6. REVOLVING LINE OF CREDIT

The Company has a secured five-year credit agreement with a group of banks and Bank of America, N.A. as the administrative agent, collateral agent, swing line lender, and letter of credit issuer (the "Credit Agreement"). The Credit Agreement allows for cash borrowings under a revolving loan and letters of credit under a secured asset-based credit facility of up to $190.0 million as well as a $10.0 million term loan which was drawn on the effective date. The Company has paid off the term loan in full. The amount available for borrowing at any time is limited by a stated percentage of the aggregate amount of the liquidated value of eligible inventory and the face amount of eligible credit card receivables. The Credit Agreement includes three options to increase the size of the asset-based credit facility by up to $50.0 million in the aggregate. All borrowings and letters of credit under the Credit Agreement are collateralized by all assets presently owned or hereafter-acquired by the Company. Interest is paid in arrears monthly, quarterly, or over the applicable interest period as selected by the Company in the Revolving Loan Notice, with the entire balance payable on January 3, 2016. Borrowings pursuant to the asset-based credit facility bear interest, at the Company's election, at a rate equal to either (i) the higher of Bank of America's prime rate or the federal funds effective rate plus an applicable margin; or (ii) the LIBOR rate plus an applicable margin. The applicable margin is based on the Company's Average Daily Availability (as defined in the Credit Agreement). In addition, the Company pays a commitment fee on the unused portion of the amount available for borrowing as described in the Credit Agreement. The Credit Agreement includes limitations on the ability of the Company to, among other things, incur debt, grant liens, make investments, enter into mergers and acquisitions, pay dividends, change its business, enter into transactions with affiliates, and dispose of assets. The events of default under the Credit Agreement include, among others, payment defaults, cross defaults with certain other indebtedness, breaches of covenants, loss of collateral, judgments, changes in control, and bankruptcy events. In the event of a default, the Credit Agreement requires the Company to pay incremental interest at the rate of 2.0% and the lenders may, among other remedies, foreclose on the security (which could include the sale of the Company's inventory), eliminate their commitments to make credit available, declare due all unpaid principal amounts outstanding, and require cash collateral for any letter of credit obligations. In addition, in the event of a default or if the Company's Availability (as defined in the Credit Agreement) is not equal to the greater of either $20.0 million or 15% of the loan cap under the asset-based credit facility, the Company will be subject to additional restrictions, including specific restrictions with respect to its cash management procedures.

The Company intends to use the proceeds from the Credit Agreement for working capital, issuance of commercial and standby letters of credit, capital expenditures, and other general corporate purposes. As of April 28, 2012, the Company was in compliance with its loan covenant requirements, had $22.8 million in borrowings and $6.9 million in issued and outstanding letters of credit, and had remaining credit available under the Credit Agreement of $113.8 million. The Company's business is highly seasonal, reflecting the general pattern associated with the retail industry of peak sales and earnings during the fourth quarter holiday season, therefore borrowings under the line of credit often peak during the beginning of the fourth quarter.

The borrowing base, based on inventory and accounts receivable value less certain reserves, at April 28, 2012, January 28, 2012 and April 30, 2011 consisted of the following (in millions):

		0000000000000			0000000000000			0000000000000
	April 28, 2012			January 28, 2012			April 30, 2011
Account receivable availability	$	7.6		$	8.0		$	6.1
Inventory availability		143.4			146.6			131.6
Less: reserves		(7.5	)		(9.1	)		(8.7	)

Total borrowing base	$	143.5		$	145.5		$	129.0

The aggregate borrowing base is reduced by the following obligations:

		000000001001,,		000000001001,,		000000001001,,

Ending loan balance	$	22.8	$	—	$	41.0
Outstanding letters of credit		6.9		9.6		7.8

Total obligations	$	29.7	$	9.6	$	48.8

The availability at April 28, 2012, January 28, 2012 and April 30, 2011 was:

		0000000000001			0000000000001			0000000000001

Total borrowing base	$	143.5		$	145.5		$	129.0
Less: obligations		(29.7	)		(9.6	)		(48.8	)

Total availability	$	113.8		$	135.9		$	80.2