CREDIT FACILITY

The Company and certain of its domestic subsidiaries maintain a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”), Bank of America, N.A., HSBC Business Credit (USA) Inc., and JPMorgan Chase Bank, N.A. as lenders (collectively, the “Lenders”) and Wells Fargo, as Administrative Agent, Collateral Agent and Swing Line Lender (the “Credit Agreement”). The Credit Agreement was amended and restated on March 4, 2014 to incorporate all amendments, and the provisions below reflect the amended and restated Credit Agreement.

The Credit Agreement, which expires in August 2018, consists of a $200 million asset based revolving credit facility, with a $50 million sublimit for standby and documentary letters of credit and an uncommitted accordion feature that could provide up to $25 million of additional availability. Revolving credit loans outstanding under the Credit Agreement bear interest, at the Company’s option, at:


(i)	the prime rate plus a margin of 0.50% to 0.75% based on the amount of the Company’s average excess availability under the facility; or


(ii)	the London InterBank Offered Rate, or “LIBOR”, for an interest period of one, two, three or six months, as selected by the Company, plus a margin of 1.50% to 1.75% based on the amount of the Company’s average excess availability under the facility.

The Company is charged an unused line fee of 0.25% on the unused portion of the commitments. Letter of credit fees range from 0.75% to 0.875% for commercial letters of credit and range from 1.00% to 1.25% for standby letters of credit. Letter of credit fees are determined based on the amount of the Company's average excess availability under the facility. The amount available for loans and letters of credit under the Credit Agreement is determined by a borrowing base consisting of certain credit card receivables, certain inventory and the fair market value of certain real estate, subject to certain reserves.

The outstanding obligations under the Credit Agreement may be accelerated upon the occurrence of certain events, including, among others, non-payment, breach of covenants, the institution of insolvency proceedings, defaults under other material indebtedness and a change of control, subject, in the case of certain defaults, to the expiration of applicable grace periods. The Company is not subject to any early termination fees.

The Credit Agreement contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. Credit extended under the Credit Agreement is secured by a first priority security interest in substantially all of the Company’s U.S. assets excluding intellectual property, software, equipment and fixtures.

On March 4, 2014, the Credit Agreement was amended to permit the payment of dividends, subject to certain conditions, to increase the revolving credit limit from $150 million to its current $200 million and to extend the term from August 2017 to August 2018, and was restated to incorporate all prior amendments. In conjunction with this amendment and restatement, the Company paid approximately $0.3 million in additional deferred financing costs.

As of August 2, 2014, the Company has capitalized an aggregate of approximately $4.0 million in deferred financing costs related to the Credit Agreement. The unamortized balance of deferred financing costs at August 2, 2014 was approximately $1.4 million. Unamortized deferred financing costs are amortized on a straight-line basis over the remaining term of the Credit Agreement.

The table below presents the components (in millions) of the Company’s credit facility:



	August 2, 2014			February 1, 2014			August 3, 2013
Credit facility maximum	$	200.0		$	150.0		$	150.0
Borrowing base	200.0			150.0			150.0

Outstanding borrowings	26.5			—			—
Letters of credit outstanding—merchandise	0.1			1.2			42.2
Letters of credit outstanding—standby	9.1			9.9			11.2
Utilization of credit facility at end of period	35.7			11.1			53.4

Availability (1)	$	164.3		$	138.9		$	96.6

Interest rate at end of period	3.8		%	3.8		%	3.8		%



	Year-To-Date 2014			Fiscal 2013			Year-To-Date 2013
Average end of day loan balance during the period	$	6.9		$	—		$	0.3
Highest end of day loan balance during the period	40.9			10.4			10.4
Average interest rate	3.8		%	3.8		%	3.8		%

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(1)	The sublimit availability for the letters of credit was $40.8 million, $113.9 million, and $71.6 million at August 2, 2014, February 1, 2014, and August 3, 2013, respectively.

Letter of credit fees were immaterial during Year-To-Date 2014 and approximately $0.1 million during Year-To-Date 2013 and are substantially included in cost of sales