credit Agreement) pursuant to Section 2.04(b)(i) of the Term Loan Facility Credit Agreement as determined from and after, and for so long as, such Leverage Ratio is in effect and so long as no Event of Default shall have occurred and be continuing at the time of such declaration and payment of cash dividend or would result therefrom;

(iii) any Subsidiary of the Borrower may declare and pay dividends or other distributions to the Borrower or to any Loan Party of which it is a Subsidiary;

(iv) the Loan Parties may acquire Equity Interests of the Borrower or the Parent or any other Loan Party in connection with the exercise of stock options (or the equivalent with respect to membership interests) or stock appreciation rights (or the equivalent with respect to membership interests) by way of cashless exercise or in connection with the satisfaction of withholding tax obligations so long as no Event of Default shall have occurred and be continuing at the time of the acquisition of such Equity Interests or would result therefrom;

(v) the Loan Parties may purchase, redeem or acquire fractional shares of Equity Interests arising out of stock dividends, splits or combinations or business combinations;

(vi) the Parent may convert convertible securities and make cash payments in lieu of fractional shares in connection with any such conversion;

(vii) in connection with any acquisition permitted by Section 5.02(f) and so long as no Event of Default shall have occurred and be continuing at the time of such acquisition or would result therefrom, the Borrower or any Subsidiary may (A) receive or accept the return to the Borrower or any of its Subsidiaries of Equity Interests constituting a portion of the purchase price consideration in settlement of indemnification claims or (B) make payments or distributions to dissenting stockholders pursuant to applicable law;

(viii) the Loan Parties may make Permitted Distributions;

(ix) so long as no Event of Default shall have occurred and be continuing at such time or would result therefrom, payments to the Parent to permit the Parent, and the subsequent use of such payments by Parent, to repurchase or redeem Qualified Capital Stock of Parent held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of any Loan Party, upon their death, disability, retirement, severance or termination of employment or service, or to make payments on Indebtedness issued to buy such Qualified Capital Stock or pursuant to and in accordance with stock option plans or other benefit plans; provided that the aggregate cash consideration paid for all such redemptions and payments shall not exceed, in any fiscal year, the sum of (x) net cash proceeds from issuances of Equity Interests (other than Excluded Issuances or issuances of Equity Interests applied to satisfy any financial covenant under the Term Loan Facility Credit Agreement) plus (y)

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$3,000,000 (and up to 100% of such amount not used in any fiscal year may be carried forward to the next succeeding (but no other) fiscal year) plus (z) the amount of any net cash proceeds received by or contributed to Borrower from the issuance and sale since the issue date of Qualified Capital Stock of Parent to officers, directors or employees of any Loan Party that have not been used to make any repurchases, redemptions or payments under this clause (ix);

(x) the Parent and the Borrower, at any time and for so long as the Fixed Charge Coverage Ratio is not less than 1.0:1.0 (calculated on a pro forma basis immediately before and immediately after giving effect to such additional Restricted Payments) and the Excess Availability plus Eligible Cash Collateral for the subsequent twelve months (calculated on a pro forma basis immediately before and immediately after giving effect to such additional Restricted Payments) is not less than $20,000,000, make additional Restricted Payments to their respective shareholders; and

(xi) the Loan Parties may perform the Transactions as contemplated by the Transaction Documents.

(h) Amendments of Constitutive Documents. Other than in respect of the limited liability company agreements set forth on Schedule 5.02(h), amend, or permit any of its Subsidiaries to amend, its certificate of incorporation or bylaws or other constitutive documents in a manner materially adverse to the Lenders. Nothing contained in this Section 5.01(h) shall be deemed to prohibit any Subsidiary or the parent entity of such Subsidiary from reorganizing or changing the entity form of such Subsidiary upon prior notice to the Administrative Agent and provided that such reorganization or change is not materially adverse to the Lenders (it being understood that any reorganization or change into a limited partnership or a limited liability company by any Subsidiary or the parent entity of such Subsidiary shall not be deemed to be materially adverse to the Lenders).

(i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or permit, any change in Fiscal Year.

(j) Prepayments, Etc., of Debt. (i) Voluntarily prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, in each case in violation of any subordination terms of, any Subordinated Debt, except any repayment of Debt by the Loan Parties so long as (x) no Event of Default has occurred or would occur in connection with such repayment and (y) the Excess Availability plus Eligible Cash Collateral for the subsequent twelve months is not less than $20,000,000 (calculated on a pro forma basis both immediately before and immediately after giving effect to such repayment) and the Fixed Charge Coverage Ratio for the subsequent twelve months is not less than 1.0:1.0 (calculated on a pro forma basis both immediately before and immediately after giving effect to such repayment); (ii) amend, modify or change in any manner materially adverse to the Lenders any term or condition of any Subordinated Debt unless permitted by the subordination provisions thereof, or (iii) permit any of its Subsidiaries to do any of the foregoing other than to prepay any Debt permitted to be incurred hereunder payable to the Borrower or another Subsidiary.

(k) Amendment, Etc., of Related Documents. Other than with respect to the Term Loan Facility Loan Document (which may be amended or otherwise modified in accordance with the Intercreditor Agreement), amend, modify or change in any manner materially adverse to the Lenders any term or condition of any Related Document or give any consent, waiver or approval thereunder that is materially adverse to the Lenders.

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(l) Negative Pledge. Enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets securing the Obligations under the Loan Documents, except (i) prohibitions or conditions under (A) any purchase money Debt permitted by Section 5.02(b)(ii) solely to the extent that the agreement or instrument governing such Debt prohibits a Lien on the property acquired with the proceeds of such Debt (together with any accessions and additions thereto and the proceeds thereof), (B) any Surviving Debt or (C) any Capitalized Lease permitted by Section 5.02(b)(ii) solely to the extent that such Capitalized Lease prohibits a Lien on the property subject thereto (together with any accessions and additions thereto and the proceeds thereof); (ii) specific property to be sold pursuant to an executed agreement with respect to a permitted Transfer permitted under this agreement; (iii) restrictions by reason of customary provisions restricting Liens, assignments, subletting or other transfers contained in leases, licenses and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses or similar agreements, as the case may be); (iv) restrictions and conditions applicable to any Subsidiary acquired after the date hereof if such restrictions and conditions existed at the time such Subsidiary was acquired, were not created in anticipation of such acquisition and apply solely to such acquired Subsidiary; (v) restrictions disclosed in Schedule 5.02(l); (vi) covenants in documents creating Liens permitted by Section 5.02(a) prohibiting further Liens on the properties encumbered thereby; (vii) prohibitions or limitations that exist in any agreement governing Debt permitted by Section 5.02(b)(viii), (xii) or (xv), provided that such prohibition or limitation is not more restrictive in any material respect than those contained in the Loan Documents; or (viii) restrictions or limitations imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts, instruments or obligations referred to in clause (ii), provided that such amendments and refinancings are no more materially restrictive with respect to such prohibitions and limitations than those prior to such amendment or refinancing.

SECTION 5.03. Reporting Requirements. So long as any Advance or any other Obligation (other than Unmatured Surviving Obligations) of any Loan Party under any Loan Document shall remain unpaid, or any Lender Party shall have any Commitment hereunder, the Borrower will furnish to the Administrative Agent:

(a) Default Notice. Within three Business Days after the occurrence of each Default or any event, development or occurrence that has resulted in a Material Adverse Effect continuing on the date of such statement, a statement of a Responsible Officer of the Borrower setting forth details of such Default, event, development or occurrence and the action that the Borrower has taken and proposes to take with respect thereto.

(b) Annual Financials. Within 120 days after the end of each Fiscal Year, a copy of the annual audit report for such year for the Parent and its Subsidiaries, including therein a Consolidated balance sheet of the Parent and its Subsidiaries as of the end of such Fiscal Year and a Consolidated statement of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion as to such audit report of any of the “Big 4” accounting firms or other independent public accountants of recognized standing reasonably acceptable to the Administrative Agent, which opinion shall not have any “going concern” qualification, together with a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by such accountants in determining, as of the end of such Fiscal Year, pro forma calculation of the Leverage Ratio; provided that, in the event of any change in GAAP used in the preparation of such financial statements, the Parent

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shall also provide a reconciliation of such financial statements to former GAAP and (iii) a certificate on behalf of the Parent signed by a Responsible Officer of the Parent stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Parent has taken and proposes to take with respect thereto.

(c) Quarterly Financials. Within 60 days after the end of each of the first three quarters of each Fiscal Year, a Consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments) by a Responsible Officer of the Parent as having been prepared in accordance with GAAP (other than the absence of footnotes), together with (i) a certificate on behalf of Parent signed by a Responsible Officer stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Parent has taken and proposes to take with respect thereto and (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by the Parent in determining a pro forma calculation of a Leverage Ratio.

(d) Annual Forecasts. No later than 45 days after the end of each Fiscal Year, forecasts prepared by management of the Parent, in form reasonably satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on a quarterly basis for the Fiscal Year following such Fiscal Year.

(e) Litigation. Promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any Governmental Authority affecting any Loan Party or any of its Subsidiaries of the type described in Section 4.01(g).

(f) Securities Reports. Promptly after the sending or filing thereof copies of all regular, periodic and special reports, and all registration statements, that any Loan Party or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange.

(g) INTENTIONALLY OMITTED.

(h) INTENTIONALLY OMITTED.

(i) Plan Terminations. Promptly and in any event within two Business Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan.

(ii) Plan Annual Reports. Promptly upon request by the Administrative Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan.

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(iii) Multiemployer Plan Notices. Promptly and in any event within five Business Days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by such Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B).

(i) Environmental Conditions. Promptly after the assertion or occurrence thereof, notice of any Environmental Action against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any property described in the Mortgages to be subject to any material restrictions on ownership, occupancy, transferability or use under any Environmental Law.

(j) INTENTIONALLY OMITTED.

(k) INTENTIONALLY OMITTED.

(l) Other Information. Such other information respecting the business, financial condition, operations of any Loan Party or any of its Subsidiaries as any Agent, or any Lender Party through the Administrative Agent, may from time to time reasonably request. Notwithstanding anything to the contrary in this Agreement, none of the Parent, the Borrower or any Subsidiary will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding agreement or (iii) is confidential or is subject to attorney-client or similar privilege or constitutes attorney work product.

(m) Borrowing Base Certificates, Etc. (i) (A) So long as no Event of Default has occurred and is continuing and Excess Availability plus Eligible Cash Collateral is at least $20,000,000, Borrowing Base Certificates will be completed as of the last day of the fiscal month and delivered within fifteen (15) Business Days thereafter; (B) so long as Excess Availability plus Eligible Cash Collateral is less than $20,000,000 for a period of five (5) consecutive Business Days, Borrowing Base Certificates will be delivered weekly, completed as of each Saturday and delivered five (5) Business Days after each Saturday; or (C) so long as an Event of Default has occurred and is continuing, an updated Borrowing Base Certificate will be delivered within one (1) Business Days following such request.

(ii) The Borrowing Base Certificates referred to in clause (i) above shall be delivered with the supporting documentation set forth on Schedule 5.03(m), to the extent required to be delivered at such time.

SECTION 5.04. Holding Company Status of Parent. Parent shall not engage in any business or activity other than (a) the ownership of all outstanding Equity Interests in the Borrower, (b) maintaining its corporate existence, (c) participating in tax, accounting and other administrative activities as parent of the consolidated group of companies including the Loan Parties, (d) the performance of obligations under the Transaction Documents to which it is a party, (e) making or receiving any Restricted Payment permitted under Section 5.02(g) and (e) activities incidental to the businesses or activities described in the foregoing clauses (a) through (e).

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SECTION 5.05. Financial Covenant. (a) In the event that, at any time, the Excess Availability as of such date (after giving effect to the funding of all Revolving Credit Advances and the issuance of all Letter of Credit Advances to be funded or issued as of such date) plus the Eligible Cash Collateral is less than $20,000,000, then the Borrower shall be required to maintain, as of the last day of any Measurement Period, a Fixed Charge Coverage Ratio of at least 1.0:1.0 until Excess Availability plus Eligible Cash Collateral shall be greater than $20,000,000 for a period of fifteen (15) consecutive Business Days.

(b) For purposes of determining compliance with the foregoing clause (a), any equity investment made to the Borrower after the Effective Date and on or prior to the day that is ten (10) Business Days after the day on which financial statements are required to be delivered for a Fiscal Quarter shall, at the request of the Borrower and in the event that the proceeds thereof have been contributed to the Borrower as common equity or other equity on terms and conditions reasonably acceptable to the Administrative Agent, be included in the calculation of EBITDA for the purpose of determining compliance with such covenant at the end of such Fiscal Quarter and applicable subsequent periods (any such equity contribution so included in the calculation of EBITDA, a “Specified Equity Contribution”); provided that (i) in each four consecutive Fiscal Quarter period there shall be at least one Fiscal Quarter in which no Specified Equity Contribution is made and (ii) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Borrower to be in compliance with the Fixed Charge Coverage Ratio and Section 5.05 of the Term Loan Facility Credit Agreement.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default. If any of the following events (“Events of Default”) shall occur and be continuing:

(a) (i) the Borrower shall fail to pay any principal of any Advance when the same shall become due and payable or (ii) the Borrower shall fail to pay any interest on any Advance or any fee within five Business Days after the same shall become due and payable, or any Loan Party shall fail to make any other payment under any Loan Document within thirty days after the same shall become due and payable; or

(b) any representation or warranty made by any Loan Party (or any of its officers) under or in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or

(c) the Borrower shall fail to perform or observe any term, covenant or agreement contained in Sections 2.14, 5.01(e) (as to preservation of existence only), (f), (i) or 5.02, 5.03(a) or 5.03(m) (with a three (3) Business Day grace period from the earlier of the date on which (i) any Responsible Officer of a Loan Party becomes aware of such failure or (ii) written notice thereof shall have been given to the Borrower by any Agent or any Lender Party); or

(d) any Loan Party shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 30 days after the earlier of the date on which (i) any Responsible Officer of a Loan Party becomes aware of such failure or (ii) written notice thereof shall have been given to the Borrower by any Agent or any Lender Party; or

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(e) any Loan Party or any of its Subsidiaries shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Debt of such Loan Party or such Subsidiary (as the case may be) that is outstanding in a principal amount (or, in the case of any Hedge Agreement, an Agreement Value) of at least $15,000,000 either individually or in the aggregate for all such Loan Parties and Subsidiaries (but excluding Debt outstanding hereunder), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or any such Debt shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or mandatory prepayments), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; provided that this clause (e) shall not apply to secured Debt that becomes due as a result of the voluntary Transfer of the property or assets securing such Debt, if such Transfer is permitted hereunder and under the documents providing for such Debt; provided, further, that an Event of Default under this clause (e) shall continue only so long as the applicable event or condition constituting such Event of Default is unremedied and is not waived or rescinded by the holders of such Debt; provided, further, that an “Event of Default” under Section 5.05 of the Term Loan Facility Credit Agreement shall not be an Event of Default under this clause (e), unless such “Event of Default” shall be unremedied and is not waived or rescinded by the Lenders under the Term Loan Facility Credit Agreement for a period of 30 days; or

(f) the Parent, the Borrower or any Significant Guarantor shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party or any of its Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or, except as permitted under Section 5.02(e)(viii), 5.02(d)(iv) or 5.02(d)(vi), seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 60 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Loan Party or any of its Material Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or

(g) any judgments or orders, either individually or in the aggregate, for the payment of money in excess of $12,500,000 (to the extent not reasonably expected to be adequately covered by insurance in respect of which a solvent and unaffiliated insurance company has acknowledged coverage) shall be rendered against any Loan Party or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order (and such proceedings shall not have been stayed) or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

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(h) any material provision of any Loan Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or enforceable against any Loan Party party to it, or any such Loan Party shall so state in writing; or

(i) any Collateral Document or financing statement after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority (except to the extent of Permitted Liens and other Liens created or permitted by the Loan Documents) lien on and security interest in the ABL First Lien Collateral purported to be covered thereby, except to the extent that any such loss of perfection or priority results from the acts or omissions of the Administrative Agent or the Collateral Agent; or

(j) a Change of Control shall occur; or

(k) any ERISA Event shall have occurred with respect to a Plan and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates related to such ERISA Event) exceeds $12,500,000; or

(l) any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $12,500,000 or requires payments exceeding $2,000,000 per annum; or

(m) any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $12,500,000;

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each Lender Party and the obligation of each Lender Party to make Advances terminated (other than Letter of Credit Advances by the Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Advances, all interest thereon and all other amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that, in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (x) the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by the Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit shall automatically be terminated and (y) the Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.

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SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If any Event of Default shall have occurred and be continuing, the Administrative Agent may, or shall at the request of the Required Lenders, irrespective of whether it is taking any of the actions described in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such demand the Borrower will, pay to the Collateral Agent on behalf of the Lender Parties in same day funds at the Collateral Agent’s Office, for deposit in the Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, the Borrower shall be obligated to pay to the Collateral Agent on behalf of the Lender Parties in same day funds at the Collateral Agent’s Office, for deposit in the Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. If at any time during the occurrence and continuance of an Event of Default the Administrative Agent or the Collateral Agent determines that any funds held in the Collateral Account are subject to any right or claim of any Person other than the Agents and the Lender Parties or that the total amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the Borrower will, forthwith upon demand by the Administrative Agent or the Collateral Agent, pay to the Collateral Agent, as additional funds to be deposited and held in the Collateral Account, an amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the Collateral Account that the Administrative Agent or the Collateral Agent, as the case may be, determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit in the Collateral Account, such funds shall be applied to reimburse the Issuing Bank or Revolving Credit Lenders, as applicable, to the extent permitted by applicable law.

ARTICLE VII

THE AGENTS

SECTION 7.01. Authorization and Action. (a) Each Lender Party (in its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of the Obligations of the Loan Parties under the Loan Documents), no Agent shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lender Parties, all Hedge Banks and all holders of Notes; provided, however, that no Agent shall be required to take any action that exposes such Agent to personal liability or that is contrary to this Agreement or applicable law.

(b) In furtherance of the foregoing, each Lender Party (in its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes the Collateral Agent to act as the agent of such Lender Party for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such

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powers and discretion as are reasonably incidental thereto. In this connection, the Collateral Agent (and any Supplemental Collateral Agents appointed by the Collateral Agent pursuant to Section 7.01(c) for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights or remedies thereunder at the direction of the Collateral Agent) shall be entitled to the benefits of this Article VII (including, without limitation, Section 7.05) as though the Collateral Agent (and any such Supplemental Collateral Agents) were an “Agent” under the Loan Documents, as if set forth in full herein with respect thereto.

(c) Any Agent may execute any of its duties under this Agreement or any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder at the direction of the Collateral Agent) by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Collateral Agent may also from time to time, when the Collateral Agent deems it to be necessary or desirable, appoint one or more trustees, co-trustees, collateral co-agents, collateral subagents or attorneys-in-fact (each, a “Supplemental Collateral Agent”) with respect to all or any part of the Collateral; provided, however, that no such Supplemental Collateral Agent shall be authorized to take any action with respect to any Collateral unless and except to the extent expressly authorized in writing by the Collateral Agent. Should any instrument in writing from the Borrower or any other Loan Party be required by any Supplemental Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest in and confirm to such Supplemental Collateral Agent such rights, powers, privileges and duties, the Borrower shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly upon the reasonable request by the Collateral Agent. If any Supplemental Collateral Agent, or successor thereto, shall die, become incapable of acting, resign or be removed, all rights, powers, privileges and duties of such Supplemental Collateral Agent, to the extent permitted by law, shall automatically vest in and be exercised by the Collateral Agent until the appointment of a new Supplemental Collateral Agent. No Agent shall be responsible for the negligence or misconduct of any agent, attorney-in-fact or Supplemental Collateral Agent that it selects in accordance with the foregoing provisions of this Section 7.01(c) in the absence of such Agent’s gross negligence or willful misconduct.

(d) Notwithstanding anything contained in this Agreement to the contrary, the Documentation Agents are named as such for recognition purposes only and in their capacity as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Loan Documents or the Transactions. Without limitation of the foregoing, the Documentation Agents shall not, solely by reason of this Agreement or any other Loan Document, have any fiduciary relationship in respect of any Lender or any other Person.

SECTION 7.02. Agents’ Reliance, Etc. Neither any Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with the Loan Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each Agent: (a) may consult with legal counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Lender Party and shall not be responsible to any Lender Party for any statements, warranties or representations (whether written or oral) made in or in connection with the Loan Documents; (c) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of any Loan Document on the part of any Loan Party or the existence at any time of any Default under the Loan Documents or to inspect the property (including the books and records) of any Loan Party; (d) shall not be responsible to any Lender Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection

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or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; and (e) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, telecopy or electronic communication) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 7.03. WFR and Affiliates. With respect to its Commitments, the Advances made by it and any Notes issued to it, WFR shall have the same rights and powers under the Loan Documents as any other Lender Party and may exercise the same as though it were not an Agent; and the term “Lender Party” or “Lender Parties” shall, unless otherwise expressly indicated, include WFR in its individual capacity. WFR and its affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, any Loan Party, any of its Subsidiaries and any Person that may do business with or own securities of any Loan Party or any such Subsidiary, all as if WFR were not an Agent and without any duty to account therefor to the Lender Parties. WFR shall have no duty to disclose any information obtained or received by it or any of its Affiliates relating to any Loan Party or any of its Subsidiaries to the extent such information was obtained or received in any capacity other than as such Agent.

SECTION 7.04. Lender Party Credit Decision. Each Lender Party acknowledges that it has, independently and without reliance upon any Agent or any other Lender Party and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender Party also acknowledges that it will, independently and without reliance upon any Agent or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees to indemnify each Agent (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Agent under the Loan Documents (collectively, the “Indemnified Costs”); provided, however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the foregoing, each Lender Party agrees to reimburse each Agent promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 9.04, to the extent that such Agent is not promptly reimbursed for such costs and expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by any Lender Party or any other Person.

(b) Each Lender Party severally agrees to indemnify the Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Issuing Bank in any way relating to or arising out of the Loan Documents or any action taken or omitted by the Issuing Bank under the Loan Documents; provided, however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Issuing

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Bank’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the foregoing, each Lender Party agrees to reimburse the Issuing Bank promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 9.04, to the extent that the Issuing Bank is not promptly reimbursed for such costs and expenses by the Borrower.

(c) For purposes of this Section 7.05, each Lender Party’s ratable share of any amount shall be determined, at any time, according to the sum of (i) the aggregate principal amount of the Advances outstanding at such time and owing to such Lender Party’s, (ii) such Lender Party’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time and (iii) such Lender Party’s Unused Revolving Credit Commitments at such time; provided that the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to the Issuing Bank shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments. The failure of any Lender Party to reimburse any Agent or the Issuing Bank, as the case may be, promptly upon demand for its ratable share of any amount required to be paid by the Lender Parties to such Agent or the Issuing Bank, as the case may be, as provided herein shall not relieve any other Lender Party of its obligation hereunder to reimburse such Agent or the Issuing Bank, as the case may be, for its ratable share of such amount, but no Lender Party shall be responsible for the failure of any other Lender Party to reimburse such Agent or the Issuing Bank, as the case may be, for such other Lender Party’s ratable share of such amount. Without prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender Party contained in this Section 7.05 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents.

SECTION 7.06. Successor Agents. Any Agent may resign at any time by giving written notice thereof to the Lender Parties and the Borrower and may be removed at any time with or without cause by the Required Lenders; provided, however, that any removal of the Administrative Agent will not be effective until it has also been replaced as Collateral Agent, Swing Line Bank and Issuing Bank and released from all of its obligations in respect thereof. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent with the consent of the Borrower (not to 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 or the Required Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the Lender Parties, with the consent of the Borrower (such consent not to be unreasonably withheld or delayed), appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States or of any State thereof and having a combined capital and surplus of at least $250,000,000; provided that, if, such retiring Administrative Agent is unable to find a commercial banking institution which is willing to accept such appointment and which meets the qualifications set forth above, subject to this Section 7.06, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Required Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor as provided for above. Upon the acceptance of any appointment as Agent hereunder by a successor Agent and, in the case of a successor Collateral Agent, upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the Mortgages, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents. If within 45 days after written notice is given of the retiring Agent’s resignation or removal under this Section 7.06 no successor Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (a) the retiring Agent’s

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resignation or removal shall become effective, (b) the retiring Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (c) the Required Lenders shall thereafter perform all duties of the retiring Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a successor Agent as provided above. After any retiring Agent’s resignation or removal hereunder as Agent shall have become effective, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

SECTION 7.07. Intercreditor Agreement. Each of the Lender Parties hereby acknowledges that it has received and reviewed the Intercreditor Agreement and agrees to be bound by the terms thereof. Each Lender Party (and each Person that becomes a Lender Party hereunder pursuant to Section 9.07) hereby acknowledges that WFR is acting under the Intercreditor Agreement in multiple capacities as Administrative Agent or Collateral Agent, as the case may be. Each Lender Party (and each Person that becomes a Lender Party hereunder pursuant to Section 9.07) hereby authorizes and directs WFR to enter into the Intercreditor Agreement on behalf of such Lender and agrees that WFR, in its various capacities thereunder, may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement.

ARTICLE VIII

GUARANTY

SECTION 8.01. Guaranty; Limitation of Liability. (a) Each Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other Loan Party now or hereafter existing under or in respect of the Loan Documents, any Secured Hedge Agreement or any Secured Cash Management Agreement (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent, any other Lender Party, any Hedge Bank or any Cash Management Bank in enforcing any rights under, as applicable, this Guaranty, any other Loan Document, any Secured Hedge Agreement or any Secured Cash Management Agreement. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Loan Party to any Lender Party or any Hedge Bank or any Cash Management Bank under or in respect of, as applicable, the Loan Documents or any Secured Hedge Agreement or any Secured Cash Management Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Loan Party.

(b) Each Guarantor, and by its acceptance of this Guaranty, the Administrative Agent and each other Lender Party, hereby confirms that it is the intention of all such Persons that this Guaranty and the Obligations of each Subsidiary Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Obligations of each Subsidiary Guarantor hereunder. To effectuate the foregoing intention, the Administrative Agent, the other Lender Parties and the Guarantors hereby irrevocably agree that the Obligations of each Subsidiary Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.

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(c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Lender Party under this Guaranty or any other guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Lender Parties or Hedge Banks or any Cash Management Bank under or in respect of, as applicable, the Loan Documents or any Secured Hedge Agreement or any Secured Cash Management Agreement.

SECTION 8.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents or any Secured Hedge Agreement or any Secured Cash Management Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of, as applicable, any Lender Party or any Hedge Bank with respect thereto. The Obligations of each Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents or any Secured Hedge Agreement or any Secured Cash Management Agreement, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any Secured Hedge Agreement or any Secured Cash Management Agreement or any agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents or any Secured Hedge Agreement or any Secured Cash Management Agreement in accordance with their respective terms, or any other amendment or waiver of or any consent to departure from any Loan Document or any Secured Hedge Agreement or any Secured Cash Management Agreement in accordance with their respective terms, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other guaranty in accordance with its terms, for all or any of the Guaranteed Obligations;

(d) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents or under any Secured Hedge Agreement or under any Secured Cash Management Agreement or any other assets of any Loan Party or any of its Subsidiaries;

(e) any change, restructuring or termination of the corporate structure or existence of any Loan Party or any of its Subsidiaries;

(f) any failure of any Lender Party to disclose to any Loan Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known to such Lender Party (each Guarantor waiving any duty on the part of the Lender Parties to disclose such information);

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(g) the failure of any other Person to execute or deliver this Agreement, any Guaranty Supplement or any other guaranty or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or

(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Lender Party that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety, except payment in full.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made.

SECTION 8.03. Waivers and Acknowledgments. (a) Each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and, except for those notices specified under this Agreement, any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that any Lender Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any Loan Party or any other Person or any Collateral.

(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by any Lender Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Obligations of such Guarantor hereunder.

(d) Each Guarantor acknowledges that the Collateral Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to the recovery by the Collateral Agent and the other Secured Parties against such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable law.

(e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any Lender Party to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party or any of its Subsidiaries now or hereafter known by such Lender Party.

(f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents or any Secured Hedge Agreement and that the waivers set forth in Section 8.02 and this Section 8.03 are knowingly made in contemplation of such benefits.

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SECTION 8.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower, any other Loan Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s Obligations under or in respect of this Guaranty or any other Loan Document or any Secured Hedge Agreement or any Secured Cash Management Agreement, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Lender Party against the Borrower, any other Loan Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrower, any other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, all Letters of Credit and all Secured Hedge Agreements and all Secured Cash Management Agreements shall have expired or been terminated (or the Letters of Credit shall have been cash collateralized or any other back-stop thereof shall have occurred) and the Commitments shall have expired or been terminated. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the latest of (a) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (b) the Termination Date and (c) the latest date of expiration or termination of all Letters of Credit (or cash collateralization thereof or other back-stop thereof, as applicable) and all Secured Hedge Agreements and Secured Cash Management Agreements, such amount shall be received and held in trust for the benefit of the Lender Parties, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents or any Secured Hedge Agreement, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to any Lender Party of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, (iii) the Termination Date shall have occurred and (iv) all Letters of Credit and all Secured Hedge Agreements shall have expired or been terminated (or, in the case of the Letters of Credit, shall have been cash collateralized or any other back-stop thereof shall have occurred), the Lender Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Guaranty.

SECTION 8.05. Guaranty Supplements. Upon the execution and delivery by any Person of a guaranty supplement in substantially the form of Exhibit E hereto (each, a “Guaranty Supplement”), (a) such Person shall be referred to as an “Additional Guarantor” and shall become and be a Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall also mean and be a reference to such Additional Guarantor, and each reference in any other Loan Document or any Secured Hedge Agreement to a “Subsidiary Guarantor” shall also mean and be a reference to such Additional Guarantor, and (b) each reference herein to “this Guaranty,” “hereunder,” “hereof” or words of like import referring to this Guaranty, and each reference in any other Loan Document or any Secured Hedge Agreement or Secured Cash Management Agreement to the “Guaranty,” “thereunder,” “thereof” or words of like import referring to this Guaranty, shall mean and be a reference to this Guaranty as supplemented by such Guaranty Supplement.

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SECTION 8.06. Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and other Obligations owed to such Guarantor by each other Loan Party (the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 8.06:

(a) Prohibited Payments, Etc. Except during the continuance of an Event of Default, each Guarantor may receive payments from any other Loan Party on account of the Subordinated Obligations. After the occurrence and during the continuance of any Event of Default, however, unless the Required Lenders otherwise agree, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.

(b) Prior Payment of Guaranteed Obligations. In any proceeding under any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the Lender Parties shall be entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses accruing after the commencement of a proceeding under any Bankruptcy Law, whether or not constituting an allowed claim in such proceeding (“Post-Petition Interest”)) before such Guarantor receives payment of any Subordinated Obligations.

(c) Turn-Over. After the occurrence and during the continuance of any Event of Default, each Guarantor shall, if the Administrative Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for the Lender Parties and deliver such payments to the Administrative Agent on account of the Guaranteed Obligations (including all Post-Petition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guaranty.

(d) Administrative Agent Authorization. After the occurrence and during the continuance of any Event of Default, the Administrative Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations (including any and all Post-Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and (B) to pay any amounts received on such obligations to the Administrative Agent for application to the Guaranteed Obligations (including any and all Post-Petition Interest).

SECTION 8.07. Continuing Guaranty; Assignments. This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Guaranteed Obligations (other than Unmatured Surviving Obligations) and all other amounts payable under this Guaranty, (ii) the Termination Date and (iii) the latest date of expiration or termination of all Letters of Credit (or cash collateralization thereof or other back-stop thereof), (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Lender Parties and their successors, transferees and assigns that are permitted under Section 9.07. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender Parties.

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ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. Except as provided in Section 2.18 with respect to any Additional Revolving Credit Commitment Amendment, no amendment or waiver of any provision of this Agreement or the Notes, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders (except as provided in Section 5.01(k)(i), which may be performed by the Administrative Agent), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent shall, unless in writing and signed by all of the Lender Parties (other than any Lender Party that is, at such time, a Defaulting Lender), do any of the following at any time:

(i) in the case of the Initial Extension of Credit, waive any of the conditions specified in Section 3.01 or Section 3.02,

(ii) amend the definition of “Required Lenders”, “Supermajority Lenders”, or “Pro Rata Share” or any other provision hereof that would change the percentage of (x) the Commitments, (y) the aggregate unpaid principal amount of the Advances or (z) the aggregate Available Amount of outstanding Letters of Credit that, in each case, shall be required for the Lenders or any of them to take any action hereunder,

(iii) except pursuant to the Intercreditor Agreement and except to the extent that it would constitute a Transfer permitted under Section 5.02(e), release one or more Significant Guarantors (or otherwise limit such Significant Guarantors’ liability with respect to the Obligations owing to the Agents and the Lender Parties under the Guaranties) if such release or limitation is in respect of all or substantially all of the value of the Guaranties to the Lender Parties, except as a transfer or dissolution would be permitted under Section 5.02(d),

(iv) except pursuant to the Intercreditor Agreement, release all or substantially all of the Collateral in any transaction or series of related transactions,

(v) amend this Section 9.01, or

(b) no amendment, waiver or consent shall, unless in writing and signed by the Supermajority Lenders:

(i) change the definition of “Excess Availability” or “Borrowing Base” or any component definition of any such terms if, as a result thereof, the amounts available to be borrowed by the Borrower would be increased, provided that the foregoing shall not limit the discretion of the Administrative Agent to change, establish or eliminate any Reserves pursuant hereto,

(ii) increase the Credit Card Advance Rate or the Inventory Advance Rate if, as a result thereof, the amount available to be borrowed by the Borrower would be increased, or

and (c) no amendment, waiver or consent shall, unless in writing and signed by the Required Lenders and each Lender Party specified below for such amendment, waiver or consent:

(i) increase the Commitments of a Lender Party without the consent of such Lender Party,

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(ii) reduce the principal of, or stated rate of interest (other than Default Rate) on, the Advances owed to a Lender Party or any fees or other amounts stated to be payable hereunder or under the other Loan Documents to such Lender Party (other than in accordance with the terms hereof) without the consent of such Lender Party,

(iii) postpone any date scheduled for any payment of principal of, or interest on, the Advances pursuant to Section 2.07 or any date fixed for any payment of fees hereunder in each case payable to a Lender Party without the consent of such Lender Party;

provided further that no amendment, waiver or consent shall, unless in writing and signed by an Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Agent under this Agreement or the other Loan Documents.

SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for hereunder shall be either (x) in writing (including telegraphic, telecopy or electronic communication) and mailed, telegraphed, telecopied or delivered or (y) as and to the extent set forth in Section 9.02(b) and in the proviso to this Section 9.02(a), in an electronic medium and delivered as set forth in Section 9.02(b), if to any Loan Party, to the Borrower at its address at One Limited Parkway, Columbus, OH 43230, Attention: Matt Moellering, Chief Financial Officer; Telecopy: (614) 415-4858, E-mail Address: mmoellering@expressfashion.com; with a copy to: Golden Gate Capital at its address at One Embarcadero Center, 33^rd Floor, San Francisco, CA 94111, Attention: Joshua Olshansky, Telecopy: (415) 627-4501, E-mail Address: jolshansky@goldengatecap.com; with a copy to: Kirkland & Ellis LLP, 555 California Street, Suite 2700, San Francisco, CA 94104, Telecopy: (415) 439-1500, Attention: John Friedrichs, E-mail Address: jfriedrichs@kirkland.com; if to any Initial Lender Party, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office specified in the Assignment and Assumption pursuant to which it became a Lender Party; if to the Administrative Agent and to the Collateral Agent, to Wells Fargo Retail Finance, LLC, at its address at One Boston Place, 18^th Floor, Boston, MA 02108, Attention: William Chan, Vice President and Senior Account Executive, Telecopy: (866) 349 8857, E-mail Address: william.chan@wellsfargo.com, with a copy to Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York, 10022, Attention: Maura O’ Sullivan, Esq., Telecopy: (646) 848 7897, E-mail Address: mosullivan@shearman.com; or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties; provided, however, that materials and information described in Section 9.02(b) shall be delivered to the Administrative Agent in accordance with the provisions thereof or as otherwise specified to the Borrower by the Administrative Agent. All such notices and other communications shall, when mailed, telegraphed, telecopied, or e-mailed, be effective upon receipt. Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes shall be effective as delivery of an original executed counterpart thereof.

(b) The Borrower hereby agrees that it will provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent pursuant to the Loan Documents, including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (i) relates to a request for a Conversion of an existing, Borrowing (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default under this Agreement or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any Borrowing (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Administrative Agent to an

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electronic mail address specified by the Administrative Agent to the Borrower. In addition, the Borrower agrees to continue to provide the Communications to the Administrative Agent in the manner specified in the Loan Documents but only to the extent requested by the Administrative Agent. The Borrower further agrees that the Administrative Agent may make the Communications available to the Lenders by posting the Communications on IntraLinks or a substantially similar electronic transmission system (the “Platform”).

(c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER PARTY OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(d) The Administrative Agent agrees that the receipt of the Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender Party agrees that notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender Party for purposes of the Loan Documents. Each Lender Party agrees (i) to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Lender Party’s e-mail address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the right of the Administrative Agent or any Lender Party to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender Party or any Agent to exercise, and no delay in exercising, any right hereunder or under any Note or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay within 30 days of demand with backup documentation (i) all reasonable, documented and out-of-pocket costs and expenses of each Agent and the Lead Arranger in connection with the preparation, execution, delivery, administration, modification and amendment of, or any consent or waiver under, the Loan Documents

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(including, without limitation, (A) all due diligence, collateral review, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and recording fees and expenses, (B) in connection with the “work-out” or restructuring of the obligations and (C) the reasonable fees and expenses of one counsel (together with one local or foreign counsel in each relevant jurisdiction) representing both the Administrative Agent and the Lead Arranger with respect thereto, with respect to advising such Agent as to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Event of Default or any events or circumstances that may give rise to an Event of Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto and (ii) all reasonable, documented and out-of-pocket costs and expenses of the Administrative Agent, the Lead Arranger and each Lender Party in connection with the enforcement of the Loan Documents, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally (including, without limitation, the reasonable fees and expenses of one counsel for the Administrative Agent and each Lender Party with respect thereto).

(b) The Borrower agrees to indemnify, defend and save and hold harmless each Agent, the Lead Arranger, each Lender Party and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) the Facilities, the actual or proposed use of the proceeds of the Advances, the Transaction Documents or any of the transactions contemplated thereby, including, without limitation, any acquisition or proposed acquisition (including, without limitation, the Transaction) by the Sponsor or any of its Subsidiaries or Affiliates of all or any portion of the Equity Interests in or Debt securities or substantially all of the assets of the Borrower or any of its Subsidiaries or (ii) the actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence, bad faith or willful misconduct or that of its affiliates, directors, officers, employees, advisors or agents; provided that the Borrower shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to a single special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnified Parties (which shall be selected by the Administrative Agent) unless, in the reasonable opinion of the Administrative Agent, representation of all such Indemnified Parties would be inappropriate due to existence of an actual or potential conflict of interest. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 9.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors, any Indemnified Party or any other Person, whether or not any Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated. The Borrower also agrees not to assert any claim against the Administrative Agent, any Lender Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances, the Transaction Documents or any of the transactions contemplated by the Transaction Documents.

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(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender Party other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06, 2.09(a)(i) or 2.10(d), acceleration of the maturity of the Advances pursuant to Section 6.01 or for any other reason, or if the Borrower fails to make any payment or prepayment of a Eurodollar Rate Advance for which a notice of prepayment has been given or that is otherwise required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender Party to fund or maintain such Advance.

(d) If any Loan Party fails to pay when due any undisputed costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or any Lender Party, in its sole discretion.

(e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section 9.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Loan Documents.

SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the continuance of any Event of Default and (b) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01, each Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account of the Borrower against any and all of the Obligations of the Borrower now or hereafter existing under the Loan Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under this Agreement and although such Obligations may be unmatured. Each Agent and each Lender Party agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and each Lender Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Agent, such Lender Party and their respective Affiliates may have.

SECTION 9.06. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and each Agent and the Administrative Agent shall have been notified by each Initial Lender Party that such Initial Lender Party has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, each Agent and each Lender Party and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of each Lender Party.

SECTION 9.07. Assignments and Participations. (a) Each Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Revolving Credit Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a

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uniform, and not a varying, percentage of all rights and obligations under and in respect of the applicable Facility, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined as of the date of the Assignment and Assumption with respect to such assignment) shall in no event be less than $5,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) no such assignments shall be permitted without the consent of the Administrative Agent until the Administrative Agent shall have notified the Lender Parties that syndication of the Commitments hereunder has been completed and (v) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Assumption, together with any Note or Notes (if any).

(b) Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Assumption, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Assumption, have the rights and obligations of a Lender or Issuing Bank, as the case may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Assumption, relinquish its rights (other than its rights under Sections 2.10, 2.12 and 9.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the remaining portion of an assigning Lender’s or Issuing Bank’s rights and obligations under this Agreement, such Lender or Issuing Bank shall cease to be a party hereto).

(c) By executing and delivering an Assignment and Assumption, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and the other parties thereto and hereto as follows: (i) other than as provided in such Assignment and Assumption, such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption; (iv) such assignee will, independently and without reliance upon any Agent, such assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender or Issuing Bank, as the case may be.

(d) The Administrative Agent, acting for this purpose (but only for this purpose) as the agent of the Borrower, shall maintain at its address referred to in Section 9.02 a copy of each Assignment and Assumption delivered to and accepted by it and a register for the recordation of the

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names and addresses of the Lender Parties and the Commitment under each Facility of, and principal amount of the Advances owing under each Facility to, each Lender Party from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agents and the Lender Parties shall treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of an Assignment and Assumption executed by an assigning Lender Party and an assignee, together with any Note or Notes (if any) subject to such assignment, the Administrative Agent shall, if such Assignment and Assumption has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Assumption, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower and each other Agent. In the case of any assignment by a Lender, within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes (if any) a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under each Facility pursuant to such Assignment and Assumption and, if any assigning Lender that had a Note or Notes prior to such assignment has retained a Commitment hereunder under such Facility, a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be dated the effective date of such Assignment and Assumption and shall otherwise be in substantially the form of Exhibit A hereto. Notwithstanding anything contained herein to the contrary, Notes shall not be required in respect of the Letter of Credit Facility.

(f) The Issuing Bank may assign to an Eligible Assignee all of its rights and obligations under the undrawn portion of its Letter of Credit Commitment at any time; provided, however, that (i) each such assignment shall be to an Eligible Assignee and (ii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment.

(g) Each Lender Party may sell participations to one or more Persons (other than any Loan Party or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender Party’s obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender Parties shall continue to deal solely and directly with such Lender Party in connection with such Lender Party’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date fixed for any payment of principal of, or interest on, the Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or release all or substantially all of the Collateral or the value of the Guaranties.

(h) Any Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.07, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender

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Party by or on behalf of the Borrower; provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party.

(i) Notwithstanding any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes (if any) held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

(j) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may create a security interest in all or any portion of the Advances owing to it and any Note or Notes held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities; provided that, unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 9.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

(k) Notwithstanding anything to the contrary contained herein, any Lender Party (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Advance that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Advance and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender. Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender Party would be liable, (ii) no SPC shall be entitled to the benefits of Sections 2.10 or 2.12 (or any other increased costs protection provision) and (iii) the Granting Lender shall for all purposes, including, without limitation, the approval of any amendment or waiver of any provision of any Loan Document, remain the Lender Party of record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior Debt of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained in this Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrower and the Administrative Agent, assign all or any portion of its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Advances to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC. This subsection (k) may not be amended without the prior written consent of each Granting Lender, all or any part of whose Advances are being funded by the SPC at the time of such amendment.

SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery by telecopier or by electronic file of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.

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SECTION 9.09. No Liability of the Issuing Bank. The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither the Issuing Bank nor any of its officers or directors shall be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that the Borrower proves were caused by (i) the Issuing Bank’s willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank’s willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

SECTION 9.10. Confidentiality. Neither any Agent nor any Lender Party shall disclose any Confidential Information to any Person without the consent of the Borrower, other than (a) to such Agent’s or such Lender Party’s Affiliates and their officers, directors, employees, agents and advisors and to actual or prospective Eligible Assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, Federal or foreign authority or examiner (including the National Association of Insurance Commissioners or any similar organization or quasi-regulatory authority) regulating such Lender Party, (d) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Loan Parties received by it from such Lender Party or (e) in connection with the exercise of any right or remedy under this Agreement or any other Loan Document; provided that, in the case of disclosure under clause (b), unless specifically prohibited by law or court order, each Agent and each Lender Party shall make reasonable efforts to notify the Borrower of any such requirement for disclosure prior to the disclosure of such Confidential Information; or (f) to any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to Obligations of the Borrower hereunder; provided that such counterparty (or such counterparty’s professional advisor) shall undertake to preserve the confidentiality of any Confidential Information relating to the Loan Parties received by it in connection with such credit derivative transaction.

SECTION 9.11. Release of Collateral. Upon the sale, lease, transfer or other disposition of any item of Collateral of any Loan Party in accordance with the terms of the Loan Documents, the Collateral Agent will, at the Borrower’s expense, execute and deliver to such Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents in accordance with the terms of the Loan Documents and, in the case of any sale or dissolution of any Guarantor (to the extent permitted by the Loan Documents), a release of such Guarantor from the Guaranty.

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SECTION 9.12. Replacement of Holdout Lender. (a) (i) If any action to be taken by the Lender Parties or any Agent hereunder requires the unanimous consent, authorization, or agreement of all Lender Parties and the consent of the Required Lenders is obtained but a Lender (“Holdout Lender”) fails to give its consent, authorization, or agreement or (ii) if at any time any Lender becomes a Defaulting Lender or becomes insolvent or (iii) if at any time the Borrower becomes obligated to pay additional payments described in Section 2.10 and 2.12(a) to a Lender, in each case, then the Administrative Agent or the Borrower, upon at least five (5) Business Days prior irrevocable notice to the Holdout Lender, Defaulting Lender or other Lender, as the case may be, may permanently replace the Holdout Lender, Defaulting Lender or other Lender, as the case may be, with one or more substitute Lenders (each, a “Replacement Lender”), and the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, and each Replacement Lender shall execute and deliver an Assignment and Assumption, subject only to the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, being repaid its share of the outstanding Obligations under the Loan Documents (including an assumption of such Lender’s participation, if such Lender is a Revolving Credit Lender, in all Letters of Credit outstanding hereunder in an amount equal to such Lender’s Pro Rata Share of the Available Amount of such Letter of Credit) without any premium or penalty of any kind whatsoever. If the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall refuse or fail to execute and deliver any such Assignment and Assumption prior to the effective date of such replacement, the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall be deemed to have executed and delivered such Assignment and Assumption. The replacement of any Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall be made in accordance with the terms of Section 9.07. Until such time as the Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender, the Defaulting Lender or the other Lender, as the case may be, shall remain obligated to make the Holdout Lender’s, the Defaulting Lender’s or the other Lender’s Pro Rata Share of Advances and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of the Available Amount of such Letter of Credit.

SECTION 9.13. Patriot Act Notice. Each Lender Party and each Agent (for itself and not on behalf of any Lender Party) hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender Party or such Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. The Borrower shall, and shall cause each of its Subsidiaries to, provide such information and take such actions as are reasonably requested by any Agent or any Lender Party in order to assist the Agents and the Lender Parties in maintaining compliance with the Patriot Act.

SECTION 9.14. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, or for recognition or enforcement of any

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judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

SECTION 9.15. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 9.16. Waiver of Jury Trial. The Loan Parties, the Agents and the Lender Parties irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the Advances, the Letters of Credit or the actions of any Agent or any Lender Party in the negotiation, administration, performance or enforcement thereof.

Express – Asset-Based Loan Credit Agreement

102

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

EXPRESS, LLC, as Borrower
By:	/s/ Matt Moellering
	Name:	Matt Moellering
	Title:	Chief Financial Officer
EXPRESS HOLDING, LLC, as Parent
By:	/s/ Matt Moellering
	Name:	Matt Moellering
	Title:	Chief Financial Officer
EXPRESS GC, LLC
By:	/s/ Matt Moellering
	Name:	Matt Moellering
	Title:	Chief Financial Officer
RETAIL FACTORING, LLC
By:	/s/ Matt Moellering
	Name:	Matt Moellering
	Title:	Chief Financial Officer
WELLS FARGO RETAIL FINANCE, LLC, as Administrative Agent
By:	/s/ William Chan
	Name:	William Chan
	Title:	Vice President

Express – Asset-Based Loan Credit Agreement

103

WELLS FARGO RETAIL FINANCE, LLC, as Collateral Agent
By:	/s/ William Chan
	Name:	William Chan
	Title:	Vice President

Express – Asset-Based Loan Credit Agreement

104

Initial Lenders
THE CIT GROUP/BUSINESS CREDIT, INC. as Co-Documentation Agent and Initial Lender
By:	/s/ Robert L. Klein
	Name:	Robert L. Klein
	Title:	Vice President
ALLIED IRISH BANK, as Initial Lender
By:	/s/ Mia Bolin
	Name:	Mia Bolin
	Title:	Assistant Vice President
GENERAL ELECTRIC CAPITAL CORPORATION as Initial Lender
By:	/s/ Lisa M. Staub
	Name:	Lisa M. Staub
	Title:	Duly Authorized Signatory
MORGAN STANLEY SENIOR FUNDING, INC. as Initial Lender
By:	/s/ Eugene F. Martin
	Name:	Eugene F. Martin
	Title:	Vice President

Express – Asset-Based Loan Credit Agreement

105

UPS CAPITAL CORPORATION as Initial Lender
By:	/s/ William H. Talbot
	Name:	William H. Talbot
	Title:	Sr. Client Manager
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), as Initial Lender
By:	/s/ Anthony Vizgrod
	Name:	Anthony Vizgrod
	Title:	Director
Initial Issuing Bank
WELLS FARGO RETAIL FINANCE, LLC, as Initial Issuing Bank
By:	/s/ William Chan
	Name:	William Chan
	Title:	Vice President
Initial Swing Line Bank
WELLS FARGO RETAIL FINANCE, LLC, as Initial Swing Line Bank
By:	/s/ William Chan
	Name:	William Chan
	Title:	Vice President

Express – Asset-Based Loan Credit Agreement

106

EX-10.2

Exhibit 10.2

AMENDMENT NO. 1 TO THE ASSET-BASED LOAN CREDIT AGREEMENT

Dated as of June 3, 2008

AMENDMENT NO. 1 TO THE ASSET-BASED LOAN CREDIT AGREEMENT (this “Amendment”) among EXPRESS HOLDING, LLC, a Delaware limited liability company (the “Parent”), EXPRESS, LLC, a Delaware limited liability company (the “Borrower”), the Subsidiary Guarantors (as hereinafter defined) party hereto, the Lenders (as hereinafter defined) party hereto, WELLS FARGO RETAIL FINANCE, LLC, (“Wells Fargo”), as collateral agent (the “Collateral Agent”), and Wells Fargo, as administrative agent (the “Administrative Agent”; together with the Collateral Agent, the “Agents”).

PRELIMINARY STATEMENTS:

(1) The Parent, the Borrower, the Subsidiary Guarantors, certain financial institutions and other persons from time to time parties thereto and the Agents have entered into that certain Asset-Based Credit Agreement dated as of July 6, 2007 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein but not defined shall be used herein as defined in the Credit Agreement).

(2) The Borrower has requested that the Required Lenders and the Issuing Bank agree to amend the definition of “Letter of Credit Commitment” to increase the Available Amount.

(3) Subject to the terms and conditions hereinafter set forth, the Required Lenders and the Issuing Bank have indicated their willingness to agree to the amendment of the Credit Agreement set forth herein.

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

SECTION 1. Amendment. Effective as of the Amendment Effective Date, the Credit Agreement is hereby amended as follows:

(a) The definition of “Letter of Credit Commitment” set forth in Section 1.01 of the Credit Agreement is hereby amended by deleting the figure “$40,000,000” in the second line thereof and inserting the figure “$45,000,000” in its place; and

(b) Section 2.01(c) of the Credit Agreement is hereby amended by deleting the figure “$40,000,000” in the fifth line thereof and inserting the figure “$45,000,000” in its place.

SECTION 2. Conditions to Effectiveness. Section 1 of this Amendment shall become effective (the “Amendment Effective Date”) when each of the conditions set forth in this Section 2 shall have been fulfilled to the reasonable satisfaction of the Administrative Agent.

(a) The Administrative Agent shall have received counterparts of this Amendment, duly executed and delivered on behalf of each of (i) the Loan Parties and (ii) the Required Lenders, the Issuing Bank and the Administrative Agent, or as to any of the foregoing parties, advice reasonably satisfactory to the Administrative Agent that each of the foregoing parties has executed a counterpart of this Amendment.

(b) The Borrower shall have paid all reasonable expenses (including the reasonable fees and expenses of Shearman & Sterling LLP) incurred in connection with the preparation, negotiation and execution of this Amendment and other matters relating to the Credit Agreement to the extent invoiced on or prior to the Amendment Effective Date.

(c) INTENTIONALLY OMITTED.

(d) No Default or Event of Default shall have occurred and be continuing, or would occur as a result of the transactions contemplated by this Amendment.

SECTION 3. Confirmation of Representations and Warranties. Each of the Loan Parties hereby represents and warrants, on and as of the date hereof and as of the Amendment Effective Date, that the representations and warranties contained in the Credit Agreement and the other Loan Documents are correct and true in all material respects (without duplication of any materiality qualifier contained in any such representations and warranties) on and as of such date, after giving effect to this Amendment, as though made on and as of such date, other than any such representations or warranties that by their terms refer to a specific date.

SECTION 4. Affirmation of Guarantors. Each Guarantor hereby consents to the amendment to the Credit Agreement effected hereby, and hereby confirms and agrees that, notwithstanding the effectiveness of this Amendment, the obligations of such Guarantor contained in the Guaranties or in any other Loan Documents to which such Guarantor is a party are, and shall remain, in full force and effect and are hereby ratified and confirmed in all respects. Without limiting the generality of the foregoing, the Collateral Documents to which such Guarantor is a party and all of the Collateral described therein do, and shall continue to, secure payment of all of the Secured Obligations (in each case, as defined therein).

SECTION 5. Reference to and Effect on the Loan Documents. (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified by this Amendment.

2

(a) The Credit Agreement, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all Secured Obligations (in each case as defined therein), in each case as amended by this Amendment.

(b) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment.

SECTION 7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, and shall be subject to the jurisdictional and service provisions of the Credit Agreement, as if this were a part of the Credit Agreement.

SECTION 8. Entire Agreement; Modification. This Amendment constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, there being no other agreements or understandings, oral, written or otherwise, respecting such subject matter, any such agreement or understanding being superseded hereby, shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, and may not be amended, extended or otherwise modified, except in a writing executed in whole or in counterparts by each party hereto.

[SIGNATURES FOLLOW.]

3

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

EXPRESS, LLC
By	/s/ Matt Moellering
Name:	Matt Moellering
Title:	CFO
EXPRESS HOLDING, LLC
By	/s/ Matt Moellering
Name:	Matt Moellering
Title:	CFO
EXPRESS GC, LLC
By	/s/ Matt Moellering
Name:	Matt Moellering
Title:	CFO

4

WELLS FARGO RETAIL FINANCE, LLC, as Administrative Agent, Collateral Agent and Issuing Bank
By	/s/ Lynn S. Whitmore
Name:	Lynn S. Whitmore
Title:	Senior Vice President

5

Lenders:
WACHOVIA CAPITAL FINANCES CORPORATION (CENTRAL)
By	/s/ Dan Laven
Name:	Dan Laven
Title:	V. P.

6

Lenders:
GENERAL ELECTRIC CAPITAL CORPORATION
By	/s/ Mark E. Blankstein
Name:	Mark E. Blankstein
Title:	Duly Authorized Signatory

7

EX-10.4

Exhibit 10.4

$125,000,000 TERM LOAN CREDIT AGREEMENT

Dated as of July 6, 2007

Among

EXPRESS HOLDING, LLC,

as Parent

EXPRESS, LLC,

as Borrower

and

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders

and

MORGAN STANLEY & CO. INCORPORATED

as Collateral Agent

and

MORGAN STANLEY SENIOR FUNDING, INC.,

as Administrative Agent and Syndication Agent

MORGAN STANLEY SENIOR FUNDING, INC.,

as Sole Lead Arranger and Sole Bookrunner

T A B L E  O F  C O N T E N T S

Section		Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01.	Certain Defined Terms	1
SECTION 1.02.	Computation of Time Periods; Other Definitional Provisions	26
SECTION 1.03.	Accounting Terms	26
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01.	The Term Advances	26
SECTION 2.02.	Making the Advances	26
SECTION 2.03.	Repayment of Advances	27
SECTION 2.04.	Prepayments	28
SECTION 2.05.	Interest	28
SECTION 2.06.	Fees	29
SECTION 2.07.	Conversion of Advances	29
SECTION 2.08.	Increased Costs, Etc.	30
SECTION 2.09.	Payments and Computations	31
SECTION 2.10.	Taxes	33
SECTION 2.11.	Sharing of Payments, Etc.	35
SECTION 2.12.	Use of Proceeds	36
SECTION 2.13.	Defaulting Lenders	36
SECTION 2.14.	Evidence of Debt	38
SECTION 2.15.	Increase in Commitments	39
ARTICLE III CONDITIONS TO EFFECTIVENESS AND OF LENDING
SECTION 3.01.	Conditions Precedent	39
SECTION 3.02.	Conditions Precedent to Initial Borrowing	42
SECTION 3.03.	Determinations Under Section 3.01	43
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01.	Representations and Warranties	43
ARTICLE V COVENANTS OF THE PARENT
SECTION 5.01.	Affirmative Covenants	48

Express – Term Loan Credit Agreement

SECTION 5.02.	Negative Covenants	53
SECTION 5.03.	Reporting Requirements	62
SECTION 5.04.	Holding Company Status of Parent	64
SECTION 5.05.	Financial Covenant	65
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01.	Events of Default	65
ARTICLE VII THE AGENTS
SECTION 7.01.	Authorization and Action	68
SECTION 7.02.	Agents’ Reliance, Etc.	69
SECTION 7.03.	MSSF, MS&Co and Affiliates	69
SECTION 7.04.	Lender Party Credit Decision	69
SECTION 7.05.	Indemnification	70
SECTION 7.06.	Successor Agents	70
SECTION 7.07.	Intercreditor Agreement	71
ARTICLE VIII GUARANTY
SECTION 8.01.	Guaranty; Limitation of Liability	71
SECTION 8.02.	Guaranty Absolute	72
SECTION 8.03.	Waivers and Acknowledgments	73
SECTION 8.04.	Subrogation	74
SECTION 8.05.	Guaranty Supplements	74
SECTION 8.06.	Subordination	75
SECTION 8.07.	Continuing Guaranty; Assignments	75
ARTICLE IX MISCELLANEOUS
SECTION 9.01.	Amendments, Etc.	75
SECTION 9.02.	Notices, Etc.	76
SECTION 9.03.	No Waiver; Remedies	78
SECTION 9.04.	Costs and Expenses	78
SECTION 9.05.	Right of Set-off	80
SECTION 9.06.	Binding Effect	80
SECTION 9.07.	Assignments and Participations	80
SECTION 9.08.	Execution in Counterparts	83
SECTION 9.09.	Confidentiality	83
SECTION 9.10.	Release of Collateral	83
SECTION 9.11.	Replacement of Holdout Lender	84
SECTION 9.12.	Patriot Act Notice	84
SECTION 9.13.	Jurisdiction, Etc.	84
SECTION 9.14.	Governing Law	85
SECTION 9.15.	Waiver of Jury Trial	85

Express – Term Loan Credit Agreement

ii

SCHEDULES TO THE CREDIT AGREEMENT

Schedule I	-	Commitments and Applicable Lending Offices
Schedule II	-	Subsidiary Guarantors
Schedule III	-	EBITDA
Schedule 4.01(b)	-	Loan Parties
Schedule 4.01(c)	-	Subsidiaries and Other Equity Investments
Schedule 4.01(e)	-	Governmental Authorizations
Schedule 4.01(g)	-	Litigation
Schedule 4.01(q)	-	Certain Employee Benefits Plans
Schedule 4.01(s)	-	Tax Returns
Schedule 4.01(t)	-	Existing Debt
Schedule 4.01(u)	-	Surviving Debt
Schedule 4.01(v)	-	Liens
Schedule 4.01(z)	-	Intellectual Property
Schedule 5.02(f)	-	Investments
Schedule 5.02(l)	-	Negative Pledge
Schedule 5.02(h)	-	Limited Liability Company Agreements

EXHIBITS

Exhibit A	-	Form of Term Note
Exhibit B	-	Form of Notice of Borrowing
Exhibit C	-	Form of Assignment and Assumption
Exhibit D	-	Form of Term Loan Security Agreement
Exhibit E	-	Form of Guaranty Supplement
Exhibit F	-	Form of Opinion of Counsel to the Loan Parties
Exhibit G	-	Form of Solvency Certificate
Exhibit H	-	Form of Intercreditor Agreement

Express – Term Loan Credit Agreement

iii

TERM LOAN CREDIT AGREEMENT

TERM LOAN CREDIT AGREEMENT dated as of July 6, 2007 among EXPRESS HOLDING, LLC, a Delaware limited liability company (the “Parent”), EXPRESS, LLC, a Delaware limited liability company (the “Borrower”), the Subsidiary Guarantors (as hereinafter defined), the Lenders (as hereinafter defined), MORGAN STANLEY & CO. INCORPORATED (“MS&Co”), as collateral agent (together with any successor collateral agent appointed pursuant to Article VII, the “Collateral Agent”) for the Secured Parties (as hereinafter defined), and MORGAN STANLEY SENIOR FUNDING, INC. (“MSSF”), as syndication agent, and MSSF, as administrative agent (together with any successor administrative agent appointed pursuant to Article VII, the “Administrative Agent” and, together with the Collateral Agent, the “Agents”) for the Lender Parties (as hereinafter defined).

PRELIMINARY STATEMENTS:

(1) Express Investment Corp., a Delaware corporation (“Express”), has entered into that certain Unit Purchase Agreement dated as of May 15, 2007, as amended, supplemented or otherwise modified in accordance with its terms, to the extent permitted hereunder (the “Purchase Agreement”), with Limited Brands Store Operations, Inc., a Delaware corporation (the “Seller”), Limited Brands, Inc., a Delaware corporation, and the Parent for the purposes of acquiring (the “Acquisition”) from the Seller 75% of the issued and outstanding limited liability company interests (the “Units”) of the Parent.

(2) The Borrower has requested that, substantially simultaneously with the consummation of the Acquisition, (a) the Lender Parties lend to the Borrower $125,000,000 under the Facility (as hereinafter defined) and (b) the Lender Parties (as defined in the ABL Facility Credit Agreement (as hereinafter defined)) lend to the Borrower up to $200,000,000 under the ABL Facility (as hereinafter defined).

(3) The Sponsor (as hereinafter defined) and certain co-investors will indirectly purchase for cash equity of the Parent in an aggregate amount of not less than $484,875,000 (the “Equity Contribution”) and, upon consummation of the Acquisition, Express will own 75% of the Units of the Parent, and the Parent will own, directly or indirectly, all of the Units of the Borrower.

(4) The proceeds of the Facility (as hereinafter defined) are to be used to finance, in part, the Acquisition and to pay transaction fees and expenses relating to the Transaction (as hereinafter defined).

(5) The Lender Parties have indicated their willingness to agree to lend such amounts on the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ABL Facility” means the senior secured asset-based revolving credit facility to be provided to the Borrower concurrently with the Facility pursuant to the ABL Facility Credit Agreement.

Express – Term Loan Credit Agreement

“ABL Facility Credit Agreement” means the credit agreement of even date herewith among the Borrower, the Parent, the Administrative Agent (as defined in the ABL Facility Credit Agreement), the Collateral Agent (as defined in the ABL Facility Credit Agreement) and the lenders party thereto, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

“ABL Facility Loan Documents” means those documents that are specified as “Loan Documents” in the ABL Facility Credit Agreement.

“Acquisition” has the meaning specified in the preliminary statements to this Agreement.

“Additional Term Commitment Amendment” has the meaning specified in Section 2.15(b).

“Additional Commitments Effective Date” has the meaning specified in Section 2.15(b).

“Additional Term Commitments” means the commitments of the Additional Term Lenders to make Additional Term Advances pursuant to Section 2.15.

“Additional Term Lenders” means the lenders providing the Additional Term Advances.

“Additional Term Advances” means any loans made in respect of any Additional Term Commitments that shall have been added pursuant to Section 2.15.

“Administrative Agent” has the meaning specified in the recital of parties to this Agreement.

“Administrative Agent’s Account” means the account of the Administrative Agent specified by the Administrative Agent in writing to the Lender Parties from time to time.

“Advance” means a Term Advance or an Additional Term Advance.

“Advisory Agreement” means the advisory agreement dated as of the date hereof among the Parent, the Borrower and GGC, as amended to the extent permitted under this Agreement.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person by contract or other agreement.

“Agents” has the meaning specified in the recital of parties to this Agreement.

“Agreement Value” means, for each Hedge Agreement, on any date of determination, an amount, if any, determined by the counterparty of the Hedge Agreement that is not a Loan Party or a Subsidiary of such Loan Party that would be payable by such Loan Party or Subsidiary that is a party to such Hedge Agreement to its counterparty to such Hedge Agreement in accordance

Express – Term Loan Credit Agreement

2

with its terms, as if (i) such Hedge Agreement was being terminated early on such date of determination, (ii) such Loan Party or Subsidiary was the sole “Affected Party” and (iii) such counterparty was the sole party determining such payment amount.

“Applicable Lending Office” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“Applicable Margin” means (a), for the first two full fiscal quarters following the Effective Date, 1.75% per annum for Base Rate Advances and 2.75% per annum for Eurodollar Rate Advances and (b) thereafter, a percentage per annum determined by reference to the Leverage Ratio as set forth below:

Leverage Ratio	Base Rate Advances		Eurodollar Rate Advances
Level I less than 1.00:1.00	1.50	%	2.50	%
Level II 1.00:1.00 or greater	1.75	%	2.75	%

In the case of Term Advances following the first two full fiscal quarters after the Effective Date, the Applicable Margin for Base Rate Advances shall be determined by reference to the Leverage Ratio in effect from time to time and the Applicable Margin for Eurodollar Rate Advances shall be determined by reference to the Leverage Ratio in effect on the first day of each Interest Period for such Advance; provided, however, that (A) no reduction in the Applicable Margin shall be effective until the date on which the Administrative Agent receives the financial statements required to be delivered pursuant to Section 5.03(b) or (c), as the case may be, and a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by the Parent in determining compliance with the covenant set forth in Section 5.05 and (B) the Applicable Margin shall be at Level II for so long as the Borrower has not submitted to the Administrative Agent the information described in clause (A) of this proviso as and when required under Section 5.03(b) or (c), as the case may be.

If for any period the actual Leverage Ratio (the “Actual Leverage Ratio”) is greater than the Leverage Ratio set forth in the schedule described in clause (A) of the proviso of this definition and application of the Actual Leverage Ratio would have resulted in a higher Applicable Margin for any period (the “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (i) the Applicable Margin shall be determined as if Level II (as provided in this definition) were applicable for such Applicable Period and (ii) such resulting additional interest shall accrue and be payable on the earlier of the Termination Date and demand. Notwithstanding anything contained herein, the foregoing shall not limit the rights of the Administrative Agent and Lender Parties with respect to Sections 6.01 and 2.05(b).

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

“Assignment and Assumption” means an assignment and assumption entered into by a Lender Party and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.07 or by the definition of “Eligible Assignee”), and accepted by the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit C hereto or any other form approved by the Administrative Agent and Borrower.

Express – Term Loan Credit Agreement

3

“Bankruptcy Law” means Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

“Base Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of:

(a) the rate of interest published by the Wall Street Journal from time to time, as the prime lending rate; and

(b)  ¹ /2 of 1% per annum above the Federal Funds Rate.

“Base Rate Advance” means an Advance that bears interest as provided in Section 2.05(a)(i).

“Borrower” has the meaning specified in the recital of parties to this Agreement.

“Borrower’s Account” means the account of the Borrower specified by the Borrower in writing to the Administrative Agent from time to time.

“Borrowing” means a Term Borrowing.

“Business Day” means a day of the year on which banks are not required or authorized by law to close in New York City, and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

“Capital Expenditures” means, for any Person for any period, without duplication, all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during such period for equipment, fixed assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP, reflected as additions to property, plant or equipment on a Consolidated balance sheet of such Person. For purposes of this definition, “Capital Expenditures” shall not include expenditures (i) made to restore, replace, rebuild, develop, maintain, improve or upgrade property, to the extent such expenditure is made with, or subsequently reimbursed out of, insurance proceeds, indemnity payments, condemnation awards (or payments in lieu thereof) or damage recovery proceeds or other settlements relating to any damage, loss, destruction or condemnation of such property, (ii) constituting reinvestment of the net proceeds of any Transfer, to the extent permitted hereunder, (iii) made by the Parent or any of its Subsidiaries as payment of the consideration for Permitted Acquisitions, (iv) made by Parent or any of its Subsidiaries to effect leasehold improvements to any property leased by Parent or any of its Subsidiaries as lessee, to the extent that such expenses have been reimbursed in cash by the landlord, (v) actually paid for by a third party (excluding any Loan Party) and for which no Loan Party has provided or is required to provide or incur, directly or indirectly, any consideration or monetary obligation to such third party or any other person (whether before, during or after such period), or (vi) made with the cash proceeds from the sale or issuance of Qualified Capital Stock of Parent.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

Express – Term Loan Credit Agreement

4

“Cash Equivalents” means any of the following, to the extent owned by the Parent or any of its Subsidiaries free and clear of all Liens other than Permitted Liens and Liens created under the Collateral Documents and, in each case, having a maturity of not greater than one year from the date of issuance thereof: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) readily marketable direct obligations of any member of the European Economic Area, Switzerland or Japan, or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of such country, and, at the time of acquisition thereof having a credit rating of at least AA- (or the equivalent grade) by Moody’s or Aa3 by S&P, (c) marketable general obligations issued by any state of the United States or any political subdivision thereof or any or any instrumentality thereof that is guaranteed by the full faith and credit of such state and, at the time of acquisition thereof having a credit rating of at least AA- (or the equivalent grade) by Moody’s or Aa3 by S&P, (d) insured certificates of deposit, time deposits, eurodollar time deposits or overnight time deposits with any commercial bank that is organized under the laws of the United States or any State thereof, any member of the European Economic Area, Switzerland or Japan and has combined capital and surplus of at least $500 million, (e) commercial paper issued by any Lender or any corporation organized under the laws of any State of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P, (f) repurchase agreements and reverse repurchase agreements with a duration of not more than 30 days for underlying securities of the types set forth in clauses (a) through (e) entered into with any financial institution meeting the specifications in clause (d) above, (g) auction rate securities or (h) Investments in money market funds, of which at least 95% of the portfolios are limited solely to Investments of the character, quality and maturity described in clauses (a) through (f) of this definition. With respect to any Foreign Subsidiary, “Cash Equivalents” shall also include any Investment substantially comparable to the foregoing but in the currency of the jurisdiction of organization of such Subsidiary, Euros or U.S. Dollars.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

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

“CFC” means an entity that is a controlled foreign corporation of the Borrower under Section 957 of the Internal Revenue Code.

“Change of Control” means the occurrence of any of the following: (a) at any time prior to the consummation of an IPO of the Equity Interests of the Parent, the Sponsor shall cease to own at least 50% (directly or indirectly) of the Voting Interests in the Parent; or (b) at any time after the consummation of an IPO of the Equity Interests of the Parent, any Person or two or more Persons acting in concert other than the Sponsor shall have acquired beneficial ownership (within the meaning of Rule 13(d)-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests (or other securities convertible into such Voting Interests) representing 35% or more of the combined voting power of all Voting Interests of the Parent, unless the Sponsor owns Voting Interests representing a greater percentage; or (c) at any time after the consummation of an IPO of the Equity Interests of the Parent, during any period of up to 24 consecutive months, Continuing Directors shall cease for any reason to constitute a majority of the board of directors of the Parent.

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“Collateral” means all “Collateral” referred to in the Collateral Documents and all other property that is or is intended to be subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

“Collateral Agent” has the meaning specified in the recital of parties to this Agreement.

“Collateral Documents” means the Term Loan Security Agreement, the Intellectual Property Term Loan Security Agreement, the Intercreditor Agreement, each of the collateral documents, instruments and agreements delivered pursuant to Section 5.01(j), and each other agreement that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

“Commitment” means a Term Commitment.

“Confidential Information” means information that any Loan Party or its Subsidiaries furnishes to any Agent or any Lender Party, but does not include any such information that is or becomes generally available to the public other than as a result of a breach by such Agent or any Lender Party of its obligations hereunder or that is or becomes available to such Agent or such Lender Party from a source other than the Loan Parties who is not subject to any legally binding obligation to any Loan Party or its Subsidiaries to keep such information confidential.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Continuing Directors” means, in the case of the Parent, the directors of the Parent on the Effective Date and each other director if, in each case, such other director’s nomination for election to the board of directors of the Parent is recommended by at least a majority of the then Continuing Directors.

“Conversion,” “Convert” and “Converted” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.07 or 2.08.

“Current Assets” of any Person means all assets of such Person that would, in accordance with GAAP, be classified as current assets of such Person, after deducting adequate reserves in each case in which a reserve is proper in accordance with GAAP (excluding deferred taxes).

“Current Liabilities” of any Person means all items (including taxes accrued as estimated) that in accordance with GAAP would be classified as current liabilities of such Person excluding Debt and deferred taxes.

“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than (1) trade payables not overdue by more than 90 days, deferred compensation and straight-line rent and landlord allowance, in each case incurred in the ordinary course of such Person’s business and (2) purchase price adjustments under the Purchase Agreement), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person with respect to Disqualified Stock, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the

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Agreement Value thereof, (i) all Guaranteed Debt and Synthetic Debt of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations; but limited in amount to the lesser of (i) the fair market value of such property or (ii) the amount of such indebtedness or other payment obligations.

Notwithstanding anything to the contrary contained herein, Debt shall not include (i) any amounts relating to preferred equity (other than Disqualified Stock), employee consulting arrangements, accrued expenses, deferred rent (other than Capitalized Leases), deferred taxes, obligations under employment agreements, unredeemed gift card deferred revenue and deferred compensation, or (ii) in connection with the existing letters of credit or any Permitted Acquisition or other acquisition otherwise permitted hereunder or consented to by the Lenders or consummated prior to the Effective Date, (A) reimbursement obligations in respect of such existing letters of credit or any letter of credit assumed in such Permitted Acquisition or other acquisition, the payment of which is either fully (x) backed by a letter of credit or (y) cash collateralized, or (B) post-closing purchase price adjustments, earn-outs or similar obligations that are dependent upon the performance of the acquisition target after such closing to which the seller in such Permitted Acquisition or acquisition may become entitled.

“Debt for Borrowed Money” of any Person means, at any date of determination, the sum of (a) the outstanding principal amount of all Debt of the type referred to in clauses (a), (c) and (e) of the definition of “Debt”, (b) all reimbursement Obligations at such date of such Person under acceptance, letter of credit or similar facilities at such date for amounts that have been drawn under such facilities and (c) all Synthetic Debt of such Person at such date; provided, however, for purposes of calculating Debt for Borrowed Money, the amount of the Revolving Credit Advances (as defined in the ABL Facility Credit Agreement) included therein shall (i) for any date that is within twelve (12) months after the date of this Agreement, be equal to $33,000,000, and (ii) for any date thereafter, be equal to the average daily outstanding balance of such revolving loans during the twelve (12) month period ended on such date

“Default” means any Event of Default or any event that would constitute an Event of Default but for the passage of time or the requirement that notice be given or both.

“Default Interest” has the meaning set forth in Section 2.05(b).

“Defaulted Advance” means, with respect to any Lender Party at any time, the portion of any Advance required to be made by such Lender Party to the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time that has not been made by such Lender Party or by the Administrative Agent for the account of such Lender Party pursuant to Section 2.02(d) as of such time. In the event that a portion of a Defaulted Advance shall be deemed made pursuant to Section 2.13(a), the remaining portion of such Defaulted Advance shall be considered a Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed made in part.

“Defaulted Amount” means, with respect to any Lender Party at any time, any amount required to be paid by such Lender Party to any Agent or any other Lender Party hereunder or under any other Loan Document at or prior to such time that has not been so paid by such Lender Party as of such time, including, without limitation, any amount required to be paid by such

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Lender Party to (a) the Administrative Agent pursuant to Section 2.02(d) to reimburse the Administrative Agent for the amount of any Advance made by the Administrative Agent for the account of such Lender Party and (b) any other Lender Party pursuant to Section 2.11 to purchase any participation in Advances owing to such other Lender Party. In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.13(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be paid hereunder or under any other Loan Document on the same date as the Defaulted Amount so deemed paid in part.

“Defaulting Lender” means, at any time, any Lender Party that, at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of any action or proceeding of a type described in Section 6.01(f).

“Disqualified Stock” means any Equity Interest that, by its terms, matures or is Redeemable, in whole or in part, on or prior to the date that is 91 days after the Termination Date. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement shall be the maximum amount that the Loan Parties may become obligated to pay upon such maturity of, or pursuant to such Redeemable provisions in respect of, such Disqualified Stock.

“Domestic Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“EBITDA” means, for any period and with respect to any Person, Consolidated Net Income of such Person for such period, plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income (except with respect to item (xiv)), the sum of (i) Consolidated interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Debt (including the Advances hereunder and the ABL Facility) of such Person for such period, (ii) Consolidated income tax (and franchise tax in the nature of income tax) (including federal, state, local and foreign income tax) expense and foreign withholding tax expense, in each case for such period, and any state single business unitary or similar tax of such Person for such period, (iii) depreciation and amortization expense (including amortization or impairment of intangibles (including goodwill) and organization costs) for such period (excluding amortization expense attributable to a prepaid cash item (except for deferred finance charges) that was paid in a prior period) of such Person for such period, (iv) any other non-cash deductions, losses, charges or expenses made in the ordinary course of business in determining Consolidated Net Income (but excluding any such non-cash charge in respect of an item that increased Consolidated Net Income in a prior period (to the extent of such increase) of such Person for such period, (v) any extraordinary losses and unusual or non-recurring expenses or charges incurred in such period, (vi) any Transaction Expenses paid in such period, (vii) costs and expenses incurred in the ordinary course of business in connection with acquisitions permitted under Section 5.02(f), Excluded Issuances, recapitalizations, Transfers or incurrence of Debt permitted under Article V hereunder (for the purposes of this definition, each a “Permitted Item”), (viii) any payments made or accrued pursuant to the Advisory Agreement (as in effect on the Effective Date or as permitted to be amended hereby) and of reimbursement of ordinary course out-of-pocket costs and expenses payable to GGC or its Affiliates pursuant to the Advisory Agreement, (ix) foreign exchange losses recorded in “other income”, (x) expenses in connection with earn-out obligations, (xi) any

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one-time payments made related to any Permitted Item, including, without limitation, one-time compensation charges, stay bonuses paid to existing management and severance cost, (xii) expenses incurred to the extent reimbursable by third parties pursuant to indemnification provisions and either so collected or reasonably expected to be so collected, (xiii) all losses during such period resulting from the sale or disposition of any asset of Parent or any Subsidiary outside the ordinary course of business, (xiv) proceeds received from business interruption insurance, in each case, with respect to such measurement period, (xv) non-cash expenses resulting from the grant or periodic remeasurement of stock options or other equity-related incentives (and, for the avoidance of doubt, including any non-cash expenses related to any stock option or other equity-related incentives resulting from the acceleration of vesting in the event of a change in control) to any director, officer, employee, former employee or consultant of Parent or any Subsidiary pursuant to a written plan or agreement approved by the board of directors of Parent, (xvi) salary, benefit and other direct savings resulting from workforce reductions implemented or reasonably expected to be implemented within the following twelve months and severance related thereto in connection with the Permitted Acquisitions, (xvii) losses in respect of post-retirement benefits, as a result of the application of FASB 106, (xviii) losses during such period in connection with the extinguishment, retirement or write-off of Debt and (xix) the amount of any loss from stores which have been closed or identified to be closed,

and minus (b) without duplication and to the extent included in determining such Consolidated Net Income of such Person, any non-cash gains included in Consolidated Net Income of such Person for such period (other than any gains which represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period), minus (c) without duplication and to the extent included in determining such Consolidated Net Income of such Person, any extraordinary gains and unusual or non-recurring gains for such period, all determined on a Consolidated basis in accordance with GAAP, minus (d) without duplication and to the extent included in determining such Consolidated Net Income of such Person, foreign exchange gains recorded in “other income”, minus (e) without duplication and to the extent included in determining such Consolidated Net Income of such Person, all gains during such period resulting from the sale or disposition of any asset of Parent or any Subsidiary outside the ordinary course of business, minus (f) without duplication and to the extent included in determining such Consolidated Net Income of such Person, the amount of any gain in respect of post-retirement benefits as a result of the application of FASB 106; provided that, for the purpose of determining EBITDA for the first four fiscal quarters after the Effective Date, EBITDA shall be determined in accordance with the pro forma adjustments set forth on Schedule III hereto, to the extent applicable.

The historical EBITDA for any Measurement Period of entities (A) that are acquired by the Parent or any of its Subsidiaries after the Effective Date as permitted under the Loan Documents will be included in the calculation of EBITDA and (B) that are disposed of by the Parent or any of its Subsidiaries after the Effective Date will be excluded in the calculation of EBITDA; provided that, in the case of entities that are acquired by the Parent or any of its Subsidiaries after the Effective Date, the Administrative Agent shall be furnished with audited financial statements, or if audited financial statements are not available, other financial statements reasonably acceptable to the Administrative Agent, of such entities (or if the acquisition is of a division or branch of a larger business or a group of businesses, the audited financial statements, or if audited financial statements are not available, other financial statements reasonably acceptable to the Administrative Agent of such larger business or group of businesses, so long as the individual activities of the acquired entity are clearly reflected in such financial statements, together with a certificate certifying that the Parent has reviewed the historical financial statements of the division or branch and that they reflect proper divisional accounting in relation to the large

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business or group of businesses in all material respects), reasonably satisfactory to the Administrative Agent in all material respects, confirming such historical results. In addition, EBITDA for any Measurement Period will be determined after giving effect to any identifiable cost savings resulting from any acquisition consummated during such Measurement Period and expected to be realized within 12 months following the closing thereof on a pro forma basis, in each case to the extent calculated on terms reasonably satisfactory to the Administrative Agent and certified by a Responsible Officer of the Parent.

“Effective Date” has the meaning specified in Section 3.01.

“Eligible Assignee” means (a) a Lender Party; (b) an Affiliate of a Lender Party; (c) an Approved Fund; and (d) any other Person (other than an individual) approved by the Administrative Agent and, unless an Event of Default under Section 6.01(a) and (f) has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided, however, that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

“Environmental Action” means any action, suit, demand, demand letter, claim, notice of non compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any violation of, or liability under, any Environmental Law, or an Environmental Permit or arising from an alleged injury or threat to the environment, or to health and safety with regard to exposure to Hazardous Materials, including, without limitation, and to the extent arising from the foregoing, by any governmental or regulatory authority or third party for enforcement, cleanup, removal, response, remedial or other actions, damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“Environmental Law” means any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction or decree relating to pollution or protection of the environment, natural resources or exposure of any individual to Hazardous Material, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized on any date of determination.

“Equity Investor” means the Sponsor, the Seller and EXP Investments, Inc., a Delaware corporation.

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

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“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 4001(a)(14) of ERISA.

“ERISA Event” means (a)(i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30 day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan.

“Escrow Bank” has the meaning specified in Section 2.13(c).

“Eurodollar Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period equal to such Interest Period (provided that, if for any reason such rate is not available, the term “Eurodollar Rate” shall mean, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.

“Eurodollar Rate Advance” means an Advance that bears interest as provided in Section 2.05(a)(ii).

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“Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

“Events of Default” has the meaning specified in Section 6.01.

“Excess Cash Flow” means, for any period,

(a) the sum of, without duplication:

(i) Consolidated Net Income (or loss) of the Parent and its Subsidiaries for such period plus

(ii) depreciation, amortization and other non-cash charges or losses (including deferred income taxes) deducted in determining Consolidated Net Income for such period plus

(iii) if there was a net increase in Consolidated Current Liabilities of the Parent and its Subsidiaries during such period, the amount of such net increase plus

(iv) if there was a net decrease in Consolidated Current Assets (excluding cash and Cash Equivalents) of the Parent and its Subsidiaries during such period, the amount of such net decrease less

(b) the sum of:

(i) the aggregate amount of all non cash credits included in arriving at such Consolidated Net Income (or loss) for such period plus

(ii) if there was a net decrease in Consolidated Current Liabilities of the Parent and its Subsidiaries during such period, the amount of such net decrease plus

(iii) if there was a net increase in Consolidated Current Assets (excluding cash and Cash Equivalents) of the Parent and its Subsidiaries during such period, the amount of such net increase plus

(iv) the aggregate amount of Capital Expenditures (and research and development expenditures and any other costs that are treated as additions to property, plant and equipment or other long-term assets or other capital expenditures in accordance with GAAP), Investments and Restricted Payments, in each case paid by the Parent and its Subsidiaries to a party other than the Parent or any Subsidiary in cash during such period solely to the extent permitted by this Agreement plus

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(v) the aggregate amount of all regularly scheduled principal payments of Funded Debt and Debt for Borrowed Money made during such period, excluding any amount funded with proceeds from the issuance of Debt (other than with the proceeds from the ABL Facility or from other revolving credit facilities) or Equity Interests plus

(vi) the aggregate principal amount of all mandatory prepayments of the Facility pursuant to Section 2.04(b)(ii) in respect of Net Cash Proceeds of the type described in clause (a) of the definition thereof to the extent that the applicable Net Cash Proceeds were taken into account in calculating such Consolidated Net Income (or loss) for such period plus

(vii) the aggregate principal amount of any Debt voluntarily prepaid for such period (other than prepayments of Term Advances pursuant to Section 2.04(a)); provided that such prepayments are otherwise permitted hereunder plus

(viii) the aggregate amount paid by Parent and the Subsidiaries during such period in respect of the Transaction Expenses, except to the extent that such Transaction Expenses (to the extent not paid out of proceeds on the Effective Date) reduce Consolidated Net Income.

“Excluded Issuance” shall mean (i) an issuance and sale of Qualified Capital Stock of the Parent or Subordinated Debt to the Equity Investor (or any other stockholder exercising preemptive rights triggered by such issuance), to the extent such Qualified Capital Stock or Subordinated Debt is used, or the net cash proceeds thereof shall be, within 90 days of the consummation of such issuance and sale, used or committed to be used (and so used within 180 days of consummation), without duplication, to finance Capital Expenditures, or one or more permitted Investments permitted under Section 5.02(f) and (ii) an issuance and sale of Qualified Capital Stock to satisfy legal requirements regarding the issuance of a de minimis amount of shares.

“Excluded Subsidiary” means (i) any CFC or (ii) any Subsidiary of the Parent that is organized under the laws of a jurisdiction located inside the United States that is not a Material Subsidiary; provided that all Excluded Subsidiaries covered by this clause (ii) shall not represent, in the aggregate, more than 5% of Consolidated EBITDA or 5% of Consolidated tangible assets of the Parent and its Subsidiaries and the Parent shall be obligated to designate one or more Subsidiaries that would otherwise qualify as Excluded Subsidiaries covered by this clause (ii) as Material Subsidiaries in order to comply with the terms of this proviso.

“Existing Debt” means such Debt set forth on Schedule 4.01(t).

“Extraordinary Receipt” means any cash amount actually received by any Loan Party (net of all out-of-pocket fees, costs, legal fees, court costs, taxes and other expenses incurred by any Loan Party in connection with the collection, litigation, adjudication, arbitration, receipt or recovery of any such Extraordinary Receipt, in each case to the extent such amounts are not deducted in calculating Consolidated Net Income) that is not received in the ordinary course of business and which is received as a result of proceeds of casualty insurance and condemnation awards (and payments in lieu thereof); provided, however, that an Extraordinary Receipt shall not

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include cash receipts received from proceeds of insurance or condemnation awards (or payments in lieu thereof) to the extent that such proceeds or awards are received by any Person in respect of any third party claim against such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and expenses of such Person with respect thereto.

“Facility” means the Term Facility.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding 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 of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letter” means the fee letter dated July 6, 2007 between the Borrower and the Lead Arranger, as amended.

“Fiscal Year” means a fiscal year of the Parent and its Consolidated Subsidiaries ending on the Saturday closest to January 31 in any calendar year.

“Foreign Subsidiary” means a Subsidiary of the Parent that is organized under the laws of a jurisdiction located outside of the United States.

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

“Funded Debt” of any Person means all Debt of such Person that by its terms matures more than one year after the date of determination or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year after such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year after such date, including, without limitation, all amounts of Funded Debt of such Person required to be paid or prepaid within one year after the date of its creation.

“GAAP” has the meaning specified in Section 1.03.

“GGC” means GGC Administration, LLC.

“Governmental Authority” means any nation or government, any state, province, city, municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board, bureau or similar body, whether federal, state, provincial, territorial, local or foreign.

“Governmental Authorization” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Governmental Authority.

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“Guaranteed Debt” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Guaranteed Debt” shall not include any product warranties or other ordinary course contingent obligations incurred in the ordinary course of business, including indemnities. The amount of any Guaranteed Debt shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guaranteed Debt is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Guaranteed Debt) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Guaranteed Obligations” has the meaning specified in Section 8.01.

“Guaranties” means the Parent Guaranty and the Subsidiary Guaranty.

“Guarantors” means the Parent and the Subsidiary Guarantors.

“Guaranty Supplement” has the meaning specified in Section 8.05.

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls, radon gas and toxic mold and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

“Hedge Agreements” means interest rate, currency exchange rate or commodity price swap, cap or collar agreements, future or option contracts and other hedging agreements; provided that such Hedge Bank shall be required to be a Lender Party or an Affiliate of a Lender Party only at the time that such Hedge Bank enters into such Secured Hedge Agreement.

“Hedge Bank” means any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Secured Hedge Agreement.

“Indemnified Party” has the meaning specified in Section 9.04(b).

“Intercreditor Agreement” has the meaning specified in Section 3.01(a)(iii).

“Initial Extension of Credit” means the initial Borrowing hereunder.

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“Initial Lender Parties” means the Initial Lenders.

“Initial Lenders” means the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the Initial Lenders.

“Initial Pledged Debt” has the meaning specified in the Term Loan Security Agreement.

“Initial Pledged Equity” has the meaning specified in the Term Loan Security Agreement.

“Insufficiency” means, with respect to any Plan, the amount, if any, of a Plan’s accumulated benefit obligation (determined in accordance with GAAP) in excess of the Plan’s fair value of assets.

“Intellectual Property Term Loan Security Agreement” has the meaning specified in the Term Loan Security Agreement.

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months (or, until the completion of the primary syndication, two weeks or one month, provided that such period shall end on the 30^th day after the date hereof (or such earlier date as shall be specified in its sole discretion by the Administrative Agent in a written notice to the Borrower and the Lenders that such primary syndication has been achieved)), as the Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select (or, if available to all Lenders, nine or twelve months thereafter, as selected by the Borrower in its Notice of Borrowing or conversion); provided, however, that:

(a) the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under the Facility that ends after any principal repayment installment date for the Facility unless, after giving effect to such selection, the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to such principal repayment installment date for the Facility shall be at least equal to the aggregate principal amount of Advances under the Facility due and payable on or prior to such date;

(b) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

(c) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

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(d) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Inventory” means all Inventory referred to in Section 1(b) of the Term Loan Security Agreement.

“Investment” in any Person means any loan or advance to such Person (other than (a) third-party trade receivables or (b) intercompany trade receivables, in each case incurred in the ordinary course of such Person’s business), any purchase or other acquisition of any Equity Interests or Debt or the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or any other direct or indirect investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation (or similar transaction) and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (i) or (j) of the definition of “Debt” in respect of such Person.

“IPO” means, with respect to any Person, a registered initial public offering of the capital stock of such Person (other than on Form S-8).

“Lead Arranger” means Morgan Stanley Senior Funding, Inc.

“Lender Party” means any Lender.

“Lenders” means the Initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 9.07 for so long as such Initial Lender or Person, as the case may be, shall be a party to this Agreement.

“Leverage Ratio” means, at any date of determination, the ratio of Consolidated Debt for Borrowed Money (net of cash and Cash Equivalents) at such date to Consolidated EBITDA for the most recently completed Measurement Period, in each case of the Parent and its Subsidiaries.

“Lien” means any lien, security interest, pledge or other charge or encumbrance of any kind, or any other type of preferential arrangement intended for security, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“Loan Documents” means (i) this Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) the Fee Letter and (v) the Intercreditor Agreement.

“Loan Parties” means the Borrower and the Guarantors.

“Margin Stock” has the meaning specified in Regulation U.

“Material Adverse Effect” means a material adverse effect on (a) the business, financial condition, operations, performance or properties of the Parent and its Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party under any Loan Document or (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is a party.

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“Material Subsidiary” means, at any time, (i) any Subsidiary of the Parent that represents more than 5% of Consolidated EBITDA and more than 5% of Consolidated tangible assets of the Parent and its Subsidiaries, determined at the end of the most recently completed financial quarter of the Parent based on the financial statements of the Parent delivered pursuant to Section 5.03(b) or (c) or (ii) any Subsidiary of the Parent designated by notice in writing given by the Parent to the Administrative Agent to be a “Material Subsidiary”; provided that, any such Subsidiary so designated as a Material Subsidiary shall at all times thereafter remain a Material Subsidiary for the purposes of this Agreement unless otherwise agreed to by the Borrower and the Required Lenders.

“Measurement Period” means each period of four consecutive fiscal quarters of the Parent.

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

“MS&Co” has the meaning specified in the recital of parties to this Agreement.

“MSSF” has the meaning specified in the recital of parties to this Agreement.

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or with respect to which any Loan Party has any liability.

“Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA and subject to Title IV of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

“Net Cash Proceeds” means,

(a) with respect to any Transfer of any asset of the Parent or any of its Subsidiaries (other than any Transfer of assets pursuant to Section 5.02(e)(other than clause (v) thereof)), the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such Transfer (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Debt (other than Debt under the Loan Documents) that is secured by such asset and that is required to be repaid in connection with such Transfer thereof, (B) the reasonable and customary out-of-pocket costs, fees, commissions, premiums and expenses incurred by the Parent or its Subsidiaries, and (C) federal, state, provincial, foreign and local taxes reasonably estimated (on a Consolidated basis) to be actually payable as a result of any gain recognized in connection therewith; provided, however, that Net Cash Proceeds shall not include any such amounts to the extent such amounts are (x) reinvested (or intended to be reinvested) in similar assets used or useful in the business of Parent and its Subsidiaries within 12 months after the date of receipt thereof or (y) committed to be reinvested in similar assets useful in the business of Parent and its Subsidiaries within 12 months after the date of receipt thereof and are so reinvested within 6 months after such commitment; provided, further, however, that no such amounts resulting from any Transfer shall be considered Net Cash Proceeds until they aggregate $1,000,000 in any fiscal year;

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(b) with respect to the incurrence or issuance of any Debt by the Parent or any of its Subsidiaries (other than Debt incurred or issued pursuant to Section 5.02(b)), the excess of (i) the sum of the cash and Cash Equivalents received in connection with such incurrence or issuance over (ii) the underwriting discounts and commissions or other similar payments, and other out-of-pocket costs, fees, commissions, premiums and expenses incurred by the Parent or any of its Subsidiaries in connection with such incurrence or issuance to the extent such amounts were not deducted in determining the amount referred to in clause (i); and

(c) with respect to any Extraordinary Receipt received by the Parent or any of its Subsidiaries that is not otherwise included in clauses (a) or (b) above, the sum of the cash and Cash Equivalents received in connection therewith; provided, however, that Net Cash Proceeds shall not include any such amounts to the extent such amounts are (x) reinvested (or intended to be reinvested) in fixed or capital assets used or useful in the business of the Parent and its Subsidiaries within 12 months after the date of receipt thereof or (y) committed to be reinvested in fixed or capital assets used or useful in the business of the Parent and its Subsidiaries within 12 months after the date of receipt thereof and are so reinvested within 6 months after such commitment.

“Net Income” means, for any period, the net income or loss of the Parent and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) unrealized gains and losses with respect to Hedge Agreements during such period and (b) the impact of purchase accounting or similar adjustments required or permitted by GAAP in connection with the Acquisition or any Permitted Acquisition (including the reduction of revenue from any write-down of deferred revenue).

“Note” means a Term Note.

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

“NPL” means the National Priorities List under CERCLA.

“Obligation” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party, to the extent permitted by the Loan Documents.

“Other Taxes” has the meaning specified in Section 2.10(b).

“Parent” has the meaning specified in the recital of parties to this Agreement.

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“Parent Guaranty” means the guaranty of the Parent set forth in Article VIII.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

“Permitted Distributions” shall mean (i) a payment by the Borrower or its Subsidiaries to or on behalf of Parent (and any subsequent payment by Parent) for fees, costs and expenses paid to GGC or any of its Affiliates in accordance with the Advisory Agreement (as in effect on the Effective Date or as amended as permitted hereby); provided that nothing herein shall prohibit the accrual of any such fees under the terms of the Advisory Agreement; (ii) payments by the Borrower or its Subsidiaries to or on behalf of Parent for franchise taxes and other fees required to maintain the legal existence of Parent or to pay the out-of-pocket legal, accounting and other fees and expenses in the nature of overhead in the ordinary course of business of Parent, including without limitation payment of fees and reimbursement of expenses of the board of directors and (iii) any payments to Parent in order for Parent to make tax distributions to its members pursuant to Section 4.2 of that certain Amended and Restated Limited Liability Company Agreement, dated July 6, 2007, by and between Limited Brands Store Operations, Inc., a Delaware corporation, EXP Investments, Inc., a Delaware corporation and Express Investment Corp., a Delaware corporation; provided that the amount of such payment shall not exceed the amount that the Borrower would be required to pay in respect of federal, state, local or non-US taxes were the Borrower a corporation filing a consolidated return with each of its domestic Subsidiaries since immediately before the closing date of the Acquisition.

“Permitted Liens” means: (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b) and Liens for taxes, assessments or governmental charges or levies, which are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (b) Liens imposed by contract or law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) in the aggregate do not materially adversely affect the use of the property to which they relate and (ii) are being contested in good faith and for which adequate reserves have been established in accordance with GAAP; (c) Liens in the ordinary course of business to secure obligations under workers’ compensation laws, unemployment insurance, social security or similar legislation or to secure public or statutory obligations; (d) deposits to secure the performance of bids, trade contracts and leases (other than Debt), contracts for the purchase of property otherwise permitted by this Agreement, statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) Liens securing judgments (or the payment of money) not constituting an Event of Default under Section 6.01(g) or securing appeal or other surety bonds related to such judgments, (f) easements, rights of way, restrictions, and other encumbrances on title to real property that do not materially adversely affect the use of such property for its present purposes; (g) statutory, common law or contractual Liens of landlords, creditor depository institutions or institutions holding securities accounts (including rights of set-off or similar rights and remedies), (h) any interest or title of a lessor or sublessor under any lease of real estate or licensor or sublicensor of intellectual property not prohibited hereby, (i) Liens on the property of a Person existing at the time such Person becomes a Subsidiary of the Borrower; provided that, any such Lien may not extend to any other Property of the Borrower or any other Subsidiary that is not a direct Subsidiary of such Person; and provided further that, any such Lien

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was not created in anticipation of or in connection with the transaction or series of transactions pursuant to which such Person became a Subsidiary of the Borrower; (j) Liens on property at the time the Borrower or any Subsidiary acquired such property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Borrower or any of its Subsidiaries; provided that, such Lien may not extend to any other property of the Borrower or any of its Subsidiaries; provided further that, such Liens shall not have been created in anticipation of or in connection with the transaction or series of transactions pursuant to which such property was acquired by the Borrower or any Subsidiary; (k) Liens on specific items of inventory or other goods and the proceeds thereof (and each of the following relating thereto: documents, instruments, accounts, chattel paper, letter of credit rights, general intangibles, supporting obligations, and claims under insurance policies) securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or credited for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods; (l) Liens arising under conditional sale, title retention, consignment or similar arrangements for the sale of goods in the ordinary course of business; (m) Liens on insurance proceeds securing the payment of financed insurance premiums; (n) leases or subleases and licenses or sublicenses granted to others in the ordinary course of business; (o) customary Liens granted in favor of a trustee to secure fees and other amounts owing to such trustee under an indenture or other agreement pursuant to which Debt permitted by Section 5.02(b) is issued; (p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods; (q) the filing of precautionary financing statements in connection with operating leases, consignment, Transfers permitted under Section 5.02(e) and similar matters; (r) Liens on proceeds of sales of assets held in escrow pending resolution of indemnity or purchase price reduction claims; (s) other Liens on assets, securing Debt or other obligations not prohibited hereunder in an aggregate amount not to exceed $7,500,000 at any time outstanding; (t) Liens granted pursuant to the Collateral Documents; (u) Liens under the ABL Facility Loan Documents and any Lien in existence on the Effective Date and set forth on Schedule 4.01(v); (v) replacement, extension and renewal of any Lien permitted hereby (provided, however, that (1) no such Lien shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced and (2) the aggregate amount secured shall not exceed the amount permitted to be secured prior to such extension, renewal or replacement); (w) Liens securing Debt incurred pursuant to Section 5.02(b)(ii), provided that any such Liens attach only to the property being financed pursuant to such Indebtedness and do not encumber any other property of any Loan Party; (x) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Loan Party, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements, provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Debt; (y) purchase money Liens upon or in real property or equipment acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition of any such property or equipment to be subject to such Liens, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that do not secure the purchase price), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any property other than the property or equipment being acquired, and (z) Liens on assets of Foreign Subsidiaries securing Debt of Foreign Subsidiaries permitted pursuant to Section 5.02(b)(viii).

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“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

“Pledged Debt” has the meaning specified in the Term Loan Security Agreement.

“Post Petition Interest” has the meaning specified in Section 8.06(b).

“Prepayment Percentage” means the applicable percentage based on the Leverage Ratio set forth below for each item set forth below:

Level	Excess Cash Flow
Level I Greater than 1.25:1.0	50	%
Level II Less than or equal to 1.25:1.0 but equal to or greater than 1.0:1.0	25	%
Level III Less than 1.0:1.0	0	%

Any increase or decrease in the Prepayment Percentage resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately following the date on which the financial statements are delivered pursuant to Section 5.03(b).

“Qualified Capital Stock” of any person shall mean any Equity Interests of such person that are not Disqualified Stock.

“Redeemable” means, with respect to any Equity Interest, any such Equity Interest that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

“Register” has the meaning specified in Section 9.07(d).

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Related Documents” means the Purchase Agreement and related documents, the ABL Facility Loan Documents and the Advisory Agreement.

“Required Lenders” means, at any time, Lenders owed or holding at least a majority in interest of the sum of the aggregate principal amount of the Advances outstanding at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time.

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“Responsible Officer” means the Chief Executive Officer, Chief Financial Officer and Treasurer of the Parent or the Borrower, as applicable.

“Restricted Payment” has the meaning specified in Section 5.02(g).

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

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

“Secured Hedge Agreement” means any Hedge Agreement required or permitted under Article V that is entered into by and between the Borrower and any Hedge Bank.

“Secured Obligations” has the meaning specified in Section 2 of the Term Loan Security Agreement.

“Secured Parties” means the Agents, the Lender Parties and the Hedge Banks.

“Significant Guarantor” means, at any date of determination, any (i) Subsidiary Guarantor of the Borrower that individually has or (ii) group of Subsidiary Guarantors of the Borrower, that in the aggregate has, in either case, revenues, assets or earnings in an amount equal to at least 5% of (a) the consolidated revenues of the Parent and its Subsidiaries for the most recently completed fiscal quarter for which the Lenders have received financial statements of the Parent and its Subsidiaries pursuant to Section 5.03(b) or (c), (b) the consolidated assets of the Parent and its Subsidiaries as of the last day of the most recently completed fiscal quarter for which the Lenders have received financial statements of the Parent and its Subsidiaries pursuant to Section 5.03(b) or (c), or (c) the consolidated net earnings of the Parent and its Subsidiaries for the most recently completed fiscal quarter for which the Lenders have received financial statements of the Parent and its Subsidiaries pursuant to Section 5.03(b) or (c), in each case determined in accordance with GAAP for such period.

“Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA and subject to Title IV of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

“Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

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“Specified Representations” means (a) such of the representations made by the Seller in the Purchase Agreement as are material to the interests of the Lenders, but only to the extent that the Parent has the right to terminate its obligations under the Purchase Agreement as a result of a breach of such representations in the Purchase Agreement and (b) the representations and warranties made by the Borrower in Sections 4.01(a)(excluding the last sentence thereof), (d) (only as to the Loan Documents (excluding clauses (iii) and (iv) therein and the last sentence thereof)), (f), (l), (m) and (n) (excluding the last sentence thereof) of this Agreement.

“Sponsor” means Golden Gate Private Equity, Inc., a Delaware corporation and each investment fund managed by it.

“Subordinated Debt” means any Debt of any Loan Party that is subordinated to the Obligations of such Loan Party under the Loan Documents on, and that otherwise contains, terms and conditions reasonably satisfactory to the Administrative Agent.

“Subordinated Obligations” has the meaning specified in Section 8.06.

“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is, in the case of clauses (a), (b) and (c), at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

“Subsidiary Guarantors” means the Subsidiaries of the Parent listed on Schedule II hereto and each other Subsidiary of the Parent that shall be required to execute and deliver a guaranty pursuant to Section 5.01(j).

“Subsidiary Guaranty” means the guaranty of the Subsidiary Guarantors set forth in Article VIII, together with each other guaranty and guaranty supplement delivered pursuant to Section 5.01(j), in each case as amended, amended and restated, modified or otherwise supplemented.

“Supplemental Collateral Agent” has the meaning specified in Section 7.01(c).

“Surviving Debt” means (i) Debt of each Loan Party and its Subsidiaries outstanding immediately before and after giving effect to the Initial Extension of Credit and (ii) Debt incurred under credit facilities existing immediately before and after giving effect to the Initial Extension of Credit, in each case listed on Schedule 4.01(u) to this Agreement.

“Synthetic Debt” means, with respect to any Person, without duplication of any clause within the definition of “Debt,” all (a) Obligations of such Person under any lease that is treated as an operating lease for financial accounting purposes and a financing lease for tax purposes (i.e., a “synthetic lease”) and (b) Obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including, without limitation, any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Debt” or as a liability on a Consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

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“Taxes” has the meaning specified in Section 2.10(a).

“Term Advance” has the meaning specified in Section 2.01.

“Term Borrowing” means a borrowing consisting of simultaneous Term Advances of the same Type made by the Term Lenders.

“Term Commitment” means, with respect to any Term Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Term Commitment” or, if such Lender has entered into one or more Assignment and Assumptions, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Term Commitment”.

“Term Facility” means, at any time, the aggregate amount of the Term Lenders’ Term Commitments at such time.

“Term Lender” means any Lender that has a Term Commitment.

“Term Loan First Lien Collateral” shall have the meaning specified in the Intercreditor Agreement.

“Term Loan Security Agreement” has the meaning specified in Section 3.01(a)(ii).

“Term Note” means a promissory note of the Borrower payable to the order of any Term Lender, in substantially the form of Exhibit A hereto, evidencing the indebtedness of the Borrower to such Lender resulting from the Term Advance made by such Lender, as amended.

“Termination Date” means the earlier of (a) July __, 2014 and (b) the date the Advances are declared due and payable pursuant to Section 6.01.

“Transaction” means the Acquisition and the other transactions contemplated by the Transaction Documents.

“Transaction Documents” means, collectively, the Loan Documents and the Related Documents.

“Transaction Expenses” means costs and expenses incurred in connection with the Transaction, dividend payments to any director, officer or employee in connection with the Transaction deemed to be an expense in accordance with GAAP and retention bonuses paid to employees in an aggregate amount not to exceed $35,000,000 from the Effective Date through the anniversary of the Effective Date.

“Transfer” has the meaning set forth in Section 5.02(e).

“Type” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

“Unmatured Surviving Obligations” means Obligations under this Agreement and the other Loan Documents that by their terms survive the termination of this Agreement or the other Loan Documents but are not, as of the date of determination, due and payable and for which no outstanding claim has been made.

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“Voting Interests” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“Welfare Plan” means a welfare benefit plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in respect of which any Loan Party could have liability.

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.” References in the Loan Documents to any agreement or contract “as amended” shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles as in effect from time to time in the United States (“GAAP”).

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Term Advances. Each Term Lender severally agrees, on the terms and conditions hereinafter set forth, to make a single advance (a “Term Advance”) to the Borrower on the Effective Date in an amount not to exceed such Lender’s Term Commitment at such time. The Term Borrowing shall consist of Term Advances made simultaneously by the Term Lenders ratably according to their Term Commitments. Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.

SECTION 2.02. Making the Advances. (a) The Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or the first Business Day prior to the date of the Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telecopier or electronic communication. Such notice of Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately in writing, or by telecopier or electronic communication, in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Commitments under the Facility of such Lender and the other Lenders. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s Account.

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(b) Anything in subsection (a) above to the contrary notwithstanding, the Borrower may only select Eurodollar Rate Advances with an Interest Period of two weeks or one month for the period from the date hereof for so long as is required by the Lead Arranger to achieve primary syndication; provided that such period shall end on the 30^th day after the date hereof (or such earlier date as shall be specified in its sole discretion by the Administrative Agent in a written notice to the Borrower and the Lenders that such primary syndication has been achieved).

(c) The Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of a Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender (as set forth in a written notice delivered by such Lender or the Administrative Agent to the Borrower) as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

(d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.05 to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes.

(e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

SECTION 2.03. Repayment of Advances. The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders the aggregate outstanding principal amount of the Advances in quarterly installments payable on the last Business Day of each April, July, October, and January commencing on October 31, 2007, in an amount equal to (i) on each such date occurring on or prior to the sixth year anniversary of the Effective Date, 0.25% of the initial aggregate principal amount of the Term Advances and (ii) the remaining amount payable in full on the Termination Date (which amount shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.04) and in any event shall be in an amount equal to the aggregate principal amount of the Advances outstanding on such date.

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SECTION 2.04. Prepayments. (a) Optional. The Borrower may, upon at least one Business Day’s notice in the case of Base Rate Advances and three Business Days’ notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the Borrower shall prepay the outstanding aggregate principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid without premium or penalty; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $1,000,000 or an integral multiple of $500,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period for such Advance, the Borrower shall also pay any amounts owing pursuant to Section 9.04(c). Each such prepayment of any Term Advances shall be applied as directed by the Borrower. Notwithstanding anything to the contrary contained in this Agreement, the Borrower may rescind any notice of prepayment under this Section 2.04(a) if such prepayment would have resulted from a refinancing of the Facility, which refinancing shall not be consummated or shall otherwise be delayed.

(b) Mandatory. (i) Within five Business Days after the date the Borrower is required to deliver financial statements pursuant to Section 5.03(b) (commencing with the Fiscal Year ended January 31, 2009), the Borrower shall prepay Advances in an amount equal to the amount by which (A) the Prepayment Percentage of Excess Cash Flow, if any, for the Fiscal Year covered by such financial statements exceeds (B) the aggregate amount of all voluntary prepayments made during such fiscal year pursuant to Section 2.04(a).

(ii) The Borrower shall, not later than five Business Days after receipt of any Net Cash Proceeds by any Loan Party or any of its Subsidiaries (if not reinvested in accordance with the definition of Net Cash Proceeds) prepay an aggregate principal amount of the Advances comprising part of the same Borrowings in an amount equal to the amount of such Net Cash Proceeds.

(iii) Each prepayment of Advances pursuant to clause (i) or (ii) of this Section 2.04(b) shall be applied in direct order to the remaining principal repayment installments of the Facility until all such installments are paid in full.

(iv) All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid, and subject to Section 2.04(v) below, together with any amounts owing pursuant to Section 9.04(c).

(v) In lieu of making any prepayment pursuant to this subsection (b) in respect of any Eurodollar Rate Advance other than on the last day of the Interest Period therefor, so long as no Event of Default shall have occurred and be continuing, the Borrower at its option may deposit with the Administrative Agent an amount equal to the amount of the Eurodollar Rate Advance to be prepaid and such Eurodollar Rate Advance shall be repaid on the last day of the Interest Period therefor in the required amount. Such deposit shall be held by the Administrative Agent in a corporate time deposit account established on terms reasonably satisfactory to the Administrative Agent, earning interest at the then-customary rate for accounts of such type.

SECTION 2.05. Interest. (a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(i) Base Rate Advances. During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each April, July, October and January during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

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(ii) Eurodollar Rate Advances. During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b) Default Interest. Upon the occurrence and during the continuation of an Event of Default under Section 6.01(a) or (f), the Administrative Agent may, and upon the request of the Required Lenders shall, require that the Borrower pay interest (“Default Interest”) on (A) any overdue principal amount, payable in arrears on the dates referred to in clause (i) or (ii) of Section 2.05(a), as applicable, and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such principal amount pursuant to clause (i) or (ii) of Section 2.05(a), as applicable, and (B) to the fullest extent permitted by applicable law, the amount of any interest, fee or other amount payable (other than any principal of any Advance) under this Agreement or any other Loan Document to any Agent or any Lender Party that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (i) of Section 2.05(a).

(c) Notice of Interest Period and Interest Rate. Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.07 or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period,” the Administrative Agent shall give notice to the Borrower and each Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

SECTION 2.06. Fees. The Borrower shall pay to each Agent for its own account such fees as may from time to time be agreed between the Borrower and such Agent.

SECTION 2.07. Conversion of Advances. (a) Optional. The Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Section 2.08, Convert all or any portion of the Advances of one Type comprising the same Borrowing into Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than $1,000,000, no Conversion of any Advances shall result in more than 15 Interest Periods in effect and each Conversion of Advances comprising part of the same Borrowing shall be made ratably among the Lenders in accordance with their Commitments. Each such notice of Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances. Each notice of Conversion shall be irrevocable and binding on the Borrower.

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(b) Mandatory. (i) If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify the Borrower and the Lenders, whereupon with respect to each such Eurodollar Rate Advance, on the last day of the then existing Interest Period therefor, Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(ii) Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent and the Required Lenders may require, by notice to the Borrower, that (x) at the end of the then existing applicable Interest Period each Eurodollar Rate Advance be Converted into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

SECTION 2.08. Increased Costs, Etc. (a) If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation by a central bank or governmental authority or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances (excluding, for purposes of this Section 2.08, any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.10 shall govern) and (y) changes in the basis of imposition, or the rate, of any taxes, levies, imposts, deductions, charges, withholdings or liabilities that are excluded from the definition of Taxes), then the Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party additional amounts sufficient to compensate such Lender Party for such increased cost. A certificate as to the amount of such increased cost, submitted to the Borrower by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding anything contained herein to the contrary, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.08(a) for any such increased cost incurred more than one-hundred-eighty (180) days prior to the date that such Lender demands compensation therefor; provided that, if the circumstance giving rise to such increased cost is retroactive, then such 180-day period shall be extended to include the period of retroactive effect thereof.

(b) If any Lender Party determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender Party or any corporation controlling such Lender Party and that the amount of such capital is increased by or based upon the existence of such Lender Party’s commitment to lend hereunder, then, upon demand by such Lender Party or such corporation (with a copy of such demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of such Lender Party’s commitment to lend hereunder. A certificate as to such amounts submitted to the Borrower by such Lender Party shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding anything contained herein to the contrary, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.08(b) for any such increased cost incurred more than one-hundred-eighty (180) days prior to the date that such Lender demands compensation therefor; provided that, if the circumstance giving rise to such increased cost is retroactive, then such 180-day period shall be extended to include the period of retroactive effect thereof.

(c) If, with respect to any Eurodollar Rate Advances under the Facility, Lenders owed at least a majority of the then aggregate unpaid principal amount thereof notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the

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cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance under such Facility will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lenders have determined that the circumstances causing such suspension no longer exist.

(d) Notwithstanding any other provision of this Agreement, if the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist; provided, however, that, before making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 2.09. Payments and Computations. (a) The Borrower shall make each payment hereunder and under the other Loan Documents, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.13), not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day funds, with payments being received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest or any other Obligation then payable hereunder and under the other Loan Documents to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Assumption and recording of the information contained therein in the Register pursuant to Section 9.07(d), from and after the effective date of such Assignment and Assumption, the Administrative Agent shall make all payments hereunder and under the other Loan Documents in respect of the interest assigned thereby to the assignee thereunder, and the parties to such Assignment and Assumption shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b) INTENTIONALLY OMITTED.

(c) All computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate and of fees shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable. Each determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error.

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(d) Whenever any payment hereunder or under the other Loan Documents shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the preceding Business Day.

(e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to any Lender Party hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each such Lender Party on such due date an amount equal to the amount then due such Lender Party. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, each such Lender Party shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender Party together with interest thereon, for each day from the date such amount is distributed to such Lender Party until the date such Lender Party repays such amount to the Administrative Agent, at the Federal Funds Rate.

(f) Whenever any payment received by the Administrative Agent from the Borrower under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Agents and the Lender Parties by the Borrower under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Agents and the Lender Parties in the following order of priority (x) upon the occurrence and during the continuance of an Event of Default or (y) at any other time that the Administrative Agent receives a payment from the Borrower without direction as to the application of such payment:

(i) first, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the Agents (solely in their respective capacities as Agents) under or in respect of this Agreement and the other Loan Documents on such date by such Borrower, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Agents on such date;

(ii) second, to the payment of all of the fees, indemnification payments (other than indemnification payments as set forth in clause (iii) below), costs and expenses that are due and payable to the applicable Lenders under or in respect of this Agreement and the other Loan Documents on such date by such Borrower, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the applicable Lenders on such date;

(iii) third, to the payment of all of the indemnification payments, costs and expenses that are due and payable to the Lenders under Sections 9.04 hereof, Section 21 of the Term Loan Security Agreement and any similar section of any other Loan Documents on such date by the Borrower, ratably based upon the respective aggregate amounts of all such indemnification payments, costs and expenses owing to the applicable Lenders on such date;

(iv) fourth, to the payment of all of the amounts that are due and payable to the Administrative Agent and the Lender Parties under Sections 2.08 and 2.10 hereof on such date by such Borrower, ratably based upon the respective aggregate amounts thereof owing to the Administrative Agent and the Lender Parties on such date;

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(v) fifth, to the payment of all of the accrued and unpaid interest on the Obligations of the Borrower under or in respect of the Loan Documents that is due and payable to the Agents and the applicable Lender Parties under Section 2.05 on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Agents and the applicable Lender Parties on such date;

(vi) sixth, to the payment of the principal amount of all of the outstanding applicable Advances that is due and payable to the Agents and the applicable Lender Parties on such date by such Borrower, ratably based upon the respective aggregate amounts of all such principal owing to the Agents and the applicable Lender Parties on such date; and

(vii) seventh, to the payment of all other Obligations owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent and the other Secured Parties on such date by such Borrower, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date.

SECTION 2.10. Taxes. (a) Any and all payments by any Loan Party to or for the account of any Lender Party or any Agent hereunder or under any other Loan Document shall be made, in accordance with Section 2.09 or the applicable provisions of such other Loan Document, if any, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender Party and each Agent, taxes that are imposed on its overall net income by the United States (including franchise taxes imposed in lieu thereof and branch profits taxes) and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof and branch profits taxes) by the state or foreign jurisdiction under the laws of which such Lender Party or such Agent, as the case may be, is organized, or in which its principal office is located, or any political subdivision thereof and, in the case of each Lender Party, taxes that are imposed on its overall net income (including franchise taxes imposed in lieu thereof and branch profits taxes) by the state or foreign jurisdiction of such Lender Party’s Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under any other Loan Document being hereinafter referred to as “Taxes”). If any Loan Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan Document to any Lender Party or any Agent, (i) the sum payable by such Loan Party shall be increased as may be necessary so that after such Loan Party and the Administrative Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.10) such Lender Party or such Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make all such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, each Loan Party shall pay any present or future stamp, documentary, excise, property, intangible, mortgage recording or similar taxes, charges or levies that arise from any payment made by such Loan Party hereunder or under any other Loan Documents or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or the other Loan Documents (hereinafter referred to as “Other Taxes”).

(c) The Loan Parties shall indemnify each Lender Party and each Agent for and hold them harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed or asserted by any jurisdiction on amounts payable under this Section 2.10, imposed on or paid by such Lender Party or such Agent (as the case may be) and any liability (including penalties,

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additions to tax, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender Party or such Agent (as the case may be) makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender Party (with a copy to the Administrative Agent) or by the Agents on their own behalf or on behalf of a Lender Party shall be conclusive absent manifest error.

(d) Within 30 days after the date of any payment of Taxes, the appropriate Loan Party shall furnish to the Administrative Agent, at its address referred to in Section 9.02, the original or a certified copy of a receipt evidencing such payment, to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Administrative Agent. For purposes of subsections (e) of this Section 2.10, the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.

(e) (I) Each Lender Party organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender Party and on the date of the Assignment and Assumption pursuant to which it becomes a Lender Party in the case of each other Lender Party, and from time to time thereafter as reasonably requested in writing by the Borrower (but only so long thereafter as such Lender Party remains lawfully able to do so), provide each of the Administrative Agent and the Borrower with two original Internal Revenue Service Forms W-8BEN or W-8ECI or (in the case of a Lender Party that has certified in writing to the Administrative Agent that it is not (i) a “bank” as defined in Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of any Loan Party or (iii) a controlled foreign corporation related to any Loan Party (within the meaning of Section 864(d)(4) of the Internal Revenue Code), Internal Revenue Service Form W-8BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or any other Loan Document or, in the case of a Lender Party that has certified that it is not a “bank” as described above, certifying that such Lender Party is a foreign corporation, partnership, estate or trust. If, at the time such Lender Party first becomes a party to this Agreement payments pursuant to this Agreement or any other Loan Document are subject to withholding tax rate at a rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms; provided, however, that if, at the effective date of the Assignment and Assumption pursuant to which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to payments under subsection (a) of this Section 2.10 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future as a result of a change in law after the date that a Lender becomes a party to this Agreement or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender Party assignee on such date.

(II) Each Lender Party that is a “United States person” shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender Party fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable backup withholding tax imposed by the Code, without reduction, and such amount shall be excluded from Taxes.

(f) For any period with respect to which a Lender Party has failed to provide the Borrower with the appropriate form, certificate or other document described in subsection (e) above (other than if such failure is due to a change in law, or in the interpretation or application thereof,

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occurring after the date on which a form, certificate or other document originally was required to be provided), such Lender Party shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.10 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender Party become subject to Taxes because of its failure to deliver a form, certificate or other document required hereunder, the Loan Parties shall take such steps as such Lender Party shall reasonably request to assist such Lender Party to recover such Taxes.

(g) INTENTIONALLY OMITTED.

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

(i) If any Lender Party requests compensation under Section 2.08 or requires the Borrower to pay any additional amount to any Lender Party or any Governmental Authority for the account of any Lender Party pursuant to this Section 2.10, then such Lender Party shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates or to file any certificate or document reasonably requested by the Borrower, if, in the judgment of such Lender Party, such designation, assignment or filing would (x) eliminate or reduce amounts payable pursuant to Section 2.08 or 2.10, as the case may be, in the future and (y) would not subject such Lender Party to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender Party. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender Party in connection with any such designation or assignment. A certificate setting forth such costs and expenses submitted by such Lender Party to the Borrower shall be conclusive absent manifest error.

SECTION 2.11. Sharing of Payments, Etc. If any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, other than as a result of an assignment pursuant to Section 9.07) (a) on account of Obligations due and payable to such Lender Party hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender Party at such time to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lender Parties hereunder and under the other Loan Documents at such time obtained by all the Lender Parties at such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing to such Lender Party at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the other Loan Documents at such time) of payments on account of

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the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the other Loan Documents at such time obtained by all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party’s ratable share (according to the proportion of (i) the purchase price paid to such Lender Party to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other Lender Party’s required repayment to (ii) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by the purchasing Lender Party in respect of the total amount so recovered. The Loan Parties agree that any Lender Party so purchasing an interest or participating interest from another Lender Party pursuant to this Section 2.11 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest or participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of the Loan Parties in the amount of such interest or participating interest, as the case may be.

SECTION 2.12. Use of Proceeds. The proceeds of the Term Facility shall be available (and the Borrower agrees that it shall use such proceeds) to finance, in part, the Acquisition, to pay transaction fees and expenses relating to the Transaction.

SECTION 2.13. Defaulting Lenders. (a) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower shall be required to make any payment hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then the Borrower may, so long as no Default shall occur or be continuing at such time and to the fullest extent permitted by applicable law, set off and otherwise apply the Obligation of the Borrower to make such payment to or for the account of such Defaulting Lender against the obligation of such Defaulting Lender to make such Defaulted Advance. In the event that, on any date, the Borrower shall so set off and otherwise apply its obligation to make any such payment against the obligation of such Defaulting Lender to make any such Defaulted Advance on or prior to such date, the amount so set off and otherwise applied by the Borrower shall constitute for all purposes of this Agreement and the other Loan Documents an Advance by such Defaulting Lender made on the date of such setoff under the Facility pursuant to which such Defaulted Advance was originally required to have been made pursuant to Section 2.01. Such Advance shall be considered, for all purposes of this Agreement, to comprise part of the Borrowing in connection with which such Defaulted Advance was originally required to have been made pursuant to Section 2.01, even if the other Advances comprising such Borrowing shall be Eurodollar Rate Advances on the date such Advance is deemed to be made pursuant to this subsection (a). The Borrower shall notify the Administrative Agent at any time the Borrower exercises its right of set-off pursuant to this subsection (a) and shall set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Advance required to be made by such Defaulting Lender and (B) the amount set off and otherwise applied in respect of such Defaulted Advance pursuant to this subsection (a). Any portion of such payment otherwise required to be made by the Borrower to or for the account of such Defaulting Lender which is paid by the Borrower, after giving effect to the amount set off and otherwise applied by the Borrower pursuant to this subsection (a), shall be applied by the Administrative Agent as specified in subsection (b) or (c) of this Section 2.13.

(b) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to any Agent or any of the other Lender Parties and (iii) the Borrower shall make any payment hereunder or under any other Loan

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Document to the Administrative Agent for the account of such Defaulting Lender, then the Administrative Agent may, on its behalf or on behalf of such other Agents or such other Lender Parties and to the fullest extent permitted by applicable law, apply at such time the amount so paid by the Borrower to or for the account of such Defaulting Lender to the payment of each such Defaulted Amount to the extent required to pay such Defaulted Amount. In the event that the Administrative Agent shall so apply any such amount to the payment of any such Defaulted Amount on any date, the amount so applied by the Administrative Agent shall constitute for all purposes of this Agreement and the other Loan Documents payment, to such extent, of such Defaulted Amount on such date. Any such amount so applied by the Administrative Agent shall be retained by the Administrative Agent or distributed by the Administrative Agent to such other Agents or such other Lender Parties in the following order of priority:

(i) first, to the Agents for any Defaulted Amounts then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to the Agents; and

(ii) second, to any other Lender Parties for any Defaulted Amounts then owing to such other Lender Parties, ratably in accordance with such respective Defaulted Amounts then owing to such other Lender Parties.

Any portion of such amount paid by the Borrower for the account of such Defaulting Lender remaining after giving effect to the amount applied by the Administrative Agent pursuant to this subsection (b) shall be applied by the Administrative Agent as specified in subsection (c) of this Section 2.13.

(c) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance or a Defaulted Amount and (iii) the Borrower, any Agent or any other Lender Party shall be required to pay or distribute any amount hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then the Borrower or such Agent or such other Lender Party shall pay such amount to the Administrative Agent to be held by the Administrative Agent, to the fullest extent permitted by applicable law, in escrow or the Administrative Agent shall, to the fullest extent permitted by applicable law, hold in escrow such amount otherwise held by it. Any funds held by the Administrative Agent in escrow under this subsection (c) shall be deposited by the Administrative Agent in an account with a commercial bank selected by the Administrative Agent (the “Escrow Bank”), in the name and under the control of the Administrative Agent, but subject to the provisions of this subsection (c). The terms applicable to such account, including the rate of interest payable with respect to the credit balance of such account from time to time, shall be the Escrow Bank’s standard terms applicable to escrow accounts maintained with it. Any interest credited to such account from time to time shall be held by the Administrative Agent in escrow under, and applied by the Administrative Agent from time to time in accordance with the provisions of, this subsection (c). The Administrative Agent shall, to the fullest extent permitted by applicable law, apply all funds so held in escrow from time to time to the extent necessary to make any Advances required to be made by such Defaulting Lender and to pay any amount payable by such Defaulting Lender hereunder and under the other Loan Documents to the Administrative Agent or any other Lender Party, as and when such Advances or amounts are required to be made or paid and, if the amount so held in escrow shall at any time be insufficient to make and pay all such Advances and amounts required to be made or paid at such time, in the following order of priority:

(i) first, to the Agents for any amounts then due and payable by such Defaulting Lender to them hereunder, in their capacities as such, ratably in accordance with such respective amounts then due and payable to the Agents;

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(ii) second, to any other Lender Parties for any amount then due and payable by such Defaulting Lender to such other Lender Parties hereunder, ratably in accordance with such respective amounts then due and payable to such other Lender Parties; and

(iii) third, to the Borrower for any Advance then required to be made by such Defaulting Lender pursuant to a Commitment of such Defaulting Lender.

In the event that any Lender Party that is a Defaulting Lender shall, at any time, cease to be a Defaulting Lender, any funds held by the Administrative Agent in escrow at such time with respect to such Lender Party shall be distributed by the Administrative Agent to such Lender Party and applied by such Lender Party to the Obligations owing to such Lender Party at such time under this Agreement and the other Loan Documents ratably in accordance with the respective amounts of such Obligations outstanding at such time.

(d) The rights and remedies against a Defaulting Lender under this Section 2.13 are in addition to other rights and remedies that the Borrower may have against such Defaulting Lender with respect to any Defaulted Advance and that any Agent or any Lender Party may have against such Defaulting Lender with respect to any Defaulted Amount.

SECTION 2.14. Evidence of Debt. (a) Each Lender Party shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender Party resulting from each Advance owing to such Lender Party from time to time, including the amounts of principal and interest payable and paid to such Lender Party from time to time hereunder. The Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy of such notice to the Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, the Borrower shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a Term Note, as applicable, in substantially the form of Exhibit A hereto, payable to the order of such Lender Party in a principal amount equal to the Advances of such Lender Party. All references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder.

(b) The Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall include a control account, and a subsidiary account for each Lender Party, in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and Assumption delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender Party hereunder and (iv) the amount of any sum received by the Administrative Agent from the Borrower hereunder and each Lender Party’s share thereof.

(c) Entries made in good faith by the Administrative Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest error; provided, however, that the failure of the Administrative Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement.

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SECTION 2.15. Increase in Commitments. (a) Upon notice to the Administrative Agent, at any time after the Effective Date, the Borrower may request that Additional Term Commitments be provided by Additional Term Lenders (which may include Persons meeting the definition of an Eligible Assignee) on terms agreed to by the Borrower and such Additional Term Lenders; provided that (i) after giving effect to any such Additional Term Commitments, the aggregate amount of Additional Term Commitments that have been added pursuant to this Section 2.15 shall not exceed $75,000,000, (ii) the final maturity date of any Additional Term Advances shall be no earlier than the Termination Date for the Term Advances, and (iii) the average life to maturity of the Additional Term Advances shall be no shorter than the remaining average life to maturity of the Term Advances. Notwithstanding anything to the contrary contained herein, the Lender Parties shall not be obligated to commit to the Additional Term Commitments.

(b) Any Additional Term Commitments to provide Additional Term Advances under this Section 2.15 shall be added to this Agreement pursuant to an amendment (the “Additional Term Commitment Amendment”) among the Parent, the Borrower, the Administrative Agent and the Additional Term Lenders. As a condition precedent to the effectiveness of the Additional Term Commitment Amendment, the Borrower shall deliver to the Administrative Agent a certificate on behalf of the Borrower dated as of the effective date (the “Additional Commitments Effective Date”) signed by a Responsible Officer of the Borrower certifying that, before and after giving effect to such increase, (i) the representations and warranties of Loan Parties contained in Article IV and the other Loan Documents are true and correct in all material respects on and as of the Additional Commitments Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date and (ii) no Default or Event of Default exists immediately before or immediately after giving effect to such addition. On each Additional Commitments Effective Date, each applicable Lender, Eligible Assignee or other Person which is providing an Additional Term Commitment (i) shall become a “Term Lender” for all purposes of this Agreement and the other Loan Documents and (ii) in the case of any Additional Term Commitment, shall make an Additional Term Advance to the Borrower in a principal amount equal to such Additional Term Commitment, and such Additional Term Advance shall be a “Term Advance” for all purposes of this Agreement and the other Loan Documents.

(c) Any Additional Term Commitment Amendment and any related documentation may, without the consent of any Lenders (other than Additional Term Lenders that are party to such Additional Term Commitment Amendment), effect such amendments to this Agreement and the other Loan Documents as may be reasonably necessary, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.15. Any Additional Term Advances made pursuant to this Section 2.15 shall be evidenced by one or more entries in the Register maintained by the Administrative Agent in accordance with the provisions set forth in Section 9.07(d).

(d) This Section 2.15 shall supersede any provisions in Section 9.01 to the contrary. Notwithstanding any other provision of any Loan Document, the Loan Documents may be amended by the Administrative Agent and the Loan Parties, if necessary, to provide for terms applicable to each Additional Term Commitment.

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND OF LENDING

SECTION 3.01. Conditions Precedent. Section 2.01 of this Agreement shall become effective on and as of the first date on or before July 6, 2007 (the “Effective Date”) on which the following conditions precedent have been satisfied (and the obligation of each Lender to make an Advance on the occasion of the Initial Extension of Credit hereunder is subject to the satisfaction of such conditions precedent before or concurrently with the Effective Date):

(a) The Administrative Agent shall have received on or before the Effective Date the following, each dated such day (unless otherwise specified), in form and substance reasonably satisfactory to the Administrative Agent (unless otherwise specified):

(i) The Notes payable to the order of the Lenders to the extent requested by the Lenders pursuant to the terms of Section 2.14.

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(ii) A security agreement in substantially the form of Exhibit D hereto (the “Term Loan Security Agreement”), duly executed by each Loan Party, together with:

(A) certificates representing the Initial Pledged Equity referred to therein, to the extent certificated, accompanied by undated stock powers executed in blank and instruments evidencing the Initial Pledged Debt referred to therein, indorsed in blank; provided, however, that if the delivery of such certificates may not be accomplished prior to the Effective Date without undue burden or expense, then the delivery of such certificates shall not constitute a condition precedent to the Initial Extension of Credit and the applicable Lender Part shall agree to deliver or cause to be delivered such certificates within a reasonable period of time after the Effective Date (or such later date as may be agreed to by the Administrative Agent);

(B) proper financing statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent may deem necessary, in the reasonable opinion of the Administrative Agent, in order to perfect and protect the liens and security interests created under the Term Loan Security Agreement and the required priority thereof, covering the Collateral described in the Term Loan Security Agreement,

(C) INTENTIONALLY OMITTED,

(D) the Intellectual Property Term Loan Security Agreement duly executed by each Loan Party,

(E) INTENTIONALLY OMITTED,

(F) evidence of the insurance required by the terms of the Term Loan Security Agreement,

(G) INTENTIONALLY OMITTED,

(H) INTENTIONALLY OMITTED, and

(I) evidence that all other action that the Administrative Agent may deem necessary in order to perfect and protect the liens and security interests created under the Term Loan Security Agreement and the required priority thereof has been taken (including, without limitation, receipt of duly executed payoff letters and UCC-3 termination statements).

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(iii) An intercreditor agreement in substantially the form of Exhibit I hereto (the “Intercreditor Agreement”), duly executed by the Administrative Agent, the administrative agent for the ABL Facility and each Loan Party.

(iv) Certified copies of the resolutions of the board of directors of each Loan Party approving each Loan Document to which it is or is to be a party.

(v) A copy of a certificate of the Secretary of State of the jurisdiction of incorporation or formation of each Loan Party, dated reasonably near the Effective Date certifying (A) as to a true and correct copy of the charter of such Loan Party and each amendment thereto on file in such Secretary’s office and (B) that (1) such amendments are the only amendments to such Loan Party’s charter on file in such Secretary’s office, (2) (to the extent customary for such jurisdiction’s Secretary of State’s certificate) such Loan Party has paid all franchise taxes to the date of such certificate and (3) such Loan Party is duly incorporated and in good standing or presently subsisting under the laws of the State of the jurisdiction of its incorporation or formation.

(vi) A certificate of each Loan Party signed on behalf of such Loan Party by its Chief Executive Officer or a Vice President, dated the Effective Date (the statements made in which certificate shall be true on and as of the Effective Date), certifying as to (A) the absence of any proceeding for the dissolution or liquidation of such Loan Party and (B) the truth in all material respects of the Specified Representations, as though made on and as of the Effective Date, other than any Specified Representations that, by their terms, refer to a specific date other than the Effective Date, in which case as of such specific date.

(vii) A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying as to (A) the absence of any amendments to the charter of such Loan Party since the date of the Secretary of State’s certificate referred to in Section 3.01(a)(v), (B) a true and correct copy of the bylaws or operating agreement of such Loan Party as in effect on the date on which the resolutions referred to in Section 3.01(a)(iv) were adopted and on the Effective Date, (C) the due incorporation and good standing or valid existence of such Loan Party as a corporation organized under the laws of the jurisdiction of its incorporation or formation and (D) the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

(viii) INTENTIONALLY OMITTED.

(ix) Unaudited combined statements of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses for the Parent for the Fiscal Year ended February 3, 2007; provided that the Lead Arranger acknowledges that it is reasonably satisfied with such statements provided on June 14, 2007.

(x) Unaudited combined statement of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses for the Parent for the first quarter of the Fiscal Year 2007.

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(xi) A pro forma Consolidated combined statement of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses as of and for the three-month period ending at the end of the Parent’s first fiscal quarter for Fiscal Year 2007 after giving effect to the Transaction as if the Transaction had occurred as of such date (which statement would not reflect final purchase accounting and normal year-end audit adjustments) (in the case of such statement of assets acquired and liabilities assumed) or at the beginning of such period (in the case of such other financial statements).

(xii) A certificate, in substantially the form of Exhibit H, attesting to the Solvency of the Loan Parties, taken as a whole, before and after giving effect to the Transaction, from its Chief Financial Officer.

(xiii) Certified copies of the Advisory Agreement, duly executed by the parties thereto and in form and substance satisfactory to the Lender Parties.

(xiv) A favorable opinion of Kirkland & Ellis LLP, counsel for the Loan Parties, in substantially the form of Exhibit F hereto.

(b) The Lender Parties shall be satisfied that all Existing Debt, other than Surviving Debt, has been prepaid, redeemed or defeased in full or otherwise satisfied and extinguished and all commitments relating thereto terminated and that all Surviving Debt shall be on terms and conditions satisfactory to the Lender Parties.

(c) Substantially concurrently with the funding of the Initial Extension of Credit, the Borrower shall have made arrangements to pay, to the extent reasonably invoiced in advance, all accrued fees of the Agents, the Lead Arranger and the Lender Parties and all accrued expenses of the Agents and the Lead Arranger (including the accrued fees and expenses of counsel to the Lead Arranger payable by the Borrower hereunder).

(d) The Administrative Agent shall have received confirmation that the Acquisition will be consummated in accordance with the terms of the Purchase Agreement, without any waiver or amendment of any term, provision or condition set forth therein that is materially adverse to the Lenders and that has not been consented to by the Administrative Agent.

(e) The Administrative Agent shall have received confirmation that the sum of cash and Cash Equivalents to be paid to Limited Brands, Inc. and its Affiliates in connection with the Equity Contribution shall be equal to at least $431,000,000.

(f) The Lead Arranger shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.

SECTION 3.02. Conditions Precedent to Initial Borrowing. The obligation of each Lender to make an Advance on the occasion of the initial Borrowing shall be subject to the further conditions precedent that on the date of such Borrowing the following statement shall be true (and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statement is true):

(i) the Specified Representations are correct in all material respects on and as of the Effective Date, immediately before and immediately after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, other than any such Specified Representations that, by their terms, refer to a specific date other than the Effective Date, in which case as of such specific date.

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SECTION 3.03. Determinations Under Section 3.01. For purposes of determining compliance with the conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender Parties unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender Party prior to the Effective Date specifying its objection thereto and such Lender Party shall not have made available to the Administrative Agent such Lender Party’s ratable portion of such Initial Extension of Credit.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties. Subject to Section 3.02, each Loan Party represents and warrants as follows:

(a) Each Loan Party and each of its Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (ii) is duly qualified and in good standing (to the extent applicable in the relevant jurisdiction) in each other jurisdiction in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed could not be reasonably expected to have a Material Adverse Effect and (iii) has all requisite power and authority (including, without limitation, all Governmental Authorizations) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted except where the failure to have such power and authority could not be reasonably expected to have a Material Adverse Effect. All of the outstanding Equity Interests in the Borrower have been validly issued, are fully paid and non-assessable and, other than those Equity Interests in respect of stock options that have not been tendered pursuant to the Purchase Agreement, are owned by the Parent free and clear of all Liens, except those created under the Collateral Documents, the ABL Facility Loan Documents and Permitted Liens.

(b) Set forth on Schedule 4.01(b) is a complete and accurate list of all Loan Parties, showing as of the date hereof (as to each Loan Party) the jurisdiction of its incorporation or formation, the address of its principal place of business and its U.S. taxpayer identification number or, in the case of any non-U.S. Loan Party that does not have a U.S. taxpayer identification number, its unique identification number issued to it by the jurisdiction of its incorporation or formation.

(c) Set forth on Schedule 4.01(c) is a complete and accurate list of all Subsidiaries of each Loan Party as of the date hereof, showing as of the date hereof (as to each such Subsidiary) the jurisdiction of its formation, the number of shares, membership interests or partnership interests (as applicable) of each class of its Equity Interests authorized, and the number outstanding, on the date hereof and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such Loan Party and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the date hereof. All of the outstanding Equity Interests in each Loan Party’s Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens, except those created under the Collateral Documents, the ABL Facility Loan Documents and Permitted Liens.

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(d) The execution, delivery and performance by each Loan Party of each Transaction Document to which it is or is to be a party, and the consummation of the Transaction, are within such Loan Party’s powers, have been duly authorized by all necessary action, and do not (i) contravene such Loan Party’s charter, bylaws, limited liability company agreement, partnership agreement or other constituent documents, (ii) violate any law, rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, except for violations that (either individually or in the aggregate) could not reasonably be expected to have a Material Adverse Effect, (iii) conflict with or result in the breach of, or constitute a default or require any payment to be made under, any material contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties, except for violations, defaults or the creation of such rights that could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, or (iv) except for the Liens created under the Loan Documents, ABL Facility Loan Documents and Permitted Liens, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. Each Loan Party and each of its Subsidiaries is in compliance with all applicable laws, rules and regulations, except to the extent that failure to do so could not be reasonably expected to have a Material Adverse Effect.

(e) No Governmental Authorization, and no notice to or filing with, any Governmental Authority or any other third party is required for (i) the due execution, delivery or performance by any Loan Party of any Transaction Document to which it is or is to be a party, or for the consummation of the Transaction, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature and second priority nature thereof) or (iv) the exercise by any Agent or any Lender Party of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (w) the authorizations, approvals, actions, notices and filings contemplated by the Collateral Documents and those listed on Schedule 4.01(e), (x) those authorizations, approvals, actions, notices and filings, the failure of which to obtain, take, give or make could not be reasonably expected to have a Material Adverse Effect, (y) notices and filings which customarily are required in connection with the exercise of remedies in respect of the Collateral and (z) landlord consents and waivers. The Acquisition has been consummated in all material respects in accordance with the Purchase Agreement (without any waiver or amendment of any term, provision or condition set forth therein that is materially adverse to the Lenders and that has not been consented to by the Administrative Agent).

(f) This Agreement has been, and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto. This Agreement is, and each other Loan Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought in equity or at law).

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(g) Except as set forth in Schedule 4.01(g), there is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries, including any Environmental Action, pending or threatened before any Governmental Authority or arbitrator that (i) could be reasonably expected to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the Transaction.

(h) The unaudited combined statements of assets acquired and liabilities assumed delivered to the Administrative Agent pursuant to Section 3.01(a)(ix) and (x), and the related combined statement of revenues and direct and allocated expenses for the period or periods then ended, (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and except for the exceptions set forth in Section 3.08 of the Purchase Agreement, and (ii) fairly present in all material respects the financial condition of the Parent as of the date thereof and their results of operations for the period covered thereby, other than the exceptions set forth in Section 3.08 of the Purchase Agreement and as expressly noted therein (except in the case of Section 3.01(a)(x), such statements would not reflect the normal year-end audit adjustments).

(i) The Consolidated pro forma combined statement of assets acquired and liabilities assumed and related combined statements of revenues and direct and allocated expenses of the Parent and its Subsidiaries as at May 5, 2007, copies of which have been furnished to the Administrative Agent, fairly present the Consolidated pro forma financial condition of the Parent and its Subsidiaries as at such date and the Consolidated pro forma results of operations of the Parent and its Subsidiaries for the period ended on such date, in each case giving effect to the Transaction, all in accordance with GAAP other than the exceptions set forth in Section 3.08 of the Purchase Agreement and as expressly noted therein (except that such statement would not reflect final purchase accounting and normal year-end audit adjustments).

(j) The Consolidated forecasted balance sheets, statements of income and statement of cash flows of the Borrower and the Parent and their respective Subsidiaries delivered to the Administrative Agent pursuant to Section 5.03 were prepared in good faith on the basis of the assumptions believed to be reasonable (it being understood that (i) such Consolidated forecasted balance sheets, statements of income and statement of cash flows are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, (ii) no assurance can be given that such Consolidated forecasted balance sheets, statements of income and statement of cash flows will be realized, (iii) actual results may differ and (iv) such differences may be material).

(k) INTENTIONALLY OMITTED.

(l) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System.

(m) Neither any Loan Party nor any of its Subsidiaries is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(n) The Collateral Documents create in favor of the Collateral Agent for the benefit of the Secured Parties a valid security interest in the Collateral, securing the payment of the Obligations under the Loan Documents, and when (i) financing statements and other filings,

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including, without limitation, filings with the United States Patent and Trademark Office or the United States Copyright Office, in appropriate form are filed in the offices specified on Schedule III to the Term Loan Security Agreement and (ii) upon the taking of possession or control by the Collateral Agent of the Collateral with respect to which a security interest may be perfected only by possession or control, the Liens created by the Term Loan Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors in the Collateral (other than such Collateral in which a security interest cannot be perfected by such action under the UCC as in effect at the relevant time in the relevant jurisdiction), in each case subject to no Liens other than Permitted Liens and other Liens created or permitted by the Loan Documents. The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for Permitted Liens.

(o) The Borrower and each Guarantor, taken as a whole, are Solvent.

(p) No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

(q) (i) Set forth on Schedule 4.01(q) is a complete and accurate list of all Plans, Multiemployer Plans and Welfare Plans as of the Effective Date.

(ii) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to result in a material liability of any Loan Party or any ERISA Affiliate.

(iii) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service and made available to the Administrative Agent, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.

(iv) Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.

(v) Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.

(r) Except as would not reasonably be expected to result in a Material Adverse Effect (which representations are, along with clause (g) above, the sole representations of the Loan Parties in respect of environmental matters):

(i) the operations and properties of each Loan Party and each of its Subsidiaries comply with all applicable Environmental Laws and Environmental Permits and all past non-compliance with such Environmental Laws and Environmental Permits has been resolved without ongoing obligations or costs;

(ii) no circumstances exist that would be reasonably likely to (A) form the basis of an Environmental Action against any Loan Party or any of its Subsidiaries or any of their properties or (B) cause any such property to be subject to any restrictions on ownership, occupancy, transferability or use under any Environmental Law;

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(iii) none of the properties currently or, to the best of its knowledge, formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list;

(iv) there are no underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the best of its knowledge, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries;

(v) Hazardous Materials have not been released, discharged or disposed of on any property currently or, to the best of its knowledge, formerly owned or operated by any Loan Party or any of its Subsidiaries;

(vi) neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any governmental or regulatory authority or the requirements of any Environmental Law; and

(vii) all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently to the best of its knowledge or formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result in liability to any Loan Party or any of its Subsidiaries.

(s) Except as set forth on Schedule 4.01(s):

(i) Neither any Loan Party nor any of its Subsidiaries is party to any tax sharing agreement.

(ii) Each Loan Party and each of its Subsidiaries (A) has filed, has caused to be filed or has been included in all material tax returns (Federal, state, local and foreign) required to be filed and such tax returns are true and correct in all material respects and (B) has paid all taxes shown thereon to be due, together with applicable interest and penalties or adequate provision therefor has been made in accordance with GAAP, except for taxes (x) that are being contested in good faith by appropriate proceedings and for which such Loan Party has set aside on its books adequate reserves in accordance with GAAP and (y) that could not (individually or in the aggregate) have a Material Adverse Effect.

(iii) No issues have been raised in writing by any tax authorities that, in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(t) Set forth on Schedule 4.01(t) is a complete and accurate list of all Existing Debt (other than (i) Surviving Debt, (ii) Debt of Subsidiaries to Parent or another Subsidiary of Parent and (iii) Debt consisting of trade payables more than 90 days past due), showing as of the date hereof the obligor and the principal amount outstanding thereunder.

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(u) Set forth on Schedule 4.01(u) is a complete and accurate list of all Surviving Debt (other than in respect of Debt of Subsidiaries to Parent or another Subsidiary of Parent), showing as of the date hereof the obligor and the principal amount outstanding.

(v) Set forth on Schedule 4.01(v) is a complete and accurate list of all Liens on the property or assets of any Loan Party or any of its Subsidiaries, showing as of the date hereof the lienholder thereof and the principal amount of the obligations secured thereby (other than Permitted Liens described in clauses (a), (b), (c), (d), (f), (g), (h), (l), (n), (p), (r) and (x) of the definition thereof).

(w) INTENTIONALLY OMITTED.

(x) INTENTIONALLY OMITTED.

(ii) INTENTIONALLY OMITTED.

(y) INTENTIONALLY OMITTED.

(z) Except as set forth on Schedule 4.01(z) or as could not be expected to have a Material Adverse Effect, the Parent and each of its Subsidiaries own, or possess the right to use, or could obtain the right to use all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person, and Schedule 4.01(z) sets forth a complete and accurate list of all registrations (or applications for registrations) for all such IP Rights owned by the Parent and each of its Subsidiaries. To the best knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Parent or any of its Subsidiaries infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

ARTICLE V

COVENANTS OF THE PARENT

SECTION 5.01. Affirmative Covenants. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid (other than Unmatured Surviving Obligations) or any Lender Party shall have any Commitment hereunder, each Loan Party will (unless Required Lenders consent):

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all material lawful claims that, if unpaid, might by law become a Lien upon its property; provided, however,

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that neither the Parent nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors; provided, further, that neither the Parent nor any of its Subsidiaries shall be required to pay and discharge any such tax, assessment, charge or claim where failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c) Compliance with Environmental Laws. Comply, and cause each of its Subsidiaries to use commercially reasonable efforts to comply, with all applicable Environmental Laws and Environmental Permits; obtain and renew, and cause each of its Subsidiaries to obtain and renew, all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws, except, in each case, to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided, however, that neither the Parent nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances or to undertake such actions where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance (as deemed to be reasonably prudent in the good faith judgment of the Responsible Officers of such Loan Party or its Subsidiaries) (including, without limitation, business interruption insurance) with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas and with similar risk factors in which the Parent or such Subsidiary operates.

(e) Preservation of Corporate Existence, Etc. Except as permitted under Section 5.02(d) or 5.02(e)(viii), preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its existence, rights (charter and statutory), permits, licenses, approvals, privileges and franchises; provided that neither the Parent nor any of its Subsidiaries shall be required to preserve or maintain any right, permit, license, approval, privilege or franchise if the failure to do so could not reasonably be expected to have a Material Adverse Effect. Nothing contained in this Section 5.01(e) shall be deemed to prohibit any Subsidiary or the parent entity of such Subsidiary from reorganizing or changing the entity form of such Subsidiary upon prior notice to the Administrative Agent and provided that such reorganization or change is not materially adverse to the Lenders.

(f) Visitation Rights. At any reasonable time and from time to time, upon reasonable prior notice at any mutually agreeable reasonable time, permit any of the Agents or any of the Lender Parties, or any agents or representatives thereof, to examine and make copies of and abstracts from the financial records and books of account of, and visit the properties of, the Parent and any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Parent and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants (subject to the consent of such accountants); provided, that, so long as no Event of Default has occurred and is continuing, the Agents and the Lender Parties shall coordinate the exercise of such rights through the Administrative Agent and shall not be entitled

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to exercise the foregoing rights more than once in any calendar year at the expense of the Borrower, on a collective basis; provided, however, that a representative of the Borrower shall be given the opportunity to be present for any communication with the independent accountants.

(g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries in all material respects shall be made of all financial transactions and the assets and business of the Parent and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.

(h) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent the failure to do so could reasonably be expected not to have a Material Adverse Effect.

(i) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates on terms that are no less favorable to the Parent or such Subsidiary than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate; provided, the foregoing restriction shall not apply to (a) transactions between or among Loan Parties or transactions between or among Subsidiaries of the Parent that are not Loan Parties or transactions between a Loan Party and a Subsidiary that is not a Loan Party so long as the terms of such transaction are no less favorable to the Loan Party than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate; (b) Restricted Payments permitted to be made pursuant to Section 5.02(g) and Investments permitted under Section 5.02(f) and permitted intercompany Debt and asset transfers; (c) reasonable and customary fees paid to and indemnification of members of the board of directors (or similar governing body) of Parent and its Subsidiaries; (d) compensation and indemnity arrangements and benefit plans for officers and other employees of the Parent and its Subsidiaries entered into or maintained or established in the ordinary course of business; (e) sales of Equity Interests of Parent to Affiliates of Loan Parties or contributions to the equity capital of Parent by Equity Investors or any of its Affiliates not otherwise prohibited by the Loan Documents and the granting of registration and other customary rights in connection therewith; (f) any transaction with an Affiliate where the only consideration paid is Equity Interests of Parent; (g) the transactions contemplated in connection with the Transaction Documents and all related documents; (h) the existence of, and the performance by the Parent (or the Borrower on behalf of the Parent) and the Borrower of their respective obligations under the Advisory Agreement, any limited liability company, limited partnership or other constitutive document or security holders agreement (including any registration rights agreement or purchase agreement related thereto); any other agreement containing agreements among Parent and its Subsidiaries and their Affiliates that is in effect as of the Effective Date and has been disclosed to the Administrative Agent as of the Effective Date and similar agreements entered into after the Effective Date that (i) are not more adverse to the interest of the Lenders than those that exist as of the Effective Date taken as a whole, or (ii) which have been disclosed to and consented to by the Administrative Agent and the Required Lenders.

(j) Covenant to Guarantee Obligations and Give Security. Upon (x) the request of the Collateral Agent following the occurrence and during the continuance of an Event of Default, (y) the formation or acquisition of any new direct or indirect Subsidiaries (other than Excluded Subsidiaries) by any Loan Party or upon any Subsidiary (that is not a CFC) of a Loan Party being designated as a Material Subsidiary or (z) the acquisition of any property by any Loan Party (1) that is of a similar nature to the property of the Loan Parties that is subject to the Liens created by

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the Collateral Documents or (2) in the case of fee-owned real estate has a fair market value of at least $250,000, and such property, in the judgment of the Collateral Agent, shall not already be subject to a perfected (subject to Permitted Liens and other Liens created or permitted by the Loan Documents and the ABL Facility Loan Documents) security interest in favor of the Collateral Agent for the benefit of the Secured Parties, then in each case at the Borrower’s expense:

(i) in connection with the formation or acquisition by a Loan Party of a Subsidiary that is not an Excluded Subsidiary or upon any Subsidiary (that is not a CFC) of a Loan Party being designated as a Material Subsidiary, within 30 days after such formation, acquisition or designation, cause each such Subsidiary, and cause each direct and indirect parent (that is not a CFC) of such Subsidiary (if it has not already done so), to duly execute and deliver to the Collateral Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Collateral Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents; provided that any Subsidiary of a CFC shall not be required to execute such guaranty or guaranty supplement,

(ii) INTENTIONALLY OMITTED.

(iii) within 45 days after (A) such request or acquisition of property by any Loan Party, duly execute and deliver, and cause each Loan Party to duly execute and deliver, to the Collateral Agent such additional mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and other security agreements as specified by, and in form and substance reasonably satisfactory to the Collateral Agent, securing payment of all the Obligations of such Loan Party under the Loan Documents and constituting Liens on all such properties and (B) such formation or acquisition of any new Subsidiary (other than an Excluded Subsidiary) or the designation of any Subsidiary (that is not a CFC) of a Loan Party as a Material Subsidiary, duly execute and deliver and cause such Subsidiary and each Loan Party acquiring Equity Interests in such Subsidiary to duly execute and deliver to the Collateral Agent mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and other security agreements as specified by, and in form and substance reasonably satisfactory to, the Collateral Agent, securing payment of all of the obligations of such Subsidiary or Loan Party, respectively, under the Loan Documents; provided that (A) the Equity Interests of any Subsidiary held by a CFC shall not be required to be pledged and (B) if such new property is Equity Interests in a CFC held by a Loan Party, no more than 65% of the Equity Interests in such CFC shall be pledged in favor of the Secured Parties,

(iv) within 45 days after such request, formation, acquisition or designation, take, and cause each Loan Party and each newly acquired or newly formed Subsidiary (other than an Excluded Subsidiary or a Subsidiary that is a CFC) to take, all reasonable actions (including, without limitation, the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) as may be necessary or advisable in the opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and security agreements delivered pursuant to this Section 5.01(j), enforceable against all third parties in accordance with their terms,

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(v) within 60 days after such request, formation, acquisition or designation, deliver to the Collateral Agent, upon the request of the Collateral Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Collateral Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Collateral Agent as to such other matters as the Collateral Agent may reasonably request,

(vi) as promptly as practicable after such request, formation or acquisition, deliver, following the occurrence and during an Event of Default, upon the reasonable request of the Collateral Agent, to the Collateral Agent with respect to each parcel of real property that has a fair market value equal to or more than $250,000 and that is owned or held by each Loan Party and each newly acquired or newly formed Subsidiary (other than (x) any Subsidiary that is a CFC or an Excluded Subsidiary and (y) any leased real property) title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Collateral Agent, provided, however, that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Collateral Agent, and

(vii) at any time and from time to time, promptly execute and deliver, and cause each Loan Party and each newly acquired or newly formed Subsidiary to execute and deliver, any and all further instruments and documents and take, and cause each Loan Party and each newly acquired or newly formed Subsidiary to take, all such other action as the Collateral Agent may deem reasonably necessary in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, mortgages, pledges, assignments, security agreement supplements, intellectual property security agreement supplements and security agreements.

Notwithstanding anything in Section 4.01(z) to the contrary, the Loan Parties shall have no obligation to prefect the Collateral Agent’s or other Secured Parties’ interests in intellectual property outside of the United States. The Collateral Agent may in its discretion lengthen the foregoing time periods and otherwise modify (with the Borrower’s consent) the foregoing requirements to the extent it deems it reasonable and prudent to do so and may waive the foregoing requirements to the extent that the cost of obtaining a security interest in the foregoing Collateral is excessive (as reasonably determined by the Collateral Agent) in relation to the benefits to the Lender Parties.

(k) Further Assurances. (i) Promptly upon the reasonable request by any Agent, or any Lender Party through the Administrative Agent, correct, and cause each of its Subsidiaries promptly to correct, any matter that the parties mutually agree is a material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and

(ii) Promptly upon request by any Agent, or any Lender Party through the Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any document or instrument supplemental to or confirmatory of the Collateral Documents as any Agent, or any Lender Party through the Administrative Agent, may reasonably require from time to time in order to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder.

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(l) Compliance with Terms of Leaseholds. Make all payments and otherwise perform all obligations in respect of all leases of real property to which the Parent or any of its Subsidiaries is a party, keep such leases in full force and effect, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(m) Interest Rate Hedging. Enter into prior to the 90th day after the Effective Date, and maintain at all times thereafter, interest rate Hedge Agreements in form reasonably acceptable to the Administrative Agent, covering a notional amount of not less than 50% of the Term Commitments under the Term Facility and providing for such Persons to make payments thereunder for a period of no less than three years.

(n) Ratings. The Borrower shall use commercially reasonable efforts to maintain corporate family credit and corporate family ratings with S&P and Moody’s, respectively.

(o) Conditions Subsequent. Within 45 days after the Initial Extension of Credit (or, upon the request of the Borrower, such later date as the Administrative Agent shall approve in its reasonable discretion (such approval not to be unreasonably withheld or delayed) so long as the Borrower shall have used commercially reasonable efforts to satisfy the conditions set forth below within such 45-day period), furnish to the Administrative Agent:

(i) the Deposit Account Control Agreements referred to in the Term Loan Security Agreement, duly executed by the applicable Loan Parties and each Pledged Account Bank referred to in the Term Loan Security Agreement, and

(ii) the Securities Account Control Agreement referred to in the Term Loan Security Agreement, duly executed by the applicable Loan Party and the applicable securities intermediary.

SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid (other than Unmatured Surviving Obligations), or any Lender Party shall have any Commitment hereunder, unless the Required Lenders shall otherwise consent in writing, no Loan Party will, at any time:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a financing statement that names the Parent or any of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, except for Permitted Liens and Transfers permitted by Section 5.02(e).

(b) Debt. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:

(i) Debt under the Loan Documents or the ABL Facility Loan Documents;

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(ii) Capitalized Leases and Debt secured by Liens described in clause (w) of the definition of “Permitted Liens” not to exceed in the aggregate $10,000,000 at any one time outstanding;

(iii) the Surviving Debt and any Debt extending the maturity of, or refunding or refinancing, in whole or in part, any Surviving Debt and guarantees of the Surviving Debt or the extension, refunding or refinancing of such Surviving Debt; provided that (A) the amount of such extending, refunding or refinancing Debt does not result in an increase in the aggregate principal or facility amount thereof (plus the amount of any premium paid in respect of such Debt in connection with any such extension, refunding or refinancing and plus the amount of reasonable expenses incurred by Parent and its Subsidiaries in connection therewith), (B) such Debt (if it is term debt) does not have a weighted average life to maturity that is less than the weighted average life to maturity of the Debt being extended, refunded or refinanced, (C) such Debt (if it is term debt) does not have a final maturity earlier than the final maturity of the Debt being extended, refunded or refinanced, (D) the direct and contingent obligors therefor shall not be changed (unless any contingent obligor is released), as a result of or in connection with such extension, refunding or refinancing and (E) if the Debt being extended, refunded or refinanced is subordinate or junior to the Advances and any Guaranty thereof, then the Debt incurred to extend, refund or refinance such Debt shall be subordinate to the Advances and any Guaranty, as the case may be, at least to the same extent and in the same manner as the Debt being extended, refunded or refinanced;

(iv) Debt in respect of Hedge Agreements designed to hedge against fluctuations in interest rates, commodity prices or currency exchange rates incurred in the ordinary course of business and consistent with prudent business practice;

(v) Debt owed to the Borrower or a wholly owned Subsidiary of the Borrower, which Debt shall (x) in the case of Debt owed to a Loan Party by a Loan Party, constitute Pledged Debt and (y) be otherwise permitted under the provisions of Section 5.02(f);

(vi) To the extent it constitutes Debt, Debt incurred by the Borrower or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of the Borrower or any such Subsidiary pursuant to such agreements, in connection with acquisitions permitted by Section 5.02(f) or Transfers permitted by Section 5.02(e); provided that, in respect of any Debt incurred hereunder pursuant to agreements providing for indemnification in connection with Transfers permitted by Section 5.02(e), such Debt shall not exceed the amount of net cash proceeds received from such Transfers;

(vii) Debt which may be deemed to exist pursuant to any guaranties, performance, surety, statutory, appeal, completion guarantees, export or import indemnities, customs and revenue bonds or similar instruments, workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of any Loan Party in the ordinary course of business, including guarantees or obligations of any Loan Party with respect to letters of credit supporting such bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed) or similar obligations incurred in the ordinary course of business;

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(viii) Debt of Foreign Subsidiaries not to exceed $10,000,000 at any time outstanding and unsecured guarantees of such Debt;

(ix) Debt of a Subsidiary outstanding on the date such Subsidiary was acquired by the Borrower or any of its Subsidiaries or assumed in connection with the acquisition of assets from a Person (other than Debt incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Subsidiary became a Subsidiary of the Borrower or was otherwise acquired by the Borrower) in an acquisition permitted by Section 5.02(f); and

(x) Debt consisting of the deferred purchase price of acquisitions permitted under Section 5.02(f);

(xi) other unsecured Debt of the Borrower and its Subsidiaries in an aggregate principal amount not to exceed at any time $25,000,000 outstanding at any time;

(xii) other Debt of the Borrower and its Subsidiaries that is subordinated to the Obligations under the Loan Documents on terms reasonably acceptable to the Administrative Agent, so long as, after giving effect to the incurrence or issuance of such Debt, the Parent and its Subsidiaries are in pro forma compliance with the covenant set forth in Section 5.05;

(xiii) Guaranteed Debt of any Loan Party in respect of Debt otherwise permitted under this Section 5.02;

(xiv) Debt arising in connection with endorsement of instruments for collection or deposit in the ordinary course of business;

(xv) Debt arising from the existing letters of credit so long as such existing letters of credit are secured by a letter of credit or cash collateral reasonably acceptable to Agents;

(xvi) Debt consisting of deferred purchase price or notes issued to officers, directors and employees to purchase equity interests (or options or warrants or similar instruments) of Parent in an aggregate amount not to exceed $5,000,000 outstanding at any time;

(xvii) Debt incurred in connection with the financing of insurance premiums in an amount not to exceed the annual premiums in respect thereof at any one time outstanding; and

(xviii) the Transactions as contemplated by the Transaction Documents.

(c) Change in Nature of Business. Make, or permit any of its Subsidiaries to conduct any business other than the businesses as carried on at the date hereof and other businesses substantially related, incidental thereto, or complementary thereto or are reasonable extensions thereof).

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(d) Mergers, Etc. Merge into or consolidate with any Person or permit any Person to merge into it, or permit any of its Subsidiaries to do so, except that:

(i) any Subsidiary of the Borrower may merge into or consolidate with any other Subsidiary of the Borrower or with the Borrower; provided that, in the case of any such merger or consolidation, the Person formed by such merger or consolidation shall be a wholly owned Subsidiary of the Borrower or the Borrower; and provided further that, in the case of any such merger or consolidation to which a Subsidiary Guarantor is a party, the Person formed by such merger or consolidation shall be a Subsidiary Guarantor or the Borrower;

(ii) as part of any acquisition permitted under Section 5.02(f), any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that the Person surviving such merger shall be a wholly owned Subsidiary of the Borrower; and provided further that, in the case of any merger or consolidation to which a Subsidiary Guarantor is a party, the Person formed by such merger or consolidation shall be a Subsidiary Guarantor;

(iii) as part of any Transfer permitted under Section 5.02(e), any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it;

(iv) any Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up, as applicable, could not reasonably be expected to have a Material Adverse Effect;

(v) the Loan Parties may perform the Transactions as contemplated by the Transaction Documents; and

(vi) Retail Factoring, LLC may be dissolved.

(e) Sales, Etc. of Assets. Sell, lease, transfer, assign, exchange, convey or otherwise dispose of (each a “Transfer”), or permit any of its Subsidiaries to Transfer, any assets, except:

(i) (A) Transfers of Inventory (including unusable, excess or slow-moving Inventory) and delinquent accounts receivables in the ordinary course of its business and Transfers of accounts receivables in connection with the private label credit card programs in the ordinary course of business, (B) the granting of any option or other right to purchase, lease or otherwise acquire Inventory and delinquent accounts receivables in the ordinary course of its business; and (C) dispositions of cash and Cash Equivalents in the ordinary course of business;

(ii) (A) Transfers of assets among Loan Parties; (B) Transfers of assets among Subsidiaries that are not Loan Parties; (C) Transfers of assets from Subsidiaries that are not Loan Parties to Loan Parties; and (D) Transfers of assets from Loan Parties to Subsidiaries that are not Loan Parties in a transaction that would be permitted under clause (i) of Section 5.02(f) if such Transfer had been a transaction involving cash; provided that, for purposes of determining the application of each of clauses (A) through (D) above in connection with any Transfer made in connection with reorganizing or

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restructuring of Subsidiaries, any Transfer or series of related Transfers between Loan Parties and/or Subsidiaries shall be deemed to be a Transfer solely between the initial and the ultimate holder of any such assets transferred without regard to any intermediate holder of such assets;

(iii) Transfers of unneeded, used, worn out, obsolete or damaged equipment and trade-ins and exchanges of equipment in the ordinary course of business and the abandonment or other disposition of Intellectual Property that is, in the reasonable judgment of Loan Parties, no longer economically practicable or commercially desirable to maintain or useful in the conduct of the business of the Loan Parties taken as a whole;

(iv) Transfers in connection with any transaction in which there is an Extraordinary Receipt;

(v) Transfers for fair value, the proceeds of which are less than $2,000,000 for any such single transaction and the proceeds of which when aggregated with all other such Transactions during a fiscal year are less than $10,000,000;

(vi) Leases and subleases, licenses and sublicenses of real or personal property in the ordinary course of business;

(vii) Licensing of intellectual property on a non-exclusive basis or on an exclusive basis so long as such exclusive licensing is limited to geographic areas, particular fields of use, customized products for customers or limited time periods;

(viii) Any liquidation or dissolution of a Subsidiary so long as its immediate parent becomes the owner of its assets;

(ix) Transfers of assets consisting of accounts receivable in a transaction involving Foreign Subsidiaries that would be permitted under clause (viii) of Section 5.02(b) if such Transfer had been a transaction involving Debt;

(x) the Transactions as contemplated by the Transaction Documents;

(xi) mergers, amalgamations, consolidations and dissolutions in compliance with Section 5.02(d);

(xii) Investments in compliance with Section 5.02(f);

(xiii) discounts or forgiveness of accounts receivable in the ordinary course of business or in connection with collection or compromise thereof; and

(xiv) Permitted Liens.

(f) Investments in Other Persons. Make or hold, or permit any of its Subsidiaries to make or hold, any Investment in any Person, except:

(i) (A) Investments by the Parent and its Subsidiaries in their Subsidiaries outstanding on the date hereof, (B) additional Investments by the Parent and its Subsidiaries in Loan Parties, (C) additional Investments by Subsidiaries of the Borrower that are not Loan Parties in other Subsidiaries that are not Loan Parties, and (D)

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additional Investments by the Loan Parties in Subsidiaries that are not Loan Parties (including Subsidiaries that are Excluded Subsidiaries) in an aggregate amount invested from the date hereof not to exceed $10,000,000 at the time such Investment is made;

(ii) loans and advances to employees in the ordinary course of the business of the Borrower and its Subsidiaries as presently conducted in an aggregate principal amount not to exceed $2,000,000 at any time outstanding;

(iii) loans to directors, officers and employees to purchase Equity Interests of Parent;

(iv) Investments by the Borrower and its Subsidiaries in bank deposits in the ordinary course of business or Cash Equivalents;

(v) Investments existing on the date hereof and described on Schedule 5.02(f);

(vi) Investments in Hedge Agreements permitted under Section 5.02(b)(iv);

(vii) the purchase or other acquisition of all or substantially all of the Equity Interests in any Person that, upon the consummation thereof, will be wholly owned directly by the Borrower or one or more of its wholly owned Subsidiaries (including, without limitation, as a result of a merger or consolidation) and the purchase or other acquisition by the Borrower or one or more of its wholly-owned Subsidiaries of all or substantially all of the property and assets of any Person (collectively, an “Permitted Acquisition”); provided that, with respect to each purchase or other acquisition made pursuant to this clause (vii):

(A) the Loan Parties and any such newly created or acquired Subsidiary shall comply with the requirements of Section 5.01(j);

(B) the lines of business of the Person to be (or the property and assets of which are to be) so purchased or otherwise acquired shall be permitted by Section 5.02(c);

(C) such purchase or other acquisition shall not include or result in any contingent liabilities that could reasonably be expected to have a Material Adverse Effect on the Borrower and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or the persons performing similar functions) of the Borrower, if the board of directors is otherwise approving such transaction, or, in each other case, by the Responsible Officer of the Borrower);

(D) the total cash consideration (including, without limitation, all indemnities, earnouts reasonably anticipated by the Borrower to have to be paid and other contingent payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers of such Person or assets, and all assumptions of debt, liabilities and other obligations in connection therewith permitted by Section 5.02(b)(ix) but excluding the portion paid with proceeds of any Equity Issuance to or contribution from directly or indirectly the Equity Investors) paid by or on behalf

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of the Borrower and its Subsidiaries for any such purchase or other acquisition, shall not exceed, when aggregated with the total cash and noncash consideration paid by or on behalf of the Borrower and its Subsidiaries for all other purchases and other acquisitions made by the Borrower and its Subsidiaries pursuant to this clause (vii), $100,000,000 at the time any such purchase or other acquisition is made;

(E) (1) immediately before and immediately after giving effect to any such purchase or other acquisition, no Event of Default shall have occurred and be continuing and (2) immediately after giving effect to such purchase or other acquisition, the Parent and its Subsidiaries shall be in pro forma compliance with the covenant set forth in Section 5.05, such compliance to be determined as of the last day of the most recently ended Measurement Period; and

(F) the Borrower shall have delivered to the Administrative Agent, on behalf of the Lender Parties, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (vii) have been satisfied or will be satisfied in all material respects on or prior to the consummation of such purchase or other acquisition;

(viii) Investments (A) received in satisfaction or partial satisfaction of accounts from financially troubled account debtors (whether in connection with a foreclosure, bankruptcy, workout or otherwise) and (B) consisting of deposits, prepayments and other credits to suppliers made in the ordinary course of business consistent with the past practices of the Borrower and its Subsidiaries;

(ix) guaranties in the ordinary course of business of obligations owed to or of landlords, suppliers, customers, franchisees and licensees of the Borrower and its Subsidiaries or otherwise permitted hereunder;

(x) other Investments in an aggregate amount not to exceed at any time the sum of (A) $15,000,000 (B) net proceeds received from Investments permitted under this Section 5.02(f) and (C) any proceeds of Excluded Issuances used to make Investments;

(xi) the Loan Parties may (A) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (B) invest in, acquire and hold cash and Cash Equivalents, (C) endorse negotiable instruments held for collection in the ordinary course of business or (D) make lease, utility and other similar deposits in the ordinary course of business;

(xii) the Loan Parties may sell or transfer amounts and acquire assets to the extent permitted by Section 5.02(e);

(xiii) any Loan Party may hold Investments to the extent such Investments reflect an increase in the value of Investments already made; and

(xiv) the Transactions as contemplated by the Transaction Documents.

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For purposes of determining compliance with the provisions of this Section 5.02(f), Investments made by the Borrower or any of its Subsidiaries (the “investor”) in any Subsidiary that are effected pursuant to one or more Investments made contemporaneously or in prompt succession by the investor and/or any of its Subsidiaries shall be deemed one Investment by the investor.

(g) Restricted Payments. Declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to Parent’s stockholders, partners or members (or the equivalent Persons thereof) as such, or permit any of its Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in the Borrower (any of the foregoing, a “Restricted Payment”), except that:

(i) the Parent may (A) declare and pay dividends and distributions payable only in Equity Interests of the Parent and (B) purchase, redeem, retire, defease or otherwise acquire Equity Interests with the proceeds received contemporaneously from the issuance of Equity Interests with equal or inferior voting powers, designations, preferences and rights, so long as no Event of Default shall have occurred and be continuing at the time of such purchase, redemption, retirement, defeasance or acquisition or would result therefrom;

(ii) each of the Parent and the Borrower may, at any time when the Leverage Ratio (calculated on a pro forma basis both before and after giving effect to such cash dividends) shall be less than 1.0:1.0, declare and pay cash dividends to Parent’s equity holders and purchase, redeem, retire or otherwise acquire Parent’s Equity Interests for cash in an aggregate amount not to exceed an amount equal to 75% of the portion of Excess Cash Flow not required to prepay the Facilities pursuant to Section 2.04(b)(i) as determined from and after, and for so long as, such Leverage Ratio is in effect and so long as no Event of Default shall have occurred and be continuing at the time of such declaration and payment of cash dividend or would result therefrom;

(iii) any Subsidiary of the Borrower may declare and pay dividends or other distributions to the Borrower or to any Loan Party of which it is a Subsidiary;

(iv) the Loan Parties may acquire Equity Interests of the Borrower or the Parent or any other Loan Party in connection with the exercise of stock options (or the equivalent with respect to membership interests) or stock appreciation rights (or the equivalent with respect to membership interests) by way of cashless exercise or in connection with the satisfaction of withholding tax obligations so long as no Event of Default shall have occurred and be continuing at the time of the acquisition of such Equity Interests or would result therefrom;

(v) the Loan Parties may purchase, redeem or acquire fractional shares of Equity Interests arising out of stock dividends, splits or combinations or business combinations;

(vi) the Parent may convert convertible securities and make cash payments in lieu of fractional shares in connection with any such conversion;

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(vii) in connection with any acquisition permitted by Section 5.02(f) and so long as no Event of Default shall have occurred and be continuing at the time of such acquisition or would result therefrom, the Borrower or any Subsidiary may (A) receive or accept the return to the Borrower or any of its Subsidiaries of Equity Interests constituting a portion of the purchase price consideration in settlement of indemnification claims or (B) make payments or distributions to dissenting stockholders pursuant to applicable law;

(viii) the Loan Parties may make Permitted Distributions;

(ix) so long as no Event of Default shall have occurred and be continuing at such time or would result therefrom, payments to the Parent to permit the Parent, and the subsequent use of such payments by Parent, to repurchase or redeem Qualified Capital Stock of Parent held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of any Loan Party, upon their death, disability, retirement, severance or termination of employment or service, or to make payments on Indebtedness issued to buy such Qualified Capital Stock or pursuant to and in accordance with stock option plans or other benefit plans; provided that the aggregate cash consideration paid for all such redemptions and payments shall not exceed, in any fiscal year, the sum of (x) net cash proceeds from issuances of Equity Interests (other than Excluded Issuances or issuances of Equity Interests applied to satisfy any financial covenant under the ABL Facility Credit Agreement) plus (y) $3,000,000 (and up to 100% of such amount not used in any fiscal year may be carried forward to the next succeeding (but no other) fiscal year) plus (z) the amount of any net cash proceeds received by or contributed to Borrower from the issuance and sale since the issue date of Qualified Capital Stock of Parent to officers, directors or employees of any Loan Party that have not been used to make any repurchases, redemptions or payments under this clause (ix); and

(x) the Loan Parties may perform the Transactions as contemplated by the Transaction Documents.

(h) Amendments of Constitutive Documents. Other than in respect of the limited liability company agreements set forth on Schedule 5.02(h), amend, or permit any of its Subsidiaries to amend, its certificate of incorporation or bylaws or other constitutive documents in a manner materially adverse to the Lenders. Nothing contained in this Section 5.01(h) shall be deemed to prohibit any Subsidiary or the parent entity of such Subsidiary from reorganizing or changing the entity form of such Subsidiary upon prior notice to the Administrative Agent and provided that such reorganization or change is not materially adverse to the Lenders (it being understood that any reorganization or change into a limited partnership or a limited liability company by any Subsidiary or the parent entity of such Subsidiary shall not be deemed to be materially adverse to the Lenders).

(i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or permit, any change in Fiscal Year.

(j) Prepayments, Etc., of Debt. (i) Voluntarily prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, in each case in violation of any subordination terms of, any Subordinated Debt,; (ii) amend, modify or change in any manner materially adverse to the Lenders any term or condition of any Subordinated Debt unless permitted by the subordination provisions thereof, or (iii) permit any of its Subsidiaries to do any of the foregoing, other than to prepay any Debt permitted to be incurred hereunder payable to the Borrower or another Subsidiary.

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(k) Amendment, Etc., of Related Documents. Other than with respect to the ABL Facility Loan Document (which may be amended or otherwise modified in accordance with the Intercreditor Agreement), amend, modify or change in any manner materially adverse to the Lenders any term or condition of any Related Document or give any consent, waiver or approval thereunder that is materially adverse to the Lenders.

(l) Negative Pledge. Enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets securing the Obligations under the Loan Documents, except: (i) prohibitions or conditions under (A) any purchase money Debt permitted by Section 5.02(b)(ii) solely to the extent that the agreement or instrument governing such Debt prohibits a Lien on the property acquired with the proceeds of such Debt (together with any accessions and additions thereto and the proceeds thereof), (B) any Surviving Debt or (C) any Capitalized Lease permitted by Section 5.02(b)(ii) solely to the extent that such Capitalized Lease prohibits a Lien on the property subject thereto (together with any accessions and additions thereto and the proceeds thereof); (ii) specific property to be sold pursuant to an executed agreement with respect to a permitted Transfer permitted under this agreement; (iii) restrictions by reason of customary provisions restricting Liens, assignments, subletting or other transfers contained in leases, licenses and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses or similar agreements, as the case may be); (iv) restrictions and conditions applicable to any Subsidiary acquired after the date hereof if such restrictions and conditions existed at the time such Subsidiary was acquired, were not created in anticipation of such acquisition and apply solely to such acquired Subsidiary; (v) restrictions disclosed in Schedule 5.02(l); (vi) covenants in documents creating Liens permitted by Section 5.02(a) prohibiting further Liens on the properties encumbered thereby; (vii) prohibitions or limitations that exist in any agreement governing Debt permitted by Section 5.02(b)(viii), (xii) or (xv), provided that such prohibition or limitation is not more restrictive in any material respect than those contained in the Loan Documents; or (viii) restrictions or limitations imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts, instruments or obligations referred to in clause (ii), provided that such amendments and refinancings are no more materially restrictive with respect to such prohibitions and limitations than those prior to such amendment or refinancing.

SECTION 5.03. Reporting Requirements. So long as any Advance or any other Obligation (other than Unmatured Surviving Obligations) of any Loan Party under any Loan Document shall remain unpaid, or any Lender Party shall have any Commitment hereunder, the Borrower will furnish to the Administrative Agent:

(a) Default Notice. Within three Business Days after the occurrence of each Default or any event, development or occurrence that has resulted in a Material Adverse Effect continuing on the date of such statement, a statement of a Responsible Officer of the Borrower setting forth details of such Default, event, development or occurrence and the action that the Borrower has taken and proposes to take with respect thereto.

(b) Annual Financials. Within 120 days after the end of each Fiscal Year, a copy of the annual audit report for such year for the Parent and its Subsidiaries, including therein a Consolidated balance sheet of the Parent and its Subsidiaries as of the end of such Fiscal Year

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and a Consolidated statement of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion as to such audit report of any of the “Big-4” accounting firms or other independent public accountants of recognized standing reasonably acceptable to the Administrative Agent, which opinion shall not have any “going concern” qualification, together with a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by such accountants in determining, as of the end of such Fiscal Year, compliance with the covenant set forth in Section 5.05; provided that, in the event of any change in GAAP used in the preparation of such financial statements, the Parent shall also provide a reconciliation of such financial statements to former GAAP and (iii) a certificate on behalf of the Parent signed by a Responsible Officer of the Parent stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Parent has taken and proposes to take with respect thereto.

(c) Quarterly Financials. Within 60 days after the end of each of the first three quarters of each Fiscal Year, a Consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments) by a Responsible Officer of the Parent as having been prepared in accordance with GAAP (other than the absence of footnotes), together with (i) a certificate on behalf of Parent signed by a Responsible Officer stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Parent has taken and proposes to take with respect thereto and (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by the Parent in determining compliance with the covenant set forth in Section 5.05.

(d) Annual Forecasts. No later than 45 days after the end of each Fiscal Year, forecasts prepared by management of the Parent, in form reasonably satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on a quarterly basis for the Fiscal Year following such Fiscal Year.

(e) Litigation. Promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any Governmental Authority affecting any Loan Party or any of its Subsidiaries of the type described in Section 4.01(g).

(f) Securities Reports. Promptly after the sending or filing thereof copies of all regular, periodic and special reports, and all registration statements, that any Loan Party or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange.

(g) INTENTIONALLY OMITTED.

(h) INTENTIONALLY OMITTED.

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(i) Plan Terminations. Promptly and in any event within two Business Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan.

(ii) Plan Annual Reports. Promptly upon request by the Administrative Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan.

(iii) Multiemployer Plan Notices. Promptly and in any event within five Business Days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by such Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B).

(i) Environmental Conditions. Promptly after the assertion or occurrence thereof, notice of any Environmental Action against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any property described in the Mortgages to be subject to any material restrictions on ownership, occupancy, transferability or use under any Environmental Law.

(j) INTENTIONALLY OMITTED.

(k) INTENTIONALLY OMITTED.

(l) Other Information. Such other information respecting the business, financial condition, operations of any Loan Party or any of its Subsidiaries as any Agent, or any Lender Party through the Administrative Agent, may from time to time reasonably request. Notwithstanding anything to the contrary in this Agreement, none of the Parent, the Borrower or any Subsidiary will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding agreement or (iii) is confidential or is subject to attorney-client or similar privilege or constitutes attorney work product.

SECTION 5.04. Holding Company Status of Parent. Parent shall not engage in any business or activity other than (i) the ownership of all outstanding Equity Interests in the Borrower, (ii) maintaining its corporate existence, (iii) participating in tax, accounting and other administrative activities as parent of the consolidated group of companies including the Loan Parties, (iv) the performance of obligations under the Transaction Documents to which it is a party, (v) making or receiving any Restricted Payment permitted under Section 5.02(g) and (vi) activities incidental to the businesses or activities described in the foregoing clauses (i) through (v).

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SECTION 5.05. Financial Covenant. (a) So long as any Advance or any other Obligation (other than Unmatured Surviving Obligations) of any Loan Party under any Loan Document shall remain unpaid, or any Lender Party shall have any Commitment hereunder, the Parent will maintain at the end of each Measurement Period set forth below a Leverage Ratio of not more than the amount set forth below for such Measurement Period:

Measurement Period Ending	Leverage Ratio
Third Quarter Fiscal Year 2007	3.00:1.00
Fourth Quarter Fiscal Year 2007	3.00:1.00
First Quarter Fiscal Year 2008	2.75:1.00
Second Quarter Fiscal Year 2008	2.75:1.00
Third Quarter Fiscal Year 2008	2.75:1.00
Fourth Quarter Fiscal Year 2008	2.75:1.00
First Quarter Fiscal Year 2009	2.50:1.00
Second Quarter Fiscal Year 2009	2.50:1.00
Third Quarter Fiscal Year 2009	2.25:1.00
Fourth Quarter Fiscal Year 2009	2.25:1.00
First Quarter Fiscal Year 2010	2.00:1.00
Second Quarter Fiscal Year 2010	2.00:1.00
Third Quarter Fiscal Year 2010	1.75:1.00
Fourth Quarter Fiscal Year 2010	1.75:1.00
Thereafter	1.75:1.00

(b) For purposes of determining compliance with the foregoing clause (a), any equity investment made to the Borrower after the Effective Date and on or prior to the day that is ten (10) Business Days after the day on which financial statements are required to be delivered for a fiscal quarter shall, at the request of the Borrower and in the event that the proceeds thereof have been contributed to the Borrower as common equity or other equity on terms and conditions reasonably acceptable to the Administrative Agent, be included in the calculation of EBITDA for the purpose of determining compliance with such covenant at the end of such fiscal quarter and applicable subsequent periods (any such equity contribution so included in the calculation of EBITDA, a “Specified Equity Contribution”); provided that (i) in each four consecutive fiscal quarter period there shall be a period of at least one fiscal quarter in which no Specified Equity Contribution is made and (ii) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Borrower to be in compliance with the covenant set forth in this Section 5.05 and the covenant set forth in Section 5.05 of the ABL Facility Credit Agreement.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default. If any of the following events (“Events of Default”) shall occur and be continuing:

(a) (i) the Borrower shall fail to pay any principal of any Advance when the same shall become due and payable or (ii) the Borrower shall fail to pay any interest on any Advance or any fee within five Business Days after the same shall become due and payable, or any Loan Party shall fail to make any other payment under any Loan Document within thirty days after the same shall become due and payable; or

(b) any representation or warranty made by any Loan Party (or any of its officers) under or in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or

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(c) the Borrower shall fail to perform or observe any term, covenant or agreement contained in Sections 2.12, 5.01(e) (as to preservation of existence only), (f), (i) or 5.02, 5.03(a); or

(d) any Loan Party shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 30 days after the earlier of the date on which (i) any Responsible Officer of a Loan Party becomes aware of such failure or (ii) written notice thereof shall have been given to the Borrower by any Agent or any Lender Party; or

(e) any Loan Party or any of its Subsidiaries shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Debt of such Loan Party or such Subsidiary (as the case may be) that is outstanding in a principal amount (or, in the case of any Hedge Agreement, an Agreement Value) of at least $15,000,000 either individually or in the aggregate for all such Loan Parties and Subsidiaries (but excluding Debt outstanding hereunder), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or any such Debt shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or mandatory prepayments), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; provided that this clause (e) shall not apply to secured Debt that becomes due as a result of the voluntary Transfer of the property or assets securing such Debt, if such Transfer is permitted hereunder and under the documents providing for such Debt; provided, further, that an Event of Default under this clause (e) shall continue only so long as the applicable event or condition constituting such Event of Default is unremedied and is not waived or rescinded by the holders of such Debt; provided, further, that an “Event of Default” under Section 5.05 of the ABL Facility Credit Agreement shall not be an Event of Default under this clause (e) unless such “Event of Default” shall be unremedied and is not waived or rescinded by the Lenders under the ABL Facility Credit Agreement for a period of 30 days; or

(f) the Parent, the Borrower or any Significant Guarantor shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party or any of its Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or, except as permitted under Section 5.02(e)(viii), 5.02(d)(iv) or 5.02(d)(vi), seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 60 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Loan Party or any of its Material Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or

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(g) any judgments or orders, either individually or in the aggregate, for the payment of money in excess of $12,500,000 (to the extent not reasonably expected to be adequately covered by insurance in respect of which a solvent and unaffiliated insurance company has acknowledged coverage) shall be rendered against any Loan Party or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order (and such proceedings shall not have been stayed) or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(h) any material provision of any Loan Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or enforceable against any Loan Party party to it, or any such Loan Party shall so state in writing; or

(i) any Collateral Document or financing statement after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority (except to the extent of Permitted Liens and other Liens created or permitted by the Loan Documents) lien on and security interest in the First Lien Term Loan Collateral purported to be covered thereby, except to the extent that any such loss of perfection or priority results from the acts or omissions of the Administrative Agent or the Collateral Agent; or

(j) a Change of Control shall occur; or

(k) any ERISA Event shall have occurred with respect to a Plan and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates related to such ERISA Event) exceeds $12,500,000; or

(l) any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $12,500,000 or requires payments exceeding $2,000,000 per annum; or

(m) any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $12,500,000;

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each Lender Party and the obligation of each Lender Party to make Advances terminated and (ii) shall at the request, or may with the

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consent, of the Required Lenders, by notice to the Borrower, declare the Advances, all interest thereon and all other amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that, in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (x) the Commitments of each Lender Party and the obligation of each Lender Party to make Advances shall automatically be terminated and (y) the Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.

ARTICLE VII

THE AGENTS

SECTION 7.01. Authorization and Action. (a) Each Lender Party (in its capacities as a Lender and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of the Obligations of the Loan Parties under the Loan Documents), no Agent shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lender Parties, all Hedge Banks and all holders of Notes; provided, however, that no Agent shall be required to take any action that exposes such Agent to personal liability or that is contrary to this Agreement or applicable law.

(b) In furtherance of the foregoing, each Lender Party (in its capacities as a Lender and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes the Collateral Agent to act as the agent of such Lender Party for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Collateral Agent (and any Supplemental Collateral Agents appointed by the Collateral Agent pursuant to Section 7.01(c) for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights or remedies thereunder at the direction of the Collateral Agent) shall be entitled to the benefits of this Article VII (including, without limitation, Section 7.05) as though the Collateral Agent (and any such Supplemental Collateral Agents) were an “Agent” under the Loan Documents, as if set forth in full herein with respect thereto.

(c) Any Agent may execute any of its duties under this Agreement or any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder at the direction of the Collateral Agent) by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Collateral Agent may also from time to time, when the Collateral Agent deems it to be necessary or desirable, appoint one or more trustees, co-trustees, collateral co-agents, collateral subagents or attorneys-in-fact (each, a “Supplemental Collateral Agent”) with respect to all or any part of the Collateral; provided, however, that no such Supplemental Collateral Agent shall be authorized to take any action with respect to any Collateral unless and except to the extent expressly authorized in writing by the

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Collateral Agent. Should any instrument in writing from the Borrower or any other Loan Party be required by any Supplemental Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest in and confirm to such Supplemental Collateral Agent such rights, powers, privileges and duties, the Borrower shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly upon the reasonable request by the Collateral Agent. If any Supplemental Collateral Agent, or successor thereto, shall die, become incapable of acting, resign or be removed, all rights, powers, privileges and duties of such Supplemental Collateral Agent, to the extent permitted by law, shall automatically vest in and be exercised by the Collateral Agent until the appointment of a new Supplemental Collateral Agent. No Agent shall be responsible for the negligence or misconduct of any agent, attorney-in-fact or Supplemental Collateral Agent that it selects in accordance with the foregoing provisions of this Section 7.01(c) in the absence of such Agent’s gross negligence or willful misconduct.

SECTION 7.02. Agents’ Reliance, Etc. Neither any Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with the Loan Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each Agent: (a) may consult with legal counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Lender Party and shall not be responsible to any Lender Party for any statements, warranties or representations (whether written or oral) made in or in connection with the Loan Documents; (c) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of any Loan Document on the part of any Loan Party or the existence at any time of any Default under the Loan Documents or to inspect the property (including the books and records) of any Loan Party; (d) shall not be responsible to any Lender Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; and (e) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, telecopy or electronic communication) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 7.03. MSSF, MS&Co and Affiliates. With respect to its Commitments, the Advances made by it and any Notes issued to it, MSSF and MS&Co shall each have the same rights and powers under the Loan Documents as any other Lender Party and may exercise the same as though each were not an Agent; and the term “Lender Party” or “Lender Parties” shall, unless otherwise expressly indicated, include MSSF and MS&Co in their respective individual capacities. MSSF and MS&Co and their respective affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, any Loan Party, any of its Subsidiaries and any Person that may do business with or own securities of any Loan Party or any such Subsidiary, all as if MSSF and MS&Co were not Agents and without any duty to account therefor to the Lender Parties. No Agent shall have any duty to disclose any information obtained or received by it or any of its Affiliates relating to any Loan Party or any of its Subsidiaries to the extent such information was obtained or received in any capacity other than as such Agent.

SECTION 7.04. Lender Party Credit Decision. Each Lender Party acknowledges that it has, independently and without reliance upon any Agent or any other Lender Party and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender Party also acknowledges that it will, independently and without reliance upon any Agent or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

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SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees to indemnify each Agent (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Agent under the Loan Documents (collectively, the “Indemnified Costs”); provided, however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the foregoing, each Lender Party agrees to reimburse each Agent promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 9.04, to the extent that such Agent is not promptly reimbursed for such costs and expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by any Lender Party or any other Person.

(b) For purposes of this Section 7.05, each Lender Party’s ratable share of any amount shall be determined, at any time, according to the sum of (i) the aggregate principal amount of the Advances outstanding at such time and owing to such Lender Party and (ii) the aggregate unused portions of such Lender Party’s Term Commitments at such time. The failure of any Lender Party to reimburse any Agent promptly upon demand for its ratable share of any amount required to be paid by the Lender Parties to such Agent as provided herein shall not relieve any other Lender Party of its obligation hereunder to reimburse such Agent for its ratable share of such amount, but no Lender Party shall be responsible for the failure of any other Lender Party to reimburse such Agent for such other Lender Party’s ratable share of such amount. Without prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender Party contained in this Section 7.05 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents.

SECTION 7.06. Successor Agents. Any Agent may resign at any time by giving written notice thereof to the Lender Parties and the Borrower and may be removed at any time with or without cause by the Required Lenders; provided, however, that any removal of the Administrative Agent will not be effective until it has also been replaced as Collateral Agent and released from all of its obligations in respect thereof. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent with the consent of the Borrower (not to 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 or the Required Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the Lender Parties, with the consent of the Borrower (such consent not to be unreasonably withheld or delayed), appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States or of any State thereof and having a combined capital and surplus of at least $250,000,000; provided that, if, such retiring Administrative Agent is unable to find a commercial banking institution which is willing to accept such appointment and which meets the qualifications set forth above, subject to this Section 7.06, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Required Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor as provided for above. Upon the acceptance of any appointment as Agent hereunder by a successor Agent and, in the case of a successor

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Collateral Agent, upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the Mortgages, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents. If within 45 days after written notice is given of the retiring Agent’s resignation or removal under this Section 7.06 no successor Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (a) the retiring Agent’s resignation or removal shall become effective, (b) the retiring Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (c) the Required Lenders shall thereafter perform all duties of the retiring Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a successor Agent as provided above. After any retiring Agent’s resignation or removal hereunder as Agent shall have become effective, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

SECTION 7.07. Intercreditor Agreement. Each of the Lender Parties hereby acknowledges that it has received and reviewed the Intercreditor Agreement and agrees to be bound by the terms thereof. Each Lender Party (and each Person that becomes a Lender Party hereunder pursuant to Section 9.07) hereby (i) acknowledges that each of MSSF and MS&Co. is acting under the Intercreditor Agreement in multiple capacities as the Administrative Agent or the Collateral Agent, as the case may, and the Administrative Agent (as defined in the ABL Facility Credit Agreement) or Collateral Agent (as defined in the ABL Facility Credit Agreement), as the case may be, under the Intercreditor Agreement and (ii) waives any conflict of interest, now contemplated or arising hereafter, in connection therewith and agrees not to assert against either MSSF or MS&Co any claims, causes of action, damages or liabilities of whatever kind or nature relating thereto, except to the extent such damages or liabilities are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from MSSF’s or MS&Co’s, as applicable, gross negligence or willful misconduct. Each Lender Party (and each Person that becomes a Lender Party hereunder pursuant to Section 9.07) hereby authorizes and directs each of MSSF and MS&Co. to enter into the Intercreditor Agreement on behalf of such Lender and agrees that each of MSSF and MS&Co, in its various capacities thereunder, may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement.

ARTICLE VIII

GUARANTY

SECTION 8.01. Guaranty; Limitation of Liability. (a) Each Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other Loan Party now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent or any other Lender Party in enforcing any rights under this Guaranty or any other Loan Document. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Loan Party to any Lender Party under or in respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Loan Party.

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(b) Each Guarantor, and by its acceptance of this Guaranty, the Administrative Agent and each other Lender Party, hereby confirms that it is the intention of all such Persons that this Guaranty and the Obligations of each Subsidiary Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Obligations of each Subsidiary Guarantor hereunder. To effectuate the foregoing intention, the Administrative Agent, the other Lender Parties and the Guarantors hereby irrevocably agree that the Obligations of each Subsidiary Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.

(c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Lender Party under this Guaranty or any other guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Lender Parties under or in respect of the Loan Documents.

SECTION 8.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Lender Party with respect thereto. The Obligations of each Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents in accordance with its terms, or any other amendment or waiver of or any consent to departure from any Loan Document in accordance with its terms, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other guaranty in accordance with its terms, for all or any of the Guaranteed Obligations;

(d) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;

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(e) any change, restructuring or termination of the corporate structure or existence of any Loan Party or any of its Subsidiaries;

(f) any failure of any Lender Party to disclose to any Loan Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known to such Lender Party (each Guarantor waiving any duty on the part of the Lender Parties to disclose such information);

(g) the failure of any other Person to execute or deliver this Agreement, any Guaranty Supplement or any other guaranty or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or

(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Lender Party that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety, except payment in full.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made.

SECTION 8.03. Waivers and Acknowledgments. (a) Each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and, except for those notices specified under this Agreement, any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that any Lender Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any Loan Party or any other Person or any Collateral.

(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by any Lender Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Obligations of such Guarantor hereunder.

(d) Each Guarantor acknowledges that the Collateral Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to the recovery by the Collateral Agent and the other Secured Parties against such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable law.

(e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any Lender Party to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party or any of its Subsidiaries now or hereafter known by such Lender Party.

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(f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in Section 8.02 and this Section 8.03 are knowingly made in contemplation of such benefits.

SECTION 8.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower, any other Loan Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s Obligations under or in respect of this Guaranty or any other Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Lender Party against the Borrower, any other Loan Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrower, any other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, and all Secured Hedge Agreements shall have expired or been terminated and the Commitments shall have expired or been terminated. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the latest of (a) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (b) the Termination Date and (c) the latest date of expiration or termination of all Secured Hedge Agreements, such amount shall be received and held in trust for the benefit of the Lender Parties, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to any Lender Party of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, (iii) the Termination Date shall have occurred and (iv) all Secured Hedge Agreements shall have expired or been terminated, the Lender Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Guaranty.

SECTION 8.05. Guaranty Supplements. Upon the execution and delivery by any Person of a guaranty supplement in substantially the form of Exhibit E hereto (each, a “Guaranty Supplement”), (a) such Person shall be referred to as an “Additional Guarantor” and shall become and be a Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall also mean and be a reference to such Additional Guarantor, and each reference in any other Loan Document to a “Subsidiary Guarantor” shall also mean and be a reference to such Additional Guarantor, and (b) each reference herein to “this Guaranty,” “hereunder,” “hereof” or words of like import referring to this Guaranty, and each reference in any other Loan Document to the “Guaranty,” “thereunder,” “thereof” or words of like import referring to this Guaranty, shall mean and be a reference to this Guaranty as supplemented by such Guaranty Supplement.

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SECTION 8.06. Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and other Obligations owed to such Guarantor by each other Loan Party (the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 8.06:

(a) Prohibited Payments, Etc. Except during the continuance of an Event of Default, each Guarantor may receive payments from any other Loan Party on account of the Subordinated Obligations. After the occurrence and during the continuance of any Event of Default, however, unless the Required Lenders otherwise agree, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.

(b) Prior Payment of Guaranteed Obligations. In any proceeding under any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the Lender Parties shall be entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses accruing after the commencement of a proceeding under any Bankruptcy Law, whether or not constituting an allowed claim in such proceeding (“Post-Petition Interest”)) before such Guarantor receives payment of any Subordinated Obligations.

(c) Turn-Over. After the occurrence and during the continuance of any Event of Default, each Guarantor shall, if the Administrative Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for the Lender Parties and deliver such payments to the Administrative Agent on account of the Guaranteed Obligations (including all Post-Petition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guaranty.

(d) Administrative Agent Authorization. After the occurrence and during the continuance of any Event of Default, the Administrative Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations (including any and all Post-Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and (B) to pay any amounts received on such obligations to the Administrative Agent for application to the Guaranteed Obligations (including any and all Post-Petition Interest).

SECTION 8.07. Continuing Guaranty; Assignments. This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the later of (i) the payment in full in cash of the Guaranteed Obligations (other than Unmatured Surviving Obligations) and all other amounts payable under this Guaranty and (ii) the Termination Date (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Lender Parties and their successors, transferees and assigns that are permitted under Section 9.07. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender Parties.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. Except as provided in Section 2.15 with respect to any Additional Term Commitment Amendment, no amendment or waiver of any provision of this Agreement or the Notes, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders (except as provided in Section 5.01(k)(i), which may be performed by the Administrative Agent), and then such waiver or consent shall

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be effective only in the specific instance and for the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent shall, unless in writing and signed by all of the Lender Parties (other than any Lender Party that is, at such time, a Defaulting Lender), do any of the following at any time:

(i) In the case of the Initial Extension of Credit, waive any of the conditions specified in Section 3.01 or Section 3.02,

(ii) amend the definition of “Required Lenders” or any other provision hereof that would change the percentage of (x) the Commitments or (y) the aggregate unpaid principal amount of the Advances that, in each case, shall be required for the Lenders or any of them to take any action hereunder,

(iii) except pursuant to the Intercreditor Agreement and except to the extent that it would constitute a Transfer permitted under Section 5.02(e), release one or more Significant Guarantors (or otherwise limit such Significant Guarantors’ liability with respect to the Obligations owing to the Agents and the Lender Parties under the Guaranties) if such release or limitation is in respect of all or substantially all of the value of the Guaranties to the Lender Parties, except as a transfer or dissolution would be permitted under Section 5.02(d),

(iv) except pursuant to the Intercreditor Agreement, release all or substantially all of the Collateral in any transaction or series of related transactions, or

(v) amend this Section 9.01,

and (b) no amendment, waiver or consent shall, unless in writing and signed by the Required Lenders and each Lender Party specified below for such amendment, waiver or consent:

(i) increase the Commitments of a Lender Party without the consent of such Lender Party;

(ii) reduce the principal of, or stated rate of interest (other than Default Rate) on, the Advances owed to a Lender Party or any fees or other amounts stated to be payable hereunder or under the other Loan Documents to such Lender Party (other than in accordance with the terms hereof) without the consent of such Lender Party; or

(iii) postpone any date scheduled for any payment of principal of, or interest on, the Advances pursuant to Section 2.03 or 2.05 or any date fixed for any payment of fees hereunder in each case payable to a Lender Party without the consent of such Lender Party;

provided further that no amendment, waiver or consent shall, unless in writing and signed by an Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Agent under this Agreement or the other Loan Documents.

SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for hereunder shall be either (x) in writing (including telegraphic, telecopy or electronic communication) and mailed, telegraphed, telecopied or delivered or (y) as and to the extent set forth in Section 9.02(b) and in the proviso to this Section 9.02(a), in an electronic medium and delivered as set forth in Section 9.02(b), if to any Loan Party, to the Borrower at its address at One Limited Parkway, Columbus, OH 43230, Attention: Matt Moellering, Chief Financial Officer; Telecopy: (614) 415-4858, E-mail Address: mmoellering@expressfashion.com; with a copy to: Golden Gate Capital at its address at One

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Embarcadero Center, 33^rd Floor, San Francisco, CA 94111, Attention: Joshua Olshansky, Telecopy: (415) 627-4501, E-mail Address: jolshansky@goldengatecap.com; with a copy to: Kirkland & Ellis LLP, 555 California Street, Suite 2700, San Francisco, CA 94104, Telecopy: (415) 439-1500, Attention: John Friedrichs, E-mail Address: jfriedrichs@kirkland.com; if to any Initial Lender Party, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office specified in the Assignment and Assumption pursuant to which it became a Lender Party; if to the Collateral Agent, to Morgan Stanley & Co. Incorporated, at its address at One Pierrepont Plaza, 7th Floor, 300 Cadman Plaza West, Brooklyn, New York, 11201, Attention: Erma Dell’Aquila, Telecopy: 212-507-3544, Email Address: Erma.Dell’Aquila@morganstanley.com; and if to the Administrative Agent, to Morgan Stanley Senior Funding, Inc., at its address at One Pierrepont Plaza, 7th Floor, 300 Cadman Plaza West, Brooklyn, New York, 11201, Attention: Erma Dell’Aquila, Telecopy: 212-507-3544, Email Address: Erma.Dell’Aquila@morganstanley.com, with a copy to Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York, 10022, Attention: Maura O’ Sullivan, Esq., Telecopy: (646) 848 7897, E-mail Address: mosullivan@shearman.com; or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties; provided, however, that materials and information described in Section 9.02(b) shall be delivered to the Administrative Agent in accordance with the provisions thereof or as otherwise specified to the Borrower by the Administrative Agent. All such notices and other communications shall, when mailed, telegraphed, telecopied, or e-mailed, be effective upon receipt. Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes shall be effective as delivery of an original executed counterpart thereof.

(b) The Borrower hereby agrees that it will provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent pursuant to the Loan Documents, including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (i) relates to a request for a Conversion of an existing, Borrowing (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default under this Agreement or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any Borrowing (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Administrative Agent to an electronic mail address specified by the Administrative Agent to the Borrower. In addition, the Borrower agrees to continue to provide the Communications to the Administrative Agent in the manner specified in the Loan Documents but only to the extent requested by the Administrative Agent. The Borrower further agrees that the Administrative Agent may make the Communications available to the Lenders by posting the Communications on IntraLinks or a substantially similar electronic transmission system (the “Platform”).

(c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR

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REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER PARTY OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(d) The Administrative Agent agrees that the receipt of the Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender Party agrees that notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender Party for purposes of the Loan Documents. Each Lender Party agrees (i) to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Lender Party’s e-mail address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the right of the Administrative Agent or any Lender Party to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender Party or any Agent to exercise, and no delay in exercising, any right hereunder or under any Note or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay within 30 days of demand with backup documentation (i) all reasonable, documented and out-of-pocket costs and expenses of each Agent and the Lead Arranger in connection with the preparation, execution, delivery, administration, modification and amendment of, or any consent or waiver under, the Loan Documents (including, without limitation, (A) all due diligence, collateral review, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and recording fees and expenses, (B) in connection with the “work-out” or restructuring of the obligations and (C) the reasonable fees and expenses of one counsel (together with one local or foreign counsel in each relevant jurisdiction) representing both the Administrative Agent and the Lead Arranger with respect thereto, with respect to advising such Agent as to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Event of Default or any events or circumstances that may give rise to an Event of Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto and (ii) all reasonable, documented and out-of-pocket costs and expenses of the Administrative Agent, the Lead Arranger and each Lender Party in connection with the enforcement of the Loan Documents, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally (including, without limitation, the reasonable fees and expenses of one counsel for the Administrative Agent and each Lender Party with respect thereto).

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(b) The Borrower agrees to indemnify, defend and save and hold harmless each Agent, the Lead Arranger, each Lender Party and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) the Facilities, the actual or proposed use of the proceeds of the Advances, the Transaction Documents or any of the transactions contemplated thereby, including, without limitation, any acquisition or proposed acquisition (including, without limitation, the Transaction) by the Sponsor or any of its Subsidiaries or Affiliates of all or any portion of the Equity Interests in or Debt securities or substantially all of the assets of the Borrower or any of its Subsidiaries or (ii) the actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence, bad faith or willful misconduct or that of its affiliates, directors, officers, employees, advisors or agents; provided that the Borrower shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to a single special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnified Parties (which shall be selected by the Administrative Agent) unless, in the reasonable opinion of the Administrative Agent, representation of all such Indemnified Parties would be inappropriate due to existence of an actual or potential conflict of interest. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 9.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors, any Indemnified Party or any other Person, whether or not any Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated. The Borrower also agrees not to assert any claim against the Administrative Agent, any Lender Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances, the Transaction Documents or any of the transactions contemplated by the Transaction Documents.

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender Party other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.04, 2.07(a)(i) or 2.08(d), acceleration of the maturity of the Advances pursuant to Section 6.01 or for any other reason, or if the Borrower fails to make any payment or prepayment of Eurodollar Rate Advance for which a notice of prepayment has been given or that is otherwise required to be made, whether pursuant to Section 2.03, 2.04 or 6.01 or otherwise, the Borrower shall, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender Party to fund or maintain such Advance.

(d) If any Loan Party fails to pay when due any undisputed costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or any Lender Party, in its sole discretion.

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(e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of the Borrower contained in Sections 2.08 and 2.10 and this Section 9.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Loan Documents.

SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the continuance of any Event of Default and (b) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01, each Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account of the Borrower against any and all of the Obligations of the Borrower now or hereafter existing under the Loan Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under this Agreement and although such Obligations may be unmatured. Each Agent and each Lender Party agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and each Lender Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Agent, such Lender Party and their respective Affiliates may have.

SECTION 9.06. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and each Agent and the Administrative Agent shall have been notified by each Initial Lender Party that such Initial Lender Party has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, each Agent and each Lender Party and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of each Lender Party.

SECTION 9.07. Assignments and Participations. (a) Each Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note held by it); provided, however, that (i) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined as of the date of the Assignment and Assumption with respect to such assignment) shall in no event be less than $1,000,000, (ii) each such assignment shall be to an Eligible Assignee, (iii) no such assignments shall be permitted without the consent of the Administrative Agent until the Administrative Agent shall have notified the Lender Parties that syndication of the Commitments hereunder has been completed and (iv) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Assumption, together with any Note or Notes (if any).

(b) Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Assumption, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Assumption, have the rights and obligations of a Lender, as the case may be, hereunder and (ii) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Assumption, relinquish its rights (other than its rights under Sections 2.08, 2.10 and 9.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

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(c) By executing and delivering an Assignment and Assumption, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and the other parties thereto and hereto as follows: (i) other than as provided in such Assignment and Assumption, such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption; (iv) such assignee will, independently and without reliance upon any Agent, such assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent, acting for this purpose (but only for this purpose) as the agent of the Borrower, shall maintain at its address referred to in Section 9.02 a copy of each Assignment and Assumption delivered to and accepted by it and a register for the recordation of the names and addresses of the Lender Parties and the Commitment under the Facility of, and principal amount of the Advances owing under the Facility to, each Lender Party from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agents and the Lender Parties shall treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of an Assignment and Assumption executed by an assigning Lender Party and an assignee, together with any Note or Notes (if any) subject to such assignment, the Administrative Agent shall, if such Assignment and Assumption has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Assumption, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower and each other Agent. In the case of any assignment by a Lender, within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes (if any) a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under the Facility pursuant to such Assignment and Assumption and, if any assigning Lender that had a Note or Notes prior to such assignment has retained a Commitment hereunder, a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be dated the effective date of such Assignment and Assumption and shall otherwise be in substantially the form of Exhibit A hereto.

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(f) Each Lender Party may sell participations to one or more Persons (other than any Loan Party or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender Party’s obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender Parties shall continue to deal solely and directly with such Lender Party in connection with such Lender Party’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date fixed for any payment of principal of, or interest on, the Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or release all or substantially all of the Collateral or the value of the Guaranties.

(g) Any Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.07, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender Party by or on behalf of the Borrower; provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party.

(h) Notwithstanding any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes (if any) held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

(i) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may create a security interest in all or any portion of the Advances owing to it and any Note or Notes held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities; provided that, unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 9.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

(j) Notwithstanding anything to the contrary contained herein, any Lender Party (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Advance that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Advance and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender. Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender Party would be liable, (ii) no SPC shall be entitled to the

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benefits of Sections 2.08 and 2.10 (or any other increased costs protection provision) and (iii) the Granting Lender shall for all purposes, including, without limitation, the approval of any amendment or waiver of any provision of any Loan Document, remain the Lender Party of record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior Debt of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained in this Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrower and the Administrative Agent, assign all or any portion of its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Advances to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC. This subsection (j) may not be amended without the prior written consent of each Granting Lender, all or any part of whose Advances are being funded by the SPC at the time of such amendment.

SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery by telecopier or by electronic file of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.

SECTION 9.09. Confidentiality. Neither any Agent nor any Lender Party shall disclose any Confidential Information to any Person without the consent of the Borrower, other than (a) to such Agent’s or such Lender Party’s Affiliates and their officers, directors, employees, agents and advisors and to actual or prospective Eligible Assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, Federal or foreign authority or examiner (including the National Association of Insurance Commissioners or any similar organization or quasi-regulatory authority) regulating such Lender Party, (d) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Loan Parties received by it from such Lender Party or (e) in connection with the exercise of any right or remedy under this Agreement or any other Loan Document; provided that, in the case of disclosure under clause (b), unless specifically prohibited by law or court order, each Agent and each Lender Party shall make reasonable efforts to notify the Borrower of any such requirement for disclosure prior to the disclosure of such Confidential Information; or (f) to any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to Obligations of the Borrower hereunder; provided that such counterparty (or such counterparty’s professional advisor) shall undertake to preserve the confidentiality of any Confidential Information relating to the Loan Parties received by it in connection with such credit derivative transaction.

SECTION 9.10. Release of Collateral. Upon the sale, lease, transfer or other disposition of any item of Collateral of any Loan Party in accordance with the terms of the Loan Documents, the Collateral Agent will, at the Borrower’s expense, execute and deliver to such Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents in accordance with the terms of the Loan Documents and, in the case of any sale or dissolution of any Guarantor (to the extent permitted by the Loan Documents), a release of such Guarantor from the Guaranty.

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SECTION 9.11. Replacement of Holdout Lender. (a) (i) If any action to be taken by the Lender Parties or any Agent hereunder requires the unanimous consent, authorization, or agreement of all Lender Parties, and the consent of the Required Lenders is obtained but a Lender (“Holdout Lender”) fails to give its consent, authorization, or agreement or (ii) if at any time any Lender becomes a Defaulting Lender or becomes insolvent or (iii) if at any time the Borrower becomes obligated to pay additional payments described in Sections 2.08 and 2.10(a) to a Lender, in each case, upon at least five (5) Business Days prior irrevocable notice to the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, the Administrative Agent or the Borrower may permanently replace the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, with one or more substitute Lenders (each, a “Replacement Lender”), and the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, and each Replacement Lender shall execute and deliver an Assignment and Assumption, subject only to the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, being repaid its share of the outstanding Obligations under the Loan Documents without any premium or penalty of any kind whatsoever. If the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall refuse or fail to execute and deliver any such Assignment and Assumption prior to the effective date of such replacement, the Holdout Lender, the Defaulting Lender or other Lender, as the case may be, shall be deemed to have executed and delivered such Assignment and Assumption. The replacement of any Holdout Lender, Defaulting Lender or other Lender, as the case may be, shall be made in accordance with the terms of Section 9.07.

SECTION 9.12. Patriot Act Notice. Each Lender Party and each Agent (for itself and not on behalf of any Lender Party) hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender Party or such Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. The Borrower shall, and shall cause each of its Subsidiaries to, provide such information and take such actions as are reasonably requested by any Agent or any Lender Party in order to assist the Agents and the Lender Parties in maintaining compliance with the Patriot Act.

SECTION 9.13. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

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SECTION 9.14. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 9.15. Waiver of Jury Trial. Each Loan Party, the Agents and the Lender Parties irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the Advances or the actions of any Agent or any Lender Party in the negotiation, administration, performance or enforcement thereof.

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

EXPRESS HOLDING, LLC, as Parent
By	/s/ Matt Moellering
	Name: Matt Moellering
	Title: Chief Financial Officer

EXPRESS, LLC, as Borrower
By	/s/ Matt Moellering
	Name: Matt Moellering
	Title: Chief Financial Officer

EXPRESS GC, LLC
By	/s/ Matt Moellering
	Name: Matt Moellering
	Title: Chief Financial Officer

RETAIL FACTORING, LLC
By	/s/ Matt Moellering
	Name: Matt Moellering
	Title: Chief Financial Officer

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MORGAN STANLEY SENIOR FUNDING, INC., as Administrative Agent
By	/s/ Eugene F. Martin
	Name: Eugene F. Martin
	Title: Vice President

MORGAN STANLEY & CO. INCORPORATED, as Collateral Agent
By	/s/ Eugene F. Martin
	Name: Eugene F. Martin
	Title: Vice President

THE CIT GROUP/BUSINESS CREDIT, INC., as Documentation Agent
By	/s/ Robert L. Klein
	Name: Robert L. Klein
	Title: Vice President

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Initial Lenders

MORGAN STANLEY SENIOR FUNDING, INC., as Initial Lender
By	/s/ Paul Fassati
	Title: Vice President

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EX-10.6

Exhibit 10.6

$300,000,000

CREDIT AGREEMENT

dated June 26, 2008

among

EXPRESS TOPCO LLC,

as Borrower,

THE LENDERS PARTY HERETO

and

KKR SCF LOAN ADMINISTRATION, LLC,

as Administrative Agent

Skadden, Arps, Slate, Meagher & Flom LLP

300 S. Grand Ave

Los Angeles, CA 90071

TABLE OF CONTENTS

Section		Page
	ARTICLE I
	DEFINITIONS
SECTION 1.01	Defined Terms	1
SECTION 1.02	Terms Generally	19
SECTION 1.03	Accounting Terms; GAAP	19
SECTION 1.04	Resolution of Drafting Ambiguities	19
	ARTICLE II
	THE CREDITS
SECTION 2.01	Commitments	20
SECTION 2.02	Loans	20
SECTION 2.03	Borrowing Procedure	21
SECTION 2.04	Evidence of Debt; Repayment of Loans	21
SECTION 2.05	Interest on Loans	21
SECTION 2.06	Termination of Commitments	22
SECTION 2.07	Optional and Mandatory Prepayments of Loans	22
SECTION 2.08	Increased Costs	24
SECTION 2.09	[Reserved]	25
SECTION 2.10	Payments Generally; Pro Rata Treatment; Sharing of Setoffs	25
SECTION 2.11	Taxes	27
SECTION 2.12	Mitigation Obligations; Replacement of Lenders	28
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES
SECTION 3.01	Organization; Powers	29
SECTION 3.02	Authorization; Enforceability	29
SECTION 3.03	No Conflicts	30
SECTION 3.04	Units	30
SECTION 3.05	Collateral Documents	30
SECTION 3.06	Litigation; Compliance with Laws	30
SECTION 3.07	Federal Reserve Regulations	30
SECTION 3.08	Investment Company Act	31
SECTION 3.09	Use of Proceeds	31
SECTION 3.10	No Material Misstatements	31
SECTION 3.11	Solvency	31
SECTION 3.12	Representations and Warranties in Opco Credit Agreements	31

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Section		Page
	ARTICLE IV
	CONDITIONS TO CREDIT EXTENSION
SECTION 4.01	Conditions to the Initial Credit Extension	31
SECTION 4.02	Conditions to the Delayed Draw Loans	33
SECTION 4.03	Conditions to the Each Credit Extension	33
	ARTICLE V
	AFFIRMATIVE COVENANTS
SECTION 5.01	Financial Statements, Reports, etc.	34
SECTION 5.02	Litigation and Notices of other Material Events	34
SECTION 5.03	Existence; Businesses and Properties	35
SECTION 5.04	Obligations and Taxes	35
SECTION 5.05	Maintaining Records; Access to Properties and Inspections; Annual Meetings	36
SECTION 5.06	Transactions with Affiliates	36
SECTION 5.07	Maintenance of Insurance	36
SECTION 5.08	Further Assurances	37
SECTION 5.09	Compliance with Terms of Leaseholds	37
SECTION 5.10	Ratings	37
	ARTICLE VI
	NEGATIVE COVENANTS
SECTION 6.01	Indebtedness	37
SECTION 6.02	Mergers, Etc.	39
SECTION 6.03	Sales, Etc. of Assets.	39
SECTION 6.04	Investments in Other Persons.	40
SECTION 6.05	Accounting Changes	42
SECTION 6.06	Liens	42
SECTION 6.07	Dividends	42
SECTION 6.08	Modification of Organizational Documents; LLC Agreements; Advisory Agreement	44
SECTION 6.09	Prepayments, Etc., of Indebtedness	44
SECTION 6.10	Negative Pledge	44
SECTION 6.11	Business	44
SECTION 6.12	Financial Covenants	44
	ARTICLE VII
	EVENTS OF DEFAULT
SECTION 7.01	Events of Default	44

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Section		Page
	ARTICLE VIII
	THE ADMINISTRATIVE AGENT
SECTION 8.01	Appointment	47
SECTION 8.02	Administrative Agent in Its Individual Capacity	47
SECTION 8.03	Exculpatory Provisions	47
SECTION 8.04	Reliance by Administrative Agent	47
SECTION 8.05	Delegation of Duties	48
SECTION 8.06	Successor Administrative Agent	48
SECTION 8.07	Non-Reliance on Administrative Agent and Other Lenders	48
SECTION 8.08	Indemnification	48
	ARTICLE IX
	MISCELLANEOUS
SECTION 9.01	Notices	49
SECTION 9.02	Waivers; Amendment	50
SECTION 9.03	Expenses; Indemnity	52
SECTION 9.04	Successors and Assigns	53
SECTION 9.05	Survival of Agreement	55
SECTION 9.06	Counterparts; Integration; Effectiveness	55
SECTION 9.07	Severability	55
SECTION 9.08	Right of Setoff	55
SECTION 9.09	Governing Law; Jurisdiction; Consent to Service of Process	56
SECTION 9.10	Waiver of Jury Trial	56
SECTION 9.11	Headings	56
SECTION 9.12	Confidentiality	57
SECTION 9.13	USA PATRIOT Act Notice	57
SCHEDULES
Schedule I	Commitments
Schedule 5.06	Affiliate Transactions
Schedule 6.01	Existing Indebtedness
Schedule 6.04	Existing Investments
EXHIBITS
Exhibit A	Form of Assignment and Assumption
Exhibit B	Form of Borrowing Request
Exhibit C-1	Form of Term B Note
Exhibit C-2	Form of Term C Note
Exhibit D	Form of Opinion of Company Counsel
Exhibit E	Form of Solvency Certificate
Exhibit F	Form of Non-Bank Certificate
Exhibit G	Form of Pledge Agreement
Exhibit H	Form of Compliance Certificate

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CREDIT AGREEMENT

This CREDIT AGREEMENT (this “Agreement”), dated June 26, 2008, among EXPRESS TOPCO LLC, a Delaware limited liability company (“Borrower”), the Lenders, and KKR SCF LOAN ADMINISTRATION, LLC, a Delaware limited liability company, as administrative agent (in such capacity, “Administrative Agent”) for the Lenders.

WITNESSETH:

WHEREAS, Borrower has requested the Lenders to extend credit in the form of (x) Term B Loans in an aggregate principal amount of $150.0 million and (y) Term C Loans in an aggregate principal amount of $150.0 million.

WHEREAS, the proceeds of the Loans are to be used to finance one or more Dividends to the Equity Investors and the payment of related fees, costs and expenses.

NOW, THEREFORE, the Lenders are willing to extend such credit to Borrower on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

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

“Accelerating Lenders” shall mean, at any time, a Lender or Lenders having more than 25% of the sum of (a) the aggregate unpaid principal amount of all Loans outstanding and (ii) prior to the Commitment Termination Date, the aggregate Available Commitments then in effect.

“Administrative Agent” shall have the meaning assigned to such term in the preamble hereto and includes each other person appointed as the successor pursuant to Article VIII.

“Acquisition Transactions” shall have the meaning assigned to the term “Transactions” in the Opco Term Credit Agreement as of the date hereof.

“Advisory Agreement” means the advisory agreement dated as of July 6, 2007, as amended, among Holdings, Opco, Parent and the Borrower and GGC, as amended to the extent permitted under this Agreement.

“AHYDO Mandatory Prepayment” shall have the meaning assigned in Section 2.07(c).

“AHYDO Mandatory Prepayment Amount” shall mean the minimum portion of the Term C Loans required to be prepaid to prevent such Term C Loan from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code.

“AHYDO Mandatory Prepayment Date” shall have the meaning assigned in Section 2.07(c).

“Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.

“Agreement” shall have the meaning assigned to such term in the preamble hereto.

“Agreement Value” shall mean, for each Hedge Agreement, on any date of determination, an amount, if any, determined by the counterparty of the Hedge Agreement that is not the Borrower or a Subsidiary of the Borrower that would be payable by the Borrower or such Subsidiary that is a party to such Hedge Agreement to its counterparty to such Hedge Agreement in accordance with its terms, as if (i) such Hedge Agreement was being terminated early on such date of determination, (ii) the Borrower or such Subsidiary was the sole “Affected Party” and (iii) such counterparty was the sole party determining such payment amount.

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

“Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of each party whose consent is required by Section 9.04(b)), and accepted by the Administrative Agent, substantially in the form of Exhibit A, or such other form as shall be approved by the Administrative Agent.

“Attributable Indebtedness” shall mean, when used with respect to any Sale and Leaseback Transaction, as at the time of determination, the present value (discounted at a rate equivalent to Borrower’s then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.

“Available Term B Loan Commitment” shall mean as to any Lender at any time during the Commitment Period, an amount equal to the excess, if any, of (a) such Lender’s aggregate Commitment with respect to Term B Loans over (b) the aggregate principal amount of Term B Loans theretofore made hereunder in respect of such Commitment.

“Available Term C Loan Commitment” shall mean as to any Lender at any time during the Commitment Period, an amount equal to the excess, if any, of (a) such Lender’s aggregate Commitment with respect to Term C Loans over (b) the aggregate principal amount of Term C Loans theretofore made hereunder in respect of such Commitment.

“Bankruptcy Code” shall mean Title 11 of the United States Code, as now constituted or hereafter amended.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States.

“Board of Directors” shall mean, with respect to any person, (i) in the case of any corporation, the board of directors of such person and (ii) in any other case, the functional equivalent of the foregoing.

“Borrower” shall have the meaning assigned to such term in the preamble hereto.

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“Borrower LLC Agreement” shall mean the Limited Liability Company Agreement of Borrower dated as of the date hereof, as the same may be amended or modified from time to time in accordance with the terms of this Agreement.

“Borrowing Request” shall mean a request by Borrower in accordance with the terms of Section 2.03 and substantially in the form of Exhibit B, or such other form as shall be approved by the Administrative Agent.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in New York City are authorized or required by law to close.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Cash Equivalents” shall mean any of the following, to the extent owned by Borrower or any of its Subsidiaries and, in each case, having a maturity of not greater than one year from the date of issuance thereof: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) readily marketable direct obligations of any member of the European Economic Area, Switzerland or Japan, or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of such country, and, at the time of acquisition thereof having a credit rating of at least AA- (or the equivalent grade) by Moody’s or Aa3 by S&P, (c) marketable general obligations issued by any state of the United States or any political subdivision thereof or any instrumentality thereof that is guaranteed by the full faith and credit of such state and, at the time of acquisition thereof having a credit rating of at least AA- (or the equivalent grade) by Moody’s or Aa3 by S&P, (d) insured certificates of deposit, time deposits, eurodollar time deposits or overnight time deposits with any commercial bank that is organized under the laws of the United States or any State thereof, any member of the European Economic Area, Switzerland or Japan and has combined capital and surplus of at least $500 million, (e) commercial paper issued by any lender under the Opco Term Credit Agreement or Opco ABL Credit Agreement or any corporation organized under the laws of any State of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P, (f) repurchase agreements and reverse repurchase agreements with a duration of not more than 30 days for underlying securities of the types set forth in clauses (a) through (e) entered into with any financial institution meeting the specifications in clause (d) above, (g) auction rate securities or (h) Investments in money market funds, of which at least 95% of the portfolios are limited solely to Investments of the character, quality and maturity described in clauses (a) through (f) of this definition. With respect to any Foreign Subsidiary, “Cash Equivalents” shall also include any Investment substantially comparable to the foregoing but in the currency of the jurisdiction of organization of such Subsidiary, Euros or U.S. Dollars.

“Change in Control” shall mean the occurrence of any of the following: (a) at any time prior to the consummation of an IPO of the Equity Interests of the Parent, the Borrower or Holdings, the Sponsor shall cease to own at least 50% (directly or indirectly) of the Voting Interests in the Parent; or (b) at any time after the consummation of an IPO of the Equity Interests of the Parent, the Borrower or Holdings, any Person or two or more Persons acting in concert other than the Sponsor shall have acquired beneficial ownership (within the meaning of Rule 13(d)-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests (or other securities convertible into such Voting Interests) representing 35% or more of the combined voting power of all Voting Interests of the Parent, unless the Sponsor owns Voting Interests representing a greater percentage; or (c) at any time after the consummation of an IPO of the Equity Interests of the Parent, the

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Borrower or Holdings, during any period of up to 24 consecutive months, Continuing Directors shall cease for any reason to constitute a majority of the board of directors of the Borrower; or (d) at any time, Parent shall cease to beneficially own and control 100% of the economic and voting interest in the Equity Interests of Borrower, Borrower shall cease to beneficially own and control 100% of the economic and voting interest in the Equity Interests of Holdings or Holdings ceases to own and control 100% of the economic and voting interest in the Equity Interests of Opco.

“Change in Law” shall mean (a) the adoption of any law, treaty, order, rule or regulation after the Closing Date, (b) any change in any law, treaty, order, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance by any Lender (or for purposes of Section 2.08(c), by any lending office of such Lender or by such 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 Closing Date.

“Closing Date” shall mean the date hereof.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” shall mean all of the Equity Interests in Holdings plus all other “Collateral” referred to in the Collateral Documents.

“Collateral Documents” shall mean the Pledge Agreement and any other agreement that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

“Commitment” shall mean, with respect to each Lender, the commitment, if any of such Lender to make Loans hereunder in the amounts set forth on Schedule I attached hereto or in the Assignment and Assumption pursuant to which a Lender becomes a party hereto. The aggregate amount of all Lenders’ Commitments is $300.0 million.

“Commitment Period” shall mean the period from and including the Closing Date to and including the Commitment Termination Date.

“Commitment Termination Date” shall mean the earliest of (i) August 15, 2008, (ii) the date on which any of the Delayed Draw Term B Loans or the Delayed Draw Term C Loans are funded and (iii) the date on which the Commitments are otherwise terminated pursuant to the terms of this Agreement.

“Companies” shall mean Borrower, Holdings, Opco and their respective Subsidiaries; and “Company” shall mean any one of them.

“Compliance Certificate” shall mean the compliance certificate substantially the form of Exhibit H.

“Confidential Information” shall have the meaning assigned to such term in Section 9.12.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

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“Contingent Obligation” shall mean, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include any product warranties or other ordinary course contingent obligations incurred in the ordinary course of business, including indemnities. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Continuing Directors” means, in the case of the Borrower, the directors of the Borrower on the Closing Date and each other director if, in each case, such other director’s nomination for election to the board of directors of the Borrower is recommended by at least a majority of the then Continuing Directors.

“Control” shall mean 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 ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Credit Extension” shall mean the making of a Loan by a Lender.

“Debt for Borrowed Money” of any Person shall mean, at any date of determination, the sum of (a) the outstanding principal amount of all Indebtedness of the type referred to in clauses (a), (c) and (e) of the definition of “Indebtedness”, (b) all reimbursement Obligations at such date of such Person under acceptance, letter of credit or similar facilities at such date for amounts that have been drawn under such facilities and (c) all Synthetic Debt of such Person at such date; provided, however, for purposes of calculating Debt for Borrowed Money, the amount of the Revolving Credit Advances (as defined in the Opco ABL Credit Agreement) included therein shall be equal to the average daily outstanding balance of such revolving loans during the twelve (12) month period ended on such date.

“Default” shall mean any event, occurrence or condition which is, or upon notice, lapse of time or both would constitute, an Event of Default.

“Default Rate” shall have the meaning assigned to such term in Section 2.05(b).

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“Delayed Draw Loans” shall mean the Delayed Draw Term B Loans and the Delayed Draw Term C Loans, collectively.

“Delayed Draw Term B Loans” shall have the meaning assigned to such term in Section 2.01(a).

“Delayed Draw Term C Loans” shall have the meaning assigned to such term in Section 2.01(b).

“Disqualified Stock” means any Equity Interest that, by its terms, matures or is Redeemable, in whole or in part, on or prior to the date that is 91 days after the Final Maturity Date. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement shall be the maximum amount that Borrower or any of its Subsidiaries may become obligated to pay upon such maturity of, or pursuant to such Redeemable provisions in respect of, such Disqualified Stock.

“Dividend” with respect to any person shall mean that such person has declared or paid a dividend or returned any equity capital to the holders of its Equity Interests or authorized or made any other distribution, payment or delivery of property (other than Equity Interests of such person) or cash to the holders of its Equity Interests as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for consideration any of its Equity Interests outstanding (or any options or warrants issued by such person with respect to its Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for consideration any of the Equity Interests of such person outstanding (or any options or warrants issued by such person with respect to its Equity Interests). Without limiting the foregoing, “Dividends” with respect to any person shall also include all payments made or required to be made by such person with respect to any stock appreciation rights or similar phantom stock plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

“dollars” or “$” shall mean lawful money of the United States.

“EBITDA” means, for any period and with respect to any Person, Consolidated Net Income of such Person for such period, plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income (except with respect to item (xiv)), the sum of (i) Consolidated interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness of such Person for such period, (ii) Consolidated income tax (and franchise tax in the nature of income tax) (including federal, state, local and foreign income tax) expense and foreign withholding tax expense, in each case for such period, and any state single business unitary or similar tax of such Person for such period, (iii) depreciation and amortization expense (including amortization or impairment of intangibles (including goodwill) and organization costs) for such period (excluding amortization expense attributable to a prepaid cash item (except for deferred finance charges) that was paid in a prior period) of such Person for such period, (iv) any other non-cash deductions, losses, charges or expenses made in the ordinary course of business in determining Consolidated Net Income (but excluding any such non-cash charge in respect of an item that increased Consolidated Net Income in a prior period (to the extent of such increase) of such Person for such period, (v) any extraordinary losses and unusual or non-recurring expenses or charges incurred in such period, (vi) any Transaction Expenses paid in such period, (vii) costs and expenses incurred in the ordinary course of business in connection with acquisitions permitted under Section 6.04, issuances of Equity Interests of the Borrower (the net proceeds of which are contributed to Holdings and by Holdings to Opco), recapitalizations, Transfers or incurrence of Indebtedness permitted under Section 6.01 hereunder (for the purposes of this definition, each a “Permitted Item”), (viii) any payments made or accrued pursuant to the Advisory

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Agreement (as in effect on the Closing or as permitted to be amended hereby) and of reimbursement of ordinary course out-of-pocket costs and expenses payable to GGC or its Affiliates pursuant to the Advisory Agreement, (ix) foreign exchange losses recorded in “other income”, (x) expenses in connection with earn-out obligations, (xi) any one-time payments made related to any Permitted Item, including, without limitation, one-time compensation charges, stay bonuses paid to existing management and severance cost, and bonuses totaling $12.4 million paid to management of the Borrower and its Subsidiaries during the first Fiscal Quarter of 2008 in lieu of, or in connection with, the simultaneous payment of Dividends to the Equity Investors, (xii) expenses incurred to the extent reimbursable by third parties pursuant to indemnification provisions and either so collected or reasonably expected to be so collected, (xiii) all losses during such period resulting from the sale or disposition of any asset of the Borrower or any Subsidiary outside the ordinary course of business, (xiv) proceeds received from business interruption insurance, in each case, with respect to such measurement period, (xv) non-cash expenses resulting from the grant or periodic re-measurement of stock options or other equity-related incentives (and, for the avoidance of doubt, including any non-cash expenses related to any stock option or other equity-related incentives resulting from the acceleration of vesting in the event of a change in control) to any director, officer, employee, former employee or consultant of the Borrower or any of its Subsidiaries pursuant to a written plan or agreement approved by the board of directors of the Parent or the Borrower, (xvi) salary, benefit and other direct savings resulting from workforce reductions implemented or reasonably expected to be implemented within the following twelve months and severance related thereto in connection with the Permitted Acquisitions, (xvii) losses in respect of post-retirement benefits, as a result of the application of FASB 106, (xviii) losses during such period in connection with the extinguishment, retirement or write-off of Indebtedness and (xix) the amount of any loss from stores which have been closed or identified to be closed, and minus (b) without duplication and to the extent included in determining such Consolidated Net Income of such Person, any non-cash gains included in Consolidated Net Income of such Person for such period (other than any gains which represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period), minus (c) without duplication and to the extent included in determining such Consolidated Net Income of such Person, any extraordinary gains and unusual or non-recurring gains for such period, all determined on a Consolidated basis in accordance with GAAP, minus (d) without duplication and to the extent included in determining such Consolidated Net Income of such Person, foreign exchange gains recorded in “other income”, minus (e) without duplication and to the extent included in determining such Consolidated Net Income of such Person, all gains during such period resulting from the sale or disposition of any asset of the Borrower or any of its Subsidiaries outside the ordinary course of business, minus (f) without duplication and to the extent included in determining such Consolidated Net Income of such Person, the amount of any gain in respect of post-retirement benefits as a result of the application of FASB 106.

The historical EBITDA for any Measurement Period of entities (A) that are acquired by Holdings or any of its Subsidiaries after the Closing Date as permitted under the Loan Documents will be included in the calculation of EBITDA and (B) that are disposed of by Holdings or any of its Subsidiaries after the Closing Date will be excluded in the calculation of EBITDA; provided that, in the case of entities that are acquired by Holdings or any of its Subsidiaries after the Closing Date, the Administrative Agent shall be furnished with audited financial statements, or if audited financial statements are not available, other financial statements reasonably acceptable to the Administrative Agent, of such entities (or if the acquisition is of a division or branch of a larger business or a group of businesses, the audited financial statements, or if audited financial statements are not available, other financial statements reasonably acceptable to the Administrative Agent of such larger business or group of businesses, so long as the individual activities of the acquired entity are clearly reflected in such financial statements, together with a certificate certifying that the Borrower has reviewed the historical financial statements of the division or branch and that they reflect proper divisional accounting in relation to the large business or group of businesses in all material respects), reasonably satisfactory to the Administrative Agent in all material respects, confirming such historical results.

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“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other person (other than a natural person) approved by (i) the Administrative Agent and (ii) unless an Event of Default has occurred and is continuing, Borrower (each such approval by Administrative Agent and Borrower not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include Parent, Borrower, Holdings or any of Borrower’s or Holdings’ Subsidiaries.

“Equity Interests” shall mean, with respect to any person, shares of capital stock of (or other ownership or profit interests in) such person, warrants, options or other rights for the purchase or other acquisition from such person of shares of capital stock of (or other ownership or profit interests in) such person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such person or warrants, rights or options for the purchase or other acquisition from such person of such shares (or such other interests), and other ownership or profit interests in such person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized on any date of determination.

“Equity Investors” shall mean the direct or indirect owners of the Equity Interests of the Borrower, including Opco management, the Sponsor, Limited Brands Store Operations, Inc., a Delaware corporation, and EXP Investments, Inc., a Delaware corporation and “Equity Investor” shall mean any of them.

“Event of Default” shall have the meaning assigned to such term in Article VII.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of Borrower hereunder, (a) income, branch profits or franchise taxes imposed on (or measured by) its overall net income or overall gross income by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or is otherwise doing business (other than a business deemed to arise as a result of Borrower’s activities or as a result of the transactions contemplated by this Agreement) or, in the case of any Lender, in which its applicable lending office is located, (b) in the case of a Foreign Lender (other than an assignee pursuant to a request by Borrower under Section 2.12 or a participant pursuant to Section 2.10(c) upon a default of Borrower), any U.S. Federal 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, except to the extent that such Foreign Lender was entitled, at the time of designation of a new lending office, to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 2.11(a), and (c) any Taxes that are attributable to the failure to comply with Section 2.11(e) or (f). It is understood and agreed, for the avoidance of doubt, that any U.S. Federal withholding tax imposed on a Foreign Lender (including an assignee) as a result of a Change in Law or regulation or interpretation thereof occurring after the time such Foreign Lender became a party to this Agreement shall not be an Excluded Tax.

“Extraordinary Receipt” means any cash amount actually received by any Company (net of all out-of-pocket fees, costs, legal fees, court costs, taxes and other expenses incurred by any Company in connection with the collection, litigation, adjudication, arbitration, receipt or recovery of any

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such Extraordinary Receipt, in each case to the extent such amounts are not deducted in calculating Consolidated Net Income) that is not received in the ordinary course of business and which is received as a result of proceeds of casualty insurance and condemnation awards (and payments in lieu thereof); provided, however, that an Extraordinary Receipt shall not include cash receipts received from proceeds of insurance or condemnation awards (or payments in lieu thereof) to the extent that such proceeds or awards are received by any Person in respect of any third party claim against such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and expenses of such Person with respect thereto.

“Final Maturity Date” shall mean June 26, 2015.

“Financial Officer” of any person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such person.

“Fiscal Quarter” means a fiscal quarter of Borrower, Holdings and its Consolidated Subsidiaries ending on the Saturday ending on or next following the last day of April, July or October.

“Fiscal Year” means a fiscal year of Borrower, Holdings and its Consolidated Subsidiaries ending on the Saturday closest to January 31 in any calendar year.

“Foreign Lender” shall mean any Administrative Agent or Lender that is not a “United States person” within the meaning of Section 7701(a) (30) of the Code.

“Foreign Subsidiary” means a Subsidiary of Holdings that is organized under the laws of a jurisdiction located outside of the United States.

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

“Funding Date” shall mean any date on which a Loan is made to the Borrower pursuant to Section 2.03 hereof.

“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis.

“GGC” means GGC Administration, LLC.

“Governmental Authority” shall mean any federal, state, local or foreign court, central bank or governmental agency, authority, instrumentality or regulatory body or any subdivision thereof.

“Hedging Agreement” shall mean any swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies.

“Hedging Obligations” shall mean obligations under or with respect to Hedging Agreements.

“Holdings” shall mean Express Holding, LLC, a Delaware limited liability company.

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“Holdings LLC Agreement” shall mean the Second Amended and Restated Limited Liability Company Agreement of Holdings dated as of the date hereof, as the same may be amended or modified from time to time in accordance with the terms of this Agreement.

“Income Tax Rate” shall mean 42.0%.

“Indebtedness” of any person shall mean, without duplication, (a) all indebtedness of such person for borrowed money, (b) all Obligations of such person for the deferred purchase price of property or services (other than (1) trade payables not overdue by more than 90 days, deferred compensation and straight-line rent and landlord allowance, in each case incurred in the ordinary course of such person’s business and (2) purchase price adjustments under the Unit Purchase Agreement), (c) all Obligations of such person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person, (e) all Obligations of such person as lessee under Capitalized Leases, (f) all Obligations of such person under acceptance, letter of credit or similar facilities, (g) all Obligations of such person with respect to Disqualified Stock, (h) all Obligations of such person in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all Contingent Obligations and Synthetic Debt of such person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another person 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 (including, without limitation, accounts and contract rights) owned by such person, even though such person has not assumed or become liable for the payment of such indebtedness or other payment Obligations; but limited in amount to the lesser of (i) the fair market value of such property or (ii) the amount of such indebtedness or other payment obligations.

Notwithstanding anything to the contrary contained herein, Indebtedness shall not include (i) any amounts relating to preferred equity (other than Disqualified Stock), employee consulting arrangements, accrued expenses, deferred rent (other than Capitalized Leases), deferred taxes, obligations under employment agreements, unredeemed gift card deferred revenue and deferred compensation, or (ii) in connection with the existing letters of credit or any Permitted Acquisition or other acquisition otherwise permitted hereunder or consented to by the Lenders or in connection with the acquisition consummated pursuant to the Unit Purchase Agreement, (A) reimbursement obligations in respect of such existing letters of credit or any letter of credit assumed in such Permitted Acquisition or other acquisition, the payment of which is either fully (x) backed by a letter of credit or (y) cash collateralized, or (B) post-closing purchase price adjustments, earn-outs or similar obligations that are dependent upon the performance of the acquisition target after such closing to which the seller in such Permitted Acquisition or acquisition may become entitled.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Indemnitee” shall have the meaning assigned to such term in Section 9.03(b).

“Initial Loans” shall mean the Initial Term B Loans and the Initial Term C Loans, collectively.

“Initial Term B Loans” shall have the meaning assigned to such term in Section 2.01(a).

“Initial Term C Loans” shall have the meaning assigned to such term in Section 2.01(b).

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“Interest Coverage Ratio” shall mean the ratio, determined as of the end of a Fiscal Quarter for the most recently completed Measurement Period, of (x) EBITDA to (y) Interest Expense for such Measurement Period, all calculated for the Borrower and its Subsidiaries on a Consolidated basis.

“Interest Expense” shall mean, for any period, the total consolidated interest expense of Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP plus, without duplication, any other amounts added back in the calculation of EBITDA of the Borrower and its Subsidiaries for such period pursuant to clause (a)(i) of the definition thereof, and minus the amount of interest income earned by Borrower and its Subsidiaries during such Measurement Period; provided that (a) to the extent directly related to the Acquisition Transactions, the Transactions or the Loans, debt issuance costs, debt discount or premium and other financing fees and expenses shall be excluded from the calculation of Interest Expense (including the amortization or writeoff thereof) and (b) Interest Expense shall be calculated after giving effect to Hedging Agreements related to interest rates (including associated costs), but excluding unrealized gains and losses with respect to Hedging Agreements related to interest rates.

Interest Expense shall be calculated on a pro forma basis to give effect to any Indebtedness incurred, assumed or permanently repaid or extinguished during the relevant Measurement Period in connection with any acquisitions permitted under Section 6.04 and Asset Sales permitted under Section 6.03 (other than any dispositions in the ordinary course of business) as if such incurrence, assumption, repayment or extinguishing had been effected on the first day of such period.

“Interest Payment Date” shall mean (x) in the case of any Term B Loan, (a) the last day of each January and July to occur during any period in which any Term B Loans are outstanding and (b) the Final Maturity Date and (y) in the case of any Term C Loan, (a) the last day of each January, April, July and October to occur during any period in which any Term C Loans are outstanding and (b) the Final Maturity Date.

“Interest Period” shall mean the period commencing on the Closing Date or on the last day of the immediately preceding Interest Period, as applicable, and ending on the next following Interest Payment Date thereafter. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

“Interest Rate” shall mean, (x) in the case of interest on any Term B Loan, 13.5% per annum, and (y) in the case of interest on any Term C Loan, 14.5% per annum; provided that if the Borrower elects to pay interest due on any Term C Loan on an Interest Payment Date as PIK Interest in accordance with Section 2.05, such Term C Loan shall bear interest at 16.0% per annum for the Interest Period ending on such Interest Payment Date.

“Investment” in any Person means any loan or advance to such Person (other than (a) third-party trade receivables or (b) intercompany trade receivables, in each case incurred in the ordinary course of such Person’s business), any purchase or other acquisition of any Equity Interests or Indebtedness or the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or any other direct or indirect investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation (or similar transaction) and any arrangement pursuant to which the investor incurs Indebtedness of the types referred to in clause (i) or (j) of the definition of “Indebtedness” in respect of such Person

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“IPO” shall mean the first underwritten public offering by any direct or indirect holding company parent of Parent, Parent, Borrower, Holdings, Opco, or any of their Subsidiaries of its respective Equity Interests after the Closing Date pursuant to a registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act. For avoidance of doubt, an “IPO” shall not include any secondary sale of the Equity Interests of Parent or Borrower.

“Lenders” shall mean (a) the persons that are a party hereto as of the date hereof (other than Borrower and the Administrative Agent in such capacity) and (b) any Eligible Assignee that has become a party hereto pursuant to an Assignment and Assumption, other than, in each case, any such person that has ceased to be a party hereto pursuant to an Assignment and Assumption.

“Leverage Ratio” means, at any date of determination, the ratio of (i) Consolidated Debt for Borrowed Money (net of cash and Cash Equivalents) at such date to (ii) Consolidated EBITDA, in each case for the Borrower and its Subsidiaries for the most recently completed Measurement Period.

“Lien” shall mean, with respect to any property, (a) any mortgage, deed of trust, lien, pledge, encumbrance, claim, charge, assignment for security, hypothecation, security interest or encumbrance of any kind, in each case for security, or any filing of any financing statement under the UCC or any other similar notice of Lien under any similar notice or recording statute of any Governmental Authority, including any easement, right-of-way or other encumbrance on title to Real Property, in each of the foregoing cases whether voluntary or imposed by law; (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 property; and (c) in the case of securities, including the Units, any purchase option, call or similar right of a third party with respect to such securities (excluding any such right granted pursuant to Section 8 of the Holdings LLC Agreement).

“Loan Documents” shall mean this Agreement, the Notes (if any) and the Collateral Documents.

“Loan Document Obligations” shall mean (a) obligations from time to time arising in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on each of the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), in each case, of Borrower under this Agreement and the other Loan Documents, and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of Borrower under or pursuant to this Agreement and the other Loan Documents.

“Loan” or “Loans” shall mean, as the context may require, the Term B Loans and/or the Term C Loans.

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

“Material Adverse Effect” shall mean (a) a material adverse effect on the business, property, results of operations or financial condition of Borrower, Holdings and its Subsidiaries taken as a whole; (b) material impairment of the ability of Borrower to perform any of its obligations under any Loan Document; or (c) material impairment of the rights of or benefits or remedies available to the Lenders under any Loan Document.

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“Measurement Period” means each period of four consecutive fiscal quarters of Borrower and its Subsidiaries.

“Net Cash Proceeds” shall mean:

(a) with respect to any Transfer of any asset of the Borrower or any of its Subsidiaries (other than any Transfer of assets pursuant to Section 6.03 (other than clause (e) thereof)), the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such Transfer (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Indebtedness (other than Indebtedness under the Loan Documents) that is secured by such asset and that is required to be repaid in connection with such Transfer thereof, (B) the reasonable and customary out-of-pocket costs, fees, commissions, premiums and expenses incurred by the Borrower or its Subsidiaries, and (C) federal, state, provincial, foreign and local taxes reasonably estimated (on a Consolidated basis) to be actually payable as a result of any gain recognized in connection therewith; provided, however, that Net Cash Proceeds shall not include any such amounts to the extent such amounts are (x) reinvested (or intended to be reinvested) in similar assets used or useful in the business of Holdings and its Subsidiaries within 12 months after the date of receipt thereof, (y) committed to be reinvested in similar assets useful in the business of Holdings and its Subsidiaries within 12 months after the date of receipt thereof and are so reinvested within 6 months after such commitment or (z) not dividendable to the Borrower due to any contractual restriction or Requirement of Law then in effect (provided that any such amounts shall constitute Net Cash Proceeds at such time as such contractual or legal restrictions are no longer in effect or otherwise permit such amounts to be dividended to Borrower); provided, further, however, that no such amounts resulting from any Transfer shall be considered Net Cash Proceeds until they aggregate $1,000,000 in any fiscal year;

(b) with respect to the incurrence or issuance of any Indebtedness by Borrower or any of its Subsidiaries (other than Indebtedness incurred or issued pursuant to Section 6.01), the excess of (i) the sum of the cash and Cash Equivalents received in connection with such incurrence or issuance over (ii) the underwriting discounts and commissions or other similar payments, and other out-of-pocket costs, fees, commissions, premiums and expenses incurred by the Borrower or any of its Subsidiaries in connection with such incurrence or issuance to the extent such amounts were not deducted in determining the amount referred to in clause (i); and

(c) with respect to any Extraordinary Receipt received by the Borrower or any of its Subsidiaries that is not otherwise included in clauses (a) or (b) above, the sum of the cash and Cash Equivalents received in connection therewith; provided, however, that Net Cash Proceeds shall not include any such amounts to the extent such amounts are (x) reinvested (or intended to be reinvested) in fixed or capital assets used or useful in the business of the Borrower and its Subsidiaries within 12 months after the date of receipt thereof, (y) committed to be reinvested in fixed or capital assets used or useful in the business of Holdings and its Subsidiaries within 12 months after the date of receipt thereof and are so reinvested within 6 months after such commitment or (z) not dividendable to the Borrower due to any contractual restriction or Requirement of Law then in effect (provided that any such amounts shall constitute Net Cash Proceeds at such time as such contractual or legal restrictions are no longer in effect or otherwise permit such amounts to be dividended to Borrower).

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“Net Income” means, for any period, the net income or loss of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) unrealized gains and losses with respect to Hedge Agreements during such period and (b) the impact of purchase accounting or similar adjustments required or permitted by GAAP in connection with the Acquisition Transactions or any Permitted Acquisition (including the reduction of revenue from any write-down of deferred revenue).

“Net Taxable Income” shall mean the amount by which the cumulative taxable income or gain for all years from the first taxable year of the Borrower beginning after the Closing Date to the year of determination exceeds the cumulative tax loss of the Borrower for all such years (and, for the avoidance of doubt, taking into account the deductibility of state income taxes for United States federal income tax purposes).

“Notes” shall mean each of the notes evidencing the Term B Loans issued pursuant to this Agreement, if any, substantially in the form of Exhibit C-1 and each of the notes evidencing the Term C Loans issued pursuant to this Agreement, if any, substantially in the form of Exhibit C-2.

“Obligations” shall mean, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 7.01(g). Without limiting the generality of the foregoing, the Obligations of any Company under the Loan Documents include (a) the obligation to pay principal, interest, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Company under any Loan Document and (b) the obligation of such Company to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Company, to the extent permitted by the Loan Documents.

“Officers’ Certificate” shall mean, as to any person, a certificate executed by the chairman of the Board of Directors (if an officer), the chief executive officer, the president or any one of the Financial Officers of such person, each in his or her official (and not individual) capacity.

“Opco” means Express, LLC, a Delaware limited liability company and a wholly owned subsidiary of Holdings.

“Opco ABL Credit Agreement” means (i) that certain Asset-Based Loan Credit Agreement dated as of July 6, 2007 among Holdings, Opco, the lenders party thereto, Wells Fargo Retail, as administrative agent and as collateral agent and Morgan Stanley Senior Funding, Inc., as initial issuing bank, as amended, restated, supplemented or modified from time to time and (ii) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend or refinance in whole or in part the indebtedness and other obligations outstanding under the (x) credit agreement referred to in clause (i) or (y) any subsequent Opco ABL Credit Agreement, unless such agreement or instrument expressly provides that it is not intended to be and is not an Opco ABL Credit Agreement hereunder. Any reference to the Opco ABL Credit Agreement hereunder shall be deemed a reference to any Opco ABL Credit Agreement then in existence.

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“Opco Term Credit Agreement” means (i) that certain Term Loan Credit Agreement dated as of July 6, 2007 among Holdings, Opco, the lenders party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent, as amended, restated, supplemented or modified from time to time and (ii) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend or refinance in whole or in part the indebtedness and other obligations outstanding under the (x) credit agreement referred to in clause (i) or (y) any subsequent Opco Term Credit Agreement, unless such agreement or instrument expressly provides that it is not intended to be and is not an Opco Term Credit Agreement hereunder. Any reference to the Opco Term Credit Agreement hereunder shall be deemed a reference to any Opco Term Credit Agreement then in existence.

“Organizational Documents” shall mean, with respect to any person, (i) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such person, (ii) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such person, (iii) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such person, (iv) in the case of any general partnership, the partnership agreement (or similar document) of such person and (v) in any other case, the functional equivalent of the foregoing.

“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including related interest, fines, penalties and additions to tax) arising from any payment made or required to be made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

“Parent” means Express Parent LLC, a Delaware limited liability company which owns 100% of the Equity Interests of the Borrower.

“Participant” shall have the meaning assigned to such term in Section 9.04(e).

“Permitted Acquisition” shall have the meaning assigned to such term in Section 6.04(g).

“Permitted Borrower Subordinated Indebtedness” shall mean Indebtedness of the Borrower (a) that does not have any scheduled principal payment, mandatory principal payment, sinking fund payment or similar payment due prior to the 91^st day after the Final Maturity Date, (b) interest of which is payable in kind, (c) that is not secured by any Lien on any property, (d) for which none of the Companies (other than the Borrower) are liable in any way, (e) that is subordinated in right of payment to the Loan Document Obligations in a manner that is, and otherwise has terms and conditions that are, satisfactory to Administrative Agent, (f) that is held by a person or an Affiliate of a person that owns, directly or indirectly, Equity Interests in the Borrower and (g) that is in an amount that does not exceed the amount necessary to pay interest that is then due and payable under this Agreement and such proceeds are used for such purpose.

“Permitted Distributions” shall mean, (i) the distribution by the Borrower to Parent of fees, costs and expenses due and payable to GGC or any of its Affiliates in accordance with the Advisory Agreement (as in effect on the date hereof or as amended as permitted hereby) to the extent not otherwise paid by Borrower or its Subsidiaries; (ii) distributions by the Borrower to Parent for franchise taxes and other fees required to maintain the legal existence of Parent or to pay the out-of-pocket legal, accounting and other fees and expenses in the nature of overhead in the ordinary course of business of Parent, including without limitation payment of fees and reimbursement of expenses of the board of directors in an aggregate amount in any Fiscal Year not to exceed $1.0 million and (iii) for so long as the Borrower is

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treated as a partnership or is disregarded as an entity for federal income tax purposes, distributions by Borrower to Parent in order for Parent to make tax distributions to its members pursuant to Section 4.02 of that certain Amended and Restated Limited Liability Company Agreement, dated as of the date hereof, by and between Parent and its members in an amount equal to the product of (1) the Income Tax Rate and (2) the amount of the increase, if any, for the taxable year in the Net Taxable Income of the Borrower allocable to Parent; provided that the amount of any such payment for any taxable year shall not exceed the amount of the income tax obligations that would have been payable by Borrower for such taxable year if Borrower was and had been at all times a corporation for federal income tax purposes filing a consolidated, combined or similar group tax return, of which Borrower and its domestic Subsidiaries were members, and subject to tax at the Income Tax Rate.

“Permitted Liens” shall mean, (i) to the extent the same constitute Liens, the provisions of Section 8 of the Holdings LLC Agreement, (ii) Liens in favor of the Administrative Agent for the benefit of the Lenders granted pursuant to any Loan Document; and (iii) Liens for taxes not yet due and payable or which are being contested in good faith by appropriate proceedings and in accordance with applicable law; provided that adequate reserves with respect thereto are maintained on the books of Borrower in conformity with GAAP.

“person” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership or government, or any agency or political subdivision thereof, in any case, whether acting in a personal, fiduciary or other capacity.

“PIK Interest” shall have the meaning assigned to such term in Section 2.05(a).

“Pledge Agreement” shall mean the pledge agreement to be executed by Borrower in substantially the form of Exhibit G, or such other form as shall be approved by the Administrative Agent, as it may be amended, supplemented or otherwise modified from time to time.

“Proceeding” shall mean, with respect to any person, any (a) insolvency, bankruptcy, receivership, reorganization, readjustment, composition or other similar proceeding relating to such person or its property or creditors in such capacity, (b) proceeding for any liquidation, dissolution or other winding-up of such person, voluntary or involuntary, whether or not involving insolvency or proceedings under the Bankruptcy Code, whether partial or complete and whether by operation of law or otherwise, (c) assignment for the benefit of creditors of such person or (d) other marshalling of the assets of such person.

“property” shall mean any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity Interests or other ownership interests of any person and whether now in existence or owned or hereafter entered into or acquired, including all Real Property.

“Qualified Capital Stock” of any person shall mean any Equity Interests of such person that are not Disqualified Stock.

“Redeemable” means, with respect to any Equity Interest, any such Equity Interest that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

“Register” shall have the meaning assigned to such term in Section 9.04(c).

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

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

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

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

“Required Lenders” shall mean, at any time, a Lender or Lenders having more than 50% of the sum of (a) the aggregate unpaid principal amount of all Loans outstanding and (ii) prior to the Commitment Termination Date, the aggregate Available Commitments then in effect; provided that for purposes of such calculation, any Loans or Commitments held by any Affiliate of Borrower, Holdings, Parent or any Equity Investor shall be disregarded.

“Requirements of Law” shall mean, collectively, any and all requirements of any Governmental Authority including any and all laws, ordinances, rules, regulations or similar statutes or case law.

“Responsible Officer” of any person shall mean any executive officer or Financial Officer of such person or any other officer or similar official thereof with responsibility for the administration of the obligations of such person in respect of this Agreement.

“Sale and Leaseback Transaction” shall mean any arrangement, directly or indirectly, with any person whereby Borrower or any of its Subsidiaries shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“Secured Parties” shall mean the Administrative Agent and any Lender.

“Securities Act” shall mean the Securities Act of 1933.

“Significant Subsidiary” shall mean any Subsidiary of Opco that would be a “Significant Subsidiary” of Opco within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“Sponsor” means Golden Gate Private Equity, Inc., a Delaware corporation and each investment fund managed by it.

“Subsidiary” shall mean, with respect to any person (the “parent”) at any date, (i) any other corporation, limited liability company, association or other business entity of which securities or other ownership interests representing more than 50% of the voting power of all Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof are, as of such date, owned, controlled or held by the parent and/or one or more subsidiaries of the parent, (ii) any partnership (a) the sole general partner or the managing general partner of which is the parent and/or one or more subsidiaries of the parent or (b) the only general partners of which are the parent and/or one or more subsidiaries of the parent and (iii) any other person that is otherwise Controlled by the parent and/or one or more subsidiaries of the parent.

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“Successful Syndication” shall mean the assignment (at a cash purchase price of 98% of the applicable principal amount) after the Closing Date by the Lenders listed on Schedule I (allocated among the Lenders as they may elect in their discretion) (the “Closing Date Lenders”) to one or more assignees approved by the Sponsor in its sole discretion of $50.0 million in aggregate principal amount of Term B Loans and $50.0 million in aggregate principal amount of Term C Loans and the receipt by the Closing Date Lenders of the cash purchase price from such assignees for such assignment; provided (i) the Closing Date Lenders shall not sell or otherwise transfer any of their Loans prior to the Commitment Termination Date except in connection with a Successful Syndication and (ii) if Sponsor produces an Eligible Assignee that is ready, willing and able to consummate such assignment, then the Closing Date Lenders will consummate such assignment substantially concurrently with the draw of the Delayed Draw Loans and if the Closing Date Lenders fail to do so, the Closing Date Lenders shall be deemed to have achieved a Successful Syndication.

“Synthetic Debt” shall mean, with respect to any person, without duplication of any clause within the definition of “Indebtedness,” all (a) Obligations of such person under any lease that is treated as an operating lease for financial accounting purposes and a financing lease for tax purposes (i.e., a “synthetic lease”) and (b) Obligations of such person in respect of transactions entered into by such person that are intended to function primarily as a borrowing of funds (including, without limitation, any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on a Consolidated balance sheet of such person and its Subsidiaries in accordance with GAAP.

“Tax Return” shall mean all returns, statements, filings, attachments and other documents or certifications required to be filed in respect of Taxes.

“Taxes” shall mean any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings or other similar charges imposed by a Governmental Authority, whether computed on a separate, consolidated, unitary, combined or other basis and any and all liabilities (including related interest, fines, penalties or additions to tax) with respect to the foregoing.

“Term B Loans” shall mean the Initial Term B Loans and the Delayed Draw Term B Loans, collectively.

“Term C Loans” shall mean the Initial Term C Loans and the Delayed Draw Term C Loans, collectively.

“Transaction Expenses” shall mean costs and expenses incurred in connection with the Acquisition Transactions and the Transactions, dividend payments to any director, officer or employee in connection with the Acquisition Transactions or the Transactions deemed to be an expense in accordance with GAAP and retention bonuses paid to employees in an aggregate amount not to exceed $5,000,000 from July 6, 2007 through July 5, 2008.

“Transactions” shall mean, collectively, (a) the execution, delivery and performance of the Loan Documents and the borrowings hereunder; (b) the funding of the Dividends contemplated by Section 6.07(a);and (c) the payment of all fees and expenses to be paid on or prior to the Closing Date and any other Funding Date and owing in connection with the foregoing.

“Transfer” shall have the meaning assigned to such term in Section 6.03.

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“UCC” shall mean the Uniform Commercial Code as in effect from time to time in any applicable state or jurisdiction.

“United States” shall mean the United States of America.

“Unit Purchase Agreement” shall mean the Unit Purchase Agreement dated as of May 15, 2007, as amended, supplemented or otherwise modified in accordance with its terms, among Express Investment Corp., a Delaware corporation, Limited Brands Store Operations, Inc., a Delaware corporation, Limited Brands, Inc., a Delaware corporation, and Holdings.

“Units” means the ownership interest in Holdings held by the Borrower.

SECTION 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any Loan Document, 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, (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 Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, unless otherwise indicated, (e) any reference to any law or regulation herein shall refer to such law or regulation as amended, modified or supplemented from time to time and (f) 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.

SECTION 1.03 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from time to time and all terms of an accounting or financial nature (including those used in the calculation of the covenants set forth in Section 6.12) shall be construed and interpreted in accordance with GAAP, as in effect on the date hereof unless otherwise agreed to by Borrower and the Required Lenders.

SECTION 1.04 Resolution of Drafting Ambiguities. Borrower acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of the Loan Documents to which it is a party, that it and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof or thereof.

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ARTICLE II

THE CREDITS

SECTION 2.01 Commitments.

(a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees severally, and not jointly, to make a Loan to Borrower in dollars in a principal amount equal to 98.0% of its Commitment in respect of Term B Loans. Notwithstanding anything to the contrary herein and for the avoidance of doubt, the principal amount of each Term B Loan owing to each Lender as of the Funding Date for such Loan (before giving effect to any subsequent repayments) shall be an amount equal to such Lender’s Commitment in respect of which Term B Loan was made irrespective that the amount funded on the applicable Funding Date is 98.0% of such Commitment. Amounts paid or prepaid in respect of Term B Loans may not be reborrowed. The Term B Loans shall be available, subject to the terms and conditions hereof, in two drawings: (i) an initial drawing on the Closing Date in an aggregate principal amount of $100,000,000 (such Term B Loan made on the Closing Date being referred to herein as the “Initial Term B Loans”) and (ii) a second drawing (any such Term B Loan made in such second draw being a “Delayed Draw Term B Loan”) not later than the Commitment Termination Date of the remaining Available Term B Loan Commitments of the Lenders.

(b) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees severally, and not jointly, to make a Loan to Borrower in dollars in a principal amount equal to 98.0% of its Commitment in respect of Term C Loans. Notwithstanding anything to the contrary herein and for the avoidance of doubt, the principal amount of each Loan owing to each Lender as of the Funding Date for such Term C Loan (before giving effect to any subsequent repayments) shall be an amount equal to such Lender’s Commitment in respect of which Term C Loan was made irrespective that the amount funded on the applicable Funding Date is 98.0% of such Commitment. Amounts paid or prepaid in respect of Term C Loans may not be reborrowed. The Term C Loans shall be available, subject to the terms and conditions hereof, in two drawings: (i) an initial drawing on the Closing Date in an aggregate principal amount of $100,000,000 (such Term C Loan made on the Closing Date being referred to herein as the “Initial Term C Loans”) and (ii) a second drawing (any such Term C Loan made in such second draw being a “Delayed Draw Term C Loan”) not later than the Commitment Termination Date of the remaining Available Term C Loan Commitments of the Lenders.

SECTION 2.02 Loans.

(a) Each Term B Loan shall be made by the Lenders ratably in accordance with their applicable Commitments in respect thereof and each Term C Loan shall be made by the Lenders ratably in accordance with their applicable Commitments in respect thereof; provided that the failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender).

(b) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 2:00 p.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to an account as directed by Borrower in the applicable Borrowing Request or, if the borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.

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SECTION 2.03 Borrowing Procedure. To request the borrowing, Borrower shall deliver, by hand delivery, telecopier or “pdf” electronic transmission, a duly completed and executed Borrowing Request to the Administrative Agent not later than 1:00 p.m., New York City time, one Business Day before the anticipated Funding Date. The Borrowing Request shall be substantially in the form of Exhibit B hereto.

SECTION 2.04 Evidence of Debt; Repayment of Loans.

(a) Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender, the principal amount of each Loan of such Lender on the Final Maturity Date, and Borrower hereby acknowledges that such amount shall be due and payable on such date.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrower to such Lender resulting from the Loans made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder; (ii) the amount of any principal or interest due and payable or to become due and payable from Borrower to each Lender hereunder; and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of Borrower to repay any of the Loans in accordance with their terms.

(e) Any Lender by written notice to Borrower (with a copy to the Administrative Agent) may request that any Loans made by it be evidenced by a promissory note. In such event, Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in the form of Exhibit C-1, in the case of Term B Loans, and Exhibit C-2, in the case of Term C Loans. Thereafter, each of the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.05 Interest on Loans.

(a) Subject to the provisions of Section 2.05(b), each Loan shall bear interest at the Interest Rate which shall be payable in cash on the applicable Interest Payment Date; provided that in the case of the Term C Loans, if the Borrower elects by written notice to Administrative Agent at least 5 Business Days prior to the applicable Interest Payment Date to pay all or any portion of the same in kind, then such interest subject to such election shall accrue and be payable in kind, capitalized, compounded and added to the unpaid principal amount of the Term C Loans on the applicable Interest Payment Date (the “PIK Interest”). Amounts representing the PIK Interest shall be treated as Term C Loans for purposes of this Agreement and shall bear interest in accordance with this Section 2.05. The obligation of the Borrower to pay all such PIK Interest so added shall be automatically evidenced by any Notes issued to the Lenders with respect to Term C Loans.

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(b) Notwithstanding the foregoing, if any principal of any Loan is not paid when due or interest on any Loan is not paid within two Business Days after such amount is due, whether at stated maturity, upon acceleration or otherwise, at the request of the Required Lenders, all Loan Document Obligations shall, to the extent permitted by applicable law, bear interest, after as well as before judgment, at a rate per annum equal to 1.5% plus the rate otherwise applicable to the Loans (assuming, in the case of Term C Loans, interest is paid as PIK Interest) as provided in Section 2.05(a) (the “Default Rate”).

(c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to Section 2.05(b) shall be payable on demand and (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.

(d) The initial Interest Period with respect to the Term B Loans shall commence on the Closing Date and end on July 31, 2008, and each subsequent Interest Period shall automatically, without any action by Borrower or any other Person, commence upon the expiration of the immediately preceding Interest Period. The initial Interest Period with respect to the Term C Loans shall commence on the Closing Date and end on July 31, 2008, and each subsequent Interest Period shall automatically, without any action by Borrower or any other Person, commence upon the expiration of the immediately preceding Interest Period. All interest hereunder shall be computed on the basis of a year of 365 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

SECTION 2.06 Termination of Commitments. The Commitments shall automatically terminate at 5:00 p.m., New York City time, on the Commitment Termination Date.

SECTION 2.07 Optional and Mandatory Prepayments of Loans.

(a) Optional Prepayments. The Borrower may, at its option, prepay the Term B Loans in whole or in part at the redemption price set forth below (expressed as a percentage of the principal amount of Loans to be prepaid) plus accrued and unpaid interest, if any, to the date of prepayment; provided that each partial prepayment shall be in an amount that is an integral multiple of $500,000 and not less than $500,000 or, if less, the aggregate outstanding principal amount of the Term B Loans:

Period:	Redemption Price
On or after the Closing Date but prior to the 18 month anniversary of the Closing Date	114.00	%
On or after the 18 month anniversary of the Closing Date but prior to the second year anniversary of the Closing Date	107.00	%
On or after the second year anniversary of the Closing Date but prior to the third year anniversary of the Closing Date	104.00	%
On or after the third year anniversary of the Closing Date but prior to the fourth year anniversary of the Closing Date	102.00	%
Thereafter	100.0	%

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(b) The Borrower may, at its option, prepay the Term C Loans in whole or in part at the redemption price set forth below (expressed as a percentage of the principal amount of Loans to be prepaid (excluding any portion of such Loans representing PIK Interest)) plus accrued and unpaid interest, if any, to the date of prepayment; provided that each partial prepayment shall be in an amount that is an integral multiple of $500,000 and not less than $500,000 or, if less, the aggregate outstanding principal amount of the Term C Loans:

Period:	Redemption Price
On or after the Closing Date but prior to the first year anniversary of the Closing Date	103.00	%
On or after the first year anniversary of the Closing Date but prior to the second year anniversary of the Closing Date	102.00	%
On or after the second year anniversary of the Closing Date but prior to the third year anniversary of the Closing Date	101.00	%
Thereafter	100.0	%

In the case of Term C Loans, amounts to be applied in connection with this Section 2.07(b) shall be deemed to be applied first to PIK Interest theretofore added to principal and second to original principal amounts.

(c) Mandatory Prepayments.

(i) No later than the first Business Day following the receipt of any Net Cash Proceeds by Borrower or any of the other Companies, Borrower shall offer to prepay the Loans (at par) as set forth in Section 2.07(e) in an amount equal to 100% of such Net Cash Proceeds, without premium or penalty; provided that Borrower shall not be required to prepay any Loans in connection with this Section 2.07(c)(i) until the aggregate amount of all Net Cash Proceeds received (and not theretofore applied) equals or exceeds $500,000.

(ii) If the Term C Loans would otherwise constitute “applicable high yield discount obligations” within the meaning of Section 163(i)(1) of the Code, at the end of the first accrual period ending after the fifth anniversary of the Closing Date and each accrual period thereafter (each, an “AHYDO Prepayment Date”), the Borrower will be required to prepay a portion of the Term C Loans then outstanding in an amount equal to the AHYDO Mandatory Prepayment Amount (such prepayment, an “AHYDO Mandatory Prepayment”), without premium or penalty.

(iii) Not later than one Business Day following a Change in Control, Borrower shall prepay all outstanding Loans at a redemption price equal to the then applicable redemption price for such Loans (as applicable) pursuant to Section 2.07(a) and (b).

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(iv) Not later than one Business Day after an IPO, Borrower shall prepay the Loans, at a redemption price equal to the then applicable redemption price for such Loans (as applicable) pursuant to Section 2.07(a) and (b), in a principal amount equal to 50% of such proceeds, net of a proportionate portion of customary fees, commissions, costs and other expenses incurred in connection with such equity issuance.

(d) Notice of Prepayment. Borrower shall notify the Administrative Agent by written notice of any prepayment hereunder not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment. Each such notice shall be irrevocable. Each such notice shall specify the prepayment date, the principal amount of each Loan or portion thereof to be prepaid, the redemption price therefor and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Such notice to the Lenders may be by electronic communication. Each mandatory prepayment of a Loan pursuant to Section 2.07(c) (other than pursuant to Section 2.07(c)(ii), which shall be applied solely to the Term C Loans) shall be applied ratably to the Term B Loans and Term C Loans and as to the amount applicable to a tranche of Loans, shall be applied ratably to the Loans of such tranche. Each voluntary prepayment of a Loan pursuant to Section 2.07(a) and Section 2.07(b) shall be applied to the Term B Loans and the Term C Loans as directed by the Borrower. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.05.

(e) Lender Opt-Out. With respect to any prepayment of Loans pursuant to Section 2.07(c)(i), any Lender, at its option, may elect not to accept such prepayment. Upon the dates set forth in Section 2.07(c)(i) for any such prepayment of Loans, the Borrower shall notify the Administrative Agent of the amount that is available to prepay the Loans (the “Prepayment Amount”). Promptly after the date of receipt of such notice, the Administrative Agent shall provide written notice (the “First Offer”) to the Lenders of the amount available to prepay the Loans. Any Lender declining such prepayment (a “Declining Lender”) shall give written notice thereof to the Administrative Agent by 11:00 a.m. no later than two (2) Business Days after the date of such notice from the Administrative Agent. On such date the Administrative Agent shall then provide written notice (the “Second Offer”) to the Lenders other than the Declining Lenders (such Lenders being the “Accepting Lenders”) of the additional amount available (due to such Declining Lenders’ declining such prepayment) to prepay Loans owing to such Accepting Lenders, such available amount to be allocated on a pro rata basis among the Lenders that accept the Second Offer. Any Lender declining prepayment pursuant to such Second Offer shall give written notice thereof to the Administrative Agent by 11:00 a.m. no later than one (1) Business Day after the date of such notice of a Second Offer. The Borrower shall prepay the Loans as set forth in Section 2.07(c)(i) within one Business Day after its receipt of notice from the Administrative Agent of the aggregate amount of such prepayment. Amounts remaining after the allocation of accepted amounts with respect to the First Offer and the Second Offer to Accepting Lenders shall be retained by the Borrower.

SECTION 2.08 Increased Costs.

If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; or

(ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or Loans made by such Lender;

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and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder, then Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered (it being understood that this Section 2.08(a) shall not apply to Taxes which are governed by Section 2.11).

(b) If any Lender determines (in good faith, but in its sole absolute discretion) that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.08 shall be delivered to Borrower (with a copy to the Administrative Agent) and shall be conclusive and binding absent manifest error. Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.08 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender, as the case may be, notifies Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided, further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall not begin earlier than the date of effectiveness of the Change in Law.

SECTION 2.09 [Reserved].

SECTION 2.10 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

(a) Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.08 or 2.11, or otherwise) on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m., New York City time), on the date when due, in immediately available funds, without setoff, deduction 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 555 California Street, 50^th floor, San Francisco, California 94104 and except that payments pursuant to Sections 2.08 and 9.03 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 shall be due on a day that is not a Business Day, unless specified otherwise, the date for payment shall be extended to the next succeeding Business Day, 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.

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(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and other amounts then due hereunder, such funds shall be applied (i) first, towards payment of interest and other amounts then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and other amounts then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c) 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 resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its 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 par value) participations in the 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 Loans; provided 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 (ii) the provisions of this paragraph shall not be construed to apply to any payment made by Borrower 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 to any assignee or participant, other than to Parent, Holdings, Borrower or any of its Subsidiaries (as to which the provisions of this paragraph shall apply). Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that Borrower will not make such payment, the Administrative Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such 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 greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.10(d) or 9.03(d), 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 such Sections until all such unsatisfied obligations are fully paid.

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SECTION 2.11 Taxes.

(a) Any and all payments by or on account of any obligation of Borrower hereunder or under any other Loan Document shall be made without setoff, counterclaim or other defense and free and clear of and without deduction or withholding for any and all Indemnified Taxes; provided that if Borrower shall be required by law to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions or withholdings applicable to additional sums payable under this Section 2.11) the Administrative Agent or any Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) Borrower shall make such deductions or withholdings and (iii) Borrower shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law and shall indemnify the Administrative Agent and each Lender, within 10 Business Days after written demand therefor, for the full amount of Other Taxes paid by the Administrative Agent or such Lender, as the case may be and reasonable expenses arising therefrom or with respect thereto, whether or not such Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate accompanied by reasonable detail as to the amount of such payment or liability delivered to Borrower by a Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(c) Borrower shall indemnify the Administrative Agent and each Lender, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of Borrower hereunder or under any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11 and reasonable out-of-pocket 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 accompanied by reasonable detail as to the amount of such payment or liability delivered to Borrower by a Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes and in any event within 30 days of any such payment being due, by Borrower to a Governmental Authority, Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by Borrower or the Administrative Agent as will permit such payments under this Agreement to be made without withholding or at a reduced rate. Each Foreign Lender, on or before the date it becomes a Foreign Lender, shall to the extent it is legally entitled to do so (i) furnish two copies (which shall be accurate and complete, and originally executed) of either (a) U.S. Internal Revenue Service Form W-8BEN (or successor form), (b) U.S. Internal Revenue Service Form W-8ECI (or successor form), certifying, in the case of (a) or (b), to such Foreign Lender’s legal entitlement to an exemption or reduction from U.S. federal withholding tax with respect to payments hereunder, or (c) to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Foreign Lender, U.S. Internal Revenue Service Form W-8IMY (or any successor forms), together with any information, if any, such party chooses to transmit with such form, and any other certificate or statement of exemption

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required under the Code or the regulations issued thereunder, to establish that such party is not acting for its own account with respect to a portion of any such sums payable to such party, and (ii) to the extent it may lawfully do so at such times, upon reasonable request by Borrower or the Administrative Agent, provide a new Form W-8BEN (or successor form), Form W-8ECI (or successor form) or Form W-8IMY (or successor form) upon the expiration or obsolescence of any previously delivered form to confirm any complete exemption from, or any entitlement to a reduction in, U.S. federal withholding tax with respect to any payments hereunder, or to establish that such party is not acting for its own account with respect to a portion of any such sums payable to such party; provided that any Foreign Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code that is relying on the “portfolio interest exception” under Section 881(c) of the Code shall also furnish a “Non-Bank Certificate” in the form of Exhibit F if it is furnishing a Form W-8BEN. Each Foreign Lender that does not furnish Internal Revenue Service Form W-8ECI (or successor form) represents that, to its knowledge, any fees paid hereunder are not attributable to services performed by such Lender in the United States.

(f) Any Administrative Agent or Lender that is not a Foreign Lender and is not an exempt recipient (as defined in Section 6049(b)(4) of the Code and the regulations issued thereunder) shall deliver to the Borrower (with a copy to the Administrative Agent), on or prior to the date it become a party hereto, and at such other times as may be necessary in the determination of Borrower in its reasonable discretion, two U.S. Internal Revenue Service Form W-9 (or any successor forms) properly completed and duly executed by such party.

(g) If the Administrative Agent or a Lender (or an assignee) determines in its reasonable discretion that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by Borrower or with respect to which Borrower has paid additional amounts pursuant to this Section 2.11, it shall pay over such refund to Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by Borrower under this Section 2.11 with respect to the Indemnified Taxes or the Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (or assignee) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that Borrower, upon the request of the Administrative Agent or such Lender (or assignee), agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender (or assignee) within a reasonable time (not to exceed 20 days) after receipt of written notice that the Administrative Agent or such Lender (or assignee) is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.11(g) shall require the Administrative Agent or any Lender (or assignee) to make available its Tax Returns or any other information which it deems confidential to Borrower or any other person. Notwithstanding anything to the contrary, in no event will any Lender be required to pay any amount to Borrower the payment of which would place such Lender in a less favorable net after-tax position than such Lender would have been in if the Indemnified Taxes or Other Taxes giving rise to such refund had never been paid in the first instance.

SECTION 2.12 Mitigation Obligations; Replacement of Lenders.

(a) Mitigation of Obligations. If any Lender requests compensation under Section 2.08, or if Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, 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 Section 2.08 or 2.11, as the case may be, in the future and (ii) would not subject such Lender to

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any unreimbursed cost or expense and would not otherwise be disadvantageous in any material respect to such Lender. Borrower hereby agrees to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment. A certificate setting forth such costs and expenses in reasonable detail submitted by such Lender to the Administrative Agent shall be conclusive absent manifest error.

(b) Replacement of Lenders. If any Lender requests compensation under Section 2.08, or if Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, or if any Lender defaults in its obligation to fund Loans hereunder, then Borrower may, at its sole expense and effort, 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 9.04), all of its interests, rights and obligations under this Agreement to an assignee selected by Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of all of its Loans (at par, without any redemption premium), 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 Borrower (in the case of all other amounts) in the case of any such assignment resulting, from a claim for compensation under Section 2.08 or payments required to be made pursuant to Section 2.11, 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 Borrower to require such assignment and delegation cease to apply.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and each of the Lenders that:

SECTION 3.01 Organization; Powers. Borrower (a) is duly organized and validly existing under the laws of Delaware, (b) has all requisite power and authority to carry on its business as now conducted and to own and lease its property and (c) is qualified and in good standing to do business in every jurisdiction where such qualification is required, except in such jurisdictions where the failure to so qualify or be in good standing, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.02 Authorization; Enforceability. The debt financing transaction to be entered into by Borrower hereunder is within Borrower’s powers and has been duly authorized by all necessary action on the part of Borrower. This Agreement has been duly executed and delivered by Borrower and constitutes, and each other Loan Document, when executed and delivered by Borrower, will constitute, a legal, valid and binding obligation of Borrower, 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.

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SECTION 3.03 No Conflicts. The Transactions, including any Credit Extensions hereunder, (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) consents, approvals, registrations, filings, permits or actions the failure to obtain or perform which could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate the Organizational Documents of any Company or any judgment, decree or order of any Governmental Authority that is binding on any Company, (c) will not violate or result in a default or require any consent or approval under any indenture, agreement (including the Opco ABL Credit Agreement and the Opco Term Credit Agreement), Organizational Document or other instrument binding upon any Company or its property, or give rise to a right thereunder to require any payment to be made by any Company, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, and (d) will not result in the creation or imposition of any Lien on any property of Borrower (other than the Liens in favor of the Administrative Agent under the Collateral Documents).

SECTION 3.04 Units. Borrower has good title to Units representing 100% of all issued and outstanding Units. All Units are duly and validly issued and are fully paid and non-assessable. There are no outstanding warrants, options or other rights to purchase with respect to, or property that is convertible into, or that requires the issuance or sale of, any such Units, except as set forth in Section 8 of the Holdings LLC Agreement.

SECTION 3.05 Collateral Documents. The Pledge Agreement is effective to create in favor of the Administrative Agent for the benefit of the Secured Parties, legal, valid and enforceable Liens on, and security interests in, the Collateral and, when (i) financing statements and other filings in appropriate form are filed in the offices specified in the Pledge Agreement and (ii) upon the taking of possession or control by the Administrative Agent of the Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Administrative Agent to the extent possession or control by the Administrative Agent is required by the Pledge Agreement), the Liens created by the Pledge Agreement shall constitute fully perfected first priority Liens on, and security interests in, all right, title and interest of the grantors in the Collateral in which a security interest can be perfected under Article 9 of the UCC by filing or possession or control thereof.

SECTION 3.06 Litigation; Compliance with Laws. (a) There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority now pending or, to the knowledge of Borrower, threatened against or affecting Borrower or any Company (i) that challenge the enforceability or validity of any Loan Document or any of the Transactions or (ii) 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.

(b) Neither Borrower nor any of its property is in violation of, nor will the ownership of its property violate, any Requirements of Law or is in default with respect to any judgment, writ, injunction, decree, rule or order of any Governmental Authority, in each case where such violation or default, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07 Federal Reserve Regulations. (a) Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

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(b) No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the regulations of the Board, including Regulation T, U or X.

SECTION 3.08 Investment Company Act. The Borrower is not an “investment company,” as defined in, or subject to registration under, the Investment Company Act of 1940, as amended.

SECTION 3.09 Use of Proceeds. Borrower will use the proceeds of the Loans to finance one or more Dividends to its Equity Investors and to pay related fees, costs and expenses.

SECTION 3.10 No Material Misstatements. No written information, report, financial statement, certificate, Borrowing Request, exhibit or schedule furnished by or on behalf of Borrower to the Administrative Agent or any Lender in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto, taken as a whole, contained or contains any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were or are made, not materially misleading as of the date such information is dated or certified; provided that to the extent any such information, report, financial statement, exhibit or schedule was based upon or constitutes a forecast or projection or pro forma adjustment, Borrower represents only that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such information, report, financial statement, exhibit or schedule (it being understood that forecasts are subject to uncertainties and contingencies and that no representation or warranty is given that any forecast will be realized).

SECTION 3.11 Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date, (a) the fair value (on a going concern basis) of the properties of Borrower will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of Borrower will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) Borrower will not have unreasonably small capital with which to conduct its business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

SECTION 3.12 Representations and Warranties in Opco Credit Agreements. The Lenders have been furnished true and complete copies of the Opco ABL Credit Agreement and the Opco Term Credit Agreement. All representations and warranties regarding the Companies set forth in the Opco ABL Credit Agreement and the Opco Term Credit Agreement are true and correct in all material respects as of the Closing Date, unless stated to relate to a specific earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date.

ARTICLE IV

CONDITIONS TO CREDIT EXTENSION

SECTION 4.01 Conditions to the Initial Credit Extension. The obligation of each Lender to fund the initial Credit Extension requested to be made by it on the Closing Date shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 4.01.

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(a) Loan Documents. There shall have been delivered to the Administrative Agent an executed counterpart of each of the Loan Documents.

(b) Corporate Documents. The Administrative Agent shall have received:

(i) a certificate of the secretary or assistant secretary of Borrower dated the Closing Date, certifying (A) that attached thereto is a true and complete copy of each Organizational Document of each of the Borrower, Holdings and Opco certified as of a recent date by the Delaware Secretary of State, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of Borrower authorizing the execution, delivery and performance of the Loan Documents and the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect and (C) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of Borrower (together with a certificate of another officer as to the incumbency and specimen signature of the secretary or assistant secretary executing the certificate in this clause (i));

(ii) a certificate as to the good standing of Borrower, Holdings and Opco (in so-called “long-form”) as of a recent date, from such Secretary of State; and

(iii) a pro forma Compliance Certificate demonstrating pro forma compliance with the covenants set forth in Section 6.12 after giving effect to the Transactions for the Measurement Period most recently ended for which financial statements are available.

(c) Officers’ Certificate. The Administrative Agent shall have received a certificate, dated the Closing Date and signed by the chief executive officer or the chief financial officer of Borrower, confirming compliance with the conditions precedent set forth in Sections 4.01 and 4.03.

(d) Ratings. Each of the Term B Loans and the Term C Loans shall have been assigned a credit rating of CCC (with a stable outlook) or better by Standard & Poor’s Rating Group, a division of The McGraw Hill Corporation, and a credit rating of Caa2 (with a stable outlook) or better by Moody’s Investor Services, Inc.

(e) Opinion of Counsel. The Administrative Agent shall have received, on behalf of itself and the Lenders, a favorable written opinion of Kirkland & Ellis LLP, special counsel for Borrower, substantially to the effect set forth in Exhibit D (i) dated the Closing Date, (ii) addressed to the Administrative Agent and the Lenders and (iii) covering such matters relating to the Loan Documents as are usual and customary in the relevant jurisdictions for similar transactions and as the Administrative Agent shall reasonably request.

(f) Solvency Certificate. The Administrative Agent shall have received a solvency certificate in the form of Exhibit E, dated the Closing Date and signed by the chief financial officer of Borrower.

(g) USA Patriot Act Information. The Lenders shall have received, sufficiently in advance of the Closing Date, all documentation and other information that may be required by the Lenders in order to enable compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the United States PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) including the information described in Section 9.13.

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(h) Unit Certificates. The Borrower shall have delivered to the Administrative Agent any certificates representing the Units accompanied by undated stock powers executed in blank.

SECTION 4.02 Conditions to the Delayed Draw Loans. The obligation of each Lender to fund any Delayed Draw Loan requested to be made by it shall be subject to (i) the Closing Date Lenders having achieved a Successful Syndication, (ii) each of the conditions precedent set forth in Section 4.01 having been either satisfied or waived by the Administrative Agent and (iii) the Initial Term B Loans and Initial Term C Loans having been made.

SECTION 4.03 Conditions to the Each Credit Extension. The obligation of each Lender to fund any Credit Extension requested to be made by it on any Funding Date (including the initial Credit Extension) shall be subject to the prior or concurrent satisfaction of each of the additional conditions precedent set forth in this Section 4.03:

(a) Indebtedness. After giving effect to the Transactions and the other transactions contemplated hereby occurring on or prior to the Funding Date, no Company shall have outstanding any Indebtedness other than (i) the Loans hereunder and (ii) Indebtedness otherwise permitted by Section 6.01 hereof.

(b) Fees. The Administrative Agent shall have received reimbursement or payment of all reasonable out-of-pocket expenses (including the reasonable fees and expenses of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Administrative Agent) required to be reimbursed or paid by Borrower hereunder or under any other Loan Document and which have been invoiced to Borrower.

(c) Borrowing Request. The Administrative Agent shall have received an executed Borrowing Request from the Borrower.

(d) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Credit Extensions requested to be made on such date.

(e) Representations and Warranties. Each of the representations and warranties contained herein shall be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date of any Credit Extension with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date. Each of the delivery of a Borrowing Request and the acceptance by Borrower of the proceeds of such Credit Extension shall constitute a representation and warranty by Borrower that on the date of such Credit Extension (both immediately before and after giving effect to such Credit Extension and the application of the proceeds thereof) the conditions contained in Section 4.03 have been satisfied. Borrower shall provide such information as the Administrative Agent may reasonably request to confirm that the conditions in Section 4.03(d) have been satisfied.

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ARTICLE V

AFFIRMATIVE COVENANTS

Borrower agrees with each Lender that so long as this Agreement shall remain in effect and until the principal of and interest on each Loan and all other amounts due and payable under any Loan Document shall have been paid in full (other than contingent indemnification obligations for which no claim has been made or is reasonably anticipated), unless the Required Lenders shall otherwise consent in writing, Borrower will:

SECTION 5.01 Financial Statements, Reports, etc. Furnish to the Administrative Agent and, upon the request of the Administrative Agent or any Lender, to each such Lender making the request to Borrower or the Administrative Agent:

(a) Annual Reports. Within 120 days following the completion of Borrower’s fiscal year end, a copy of the annual audit report for such year for the Borrower and its Subsidiaries, including a Consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal year and related statements of income and cash flows for such fiscal year, and notes thereto, all prepared in accordance with GAAP and in each case accompanied by an opinion as to such audit report of any of the “Big-4” accounting firms or independent public accountants of recognized standing reasonably acceptable to the Administrative Agent, which opinion shall not have any “going-concern” qualification; provided that, in the event of any change in GAAP used in the preparation of such financial statements, the Borrower shall also provide a reconciliation of such financial statements to former GAAP and a certificate of a Financial Officer stating that such financial statements fairly present, in all material respects, the financial condition and results of operations of Borrower and its Subsidiaries on a Consolidated basis as of the date and for the periods specified in accordance with GAAP consistently applied;

(b) Quarterly Reports. Within 60 days following the completion of each of Borrower’s first three fiscal quarters of each fiscal year, the Consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal quarter and related statements of income and cash flows for such fiscal quarter and for the then elapsed portion of the fiscal year, all prepared in accordance with GAAP and accompanied by a certificate of a Financial Officer stating that such financial statements fairly present, in all material respects, the financial condition and results of operations of Borrower and its Subsidiaries on a Consolidated basis as of the date and for the periods specified in accordance with GAAP consistently applied, and on a basis consistent with the audited financial statements referred to in clause (a) of this Section, subject to normal year-end audit adjustments and the absence of footnotes; and

(c) Financial Officer’s Certificate. (i) Concurrently with any delivery of financial statements under Section 5.01(a) or (b), a Compliance Certificate substantially in the form of Exhibit H attached hereto (A) certifying that no Default has occurred or, if such a Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto and (B) beginning with the completion of the third quarter of the Borrower’s Fiscal Year 2008, setting forth computations in reasonable detail demonstrating compliance with the covenants contained in Sections 6.12(a) and (b).

SECTION 5.02 Litigation and Notices of other Material Events. Furnish to the Administrative Agent written notice of the following as soon as reasonably practicable (and, in any event, within five Business Days of the occurrence thereof):

(a) any Default, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;

(b) the filing or commencement of any action, suit, litigation or proceeding, whether at law or in equity by or before any Governmental Authority, (i) against any Company that could reasonably be expected to result in a Material Adverse Effect or (ii) with respect to any Loan Document; and

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(c) any development that has resulted in, or could reasonably be expected to result in a Material Adverse Effect.

SECTION 5.03 Existence; Businesses and Properties.

(a) Do or cause to be done all things reasonably necessary to preserve, renew and maintain in full force and effect its legal existence and that of Holdings and Opco.

(b) Do or cause to be done all things reasonably necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, privileges, franchises, and authorizations material to the conduct of its business and that of the Companies except in all cases where the failure to obtain, preserve, renew, extend or keep in effect, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; comply and cause the Companies to comply with all applicable Requirements of Law and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except in all cases where the failure to comply, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; and at all times maintain, preserve and protect (and cause each of the Companies to maintain, preserve and protect) all property material to the conduct of such businesses except in all cases where the failure to maintain, preserve or protect such property, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.04 Obligations and Taxes.

(a) Except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect, pay and discharge promptly (and cause each of the Companies to pay and discharge promptly) when due and payable all Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all other lawful claims that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided, however, that Borrower shall not be required to pay or discharge (or cause the payment or discharge) any such Tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property (or that of one or more of the Companies) and becomes enforceable against its other creditors.

(b) Timely and correctly file (and cause each of the Companies to timely and correctly file) all Tax Returns required to be filed by it, except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

(c) Borrower does not intend to treat the Loans as being a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4. In the event Borrower determines to take any action inconsistent with such intention, it will promptly notify the Administrative Agent thereof.

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SECTION 5.05 Maintaining Records; Access to Properties and Inspections; Annual Meetings. Keep proper books of record and account (and cause each of the Companies to keep the same) (i) in which full, true and correct entries are made in conformity with all Requirements of Law in all material respects, (ii) in form permitting financial statements conforming with GAAP to be derived therefrom and (iii) in which all material dealings and transactions in relation to its business and activities are recorded. Borrower will permit any representatives designated by the Administrative Agent (or any Lender, if accompanying such representatives of the Administrative Agent) to visit and inspect its financial records (and those of the Companies) upon reasonable prior notice and at a mutually acceptable time during regular business hours and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent (or any Lender, if accompanying such representatives of the Administrative Agent) to discuss the affairs, finances, accounts and condition of Borrower (or any of the Companies) with and be advised as to the same by the officers and employees thereof all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent may request; provided, that, so long as no Event of Default has occurred and is continuing, the Administrative Agent and the Lenders shall coordinate the exercise of such rights through the Administrative Agent and shall not be entitled to exercise the foregoing rights more than once in any calendar year at the expense of the Borrower, on a collective basis.

SECTION 5.06 Transactions with Affiliates. Conduct, and cause each of the Companies to conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates on terms that are no less favorable to the Borrower or such Subsidiary than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate; provided, the foregoing restriction shall not apply to (a) transactions between or among the Companies; (b) Dividends permitted to be made pursuant to Section 6.07 and Investments permitted under Section 6.04; (c) reasonable and customary fees paid to and indemnification of members of the board of directors (or similar governing body) of Borrower and its Subsidiaries; (d) compensation and indemnity arrangements and benefit plans for officers and other employees of the Borrower and its Subsidiaries entered into or maintained or established in the ordinary course of business; (e) sales of Equity Interests of Borrower to Affiliates of any Company or contributions to the equity capital of Borrower by Equity Investors or any of its Affiliates not otherwise prohibited by the Loan Documents and the granting of registration and other customary rights in connection therewith; (f) any transaction with an Affiliate where the only consideration paid is Equity Interests of Borrower; (g) the transactions contemplated in connection with the Loan Documents and all related documents; (h) the existence of, and the performance by any Company of their respective obligations under the Advisory Agreement, any limited liability company, limited partnership or other constitutive document or security holders agreement (including any registration rights agreement or purchase agreement related thereto); and (i) the other agreements among Borrower and its Subsidiaries and their Affiliates set forth on Schedule 5.06 and similar agreements entered into after the Closing Date that (i) are not more adverse to the interest of the Lenders than those that exist as of the Closing Date taken as a whole, or (ii) which have been disclosed to and consented to by the Administrative Agent and the Required Lenders.

SECTION 5.07 Maintenance of Insurance. Maintain, and cause each of the Companies to maintain, insurance (as deemed to be reasonably prudent in the good faith judgment of the Responsible Officers of such Company) (including, without limitation, business interruption insurance) with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas and with similar risk factors in which the applicable Company operates.

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SECTION 5.08 Further Assurances.

(a) Promptly upon the reasonable request by Administrative Agent, or any Lender through the Administrative Agent, correct, and cause each of the Companies promptly to correct, any matter that the parties mutually agree is a material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof; and

(b) Promptly upon request by Administrative Agent, or any Lender through the Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any document or instrument supplemental to or confirmatory of the Collateral Documents as Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder.

SECTION 5.09 Compliance with Terms of Leaseholds. Make all payments and otherwise perform all obligations in respect of all leases of real property to which Holdings or any of its Subsidiaries is a party, keep such leases in full force and effect, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

SECTION 5.10 Ratings. The Borrower shall use commercially reasonable efforts to maintain monitored ratings of the Loans with S&P and Moody’s.

ARTICLE VI

NEGATIVE COVENANTS

Borrower agrees with each Lender that, so long as this Agreement shall remain in effect and until the principal of and interest on each Loan and all other expenses or amounts due and payable under any Loan Document shall have been paid in full (other than contingent indemnification obligations), unless the Required Lenders shall otherwise consent in writing, Borrower will not, and except in the case of Sections 6.06, 6.07 and 6.11(a) (which Sections shall only apply with respect to the Borrower), will not cause or permit any Company to:

SECTION 6.01 Indebtedness. (a) Incur, create, assume or permit to exist, directly or indirectly, any Indebtedness.

(b) Notwithstanding the foregoing, nothing in the clause (a) of this Section 6.01 will prohibit any of the following:

(i) Indebtedness incurred under this Agreement and the other Loan Documents;

(ii) Indebtedness outstanding as of the Closing Date set forth on Schedule 6.01 and any Indebtedness extending the maturity of, or refinancing, in whole or in part, any such Indebtedness and guarantees of such Indebtedness or the extension or refinancing of such Indebtedness; provided that (A) the amount of such extending or refinancing Indebtedness does not result in an increase in the aggregate principal or facility amount thereof outstanding (or, in the case of revolving Indebtedness, the committed amount thereof) (plus the amount of any premium paid in respect of such Indebtedness in connection with any such extension or refinancing and plus the amount of reasonable expenses incurred by Borrower and its Subsidiaries in connection

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therewith), (B) such Indebtedness (if it is term debt) does not have a weighted average life to maturity that is less than the weighted average life to maturity of the Indebtedness being extended or refinanced, (C) such Indebtedness (if it is term debt) does not have a final maturity earlier than the final maturity of the Indebtedness being extended or refinanced and (D) the direct and contingent obligors therefor shall not be changed (unless any contingent obligor is released), as a result of or in connection with such extension or refinancing;

(iii) Indebtedness under Hedging Obligations that are designed to protect against fluctuations in interest rates, foreign currency exchange rates or commodity prices, in each case not entered into for speculative purposes;

(iv) Intercompany Indebtedness between Companies;

(v) To the extent it constitutes Indebtedness, Indebtedness incurred by Holdings or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of Holdings or any such Subsidiary pursuant to such agreements, in connection with acquisitions permitted by Section 6.04(g) or Transfers permitted by Section 6.03; provided that, in respect of any Indebtedness incurred hereunder pursuant to agreements providing for indemnification in connection with Transfers permitted by Section 6.03, such Indebtedness shall not exceed the amount of net cash proceeds received from such Transfers;

(vi) Indebtedness which may be deemed to exist pursuant to any guaranties, performance, surety, statutory, appeal, completion guarantees, export or import indemnities, customs and revenue bonds or similar instruments, workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of any Company in the ordinary course of business, including guarantees or obligations of any Company with respect to letters of credit supporting such bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed) or similar obligations incurred in the ordinary course of business;

(vii) Contingent Obligations of Holdings, Opco or any Subsidiary thereof in respect of Indebtedness otherwise permitted under this Section 6.01;

(viii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;

(ix) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(x) Other Indebtedness (other than Debt for Borrowed Money) in an aggregate principal amount not to exceed $10 million at any time outstanding;

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(xi) Capitalized Leases and Indebtedness secured by Liens that attach only to the property being financed pursuant to such Indebtedness and do not encumber any other property of any Company in an aggregate principal amount not to exceed $10 million at any time outstanding;

(xii) Indebtedness incurred in connection with the financing of insurance premiums in an amount not to exceed the annual premiums in respect thereof at any one time outstanding;

(xiii) Permitted Borrower Subordinated Indebtedness; and

(xiv) Other Debt for Borrowed Money issued to or held by Persons who are not Affiliates of any of the Companies, so long as after giving effect to the incurrence of such Indebtedness (as if such Indebtedness had been incurred on the first day of the most recently completed Measurement Period), the Leverage Ratio would be less than 2.00:1.00.

SECTION 6.02 Mergers, Etc.. Merge into or consolidate with any person or permit any person to merge into it, or permit any of the Companies to do so, except that:

(a) any Subsidiary of the Borrower may merge into or consolidate with any other Subsidiary of the Borrower; provided that, in the case of any such merger or consolidation, the Person formed by such merger or consolidation shall be Holdings or a wholly owned Subsidiary of Holdings;

(b) as part of any acquisition permitted under Section 6.04, any Subsidiary of Holdings may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that the Person surviving such merger shall be a wholly owned Subsidiary of Holdings;

(c) as part of any Transfer permitted under Section 6.03, any Subsidiary of Holdings may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; and

(d) any Subsidiary other than Holdings may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up, as applicable, could not reasonably be expected to have a Material Adverse Effect.

SECTION 6.03 Sales, Etc. of Assets. Sell, lease, transfer, assign, exchange, convey or otherwise dispose of (each a “Transfer”), or permit any of its Subsidiaries to Transfer, any assets, except:

(a)(A) Transfers of inventory (including unusable, excess or slow-moving inventory) and delinquent accounts receivables in the ordinary course of its business and Transfers of accounts receivables in connection with the private label credit card programs in the ordinary course of business, (B) the granting of any option or other right to purchase, lease or otherwise acquire inventory and delinquent accounts receivables in the ordinary course of its business; and (C) dispositions of cash and Cash Equivalents in the ordinary course of business;

(b) Transfers of assets among the Companies;

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(c) Transfers of unneeded, used, worn out, obsolete or damaged equipment and trade-ins and exchanges of equipment in the ordinary course of business and the abandonment or other disposition of intellectual property that is, in the reasonable judgment of the Companies, no longer economically practicable or commercially desirable to maintain or useful in the conduct of the business of the Companies taken as a whole;

(d) Transfers in connection with any transaction in which there is an Extraordinary Receipt;

(e) Transfers for fair value, the proceeds of which are less than $2,000,000 for any such single transaction and the proceeds of which when aggregated with all other such Transactions during a fiscal year are less than $10,000,000;

(f) Leases and subleases, licenses and sublicenses of real or personal property in the ordinary course of business;

(g) Licensing of intellectual property on a non-exclusive basis or on an exclusive basis so long as such exclusive licensing is limited to geographic areas, particular fields of use, customized products for customers or limited time periods;

(h) Any liquidation or dissolution of a Subsidiary so long as its immediate parent becomes the owner of its assets;

(i) Transfers of assets consisting of accounts receivable in a transaction that would be permitted under Section 6.01 if such Transfer had been a transaction involving Debt for Borrowed Money; provided that any such transaction shall thereafter be deemed to constitute Debt for Borrowed Money for all purposes hereunder;

(j) the Transactions as contemplated by the Loan Documents;

(k) mergers, amalgamations, consolidations and dissolutions in compliance with Section 6.02;

(l) Investments in compliance with Section 6.04;

(m) discounts or forgiveness of accounts receivable in the ordinary course of business or in connection with collection or compromise thereof; and

(n) Liens not prohibited by Section 6.06.

For the avoidance of doubt, an issuance of Equity Interests by a Subsidiary of Opco shall constitute a “Transfer” for purposes of this Agreement.

SECTION 6.04 Investments in Other Persons. Make or hold, or permit any of the Companies to make or hold, any Investment in any Person, except:

(a) Investments by the Borrower and the other Companies in their respective Subsidiaries;

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(b) loans and advances to employees in the ordinary course of the business of the Borrower and the Companies as presently conducted in an aggregate principal amount not to exceed $2,000,000 at any time outstanding;

(c) loans to directors, officers and employees to purchase Equity Interests of Borrower or Parent;

(d) Investments by the Borrower and the Companies in bank deposits in the ordinary course of business or Cash Equivalents;

(e) Investments existing as of the date hereof and described on Schedule 6.04;

(f) Investments in Hedge Agreements permitted under Section 6.01(b)(iii);

(g) the purchase or other acquisition of all or substantially all of the Equity Interests in any Person that, upon the consummation thereof, will be wholly owned directly by Holdings or one or more of its wholly owned Subsidiaries (including, without limitation, as a result of a merger or consolidation) and the purchase or other acquisition by Holdings or one or more of its wholly-owned Subsidiaries of all or substantially all of the property and assets of any Person (collectively, a “Permitted Acquisition”); provided that, with respect to each purchase or other acquisition made pursuant to this clause (g):

(i) the lines of business of the Person to be (or the property and assets of which are to be) so purchased or otherwise acquired shall be permitted by Section 6.11(b);

(ii) such purchase or other acquisition shall not include or result in any contingent liabilities that could reasonably be expected to have a Material Adverse Effect on the Borrower and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or the persons performing similar functions) of the Borrower, if the board of directors is otherwise approving such transaction, or, in each other case, by the Responsible Officer of the Borrower);

(iii)(A) immediately before and immediately after giving effect to any such purchase or other acquisition, no Event of Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition, the Leverage Ratio shall be less than 2.00:1.00 and Borrower and its Subsidiaries shall be in pro forma compliance with the covenant set forth in Section 6.12(b), such Leverage Ratio and compliance to be determined as of the last day of the most recently ended Measurement Period; and

(iv) the Borrower shall have delivered to the Administrative Agent, on behalf of the Lenders, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (g) have been satisfied or will be satisfied in all material respects on or prior to the consummation of such purchase or other acquisition;

(h) Investments (A) received in satisfaction or partial satisfaction of accounts from financially troubled account debtors (whether in connection with a foreclosure, bankruptcy, workout or otherwise) and (B) consisting of deposits, prepayments and other credits to suppliers made in the ordinary course of business consistent with the past practices of Opco and its Subsidiaries;

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(i) guaranties in the ordinary course of business of obligations owed to or of landlords, suppliers, customers, franchisees and licensees of the Borrower and its Subsidiaries or otherwise permitted hereunder;

(j) other Investments in an aggregate amount not to exceed at any time the sum of (A) $15,000,000 (B) net proceeds received from Investments permitted under this Section 6.04 and (C) any proceeds of issuances of Qualified Capital Stock of Borrower used to make Investments;

(k) the Companies may (A) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (B) invest in, acquire and hold cash and Cash Equivalents, (C) endorse negotiable instruments held for collection in the ordinary course of business or (D) make lease, utility and other similar deposits in the ordinary course of business;

(l) the Companies may sell or transfer amounts and acquire assets to the extent permitted by Section 6.03 (other than 6.03(l)); and

(m) any Company may hold Investments to the extent such Investments reflect an increase in the value of Investments already made.

For purposes of determining compliance with the provisions of this Section 6.04, Investments made by the Borrower or any of its Subsidiaries (the “investor”) in any Subsidiary that are effected pursuant to one or more Investments made contemporaneously or in prompt succession by the investor and/or any of its Subsidiaries shall be deemed one Investment by the investor.

SECTION 6.05 Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or permit, any change in Fiscal Year.

SECTION 6.06 Liens. Create, incur, assume or permit to exist, directly or indirectly, any Lien on the Units or any other Equity Interests of Holdings owned by it or the proceeds thereof, except for Permitted Liens.

SECTION 6.07 Dividends Authorize, declare or pay, directly or indirectly, any Dividends, except:

(a) Borrower may Dividend the proceeds of the Loans to Parent;

(b) Borrower may, concurrently with a prepayment of the Loans pursuant to Sections 2.07(a), 2.07(b) or 2.07(c)(iv), pay a Dividend in an amount not to exceed the amount of such concurrent prepayment of the Loans (including all principal and redemption premium but excluding any PIK Interest or current interest paid in connection with such prepayment); provided, however, payment of such Dividends shall be allowed only if (A) immediately after giving effect to such Dividend, the Leverage Ratio shall be less than 2.00:1.00 and Borrower and its Subsidiaries shall be in pro forma compliance with the covenant set forth in Section 6.12(b), such Leverage Ratio and compliance to be determined as of the last day of the most recently ended Measurement Period or, if Borrower shall have furnished or shall concurrently furnish to Administrative Agent the financial statements (in form and with a certification substantially equivalent to that used for quarterly financial statements) for the most recently ended twelve

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month period, the last day of the most recently ended calendar month, in either case as evidenced by an Officer’s Certificate delivered to the Administrative Agent, in a form reasonably satisfactory to the Administrative Agent, certifying and demonstrating the same and (B) no Default or Event of Default shall have occurred and is continuing or would result therefrom;

(c) Permitted Distributions;

(d) other Dividends not to exceed $50,000,000 in the aggregate;

(e) the Borrower may (A) declare and pay dividends and distributions payable only in Equity Interests of Borrower and (B) purchase, redeem, retire, defease or otherwise acquire Equity Interests with the proceeds received contemporaneously from the issuance of Equity Interests with equal or inferior voting powers, designations, preferences and rights, so long as no Event of Default shall have occurred and be continuing at the time of such purchase, redemption, retirement, defeasance or acquisition or would result therefrom;

(f) Borrower may Dividend to Parent amounts necessary for Parent to purchase, redeem or acquire fractional shares of Equity Interests arising out of stock dividends, splits or combinations;

(g) the Borrower may convert convertible securities and make cash payments in lieu of fractional shares in connection with any such conversion;

(h) in connection with any acquisition permitted by Section 6.04(g) and so long as no Event of Default shall have occurred and be continuing at the time of such acquisition or would result therefrom, the Borrower or any Subsidiary may (A) receive or accept the return to the Borrower or any of its Subsidiaries of Equity Interests constituting a portion of the purchase price consideration in settlement of indemnification claims or (B) make payments or distributions to dissenting stockholders pursuant to applicable law; and

(i) so long as no Event of Default shall have occurred and be continuing at such time or would result therefrom, payments to the Parent to permit the Parent, and the subsequent use of such payment by the Parent, to repurchase or redeem Qualified Capital Stock of Parent held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of any of the Companies, upon their death, disability, retirement, severance or termination of employment or service, or to make payments on Indebtedness issued to buy such Qualified Capital Stock or pursuant to and in accordance with stock option plans or other benefit plans; provided that the aggregate cash consideration paid for all such redemptions and payments shall not exceed, in any fiscal year, the sum of (x) net cash proceeds from issuances of Equity Interests of Borrower (other than issuances the proceeds of which are utilized to finance capital expenditures or Investments by Opco or its Subsidiaries or issuances of Equity Interests applied to satisfy any financial covenant under the Opco ABL Credit Agreement or the Opco Term Credit Agreement) plus (y) $3,000,000 (and up to 100% of such amount not used in any fiscal year may be carried forward to the next succeeding (but no other) fiscal year) plus (z) the amount of any net cash proceeds received by or contributed to the Borrower from the issuance and sale since the issue date of Qualified Capital Stock of Parent to officers, directors or employees of any Company that have not been used to make any repurchases, redemptions or payments under this clause (i).

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SECTION 6.08 Modification of Organizational Documents; LLC Agreements; Advisory Agreement. Directly or indirectly change any of Borrower’s Organizational Documents (including the Borrower LLC Agreement), the Holdings LLC Agreement or the Advisory Agreement, in each case, other than any such amendments, modifications or changes or such new agreements which are not adverse in any material respect to the interests of the Lenders.

SECTION 6.09 Prepayments, Etc., of Indebtedness. (i) Voluntarily prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof or make any interest or fee payment in cash with respect to any Permitted Borrower Subordinated Indebtedness, unless all accrued and unpaid interest on the Loans has been paid in full in cash; or (ii) amend, modify or change in any manner materially adverse to the Lenders any term or condition of any Permitted Borrower Subordinated Indebtedness.

SECTION 6.10 Negative Pledge. Enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon the Units securing the Loan Document Obligations.

SECTION 6.11 Business. (a) Engage in any business activities or have any properties or liabilities, other than (i) its ownership of the Units of Holdings, (ii) Loan Document Obligations and other Indebtedness permitted to be incurred hereunder by Borrower and (iii) activities, properties and ordinary course liabilities (other than Indebtedness) incidental to the foregoing clauses (i) and (ii); or

(b) Permit any of the Companies to conduct any business other than the businesses as carried on at the date hereof and other businesses substantially related, incidental thereto, or complementary thereto or are reasonable extensions thereof.

SECTION 6.12 Financial Covenants. (a) Permit the Leverage Ratio at the end of any Measurement Period commencing with the Measurement Period ending at the end of the Borrower’s third quarter of the Fiscal Year 2008 to exceed 5.00:1.00; and

(b) Permit the Interest Coverage Ratio for any Measurement Period commencing with the Measurement Period ending at the end of the Borrower’s third quarter of the Fiscal Year 2008 to be less than 1.50:1.00.

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01 Events of Default. Upon the occurrence and during the continuance of the following events (“Events of Default”):

(a) default shall be made in the payment of any principal of or redemption premium on any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment (whether voluntary or mandatory) thereof or by acceleration thereof or otherwise;

(b) default shall be made in the payment of any interest on any Loan or any other amount (other than an amount referred to in paragraph (a) above) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of five Business Days;

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(c) any representation or warranty made or deemed made by Borrower in any Loan Document or any certificate or other document furnished in connection with or pursuant to any Loan Document, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished;

(d) default shall be made in the due observance or performance by Borrower of any covenant, condition or agreement applicable to such Company contained in Section 5.03(a) or in Article VI;

(e) default shall be made in the due observance or performance by Borrower of any covenant, condition or agreement contained in any Loan Document (other than those specified in paragraphs (a), (b) or (d) immediately above) and such default shall continue unremedied or shall not be waived for a period of 30 days after written notice thereof from the Administrative Agent or any Lender to Borrower;

(f) Borrower, Holdings, Opco or any Significant Subsidiary shall (i) fail to pay any principal or interest, regardless of amount, due in respect of any Indebtedness (other than the Loan Document Obligations), when and as the same shall become due and payable beyond any applicable grace period, or (ii) fail to observe or perform any other term, covenant, condition or agreement contained in any agreement or instrument evidencing or governing any such Indebtedness if the effect of any failure referred to in this clause (ii) is to cause, or to permit the holder or holders of such Indebtedness or a trustee or other representative on its or their behalf (with or without the giving of notice, the lapse of time or both) to cause, such Indebtedness to become due prior to its stated maturity; provided that it shall not constitute an Event of Default pursuant to this paragraph (f) unless the aggregate amount of all such Indebtedness referred to in clauses (i) and (ii) exceeds $15 million at any one time (provided that, the “principal amount” in respect of any Hedging Obligations of Borrower, Holdings, Opco or any Significant Subsidiary at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Borrower, Holdings, Opco or such Significant Subsidiary would be required to pay if the related Hedging Agreement were terminated at such time);

(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Borrower, Holdings, Opco or any Significant Subsidiary, or of a substantial part of the property of Borrower, Holdings, Opco or any Significant Subsidiary, under the Bankruptcy Code, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower, Holdings, Opco or any Significant Subsidiary or for a substantial part of the property of Borrower, Holdings, Opco or any Significant Subsidiary; or (iii) the winding-up or liquidation of Borrower, Holdings, Opco or any Significant Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(h) Borrower, Holdings, Opco or any Significant Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under the Bankruptcy Code, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (g) above; (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower, Holdings, Opco or any Significant Subsidiary or for a substantial part of the property of Borrower, Holdings, Opco or any Significant Subsidiary; (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; (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due; (vii) take any action for the purpose of effecting any of the foregoing; or (viii) except as permitted under Section 6.03(h), wind up or liquidate;

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(i) one or more judgments, orders or decrees for the payment of money in an aggregate amount in excess of $10 million shall be rendered against Borrower and the same shall not be covered by insurance or any indemnity under which the insurer or indemnitee accepted coverage and shall remain undischarged, unvacated or unbonded for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon properties of Borrower to enforce any such judgment;

(j) any Loan Document or any material provisions thereof shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by Borrower or any other person, or by any Governmental Authority, seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or Borrower shall repudiate or deny any portion of its liability or obligation for the payment of Loan Document Obligations;

(k) any security interest and Lien purported to be created by any Collateral Document shall cease to be in full force and effect, or shall cease to give the Administrative Agent, for the benefit of the Secured Parties, the Liens, rights, powers and privileges purported to be created and granted under such Collateral Document (including a perfected first priority security interest in and Lien on all of the Collateral thereunder (except as otherwise expressly provided in such Collateral Document and except for any permitted liens permitted hereunder or under any Loan Document)) in favor of the Administrative Agent, or shall be asserted by Borrower or any other Company not to be a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Collateral Document) security interest in or Lien on the Collateral covered thereby, except to the extent that any such loss of perfection or priority results from the acts or omissions of the Administrative Agent;

then, and in every such event (other than an event with respect to Borrower, Holdings or Opco described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Accelerating Lenders shall, by notice to Borrower, take either or both of the following actions, at the same or different times: (i) terminate forthwith the Commitments and (ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all other liabilities of Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable at the redemption price set forth in Sections 2.07(a) or (b), as applicable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event, with respect to Borrower, Holdings or Opco described in paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all other liabilities of Borrower accrued hereunder and under any other Loan Document, shall automatically become due and payable at the redemption price set forth in Sections 2.07(a) or (b), as applicable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding.

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ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01 Appointment. Each Lender hereby irrevocably designates and appoints the Administrative Agent as an agent of such Lender under this Agreement and the other Loan Documents. Each Lender irrevocably authorizes the Administrative Agent, in such capacity, through its agents or employees, to take such actions on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto.

SECTION 8.02 Administrative Agent in Its Individual Capacity. The Administrative Agent shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent, and such person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with Borrower, Holdings or Opco or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

SECTION 8.03 Exculpatory Provisions. Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall have no duty to disclose and shall not be liable for the failure to disclose, any information relating to Borrower or any of its Subsidiaries that is communicated to or obtained by the entity serving as the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document.

SECTION 8.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed or sent by a proper person. The Administrative Agent also may rely upon any statement made to it orally and believed by it to be made by a proper person, and shall not incur any liability for relying

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thereon. The Administrative Agent may consult with legal counsel (who may be counsel for Borrower), independent accountants and other advisors selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or advisors.

SECTION 8.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Affiliates. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Affiliates of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

SECTION 8.06 Successor Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders and Borrower. Upon receipt of any such notice, the Required Lenders shall have the right to appoint a successor to the Administrative Agent, which right shall be subject to the consent of Borrower (such consent not to be unreasonably withheld) so long as no Event of Default has occurred and is continuing. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after such retiring Administrative Agent gives notice of its resignation, then such retiring Administrative Agent may, on behalf of the Lenders, appoint a successor to the Administrative Agent, which successor shall be a financial institution organized under the laws of the United States (or any State thereof) or a United States branch or agency of a financial institution; provided that if such retiring Administrative Agent is unable to find a financial institution which is willing to accept such appointment, such retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor to the Administrative Agent with the approval of Borrower (which approval shall not be unreasonably withheld).

Upon the acceptance of a successor’s appointment as the Administrative Agent hereunder, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder or under the other Loan Documents. After the Administrative Agent’s resignation hereunder, the provisions of this Article VIII and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Affiliates in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

SECTION 8.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender further represents and warrants that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

SECTION 8.08 Indemnification. The Lenders severally agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so), ratably according to their respective outstanding Loans and

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Commitments in effect on the date on which indemnification is sought under this Section 8.08 (or, if indemnification is sought after the date upon which all Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such outstanding Loans and Commitments as in effect immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01 Notices.

(a) Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier, as follows:

(i) if to Borrower, to it at:

Express Topco LLC

c/o Golden Gate Private Equity, Inc.

One Embarcadero Center, 39th Floor

San Francisco, California 94111

Attention: Stefan Kaluzny

Telecopier No.: (415) 983-2701;

With a copy to:

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attention: Gary Holihan, P.C.

Telecopier No.: (312) 861-2200;

(ii) if to the Administrative Agent, to it at:

KKR SCF Loan Administration, LLC

555 California Street, 50^th Floor

San Francisco, California 94104

Attention: Geoffrey Jones

Telecopier No.: (415) 391-3330;

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With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue, 34th Floor

Los Angeles, CA 90071

Attention: Greg Robins

Telecopier No.: (213) 621-5270

(iii) if to a Lender, to it at its address (or telecopier number) set forth on its signature page hereto or in the Assignment and Assumption pursuant to which such Lender shall have become a party 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 on the date of receipt if delivered by hand or overnight courier service or sent by telecopier or by certified or registered mail, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.01, and failure to deliver courtesy copies of notices and other communications shall in no event affect the validity or effectiveness of such notices and other communications.

(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including email and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c) Change of Address, etc. Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

SECTION 9.02 Waivers; Amendment.

(a) No failure or delay by any Agent 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.

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The rights and remedies of each Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by Borrower 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 shall not be construed as a waiver of any Default, regardless of whether any Agent or any Lender may have had notice or knowledge of such Default at the time.

(b) Except as provided in paragraphs (c) and (d) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended, supplemented or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Borrower 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 Administrative Agent and the Borrower, in each case with the written consent of the Required Lenders; provided that no such agreement shall:

(i) increase the Commitment of any Lender without the written consent of such Lender;

(ii) reduce the principal amount of any Loan or reduce the rate of interest thereon (or the portion of PIK Interest), or reduce any prepayment premium payable hereunder, or change the currency of payment of any Obligation, without the written consent of each Lender directly affected thereby;

(iii) postpone or extend the maturity of any Loan, or any date for the payment of any interest or other amounts payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby;

(iv) change Section 2.10(b) or (c) in a manner that would alter the pro rata sharing of payments or setoffs required thereby, in each case, without the written consent of each Lender;

(v) change the percentage set forth in the definition of “Required Lenders” or any other provision of any Loan Document (including this Section) 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;

(vi) waive, amend, supplement or modify the provisions of this Section 9.02(b), without the written consent of each Lender;

(vii) waive, amend, supplement or modify the provisions of Section 9.04 or the definition of “Eligible Assignee”, without the written consent of each Lender;

(viii) release the Administrative Agent’s Lien on any of the Units or subordinate the Loan Document Obligations in right of payment to any other Obligations, without the written consent of each Lender.

provided, further, that (1) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent without the prior written consent of the Administrative Agent and (2) no such agreement shall increase the aggregate amount of Commitments (or increase the principal amount of

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outstanding Loans) without the prior written consent of the Required Lenders. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by Borrower, the Required Lenders and the Administrative Agent if (x) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (y) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of, premium, if any, and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.

SECTION 9.03 Expenses; Indemnity.

(a) The Borrower agrees to pay:

(i) within 30 days of demand with backup documentation, all reasonable out-of-pocket costs and expenses incurred by the Administrative Agent (and, in the case of clause (ii) only, any Lender) including the reasonable fees, charges and disbursements of Advisors for the Administrative Agent, in connection with (i) the preparation, execution and delivery of the Loan Documents, (ii) the administration of the Loans and Commitments, (iii) filings with respect to the Collateral and (iv) any actual or proposed amendment, supplement or waiver of any of the Loan Documents;

(ii) an agency fee payable to the Administrative Agent equal to $75,000 in advance per annum payable on the Closing Date and each anniversary thereof; provided that for any year if, as of such anniversary, the number of Lenders is equal to or greater than five (considering for such purposes the Administrative Agent and its Affiliates to be one Lender and any other Lender and its Affiliates to be one Lender ), the agency fee for such year shall be $100,000; and

(iii) within 30 days of demand with backup documentation, all costs and expenses incurred by the Administrative Agent or any Lender, including the reasonable fees, charges and disbursements of Advisors for the Administrative Agent or any Lender, incurred in connection with the enforcement or protection of its rights under the Loan Documents, including its rights under this Section 9.03(a), or in connection with the Loans made hereunder and the collection of the Loan Document Obligations, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of the Loan Document Obligations.

For purposes of this Section 9.03(a), “Advisors” shall mean a single legal counsel (including a single local counsel per relevant jurisdiction), auditors, accountants, consultants, appraisers or other advisors; provided that (x) in the case of clause (i), the engagement of any Advisors other than legal counsel (including local counsel) shall be subject to approval by Borrower (which approval shall not be unreasonably withheld) and (y) in the case of clause (ii), the engagement of any Advisors other than one firm of legal counsel representing the Lenders shall be subject to approval by the Administrative Agent and Borrower.

(b) The Borrower agrees to indemnify the Agents, each Lender, each Affiliate of any of the foregoing persons and each of their respective partners, controlling persons, directors, officers, trustees, employees and agents (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, all reasonable out-of-pocket costs and any and all losses, claims, damages, liabilities, penalties, judgments, suits and related expenses, including reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution, delivery, performance, administration or enforcement of the Loan Documents, (ii) any actual or proposed use of the proceeds of the Loans or (iii) any claim, litigation,

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investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or its officers, directors, affiliates, employees or agents.

(c) The provisions of this Section 9.03 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Agents or any Lender. All amounts due under this Section 9.03 shall be payable 30 days after written demand therefor accompanied by reasonable documentation with respect to any reimbursement, indemnification or other amount requested.

(d) To the extent that Borrower fails to promptly pay any amount required to be paid by it to the Agents under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such.

SECTION 9.04 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender (and any attempted assignment or transfer by Borrower without such consent shall be null and void). Nothing in this Agreement, express or implied, shall be construed to confer upon any person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the other Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Any Lender shall have the right at any time to assign to an Eligible Assignee all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided (i) that except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1.0 million unless the Administrative Agent and Borrower otherwise consent, (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, and (iv) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire containing such information as the Administrative Agent may reasonably require. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all

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of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.08, 2.11 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be null and void to effect such assignment or transfer and instead 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 and subject to the limitations on sales of participations set forth in this Section 9.04.

(c) The Administrative Agent, acting for this purpose as an agent of Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive in the absence of manifest error, and Borrower, the Administrative Agent and the Lenders shall 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 Borrower and any Lender (with respect to its own interest only), at any reasonable time and from time to time upon reasonable prior notice.

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

(e) Any Lender shall have the right at any time, without the consent of Borrower or the Administrative Agent, to sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) Borrower, the Administrative Agent 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 and (iv) such participation is recorded in the register described in the last sentence of this Section 9.04(e). Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clause (i), (ii) or (iii) of the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this Section, Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.08 and 2.11 (subject to the requirements and limitations of Section 2.11) 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 9.08 as though it were a Lender; provided that such Participant agrees in writing to be subject to Section 2.10(c) as though it were a Lender. Each Lender shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain at one of its offices a register on which it records the names and addresses of its Participants, and the amount and terms of its participations.

(f) A Participant shall not be entitled to receive any greater payment under Section 2.08 or 2.11 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant.

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(g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. In the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of Borrower or the Administrative Agent, collaterally assign or pledge all or any portion of its rights under this Agreement, including the Loans and Notes or any other instrument evidencing its rights as a Lender under this Agreement, to any holder of, trustee for, or any other representative of holders of, obligations owed or securities issued, by such fund, as security for such obligations or securities.

SECTION 9.05 Survival of Agreement. All covenants, agreements, representations and warranties made by Borrower 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, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Agents or any Lender may have had notice or knowledge of any 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 amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.08, 2.10, 2.11 and 9.03 and Article VIII 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 Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, 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 permitted successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates are hereby authorized at any time and from time to time, 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 and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of Borrower against any and all of the obligations of

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Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to conflicts of law principles that would require the application of the laws of another jurisdiction.

(b) Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against Borrower or its properties in the courts of any jurisdiction.

(c) Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 9.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in any action or proceeding arising out of or relating to any Loan Document, in the manner provided for notices (other than telecopier) in Section 9.01. 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 applicable law.

SECTION 9.10 Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement, any other Loan Document or the transactions contemplated hereby (whether based on contract, tort or any other theory). Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section.

SECTION 9.11 Headings. Article and 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.

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SECTION 9.12 Confidentiality. Neither Administrative Agent nor any Lender shall disclose any Confidential Information to any person without the consent of Borrower, other than (a) to the Administrative Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors and to potential lenders and pledgees under Section 9.04(g) and Participants, and then only if such potential lender or Participant has agreed to be bound by the terms of this Section 9.12, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, federal or foreign Governmental Authority or regulatory authority or examiner regulating such person (including the National Association of Insurance Commissioners), (d) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or such professional advisor) that agrees to be bound by the provisions of this Section 9.12, (e) to any nationally recognized rating agency that agrees to be bound by the provisions of this Section 9.12 and (f) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder. “Confidential Information” means information concerning Borrower, Holdings or Opco or any of their respective employees, directors, or Subsidiaries, or Affiliates received by Administrative Agent or any Lender on a confidential basis from Borrower or any other person under or pursuant to this Agreement or any other Loan Document including without limitation financial terms and financial and organizational information contained in any documents, statements, certificates, materials or information furnished, or to be furnished, by or on behalf of Borrower or any other person on a confidential basis in connection with this Agreement and the Loan Documents and any information regarding the existence or the terms of this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, but does not include any such information that (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than Borrower, Holdings or Opco or any of their respective employees, directors, Subsidiaries or Affiliates or any of their respective agents or representatives. Without limiting the generality of the foregoing, neither the Administrative Agent nor any Lender will engage in any form of publicity (including, without limitation, any “tombstone” or similar advertisement) with respect to this Agreement or any other Loan Document or the transactions contemplated hereby and thereby.

SECTION 9.13 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies Borrower, which information includes the name, address and tax identification number of Borrower and other information regarding Borrower that will allow such Lender or the Administrative Agent, as applicable, to identify Borrower in accordance with the Act. This notice is given in accordance with the requirements of the Act and is effective as to the Lenders and the Administrative Agent.

[Signature Pages Follow]

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

EXPRESS TOPCO LLC
By:	/s/ Matt Moellering
Name:	Matt Moellering
Title:	CFO

KKR SCF LOAN ADMINISTRATION LLC,
as Administrative Agent
By:	/s/ Geoffrey M. Jones
Name:	Geoffrey M. Jones
Title:	Authorized Signatory

KKR STRATEGIC CAPITAL HOLDINGS I-B, LTD.,
as a Lender
By:	KKR STRATEGIC CAPITAL MANAGEMENT, L.L.C.,
	as its Investment Manager
By:	/s/ Geoffrey M. Jones
Name:	Geoffrey M. Jones
Title:	Authorized Person

KKR FINANCIAL HOLDINGS, LTD.,
as a Lender
By:	KKR FINANCIAL ADVISORS LLC,
	as its Investment Manager
By:	/s/ Jamie M. Weinstein
Name:	Jamie M. Weinstein
Title:	Authorized Person

EX-10.10

Exhibit 10.10

UNIT PURCHASE AGREEMENT

dated as of

May 15, 2007

among

EXPRESS INVESTMENT CORP.,

LIMITED BRANDS STORE OPERATIONS, INC.,

EXPRESS HOLDING, LLC

and

LIMITED BRANDS, INC.

relating to the purchase and sale

of

66 2/3% of the Units

of

EXPRESS HOLDING, LLC

TABLE OF CONTENTS

		PAGE
ARTICLE 1 DEFINITIONS
Section 1.01.	Definitions	1
Section 1.02.	Other Definitional and Interpretative Provisions	8
ARTICLE 2 PURCHASE AND SALE
Section 2.01.	Purchase and Sale; Debt Incurrence; Distribution	9
Section 2.02.	Closing	9
Section 2.03.	Estimated Closing Net Tangible Assets	10
Section 2.04.	Closing Net Tangible Assets	10
Section 2.05.	Post-Closing Adjustment	12
Section 2.06.	Payment of Indebtedness	12
Section 2.07.	Additional Understanding	12
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.01.	Corporate Existence and Power	13
Section 3.02.	Corporate Authorization	13
Section 3.03.	Governmental Authorization	13
Section 3.04.	Noncontravention	14
Section 3.05.	Capitalization	14
Section 3.06.	Ownership and Transfer of Sold Units	14
Section 3.07.	Subsidiaries	15
Section 3.08.	Financial Statements	15
Section 3.09.	Inventory	16
Section 3.10.	Absence of Certain Changes	16
Section 3.11.	No Undisclosed Material Liabilities	18
Section 3.12.	Material Contracts	18
Section 3.13.	Certain Related Party Contracts	19
Section 3.14.	Litigation	20
Section 3.15.	Properties	20
Section 3.16.	Sufficiency of Assets	21
Section 3.17.	Licenses and Permits	21
Section 3.18.	Environmental Matters	21
Section 3.19.	Compliance with Laws	22
Section 3.20.	Intellectual Property	22

Section 3.21.	Finders’ Fees	23
Section 3.22.	Company Activities	23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF LIMITED BRANDS
Section 4.01.	Corporate Existence and Power	23
Section 4.02.	Corporate Authorization	23
Section 4.03.	Governmental Authorization	24
Section 4.04.	Noncontravention	24
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
Section 5.01.	Corporate Existence and Power	24
Section 5.02.	Corporate Authorization	25
Section 5.03.	Governmental Authorization	25
Section 5.04.	Noncontravention	25
Section 5.05.	Financing	26
Section 5.06.	Litigation; Compliance with Laws	26
Section 5.07.	Finders’ Fees	26
Section 5.08.	Purchase for Investment	26
ARTICLE 6 COVENANTS OF SELLER AND LIMITED BRANDS
Section 6.01.	Conduct of the Company	27
Section 6.02.	Access to Information	28
Section 6.03.	Maintenance of Insurance Policies	28
Section 6.04.	Elimination of Intercompany Accounts	29
Section 6.05.	Audited Carve-out Financial Statements	29
Section 6.06.	Transaction Documents	29
ARTICLE 7 COVENANTS OF BUYER, SELLER AND THE COMPANY
Section 7.01.	Confidentiality	29
Section 7.02.	Cooperation on Certain Matters	30
Section 7.03.	Insurance	31
Section 7.04.	Guarantees	31
Section 7.05.	Outstanding Checks; Reimbursement of Payments by Seller	32
Section 7.06.	Inspections; No Other Representations	32

3

ARTICLE 8 COVENANTS OF BUYER, SELLER AND LIMITED BRANDS
Section 8.01.	Reasonable Best Efforts; Further Assurances	33
Section 8.02.	Certain Filings	33
Section 8.03.	Public Announcements	34
Section 8.04.	Services Agreement	34
Section 8.05.	LLC Agreement	34
Section 8.06.	DC Lease	34
Section 8.07.	Covenant Agreement	34
Section 8.08.	Master Assignment and Assumption Agreement	34
Section 8.09.	Master Sublease	34
Section 8.10.	Store Leases Agreement	34
Section 8.11.	Retained Leases Assignment and Assumption Agreement	34
Section 8.12.	LBOS License Agreement	34
Section 8.13.	Non-LBOS Quitclaim License Agreement	34
Section 8.14.	Unconditional Guaranty	35
Section 8.15.	Cancellation of Related Party Contracts	35
Section 8.16.	Mutual Release	35
Section 8.17.	Retained Landlord Claims	35
Section 8.18.	Retained Litigation	36
Section 8.19.	Litigation Cooperation	36
ARTICLE 9 TAX MATTERS
Section 9.01.	Tax Representations	37
Section 9.02.	Tax Covenants	38
Section 9.03.	Tax Sharing	39
Section 9.04.	Indemnification by Seller	39
ARTICLE 10 EMPLOYEE BENEFITS
Section 10.01.	Employee Benefits	41
Section 10.02.	ERISA Representations	42
Section 10.03.	Compensation and Benefits Following the Closing	44
Section 10.04.	Savings and Retirement Plan	46
Section 10.05.	Other Employee Plans and Benefit Arrangements	47
Section 10.06.	Necessary Action	47
Section 10.07.	Stock-Based Compensation	47
Section 10.08.	Third Party Beneficiaries	48

4

ARTICLE 11 CONDITIONS TO CLOSING
Section 11.01.	Conditions to Obligation of Buyer, Limited Brands and Seller	48
Section 11.02.	Conditions to Obligation of Buyer	48
Section 11.03.	Conditions to Obligation of Limited Brands and Seller	49
ARTICLE 12 SURVIVAL; INDEMNIFICATION
Section 12.01.	Survival	50
Section 12.02.	Indemnification	50
Section 12.03.	Procedures	51
Section 12.04.	Limitation on Damages	53
Section 12.05.	Assignment of Claims	53
Section 12.06.	Exclusivity	53
ARTICLE 13 TERMINATION
Section 13.01.	Grounds for Termination	54
Section 13.02.	Effect of Termination	55
ARTICLE 14 MISCELLANEOUS
Section 14.01.	Notices	55
Section 14.02.	Amendments and Waivers	56
Section 14.03.	Expenses	57
Section 14.04.	Waiver of Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege	57
Section 14.05.	Successors and Assigns	58
Section 14.06.	Governing Law	58
Section 14.07.	Jurisdiction	58
Section 14.08.	WAIVER OF JURY TRIAL	58
Section 14.09.	Counterparts; Third Party Beneficiaries	58
Section 14.10.	Entire Agreement	59
Section 14.11.	Severability	59
Section 14.12.	Disclosure Schedules; Certain Updates	59

Appendix 2.04(a)     Base Statement of Net Tangible Assets

Exhibit A	Form of Covenant Agreement
Exhibit B	Form of DC Lease
Exhibit C	Form of LBOS License Agreement

5

Exhibit D	Form of LLC Agreement
Exhibit E	Form of Master Assignment and Assumption Agreement
Exhibit F	Form of Master Sublease
Exhibit G	Form of Non-LBOS Quitclaim License Agreement
Exhibit H	Form of Retained Leases Assignment and Assumption Agreement
Exhibit I	Form of Services Agreement
Exhibit J	Form of Store Leases Agreement
Exhibit K	Form of Unconditional Guaranty

6

UNIT PURCHASE AGREEMENT

AGREEMENT (this “Agreement”) dated as of May 15, 2007 among Express Investment Corp., a Delaware corporation (“Buyer”), Limited Brands Store Operations, Inc., a Delaware corporation (“Seller”), Limited Brands, Inc., a Delaware corporation (“Limited Brands”) and Express Holding, LLC, a Delaware limited liability company (the “Company”).

W I T N E S S E T H :

WHEREAS, Seller owns 99% of the issued and outstanding limited liability company interests (the “Units”) of the Company and EXP Investments, Inc., a Delaware corporation and wholly owned Subsidiary of Limited Brands (“EXP”), owns 1% of the issued and outstanding Units;

WHEREAS, Seller desires to sell Units (the “Sold Units”) representing 66 2/3% of the aggregate Units of the Company, to Buyer, and Buyer desires to purchase the Sold Units from Seller upon the terms and subject to the conditions hereinafter set forth; and

WHEREAS, immediately following the consummation of the transactions contemplated hereby, Buyer will own 66 2/3% of the aggregate Units of the Company and Seller and EXP will collectively own 33 1/3% of the aggregate Units of the Company.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 . Definitions.

(a) As used herein, the following terms have the following meanings:

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with such other Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. Notwithstanding the foregoing, for purposes of this Agreement, neither the Company nor any of its Subsidiaries shall be considered an Affiliate of Seller or Limited Brands.

“Balance Sheet” means the unaudited consolidated balance sheet of Limited Brands’ Express division as of the Balance Sheet Date. The Balance Sheet is included in Section 3.08 of the Disclosure Schedule.

“Balance Sheet Date” means February 3, 2007.

“Base Net Tangible Assets” means $350,848,000.

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable Law to close.

“Closing Date” means the date of the Closing.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Combined Tax” means any state, local or foreign income or franchise Tax, including payroll and withholding taxes, with respect to which Limited Brands or any of its Affiliates or any predecessors thereof files Returns on a consolidated, combined or unitary basis with the Company or any Subsidiary.

“Covenant Agreement” means the Covenant Agreement between Limited Brands and the Company, in the form attached hereto as Exhibit A.

“DC Lease” means the Distribution Center Lease between Distribution Land Corp. and Express, in the form attached hereto as Exhibit B.

“Disclosure Schedule” means the disclosure schedules delivered by Limited Brands and the Seller to Buyer concurrently with the execution of this Agreement.

“Debt Commitment Letter” means the Commitment Letter dated the date hereof between Morgan Stanley Senior Funding, Inc. and Buyer (a copy of which was provided to Seller on the date hereof).

“Environmental Laws” means any and all Laws having as their principal purpose the protection of the environment.

“Equity Commitment Letter” means the Equity Commitment Letter from Golden Gate Private Equity, Inc. to Buyer dated the date hereof (a copy of which was provided to Seller on the date hereof).

“Express” means Express, LLC, a Delaware limited liability company.

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“Federal Tax” means any Tax, including payroll and withholding taxes, imposed under Subtitle A of the Code with respect to which the Company or any Subsidiary or any predecessor thereof has filed or will file a Return with a member of the Limited Tax Group on a consolidated basis.

“Financial Statements” means (i) the Balance Sheet and the related unaudited consolidated statements of income and cash flows of Limited Brands’ Express division for the year ended February 3, 2007, (ii) the unaudited consolidated balance sheet of Limited Brands’ Express division as of January 28, 2006 and the related unaudited consolidated statements of income and cash flows of Limited Brands’ Express division for the year ended January 28, 2006 and (iii) the unaudited consolidated balance sheet of Limited Brands’ Express division as of January 29, 2005. The Financial Statements are attached hereto as Section 3.08 of the Disclosure Schedule.

“GAAP” means generally accepted accounting principles in the United States.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Indemnified Tax” means (i) Federal Tax, (ii) Combined Tax, and (iii) with respect to each state and local taxing jurisdiction, any income, franchise or similar Tax, payroll and withholding taxes, and any sales, use, escheat or abandoned or unclaimed property Taxes payable to such state or local taxing jurisdiction by the Company or any Subsidiary or any predecessor thereof.

“Intellectual Property” means any (i) tradename, registered and unregistered trademark, service mark and related application, logo, brand name, slogan, trade dress, packaging, product design or configuration (and any goodwill associated therewith), (ii) patent, patent right, patent application or patent disclosure, (iii) copyright, copyright registration or copyright application, (iv) internet domain name registration or related applications (and any goodwill associated therewith), (v) trade secret or other proprietary confidential information, (vi) computer software and (vii) any other proprietary intellectual property right.

“knowledge of Buyer”, “Buyer’s knowledge” or any other similar knowledge qualification in this Agreement means to the actual knowledge of Stefan Kaluzny.

“knowledge of Seller”, “Seller’s knowledge” or any other similar knowledge qualification in this Agreement means to the actual knowledge of Douglas L. Williams, Anne Bramman, Gail Stern, Jeff Knudson and Timothy J. Faber.

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“Law” means any law, statute, regulation, rule, permit, license, certificate, judgment, order, award or other legally binding decision or requirement of any arbitrator, court, government or governmental agency or instrumentality (domestic or foreign).

“LBOS License Agreement” means the LBOS License Agreement between Limited Brands and Express, in the form attached hereto as Exhibit C.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge or security interest in respect of such property or asset.

“Limited Factoring” means Limited Factoring, Inc., a Nevada corporation.

“Limited Tax Group” means, with respect to federal income Taxes, the affiliated group of corporations (as defined in Section 1504(a) of the Code) of which Limited Brands is the common parent and, with respect to any Combined Tax, the applicable consolidated, combined or unitary group of which Limited Brands or any of its Affiliates is a member.

“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of the Company, in the form attached hereto as Exhibit D.

“Material Adverse Effect” means a material adverse effect on the business, assets or results of operations of the Company and the Subsidiaries, taken as whole, except any such effect resulting from or arising in connection with (1) this Agreement or the transactions contemplated hereby, (2) changes or conditions affecting the specialty apparel retail industry generally, (3) changes in economic, regulatory or political conditions generally, (4) the announcement, declaration, commencement, occurrence, continuation or threat of any war or armed hostilities, any act or acts of terrorism or any public health or other public emergency or crisis, (5) seasonal fluctuations affecting the Company or the Subsidiaries or the specialty apparel retail industry consistent with past fluctuations, (6) changes in applicable Law or GAAP or (7) any adverse change, effect, event, occurrence, state of facts or development that could be reasonably expected to arise from or relate to any matter set forth on any Appendix, Exhibit or Schedule attached hereto.

“Master Assignment and Assumption Agreement” means the Master Assignment and Assumption Agreement between Express (as assignor) and Limited Brands (as assignee), in the form attached hereto as Exhibit E.

“Master Sublease” means the Master Sublease between Limited Brands (as sub-lessor) and Express (as sub-lessee), in the form attached hereto as Exhibit F.

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“Non-LBOS Quitclaim License Agreement” means the Non-LBOS Quitclaim License Agreement between Limited Brands and Express, in the form attached hereto as Exhibit G.

“Permits” means, with respect to a Person, all governmental licenses, permits, certificates, consents, approvals, or other governmental authorizations owned or held by, granted to, or held for the benefit of, such Person.

“Permitted Liens and Exceptions” means (1) Liens disclosed in the Disclosure Schedule; (2) Liens disclosed on the Balance Sheet or notes thereto or securing liabilities reflected on the Balance Sheet or notes thereto; (3) Liens for Taxes, assessments and similar charges that are not yet due and payable; (4) mechanic’s, materialman’s, carrier’s, repairer’s and other similar Liens arising or incurred in the ordinary course of business or that are not yet due and payable; or (5) other Liens that do not secure payment of indebtedness for borrowed money and would not reasonably be expected to have a Material Adverse Effect.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Pre Closing Tax Period” means (1) any Tax period ending on or before the Closing Date and (2) with respect to a Straddle Period, the portion of such period ending on and including the Closing Date.

“Reference Rate” means the rate per annum equal to the “Prime Rate” as published in The Wall Street Journal, Eastern Edition.

“Retail Factoring” means Retail Factoring, LLC, a Nevada limited liability company.

“Retained Leases Assignment and Assumption Agreement” means the Retained Leases Assignment and Assumption Agreement between Express (as assignor) and Limited Brands (as assignee), in the form attached hereto as Exhibit H.

“Retained Litigation” means the matters set forth on Section 1.01(a) of the Disclosure Schedule.

“Senior Credit Agreement” means the senior credit agreement among the Company and/or certain of its Subsidiaries and the lenders and agents named therein, which may be entered into on or about the Closing Date, substantially on the terms set forth in the Debt Commitment Letter.

“Services Agreement” means the Services Agreement between Limited Brands and Express, in the form attached hereto as Exhibit I.

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“Store Leases Agreement” means the Store Leases Agreement among Limited Stores, LLC, Bath and Body Works, LLC, Victoria’s Secret Stores, LLC, Diva US, LLC, Express and Limited Brands, in the form attached hereto as Exhibit J.

“Straddle Period” means any Tax period that begins on or before the Closing Date and ends after the Closing Date.

“Subsidiary” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Company; provided that each entity identified as a Subsidiary on Section 3.07 of the Disclosure Schedule shall be considered a Subsidiary; provided further that Limited Factoring shall not be considered a Subsidiary.

“Tax” means (1) any tax, governmental fee or other like assessment or charge of any kind whatsoever; including, but not limited to, withholding on amounts paid to or by any Person, federal and state income taxes, real property gains taxes, sales and use taxes, escheat taxes, abandoned or unclaimed property taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, capital stock taxes, real and personal property taxes, environmental taxes, transfer taxes, severance taxes, alternative or add-on minimum taxes, and custom duties, together with any interest, penalty, addition to tax or additional amount imposed by any governmental authority (whether federal, state, local, municipal, foreign or otherwise) responsible for the imposition of any such tax (a “Taxing Authority”) and (2) any liability for the payment of any amount of the type described in the immediately preceding clause (1) as a result of the Company or any Subsidiary being a member of an affiliated, consolidated or combined group with any other corporation at any time on or prior to the Closing Date.

“Tax Asset” means any net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction or any other credit or tax attribute that could be carried forward or back to reduce income or franchise Taxes (including, without limitation, deductions and credits related to alternative minimum Taxes) and losses or deductions deferred by the Code or other applicable law.

“Transaction Documents” means this Agreement, the Covenant Agreement, the DC Lease, the LBOS License Agreement, the LLC Agreement, the Master Assignment and Assumption Agreement, the Master Sublease, the Non-LBOS Quitclaim License Agreement, the Retained Leases Assignment and Assumption Agreement, the Services Agreement, the Store Leases Agreement and the Unconditional Guaranty.

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“Unconditional Guaranty” means the Unconditional Guaranty by the Company, in the form attached hereto as Exhibit K.

(b) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Agreement	Preamble
Alternative 743(b) Statement	9.02
Buyer	Preamble
Claim	12.03
Closing	2.02
Closing Net Tangible Assets	2.04
Closing Payment	2.01	(a)
Closing Statement of Net Tangible Assets	2.04
Company	Preamble
Company IP	3.20
Company Securities	3.05
Confidentiality Agreement	7.01
Current Representation	14.04
Damages	12.02
Delinquent Payment	8.17
Designated Person	14.04
Domain Names	3.20
Estimate Certificate	2.03
Estimated Closing Net Tangible Assets	2.03
EXP	Recitals
Express Holding	Preamble
Final 743(b) Statement	9.02
Final Net Tangible Assets	2.05
Financial Support Arrangements	7.04
Indemnified Party	12.03
Indemnifying Party	12.03
Lease	3.15
Limited Brands	Preamble
Marks	3.20
Other Taxes	9.02	(c)
Payment Date	7.05
Post-Closing Invoices	7.05
Post-Closing Representation	14.04
Potential Contributor	12.05
Purchase Price	2.01	(a)
Real Property	3.15
Related Party Agreements	3.13
Retained Landlord Claims	8.17

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Returns	9.01
Seller	Preamble
743(b) Statement	9.02	(a)
Sold Units	Recitals
Subsidiary Securities	3.07
Surviving Representations and Warranties	12.01
Tax Benefit	9.04	(d)
Tax Loss	9.04	(a)
Termination Date	13.01
Third Party Claim	12.03
Transaction Expenses	14.03
Transfer Taxes	9.02	(c)
Transferred Marks and Domain Names	3.20
Units	Recitals
Warranty Breach	12.02

Section 1.02. Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Appendices, Exhibits and Schedules are to Articles, Sections, Appendices, Exhibits and Schedules of this Agreement unless otherwise specified. All Appendices, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Appendix, Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any and all Laws.

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ARTICLE 2

PURCHASE AND SALE

Section 2.01. Purchase and Sale; Debt Incurrence; Distribution.

(a) Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Sold Units. The amount payable to Seller at the Closing is $548,000,000 in cash (the “Closing Payment”) consisting of:

(i) $431,000,000 in cash from Buyer representing the purchase price for the Sold Units (the “Purchase Price”), plus

(ii) $117,000,000 in cash pursuant to the borrowings and distributions contemplated by Section 2.01(b) which shall occur immediately prior to the purchase and sale of the Sold Units.

(b) If the Senior Credit Agreement shall have been entered into as of immediately prior to Closing, (i) the Company shall cause Express to obtain an aggregate of $131,000,000 pursuant to the Senior Credit Agreement ($125,000,000 of which shall be pursuant to a term loan and $6,000,000 of which shall be pursuant to an asset-based revolving credit facility) immediately prior to Closing and (ii) immediately following the receipt of such amount, Express shall distribute $117,000,000 to the Company and the Company shall distribute such $117,000,000 to Seller and EXP (pro rata to their respective interests). Buyer acknowledges and agrees that if any portion of the term loan or revolver loan described in the preceding sentence is not obtained pursuant to the Senior Credit Agreement, (i) Buyer shall make a term loan to Express upon the terms set forth in the Debt Commitment Letter in an amount such that the aggregate proceeds to Express pursuant to this Section 2.01(b) are equal to $131,000,000 in order to enable Express and the Company to make the distributions in full contemplated by the preceding sentence and (ii) Buyer will nonetheless be required to consummate the transactions contemplated hereby on the terms set forth herein. In addition, the Company will be permitted to incur additional indebtedness to fund any payment from the Company to Seller (or Limited Brands) pursuant to Section 2.03 or Section 2.05.

Section 2.02. Closing. The closing (the “Closing”) of the purchase and sale of the Sold Units hereunder shall take place at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York on the last to occur of (x) two Business Days following the satisfaction (or, to the extent permitted under Law, waiver) of the conditions set forth in Article 11 and (y) June 15, 2007 (or as promptly after June 15, 2007 as practicable). The Closing shall be deemed to occur at the close of business on the Closing Date. At the Closing:

(i) Immediately following the borrowings and distributions contemplated by Section 2.01(b), Buyer shall deliver to Seller the Purchase Price in immediately available funds by wire transfer to an account of Seller designated by Seller, by notice to Buyer, which notice shall be delivered not later than two Business Days prior to the Closing Date (or if not so designated, then by certified or official bank check payable in immediately available funds to the order of Seller in such amount).

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(ii) Limited Brands, Seller and Buyer shall each deliver such other documents, instruments and agreements as are required to be delivered by such party at the Closing pursuant to this Agreement.

Section 2.03. Estimated Closing Net Tangible Assets. Not less than five Business Days prior to the Closing Date, Seller shall deliver to Buyer a certificate (the “Estimate Certificate”) of an executive officer of Seller setting forth Seller’s good faith estimate of the amount of Closing Net Tangible Assets (the “Estimated Closing Net Tangible Assets”). The amounts set forth on the Estimate Certificate shall be calculated in accordance with the provisions of Section 2.04(a) applicable to the calculation of the Closing Statement of Net Tangible Assets, including Appendix 2.04(a). If Estimated Closing Net Tangible Assets exceed Base Net Tangible Assets, the Company shall pay to Seller (or Limited Brands) the amount of such excess prior to Closing. If Base Net Tangible Assets exceed Estimated Closing Net Tangible Assets, Seller (or Limited Brands) shall pay to the Company the amount of such excess prior to Closing.

Section 2.04. Closing Net Tangible Assets.

(a) As promptly as practicable, but no later than 60 days, after the Closing Date, Seller will cause to be prepared and delivered to Buyer the Closing Statement of Net Tangible Assets (the “Closing Statement of Net Tangible Assets”). The Closing Statement of Net Tangible Assets will be accompanied by a certificate of an executive officer of Seller specifying that the Closing Statement of Net Tangible Assets was prepared in accordance with the provisions of this Section 2.04(a). The Closing Statement of Net Tangible Assets shall include only those categories of assets and liabilities and line items included in, and be in form consistent with, the Base Statement of Net Tangible Assets set forth in Appendix 2.04(a). The determination of the Closing Net Tangible Assets shall be made by applying the principles, policies and practices used in connection with the preparation of the relevant portions of the Balance Sheet so long as they are in accordance with GAAP, but shall be subject to the adjustments and clarifications set forth in Appendix 2.04(a). “Closing Net Tangible Assets” means total tangible assets minus total liabilities of the Company and the Subsidiaries as of the Closing Date as shown on the Closing Statement of Net Tangible Assets, determined as set forth in this Section 2.04(a).

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(b) If Buyer disagrees with Seller’s calculation of the Closing Net Tangible Assets delivered pursuant to Section 2.04(a), Buyer may, within 30 days after delivery of the certificate referred to in Section 2.04(a), deliver a notice to Seller disagreeing with such calculation and setting forth Buyer’s calculation of such amount. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed with all other items and amounts contained in the Closing Statement of Net Tangible Assets delivered pursuant to Section 2.04(a).

(c) If a notice of disagreement shall be duly delivered pursuant to Section 2.04(b), Buyer and Seller shall, during the 30 days following such delivery, use their reasonable best efforts to reach agreement on the disputed items or amounts of Closing Net Tangible Assets. If, during such period, Buyer and Seller are unable to reach such agreement, they shall promptly thereafter cause an independent accountant of nationally recognized standing reasonably satisfactory to Buyer and Seller (who shall not have any material relationship with Buyer or Seller), promptly to review this Agreement and the disputed items or amounts for the purpose of calculating the Closing Net Tangible Assets. In making such calculation, such independent accountant shall consider only those items or amounts in the Closing Net Tangible Assets as to which Buyer has disagreed. Such independent accountant shall deliver to Buyer and Seller, as promptly as practicable, a report setting forth such calculation, it being understood that the amount of the disputed items or amounts calculated by the independent accountant shall not be more than the amount thereof shown in Seller’s calculations delivered pursuant to Section 2.04(a) nor less than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 2.04(b). Such report shall be final and binding upon the parties hereto. The cost of such review and report shall be borne by Seller if the difference between the Final Net Tangible Assets and Seller’s calculation of the Closing Net Tangible Assets delivered pursuant to Section 2.04(a) is greater than the difference between the Final Net Tangible Assets and Buyer’s calculation of the Closing Net Tangible Assets delivered pursuant to Section 2.04(b), by Buyer if the first such difference is less than the second such difference and otherwise equally by Buyer and Seller.

(d) Buyer and Seller agree that they will, and agree to cause their respective independent accountants and the Company and each Subsidiary to, cooperate and assist in the preparation of the Closing Statement of Net Tangible Assets and the calculation of the Closing Net Tangible Assets and in the conduct of the audits or reviews referred to in Section 2.04(c) and with respect to any review requested by Buyer to prepare any notice of disagreement referred to in Section 2.04(b), including, without limitation, the making available to the extent necessary of books, records, work papers and personnel.

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Section 2.05. Post-Closing Adjustment.

(a) If Estimated Closing Net Tangible Assets exceeds Final Net Tangible Assets, Seller (or Limited Brands) shall pay to the Company, in the manner and with interest as provided in Section 2.05(b), the amount of such excess. If Final Net Tangible Assets exceeds Estimated Closing Net Tangible Assets, the Company shall pay to Seller (or Limited Brands), in the manner and with interest as provided in Section 2.05(b), the amount of such excess. “Final Net Tangible Assets” means Closing Net Tangible Assets as shown in Seller’s calculation delivered pursuant to Section 2.04(a), if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.04(b), or if such a notice of disagreement is delivered, as agreed by Buyer and Seller pursuant to Section 2.04(c) or in the absence of such agreement, as shown in the independent accountant’s calculation delivered pursuant to Section 2.04(c); provided that, in no event shall Final Net Tangible Assets be more than Seller’s calculation of Closing Net Tangible Assets delivered pursuant to Section 2.04(a) or less than Buyer’s calculation of Closing Net Tangible Assets delivered pursuant to Section 2.04(b).

(b) Any payment made by the Company or Seller (or Limited Brands) pursuant to Section 2.05(a) shall be made in cash within five days after such calculation has been determined by delivery by the Company or Seller, as the case may be, in immediately available funds by wire transfer to an account of Seller (in the case of a payment by the Company) or the Company (in the case of a payment by Seller or Limited Brands) or by causing such payment to be credited to such account of the receiving party as may be designated by such party. Any amount payable shall bear interest from and including the Closing Date to but excluding the actual date of payment at the Reference Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.

Section 2.06. Payment of Indebtedness. At the Closing, upon receipt of the Closing Payment, the Seller shall repay all indebtedness for borrowed money (including any capital leases) of the Company and its Subsidiaries outstanding immediately prior to the Closing, of any kind or nature whatsoever, including any obligations related thereto (including any accrued interest or prepayment penalties) (but excluding the indebtedness for borrowed money incurred by the Company and/or its Subsidiaries at or prior to the Closing pursuant to Section 2.01(b) or otherwise in connection with the transactions contemplated hereby as agreed by Seller and Buyer). At Closing, the Seller shall deliver Buyer customary payoff letters from each holder of any indebtedness of the Company and its Subsidiaries to be repaid at the Closing.

Section 2.07. Additional Understanding. It is understood and agreed that the establishment of $350,848,000 as the amount of Base Net Tangible Assets (i) was a negotiated result to establish the base from which any adjustment pursuant to Section 2.03 is to be calculated, (ii) differs from the amount that was calculated simply by adding the amounts shown on the Base Statement of Net Tangible

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Assets included as Appendix 2.04(a) (i.e., the amount shown thereon of $326,322,000) and (iii) the fact of the difference between the negotiated amount of Base Net Tangible Assets referred to in clause (i) and the calculated amount described in clause (ii) will not influence or affect in any respect the calculation of Closing Net Tangible Assets. Nothing in this Section 2.07 or in Appendix 2.04(a) shall modify in any respect the procedures set forth in Section 2.03 with respect to the calculation of Estimated Closing Net Tangible Assets.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Disclosure Schedule, Seller represents and warrants to Buyer as of the date hereof that:

Section 3.01. Corporate Existence and Power. Seller is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all limited liability company powers to carry on its business as now conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect.

Section 3.02. Corporate Authorization. The execution, delivery and performance by Seller of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby are within the corporate powers and authority of Seller and have been duly authorized by all necessary corporate action on the part of Seller. Each of the Transaction Documents to which it is or will be a party constitutes, or will when executed constitute, the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its respective terms, (a) except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws concerning fraudulent conveyances and preferential transfers and (b) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in proceeding at law or in equity).

Section 3.03. Governmental Authorization. The execution, delivery and performance by Seller of each of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby require no action, consent or approval by or in respect of, filing with or notice to, any governmental body, agency or official other than: (a) compliance with any applicable requirements of the HSR Act; and (b) any other such action or filing as to which the failure to make or obtain would not have, individually or in the aggregate, a Material Adverse Effect.

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Section 3.04. Noncontravention. The execution, delivery and performance by Seller of any of the Transaction Documents to which it is or will be a party, and the consummation of the transactions contemplated thereby do not and will not (a) violate or conflict with the organizational documents of Seller, or the Company or any Subsidiary, (b) assuming compliance with the matters referred to in Section 3.03, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Seller, or the Company or any Subsidiary, (c) with or without the giving of notice or the lapse of time, or both, constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation of Seller, or the Company or any Subsidiary, or to a loss of any benefit to which Seller, or the Company or any Subsidiary is entitled, under any provision of any agreement, contract or other instrument to which Seller, or the Company or any Subsidiary, is a party or by which any of them or their respective properties or assets is bound or (d) result in the creation or imposition of any Lien (other than Permitted Liens and Exceptions) upon or with respect to the Company, any Subsidiary, any of their respective properties or assets or the Sold Units, except, in the case of clauses (b), (c) and (d), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that would not have, individually or in the aggregate, a Material Adverse Effect.

Section 3.05. Capitalization. The authorized equity interests in the Company consist of 300 Units, of which 297 Units have been issued to Seller and 3 Units have been issued to EXP. All Units have been duly authorized and validly issued and are fully paid and non-assessable. Other than the Units, there are no outstanding (i) limited liability company interests or other voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for limited liability company interests or other voting securities of the Company or (iii) options or other rights to acquire from the Company, or other obligation of the Company to issue, any limited liability company interests or other voting securities of the Company or securities convertible into or exchangeable for limited liability company interests or other voting securities of the Company (the items in clauses (i) through (iii) being referred to collectively as the “Company Securities”). There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any Company Securities. Except for this Agreement, there are no agreements or other instruments relating to the issuance, sale or transfer of any Units or any Company Securities.

Section 3.06. Ownership and Transfer of Sold Units. Seller is the record and beneficial owner of the Sold Units, free and clear of any Lien. Subject to compliance with the matters referred to in Section 3.03, Seller has the absolute right, authority and power to sell, assign and transfer the Sold Units to Buyer free and clear of any Lien. At the Closing, Buyer will acquire good, valid and marketable title to the Sold Units, free and clear of any Lien, other than as a result of any action by Buyer or any of its Affiliates.

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Section 3.07. Subsidiaries.

(a) Each Subsidiary is a corporation or other organization duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all necessary power and authority to carry on its business as now conducted, except as would not have, individually or in the aggregate, a Material Adverse Effect. The name and jurisdiction of organization of each Subsidiary is identified in Section 3.07 of the Disclosure Schedule. Each Subsidiary is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect.

(b) All of the issued and outstanding equity interests of each Subsidiary have been duly authorized and validly issued and are fully paid and non-assessable. All of the outstanding capital stock or other equity securities of each Subsidiary is owned by the Company, directly or indirectly, free and clear of any Lien. There are no outstanding (i) shares of capital stock or other securities of any Subsidiary convertible into or exchangeable for shares of capital stock or other securities of any Subsidiary or (ii) options or other rights to acquire from the Company or any Subsidiary, or other obligation of the Company or any Subsidiary to issue, any capital stock, other securities or securities convertible into or exchangeable for capital stock or other securities of any Subsidiary (the items in clauses (i) and (ii) being referred to collectively as the “Subsidiary Securities”). There are no outstanding obligations of the Company or any Subsidiary or any other Person to repurchase, redeem or otherwise acquire any Subsidiary Securities. There are no agreements or other instruments relating to the issuance, sale or transfer of any Subsidiary Securities. Neither the Company nor any of its Subsidiaries controls directly or indirectly or has any direct or indirect equity participation in any corporation, partnership, trust, or other business association that is not a Subsidiary of the Company.

Section 3.08. Financial Statements. The Financial Statements attached hereto as Section 3.08 of the Disclosure Schedule fairly present in all material respects the consolidated financial condition, cash flows and results of operations of Limited Brands’ Express division as at the respective dates thereof and for the periods therein referred to, all in accordance with GAAP as consistently applied, except to the extent that the Financial Statements do not reflect (i) federal and state income taxes (including provision for income taxes, income taxes payable and deferred income taxes); (ii) liabilities associated with terminated leases and assets related to prepayments of rent; (iii) liabilities associated with the California wage and hour litigation described on Section 1.01(a) of the Disclosure Schedule

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and other legal matters (including certain Retained Litigation); (iv) liabilities associated with Limited Brands’ non-qualified retirement and deferred compensation plan obligations related to Company Employees; (v) liabilities associated with an accrual for sales returns (prior to September 2006); (vi) adjustments associated with the capitalization of outbound freight (prior to September 2006); (vii) certain inventory adjustments related to the retail method of accounting for inventory (prior to January 2006) and the cumulative impact of converting to cost method of accounting for inventory in fiscal year 2005; (viii) the costs related to share based compensation accounted for under Statement of Financial Accounting Standard No. 123R; (ix) certain other miscellaneous assets and liabilities accounted for on a centralized basis (including miscellaneous real estate and construction assets and liabilities) that were not material, individually or in the aggregate, to the Company and its Subsidiaries; and (x) costs not allocated to the Company and its Subsidiaries.

Section 3.09. Inventory. Subject to any reserve therefor included in the Balance Sheet, at the Balance Sheet Date, all inventories of the Company and its Subsidiaries (including inventory ordered but not yet received) consisted of items of a quality usable or saleable in the normal course of the business of the Company consistent with past practices and were in quantities sufficient for the normal operation of the business of the Company in accordance with past practices. The values at which inventories are shown on the Balance Sheet have been determined in accordance with the customary valuation policy of the Company (which is the lower of average cost or market), including any procedures normally performed only at fiscal quarter end or at the end of each fall or spring season, and in accordance with GAAP, as consistently applied by the Company. Since the Balance Sheet Date, the Company has continued to replenish its inventory and to dispose of out-of-season and slow-moving inventory in a normal and customary manner consistent with past practices prevailing in the business of the Company.

Section 3.10. Absence of Certain Changes. Except as set forth in Section 3.10 of the Disclosure Schedule and except as expressly contemplated by the Transaction Documents, since the Balance Sheet Date through the date of this Agreement (other than with respect to Section 3.10(i)), the business of the Company and its Subsidiaries has been conducted in the ordinary course consistent with past practices and there has not been:

(i) any event, occurrence or development which has had or is reasonably likely to have a Material Adverse Effect;

(ii) any declaration, setting aside or payment of any dividend or other distribution with respect to any membership interest or shares of capital stock, as the case may be, of the Company or by any Subsidiary to any Person other than a Subsidiary or the Company, or any repurchase, redemption or other acquisition by the Company or any Subsidiary of any outstanding membership interests or shares of capital stock or other securities of the Company, any Subsidiary or any other entity;

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(iii) any amendment of any term of any outstanding security of the Company or any Subsidiary;

(iv) any incurrence, assumption or guarantee by the Company or any Subsidiary of any indebtedness for borrowed money other than in the ordinary course of business consistent with past practice;

(v) any making of any loan, advance or capital contributions to or investment in any Person by the Company or any Subsidiary other than loans, advances or capital contributions to a Subsidiary or investments made in a Subsidiary in the ordinary course of business consistent with past practice and other than travel, relocation and similar advances to employees in the ordinary course of business;

(vi) any material change in any method of accounting or accounting practice by the Company or any Subsidiary (except for any such change required by reason of a concurrent change in required GAAP);

(vii) any sale (other than sales of inventory, whether through retail channels or sales through jobbers, in the ordinary course of business), assignment, lease or other disposition of any material asset or property of the Company or any Subsidiary or imposition of any Lien on any material asset or property of the Company or any Subsidiary;

(viii) any (A) employment, deferred compensation, severance, retirement or other similar agreement entered into with any director, officer or employee of the Company or any Subsidiary (or any amendment to any such existing agreement), (B) grant of any severance or termination pay to any director, officer or employee of the Company or any Subsidiary, or (C) change in compensation or other benefits payable to any director, officer or employee of the Company or any Subsidiary, in each case other than in the ordinary course of business consistent with past practice;

(ix) any adoption of or change in any Employee Plan or Benefit Arrangement maintained by the Company or any Subsidiary or any compensation or labor policy;

(x) made any material capital expenditures or commitments therefor, other than in the ordinary course of business consistent with past practice; or

(xi) any agreement, whether or not in writing, to do any of the foregoing by the Company or any Subsidiary.

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Section 3.11. No Undisclosed Material Liabilities. There are no liabilities of the Company or its Subsidiaries of any kind, other than:

(a) liabilities provided for in the Balance Sheet or disclosed in the notes thereto;

(b) liabilities not required under GAAP to be shown on the Balance Sheet for reasons other than the contingent nature thereof or the difficulty of determining the amount thereof;

(c) liabilities incurred in the ordinary course of business (none of which arises out of or relates to any breach of contract, breach of warranty, tort, infringement or violation of law); and

(d) other undisclosed liabilities that would not, individually or in the aggregate, have a Material Adverse Effect.

Section 3.12. Material Contracts.

(a) Except as set forth in Section 3.12 of the Disclosure Schedule, as of the date of this Agreement, none of the Company nor any Subsidiary has or is bound by:

(i) any agreement, indenture or other instrument relating to the borrowing of money (other than any such agreement with Seller or any of its Affiliates), other than in connection with the issuance of letters of credit or factoring arrangements in the ordinary course of business;

(ii) any material agreement, license, contract or commitment pursuant to which any trade secret, confidential or other proprietary information, or any customer information of the Company or any Subsidiary may be transferred, disclosed to or used by any third party;

(iii) any agreement, contract or commitment, for the purchase of materials, supplies, goods, services or equipment providing for either (A) annual payments of $500,000 or more or (B) aggregate payments of $1,000,000 or more, in each case (x) that cannot be terminated on not more than one year’s notice without payment of any material penalty and (y) excluding purchases of inventory in the ordinary course of business;

(iv) any agreement, contract or commitment, or group of related agreements, contracts or commitment, relating to a single capital expenditure of greater than $250,000, except for expenditures reflected in the Company’s capital expenditures budget provided to Buyer prior to the date hereof;

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(v) any loan or advance to, or investment in, any Person or any agreement, contract or commitment relating to the making of any such loan, advance or investment, other than travel, relocation and similar advances to employees in the ordinary course of business;

(vi) any material management service, sales agency, sales representative, distributorship or any other similar type contract, except for any such agreements with Seller or any of its Affiliates;

(vii) any material partnership, joint venture or similar agreement or arrangement;

(viii) any agreement, contract or commitment limiting the freedom of the Company or any Subsidiary to engage in any line of business or to compete with any Person except for customary exclusives and restrictions as may be contained in leases or other occupancy contracts that relate to a certain shopping center and not the business generally;

(ix) any collective bargaining agreement; or

(x) any agreement for the lease of personal property to or from any Person providing for lease payments in excess of $250,000 per annum.

Seller has furnished or made available to Buyer true and complete copies of each agreement, lease, plan or other document required to be disclosed in Section 3.12 of the Disclosure Schedule.

(b) Each material contract, agreement or commitment required to be disclosed in Section 3.12 of the Disclosure Schedule is in full force and effect and is valid, binding and enforceable against the parties thereto in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to the enforcement of creditors’ rights generally or by principles governing the availability of equitable remedies. None of the Company or any Subsidiary or, to the knowledge of Seller, any other party thereto, is in default or breach in any respect under the terms of any such contract, agreement or commitment, except for any such defaults or breaches which would not have, individually or in the aggregate, a Material Adverse Effect.

Section 3.13. Certain Related Party Contracts. Except as set forth on Section 3.13 of the Disclosure Schedule, as otherwise provided in the Transaction Documents, or to the extent arising out of ordinary course commercial dealings of the business of the Company and its Subsidiaries, there are no agreements, contracts, commitments or understandings, other than any such agreements, contracts, commitments or understandings that will be terminated as of Closing without any further liability or obligation on the part of the Company or any

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Subsidiary, by and between Seller or its Affiliates, on the one hand, and the Company or any Subsidiary, on the other hand, which are material to the business of the Company, including, without limitation, any such agreements, contracts, commitments or understandings pursuant to which Seller or such Affiliate provides or receives any information, assets, properties, support or other services to or from the Company or any Subsidiary (including, but not limited to accounting, tax, data processing, information technology and legal services) (collectively, “Related Party Agreements”).

Section 3.14. Litigation. There is no claim, action, suit, investigation or proceeding pending against, or to the knowledge of Seller, threatened against, the Company or any Subsidiary or any of their respective properties before any court or arbitrator or any governmental body, agency or official which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Section 3.14 of the Disclosure Schedule lists, as of the date hereof, each material known claim, action, suit, investigation or proceeding pending or threatened against the Company or any Subsidiary or any of their respective properties, and all known material orders or other decrees binding on the Company or any Subsidiary or any of their respective properties.

Section 3.15. Properties.

(a) Section 3.15 of the Disclosure Schedule correctly lists each parcel of real property leased or subleased by the Company or any Subsidiary as of the date hereof (the “Real Property”). The Company and its Subsidiaries do not own any Real Property in fee simple.

(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (i) each material lease of Real Property, together with all amendments and modifications thereto (each, a “Lease”) is in full force and effect in accordance with its terms; (ii) all material amounts due and payable as rent due under each such Lease have been paid in full (except that routine reconciliations of typical lease charges such as taxes, common area maintenance payments, insurance and the like may still be owed for prior years if such amounts have not been billed by landlords or are in the routine process of payment on the date hereof or are being disputed); (iii) in each case the lessee or an affiliate has been in peaceable possession since the commencement of the original term of such Lease and no material waiver, indulgence or postponement of the lessee’s obligations thereunder has been granted by the lessor; and (iv) to Seller’s knowledge, there exists no material default or event, occurrence, condition or act which, with the giving of notice or the lapse of time or both, would become a default under such Lease allowing the landlord to terminate such Lease. Neither the Company nor any Subsidiary or, to the knowledge of Seller, any other party thereto, has violated any of the terms or conditions under any such Lease, except for any such violations which would not have, individually or in the aggregate, a Material Adverse Effect. The Company

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and its Subsidiaries have adequate rights of ingress and egress and adequate electric, light, telephone and water utilities with respect to all Real Property for operation of the business of the Company and its Subsidiaries in the ordinary course and consistent in all material respects with past practice and with the business plans of the Company and its Subsidiaries as in effect on the date hereof, except for the failure of the Company or its Subsidiaries to have such rights as would not constitute, individually or in the aggregate, a Material Adverse Effect. Except as would not have, individually or in the aggregate, a Material Adverse Effect, no condemnation proceeding or other litigation is pending or, to the knowledge of Seller, threatened which would preclude or impair the use of any such Real Property by the Company and its Subsidiaries for the purposes for which it is currently used or proposed to be used as of the date hereof.

Section 3.16. Sufficiency of Assets. As of the Closing, the assets of the Company and its Subsidiaries, together with the services and assets provided to the Company and its Subsidiaries pursuant to the Transaction Documents, will be sufficient to conduct the business of the Company and its Subsidiaries substantially as conducted on the date hereof. The Company and its Subsidiaries own good and marketable title to, or a valid leasehold interest in, all of the assets (both tangible and intangible), free and clear of Liens (other than Permitted Liens and Exceptions) reflected on the Balance Sheet (other than those disposed of in the ordinary course of business prior to the date hereof or disposed of after the date hereof as permitted by this Agreement) or acquired thereafter or otherwise used by them in their business.

Section 3.17. Licenses and Permits. The Company and its Subsidiaries have all Permits necessary for the operation of the business of the Company and its Subsidiaries as such business is being conducted as of the date hereof, except for the absence of such Permits as would not have, individually or in the aggregate, a Material Adverse Effect. Neither the Company nor any Subsidiary is in default in any material respect under any of such Permits.

Section 3.18. Environmental Matters. Except as to matters that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

(a) No written notice, request for information, order, complaint or penalty has been received by Seller or any of its Affiliates, the Company or any Subsidiary within the two years preceding the date hereof or as to matters that have not been resolved, and there are no judicial, administrative or other actions, suits or proceedings pending or, to the knowledge of Seller threatened, which allege a violation of any Environmental Law, in each case relating to the Company or any Subsidiary or any property currently owned, leased or operated by the Company or any Subsidiary and arising out of any Environmental Law;

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(b) The Company and each Subsidiary, any property currently owned or operated by the Company or any Subsidiary and any property currently leased by the Company or any Subsidiary, have in full force and effect all material Permits necessary for their operations to comply with all applicable Environmental Laws and are in material compliance with the terms of such Permits and with all other applicable Environmental Laws; and

(c) There has been no environmental audit, investigation, report, sampling report, remediation report or other related report conducted within the past five years by or on behalf of Seller, the Company or any Subsidiary of or related to the environmental condition of any property currently owned, leased or operated by the Company or any Subsidiary which has not been delivered or made available to Buyer prior to the date hereof and listed on Section 3.18 of the Disclosure Schedule.

Section 3.19. Compliance with Laws. The Company and each Subsidiary, and their respective predecessors with respect to the business of the Company and each Subsidiary, are, and at all times since January 1, 2006 have been, in compliance with all applicable Laws, except for violations that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 3.20. Intellectual Property.

(a) Section 3.20(a)(i) of the Disclosure Schedule sets forth each material (i) registered trademark, service mark and related application (the “Marks”) and (ii) internet domain name registration and related application (the “Domain Names”), in each case owned by the Company or any Subsidiary as of the date hereof. Neither the Company nor any Subsidiary owns any registration or application for registration of any Intellectual Property other than the Marks and the Domain Names. Section 3.20(a)(ii) of the Disclosure Schedule sets forth all material license agreements to which the Company or any Subsidiary is a party with respect to any Marks or Domain Names as of the date hereof. The Intellectual Property owned or licensed by the Company and its Subsidiaries (collectively, the “Company IP”) is sufficient for the continued conduct of the respective businesses of the Company and its Subsidiaries after the Closing in the same manner as such businesses were conducted prior to the Closing in all material respects. To the knowledge of Seller, the operation of the business of the Company and its Subsidiaries does not infringe, misappropriate, dilute or otherwise violate the Intellectual Property of any third party in any material respect.

(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (i) each Mark and Domain Name listed in Section 3.20(a)(i) of the Disclosure Schedule (the “Transferred Marks and Domain Names”) is registered in the name of the Company or one of its

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Subsidiaries, as indicated in Section 3.20(a)(i) of the Disclosure Schedule, none of the material Marks are abandoned and all of the material Marks are subsisting, (ii) as of the date hereof, to the knowledge of Seller, there is no infringement of the Transferred Marks and Domain Names or any other Company IP by any third party and (iii) to the knowledge of Seller, the continued use of the Transferred Marks and Domain Names in the business will not result in any infringement or dilution of the Intellectual Property rights of any third party in the United States and there is no claim as to any Transferred Marks and Domain Names registered in the foreign countries identified in Section 3.20(b) of the Disclosure Schedule.

Section 3.21. Finders’ Fees. Except for Banc of America Securities LLC, whose fees will be paid by Seller or an Affiliate of Seller, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Seller or any of its Affiliates, the Company or any Subsidiary which might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

Section 3.22. Company Activities. The Company was duly formed on May 9, 2007 in accordance with the Delaware Limited Liability Company Act. As of the date hereof, the Company has no assets or liabilities, and has conducted no business, operations or activities since its formation, except for such activities as are incidental to its formation or to the execution and delivery of this Agreement, the Transaction Documents and the transactions contemplated hereby and thereby.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF LIMITED BRANDS

Except as set forth in the Disclosure Schedule, Limited Brands represents and warrants to Buyer as of the date hereof that:

Section 4.01. Corporate Existence and Power. Limited Brands is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation.

Section 4.02. Corporate Authorization. The execution, delivery and performance by Limited Brands of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby are within the corporate powers and authority of Limited Brands and have been duly authorized by all necessary corporate action on the part of Limited Brands. Each of the Transaction Documents to which it is or will be a party constitutes, or will when executed constitute, the legal, valid and binding obligation of Limited Brands, enforceable against Limited Brands in accordance with its respective terms, (a) except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect

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relating to or affecting creditors’ rights generally, including the effect of statutory and other laws concerning fraudulent conveyances and preferential transfers and (b) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in proceeding at law or in equity). No approval of the stockholders of Limited Brands is required in connection with the execution, delivery and performance by Limited Brands of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby.

Section 4.03. Governmental Authorization. The execution, delivery and performance by Limited Brands of each of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby require no action, consent or approval by or in respect of, filing with or notice to, any governmental body, agency or official other than: (1) compliance with any applicable requirements of the HSR Act; and (2) any other such action or filing as to which the failure to make or obtain would not have, individually or in the aggregate, a Material Adverse Effect.

Section 4.04. Noncontravention. The execution, delivery and performance by Limited Brands of any of the Transaction Documents to which it is or will be a party, and the consummation of the transactions contemplated thereby do not and will not (a) violate or conflict with the organizational documents of Limited Brands, (b) assuming compliance with the matters referred to in Section 4.03, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Limited Brands or (c) with or without the giving of notice or the lapse of time, or both, constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation of Limited Brands, or to a loss of any benefit to which Limited Brands is entitled, under any provision of any agreement, contract or other instrument to which Limited Brands is a party or by which any of them or their respective properties or assets is bound, except, in the case of clauses (a) and (b), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that would not have, individually or in the aggregate, a Material Adverse Effect.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller, as of the date hereof, that:

Section 5.01. Corporate Existence and Power. Buyer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all necessary corporate or other power and authority, and all material Permits, required to carry on its business as now conducted, to own and lease assets which it owns and leases and to perform all of

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its obligations under each agreement to which it is a party or by which it is bound. Buyer is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions in which the failure to be so qualified would not, individually or in the aggregate, impair the ability of Buyer to consummate the transactions contemplated by the Transaction Documents.

Section 5.02. Corporate Authorization. The execution, delivery and performance by Buyer of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby are within the corporate powers and authority of Buyer and have been duly authorized by all necessary corporate action on the part of Buyer. Each of the Transaction Documents to which it is or will be a party constitutes, or will when executed constitute, the legal, valid and binding obligation of Buyer, as applicable, enforceable against Buyer in accordance with its respective terms, (i) except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws concerning fraudulent conveyances and preferential transfers and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

Section 5.03. Governmental Authorization. The execution, delivery and performance by Buyer of each of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby require no material action, consent or approval by or in respect of, material filing with or material notice to, any governmental body, agency or official other than (a) compliance with any applicable requirements of the HSR Act and (b) any other such action or filing as to which the failure to make or obtain would not impair the ability of Buyer to consummate the transactions contemplated by the Transaction Documents.

Section 5.04. Noncontravention. The execution, delivery and performance by Buyer of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby do not and will not (i) violate or conflict with the certificate of incorporation or bylaws (or other organizational documents) of Buyer, (ii) assuming compliance with the matters referred to in Section 5.03, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Buyer or (iii) with or without the giving of notice or the lapse of time, or both, constitute a default under or give rise to any right of termination, cancellation or acceleration of any material right or obligation of Buyer, or to a loss of any material benefit to which Buyer is entitled under any provision of any agreement, contract or other instrument to which Buyer is a party or by which Buyer or its properties or assets is bound.

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Section 5.05. Financing. Buyer has and will have prior to the Closing sufficient cash, available lines of credit or other sources of immediately available funds necessary to enable it to pay the Closing Payment at Closing and any other amounts payable by Buyer hereunder.

Section 5.06. Litigation; Compliance with Laws. There are no claims, actions, suits, investigations or proceedings pending against, or to the knowledge of Buyer, threatened against or affecting, Buyer or any subsidiary of Buyer, any of their respective properties before any court or arbitrator or any governmental body, agency or official which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by the Transaction Documents as of the date hereof. Buyer and its subsidiaries are in compliance in all material respects with all applicable Laws, and neither Buyer nor any subsidiary of Buyer has any basis to expect any notice, order or other written communication from any governmental agency or instrumentality thereof alleging any actual or potential material violation of or failure to comply with any Law.

Section 5.07. Finders’ Fees. There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Buyer who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

Section 5.08. Purchase for Investment. Buyer is purchasing the Sold Units for investment for its own account and not with a view to, or for sale in connection with, any distribution thereof. Buyer (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Sold Units and is capable of bearing the economic risks of such investment. Buyer is an informed and sophisticated purchaser, and has engaged expert advisors, experienced in the evaluation and purchase of investments such as the Sold Units as contemplated hereunder. Buyer has undertaken such investigation as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of the Transaction Documents. Buyer acknowledges that Seller and its Affiliates have given Buyer access to key employees, documents and facilities of the Company and its Subsidiaries and, to the extent related to the Company or any Subsidiary, Seller and its Affiliates. Buyer is purchasing the Sold Units for investment for its own account and not with a view to, or for sale in connection with, any distribution thereof.

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ARTICLE 6

COVENANTS OF SELLER AND LIMITED BRANDS

Seller agrees that:

Section 6.01. Conduct of the Company. From the date hereof until the Closing Date, except as set forth in the Disclosure Schedule or as contemplated by any of the Transaction Documents, Limited Brands and Seller shall cause the Company and each Subsidiary to (i) conduct its business in the ordinary course in a manner consistent with past practice and (ii) use its reasonable efforts to preserve intact its business organizations and relationships and goodwill with third parties and to keep available the services of its present employees. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, except as required by Law, as set forth in the Disclosure Schedule or as contemplated by the Transaction Documents, Limited Brands and Seller will not, to the extent relating to the Company and its Subsidiaries, without the prior consent of Buyer (not to be unreasonably withheld), permit the Company or any of the Subsidiaries to:

(a) adopt or propose any change in its organizational documents;

(b) merge or consolidate with any other Person or acquire a material amount of assets from any other Person other than (i) pursuant to existing contracts, agreements or commitments that are disclosed herein or in the Disclosure Schedule and (ii) the acquisition of inventory, materials or supplies in the ordinary course of business;

(c) sell, lease, license or otherwise dispose of any material assets or property except (i) pursuant to existing contracts or commitments, (ii) for the sale of inventory in the ordinary course of business or (iii) for the sale, lease, disposition or encumbrance of amounts of assets no longer used in the ordinary course of business;

(d) make any loan, advance or capital contribution to or investment in any Person, except for travel, relocation and similar advances in the ordinary course of business;

(e) incur, assume or guarantee any material indebtedness for borrowed money, other than letters of credit incurred or entered into in the ordinary course of business;

(f) except as required by Law or any pre-existing contract as in effect as of the date hereof, make, grant or promise any compensation or employee benefit increase or change to any non-store level employee, other than in the ordinary course of business consistent with past custom and practice; or

(g) enter into a binding agreement to do any of the foregoing.

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Section 6.02. Access to Information.

(a) Access to Information Prior to Closing. From the date hereof until the Closing Date, Limited Brands and Seller will (i) give, and will cause the Company and its Subsidiaries to give, Buyer and its counsel, financial advisors, auditors and other authorized representatives, reasonable access to the offices, properties, books and records of the Company and its Subsidiaries and, to the extent related primarily to the Company and its Subsidiaries, to the books and records of Limited Brands and Seller, during normal business hours and upon reasonable prior notice, (ii) furnish, and will cause the Company and its Subsidiaries to furnish, to Buyer and its counsel, financial advisors, auditors and other authorized representatives, such financial and operating data and other information relating to the Company and its Subsidiaries as such Persons may reasonably request and (iii) instruct the employees, counsel and financial advisors of Limited Brands, Seller, the Company and its Subsidiaries to cooperate with Buyer in its investigation of the Company and its Subsidiaries. Any investigation pursuant to this Section 6.02 shall be conducted in such a manner as not to interfere unreasonably with the conduct of the business of Limited Brands or any of its Affiliates, the Company or any Subsidiary. Notwithstanding the foregoing, Buyer shall not have access to personnel records relating to individual performance or evaluation records, medical histories or other information the disclosure of which in Limited Brands’ good faith opinion could subject Limited Brand or any of its Affiliates, the Company or any Subsidiary to risk of liability.

(b) Access to Information Following Closing. From and after the Closing Date, Limited Brands and Seller will afford promptly to Buyer and its counsel, auditors and other authorized representatives reasonable access to its books of account, financial and other records, employees and auditors to the extent they relate to the Company or its Subsidiaries and to the extent necessary to permit Buyer to determine any matter relating to its rights and obligations in connection with any audit, investigation, dispute or litigation or any other reasonable business purpose relating to the Company or its Subsidiaries or Buyer’s rights or obligations under any of the Transaction Documents; provided that any such access by Buyer and its counsel, auditors and other authorized representatives shall not unreasonably interfere with the conduct of the business of Limited Brands or any of its Affiliates.

Section 6.03. Maintenance of Insurance Policies. Prior to the Closing, Seller and its Affiliates will use reasonable efforts to maintain insurance policies for the Company and the Subsidiaries and their assets, properties and employees in an amount and scope consistent with any such insurance policies in effect as of the date hereof. The Company and the Subsidiaries shall after the Closing continue to have coverage under any such insurance policies in effect at the Closing with respect to, but only with respect to, events occurring prior to the Closing (except that, with respect to claims made policies, the Company and the Subsidiaries shall have coverage after the Closing only with respect to claims made prior to the Closing), and it is understood that (i) the Company and the

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Subsidiaries shall continue to be responsible for amounts (including deductibles) not covered by such insurance policies and (ii) the provisions of this Section 6.03 shall not obligate Seller or any of its Affiliates to pay any money with respect to any insurance policies (including, without limitation, with respect to insurance policies in effect on or prior to the Closing) after the Closing.

Section 6.04. Elimination of Intercompany Accounts. Immediately prior to the Closing, Seller shall cause any and all intercompany accounts of any kind or nature whatsoever (other than intercompany accounts arising out of ordinary course commercial dealings of the business of the Company and its Subsidiaries which will be reflected in the Closing Net Tangible Assets determination), between Seller and any of its Affiliates, on the one hand, and the Company and its Subsidiaries on the other, to be collected, paid, eliminated or otherwise settled.

Section 6.05. Audited Carve-out Financial Statements. Seller shall use commercially reasonable efforts to prepare and deliver to Buyer by July 6, 2007 (or earlier if reasonably practicable), an audited carve-out consolidated balance sheet of the Company and its Subsidiaries as of the Balance Sheet Date, together with the related audited carve-out consolidated statements of income and cash flows of the Company and its Subsidiaries for the year ended February 3, 2007. For the avoidance of doubt, Buyer acknowledges and agrees that so long as Seller has used commercially reasonable efforts to prepare and deliver the financial statements referred to in the preceding sentence by July 6, 2007, the failure of Seller to actually deliver such financial statements by July 6, 2007 shall not be a breach of this Agreement by Seller, provided that it is understood that, if the Closing occurs, Seller shall continue to use commercially reasonable efforts after such date to prepare and deliver such financial statements.

Section 6.06. Transaction Documents. Buyer acknowledges that from and after Closing, each of the Company and Express will be subject to each of the Transaction Documents to which it is party delivered by Seller or Limited Brands pursuant to Section 11.02(b).

ARTICLE 7

COVENANTS OF BUYER, SELLER AND THE COMPANY

Buyer, Seller and the Company agree that:

Section 7.01. Confidentiality. All information provided or made available to Buyer or any of its Representatives (as such term is defined in the Confidentiality Agreement) will be subject to the Confidentiality Agreement dated February 23, 2007 between Buyer and Limited Brands (the “Confidentiality Agreement”), which agreement shall remain in full force and effect until the Closing and shall thereupon terminate except that the disclosure, but not the use (to the extent necessary to operate the Company and the

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Subsidiaries in the ordinary course) of any Confidential Information (as defined in the Confidentiality Agreement) to the extent related solely to Seller or its Affiliates shall continue to be governed by the terms of the Confidentiality Agreement.

Section 7.02. Cooperation on Certain Matters.

(a) Access to Information Following Closing. From and after the Closing Date, Buyer will afford, and will cause the Company and each Subsidiary to afford, promptly to Seller and its Affiliates and their counsel, auditors and other authorized representatives reasonable access to their books of account, financial and other records, employees and auditors to the extent they relate to the Company or its Subsidiaries (including the Retained Litigation and the Retained Landlord Claims) and to the extent necessary to permit Seller and its Affiliates to determine any matter relating to their rights and obligations in connection with any audit, investigation, dispute or litigation (including the Retained Litigation and the Retained Landlord Claims) or any other reasonable business purpose relating to the Company or its Subsidiaries or Seller’s or any of its Affiliate’s rights or obligations under any of the Transaction Documents; provided that any such access by Seller and its Affiliates and their counsel, auditors and other authorized representatives shall not unreasonably interfere with the conduct of the business of Buyer, its Affiliates, the Company or any of its Subsidiaries. Notwithstanding the foregoing, Seller and its Affiliates shall not have access to personnel records relating to individual performance or evaluation records, medical histories or other information the disclosure of which in Buyer’s good faith opinion would subject Buyer or any of its Affiliates, the Company or any Subsidiary to risk of liability, except, in each case, to the extent determined by Seller or its Affiliates in good faith to be necessary or appropriate in connection with any of their respective rights or obligations under any of the Transaction Documents or with respect to the Retained Litigation.

(b) Retention of Records. From and after the Closing Date, except as otherwise required by law or agreed to in writing, Buyer and its Affiliates shall, and shall cause the Company and its Subsidiaries to, retain all information and records (including, without limitation, records relating to Taxes) relating to the businesses of the Company and its Subsidiaries that were in the possession of the Company or any Subsidiary as of the Closing Date and, with respect to Taxes, all records related to Returns for Straddle Periods. In addition, Buyer and its Affiliates shall retain all information and records relating to any matter as to which Limited Brands or Seller seeks or may seek indemnification from Buyer hereunder, in each case until final resolution of the matter to which such information and records relate. Notwithstanding the prior two sentences of this Section 7.02(b), Buyer and its Affiliates may destroy or otherwise dispose of any such information and records at any time, provided that, prior to such destruction or disposal, (i) Buyer shall provide not less than 90 days’ prior written notice to Seller, specifying the information and records proposed to be destroyed or

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disposed of, and (ii) if Seller shall request in writing prior to the scheduled date for such destruction or disposal that any of the information and records proposed to be destroyed or disposed of be delivered to Seller, Buyer shall promptly arrange for the delivery of such of the information and records as was requested.

Section 7.03. Insurance. Buyer agrees that, subject to Section 6.03, all insurance policies covering the Company or any Subsidiary maintained by or on behalf of Seller or its Affiliates shall not provide coverage to the Company or the Subsidiaries following the Closing and that, after the Closing, Seller and its Affiliates shall have no obligation of any kind to maintain any form of insurance covering the Company or any Subsidiary.

Section 7.04. Guarantees.

(a) From and after the date hereof (including after the Closing Date), to the extent reasonably requested by Seller, the Company shall use its reasonable best efforts to cause the unconditional release of Seller and its Affiliates from their obligations under any guarantees (including, without limitation, guarantees of lease obligations), letters of credit, surety bonds and other financial support arrangements maintained by Seller or any of its Affiliates in connection with the business or operations of the Company or any of its Subsidiaries and listed on Section 7.04 of the Disclosure Schedule (collectively, the “Financial Support Arrangements”). It is understood and agreed that in no event shall Buyer, the Company or any Subsidiary be obligated to pay any money to any Person to obtain any such unconditional release.

(b) If, from and after the Closing, (i) any amounts are drawn or required to be paid under any Financial Support Arrangement by Seller or any of its Affiliates in connection with events or other matters occurring after the Closing Date or (ii) Seller or any of its Affiliates is required to pay any fees, costs or expenses under the terms of any Financial Support Arrangement, then Seller shall promptly provide the Company with written evidence of the underlying payment obligation. Upon receipt of such notice, the Company shall promptly satisfy such payment obligation on behalf of Seller or its Affiliates, or, if Seller or any of its Affiliates has made such payments itself, the Company shall reimburse Seller for such amounts promptly after receipt from Seller of proof of payment.

(c) Any amount payable pursuant to Section 7.04(b) shall bear interest at the Reference Rate commencing on the date such amount is paid by Seller or its Affiliates in connection with such Financial Support Arrangements. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.

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Section 7.05. Outstanding Checks; Reimbursement of Payments by Seller.

(a) Seller shall ensure that checks written but not cashed before the Closing in respect of obligations of the Company or any of its Subsidiaries shall be paid.

(b) It is the intent of the parties that, except as contemplated by any of the Transaction Documents, all invoices relating to the Company or any of its Subsidiaries received from a third party after the Closing be paid by the Company or a Subsidiary (as opposed to Seller or any of its Affiliates) and, in furtherance of such intent, Seller will use its reasonable commercial efforts to promptly forward to the Company all invoices relating to the Company or any of its Subsidiaries which are received by Seller or any of its Affiliates after the Closing (“Post-Closing Invoices”). It is understood, however, that there may be circumstances in which, notwithstanding the use of such reasonable commercial efforts, Seller or one of its Affiliates will pay a Post-Closing Invoice on behalf of the Company or one of its Subsidiaries. It is agreed that Buyer shall cause the Company to reimburse Seller, or an Affiliate of Seller, as Seller may designate, for all amounts paid by Seller or any of its Affiliates in respect of Post-Closing Invoices within ten (10) days after receipt from Seller of a notice thereof accompanied by written evidence of the underlying payment (each, a “Payment Date”). If the Company fails to pay any payment within thirty (30) days of the relevant Payment Date, the Company shall be obligated to pay, in addition to the amount due on such Payment Date, interest on such amount at the Reference Rate, plus 3% per annum compounded monthly from the relevant Payment Date through the date of payment.

Section 7.06. Inspections; No Other Representations. Buyer will undertake prior to Closing such further investigation and request such additional documents and information as it deems necessary. Buyer agrees to accept the Sold Units in the condition they are in on the Closing Date based upon its own inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature, whether in writing, oral or otherwise, made by or on behalf of or imputed to Seller or any of its Affiliates, except as expressly set forth in this Agreement. Without limiting the generality of the foregoing, Buyer acknowledges that Seller and its Affiliates make no representation or warranty with respect to any projections, estimates or budgets delivered to or made available to Buyer of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company and its Subsidiaries or the future business and operations of the Company and its Subsidiaries or any other information or documents made available to Buyer or its counsel, accountants or advisors with respect to the Company, its Subsidiaries, Seller, any of Seller’s Affiliates or any of the foregoing business, assets, liabilities or operations, except as expressly set forth in this Agreement.

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ARTICLE 8

COVENANTS OF BUYER, SELLER AND LIMITED BRANDS

Buyer and Seller agree that:

Section 8.01. Reasonable Best Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, Buyer and Seller will use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable to consummate the transactions contemplated by any of the Transaction Documents. Seller and Buyer shall execute and deliver, and Seller, prior to the Closing, and Buyer, after the Closing, shall cause the Company and each Subsidiary to execute and deliver, such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or appropriate in order to consummate or implement expeditiously the transactions contemplated by any of the Transaction Documents.

Section 8.02. Certain Filings.

(a) Seller and Buyer shall cooperate with one another (i) in determining whether any action by or in respect of, or filing with, any governmental body, agency, official or authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by any of the Transaction Documents and (ii) subject to the terms and conditions of this Agreement, in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers. In furtherance and not in limitation of the foregoing, if required, each of Buyer and Seller shall make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable after the date hereof (and in any event, within 5 Business Days of the date hereof) and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable.

(b) If any objections are asserted with respect to the transactions contemplated by the Transaction Documents under any antitrust Law or if any action, suit or other proceeding is instituted or threatened by any governmental authority or any private party challenging any of the transactions contemplated hereby as violative of any antitrust Law, Buyer and Seller shall use their respective reasonable best efforts promptly to resolve such objections.

(c) Buyer and Seller shall use their respective reasonable best efforts to keep the other party informed in all material respects with respect to any communication given or received in connection with any filing, submission, investigation or proceeding relating to the transactions contemplated by the Transaction Documents.

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Section 8.03. Public Announcements. The parties shall consult with each other before issuing any press release or making any public statement with respect to any Transaction Document or the transactions contemplated thereby and will not issue any such press release or make any such public statement prior to such consultation. Notwithstanding the foregoing, except as provided by Section 7.01, no provision of this Agreement shall relieve Buyer or any of its Representatives (as such term is defined in the Confidentiality Agreement) from any of its obligations under the Confidentiality Agreement.

Section 8.04. Services Agreement. At the Closing, Limited Brands will enter into (and will cause Express to enter into) the Services Agreement.

Section 8.05. LLC Agreement. At the Closing, the parties shall enter into the Limited Liability Company Agreement.

Section 8.06. DC Lease. At the Closing, Limited Brands will cause each of Distribution Land Corp. and Express to enter into the DC Lease.

Section 8.07. Covenant Agreement. At the Closing, Limited Brands will enter into (and will cause the Company to enter into) the Covenant Agreement.

Section 8.08. Master Assignment and Assumption Agreement. At the Closing, Limited Brands will enter into (and will cause Express to enter into) the Master Assignment and Assumption Agreement.

Section 8.09. Master Sublease. At the Closing, Limited Brands will enter into (and will cause Express to enter into) the Master Sublease.

Section 8.10. Store Leases Agreement. At the Closing, Limited Brands will enter into (and will cause Express and each other party thereto to enter into) the Store Leases Agreement.

Section 8.11. Retained Leases Assignment and Assumption Agreement. At the Closing, Limited Brands will enter into (and will cause Express to enter into) the Retained Leases Assignment and Assumption Agreement.

Section 8.12. LBOS License Agreement. At the Closing, Limited Brands will enter into (and will cause Express to enter into) the LBOS License Agreement.

Section 8.13. Non-LBOS Quitclaim License Agreement. At the Closing, Limited Brands will enter into (and will cause Express to enter into) the Non-LBOS Quitclaim License Agreement.

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Section 8.14. Unconditional Guaranty. At the Closing, the Company will enter into the Unconditional Guaranty.

Section 8.15. Cancellation of Related Party Contracts. Except as contemplated by any of the Transaction Documents, as set forth on Section 8.15 of the Disclosure Schedule or to the extent arising prior to the Closing out of ordinary course commercial dealings of the business of the Company and its Subsidiaries, all Related Party Agreements shall be cancelled as of the Closing Date and no party thereto shall have any further liability or obligation with respect thereto. From and after the Closing, all transactions between the Company or any Subsidiary, on the one hand, and Seller or its Affiliates, on the other hand, shall be governed by the Transaction Documents.

Section 8.16. Mutual Release.

(a) Effective immediately prior to the Closing, Seller hereby irrevocably waives, releases and discharges the Company and its Subsidiaries from any and all liabilities and obligations to Seller and its Affiliates of any kind or nature whatsoever (including, without limitation, in respect of rights of contribution or indemnification), in each case whether absolute or contingent, liquidated or unliquidated, and whether arising under any agreement or understanding, or the limited liability agreement, articles, bylaws, or other constitutive documents of the Company or any of its Subsidiaries or otherwise at law or equity. The foregoing waiver, release and discharge shall not apply in respect of any liability or obligation arising under (i) any of the Transaction Documents (including, without limitation, indemnification obligations arising under Article 9 or Article 12 of this Agreement) or (ii) any agreement entered into on or after the Closing Date.

(b) At the Closing, Buyer shall cause the Company to irrevocably waive, release and discharge Seller and its Affiliates from any and all liabilities and obligations to the Company and its Subsidiaries of any kind or nature whatsoever (including, without limitation, in respect of rights of contribution or indemnification), in each case whether absolute or contingent, liquidated or unliquidated, and whether arising under any agreement or understanding, or the articles, bylaws, or other constitutive documents of the Company or any of its Subsidiaries or otherwise at law or equity. The foregoing waiver, release and discharge shall not apply in respect of any liability or obligation arising under (i) any of the Transaction Documents (including, without limitation, indemnification obligations arising under Article 9 or Article 12 of this Agreement) or (ii) any agreement entered into on or after the Closing Date.

Section 8.17. Retained Landlord Claims. It is understood and agreed that (i) effective at Closing, the Company and its Subsidiaries shall assign to Seller or an Affiliate designated by Seller all of their rights to pursue claims for overpayments in respect of any of the Leases to the extent, but only to the extent,

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such overpayments relate to payments made prior to the Closing in respect of periods prior to the Closing (the “Retained Landlord Claims”) and (ii) at and after the Closing, the Company and its Subsidiaries shall execute such additional written assignments or other agreements as Seller shall reasonably request to implement or evidence the assignment of the Retained Landlord Claims. Without limiting the generality of the foregoing, it is understood and agreed that Seller (i) at its expense, shall control the pursuit and defense of any and all Retained Landlord Claims and shall be entitled to pursue and control the prosecution and defense of litigation or similar proceedings in respect of any such Claim and (ii) shall be entitled to all proceeds, awards, judgments and settlements in respect of any Retained Landlord Claims; provided that if, in connection with the pursuit of a Retained Landlord Claim, it is determined that rent, additional rent or percentage rent (however characterized) due and payable prior to the Closing in respect of the relevant lease was not paid in full prior to the Closing (a “Delinquent Payment”), Seller shall be responsible for such Delinquent Payment. Seller shall use good faith efforts to pursue Retained Landlord Claims in a way that reduces the risk of material impairment to the conduct of business at any affected leasehold (it being understood that, notwithstanding the foregoing, (i) Seller is entitled to pursue the Retained Landlord Claims and (ii) the pursuit of Retained Landlord Claims could result in material impairment to the conduct of business at any affected leasehold).

Section 8.18. Retained Litigation. It is understood and agreed that (i) effective at Closing, the Company and its Subsidiaries shall assign to Seller or an Affiliate designated by Seller all of their rights with respect to the Retained Litigation and (ii) at and after the Closing, Buyer shall cause the Company and its Subsidiaries to execute such additional written assignments or other agreements as Seller shall reasonably request to implement or evidence the assignment of the Retained Litigation. Without limiting the generality of the foregoing, it is understood and agreed that Seller (i) at its expense, shall control the pursuit and defense of any and all Retained Litigation and shall be entitled to pursue and control the prosecution and defense of any such Retained Litigation and (ii) shall be entitled to all proceeds, awards, judgments and settlements in respect of, and shall be responsible for all Damages arising out of, any Retained Litigation.

Section 8.19. Litigation Cooperation. Without limiting the generality of Section 7.02(a), from and after Closing, Buyer shall, and shall cause the Company and its Subsidiaries to, make available to Seller and its Affiliates and their accountants, counsel, and other designated representatives, at Seller’s cost and upon written request, the officers, employees and representatives of Buyer, its controlled Affiliates and the Company and its Subsidiaries as witnesses, and shall otherwise cooperate with Seller and its Affiliates, and furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, in each case to the extent reasonably required in connection with any legal, administrative or other

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proceeding arising out of (i) the Company’s or any of its Subsidiaries’ business and operations prior to the Closing Date in which Seller or any of its Affiliates may from time to time be involved or otherwise related to any of the Transaction Documents (other than with respect to proceedings involving disputes between Buyer, on the one hand, and Seller and its Affiliates, on the other hand), (ii) the Retained Litigation or (iii) the Retained Landlord Claims; provided, that Seller shall use its reasonable best efforts to pursue the Retained Litigation and the Retained Landlord Claims in a manner that does not involve Buyer, its Affiliates, the Company or any Subsidiary, or their respective directors, officers, employees or representatives (including, without limitation, to the extent feasible, pursuing litigation or similar proceedings in the name of Seller or one of its Affiliates); provided further that any such cooperation by Buyer, its Affiliates, the Company or its Subsidiaries shall not unreasonably interfere with the conduct of the business of Buyer, its Affiliates or the Company or its Subsidiaries, as applicable. If Seller is unable to pursue the Retained Landlord Claims or the Retained Litigation without involving Buyer, its controlled Affiliates or the Company or its Subsidiaries, Buyer and its controlled Affiliates will, and Buyer will cause the Company and any Subsidiary to, execute all complaints and other court or similar papers reasonably requested in order to assist Seller and its Affiliates in their efforts to pursue the Retained Landlord Claims and the Retained Litigation.

ARTICLE 9

TAX MATTERS

Section 9.01. Tax Representations. Seller represents and warrants to Buyer as of the date hereof that, except as set forth in the Balance Sheet (including the notes thereto) or in Section 9.01 of the Disclosure Schedule, (a) all Tax returns, statements, reports and forms (collectively, “Returns”) that are material and are required to be filed with any Taxing Authority by, or with respect to, the Company or any Subsidiary on or before the Closing Date (taking into account any duly obtained extensions) have been, or will be, timely filed, (b) the Company and the Subsidiaries (or, in the case of a Return of a Limited Tax Group, Limited Brands) have timely paid all Taxes shown as due and payable on the Returns that have been filed, (c) the Returns that have been filed are true, correct and complete in all material respects, (d) there is no action, suit, proceeding, investigation, audit or claim now proposed or pending against or with respect to the Company or any Subsidiary in respect of any material Tax, (e) each of the Company and its Subsidiaries has properly withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any shareholder, employee, creditor, independent contractor, or other third party, (f) there is no claim pending or to Seller’s knowledge proposed or threatened by a taxing authority in a jurisdiction where the Company or any of its Subsidiaries does not file Returns that such Person is or may be subject to taxation in such jurisdiction, (g) none of the Company or its Subsidiaries has consented to extend

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the time, or is the beneficiary of any extension of time, in which any Tax may be assessed or collected by any taxing authority, and (h) each of the Company and its Subsidiaries (other than Expressco, Inc., prior to its merger into Express) has been at all times classified as a partnership or disregarded entity within the meaning of Treasury Regulation Section 301.7701-2(a) and none has made an election to be treated as an association within the meaning of Treasury Regulation Section 301.7701-3.

Section 9.02. Tax Covenants.

(a) Seller and Buyer shall cause the Company to make an election under Section 754 of the Code effective for the taxable year of the Company in which the Closing occurs. Buyer shall prepare and deliver to Seller for its review and comment a statement (the “743(b) Statement”) as promptly as practicable after the determination of Final Net Tangible Assets, setting forth the allocation of the adjustment to the bases of the Company’s assets. If Seller disagrees with the allocation on the 743(b) Statement, Seller may deliver a notice to Buyer specifying those items as to which Seller disagrees or setting forth an alternative 743(b) Statement (the “Alternative 743(b) Statement”). Seller and Buyer shall use their reasonable best efforts to resolve any issues arising from the 743(b) Statement. If Seller and Buyer are unable to reach such agreement, they shall promptly thereafter cause an independent accountant of nationally recognized standing reasonably satisfactory to Seller and Buyer (who shall not have any material relationship with Seller or Buyer) promptly to review the 743(b) Statement and the notice specifying the disputed items or the Alternative 743(b) Statement for purposes of determining the proper allocation of the adjustment to the bases of the Company’s assets. Such independent accountant shall deliver to Seller and Buyer, as promptly as practicable, a final 743(b) Statement (the “Final 743(b) Statement”), it being understood that such Final 743(b) Statement shall be final and binding upon the parties hereto. The cost of such review and preparation of the Final 743(b) Statement shall be borne by Seller and Buyer equally. Seller and Buyer agree to be bound by the 743(b) Statement (or the Final 743(b) Statement, if applicable) and act in accordance therewith in the preparation, filing and audit of any Return.

(b) Seller shall prepare and timely file all Returns reflecting the income of the Company or any Subsidiary for all Pre-Closing Tax Periods. Seller and Buyer shall cause the Company to provide Seller at least 60 days before the applicable Returns are due such information as Seller may reasonably require in the preparation of such Returns.

(c) All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with transactions contemplated by this Agreement (including any real property transfer Tax and any similar Tax) (all such Taxes, excluding Other Taxes (as defined below), “Transfer Taxes”) shall be paid by the party having liability

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therefor under applicable Law (or, if both Buyer or one of its Affiliates, on the one hand, and Seller or one of its Affiliates, on the other hand, have liability under applicable Law, then 50% of such Tax shall be paid by Buyer and the remaining 50% shall be paid by Seller), and such party (or, in the case of Taxes paid by both Buyer and Seller, both parties) will file all necessary Returns and other documentation with respect to all such Taxes and fees, and, if required by applicable Law, the other party will, and will cause its Affiliates to, join in the execution of any such Returns and other documentation; provided that Buyer, on the one hand, and Seller, on the other hand, will each bear 50% of the economic burden of any Transfer Tax and of the expenses of preparing and filing all necessary Transfer Tax returns and other documentation, and Buyer and Seller shall make all such payments to one another as are necessary to achieve such allocation of such economic burden; and provided further that a reasonable period of time in advance of paying any Transfer Tax or filing any related return or other documentation, the parties will consult with one another in good faith in order to agree whether the payment of such Transfer Tax or filing of such return or other documentation is required under applicable Law. Notwithstanding any other provision of this Agreement, the Company or its Subsidiaries shall be liable for and bear the entire economic burden of any Taxes or other payments to be made to a governmental authority as a result of the transactions contemplated by this Agreement for the purpose of having the Buyer, any of its Affiliates, the Company or any Subsidiary qualify to do business in a jurisdiction, be authorized to collect sales tax, receive applicable vendors’ or other licenses, or receive other, similar authorizations, licenses, qualifications or permissions (“Other Taxes”). The provisions of this Section 9.02(c), and no other provision (including Section 9.04), will govern the allocation between the parties of the economic burden of Transfer Taxes and Other Taxes.

Section 9.03. Tax Sharing. Any and all existing Tax sharing, Tax indemnity or Tax allocation agreements or arrangements between the Company or any Subsidiary and any member of any Limited Tax Group shall be terminated as of the Closing Date. After such date neither the Company, any Subsidiary, Limited Brands nor any Affiliate of Limited Brands shall have any further rights or liabilities thereunder.

Section 9.04. Indemnification by Seller.

(a) Seller hereby indemnifies Buyer and its Affiliates and, after the Closing, the Company and the Subsidiaries against and agrees to hold them harmless from any (i) Indemnified Tax of the Company or any Subsidiary relating to a Pre-Closing Tax Period and (ii) liabilities, costs and expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses) arising out of or incident to the imposition, assessment or assertion of any Tax described in (i), including those liabilities, costs and expenses incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, in each case incurred or suffered by the Company or any Subsidiary after the Closing (the sum of (i) and (ii) being referred to as a “Tax Loss”).

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(b) For purposes of this Section 9.04, in the case of any Indemnified Tax that is payable for a Straddle Period, the portion of such Indemnified Tax related to the portion of such Straddle Period ending on the Closing Date based on or measured by income or receipts of the Company or any of its Subsidiaries shall be determined based on an interim closing of the books as of the close of business on the Closing Date, and the amount of other Indemnified Taxes for a Straddle Period which relate to the Pre-Closing Tax Period shall be deemed to be the amount of such Indemnified Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in the Straddle Period.

(c) If any claim or demand for Taxes in respect of which indemnity may be sought pursuant to this Section 9.04 is asserted against the Company, any Subsidiary or any of its Affiliates, the Company, the Subsidiary or the Affiliate shall notify Seller of such claim or demand within 10 days of receipt thereof, or such earlier time that would allow Seller to timely respond to such claim or demand, and shall give Seller such information with respect thereto as Seller may reasonably request. Seller may discharge, at any time, its indemnification obligation under this Section 9.04 by paying to the Company, the Subsidiary or the Affiliate the amount of the applicable Tax Loss, calculated on the date of such payment subject to the approval of Buyer. Seller shall have the right to assume and control at its own expense, and the Company, the Subsidiary or the Affiliate shall take all steps reasonably requested by Seller in order to fully effectuate Seller’s assumption and control of, the conduct of any contest or proceeding (including, without limitation, a Tax audit) relating to Federal Taxes, Combined Taxes or any other Taxes for which indemnification may be sought from Seller under this Section 9.04. Without limiting the foregoing, in order to effectuate such assumption and control, the Company, the Subsidiaries and the Company’s Affiliates hereby authorize and appoint as their exclusive agents Seller and any other person Seller may designate to conduct any such contest or proceeding and to take all actions and make, in Seller’s or its designee’s sole discretion, all decisions necessary or incidental to such conduct, including preparing and filing briefs and other submissions, appearing before applicable authorities for conferences and oral arguments, and determining whether and on what terms to settle any such contest or proceeding, and Company, the Subsidiaries and the Company’s Affiliates shall take such further actions as Seller requests to evidence such authority (including without limitation executing powers of attorney). The Company, the Subsidiaries and the Company’s Affiliates shall each have the right, but not the duty, to participate in any such contest or proceeding at its own expense, subject to Seller’s right to control such contest or proceeding as described in the two preceding sentences. Seller shall not settle or conclude any

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such contest or proceeding addressed by this Section 9.04(c) without Buyer’s approval, not to be unreasonably withheld, if the settlement or proposed resolution of such contest or proceeding could reasonably be expected to adversely affect the Company, any Subsidiary, Buyer or its Affiliates for any taxable period beginning or portion thereof after the Closing Date. Seller shall not be liable under this Section 9.04 for any amount arising out of a contest or proceeding of which Seller was not notified as required under this Section 9.04(c) to the extent that the failure to so notify Seller prejudiced Seller.

(d) Notwithstanding Section 9.04(a), if Seller’s indemnification obligation under this Section 9.04 arises in respect of an adjustment which makes allowable to the Company, any Subsidiary, or any of its Affiliates any deduction, amortization, exclusion from income or other allowance for any taxable period beginning after the Closing Date (a “Tax Benefit”) which would not, but for such adjustment, be allowable, then the Company, its Affiliate or any Subsidiary, as applicable, shall pay over to Seller the tax savings attributable to such Tax Benefit (calculated on a with-and-without basis) as and when realized by the Company, its Affiliate or any Subsidiary, as applicable; provided, however, that the amount paid to Seller pursuant to this provision with respect to any indemnification obligation shall not exceed the amount paid by Seller pursuant to Section 9.04(a) with respect to such indemnification obligation.

ARTICLE 10

EMPLOYEE BENEFITS

Section 10.01. Employee Benefits.

(a) The following terms, as used herein, having the following meanings:

“COBRA” means the “continuation coverage requirements” of “group health plans” as set forth in Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.

“Company Employee” means each individual who is a current or former employee of the Company or any of its Subsidiaries.

“Employee Plan” means each material “employee benefit plan,” as such term is defined in Section 3(3) of ERISA, and each material employment, severance, continuation pay, termination pay, layoff, or other similar written contract, arrangement or policy and each material plan or arrangement providing for health, medical, life or other welfare benefit insurance coverage (including any insured, self-insured or other arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, holiday, dependent care assistance, education or vacation benefits, retirement benefits or deferred compensation, profit-sharing, bonuses, stock options, stock purchase, stock

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appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits which (1) is or has been entered into, maintained, administered or contributed to, as the case may be, by Seller, any of its Affiliates, the Company or any Subsidiary and (2) covers any Company Employee or with respect to which the Company or any Subsidiary has any liability.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” of any entity means any other entity which, together with such entity, is or was, at the relevant time, treated as a single employer under Section 414 of the Code.

“HIPAA” means Section 9801 of the Code and Part 7 of Subtitle B of Title I of ERISA.

“Stock Plan” means the Limited Brands, Inc. Stock Option and Performance Incentive Plan, as amended from time to time.

(b) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Buyer NQDCP	10.05
Buyer’s Welfare Benefit Plans	10.03
Company’s FSA	10.03
Covered Employee	10.03
Defined Benefit Plan	10.02
Multiemployer Plan	10.02
Post-Closing DC Plan	10.04
Seller’s FSA	10.03
Seller Savings Plans	10.04
SRDCP	10.05

Section 10.02. ERISA Representations. Seller represents and warrants to Buyer as of the date hereof that:

(a) Section 10.02(a) of the Disclosure Schedule sets forth each Employee Plan, including all employment agreements to which the Company is a party. With respect to each such Employee Plan, Seller has furnished or made available to Buyer a true and complete copy of the plan document of each such Employee Plan. Each Employee Plan has been maintained in material compliance with its terms and with the requirements prescribed by any and all applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code.

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(b) The Internal Revenue Service has issued a favorable determination letter with respect to each Employee Plan that is intended to qualify under Section 401(a) of the Code, and to the knowledge of Seller no event has occurred before or after the date of such letter that would disqualify such Employee Plan.

(c) Limited Brands, the Company and/or the Subsidiaries have each made full payment of all amounts as required, under applicable Law or the terms of each Employee Plan on behalf of each Company Employee, to have contributed thereto before the Closing Date (including any employee salary reduction contributions described in Section 125 or Section 401(k) of the Code) for all periods through and including the Closing Date, or proper accruals for such contributions have been made and are reflected on the Company’s Balance Sheet and books and records. Limited Brands, the Company and/or the Subsidiaries will pay such contributions to the Employee Plans on behalf of Company Employees in respect of benefits payable, or otherwise made available, to the Company Employees for all periods prior to the Closing Date, or, if any such contributions will not be due prior to the Closing Date, adequate provision for reserves therefor shall be made on the Closing Statement of Net Tangible Assets.

(d) Neither Limited Brands, the Company nor any Subsidiary has within the past six years made any contributions (or has been obligated to make any contributions) on behalf of Company Employees to a “Multiemployer Plan,” as defined in Section 3(37) of ERISA or to a “Defined Benefit Plan,” as defined in Section 3(35) of ERISA. Neither the Company nor any Subsidiary has any liability with respect to a Multiemployer Plan or a Defined Benefit Plan, including without limitation as a result of the Company or any Subsidiary being treated as a single employer with any other Person under Section 414 of the Code.

(e) No Employee Plan provides (or will provide) medical, life insurance or death benefits with respect to former employees (including retirees) of the Company or any Subsidiary, other than benefits that are required to be provided pursuant to (i) Section 4980B of the Code, or (ii) the agreements listed on Section 10.02(e)(ii) of the Disclosure Schedule.

(f) There are no investigations, audits, claims or lawsuits which have been asserted or instituted involving any aspect of any Employee Plan (other than routine benefit claims) which are likely to result in material liability to the Company or any Subsidiary.

(g) Neither the Company, any Subsidiary nor any “party in interest” (as defined in Section 3(14) of ERISA) or “disqualified person” (as defined in Section 4975(e)(2) of the Code) with respect to any Employee Plan has engaged in a material “prohibited transaction” within the meaning of Part 4 of Subtitle B of Title I of ERISA or Section 4975 of the Code for which a statutory, administrative, or regulatory exemption is not available.

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(h) The consummation of the transactions contemplated by this Agreement will not, separately or together, except as set forth on Section 10.02(h) of the Disclosure Schedule, entitle any Company Employee to receive from the Company or any Subsidiary severance pay, unemployment compensation, or any other payment, or except as set forth in Section 10.07, accelerate the time of payment or vesting of, or increase the amount of, compensation due to any such Company Employee.

(i) Consummation of the transactions contemplated by this Agreement will not result in any “excess parachute payments” within the meaning of Section 280G(b) of the Code. There are no change in control payments payable to Company Employees other than any such payments which are the responsibility of Limited Brands, other than payments in respect of the termination by the Company of such Company Employees after the Closing. There are no retention payments payable to Company Employees other than any such payments which are the responsibility of Limited Brands.

Section 10.03. Compensation and Benefits Following the Closing.

(a) (i) Notwithstanding anything herein to the contrary, for a period from the Closing Date through the one year anniversary of the Closing Date, Buyer shall, or shall cause the Company to, provide all Covered Employees with base compensation, bonus opportunity and benefits that are substantially comparable in the aggregate to the compensation, bonus opportunity and benefits (excluding equity incentive compensation) such Covered Employees were receiving or eligible to receive immediately prior to the Closing Date (excluding equity incentive compensation). For purposes of this Agreement, a “Covered Employee” means each individual who is employed by the Company or its Subsidiaries on the Closing Date, including any such individual on approved leave of absence (including maternity and paternity leave, vacation, sick leave, short-term disability, long-term disability, military leave, jury duty, or bereavement leave). (ii) Buyer agrees that the Company shall assume and be responsible for, and that neither Seller nor Limited Brands shall have any liability for or in respect of, any and all bonus payments due Company Employees under Limited Brands’ Incentive Compensation Plan in respect of the Spring season performance period ending August 1, 2007 to the extent accrued on the books and records of the Company or its Subsidiaries.

(b) For a period from the Closing Date through the one year anniversary of the Closing Date, Buyer shall, or shall cause the Company to, provide severance benefits to each Covered Employee on terms that are no less favorable than those set forth in Section 10.03 of the Disclosure Schedule.

(c) Buyer shall credit the Covered Employees for service with the Company and its Subsidiaries prior to the Closing Date for purposes of eligibility to participate in, and to receive benefits under, benefit plans following the Closing Date, vesting of benefits, and benefit accrual (provided, however, that credited service for benefit accrual purposes shall apply solely for purposes of vacation, paid time off and severance benefits).

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(d) Buyer covenants that the welfare benefit plans in which Covered Employees participate on or following the Closing Date (or, if later, the end of any applicable transition period under the Services Agreement) (“Buyer’s Welfare Benefit Plans”) shall credit each Covered Employee for any coinsurance or deductibles paid prior to the date the Covered Employee becomes a participant in Buyer’s Welfare Benefit Plans, if any, with respect to the calendar year in which such participation commences. Such credit, if any, shall be given for the purpose of satisfying any applicable coinsurance or deductible requirements under any of Buyer’s Welfare Benefit Plans in which the Covered Employee is eligible to participate after the Closing Date (or, if later, the end of the applicable transition period). As of the Closing Date, the Company shall establish flexible spending accounts for medical and dependent care expenses under a new or existing plan (“Company’s FSA”) for each Covered Employee who, on or prior to the Closing Date, is a participant in a flexible spending account for medical and dependent care expenses under an Employee Plan (“Seller’s FSA”) or who elects to participate in Company’s FSA. Subject to Buyer and the Company being provided all information reasonably necessary to permit the administrator of Company’s FSA to accommodate the inclusion of the Covered Employees in Company’s FSA on the basis described herein, the Company shall credit or debit, as applicable, effective as of the Closing Date, the applicable account of each Covered Employee under Company’s FSA with an amount equal to the balance of each such Covered Employee’s account under Seller’s FSA as of immediately prior to the Closing Date. As soon as practicable after the Closing, Seller shall pay to Buyer the net aggregate amount of the account balances credited under the Company’s FSA, if such amount is positive, and the Company shall pay to Seller the net aggregate amount of the account balances credited under Company’s FSA, if such amount is negative.

(e) Buyer covenants that, with respect to the Company Employees, Buyer’s Welfare Benefit Plans shall not treat any transaction contemplated hereby as an event which, in and of itself, would cause the Company Employees to be subject to any preexisting condition limitation and shall otherwise satisfy the requirements of Section 4980B(f) of the Code with respect to any “qualifying events” (as such term is defined under Section 4980B(f)(3) of the Code) that occur under Buyer’s Welfare Benefit Plans on or after the Closing Date.

(f) (i) Buyer, the Company and their Affiliates shall be responsible for and shall indemnify and hold Seller and its Affiliates harmless for all liabilities incurred after the effectiveness of the Closing relating to any employee benefit plan maintained or contributed to by Buyer, the Company, or any Subsidiary or Affiliate thereof, with respect to any Covered Employee; provided that the allocation of liabilities and costs relating to the continued participation under the

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Employee Plans by Covered Employees following the Closing Date shall be solely governed by the Services Agreement. For purposes of this Section 10.03, a medical or dental claim shall be “incurred” when the relevant service is provided or item purchased. (ii) Effective as of the Closing Date, the Company shall cause Express to assume all obligations and liabilities of Limited Brands and its Affiliates under the employment agreements listed on Section 10.03(f)(ii) of the Disclosure Schedule.

(g) Except as expressly assumed by the Company under this Section 10.03, Section 10.04 and Section 10.05 or to the extent provided in the Services Agreement, Seller and its Affiliates shall be responsible for and shall indemnify and hold the Company and its Subsidiaries harmless for all liabilities (i) relating to any employee benefit plan currently or formerly maintained or contributed to by Limited Brands, the Company or any Subsidiary or any ERISA Affiliate thereof and (ii) incurred prior to the effectiveness of the Closing with respect to any Company Employee.

(h) The Company’s obligations under this Section 10.03 are in addition to the Company’s obligations under Section 10.04 and Section 10.05.

(i) Nothing contained in this Agreement, express or implied (A) shall be construed to establish, amend, or modify any benefit plan, program, agreement or arrangement; (B) shall alter or limit the ability of Buyer, the Company or its Subsidiaries to amend, modify or terminate any benefit plan, program, agreement or arrangement at any time assumed, established, sponsored or maintained by any of them; (C) is intended to confer upon any Person any right to employment or continued employment for any period of time by reason of this Agreement, or any right to a particular term or condition of employment; or (D) is intended to confer upon any Person any other rights as a third-party beneficiary of this Agreement.

Section 10.04. Savings and Retirement Plan.

(a) Effective as of the Closing Date, Limited Brands shall amend each of the tax-qualified defined contribution plans in which Covered Employees participate (the “Seller Savings Plans”) to cause the active participation of each Covered Employee in the Seller Savings Plans to cease as of the Closing Date.

(b) Seller shall take any steps necessary to (i) cause each Covered Employee to be fully vested in their account balances under the relevant Seller Savings Plan as of the Closing Date and (ii) permit the Covered Employees to receive a distribution of their account balances under each of the Seller Savings Plans as a result of the transactions contemplated by this Agreement. On or following the Closing Date, a tax-qualified savings plan established or maintained by Buyer or one of its affiliates, including the Company, (the “Post-Closing DC

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Plan”) shall (if elected by Covered Employees) accept individual rollovers in cash of Covered Employees’ distributions from the Seller Savings Plans, subject to the terms and conditions of the Post-Closing DC Plan and applicable Law. Limited Brands and Buyer shall reasonably cooperate in good faith to effect such transfers or distributions as soon as practicable after the Effective Time.

Section 10.05. Other Employee Plans and Benefit Arrangements. On or prior to the Closing Date, Buyer shall, or shall cause the Company to, establish a nonqualified deferred compensation plan (“Buyer NQDCP”) that mirrors Limited Brands Supplemental Retirement Plan (the “SRDCP”). Seller shall take any steps necessary to cause each Covered Employee participating in the SRDCP to be fully vested in their account balances thereunder as of the Closing Date. Effective as of the Closing Date, Buyer shall cause the Company to (1) accept the transfer (in the form of cash) from Seller of participant account balances from the SRDCP to the Buyer NQDCP with respect to benefits payable to Covered Employees who are participants in the SRDCP as of the Closing Date, and (2) assume all obligations and liabilities attributable to such account balances. On the Closing Date, Seller shall provide Buyer with a true and correct schedule setting forth the following information regarding each Covered Employee who is a participant in the SRDCP on the Closing Date: the name of the Covered Employee, his/her job title, and the amounts credited to his/her SRDCP account as of the Closing Date.

Section 10.06. Necessary Action. Limited Brands, Seller and Buyer agree to take all action, or cause such action to be taken, which may be necessary in order to effectuate the transactions contemplated by this Article, including, without limitation, adopting any necessary amendments to the Employee Plans and making all filings and submissions to the appropriate governmental agencies required to be made in connection with the events contemplated by Section 10.04.

Section 10.07. Stock-Based Compensation. As soon as commercially practicable after the date hereof, Limited Brands shall recommend to the Compensation Committee of its Board of Directors that the Committee cause each outstanding unvested stock option, restricted share or restricted stock unit granted under the Stock Plan and held by a Company Employee that would otherwise become exercisable or vested, as applicable, during the twelve month period following the Closing Date to become exercisable or vested, as applicable, immediately prior to the Closing Date. Subject to the foregoing, following the Closing Date the treatment of all stock options, restricted shares or restricted stock units held by Company Employees, whether vested or unvested, shall be governed by the terms of such options and the Stock Plan. On the Closing Date, the Company shall pay to Limited Brands an amount in cash, not to exceed $7,000,000, equal to the accounting charge recognized by Limited Brands and any other charges or out-of-pocket costs incurred by Limited Brands in connection with the acceleration of unvested stock options, restricted shares or restricted stock units referred to in this Section 10.07. It is understood and agreed that the Closing Payment includes the amounts owed by the Company to Seller pursuant to the preceding sentence.

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Section 10.08. Third Party Beneficiaries. No provision of this Article shall create any third party beneficiary rights in any Company Employee (including any beneficiary or dependent thereof).

ARTICLE 11

CONDITIONS TO CLOSING

Section 11.01. Conditions to Obligation of Buyer, Limited Brands and Seller. The obligations of Buyer, Limited Brands and Seller to consummate the Closing are subject to the satisfaction (or, to the extent permitted by Law, waiver by the relevant party) of the following conditions:

(a) Any applicable waiting period under the HSR Act relating to the transactions contemplated by the Transaction Documents shall have expired or been terminated.

(b) No provision of any applicable Law and no judgment, injunction, order or decree shall prohibit the consummation of the Closing.

Section 11.02. Conditions to Obligation of Buyer. The obligation of Buyer to consummate the Closing is subject to the satisfaction (or, to the extent permitted by Law, waiver by Buyer) of the following further conditions:

(a) (i) Limited Brands and Seller shall have performed or complied in all material respects with all of the agreements and covenants required by the Transaction Documents to be performed or complied with by them at or prior to the Closing Date, (ii) the representations and warranties of Seller and Limited Brands contained in this Agreement and in any certificate or other writing delivered by Seller or Limited Brands pursuant hereto, disregarding any qualifications or exceptions contained in such representations or warranties relating to materiality or Material Adverse Effect, shall be true and accurate at and as of the Closing Date, as if made at and as of such time (other than any representations and warranties that address matters as of a specific date, which shall be true and accurate as of such date), except for any inaccuracies which, individually or in the aggregate, would not constitute a Material Adverse Effect and (iii) Buyer shall have received a certificate signed by an executive officer of Seller to the foregoing effect.

(b) Seller or Limited Brands shall have caused the following fully executed documents to be delivered to Buyer:

(i) letters of resignation from the officers and directors of the Company and each Subsidiary, to the extent any such officer or director will remain an employee of Seller or any of its Affiliates after the Closing;

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(ii) such documents regarding the corporate organization, existence, authorization and similar matters relating to Limited Brands, Seller, the Company or any Subsidiary as Buyer may reasonably request;

(iii) the Services Agreement;

(iv) the LLC Agreement;

(v) the DC Lease;

(vi) the Covenant Agreement;

(vii) the Master Assignment and Assumption Agreement;

(viii) the Master Sublease;

(ix) the Store Leases Agreement;

(x) the Retained Leases Assignment and Assumption Agreement;

(xi) the Non-LBOS Quitclaim License Agreement;

(xii) the LBOS License Agreement; and

(xiii) the Unconditional Guaranty.

Section 11.03. Conditions to Obligation of Limited Brands and Seller. The obligation of Limited Brands and Seller to consummate the Closing is subject to the satisfaction (or, to the extent permitted by Law, waiver by Seller) of the following further conditions:

(a) (i) Buyer shall have performed or complied in all material respects with all of the agreements, covenants and conditions required by the Transaction Documents to be performed or complied with by it on or prior to the Closing Date, (ii) the representations and warranties of Buyer contained in this Agreement and in any certificate or other writing delivered by Buyer pursuant hereto shall be true and accurate in all material respects at and as of the Closing Date, as if made at and as of such time (other than any representations and warranties that address matters as of a specific date, which shall be true and accurate as of such date) and (iii) Seller shall have received a certificate signed by an executive officer of Buyer to the foregoing effect.

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(b) Buyer shall have caused the following documents to be delivered to Seller:

(i) such documents regarding the corporate organization, existence, authorization and similar matters relating to Buyer as Seller may reasonably request; and

(ii) the LLC Agreement.

ARTICLE 12

SURVIVAL; INDEMNIFICATION

Section 12.01. Survival. None of the representations and warranties of Limited Brands, Seller or Buyer contained in this Agreement shall survive the Closing Date, except that the representations and warranties contained in (i) Section 3.01, Section 3.02, Section 3.05, Section 3.06, Section 3.21, Section 4.01, Section 4.02, Section 5.01, Section 5.02, Section 5.07, Section 5.08 and Section 10.02(i) shall survive until the latest date permitted by Law, and (ii) Section 3.08 and Section 3.16 shall survive until the first anniversary of the Closing Date (the representations and warranties listed in clauses (i) and (ii), the “Surviving Representations and Warranties”). Except as specifically set forth in the preceding sentence, no other representation or warranty of any party set forth in this Agreement will survive the Closing, and no party will have any rights or remedies after the Closing with respect to any misrepresentation of or inaccuracy in any such representation or warranty. Except as otherwise provided in this Agreement, the covenants and agreements of Buyer, Limited Brands and Seller contained in this Agreement shall survive Closing and shall continue in full force and effect indefinitely or for the shorter period specified in this Agreement. Any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to Section 12.01 if notice of the inaccuracy or breach thereof giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought prior to such time.

Section 12.02. Indemnification.

(a) From and after Closing, Limited Brands hereby indemnifies Buyer and its Affiliates against and agrees to hold each of them harmless from any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (“Damages”) actually incurred or suffered by Buyer or any of its Affiliates arising out of or resulting from (i) any inaccuracy or breach of any Surviving Representation and Warranty (each such inaccuracy and breach, a “Warranty Breach”) or breach of a covenant, in each case of Limited Brands or Seller contained in this Agreement (it being agreed that,

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in the case of the inaccuracy or breach of the representation and warranty contained in Section 3.16, in addition to any other rights that Seller may have under this Agreement or under applicable Law, Seller shall first have ten (10) Business Days following delivery of notice by Buyer of an alleged breach thereof to cure such breach to the reasonable satisfaction of Buyer) and (ii) the Retained Litigation.

(b) From and after Closing, Buyer hereby indemnifies Limited Brands and its Affiliates against and agrees to hold each of them harmless from any and all Damages actually incurred or suffered by Limited Brands or any of its Affiliates arising out of or related in any way to any Warranty Breach or breach of a covenant, in each case of Buyer contained in this Agreement.

(c) From and after Closing, the Company hereby indemnifies Limited Brands and its Affiliates against and agrees to hold each of them harmless from any and all Damages actually incurred or suffered by Limited Brands or any of its Affiliates arising out of or related in any way to, to the extent contemplated by Section 7.04(b), any Financial Support Arrangements in connection with the business, liabilities, obligations or operations of the Company or any of its Subsidiaries with respect to which Limited Brands and its Affiliates have not been unconditionally released from their obligations thereunder.

(d) Notwithstanding anything to the contrary herein, (i) Buyer and its Affiliates shall not be indemnified for Damages pursuant to this Section 12.02 (in the absence of fraud or intentional misrepresentation) with respect to any Warranty Breach of the representations and warranties contained in Section 3.08 and Section 3.16 unless and until the aggregate amount of all such Damages exceeds $10,000,000, and then only to the extent of such excess, and (ii) the total liability of Limited Brands to indemnify and hold Buyer and its Affiliates harmless in respect of Damages arising as a result of a Warranty Breach of the representations and warranties contained in Section 3.08 and Section 3.16 shall be limited (in the absence of fraud or intentional misrepresentation) to $100,000,000 in the aggregate.

(e) Notwithstanding any of the provisions of this Article 12, Section 9.04 shall provide the exclusive remedy for Buyer’s and its Affiliates’ (and, after the Closing, the Company’s and its Subsidiaries’) recovery of any Tax Loss from Seller and its Affiliates, and the procedures set forth in Section 9.04 shall govern any claim for indemnification under such provision.

Section 12.03. Procedures.

(a) The party seeking indemnification under Section 12.02 (the “Indemnified Party”) agrees to give prompt notice to the party against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any claim, or the commencement of any suit, action or proceeding (“Claim”) in respect of

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which indemnity may be sought under such Section and will provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the Indemnifying Party.

(b) The Indemnifying Party shall be entitled to participate in the defense of any Claim asserted by any third party (“Third Party Claim”) and, subject to the limitations set forth in this Section, shall be entitled to control the defense of such Third Party Claim and appoint lead counsel for such defense, in each case at its expense; provided that Limited Brands or its Affiliates shall control the defense of, and appoint the lead counsel in connection with, the Retained Litigation.

(c) If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section 12.03, (i) the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of such Third Party Claim, if the settlement does not release the Indemnified Party from all liabilities and obligations with respect to such Third Party Claim or the settlement imposes injunctive or other equitable relief against the Indemnified Party and (ii) the Indemnified Party shall be entitled to participate in the defense of such Third Party Claim and to employ separate counsel of its choice for such purpose. The fees and expenses of such separate counsel shall be paid by the Indemnified Party.

(d) Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.

(e) Each Indemnified Party must mitigate in accordance with applicable Law any loss for which such Indemnified Party seeks indemnification under this Agreement. If such Indemnified Party mitigates its loss after the Indemnifying Party has paid the Indemnified Party under any indemnification provision of this Agreement in respect of that loss, the Indemnified Party must notify the Indemnifying Party and pay to the Indemnifying Party the extent of the value of the benefit (or, if less, the amount of any such loss previously paid by the Indemnifying Party) to the Indemnified Party of that mitigation (less the Indemnified Party’s reasonable costs of mitigation) within two Business Days after the benefit is received.

(f) Each Indemnified Party shall use reasonable efforts to collect any amounts available under insurance coverage, or from any other Person alleged to be responsible, for any Damages payable under Section 12.02.

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Section 12.04. Limitation on Damages.

(a) The amount of any Damages payable under Section 12.02 by the Indemnifying Party shall be net of (i) any amounts recovered by the Indemnified Party under applicable insurance policies and (ii) the amount of any Tax Benefit actually realized by the Indemnified Party arising from the incurrence or payment of any such Damages (net of any Tax detriment arising from receipt of any indemnification payment).

(b) The Indemnifying Party shall not be liable under Section 12.02 for any (i) Damages relating to any matter to the extent that (A) there is included in the Closing Statement of Net Tangible Assets an identifiable liability or reserve (including liabilities or reserves that are not individual line items, but are identifiable components of a line item) specifically relating to such matter (it being understood that the Indemnifying Party shall be liable for the excess of the Damages over such identifiable liability or reserve) or (B) the Indemnified Party had otherwise been compensated for such matter pursuant to the purchase price adjustment mechanism contemplated by Section 2.04 and Section 2.05 (it being understood that the Indemnifying Party shall be liable only for the excess of the Damages over such purchase price adjustment compensation), (ii) special, punitive, indirect or consequential Damages (including diminution in value of the Sold Units) or (iii) Damages for lost profits.

(c) Notwithstanding anything in this Agreement to the contrary, no Damages shall be determined or increased based on any multiple of any financial measure (including earnings, sales or other benchmarks) that might have been used by Buyer in the valuation of the Company and its Subsidiaries or their businesses and operations.

Section 12.05. Assignment of Claims. If the Indemnified Party receives any payment from an Indemnifying Party in respect of any Damages pursuant to Section 12.02 and the Indemnified Party could have recovered all or a part of such Damages from a third party (other than from the Company, any Subsidiary, any Affiliate of the Company or any current or former employee or agent of any such Persons) (a “Potential Contributor”) based on the underlying Claim asserted against the Indemnifying Party, the Indemnified Party shall assign such of its rights to proceed against the Potential Contributor as are necessary to permit the Indemnifying Party to recover from the Potential Contributor the amount of such payment.

Section 12.06. Exclusivity. Except as specifically set forth in this Agreement, Buyer waives any rights and claims Buyer and its Affiliates may have against Seller and its Affiliates, whether in law or in equity, relating to the Company or any of its Subsidiaries or any of their respective assets, business or operations, the Sold Units or the transactions contemplated hereby, and Seller waives any such rights and claims Seller and its Affiliates may have against

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Buyer and its Affiliates, the Company or any of its Subsidiaries, except in either case, any claim for fraud. The rights and claims waived hereby include, without limitation, claims for contribution or other rights of recovery arising out of or relating to any Environmental Law, claims for breach of contract, breach of representation or warranty, negligent misrepresentation and all other claims for breach of duty other than fraud. After the Closing, Article 9 and Section 12.02 will provide the exclusive remedy for any misrepresentation, breach of warranty, covenant or other agreement (other than those contained in Section 2.05, Section 6.02, Section 7.02, Section 7.04 or Section 7.05) or other claim arising out of this Agreement or the transactions contemplated hereby, other than any claim for fraud. Notwithstanding the foregoing, except as otherwise provided in Article 13, it is understood that nothing herein shall prohibit any party hereto from exercising its rights to seek equitable relief with respect to a breach of covenant or agreement under any Transaction Document.

ARTICLE 13

TERMINATION

Section 13.01. Grounds for Termination. This Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Closing:

(a) by mutual written agreement of Limited Brands and Buyer;

(b) by either Limited Brands or Buyer if the Closing shall not have been consummated on or before July 6, 2007 (the “Termination Date”); provided that neither of the parties may terminate this Agreement pursuant to this clause if the Closing shall not have been consummated by the Termination Date by reason of the failure of such party or any of its Affiliates to perform in all material respects any of its or their respective covenants or agreements contained in this Agreement;

(c) by either Buyer, on the one hand, or Limited Brands, on the other hand, if a material breach of any provision of this Agreement has been committed by the other party or any of its Affiliates and such breach is not capable of being satisfied or cured by the Termination Date; or

(d) by either Limited Brands or Buyer if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction.

The party desiring to terminate this Agreement pursuant to Section 13.01(b)-(d) shall give notice of such termination to the other party.

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Section 13.02. Effect of Termination. If this Agreement is terminated as permitted by Section 13.01, such termination shall be without liability of any party (or any Affiliate, stockholder, director, officer, employee, agent, consultant or representative of such party) to any other party to this Agreement; provided that if such termination shall result from the (i) willful failure of any party to fulfill a condition to the performance of the obligations of the other parties, (ii) willful failure of any party to this Agreement to perform a covenant or agreement contained in this Agreement or (iii) willful breach by any party hereto of any representation or warranty contained herein made as of the date of this Agreement, such party shall be fully liable for any and all Damages incurred or suffered by any other party as a result of such failure or breach; provided that, notwithstanding anything to the contrary contained in this Agreement, the parties hereto acknowledge and agree that if Buyer fails to consummate the transactions contemplated by this Agreement as a result of Buyer’s material breach of this Agreement which is not cured by the Termination Date, then (i) none of Limited Brands, the Company, LBSO or any of their respective Affiliates shall be entitled to equitable relief, including specific performance, with respect to any such failure to consummate the transactions contemplated hereby on account of such breach and (ii) the sole and exclusive remedy of Limited Brands, the Company, LBSO, and each of their respective Affiliates shall be to recover from Buyer the termination fee set forth in the Equity Commitment Letter. The provisions of Section 7.01 (it being understood that all provisions of the Confidentiality Agreement will remain in full force and effect), Section 13.02 and Article 14 shall survive any termination hereof pursuant to Section 13.01.

ARTICLE 14

MISCELLANEOUS

Section 14.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to Buyer, to:

Express Investment Corp.

c/o Golden Gate Private Equity, Inc.

One Embarcadero Center, 33rd Floor

San Francisco, California 94111

Attention: Stefan Kaluzny

Fax: (415) 627-4501

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

Kirkland & Ellis LLP

200 E. Randolph Drive

Chicago, Illinois 60601

Attention: Gary M. Holihan, P.C.

Fax: (312) 861-2200

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if to Limited Brands or Seller, to:

Limited Brands, Inc.

Three Limited Parkway

Columbus, Ohio 43230

Attention: Douglas L. Williams

Facsimile No.: 614-415-7188

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

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York 10017

Attention: David L. Caplan

Fax: (212) 450 3800

or to such other address or telecopy number and with such other copies, as such party may hereafter specify for the purpose by notice to the other parties. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Each such notice, request or other communication shall be effective (1) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section and evidence of receipt is received or (2) if given by any other means, upon delivery or refusal of delivery at the address specified in this Section 14.01.

Section 14.02. Amendments and Waivers.

(a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.

(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

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Section 14.03. Expenses. Except to the extent otherwise expressly provided in any of the Transaction Documents, at or promptly following Closing, Buyer and Seller shall cause the Company to reimburse each of Buyer and Seller for all reasonable out-of-pocket costs and expenses incurred by each of them as of Closing in connection with the negotiation, preparation, execution and delivery of this Agreement and the Transaction Documents and the consummation of the Closing and the financing of the transactions contemplated hereby and thereby (collectively, “Transaction Expenses”); provided that the aggregate reimbursement to be paid by the Company to Buyer shall not exceed $14,000,000 and the aggregate reimbursement to paid by the Company to Seller shall not exceed $7,000,000. To the extent any Transaction Expenses are not reimbursed by the Company pursuant to the preceding sentence, all such Transaction Expenses shall be paid by the party incurring such cost or expense. It is understood and agreed that the Closing Payment includes the amounts owed by the Company to Seller pursuant to this Section 14.03.

Section 14.04. Waiver of Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege.

(a) Buyer waives and will not assert, and, after the Closing, will cause the Company and its Subsidiaries to waive and not to assert, any conflict of interest arising out of or relating to the representation, after the Closing (the “Post-Closing Representation”), of Limited Brands, the Seller, or any stockholder, officer, employee or director of the Company or any of its Subsidiaries, or any Affiliate of any of the foregoing (any such Person, a “Designated Person”) in any matter involving this Agreement, the Transaction Documents or any other agreements or transactions contemplated thereby, by any legal counsel currently representing Limited Brands, the Seller or the Company or any Subsidiary in connection with this Agreement, the Transaction Documents or any other agreements or transactions contemplated thereby (the “Current Representation”).

(b) Buyer waives and will not assert, and after the Closing, will cause the Company and its Subsidiaries to waive and not to assert, any attorney-client privilege with respect to any communication between any legal counsel and any Designated Person occurring during the Current Representation in connection with any Post-Closing Representation, including in connection with a dispute with Buyer, and following the Closing, with the Company or any of its Subsidiaries, it being the intention of the parties hereto that all such rights to such attorney-client privilege and to control such attorney-client privilege shall be retained by Limited Brands or Seller; provided that the foregoing waiver and acknowledgment of retention shall not extend to any communication not involving this Agreement, the Transaction Documents or any other agreements or transactions contemplated thereby, or to communications with any Person other than the Designated Persons.

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Section 14.05. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 14.06. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

Section 14.07. Jurisdiction. Except as otherwise expressly provided in this Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, any of the Transaction Documents or the transactions contemplated thereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of any of the Transaction Documents shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 14.01 shall be deemed effective service of process on such party.

Section 14.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 14.09. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Each Transaction Document shall become effective when each party thereto shall have received a counterpart thereof signed by the other party thereto. No Transaction Document is intended to confer upon any Person other than the parties thereto any rights or remedies hereunder.

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Section 14.10. Entire Agreement. The Transaction Documents, together with the Confidentiality Agreement, constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by any party hereto.

Section 14.11. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other governmental authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 14.12. Disclosure Schedules; Certain Updates.

(a) The parties acknowledge and agree that (i) the Disclosure Schedule to this Agreement may include certain items and information solely for informational purposes for the convenience of Buyer and (ii) the disclosure by Limited Brands or Seller of any matter in the Disclosure Schedule shall not be deemed to constitute an acknowledgment by Limited Brands or Seller that the matter is required to be disclosed by the terms of this Agreement or that the matter is material. If any section of the Disclosure Schedule discloses an item or information in such a way as to make its relevance to the disclosure required by another section of the Disclosure Schedule reasonably apparent, the matter shall be deemed to have been disclosed in such other section of the Disclosure Schedule, notwithstanding the omission of an appropriate cross-reference to such other section of the Disclosure Schedule. The parties further acknowledge and agree that neither the specification in any provision of this Agreement nor the inclusion in any section of the Disclosure Schedule of any dollar amount or any item or matter is intended to imply or shall be deemed to constitute an acknowledgment by Limited Brands or Seller that such amount (or higher or lower amount) or such item or matter (or other items or matters) are or are not (x) material or rise to the level of any materiality or Material Adverse Effect standard for purposes of this Agreement or the Disclosure Schedule, (y) in the ordinary course of business of the Company or any of its Subsidiaries or (z) required to be disclosed by the terms of this Agreement. No party shall use the fact of any such specification or inclusion (or lack thereof) in any dispute or controversy among the parties as to the foregoing matters.

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(b) The parties acknowledge and agree that certain schedules contained in the Store Leases Agreement, the Master Assignment and Assumption Agreement, the Master Sublease, Schedule IV – Appendices A and B of the Services Agreement and Section 7.04 of the Disclosure Schedule may be updated by Seller prior to Closing in order to reflect changes thereto resulting from the ordinary course of business of the Company and its Subsidiaries from the date hereof until Closing (it being understood that Seller or Limited Brands shall not increase the aggregate amount of the Financial Support Arrangements above the amount outstanding on the date hereof).

[Remainder of page intentionally left blank; next page is signature page]

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

EXPRESS INVESTMENT CORP.
By:	/s/ Stefan Kaluzny
	Name:	Stefan Kaluzny
	Title:	President
LIMITED BRANDS STORE OPERATIONS, INC.
By:	/s/ Douglas L. Williams
	Name:	Douglas L. Williams
	Title:	SVP, General Counsel
LIMITED BRANDS, INC.
By:	/s/ Douglas L. Williams
	Name:	Douglas L. Williams
	Title:	SVP, General Counsel
EXPRESS HOLDING, LLC
By:	Limited Brands Store Operations, Inc.: Member
By:	/s/ Douglas L. Williams
	Name:	Douglas L. Williams
	Title:	SVP, General Counsel
EXPRESS HOLDING, LLC
By:	EXP Investments, Inc.: Member
By:	/s/ Timothy J. Faber
	Name:	Timothy J. Faber
	Title:	Vice President

EX-10.11

Exhibit 10.11

AMENDMENT NO. 1 TO UNIT PURCHASE AGREEMENT

AMENDMENT NO. 1 TO UNIT PURCHASE AGREEMENT (this “Amendment”), dated as of July 6, 2007, among Express Investment Corp., a Delaware corporation (“Buyer”), Limited Brands Store Operations, Inc., a Delaware corporation (“Seller”), Limited Brands, Inc., a Delaware corporation (“Limited Brands”), and Express Holding, LLC, a Delaware limited liability company (the “Company”).

WHEREAS, the parties hereto have entered into a Unit Purchase Agreement dated as of May 15, 2007 (the “Purchase Agreement”);

WHEREAS, Section 14.02(a) of the Purchase Agreement provides that the Purchase Agreement may be amended in writing if signed by each party to the Purchase Agreement; and

WHEREAS, the parties hereto desire to amend the Purchase Agreement as set forth herein.

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

Section 1. Definitions. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Purchase Agreement.

Section 2. Increase in Units Sold to Buyer. The Purchase Agreement is hereby amended to provide for the sale by Seller to Buyer of additional Units representing 8 ¹/3% of the aggregate Units of the Company in exchange for the payment by Buyer to Seller of an additional $53,875,000, as follows:

(a) The cover page of the Purchase Agreement and the recitals to the Purchase Agreement are each amended by replacing all references to “66 2/3%” and “33 1/3%” with “75%” and “25%”, respectively.

(b) Section 2.01(a) of the Purchase Agreement is amended by adding the following sentence immediately after the first full sentence set forth therein:

“The aggregate purchase price for the Sold Units is $484,875,000 in cash, payable in installments, with the Closing Purchase Price to be paid at the Closing in accordance with this Section 2.01(a) and Section 2.02(i) and the Installment Purchase Price to be paid on or prior to the Installment Payment Date in accordance with Section 2.01(c).”

(c) Section 2.01(a)(i) of the Purchase Agreement is deleted in its entirety and replaced with the following:

“(i) $431,000,000 in cash from Buyer representing the portion of the purchase price for the Sold Units to be paid at Closing (the “Closing Purchase Price”), plus”

(d) All references to “Purchase Price” in the Purchase Agreement are replaced with the words “Closing Purchase Price”.

(e) Section 2.01 of the Purchase Agreement is amended by inserting a new Section 2.01(c) as follows:

“(c) No later than July 31, 2007 (the “Installment Payment Date”), Buyer shall pay to Seller $53,875,000 (the “Installment Purchase Price”), representing the portion of the purchase price for the Sold Units not paid at Closing. Buyer shall deliver to Seller the Installment Purchase Price in immediately available funds by wire transfer to the account designated by Seller pursuant to Section 2.02(i) with respect to the Closing Purchase Price (or if not so designated, then by certified or official bank check payable in immediately available funds to the order of Seller in such amount).”

(f) Section 5.05 of the Purchase Agreement is deleted in its entirety and replaced with the following:

“Section 5.05. Financing. Buyer has and will have prior to the Closing sufficient cash, available lines of credit or other sources of immediately available funds necessary to enable it to pay the Closing Payment at Closing and any other amounts payable by Buyer hereunder when due. Buyer will have on or prior to the Installment Payment Date sufficient cash, available lines of credit or other sources of immediately available funds necessary to enable it to pay the Installment Purchase Price on the Installment Payment Date. As of the date hereof, Buyer has received and furnished a copy to Seller of the equity commitment letter dated as of the date hereof between Golden Gate Private Equity, Inc. and Buyer pursuant to which Golden Gate Private Equity, Inc. has agreed to make an equity commitment to Buyer no later than the Installment Payment Date in an aggregate amount equal to the Installment Purchase Price.”

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Section 3. Flexible Spending Account Plan. The third, fourth and fifth sentences of Section 10.03(d) of the Purchase Agreement are hereby deleted in their entirety and replaced with the following:

“As of January 1, 2008, the Company shall establish flexible spending accounts for medical and dependent care expenses under a new or existing plan (“Company’s FSA”) for each Covered Employee who elects to participate in the Company’s FSA. On May 1, 2008 or as soon as practicable thereafter, Seller shall pay to the Company the net aggregate amount of the Covered Employees’ account balances credited under the Seller’s flexible spending account plan (“Seller’s FSA”), if such amount is positive, and the Company shall pay to Seller the net aggregate amount of the Covered Employees’ account balances credited under Seller’s FSA, if such amount is negative.”

Section 4. Indemnification for Liabilities under Employee Benefit Plans. Section 10.03(g) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:

“Except as expressly assumed by the Company under this Section 10.03, Section 10.04 and Section 10.05 or to the extent provided in the Services Agreement, Seller and its Affiliates shall be responsible for and shall indemnify and hold the Company and its Subsidiaries harmless for all liabilities (i) relating to any employee benefit plan (including any and all worker’s compensation claims) currently or formerly maintained or contributed to by Limited Brands, the Company or any Subsidiary or any ERISA Affiliate thereof and (ii) incurred prior to the effectiveness of the Closing with respect to any Company Employee. For purposes of this Section 10.03(g), a worker’s compensation claim shall be “incurred” when the event giving rise to such claim occurred.”

Section 5. Savings and Retirement Plan. Section 10.04(a) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:

“Effective as of the Closing Date, Limited Brands shall amend each of the tax-qualified defined contribution plans in which Covered Employees participate (the “Seller Savings Plans”) to cause the active participation of each Covered Employee in the Seller Savings Plans to cease as of the end of the payroll period in which the Closing Date occurs.”

Section 6. Replacement of Exhibits. Exhibits A, B, C, D, E, F, G, H, I, J and K to the Purchase Agreement are replaced in their entirety by Exhibits A, B, C, D, E, F, G, H, I, J and K attached hereto, respectively.

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Section 7. Defined Term References. Section 1.01(b) of the Purchase Agreement is hereby amended by:

(a) deleting the following from the table set forth therein:

Purchase Price 2.01 (a) 

(b) inserting, in the appropriate alphabetical order, the following to the table set forth therein:

Closing Purchase Price	2.01	(a)
Installment Payment Date	2.01	(c)
Installment Purchase Price	2.01	(c)

Section 8. Disclosure Schedule. Section 3.15 of the Disclosure Schedule is hereby amended to replace the table therein titled “Approved PCRs” with the table attached hereto as Annex A.

Section 9. Amendment. Except as expressly set forth in this Amendment, this Amendment shall not constitute an amendment or modification of any other provision of the Purchase Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference, and each reference to “this Agreement” and each other similar reference contained in the Purchase Agreement shall refer to the Purchase Agreement as amended by this Amendment.

Section 10. Governing Law. This Amendment shall be governed by and construed in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state.

Section 11. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective when each party hereto shall have received counterparts hereof signed by the other party hereto.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written.

EXPRESS INVESTMENT CORP.
By:	/s/ Stefan Kaluzny
	Name:	Stefan Kaluzny
	Title:	President and CEO
LIMITED BRANDS STORE OPERATIONS, INC.
By:	/s/ Timothy J. Faber
	Name:	Timothy J. Faber
	Title:	Senior Vice President - Treasury/Mergers & Acquisitions
LIMITED BRANDS, INC.
By:	/s/ Timothy J. Faber
	Name:	Timothy J. Faber
	Title:	Vice President - Treasury/Mergers & Acquisitions
EXPRESS HOLDING, LLC
By:	Limited Brands Store Operations, Inc., as Member
By:	/s/ Timothy J. Faber
	Name:	Timothy J. Faber
	Title:	Senior Vice President - Treasury/Mergers & Acquisitions
By:	EXP Investments, Inc., as Member
By:	/s/ Douglas L. Williams
	Name:	Douglas L. Williams
	Title:	Senior Vice President - Enterprise General Counsel

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EX-10.12

Exhibit 10.12

MASTER SUBLEASE

This MASTER SUBLEASE (this “Sublease”) dated as of July 6, 2007 by and between LIMITED BRANDS, INC., a Delaware corporation (“Lessor”), and EXPRESS, LLC, a Delaware limited liability company (“Lessee”).

RECITALS:

A. Lessor is currently the tenant under leases (as amended, modified or supplemented from time to time, collectively, the “Prime Leases” and each a “Prime Lease”) for certain premises described on Exhibit A attached hereto (collectively, the “Properties” and each a “Property”, as the context herein may require).

B. Lessor is currently the guarantor under a guaranty agreement (collectively, the “Guarantees” and each a “Guaranty”) with respect to the obligations arising under each Prime Lease.

C. Lessor desires to sublet to Lessee, and Lessee desires to hire and sublease from Lessor, the Properties, on the terms and subject to the conditions contained in this Sublease.

AGREEMENT:

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

1. Demise.

Pursuant to the terms and subject to the conditions of this Sublease, Lessor does hereby demise and sublease to Lessee, and Lessee does hereby sublease from Lessor, the Properties. Lessee has inspected each of the Properties and is acquainted with its condition and agrees to take the same “as is”, except and to the extent of disclosures, agreements, representations and warranties inconsistent therewith as set forth in the Unit Purchase Agreement (as defined below) or, subject to Section 2(b)(vii) below, the applicable Prime Lease.

2. Subordination; Incorporation of Prime Lease by Reference.

(a) Lessee acknowledges that Lessor has provided and/or Lessee has received and reviewed a copy of each of the Prime Leases (together with all amendments, modifications, supplements and material correspondence related thereto). This Sublease, with respect to each Property, is subject and subordinate in all respects to the Prime Lease with respect to such Property. Each of Lessor and Lessee agrees that it shall not take any action or fail to take any action in connection with any Property which is a violation of or default under any of the provisions of the Prime Lease with respect to such Property. Lessee hereby assumes and shall fully perform and discharge, with respect to each Property, all the obligations of Lessor as “Tenant” under the Prime Lease with respect to such Property during the Term (as defined below) and shall abide by and adhere to all restrictions contained in, and all other terms, covenants and conditions of, each Prime Lease, and, except as otherwise provided herein, Lessee acknowledges that Lessor shall have no duty to take any action to comply with the obligations of Lessor as “Tenant” under each Prime Lease arising during the Term. Lessor represents and warrants that the transactions contemplated by this Sublease and the Master Assignment and Assumption Agreement dated as of the date hereof between Lessor and Lessee (the “Master Assignment”) are, with respect to each Property, (i) permitted under the terms of the respective Prime Lease for such Property without the consent of each respective “Landlord” under each Prime Lease (each a “Prime Landlord”) or (ii) if such Prime Lease requires the Prime Landlord’s consent thereunder, such consent has been obtained (or, subject to Section 21(a) of this Sublease, will be obtained) by Lessor at Lessor’s sole cost and expense, and Lessor agrees to indemnify, defend and hold harmless Lessee with respect to any Losses (as defined below) incurred by Lessee in connection with the assignment of each Prime Lease to Lessor under the Master Assignment and the subsequent subletting of each Property to Lessee under this Sublease; provided, however, Lessor shall have no obligation and shall not be liable in any manner to Lessee with respect to any Losses that arise by reason of the sale, directly or indirectly, of the stock of Lessee and/or the change of control of Lessee, except as otherwise provided in the Unit Purchase Agreement. Lessor’s foregoing indemnification, defense and hold harmless obligations shall survive the expiration or termination of this Sublease.

(b) Except to the extent expressly set forth herein to the contrary, all of the terms, provisions, covenants and conditions of the Prime Lease with respect to each Property are hereby incorporated by reference in and made part of this Sublease with respect to such Property with the same force and effect, and binding upon and enforceable between Lessor and Lessee, as though set forth in full herein. For purposes of such incorporation, (i) the term “Owner”, “Landlord” or “Lessor” (or words of similar import) in any Prime Lease shall refer to Lessor under this Sublease, its successors and assigns; (ii) the term “Tenant” or “Lessee” (or words of similar import) in any Prime Lease shall refer to Lessee under this Sublease, its successors and assigns; (iii) the term “this

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Lease” or “this Agreement” (or words of similar import) in each Prime Lease shall refer to this Sublease; (iv) the term “the term of this Lease” (or words of similar import) in each Prime Lease shall refer to the Term of this Sublease with respect to the applicable Property; (v) the terms “Commencement Date”, “Expiration Date” and “Rent” (or words of similar import) in each Prime Lease shall each refer to the respective definitions of such terms as are set forth in this Sublease; (vi) references to rules, regulations, requirements and similar terms promulgated or prescribed by Landlord shall refer to those of Prime Landlord, not of Lessor; and (vii) notwithstanding anything herein to the contrary, Lessor assumes no responsibility for any representation, warranty, covenant or obligation made by Prime Landlord under any Prime Lease. The obligations of Lessee hereunder which are to be performed during the Term with respect to each Property shall survive and extend beyond the termination of this Sublease with respect to such Property to the extent such survival is contemplated in this Sublease or in the applicable Prime Lease. If there is any inconsistency or conflict between the provisions of the respective Prime Lease and this Sublease with respect to each Property, the provisions of this Sublease shall control.

3. Term.

(a) The term of this Sublease with respect to any Property (the “Term”) shall commence as of the date hereof (the “Commencement Date”) and shall expire on the day preceding (the “Expiration Date”) the day of expiration of the current term of the Prime Lease with respect to such Property (the “Prime Lease Term”), unless sooner terminated as provided herein or in the Transaction Documents (as hereinafter defined). Lessee acknowledges that, except as provided in the immediately following sentence, the Prime Lease Term with respect to any Property shall not include renewal or extension options (or, if the Prime Lease Term with respect to any Property is currently under a renewal or extension option, any additional renewal or extension options) available under the Prime Lease with respect to such Property. Lessee agrees that Lessee shall have no right to exercise, or to cause Lessor to exercise, any renewal or extension terms under the Prime Lease with respect to any Property (unless Lessor is completely and unconditionally released from any and all liability under any Prime Lease and any guaranty in respect thereof or Lessee provides to Lessor a letter of credit in form and amount satisfactory to Lessor from a financial institution acceptable to Lessor securing Lessor from loss with respect to any such liability or guaranty obligation, in which event Lessee shall have the right to exercise, or cause Lessor to exercise, any such renewal or extension terms). In addition, during the 18 month period immediately prior to the scheduled expiration of any Prime Lease, Lessor and Lessee agree to have monthly calls to discuss each party’s relative interest in remaining in the pertinent Property, and each party shall in good faith consider the other party’s interests, but with no obligation to act or refrain from acting in connection with a new lease or an extension or renewal of any such Prime Lease.

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(b) Except as otherwise expressly provided herein, and subject to Section 13 of this Sublease, Lessor agrees to cooperate (at Lessee’s request) with Lessee, and Lessee, at Lessee’s sole cost and expense, shall have the right and power to control all courses of action, in connection with the exercise or the election not to exercise any and all rights of the “Tenant” under a Prime Lease, including, without limitation, the right to terminate such Prime Lease (including, without limitation, any (i) “kick-out” or “co-tenancy” rights, (ii) rights to terminate such Prime Lease in the event of a casualty or condemnation or (iii) rights to terminate such Prime Lease in the event of a default under such Prime Lease by the Prime Landlord thereunder (except for any termination proceedings that result from a default by Lessee under this Sublease or under such Prime Lease), provided Lessee agrees to (x) deliver to Lessor a copy of any termination notice delivered pursuant to clauses (i) and (ii) above to a Prime Landlord under the respective Prime Lease and (y) notify Lessor at least 10 Business Days prior to its intention to deliver a termination notice pursuant to clause (iii) above to a Prime Landlord under the respective Prime Lease. Each party agrees to deliver copies to the other of all notices and material correspondence received or delivered by such party in connection with the matters described above.

(c) Wherever in this Sublease Lessor agrees to cooperate with Lessee, at Lessee’s request, with respect to matters arising under a Prime Lease, Lessor agrees that Lessor shall not charge Lessee any fees or other expenses, including administrative fees or otherwise, in connection with such cooperation; provided, however, Lessee agrees that all courses of action (as described in subsection (b) above, or otherwise as provided in this Sublease) undertaken at Lessee’s direction shall be at Lessee’s sole cost and expense with respect to any amounts charged to Lessee by any Person other than Lessor (or incurred or otherwise payable by Lessee to such other Person).

4. Rent.

(a) Subject to subsection (c) below, commencing on and after the Commencement Date, Lessee shall pay Lessor all monetary obligations of Lessor under each Prime Lease for its respective Property applicable to the Term (including, without limitation, base, fixed or minimum rent, percentage rent, additional rent, common area maintenance charges, real estate taxes and assessments, insurance charges, waste removal charges, merchants association dues, marketing, advertising and other promotional fund contributions, utility charges, HVAC and chilled water charges) (collectively, the “Property Rent”).

(b) Commencing on and after the Commencement Date, Lessee shall pay directly to Lessor, at Lessor’s office at the address designated for notices to Lessor in Section 11(a) hereof, all other amounts payable by Lessee that arise as an independent obligation under this Sublease (the “Additional Rent”, together with the Property Rent, the “Rent”).

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(c) Lessor and Lessee agree to cooperate, and to take all reasonably necessary or desirable actions possible, to arrange for all payments by Lessee of the Property Rent with respect to each Property directly to Prime Landlord with respect to such Property, and, with respect to each Property, to otherwise establish a direct relationship between Prime Landlord and Lessee with respect to all matters arising under the Prime Lease with respect to such Property and this Sublease with respect to such Property. All Property Rent with respect to any Property shall be paid in lawful money of the United States to Prime Landlord with respect to such Property (or, if such Prime Landlord will not agree to such arrangement, then to Lessor at Lessor’s office at the address designated for notices to Lessor in Section 11(a) hereof in immediately available funds at least two (2) Business Days prior to the date when such Property Rent is due and payable under such Prime Lease), or at such other place as either Prime Landlord or Lessor may designate, as the case may be, by notice to Lessee. Lessor and Lessee agree that it is the intention of Lessor and Lessee to pass all of Lessor’s obligations (without premium or mark-up) for Property Rent incurred under the Prime Lease during the Term with respect to each Property to Lessee, and Lessee agrees to pay or otherwise reimburse Lessor for all of Lessor’s obligations for Property Rent incurred with respect to each Prime Leases and each Property. If a Prime Landlord will not accept a direct payment from Lessee of Property Rent under the respective Prime Lease, then, provided Lessee shall have delivered such Property Rent payment to Lessor within the time and in the manner specified in this subsection (c), Lessor shall deliver such payment of Property Rent to such Prime Landlord on or prior to the date when such Property Rent is due and payable under such Prime Lease and in such manner as provided under the respective Prime Lease.

(d) All obligations of Lessee and Lessor under this Section 4 shall survive the termination of the Prime Leases or this Sublease.

5. Alterations.

Lessee shall be permitted to make any alterations or additions to any Property which are permitted under the applicable provisions of the pertinent Prime Lease.

6. Brokers.

Each party represents and warrants to the other that it dealt with no broker (or other person who may claim a commission or similar compensation) in connection with this Sublease, and each party shall defend, indemnify and hold the other harmless from any liability or loss, including, without limitation, reasonable attorneys’ fees and expenses, based upon an alleged breach of said representation and warranty.

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7. Assignment, Subletting; Subordination.

(a) Except as otherwise set forth herein, Lessee shall not assign this Sublease or allow it to be assigned, in whole or in part, by operation of law or otherwise, or mortgage or pledge the same, or sublet any Property, without the prior written consent of Lessor, which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding anything contained herein to the contrary, any assignment or transfer which may occur by operation of law or otherwise as a consequence of a transfer of interests (whether as a matter of right or pursuant to consent) under the pertinent provisions of the “LLC Agreement” (as defined in the Unit Purchase Agreement) shall be permitted without the consent of Lessor; provided that, if Lessor’s financial exposure is increased or otherwise adversely affected as a consequence thereof, then Lessee shall provide to Lessor reasonable security as a consequence thereof. Notwithstanding the foregoing, but subject to the terms of the Prime Lease, Lessee may effect an assignment, transfer or sublet, without the consent of Lessor, to any one of its affiliates, provided, however, that except as otherwise contemplated in the Transaction Documents, if at anytime after such permitted assignment, transfer or sublet the transferee is no longer an affiliate of Lessee, the event terminating such affiliation shall be an assignment, transfer or sublet subject to the preceding sentence. For purposes of this Section 7(a), the term “Transaction Documents” means the Unit Purchase Agreement, together with all other agreements and documents contemplated thereby executed and delivered by such parties and their respective affiliates with respect to the chain of stores known as “Express”. If Lessee shall at any time or times during the Term of this Sublease with respect to any Property desire to assign or transfer this Sublease or sublet all or part of any Property, Lessee shall give notice thereof to Lessor, which notice shall be accompanied by all documents or information (if any) otherwise required under the applicable Prime Lease. Subject to the provisions of Section 13 of this Sublease, and in the event that Lessor so consents to any such assignment, transfer or sublet, Lessor agrees to cooperate with Lessee (at Lessee’s sole cost and expense) in connection with obtaining the applicable Prime Landlord’s consent, if required, under the applicable Prime Lease.

(b) (i) Lessee acknowledges that any such assignment, transfer or subletting shall be, in each instance, conditional and subject to the requirements of the applicable Prime Lease (including, without limitation, the payment by Lessee of the applicable Prime Landlord’s fees and expenses in connection with any assignment, transfer or subletting, if such payment is required under such Prime Lease) and to obtaining the written consent of the applicable Prime Landlord under the applicable Prime Lease, if required thereunder. Each assignment, transfer or subletting pursuant to this Section 7 shall be subject to all of the covenants, agreements, terms, provisions and conditions contained in this Sublease.

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(ii) Notwithstanding any assignment, transfer or subletting contemplated under this Section 7, or acceptance of rent or additional rent by Lessor from any subtenant or assignee, Lessee shall and will remain fully liable for the payment of the Rent due and to become due hereunder and for the performance of all the covenants, agreements, terms, provisions and conditions contained in this Sublease on the part of Lessee to be performed during the Term hereof and all acts and omissions of any subtenant or assignee or anyone claiming under or through any subtenant or assignee which shall be in violation of any of the obligations of this Sublease, and any such violation shall be deemed to be a violation by Lessee. Lessee further agrees that notwithstanding any such assignment, transfer or subletting, no other and further assignment, transfer or subletting by Lessee or any person claiming through or under Lessee shall or will be made except upon compliance with and subject to the provisions of this Section 7.

(c) With respect to each and every permitted sublease or subletting under the provisions of this Sublease, it is further agreed:

(i) No subletting with respect to any Property shall be for a term ending later than one day prior to the Expiration Date with respect to such Property, or the earlier termination of this Sublease with respect to such Property; and

(ii) Each sublease shall expressly provide that it is subject and subordinate to this Sublease and to the matters to which this Sublease is or shall be subordinate and that, in the event of termination, re-entry or dispossession by Lessor under this Sublease, Lessor may, at its option, take over all of the right, title and interest of Lessee, as sublessor, under such sublease; provided, so long as such subtenant is not in default under the terms of such sublease or this Sublease (after any applicable notice or cure period), Lessor agrees that Lessor shall not disturb such subtenant’s use, occupancy and enjoyment of such Property, and Lessor agrees to execute and deliver to such subtenant a non-disturbance agreement in a form reasonable acceptable to Lessor within 20 days of submission to Lessor of such non-disturbance agreement by such subtenant; in addition, such subtenant shall, at Lessor’s option, attorn to Lessor pursuant to the then executory provisions of such sublease, except that Lessor shall not (x) be liable for any previous act or omission of Lessee under such sublease, (y) be subject to any offset which theretofore accrued to such subtenant against Lessee, or (z) be bound by any previous modification of such sublease not consented to by Lessor (if such consent is required under Section 13 of this Sublease) or by any advance payment of more than one month’s rent.

(d) The parties hereto hereby acknowledge that, pursuant to the Prime Lease with respect to any Property, this Sublease is subject and subordinate

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to such Prime Lease, and that in the event of termination, re-entry or dispossession by any Prime Landlord under the Prime Lease, such Prime Landlord may, at its option, take over all of the right, title and interest of Lessor, as sublessor, under this Sublease with respect to the applicable Property, and Lessee shall, at such Prime Landlord’s option, attorn to such Prime Landlord pursuant to the then executory provisions of this Sublease with respect to such Property, except that such Prime Landlord shall not (i) be liable for any previous act or omission of Lessor under this Sublease; (ii) be subject to any offset which theretofore accrued to Lessee against Lessor; or (iii) be bound by any previous modification of this Sublease not previously approved by such Prime Landlord or by any advance payment of more than one month’s rent. In addition, the parties hereto hereby acknowledge that if Lessor defaults in paying any Property Rent with respect to any Property, the applicable Prime Landlord is authorized to collect any Property Rent due or accruing from Lessee (or any other occupant of the applicable Property) and to apply the amounts collected to such Property Rent, and that any Prime Landlord’s receipt or acceptance of any payments from Lessee (or any other occupant of the applicable Property) shall not be deemed or construed as releasing Lessor from Lessor’s obligations under the applicable Prime Lease.

8. Services; Right to Cure Defaults; Remedies; Consents.

(a) Notwithstanding anything to the contrary set forth in this Sublease, Lessor shall have no obligation (and the incorporation by reference of each Prime Lease into this Sublease with respect to each respective Property shall not include any obligation) to render any work, labor, services (including elevator facilities, HVAC, water, cleaning or security services), repairs or restorations to Lessee of any nature whatsoever or to expend any monies for the preservation, maintenance, restoration or repair of the Properties or any portion thereof, and Lessee shall look solely to the applicable Prime Landlord for the furnishing of any services, maintenance, restoration or repairs with respect to any Property to which Lessee may be entitled. Lessor shall in no event be liable to Lessee nor shall the obligations of Lessee hereunder be impaired or the performance thereof excused because of any failure or delay on the applicable Prime Landlord’s part in furnishing services with respect thereto (except and to the extent the same obligation of Lessor, as “Tenant” under such Prime Lease, would be so impaired or excused). If any Prime Landlord shall default in any of its obligations to Lessor with respect to any Property, Lessee shall have the right to exercise in its own name and that of Lessor (as Lessor’s attorney-in-fact, coupled with an interest) all the rights to enforce compliance on the part of such Prime Landlord as are available to Lessor with respect to such Property. Lessor hereby agrees to cooperate with (including, at Lessee’s request and at Lessee’s sole expense, exercising reasonable commercial efforts to enforce any Prime Landlord’s obligations to Lessor under any Prime Lease) and execute, all at Lessee’s expense, all instruments reasonably required by Lessee to enforce such compliance, and Lessee hereby agrees to indemnify, defend and hold Lessor

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harmless of and from any and all damages, liabilities, obligations, costs, claims, losses, demands, expenses and injuries, including reasonable attorney’s fees and expenses, which may be incurred by Lessor in connection with or as a result of such cooperation and execution, except and to the extent of Lessor’s gross negligence or willful misconduct. Any amount of recovery resulting from such enforcement obtained by either Lessee or Lessor shall be the property of Lessee.

(b) If Lessee fails to perform any of its obligations under this Sublease with respect to a Property and its applicable Prime Lease, Lessor may cure such default, after the giving of notice and the expiration of any applicable grace period (as the same may be extended), when such a period is specified in such Prime Lease, and within a reasonable period where no grace period is specified in this Sublease or in such Prime Lease, and Lessee shall pay Lessor the cost of such cure, including reasonable attorneys’ fees and expenses, as Additional Rent, within five (5) Business Days after receiving Lessor’s statement therefor. Lessor shall have the right (but shall not be obligated) to enter the Properties, at reasonable times (which shall be during normal business hours) and upon reasonable notice, and following a default by Lessee at any time, to inspect the Properties or to cure any defaults by Lessee, provided Lessor shall conduct such entries in a manner which does not unreasonably interfere with the operation of Lessee’s business on such Property. Except for any defaults by Lessee with respect to the payment of Rent, Lessor agrees not to cure any non-monetary defaults that arise under a Prime Lease unless the respective Prime Landlord has notified either Lessor or Lessee of such non-monetary default under such Prime Lease and of such Prime Landlord’s election to exercise a remedy as a result thereof, it being the intention of the parties hereto that Lessor shall not exercise any rights under this Sublease with respect to non-monetary defaults under a Prime Lease unless the respective Prime Landlord intends to exercise concomitant rights under such Prime Lease because of the same act or omission.

9. Insurance.

(a) Lessee shall maintain, at its sole cost and expense throughout the Term of this Sublease with respect to each Property, insurance in the types and amounts, and subject to the conditions, as are required pursuant to the applicable Prime Lease, as incorporated herein by reference. All such policies shall name Lessor and the applicable Prime Landlord, and any other persons required pursuant to the applicable Prime Lease, as additional insured parties and shall be endorsed to provide that they shall not be canceled without thirty (30) days’ prior written notice (or, with respect to each Property, such lesser time period as is customary in the jurisdiction where such Property is located, provided such lesser time period shall not be less than the period set forth in the respective Prime Lease) to Lessor and the applicable Prime Landlord. Lessee shall furnish certificates evidencing the required coverage to Lessor, together with such evidence as Lessor shall reasonably deem satisfactory of the payment of premiums thereon, promptly following the execution of this Sublease.

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(b) Lessor and Lessee each hereby waive any and all right that they may have to recover from the other damages for any loss occurring to them by reason of any act or omission of the other, but only to the extent that the waiving party is actually compensated therefor by insurance; provided that this waiver shall be effective only with respect to loss or damage occurring during such time as the waiving party’s coverage under the appropriate policy of insurance is not adversely affected by this waiver. If, in order to avoid such adverse effect, an endorsement must be added to any insurance policy required hereunder, Lessor and Lessee shall cause such endorsement immediately to be added and thereafter maintained throughout the Term of this Sublease.

10. Quiet Enjoyment.

Subject to the terms and conditions of each Prime Lease, Lessor acknowledges and agrees that Lessee, upon Lessee paying the Rent and observing and performing all the terms, covenants and conditions to be observed and performed by Lessee under this Sublease with respect to each Property and each Prime Lease with respect to such Property, is entitled to the quiet enjoyment of each Property during the Term of this Sublease applicable thereto.

11. Notices.

(a) All consents, approvals, requests, notices, copies or other communication (collectively “Notices”) required or desired to be delivered under this Sublease shall be in writing, and transmitted by facsimile machine or inter-connected computer systems, with a copy to be delivered promptly thereafter by reputable overnight courier, addressed to the parties at the addresses first above written. Notice shall be deemed given on the date of receipt by the addressee, if received on a Business Day, or the first Business Day following receipt, if received on a non-Business Day. Addresses for Notice are as follows:

Lessee:	Express, LLC
	One Limited Parkway
	Columbus, Ohio 43230
	Attention: Corporate Real Estate Department
	Facsimile: (614) 415-4000
copy to:	Kirkland & Ellis LLP
	555 California Street
	San Francisco, California 94104
	Attention: Mikaal Shoaib
	Facsimile: (415) 439-1680

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Lessor:	Limited Brands, Inc.
	Three Limited Parkway
	Columbus, Ohio 43230
	Attention: Real Estate Department/Managing Real Estate Attorney
	Facsimile: (614) 415-7900
copy to	Limited Brands, Inc.
	Three Limited Parkway
	Columbus, Ohio 43230
	Attention: Lease Administration Department
	Facsimile: (614) 415-6002

Lessor and Lessee each agree to promptly deliver to each other (i) copies of any and all notices delivered to a Prime Landlord by such party or received by such party from such Prime Landlord and (ii) other material correspondence to or from a Prime Landlord and such party.

(b) Either party may, by Notice pursuant to Section 11(a), change the address, person or officer, and include additional Notice recipients, to which all Notices are to be sent thereafter.

(c) Solely for the purpose of this Sublease, wherever in the Prime Lease with respect to any Property a time is specified for the giving of any notice or the making of any demand by Lessee thereunder, such time is hereby changed (for the purpose of this Sublease with respect to such Property only) by adding three (3) Business Days thereto, and wherever in the Prime Lease with respect to such Property a time is specified for the giving of any notice or the making of any demand by Lessor thereunder, such time is hereby changed (for the purpose of this Sublease with respect to such Property only) by subtracting three (3) Business Days therefrom. Wherever in the Prime Lease with respect to any Property a time is specified within which Lessee thereunder must give notice, perform or make a demand following an event, or within which Lessee must perform or respond to any notice, request or demand previously given or made by Lessor thereunder, or to comply with any obligation on Lessee’s part thereunder, such time is hereby changed (for the purpose of this Sublease with respect to such Property only) by subtracting three (3) Business Days therefrom. Wherever in the Prime Lease with respect to any Property a time is specified within which Lessor thereunder must give notice, perform or make a demand following an event, or within which Lessor must respond to any notice, request or demand previously given or made by Lessee thereunder, or to comply with any obligation on Lessor’s part thereunder, such time is hereby changed (for the purpose of this Sublease with respect to such Property only) by adding three (3) Business Days thereto. It is the purpose and intent of the foregoing provisions to provide Lessor with time within which to transmit to any Prime Landlord any notices or demands received from Lessee, and to transmit to Lessee any notices or demands received from any

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Prime Landlord. Notwithstanding anything to the contrary contained herein, the provisions of this Section 11(c) shall not apply to any Notices or demands made by Lessor or Lessee that arise solely under this Sublease and do not require delivery to or from a Prime Landlord under the respective Prime Lease.

12. Indemnity.

(a) Lessee shall defend, indemnify and hold harmless Lessor and its employees, officers, directors, partners and agents against and from any and all losses, damages, claims, liabilities, demands, fines, suits, actions, proceedings, orders, decrees and judgments (collectively, “Losses”) of any kind or nature by, or in favor of, anyone whomsoever, and against and from any and all costs, damages and expenses, including attorneys’ fees, resulting from, or in connection with (i) loss of life, bodily or personal injury or property damage arising, directly or indirectly, out of, or from, or on account of any accident or other occurrence in, upon or from Lessee’s occupancy of the Properties during the Term hereof (including any holdover periods by Lessee); (ii) a breach by Lessee of this Sublease or any Prime Lease (following the expiration of applicable notice and cure periods), except and to the extent any breach by Lessee of a Prime Lease results solely from Lessor’s breach of such Prime Lease; or (iii) the use and occupancy of the Properties or any construction, repair, alterations or improvements therein or appurtenances thereto by or on behalf of Lessee or anyone holding by, through or under Lessee or its employees, agents or invitees, and except as otherwise provided in subsection (b) below, except and only to the extent such Losses result from the gross negligence or willful misconduct of Lessor, its employees, agents, or invitees. Lessee agrees that Losses shall include any damages, costs and expenses incurred or suffered by Lessor which are caused by Lessee’s holdover of any Property beyond the Term of this Sublease with respect to such Property.

(b) Lessor shall defend, indemnify and hold harmless Lessee and its employees, officers, directors, partners and agents against and from any and all Losses of any kind or nature by, or in favor of, anyone whomsoever, and against and from any and all costs, damages and expenses, including attorneys’ fees, resulting from, or in connection with (i) loss of life, bodily or personal injury or property damage arising, directly or indirectly, out of, or from, or on account of any accident or other occurrence in, upon or from the Properties during the Term hereof; (ii) a breach by Lessor of this Sublease or any Prime Lease (following the expiration of applicable notice and cure periods), except and to the extent any breach by Lessor of a Prime Lease results solely from Lessee’s breach of such Prime Lease or this Sublease; or (iii) the use and occupancy of the Properties or any construction, repair, alterations or improvements therein or appurtenances thereto by or on behalf of Lessor, and, with respect to subsections (b)(i) and (b)(iii) (but not subsection (b)(ii)), only to the extent such Losses result from the gross negligence or willful misconduct of Lessor, its employees, agents, or invitees.

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13. Amendments to Prime Lease/Sublease.

(a) Neither Lessor nor Lessee shall amend, modify, supplement or otherwise alter in any manner the provisions of any Prime Lease, this Sublease or any other agreement with respect to any Property without in each instance the prior written consent of the other, which consent shall not be unreasonably withheld.

(b) Lessor shall have no obligation to provide any guarantee or other assurance for any lease or sublease entered into, modified or amended by Lessee after the Commencement Date or for any renewal or extension of any Prime Lease beyond the original Prime Lease Term, without Lessor’s consent, beyond any Guaranty or assurance in existence as of the date hereof; provided, Lessor shall reaffirm a Guaranty of its respective Prime Lease for the period until the expiration of the original Prime Lease Term, if expressly required by such Prime Landlord, in connection with an amendment or modification of such Prime Lease, provided that, except as set forth in Section 3(a) hereof, such reaffirmation shall not extend or renew the Prime Lease Term, increase the obligations of Lessor thereunder or otherwise materially or adversely affect Lessor.

14. Successors.

Subject to Section 7 and Section 22, the covenants and agreements herein contained shall bind and inure to the benefit of Lessor and Lessee and their respective permitted successors and assigns.

15. Captions.

The captions or headings of paragraphs in this Sublease are inserted for convenience only, and shall not be considered in construing the provisions hereof if any question of intent should arise.

16. Severability.

If any provisions of this Sublease shall be held to be invalid or unenforceable, the validity and enforceability of the remaining provisions of this Sublease shall not be affected thereby.

17. Governing Law.

With respect to each Property, this Sublease shall be construed in accordance with, and governed by, the laws of the state in which such Property is located.

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18. Further Assurances/Reasonableness and Good Faith.

Lessor and Lessee shall execute, acknowledge and deliver such instruments and take such other action as may be necessary to carry out their rights and obligations under this Sublease, including the execution of any agreement or instrument required by any Prime Landlord under any Prime Lease. In addition to the provisions of Section 4(c) of this Sublease, Lessor and Lessee agree to cooperate and to take all reasonably necessary or desirable actions in order to establish a direct relationship between the applicable Prime Landlord and Lessee with respect to all matters related to each Property. Whenever this Sublease grants Lessor or Lessee the right to take action, exercise discretion or make other determinations regarding a Property or this Sublease, each party agrees to act reasonably, timely and in good faith unless a different standard is specified herein.

19. Sublease Subject to Unit Purchase Agreement.

This Sublease is being entered into in connection with the transactions contemplated by that certain Unit Purchase Agreement dated as of May 15, 2007 among Lessor, LBI, Express Investment Corp., Limited Brands Store Operations, Inc. and Express Holding, LLC, as amended (the “Unit Purchase Agreement”). Lessor and Lessee agree that this Sublease shall be subject to the terms of the Unit Purchase Agreement and, if there is any conflict or inconsistency between the terms of this Sublease and the terms of the Unit Purchase Agreement, the terms of the Unit Purchase Agreement shall control; provided, however, Lessor and Lessee agree that this Section 19 shall not be applicable to the provisions of Section 22 of this Sublease. Defined terms used but not defined herein shall have the meanings ascribed to such terms in the Unit Purchase Agreement.

20. Waiver of Lien.

Lessor hereby waives and relinquishes any landlord’s lien, right of levy or distraint, claim, security interest or other interest Lessor may now or hereafter have in or with respect to any of the Personal Property of Lessee. For purposes of this Sublease, Lessee’s “Personal Property” shall include all of Lessee’s personal property, including inventory and equipment, but shall not include plumbing and electrical fixtures, heating, ventilation and air conditioning, wall and floor coverings, walls or ceilings and other fixtures not constituting trade fixtures. Lessor agrees to execute and deliver a Landlord waiver and collateral access agreement to such effect in a form reasonably acceptable to Lessor.

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21. Recission of this Sublease; Termination in Connection with Release of Guaranty.

(a) Lessor and Lessee agree that, with respect to each Property and its respective Prime Lease, if the respective Prime Landlord challenges the assignment of such Prime Lease pursuant to the Master Assignment and the subsequent subletting of such Property to Lessee pursuant to this Sublease, or otherwise makes any allegations that such transactions do not comply with the provisions of the respective Prime Lease, then Lessor shall have the right (to be exercised or not exercised in Lessor’s sole discretion) to deem the Master Assignment and this Sublease rescinded and declared null and void as of the date hereof with respect to such Property; provided, Lessor shall indemnify, defend and hold harmless Lessee from any Losses arising in connection with such rescission in accordance with Section 2(a) of this Sublease, and such obligation shall survive the termination or expiration of this Sublease.

(b) Lessee agrees that Lessor shall have the right to negotiate with any Prime Landlord in order to effect the release of any Guaranty, and Lessee shall endeavor to obtain any such release of a Guaranty to the same extent that the Company (as defined in the Unit Purchase Agreement) is so obligated under Section 7.04 of the Unit Purchase Agreement. The Sublease shall terminate from time to time with respect to one or more Properties, if the Prime Landlord of the applicable Prime Lease shall have relieved Lessor of its obligations under such Prime Lease and any Guaranty thereunder pursuant to a written agreement reasonably acceptable to Lessor, provided that, Lessor shall (with the consent of the applicable Prime Landlord, if required) (i) cause the reassignment of the Prime Lease to Lessee and (ii) otherwise secure for Lessee the benefits, subject to the obligations, of the Prime Lease related thereto (other than rights or options to extend the term thereof in accordance with the provisions of Section 3(a) hereof).

22. Restrictions on Assignment by Lessor.

Lessor shall not assign or otherwise transfer this Sublease or the Master Assignment (or any interest therein) without in each instance the prior written consent of Lessee, which consent may be granted or withheld in Lessee’s sole and absolute discretion; provided, however, Lessee shall not unreasonably withhold, condition or delay such consent for any assignment or other transfer by Lessor to a wholly-owned (directly or indirectly) subsidiary of Lessor, provided (i) such transferee shall assume in full the punctual performance of all of Lessor’s obligations (and Lessor shall remain directly, primarily, absolutely and unconditionally liable for and otherwise guarantee such transferee’s performance of such obligations as guarantor and surety) under this Sublease and the Master Assignment; (ii) the rights of Lessee under this Sublease and the Master Assignment shall not be impaired or otherwise adversely affected by such assignment or other transfer by Lessor hereunder; (iii) Lessor shall, as a condition precedent to such assignment or transfer, execute and deliver to Lessee a guaranty and suretyship agreement, in form and substance reasonably acceptable to Lessee,

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reaffirming Lessor’s obligations and undertakings set forth herein; and (iv) such assignment or other transfer is permitted under the Prime Lease or Prime Landlord’s consent has been obtained.

23. WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS SUBLEASE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

24. Counterparts.

This Sublease may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[The remainder of this page intentionally left blank.]

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IN WITNESS WHEREOF, Lessor and Lessee have caused this Sublease to be executed and delivered by their duly authorized officers as of the date first written above.

Lessor:	LIMITED BRANDS, INC.
	By:	/s/ Timothy J. Faber
		Timothy J. Faber
	Its:	Vice President – Treasury, Mergers & Acquisitions
Lessee:	EXPRESS, LLC
	By:	/s/ Douglas L. Williams
		Douglas L. Williams
	Its:	Senior Vice President – Enterprise General Counsel

EX-10.13

Exhibit 10.13

SERVICES AGREEMENT

dated as of

July 6, 2007

between

Express, LLC

and

Limited Brands, Inc.

ARTICLE 1 DEFINITIONS
Section 1.01.	Definitions	1
Section 1.02.	Internal Reference	4
ARTICLE 2
PURCHASE AND SALE OF SERVICES
Section 2.01.	Purchase and Sale of Services	4
Section 2.02.	Additional Services	5
ARTICLE 3 SERVICE COSTS
Section 3.01.	Service Costs Generally	5
Section 3.02.	Subcontractors	7
Section 3.03.	Title to Assets; Methods, etc.	7
Section 3.04.	Customary Billing	8
Section 3.05.	Pass-Through Billing	8
Section 3.06.	Percent of Sales Billing	8
Section 3.07.	Fixed Fee Billing	9
Section 3.08.	Capital Investments	9
Section 3.09.	Invoicing and Settlement of Costs	9
Section 3.10.	Amended Schedules	11
ARTICLE 4 PROVISION OF SERVICES; INDEMNIFICATION
Section 4.01.	General Standard of Service	12
Section 4.02.	Ownership of Products	12
Section 4.03.	Review Meetings	13
Section 4.04.	Limitation of Liability	13
Section 4.05.	Indemnification of Limited Brands by the Company	13
Section 4.06.	Indemnification of the Company by Seller	14
Section 4.07.	Notice of Certain Matters	14
Section 4.08.	Indemnification Procedures	15
ARTICLE 5 TERM AND TERMINATION
Section 5.01.	Term	16
Section 5.02.	Termination by the Parties	16
Section 5.03.	Transfer of Associates	17
Section 5.04.	Effect of Termination	17
Section 5.05.	Notification of Change of Control	18

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ARTICLE 6 MISCELLANEOUS
Section 6.01.   Confidential Information; Non-Solicitation	18
Section 6.02.   Audits	20
Section 6.03.   No Agency	21
Section 6.04.   Force Majeure	21
Section 6.05.   Entire Agreement; Successors and Assigns	22
Section 6.06.   Notices	22
Section 6.07.   Governing Law	24
Section 6.08.   Jurisdiction	24
Section 6.09.   WAIVER OF JURY TRIAL	24
Section 6.10.   Severability	24
Section 6.11.   Amendment	24
Section 6.12.   Counterparts	25
Section 6.13.   Headings; Interpretation and Construction	25
Section 6.14.   Mutual Contribution	25

Exhibit 3.0l(d)	2007 Cost Allocation
Exhibit 3.08(c)	Work-in Progress Capital Investments
Schedule I	Human Resources and Benefits Services
Schedule II	Information Technology Services
Schedule III	Logistics and Related Services
Schedule IV	Store Design and Store Construction Services
Schedule V	Real Estate Services
Schedule VI	Tax Services
Schedule VII	Treasury and Cash Management Services
Schedule VIII	Production and Sourcing Support Services
Schedule IX	Customer Marketing Services
Schedule X	Enterprise Shared Services
Schedule XI	Loss Prevention Services

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SERVICES AGREEMENT

This Services Agreement (this “Agreement”) is entered into as of July 6, 2007 by and between Express, LLC, a Delaware limited liability company (the “Company”), and Limited Brands, Inc., a Delaware corporation (“Limited Brands”).

WITNESSETH:

WHEREAS, Express Investment Corp., a Delaware corporation (“Buyer”), has acquired seventy-five percent (75%) of the limited liability company interests of Express Holding, LLC, a Delaware limited liability company (“Express Holding”), pursuant to the Unit Purchase Agreement (the “Unit Purchase Agreement”) dated as of May 15, 2007, as amended on July 6, 2007, among Limited Brands, Limited Brands Store Operations, Inc., Express Holding and Buyer;

WHEREAS, the Company is a wholly-owned subsidiary of Express Holding;

WHEREAS, Limited Brands has heretofore provided to the Company and its Subsidiaries certain administrative, financial, management and other services; and

WHEREAS, the Company desires to obtain certain services from Limited Brands, on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1

Definitions

Section 1.01. Definitions. (a) All terms used but not defined herein shall have the meanings ascribed to them in the Unit Purchase Agreement. The following terms, as used herein, have, the following meanings, applicable to both the singular and the plural forms of the terms described:

“Agreement” has the meaning ascribed thereto in the preamble hereto, as such agreement may be amended and supplemented from time to time in accordance with its terms.

“Change of Control of the Company” means any “Transfer” (as defined in the LLC Agreement), transaction or series of transactions which results in (i) any Person (other than Buyer and its Affiliates or Limited Brands and its Affiliates) acquiring directly or indirectly 25% or more of the Total Voting Power of Express Holding or (ii) any Person (other than Buyer and its Affiliates or Limited Brands and its Affiliates) acquiring “control” (as defined in the Affiliate definition of Section 1.01 of the Unit Purchase Agreement) of Express Holding.

“Disengagement Costs” means any and all direct or indirect out-of-pocket fees, and all other out-of-pocket costs, charges and expenses of any kind incurred by the Limited Entities, the Company and/or its Subsidiaries in connection with the termination of this Agreement and/or relating to the cessation of Services hereunder including, without limitation, all third party charges, costs and/or fees; all third party cancellation and/or termination charges, costs and/or fees; the market value of all Disengagement Services provided by other Persons (but not Limited Brands’ personnel) and a portion (as determined in this paragraph below) of the out-of-pocket costs of appropriate severance payments to all employees of the Limited Entities (the “Severance Payments”) that will be terminated by the Limited Entities as a result of the termination of this Agreement and/of the cessation of any Services hereunder (each a “Severed Employee” and collectively the “Severed Employees”) as specified below. Consistent with Section 6.01(d) of this Agreement, Limited Brands will at the request of the Company allow the Company to provide to each Severed Employee the opportunity to become an employee of the Company but in the event that any such Severed Employee chooses not to become an employee of the Company, Limited Brands will pay each such Severed Employee’s Severance Payments as determined and specified below. With respect to any such Severed Employee that accepts the Company’s offer of employment, no such Severance Payments shall be made to such Severed Employee provided that Limited Brands is notified in writing that such Severed Employee has accepted the Company’s offer of employment prior to Limited Brands’ payment of Severance Payments to any such Severed Employee (which shall not occur until such Severed Employee’s termination of employment). In connection with the foregoing: (i) the Company and Limited Brands shall determine by mutual agreement in good faith the amount of such Severance Payments for each Severed Employee and in each case such Severance Payments shall be no less than the amount of severance that would be paid if determined consistent with the then-applicable guidelines of Limited Brands relating to severance payments (it being agreed that in no event shall the Company be responsible for any severance in any separate agreement between the Limited Entities and any affected employee which provides for severance payments in addition to, or in lieu of, those provided by the then-applicable guidelines of Limited Brands relating to severance payments except for any severance obligations arising in customary agreements executed by Limited Brands’ associates ranking Vice President or above which agreements do not provide for more than 12 months Severance Payments payable to such Limited Brands’ associates and in which case the severance provisions of the applicable customary agreements shall govern the amount of Severance Payments to be made to each applicable Severed Employee); (ii) the Company shall pay a portion of the Severance Payments to be made to each Severed Employee in an amount equal to (A) the aggregate Severance Payments to be paid to each such Severed Employee multiplied by (B) a percentage which Limited Brands and the Company shall determine in good faith by dividing the estimated amount of hours that each such Severed Employee dedicated to performing the Services hereunder on an annualized basis by the total hours of work time for each such Severed

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Employee on an annualized basis; and (iii) the Company and Limited Brands otherwise shall work collaboratively and each shall have an ongoing affirmative duty to endeavor in good faith, using commercially reasonable efforts, to mitigate the amount of Disengagement Costs upon the termination of this Agreement and/or the cessation of any Service hereunder. Notwithstanding anything in this Agreement to the contrary, due to the one time nature of the Disengagement Costs, the parties acknowledge and agree that in no event shall any allocated costs or mark-up be included in the calculation of the Disengagement Costs.

“Disengagement Services” means all Services provided hereunder primarily for the purpose of disengaging and transitioning Services from Limited Brands to the Company.

“Limited Entities” means Limited Brands and its Subsidiaries, and “Limited Entity” means any of the Limited Entities.

“Products” means apparel and accessory or other merchandise (of a type typically sold by the Company) acquired for re-sale by the Company,

“Schedules” means Schedules I through XI hereto and any additional Schedule hereto by written agreement of the parties.

“Service Recipient” means the Company and Limited Stores, LLC (or any other entity receiving services equivalent to the Services on behalf of the business operated by Limited Stores, LLC as of the Closing Date).

“Services” means all of the various ongoing and other services described in any and all of the Schedules, together with the Disengagement Services. “Service” means any of the Services.

“Subsidiary” (and, collectively, “Subsidiaries”) means, at any time, with respect to any Person (the “Subject Person”), (1) any Person of which either (x) more than 50% of the shares of stock or other interests entitled to vote in the election of directors or comparable Persons performing similar functions (excluding shares or other interests entitled to vote only upon the failure to pay dividends thereon or other contingencies) or (y) more than a 50% interest in the profits or capital of such Person, are at the time owned or controlled directly or indirectly by the Subject Person or (2) any Person whose assets, or portions thereof, are consolidated with the net earnings of the Subject Person and are recorded on the books of the Subject Person for financial reporting purposes in accordance with generally accepted accounting principles in effect in the country in which the Subject Person is incorporated.

“Total Voting Power” means the aggregate number of Units of Express Holding then issued and outstanding.

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(b) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Additional Service(s)	2.02
Administrative Charge	3.01
Allocated Cost	3.01
Assets	3.03
Applicable Employee	6.01
Capital Investment(s)	3.08
Change of Control Notice	5.05
Company Indemnified Person(s)	4.06
Confidential Information	6.01
Cost Component(s)	3.01
Customary Billing	3.01/3.04
Damages	4.05
Fixed-Fee Billing	3.01/3.07
Force Majeure	6.04
Indemnified Party	4.08
Indemnifying Party	4.08
Limited Indemnified Person(s)	4.04
Net Sales Ratio	3.06
Non-Company Costs	3.01
Non-Compliance Notice	4.07
Pass-Through Billing	3.01/3.05
Percent of Sales Billing	3.01/3.06
Proposed Change	3.10
Review Meetings	4.03
Service Costs	3.01
significant increase	3.10
Specific Billing	3.01
Subcontractor	3.02

Section 1.02. Internal Reference. Unless the context indicates otherwise, references to articles, sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement.

ARTICLE 2

PURCHASE AND SALE OF SERVICES

Section 2.01. Purchase and Sale of Services. (a) On the terms and subject to the conditions of this Agreement, Limited Brands agrees to provide to the Company, or procure the provision to the Company of, and the Company agrees to purchase from Limited Brands, the Services.

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(b) Notwithstanding anything herein to the contrary, (1) the Services to be provided to the Company under this Agreement shall, at the Company’s request, be provided to each Subsidiary of the Company which is directly involved in the operation of Express stores, and (2) Limited Brands shall have the right, in its sole and absolute discretion, to satisfy its obligation to provide or procure Services hereunder by causing one or more of its Subsidiaries (directly or through one or more Subcontractors as set forth in Section 3.02) to provide or procure such Services in the manner set forth on the Schedules, (3) in no event shall Limited Brands be required to provide the Company with any Service for any fiscal year at volumes or levels more than 110% of the volumes or levels provided to the Company in the immediately preceding fiscal year with respect to such Service and (4) with respect to all Services, except as otherwise expressly provided herein, Limited Brands will only make recommendations regarding such services and the Company shall have the sole responsibility to make and will make all final decisions and determinations regarding the same. With respect to Services provided to, or procured on behalf of, any Subsidiary of the Company, the Company agrees to pay or to cause such Subsidiary to pay all amounts payable by or in respect of such Services pursuant to this Agreement.

(c) Notwithstanding anything in this Agreement to the contrary, Limited Brands shall not be obligated to provide any Service hereunder where the consent of a third party is reasonably required for the provision of such Service. Limited Brands and the Company each shall use its reasonable commercial efforts to cooperate in obtaining any such consent (the terms of which shall not impose any obligations or conditions on Limited Brands) and the Company shall bear any and all out-of-pocket costs incurred in connection with the obtaining of such consent.

Section 2.02. Additional Services. In addition to the Services to be provided or procured by Limited Brands in accordance with Section. 2.01, if requested by the Company, and to the extent that Limited Brands and the Company may mutually agree, Limited Brands shall provide additional services to the Company (the “Additional Services”, and each an “Additional Service”). The scope of any such Additional Services, as well as the term, costs, and other terms and conditions applicable to such Additional Services, shall be as mutually agreed by Limited Brands and the Company and shall be reflected in amendments or additions to the Schedules as mutually agreed by Limited Brands and the Company. It is understood and agreed that (1) Limited Brands shall be under no obligation to provide or procure any such Additional Service requested by the Company and (2) any decision to provide or procure any such Additional Service shall be made by Limited Brands in its sole discretion.

ARTICLE 3

SERVICE COSTS

Section 3.01. Service Costs Generally. (a) The Schedules indicate, with respect to each Service listed therein, whether the costs to be charged to the Company for such Service are determined by (1) the customary billing method

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described in Section 3.04 (“Customary Billing”), (2) the pass-through billing method described in Section 3.05 (“Pass-Through Billing”), (3) the percentage of net sales method described in Section 3.06 (“Percent of Sales Billing”), (4) the fixed fee method described in Section 3.07 (“Fixed Fee Billing”), (5) a specific billing method to be mutually agreed upon by the Company and Limited Brands (“Specific Billing”), which may include, without limitation, a cost-plus billing method based upon the aggregate costs incurred by Limited Brands relative to the particular Service plus a percentage of such costs in consideration of Limited Brands’ procurement and administration (hereinafter referred to as an “Administrative Charge”) of such Service or (6) some combination thereof. The amounts calculated by the Limited Entities pursuant to the Customary Billing, Pass-Through Billing, Percent of Sales Billing, Fixed Fee Billing and Specific Billing methods applicable to Services provided to the Company and charged to the Company as provided herein, together with any and all Disengagement Costs incurred in connection with the provision of any and all Disengagement Services, are collectively referred to herein as the “Service Costs.”

(b) The Company agrees to pay to Limited Brands or its designee in the manner set forth in Section 3.09 the Service Costs applicable to each of the Services actually provided or procured by Limited Brands.

(c) The Service Costs calculated pursuant to each of the specific billing methods described herein may include without limitation (and without duplication) one or more of the following costs: (1) direct (i.e., out-of-pocket) costs incurred by the Limited Entities in providing the Services, (2) a reasonably and fairly allocated portion of costs or expenses (including without limitation service-specific overhead costs and the costs of depreciation of new and existing assets) incurred by one or more of the Limited Entities in providing services to one or more of the Limited Entities, their Affiliates and the Company (each, an “Allocated Cost”), and (3) third party costs incurred by the Limited Entities in providing the Services (each of (1)-(3), a “Cost Component,” and collectively, the “Cost Components”).

(d) The parties intend and agree that this Agreement provide for the orderly and efficient, transition of the Company and its business to stand-alone functionality and that the methods of calculation of each of the Service Costs hereunder shall permit the Limited Entities to receive full reimbursement for all overhead, administrative and supervisory costs and expenses incurred directly or indirectly by the Limited Entities in connection with the provision of the Services consistent with the manner in which Limited Brands charges and/or receives reimbursement from its Affiliates from time to time (including, without limitation, one or more of the Cost Components) together with any other amounts agreed to by the parties including, but not limited to, specified mark-ups as provided in the Schedules or as otherwise agreed by the parties. Except as otherwise provided herein or in any of the Transaction Documents, the method of allocating Service Costs (including, without limitation, with respect to each of the Cost Components) hereunder shall be generally consistent with the 2007 cost allocation

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attached hereto as Exhibit 3.01(d). It is further understood and agreed that when any Service Costs for Services hereunder are to be determined or agreed upon by Limited Brands and the Company (whether before or after the Closing Date), such Service Costs shall, except as otherwise set forth in this Agreement, in all events include all pertinent Cost Components, plus if mutually agreed to by the parties, an Administrative Charge therefor.

Section 3.02. Subcontractors. Limited Brands shall have the right, directly or through one or more Subsidiaries, to hire or engage one or more subcontractors or other third parties (each, a “Subcontractor”) to perform all or any of its obligations under this Agreement; provided, however, and notwithstanding the foregoing, Limited Brands shall retain responsibility for the provision of such Services to the Company but shall not be responsible for any actions or omissions of any Subcontractors including, but not limited to, the negligence and/or misconduct of any such Subcontractors. If Limited Brands elects to commence the provision of specified Services hereunder through a Subcontractor that is not engaged with respect to the Service in question by Limited Brands as of the date hereof, then the Company shall have the right to terminate such specified Services on ten days prior written notice to Limited Brands and to engage such Subcontractor to perform such specified Services directly for the Company and the Company shall have no further liability or obligation to Limited Brands with respect to such terminated Service except as set forth in Section 4.05 and Section 5.03(a) of this Agreement.

Section 3.03. Title to Assets; Methods, etc. (a) All procedures, methods, systems, strategies, tools, equipment, facilities and other resources used by any Limited Entity in connection with the provision of Services hereunder (including all intellectual property rights whether existing or created in connection with the provision of the Services or otherwise) (collectively, the “Assets”) shall remain the property of such Limited Entity and shall at all times be under the sole direction and control of Limited Brands; provided, however, and unless Limited Brands is prohibited by Law or contractual restriction, Limited Brands hereby assigns to the Company any and all of its rights and/or ownership interests (as the case may be), if any, to any and all design information (whether with respect to apparel, real estate or otherwise) that is exclusively associated with the Company or the Express brand and that currently exists or is created as a result of Limited Brands’ provision of the Services hereunder.

(b) Notwithstanding any other provisions of this Agreement, but subject to the terms of Section 4.01 of this Agreement, Limited Brands shall have the right in its sole discretion to modify or change the methods of operation and delivery of the Services so long as such modification or change does not materially and adversely impact the functionality of the Services for their intended use.

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Section 3.04. Customary Billing. The Service Costs to which the Customary Billing method applies shall, subject to Section 3.01(c) and (d), be calculated on a basis that is substantially equivalent to the basis on which costs are attributed (whether through direct or indirect charges, allocations or otherwise) from time to time, now or in the future, to other companies or businesses operated by Limited Brands for the same or comparable services (including, without limitation, one or more of the Cost Components), plus an Administrative Charge therefor; provided, that (i) in respect of any particular Services, if Limited Brands does not generally attribute costs associated with the same or comparable services to other companies or businesses operated by Limited Brands as provided above, then the Customary Billing method for such Services shall be equivalent to the market value of all Services provided by Limited Brands personnel and other Persons (including, without limitation, all Cost Components) which are reasonably allocable to the provision of such Services to the Company and (ii) if Limited Brands provides financial relief from time to time to any companies or businesses operated by Limited Brands with respect to any costs, fees, expenses and/or allocations that are otherwise generally allocated to or paid by companies or businesses operated by Limited Brands, the Company shall not be entitled to the same financial relief.

Section 3.05. Pass-Through Billing. The costs of Services to which the Pass-Through Billing method applies shall, subject to Section 3.01(c) and (d), be equal to the aggregate amount of the third-party costs and expenses incurred (which costs shall include but not be limited to adjustments for attributable rebates and the costs incurred in connection with obtaining the consent of any party to a contract or agreement to which any Limited Entity is a party where such consent is related to and reasonably required for the provision of any Service; it being agreed that Limited Brands shall consult in advance with the Company prior to incurring any such cost to obtain the consent of the third party, and shall obtain the Company’s approval to incur such cost, which approval shall not be unreasonably withheld) by any Limited Entity on behalf of the Company, plus an Administrative Charge therefor.

Section 3.06. Percent of Sales Billing. The costs of Services to which the Percent-of-Sales Billing method applies shall, subject to Section 3.01(c) and (d), be equal to the amount obtained by multiplying (x) the aggregate cost incurred each month by the Limited Entities in providing such Services to one or more businesses of Limited Brands and to all Service Recipients by (y) the Net Sales Ratio for such month, plus an Administrative Charge therefor. “Net Sales Ratio” means the net sales of the Company for a particular month divided by the aggregate net sales of all businesses of Limited Brands, combined with (i) the net sales of the Company to which costs for such month are being allocated and (ii) the net sales of any Service Recipient other than Company receiving such Services to which costs for such month are being allocated. In order to permit Limited Brands to calculate the billing method provided for in this Section 3.06 (and for no other purpose), the Company shall provide Limited Brands with all reasonably necessary sales information not later than the close of business on the first Business Day immediately following such calendar month.

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Section 3.07. Fixed Fee Billing. The cost of Services to which the Fixed Fee Billing method applies shall be in the amount set forth in the applicable Schedule.

Section 3.08. Capital Investments. (a) Subject to clauses (b)-(c) hereto, Limited Brands shall have the right from time to time to make such capital investments as one or more of the Limited Entities deems reasonably necessary to support performance of the Services. Costs incurred by Limited Brands in connection with such capital investments (including without limitation transportation and installation costs) (“Capital Investments”, and each a “Capital Investment”) shall be part of the Service Costs (in addition to any Service Costs determined pursuant to any of the billing methods described in Section 3.01(a) hereof), it being agreed that there shall be no allocation of any of the Limited Entities’ internal costs, and no mark-up with respect to any Capital Investment) and shall be reimbursed by the Company pursuant to the procedures set forth in Section 3.09(c).

(b) Unless otherwise provided in Schedule IV hereto, Capital Investment costs incurred by Limited Brands on the Company’s behalf in connection with store design and construction shall be paid for by the Company directly.

(c) For Capital Investments specifically incurred on behalf of the Company which support the Services hereunder, the Company shall reimburse Limited Brands for, and shall retain title to, such Capital Investments. Limited Brands shall consult with the Company with respect to any such Capital Investment in excess of $100,000 and for any Capital Investments from and after such time as the aggregate amount of all Capital Investments exceeds $1,000,000; provided, that the foregoing shall not apply to any work-in-progress Capital Investments relating to stores and/or other items of which the Company has been apprised as of the date of this Agreement (each of which are described in Exhibit 3.08(c) attached hereto); provided, further, that if the Company declines to pay for such Capital Investment, Limited Brands may terminate such Service if, in the reasonable judgment of Limited Brands, the provision of such Service is not practicable without the making of such Capital Investments, and the Company shall have no further liability or obligations to Limited Brands with respect to such terminated Service except as set forth in Section 4.05 and Section 5.03(a) of this Agreement.

Section 3.09. Invoicing and Settlement of Costs. (a) Limited Brands shall (or shall cause one or more of the Limited Entities to) invoice the Chief Financial Officer of the Company on a monthly basis (not later than the fifteenth day of the following month), for the Service Costs (including, without limitation, invoices for Disengagement Costs as contemplated by Sections 5.01 and 5.03(a)(3) hereof) incurred in the prior month, and will provide to the Company the same billing data and level of detail as Limited Brands customarily provides to the other businesses operated by Limited Brands and such other supporting data,

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particularly in connection with Disengagement Costs, as the Company may reasonably request. Limited Brands shall use its commercially reasonable efforts to cause invoices to be presented to the Company on the schedule set forth in this Article 3, but no delay in presentation of an invoice shall affect the Company’s obligation to pay the full amount of such invoice, when presented, on the terms set forth herein.

(b) Except as provided in Section 3.09(e) or as specifically provided elsewhere in this Agreement or in any Schedule hereto, the Company agrees to pay on or before 30 days after the date on which Limited Brands invoices the Company for the Service Costs, all amounts invoiced by Limited Brands pursuant to Section 3.09(a). Such payments shall be made by the Company by wire transfer of immediately available funds to an account designated by Limited Brands.

(c) Subject to Section 3.08(c), the Company shall pay Limited Brands by wire transfer or other methods mutually agreeable to the parties, all amounts with respect to Capital Investments within 10 Business Days of the date on which Limited Brands invoices the Company for such Capital Investments (either in whole or in part). Limited Brands shall be under no obligation to make any Capital Investment before receipt of the Company’s advance payment for such expenditure.

(d) If the Company fails to pay the full amount of any invoice under this Agreement within 15 days of the relevant payment due date, the Company shall be obligated to pay, in addition to the amount due on such payment due date, interest on such amount at the greater of (1) 12% or (2) the Reference Rate plus 5%, in each case per annum compounded monthly from the relevant payment due date through the date of payment; provided that such interest rate shall not exceed the maximum rate permitted by applicable law. All payments made shall be applied first to unpaid interest and then to amounts invoiced but unpaid. If the Company fails to pay the full amount of any invoice within 30 days of the relevant payment due date, such failure shall be considered a material breach of this Agreement, and to the extent the aggregate amount of such overdue unpaid invoices exceeds $250,000, Limited Brands may, after 10 days’ prior notice to the Company of its election to suspend, without liability suspend its obligations hereunder to provide any and/or all Services to the Company until such time as such invoices have been paid in full.

(e) For certain Services, Service Costs may be invoiced to the Company on an estimated basis. In such cases the method of estimation will be reasonably determined by Limited Brands and will be made available to the Company. Any estimated costs invoiced pursuant to this Section 3.09(e) shall be invoiced and paid pursuant to the procedures set forth in this Section 3.09. At such point in time as the actual costs for any Services previously invoiced on an estimated basis are determined, Limited Brands will notify the Company of such actual costs (and provide reasonable supporting documentation therefor) and will notify the

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Company if any adjustment is necessary to reimburse one party for any difference between the actual and estimated costs. If in any case (1) an adjustment is necessary in favor of the Company, Limited Brands will reimburse the Company for the amount of such adjustment at the time such notice is given and (2) an adjustment is necessary in favor of Limited Brands, Limited Brands will provide an invoice to the Company therefor and the Company shall reimburse Limited Brands for the amount of such adjustment no later than 30 days after receipt of such invoice. Limited Brands shall have the right to notify the Company of such adjustment and, as applicable, to receive payment from the Company or make payment to the Company for the amount of such difference, whether or not such notification and adjustment is made with respect to any Limited Entity receiving comparable services.

Section 3.10. Amended Schedules. (a) Prior to January 31 of each year for so long as the relevant Services continue to be provided under this Agreement, Limited Brands may not more than once with respect to each upcoming Fiscal Year of Limited Brands prepare and deliver to the Company amended versions of the Schedules, setting forth with respect to the Services described in such Schedules, proposed changes in any of the methodologies used to calculate the Service Costs (each, a “Proposed Change”) and, to the extent available, the Service Costs estimated to be payable for such Services for the then current Fiscal Year of Limited Brands. Except as the Company and Limited Brands may otherwise agree, and except as specifically described in this Agreement, any Proposed Change shall be accompanied by a statement providing reasonable justification of, and support for, such Proposed Change. Upon receipt of any notice of a Proposed Change, the Company shall, within 21 days, provide a written statement to Limited Brands stating any objection to the Proposed Change and the reasons therefor. Limited Brands and the Company shall work together in good faith to resolve any such objections in a manner reasonably satisfactory to both parties. In any case, after all Proposed Changes for a Fiscal Year have been submitted to the Company, Limited Brands shall be available for a meeting at the Company’s request to review all such Proposed Changes prior to the date such Proposed Changes are to take effect. Subject to Section 3.10(b), all Proposed Changes shall take effect no sooner than 60 days after notification to the Company of such Proposed Changes, but not before February 1 of the applicable fiscal year (e.g., a Proposed Change delivered in November 2007 would take effect on February 1, 2008).

(b) Notwithstanding any other provision of this Agreement, if a Proposed Change for a particular Service would result in a significant increase in the amount of Service Costs that the Company would be obligated to pay under this Agreement as compared to those that would be payable were such Proposed Change not made, then the Company shall have the right during such 60-day period following receipt of notice of such Proposed Change to terminate such Service upon written notice to Limited Brands, and such termination shall be effective within the time period specified in the pertinent Schedule (or if not so specified, within 30 days after Limited Brands’ receipt of such notice of

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termination). If the Company terminates such Service in accordance with this Section 3.10(b); Limited Brands shall continue to provide such Service until the effective date of such termination on the financial terms (or reasonable estimate thereof) existing prior to the Proposed Change. For purposes of this paragraph, a “significant increase” means an aggregate increase of more than 10% over the total amount of Service Costs applicable to any such Service during the previous Fiscal Year of Limited Brands (it being agreed that the terms and conditions of this Section 3.10 shall not apply with respect to the Services described in Schedule VIII — Production and Sourcing Support Services); provided, such increase is at least $100,000 with respect to any allocated overhead cost and provided such increase is at least $500,000 with respect to any non-allocated overhead cost (each such amount as annually adjusted for changes pursuant to the U.S. Department of Commerce Services Index).

ARTICLE 4

PROVISION OF SERVICES; INDEMNIFICATION

Section 4.01. General Standard of Service. Except as otherwise agreed with the Company or expressly provided in this Agreement, and provided that Limited Brands or any of its Affiliates is not restricted by contract with third parties or by applicable law, Limited Brands agrees that the nature, quality, and standard of care applicable to the delivery of the Services hereunder shall be substantially the same as that of the Services which Limited Brands generally provides from time to time, now or in the future, to its Subsidiaries and Affiliates throughout its companies or businesses. Management of and control over the provision of the Services (including without limitation the determination or designation at any time of the Assets, employees and other resources of the Limited Entities to be used in connection with the provision of the Services) shall reside solely with Limited Brands. Without limiting the generality of the foregoing, all labor matters relating to any associates of Limited Brands and its Subsidiaries (including, without limitation, any associates of any Limited Entity involved in the provision of Services to the Company) shall be within the exclusive control of Limited Brands, and the Company shall take no action affecting such matters.

Section 4.02. Ownership of Products. Notwithstanding any other provision of this Agreement, and except as otherwise expressly provided in the Schedules or in a separate written agreement that is not, by its terms, superceded by this Agreement, title to all Products or other materials that are transported, shipped, warehoused or otherwise held in the custody of any Limited Entity on behalf of the Company shall at all times remain with the Company, and the Company shall at all times be the owner of record of such Products or other materials, and, subject to Section 4.04, shall be solely responsible for any matters arising from or relating to such Products or other materials.

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Section 4.03. Review Meetings. The parties agree to hold review meetings (the “Review Meetings”) not less than once each Fiscal Year of Limited Brands on a date to be set by management of Limited Brands with the consent of the Company, which shall not be unreasonably withheld, conditioned or delayed. Representatives of the Company and of all Limited Entities which are providing Services to the Company at the time of the meeting shall attend the Review Meeting and shall review and discuss any operational, strategic or other issues raised by any participant with respect to the provision of the Services, including any Proposed Changes pursuant to Section 3.10 prior to their effective date. The parties intend that information exchanged at such Review Meetings shall be in addition to ongoing communication between representatives of the Company and the Limited Entities with respect to the provision of the Services hereunder.

Section 4.04. Limitation of Liability. (a) The Company agrees that none of the Limited Entities and their respective directors, officers, partners, members, managers, agents, and employees (each, a “Limited Indemnified Person”, and collectively, “Limited Indemnified Persons”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to the Company or any other Person for or in connection with the Services rendered or to be rendered by any Limited Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Limited Indemnified Person’s actions or inactions in connection with any such Services or transactions, except for damages which have resulted from such Limited Indemnified Person’s gross negligence or willful misconduct in connection with any such Services, actions or inactions or breach of such Limited Indemnified Person’s obligations hereunder.

(b) Notwithstanding the provisions of Section 4.04(a) or any other provision of this Agreement, none of the Limited Indemnified Persons shall be liable for any special, indirect, incidental, punitive or consequential damages of any kind whatsoever (including, without limitation, attorneys’ fees) in any way due to, resulting from or arising in connection with any of the Services or the performance of or failure to perform Limited Brands’ obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the Services or any failure or delay in connection therewith; (2) to claims for lost profits or lost opportunities; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether Limited Brands has been advised of the possibility of such damages.

(c) In addition to the foregoing, the Company agrees that it shall, in all circumstances, use commercially reasonable efforts to mitigate and otherwise minimize its and its Subsidiaries’ damages, whether direct or indirect, due to, resulting from or arising in connection with any failure by Limited Brands to comply fully with its obligations under this Agreement.

Section 4.05. Indemnification of Limited Brands by the Company. The Company agrees to and shall indemnify and hold harmless each Limited Indemnified Person from and against any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and

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reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (“Damages”) incurred or suffered by any Limited Indemnified Person arising out of or in connection with Services rendered or to be rendered by any Limited Indemnified Person pursuant to this Agreement, any transaction entered into in connection with the Services to be performed hereunder or any Limited Indemnified Person’s actions or inaction in connection with any such Services or transactions; provided that the Company shall not be responsible for any damages of any Limited Indemnified Person that have resulted from such Limited Indemnified Person’s negligence or willful misconduct in connection with any of the advice, actions, inaction, or Services referred to above (it being understood and agreed that the provision by any Limited Entity of any of the Services without obtaining the consent of any party to any contract or agreement to which any Limited Entity is a party as of the date hereof shall not constitute negligence or willful misconduct by any Limited Entity).

Section 4.06. Indemnification of the Company by Limited Brands. Except as set forth in Section 4.07, Limited Brands agrees to indemnify and hold harmless the Company and its Subsidiaries and their respective directors, officers, partners, members, managers, agents, and employees (each, a “Company Indemnified Person”, and collectively “Company Indemnified Persons”) from and against any and all Damages incurred or suffered by any Company Indemnified Person arising out of the gross negligence or willful misconduct of any Limited Indemnified Person in connection with the Services rendered or to be rendered pursuant to this Agreement. Notwithstanding the provisions of this Section 4.06 or any other provision of this Agreement, none of the Limited Indemnified Persons shall be liable for any special, indirect, incidental, punitive or consequential damages of any kind whatsoever (including, without limitation, attorneys’ fees) in any way due to, resulting from or arising in connection with any of the Services or the performance of or failure to perform Limited Brands’ obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the Services or any failure or delay in connection therewith; (2) to claims for lost profits or lost opportunities; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether Limited Brands has been advised of the possibility of such damages.

Section 4.07. Notice of Certain Matters. If the Company at any time believes that Limited Brands is not in full compliance with its obligations under this Agreement, the Company shall so notify Limited Brands in writing promptly (but not later than 30 days), after becoming aware of such possible non-compliance by Limited Brands. Such notice (a “Non-Compliance Notice”) shall set forth in reasonable detail the basis for the Company’s belief as well as the Company’s view as to the steps to be taken by Limited Brands to address the possible non-compliance. For the 30 days after receipt of such a notice, appropriate representatives of Limited Brands and the Company shall work in good faith to develop a plan to resolve the matters referred to in the

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Non-Compliance Notice. If such matters are not resolved through such discussions, the Company may elect to terminate Limited Brands’ obligation to provide or procure, and its obligation to purchase, the Service or Services referred to in its Non-Compliance Notice in accordance with Section 5.02. In the event such matters are resolved through such discussions, the Company shall not be entitled to deliver another Non-Compliance Notice or pursue other remedies with respect to same or any substantially similar matter so long as Limited Brands complies in all material respects with the terms of such resolution, if any.

Section 4.08. Indemnification Procedures. (a) Each party and any other indemnified persons shall be entitled to the indemnity described in this Article 4, provided that, in the case of third party claims, the following conditions are met (the party obliged to provide indemnification is referred to as the “Indemnifying Party,” and the party entitled to be indemnified is referred to as the “Indemnified Party”):

(1) Promptly upon learning of any claim for which indemnification is sought from the Indemnifying Party, the Indemnified Party shall notify the Indemnifying Party of such claim and shall furnish to the Indemnifying Party all information known and reasonably available to the Indemnified Party related to such claim; provided that any failure to comply with the provisions of this clause (1) shall not relieve the Indemnifying Party of its indemnification obligations except to the extent such failure shall have adversely prejudiced the Indemnifying Party.

(2) In the event of the commencement of litigation on the basis of such claim, the Indemnified Party shall tender the defense of such litigation to the Indemnifying Party, and the Indemnifying Party shall promptly assume and thereafter diligently prosecute the defense of such claim, and the Indemnifying Party shall bear all Damages in connection therewith, using counsel selected by the Indemnifying Party (which shall be subject to the Indemnified Party’s approval, which shall not be unreasonably withheld, conditioned or delayed). The Indemnified Party shall be entitled to engage separate counsel and participate in such defense; provided that the fees and expenses and such separate counsel shall be paid by the Indemnified Party unless the interests of the Indemnified Party and the Indemnifying Party are in conflict so that they cannot be adequately represented by the same counsel, in which event the reasonable fees and expenses of such separate counsel shall be paid by the Indemnifying Party following a final determination of the indemnification liabilities hereunder.

(3) Neither the Indemnifying Party nor the Indemnified Party shall settle any such claim without the prior written consent of the other party, which consent may be withheld in the other party’s sole discretion if such settlement would require the expenditure of funds by the other party or admit on behalf of, or otherwise attribute to, the other party any fault or misconduct. To the extent that both Limited Brands and the Company are required to bear damages, claims, costs and expenses with respect to a particular claim, the intent of Limited Brands and

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the Company is that they shall bear such damages, claims, costs and expenses in proportion to their respective degrees of responsibility for such claim as allocated in this Article 4 or, if not allocated herein, then in accordance with their respective percentages of fault or responsibility for such claims.

(b) Except as otherwise specifically set forth herein, the terms of this Article 4 shall provide the exclusive remedy for monetary damages of Limited Indemnified Persons and Company Indemnified Persons with respect to Damages associated with the matters set forth in this Agreement.

ARTICLE 5

TERM AND TERMINATION

Section 5.01. Term. Except as otherwise provided in this Article 5 or as otherwise agreed in writing by the parties, this Agreement shall be effective as of the date hereof and Limited Brands’ obligation to provide or procure, and the Company’s obligation to purchase, each Service hereunder shall cease as of the earlier of (a) the date of termination of this Agreement or a particular Service as determined in accordance with Section 5.02 hereof or (b) the applicable termination date for such Service as set forth in the applicable Schedule (or if no termination date is specified, the 3^rd anniversary of the date of this Agreement).

Notwithstanding anything contained herein to the contrary, the Company shall be solely responsible for and shall pay to Limited Brands in accordance with the provisions of Section 3.09 hereof any and all Disengagement Costs incurred in connection with the provision of any and all Disengagement Services.

Section 5.02. Termination by the Parties.

(a) In addition to any rights of termination otherwise expressly provided for under this Agreement, the Company may terminate Services hereunder if Limited Brands shall have failed to perform any of its material obligations under this Agreement relating to such Service, the Company has notified Limited Brands in writing of such failure, and such failure shall have continued for a period of 30 days after receipt by Limited Brands of written notice of such failure.

(b) In addition to any rights of termination otherwise expressly provided for under this Agreement: (i) Limited Brands, at its option, may terminate Services hereunder if the Company shall have failed to perform any of its material obligations under this Agreement relating to such Service, Limited Brands has notified the Company in writing of such failure, and such failure shall have continued for a period of 30 days after receipt by the Company of written notice of such failure and (ii) Limited Brands, at its option, may terminate this Agreement or any Services hereunder by providing written notice of termination to the Company upon or following a Change of Control of the Company.

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Section 5.03. Transfer of Associates. Notwithstanding anything in the Schedules to the contrary, in the event that Limited Brands and the Company mutually agree in writing or otherwise to transfer any Limited Brands’ associates to Express during the term of this Agreement, Limited Brands’ obligation to provide the specific Services that were performed by the Limited Brands’ associates so transferred to the Company, and the Company’s obligation to accept and pay for such Services, shall cease effective as of the date of the transfer, unless the parties agree otherwise.

Section 5.04. Effect of Termination.

(a) Upon termination of any Service pursuant to this Agreement, or upon termination of this Agreement in accordance with its terms, Limited Brands shall have no further obligation to provide the terminated Service (or any Service, in the case of termination of this Agreement) or to perform its obligations hereunder relating to any such terminated Service, and the Company shall have no obligation to purchase any such Services from Limited Brands, pay any fees relating to such Services or make any other payments hereunder; provided that the foregoing shall not in any way operate to impair or destroy any of the rights or remedies of either party or to relieve either party of its obligations to comply with the provisions of this Agreement which have accrued prior to the effective date of termination. Notwithstanding such termination, but subject to the other terms of this Agreement, (1) the Company shall remain liable to Limited Brands for all Service Costs incurred before or after the effective date of termination of this Agreement by any Limited Entity on behalf of the Company to the extent that such Services Costs were incurred in connection with or to assist Limited Brands in the provision of any Services prior to the effective date of the termination (including without limitation (A) the aggregate outstanding amount of any capital expenditure incurred by any Limited Entity on behalf of the Company in accordance with the terms of this Agreement, and (B) any amounts owed under any noncancelable or other contract or agreement entered into by any Limited Entity on behalf of or for the benefit of the Company with the prior written consent of the Company); (2) Limited Brands shall continue to charge the Company for administrative and program costs and Administrative Charges relating to benefits paid after but incurred prior to the termination of any Service and other services reasonably required to be provided after the termination of such Service and the Company shall be obligated to pay such expenses in accordance with the terms of this Agreement; (3) the Company shall be responsible for and shall pay to Limited Brands in accordance with the provisions of Sections 3.09 and/or 5.01 hereof all Disengagement Costs relating to the termination of any Service hereunder for any reason; and (4) the provisions of Articles 3,4, 5 and 6 shall survive any such termination indefinitely.

(b) Limited Brands shall invoice the Company for the aggregate outstanding amount payable to Limited Brands pursuant to Section 5.03(a)(l), (a)(2) and (a)(3), and the Company shall pay such amount within 30 days of receipt of such invoice, by wire transfer of immediately available funds to an account designated by Limited Brands.

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(c) As soon as practicable, and in any event no later than 30 days after termination of this Agreement or any of the Services hereunder in accordance with the terms of this Agreement, each party shall return to the other party in accordance with such other party’s instructions and at such other party’s expense, all of the other party’s materials and Confidential Information in its possession or control (including, without limitation, all Confidential Information and any copies thereof) relating to the terminated Service (or if the Agreement is terminated in its entirety, all such materials and Confidential Information).

(d) Following the delivery of a notice with respect to the termination of any Service, Limited Brands and the Company, commencing promptly following such notice, shall cooperate in good faith to provide for an orderly transition of such Service to the Company or to a successor service provider in accordance with a transition schedule reasonably requested by the Company.

Section 5.05. Notification of Change of Control. To the extent permitted by applicable law, the Company shall promptly notify Limited Brands of any Change of Control of the Company (or any definitive agreement, arrangement or plan which, if consummated, would result in such a Change of Control of the Company), setting forth the date and circumstances of such Change of Control of the Company and the identity of the third party(ies) involved in such Change of Control of the Company (such notice, the “Change of Control Notice”).

ARTICLE 6

MISCELLANEOUS

Section 6.01. Confidential Information; Non-Solicitation. (a) Confidential Information. Either party may provide to the other party certain confidential, proprietary and trade secret business and technical information in connection with the performance of this Agreement (“Confidential Information”). All information shall be presumed to be Confidential Information unless such information is generally available to the public (other than by the receiving party in violation of this Section 6.01) or if a disclosing party acknowledges in writing that such information is not Confidential Information. Each party shall preserve the confidentiality of all Confidential Information that is provided by the other party in connection with this Agreement, and shall not, without the prior written consent of the other party, disclose, display or make available to any Person, or use for its own or any other Person’s benefit, other than as necessary in performance of its obligations under this Agreement, any Confidential Information of the other party; provided that a party may disclose such portion of the Confidential Information relating to the other party to the extent, but only to the extent, that the disclosing party reasonably believes that such disclosure is required in connection with litigation between the parties hereto relating directly to this Agreement, under applicable law, pursuant to court order

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or as a consequence of the rules of a securities exchange; provided, further that the disclosing party first notifies the other party hereto of such requirement and allows such party a reasonable opportunity to seek a protective order or other appropriate remedy to prevent such disclosure. The parties shall exercise a commercially reasonable standard of care to safeguard all Confidential Information of the other party against improper disclosure or use. The parties acknowledge that money damages would not be a sufficient remedy for any breach of the provision of this Section 6.01 and that the non-breaching party shall be entitled to equitable relief in a court of law in the event of, or to prevent, a breach or threatened breach of this Section 6.01.

(b) Notwithstanding the provisions of Section 6.01(a), upon a Change of Control of the Company, the Company shall (1) promptly (but in no event later than 10 days after the occurrence of such Change of Control of the Company) return to Limited Brands or destroy all Confidential Information in its possession (or in the possession of any of its Affiliates) relating to Limited Brands or any of its Affiliates, (2) no longer be permitted to use such Confidential Information in its business or operations (or the business or operations of any of its Affiliates) and (3) promptly (but in no event later than 30 days after the occurrence of such Change of Control of the Company) deliver a written certificate to Limited Brands executed by the Company’s Chief Executive Officer expressly acknowledging the obligations set forth in clauses (1) and (2) of this sentence and certifying that the Company has and will continue to adhere to such requirements.

(c) Third-Party Non-Disclosure Agreements. To the extent that any third-party proprietor of information or software to be disclosed or made available to the Company in connection with performance of Services requires a specific form of non-disclosure agreement as a condition of its consent to use of the same for the benefit of the Company or to permit the Company access to such information or software, the Company will execute (and will cause the Company employees to execute, if required) any such form.

(d) Non-Solicitation. (i) From the date hereof and until the expiration of 12 months from the termination of all of the Services under this Agreement, and except as otherwise expressly provided in the Schedules or in this Agreement, (A) Limited Brands hereby agrees to abide by the non-solicitation restrictions contained in Section 9.04(d) of the LLC Agreement to the same extent as if it were a “Member” and (B) none of the Company nor any of its controlled Affiliates will (nor shall the Company, so long as it is controlled by Golden Gate Private Equity, Inc., permit Golden Gate Private Equity, Inc. and its managed investments funds to) without the prior written consent of Limited Brands, directly or indirectly solicit any Applicable Employee for employment, encourage any Applicable Employee to leave Limited Brands’ or its Affiliates’ employ or employ any Applicable Employee. “Applicable Employee” means any employee of Limited Brands or any of its Affiliates who has performed any of the Services under this Agreement or with whom the Company or any of its Affiliates otherwise has had any contact at any time during the performance of the Services hereunder.

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(ii) Notwithstanding anything contained in this Agreement or in the Schedules to the contrary, including, but not limited to, Section 6.01(d)(i) above, Limited Brands and the Company will jointly develop an orderly process whereby, for a reasonable period of time prior to the scheduled termination of any specific Services hereunder, employees of the Limited Entities whose job duties are primarily comprised of providing the specific Services scheduled to be terminated hereunder will be given the opportunity to become employees of the Company.

(iii) Further notwithstanding anything in this Agreement or in the Schedules to the contrary, including, but not limited to, Section 6.01(d)(i) above, if the Company wishes to hire (under circumstances other than as described in Section 6.01(d)(ii) above) any employees of the Limited Entities whose job duties are primarily comprised of providing specific Services hereunder, Limited Brands and the Company will jointly develop an orderly process whereby such employees may be given the opportunity to become employees of the Company so long as there is no adverse financial impact to the Limited Entities in connection with transferring such employees to the Company and/or terminating early the specific Services which such employees provide unless the Company agrees to fully compensate Limited Brands for the full amount of said adverse financial impact.

Section 6.02. Audits. (a) Throughout the term of this Agreement and for 1 year thereafter, the Company shall have the right once within each 12 month period, at its own expense and on 30 days advance written notice to Limited Brands, to have its auditors or other representatives audit the books and records of any Limited Entity for the sole purpose of certifying the accuracy of the Service Costs and Cost Components charged by Limited Brands to the Company in accordance with the terms of this Agreement for the preceding 12-month period. The Company shall provide to Limited Brands a copy of each such audit report promptly after its receipt thereof. In the event that any such audit indicates any overpayment or underpayment of amounts paid to Limited Brands by the Company, the applicable party shall pay to the other party (within 30 days following the date of delivery of such audit report to Limited Brands) the amount of such overpayment or underpayment, as the case may be, plus (if the overpayment or underpayment amount exceeds $100,000.00) interest accruing monthly from the date of such overpayment or underpayment until such amount is paid at the Reference Rate, compounded monthly from the relevant payment due date through the date of payment (provided that such interest rate shall not exceed the maximum rate permitted by applicable law).

(b) Notwithstanding any other provision of this Agreement, upon a Change of Control of the Company, (1) the Company only shall be permitted to exercise its rights under Section 6.02(a) by employing the services of a third party

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auditor reasonably acceptable to Limited Brands, (2) the Company and its Affiliates shall have no access to such auditor’s workpapers and (3) such auditor shall agree in writing to be bound by a confidentiality agreement with respect to the foregoing on terms reasonably acceptable to Limited Brands.

Section 6.03. No Agency. (a) Nothing in this Agreement shall constitute or be deemed to constitute a partnership, agency or joint venture between the parties hereto or, except as is necessary for performance of the Services, shall constitute or be deemed to constitute any party the agent or employee of the other party for any purpose whatsoever and neither party shall have authority or power to make any statements, representations or commitments of any kind, take any action which shall be binding on the other, or bind the other or to contract in the name of, or create a liability against, the other in any way or for any purpose.

(b) Nothing in this Agreement shall establish or be deemed to establish any fiduciary relationship between the parties hereto. The parties’ respective rights and obligations hereunder shall be limited to the contractual rights and obligations expressly set forth herein on the terms and conditions set forth herein.

(c) Except as otherwise specifically provided for herein, each party shall be responsible for compliance with all applicable laws, rules, regulations and orders of governmental authorities, for obtaining required licenses and permits, for the payments of all applicable taxes and for the conduct and compensation of its employees.

Section 6.04. Force Majeure. (a) Neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure, or delay is caused by or results from causes beyond the reasonable control of the affected party, including, but not limited to, fire; floods; storms; embargoes, war or acts of war (declared or undeclared); insurrections, riots or other civil commotions; acts of terrorism, strikes, lockouts, or other labor disturbances; explosions; sabotage; accidents; governmental orders; changes in statutes, rules or regulations; delays by unaffiliated suppliers or carriers; shortages of fuel, power, raw materials or components; acts of God; or acts, omissions, or delays in acting by any governmental or military authority, or the other party (collectively, “Force Majeure”); provided, however, it is understood that (i) this Section 6.04 only operates to suspend, and not to discharge, a party’s obligations under this Agreement, and that when the causes of the failure or delay are removed or alleviated the affected party shall resume performance of its obligations hereunder and (ii) this Section 6.04 shall not excuse a party’s obligation to pay money; provided, that the Company shall not be obligated to pay for any particular Service during the pendency of the Limited Entities’ failure to provide such particular Service. A party that is unable to fulfill its obligations due to any Force Majeure event shall (1) promptly after the occurrence thereof give notice to the other party with details of such event and (2) use its commercially reasonable efforts to remedy such event as promptly as

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practicable. If Limited Brands is unable to provide any of the Services due to Force Majeure, both parties shall exert commercially reasonable efforts to cooperatively seek a solution that is mutually satisfactory, such as the subcontracting of all or part of the provision of the Services under the supervision of Limited Brands for the period of time during or affected by the Force Majeure.

(b) Promptly on becoming aware of Force Majeure causing a delay in performance or preventing performance of any obligations imposed by this Agreement (and termination of such delay), the Company shall have the right, but not the obligation, to engage Subcontractors to perform such obligations for the duration of such period that Force Majeure delays or prevents the performance of such obligation by a party.

Section 6.05. Entire Agreement; Successors and Assigns. (a) This Agreement (including the Schedules constituting a part of this Agreement) and any other writing signed by authorized representatives of the parties after the date hereof that specifically references this Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.

(b) This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto. Except as expressly provided herein, neither party may assign, delegate, or otherwise transfer any rights or duties under this Agreement to any party without the prior written consent of the other party hereto.

Section 6.06. Notices. (a) Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission (with the original copy promptly thereafter delivered by mail), or mail, to the following addresses:

(i) If to the Company to:

Express, LLC

One Limited Parkway

Columbus, Ohio 43230

Fax: (614) 415-4858

Attention: Chief Financial Officer

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

Kirkland & Ellis LLP

555 California Street

San Francisco, CA 94104

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Fax: (415) 439-1680

Attention: Mikaal Shoaib

(ii) If to Limited Brands, to:

Limited Brands, Inc.

Three Limited Parkway

Columbus, OH 43230

Fax: (614) 415-7188

Attention: Office of General Counsel

with copies (which shall not constitute notice) to:

Limited Brands, Inc.

Three Limited Parkway

Columbus, OH 43230

Fax: 614-415-8098

Attention: Office of Treasurer

Vorys Sater Seymour and Pease LLP

52 E. Gay Street

P. O. Box 1008

Columbus, OH 43216-1008

Fax: 614-719-5028

Attention: John P. Wellner, Esq.

or to such other addresses or telecopy number and with such other copies, as such party may hereafter specify for the purpose by notice to the other parties. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Each such notice, request or other communication shall be effective (1) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section and evidence of receipt is received or (2) if given by any other means, upon delivery or refusal of delivery at the address specified in this Section 6.06.

(b) Notwithstanding the provisions of 6.06(a) above, the parties hereto hereby expressly acknowledge and agree that any notices, consents or approvals contemplated to be given by either party to the other hereunder in connection with the day-to-day implementation or provision of particular Services pursuant to the ordinary course of business may be given orally or in writing other than in accordance with Section 6.06(a) above by director-level employees (or above), which notices, consents and/or approvals shall be binding and on which notices, consents and/or approvals the other party shall be entitled to rely. The parties further acknowledge and agree that this Section 6.06(b) is intended solely to facilitate the effective and efficient provision of the Services contemplated by this

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Agreement and it is not intended to, nor shall it be interpreted to, (i) permit the giving of any other type of notices, direction or demand other than in accordance with the provisions of said Section 6.06(a) or (ii) increase or decrease billing methods, Service Costs or the scope of Services under this Agreement.

Section 6.07. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Ohio, without regard to conflict of laws and rules of such state.

Section 6.08. Jurisdiction. Except as otherwise expressly provided in this Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated thereby shall be brought either in (i) the United States District Court for the Southern District of Ohio, Eastern Division or (ii) the Court of Common Pleas of Franklin County, Ohio, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 6.06 shall be deemed effective service of process on such party.

Section 6.09. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 6.10. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each party shall be construed and enforced accordingly.

Section 6.11. Amendment. (a) This Agreement may not be amended or modified except in writing signed by the parties hereto.

(b) Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if it is memorialized in writing by the waiving party. No course of dealing, manner of performance or failure of any party hereto to

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enforce at any time any provision of this Agreement shall be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision in accordance with its terms. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

Section 6.12. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. An executed copy or counterpart hereof delivered by facsimile shall be deemed an original instrument.

Section 6.13. Headings; Interpretation and Construction. The headings to sections of this Agreement and the table of contents to this Agreement are inserted for convenience of reference only and in no way define, limit or describe the scope of this Agreement or the meaning of any provisions of this Agreement. The words “include,” “includes,” ”including” and “such as” are deemed to be followed by the phrase, “without limitation,”. All references to “$” or “dollars” shall be to United States dollars and all references to “days” shall be to calendar days unless otherwise specified. Any reference to the masculine, feminine or neuter gender shall include such other genders, and references to the singular or plural shall include the other, in each case unless the context otherwise requires. The Schedules hereto shall be deemed to be incorporated in and an integral part of this Agreement. In the event of any conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of any of the Schedules, the terms and conditions of the Schedules shall prevail to resolve any inconsistency.

Section 6.14. Mutual Contribution. The parties to this Agreement and their counsel have mutually contributed to its drafting. Consequently, no provision of this Agreement shall be construed against any party on the ground that party drafted the provision or caused it to be drafted.

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

LIMITED BRANDS, INC.
By:	/s/ Timothy J. Faber
	Timothy J. Faber
Its:	Vice President –
	Treasury, Mergers & Acquisitions
EXPRESS, LLC
By:	/s/ Douglas L. Williams
	Douglas L. Williams
Its:	Senior Vice President –
	Enterprise General Counsel

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EX-10.14

Exhibit 10.14

STORE LEASES AGREEMENT

This STORE LEASES AGREEMENT is entered into as of July 6, 2007 (this “Agreement”), by and among LIMITED STORES, LLC (“LS”), BATH & BODY WORKS, LLC (“Bath & Body Works”), VICTORIA’S SECRET STORES, LLC (“Vic”), DIVA US, LLC (“Diva”), EXPRESS, LLC (“Express”) and LIMITED BRANDS, INC. (“Limited”);

WITNESSETH:

WHEREAS, each of LS, Bath & Body Works, Vic and Diva are subsidiaries of Limited (collectively, the “Limited Tenants” and each a “Limited Tenant”);

WHEREAS, one of LS or Limited is the original prime tenant under each of the leases for the stores described on Schedule 1 hereto (each such store a “Limited Store” and collectively, the “Limited Stores”);

WHEREAS, Limited is the prime tenant under each of the leases for the stores described on Schedule 2 hereto pursuant to a Master Assignment and Assumption Agreement dated as of the date hereof (but effective prior to this Agreement) between Limited and Express (the “Master Assignment”), which leases for such Schedule 2 stores are guaranteed by Limited (each such store a “Guaranteed Lease Store” and collectively, the “Guaranteed Lease Stores”) pursuant to a guaranty agreement (collectively, the “Guarantees” and each a “Guaranty”) with respect to the obligations arising under such leases;

WHEREAS, as of the date hereof, Express occupies a portion of one or more Limited Stores without a written agreement;

WHEREAS, as of the date hereof, and after giving effect to the transactions contemplated by the Master Assignment, Express is the original and current prime tenant under the leases for the stores described on Schedule 3 hereto (each such store an “Express Store” and collectively, the “Express Stores”);

WHEREAS, as of the date hereof, one (or more) Limited Tenant(s) (other than Limited) occupies (or occupy) a portion of one or more Express Stores and/or the Guaranteed Lease Stores without a written agreement;

WHEREAS, in the locations listed on Schedule 6, there are one or more stores operated by prior affiliates of Limited, such stores operating as Limited Too, Lane Bryant and/or Lerner (each a “Prior Affiliate”);

WHEREAS, each Prior Affiliate is a party to one or more previously executed store leases agreements by and between Prior Affiliates and Limited or its Affiliates (each a “Prior Affiliate SLA”);

WHEREAS, as of the date hereof, Express directly leases premises described on Schedule 4 hereto which are adjacent to, but not fully separated, either physically and/or functionally, from premises leased directly by a Limited Tenant (the “Adjacent Premises”);

WHEREAS, the parties hereto desire to memorialize their prior agreements and understandings with respect to such premises, as such agreements and understandings are amended by this Agreement; and

NOW, THEREFORE, in consideration of the covenants set forth herein, the parties hereto, intending to be legally bound, agree as follows:

1. Definitions.

As used in this Agreement the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described:

“Affiliate” means a corporation, partnership, limited liability company or other business entity, which, directly or indirectly, controls, is controlled by, or is under common control with, another corporation, partnership, limited liability company or other business entity. If more than fifty percent (50%) of the voting stock of a corporation is owned by another corporation, partnership, limited liability company or other business entity, the corporation whose stock is so owned shall be deemed to be controlled by the corporation, partnership, limited liability company or business entity owning such stock. An Affiliate of Express as defined under this paragraph, however, only refers to Affiliates thereof after the Closing Date.

“Closing Date” is defined in the Unit Purchase Agreement included as one of the Transaction Documents.

“Excess Rent” means, in respect of any Leased Premises, rent or any other amount payable under the relevant Prime Lease, which is calculated on the basis of a fixed percentage of sales over a pre-determined sales level, and is in addition to the fixed base rent or other fixed payment required by the relevant Prime Lease.

“Express Premises” means that portion of the Leased Premises occupied by Express pursuant to a Prime Lease or this Agreement.

“Gross Sales” shall mean the term (or any similar term) used in the relevant Prime Lease to determine the basis for calculating the payments due to the Landlord thereunder, regardless of whether the relevant Prime Lease refers to such term as gross sales, net sales or a similar term.

“Landlord” means the landlord under a Prime Lease.

“Lease Term” means, in respect of any Prime Lease, the initial term of such Prime Lease and any renewal or extension option thereunder exercised pursuant to the provisions of this Agreement; provided, with respect to the Guaranteed Lease Stores, the Lease Term shall not include renewal or extension options (or, if the Prime Lease Term with respect to any Leased Premises is currently under a renewal or extension option, any additional renewal or extension options) available under the Prime Lease with respect to such Leased Premises, except as provided in Section 4(a).

“Leased Premises” means the premises in which either Express or Limited Tenant has a leasehold interest as the tenant under a Prime Lease or all such premises collectively, as the context may require.

“Limited Tenant Premises” means that portion of the Leased Premises occupied by a Limited Tenant pursuant to a Prime Lease or this Agreement.

“Percentage Rent” means, in respect of any Leased Premises, monthly rent which, in lieu of a fixed monthly rent or any other amount payable under the relevant Prime Lease, is calculated exclusively as a percentage of the Gross Sales of the tenant of such Leased Premises for such month.

“Prime Lease” means each of the leases set forth on Appendix A; all such leases are collectively referred to as the “Prime Leases.”

“Prior Affiliate Premises” means that portion of the Leased Premises occupied by a Prior Affiliate pursuant to a Prime Lease, Prior Affiliate SLA or other agreement.

“Space Size Ratios” means, in respect of any Subleased Premises, the ratio of (x) the size of the selling space in the Subleased Premises to (y) the size of the selling space in the entire Leased Premises regardless of the person, party or entity in possession or control thereof. All such sizes, as of the date hereof, are as reflected on Schedule 5. The applicable Space Size Ratios shall be adjusted accordingly in the event of any change in the size of either a Leased Premises or a Subleased Premises, or in the event of the presence of any other tenants or occupants in the Leased Premises, but shall not be adjusted solely due to a reallocation between the total amount of selling space and the total amount of storage space in a given Leased Premises or Subleased Premises.

“Store Separation” means all work reasonably necessary to physically separate, in a manner and to an extent mutually satisfactory to Limited and Express, the applicable Limited Tenant Premises and Express Premises, including any Adjacent Premises, whether or not such locations have been listed on the Schedules attached hereto as of the date hereof or have been inadvertently omitted therefrom and are subsequently included thereto by agreement between the parties (it being the

parties’ intention that all such affected stores, but for those specifically excluded herein, be covered hereby) including (i) compliance with all applicable local, state and federal laws, rules and regulations to ensure that the Express Premises and the Limited Tenant Premises may each be leased, used and occupied for their intended purposes lawfully in all respects, (ii) any segregation of selling or storage space, construction of firewalls, construction of access corridors, necessary modifications to and separation of the HVAC system or utilities (e.g., to enable separate services and metering), (iii) where applicable, purchase of cabinets and fixtures for use on the newly constructed separation wall, in each case on both sides of a separation wall and of comparable quality to other cabinets and fixtures already used in the relevant store, and (iv) where applicable, installation of duplicate facilities (e.g., bathrooms, storerooms, backrooms, fire doors, and entrances and exits to the exterior and interior malls) of comparable quality to those in existence and shared by Express and the respective Limited Tenant immediately prior to the separation. Except and to the extent noted in this Agreement as to any specific location, it is the intention of the parties hereto for each Express Premises and each Limited Tenant Premises, after the completion of the Store Separation work, if any, to be a fully functional, separated, segregated and secured lawful business unit in all respects.

“Store Separation Costs” means all costs reasonably necessary to effectuate a Store Separation (exclusive of costs, fees and expenses incurred by any party hereto to evaluate for its own account the design, commencement and/or completion of any aspect of Store Separation work performed by the other party or parties, as the case may be, hereunder).

“Subleased Premises” means the portion of the Leased Premises occupied by either Express or a Limited Tenant as the subtenant in accordance with this Agreement, individually or collectively, as the context may require. Each of the Subleased Premises as of the date hereof is described on Schedules 1, 2 and 3.

“Subtenant” means either a Limited Tenant or Express, as the context may require, which party subleases the Subleased Premises from the other party (as Tenant under a Prime Lease) pursuant to this Agreement; provided, with respect to any Guaranteed Lease Store, Express shall be deemed to be the Tenant hereunder.

“Tenant” means either a Limited Tenant or Express, as the context may require, which party is the direct tenant under a Prime Lease; provided, with respect to any Guaranteed Lease Store, Express shall be deemed to be the Tenant hereunder.

“Transaction Documents” means the Unit Purchase Agreement, together with all other agreements and documents contemplated thereby executed and delivered by such parties and their respective Affiliates with respect to the chain of stores known as “Express”.

“Unit Purchase Agreement” means that certain Unit Purchase Agreement dated as of May 15, 2007 among Limited, Express Investment Corp., Limited Brands Store Operations, Inc. and Express Holding, LLC, as amended.

2. Sublease.

(a) Limited Stores. With respect to the Limited Stores set forth on Schedule 1 hereto, the respective Limited Tenant, in consideration of the covenants and agreements to be performed by Express as subtenant and upon the terms and conditions hereinafter stated, does hereby sublease, demise and let unto Express, and Express does hereby sublease from such Limited Tenant, each of the Express Premises upon the terms and conditions set forth below.

(b) Guaranteed Lease Stores. With respect to the Guaranteed Lease Stores set forth on Schedule 2 hereto, (i) Limited, in consideration of the covenants and agreements to be performed by Express as subtenant and upon the terms and conditions hereinafter stated, does hereby sublease, demise and let unto Express, and Express does hereby (A) sublease from Limited, the entire Leased Premises with respect to such Guaranteed Lease Stores upon the terms and conditions set forth below and (B) assume and shall fully perform and discharge, with respect to each Guaranteed Lease Store, all the obligations of Limited as “Tenant” under the Prime Lease with respect to such Guaranteed Lease Store during the Term (as defined below) and shall abide by and adhere to all restrictions contained in, and all other terms, covenants and conditions of, each Prime Lease, and, except as otherwise provided herein, Express acknowledges that Limited shall have no duty to take any action to comply with the obligations of Limited as “Tenant” under each Prime Lease with respect to the Guaranteed Lease Stores and, in turn, (ii) Express shall sub-sublease the Limited Tenant Premises at such Guaranteed Lease Stores to the Limited Tenant in accordance with Section 2(c) below.

(c) Express Stores. With respect to the Express Stores set forth on Schedule 3 hereto and the Guaranteed Lease Stores in accordance with Section 2(b) above, Express, in consideration of the covenants and agreements to be performed by the Limited Tenant as subtenant and upon the terms and conditions hereinafter stated, does hereby sublease, demise and let unto such Limited Tenant, and such Limited Tenant does hereby sublease from Express, each of the Limited Tenant Premises upon the terms and conditions set forth below.

(d) Prior Affiliate SLAs. Notwithstanding anything contained herein to the contrary, Express hereby (i) acknowledges the occupancy by Prior Affiliates of the Prior Affiliate Premises, as applicable and (ii) acknowledges and agrees that the terms and conditions of this Agreement and all of the rights of Express hereunder are and shall remain subject to the terms and conditions of each Prior Affiliate SLA.

(e) Diva Space. Express hereby acknowledges and agrees (i) that Diva currently occupies approximately 557 square feet of the Leased Premises situated at Annapolis Mall, as identified on Attached Schedule 3 (the “Diva Space”) and (ii) that, notwithstanding anything contained herein to the contrary, if Limited Brands hereafter decides to close such Diva store and to cause Diva to vacate the Diva Space, then, upon thirty (30) days prior written notice to Express, Limited Brands shall have the right and option to put the Diva Space to Express, whereupon, the same shall be and become part of the Express Premises and the responsibility of Express for all purposes hereunder and under the pertinent Prime Lease.

3. Priority of Prime Lease.

(a) Except to the extent otherwise expressly set forth in this Agreement, this Agreement, as it relates to the Subleased Premises (and, in the case of the Guaranteed Lease Stores, the Leased Premises), is expressly subject and subordinate to the applicable Prime Lease and all the terms, conditions and covenants therein contained. Except to the extent otherwise expressly set forth in this Agreement, in which event the terms of this Agreement shall prevail, all the terms, covenants and conditions of a Prime Lease shall be applicable with respect to the corresponding Subleased Premises (and, in the case of the Guaranteed Lease Stores, the Leased Premises) with the same force and effect as if Tenant were the landlord under the Prime Lease and Subtenant were the tenant thereunder, and the provisions of the Prime Lease are incorporated herein by reference with the same force and effect as if they were fully set forth herein. Limited represents and warrants that the transactions contemplated by this Agreement and the Master Assignment are, with respect to each Leased Premises and Subleased Premises, as the context may require, (i) permitted under the terms of the respective Prime Lease without the respective Landlord’s consent thereunder or (ii) if such Prime Lease requires the Landlord’s consent thereunder, such consent has been obtained (or, subject to Section 29.D.(b) of this Agreement, will be obtained) by Limited at Limited’s sole cost and expense, and Limited agrees to indemnify, defend and hold harmless Express with respect to any Claims (as defined below) incurred by Express in connection with (x) with respect to the Guaranteed Lease Stores, the assignment of each Prime Lease to Limited under the Master Assignment and the subsequent subletting of each the Leased Premises to Express under this Agreement and (y) with respect to the Limited Stores and the Express Stores, the subletting of the Subleased Premises to either Express or a Limited Tenant, as the case may be; provided, however, Limited shall have no obligation and shall not be liable in any manner to Express with respect to any Claims that arise by reason of the sale, directly or indirectly, of the stock of Express and/or the change of control of Express, except as otherwise provided in the Unit Purchase Agreement. Limited’s foregoing indemnification, defense and hold harmless obligations shall survive the expiration or termination of this Agreement.

(b) Subtenant agrees that nothing in this Agreement shall be deemed to grant Subtenant any rights that would conflict with any of the covenants and

conditions of the Prime Lease, and Subtenant agrees that it will do nothing in, on or about the Subleased Premises that would result in the breach by Tenant of its undertakings and obligations under the Prime Lease. Subtenant hereby assumes and shall fully perform and discharge, with regard and to the extent applicable to the Subleased Premises, all the obligations of Tenant as tenant under the Lease during the Lease Term and shall abide by and adhere to all other terms, covenants and conditions of the Prime Lease. Nothing contained in this Agreement shall be construed as a guaranty by Tenant of any of the obligations, covenants, warranties, agreements or undertakings of the Landlord in the Prime Lease. Tenant covenants that it will keep, observe and perform on a timely basis all of its obligations and undertakings under the Prime Lease (exclusive of those pertaining to the Subleased Premises which are the responsibility of Subtenant hereunder after the sublease thereof to Subtenant and the completion of the transactions contemplated by the Transaction Documents).

(c) In the event of any breach by Subtenant of any term, covenant or condition of this Agreement, in addition to the rights and remedies provided in this Agreement, Tenant shall have all the rights against Subtenant as would be available to the Landlord against Tenant, as tenant, under the applicable Prime Lease if such breach were by Tenant thereunder, including the right to terminate the sublease under certain circumstances set forth in the Prime Lease, provided, however, Tenant shall first have given Subtenant notice and an opportunity to cure, if any, that is similar, but less by three (3) days, to that which the applicable Landlord would be obligated to provide Tenant under the applicable Prime Lease for such a default.

4. Term; Renewals; Termination.

(a) The term of the sublease granted herein with respect to each of the Subleased Premises shall be coextensive, less one day, with the Lease Term of the corresponding Prime Lease, unless sooner terminated or extended as provided herein. The parties hereto acknowledge that (i) with respect to the Limited Stores and the Express Stores, the Lease Term shall include renewal or extension options exercisable by Tenant (only if in fact such renewal or extension options are exercised) and that the exercise of any such option shall be determined by Tenant or Subtenant as hereinafter provided and (ii) with respect to Guaranteed Lease Stores, and except as provided below, the Lease Term shall not include renewal or extension options (or, if the Lease Term with respect to any Leased Premises is currently under a renewal or extension option, any additional renewal or extension options) available under the Prime Lease with respect to such Leased Premises, and Express agrees that Express shall have no right to exercise, or to cause Limited to exercise, any renewal or extension terms under the Prime Lease with respect to any such Guaranteed Lease Store (unless Limited is completely and unconditionally released from any and all liability under any Prime Lease and any guaranty in respect thereof or Express provides to Limited a letter of credit in form and amount satisfactory to Limited from a financial institution acceptable to Limited securing Limited from loss with respect

to any liability or guaranty obligation, in which event Express shall have the right to exercise, or cause Limited to exercise, any such renewal or extension terms). Subtenant shall indemnify Tenant and hold Tenant harmless against any and all claims by the applicable Landlord in the event Subtenant fails to vacate any Subleased Premises by the expiration date of the sublease term granted herein and the sublease term has not been validly renewed or extended.

(b) Subject to subsection (a)(ii) above, Tenant shall notify Subtenant no later than the 60th day prior to the deadline by which Tenant may exercise any renewal or extension option in respect of the Prime Lease if Tenant has determined not to exercise any such option, and Tenant shall first offer to assign the Prime Lease to Subtenant to the extent permitted under such Prime Lease or by the Landlord, or otherwise to cooperate with Subtenant to allow Subtenant, in its discretion, to exercise any such option with respect to the Leased Premises, so long as Tenant and its Affiliates have no responsibility or liability under the Prime Lease (or any Guaranty, as the case may be) after the expiration of the Lease Term (without giving effect to such renewal option). If Subtenant decides to, and is permitted to, assume the Prime Lease on such terms, then Subtenant shall assume responsibility for and pay any and all costs relating to such Leased Premises (including, without limitation, all liabilities and obligations under the Prime Lease as so extended). Subtenant acknowledges that in the event of any expiration of a Lease Term, this Agreement shall terminate with respect to the corresponding Prime Lease.

(c) Subject to subsection (a)(ii) above, if Tenant desires to renew or extend a Prime Lease, then Tenant shall notify Subtenant thereof no later than 60 days prior to the deadline by which Tenant may exercise any renewal or extension option in respect of the Prime Lease. Within 10 Business Days of Subtenant’s receiving such notice, Subtenant shall notify Tenant as to whether Subtenant wishes to remain in the Subleased Premises. If both parties have decided to renew or extend their respective lease arrangements, then, unless otherwise agreed, the parties shall each negotiate and enter into separate lease arrangements with the applicable Landlord with respect to each party’s respective premises. Any Store Separations (and the corresponding Store Separation Costs) shall be performed and paid for in accordance with Section 9 of this Agreement. Limited and Express agree that, except as set forth in subsection (a)(ii) above, neither Limited nor any Affiliate thereof shall be required to provide any guaranty or other assurance for any renewal or extension of any Prime Lease beyond the original Lease Term.

(d) Except as otherwise expressly provided in this Agreement, all rights of the “tenant” under a Prime Lease to terminate such Prime Lease, including, without limitation, any “kickout” or “cotenancy” rights or rights to terminate in the event of a casualty or condemnation or default by the Landlord (“Termination Rights”), shall belong exclusively to Tenant and may be exercised by Tenant in its sole and absolute discretion without liability to Subtenant; provided, (1) in the event the Limited Tenants occupy more than fifty percent (50%) of the sales area in an Express Store

and/or Guaranteed Lease Store, all such Termination Rights shall belong solely to the Limited Tenants as if they were the Tenant hereunder, (2) except as otherwise provided in Schedule 10 hereto, in the event that Express occupies more than fifty percent (50%) of the sales area in a Limited Store and/or fifty percent (50%) or more of the sales area in a Guaranteed Lease Store, all such Termination Rights shall belong solely to Express as if it were the Tenant hereunder; and (3) in the event that Tenant shall wish to exercise a Termination Right, Tenant shall promptly notify Subtenant of its intent to terminate a Prime Lease and shall first offer to assign the Prime Lease to Subtenant to the extent permitted under such Prime Lease or by the Landlord, so long as Tenant and its Affiliates have no responsibility or liability under the Prime Lease (or any Guaranty, as the case may be) after such assignment. Subtenant acknowledges that in the event of any such termination, this Agreement shall terminate with respect to the corresponding Prime Lease.

5. Utilities/Other Services.

(a) Except as otherwise specified herein, the only services, utilities or rights to which Subtenant is entitled under this Agreement with respect to the Subleased Premises are those to which the applicable Tenant is entitled from the Landlord under the applicable Prime Lease, and Tenant shall have no liability to Subtenant for the failure to provide such services, utilities or rights unless such failure is the result of some act or omission of Tenant under the Prime Lease or any subtenant, concessionaire or licensee of Tenant (other than Subtenant or any of its Affiliates), or its employees, agents, contractors or invitees. Tenant, however, covenants to cooperate fully with Subtenant to ensure that Subtenant shall receive the same level of all such services and utilities in the Subleased Premises in accordance with past business practices and operations at the subject store immediately prior to the Closing Date.

(b) If any utility services to the Leased Premises are not separately metered as between the Subleased Premises and the remainder of the Leased Premises, the accounts shall be in the name of Tenant, or the Landlord if required by the Prime Lease, and the payments to the utility companies or the Landlord, as the case may be, shall be shared pro rata by Subtenant, Tenant and any other occupant of the Leased Premises based on their respective Space Size Ratios, and without regard to consumption. Either party shall have the right to cause the utility services furnished to their respective premises to be separately metered or sub-metered, subject to applicable law and the obtaining of any necessary consent from the Landlord and provided that the party causing separate metering or sub-metering pays all costs and expenses related thereto and that the other party’s utility services are not thereby diminished. For so long as utility services in respect of the Subleased Premises are paid for by Landlord or Tenant, they shall be considered to be “monetary obligations” for purposes of Section 6 and invoiced and paid in accordance therewith.

6. Monetary Obligations Under the Prime Lease.

(a) With respect to the Leased Premises, except as specified in Section 7, and except with respect to Percentage Rent, all monetary obligations of Tenant (including, without limitation, base, fixed or minimum rent, common area maintenance charges, real estate taxes and assessments, insurance charges, waste removal, merchants association dues, marketing, advertising and other promotional fund contributions, utilities (if applicable), HVAC and chilled water charges, whether same are payable pursuant to the Prime Lease) shall be shared pro rata by Subtenant, Tenant and any other occupant of the Leased Premises in proportion to their respective Space Size Ratios. With respect to any Prime Lease which provides for payment of Excess Rent, the determination of whether any such Excess Rent is payable shall be made on a consolidated basis among Tenant, Subtenant and other occupant of the Leased Premises, and if any Excess Rent is due and owing to the Landlord, such Excess Rent shall be paid pro rata by Tenant, Subtenant and any other occupant of the Leased Premises in proportion to their respective Gross Sales. Notwithstanding the foregoing, in the event there are any specific payment processes, including particular rent allocations outside of a typical pro rata allocation, which have been in practice in respect of Leased Premises prior to execution of this Agreement, such payment processes shall continue notwithstanding the terms of this Agreement to the contrary.

(b) With respect to the Leased Premises, Tenant and Subtenant shall cooperate to calculate the pro rata share of Subtenant’s estimated monetary obligations for each Subleased Premises. To the extent that the estimated payment invoiced by Tenant in respect of any lease month ultimately differs from Subtenant’s pro rata share of the monetary obligations actually incurred by Tenant in such lease month as calculated pursuant to Section 6(a) hereof, Tenant’s monthly invoice in the following month shall include an adjustment to correct such difference; provided that if Tenant shall fail to effect such adjustment it shall retain both the right and obligation to effect such adjustment at any subsequent time. Tenant shall send all invoices to Subtenant on or before the 15^th day of the month prior to the date such amount is payable under the Prime Lease, and Subtenant shall pay to Tenant, on or before the last day of the month prior to the date such amount is payable under the Prime Lease, the amount so invoiced. Subtenant may request to audit the source of Tenant’s billing records up to twice per year. All costs of any such audit will be paid by Subtenant. The scope of any audits will be limited to charges paid by Tenant and invoiced to Subtenant and related matters, such as Percentage and Excess Rents, including sales and other information of Tenant relevant thereto. At Subtenant’s request, Tenant shall certify the accuracy of any such information so submitted to Subtenant to the then knowledge of the Tenant. Any remedial payments made by either party shall be without interest, except that remedial payments relating to a period ending more than 30 days prior to the commencement of the applicable audit

shall bear interest at the prime rate (as quoted from time to time in the Wall Street Journal).

(c) With respect to the Leased Premises, if rent under a Prime Lease is based upon Percentage Rent, then such rent shall be paid pro rata by Tenant, Subtenant and any other occupant of the Leased Premises in proportion to their respective Gross Sales. Subtenant shall pay its share of the Percentage Rent to Tenant for any month on or before the last day of the following month.

(d) Subtenant agrees to provide the relevant Tenant promptly with all sales and other information as may be reasonably requested by such Tenant in connection with the calculation of Tenant’s monetary obligations to the relevant Landlord required under the relevant Prime Lease or in connection with Tenant’s calculation of Percentage Rent or Excess Rent. At Tenant’s request, Subtenant shall certify, to the then knowledge of Subtenant, the accuracy of any information so submitted.

(e) All obligations of Subtenant hereunder shall survive the termination of the relevant Prime Lease or the sublease hereunder for the same period that the relevant Tenant has any obligation to the relevant Landlord, and all obligations of Tenant hereunder shall also survive the termination of the relevant Prime Lease or the sublease hereunder.

7. Non-Monetary Obligations.

(a) Except as set forth in subsection (b), if any non-monetary obligation of the tenant under a Prime Lease, other than those for which specific provision is made in this Agreement, is not attributable either to the Subleased Premises exclusively or the remainder of the Leased Premises exclusively (e.g., the maintenance of insurance or the repair of any HVAC unit serving the entire Leased Premises or the roof), such obligation shall be performed by Tenant and the cost of performing same shall be shared pro rata by Subtenant, Tenant and any other occupant of the Leased Premises based on their respective Space Size Ratios, unless the parties have agreed to a different cost-sharing arrangement under a separate written agreement. For all non-monetary obligations of the tenant under a Prime Lease which are attributable either to the Subleased Premises exclusively or the remainder of the Leased Premises exclusively, then such obligations shall be the sole responsibility of the Subtenant or Tenant, respectively.

(b) If any individual capital expenditure or repair required to be performed by Tenant pursuant to the provisions of the Prime Lease is estimated to be in excess of $10,000, Tenant shall notify Subtenant of such estimate prior to entering into any binding agreement with respect thereto, and Subtenant shall have the right (i) to challenge such estimate or find a lower estimate within 30 days of receiving such notice from Tenant and (ii) if the remaining term of the applicable sublease is less

than eighteen (18) months, to decline to share the costs of such capital expenditure or repair (unless such expenditure or repair is reasonably necessary or is mandated by the Prime Lease, in which case Subtenant may pay only its pro rata share of the costs of any reasonable, lower cost alternative which would be permissible under the Prime Lease if the Tenant were not renewing the Prime Lease upon its expiration).

8. Tenant Inducements.

(a) The parties acknowledge that all monetary tenant inducements and underpayments or overpayments by Tenant of any monetary obligations under the Prime Leases arising prior to the date hereof, including, without limitation, tenant improvement allowances, moving allowances and key money, under a Prime Lease payable to or by Tenant shall be shared and/or reimbursed by and among Subtenant, Tenant and Landlord pursuant to the applicable provisions of the Transaction Documents.

(b) Except as specified in subsection (c), if a Limited Tenant is entitled to an abatement or reduction of rent (e.g., as a result of a condemnation or casualty) under a Prime Lease, Express shall be entitled to a share of such abatement or reduction of rent in an equitable manner taking into account the extent to which the Subleased Premises are affected by the circumstances resulting in such abatement or rent reduction.

(c) Subject to the provisions of the Transaction Documents, if a Limited Tenant (or Limited) recovers from a Landlord under a Prime Lease, whether before, on or after the Closing Date, any amounts in respect of such Prime Lease (including, without limitation, common area charges, maintenance or related charges) in respect of any period prior to the Closing Date, such amounts shall belong exclusively to Limited Tenant or Limited (regardless of whether such amounts are actually paid or take the form of a reduction or abatement in rent or other charges otherwise subsequently payable to Landlord under the Prime Lease). If, however, Tenant becomes entitled at any time to any amounts in respect to such Prime Lease, including without limitation, any abatement or reduction in common area charges, maintenance or related charges relating, in each case, to any period or periods after the Closing Date, then Limited Tenant and Express shall share such abatement or reduction in proportion to their respective Space Size Ratios after the party incurring any out-of-pocket costs and expenses related to obtaining such abatements and reductions has been fully reimbursed for such costs and expenses.

9. Access; Alterations; Store Separation.

(a) The parties acknowledge that the Adjacent Premises are, and certain of the Leased Premises may be, configured in such a manner that a Limited Tenant may need access to a Express Premises (or a Express Store, as the case may be) and Express may need access to a Limited Tenant Premises (or a Limited Store, as the

case may be) for purposes of maintaining or making adjustments or repairs to facilities (e.g., pipes, conduits, electrical and telecommunication wiring, etc.) serving such party’s premises or for purposes of using restroom facilities or stock or storage rooms or for such other reasonable purposes until the Store Separation work, if any, has been completed. However, the parties acknowledge that Store Separation work may never be performed and, therefore, in order to maintain the benefits and continued business operations that each party has enjoyed prior to the Closing Date, each of the Limited Tenants and Express hereby grants the other party access through their respective premises for such purposes, provided that (x) with respect to everyday activities, such access is in keeping with customary past practices and (y) with respect to renovations or other alteration work or special projects, such access will be limited to business hours (or, if outside of regular business hours, is requested at least 48 hours in advance) and the party exercising such right does not unreasonably interfere with the business of the other party.

(b) Except as otherwise agreed by the parties, no party may make any alterations to its premises, including the Store Separations, that would adversely affect the other party’s business or use or occupancy of its premises either during and/or after the completion thereof, including without limitation, any alterations that would (i) reduce the availability or capacity of utilities, HVAC or other services to the other party’s premises, (ii) impair access to or egress from the other party’s premises or (iii) cause the other party’s premises not to comply with applicable laws, rules and regulations. No party may make any alterations or effect any renovations to its premises, including the Store Separations, without first obtaining all necessary consents from the Landlord and any other necessary persons, and ensuring the compliance of such alterations or renovations with applicable building codes. The party making such alterations or renovations, including the Store Separations, shall bear the entire cost of obtaining such consents and ensuring such compliance.

(c) If either Tenant or Subtenant seeks, in one or more projects in any twelve consecutive months, to remodel premises which are the subject of a Prime Lease, and the total budgeted or actual cost of such renovations equals or exceeds the dollar amount under the provisions of the Prime Lease which requires the consent of the Landlord to first be obtained, then the party undertaking such renovations shall notify the other party of its renovation plans and budget and Tenant and Subtenant shall cooperate and use reasonable efforts to obtain the consent thereto of the Landlord of such premises. The party undertaking such renovations shall ensure that such renovations comply with all applicable building codes and shall bear the entire cost of obtaining such Landlord consents.

(d) Anything in this Agreement to the contrary notwithstanding, no party shall be required by the other party to undertake any Store Separations; provided that, with respect to the Leased Premises identified on attached Schedule 9 hereto, Limited may, at its sole option, elect to effect a Store Separation in connection with each such Leased Premises (generally in accordance with the

schematic drawings included within said Schedule 9) upon thirty (30) days prior written notice to Express, in which event the Store Separation Costs shall be paid 50% by Limited and 50% by Express. Otherwise, Store Separations, if any, shall be conducted in accordance with the following provisions:

(i) If, during any Lease Term, any Limited Tenant or Express desires to perform one or more Store Separations, then the party desiring to undertake such Store Separation(s) shall prepare and deliver reasonably detailed plans for such Store Separation(s) and budgets of Store Separation Costs for such work to the other party. The other party shall have the right to approve such plans and budgets, and such approval shall not be unreasonably withheld, conditioned or delayed. The party desiring to effect a Store Separation shall pay all Store Separation Costs, and such Store Separation shall be conducted in accordance with the provisions of subsections (b) and (c); and

(ii) If, at the expiration of a Lease Term, and in connection with any renewal or extension of the term of a Prime Lease otherwise permitted by the terms of this Agreement, (A) both Tenant and Subtenant elect to renew or extend such Lease Term, and a Store Separation is required by the Landlord or is otherwise agreed upon by both parties, then the parties shall cooperate to prepare and deliver reasonably detailed plans for such Store Separation(s) and budgets of Store Separation Costs for such work; the Store Separation Costs for such Store Separations shall be paid 50% by the Limited Tenants and 50% by Express, and such Store Separation shall be conducted in accordance with the provisions of subsections (b) and (c); and (B) only one of Tenant or Subtenant elects to renew or extend such Lease Term (subject to the provisions of Section 4 of this Agreement), then Store Separations, if any, shall be conducted (and all Store Separation Costs paid) by the party remaining in all or any part of the Leased Premises for such extended or renewal Lease Term.

10. Assignment and Subletting.

(a) Except as otherwise set forth herein, neither the Limited Tenants nor Express may assign this Agreement in whole or in part, by operation of law or otherwise or mortgage or pledge the same, or sublet any Leased Premises (each of the foregoing a “Transfer”) without the prior written consent of the other, which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding anything contained herein to the contrary, any Transfer which may occur by operation of law or otherwise as a consequence of a transfer of interests (whether as a matter of right or pursuant to consent) under the pertinent provisions of the “LLC Agreement” (as defined in the Unit Purchase Agreement) shall be permitted without the consent of the other party; provided that, if Limited’s financial exposure is increased or otherwise adversely affected as a consequence thereof, then Express shall provide to

Limited reasonable security as a consequence thereof. Notwithstanding the foregoing, but subject to the terms of the Prime Lease, Limited Tenant and Express may each effect a Transfer, without the consent of the other party, to any one of its Affiliates, provided, however, that, except as otherwise contemplated in the Transaction Documents, if at anytime after such permitted Transfer the transferee is no longer an Affiliate of such party, the event terminating such affiliation shall be deemed a Transfer subject to the preceding sentence.

(b) In the event of any Transfer, whether or not Limited Tenant or Express as the case may be, grants its consent to such Transfer or withholds its consent to such Transfer, the respective parties shall remain fully liable to perform their duties under this Agreement following a Transfer.

(c) Any proposed Transfer shall also be subject to the restrictions and requirements set forth in the Prime Lease. Any purported Transfer consummated in violation of the provisions of this Section 10 shall be null and void and of no force or effect.

11. Insurance.

Tenant and Subtenant shall maintain, at their respective cost and expense, throughout the term hereof as to each Subleased Premises and the balance of the Leased Premises retained by Tenant, insurance in the types and amounts, and subject to the conditions, as are required pursuant to the Prime Lease. All such policies shall name the other party hereto and Landlord, and any other persons required pursuant to the Prime Lease, as additional insured parties and shall be endorsed to provide that they shall not be canceled without ten (10) days’ prior written notice to the other party hereto and Landlord. Each party hereto shall furnish said policies (or certificates evidencing the required coverage) to the other, together with such evidence as the other party shall reasonably deem satisfactory of the payment of premiums thereon, promptly following the execution and delivery of this Agreement.

12. Consent/Approvals.

If Subtenant seeks a consent or approval from Tenant with respect to any matter to which such consent or approval is required under this Agreement or the Prime Lease, then the denial of such consent or approval by the Landlord shall be conclusive and binding on Subtenant; provided that, where consent or approval of the Landlord under a Prime Lease is required, Tenant shall use good faith efforts to obtain such consent or approval from the Landlord, except that nothing herein shall require Tenant to make any payment, or to amend any terms of such Prime Lease in a way that would have an adverse effect on Tenant, in respect of such consent or approval.

13. Default Notice from Landlord.

If Tenant or Subtenant receives a notice of default from the Landlord with respect to any matter pertaining to the Leased Premises or the Subleased Premises or any obligation of Tenant or Subtenant under this Agreement or under the Transaction Documents, such party shall immediately notify the other party of same in writing, and (exclusive of a default of Landlord under the Prime Lease) if the responsible party fails to promptly commence the cure of such default or fails to cure such default as of a date that is 30 days after the date on which such notice is received, but in no event later than the date which is 10 days prior to the expiration of the applicable cure period under the Prime Lease, the non-defaulting party shall have the right, but no obligation, to immediately cure such default and the defaulting party shall reimburse the other party for the reasonable costs incurred in connection with curing such default within 30 days after receipt of an invoice therefor from the non-defaulting party.

14. Signage.

Each Limited Tenant and Express shall each have the right to maintain any existing signage it may have in respect of any Leased Premises or Subleased Premises, as the case may be.

15. Indemnity; Subrogation.

(a) Anything in this Agreement to the contrary notwithstanding, the Limited Tenants shall defend, indemnify and hold harmless Express and its employees, officers, directors, partners and agents against and from any and all claims, liabilities, demands, fines, suits, actions, proceedings, orders, decrees and judgments (collectively, “Claims”) of any kind or nature by, or in favor of, anyone whomsoever, and against and from any and all costs, damages and expenses, including attorneys’ fees, resulting from, or in connection with, loss of life, bodily or personal injury or property damage (i) arising, directly or indirectly, out of, or from, or on account of any accident or other occurrence in, upon or from the Limited Tenant Premises exclusive of the Express Premises or (ii) occasioned in whole or in part through the use and occupancy of the Limited Tenant Premises exclusive of the Express Premises or any construction, repair, alterations or improvements therein or appurtenances thereto, or (iii) by any act or omission of Limited Tenant or any subtenant, concessionaire or licensee of Limited Tenant (other than Express or any of its Affiliates), or its employees, agents, contractors or invitees in, upon, at or from the Limited Tenant Premises exclusive of the Express Premises, or (iv) by any breach by Limited Tenant of any of the provisions of this Agreement or of the respective Prime Lease. The indemnification, defense and hold harmless provisions of this subsection shall survive the termination or expiration of this Agreement and of the respective Prime Lease.

(b) Anything in this Agreement to the contrary notwithstanding, Express shall defend, indemnify and hold harmless the Limited Tenants and their Affiliates, employees, officers, directors, partners and agents against and from any and all Claims of any kind or nature by, or in favor of, anyone whomsoever, and against and from any and all costs, damages and expenses, including without limitation attorneys’ fees, resulting from, or in connection with, loss of life, bodily or personal injury or property damage (i) arising, directly or indirectly, out of, or from, or on account of any accident or other occurrence in, upon or from the Express Premises (exclusive of the Limited Tenant Premises) or (ii) occasioned in whole or in part through the use and occupancy of the Express Premises (exclusive of the Limited Tenant Premises) or any construction, repair, alterations or improvements therein or appurtenances thereto or (iii) by any act or omission of Express or any subtenant, concessionaire or licensee of Express, or its employees, agents, contractors or invitees in, upon, at or from the Express Premises (exclusive of the Limited Tenant Premises) or (iv) by any breach by Express of any of the provisions of this Agreement. The indemnification, defense and hold harmless provisions of this subsection shall survive the termination or expiration of this Agreement and of the respective Prime Lease.

(c) Each party hereto (the “Releasing Party”) hereby releases the other (the “Released Party”), from any loss, damage, claim or liability which the Released Party would, but for this Section 15(c), have had to the Releasing Party arising out of or in connection with any damage to the property of the Releasing Party to the extent such damage or the cause thereof is covered by insurance maintained by the Releasing Party. Such insurance coverage maintained shall be deemed to include any deductible or self-insured retention in effect or permitted pursuant to this Agreement. SUCH RELEASE SHALL EXTEND TO ANY LOSS, DAMAGE, CLAIM OR LIABILITY THAT MAY HAVE RESULTED IN WHOLE OR IN PART FROM ANY ACT OR NEGLECT OF THE RELEASED PARTY, ITS OFFICERS, AGENTS OR EMPLOYEES. Each party hereto shall immediately give to each insurance company which has issued to it property insurance policies written notice of the terms of such mutual releases and have such insurance policies properly endorsed, if necessary, to prevent the invalidation of such insurance coverages by reason of such releases and to waive the Releasing Party’s insurer’s right of subrogation that would exist had the Releasing Party not given the foregoing release.

16. Required Notice Under Prime Lease.

Each party shall promptly give written notice to the other party of (i) all claims, demands or controversies by or with the Landlord under the Prime Lease or (ii) any injury, death or property damage arising on or about the Leased Premises or Subleased Premises as the context may require.

17. Accepting Subleased Premises “As Is”.

Each party hereto represents that it is familiar with the Leased Premises or Subleased Premises (as the context may require) and the Adjacent Premises and has inspected same prior to the date hereof. Each party hereto accepts and has accepted possession of the Leased Premises or Subleased Premises (as the context may require) and the Adjacent Premises “as is”, except and to the extent of disclosures, agreements, representations and warranties in connection therewith set forth herein or in any of the Transaction Documents. Each party hereto acknowledges that, notwithstanding anything to the contrary in any Prime Lease, no party to this Agreement has made any representations or warranties with respect to the Leased Premises or Subleased Premises (as the context may require) or the Adjacent Premises or to the condition thereof, except to the extent set forth in this Agreement or in the Transaction Documents.

18. No Waiver.

The failure of a party hereto to insist in any instance upon the strict keeping, observance or performance of any covenant, agreement, term, provision or condition of this Agreement or to exercise any election herein contained shall not be construed as a waiver or relinquishment for the future of such covenant, agreement, term, provision, condition or election, but the same shall continue and remain in full force and effect. No waiver or modification by a party of any covenant, agreement, term, provision or condition of this Agreement shall be deemed to have been made unless expressed in writing and signed by such party.

19. Notices.

Any notice or demand which either party may or must give to the other under this Agreement shall be given in the same manner for giving notices under the Prime Lease, but addressed as follows:

If to Limited or any Limited Tenant:

Limited Brands, Inc.

P. O. Box 16000

Three Limited Parkway

Columbus, Ohio 43216 (43230 for courier delivery)

Attention: Gail M. Stern, Senior Vice President – Retail Operations, Legal

Facsimile: (614) 415-7900

copy to:

Limited Brands, Inc.

P. O. Box 16000

Three Limited Parkway

Columbus, Ohio 43216 (43230 for courier delivery)

Attention: Information Management Department

Facsimile: (614) 415-6002

If to Express:

Express, LLC

One Limited Parkway

Columbus, Ohio 43230

Attention: Corporate Real Estate Department

Facsimile: (614) 415-4000

copy to:

Kirkland & Ellis LLP

555 California Street

San Francisco, California 94104

Attention: Mikaal Shoaib

Facsimile: (415) 439-1680

Either party may, by notice in writing, direct that future notices or demands be sent to a different address.

20. Successors.

Subject to Section 10, the covenants and agreements herein contained shall bind and inure to the benefit of Limited, each Limited Tenant and Express and their respective permitted successors and assigns.

21. Captions.

The captions or headings of paragraphs in this Agreement are inserted for convenience only, and shall not be considered in construing the provisions hereof if any question of intent should arise.

22. Severability.

If any provisions of this Agreement shall be held to be invalid or unenforceable, the validity and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

23. Governing Law.

With respect to each Leased Premises (and Subleased Premises) and the Adjacent Premises, this Agreement shall be construed in accordance with, and governed by, the laws of the state in which such premises are located.

24. Further Assurances.

Limited, each Limited Tenant and Express shall execute, acknowledge and deliver such instruments and take such other action as may be reasonably necessary or advisable to carry out their rights and obligations under this Agreement, including the execution of any agreement or instrument required by the Landlord under the Prime Lease. In addition, if prior to the expiration of the Lease Term, Express or a Limited Tenant desires to enter into a direct and separate lease with a Landlord for the Subleased Premises or the remainder of the Leased Premises, as the case may be, the other party shall cooperate in good faith and likewise agree to enter into a direct and separate lease for its premises; provided that (i) such other party’s new lease is for a term equal to the term remaining under the Prime Lease and is on terms at least as favorable as the terms of this Agreement and the terms of the Prime Lease, (ii) any Store Separation shall be conducted (and Store Separation Costs paid) by the party desiring such direct and separate lease and otherwise in accordance with Section 9 of this Agreement and (iii) Limited shall have no obligation to guarantee any of the obligations under any such new lease.

25. Amendment to Prime Lease.

No Tenant may make any amendment to a Prime Lease that would impair or reduce the rights or increase the obligations of Subtenant under this Agreement, without the written consent of Subtenant, which may be granted or withheld in Subtenant’s sole and absolute discretion.

26. Reasonableness and Good Faith.

Whenever this Agreement grants Tenant or Subtenant the right to take action, exercise discretion or make other determinations regarding this Agreement or the Leased Premises or Subleased Premises (as the case may be), each party agrees to act reasonably, timely and in good faith unless a different standard is specified herein.

27. WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS SUBLEASE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

28. Counterparts.

This Sublease may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

29. Special Provisions Regarding Guaranteed Leases.

A. Effect of Master Assignment. As described in the third recital of this Agreement, the Master Assignment relates to the assignment by Express to Limited of the certain leases relating to the Guaranteed Lease Stores (being the stores involving shared occupancy by Express and the Limited Tenants), which leases are guaranteed by Limited pursuant to a Guaranty in connection with each. The Master Assignment also effects the assignment by Express to Limited of the certain leases identified on Schedule 7 hereto, which relate to stores occupied solely by Express (each a “Non-Shared Guaranteed Lease Store” and, collectively, “Non-Shared Guaranteed Lease Stores”), and which leases are also guaranteed by Limited pursuant to guaranty agreements in connection therewith (the “Non-Shared Guarantees”, with each a “Non-Shared Guarantee”). For purposes of this Agreement, and in particular this Section 29: (i) the term “Guaranteed Lease” shall mean each lease which relates either to a Guaranteed Lease Store or to a Non-Shared Guaranty Lease Store, and collectively, “Guaranteed Leases” and (ii) the term “Lease Guarantees” shall mean, collectively, the Guarantees and the Non-Shared Guarantees, with each a “Lease Guaranty”.

B. Guaranteed Leases.

(a) Limited shall continue to guarantee the full amount of lease payments under each Guaranteed Lease until the date upon which any of the following occurs in respect of a Guaranteed Lease:

(i) except as provided in Section 4(a), the initial lease term in respect of such Guaranteed Lease (excluding any renewals or extensions thereunder) expires, or such Guaranteed Lease earlier terminates according to its terms;

(ii) except as provided in Section 4(a), such Guaranteed Lease is amended, extended or renewed; or

(iii) except as provided in Section 4(a), the landlord under such Guaranteed Lease consents to any amendment to or waiver under the Guaranteed Lease.

Upon the earliest to occur of any of the preceding with respect to any Guaranteed Lease and the effectuation of a release of any Guaranty relating thereto either by virtue of a Landlord’s written release or by operation of law, then Limited’s guarantee obligations in respect of such Guaranteed Lease shall immediately cease, and (i) if such lease is one of the leases identified in Schedule 7 hereto, then the same shall be deemed to have been deleted from said Schedule 7 and (ii) if such Lease is one of the Leases identified in Schedule 2 hereto, then such Lease shall no longer be deemed to be a Guaranteed Lease hereunder for purposes of the provisions hereof which relate to Guarantees, but the provisions of this Agreement otherwise shall remain applicable thereto and the same shall not be deleted from Schedule 2 hereto.

(b) Limited shall have no obligation to provide any guarantee or other assurance for any lease or sublease entered into, modified or amended by Express after the date hereof or, except as provided in Section 4(a), for any renewal or extension of any Guaranteed Lease beyond the original Lease Term.

C. Reporting Requirements of Threshold Sales.

(a) No later than the first Sunday of each fiscal month of Limited, Express shall provide to Limited a data file, in a file format acceptable to both parties, with the following information: (i) for each store occupying those Subleased Premises identified on Schedules 1 and 2 hereto, the prior fiscal month’s Gross Sales and (ii) for each store which is the subject of a Guaranteed Lease, the prior fiscal month’s total sales and Excess Rent paid to Landlords. In furtherance of and not in limitation of the foregoing, Express also shall provide to Limited such further information as Limited may request in order to comply with Limited’s obligations to Landlords.

(b) As soon as practicable, and in any event no later than 45 days following the end of each fiscal quarter and 60 days following the end of each fiscal year of Express, Express shall provide to Limited (in a form or forms reasonably acceptable to both parties) the unaudited consolidated balance sheet and the related unaudited statement of operations and cash flows of Express and its Subsidiaries (as defined in the LLC Agreement) (collectively, the “Financial Statements”) for the pertinent fiscal quarter and year, respectively, in each case prepared in accordance with GAAP (as defined in the LLC Agreement), setting forth in comparative form the figures for the corresponding previous fiscal quarter and year, as the case may be, and

the figures for the corresponding fiscal quarter and year as set forth in Express’ annual operating budget. Further, to the extent that Express shall at any time cause or permit the Financial Statements to be or become audited, then Express also shall provide to Limited said audited Financial Statements within 30 days after Express’ receipt thereof. The financial reporting obligations of Express under this Section 29.C.(b) shall terminate on the earlier to occur of (i) the consummation of a Qualified Initial Public Offering (as defined in the LLC Agreement) and (ii) the first date upon which Limited’s aggregate financial exposure under all Guaranteed Leases falls to $5,000,000 or less (taking into account all letters of credit provided to Limited by or on behalf of Express in respect of such financial exposure, which letters of credit will be from an entity and in a form reasonably acceptable to Limited).

D. Miscellaneous Provisions Regarding Guaranteed Lease Stores.

(a) Limited and Express agree that, with respect to each Guaranteed Lease Store and its respective Prime Lease, if the respective Landlord challenges the assignment of such Prime Lease pursuant to the Master Assignment and the subsequent subletting of such Leased Premises to Express pursuant to this Agreement, or otherwise makes any allegations that such transactions do not comply with the provisions of the respective Prime Lease, then Limited shall have the right (to be exercised or not exercised in Limited’s sole discretion) to deem the Master Assignment and the sublease of such Leased Premises to Express pursuant to this Agreement rescinded and declared null and void as of the date hereof with respect to such Leased Premises; provided, Limited shall indemnify, defend and hold harmless Express from any Claims arising in connection with such rescission in accordance with Section 3(a) of this Agreement, and such obligation shall survive the termination or expiration of this Agreement.

(b) Express agrees that Limited shall have the right to negotiate with any Landlord in order to effect the release of any Guaranty, and Express shall endeavor to obtain any such release to the same extent that the Company (as defined in the Unit Purchase Agreement) is so obligated under the provisions of Section 7.04 of the Unit Purchase Agreement. The sublease to Express of the Leased Premises for any Guaranteed Lease Store shall terminate from time to time with respect to one or more Guaranteed Lease Stores (and thereafter such store shall be deemed a Express Store for purposes of this Agreement), if the Landlord of the premises subject thereto shall have relieved Limited of its obligations under the applicable Prime Lease (other than the obligations of a Limited Tenant, as Subtenant, pursuant to this Agreement) and any Guaranty thereunder pursuant to a written agreement reasonably acceptable to Limited, provided that, Limited shall (with the consent of the applicable Landlord, if required) (i) cause the reassignment of the Prime Lease to Express and (ii) otherwise secure for Express the benefits, subject to the obligations, of the Prime Lease related thereto (other than rights or options to extend the term thereof unless Limited and its Affiliates shall have no obligation in respect of any such extension pursuant to the Prime Lease or any Guaranty thereof).

(c) With respect to each Guaranteed Lease Store, from and after the date of this Agreement, the tenant which occupies less than 50% of the Leased Premises (the “Minor Tenant”, with the tenant occupying equal to or greater than 50% being the “Major Tenant”) shall not enter into any negotiations with the pertinent Landlord for a new lease or to extend or renew the lease term for all or any portion of the Major Tenant’s occupied space (the “Major Tenant Premises”) under the particular Guaranteed Lease Store until the earlier to occur of (i) that date which is 120 days prior to the expiration (or earlier termination) of the lease term relating to such Guaranteed Lease Store, (ii) that date which is 30 days after the date upon which Landlord advises both occupants in writing (the “Intention Letter”) that it does not intend to enter into a new lease or a lease extension or renewal for the Major Tenant Premises with the Major Tenant or (iii) that date upon which the Major Tenant advises the Minor Tenant that the Major Tenant does not intend to seek a new lease or an extension or renewal of the lease term for the entire portion of the Major Tenant Premises. If the Landlord approaches the Minor Tenant to discuss the Minor Tenant’s plans for all or any portion of the Major Tenant Premises, the Minor Tenant may advise the Landlord that it cannot enter into discussions in connection therewith unless and until the Landlord issues an Intention Letter. During the 18 month period immediately prior to the scheduled expiration of any lease relating to any such Guaranteed Lease Store, the Major Tenant and the Minor Tenant agree to have monthly calls to discuss each party’s relative interest in remaining in the Leased Premises, and each party shall in good faith consider the other party’s interests, but with no obligation to act or refrain from acting in connection with a new lease or an extension or renewal of any such lease, except as otherwise provided herein. The provisions of this Section 29.D.(c) shall not apply to those Guaranteed Lease Stores identified in Schedule 11 hereto.

30. Guaranty by Limited for Limited Tenants Following Certain Transactions.

Limited agrees that if Limited sells (a) all or substantially all of the assets of any Limited Tenant to a person who is not an Affiliate of Limited or (b) the capital stock of any Limited Tenant to a person and such transaction results in such Limited Tenant no longer being an Affiliate of Limited, then Limited shall guaranty the obligations of such Limited Tenant under this Agreement from and after the date of such event through the expiration of the Term hereof with respect to the respective Leased Premises or Subleased Premises, as the case may be.

31. Entire Agreement.

Except as otherwise provided in the Transaction Documents, this Agreement supercedes all prior agreements and understandings, both oral and written.

[The remainder of this page intentionally left blank.]

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

LIMITED STORES, LLC
By:	/s/ Gail M. Stern
	Gail M. Stern
Its:	Senior Vice President - Retail Operations, Legal
BATH & BODY WORKS, LLC
By:	/s/ Gail M. Stern
	Gail M. Stern
Its:	Senior Vice President - Retail Operations, Legal
VICTORIA’S SECRET STORES, LLC
By:	/s/ Gail M. Stern
	Gail M. Stern
Its:	Senior Vice President - Retail Operations, Legal
DIVA US, LLC
By:	/s/ Gail M. Stern
	Gail M. Stern
Its:	Senior Vice President - Retail Operations, Legal
EXPRESS, LLC
By:	/s/ Douglas L. Williams
	Douglas L. Williams
Its:	Senior Vice President - Enterprise General Counsel
LIMITED BRANDS, INC.
By:	/s/ Timothy J. Faber
	Timothy J. Faber
Its:	Vice President - Treasury, Mergers & Acquisitions

EX-10.15

Exhibit 10.15

LOGISTICS SERVICES AGREEMENT

THIS LOGISTICS SERVICES AGREEMENT (the “Agreement”) is entered into this 5th day of October, 2009, by and between LIMITED LOGISTICS SERVICES, INC., a Delaware corporation (“LLS”), and Express, LLC, a Delaware limited liability company (“Express”).

R E C I T A L S:

WHEREAS, LLS has pre-existing contractual arrangements with certain carriers engaged in the business of transporting property in interstate, intrastate or foreign commerce and is in the business of providing other Logistics Services (as described below); and

WHEREAS, LLS is currently providing certain logistics services to Express pursuant to a Services Agreement dated July 6, 2007, as amended (“Existing Services Agreement”);

WHEREAS, LLS and Express desire to terminate the provision of such logistics services as set forth in Schedule III of the Existing Services Agreement and institute the provision of Logistics Services pursuant to this Agreement;

NOW THEREFORE, in consideration of the mutual agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1. Services.

1.1. General. LLS will provide the following logistics services to Express: (1) inbound and outbound transportation and delivery services as more particularly set forth in this Agreement and on Schedule 1 (“T&D Services”); (2) distribution services as more particularly set forth in this Agreement and on Schedule 2 (“Distribution Services”); (3) customs, IPS and brokerage services as more particularly set forth in this Agreement and on Schedule 3 (“Global Trade Services”); and (4) such additional services, to the extent terms, including cost, are agreed upon by LLS and Express (it being agreed that LLS shall consider in good faith any reasonable request by Express for such additional services and that the parties shall negotiate in good faith the terms (including cost) thereof) (“Additional Services”); (all of such services collectively referred to herein as “Logistics Services”). Logistics Services shall be provided to support the needs of Express in connection with its domestic, international and e-commerce businesses as forecasted in Schedule 4 (“Logistics Services – Capacity”); provided that the standard of service provided by LLS in respect of the Logistics Services shall be no less than the standard of service currently provided by LLS with respect to the logistics services and related services, including with respect to international, shipment preparation and overseas outbound transportation but with e-commerce support excluding the fulfillment, call center and other activities currently provided to Express by others.

1.2. Products. LLS shall provide Logistics Services for current and, to the extent described in the immediately succeeding sentence, future Express products, including existing personal care product lines processed through LLS (“Products”). Products shall also include, and LLS shall also provide, Logistics Services for any future lines of business Express chooses to process through LLS, including additional personal care products, so long as the parties agree on reasonable terms for Logistics Services for such additional lines of business.

LLS shall have the opportunity to participate in the bidding process for Logistics Services for: (a) any future lines of business of Express; and (b) any Logistics Services for selling geographies outside of the United States. LLS and Express shall discuss all such opportunities referred to in the preceding clauses (a) and (b) and Express agrees to include LLS in any “request for proposal” process and to consider in good faith any offer made by LLS for such future lines of business and new selling geographies. The obligation to consider any offer by LLS in good faith shall not be construed as an obligation on Express to select LLS’ offer, but rather, an obligation to reasonably consider such offer by LLS in connection with Express’ “request for proposal” process. The parties acknowledge that the types of products or services referred to in clause (a) above may require different processing and different cost structure, but LLS shall use commercially reasonable efforts to work with Express in connection with support of any such additional business, subject to the provisions of this Agreement.

1.3. Distribution Center. Logistics Services provided pursuant to this Agreement shall be provided, unless otherwise specified herein, at the distribution center located at One Limited Parkway, Columbus, Ohio, 43230 (“Distribution Center” or “DC1”); provided that LLS shall have the right to continue to utilize other facilities (including the distribution center located at Four Limited Parkway in Reynoldsburg, Ohio) to the extent currently utilized and as necessary for personal care products. DC1 shall be utilized exclusively for providing Express Logistics Services. In the event the current facilities are not sufficient to provide Logistics Services as forecasted in Schedule 4, LLS shall provide such additional facilities as the parties mutually determine may be necessary or appropriate to support the required Logistics Services.

Section 2. Rates.

2.1. General. Subject to the provisions hereof, Express shall pay LLS for the Logistics Services in the amounts set forth in, and in accordance with the provisions of, this Agreement, including the Schedules, without any offset or deduction except as otherwise set forth herein. Express and LLS acknowledge that the Rent and operating expenses set forth on Schedule 5 are payable regardless of the amount of Products processed through LLS.

2.2. Payment. LLS shall invoice Express on a monthly basis (not later than the fifteenth (15^th) day of the following month), for the Logistics Services incurred in the prior month, and will provide to Express the same billing data and level of detail currently provided to Express, plus any additional back-up information as may be

reasonably requested by Express. Express agrees to pay all amounts invoiced by LLS (excluding any “Disputed Amount(s)”, defined below) on or before thirty (30) days after the date of the invoice (such 30^th day, the “Payment Date”). Such payments shall be made by Express by wire transfer of immediately available funds to an account designated in advance in writing by LLS, or if no such designation is made, by check. If Express fails to pay the amount of any invoice under this Agreement (excluding any Disputed Amount(s)) within fifteen (15) days of the relevant Payment Date, LLS may charge, in addition to the amount due on such Payment Date, interest on such amount at eight percent (8%) per annum, from such 15^th day following the relevant Payment Date to the date payment is actually made, provided that such interest rate shall not exceed the maximum rate permitted by applicable law. All payments made shall be applied first to unpaid interest and then to amounts invoiced but unpaid. If Express fails to pay the amount of any invoice (excluding any Disputed Amount(s)) within thirty (30) days of the relevant Payment Date, such failure shall be considered a material breach of this Agreement.

In the event Express has a good faith dispute that any amount invoiced by LLS is not properly payable by Express pursuant to the terms of this Agreement (“Disputed Amount(s)”), Express shall notify LLS in writing within forty-five (45) days after the later of receipt of the invoice or the date Express becomes aware of the Disputed Amount, but in no event later than one year after Express’ receipt of the invoice. Such notice shall contain the amount of the Disputed Amount, reasonable back-up related to the dispute and a written description of the reason(s) Express is disputing such payment. The parties shall then work diligently and in good faith to resolve the dispute. In the event the resolution of the dispute is such that payment is due from Express, Express shall pay the amount due within thirty (30) days of resolution, with interest accruing for any such payments not made within fifteen (15) days of the payment due date, at the rate described in this Section 2.2. In the event Express is disputing more than $100,000.00 of the amount invoiced by LLS, Express shall pay the Disputed Amount into an escrow account pending resolution of the dispute.

2.3. Billing. Express shall pay LLS for Logistics Services as set forth in Schedules 1 through 4 attached hereto. LLS agrees that it shall have no right to invoice Express for any amount due later than one (1) year following the date on which such amount would be invoiced in the normal course of business.

Section 3. Standards of Service.

3.1. General Standard of Service. Except as otherwise agreed with Express in writing or expressly provided in this Agreement, LLS agrees that the nature, quality, and standard of care applicable to the delivery of the Logistics Services hereunder shall be substantially the same as that of the Logistics Services which LLS generally provides from time to time, now or in the future, to its subsidiaries and affiliates, but in no event less than the standard of service currently provided to Express. LLS shall work in good faith with Express to customize processes, including but not limited to the inbound shipping matrix, taking into account and incorporating reasonable

suggestions made by Express in such regard. In addition, LLS shall proactively seek savings (consistent with the last paragraph of Schedule 2) in costs and expenses to Express through efficiencies and technologies and processes and shall inform Express thereof in the Review Meetings, as hereinafter defined in Section 3.3. In general, the parties intend that LLS and Express shall partner together on issues related to Express’ Logistics Services, and, in addition to LLS’ other obligations hereunder, LLS shall confer with and consider all reasonable requests of Express regarding Logistics Services. LLS shall inform Express in writing at least sixty (60) days in advance of any significant change it proposes to undertake with respect to the Logistics Services hereunder which would, in Express’ reasonable discretion, result in a material increase in the cost structure of Logistics Services, a material change that would diminish the Logistics Services provided to Express, or result in any material asset additions or material management increases in the Distribution Center, and in the event Express objects thereto, the parties shall work together to equitably resolve such objection. Except as otherwise provided in this Agreement, the parties acknowledge that the management of and control over the provision of the Logistics Services (including, without limitation, the determination or designation at any time of the assets, employees and other resources of LLS to be used in connection with providing the Logistics Services) shall reside with LLS. In addition, all labor matters relating to any associates of LLS (including, without limitation, any associates of any related entity involved in the provision of Logistics Services to Express) shall be within the exclusive control of LLS, and Express shall take no action affecting such matters.

3.2. Ownership of Products. Notwithstanding any other provision of this Agreement, but except as otherwise expressly provided in the Schedules or in a separate written agreement that is not, by its terms, superseded by this Agreement, title to all Products or other materials that are transported, shipped, warehoused or otherwise held in the custody of LLS on behalf of Express pursuant to this Agreement, shall at all times remain with Express, and Express shall at all times be the owner of record of such Products or other materials, and, subject to the express provisions of this Agreement to the contrary, shall be solely responsible for any matters arising from or relating to such Products or other materials.

3.3 Reporting, Auditing and Review Meetings. LLS shall work in good faith with Express to ensure that Express has access to LLS reporting and records for Express-related activities it needs to proactively manage its business, which includes but is not limited to inbound, customs, distribution center and outbound.

Express shall have reasonable access to DC1 (including inbound/outbound operations) and to any distribution center providing Logistics Services, at any time following reasonable advance notice, which may be verbal.

Express and LLS shall work together in good faith to establish reasonable and appropriate performance metrics against which LLS shall be measured and LLS shall perform the Logistics Services in accordance therewith. Such performance metrics include without limitation pre-pack, pre-allocation, cross dock, distribution center receipt/through put (specific to the purchase orders), DC1 UPH, DC1 throughput and

shipping matrices. LLS shall provide Express with monthly, quarterly and annual reporting which monitors and tracks its performance against such matrices in a mutually agreeable form. Express may independently monitor and track such performance.

LLS shall provide the Logistics Services in accordance with the Overages, Shortages and Damages Policy attached hereto and made a part hereof as Schedule 8 and LLS shall perform the Logistics Services in accordance therewith. The policies addressed by this Agreement shall be reviewed in the Review Meetings, described below.

In addition to the processes set forth in the Overages, Shortages and Damages Policy, the parties agree that the following procedures shall be implemented to further establish the responsibility and accountability of LLS for the Logistics Services provided to Express:

Inbound: Meetings shall be held no less than monthly to track, review, analyze, and if necessary, escalate all pending claims for shortages and damaged goods. The purpose of these meetings is to create an ongoing dialogue between LLS and Express to ensure that Express is reimbursed for all shortages and damages in a timely manner; to communicate regarding all shortages and damages; to analyze losses to identify the root cause of such losses; to establish corrective procedures to prevent future losses; and to discuss and resolve any inbound issues of concern to Express or LLS. Claims shall be based on the cost of goods. Claims amounting to $20,000 or more shall be escalated to the chief financial officer of each party for resolution. LLS shall file all claims with the appropriate carrier in a timely manner. In the event Express is not reimbursed for a claim as a result of LLS’ failure to timely file a claim or to pursue a claim, to the extent not caused by Express’ failure to cooperate with LLS in connection with filing and pursuing such claim (including providing reasonable supporting documentation requested by LLS), LLS shall reimburse Express for such loss.

Outbound: Meetings shall be held no less than monthly to investigate, analyze and if necessary, escalate issues regarding shrink, shortages and damaged goods. The purpose of these meetings is to create an ongoing dialogue between LLS and Express to investigate and analyze losses to identify the root cause of such losses; to react in a prompt manner to resolve such losses; to establish corrective procedures to prevent future losses; to resolve any issues regarding a particular delivery agent; to discuss and resolve any outbound issues of concern to Express or LLS; and if necessary, to escalate any issues to the chief financial officer of each party for resolution. LLS agrees that it shall strictly enforce the existing “three strikes” policy wherein any driver with three violations of LLS policies shall be removed from all Express routes. Claims shall be based on the cost of goods. Claims amounting to $20,000 or more shall be escalated to the chief financial officer of each party for resolution. In the event Express is not reimbursed for a claim as a result of LLS’ failure to timely file a claim or to pursue a claim, to the extent not caused by Express’ failure to cooperate with LLS in connection with filing and pursuing such claim (including providing reasonable supporting documentation requested by LLS), LLS shall reimburse Express for such loss.

Distribution Center: Cycle counting will be completed on a quarterly basis. Inventory unit gains and shrink will be combined to determine the total gain or shrink from the cycle counting for that quarter. The resulting gain or shrink will be combined with the gain or shrink results from the other quarter relating to that season to determine a combined seasonal result. If the combined seasonal result exceeds .0015 of total units processed, LLS shall reimburse Express for the number of units which exceed the .0015 threshold at the average unit cost for goods processed during that seasonal period. If when reviewing the shrink causes for a season, it is determined that Express related systems or activity negatively impacted the LLS processes and significantly contributed to the shrink results, those impacts will be appropriately adjusted from the shrink results for purposes of determining if reimbursement is owed by LLS. Express and LLS shall work together in good faith to develop a mutually agreeable protocol for determining concealed shortages and the optimal level of diligence necessary by LLS for processing goods.

The parties agree to hold review meetings (the “Review Meetings”) not less than twice each fiscal year of LLS, each such meeting to be held ninety (90) days prior to the end of each season. Representatives of Express and of LLS shall work together in good faith and review and discuss any operational, strategic or other issues raised by any participant with respect to the provision of the Logistics Services. The parties shall also review season end results and next season projections. The parties intend that information exchanged at such Review Meetings shall be in addition to ongoing communication between representatives of Express and LLS with respect to the provision of the Logistics Services. Further, LLS and Express agree to work together in good faith to identify projects which will lower the cost per unit charged per the terms of this Agreement, with both parties sharing in any resulting savings (consistent with the last paragraph in Schedule 2), determined based on the dynamics of each individual project.

Section 4. Hazardous Materials and Compliance with Laws.

4.1. Hazardous Materials. Except as otherwise agreed upon between the parties as more fully described in this Agreement, Express hereby represents to its actual knowledge that all current Products transported in accordance with this Agreement shall have a hazardous materials rating of ORM-D or less such that no hazardous shipping papers are required. The parties acknowledge that all Products for which LLS currently provides Logistics Services and personal care products have a hazardous materials rating of ORM-D or less.

4.2. Compliance with Law. The parties shall comply with all laws, rules, regulations or other requirements imposed by any governmental body or entity which are applicable to the performance of services under this Agreement.

Section 5. Insurance. Express shall maintain at Express’ expense, at all times insurance in commercially reasonable amounts on Products it owns against risk of loss and/or damage. Express represents that in no event shall its deductible be more than $1,000,000.00. LLS shall not provide any insurance coverage for the Products, it being agreed that Express shall be solely responsible for the provision and maintenance of such coverages.

Section 6. Limitation of Liability and Indemnification.

6.1. Limitation of Liability. Express agrees that neither LLS nor any of its directors, officers, partners, members, managers, agents, and employees (each, a “LLS Indemnified Person”, and collectively “LLS Indemnified Persons”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to Express or any other party for or in connection with the Logistics Services rendered or to be rendered by any LLS Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any LLS Indemnified Person’s actions or inactions in connection with any such Logistics Services, except for Damages (as defined below) arising out of or resulting from (i) LLS’ breach of this Agreement, (ii) such LLS Indemnified Person’s violation of law, (iii) a breach of LLS’ representations set forth in this Agreement, or (iv) such LLS Indemnified Person’s negligence or willful misconduct. Notwithstanding the foregoing, LLS expressly agrees that the foregoing limitation of liability shall in no way extend to carriers of the Products. LLS agrees that neither Express nor any of its directors, officers, partners, members, managers, agents and employees (each, an “Express Indemnified Person”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to LLS or any other party for or in connection with this Agreement, except for Damages arising out of or resulting from (i) such Express Indemnified Person’s violation of law, (ii) a breach of Express’ representations set forth in this Agreement, or (iii) such Express Indemnified Person’s negligence or willful misconduct.

Notwithstanding anything to the contrary in this Agreement, none of the LLS Indemnified Persons or the Express Indemnified Persons shall be liable for (and the term “Damages” shall not include) any special, indirect, incidental, punitive or consequential damages of any kind whatsoever in any way due to, resulting from or arising in connection with any of the Logistics Services or the performance of or failure to perform its obligations under this Agreement. This limitation applies without limitation (1) to claims arising from the Logistics Services or any failure or delay in connection therewith; (2) to claims for lost profits or lost opportunities; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether the parties have been advised of the possibility of such damages.

In addition to the foregoing, each of Express and LLS agrees that it shall use commercially reasonable efforts to mitigate its damages to the extent required by applicable law.

6.2. Indemnification of LLS by Express. Subject to the provisions of Section 6.1, Express agrees to and shall indemnify and hold harmless each LLS Indemnified Person from and against any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (“Damages”) incurred or suffered by any LLS Indemnified Person or as a result of Damages arising from a claim by a third party, in each case, arising out of or in

connection with Express’ breach of this Agreement, violation of law, breach of Express’ representations and warranties set forth in this Agreement, and Express’ negligence or willful misconduct.

6.3. Indemnification of Express by LLS. Subject to the provisions of Section 6.1, LLS agrees to and shall indemnify and hold harmless each Express Indemnified Person from and against any and all Damages incurred or suffered by any Express Indemnified Person or as a result of Damages arising from a claim by a third party, in each case, arising out of or in connection with LLS’ breach of this Agreement, violation of law, breach of LLS representations and warranties set forth in this Agreement, and LLS’ negligence or willful misconduct.

6.4. Waiver of Subrogation. LLS and Express mutually agree that with respect to any loss which is covered by self-insurance, insurance then being carried by them respectively, or required to be carried hereunder, the one self-insuring, carrying or required to carry such insurance and suffering said loss hereby releases the other of and from any and all claims with respect to such loss; and LLS and Express further mutually agree that their respective insurance companies (including self-insurance) shall have no right of subrogation against the other on account thereof.

Section 7. Confidential Information. Each of Express and LLS will keep confidential and not use on its own behalf (except as set forth in this Agreement) or disclose to any third parties any information regarding the other party’s business, affairs or customers (“Confidential Information”). The Confidential Information shall be used solely in connection with this Agreement and the Logistics Services provided hereunder. LLS and Express agree to take all necessary steps to ensure the protection of the Confidential Information and shall in no event disclose Confidential Information to third parties.

Section 8. Term and Termination.

8.1 Term. This Agreement will have an initial term of approximately six (6) years, commencing on February 1, 2010 and ending April 30, 2016. Following the expiration of the Term, this Agreement shall continue, on the same terms and conditions, and be terminable by either party upon no less than twenty four (24) months advance notice; provided that neither party may establish a termination date between October 1^st of any calendar year and the last day of February of the following calendar year. Upon any termination of this Agreement, LLS shall cooperate with Express to provide for an orderly transition of Logistics Service, with LLS acknowledging that gradual reduction in Products receiving Logistics Services may be part of the transition process.

8.2. Early Termination. Notwithstanding the foregoing, Express shall have the right to terminate this Agreement upon no less than twenty-four (24) months advance notice, given no earlier than February 1, 2011; provided that Express may not establish a termination date pursuant to this Section 8.2 between October 1^st of any calendar year and the last day of February of the following calendar year.

8.3. Termination for Breach. Express and LLS shall each have the right to terminate this Agreement if the other party is in material breach of this Agreement, including, with respect to a breach by Express, any monetary breach beyond the applicable cure period. Such termination shall follow written notice to the breaching party specifying the nature of the breach. If such breach has not been cured within thirty (30) after written notice of such breach is delivered to the breaching party, (or such longer time as may be necessary because of the nature of the breach, provided the breaching party is diligently attempting to cure such breach and provided that no additional notice or cure period beyond those specified elsewhere in this Agreement shall apply in the event of a monetary default), the non-breaching party may thereupon terminate this Agreement upon an additional ninety (90) days written notice to the breaching party, and the non-breaching party shall be entitled to all remedies available at law or in equity.

8.4. Termination of Existing Services Agreement. Effective as of the commencement of the Term, Schedule III (Logistics and Related Services) to the Existing Services Agreement is hereby terminated, null and void and of no further force or effect, and the services described therein are hereby terminated, and Logistics Services shall be provided by LLS to Express solely pursuant to this Agreement. Notwithstanding anything in the Existing Services Agreement to the contrary, there shall be no negative impact to Express with respect to termination of Schedule III to the Existing Services Agreement and the services described therein, and Express shall not be required to pay any Disengagement Costs, as defined in the Existing Services Agreement, or any other costs, fees or expenses (except any amounts outstanding under the Existing Services Agreement), and shall have no liabilities or obligations to any person or entity, as a result of the termination of Schedule III to the Existing Services Agreement and the services described therein.

Section 9. Miscellaneous.

9.1. Waiver. No purported waiver by either party of any default by the other party of any term or provision contained herein shall be deemed to be a waiver of such term or provision unless the waiver is in writing and signed by the waiving party. No such waiver shall in any event be deemed a waiver of any subsequent default under the same or any other term or provision contained herein.

9.2. Entire Agreement. This Agreement and the schedules attached hereto set forth the entire understanding between the parties concerning the subject matter of this Agreement and incorporate all prior negotiations and understandings. There are no covenants, promises, agreements, conditions or understandings, either oral or written, between them relating to the subject matter of this Agreement other than those set forth herein. No representation or warranty has been made by or on behalf of either party to this Agreement (or any officer, director, employee or agent thereof) to induce the other party to enter into this Agreement or to abide by or consummate any transactions contemplated by any terms of this Agreement except representations and warranties, if any, expressly set forth herein. No alteration, amendment, change or addition to this Agreement shall be binding upon either party unless in writing and signed by both parties.

9.3. No Partnership. Nothing contained in this Agreement shall be deemed or construed by the parties hereto or by any third person to create the relationship of employee and employer, principal and agent or of partnership or of joint venture. Express assumes full responsibility for, and LLS will have no liability with respect to, Express’ employees or agents. Subject to the provisions of this Agreement, including indemnity, LLS assumes full responsibility for, and Express will have no liability with respect to, LLS’ employees or agents.

Nothing in this Agreement shall establish or be deemed to establish any fiduciary relationship between the parties hereto. The parties’ respective rights and obligations hereunder shall be limited to the contractual rights and obligations expressly set forth herein on the terms and conditions set forth herein.

9.4. Successors. Each and all of the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and, except as otherwise specifically provided in this Agreement, their respective successors and assigns.

9.5. Notices. Any consent, waiver, notice, demand, request or other Instrument required or permitted to be given under this Agreement shall be in writing and be deemed to have been properly given only when sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed:

If to LLS:

Limited Logistics Services, Inc.

Two Limited Parkway

Columbus, OH 43230

Attn: Vice President, DC Operations

With a copy to:

Limited Logistics Services, Inc.

c/o Limited Brands, Inc.

Three Limited Parkway

Columbus, OH 43230

Attn: Senior Vice President, Finance

If to Express:

Express, LLC

One Limited Parkway

Columbus, OH 43230

Attn: Chief Financial Officer

Notwithstanding the foregoing, invoices and reminder notices may be given via electronic (or email) delivery, provided the sender verifies receipt. Either party may change its address for notices by notice in the manner set forth above.

9.6. Force Majeure. Neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected party, including, but not limited to, fire; floods; storms; embargoes, war or acts of war (declared or undeclared); insurrections, riots or other civil commotions; acts of terrorism; strikes, lockouts, or other labor disturbances; explosions; sabotage; accidents; governmental orders; change in statutes, rules or regulations; delays by unaffiliated suppliers or carriers; shortages of fuel, power, raw materials or components; acts of God; or acts, omissions, or delays in acting by any governmental or military authority, or the other party (collectively, “Force Majeure”); provided, however, it is understood that (i) this Section only operates to suspend, and not to discharge, a party’s obligations under this Agreement, and that when the causes of the failure or delay are removed or alleviated the affected party shall resume performance of its obligations hereunder and (ii) this Section shall not excuse a party’s obligation to pay money; provided that Express shall not be obligated to pay for any particular Logistics Service during the pendency of LLS’ failure to provide such particular Logistics Service on account of such Force Majeure event. A party that is unable to fulfill its obligations due to any Force Majeure event shall (1) promptly after the occurrence thereof give notice to the other party with details of such event and (2) work diligently and use its commercially reasonable efforts to remedy such event as promptly as practicable, including using other distribution centers to the extent reasonably possible during the duration of such occurrence. If LLS is unable to provide any of the Logistics Services due to Force Majeure, both parties shall work together in good faith and exert commercially reasonable efforts to cooperatively seek a solution that is mutually satisfactory.

Express and LLS shall work together in good faith to establish a mutually agreeable business continuity plan which specifies the manner in which Logistics Services will be provided in the event of an event of Force Majeure.

9.7. Employees. From the date hereof and until the expiration of twenty-four (24) months from the date of notification of termination of all of the Logistics Services under this Agreement, Express hereby agrees that it shall not hire or engage in discussions relating to employment with any employee of LLS who are involved in the provision of any of the Logistics Services

9.8. Captions. The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of the provisions of this Agreement.

9.9. Partial Invalidity. If any term or provision of this Agreement, or the application thereof to any person, firm, corporation or circumstance, shall be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons, firms, corporations or circumstances other than those as to which it is held invalid, shall be unaffected thereby and each term or provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

9.10. Governing Law. This Agreement shall be governed and construed by the provisions hereof and in accordance with the laws of the State of Ohio applicable to agreements to be performed in the State of Ohio, and by applicable federal law.

9.11. Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

9.12. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each party shall be construed and enforced accordingly.

9.13. Amendment. This Agreement may not be amended or modified except in writing signed by the parties hereto.

9.14. Counterparts. This Agreement may be executed in counterparts, each of which when executed by the parties hereto shall be deemed an original and all of which together shall be deemed the same Agreement.

9.15. Assignment. This Agreement may not be assigned, in whole or in part (including, without limitation, by the assignment of Express’ rights to receive any payment hereunder), by Express without the written consent of LLS. Notwithstanding the foregoing, Express shall have the right to assign this Agreement without the written consent of LLS (“Permitted Assignment”) to any parent, subsidiary or affiliated company of Express, any company with which Express may merge or consolidate, any company acquiring all or substantially all of the assets or stock of Express or the offering of stock; provided that such Permitted Assignment is to an entity that will, following such assignment, continue to operate the Express division, it being agreed that in such event, this Agreement shall be applicable only to the Express division’s operations (and not the operations of any other division of such entity).

9.16. Authorization. It is agreed and warranted by the parties that the persons signing this Agreement respectively for Express and LLS are the authorized representatives to sign this Agreement on behalf of each such party.

9.17. Headings; Interpretation and Construction. The headings to sections of this Agreement and the table of contents to this Agreement are inserted for convenience of reference only and in no way define, limit or describe the scope of this Agreement or the meaning of any provisions of this Agreement. The words “include,” “includes,” “including” and “such as” are deemed to be followed by the phrase “, without limitation,”. All references to “$” or “dollars” shall be to United States dollars and all references to “days” shall be to calendar days unless otherwise specified. Any reference to the masculine, feminine or neuter gender shall include such other genders, and references to the singular or plural shall include the other, in each case unless the context otherwise requires. The Schedules hereto shall be deemed to be incorporated in and an integral part of this Agreement. In the event of any conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of any of the Schedules, the terms and conditions of the Schedules shall prevail to resolve any inconsistency.

9.18. Mutual Contribution. The parties to this Agreement and their counsel have mutually contributed to its drafting. Consequently, no provision of this Agreement shall be construed against any party on the ground that party drafted the provision or caused it to be drafted.

9.19. LLS Representations. LLS represents that the Logistics Services shall be provided in accordance with the terms of this Agreement; the Logistics Services will be provided in a good and workmanlike manner; LLS shall comply with law (in accordance with Section 4.2 of this Agreement); LLS shall comply with the confidentiality provisions contained in Section 7 of this Agreement; the Warehouse Management for iSeries, version 99R2, is the current configuration operated by LLS and is sufficient during the initial term, to maintain operations as currently being provided, without the necessity for additional modules or software; and LLS shall provide the Services in accordance with the policies (in accordance with Section 3.3 of this Agreement).

The parties have duly executed this Agreement by their authorized representatives as of the date and year set forth on the first page of this Agreement.

LIMITED LOGISTICS SERVICES, INC.,     a Delaware corporation
By:	/s/ Richard Jackson
Print Name:	Richard Jackson
Title:	Executive Vice President
EXPRESS, LLC.,     a Delaware limited liability company
By:	/s/ Michael Weiss
Print Name:	Michael Weiss
Title:	CEO

EX-10.16

Exhibit 10.16

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (this “Agreement”) is made and entered as of June 26, 2008, by and among Express Parent LLC, a Delaware limited liability company (“Parent”), Express Topco LLC, a Delaware limited liability company (“Topco”), Express Holding, LLC, a Delaware limited liability company (“Holding”), and the persons and entities listed on Schedule I attached hereto (each, a “Securityholder,” and collectively, the “Securityholders”).

WHEREAS, each of the Securityholders is an owner of such number and type of issued and outstanding equity interests of Express Holding, LLC, a Delaware limited liability company, as are set forth opposite the name of such Securityholder on Schedule I attached hereto (the “Contributed Securities”).

WHEREAS, the parties hereto desire that each Securityholder shall contribute transfer, assign and deliver to Parent, and Parent shall accept, assume and receive from such Securityholder, as a contribution to its capital, all right, title and interest in and to the Contributed Securities in exchange for issuance by Parent to such Securityholder of an equivalent number and type of Parent’s equity interests as indicated on Schedule I attached hereto (the “Parent Securities”).

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

1. Contribution. Each Securityholder hereby contributes, transfers, assigns and delivers to Parent, and Parent hereby accepts, acquires, assumes and receives from such Securityholder, as a contribution to its capital, all right, title and interest in and to the Contributed Securities indicated opposite the name of such Securityholder under the caption “Contributed Securities” on Schedule I attached hereto, in exchange for the issuance by Parent to such Securityholder of the Parent Securities indicated opposite the name of such Securityholder under the caption “Parent Securities” on Schedule I hereto. The amount of the capital contributions with respect to the Parent Securities are set forth on Schedule I to the Limited Liability Company Agreement of Parent dated as of the date hereof (the “Parent LLC Agreement”). Each Securityholder has contemporaneously herewith executed and delivered a copy of the Parent LLC Agreement, which is attached hereto as Exhibit A. The Securityholders agree that the initial Board of Managers of Parent shall be identical to the Board of Managers of Holding as of the date hereof.

2. Restricted and Pledged Interests.

(a) Pledged Interests. Michael A. Weiss (“Weiss”) hereby acknowledges and agrees that the Parent Securities issued to Weiss hereunder are subject in all respects to the terms of that certain Pledge Agreement, dated July 6, 2007, between Holding and Weiss (the “Pledge Agreement”) as Pledged Interests (as defined in the Pledge Agreement).

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(b) Executive Unit Purchase Agreement. Each of (i) Weiss, (ii) the Weiss Family 2008 Irrevocable Trust Alpha under Agreement with Michael A. Weiss, as Grantor, dated March 13, 2008, (iii) the Weiss Family 2008 Irrevocable Trust Beta under Agreement with Michael A. Weiss, as Grantor, dated March 13, 2008, (iv) the Weiss Descendants 2008 Irrevocable Trust under Agreement with Michael A. Weiss, as Grantor, dated March 13, 2008, and (v) Arlene Weiss (collectively, the “Weiss Group”) hereby acknowledges and agrees that the Parent Securities issued to such member of the Weiss Group hereunder are subject in all respect to the terms of that certain Executive Unit Purchase Agreement, dated as of July 6, 2007, between Holding and Weiss (the “Executive Unit Purchase Agreement”); provided that all references in the Executive Unit Purchase Agreement to “Holding” and the “Amended and Restated Limited Liability Agreement of Holding” shall hereafter be deemed to be a reference to “Parent” and the “Parent LLC Agreement”, respectively.

3. Addition of Parent and Topco to Certain Agreements. In order to reflect the fact that each of Parent and Topco are now part of the Express family of companies, each of Parent and Topco shall be deemed to be joint and several obligors together with each of Holding and Express, LLC (as the case may be) pursuant to each of that certain Unconditional Guaranty, dated as of July 6, 2007, made by Holding in favor of the Limited Entities (as defined therein) and that certain Advisory Agreement, dated as of July 6, 2007, among Holding, Express, LLC, and the other party thereto. Each of the counterparties to the aforementioned agreements (including each of the Limited Entities) shall be intended third party beneficiaries of this Agreement.

4. Representations and Warranties of Parent, Topco and Holding. As a material inducement to the Securityholders to enter into this Agreement and perform their obligations hereunder, each of Parent, Topco and Holding hereby represents and warrants to the Securityholders as of the date hereof as follows:

(a) Organization and Corporate Power. Each of Parent, Topco and Holding is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of Parent, Topco and Holding possesses all requisite corporate power and authority to carry out the transactions contemplated by this Agreement.

(b) Capitalization. As of the date hereof, there are not outstanding any equity interests of Parent or securities convertible or exchangeable for equity interests of Parent, nor are there outstanding any rights or options to subscribe for or to purchase any equity interests of Parent or any securities convertible into or exchangeable for equity interests of Parent or any equity appreciation rights or phantom equity plans relating to Parent, except for the Parent Securities issued pursuant hereto and set forth on Schedule I hereto. All of the Parent Securities issued pursuant hereto have been validly issued, and are fully paid and nonassessable. Immediately following the consummation of the transactions contemplated hereby (and the subsequent contribution of the Contributed Securities by Parent to Topco), Parent will own 100% of the issued and outstanding equity of Topco, and Topco will own 100% of the issued and outstanding equity of Holding.

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(c) Authorization. The execution, delivery and performance of this Agreement have been duly authorized by all necessary limited liability company action on the part of each of Parent, Topco and Holding.

(d) Conflicts. The execution, delivery and performance of this Agreement by each of Parent, Topco and Holding does not conflict with, violate or result in the breach of, or create any lien or encumbrance on the Parent Securities pursuant to any agreement, instrument, order, judgment, decree, law or governmental regulation to which any of them is a party or is subject or by which the Parent Securities are bound, except for federal and state securities laws.

5. Representations and Warranties of the Securityholders. As a material inducement to Parent to enter into this Agreement and to perform its obligations hereunder, each Securityholder hereby severally represents and warrants to Parent, Topco and Holding as of the date hereof as follows:

(a) Authorization. Such Securityholder possesses all requisite power and authority to carry out the transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of such Securityholder.

(b) Conflicts. The execution, delivery and performance of this Agreement by such Securityholder does not and will not conflict with, violate or result in the breach of, or create any lien or encumbrance on the Contributed Securities or the Parent Securities pursuant to any agreement, instrument, order, judgment, decree, law or governmental regulation to which such Securityholder is a party or is subject or by which the Contributed Securities or the Parent Securities are bound, except for federal and state securities laws and except for any restrictions pursuant to the LLC Agreements of each of Parent and Holding (it being agreed that each of the parties hereto hereby waives any such restriction which would otherwise prohibit the transactions contemplated by this Agreement).

(c) Title to Securities; No Encumbrances. Such Securityholder owns the Contributed Securities listed on Schedule I opposite the name of such Securityholder, free and clear of any and all liens, options, rights of first refusal, co-sale rights, security interests and other encumbrances other than (i) those set forth in the Holding LLC Agreement, (ii) in the case of the Weiss Group, those set forth in the Executive Unit Purchase Agreement and (iii) in the case of Weiss, those set forth in the Pledge Agreement. No Securityholder is a party to any contract or arrangement restricting the transfer or otherwise relating to or affecting any of the Contributed Securities held by such Securityholder, and there are no voting trusts, proxies or other agreements or understandings with respect to the voting or transfer of such Contributed Securities, other than (i) the Holding LLC Agreement, (ii) in the case of the Weiss Group, the Executive Unit Purchase Agreement and (iii) in the case of Weiss, the Pledge Agreement. Such Securityholder does not own any equity interests in Holding other than the Contributed Securities listed on Schedule I opposite the name of such Securityholder.

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(d) Investment. Such Securityholder hereby severally represents that such Securityholder is acquiring the Parent Securities hereunder for such Securityholder’s own account with the present intention of holding such securities for investment purposes and that such Securityholder has no intention of selling such securities in a public distribution in violation of the federal securities laws or any applicable state securities laws and is an “accredited” investor as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

6. Survival. All representations, warranties, covenants and agreements contained herein or made in writing by any party in connection herewith shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

7. Entire Agreement. This Agreement, which includes each schedule and exhibit attached hereto and the other documents, agreements and instruments executed and delivered pursuant to this Agreement, contains the entire agreement between the parties hereto with respect to the transactions contemplated by this Agreement and supersedes and preempts all prior arrangements, agreements or understandings with respect thereto, whether written or oral.

8. Remedies. Each Securityholder acquiring Parent Securities hereunder will have all of the rights and remedies set forth in this Agreement and the Parent LLC Agreement, as amended or modified from time to time in accordance therewith, and all of the rights and remedies which such Securityholders have been granted at any time under any other contract, and all of the rights and remedies which such Securityholders have under applicable law. Any person or entity having any rights under any provision of this Agreement will be entitled to enforce such rights specifically, to recover damages by reason of any breach of any provision of this Agreement, and to exercise all other rights granted by law.

9. Further Assurances. As and when requested by Parent, each Securityholder shall, without further consideration, execute and deliver all such instruments of conveyance and transfer and shall take such further actions as are necessary to confirm the transfer of the Contributed Securities to Parent. As and when requested by any Securityholder, Parent shall, without further consideration, execute and deliver all such instruments of conveyance and transfer and shall take such further actions as are necessary to confirm the issuance of the Parent Securities to such Securityholder.

10. Descriptive Headings; Interpretation. The descriptive headings of this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any provision of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. Unless the context of this Agreement clearly requires otherwise, (a) “or” has the inclusive meaning frequently identified with the phrase “and/or,” (b) “including” has the inclusive meaning frequently identified with the phrase “but not limited to” or “without limitation” and (c) references “hereunder” or “herein” relate to this Agreement.

11. Notices. All notices or other communications which are required or permitted hereunder shall be made in accordance with Section 11.01 of the Parent LLC Agreement.

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12. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns, and any such permitted assignment shall be subject to all obligations and liabilities of the assigning party.

13. Miscellaneous. This Agreement shall be subject to the Governing Law (Section 11.08), Jurisdiction (Section 11.09) and Waiver of Jury Trial (Section 11.10) provisions of the Parent LLC Agreement as if fully set forth in this Agreement.

14. Severability. If any term or provision of this Agreement shall, in any jurisdiction, be invalid or unenforceable, such term or provision shall be ineffective as to such jurisdiction to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable such term or provision in any other jurisdiction, or affecting any other provision of this Agreement.

15. Waivers and Amendments. Any waiver of any term or condition of this Agreement, or any amendment or supplement to this Agreement, shall be effective only if in writing and signed by the parties hereto. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive a party’s rights hereunder at any time to enforce strict compliance thereafter with every term or condition of this Agreement.

16. Counterparts. This Agreement may be executed in multiple counterparts (including by means of electronic delivery or facsimile), each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

*  *  *  *  *

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IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Exchange Agreement as of the date first set forth above.

EXPRESS PARENT LLC
By:	/s/ Matthew Moellering
Name:	Matthew Moellering
Title:	Chief Financial Officer
EXPRESS TOPCO LLC
By:	/s/ Matthew Moellering
Name:	Matthew Moellering
Title:	Chief Financial Officer
EXPRESS INVESTMENT CORP.
By:	/s/ Joshua Olshansky
Name:	Joshua Olshansky
Title:	Vice President
LIMITED BRANDS STORE OPERATIONS, INC.
By:	/s/ Timothy J. Faber
Name:
Title:
EXP INVESTMENTS, INC.
By:	/s/ Timothy J. Faber
Name:
Title:
EXPRESS MANAGEMENT INVESTORS BLOCKER INC.
By:	/s/ Matthew Moellering
Name:	Matthew Moellering
Title:	Treasurer

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WEISS FAMILY 2008 IRREVOCABLE TRUST ALPHA UNDER AGREEMENT WITH MICHAEL A. WEISS, AS GRANTOR, DATED MARCH 13, 2008
By:	/s/ Robert M. Clark
Its: Senior Trust Officer
WEISS FAMILY 2008 IRREVOCABLE TRUST BETA UNDER AGREEMENT WITH MICHAEL A. WEISS, AS GRANTOR, DATED MARCH 13, 2008
By:	/s/ Robert M. Clark
Its: Senior Trust Officer
WEISS DESCENDANTS 2008 IRREVOCABLE TRUST UNDER AGREEMENT WITH MICHAEL A. WEISS, AS GRANTOR, DATED MARCH 13, 2008
By:	/s/ Robert M. Clark
Its: Senior Trust Officer
/s/ Michael A. Weiss
MICHAEL A. WEISS
/s/ Arlene Weiss
ARLENE WEISS

EXPRESS HOLDING, LLC
By:	/s/ Matthew Moellering
Name:	Matthew Moellering
Title:	Chief Financial Officer

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of our report dated May 31, 2009, except with respect to our opinion on the consolidated financial statements insofar as it relates to the effects of the change in accounting for uncertain tax positions and the effects of segment reporting discussed in Note 1, the effects of earnings per unit discussed in Note 12 and the effects of the restatement discussed in Note 3, as to which the date is February 15, 2010 relating to the financial statements of Express Parent LLC, which appears in such Registration Statement. We also consent to the reference to us under the headings “Experts,” “Summary Historical and Pro Forma Consolidated Financial and Operating Data,” and “Selected Historical Consolidated Financial and Operating Data,” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

Columbus, Ohio

February 15, 2010

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the references to our firm under the captions “Experts,” “Summary Historical and Pro Forma Consolidated Financial and Operating Data,” and “Selected Historical Consolidated Financial and Operating Data,” and to the use of our report dated May 2, 2008, except for Note 1 (as it pertains to segment disclosure and the impact of the recapitalization of the Company) and Notes 3, 8 and 12, as to which the date is February 15, 2010, in this Registration Statement on Form S-1 and related Prospectus of Express Parent LLC for the registration of shares of its common stock.

/s/ Ernst & Young LLP

Columbus, Ohio

February 15, 2010