10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2010 or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission file number 0-16611

GSI COMMERCE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	04-2958132
(State or other jurisdiction of	(I.R.S. employer identification no.)
incorporation or organization)

935 FIRST AVENUE, KING OF PRUSSIA, PA	19406
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (610) 491-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

There were 66,492,417 shares of the registrant’s Common Stock outstanding as of the close of business on October 27, 2010.

GSI COMMERCE, INC.
FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 2, 2010
INDEX

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets		3
Condensed Consolidated Statements of Operations		4
Condensed Consolidated Statements of Cash Flows		5
Notes to Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3. Quantitative and Qualitative Disclosures About Market Risk		26
Item 4. Controls and Procedures		26
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		27
Item 1A. Risk Factors		27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3. Defaults Upon Senior Securities		27
Item 4. (Reserved)		27
Item 5. Other Information		27
Item 6. Exhibits		28
SIGNATURES		29
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

The Company’s fiscal year ends on the Saturday nearest the last day of December. The Company’s fiscal year ends are as follows:

References To	Refer to the Years Ended/Ending
Fiscal 2009	January 2, 2010
Fiscal 2010	January 1, 2011
Fiscal 2011	December 31, 2011
Fiscal 2012	December 29, 2012
Fiscal 2013	December 28, 2013
Fiscal 2014	January 3, 2015

2

PART I

ITEM 1: FINANCIAL STATEMENTS

GSI COMMERCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)

	January 2,			October 2,
	2010			2010
ASSETS
Current assets:
Cash and cash equivalents	$	228,430		$	66,709
Accounts receivable, net		70,582			76,958
Inventory		55,678			68,943
Deferred tax assets		12,347			22,580
Prepaid expenses and other current assets		13,187			16,919
Total current assets		380,224			252,109
Property and equipment, net		163,329			180,363
Goodwill		373,003			396,041
Intangible assets, net		132,875			148,959
Long-term deferred tax assets		—			10,886
Other assets, net		12,417			31,253
Total assets	$	1,061,848		$	1,019,611
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	126,914		$	77,991
Accrued expenses and other		150,173			123,155
Deferred revenue		20,645			20,724
Convertible notes		55,443			—
Current portion — long-term debt		5,260			8,054
Total current liabilities		358,435			229,924
Convertible notes		116,948			121,747
Long-term debt		28,142			53,378
Deferred acquisition payments		63,763			68,935
Deferred tax liabilities		8,534			—
Deferred revenue and other long-term liabilities		9,686			9,892
Total liabilities		585,508			483,876
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 5,000
Issued and outstanding shares — none		—			—
Common stock, $0.01 par value:
Authorized shares — 90,000 and 180,000
Issued and outstanding shares — 60,033 and 66,486		600			665
Additional paid in capital		642,852			753,771
Accumulated other comprehensive loss		(1,498	)		(653	)
Accumulated deficit		(165,614	)		(218,048	)
Total stockholders’ equity		476,340			535,735
Total liabilities and stockholders’ equity	$	1,061,848		$	1,019,611

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

GSI COMMERCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

	Three Months Ended						Nine Months Ended
	October 3,			October 2,			October 3,			October 2,
	2009			2010			2009			2010
Revenues:
Net revenues from product sales	$	90,767		$	153,238		$	288,150		$	458,667
Service fee revenues		99,544			130,900			285,817			362,291
Net revenues		190,311			284,138			573,967			820,958
Costs and expenses:
Cost of revenues from product sales		67,548			113,701			217,345			338,627
Marketing		9,087			11,394			27,002			29,903
Account management and operations		60,173			83,500			176,969			240,489
Product development		28,396			42,410			84,871			118,789
General and administrative		19,365			29,309			58,169			81,396
Depreciation and amortization		15,655			21,971			46,335			61,306
Changes in fair value of deferred acquisition payments		—			2,074			—			6,222
Total costs and expenses		200,224			304,359			610,691			876,732
Loss from operations		(9,913	)		(20,221	)		(36,724	)		(55,774	)
Other (income) expense:
Interest expense		4,897			3,648			14,452			13,595
Interest income		(99	)		(10	)		(304	)		(316	)
Other (income) expense		(32	)		(506	)		(197	)		906
Loss on investments		—			736			—			736
Total other expense		4,766			3,868			13,951			14,921
Loss before income taxes and equity-method investment earnings		(14,679	)		(24,089	)		(50,675	)		(70,695	)
Benefit for income taxes		(5,273	)		(5,435	)		(16,046	)		(18,185	)
Equity-method investment earnings		—			(76	)		—			(76	)
Net loss	$	(9,406	)	$	(18,578	)	$	(34,629	)	$	(52,434	)
Basic and diluted loss per share	$	(0.18	)	$	(0.28	)	$	(0.70	)	$	(0.83	)
Weighted average shares outstanding — basic and diluted		51,910			66,419			49,506			63,384

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

GSI COMMERCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Nine Months Ended
	October 3,			October 2,
	2009			2010
Cash Flows from Operating Activities:
Net loss	$	(34,629	)	$	(52,434	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		38,856			46,538
Amortization		7,479			14,768
Amortization of discount on convertible notes		7,765			6,824
Changes in fair value of deferred acquisition payments		—			6,222
Stock-based compensation		18,722			21,128
Foreign currency transaction losses		(184	)		(909	)
Loss on investments		—			736
Gain on disposal of equipment		(10	)		—
Equity-method investment earnings		—			(76	)
Deferred income taxes		(16,046	)		(19,578	)
Changes in operating assets and liabilities:
Accounts receivable, net		14,602			(3,022	)
Inventory		(1,087	)		(13,265	)
Prepaid expenses and other current assets		(1,900	)		(2,955	)
Other assets, net		1,938			744
Accounts payable, accrued expenses and other		(81,434	)		(78,572	)
Deferred revenue		(2,224	)		(2,668	)
Net cash used in operating activities		(48,152	)		(76,519	)
Cash Flows from Investing Activities:
Payments for acquisitions of businesses, net of cash acquired		(5,601	)		(47,850	)
Cash paid for property and equipment, including internal use software		(29,585	)		(54,648	)
Purchase of investments		—			(18,611	)
Release from restricted cash escrow funds		1,052			—
Net cash used in investing activities		(34,134	)		(121,109	)
Cash Flows from Financing Activities:
Borrowings on revolving credit loan		—			25,000
Proceeds from the sale of common stock		92,596			—
Equity issuance costs paid		(4,179	)		—
Debt issuance costs paid		(83	)		(887	)
Repayments of capital lease obligations		(3,359	)		(4,446	)
Repayments of mortgage note		(136	)		(145	)
Excess tax benefit in connection with exercise of stock options and awards		—			978
Proceeds from exercise of common stock options		2,065			14,693
Net cash provided by financing activities		86,904			35,193
Effect of exchange rate changes on cash and cash equivalents		340			714
Net increase (decrease) in cash and cash equivalents		4,958			(161,721	)
Cash and cash equivalents, beginning of period		130,315			228,430
Cash and cash equivalents, end of period	$	135,273		$	66,709
Supplemental Cash Flow Information:
Cash paid during the period for interest	$	4,672		$	5,316
Cash paid during the period for income taxes		2,620			739
Noncash Investing and Financing Activities:
Accrual for purchases of property and equipment		3,196			2,636
Equipment financed under capital lease		257			7,482

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 1—BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of GSI Commerce, Inc. and Subsidiaries (“the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements.

The accompanying financial information is unaudited; however, in the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the financial position, results of operations and cash flows for the periods reported have been included. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.

The financial statements presented include the accounts of the Company and all wholly-owned subsidiaries. All inter-company balances and transactions among consolidated entities have been eliminated.

This quarterly report should be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements presented in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, filed with the Securities and Exchange Commission (“SEC”) on March 5, 2010.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

Accrued Expenses and Other: Accrued expenses and other include $43,038 of amounts payable to the Company’s clients and accrued payroll of $17,495 as of October 2, 2010. No other item included in accrued expenses was greater than 5% of total current liabilities as of October 2, 2010.

Accrued expenses include $62,705 of amounts payable to the Company’s clients and accrued payroll of $25,617 as of January 2, 2010. No other item included in accrued expenses was greater than 5% of total current liabilities as of January 2, 2010.

Client Revenue Share: Client revenue share charges are payments made to the Company’s clients in exchange for the use of their brand names, logos, the promotion of its clients’ URLs, Web stores and toll-free telephone numbers in clients’ marketing and communications materials, the implementation of programs to provide incentives to consumers to shop through the e-commerce businesses that the Company operates for its clients and other programs and services provided to the consumers of the e-commerce businesses that the Company operates for its clients, net of amounts reimbursed to the Company by its clients. Client revenue share is calculated as either a percentage of product sales, a guaranteed annual amount, or both. Client revenue share charges were $5,964 and $16,430 for the three- and nine-month periods ended October 2, 2010 and $5,613 and $17,900 for the three- and nine-month periods ended October 3, 2009, and are included in marketing expenses in the Condensed Consolidated Statements of Operations.

Fulfillment Costs: The Company defines fulfillment costs as personnel, occupancy and other costs associated with its fulfillment centers, personnel and other costs associated with its logistical support and vendor operations departments and third-party warehouse and fulfillment services costs. Fulfillment costs were $25,775 and $75,190 for the three- and nine- month periods ended October 2, 2010 and $19,541 and $59,351 for the three- and nine-month periods ended October 3, 2009, and are included in account management and operations expenses in the Condensed Consolidated Statements of Operations.

6

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

Recent Accounting Pronouncements:

The following is a summary of recent accounting standards issued by the Financial Accounting Standards Board (“FASB”):

				Effective Date for
Subject	Date Issued	Summary	Effect of Adoption	The Company
Multiple Element Arrangements	October 2009	Removes the objective-and-reliable-evidence-of-fair-value criterion from the separation criteria used to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. Replaces references to “fair value” with “selling price” to distinguish from the fair value measurements required under accounting standards for “Fair Value Measurements.” Provides a hierarchy that entities must use to estimate the selling price, eliminates the use of the residual method for allocation, and expands the ongoing disclosure requirements.	No material impact.	January 2, 2011, with early adoption permitted. The Company chose to prospectively adopt this standard on January 3, 2010

NOTE 3— FAIR VALUE OF FINANCIAL AND NONFINANCIAL INSTRUMENTS

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis are as follows:

	Fair Value Measurements on January 2, 2010
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents:(1)
Money market mutual funds	$	13,606	$	—	$	—
Liabilities
Deferred acquisition payments(2)	$	—	$	—	$	60,963

	Fair Value Measurements on October 2, 2010
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents:(1)
Money market mutual funds	$	—	$	—	$	—
Liabilities
Deferred acquisition payments(2)	$	—	$	—	$	67,185

(1)

Cash and cash equivalents totaled $66,709 as of October 2, 2010, and were entirely comprised of bank deposits. Cash and cash equivalents totaled $228,430 as of January 2, 2010, and were comprised of $13,606 of money market mutual funds and $214,824 of bank deposits.

(2)

Deferred acquisition payments represent the fair value of estimated acquisition payments that are contingent upon RueLaLa, Inc., formerly known as Retail Convergence, Inc. (“Rue La La”) achieving specified minimum earnings thresholds over one or more years. The Company utilized a discounted cash flow model and a discount rate of 13.6% to determine fair value. The Company accreted $2,074 and $6,222 of its deferred acquisition payments from the acquisition date of Rue La La during the three- and nine-month periods ended October 2, 2010 and $0 during the three- and nine-month periods ended October 3, 2009, and the corresponding charge was recorded to changes in fair value of deferred acquisition payments in the Condensed Consolidated Statements of Operations.

7

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

The following table provides a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis in the table above that used significant unobservable inputs (Level 3):

	Three Months Ended		Nine Months Ended
	October 2, 2010		October 2, 2010
Balance, beginning of period	$	65,111	$	60,963
Changes in fair value of deferred acquisition payments included in the Company’s Condensed Consolidated Statements of Operations		2,074		6,222
Balance, end of period	$	67,185	$	67,185

NOTE 4—PROPERTY AND EQUIPMENT

The major classes of property and equipment, at cost, as of January 2, 2010 and October 2, 2010 are as follows:

	January 2,			October 2,
	2010			2010
Computer hardware and software	$	231,954		$	282,365
Building and building improvements		44,822			44,977
Furniture, warehouse and office equipment, and other		45,722			47,570
Land		7,889			7,889
Leasehold improvements		8,847			11,406
Capitalized leases		29,132			36,955
		368,366			431,162
Less: Accumulated depreciation		(205,037	)		(250,799	)
Property and equipment, net	$	163,329		$	180,363

The Company’s net book value in capital leases was $21,568 as of October 2, 2010 and $18,500 as of January 2, 2010. The Company’s capital leases primarily relate to warehouse equipment, computer hardware, and computer software. The depreciation of capital leases is included within depreciation and amortization expense in the Condensed Consolidated Statements of Operations. Interest expense recorded on capital leases was $379 and $1,022 for the three- and nine-month periods ended October 2, 2010 and $357 and $1,126 for the three- and nine-month periods ended October 3, 2009.

8

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 5—GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the changes in the carrying amount of goodwill for each of the Company’s reportable segments:

	E-Commerce			Marketing		Consumer
	Services			Services		Engagement		Consolidated
January 2, 2010	$	83,090		$	117,025	$	172,888	$	373,003
Acquisitions		2,556			20,708		—		23,264
Foreign currency translation		(226	)		—		—		(226	)
October 2, 2010	$	85,420		$	137,733	$	172,888	$	396,041

The Company’s intangible assets are as follows:

							Weighted-
	January 2,			October 2,			Average
	2010			2010			Life
							(in years)
Gross carrying value of intangible assets subject to amortization:
Customer contracts	$	41,190		$	56,148			2.5
Member relationships		22,200			22,200			2.6
Supplier relationships		11,186			11,186			3.4
Non-compete agreements		4,079			4,481			3.0
Purchased technology		4,805			13,723			3.6
Trade names		840			840			1.5
Foreign currency translation		(482	)		(528	)
		83,818			108,050			2.7
Accumulated amortization:
Customer contracts		(22,907	)		(29,387	)
Member relationships		(489	)		(5,109	)
Supplier relationships		—			(708	)
Non-compete agreements		(2,888	)		(3,963	)
Purchased technology		(2,428	)		(4,147	)
Trade names		(532	)		(670	)
Foreign currency translation		72			89
		(29,172	)		(43,895	)
Net carrying value:
Customer contracts		18,283			26,761
Member relationships		21,711			17,091
Supplier relationships		11,186			10,478
Non-compete agreements		1,191			518
Purchased technology		2,377			9,576
Trade names		308			170
Foreign currency translation		(410	)		(439	)
Total intangible assets subject to amortization, net		54,646			64,155
Indefinite life intangible assets:
Trade names		78,229			84,804
Total intangible assets	$	132,875		$	148,959

9

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

Amortization expense of intangible assets was $5,677 and $14,741 for the three- and nine-month periods ended October 2, 2010 and $2,582 and $7,544 for the three- and nine-month periods ended October 3, 2009. Estimated future amortization expense related to intangible assets as of October 2, 2010, is as follows:

Fiscal 2010	$	5,358
Fiscal 2011		20,937
Fiscal 2012		16,122
Fiscal 2013		12,452
Fiscal 2014		8,044
Thereafter		1,242
	$	64,155

NOTE 6—ACQUISITIONS AND INVESTMENTS

The Company accounts for acquisitions using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed from acquisitions are recorded at their fair values as of the acquisition date. Any excess of the purchase price over the fair values of the net assets acquired is recorded as goodwill. The Company’s purchased intangible assets and goodwill are not deductible for tax purposes. However, acquisition method accounting allows for the establishment of deferred tax liabilities on purchased intangible assets, other than goodwill.

MBS

On April 30, 2010, the Company acquired 100% of the issued and outstanding capital stock of MBS Insight, Inc. (“MBS”), a wholly owned subsidiary of World Marketing, Inc. for $22,200. MBS is a database marketing solutions provider that offers a knowledge-based marketing services and solutions that help marketers innovate, advance, and automate their marketing efforts for greater return on their investment. The acquisition strengthens e-Dialog’s suite of products providing marketers with an operational, multichannel view of customers in order to understand customer behavior and preferences in real time.

The table below summarizes the fair values of the MBS’s assets and acquired liabilities assumed, including cash acquired, as of acquisition date:

Total current assets	$	2,472
Property, plant, and equipment		949
Goodwill		11,563
Indentifiable intangible assets:
Customer relationships		8,611
Technology		2,551
Trade name		1,710
Total assets acquired		27,856
Total current liabilities		(1,476	)
Long-term deferred tax liabilities		(4,180	)
Total liabilities assumed		(5,656	)
Net assets acquired	$	22,200

MBS’ results of operations are included on the Company’s Consolidated Statements of Operations beginning on April 30, 2010. MBS' revenue and net loss for the period from April 30, 2010 to October 2, 2010 included in the Company's Consolidated Statements of Operations was $7,282 and $159, respectively.

10

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

Rue La La

In November 2009, the Company completed the acquisition of substantially all of the outstanding common stock of Rue La La pursuant to the terms of an Agreement and Plan of Merger dated October 27, 2009. In December 2009, the Company acquired the remaining outstanding common stock of Rue La La.

Other Acquisitions

During the nine months ended October 2, 2010, the Company made three other acquisitions. Results of operations for each of the Company’s 2010 acquisitions are included in the Company’s Condensed Consolidated Statements of Operations beginning on each respective acquisition date.

Unaudited Pro Forma Financial Information

The financial information in the table below summarizes the combined results of operations of the Company, MBS, and Rue La La on a pro forma basis, as though the companies had been combined as of the beginning of each of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had actually taken place at the beginning of each of the periods presented and is not intended to be a projection of future results or trends.

	Three Months Ended						Nine Months Ended
	October 3,			October 2,			October 3,			October 2,
	2009			2010			2009			2010
Net revenues	$	226,341		$	284,138		$	675,934		$	826,621
Net loss	$	(14,826	)	$	(18,578	)	$	(48,089	)	$	(52,722	)

Equity Method Investment

As of October 2, 2010, the Company owned 27% of the common stock of Intershop Communications AG (“Intershop”), a provider of e-commerce software based in Germany and publicly traded on the Frankfurt Stock Exchange. The carrying amount of the investment as of October 2, 2010 is $20,120, which includes a cumulative translation adjustment of $1,433 due to the increase in the exchange rate between the Euro and the Unites States dollar. The Company recorded $76 during the three months ended October 2, 2010 for its share of Intershop’s earnings.

The Company accounts for this investment using the equity method of accounting, and monitors its investment periodically to evaluate whether any changes in fair value below its cost basis become other-than-temporary. The Company has elected to record its share of earnings/losses for Intershop on a three-month lag due to timeliness considerations. The Company’s investment in Intershop is included in other assets, net in the Company’s Condensed Consolidated Balance Sheets. As of October 2, 2010, the market value of the Company’s investment in Intershop, based on the quoted market price of its stock, is $18,820.

Other Investment

During the three months ended October 3, 2010, the Company recorded an other-than-temporary impairment loss of $736 related to one of its cost-method investments which reduced the carrying value of the investment to $0.

11

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 7—LONG-TERM DEBT AND CREDIT FACILITY

The following table summarizes the Company’s long-term debt as of:

	January 2,			October 2,
	2010			2010
Convertible notes	$	172,391		$	121,747
Notes payable (1)		12,479			12,334
Capital lease obligations		20,923			24,098
Line of credit		—			25,000
Total debt		205,793			183,179
Less: Current portion of convertible notes		(55,443	)		—
Less: Current portion of notes payable		(195	)		(206	)
Less: Current portion of capital lease obligations	(5,065		)		(7,848	)
Total long-term debt	$	145,090		$	175,125

(1) The estimated fair market value of the notes payable approximated their carrying value as of October 2, 2010 and January 2, 2010.

3% Convertible Notes due 2025

In 2005, the Company completed a public offering of $57,500 aggregate principal amount of 3% subordinated convertible notes due June 1, 2025.

In April 2010, the Company called the notes for redemption and in June 2010, the Company issued 3,227 shares of common stock upon the conversion of $57,469 of the 3% convertible notes at the election of the holders of the notes, which was recorded as an increase to additional paid in capital in the Condensed Consolidated Balance Sheets. The Company paid $31 for the remaining 3% convertible notes that were not converted by the holders of the notes.

The following table provides additional information about the Company’s 3% convertible notes:

	As of		As of
	January 2, 2010		October 2, 2010
Carrying amount of the equity component	$	18,187	$	—
Principal amount of the liability component	$	57,500	$	—
Unamortized discount of liability component	$	2,057	$	—
Net carrying amount of liability component	$	55,443	$	—

The following table provides the components of interest expense for the Company’s 3% convertible notes:

	Three Months Ended				Nine Months Ended
	October 3,		October 2,		October 3,		October 2,
	2009		2010		2009		2010
Amortization of the discount on the liability component	$	1,161	$	—	$	3,354	$	2,053
Contract interest coupon		431		—		1,294		719
Amortization of the liability component of the issue costs		101		—		292		173
Interest expense	$	1,693	$	—	$	4,940	$	2,945

12

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

2.5% Convertible Notes due 2027

In 2007, the Company completed a private placement of $150,000 of aggregate principal amount of 2.5% subordinated convertible notes due June 1, 2027, raising net proceeds of approximately $145,000, after deducting initial purchaser’s discount and issuance costs. The notes bear interest at 2.5%, payable semi-annually on June 1 and December 1.

Holders may convert the notes into shares of the Company’s common stock (or cash or a combination of the Company’s common stock and cash, if the Company so elects) at a conversion rate of 33.3333 shares per $1,000 principal amount of notes (representing a conversion price of approximately $30.00 per share) beginning on March 1, 2014. Holders can require the Company to repurchase the notes for 100% of principal amount of the notes on June 1, 2014. At any time on or after June 8, 2014, the Company may redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest, if any, up to but excluding, the redemption date. Based on the Company’s closing stock price of $24.39 on October 2, 2010, the if-converted value of the notes does not exceed the aggregate principal amount of the notes.

The following table provides additional information about the Company’s 2.5% convertible notes:

	As of		As of
	January 2, 2010		October 2, 2010
Carrying amount of the equity component	$	26,783	$	26,783
Principal amount of the liability component	$	150,000	$	150,000
Unamortized discount of liability component	$	33,052	$	28,253
Net carrying amount of liability component	$	116,948	$	121,747
Remaining amortization period of discount			44 months
Effective interest rate on liability component				8.60	%

The following table provides the components of interest expense for the Company’s 2.5% convertible notes:

	Three Months Ended				Nine Months Ended
	October 3,		October 2,		October 3,		October 2,
	2009		2010		2009		2010
Amortization of the discount on the liability component	$	1,512	$	1,645	$	4,411	$	4,799
Contract interest coupon		937		937		2,812		2,812
Amortization of the liability component of the issue costs		116		122		342		360
Interest expense	$	2,565	$	2,704	$	7,565	$	7,971

The estimated fair market value of the 2.5% subordinated convertible notes was $159,600 as of October 2, 2010 and $157,125 as of January 2, 2010 based on quoted market prices.

Credit Facility

In March 2010, the Company amended and expanded its existing secured revolving credit facility expanding the credit facility to $150,000. The credit facility expires in March 2013 and is available for letters of credit, working capital, and general corporate purposes, including possible acquisitions. The $150,000 secured revolving credit facility provides for the issuance of up to $30,000 of letters of credit, which is included in the $150,000 available under the secured revolving credit facility. The secured revolving credit facility is collateralized by substantially all of the Company’s assets. The Company may elect to have amounts outstanding under the credit facilities bear interest at either a LIBOR rate plus an applicable margin of 2.0% to 3.25%, the prime rate plus an applicable margin of 2.0% to 3.25%, Daily LIBOR plus 1.0% plus an applicable margin of 2.0% to 3.25%, or at the Federal Funds Open Rate plus 0.5% plus an applicable margin of 2.0% to 3.25%. The applicable margin is determined by the leverage ratio of funded debt to EBITDA, as defined in the credit facility. The Company had $25,000 of outstanding borrowings and $3,929 of outstanding letters of credit under the secured revolving credit facility as of October 2, 2010.

13

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 8—COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved in various litigation incidental to its business, including alleged contractual claims, claims relating to infringement of intellectual property rights of third parties, claims relating to the manner in which goods are sold through its integrated-commerce platform and claims relating to the Company’s collection of sales taxes in certain states. The Company collects sales taxes for goods owned and sold by it and shipped into certain states. As a result, the Company is subject from time to time to claims from other states alleging that the Company failed to collect and remit sales taxes for sales and shipments of products to customers in such other states.

Based on the merits of the cases and/or the amounts claimed, the Company does not believe that any claims are likely to have a material adverse effect on its business, financial position or results of operations. The Company may, however incur substantial expenses and devote substantial time to defend these claims whether or not such claims are meritorious. In addition, litigation is inherently unpredictable. In the event of a determination adverse to the Company, the Company may incur substantial monetary liability and may be required to implement expensive changes in its business practices, enter into costly royalty or licensing agreements, or begin to collect sales taxes in states in which it previously did not. An adverse determination could have a material adverse effect on the Company’s business, financial position or results of operations. Expenditures for legal costs are expensed as incurred.

Operating and Capital Commitments

The following summarizes the Company’s principal contractual commitments, excluding open orders for inventory purchases that support normal operations, as of October 2, 2010:

	Payments due by fiscal year
	2010		2011		2012		2013		2014		Thereafter		Total
Operating lease obligations(1)	$	5,976	$	21,175	$	20,701	$	16,740	$	13,257	$	21,356	$	99,205
Marketing commitments(1)		344		1,702		2,570		2,570		2,570		—		9,756
Client revenue share payments(1)		3,714		21,400		22,158		23,368		15,991		33,269		119,900
Debt interest(1)		2,664		4,509		4,498		4,480		1,921		—		18,072
Debt obligations		50		209		563		25,237		161,275		—		187,334
Capital lease obligations, including interest(2)		2,145		9,412		8,171		4,883		1,800		—		26,411
Deferred acquisition payments(3)		—		1,500		750		1,000		—		—		3,250
Total	$	14,893	$	59,907	$	59,411	$	78,278	$	196,814	$	54,625	$	463,928

(1)	Not required to be recorded in the Condensed Consolidated Balance Sheet as of October 2, 2010 in accordance with accounting principles generally accepted in the United States of America.
(2)	Capital lease obligations, excluding interest, are recorded in the Condensed Consolidated Balance Sheets.
(3)	The $3,250 of deferred acquisition payments in the table above represent fixed contractual future payments. The Company is also obligated to pay up to an additional $208,400 from fiscal 2011 through fiscal 2016 based on the achievement of certain financial targets by some of our acquired companies, of which the Company has the ability to pay up to $45,800 with shares of the Company’s common stock. The Company is uncertain as to if or when such amounts may be settled; as a result, these obligations are not included in the table above.

Approximately $3,894 of unrecognized tax benefits have been recorded as liabilities as of October 2, 2010, and the Company is uncertain as to if or when such amounts may be settled; as a result, these obligations are not included in the table above. Changes to these tax contingencies that are reasonably possible in the next 12 months are not expected to be material.

14

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 9—STOCK AWARDS

In May 2010, the Company’s stockholders approved the 2010 Equity Incentive Plan (“2010 Plan”). The 2010 Plan authorizes the award of 3,500 shares of the Company’s common stock. In addition, any outstanding stock awards previously granted under the Company’s 2005 Equity Incentive Plan (the “2005 Plan”) or the Company’s Amended and Restated 1996 Equity Incentive Plan that expire, are terminated, cancelled or forfeited, or are withheld in satisfaction of payment of withholding taxes after May 28, 2010 will become available for grant under the 2010 Plan. The 2010 Plan will terminate on March 2, 2020, after which no further awards may be granted under the 2010 Plan.

In May 2010, the Company’s stockholders also approved an increase to the total number of authorized shares of common stock from 90,000 shares to 180,000 shares.

As of October 2, 2010, 3,584 shares of common stock were available for future grants under the 2010 Plan. The equity awards granted under the Plan generally vest at various times over periods ranging up to five years and have terms of up to ten years after the date of grant, unless the optionee’s service to the Company is interrupted or terminated.

Stock Options and Warrants

The following table summarizes the stock option and warrant activity for the nine-month period ended October 2, 2010:

						Weighted
				Weighted		Average
	Number of			Average		Remaining		Aggregate
	Shares			Exercise		Contractual		Intrinsic
	(in thousands)			Price		Life (in years)		Value
Outstanding at January 2, 2010		3,252		$	9.88
Granted		—		$	—
Exercised		(1,651	)	$	8.90
Forfeited/Cancelled		(2	)	$	12.16
Outstanding at October 2, 2010		1,599		$	10.89		2.81	$	21,588
Vested and expected to vest at October 2, 2010		1,599		$	10.89		2.81	$	21,588
Exercisable at October 2, 2010		1,599		$	10.89		2.81	$	21,588

Restricted Stock Units and Awards

The following table summarizes the restricted stock unit and restricted stock award activity for the nine-month period ended October 2, 2010:

				Weighted
	Number of			Average
	Shares			Grant Date
	(in thousands)			Fair Value
Nonvested shares at January 2, 2010		4,294		$	16.64
Granted		1,402		$	27.19
Vested		(1,690	)	$	14.25
Forfeited/Cancelled		(284	)	$	16.78
Nonvested shares at October 2, 2010		3,722		$	21.69

15

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

Stock-based Compensation Expense

The following table summarizes stock-based compensation expense included in the Company’s Condensed Consolidated Statements of Operations:

	Three Months Ended				Nine Months Ended
	October 3,		October 2,		October 3,		October 2,
	2009		2010		2009		2010
Includes stock-based compensation as follows:
Account management and operations	$	2,033	$	2,162	$	6,684	$	8,030
Product development	$	1,207	$	1,603	$	3,843	$	5,231
General and administrative	$	2,436	$	2,693	$	8,195	$	7,867

NOTE 10—INCOME TAXES

In the first quarter of fiscal 2010, the Company’s tax provision was determined using an estimate of its annual effective rate of 65.3% plus any discrete items that occurred during the quarter. In the second and third quarters of fiscal 2010, due to the impact of the Company’s acquisitions made during the second quarter and other factors, small variations to the full-year projection would result in material variability in the Company’s estimated annual effective rate. Therefore, the Company has calculated the third quarter tax provision using a calculation of the actual tax rate on the actual results for the nine months ended October 2, 2010, which is the best estimate of the Company’s estimated annual effective tax rate. Using this approach, the Company’s effective tax rate is 23.1% for the nine months ended October 2, 2010, while the reported effective tax rate for the nine months ended October 2, 2010 is 25.7%. The difference between the year-to-date effective and the reported effective tax rate is due to discrete items. Both rates are lower than the 35% federal statutory tax rate primarily due to non-deductible permanent items and certain losses in foreign operations that generate no tax benefit. The Company does not provide for U.S. taxes on its undistributed earnings of foreign subsidiaries, if any, since it intends to invest such undistributed earnings indefinitely outside of the U.S.

The reported effective tax rate for the nine months ended October 3, 2009 was 31.7%. The estimated annual effective tax rate of 39.2% was different from the actual tax rate of 31.7% primarily due to the losses in foreign operations that generate no tax benefit and therefore they are not included in the pre-tax book income calculation for the annual effective tax rate partially offset by the benefit from certain discrete items.

The total amount of liabilities, interest and penalties related to uncertain tax positions and recognized in the Condensed Consolidated Balance Sheets were $3,894 as of October 2, 2010, and $2,052 as of January 2, 2010.

NOTE 11—LOSS PER SHARE

Basic and diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the fiscal year.

The following is a summary of the securities outstanding during the respective periods that have been excluded from the calculations because the effect on net loss per share would have been anti-dilutive for the three- and nine-month periods ended:

	October 3,		October 2,
	2009		2010
Stock units and awards		4,379		3,722
Stock options and warrants		3,565		1,599
Convertible notes		8,229		5,000
		16,173		10,321

16

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 12 — COMPREHENSIVE LOSS

Comprehensive loss is computed as net loss plus certain other items that are recorded directly to shareholders’ equity in accordance with standards of accounting for “Reporting Comprehensive Income.” Comprehensive loss is calculated as follows:

	Three Months Ended						Nine Months Ended
	October 3,			October 2,			October 3,			October 2,
	2009			2010			2009			2010
Net loss	$	(9,406	)	$	(18,578	)	$	(34,629	)	$	(52,434	)
Other comprehensive loss:
Cumulative translation adjustment		153			2,354			935			845
Comprehensive loss	$	(9,253	)	$	(16,224	)	$	(33,694	)	$	(51,589	)

NOTE 13—SEGMENT INFORMATION

The Company operates three reportable segments: e-commerce services, marketing services and consumer engagement. For e-commerce services, the Company delivers customized solutions through an integrated platform which is comprised of technology, fulfillment and customer care and is available on a modular basis or as part of an integrated, end-to-end solution. For marketing services, the Company offers a full suite of interactive marketing services. For consumer engagement, the Company provides brands and retailers a platform for online private sales through RueLaLa.com. In addition, the consumer engagement segment includes expenses for the start up of a new business, ShopRunner.

The Company manages its segments and makes financial decisions and allocates resources based on an internal management reporting process that provides segment revenue and segment profit (loss) before depreciation, amortization, changes in fair value of deferred acquisition payments and stock-based compensation expense. Beginning in the second quarter of fiscal 2010, the Company started excluding the following expenses from its segment profit (loss): acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense. The Company has conformed its prior period segment results to reflect this change in Form 8-K filed on August 10, 2010 and in this footnote. The Company believes this metric is an appropriate measure of evaluating the operational performance of the Company’s segments. The Company also uses this metric for planning, forecasting and analyzing future periods. However, this measure should be considered in addition to, not as a substitute for, or superior to, income from operations or other measures of financial performance prepared in accordance with GAAP.

The Company manages its working capital on a consolidated basis and does not allocate long-lived assets to segments. Pursuant to accounting standards for “Disclosures about Segments of an Enterprise and Related Information,” total segment assets have not been disclosed.

17

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

The following tables present summarized information by segment:

	Three Months Ended October 3, 2009
	E-Commerce		Marketing		Consumer		Intersegment
	Services		Services		Engagement		Eliminations			Consolidated
Net revenues	$	166,641	$	31,038	$	—	$	(7,368	)	$	190,311
Segment costs and expenses		161,003		24,535		—		(7,368	)		178,170
Segment profit		5,638		6,503		—		—			12,141
Acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense											723
Depreciation and amortization											15,655
Changes in fair value of deferred acquisition payments											—
Stock-based compensation expense											5,676
Loss from operations											(9,913	)
Interest expense											4,897
Interest income											(99	)
Other expense, net											(32	)
Loss before income taxes										$	(14,679	)

	Three Months Ended October 2, 2010
	E-Commerce		Marketing		Consumer			Intersegment
	Services		Services		Engagement			Eliminations			Consolidated
Net revenues	$	203,067	$	50,838	$	51,524		$	(21,291	)	$	284,138
Segment costs and expenses		197,480		40,037		54,650			(21,291	)		270,876
Segment profit (loss)		5,587		10,801		(3,126	)		—			13,262
Acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense												2,980
Depreciation and amortization												21,971
Changes in fair value of deferred acquisition payments												2,074
Stock-based compensation expense												6,458
Loss from operations												(20,221	)
Interest expense												3,648
Interest income												(10	)
Other expense, net												(506	)
Loss on investments												736
Loss before income taxes											$	(24,089	)

18

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

	Nine Months Ended October 3, 2009
	E-Commerce		Marketing		Consumer		Intersegment
	Services		Services		Engagement		Eliminations			Consolidated
Net revenues	$	508,921	$	84,646	$	—	$	(19,600	)	$	573,967
Segment costs and expenses		495,245		67,642		—		(19,600	)		543,287
Segment profit		13,676		17,004		—		—			30,680
Acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense											2,347
Depreciation and amortization											46,335
Changes in fair value of deferred acquisition payments											—
Stock-based compensation expense											18,722
Loss from operations											(36,724	)
Interest expense											14,452
Interest income											(304	)
Other expense, net											(197	)
Loss before income taxes										$	(50,675	)

	Nine Months Ended October 2, 2010
	E-Commerce		Marketing		Consumer			Intersegment
	Services		Services		Engagement			Eliminations			Consolidated
Net revenues	$	592,311	$	133,249	$	147,663		$	(52,265	)	$	820,958
Segment costs and expenses		571,603		104,812		154,353			(52,265	)		778,503
Segment profit (loss)		20,708		28,437		(6,690	)		—			42,455
Acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense												9,573
Depreciation and amortization												61,306
Changes in fair value of deferred acquisition payments												6,222
Stock-based compensation expense												21,128
Loss from operations												(55,774	)
Interest expense												13,595
Interest income												(316	)
Other expense, net												906
Loss on investments												736
Loss before income taxes											$	(70,695	)

The Company’s operations are substantially within the United States.

19

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements, as defined under federal securities law. The words “look forward to,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “could,” “guidance,” “potential,” “opportunity,” “continue,” “project,” “forecast,” “confident,” “prospects,” “schedule,” “designed,” “future” “discussions,” “if” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Factors which may affect our business, financial condition and operating results include the effects of changes in the economy, consumer spending, the financial markets and the industries in which we and our clients operate; changes affecting the Internet e-commerce and marketing service, our ability to develop and maintain relationships with clients and suppliers and the timing of our establishment, extension or termination of our relationships with clients; our ability to timely and successfully develop, maintain and protect our technology, confidential and proprietary information, and to timely and successfully enhance, develop and maintain its product and service offerings; our ability to execute operationally to attract and retain qualified personnel, to successfully integrate our recent acquisitions of other businesses; and the performance of acquired businesses. More information about potential factors that could affect us are described in Part I, Item 1A in our Form 10-K for the fiscal year ended January 2, 2010, filed with the SEC on March 5, 2010, and in Part II, Item 1A of this Quarterly Report. We expressly disclaim any intent or obligation to update these forward-looking statements.

Executive Overview

Third Quarter of Fiscal 2010 Financial Results Compared to the Third Quarter of Fiscal 2009:

• Net revenues increased by $93.8 million, or 49%, net revenues from product sales increased by $62.4 million, or 69%, and service fee revenues increased $31.4 million, or 32%.

• Loss from operations was $20.2 million compared to a loss of $9.9 million.

• Net loss was $18.6 million including a benefit for income taxes of $5.4 million, compared to a net loss of $9.4 million including a benefit for income taxes of $5.3 million.

20

Consolidated Results (amounts in tables in millions)

Total Net Revenues, Costs and Expenses and Loss from Operations:

	Third Quarter																		Nine Months Ended
				% of						% of												% of						% of
	Fiscal			Net			Fiscal			Net			Increase/						Fiscal			Net			Fiscal			Net			Increase/
	2009			Revenues			2010			Revenues			(Decrease)			% Change			2009			Revenues			2010			Revenues			(Decrease)			% Change
Revenues:
Net revenues from product sales	$	90.8			48	%	$	153.2			54	%	$	62.4			69	%	$	288.2			50	%	$	458.7			56	%	$	170.5			59	%
Service fee revenues		99.5			52	%		130.9			46	%		31.4			32	%		285.8			50	%		362.3			44	%		76.5			27	%
Total net revenues		190.3			100	%		284.1			100	%		93.8			49	%		574.0			100	%		821.0			100	%		247.0			43	%
Costs and expenses:
Cost of revenues from product sales		67.5			35	%		113.7			40	%		46.2			68	%		217.3			38	%		338.7			41	%		121.4			56	%
Marketing		9.1			5	%		11.4			4	%		2.3			25	%		27.0			4	%		29.9			4	%		2.9			11	%
Account management and operations		60.2			32	%		83.5			29	%		23.3			39	%		177.0			31	%		240.5			29	%		63.5			36	%
Product development		28.4			15	%		42.4			15	%		14.0			49	%		84.9			15	%		118.8			15	%		33.9			40	%
General and administrative		19.4			10	%		29.3			10	%		9.9			51	%		58.2			10	%		81.4			10	%		23.2			40	%
Depreciation and amortization		15.6			8	%		21.9			8	%		6.3			40	%		46.3			8	%		61.3			7	%		15.0			32	%
Changes in fair value of deferred acquisitoin payments		—			0	%		2.1			1	%		2.1						—			0	%		6.2			1	%		6.2
Total costs and expenses		200.2			105	%		304.3			107	%		104.1			52	%		610.7			106	%		876.8			107	%		266.1			44	%
Loss from operations	$	(9.9	)		-5	%	$	(20.2	)		-7	%	$	(10.3	)		104	%	$	(36.7	)		-6	%	$	(55.8	)		-7	%	$	(19.1	)		52	%

Net Revenues from Product Sales. The increase in product sales for the third quarter and nine-months ended October 2, 2010 was primarily driven by the acquisition of Rue La La, which we acquired in November 2009, as well as higher shipping revenue due to increased volume of unit shipments in the e-commerce segment.

Service Fee Revenues. The increase in service fee revenues for the third quarter and nine-months ended October 2, 2010 was primarily driven by growth in the e-commerce and marketing services segments. The revenue growth in both segments was driven by increased revenue from existing clients, the addition of new clients as well as from the impact of companies acquired in the last twelve months.

Cost and Expenses.

Cost of Revenues from Products Sales:

	Third Quarter						Nine Months Ended
	October 3, 2009			October 2, 2010			October 3, 2009			October 2, 2010
Cost of revenues from product sales	$	67.5		$	113.7		$	217.3		$	338.7
As a percentage of net revenues from product sales		74	%		74	%		75	%		74	%

The increase in cost of revenues from product sales for the third quarter and nine-months ended October 2, 2010 was driven by the addition of the consumer engagement segment as well as increased net revenues from products sales in the e-commerce segment. Cost of revenue from product sales as a percentage of net revenues from product sales was relatively flat in each time period.

Marketing: The absolute dollar increase in marketing expenses, which are substantially related to net revenues from product sales, was driven by the increase in net revenues from product sales in the e-commerce and consumer engagement segment. As a percentage of net revenues from product sales, marketing expenses decreased from 10% to 7% in the third quarter of fiscal 2010 and from 9% to 7% in the first nine months of fiscal 2010 due to the increase in product sales from the consumer engagement segment which have lower marketing expenses as a percentage of net revenues from product sales than the e-commerce segment.

21

Account Management and Operations: The absolute dollar increase in account management and operations expenses was driven primarily by increased payroll, professional fees and related personnel expenses in each of our segments as well as increased fulfillment, customer care and credit card fees in the e-commerce segment driven by increased order and shipment volume.

Product Development: The absolute dollar increase in product development expenses was primarily driven by payroll and professional fees in each of our segments for enhancements to our technology platforms, the expansion and upgrading of our technology operations infrastructure and costs associated with launching new clients on our platforms as well as from companies acquired in the past twelve months.

General and Administrative: The absolute dollar increase in general and administrative expenses was primarily driven by increased payroll and related expenses and professional fees in each of our segments including expenses from the companies acquired in the last year. Expenses for the third quarter and nine months ended October 2, 2010 included $3.0 million and $9.6 million of acquisition related integration, transaction, due diligence and earn-out expenses, respectively, compared to $0.7 million and $2.3 million in the third quarter and nine months ended October 3, 2009.

Depreciation and Amortization: Depreciation expenses increased by $3.2 million and $7.7 million for the third quarter and nine months ended October 2, 2010 primarily due to an increase in capital expenditures in fiscal 2010 compared to fiscal 2009 as well as depreciation on assets from companies acquired in the past twelve months. Amortization expenses increased by $3.1 million and $7.3 million for the third quarter and nine months ended October 2, 2010, respectively, due to the intangible asset amortization related to the companies acquired in the past twelve months.

Changes in Fair Value of Deferred Acquisition Payments: The increase was due to the acquisition of Rue La La. Assuming our estimate of the value of the Rue La La earnout does not change, we expect changes in fair value of deferred acquisition payments to continue to increase in fiscal 2010 as we accrete our deferred acquisition payments liability up to the estimated payment amount. Any change in our assumptions about the value of future earnout payments may result in a significant change to our change in fair value of deferred acquisition payments.

Other (Income) Expense:

	Third Quarter									Nine Months Ended
	October 3, 2009			October 2, 2010			Change			October 3, 2009			October 2, 2010			Change
Interest expense	$	4.9		$	3.7		$	(1.2	)	$	14.5		$	13.6		$	(0.9	)
Interest income		(0.1	)		—			0.1			(0.3	)		(0.3	)		—
Other (income) expense		—			(0.5	)		(0.5	)		(0.2	)		0.9			1.1
Loss on investments		—			0.7			0.7			—			0.7			0.7
Total other expense	$	4.8		$	3.9		$	(0.9	)	$	14.0		$	14.9		$	0.9

Interest expense decreased in the third quarter and nine-months ended October 2, 2010 primarily due to the conversion of our $57.5 million 3% convertible notes into shares of our common stock in June 2010. Other (income) expense is primarily comprised of foreign currency exchange gains and losses on transactions denominated in currencies other than the functional currency. The $0.7 million loss on investments in the third quarter of fiscal 2010 is a result of the write-off on an investment, which was accounted for under the cost method, due to the deterioration in the financial condition of the investee.

Income Taxes:

In the first quarter of 2010, our tax provision was determined using an estimate of our annual effective rate of 65.3% plus any discrete items that occurred during the quarter. In the second and third quarters of 2010, due to the impact of our acquisitions made during the second quarter and other factors, small variations to the full-year projection can result in material variability in our estimated annual effective rate. Therefore, we have calculated the third quarter tax provision using a calculation of the actual tax rate on the actual results for the nine months ended October 2, 2010, which is the best estimate of the our estimated annual effective tax rate. Using this approach, we recorded a benefit of $18.2 million in the first nine months of fiscal 2010. Our tax provision for this interim period resulted in a tax rate of 25.7% based on the actual result for the first nine months of fiscal 2010. The actual tax rate is lower than the 35% federal statutory tax rate primarily due to non- deductible permanent items and certain losses in foreign operations that generate no tax benefit. We do not provide for U.S. taxes on our undistributed earnings of foreign subsidiaries, if any, since we intend to invest such undistributed earnings indefinitely outside of the U.S.

22

As of January 2, 2010, we had available federal net operating loss carryforwards of approximately $507.3 million which expire in the years 2010 through 2029. Approximately $308.6 million, out of the total $507.3 million, will expire as a result of the Internal Revenue Code Section 382 limitation regardless of the amount of future taxable income, and thus has a full valuation allowance recorded against this deferred tax asset. As such, we expect a majority of our 2010 net tax provision to be non-cash. As of January 2, 2010, we had available state net operating loss carryforwards of approximately $268.6 million which expire in the years 2010 through 2029 and foreign net operating loss carryforwards of approximately $18.7 million that either begin expiring in 2023 or have no expiration date. A portion of these net operating loss carryforwards are offset by a valuation allowance. Management monitors all available positive and negative evidence related to our ability to utilize our deferred tax assets. Should management determine that it is more likely than not that these deferred tax assets will be utilized, we will release a portion of the remaining valuation allowance. Should management determine that it is more likely than not that these deferred tax assets will not be utilized, we will increase the valuation allowance.

Segment Results

	Third Quarter												Nine Months Ended
	Fiscal 2009			Fiscal 2010			$ Change			% Change			Fiscal 2009			Fiscal 2010			$ Change			% Change
E-Commerce services:
Net revenues	$	166.7		$	203.1		$	36.4			22	%	$	508.9		$	592.3		$	83.4			16	%
Segment profit	$	5.6		$	5.6		$	—			0	%	$	13.7		$	20.7		$	7.0			51	%
Marketing services:
Net revenues	$	31.0		$	50.8		$	19.8			64	%	$	84.7		$	133.2		$	48.5			57	%
Segment profit	$	6.5		$	10.8		$	4.3			66	%	$	17.0		$	28.4		$	11.4			67	%
Consumer engagement:
Net revenues	$	—		$	51.5		$	51.5			100	%	$	—		$	147.8		$	147.8			100	%
Segment loss	$	—		$	(3.1	)	$	(3.1	)		100	%	$	—		$	(6.7	)	$	(6.7	)		100	%
Intersegment eliminations:
Net revenues	$	(7.4	)	$	(21.3	)	$	(13.9	)		188	%	$	(19.6	)	$	(52.3	)	$	(32.7	)		167	%
Segment profit	$	—		$	—		$	—			0	%	$	—		$	—		$	—			0	%
Consolidated net revenues	$	190.3		$	284.1		$	93.8			49	%	$	574.0		$	821.0		$	247.0			43	%
Consolidated segment profit	$	12.1		$	13.3		$	1.2			10	%	$	30.7		$	42.4		$	11.7			38	%
Segment Margins:
E-Commerce services		3.4	%		2.8	%								2.7	%		3.5	%
Marketing services		21.0	%		21.3	%								20.1	%		21.3	%
Consumer engagement	NA				-6.0	%							NA				-4.5	%

E-Commerce Services Segment:

Net revenues increased 22% and 16% for the third quarter and first nine months of fiscal 2010, respectively. The growth in both periods is due to an increase in net revenues from product sales and services fees. The increase in net revenues from product sales was driven by an increase in shipping revenue due to increased unit shipments as well as an increase in product revenue from clients that operated for the entirely of both periods. The increase in service fees revenues for the third quarter and nine-months ended October 2, 2010 was primarily due to an increase in revenues from clients that operated during the entirety of both periods as well as from the addition of clients that began generating revenue for us after the third quarter of fiscal 2009.

Segment profit was unchanged for the third quarter fiscal 2010 compared to the same period in fiscal 2009 and segment operating margins decreased to 2.8% in the third quarter of fiscal 2010 versus 3.4% in the same period in fiscal 2009. The decrease in segment operating margins was primarily driven by expenses associated with the launches of international webstores. Segment operating margins for the nine months ended October 2, 2010 increased from 2.7% to 3.5% compared to the same period in 2009. The increase in segment operating margins was driven primarily by service fee revenues comprising a larger percentage of total net revenues as services fee revenue has no associated cost of revenue or marketing expenses.

23

Marketing Services Segment:

Net revenues increased by 64% and 57% for the third quarter and first nine months of fiscal 2010, respectively. The increases are due to growth of revenue from existing clients, revenue from new clients as well as revenue from the acquisitions of Silverlign and Pepperjam in 2009 and MBS Insight, FetchBack and M3 Mobile in 2010.

Segment profit increased $4.3 million or 66% in the third quarter of fiscal 2010 compared to the same period in fiscal 2009, and increased $11.4 million or 67% in the first nine months of fiscal 2010 compared to the same period in fiscal 2009. Segment operating margins remained constant at 21% in the third quarter of fiscal 2010 compared to same period in 2009 and increased slightly from 20% to 21% in the first nine months of fiscal 2010 compared to same period in 2009. The increase in segment profit was primarily driven by the revenue growth described above. The increase in the segment margins for the first nine months of fiscal 2010 compared to same period in 2009 was driven by a favorable mix of revenue from higher margin services partially offset by expenses associated with hiring an executive management team.

Consumer Engagement Segment:

The segment was established upon the acquisition of Rue La La and as such, did not have any revenues or expenses in the first nine months of fiscal 2009.

Seasonality

We have experienced and expect to continue to experience seasonal fluctuations in our revenues from e-commerce services. These seasonal patterns will cause quarterly fluctuations in our operating results. We also expect to experience seasonal fluctuations from our consumer engagement segment, but to a lesser degree than with our e-commerce services segment. We experience less seasonality in our revenues from marketing services. The fourth fiscal quarter has accounted for and is expected to continue to account for a disproportionate percentage of our total annual revenues. We believe that results of operations for any quarterly period may not be indicative of the results for any other quarter or for the full year.

Liquidity and Capital Resources

	As of
	January 2,			October 2,
	2010			2010
	(in millions)
Cash and cash equivalents	$	228.4		$	66.7
Percentage of total assets		21	%		7	%

As of October 2, 2010, our cash was comprised entirely of bank deposits. As of January 2, 2010, our cash and cash equivalents were comprised of $13.6 million of money market mutual funds and $214.8 million of bank deposits.

In June 2010, we called all of our $57.5 million 3% convertible notes for redemption and substantially all of the notes were converted into 3.2 million shares of our common stock.

We have experienced and expect to continue to experience seasonal fluctuations in our cash flows. We generate the substantial majority of cash from our operating activities in our fourth fiscal quarter. In our first fiscal quarter, we typically use cash generated from operating activities in the fourth quarter of the prior fiscal year to satisfy accounts payable and accrued expenses incurred in the fourth fiscal quarter of our prior fiscal year. During our second and third fiscal quarters, we generally fund our operating expenses and capital expenditures from either cash generated from operating activities, cash and cash equivalents, or financing activities.

Sources of Cash

Our principal sources of liquidity in the first nine months of fiscal 2010 were our cash and cash equivalents balances and a $25.0 million borrowing on our line of credit.

24

We generated $35.2 million of cash from financing activities in the first nine months of fiscal 2010 primarily from a $25.0 million borrowing on our line of credit and from the proceeds from exercise of common stock options partially offset by principal payments on our debt and lease obligations. During the first nine months of fiscal 2009, we generated $86.9 million of cash for financing activities primarily from the proceeds sale of 5.4 million shares of common stock in the first nine months of fiscal 2009.

As of October 2, 2010 we had $25 million of outstanding borrowings under our $150 million secured revolving bank credit facility and $3.9 million of letters of credit outstanding. As of January 2, 2010, we had no outstanding borrowings and $6.6 million of letters of credit outstanding. The credit facility contains financial and restrictive covenants that limit our ability to engage in activities that may be in our long term best interests. We do not believe the financial covenants will limit our ability to utilize the entire borrowing availability in fiscal 2010, if necessary.

Uses of Cash

We used $76.5 million and $48.2 million of cash to fund operating activities in the first nine months of fiscal 2010 and fiscal 2009, respectively. Our operating cash flows result primarily from cash received from our customers and clients offset by cash payments we make for products and services, employee compensation (less amounts capitalized related to internal use software that are reflected as cash used in investing activities), payment processing and related transaction costs, and operating leases. Changes to our operating cash flows have historically been driven primarily by changes in operating income (excluding changes in non-cash items such as depreciation, amortization and stock-based compensation) and changes to the components of working capital, including changes to accounts receivable, accounts payable, accrued expenses and deferred revenue.

We used $47.9 million in cash for acquisitions in the first nine months of fiscal 2010. We acquired MBS for $22.2 million, acquired three additional companies during fiscal 2010 for an aggregate purchase price of $24.1 million, net of cash acquired, and made $1.6 million of deferred acquisition payments. We are also obligated to pay up to an additional $208.4 million in earnout payments through 2016 based on the achievement of certain performance targets by some of our acquired companies, of which we have the ability to pay up to $45.8 million with shares of our common stock. In addition, we invested $18.6 million in fiscal 2010 for a 27% noncontrolling interest in Intershop Communications.

Our capital expenditures totaled $54.6 million and $29.6 million in the first nine months of fiscal 2010 and fiscal 2009, respectively. Our capital expenditures have generally comprised purchases of computer hardware and software, internally developed software, and furniture and fixtures.

See Item 1 of Part I, Financial Statements, Note 8, Commitments and Contingencies, for additional discussion of our principal contractual commitments. Purchase obligations and open purchase orders, consisting primarily of inventory commitments, were $96.4 million at October 2, 2010.

Outlook and Guidance

Outlook

We expect an increase in net revenues primarily driven by the inclusion of Rue La La in our full year results as well as increases in our e-commerce services and marketing services segments driven by increased revenue from existing clients as well as the addition of new clients who started generating revenue for us in fiscal 2010. The expected increase in net revenues from our existing clients is based on the Company’s recent revenue growth trends which are expected to continue as well as projected industry growth.

We expect a decrease in income from operations compared to 2009. The expected decrease is primarily driven by the expected percentage increase in amortization expense from companies acquired in 2009 and 2010 and the expected percentage increase in changes in fair value of deferred acquisition payments from the Rue La La acquisition being greater than the expected percentage increase in revenue. The expected percentage increase in other operating costs and expenses is expected to be less than the expected percentage increase in net revenues.

We expect to have a larger net loss in 2010 as compared to 2009 based on the expected decrease in income from operations noted above, partially offset by a decrease in interest expense resulting from the conversion of our $57.5 million convertible notes in the second quarter of fiscal 2010.

We expect an increase in our capital expenditures primarily from investments in our e-commerce technology platform and capital expenditures for companies acquired in 2009 and 2010.

25

We expect to generate positive cash flow from operations in fiscal 2010, all of which will be generated in our fourth fiscal quarter. We believe that our cash flow from operating activities, cash and cash equivalents balances, and borrowing availability under our secured revolving credit facility will be sufficient to meet our anticipated operating cash needs for at least the next 12 months, which includes any deferred acquisition payments. However, any projections of future cash needs and cash flows are subject to substantial uncertainty.

We continually evaluate opportunities to sell additional equity or debt securities, obtain credit facilities, or repurchase, refinance, or otherwise restructure our long-term debt for strategic reasons or to further strengthen our financial position. Our secured revolving bank credit facility contains negative covenants including prohibitions on our ability to incur additional indebtedness. The sale of additional equity or convertible debt securities would likely be dilutive to our stockholders. In addition, we will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services, and technologies, which might affect our liquidity requirements or cause us to issue additional equity or debt securities. There can be no assurance that additional lines-of-credit or financing instruments will be available in amounts or on terms acceptable to us, if at all.

Guidance

We provided the following guidance for fiscal 2010 on October 27, 2010, in our earnings released furnished on Form 8-K:

• Net revenues are expected to be $1.35 billion.

• Income/loss from operations is expected to be between a loss of $1.3 million and income of $0.7 million.

• Capital expenditures are expected to be between $65 million and $70 million.

These projections are subject to substantial uncertainty. More information about potential factors that could affect us are described in Part I, Item 1A in our Form 10-K for the fiscal year ended January 2, 2010, filed with the SEC on March 5, 2010, and in Part II, Item 1A of this Quarterly Report.

Critical Accounting Policies

The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. We base these estimates and assumptions on historical data and trends, current fact patterns, expectations and other sources of information we believe are reasonable. Actual results may differ from these estimates under different conditions. For a full description of our critical accounting policies, see Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2009 Annual Report on Form 10-K for the fiscal year ended January 2, 2010, filed with the SEC on March 5, 2010.

Recent Accounting Pronouncements

See Item 1 of Part I, “Financial Statements — Note 2, Summary of Significant Accounting Policies” for recent accounting pronouncements that could have an effect on us.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no significant changes in market risks for the fiscal quarter ended October 2, 2010. See the information set forth in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010 filed with the Securities and Exchange Commissions (“SEC”) on March 5, 2010.

ITEM 4: CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and accumulated and communicated to our management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our chief executive officer and our chief financial officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e).  Based on this evaluation, our chief executive officer and our chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures, as defined in Rule 13a-15(e), were effective at the reasonable assurance level. 

26

Changes in internal control over financial reporting. We monitor and evaluate on an ongoing basis our internal control over financial reporting in order to improve its overall effectiveness. In the course of these evaluations, we modify and refine our internal processes and controls as conditions warrant. As required by Rule 13a-15(d), our management, including our chief executive officer and our chief financial officer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the fiscal quarter ended October 2, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the fiscal quarter ended October 2, 2010.

PART II — OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS.

See Item 1 of Part I, “Financial Statements — Note 8, Commitments and Contingencies.”

ITEM 1A: RISK FACTORS.

Our Annual Report on Form 10-K for the fiscal year ended January 2, 2010, filed with the Securities and Exchange Commission on March 5, 2010, includes a detailed discussion of our risk factors. The information presented below updates and should be read in conjunction with the risk factors and information disclosed in our Form 10-K for the fiscal year ended January 2, 2010, and our Forms 10-Q for the fiscal quarters ended April 3, 2010 and July 3, 2010.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Pursuant to the terms of a Consulting Agreement dated April 22, 2009 between Arimor, LLC (“Arimor”) and GSI Commerce Solutions, Inc., the Company agreed to issue to Arimor shares of the Company’s common stock as a fee for consulting services provided by Arimor. In the fiscal quarter ended October 2, 2010, the Company issued an aggregate of 10,946 shares of common stock to Arimor (“Arimor Shares”) pursuant to such agreement.

The issuance of the Arimor Shares was completed in accordance with Section 4(2) of the Securities Act of 1933, as amended, in offerings without any public offering or distribution. The Arimor Shares are restricted securities and include appropriate restrictive legends.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4: [Reserved]

None

ITEM 5: OTHER INFORMATION.

None

27

ITEM 6: EXHIBITS.

3.1	Certificate of Amendment to Amended and Restated Certificate of Incorporation of GSI Commerce, Inc. (filed as Appendix B to GSI Commerce, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 13, 2010 and incorporated herein by reference)
10.1	Form of Performance Restricted Stock Unit Award Issued to Michael Rubin Under the GSI Commerce, Inc. 2010 Equity Incentive Plan.
10.2	Amended and Restated Credit Agreement, dated as of March 24, 2010, by and among GSI Commerce Solutions, Inc., the Guarantors named therein, the Lenders named therein, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC and Bank of America, N.A., as joint lead arrangers and joint bookrunners.+
10.3	Form of Indemnification Agreement
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

+ Confidential treatment has been requested for certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

28

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 4, 2010

GSI COMMERCE, INC.
By:	/s/ MICHAEL G. RUBIN
	Michael G. Rubin
	Chairman, President and Chief Executive Officer
By:	/s/ MICHAEL R. CONN
	Michael R. Conn
	Executive Vice President, Finance and Chief Financial Officer (principal financial officer & principal accounting officer)

29

EX-10.1

Exhibit 10.1

GSI Commerce, Inc.
2010 Equity Incentive Plan
Performance Restricted Stock Unit Award Agreement

PARTICIPANT:	MICHAEL G. RUBIN
GRANT DATE:
TARGET NUMBER OF PERFORMANCE RESTRICTED STOCK UNITS:	units
MAXIMUM NUMBER OF PERFORMANCE RESTRICTED STOCK UNITS GRANTED (____% OF TARGET):	units
AWARD AND VESTING CRITERIA	The actual number of Performance Restricted Stock Units to be awarded to Participant and that may vest will be determined in accordance with conditions specified below.
PERFORMANCE PERIOD:

THIS AGREEMENT, effective as of the Grant Date set forth above, is between GSI Commerce, Inc., a Delaware corporation (the “Company”, “we”, “our” or “us”), and the Participant named above (“you” or “yours”), pursuant to the provisions of the Company’s 2010 Equity Incentive Plan (the “Plan”) with respect to the grant of the maximum number of performance restricted stock units (“PRSUs”) specified above. Capitalized terms used and not defined in this Performance Restricted Stock Unit Award Agreement (this “Agreement”) shall have the meanings given to them in the Plan.

By accepting this Agreement, you irrevocably agree, on your own behalf and on behalf of your heirs and any other person claiming rights under this Agreement, to all of the terms and conditions of the PRSUs as set forth in or pursuant to this Agreement and the Plan (as such may be amended from time to time). You and the Company agree as follows:

1.   Application of Plan; Administration This Agreement and your rights under this Agreement are subject to all the terms and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Board (or an appropriate committee thereof) may adopt. It is expressly understood that the Board (or an appropriate committee thereof) that administers the Plan is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon you to the extent permitted by the Plan.

2.    Performance Goal	(a) The number of PRSUs to be awarded to you under this Agreement shall depend upon the extent to which the [the Performance Metric(s)] exceeds or falls short of $_____  [the Performance Target(s)] for the Performance Period. If actual [Performance Metrics(s)] equal or exceed the  _____% [of the Performance Target(s)], the right to receive an award of any PRSUs pursuant to this Agreement shall expire without consideration.
	(b) [Definition of Performance Metrics]
	(c) Subject to the foregoing, and provided that you have remained in Continuous Service with the Company from the Grant Date set forth above, the number of PRSUs to be awarded to you following completion of the Performance Period (such PRSUs, the “Awarded PRSUs”) shall be determined in accordance with the following schedules:
	In the event that the Company’s [Performance Metric(s)] for the Performance Period falls between two of the [Performance Target(s)] listed in the table above, the number of Awarded PRSUs shall be determined by linear interpolation.
	Notwithstanding anything herein to the contrary, in no event shall more than  _____  times the Target Number of PRSUs be awarded under this Agreement.
	Following the end of the Performance Period and the collection of relevant data necessary to determine the extent to which the [Performance Target(s)] set forth in this Section 2 has been satisfied, the Board (or an appropriate committee thereof) will determine: (a) the [Performance Metric(s)] achieved by the Company for the Performance Period, and (b) the multiple of the Target Number of PRSUs to be awarded as Awarded PRSUs. The Board (or an appropriate committee thereof) shall make these determinations in its sole discretion. The class and number of securities to be issued under this Agreement shall be subject to adjustment as provided for in Section 9(a) of the Plan. The Board’s (or an appropriate committee thereof) determination pursuant to this paragraph shall be evidenced by a written certification.
3.   Vesting	50% of the Awarded PRSUs will vest (becoming “Vested Performance Units”) on  _____  and the remaining Awarded PRSUs will vest on  _____  (each such date, a “Vesting Date”), provided that you have remained in Continuous Service with the Company from the Grant Date set forth above until the respective Vesting Date, and provided further that in no case shall any Awarded PRSUs vest before the date of the Board’s (or an appropriate committee thereof) written certification pursuant to Section 2 hereof. Notwithstanding the foregoing, the terms and provisions of that certain Employment Agreement between you and the Company, effective as of July 1, 2006 (your “Employment Agreement”), may provide that any vesting restrictions contained in this Section 3 will earlier lapse in certain circumstances.
4.   Termination of Continuous Service	Except as otherwise provided in your Employment Agreement and Section 7 of this Agreement, your right to any award of PRSUs and your rights under any Awarded PRSUs that have not become Vested Performance Units will be forfeited without consideration as of the date of termination of your Continuous Service with the Company for any reason.

5.   Settlement of Vested Performance Units and Issuance of Shares of our Common Stock	Each Vested Performance Unit will be settled by the delivery of one share of Common Stock (subject to adjustment under Section 9(a) of the Plan, a “Share”) to you or, in the event of your death, to your designated beneficiary, within 5 days following the Vesting Date. Notwithstanding any other provision of this Agreement or the Plan, the Company will not be obligated to issue or deliver any Shares pursuant to this Agreement (i) until all conditions to this Agreement have been satisfied or removed, (ii) until, in the opinion of counsel to the Company, all applicable federal and state laws and regulations have been complied with, (iii) if the outstanding Common Stock is at the time listed on any stock exchange or included for quotation on an inter-dealer system, until the Shares have been listed or included or authorized to be listed or included on such exchange or system upon official notice of issuance, (iv) until the issuance or delivery of the Shares would not cause the Company to issue or sell more shares of Common Stock than the Company is then legally entitled to issue or sell, and (v) until all other legal matters in connection with the issuance and delivery of such Shares have been approved by counsel to the Company.
	You hereby authorize any brokerage service provider determined acceptable to the Company to open a securities account for you to be used for the settlement of Vested Performance Units. The date on which Shares are issued may include a delay in order to provide the Company such time as it determines appropriate to address tax withholding and other administrative matters.
	In no event shall the delivery of the Shares be delayed pursuant to any provision of this Agreement beyond the later of: (1) December 31st of the same calendar year of the Vesting Date, or (2) the 15th day of the third calendar month following the Vesting Date.
6.   Rights as Stockholder	Except as otherwise provided in this Agreement, you will not be entitled to any privileges of ownership of the shares of Common Stock underlying your PRSUs, including voting, receipt of dividends or any other rights as a stockholder of the Company, unless and until shares of Common Stock are actually delivered to you under this Agreement.
7.   Change in Control	Notwithstanding anything to the contrary in this Agreement, the Awarded PRSUs shall be subject to such acceleration of vesting upon a Change in Control as may be provided for in your Employment Agreement.

8.   Transferability	Except as provided in Section 10(k) hereof, your right to receive PRSUs under this Agreement, your Awarded PRSUs and any Vested Performance Units that you hold pursuant to this Agreement are not transferable, whether voluntarily or involuntarily, by operation of law or otherwise, other than by will or the laws of descent and distribution. Any voluntary or involuntary assignment, pledge, transfer, or other disposition of, or any attachment, execution, garnishment, or lien issued against or placed upon your right to receive PRSUs under this Agreement, your Awarded PRSUs and any Vested Performance Units that you hold pursuant to this Agreement in violation of the terms of this Agreement shall be void. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of Shares pursuant to this Agreement.
9.   Taxes	(a)    General. You are ultimately liable and responsible for all taxes owed by you in connection with your PRSUs, regardless of any action the Company takes or any transaction pursuant to this Section 9 with respect to any tax withholding obligations that arise in connection with the PRSUs. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the grant, award, vesting or settlement of the PRSUs, the Awarded PRSUs or the Vested Performance Units, and the subsequent sale of any of the Shares issued in respect of any Awarded PRSUs that may vest. Except as otherwise provided in the Employment Agreement, the Company does not commit and is under no obligation to structure this Agreement to reduce or eliminate your tax liability.
	(b)    Withholding. On or before any Vesting Date, the date your Vested Performance Units are settled and Shares are issued to you pursuant to the terms of Section 5, and any other date upon which tax withholding obligations of the Company may arise, or at any time thereafter as requested by the Company, you hereby authorize withholding from, at the Company’s election, the Shares, payroll and any other amounts payable to you and you otherwise agree to make adequate provision for, as determined by the Company, any sums required to satisfy the Federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with any of the above events or otherwise. Unless the tax withholding obligations of the Company or any Affiliate are satisfied, the Company will have no obligation to issue a certificate for Shares.

10. Miscellaneous	(a)    YOU ACKNOWLEDGE AND AGREE THAT THE VESTING OF ANY AWARDED PRSUS PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY YOUR CONTINUOUS SERVICE WITH THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR ACQUIRING GRANTED PRSUS HEREUNDER). YOU FURTHER ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT OF THE COMPANY FOR THE VESTING PERIOD, FOR THE PERFORMANCE PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH YOUR RIGHT OR THE COMPANY’S RIGHT TO TERMINATE YOUR RELATIONSHIP (I) AS AN EMPLOYEE AT ANY TIME, FOR ANY REASON OR NO REASON, WITH OR WITHOUT CAUSE; (II) AS A CONSULTANT PURSUANT TO THE TERMS OF YOUR AGREEMENT WITH THE COMPANY OR AN AFFILIATE; OR (III) AS A DIRECTOR PURSUANT TO THE BYLAWS OF THE COMPANY AND ANY APPLICABLE PROVISIONS OF THE CORPORATE LAW OF THE STATE OR OTHER JURISDICTION IN WHICH THE COMPANY IS DOMICILED, AS THE CASE MAY BE.
	(b)    Your PRSUs are unfunded and as a holder of Vested Performance Units you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue Shares pursuant to this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.
	(c)    This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or stock exchanges as may be required. The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by you or other subsequent transfers by you of any Shares issued as a result of or under this Agreement, including without limitation (i) restrictions under an insider trading policy, (ii) restrictions that may be necessary in the absence of an effective registration statement under the Securities Act of 1933, as amended, covering the PRSUs and (iii) restrictions as to the use of a specified brokerage firm or other agent for such resales or other transfers. Any sale of Shares issued pursuant to this Agreement must also comply with other applicable laws and regulations governing the sale of such Shares.
	(d)    The benefits provided under this Agreement are intended to be subject to a “substantial risk of forfeiture” under Code Section 409A, and to qualify for the “short term deferral exemption” from application of Code Section 409A as payable only within the permitted period following lapse of the applicable forfeiture conditions, and any ambiguities contained herein shall be interpreted in a manner so as to comply with the requirements of such exemption. Notwithstanding anything in the Plan or this Agreement to the contrary, the Board (or an appropriate committee thereof) may, without your consent, amend this Agreement to comply with all of the requirements of Section 409A of the Code and any corresponding guidance and regulations issued under Section 409A of the Code to the extent it is determined, in the sole discretion of the Board (or an appropriate committee thereof), that such amendment is necessary to comply with the requirements of Section 409A of the Code.
	(e)    The interpretation, performance and enforcement of this Agreement will be governed by the law of the state of Delaware without regard to such state’s conflicts of laws rules.
	(f)    Any question concerning the interpretation of this Agreement or the Plan, any adjustments required to be made under the Plan and any controversy that may arise under the Plan or this Agreement shall be determined by the Board (or an appropriate committee thereof) (including any person(s) to whom the Board has delegated its authority) in its sole and absolute discretion. Such decision by the Board (or an appropriate committee thereof) shall be final and binding.

(g)    This Agreement, the Plan and the Employment Agreement represent the entire agreement between the parties with respect to the PRSUs. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement or the Employment Agreement, the terms and conditions of the Plan shall prevail. In the event of a conflict between the terms and conditions of this Agreement and the terms and conditions of the Employment Agreement, the terms and conditions of the Employment Agreement shall prevail.

(h)    If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of such Section to the fullest extent possible while remaining lawful and valid.

(i)    Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any other provision of this Agreement. The rights granted both parties hereunder are cumulative and shall not constitute a waiver of either party’s right to assert any other legal remedy available to it.

(j)    This Agreement may be amended only by a writing executed by you and the Company which specifically states that it is amending this Agreement. Notwithstanding the foregoing and subject to Section 2(b)(viii) of the Plan, this Agreement may be amended solely by the Board (or an appropriate committee thereof) by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you. Without limiting the foregoing, the Board (or an appropriate committee thereof) reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the PRSUs which are then subject to restrictions as provided herein.

(k)    The rights and obligations of the Company under this Agreement will be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns. You may not assign, transfer or pledge the granted PRSUs, the Awarded PRSUs, the Vested Performance Units or any right or interest therein or thereunder to anyone other than by will or the laws of descent and distribution except with the prior written consent of the Company. The Company may cancel your rights hereunder if you attempt to assign or transfer them in a manner inconsistent with this Agreement.

(l)    All notices with respect to this Agreement shall be in writing and shall be hand delivered or sent by first class mail or reputable overnight delivery service, expenses prepaid. Notice may also be given by electronic mail or facsimile and shall be effective on the date transmitted if confirmed within 24 hours thereafter by a signed original sent in a manner provided in the preceding sentence. Notices to the Company or the Board (or an appropriate committee thereof) shall be delivered or sent to the Company’s headquarters, 935 First Avenue, King of Prussia, PA 19406, to the attention of its Chief Financial Officer and its General Counsel. Notices to the Participant or holder of Shares issued pursuant to this Agreement shall be sufficient if delivered or sent to such person’s address as it appears in the regular records of the Company or its transfer agent.

(m)   The headings of the Sections in this Agreement are inserted for convenience only and will not be deemed to constitute a part of this Agreement or to affect the meaning of this Agreement.

(n)    You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of this Agreement.

By the signatures below, you and the authorized representative of the Company acknowledge your agreement to this Performance Restricted Stock Unit Award Agreement as of the Grant Date specified above.

Michael G. Rubin	Date
Accepted by:
GSI COMMERCE, INC.
By	Date
Name
Title

EX-10.2

**INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit 10.2

EXECUTION COPY

$150,000,000.00 REVOLVING CREDIT FACILITY

AMENDED AND RESTATED CREDIT AGREEMENT

by and among

GSI COMMERCE SOLUTIONS, INC.

and

THE LENDERS PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION, As Administrative Agent

and

PNC CAPITAL MARKETS LLC

BANK OF AMERICA SECURITIES LLC

As Joint Lead Arrangers and Joint Bookrunners

Dated as of March 24, 2010

TABLE OF CONTENTS

	Page
1. CERTAIN DEFINITIONS		1
1.1 Certain Definitions		1
1.2 Construction		21
1.3 Accounting Principles		21
2. REVOLVING CREDIT AND SWING LOAN FACILITIES		22
2.1 Revolving Credit Commitments		22
2.2 Nature of the Lenders’ Obligations with Respect to Revolving Credit Loans		24
2.3 Fees		25
2.4 Revolving Credit Loan Requests; Swing Loan Requests		25
2.5 Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans		26
2.6 Notes		28
2.7 Use of Proceeds		28
2.8 Letter of Credit Subfacility		29
2.9 Utilization of Commitments in Optional Currencies		36
2.10 Currency Repayments		38
2.11 Optional Currency Amounts		38
3. INTEREST RATES		38
3.1 Interest Rate Options		38
3.2 Interest Periods		39
3.3 Interest After Default		40
3.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available		40
3.5 Selection of Interest Rate Options		42
4. PAYMENTS		42
4.1 Payments		42
4.2 Pro Rata Treatment of Lenders		42
4.3 Sharing of Payments by Lenders		43
4.4 Presumptions by Administrative Agent		44
4.5 Interest Payment Dates		44
4.6 Voluntary Prepayments; Reduction of Revolving Credit Commitments		44
4.7 Mandatory Prepayments		46
4.8 Increased Costs		48
4.9 Taxes		49
4.10 Indemnity		51
4.11 Settlement Date Procedures		52
4.12 Interbank Market Presumption		52
4.13 Judgment Currency		52

i 

	Page
5. REPRESENTATIONS AND WARRANTIES		53
5.1 Representations and Warranties		53
5.2 Updates to Schedules		57
6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT		57
6.1 First Loans and Letters of Credit		58
6.2 Each Loan or Letter of Credit		59
7. COVENANTS		59
7.1 Affirmative Covenants		59
7.2 Negative Covenants		62
7.3 Reporting Requirements		67
8. DEFAULT		69
8.1 Events of Default		69
8.2 Consequences of Event of Default		72
9. THE ADMINISTRATIVE AGENT		73
9.1 Appointment and Authority		73
9.2 Rights as a Lender		74
9.3 Exculpatory Provisions		74
9.4 Reliance by Administrative Agent		75
9.5 Delegation of Duties		75
9.6 Resignation of Administrative Agent		75
9.7 Non-Reliance on Administrative Agent and Other Lenders		76
9.8 Administrative Agent’s Fee		77
9.9 Authorization to Release Collateral and Guarantors		77
9.10 No Reliance on Administrative Agent’s Customer Identification Program		77
10. MISCELLANEOUS		77
10.1 Modifications, Amendments or Waivers		77
10.2 No Implied Waivers; Cumulative Remedies		78
10.3 Expenses; Indemnity; Damage Waiver		78
10.4 Holidays		80
10.5 Notices; Effectiveness; Electronic Communication		81
10.6 Severability		82
10.7 Duration; Survival		82
10.8 Successors and Assigns		82
10.9 Confidentiality		85
10.10 Counterparts; Integration; Effectiveness		86
10.11 Choice of Law; Submission to Jurisdiction; Waiver of Venue; Service of Process; Waiver of Jury Trial		86
10.12 USA Patriot Act Notice		88

ii 

LIST OF SCHEDULES AND EXHIBITS

SCHEDULES
SCHEDULE 1.1(A)	-	PRICING GRID
SCHEDULE 1.1(B)	-	COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(P)	-	PERMITTED LIENS
SCHEDULE 2.8	-	EXISTING LETTERS OF CREDIT
SCHEDULE 5.1(a)	-	QUALIFICATIONS TO DO BUSINESS
SCHEDULE 5.1(b)	-	SUBSIDIARIES
SCHEDULE 5.1(e)	-	MATERIAL LITIGATION
SCHEDULE 5.1(n)	-	ENVIRONMENTAL DISCLOSURES
SCHEDULE 6.1(a)	-	OPINION OF COUNSEL
SCHEDULE 7.1(c)	-	INSURANCE REQUIREMENTS RELATING TO COLLATERAL
SCHEDULE 7.2(a)	-	PERMITTED INDEBTEDNESS
SCHEDULE 7.2(d)	-	EXISTING INVESTMENTS
SCHEDULE 8.1(j)	-	EXISTING 5% SHAREHOLDERS
EXHIBITS
EXHIBIT 1.1(A)	-	ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(G)	-	GUARANTOR JOINDER
EXHIBIT 1.1(N)(1)	-	REVOLVING CREDIT NOTE
EXHIBIT 1.1(N)(2)	-	SWING LOAN NOTE
EXHIBIT 2.1	-	LENDER JOINDER
EXHIBIT 2.4	-	LOAN REQUEST
EXHIBIT 2.8	-	EXISTING LETTERS OF CREDIT
EXHIBIT 2.4(b)	-	SWING LOAN REQUEST
EXHIBIT 7.3(c)	-	QUARTERLY COMPLIANCE CERTIFICATE

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (as hereafter amended, the “Agreement”) is dated as of March 24, 2010, and is made by and among GSI COMMERCE SOLUTIONS, INC., a Pennsylvania corporation (the “Borrower”), each of the GUARANTORS (as hereinafter defined), the LENDERS (as hereinafter defined), and PNC BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent for the Lenders under this Agreement.

BACKGROUND

The Parties hereto entered into a Credit Agreement dated as of January 11, 2008 (the “Original Agreement”), whereby the Lenders agreed to make available to the Borrower a $75,000,000.00 revolving credit facility on the terms and conditions set forth in the Original Agreement. On or about May 14, 2008, the amount of such revolving credit facility was increased to $90,000,000.00 pursuant to Section 2.1(b) of the Original Agreement. The Borrower has requested that certain terms of the Original Agreement be amended, and the parties hereto have agreed to amend and restate the Original Agreement in its entirety as follows:

1. CERTAIN DEFINITIONS.

1.1 Certain Definitions. In addition to words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, respectively, unless the context hereof clearly requires otherwise:

Administrative Agent means PNC Bank, National Association, and its successors and assigns, in its capacity as agent for the Lenders.

Administrative Agent’s Fee has the meaning specified in Section 9.8 [Administrative Agent’s Fee].

Administrative Agent’s Letter has the meaning specified in Section 9.8 [Administrative Agent’s Fee].

Affiliate means as to any Person, any other Person (a) which directly or indirectly controls, is controlled by, or is under common control with such Person, (b) which beneficially owns or holds 15% or more of any class of the voting or other equity interests of such Person, or (c) 15% or more of any class of voting interests or other equity interests of which is beneficially owned or held, directly or indirectly, by such Person.

Agreement has the meaning given to such term in the introductory paragraph.

Anti-Terrorism Laws means any Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).

Applicable Commitment Fee Rate means the percentage rate per annum based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Commitment Fee.”

Applicable Letter of Credit Fee Rate means the percentage rate per annum based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “LIBOR Rate Spread.”

Applicable Margin means as applicable:

(a) the percentage spread to be added to the Base Rate applicable to Revolving Credit Loans under the Base Rate Option and Swing Loans based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Base Rate Spread”, or

(b) the percentage spread to be added to the LIBOR Rate applicable to Revolving Credit Loans under the LIBOR Rate Option based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “LIBOR Rate Spread”.

Approved Fund means any fund that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of business and 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 means an assignment and assumption entered into by a Lender and an assignee permitted under Section 10.8 [Successors and Assigns], in substantially the form of Exhibit 1.1(A).

Authorized Officer means, with respect to any Loan Party, the Chief Executive Officer, President, Chief Financial Officer, Treasurer or Assistant Treasurer of such Loan Party or such other individuals, designated by written notice to the Administrative Agent from the Borrower, authorized to execute notices, reports and other documents on behalf of the Loan Parties required hereunder. The Borrower may amend such list of individuals from time to time by giving written notice of such amendment to the Administrative Agent.

Base Rate means, for any day, a fluctuating per annum rate of interest equal to the highest of (a) the Federal Funds Open Rate, plus 0.5% per annum, and (b) the Prime Rate, and (c) the Daily LIBOR Rate, plus 1.0% per annum. Any change in the Base Rate (or any component thereof) shall take effect at the opening of business on the day such change occurs.

Base Rate Option means the option of the Borrower to have Loans bear interest at the rate and under the terms set forth in Section 3.1(a)(i) [Revolving Credit Base Rate Option].

Borrower has the meaning specified in the introductory paragraph.

- 2 -

Borrower Equity Interests has the meaning specified in Section 5.1(b) [Subsidiaries and Owners; Investment Companies].

Borrowing Date means, with respect to any Loan, the date for the making thereof or the renewal or conversion thereof at the same or to a different Interest Rate Option, which shall be a Business Day.

Borrowing Tranche means specified portions of Loans outstanding as follows: (a) any Loans to which a LIBOR Rate Option applies which become subject to the same Interest Rate Option under the same Loan Request by the Borrower and which have the same Interest Period and which are denominated either in Dollars or in the same Optional Currency shall constitute one Borrowing Tranche, and (b) all Loans to which a Base Rate Option applies shall constitute one Borrowing Tranche.

Business Day means any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in Pittsburgh, Pennsylvania and (a) if the applicable Business Day relates to any Loan to which the LIBOR Rate Option applies, such day must also be a day on which dealings are carried on in the London interbank market, (b) with respect to advances or payments of Loans or any other matters relating to Loans denominated in an Optional Currency, such day also shall be a day on which dealings in deposits in the relevant Optional Currency are carried on in the applicable interbank market, and (c) with respect to advances or payments of Loans denominated in an Optional Currency, such day shall also be a day on which all applicable banks into which Loan proceeds may be deposited are open for business and foreign exchange markets are open for business in the principal financial center of the country of such currency.

Cash Collateralize means, with respect to Letter of Credit Obligations, that the Borrower shall deposit in a non-interest bearing account with the Administrative Agent, as cash collateral for its Obligations under the Loan Documents, an amount equal to the Letter of Credit Obligations, and with respect to Section 4.7(c), the amount required under such Section.

Cash Equivalents means, as to any Person, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (b) time deposits and certificates of deposit with maturities of not more than one year from the date of acquisition by such Person of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof, the District of Columbia or any foreign jurisdiction having capital, surplus and undivided profits aggregating in excess of $200,000,000, (c) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above, (d) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (c) above (including each of the Blackrock money market funds currently utilized by the Borrower) and (e) demand deposit accounts maintained in the ordinary course of business.

- 3 -

Change in Law means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation or application thereof by any Official Body or (c) the making or issuance of any request, guideline or directive (whether or not having the force of Law) by any Official Body.

CIP Regulations has the meaning given to such term in Section 9.10 [No Reliance on Administrative Agent’s Customer Identification Program]

Closing Date means the Business Day on which the Borrower first satisfies all of the conditions set forth in Section 6.1 [First Loans and Letters of Credit] not otherwise waived by the Administrative Agent.

Code means the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

Collateral means the collateral under the Collateral Documents.

Collateral Documents has the meaning given to such term in Section 5.1(k) [Liens in the Collateral].

Commitment means as to any Lender the aggregate of its Revolving Credit Commitment and, in the case of the Administrative Agent, its Swing Loan Commitment, and Commitments means the aggregate of the Revolving Credit Commitments and Swing Loan Commitment of all of the Lenders.

Commitment Fee has the meaning specified in Section 2.3(a) [Commitment Fees].

Compliance Certificate has the meaning specified in Section 7.3(c) [Certificate of the Borrower].

Complying Lender means any Lender which is not a Non-Complying Lender.

Computation Date has the meaning specified in Section 2.9(a).

Consolidated Adjusted EBITDA means, for any period of determination, Consolidated EBITDA for such period plus (or minus, if negative), with respect to any Guarantor acquired during such period, EBITDA of such Guarantor for such period prior to such acquisition (whether positive or negative), provided that (a) if the aggregate amount of EBITDA to be so included in any period equals or exceeds fifteen percent (15%) of Consolidated EBITDA for such period, then any such EBITDA to be so included shall have been audited or otherwise verified and validated by a Person unaffiliated with the Borrower acceptable to the Required Lenders in its reasonable discretion, (b) if the aggregate amount of EBITDA to be so included in any period is less than fifteen percent (15%) of Consolidated EBITDA for such period, then such EBITDA to be so included shall be in amount, detail, historical presentation, analysis, and otherwise, satisfactory to the Required Lenders in their reasonable discretion; and (c) any

- 4 -

adjustments to any such EBITDA to be so included shall be subject to approval of the Required Lenders.

Consolidated EBITDA for any period of determination means (in each case, of the Loan Parties for such period determined and consolidated in accordance with GAAP) (a) the sum of (i) net income, depreciation, amortization, non-cash stock-based compensation expense, non-cash investment, goodwill or other intangible impairment charges, interest expense and income tax expense, (ii) any expenses directly resulting from GAAP treatment of earn-out liabilities incurred in connection with any acquisition of a Guarantor and the payment of such liabilities during such period of determination, (iii) uncapitalized expenses paid to unrelated third parties and uncapitalized integration expenses incurred during such period in connection with the acquisition of any Guarantor during such period to the extent that documentation for and other evidence of the incurrence and purpose of such expenses are reasonably satisfactory to the Administrative Agent in amounts not exceeding the Max Expense Add Back for each such acquisition, and (iv) the expense resulting from any upward adjustment in inventory valuation directly related to an acquisition of a Guarantor occurring in such period of determination, minus (b) (i) non-cash credits to net income, (ii) the amount, if any, included in clause (a) attributable in such period to Persons which have been divested during such period or which are the subject of written agreements providing for their divestiture, which amount, and method of calculating such amount, shall be reasonably satisfactory to the Administrative Agent, (iii) any income directly resulting from GAAP treatment of earn-out liabilities incurred in connection with any acquisition of a Guarantor and the payment of such liabilities during such period of determination, and (iv) any downward adjustment in inventory valuation directly related to an acquisition of a Guarantor occurring in such period of determination.

Consolidated Net Worth means at any time the Loan Parties’ assets minus the Loan Parties’ liabilities, all determined on a consolidated basis in accordance with GAAP.

Daily LIBOR Rate means, for any day, the rate per annum determined by the Administrative Agent by dividing (a) the Published Rate by (b) a number equal to 1.00 minus the LIBOR Reserve Percentage on such day.

Delinquent Lender has the meaning specified in Section 4.3.

Dollar, Dollars, U.S. Dollars and the symbol $ means lawful money of the United States of America.

Dollar Equivalent means, with respect to any amount of any currency, the Equivalent Amount of such currency expressed in Dollars.

Dollar Equivalent Revolving Facility Usage means at any time the sum of the Dollar Equivalent amount of Revolving Credit Loans then outstanding, the Dollar Equivalent amount of Swing Loans then outstanding, and the Dollar Equivalent amount of Letters of Credit Outstanding.

Domestic Subsidiary means a Subsidiary of a Loan Party organized under the laws of the United States or one of the states or territories thereof.

- 5 -

Drawing Date has the meaning specified in Section 2.8(c)(i) [Disbursements, Reimbursement].

EBITDA means, for any period for any Person, net income plus interest expense, depreciation, amortization, income tax expense and other non-cash charges to net income acceptable to Required Lenders, minus non-cash credits to net income, all for such period and for such Person, determined in accordance with GAAP.

Environmental Laws means all applicable federal, state, local, tribal, territorial and foreign Laws (including common law), constitutions, statutes, treaties, regulations, rules, ordinances and codes and any consent decrees, settlement agreements, judgments, orders, directives, policies or programs issued by or entered into with an Official Body pertaining or relating to: (a) pollution or pollution control; (b) protection of human health from exposure to regulated substances; or the environment; (c) protection of the environment and/or natural resources; employee safety in the workplace; (d) the presence, use, management, generation, manufacture, processing, extraction, treatment, recycling, refining, reclamation, labeling, packaging, sale, transport, storage, collection, distribution, disposal or release or threat of release of regulated substances; (e) the presence of contamination; (f) the protection of endangered or threatened species; and (g) the protection of environmentally sensitive areas.

Equity Interests has the meaning given to such term in Section 5.1(b) [Subsidiaries and Owners; Investment Companies].

Equivalent Amount means, at any time, as determined by the Administrative Agent (which determination shall be conclusive absent manifest error), with respect to an amount of any currency (the “Reference Currency”) which is to be computed as an equivalent amount of another currency (the “Equivalent Currency”): (a) if the Reference Currency and the Equivalent Currency are the same, the amount of such Reference Currency, or (b) if the Reference Currency and the Equivalent Currency are not the same, the amount of such Equivalent Currency converted from such Reference Currency at the Administrative Agent’s spot selling rate (based on the market rates then prevailing and available to the Administrative Agent) for the sale of such Equivalent Currency for such Reference Currency at a time determined by the Administrative Agent on the second Business Day immediately preceding the event for which such calculation is made.

Equivalent Currency has the meaning specified in the definition of Equivalent Amount.

ERISA means the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

ERISA Affiliate means, at any time, any trade or business (whether or not incorporated) under common control with the Borrower and are treated as a single employer under Section 414 of the Code.

ERISA Event means (a) a reportable event (under Section 4043 of ERISA and regulations thereunder) with respect to a Pension Plan; (b) a withdrawal by the Borrower or any

- 6 -

ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

ERISA Group means, at any time, the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with the Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code.

Event of Default means any of the events described in Section 8.1 [Events of Default] and referred to therein as an “Event of Default.”

Excluded Taxes means, with respect to the Administrative Agent, any Lender, the Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 4.9(e) [Status of Lenders], except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 4.9(a) [Payment Free of Taxes].

Executive Order No. 13224 means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

Expiration Date means March 24, 2013.

Federal Funds Effective Rate for any day means the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal

- 7 -

funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

Federal Funds Open Rate for any day means the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by the Administrative Agent (for purposes of this definition an “Alternate Source”) or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day. If and when the Federal Funds Open Rate changes, the rate of interest with respect to any amount to which the Federal Funds Open Rate applies will change automatically without notice to the Borrower, effective on the date of any such change.

Fixed Charge Coverage Ratio means the ratio of Consolidated EBITDA to Fixed Charges.

Fixed Charges means, for any period of determination, the sum of cash interest expense, cash income taxes, scheduled principal installments on Indebtedness and cash dividends, in each case of the Borrower and its Subsidiaries for such period determined and consolidated in accordance with GAAP.

Foreign Subsidiary means a Subsidiary of a Loan Party which is not a Domestic Subsidiary.

Foreign Lender means any Lender that is organized under the Laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

GAAP means generally accepted accounting principles as are in effect from time to time, subject to the provisions of Section 1.3 [Accounting Principles], and applied on a consistent basis both as to classification of items and amounts.

Guarantor means each of the parties to this Agreement which is designated as a “Guarantor” on the signature page hereof and each other Person which joins this Agreement as a Guarantor after the date hereof.

- 8 -

Guarantor Joinder means a joinder by a Person as a Guarantor under the Loan Documents in the form of Exhibit 1.1(G).

Guaranty of any Person means any obligation of such Person guaranteeing or in effect guaranteeing any liability or obligation of any other Person in any manner, whether directly or indirectly, including any agreement to indemnify or hold harmless any other Person, any performance bond or other suretyship arrangement and any other form of assurance against loss, except endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business.

Guaranty Agreement means the Continuing Agreement of Guaranty and Suretyship executed and delivered by each of the Guarantors.

Increasing Lender has the meaning specified in Section 2.1(b) [Increase in Revolving Credit Commitments].

Indebtedness means, as to any Person at any time and without duplication, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (a) borrowed money, (b) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (c) reimbursement obligations (contingent or otherwise) under any letter of credit, and the net value of any obligation under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (d) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business other than trade payables which are either or both (i) represented by a promissory note or other evidence of indebtedness and/or (ii) are more than ninety (90) days past due and are not being diligently contested in good faith), or (e) any Guaranty of Indebtedness for borrowed money; provided that for purposes of this Agreement in cases where GAAP reporting permits or requires a valuation of any Indebtedness at less than the principal amount outstanding, the amount of any Indebtedness shall be determined by the principal amount thereof outstanding.

Indemnified Taxes means Taxes other than Excluded Taxes.

Indemnitee has the meaning specified in Section 10.3(b) [Indemnification by the Borrower].

Information means all information received from the Loan Parties or any of their Subsidiaries relating to the Loan Parties or any of such Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Lender on a non-confidential basis prior to disclosure by the Loan Parties or any of their Subsidiaries, provided that, in the case of information received from the Loan Parties or any of their Subsidiaries after the date of this Agreement, such information is clearly identified at the time of delivery as confidential.

- 9 -

Insolvency Proceeding means with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Loan Party or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors; undertaken under any Law.

Intercompany Subordination Agreement means a subordination agreement among the Loan Parties for the benefit of the Administrative Agent and the Lenders, in form and substance satisfactory to the Administrative Agent.

Interest Period means the period of time selected by the Borrower in connection with (and to apply to) any election permitted hereunder by the Borrower to have Revolving Credit Loans bear interest under the LIBOR Rate Option. Subject to the last sentence of this definition, such period shall be one, two, three or six Months, provided that the only Interest Periods available for Optional Currency Loans shall be one Month. Such Interest Period shall commence on the effective date of such Interest Rate Option, which shall be (a) the Borrowing Date if the Borrower is requesting new Loans, or (b) the date of renewal of or conversion to the LIBOR Rate Option if the Borrower is renewing or converting to the LIBOR Rate Option applicable to outstanding Loans. Notwithstanding the second sentence hereof: (i) any Interest Period which would otherwise end on a date which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) the Borrower shall not select, convert to or renew an Interest Period for any portion of the Loans that would end after the Expiration Date.

Interest Rate Hedge means an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by the Loan Parties or their Subsidiaries in order to provide protection to, or minimize the impact upon, the Borrower, the Guarantors and/or their Subsidiaries of increasing floating rates of interest applicable to Indebtedness.

Interest Rate Option means any LIBOR Rate Option or Base Rate Option.

IRS means the Internal Revenue Service.

Issuing Lender means PNC Bank, in its individual capacity as the Lender which is the issuer of Letters of Credit hereunder.

Joint Venture means a corporation, partnership, limited liability company or other entities in which any Person other than the Loan Parties and their Subsidiaries holds, directly or indirectly, an equity interest.

Law means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond,

- 10 -

judgment, authorization or approval, lien or award by or settlement agreement with any Official Body.

Lender Provided Interest Rate Hedge means an Interest Rate Hedge which is provided by any Lender or its Affiliate and with respect to which the Administrative Agent determines: (a) is documented in a standard International Swap Dealer Association Agreement, (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (c) is entered into for hedging (rather than speculative) purposes.

Lenders means the financial institutions named on Schedule 1.1(B) and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a Lender. For the purpose of any Loan Document which provides for the granting of a Lien to the Lenders or to the Administrative Agent for the benefit of the Lenders as security for the Obligations, “Lenders” shall include any Affiliate of a Lender to which such Obligation is owed.

Letter of Credit has the meaning specified in Section 2.8(a) [Issuance of Letters of Credit].

Letter of Credit Borrowing has the meaning specified in Section 2.8(c)(iii) [Disbursements, Reimbursement].

Letter of Credit Fee has the meaning specified in Section 2.8(b) [Letter of Credit Fees].

Letter of Credit Obligation means, as of any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit on such date (if any Letter of Credit shall increase in amount automatically in the future, such aggregate amount available to be drawn shall currently give effect to any such future increase) plus the aggregate Reimbursement Obligations and Letter of Credit Borrowings on such date.

Letter of Credit Sublimit has the meaning specified in Section 2.8(a) [Issuance of Letters of Credit].

Leverage Ratio means, as of the end of any date of determination, the ratio of (a) consolidated Indebtedness of the Loan Parties and their Subsidiaries on such date; to (b) Consolidated Adjusted EBITDA (i) for the four fiscal quarters then ending if such date is a fiscal quarter end, or (ii) for the four fiscal quarters most recently ended if such date is not a fiscal quarter end.

LIBOR Rate means (a) with respect to Dollar Loans comprising any Borrowing Tranche to which the LIBOR Rate Option applies for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market) or the rate which is quoted by another source selected by the Administrative Agent which has been approved by the British Bankers’ Association as an authorized information

- 11 -

vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate Source”) at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of such Interest Period as the London interbank offered rate for Dollars for an amount and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent as such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the LIBOR Rate Reserve Percentage. Such LIBOR Rate may also be expressed by the following formula:

	London interbank offered rate quoted by Bloomberg or appropriate successor as shown on
LIBOR Rate =	Bloomberg Page BBAM1
	1.00 = LIBOR Rate Reserve Percentage

The LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR Rate Option applies that is outstanding on the effective date of any change in the LIBOR Rate Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error; and

(b) with respect to Optional Currency Loans comprising any Borrowing Tranche to which the LIBOR Rate Option applies for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (i) the rate of interest which appears on the relevant Bloomberg Page (or, if no such quotation is available on such Bloomberg Page, on the appropriate such other substitute Bloomberg page that displays rates at which the relevant Optional Currency deposits are offered by leading banks in the London interbank deposit market) or the rate which is quoted by another source selected by the Administrative Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates at which such Optional Currency deposits are offered by leading banks in the London interbank deposit market, at approximately 9:00 a.m., Pittsburgh time, two (2) Business Days prior to the first day of such Interest Period for delivery on the first day of such Interest Period for a period, and in an amount, comparable to such Interest Period and principal amount of such Borrowing Tranche (“LIBO Rate”) by (ii) a number equal to 1.00 minus the LIBOR Rate Reserve Percentage. Such LIBOR Rate may also be expressed by the following formula:

	LIBO Rate
LIBOR Rate =	1 – LIBOR Rate Reserve Percentage

The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Option outstanding on the effective date of any change in the LIBOR Rate Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error. The LIBOR Rate for any Loans shall be based upon the LIBOR Rate for the currency in which such Loans are requested.

- 12 -

LIBOR Rate Option means the option of the Borrower to have Revolving Credit Loans bear interest at the rate and under the terms set forth in Section 3.1(a)(ii) [Revolving Credit LIBOR Rate Option].

LIBOR Rate Reserve Percentage means the maximum percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined by the Administrative Agent which is in effect during any relevant period, (a) as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”) of a member bank in such System; and (b) to be maintained by a Lender as required for reserve liquidity, special deposit, or a similar purpose by any governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (i) any category of liabilities that includes deposits by reference to which a LIBOR Rate is to be determined, or (ii) any category of extension of credit or other assets that includes Loans or Borrowing Tranches to which a LIBOR Rate applies.

Lien means any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).

Loan Documents means this Agreement, the Administrative Agent’s Letter, the Guaranty Agreement, the Intercompany Subordination Agreement, if any, the Notes, the Patent, Trademark and Copyright Assignment, the Pledge Agreement, the Security Agreement, and any other instruments, certificates or documents delivered in connection herewith or therewith.

Loan Parties means the Borrower and the Guarantors.

Loan Request has the meaning specified in Section 2.4(a) [Revolving Credit Loan Requests].

Loans means collectively and Loan means separately all Revolving Credit Loans and Swing Loans or any Revolving Credit Loan or Swing Loan.

Material Adverse Change means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any other Loan Document, (b) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition, or results of operations of the Loan Parties taken as a whole, (c) impairs or could reasonably be expected to impair the ability of the Loan Parties taken as a whole to duly and punctually pay or perform its Indebtedness, or (d) impairs or could reasonably be expected to impair the ability of the Administrative Agent or any of the Lenders, to the extent permitted, to enforce their legal remedies pursuant to this Agreement or any other Loan Document.

- 13 -

Max Expense Add Back means, for each acquisition of a Guarantor, an amount determined in accordance with the following:

Total Acquisition Price	Max Expense Add Back
less that $50,000,000.00	$1,000,000.00
$50,000,000.000 or more, but less than $100,000,000.00	$2,000,000.00
$100,000,000.000 or more, but less than $150,000,000.00	$3,000,000.00
$150,000,000.000 or more, but less than $200,000,000.00	$4,000,000.00
$200,000,000.000 or more	$5,000,000.00

Month with respect to an Interest Period under the LIBOR Rate Option, means the interval between the days in consecutive calendar months numerically corresponding to the first day of such Interest Period. If any Interest Period begins on a day of a calendar month for which there is no numerically corresponding day in the month in which such Interest Period is to end, the final month of such Interest Period shall be deemed to end on the last Business Day of such final month.

Multiemployer Plan means any employee benefit plan which is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower or any member of the ERISA Group is then making or accruing an obligation to make contributions or, within the preceding five Plan years, has made or had an obligation to make such contributions.

New Lender has the meaning specified in Section 2.1(b)(i) [Increasing Lenders and New Lenders].

Non-Complying Lender means any Lender that (a) has failed to fund any portion of the Loans, participations with respect to Letters of Credit, or participations in Swing Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder unless such failure has been cured and all interest accruing as a result of such failure has been fully paid in accordance with the terms hereof, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute or unless such failure has been cured and all interest accruing as a result of such failure has been fully paid in accordance with the terms hereof, or (c) has since the date of this Agreement been deemed insolvent by an Official Body or become the subject of a bankruptcy, receivership, conservatorship or insolvency proceeding.

Non-Consenting Lender has the meaning specified in Section 10.1 [Modification, Amendments or Waivers].

Notes means, collectively, the promissory notes evidencing the Revolving Credit Loans in the form of Exhibit 1.1(N)(1) and the Swing Loan Note.

- 14 -

Obligation means any obligation or liability of any of the Loan Parties or any of their Subsidiaries, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under or in connection with (a) this Agreement, the Notes, the Letters of Credit, the Administrative Agent’s Letter or any other Loan Document whether to the Administrative Agent, any of the Lenders or their Affiliates or other persons provided for under such Loan Documents, (b) any Lender Provided Interest Rate Hedge and (c) any Other Lender Provided Financial Service Product.

Official Body means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Order has the meaning specified in Section 2.8(i) [Liability for Acts and Omissions].

Original Agreement has the meaning specified in the Background section.

Optional Currency means any of the following currencies: British Pounds Sterling, Euros, Canadian Dollars, Japanese Yen, Danish Kroner, Swedish Krona, Swiss Franc, Norwegian Krone, Australian Dollar and any other currency approved by the Administrative Agent and all of the Lenders pursuant to Section 2.9(d) [Request for Additional Optional Currencies], and no other currency

Original Currency has the meaning specified in Section 4.13(a).

Other Currency has the meaning specified in Section 4.13(a).

Other Lender Provided Financial Service Product means agreements or other arrangements under which any Lender or Affiliate of a Lender provides any of the following products or services to any of the Loan Parties: (a) credit cards, (b) debit cards, (c) purchasing and commercial cards, (d) ACH Transactions, (e) cash management, including controlled disbursement, accounts or services, (f) foreign currency exchange, or (g) trade finance, including trade, commercial and documentary letters of credit.

Other Taxes means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

Overnight Rate means for any day with respect to any Loans in an Optional Currency, the rate of interest per annum as determined by the Administrative Agent at which overnight deposits in the such currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day in the applicable offshore interbank market.

- 15 -

Parent means GSI Commerce, Inc., a Delaware corporation.

Participant has the meaning specified in Section 10.8(d) [Participations].

Participation Advance has the meaning specified in Section 2.8(c) [Disbursements, Reimbursement].

Patent, Trademark and Copyright Assignment means the Patent, Trademark and Copyright Security Agreement in form and substance acceptable to the Administrative Agent executed and delivered by each of the Loan Parties to the Administrative Agent for the benefit of the Lenders.

Payment Date means (a) the first Business Day of each fiscal quarter after the date hereof (being the first Business Day following the Saturday closest to the end of each calendar quarter), (b) the Expiration Date and (c) the date of any acceleration of the Loans.

Payment In Full means payment in full in cash of the Loans and other Obligations hereunder, termination of the Commitments and expiration or termination of all Letters of Credit.

PBGC means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

Pension Plan means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any times during the immediately preceding five plan years.

Permitted Investments means:

(a) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition;

(b) commercial paper maturing in 180 days or less rated not lower than A-1, by Standard & Poor’s or P-1 by Moody’s Investors Service, Inc. on the date of acquisition;

(c) Cash Equivalents; and

(d) money market or mutual funds whose investments are limited to those types of investments described in clauses (a)-(c) above.

Permitted Liens means:

(a) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business and which are not yet due and payable;

- 16 -

(b) Pledges or deposits made in the ordinary course of business to secure payment of workmen’s compensation, or to participate in any fund in connection with workmen’s compensation, unemployment insurance, old-age pensions or other social security programs;

(c) Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable and Liens of landlords securing obligations to pay lease payments that are not yet due and payable or in default;

(d) Good-faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business;

(e) Encumbrances consisting of zoning restrictions, easements or other restrictions on the use of real property, none of which materially impairs the use of such property or the value thereof, and none of which is violated in any material respect by existing or proposed structures or land use;

(f) Liens, security interests and mortgages in favor of the Administrative Agent for the benefit of the Lenders and their Affiliates securing the Obligations including Other Lender Provided Financial Services Obligations;

(g) Liens on personal property leased by any Loan Party or Subsidiary of a Loan Party under capital and operating leases securing obligations of such Loan Party or Subsidiary to the lessor under such leases;

(h) Any Lien existing on the date of this Agreement and described on Schedule 1.1(P), provided that the principal amount secured thereby is not hereafter increased, and no additional assets become subject to such Lien;

(i) Purchase Money Security Interests on personal property; provided that the aggregate amount of loans and deferred payments secured by such Purchase Money Security Interests shall not exceed $10,000,000.00 (excluding for the purpose of this computation any loans or deferred payments secured by Liens described on Schedule 1.1(P)); and

(j) The following, (i) if the validity or amount thereof is being contested in good faith by appropriate and lawful proceedings diligently conducted so long as levy and execution thereon have been stayed and continue to be stayed or (ii) if a final judgment is entered and such judgment is discharged within thirty (30) days of entry, and in either case they do not affect the Collateral or, in the aggregate, materially impair the ability of any Loan Party to perform its Obligations hereunder or under the other Loan Documents:

(A) Claims or Liens for taxes, assessments or charges due and payable and subject to interest or penalty; provided that the applicable Loan Party maintains such reserves or other appropriate provisions as shall be required by GAAP and pays all such taxes,

- 17 -

assessments or charges forthwith upon the commencement of proceedings to foreclose any such Lien;

(B) Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory nonconsensual Liens; or

(C) Liens resulting from final judgments or orders described in Section 8.1(f) [Final Judgments or Orders].

Permitted Repayment has the meaning given to such term in Section 2.5(d) [Repayment of Loans].

Person means any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, joint venture, government or political subdivision or agency thereof, or any other entity.

Plan means at any time an employee pension benefit plan (including a multiple employer plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and either (a) is maintained by any member of the ERISA Group for employees of any member of the ERISA Group or (b) has at any time within the preceding five years been maintained by any entity which was at such time a member of the ERISA Group for employees of any entity which was at such time a member of the ERISA Group.

Pledge Agreement means the Pledge Agreement in form and substance acceptable to the Administrative Agent executed and delivered by each of the Loan Parties and their Subsidiaries to the Administrative Agent for the benefit of the Lenders.

PNC Bank means PNC Bank, National Association, its successors and assigns, in its individual capacity as a Lender.

Potential Default means any event or condition which with notice or passage of time, or both, would constitute an Event of Default.

Prime Rate means the interest rate per annum announced from time to time by the Administrative Agent at its Principal Office as its then prime rate, which rate may not be the lowest or most favorable rate then being charged commercial borrowers or others by the Administrative Agent. Any change in the Prime Rate shall take effect at the opening of business on the day such change is announced.

Principal Office means the main banking office of the Administrative Agent in Pittsburgh, Pennsylvania.

Prior Security Interest means a valid and enforceable perfected first-priority security interest under the Uniform Commercial Code in the Collateral which is subject only to Permitted Liens (other than Permitted Liens described in clauses (a), (c) or (j) of such definition to the extent such Permitted Liens are not given super priority by statute).

- 18 -

Published Rate means the rate of interest published each Business Day in The Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one Month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the rate at which U.S. Dollar deposits are offered by leading banks in the London Interbank deposit market for a one Month period as published in another publication selected by the Administrative Agent.

Purchase Money Security Interest means Liens upon tangible personal property securing loans to any Loan Party or Subsidiary of a Loan Party or deferred payments by such Loan Party or Subsidiary for the purchase (or for the refinancing thereof) of such tangible personal property (but for no other purpose).

Ratable Share means the proportion that a Lender’s Commitment (excluding the Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan Commitment) of all of the Lenders. If the Commitments have terminated or expired, the Ratable Shares shall be determined based upon the Commitments (excluding the Swing Loan Commitment) most recently in effect, giving effect to any assignments.

Reimbursement Obligation has the meaning specified in Section 2.8(c) [Disbursements, Reimbursement].

Related Parties means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

Relief Proceeding means any proceeding seeking a decree or order for relief in respect of any Loan Party or Subsidiary of a Loan Party in a voluntary or involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Loan Party or Subsidiary of a Loan Party for any substantial part of its property, or for the winding-up or liquidation of its affairs, or an assignment for the benefit of its creditors.

Required Lenders means:

(a) If there exists fewer than three (3) Lenders, all Lenders, and

(b) If there exist three (3) or more Lenders:

(i) if there are no Loans, Reimbursement Obligations or Letter of Credit Borrowings outstanding, Complying Lenders whose Revolving Credit Commitments aggregate at least 50.1% of the Revolving Credit Commitments of all of the Complying Lenders, or

(ii) if there are Loans, Reimbursement Obligations or Letter of Credit Borrowings outstanding, any group of Complying Lenders if the sum of the Loans (excluding the Swing Loans), Reimbursement Obligations and Letter of Credit Borrowings of such Lenders then outstanding aggregates at least 50.1% of the total principal amount of all of the Loans

- 19 -

(excluding the Swing Loans), Reimbursement Obligations and Letter of Credit Borrowings of all of the Complying Lenders then outstanding.

Required Share has the meaning assigned to such term in Section 4.11 [Settlement Date Procedures].

Revolving Credit Commitment means, as to any Lender at any time, the amount initially set forth opposite its name on Schedule 1.1(B) in the column labeled “Amount of Commitment for Revolving Credit Loans,” as such Commitment is thereafter assigned or modified and Revolving Credit Commitments means the aggregate Revolving Credit Commitments of all of the Lenders.

Revolving Credit Loans means collectively and Revolving Credit Loan means separately all Revolving Credit Loans or any Revolving Credit Loan made by the Lenders or one of the Lenders to the Borrower pursuant to Section 2.1 [Revolving Credit Commitments] or Section 2.8(c) [Disbursements, Reimbursement].

Revolving Facility Usage means at any time the sum of the outstanding Revolving Credit Loans, the outstanding Swing Loans and the Letter of Credit Obligations.

Security Agreement means the Security Agreement in form and substance reasonably acceptable to the Administrative Agent executed and delivered by each of the Loan Parties to the Administrative Agent for the benefit of the Lenders.

Senior Leverage Ratio means, as of the end of any date of determination, the ratio of (a) consolidated Indebtedness of the Loan Parties and their Subsidiaries on such date which is secured by Lien on any of their property; to (b) Consolidated Adjusted EBITDA (i) for the four fiscal quarters then ending if such date is a fiscal quarter end, or (ii) for the four fiscal quarters most recently ended if such date is not a fiscal quarter end.

Settlement Date means any Business Day on which the Administrative Agent elects to effect settlement pursuant to Section 2.5(e) [Borrowings to Repay Swing Loans].

Standard & Poor’s means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Statements has the meaning specified in Section 5.1(f)(i) [Historical Statements].

Subsidiary of any Person at any time means any corporation, trust, partnership, limited liability company or other business entity of which 50% or more of the outstanding voting securities or other interests normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries.

Subsidiary Equity Interests has the meaning specified in Section 5.1(b) [Subsidiaries and Owners; Investment Companies].

- 20 -

Swing Loan Commitment means PNC Bank’s commitment to make Swing Loans to the Borrower pursuant to Section 2.1(c) [Swing Loan Commitment] in an aggregate principal amount up to $15,000,000.00.

Swing Loan Note means the Swing Loan Note of the Borrower in the form of Exhibit 1.1(N)(2) evidencing the Swing Loans, together with all amendments, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.

Swing Loan Request has the meaning given to such term in Section 2.4(b) [Swing Loan Request].

Swing Loans means collectively and Swing Loan means separately all Swing Loans or any Swing Loan made by the Administrative Agent to the Borrower pursuant to Section 2.1(c) [Swing Loan Commitment] hereof.

Taxes means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Official Body, including any interest, additions to tax or penalties applicable thereto.

USA Patriot Act means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

1.2 Construction. Unless the context of this Agreement otherwise clearly requires, the following rules of construction shall apply to this Agreement and each of the other Loan Documents: (a) references to the plural include the singular, the plural, the part and the whole and the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (b) the words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole; (c) article, section, subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified; (d) reference to any Person includes such Person’s successors and assigns; (e) reference to any agreement, including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto, document or instrument means such agreement, document or instrument as amended, modified, replaced, substituted for, superseded or restated; (f) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; (g) 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, (h) section headings herein and in each other Loan Document are included for convenience and shall not affect the interpretation of this Agreement or such Loan Document, and (i) unless otherwise specified, all references herein to times of day shall be references to Eastern Standard Time.

1.3 Accounting Principles. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or

- 21 -

financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that all accounting terms used in Section 7.2 [Negative Covenants] (and all defined terms used in the definition of any accounting term used in Section 7.2 [Negative Covenants] have the meanings given to such terms (and defined terms) under GAAP as in effect on the date hereof applied on a basis consistent with those used in preparing Statements referred to in Section 5.1(f)(i) [Historical Statements]. In the event of any change after the date hereof in GAAP, and if such change would affect the computation of any of the financial covenants set forth in Section 7.2 [Negative Covenants], then the parties hereto agree to endeavor, in good faith, to agree upon an amendment to this Agreement that would adjust such financial covenants in a manner that would preserve the original intent thereof, but would allow compliance therewith to be determined in accordance with the Borrower’s financial statements at that time, provided that , until so amended such financial covenants shall continue to be computed in accordance with GAAP prior to such change therein.

2. REVOLVING CREDIT AND SWING LOAN FACILITIES.

2.1 Revolving Credit Commitments.

(a) Revolving Credit Loans.

Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Revolving Credit Loans in either Dollars or one or more Optional Currencies to the Borrower at any time or from time to time on or after the date hereof to the Expiration Date; provided that after giving effect to such Loan (i) the aggregate Dollar Equivalent amount of Loans from such Lender shall not exceed such Lender’s Revolving Credit Commitment minus such Lender’s Ratable Share of the Dollar Equivalent amount of the then outstanding Swing Loans and the Dollar Equivalent amount of Letter of Credit Obligations, (ii) the Revolving Facility Usage shall not exceed the Revolving Credit Commitments; (iii) the aggregate Dollar Equivalent amount of Loans in Optional Currencies outstanding shall not exceed $50,000,000.00; and (iv) no Loan to which the Base Rate Option applies shall be made in an Optional Currency. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.

(b) Increase in Revolving Credit Commitments.

(i) Increasing Lenders and New Lenders. The Borrower may, at any time prior to the second (2^nd) anniversary of the Closing Date, request that (A) the current Lenders increase their Revolving Credit Commitments (any current Lender which elects to increase its Revolving Credit Commitment shall be referred to as an “Increasing Lender”) by giving written request thereof to the Administrative Agent for distribution to the Lenders not less than fifteen (15) Business Days prior to the proposed effective date of such increase, or if there are insufficient Increasing Lenders to provide such requested increase, (B) one or more new lenders (each a “New Lender”) join this Agreement and provide a Revolving Credit Commitment hereunder, subject to the following terms and conditions:

- 22 -

(1) No Obligation to Increase. No Lender shall be obligated to increase its Revolving Credit Commitment and any increase in its Revolving Credit Commitment shall be in the sole discretion of such Lender.

(2) Defaults. There shall exist no Events of Default or Potential Default on the effective date of such increase after giving effect to such increase.

(3) Aggregate Revolving Credit Commitments. After giving effect to such increase, the total Revolving Credit Commitments shall not exceed $150,000,000.00.

(4) Minimum Revolving Credit Commitments. After giving effect to such increase, the amount of the Revolving Credit Commitments provided by each of the New Lenders and each of the Increasing Lenders with respect to such increase shall be at least $10,000,000.00 in the aggregate; and

(5) Resolutions; Opinion. The Loan Parties shall deliver to the Administrative Agent on or before the effective date of such increase the following documents in a form reasonably acceptable to the Administrative Agent: (a) certifications of their corporate secretaries with attached resolutions certifying that the increase in the Revolving Credit Commitment has been approved by such Loan Parties, and (b) an opinion of counsel addressed to the Administrative Agent and the Lenders addressing the authorization and execution of the Loan Documents by, and enforceability of the Loan Documents against, the Loan Parties.

(6) Notes. The Borrower shall execute and deliver (a) to each Increasing Lender a replacement revolving credit Note reflecting the new amount of such Increasing Lender’s Revolving Credit Commitment after giving effect to the increase (and the prior Note issued to such Increasing Lender shall be deemed to be terminated), and (b) to each New Lender a revolving credit Note reflecting the amount of such New Lender’s Revolving Credit Commitment.

(7) Approval of New Lenders. Any New Lender shall be subject to the reasonable approval of the Administrative Agent and the Borrower.

(8) Increasing Lenders. Each Increasing Lender shall confirm its agreement to increase its Revolving Credit Commitment pursuant to an acknowledgement in a form acceptable to the Administrative Agent, signed by it and the Borrower and delivered to the Administrative Agent at least three (3) Business Days before the effective date of such increase.

(9) New Lenders-Joinder. Each New Lender shall execute a lender joinder in substantially the form of Exhibit 2.1 pursuant to which such New Lender shall join and become a party to this Agreement and the other Loan Documents with a Revolving Credit Commitment in the amount set forth in such lender joinder.

(10) Commitments of Lenders. The Administrative Agent shall prepare a revised Schedule 1.1(B) to reflect the changes occasioned by the increase

- 23 -

in Revolving Credit Commitments pursuant to this Section 2.1(b), and distribute such revised Schedule 1.1(B) to the Borrower and the Lenders, whereupon such revised Schedule 1.1(B), absent manifest error, shall replace the prior schedule without any further action by any of the other parties hereto.

(ii) Treatment of Outstanding Loans and Letters of Credit.

(A) Repayment of Outstanding Loans; Borrowing of New Loans. On the effective date of such increase, the Borrower shall repay all Loans then outstanding, subject to the Borrower’s indemnity obligations under Section 4.10 [Indemnity]; provided that it may borrow new Loans with a Borrowing Date on such date. Each of the Lenders shall participate in any new Loans made on or after such date in accordance with their respective Ratable Shares after giving effect to the increase in Revolving Credit Commitments contemplated by this Section 2.1(b).

(B) Outstanding Letters of Credit; Repayment of Outstanding Loans; Borrowing of New Loans. On the effective date of such increase, each Increasing Lender and each New Lender (1) will be deemed to have purchased a participation in each then outstanding Letter of Credit equal to its Ratable Share of such Letter of Credit and the participation of each other Lender in such Letter of Credit shall be adjusted accordingly and (2) will acquire (and will pay to the Administrative Agent, for the account of each Lender, in immediately available funds, an amount equal to) its Ratable Share of all outstanding Participation Advances.

(c) Swing Loan Commitment.

Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, and in order to facilitate loans and repayments between Settlement Dates, PNC Bank may, at its option, cancelable at any time for any reason whatsoever, make Swing Loans to the Borrower at any time or from time to time after the date hereof to, but not including, the Expiration Date, in an aggregate principal amount up to but not in excess of $15,000,000.00, provided that the aggregate principal amount of PNC Bank’s Swing Loans and the Revolving Credit Loans of all the Lenders at any one time outstanding shall not exceed the Revolving Credit Commitments of all the Lenders. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow Swing Loans pursuant to this Section 2.1(c).

2.2 Nature of the Lenders’ Obligations with Respect to Revolving Credit Loans. Each Lender shall be obligated to participate in each request for Revolving Credit Loans pursuant to Section 2.4(a) [Revolving Credit Loan Requests; Swing Loan Requests] in accordance with its Ratable Share. If at any time the aggregate Dollar Equivalent amount of any Lender’s Revolving Credit Loans outstanding hereunder to the Borrower shall exceed its Revolving Credit Commitment minus its Ratable Share of the Dollar Equivalent amount of the then outstanding Swing Loans and the Dollar Equivalent amount of Letter of Credit Obligations, the Borrower shall immediately repay such excess without demand or prior notice. The obligations of each Lender hereunder are several. The failure of any Lender to perform its obligations hereunder shall not affect the Obligations of the Borrower to any other party, nor

- 24 -

shall any other party be liable for the failure of such Lender to perform its obligations hereunder. The Lenders shall have no obligation to make Revolving Credit Loans hereunder on or after the Expiration Date.

2.3 Fees.

(a) Commitment Fees.

Accruing from the date hereof until the Expiration Date, the Borrower agrees to pay to the Administrative Agent for the account of each Lender according to its Ratable Share, a nonrefundable commitment fee (the “Commitment Fee”) equal to the Applicable Commitment Fee Rate (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) times the average daily difference between the amount of (i) the Revolving Credit Commitments, and (ii) the Revolving Facility Usage (and for purposes of this computation, Swing Loans shall be deemed to be borrowed amounts under PNC Bank’s Revolving Credit Commitment) provided, however, that any Commitment Fee accrued with respect to the Revolving Credit Commitment of a Non-Complying Lender during the period prior to the time such Lender became a Non-Complying Lender and unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a Non-Complying Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by the Borrower prior to such time; and provided further that no Commitment Fee shall accrue with respect to the Revolving Credit Commitment of a Non-Complying Lender so long as such Lender shall be a Non-Complying Lender. Subject to the proviso in the directly preceding sentence, all Commitment Fees shall be payable in arrears on each Payment Date.

(b) Transaction Fees.

The Borrower agrees to pay to the Administrative Agent on the Closing Date for the account of each Lender, as consideration for such Lender’s Commitment, a nonrefundable transaction fee equal to (i) 0.2% of an amount equal to that portion of such Lender’s Commitment on the Closing Date equal to such Lender’s Commitment under the Original Agreement immediately prior to the Closing Date, plus (ii) 0.3% of an amount equal to that portion of such Lender’s Commitment in excess of such Lender’s Commitment under the Original Agreement (or, if such Lender was not a lender under the Original Agreement, equal to such Lender’s Commitment).

2.4 Revolving Credit Loan Requests; Swing Loan Requests.

(a) Revolving Credit Loan Requests.

Except as otherwise provided herein, the Borrower may from time to time prior to the Expiration Date request the Lenders to make Revolving Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit Loans pursuant to Section 3.2 [Interest Periods], by delivering to the Administrative Agent, not later than 10:00 a.m., (i) three (3) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans in Dollars to which the LIBOR Rate Option applies or the conversion to or the renewal of the LIBOR Rate Option for any Loans, and four (4) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit

- 25 -

Loans in an Optional Currency or the date of conversion or renewal of the LIBOR Rate Option for Revolving Credit Loans in Optional Currencies; and (ii) one (1) Business Day prior to either the proposed Borrowing Date with respect to the making of a Revolving Credit Loan to which the Base Rate Option applies or the last day of the preceding Interest Period with respect to the conversion to the Base Rate Option for any Loan, of a duly completed request therefor substantially in the form of Exhibit 2.4 or a request by telephone immediately confirmed in writing by letter, facsimile or telex in such form (each, a “Loan Request”), it being understood that the Administrative Agent may reasonably rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Loan Request shall be irrevocable and shall specify (A) the proposed Borrowing Date, (B) the aggregate amount of the proposed Loans (expressed in the currency in which such Loans are to be funded) comprising each Borrowing Tranche, provided that the amount of any Borrowing Tranche in Dollars shall be in integral multiples of $100,000.00 and not less than $1,000,000.00 for each Borrowing Tranche under the LIBOR Rate Option and not less than the lesser of $500,000.00 or the maximum amount available for Borrowing Tranches under the Base Rate Option; (C) the currencies in which such Loans shall be funded if the Borrower is electing the LIBOR Rate Option; (D) whether the LIBOR Rate Option or Base Rate Option shall apply to the proposed Revolving Credit Loans comprising each Borrowing Tranche; and (E) in the case of a Borrowing Tranche to which the LIBOR Rate Option applies, an appropriate Interest Period. Each Loan Request shall be deemed a representation by the Borrower that it has satisfied all of the conditions for the Loan so requested set forth in this Agreement.

(b) Swing Loan Requests.

Except as otherwise provided herein, the Borrower may from time to time prior to the Expiration Date request PNC Bank to make Swing Loans by delivery to PNC Bank not later than 10:00 o’clock a.m. Pittsburgh time on the proposed Borrowing Date of a duly completed request therefor substantially in the form of Exhibit 2.4(b) hereto or a request by telephone immediately confirmed in writing by letter, facsimile or telex (each, a “Swing Loan Request”), it being understood that PNC Bank may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Swing Loan Request shall be irrevocable and shall specify the proposed Borrowing Date and the principal amount of such Swing Loan, which shall be not less than $200,000.00. Each Swing Loan Request shall be deemed a representation by the Borrower that it has satisfied all of the conditions for the Swing Loan so requested set forth in this Agreement.

2.5 Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans.

(a) Making Revolving Credit Loans.

Promptly after receipt by the Administrative Agent of a Loan Request pursuant to Section 2.4 [Revolving Credit Loan Requests; Swing Loan Requests], the Administrative Agent shall notify the Lenders of its receipt of such Loan Request specifying the information provided by the Borrower and the apportionment among the Lenders of the requested Revolving Credit Loans as determined by the Administrative Agent in accordance with

- 26 -

Section 2.2 [Nature of Lenders’ Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit the principal amount of each Revolving Credit Loan to the Administrative Agent in the appropriate currencies such that the Administrative Agent is able to, and the Administrative Agent shall, to the extent the Lenders have made funds available to it for such purpose and subject to Section 6.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans to the Borrower in U.S. Dollars and/or Optional Currencies, as applicable, and immediately available funds at the Principal Office prior to 2:00 p.m., on the applicable Borrowing Date; provided that if any Lender fails to remit such funds to the Administrative Agent in a timely manner, the Administrative Agent may elect in its sole discretion to fund with its own funds the Revolving Credit Loans of such Lender on such Borrowing Date, and such Lender shall be subject to the repayment obligation in Section 2.5(b) [Presumptions by the Administrative Agent].

(b) Presumptions by the Administrative Agent.

Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Revolving Credit Loan that such Lender will not make available to the Administrative Agent such Lender’s share of such Revolving Credit Loan, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.5(a) [Making Revolving Credit Loans] and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Revolving Credit Loan available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, 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, and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Revolving Credit Loans under the Base Rate Option. If such Lender pays its share of the applicable Revolving Credit Loan to the Administrative Agent, then the amount so paid shall constitute such Lender’s Revolving Credit Loan. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(c) Making Swing Loans.

So long as PNC Bank elects to make Swing Loans, PNC Bank shall, after receipt by it of a Swing Loan Request pursuant to Section 2.4(b) [Swing Loan Request], fund such Swing Loan to the Borrower in U.S. Dollars and immediately available funds at the Principal Office prior to 3:00 o’clock p.m. Philadelphia time on the Borrowing Date.

(d) Repayment of Loans.

The Borrower shall repay the Loans together with all outstanding interest thereon on the Expiration Date. Except as set forth in the immediate following sentence, the Borrower shall also repay the Loans together with all outstanding interest thereon prior to any

- 27 -

Loan Party making any principal payment on any Indebtedness for borrowed money which is unsecured or is subordinated to the Obligations, whereupon the Commitments shall terminate. Notwithstanding the immediately prior sentence the Loans shall not become due and payable and the Commitments shall not terminate solely due to the payment of principal of the Parent’s 3% Convertible Notes due 2025 solely as a result of the exercise of the repurchase option by any holder of, or the exercise of any redemption right by the Parent with respect to, such Convertible Notes on June 1, 2010, or other payment, redemption or purchase permitted under Section 7.2(n) [Repayment of Indebtedness], provided that the Senior Leverage Ratio is 2.0 to 1.0 or less both before and after giving effect to such payment (a “Permitted Repayment”).

(e) Borrowings to Repay Swing Loans.

PNC Bank may, at its option, exercisable at any time for any reason whatsoever, demand repayment of the Swing Loans, and each Lender shall make a Revolving Credit Loan in an amount equal to such Lender’s Ratable Share of the aggregate principal amount of the outstanding Swing Loans, plus, if PNC Bank so requests, accrued interest thereon, provided that no Lender shall be obligated in any event to make Revolving Credit Loans in excess of its Revolving Credit Commitment. Revolving Credit Loans made pursuant to the preceding sentence shall bear interest at the Base Rate Option and shall be deemed to have been properly requested in accordance with Section 2.4(a) [Revolving Credit Loan Requests] without regard to any of the requirements of that provision. PNC Bank shall provide notice to the Lenders (which may be telephonic or written notice by letter, facsimile or telex) that such Revolving Credit Loans are to be made under this Section 2.5(e) and of the apportionment among the Lenders, and the Lenders shall be unconditionally obligated to fund such Revolving Credit Loans (whether or not the conditions specified in Section 6.2 [Each Loan or Letter of Credit] are then satisfied) by the time PNC Bank so requests, which shall not be earlier than 2:00 p.m. Philadelphia time on the Business Day next after the date the Lenders receive such notice from PNC.

2.6 Notes. The Obligation of the Borrower to repay the aggregate unpaid principal amount (a) of the Revolving Credit Loans made to it by each Lender, together with interest thereon, shall be evidenced by a revolving credit Note dated the Closing Date payable to the order of such Lender in a face amount equal to the Revolving Credit Commitment of such Lender, and (b) of the Swing Loans made to it by PNC Bank, together with interest thereon, shall be evidenced by the Swing Loan Note, dated the Closing Date payable to the order of PNC Bank in the face amount of $15,000,000.00.

2.7 Use of Proceeds. The proceeds of the Loans shall be used for general corporate purposes, including working capital financing, financing capital expenditures and financing permitted acquisitions provided that except for a Permitted Repayment made when there exists no Event of Default or Potential Default the Borrower shall not use the proceeds of the Loans, directly or indirectly, to pay any Indebtedness for borrowed money of any Loan Party or any of their Subsidiaries.

- 28 -

2.8 Letter of Credit Subfacility.

(a) Issuance of Letters of Credit.

The Borrower may at any time prior to the Expiration Date request the issuance of a letter of credit (each a “Letter of Credit”) which may be denominated in either Dollars or an Optional Currency on behalf of itself or another Loan Party, or the amendment or extension of an existing Letter of Credit, by delivering or having such other Loan Party deliver to the Issuing Lender (with a copy to the Administrative Agent) a completed application and agreement for Letters of Credit, or request for such amendment or extension, as applicable, in such form as the Issuing Lender may specify from time to time by no later than 10:00 a.m. at least five (5) Business Days, or such shorter period as may be agreed to by the Issuing Lender, in advance of the proposed date of issuance. The letters of credit issued prior to, and outstanding on, the Closing Date as identified on Schedule 2.8 attached hereto are deemed to be Letters of Credit hereunder. Promptly after receipt of any Letter of Credit application, the Issuing Lender shall confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit application and if not, such Issuing Lender will provide Administrative Agent with a copy thereof. Unless the Issuing Lender has received notice from any Lender, Administrative Agent or any Loan Party, at least one day prior to the requested date of issuance, amendment or extension of the applicable Letter of Credit, that one or more applicable conditions in Section 6 [Conditions of Lending and Issuance of Letters of Credit] is not satisfied, then, subject to the terms and conditions hereof and in reliance on the agreements of the other Lenders set forth in this Section 2.8, the Issuing Lender or any of the Issuing Lender’s Affiliates will issue a Letter of Credit or agree to such amendment or extension, provided that each Letter of Credit shall in no event expire later than five (5) Business Days prior to the Expiration Date and provided further that in no event shall (i) the Dollar Equivalent amount of the Letter of Credit Obligations exceed, at any one time, $30,000,000.00 (the “Letter of Credit Sublimit”) or (ii) the Dollar Equivalent amount of the Revolving Facility Usage exceed, at any time, the Revolving Credit Commitments. Each request by the Borrower for the issuance, amendment or extension of a Letter of Credit shall be deemed to be a representation by the Borrower that it is in compliance with the preceding sentence and with Section 6 [Conditions of Lending and Issuance of Letters of Credit] after giving effect to the requested issuance, amendment or extension of such Letter of Credit. The Revolving Credit Commitments shall be available for the issuance of stand-by, documentary and commercial letters of credit.

Notwithstanding any other provision hereof, no Issuing Lender shall be required to issue any Letter of Credit, if any Lender is at such time a Non-Complying Lender hereunder, unless such Issuing Lender has entered into satisfactory arrangements with the Borrower or such Non-Complying Lender to eliminate the Issuing Lender’s risk with respect to such Non-Complying Lender (it being understood that the Issuing Lender would consider the Borrower providing cash collateral to the Administrative Agent, for the benefit of the Issuing Lender, to secure the Non-Complying Lender’s Ratable Share of the Letter of Credit a satisfactory arrangement).

- 29 -

(b) Letter of Credit Fees.

The Borrower shall pay in Dollars (i) to the Administrative Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”) computed at the Applicable Letter of Credit Fee Rate, provided that the share of such fee to which any Non-Complying Lender would otherwise be entitled shall be payable to the Issuing Lender, and (ii) to the Issuing Lender for its own account a fronting fee computed at 0.125% per annum (in each case computed on the basis of a year of 360 days and actual days elapsed), which fees shall be computed on the daily average Dollar Equivalent Letter of Credit Obligations and shall be payable quarterly in arrears on each Payment Date following issuance of each Letter of Credit. The Borrower shall also pay in Dollars to the Issuing Lender for the Issuing Lender’s sole account the Issuing Lender’s then in effect customary fees and administrative expenses payable with respect to the Letters of Credit as the Issuing Lender may generally charge or incur from time to time in connection with the issuance, maintenance, amendment (if any), assignment or transfer (if any), negotiation, and administration of letters of credit.

(c) Disbursements, Reimbursement.

Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Ratable Share of the maximum amount available to be drawn under such Letter of Credit and the amount of such drawing, respectively.

(i) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Issuing Lender will promptly notify the Borrower and the Administrative Agent thereof. Provided that it shall have received such notice, the Borrower shall reimburse (such obligation to reimburse the Issuing Lender shall sometimes be referred to as a “Reimbursement Obligation”) the Issuing Lender in Dollars prior to 12:00 noon, Philadelphia time on each date that an amount is paid by the Issuing Lender under any Letter of Credit (each such date, a “Drawing Date”) by paying to the Administrative Agent for the account of the Issuing Lender an amount equal to the Dollar Equivalent amount so paid by the Issuing Lender. In the event the Borrower fails to reimburse the Issuing Lender (through the Administrative Agent) for the full Dollar Equivalent amount of any drawing under any Letter of Credit by 12:00 noon, Philadelphia time, on the Drawing Date, the Administrative Agent will promptly notify each Lender thereof, and the Borrower shall be deemed to have requested that Revolving Credit Loans be made by the Lenders under the Base Rate Option to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the Revolving Credit Commitment and subject to the conditions set forth in Section 6.2 [Each Loan or Letter of Credit] other than any notice requirements. Any notice given by the Administrative Agent or Issuing Lender pursuant to this Section 2.8(c)(i) may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Lender shall upon any notice pursuant to subsection (i) make available to the Administrative Agent for the account of the Issuing Lender an amount in Dollars and in immediately available funds equal to its Ratable Share of the Dollar Equivalent amount of

- 30 -

the drawing, whereupon the participating Lenders shall each be deemed to have made a Revolving Credit Loan in Dollars under the Base Rate Option to the Borrower in that amount. If any Lender so notified fails to make available in Dollars to the Administrative Agent for the account of the Issuing Lender the amount of such Lender’s Ratable Share of such Dollar Equivalent amount by no later than 2:00 p.m., Philadelphia time on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (A) at a rate per annum equal to the Federal Funds Effective Rate during the first three (3) days following the Drawing Date, and (B) at a rate per annum equal to the rate applicable to Loans under the Base Rate Option on and after the fourth day following the Drawing Date. The Administrative Agent and the Issuing Lender will promptly give notice (as described in subsection (i) above) of the occurrence of the Drawing Date, but failure of the Administrative Agent or the Issuing Lender to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this subsection (ii).

(iii) With respect to any unreimbursed drawing that is not converted into Revolving Credit Loans under the Base Rate Option to the Borrower in whole or in part as contemplated by subsection (i), because of the Borrower’s failure to satisfy the conditions set forth in Section 6.2 [Each Loan or Letter of Credit] other than any notice requirements, or for any other reason, the Borrower shall be deemed to have incurred from the Issuing Lender a borrowing (each a “Letter of Credit Borrowing”) in Dollars equal to the Dollar Equivalent amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to the Revolving Credit Loans under the Base Rate Option. Each Lender shall make payment to the Administrative Agent for the account of the Issuing Lender as set forth in subsection (ii) and such payment shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing (each a “Participation Advance”) from such Lender in satisfaction of its participation obligation under this Section 2.8(c).

(d) Repayment of Participation Advances.

(i) Upon (and only upon) receipt by the Administrative Agent for the account of the Issuing Lender of immediately available funds from the Borrower (A) in reimbursement of any payment made by the Issuing Lender under the Letter of Credit with respect to which any Lender has made a Participation Advance to the Administrative Agent, or (B) in payment of interest on such a payment made by the Issuing Lender under such a Letter of Credit, the Administrative Agent on behalf of the Issuing Lender will pay to each Lender, in the same funds as those received by the Administrative Agent, the amount of such Lender’s Ratable Share of such funds, except the Administrative Agent shall retain for the account of the Issuing Lender the amount of the Ratable Share of such funds of any Lender that did not make a Participation Advance in respect of such payment by the Issuing Lender.

(ii) If the Administrative Agent or the Issuing Lender is required at any time to return to any Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in any Insolvency Proceeding, any portion of any payment made by any Loan Party to the Administrative Agent for the account of the Issuing Lender pursuant to this Section 2.8 in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each

- 31 -

Lender shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent for the account of the Issuing Lender the amount of its Ratable Share of any amounts so returned by the Administrative Agent plus interest thereon from the date such demand is made to the date such amounts are returned by such Lender to the Administrative Agent, at a rate per annum equal to the Federal Funds Effective Rate in effect from time to time.

(e) Documentation.

Each Loan Party agrees to be bound by the terms of the Issuing Lender’s application and agreement for letters of credit and the Issuing Lender’s written regulations and customary practices relating to letters of credit, though such interpretation may be different from such Loan Party’s own. In the event of a conflict between such application or agreement and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct, the Issuing Lender shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following any Loan Party’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.

(f) Determinations to Honor Drawing Requests.

In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit.

(g) Nature of Participation and Reimbursement Obligations.

Each Lender’s obligation in accordance with this Agreement to make the Revolving Credit Loans or Participation Advances, as contemplated by Section 2.8(c) [Disbursements, Reimbursement], as a result of a drawing under a Letter of Credit, and the Obligations of the Borrower to reimburse the Issuing Lender upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.8 under all circumstances, including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Lender or any of its Affiliates, the Borrower or any other Person for any reason whatsoever, or which any Loan Party may have against the Issuing Lender or any of its Affiliates, any Lender or any other Person for any reason whatsoever;

(ii) the failure of any Loan Party or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in Section 2.1 [Revolving Credit Commitments], Section 2.4 [Revolving Credit Loan Requests; Swing Loan Requests], Section 2.5 [Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans] or Section 6.2 [Each Loan and Letter of Credit] or as otherwise set forth in this Agreement for the making of a Revolving Credit Loan, it being acknowledged that such

- 32 -

conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section 2.8(c) [Disbursements, Reimbursement];

(iii) any lack of validity or enforceability of any Letter of Credit;

(iv) any claim of breach of warranty that might be made by any Loan Party or any Lender against any beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right which any Loan Party or any Lender may have at any time against a beneficiary, successor beneficiary any transferee or assignee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), the Issuing Lender or its Affiliates or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Loan Party or Subsidiaries of a Loan Party and the beneficiary for which any Letter of Credit was procured);

(v) the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provision of services relating to a Letter of Credit, in each case even if the Issuing Lender or any of its Affiliates has been notified thereof;

(vi) payment by the Issuing Lender or any of its Affiliates under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

(viii) any failure by the Issuing Lender or any of its Affiliates to issue any Letter of Credit in the form requested by any Loan Party, unless the Issuing Lender has received written notice from such Loan Party of such failure within three (3) Business Days after the Issuing Lender shall have furnished such Loan Party and the Administrative Agent a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

(ix) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Loan Party or Subsidiaries of a Loan Party;

(x) any breach of this Agreement or any other Loan Document by any party thereto;

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to any Loan Party;

- 33 -

(xii) the fact that an Event of Default or a Potential Default shall have occurred and be continuing;

(xiii) the fact that the Expiration Date shall have passed or this Agreement or the Commitments hereunder shall have been terminated; and

(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

(h) Indemnity.

The Borrower hereby agrees to protect, indemnify, pay and save harmless the Issuing Lender and any of its Affiliates that has issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel) which the Issuing Lender or any of its Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (i) the gross negligence or willful misconduct of the Issuing Lender as determined by a final non-appealable judgment of a court of competent jurisdiction or (ii) the wrongful dishonor by the Issuing Lender or any of Issuing Lender’s Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority or a material breach of Issuing Lender’s obligations hereunder with respect thereto.

(i) Liability for Acts and Omissions.

As between any Loan Party and the Issuing Lender, or the Issuing Lender’s Affiliates, such Loan Party assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender shall not be responsible for any of the following, including any losses or damages to any Loan Party or other Person or property relating therefrom: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or its Affiliates shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Loan Party against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Loan Party and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the

- 34 -

misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Lender or the its Affiliates, as applicable, including any act or omission of any governmental authority, and none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Lender’s or its Affiliates rights or powers hereunder. Nothing in the preceding sentence shall relieve the Issuing Lender from liability for the Issuing Lender’s gross negligence or willful misconduct in connection with actions or omissions described in such clauses (i) through (viii) of such sentence. In no event shall the Issuing Lender or its Affiliates be liable to any Loan Party for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, the Issuing Lender and each of its Affiliates (A) may rely on any oral or other communication believed in good faith by the Issuing Lender or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (B) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (C) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the Issuing Lender or its Affiliate; (D) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (E) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (F) may settle or adjust any claim or demand made on the Issuing Lender or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the Issuing Lender or its Affiliates under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put the Issuing Lender or its Affiliates under any resulting liability to the Borrower or any Lender.

(j) Issuing Lender Reporting Requirements.

The Issuing Lender shall, on the first business day of each month, provide to Administrative Agent and the Borrower a schedule of the Letters of Credit issued by it, in form and substance satisfactory to Administrative Agent, showing the date of issuance of each Letter of Credit, the account party, the original face amount (if any), and the expiration date of

- 35 -

any Letter of Credit outstanding at any time during the preceding month, and any other information relating to such Letter of Credit that the Administrative Agent may request.

2.9 Utilization of Commitments in Optional Currencies.

(a) Periodic Computations of Dollar Equivalent Amounts of Loans and Letters of Credit Outstanding.

The Administrative Agent will determine the Dollar Equivalent amount of (i) proposed Revolving Credit Loans or Letters of Credit to be denominated in an Optional Currency as of the requested Borrowing Date or date of issuance, as the case may be, (ii) Letters of Credit Outstanding denominated in an Optional Currency as of the last Business Day of each month, and (iii) outstanding Revolving Credit Loans denominated in an Optional Currency as of the end of each Interest Period (each such date under clauses (i) through (iii), a “Computation Date”).

(b) Notices From Lenders That Optional Currencies Are Unavailable to Fund New Loans.

The Lenders shall be under no obligation to make the Revolving Credit Loans requested by the Borrower which are denominated in an Optional Currency if any Lender notifies the Administrative Agent by 5:00 p.m. (Pittsburgh time) four (4) Business Days prior to the Borrowing Date for such Revolving Credit Loans that such Lender cannot provide its share of such Revolving Credit Loans in such Optional Currency because (i) the making, maintenance or funding of such Optional Currency Loan has been made impracticable or unlawful by compliance by such Lender in good-faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law) or (ii) after making all reasonable efforts, deposits of the relevant amount in the relevant Optional Currency for the relevant Interest Period are not available to such Lender with respect to such Loan in the London interbank market. In the event the Administrative Agent receives a timely notice from a Lender pursuant to the preceding sentence, the Administrative Agent will notify the Borrower no later than 12:00 noon (Pittsburgh time) three (3) Business Days prior to the Borrowing Date for such Revolving Credit Loans that the Optional Currency is not then available for such Revolving Credit Loans, and the Administrative Agent shall promptly thereafter notify the Lenders of the same. If the Borrower receives a notice described in the preceding sentence, the Borrower may, by notice to the Administrative Agent not later than 5:00 p.m. (Pittsburgh time) three (3) Business Days prior to the Borrowing Date for such Revolving Credit Loans, either (i) withdraw the Loan Request for such Revolving Credit Loans, in which event the Administrative Agent will promptly notify each Lender of the same and the Lenders shall not make such Revolving Credit Loans, or (ii) request that the Revolving Credit Loans referred to in its Loan Request be made in Dollars or in a different Optional Currency in an amount equal to the Dollar Equivalent or other Optional Currency Equivalent Amount of such Revolving Credit Loans and which shall (A) in the case of Revolving Credit Loans denominated in Dollars, bear interest under the Base Rate Option or the LIBOR Rate Option, as elected by the Borrower, or (B) in the case of Revolving Credit Loans denominated in an Optional Currency, bear interest under the LIBOR Rate Option, in which event the Administrative Agent shall promptly deliver a notice to each Lender stating: (1) that such

- 36 -

Revolving Credit Loans shall be made in the applicable currency and shall bear interest under the Base Rate Option or the LIBOR Rate Option, as applicable, (2) the aggregate amount of such Revolving Credit Loans, and (3) such Lender’s Ratable Share of such Revolving Credit Loans. If the Borrower does not withdraw such Loan Request before such time as provided in clause (i) or request before such time that the requested Revolving Credit Loans referred to in its Loan Request be made in Dollars or a different Optional Currency as provided in clause (ii), then (a) the Borrower shall be deemed to have withdrawn such Loan Request and (b) the Administrative Agent shall promptly deliver a notice to each Lender thereof and the Lenders shall not make such Revolving Credit Loans.

(c) Notices From Lenders That Optional Currencies Are Unavailable to Fund Renewals of the LIBOR Rate Option.

If the Borrower delivers a Loan Request requesting that the Lenders renew the LIBOR Rate Option with respect to an outstanding Borrowing Tranche of Revolving Credit Loans denominated in an Optional Currency, the Lenders shall be under no obligation to renew such LIBOR Rate Option if any Lender delivers to the Administrative Agent a notice by 5:00 p.m. (Pittsburgh time) four (4) Business Days prior to effective date of such renewal that such Lender cannot continue to provide Revolving Credit Loans in such Optional Currency because (i) the making, maintenance or funding of such Optional Currency Loan has been made impracticable or unlawful by compliance by such Lender in good-faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law) or (ii) after making all reasonable efforts, deposits of the relevant amount in the relevant Optional Currency for the relevant Interest Period are not available to such Lender with respect to such Loan in the London interbank market. In the event the Administrative Agent receives a timely notice from a Lender pursuant to the preceding sentence, the Administrative Agent will notify the Borrower no later than 12:00 noon (Pittsburgh time) three (3) Business Days prior to the renewal date that the renewal of such Revolving Credit Loans in such Optional Currency is not then available, and the Administrative Agent shall promptly thereafter notify the Lenders of the same. If the Administrative Agent shall have so notified the Borrower that any such renewal of Optional Currency Loans is not then available, any notice of renewal with respect thereto shall be deemed withdrawn, and such Optional Currency Loans shall be redenominated into Base Rate Loans in Dollars with effect from the last day of the Interest Period with respect to any such Optional Currency Loans. The Administrative Agent will promptly notify the Borrower and the Lenders of any such redenomination, and in such notice, the Administrative Agent will state the aggregate Dollar Equivalent amount of the redenominated Optional Currency Loans as of the Computation Date with respect thereto and such Lender’s Ratable Share thereof.

(d) Requests for Additional Optional Currencies.

The Borrower may deliver to the Administrative Agent a written request that Revolving Credit Loans hereunder also be permitted to be made in any other lawful currency (other than Dollars), in addition to the currencies specified in the definition of “Optional Currency” herein provided that such currency must be freely traded in the offshore interbank foreign exchange markets, freely transferable, freely convertible into Dollars and available to the Lenders in the applicable interbank market. The Administrative Agent will promptly notify the

- 37 -

Lenders of any such request promptly after the Administrative Agent receives such request. The Administrative Agent and each Lender may grant or accept such request in their sole discretion. The Administrative Agent will promptly notify the Borrower of the acceptance or rejection by the Administrative Agent and each of the Lenders of the Borrower’s request. The requested currency shall be approved as an Optional Currency hereunder only if the Administrative Agent and all of the Lenders approve of the Borrower’s request.

2.10 Currency Repayments. Notwithstanding anything contained herein to the contrary, the entire amount of principal of and interest on any Loan made in an Optional Currency shall be repaid in the same Optional Currency in which such Loan was made, provided, however, that if it is impossible or illegal for the Borrower to effect payment of a Loan in the Optional Currency in which such Loan was made, or if the Borrower defaults in its obligations to do so, the Required Lenders may at their option permit such payment to be made (a) at and to a different location, subsidiary, affiliate or correspondent of the Administrative Agent, or (b) in the Equivalent Amount of Dollars or (c) in an Equivalent Amount of such other currency (freely convertible into Dollars) as the Required Lenders may solely at their option designate. Upon any events described in (a) through (c) of the preceding sentence, the Borrower shall make such payment, and the Borrower agrees to hold each Lender harmless from and against any loss incurred by any Lender arising from the cost to such Lender of any premium, any costs of exchange, the cost of hedging and covering the Optional Currency in which such Loan was originally made, and from any change in the value of Dollars, or such other currency, in relation to the Optional Currency that was due and owing. Such loss shall be calculated for the period commencing with the first day of the Interest Period for such Loan and continuing through the date of payment thereof. Without prejudice to the survival of any other agreement of the Borrower hereunder, the Borrower’s obligations under this Section 2.10 shall survive termination of this Agreement.

2.11 Optional Currency Amounts. Notwithstanding anything contained herein to the contrary, the Administrative Agent may, with respect to notices by the Borrower for Loans in an Optional Currency or voluntary prepayments of less than the full amount of an Optional Currency Borrowing Tranche, engage in reasonable rounding of the Optional Currency amounts requested to be loaned or repaid; and, in such event, the Administrative Agent shall promptly notify the Borrower and the Lenders of such rounded amounts and the Borrower’s request or notice shall thereby be deemed to reflect such rounded amounts.

3. INTEREST RATES.

3.1 Interest Rate Options. The Borrower shall pay interest in respect of the outstanding unpaid principal amount of the Loans as selected by it from the Base Rate Option or LIBOR Rate Option set forth below applicable to the Loans, it being understood that, subject to the provisions of this Agreement, the Borrower may select different Interest Rate Options and different Interest Periods to apply simultaneously to the Loans comprising different Borrowing Tranches and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the Loans comprising any Borrowing Tranche; provided that there shall not be at any one time outstanding more than six (6) Borrowing Tranches in the aggregate among all of the Loans and provided further that if an Event of Default or Potential Default exists and is continuing, the Borrower may not request, convert to, or renew the LIBOR Rate Option for any

- 38 -

Loans and the Required Lenders may demand that all existing Borrowing Tranches bearing interest under the LIBOR Rate Option shall be converted immediately to the Base Rate Option, subject to the obligation of the Borrower to pay any indemnity under Section 4.10 [Indemnity] in connection with such conversion. If at any time the designated rate applicable to any Loan made by any Lender exceeds such Lender’s highest lawful rate, the rate of interest on such Lender’s Loan shall be limited to such Lender’s highest lawful rate. Interest on the principal amount of each Loan made in an Optional Currency shall be paid by the Borrower in such Optional Currency.

(a) Revolving Credit Interest Rate Options.

The Borrower shall have the right to select from the following Interest Rate Options applicable to the Revolving Credit Loans, except that no Loan to which the Base Rate Option shall apply may be made in an Optional Currency:

(i) Revolving Credit Base Rate Option. A fluctuating rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate to change automatically from time to time effective as of the effective date of each change in the Base Rate; or

(ii) Revolving Credit LIBOR Rate Option. A rate per annum (computed on the basis of a year of 360 days and actual days elapsed, provided that, for Loans made in Optional Currencies for which a 365-day basis is the only market practice available to the Administrative Agent, such rate shall be calculated on the basis of a year of 365 days for the actual days elapsed) equal to the LIBOR Rate plus the Applicable Margin.

(b) Swing Line Interest Rate.

Only the Base Rate Option shall apply to the Swing Loans.

(c) Rate Quotations.

The Borrower may call the Administrative Agent on or before the date on which a Loan Request is to be delivered to receive an indication of the rates and the applicable currency exchange rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest or the calculation of Equivalent Amounts which thereafter is actually in effect when the election is made.

3.2 Interest Periods. At any time when the Borrower shall select, convert to or renew a LIBOR Rate Option, the Borrower shall notify the Administrative Agent thereof at least four (4) Business Days prior to the effective date of such Interest Rate Option, with respect to an Optional Currency Loan, and three (3) Business Days prior to the effective date of such LIBOR Rate Option by delivering a Loan Request. The notice shall specify an Interest Period during which such Interest Rate Option shall apply. Notwithstanding the preceding sentence, the following provisions shall apply to any selection of, renewal of, or conversion to a LIBOR Rate Option:

- 39 -

(a) Amount of Borrowing Tranche.

The Dollar Equivalent amount of each Borrowing Tranche of Loans under the LIBOR Rate Option shall be in integral multiples of $100,000.00 and not less than $1,000,000.00; and

(b) Renewals.

In the case of the renewal of a LIBOR Rate Option at the end of an Interest Period, the first day of the new Interest Period shall be the last day of the preceding Interest Period, without duplication in payment of interest for such day.

3.3 Interest After Default. To the extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived:

(a) Letter of Credit Fees, Interest Rate.The Letter of Credit Fees and the rate of interest for each Loan otherwise applicable pursuant to Section 2.8(b) [Letter of Credit Fees] or Section 3.1 [Interest Rate Options], respectively, shall be increased by 2.0% per annum at the direction of Required Lenders;

(b) Other Obligations.At the direction of Required Lenders each other Obligation hereunder if not paid when due shall bear interest at a rate per annum equal to the sum of the rate of interest applicable under the Base Rate Option plus an additional 2% per annum from the time such Obligation becomes due and payable and until it is paid in full; and

(c) Acknowledgment.

The Borrower acknowledges that the increase in rates referred to in this Section 3.3 reflects, among other things, the fact that such Loans or other amounts have become a substantially greater risk given their default status and that the Lenders are entitled to additional compensation for such risk; and all such interest shall be payable by Borrower upon demand by Administrative Agent.

3.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available.

(a) Unascertainable.

If on any date on which a LIBOR Rate would otherwise be determined, the Administrative Agent shall have determined that:

(i) adequate and reasonable means do not exist for ascertaining such LIBOR Rate, or

(ii) a contingency has occurred which materially and adversely affects the London interbank eurodollar market relating to the LIBOR Rate, the Administrative Agent shall have the rights specified in Section 3.4(c) [Administrative Agent’s and Lender’s Rights].

- 40 -

(b) Illegality; Increased Costs; Deposits Not Available.

If at any time any Lender shall have determined that:

(i) the making, maintenance or funding of any Loan to which a LIBOR Rate Option applies has been made impracticable or unlawful by compliance by such Lender in good faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law), or

(ii) such LIBOR Rate Option will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any such Loan, or

(iii) after making all reasonable efforts, deposits of the relevant amount in Dollars or the Optional Currency (as applicable) for the relevant Interest Period for a Loan, or to banks generally, to which a LIBOR Rate Option applies, respectively, are not available to such Lender with respect to such Loan, or to banks generally, in the interbank eurodollar market,

(iv) then the Administrative Agent shall have the rights specified in Section 3.4(c) [Administrative Agent’s and Lender’s Rights].

(c) Administrative Agent’s and Lender’s Rights.

In the case of any event specified in Section 3.4(a) [Unascertainable] above, the Administrative Agent shall promptly so notify the Lenders and the Borrower thereof, and in the case of an event specified in Section 3.4(b) [Illegality; Increased Costs; Deposits Not Available] above, such Lender shall promptly so notify the Administrative Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Administrative Agent shall promptly send copies of such notice and certificate to the other Lenders and the Borrower. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (i) the Lenders, in the case of such notice given by the Administrative Agent, or (ii) such Lender, in the case of such notice given by such Lender, to allow the Borrower to select, convert to or renew a LIBOR Rate Option or select an Optional Currency (as applicable) shall be suspended until the Administrative Agent shall have later notified the Borrower, or such Lender shall have later notified the Administrative Agent, of the Administrative Agent’s or such Lender’s, as the case may be, determination that the circumstances giving rise to such previous determination no longer exist. If at any time the Administrative Agent makes a determination under Section 3.4(a) [Unascertainable] and the Borrower has previously notified the Administrative Agent of its selection of, conversion to or renewal of a LIBOR Rate Option and such Interest Rate Option has not yet gone into effect, such notification shall be deemed to provide for selection of, conversion to or renewal of the Base Rate Option otherwise available with respect to such Loans. If any Lender notifies the Administrative Agent of a determination under Section 3.4(b) [Illegality; Increased Costs; Deposits Not Available], the Borrower shall, subject to the Borrower’s indemnification Obligations under Section 4.10 [Indemnity], as to any Loan of the Lender to which a LIBOR Rate Option applies, on the date specified in such notice either (A) as applicable convert such Loan to the Base Rate Option otherwise available with respect to such Loan or select a different Optional Currency or Dollars or (B) prepay such Loan in accordance with Section 4.6

- 41 -

[Voluntary Prepayments]. Absent due notice from the Borrower of conversion or prepayment, such Loan shall automatically be converted to the Base Rate Option otherwise available with respect to such Loan upon such specified date.

3.5 Selection of Interest Rate Options. If the Borrower fails to select a new Interest Period or Optional Currency to apply to any Borrowing Tranche of Loans under the LIBOR Rate Option at the expiration of an existing Interest Period applicable to such Borrowing Tranche in accordance with the provisions of Section 3.2 [Interest Periods], the Borrower shall be deemed to have (a) with respect to Dollar Loans, converted such Borrowing Tranche to the Base Rate Option commencing upon the last day of the existing Interest Period, and (b) with respect to any such Optional Currency Borrowing Tranche, continue the same Optional Currency therefor, but select a one Month Interest Period, commencing upon the last day of the existing Interest Period.

4. PAYMENTS.

4.1 Payments. All payments and prepayments to be made in respect of principal, interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or other fees or amounts due from the Borrower hereunder shall be payable prior to 11:00 a.m. on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without set-off, counterclaim or other deduction of any nature, and an action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent at the Principal Office for the account of PNC Bank with respect to the Swing Loans, for the accounts of the Issuing Bank and/or the ratable accounts of the Lenders (as provided in Section 2.8 [Letter of Credit Subfacility] with respect to payments respecting Letter of Credit Obligations and fees payable under such Section, for the ratable accounts of the Lenders with respect to the Revolving Credit Loans and for the account of the Administrative Agent with respect to the Administrative Agent’s Fee in U.S. Dollars, except that payments of principal or interest shall be made in the currency in which such Loan was made, and in immediately available funds, and the Administrative Agent shall promptly distribute any such amounts payable to the Lenders in immediately available funds; provided that in the event payments are received by 11:00 a.m. by the Administrative Agent with respect to the Loans and such payments are not distributed to the Lenders on the same day received by the Administrative Agent, the Administrative Agent shall pay the Lenders the Federal Funds Effective Rate in the case of Loans or other amounts due in Dollars, or the Overnight Rate in the case of Loans or other amounts due in an Optional Currency with respect to the amount of such payments for each day held by the Administrative Agent and not distributed to the Lenders. The Administrative Agent’s and each Lender’s statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the Loans and other amounts owing under this Agreement (including the Equivalent Amounts of the applicable currencies where such computations are required) and shall be deemed an “account stated.”

4.2 Pro Rata Treatment of Lenders. Each borrowing shall be allocated to each Lender according to its Ratable Share, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrower with respect to principal, interest, Commitment Fees, Letter of Credit Fees, or other fees (except for the Administrative Agent’s Fee and fronting or administrative fees charged by the Issuing Lender) or amounts due

- 42 -

from the Borrower hereunder to the Lenders with respect to the Loans, shall (except as provided with respect to a Non-Complying Lender or a Delinquent Lender and except as provided in Section 3.4(c) [Administrative Agent’s and Lender’s Rights], Section 4.6(b) [Replacement of a Lender] or Section 4.8 [Increased Costs]) be made in proportion to the applicable Loans outstanding from each Lender and, if no such Loans are then outstanding, in proportion to the Ratable Share of each Lender. Notwithstanding any of the foregoing, each borrowing or payment or prepayment by the Borrower of principal, interest, fees or other amounts from the Borrower with respect to Swing Loans shall be made by or to PNC Bank according to Section 2.5 [Making Revolving Credit Loans and Swing Loans; Presumption by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowing to Repay Swing Loans].

4.3 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by realization upon security, or by any other non-pro rata source, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its Ratable Share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, 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, together with interest or other amounts, if any, required by Law (including court order) to be paid by the Lender or the holder making such purchase; and

(ii) the provisions of this Section 4.3 shall not be construed to apply to (A) any payment made by the Loan Parties pursuant to and in accordance with the express terms of the Loan Documents or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or Participation Advances to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section 4.3 shall apply).

Each Loan Party 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 each Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Loan Party in the amount of such participation. Notwithstanding anything to the contrary contained in this Agreement or any of the other Loan Documents, any Lender that fails at any time to comply with the provisions of this Section 4.3 with respect to purchasing participations from the other Lenders whereby such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of its Ratable Share of such payments due and payable to all of the Lenders, when and

- 43 -

to the full extent required by the provisions of this Agreement, shall be deemed delinquent (a “Delinquent Lender”) and shall be deemed a Delinquent Lender until such time as each such delinquency and all of its obligations hereunder are satisfied. A Delinquent Lender shall be deemed to have assigned any and all payments due to it from the Borrower, whether on account of or relating to outstanding Loans, Letters of Credit, interest, fees or otherwise, to the remaining nondelinquent Lenders for application to, and reduction of, their respective Ratable Share of all outstanding Loans and other unpaid Obligations of any of the Loan Parties. The Delinquent Lender hereby authorizes the Administrative Agent to distribute such payments to the nondelinquent Lenders in proportion to their respective Ratable Share of all outstanding Loans and other unpaid Obligations of any of the Loan Parties. A Delinquent Lender shall be deemed to have satisfied in full a delinquency when and if, as a result of application of the assigned payments to all outstanding Loans and other unpaid Obligations of any of the Loan Parties to the nondelinquent Lenders, the Lenders’ respective Ratable Share of all outstanding Loans and unpaid Obligations have returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment causing such delinquency.

4.4 Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing 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.

4.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option applies shall be due and payable in arrears on each Payment Date. Interest on Loans to which the LIBOR Rate Option applies shall be due and payable in the currency in which such Loan was made on the last day of each Interest Period for those Loans and, if such Interest Period is longer than three (3) Months, also on the 90th day of such Interest Period. Interest on mandatory prepayments of principal under Section 4.7 [Mandatory Prepayments] shall be made in the currency in which such Loan was made and shall be due on the date such mandatory prepayment is due. Interest on the principal amount of each Loan or other monetary Obligation shall be due and payable on demand after such principal amount or other monetary Obligation becomes due and payable (whether on the stated Expiration Date, upon acceleration or otherwise).

4.6 Voluntary Prepayments; Reduction of Revolving Credit Commitments.

(a) Right to Prepay.

The Borrower shall have the right at its option from time to time to prepay the Loans in whole or part without premium or penalty (except as provided in Section 4.6(b)

- 44 -

[Replacement of a Lender] below, in Section 4.8 [Increased Costs] and Section 4.10 [Indemnity]) in the currency in which such Loan was made. Whenever the Borrower desires to prepay any part of the Loans, it shall provide a prepayment notice to the Administrative Agent by 1:00 p.m. at least one (1) Business Day prior to the date of prepayment of the Revolving Credit Loans or no later than 12:00 p.m., Philadelphia time, on the date of prepayment of Swing Loans, setting forth the following information:

(i) the date, which shall be a Business Day, on which the proposed prepayment is to be made;

(ii) a statement indicating the application of the prepayment between the Revolving Credit Loans and Swing Loans; and

(iii) the total principal amount and currency of such prepayment, the Dollar Equivalent of which shall not be less than the lesser of the then outstanding amount or $100,000.00 for any Swing Loan or $250,000.00 for any Revolving Credit Loan.

All prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount except with respect to Loans to which the Base Rate Option applies, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made in the currency in which such Loan was made. Except as provided in Section 3.4(c) [Administrative Agent’s and Lender’s Rights], if the Borrower prepays a Loan but fails to specify the applicable Borrowing Tranche which the Borrower is prepaying, the prepayment shall be applied first to Loans to which the Base Rate Option applies, then to Dollar Loans to which the LIBOR Rate Option applies and then to Optional Currency Loans. Any prepayment hereunder shall be subject to the Borrower’s Obligation to indemnify the Lenders under Section 4.10 [Indemnity].

(b) Replacement of a Lender.

In the event any Lender (i) gives notice under Section 3.4 [LIBOR Rate Unascertainable, Etc.], (ii) requests compensation under Section 4.8 [Increased Costs], or requires the Borrower to pay any additional amount to any Lender or any Official Body for the account of any Lender pursuant to Section 4.9 [Taxes], (iii) is a Non-Complying Lender, (iv) becomes subject to the control of an Official Body (other than normal and customary supervision), or (v) is a Non-Consenting Lender referred to in Section 10.1 [Modifications, Amendments or Waivers] then in any such event the Borrower may, at its sole expense, 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, and consents required by, Section 10.8 [Successors and Assigns]), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(A) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.8 [Successors and Assigns];

- 45 -

(B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and Participation Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 4.10 [Indemnity]) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(C) in the case of any such assignment resulting from a claim for compensation under Section 4.8(a) [Increased Costs Generally] or payments required to be made pursuant to Section 4.9 [Taxes], such assignment will result in a reduction in such compensation or payments thereafter; and

(D) such assignment does not conflict with applicable Law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

(c) Termination or Reduction of Revolving Credit Commitments.

The Borrower may, upon notice to the Administrative Agent, terminate the Revolving Credit Commitments, or from time to time permanently reduce the Revolving Credit Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000.00 or a whole multiple of $1,000,000.00 in excess thereof , (iii) the Borrower shall not terminate or reduce the Revolving Credit Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Revolving Facility Usage would exceed the Revolving Credit Commitments, and (iv) if, after giving effect to any reduction of the Revolving Credit Commitments, the Letter of Credit Sublimit or the Swing Line Commitment exceeds the amount of the Revolving Credit Commitments, each shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Revolving Credit Commitments. The amount of any such Revolving Credit Commitment reduction shall not be applied to the Swing Line pro rata or the Letter of Credit Sublimit unless otherwise specified by the Borrower or required by clause (iv). Any reduction of the Revolving Credit Commitments shall be applied to the Revolving Credit Commitment of each Lender pro rata. All fees accrued until the effective date of any termination of the Revolving Credit Commitments shall be paid on the effective date of such termination.

4.7 Mandatory Prepayments.

(a) Sale of Assets.

Within five (5) Business Days of any sale of assets authorized by Section 7.2(g) [Disposition of Assets or Subsidiaries] for a purchase price (when added to the purchase price of other assets sold during the same fiscal year) equal to or in excess of Five Million Dollars ($5,000,000.00), the Borrower shall make a mandatory prepayment of principal (and simultaneous reduction of Revolving Credit Commitments) equal to after-tax proceeds of

- 46 -

such sale (as estimated in good faith by the Borrower) net of any such proceeds used within 365 days of such sale for the purchase of property of a kind and use similar to the property sold. The Borrower shall also pay simultaneously with such prepayment accrued interest on any principal amount of the Loans prepaid under this clause (a).

(b) Material Recovery Event.

Within five (5) Business Days following any receipt by a Loan Party of property or casualty insurance proceeds or condemnation award proceeds, (when added to other such proceeds received during the same fiscal year), equal or exceed Five Million Dollars ($5,000,000.00), if the recovered proceeds are not intended by such Loan Party to be used within 365 days for the repair, replacement or restoration of damaged property (or on such 365th day if the Borrower intended to use such proceeds for such repair, replacement or restoration but fails to do so within such 365-day period), the Borrower shall make a mandatory prepayment of principal (and simultaneous reduction of Revolving Credit Commitments) equal to such proceeds not intended to be so used, or not so used (as the case may be), together with accrued interest on such principal amount.

(c) Currency Fluctuations.

If on any Computation Date (i) the Dollar Equivalent Revolving Facility Usage is greater than the Revolving Credit Commitments, (ii) the Dollar Equivalent of Loans in Optional Currencies shall exceed $50,000,000.00, in the aggregate, or (iii) the Dollar Equivalent of Letters of Credit Outstanding shall exceed $30,000,000.00, in each case as a result of a change in exchange rates between one (1) or more Optional Currencies and Dollars, then the Administrative Agent shall notify the Borrower of the same. The Borrower shall pay or prepay Loans (subject to Borrower’s indemnity obligations under Section 4.8 [Increase Costs] and Section 4.10 [Indemnity]) within one (1) Business Day after receiving such notice such that after giving effect to such payments or prepayments, (A) the Dollar Equivalent Revolving Facility Usage shall not exceed the Revolving Credit Commitments, and (B) the Dollar Equivalent of Loans in Optional Currencies shall not exceed $50,000,000.00. With respect to the circumstance identified in clause (iii) of the first sentence of this paragraph, the Borrower shall Cash Collateralize the Letters of Credit Outstanding to the extent of the amount by which the Dollar Equivalent of Letters of Credit Outstanding exceeds $30,000,000.00.

(d) Application Among Interest Rate Options.

All prepayments required pursuant to this Section 4.7 shall first be applied among the Interest Rate Options to the principal amount of the Loans subject to the Base Rate Option, then to Loans subject to a LIBOR Rate Option. In accordance with Section 4.10 [Indemnity], the Borrower shall indemnify the Lenders for any loss or expense, including loss of margin, incurred with respect to any such prepayments applied against Loans subject to a LIBOR Rate Option on any day other than the last day of the applicable Interest Period.

- 47 -

4.8 Increased Costs.

(a) Increased Costs Generally.

If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate) or the Issuing Lender;

(ii) subject any Lender or the Issuing Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Loan under the LIBOR Rate Option made by it, or change the basis of taxation of payments to such Lender or the Issuing Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 4.9 [Taxes] and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Lender); or

(iii) impose on any Lender, the Issuing Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Loan under the LIBOR Rate Option made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan under the LIBOR Rate Option (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Issuing Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Issuing Lender, the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements.

If any Lender or the Issuing Lender determines that any Change in Law affecting such Lender or the Issuing Lender or any lending office of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Lender, as the case may be,

- 48 -

such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans.

A certificate of a Lender or the Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or the Issuing Lender or its holding company, as the case may be, as specified in Section 4.8(a) [Increased Costs Generally] or Section 4.8(b) [Capital Requirements] and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d) Delay in Requests.

Failure or delay on the part of any Lender or the Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).

4.9 Taxes.

(a) Payments Free of Taxes.

Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required by applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Official Body in accordance with applicable Law.

(b) Payment of Other Taxes by the Borrower.

Without limiting the provisions of Section 4.9(a) [Payments Free of Taxes] above, the Borrower shall timely pay any Other Taxes to the relevant Official Body in accordance with applicable Law.

- 49 -

(c) Indemnification by the Borrower.

The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or the Issuing Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Official Body. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.

(d) Evidence of Payments.

As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Official Body, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Official Body evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders.

Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the Law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding the submission of any such documentation claiming a reduced rate of or exemption from U.S. withholding tax, the Administrative Agent shall be entitled to withhold United States federal income taxes at the full 30% withholding rate if in its reasonable judgment it is required to do so under the due diligence requirements imposed upon a withholding agent under §1.1441-7(b) of the United States Income Tax Regulations. Further, the Administrative Agent is indemnified under §1.1461-1(e) of the United States Income Tax Regulations against any claims and demands of any Lender or assignee or participant of a Lender for the amount of any tax it deducts and withholds in accordance with regulations under §1441 of the Code. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States of America, any Foreign Lender shall

- 50 -

deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,

(ii) duly completed copies of IRS Form W-8ECI,

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed copies of IRS Form W-8BEN, or

(iv) any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower to determine the withholding or deduction required to be made.

4.10 Indemnity. In addition to the compensation or payments required by Section 4.8 [Increased Costs] or Section 4.9 [Taxes], the Borrower shall indemnify each Lender against all liabilities, losses or expenses (including loss of margin, any loss or expense incurred in liquidating or employing deposits from third parties and any loss or expense incurred in connection with funds acquired by a Lender to fund or maintain Loans subject to a LIBOR Rate Option) which such Lender sustains or incurs as a consequence of any

(a) payment, prepayment, conversion or renewal of any Loan to which a LIBOR Rate Option applies on a day other than the last day of the corresponding Interest Period (whether or not such payment or prepayment is mandatory, voluntary or automatic and whether or not such payment or prepayment is then due),

(b) attempt by the Borrower to revoke (expressly, by later inconsistent notices or otherwise) in whole or part any Loan Requests under Section 2.4 [Revolving Credit Loan Requests] or Section 3.2 [Interest Periods] or notice relating to prepayments under Section 4.6 [Voluntary Prepayments], or

(c) default by the Borrower in the performance or observance of any covenant or condition contained in this Agreement or any other Loan Document, including any failure of the Borrower to pay when due (by acceleration or otherwise) any principal, interest, Commitment Fee or any other amount due hereunder.

If any Lender sustains or incurs any such loss or expense, it shall from time to time notify the Borrower in writing of the amount determined in good faith by such Lender (which determination may include such assumptions, allocations of costs and expenses and

- 51 -

averaging or attribution methods as such Lender shall deem reasonable) to be necessary to indemnify such Lender for such loss or expense. Such notice shall set forth in reasonable detail the basis for such determination. Such amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such notice is given.

4.11 Settlement Date Procedures. In order to minimize the transfer of funds between the Lenders and the Agent, the Borrower may borrow, repay and reborrow Swing Loans and PNC Bank may make Swing Loans as provided in Section 2.1(c) [Swing Loan Commitment] hereof during the period between Settlement Dates. Not later than 11:00 a.m. on each Settlement Date, the Administrative Agent shall notify each Lender of its Ratable Share of the total of the Revolving Credit Loans and the Swing Loans (each a “Required Share”). Prior to 2:00 p.m., Philadelphia time, on such Settlement Date, each Lender shall pay to the Administrative Agent the amount equal to the difference between its Required Share and its Revolving Credit Loans, and the Administrative Agent shall pay to each Lender its Ratable Share of all payments made by the Borrower to the Administrative Agent with respect to the Revolving Credit Loans. The Administrative Agent shall also effect settlement in accordance with the foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans and may at its option effect settlement on any other Business Day. These settlement procedures are established solely as a matter of administrative convenience, and nothing contained in this Section 4.11 shall relieve the Lenders of their obligations to fund Revolving Credit Loans on dates other than a Settlement Date pursuant to Section 2.5 [Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowing to Repay Swing Loans]. The Administrative Agent may at any time at its option for any reason whatsoever require each Lender to pay immediately to the Administrative Agent such Lender’s Ratable Share of the outstanding Revolving Credit Loans and each Lender may at any time require the Administrative Agent to pay immediately to such Lender its Ratable Share of all payments made by the borrower to the Administrative Agent with respect to the Revolving Credit Loans.

4.12 Interbank Market Presumption. For all purposes of this Agreement and each Note with respect to any aspects of the LIBOR Rate, or any Loan under the LIBOR Rate Option, or any Optional Currency, each Lender and the Administrative Agent shall be presumed to have obtained rates, funding, currencies, deposits, and the like in the London interbank market regardless whether it did so or not; and, each Lender’s and the Administrative Agent’s determination of amounts payable under, and actions required or authorized by, Section 4.10 [Indemnity] shall be calculated, at each Lender’s and the Administrative Agent’s option, as though each Lender and the Administrative Agent funded each Borrowing Tranche of Loans under the LIBOR Rate Option through the purchase of deposits of the types and maturities corresponding to the deposits used as a reference in accordance with the terms hereof in determining the LIBOR Rate applicable to such Loans, whether in fact that is the case.

4.13 Judgment Currency.

(a) Currency Conversion Procedures for Judgments.

If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder or under a Note in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties hereby agree, to the fullest extent

- 52 -

permitted by Law, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the Original Currency with the Other Currency after any premium and costs of exchange on the Business Day preceding that on which final judgment is given.

(b) Indemnity in Certain Events.

The obligation of the Borrower in respect of any sum due from the Borrower to any Lender hereunder shall, notwithstanding any judgment in an Other Currency, whether pursuant to a judgment or otherwise, be discharged only to the extent that, on the Business Day following receipt by any Lender of any sum adjudged to be so due in such Other Currency, such Lender may in accordance with normal banking procedures purchase the Original Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum originally due to such Lender in the Original Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment or payment, to indemnify such Lender against such loss.

5. REPRESENTATIONS AND WARRANTIES.

5.1 Representations and Warranties.

The Loan Parties, jointly and severally, represent and warrant to the Administrative Agent and each of the Lenders as follows:

(a) Organization and Qualification; Power and Authority; Compliance With Laws; Title to Properties; Event of Default.

Each Loan Party and each Subsidiary of each Loan Party (i) is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) has the lawful power to own or lease its properties and to engage in the business it presently conducts or proposes to conduct, (iii) is duly licensed or qualified and in good standing in each jurisdiction listed on Schedule 5.1(a) and in all other jurisdictions where the property owned or leased by it or the nature of the business transacted by it or both makes such licensing or qualification necessary except where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Change, (iv) has full power to enter into, execute, deliver and carry out this Agreement and the other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan Documents and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary proceedings on its part, (v) is in compliance in all material respects with all applicable Laws (other than Environmental Laws which are specifically addressed in Section 5.1(n) [Environmental Matters]) in all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is presently or will be doing business except where the failure to do so would not constitute a Material Adverse Change, and (vi) has good and marketable title to or valid leasehold interest in all properties, assets and other rights which it purports to own or lease or which are reflected as owned or leased on its books and records, free and clear of all Liens and encumbrances except Permitted Liens. No Event of Default or Potential Default exists or is continuing.

- 53 -

(b) Subsidiaries and Owners; Investment Companies.

Schedule 5.1(b) states (i) the name of each of the Parent’s Subsidiaries, its jurisdiction of organization and the amount, percentage and type of equity interests in such Subsidiary (the “Subsidiary Equity Interests”), (ii) the amount, percentage and type of each equity interest in the Borrower (the “Borrower Equity Interests”), all of which is owned by the Parent, (iii) the name of each other Loan Party, its jurisdiction of organization, and whether such Loan Party is a public company, and, if not, the owners and ownership percentages of the equity of such Loan Party and (iv) any options, warrants or other rights outstanding to purchase any such equity interests referred to in clauses (i), (ii) or (iii) (collectively the “Equity Interests”). The Loan Parties have good and marketable title to all of the Equity Interests they purport to own, free and clear in each case of any Lien and all such Equity Interests been validly issued, fully paid and nonassessable. None of the Loan Parties or Subsidiaries of any Loan Party is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.”

(c) Validity and Binding Effect.

This Agreement and each of the other Loan Documents (i) has been duly and validly executed and delivered by each Loan Party, and (ii) constitutes, or will constitute, legal, valid and binding obligations of each Loan Party which is or will be a party thereto, enforceable against such Loan Party in accordance with its terms except to the extent that enforceability of any Loan Document may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the rights of specific performance.

(d) No Conflict; Material Agreements; Consents.

Neither the execution and delivery of this Agreement or the other Loan Documents by any Loan Party nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by any of them will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of the certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents of any Loan Party or (ii) any Law or any material agreement or instrument or order, writ, judgment, injunction or decree to which any Loan Party or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan Party or any of its Subsidiaries (other than Liens granted under the Loan Documents). There is no default under such material agreement (referred to above) and none of the Loan Parties or their Subsidiaries is bound by any contractual obligation, or subject to any restriction in any organization document, or any requirement of Law which could result in a Material Adverse Change. No consent, approval, exemption, order or authorization of, or a registration or filing with, any Official Body or any other Person is required by any Law or any

- 54 -

agreement in connection with the execution, delivery and carrying out of this Agreement and the other Loan Documents.

(e) Litigation.

Except as set forth on Schedule 5.1(e), there are no actions, suits, proceedings or investigations pending or, to the knowledge of any Loan Party, threatened against such Loan Party or any Subsidiary of such Loan Party at law or in equity before any Official Body which individually or in the aggregate could reasonably be expected to result in any Material Adverse Change. None of the Loan Parties or any Subsidiaries of any Loan Party is in violation of any order, writ, injunction or any decree of any Official Body which could reasonably be expected to result in any Material Adverse Change.

(f) Financial Statements.

(i) Historical Statements. The Loan Parties have delivered to the Administrative Agent copies of their audited consolidated year-end financial statements for and as of the fiscal year ended January 2, 2010 (the “Statements”). The Statements were compiled from the books and records maintained by the Parent’s management, are correct and complete and fairly represent in all material respects the consolidated financial condition of the Loan Parties as of the respective dates thereof and the results of operations for the fiscal periods then ended and have been prepared in accordance with GAAP consistently applied.

(ii) Accuracy of Financial Statements. No Loan Party has any liabilities, contingent or otherwise, or forward or long-term commitments that are not disclosed in the Statements or in the notes thereto, and except as disclosed therein there are no unrealized or anticipated losses from any commitments of any Loan Party which may cause a Material Adverse Change. Since January 2, 2010, no Material Adverse Change has occurred.

(g) Margin Stock.

None of the Loan Parties or any Subsidiaries of any Loan Party engages or intends to engage principally, or as one of its important activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U, T or X as promulgated by the Board of Governors of the Federal Reserve System). No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or which is inconsistent with the provisions of the regulations of the Board of Governors of the Federal Reserve System. None of the Loan Parties or any Subsidiary of any Loan Party holds or intends to hold margin stock in such amounts that more than 25% of the reasonable value of the assets of any Loan Party or Subsidiary of any Loan Party are or will be represented by margin stock.

(h) Full Disclosure.

Neither this Agreement nor any other Loan Document, nor any written certificate, statement, agreement or other documents furnished to the Administrative Agent or any Lender in connection herewith or therewith, contains any untrue statement of a material fact

- 55 -

or omits to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading. There is no fact known to any Loan Party which materially adversely affects the business, property, assets, financial condition, results of operations or prospects of any Loan Party or Subsidiary of any Loan Party which has not been set forth in this Agreement or in the certificates, statements, agreements or other documents furnished in writing to the Administrative Agent and the Lenders prior to or at the date hereof in connection with the transactions contemplated hereby.

(i) Taxes.

All federal, state, and material local and other tax returns required to have been filed with respect to each Loan Party and each Subsidiary of each Loan Party have been filed, and payment or adequate provision has been made for the payment of all taxes, fees, assessments and other governmental charges which have or may become due pursuant to said returns or to assessments received, except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made.

(j) Patents, Trademarks, Copyrights, Licenses, Etc.

Each Loan Party and each Subsidiary of each Loan Party owns or possesses all the material patents, trademarks, service marks, trade names, copyrights, licenses, registrations, franchises, permits and rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to be conducted by such Loan Party or Subsidiary, without, to the best of the knowledge of the Loan Parties, conflict with the rights of others which could reasonably be expected to result in a Material Adverse Change.

(k) Liens in the Collateral.

The Liens in the Collateral granted to the Administrative Agent for the benefit of the Lenders pursuant to the Patent, Trademark and Copyright Assignment, the Pledge Agreement and the Security Agreement (collectively, the “Collateral Documents”) constitute and will continue to constitute a Prior Security Interest. All filing fees and other expenses in connection with the perfection of such Liens have been or will be paid by the Borrower.

(l) Insurance.

The properties of each Loan Party and each of its Subsidiaries are insured pursuant to policies and other bonds which are valid and in full force and effect and which provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of each such Loan Party and Subsidiary in accordance with prudent business practice in the industry of such Loan Parties and Subsidiaries.

(m) ERISA Compliance.

Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state Laws. Each Plan that is intended to

- 56 -

qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or is the subject of a favorable opinion letter or an application for such a letter from the IRS is currently being processed by the IRS with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. No ERISA Event has occurred or is reasonably expected to occur; no Pension Plan has any unfunded pension liability (i.e. excess of benefit liabilities over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan for the applicable plan year); neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

(n) Environmental Matters.

Each Loan Party is and, to the knowledge of each respective Loan Party and each of its Subsidiaries is and has been in material compliance with applicable Environmental Laws except as disclosed on Schedule 5.1(n); provided that such matters so disclosed could not in the aggregate result in a Material Adverse Change.

5.2 Updates to Schedules. Should any of the information or disclosures provided on any of the Schedules attached hereto become outdated or incorrect in any material respect, the Borrower shall promptly provide the Administrative Agent in writing with such revisions or updates to such Schedule as may be necessary or appropriate to update or correct same; provided, however, that no Schedule shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule be deemed to have been cured thereby, unless and until the Required Lenders, in their sole and absolute discretion acting in good faith, shall have accepted in writing such revisions or updates to such Schedule.

6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT.

The obligation of each Lender to make Loans and of the Issuing Lender to issue Letters of Credit hereunder is subject to the performance by each of the Loan Parties of its Obligations to be performed hereunder at or prior to the making of any such Loans or issuance of such Letters of Credit and to the satisfaction of the following further conditions:

- 57 -

6.1 First Loans and Letters of Credit.

(a) Deliveries.

On the Closing Date (except as expressly set forth below), the Administrative Agent shall have received each of the following in form and substance satisfactory to the Administrative Agent:

(i) A certificate of each of the Loan Parties signed by an Authorized Officer, dated the Closing Date stating that the Loan Parties are in compliance with each of its representations, warranties, covenants and conditions hereunder and no Event of Default or Potential Default exists and no Material Adverse Change has occurred since the date of the last audited financial statements of the Borrower delivered to the Administrative Agent.

(ii) A certificate dated the Closing Date and signed by the Secretary or an Assistant Secretary of each of the Loan Parties, certifying as appropriate as to: (A) all action taken by each Loan Party in connection with this Agreement and the other Loan Documents; (B) the names of the Authorized Officers authorized to sign the Loan Documents and their true signatures; and (C) copies of its organizational documents as in effect on the Closing Date certified by the appropriate state official where such documents are filed in a state office (or a certification that there have been no changes to the organizational documents since last delivered to the Administrative Agent), together with certificates from the appropriate state officials as to the continued existence and good standing of each Loan Party in each state where organized or qualified to do business.

(iii) This Agreement and each of the other Loan Documents signed by an Authorized Officer and all appropriate financing statements and appropriate stock powers and certificates evidencing the pledged Collateral; provided that the Loan Parties agree to take all action to perfect, at the Loan Parties’ cost, the Administrative Agent’s lien in sixty five percent (65%) of the equity in first tier Foreign Subsidiaries pursuant to the Pledge Agreement within ninety (90) days after the Closing Date or such longer period of time agreed to by the Administrative Agent.

(iv) A written opinion of counsel for the Loan Parties, dated the Closing Date and as to the matters set forth in Schedule 6.1(a).

(v) Evidence that adequate insurance required to be maintained under this Agreement is in full force and effect, with additional insured, mortgagee and lender loss payable special endorsements attached thereto in form and substance satisfactory to the Administrative Agent and its counsel naming the Administrative Agent as additional insured, mortgagee and lender loss payee.

(vi) A duly completed Compliance Certificate as of the last day of the fiscal quarter of the Borrower most recently ended prior to the Closing Date, signed by an Authorized Officer of the Borrower;

(vii) Copies of all material consents required to effectuate the transactions contemplated hereby;

- 58 -

(viii) A Lien search in acceptable scope and with results acceptable to the Administrative Agent showing the Liens in favor of the Administrative Agent to be a Prior Security Interest, provided that the Loan Parties agree to provide the Administrative Agent with a Lien search of the real properties owned by any of the Loan Parties or their Subsidiaries within ninety (90) days of the Closing Date, showing no Liens against any such real estate except for Permitted Liens;

(ix) Use commercially reasonable efforts to obtain an executed landlord’s waiver in form and substance acceptable to the Administrative Agent from the lessor for each leased Collateral location as required under the Security Agreement; and

(x) Such other documents in connection with such transactions as the Administrative Agent or said counsel may reasonably request.

(b) Payment of Fees.

The Borrower shall have paid all fees payable on or before the Closing Date.

(c) Completion of Due Diligence.

Each of the Administrative Agent and the Lenders shall have completed its due diligence on the Loan Parties and shall be satisfied with the results thereof, including without limitation, with respect to creditworthiness, ERISA matters, Environmental Law matters, and labor and employment matters.

6.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing any Letters of Credit and after giving effect to the proposed extensions of credit: the representations, warranties and covenants of the Loan Parties shall then be true in all material respects and no Event of Default or Potential Default shall have occurred and be continuing; the making of the Loans or issuance of such Letter of Credit shall not contravene any Law applicable to any Loan Party or Subsidiary of any Loan Party or any of the Lenders; and the Borrower shall have delivered to the Administrative Agent a duly executed and completed Loan Request or to the Issuing Lender an application for a Letter of Credit, as the case may be.

7. COVENANTS.

The Loan Parties, jointly and severally, covenant and agree that until Payment in Full, the Loan Parties shall comply at all times with the following covenants:

7.1 Affirmative Covenants.

(a) Preservation of Existence, Etc.

Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain its legal existence as a corporation, limited partnership or limited liability company and its license or qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary, except as

- 59 -

otherwise expressly (i) required by subsection (j) of this Section 7.1, or (ii) permitted in Section 7.2(f) [Liquidations, Mergers, Etc.].

(b) Payment of Liabilities, Including Taxes, Etc.

Each Loan Party shall, and shall cause each of its Subsidiaries to, duly pay and discharge all liabilities to which it is subject or which are asserted against it, promptly as and when the same shall become due and payable, including all taxes, assessments and governmental charges upon it or any of its properties, assets, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or charges, are being contested in good faith and by appropriate and lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made.

(c) Maintenance of Insurance.

Each Loan Party shall, and shall cause each of its Subsidiaries to, insure its properties and assets against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, workers’ compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary, all as reasonably determined by the Administrative Agent. The Loan Parties shall comply with the covenants and provide the endorsement set forth on Schedule 7.2(c) relating to property and related insurance policies covering the Collateral.

(d) Maintenance of Properties and Leases.

Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the general practice of other businesses of similar character and size, all of those properties useful or necessary to its business, and from time to time, such Loan Party will make or cause to be made all appropriate repairs, renewals or replacements thereof.

(e) Visitation Rights.

Each Loan Party shall, and shall cause each of its Subsidiaries to, permit any of the officers or authorized employees or representatives of the Administrative Agent or any of the Lenders to visit and inspect any of its properties and to examine and make excerpts from its books and records and discuss its business affairs, finances and accounts with its officers, all in such detail and at such times and as often as any of the Lenders may reasonably request, provided that each Lender shall provide the Borrower and the Administrative Agent with reasonable notice prior to any visit or inspection. In the event any Lender desires to conduct an audit of any Loan Party, such Lender shall make a reasonable effort to conduct such audit contemporaneously with any audit to be performed by the Administrative Agent.

- 60 -

(f) Keeping of Records and Books of Account.

Each Loan Party shall maintain and keep proper books of record and account which enable the Borrower and its Subsidiaries to issue financial statements in accordance with GAAP and as otherwise required by applicable Laws of any Official Body having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in which full, true and correct entries shall be made in all material respects of all its dealings and business and financial affairs.

(g) Compliance with Laws; Use of Proceeds.

Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with all applicable Laws, including all Environmental Laws, in all respects; provided that it shall not be deemed to be a violation of this Section 7.1(g) if any failure to comply with any Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief which in the aggregate would constitute a Material Adverse Change. The Loan Parties will use the Letters of Credit and the proceeds of the Loans only in accordance with Section 2.7 [Use of Proceeds] and as permitted by applicable Law.

(h) Further Assurances.

Each Loan Party shall, from time to time, at its expense, faithfully preserve and protect the Administrative Agent’s Lien on and Prior Security Interest in the Collateral and all other real and personal property of the Loan Parties whether now owned or hereafter acquired as a continuing first priority perfected Lien, subject only to Permitted Liens, and shall do such other acts and things as the Administrative Agent in its sole discretion may deem reasonably necessary or advisable from time to time in order to preserve, perfect and protect the Liens granted under the Loan Documents and to exercise and enforce its rights and remedies thereunder with respect to the Collateral. Without limiting the generality of the foregoing, the Loan Parties shall continue to use commercially reasonable efforts to obtain (i) executed landlord’s waivers in form and substance acceptable to the Administrative Agent from the lessors of Collateral locations now or hereafter leased, as required by the Security Agreement, and (ii) executed account control agreements in form and substance acceptable to the Administrative Agent from each financial institution, other than the Administrative Agent, at which any Loan Party maintains a deposit account if required in writing by the Administrative Agent.

(i) Anti-Terrorism Laws.

None of the Loan Parties is or shall be (i) a Person with whom any Lender is restricted from doing business under Executive Order No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved in making or receiving any contribution of funds, goods or services to or for the benefit of such a Person or in any transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set forth in any Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law. The Loan Parties shall provide to the Lenders any certifications or information that a Lender requests to confirm compliance by the Loan Parties with Anti-Terrorism Laws.

- 61 -

7.2 Negative Covenants.

(a) Indebtedness.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Indebtedness, except:

(i) Indebtedness under the Loan Documents;

(ii) Existing Indebtedness as set forth on Schedule 7.2(a) (including any extensions, refinancings or renewals thereof; provided there is no increase in the amount thereof or other significant change in the terms thereof unless otherwise specified on Schedule 7.2(a);

(iii) Capitalized and operating leases;

(iv) Indebtedness secured by Purchase Money Security Interests not exceeding $10,000,000.00;

(v) Indebtedness of a Loan Party to another Loan Party which is subordinated pursuant to the Intercompany Subordination Agreement;

(vi) Indebtedness for borrowed money which is subordinated to the Obligations pursuant to a subordination agreement on terms and conditions satisfactory to the Administrative Agent in its sole discretion, or unsecured Indebtedness for borrowed money, provided that the principal amount of any such Indebtedness coming due prior to April 1, 2013, when added to the amount of dividends and distributions (including stock repurchases) paid as permitted pursuant to Section 7.2(e)(ii) and the amount of repayments, redemptions and repurchases of Indebtedness paid as permitted pursuant to Section 7.2(n)(ii) shall not exceed in the aggregate $50,000,000.00; and provided further that (A) at the time of incurrence there does not exist any Event of Default or Potential Default, and (B) after giving effect thereto, the Loan Parties would remain in compliance with clauses (o), (p) and (s) of this Section 7.2;

(vii) Any (A) Lender Provided Interest Rate Hedge, (B) other Interest Rate Hedge approved by the Administrative Agent, for or (C) Indebtedness under any Other Lender Provided Financial Services Product.

(b) Liens.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens.

(c) Guaranties.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, at any time, directly or indirectly, become or be liable in respect of any Guaranty, or assume,

- 62 -

guarantee, become surety for, endorse or otherwise agree, become or remain directly or contingently liable upon or with respect to any obligation or liability of any other Person except with respect to Indebtedness of a Loan Party permitted under Section 7.2(a) [Indebtedness].

(d) Loans and Investments.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, at any time make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) or limited liability company interest in, or any other investment or interest in, or make any capital contribution to, any other Person, or agree, become or remain liable to do any of the foregoing, except:

(i) trade credit extended on usual and customary terms in the ordinary course of business;

(ii) advances to employees to meet expenses incurred by such employees in the ordinary course of business;

(iii) Permitted Investments;

(iv) loans, advances and investments in other Loan Parties;

(v) investments existing on the Closing Date as described on Schedule 7.2(d); and

(vi) other investments (not otherwise prohibited by Section 7.2(f) [Liquidation, Mergers, Consolidations, Acquisitions], Section 7.2(h) [Affiliate Transactions] or Section 7.2(i) [Subsidiaries, Partnerships and Joint Ventures]) provided that (A) at the time of any such investment there exists no Event of Default or Potential Default; (B) if such investment had occurred during the fiscal quarter last ended, the Loan Parties would have been in compliance with all of the terms and conditions of this Agreement, Section 7.2(q) [Minimum Liquidity]; (C) if such investment had occurred during the fiscal quarter last ended, the Senior Leverage Ratio would have been equal to or less than 2.0 to 1.0; and (D) the aggregate amount of such investments, (computed for each investment at the time such investment is made) shall not exceed 20% of the Loan Parties’ Consolidated Net Worth.

(e) Dividends and Related Distributions.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, make or pay, or agree to become or remain liable to make or pay, any dividend or other distribution of any nature (whether in cash, property, securities or otherwise) on account of or in respect of its shares of capital stock, partnership interests or limited liability company interests on account of the purchase, redemption, retirement or acquisition of its shares of capital stock (or warrants, options or rights therefor), partnership interests or limited liability company interests, except (i) dividends or other distributions payable to another Loan Party; and (ii) dividends or other distributions, including stock repurchases, made when there exists no Event of Default or Potential Default provided that the aggregate of all such dividends and distributions (including

- 63 -

stock repurchases) paid, when added to the aggregate of all principal of Indebtedness permitted pursuant to Section 7.2(a)(vi) coming due prior to April 1, 2013, and repayments, repurchases or redemptions of Indebtedness paid as permitted under Section 7.2(n)(ii) shall not exceed $50,000,000.00.

(f) Liquidations, Mergers, Consolidations, Acquisitions.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or substantially all of the assets or capital stock of any other Person; provided that (i) any Loan Party other than the Borrower may consolidate with or merge into another Loan Party which is wholly-owned by one or more of the other Loan Parties; (ii) any Loan Party may be liquidated if such Loan Party has no assets or liabilities; and (iii) any Loan Party shall be entitled to acquire by purchase or by merger all of the ownership interest, or substantially all of the assets, of a Person as long as each of the following requirements are met

(A) there does not then, or immediately after such acquisition, exist any Potential Default or Event of Default;

(B) if any Loan Party acquires the ownership interests in a Person, such Person shall execute a Guarantor Joinder and other documents and join this Agreement simultaneously with such acquisition, as contemplated by Section 7.2(i) [Subsidiaries, Partnerships and Joint Ventures];

(C) the boards of directors of the Loan Party acquiring a Person and the Person which is being acquired each approving such acquisition, and certified copies thereof shall have been delivered to the Administrative Agent;

(D) the business acquired shall be substantially the same as or complementary to one or more lines of business conducted by the Loan Parties prior to such acquisition;

(E) the Loan Parties shall deliver to the Administrative Agent not less than five (5) Business Days prior to such acquisition, evidence and a certification thereto, all in form and substance acceptable to the Administrative Agent (1) that, if such acquisition had occurred during the fiscal quarter last ended, the Loan Parties would have been in compliance with all of the terms and conditions of this Agreement, including Section 7.2(q) [Minimum Liquidity], and (2) that if such acquisition had occurred during the fiscal quarter last ended, the Senior Leverage Ratio would have been equal to or less than 2.0 to 1.0; and

(F) the Loan Parties shall deliver to the Administrative Agent not less than five (5) Business Days prior to such acquisition, copies of any agreements entered into or proposed to be entered into in connection therewith and shall deliver to the Administrative Agent such other information as it may request, all such agreements and information shall be reasonably satisfactory to the Administrative Agent.

- 64 -

(g) Dispositions of Assets or Subsidiaries.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any of its properties or assets, tangible or intangible (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or of capital stock, shares of beneficial interest, partnership interests or limited liability company interests of a Subsidiary of such Loan Party), except:

(i) transactions involving the sale of inventory in the ordinary course of business;

(ii) any sale, transfer or lease of assets in the ordinary course of business which are no longer necessary or required in the conduct of such Loan Party’s or such Subsidiary’s business;

(iii) any sale, transfer or lease of assets by any wholly owned Subsidiary of such Loan Party to another Loan Party;

(iv) any sale, transfer or lease of assets in the ordinary course of business which are replaced by substitute assets; provided such substitute assets are subject to the Prior Security Interest in favor of the Administrative Agent; or

(v) any sale, transfer or lease of assets, other than those specifically excepted pursuant to clauses (i) through (iv) above, which is approved by the Required Lenders so long as the after-tax proceeds (as reasonably estimated by the Borrower) are applied as a mandatory prepayment of the Loans in accordance with the provisions of Section 4.7(a) [Sale of Assets] above.

(h) Affiliate Transactions.

No Loan Parties shall, and no Loan Party shall permit any of its Subsidiaries to, enter into or carry out any transaction (including purchasing property or services from or selling property or services to any Affiliate of any Loan Party) unless such transaction is not otherwise prohibited by this Agreement, is entered into in the ordinary course of business upon fair and reasonable arm’s-length terms and conditions which are fully disclosed to the Administrative Agent and is in accordance with all applicable Law.

(i) Subsidiaries, Partnerships and Joint Ventures.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to own or create directly or indirectly any Domestic Subsidiaries other than (i) any Domestic Subsidiary which has joined this Agreement as Guarantor on the Closing Date; (ii) 935 HQ Associates, LLC, provided that it owns no assets other than the land and improvements constituting 935 First Avenue, King of Prussia, PA 19406; and (iii) any Domestic Subsidiary formed after the Closing Date which joins this Agreement as a Guarantor by delivering to the Administrative Agent (A) a signed Guarantor Joinder; (B) documents in the forms described in clauses (i), (ii), (iii), (v), (vi), (vii), (viii), (ix) and if required by the Administrative Agent, (iv)

- 65 -

and (x) of Section 6.1 [First Loans and Letters of Credit] modified as appropriate; and (C) documents necessary to grant and perfect Prior Security Interests to the Administrative Agent for the benefit of the Lenders in the equity interests of, and Collateral held by, such Subsidiary. No Loan Party shall become or agree to become a party to a Joint Venture, unless (1) it is not otherwise prohibited by Section 7.2(f) [Liquidation, Merger, Consolidations, Acquisitions] or Section 7.2(h) [Affiliate Transactions], (2) the conditions set forth in Section 7.2(d)(vi)(A)-(D) have been met, and (3) to the extent such Joint Venture would be a Subsidiary, the conditions set forth in this Section 7.2(i) have been met.

(j) Continuation of or Change in Business.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in any business that is not similar or complementary to the business in which they engage as of the Closing Date, and such Loan Party or Subsidiary shall not permit any material change in such business.

(k) Fiscal Year.

The Parent shall not, and shall not permit Borrower or any other Loan Party to, change its fiscal year end from the Saturday nearest to December 31^st.

(l) Issuance of Stock.

No Loan Party (other than the Parent) shall, and no Loan Party shall permit any of its Subsidiaries to, issue any additional shares of its capital stock or any options, warrants or other rights in respect thereof other than the issuance of capital stock by one Loan Party to another Loan Party provided that such capital stock shall be subject to the Pledge Agreement and all certificates evidencing such capital stock shall be delivered immediately upon issuance to the Administrative Agent together with stock powers executed in blank.

(m) Changes in Organizational Documents.

No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, amend in any respect its certificate of incorporation (including any provisions or resolutions relating to capital stock), by-laws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents without providing at least thirty (30) calendar days’ prior written notice to the Administrative Agent and the Lenders and, in the event such change would be adverse to the Lenders as determined by the Administrative Agent in its sole discretion, obtaining the prior written consent of the Required Lenders.

(n) Repayment of Indebtedness.

The Loan Parties shall not prepay, redeem or repurchase any Indebtedness except (i) repurchases or early redemptions of the Parent’s 3% Convertible Notes due 2025 in the aggregate amount of $57,500,000.00 as identified on Schedule 7.2(a), or (ii) repayments, redemptions or repurchases of other Indebtedness in an aggregate principal amount under this clause (ii) that, when added to the aggregate amount of Indebtedness permitted under

- 66 -

Section 7.2(a)(vi) and the aggregate amount of dividends and distributions (including stock repurchases) paid as permitted pursuant to Section 7.2(e)(ii), shall not exceed $50,000,000.00.

(o) Minimum Fixed Charge Coverage Ratio.

The Loan Parties shall not permit the Fixed Charge Coverage Ratio, calculated as of the end of each fiscal quarter for the four (4) fiscal quarters then ended, to be less than 2.5 to 1.0.

(p) Maximum Leverage Ratio.

The Loan Parties shall not at any time permit the Leverage Ratio to exceed 4.0 to 1.0.

(q) Minimum Liquidity.

The Loan Parties shall not permit cash and Cash Equivalents to be less than $30,000,000.00 as of the end of any fiscal quarter, of which not less than $25,000,000.00 shall be owned by the Parent, the Borrower and/or the Domestic Subsidiaries and maintained in the United States.

(r) Foreign Subsidiaries.

The Loan Parties shall not permit more than the following portion of their consolidated total assets to be owned by Foreign Subsidiaries:

Maximum Percentage	Period
25%	Through fiscal year end 2009
35%	During fiscal year 2010 and through fiscal year end 2011
40%	after fiscal year end 2011

(s) Maximum Senior Leverage Ratio.

The Loan Parties shall not at any time permit the Senior Leverage Ratio to exceed 2.5 to 1.0.

7.3 Reporting Requirements. The Loan Parties will furnish or cause to be furnished to the Administrative Agent and each of the Lenders.

(a) Quarterly Financial Statements.

As soon as available and in any event within forty-five (45) calendar days after the end of each of the first three fiscal quarters in each fiscal year, financial statements of the Parent, consisting of a consolidated and consolidating balance sheet as of the end of such fiscal quarter and related consolidated and consolidating statements of income, retained earnings and cash flows for the fiscal quarter then ended and the fiscal year through that date, all in

- 67 -

reasonable detail and certified (subject to normal year-end audit adjustments) by the Chief Executive Officer, President or Chief Financial Officer of the Parent as having been prepared in accordance with GAAP, consistently applied, and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year, it being understood and agreed that the delivery of the Parent’s Form 10-Q (or transmission of the weblink where such Form 10-Q can be found), promptly after the filing thereof with the Securities and Exchange Commission shall satisfy the requirements of this subsection with respect to consolidated financial statements and reports.

(b) Annual Financial Statements.

As soon as available and in any event within one hundred twenty (120) days after the end of each fiscal year of the Borrower, financial statements of the Parent consisting of a consolidated and consolidating balance sheet as of the end of such fiscal year, and related consolidated and consolidating statements of income, retained earnings and cash flows for the fiscal year then ended, all in reasonable detail and setting forth in comparative form the financial statements as of the end of and for the preceding fiscal year, and certified by independent certified public accountants of nationally recognized standing satisfactory to the Administrative Agent, it being understood and agreed that the delivery of the Parent’s Form 10-K (or transmission of the weblink where such Form 10-K can be found), promptly after the filing thereof with the Securities and Exchange Commission together with a certificate or report of such independent certified public accountants shall satisfy the requirements of this subsection with respect to consolidated financial statements and reports. The certificate or report of accountants shall be free of qualifications (other than any consistency qualification that may result from a change in the method used to prepare the financial statements as to which such accountants concur) and shall not indicate the occurrence or existence of any event, condition or contingency which would materially impair the prospect of payment or performance of any covenant, agreement or duty of any Loan Party under any of the Loan Documents.

(c) Certificate of the Borrower.

Concurrently with the financial statements of the Borrower furnished to the Administrative Agent and to the Lenders pursuant to Section 7.3(a) [Quarterly Financial Statements] and Section 7.3(b) [Annual Financial Statements], a certificate (each a “Compliance Certificate”) of the Borrower signed by the Chief Executive Officer, President or Chief Financial Officer of the Borrower, in the form of Exhibit 7.3(c).

(d) Notices.

(i) Default. Promptly after any officer of any Loan Party has learned of the occurrence of an Event of Default or Potential Default, a certificate signed by an Authorized Officer setting forth the details of such Event of Default or Potential Default and the action which such Loan Party proposes to take with respect thereto.

(ii) Litigation. Promptly after the commencement thereof, notice of all actions, suits, proceedings or investigations before or by any Official Body or any other Person against any Loan Party or Subsidiary of any Loan Party which relate to the Collateral, involve a

- 68 -

claim or series of claims in excess of $2,000,000.00 or which if adversely determined would constitute a Material Adverse Change.

(iii) Organizational Documents. Within the time limits set forth in Section 7.2(m) [Changes in Organizational Documents], any amendment to the organizational documents of any Loan Party.

(iv) Erroneous Financial Information. Immediately in the event that any Loan Party or its accountants conclude or advise that any previously issued financial statement, audit report or interim review should no longer be relied upon or that disclosure should be made or action should be taken to prevent future reliance.

(v) ERISA Event. Immediately upon the occurrence of any ERISA Event.

(vi) Other Reports. Promptly upon their becoming available to any Loan Party or filed with the Securities and Exchange Commission:

(A) Annual Budget. The annual budget, any forecasts or projections of the Borrower and the other Loan Parties and any supplements or updates thereto, to be supplied with the annual financial statements required under Section 7.3(b) [Annual Financial Statements] and at such times as the Administrative Agent may reasonably require, from time to time.

(B) Management Letters. Any reports including management letters submitted to the Borrower or any other Loan Party by independent accountants in connection with any annual, interim or special audit,

(C) SEC Reports; Shareholder Communications. Reports, including Forms 10-K, 10-Q and 8-K, registration statements and prospectuses and other shareholder communications, filed by any Loan Party with the Securities and Exchange Commission (or transmission of the weblink where such reports, statements or other communications can be found).

(D) Other Information. Such other reports and information as any of the Lenders may from time to time reasonably request.

8. DEFAULT.

8.1 Events of Default. An Event of Default means the occurrence or existence of any one or more of the following events or conditions (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):

(a) Payments Under Loan Documents.

The Borrower shall fail to pay any principal of any Loan (including scheduled installments, mandatory prepayments or the payment due at maturity), Reimbursement Obligation or Letter of Credit Obligation or any interest on any Loan , Reimbursement

- 69 -

Obligation or Letter of Credit Obligation or any other amount owing hereunder or under the other Loan Documents on the date on which such principal, interest or other amount becomes due in accordance with the terms hereof or thereof;

(b) Breach of Warranty.

Any representation or warranty made at any time by any of the Loan Parties herein or by any of the Loan Parties in any other Loan Document, or in any certificate, other instrument or statement furnished pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time it was made or furnished;

(c) Breach of Negative Covenants or Visitation Rights.

Any of the Loan Parties shall default in the observance or performance of any covenant contained in Section 7.1(e) [Visitation Rights] or Section 7.2 [Negative Covenants];

(d) Breach of Other Covenants.

Any of the Loan Parties shall default in the observance or performance of any other covenant, condition or provision hereof or of any other Loan Document and such default shall continue unremedied for a period of thirty (30) Business Days;

(e) Defaults in Other Agreements or Indebtedness.

A default or event of default shall occur at any time under the terms of any other agreement involving borrowed money or the extension of credit or any other Indebtedness under which any Loan Party or Subsidiary of any Loan Party may be obligated as a borrower or guarantor in excess of $5,000,000.00 in the aggregate, and such breach, default or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any Indebtedness when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any Indebtedness (whether or not such right shall have been waived) or the termination of any commitment to lend, or if there occurs any “Fundamental Change” under the Indenture dated as of July 2, 2007, between the Parent and The Bank of New York, as trustee, providing for the issuance of the Parent’s 2.50% Convertible Senior Notes due 2027, or a “Designated Event” under the Indenture dated as of June 1, 2005 between the Parent and JP Morgan Chase Bank, NA as trustee providing for the issuance of the Parent’s 3% Convertible Notes due 2025, or any other event under either such Indenture which entitles either trustee or any noteholder to accelerate repayment of any notes issued under either such Indenture, other than an event that gives rise to a Permitted Payment;

(f) Final Judgments or Orders.

Any final judgments or orders for the payment of money in excess of $1,000,000.00 in the aggregate shall be entered against any Loan Party or any Subsidiary of any Loan Party by a court having jurisdiction in the premises, which judgment is not discharged,

- 70 -

vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry;

(g) Loan Document Unenforceable.

Any of the Loan Documents shall cease to be legal, valid and binding agreements enforceable against the Loan Party executing the same or such party’s successors and assigns (as permitted under the Loan Documents) in accordance with the respective terms thereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or shall in any way be challenged or contested or cease to give or provide the respective Liens, security interests, rights, titles, interests, remedies, powers or privileges intended to be created thereby except if resulting solely from the Administrative Agent’s failure to file UCC-3 continuation statements in a timely manner;

(h) Uninsured Losses; Proceedings Against Assets.

There shall occur any material uninsured damage to or loss, theft or destruction of any of the Collateral in excess of $5,000,000.00 or the Collateral or any material portion of the Loan Parties’ or any of their Subsidiaries’ assets are attached, seized, levied upon or subjected to a writ or distress warrant; or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within thirty (30) days thereafter;

(i) Events Relating to Plans and Benefit Arrangements.

(i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000.00 or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $500,000.00;

(j) Change of Control.

Any person or group of persons (within the meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended) other than those shareholders identified on Schedule 8.1(j) shall have acquired beneficial ownership of (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) 25.5% or more of the voting capital stock of the Parent; (ii) within a period of twelve (12) consecutive calendar months, individuals who were directors of the Parent on the first day of such period (together with any new directors whose election by the board of directors or nomination for election by the shareholders was approved by a vote of the majority of directors then still in office who were either directors as of the first day of the period or whose election or nomination for election was previously so approved) shall cease to constitute a majority of the board of directors of the Parent; or (iii) the Parent ceases to own 100% of the Borrower Equity Interests.

- 71 -

(k) Relief Proceedings.

(i) Relief Proceeding shall have been instituted against any Loan Party or Subsidiary of a Loan Party and such Relief Proceeding shall remain undismissed or unstayed and in effect for a period of thirty (30) consecutive days or such court shall enter a decree or order granting any of the relief sought in such Relief Proceeding, (ii) any Loan Party or Subsidiary of a Loan Party institutes, or takes any action (other than action to dismiss such Relief Proceeding) in furtherance of, a Relief Proceeding, or (iii) any Loan Party or any Subsidiary of a Loan Party ceases to be solvent or admits in writing its inability to pay its debts as they mature.

8.2 Consequences of Event of Default.

(a) Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings.

If an Event of Default specified under Sections 8.1(a) through (j) shall occur and be continuing, the Lenders and the Administrative Agent shall be under no further obligation to make Loans and the Issuing Lender shall be under no obligation to issue Letters of Credit and the Administrative Agent may, and, upon the request of the Required Lenders, shall (i) by written notice to the Borrower, declare the unpaid principal amount of the Notes then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder to be forthwith due and payable, and the same shall thereupon become and be immediately due and payable to the Administrative Agent for the benefit of each Lender without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, and (ii) require the Borrower to, and the Borrower shall thereupon, deposit in a non-interest-bearing account with the Administrative Agent, as cash collateral for its Obligations under the Loan Documents, an amount equal to the maximum amount currently or at any time thereafter available to be drawn on all outstanding Letters of Credit, and the Borrower hereby pledges to the Administrative Agent and the Lenders, and grants to the Administrative Agent and the Lenders a security interest in, all such cash as security for such Obligations; and

(b) Bankruptcy, Insolvency or Reorganization Proceedings.

If an Event of Default specified under Section 8.1(k) [Relief Proceedings] shall occur, the Lenders shall be under no further obligations to make Loans hereunder and the Issuing Lender shall be under no obligation to issue Letters of Credit and the unpaid principal amount of the Loans then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and

(c) Set-off.

If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Lender, and each of their respective Affiliates and any participant of such Lender or Affiliate which has agreed in writing to be bound by the provisions of Section 4.3 [Sharing of Payments by Lenders] is hereby authorized at any time and from time to time, to the fullest

- 72 -

extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Lender or any such Affiliate or participant to or for the credit or the account of any Loan Party against any and all of the Obligations of such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, the Issuing Lender, Affiliate or participant, irrespective of whether or not such Lender, Issuing Lender, Affiliate or participant shall have made any demand under this Agreement or any other Loan Document and although such Obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the Issuing Lender different from the branch or office holding such deposit or obligated on such Indebtedness. The rights of each Lender, the Issuing Lender and their respective Affiliates and participants under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Lender or their respective Affiliates and participants may have. Each Lender and the Issuing Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application; and

(d) Application of Proceeds. From and after the date on which the Administrative Agent has taken any action pursuant to this Section 8.2 and until all Obligations of the Loan Parties have been paid in full, any and all proceeds received by the Administrative Agent from any sale or other disposition of the Collateral, or any part thereof, or the exercise of any other remedy by the Administrative Agent, shall be applied as follows:

(i) first, to reimburse the Administrative Agent and the Lenders for out-of-pocket costs, expenses and disbursements, including reasonable attorneys’ and paralegals’ fees and legal expenses, incurred by the Administrative Agent or the Lenders in connection with realizing on the Collateral or collection of any Obligations of any of the Loan Parties under any of the Loan Documents, including advances made by the Lenders or any one of them or the Administrative Agent for the reasonable maintenance, preservation, protection or enforcement of, or realization upon, the Collateral, including advances for taxes, insurance, repairs and the like and reasonable expenses incurred to sell or otherwise realize on, or prepare for sale or other realization on, any of the Collateral;

(ii) second, to the repayment of all Obligations then due and unpaid of the Loan Parties to the Lenders or their Affiliates incurred under this Agreement or any of the other Loan Documents or agreements evidencing Other Lender Provided Financial Services Obligations or agreements evidencing Lender Provided Interest Rate Hedges, whether of principal, interest, fees, expenses or otherwise and to Cash Collateralize the Letter of Credit Obligations, in such manner as the Administrative Agent may determine in its discretion; and

(iii) the balance, if any, as required by Law.

9. THE ADMINISTRATIVE AGENT.

9.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby irrevocably appoints PNC Bank, National Association to act on its behalf as the

- 73 -

Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 9 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

9.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder 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 the Administrative Agent and the term “Lender” or “Lenders”, unless otherwise expressly indicated or unless the context otherwise requires, includes the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.3 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Potential Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person 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 (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.1 [Modifications, Amendments or Waivers] and Section 8.2 [Consequences of Event of Default]) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Potential Default or Event of Default

- 74 -

unless and until notice describing such Potential Default or Event of Default is given to the Administrative Agent by the Borrower, a Lender or the Issuing Lender.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (A) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (B) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Potential Default or Event of Default, (D) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (E) the satisfaction of any condition set forth in Section 6 [Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.4 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, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts 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 experts.

9.5 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 of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 9 shall apply to any such sub-agent and to the Related Parties 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.

9.6 Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with approval from the Borrower (so long as no Event of Default has occurred and is continuing), to appoint a successor, such approval not to be unreasonably withheld or delayed. If no such

- 75 -

successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lender under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section 9.6. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Section 9 and Section 10.3 [Expenses; Indemnity; Damage Waiver] shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

If PNC Bank resigns as Administrative Agent under this Section 9.6, PNC Bank shall also resign as an Issuing Lender. Upon the appointment of a successor Administrative Agent hereunder, such successor shall (i) succeed to all of the rights, powers, privileges and duties of PNC Bank as the retiring Issuing Lender and Administrative Agent and PNC Bank shall be discharged from all of its respective duties and obligations as Issuing Lender and Administrative Agent under the Loan Documents, and (ii) issue letters of credit in substitution for the Letters of Credit issued by PNC Bank, if any, outstanding at the time of such succession or make other arrangement satisfactory to PNC Bank to effectively assume the obligations of PNC Bank with respect to such Letters of Credit.

9.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties 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 and the Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties 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

- 76 -

action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.8 Administrative Agent’s Fee. The Borrower shall pay to the Administrative Agent a nonrefundable fee (the “Administrative Agent’s Fee”) under the terms of a letter (the “Administrative Agent’s Letter”) between the Borrower and Administrative Agent, as amended from time to time.

9.9 Authorization to Release Collateral and Guarantors. The Lenders and Issuing Lenders authorize the Administrative Agent to release (a) any Collateral consisting of assets or equity interests sold or otherwise disposed of in a sale or other disposition or transfer permitted under Section 7.2(g) [Disposition of Assets or Subsidiaries] or Section 7.2(f) [Liquidations, Mergers, Consolidations, Acquisitions], and (b) any Guarantor from its obligations under the Guaranty Agreement if the ownership interests in such Guarantor are sold or otherwise disposed of or transferred to persons other than Loan Parties or Subsidiaries of the Loan Parties in a transaction permitted under Section 7.2(g) [Disposition of Assets or Subsidiaries] or Section 7.2(f) [Liquidations, Mergers, Consolidations, Acquisitions].

9.10 No Reliance on Administrative Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any of the Loan Parties, their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (a) any identity verification procedures, (b) any recordkeeping, (c) comparisons with government lists, (d) customer notices or (e) other procedures required under the CIP Regulations or such other Laws.

10. MISCELLANEOUS.

10.1 Modifications, Amendments or Waivers. With the written consent of the Required Lenders, the Administrative Agent, acting on behalf of all the Lenders, and the Borrower, on behalf of the Loan Parties, may from time to time enter into written agreements amending or changing any provision of this Agreement or any other Loan Document or the rights of the Lenders or the Loan Parties hereunder or thereunder, or may grant written waivers or consents hereunder or thereunder. Any such agreement, waiver or consent made with such written consent shall be effective to bind all the Lenders and the Loan Parties; provided, that no such agreement, waiver or consent may be made which will:

(a) Increase of Commitment.

Increase the amount of the Revolving Credit Commitment of any Lender hereunder without the consent of such Lender;

- 77 -

(b) Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment.

Whether or not any Loans are outstanding, extend the Expiration Date or the time for payment of principal or interest of any Loan (excluding the due date of any mandatory prepayment of a Loan), the Commitment Fee or any other fee payable to any Lender, or reduce the principal amount of or the rate of interest borne by any Loan or reduce the Commitment Fee or any other fee payable to any Lender, the Commitment Fee or any other fee payable to any Lender, without the consent of each Lender directly affected thereby;

(c) Release of Collateral or Guarantor.

Except for sales of assets permitted by Section 7.2(g) [Disposition of Assets or Subsidiaries], release all or substantially all of the Collateral or any Guarantor from its Obligations under the Guaranty Agreement without the consent of all Complying Lenders; or

(d) Miscellaneous.

Amend Section 4.2 [Pro Rata Treatment of Lenders], Section 9.3 [Exculpatory Provisions, Etc.] or Section 4.3 [Sharing of Payments by Lenders] or this Section 10.1, alter any provision regarding the pro rata treatment of the Lenders or requiring all Lenders to authorize the taking of any action or reduce any percentage specified in the definition of Required Lenders, in each case without the consent of all of the Complying Lenders;

provided that no agreement, waiver or consent which would modify the interests, rights or obligations of the Administrative Agent or the Issuing Lender without the written consent of such Administrative Agent or Issuing Lender, as applicable, and provided, further that, if in connection with any proposed waiver, amendment or modification referred to in subsections (a) through (d) above, the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained (each a “Non-Consenting Lender”), then the Borrower shall have the right to replace any such Non-Consenting Lender with one or more replacement Lenders pursuant to Section 4.6(b) [Replacement of a Lender].

10.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further exercise thereof or of any other right, power, remedy or privilege. The rights and remedies of the Administrative Agent and the Lenders under this Agreement and any other Loan Documents are cumulative and not exclusive of any rights or remedies which they would otherwise have.

10.3 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses.

The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and

- 78 -

disbursements of counsel for the Administrative Agent), and shall pay all fees and time charges and disbursements for attorneys who may be employees of the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the Issuing Lender) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit, and (iv) all reasonable out-of-pocket expenses of the Administrative Agent’s regular employees and agents engaged periodically to perform audits of the Loan Parties’ books, records and business properties provided that as long as there exists no Event of Default or Potential Default, the Borrower shall not be obligated to pay more than $15,000.00 in any fiscal year for expenses incurred under this clause (iv).

(b) Indemnification by the Borrower.

The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) breach of representations, warranties or covenants of the Borrower under the Loan Documents, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, including any such items or losses relating to or arising under Environmental Laws or pertaining to environmental matters, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether 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 (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of

- 79 -

such Indemnitee or (B) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders.

To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 10.3(a) [Costs and Expenses] or Section 10.3(b) [Indemnification by the Borrower] to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Lender or such Related Party, as the case may be, such Lender’s Ratable 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 (or any such sub-agent) or the Issuing Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or Issuing Lender in connection with such capacity.

(d) Waiver of Consequential Damages, Etc.

To the fullest extent permitted by applicable Law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in Section 10.3(b) [Indemnification by the Borrower] shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments.

All amounts due under this Section shall be payable not later than ten (10) days after demand therefor.

10.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be due on a day which is not a Business Day such payment shall be due on the next Business Day (except as provided in Section 3.2 [Interest Periods]) and such extension of time shall be included in computing interest and fees, except that the Loans shall be due on the Business Day preceding the Expiration Date if the Expiration Date is not a Business Day. Whenever any payment or action to be made or taken hereunder (other than payment of the Loans) shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or

- 80 -

taken on the next following Business Day, and such extension of time shall not be included in computing interest or fees, if any, in connection with such payment or action.

10.5 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally.

Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 10.5(b) [Electronic Communications]), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier (i) if to a Lender, to it at its address set forth in its administrative questionnaire, or (ii) if to any other Person, to it at its address set forth on Schedule 1.1(B).

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in Section 10.5(b) [Electronic Communications], shall be effective as provided in such Section.

(b) Electronic Communications.

Notices and other communications to the Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic communication (including e-mail 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 or the Issuing Lender if such Lender or the Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the 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.

- 81 -

10.6 Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

10.7 Duration; Survival. All representations and warranties of the Loan Parties contained herein or made in connection herewith shall survive the execution and delivery of this Agreement, the completion of the transactions hereunder and Payment In Full. All covenants and agreements of the Borrower contained herein relating to the payment of principal, interest, premiums, additional compensation or expenses and indemnification, including those set forth in the Notes, Section 4 [Payments] and Section 10.3 [Expenses; Indemnity; Damage Waiver], shall survive Payment in Full. All other covenants and agreements of the Loan Parties shall continue in full force and effect from and after the date hereof and until Payment in Full.

10.8 Successors and Assigns.

(a) Successors and Assigns Generally.

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 neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 10.8(b) [Assignments by Lenders], (ii) by way of participation in accordance with the provisions of Section 10.8(d) [Participations], or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.8(f) [Certain Pledges; Successors and Assigns Generally] (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 10.8(d) [Participations] and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders.

Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

- 82 -

(B) in any case not described in clause (i)(A) of this subsection (b), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption Agreement with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption Agreement, as of the Trade Date) shall not be less than $5,000,000.00, in the case of any assignment in respect of the Revolving Credit Commitment of the assigning Lender, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. 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 with respect to the Loan or the Commitment assigned.

(iii) Required Consents. No consent shall be required for any assignment except for the consent of the Administrative Agent (which shall not be unreasonably withheld or delayed) and:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Issuing Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding).

(iv) Assignment and Assumption Agreement. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption Agreement, together with a processing and recordation fee of $3,500.00, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an administrative questionnaire provided by the Administrative Agent.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 10.8(c) [Register], from and after the effective date specified in each Assignment and Assumption Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption Agreement, 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 Agreement, be released

- 83 -

from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Section 3.4 [LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available], Section 4.8 [Increased Costs], and Section 10.3 [Expenses, Indemnity; Damage Waiver] with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection (b) 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 Section 10.8(d) [Participations].

(c) Register.

The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain a record of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time. Such register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is in such register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Such register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations.

Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or 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 and (iii) the Borrower, the Administrative Agent and the Lenders, Issuing Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; 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 with respect to Section 10.1(a) [Increase of Commitment, Etc.], Section 10.1(b) [Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment], or Section 10.1(c) [Release of Collateral or Guarantor]). Subject to Section 10.18(e) [Limitations upon Participant Rights Successors and Assigns Generally], the Borrower agrees that each Participant shall be entitled to the benefits of Section 3.4 [LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available] and Section 4.8 [Increased Costs] to the same extent as if it were a

- 84 -

Lender and had acquired its interest by assignment pursuant to Section 10.8(b) [Assignments by Lenders]. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 8.2(c) [Setoff] as though it were a Lender; provided such Participant agrees to be subject to Section 4.3 [Sharing of Payments by Lenders] as though it were a Lender.

(e) Limitations upon Participant Rights Successors and Assigns Generally.

A Participant shall not be entitled to receive any greater payment under Section 4.8 [Increased Costs], Section 4.9 [Taxes] or Section 10.3 [ Expenses; Indemnity; Damage Waiver] than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.9 [Taxes] unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 4.9(e) [Status of Lenders] as though it were a Lender.

(f) Certain Pledges; Successors and Assigns Generally.

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; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

10.9 Confidentiality.

(a) General.

Each of the Administrative Agent, the Lenders and the Issuing Lender agrees to maintain the confidentiality of the Information, except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their respective Affiliates on a nonconfidential

- 85 -

basis from a source other than the Borrower or the other Loan Parties. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

(b) Sharing Information With Affiliates of the Lenders.

Each Loan Party acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each of the Loan Parties hereby authorizes each Lender to share any information delivered to such Lender by such Loan Party and its Subsidiaries pursuant to this Agreement to any such Subsidiary or Affiliate subject to the provisions of Section 10.9(a) [General].

10.10 Counterparts; Integration; Effectiveness.

(a) Counterparts; Integration; Effectiveness.

This Agreement may be executed in counterparts (and by different parties hereto in 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, and any separate letter agreements with respect to fees payable to the Administrative Agent, 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 including any prior confidentiality agreements and commitments. Except as provided in Section 6 [Conditions Of Lending And Issuance Of Letters Of Credit], 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 that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

10.11 Choice of Law; Submission to Jurisdiction; Waiver of Venue; Service of Process; Waiver of Jury Trial.

(a) Governing Law.

This Agreement shall be deemed to be a contract under the Laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles. Each standby Letter of Credit issued under this Agreement shall be subject either to the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ICC”) at the time of issuance (“UCP”) or the rules of the International Standby Practices (ICC Publication Number 590) (“ISP98”), as determined by the Issuing Lender, and each trade Letter of Credit shall be subject to UCP, and in each case to the extent not inconsistent therewith, the Laws of the Commonwealth of Pennsylvania without regard to is conflict of laws principles.

- 86 -

(b) SUBMISSION TO JURISDICTION.

THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA SITTING IN ALLEGHENY COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE WESTERN DISTRICT OF PENNSYLVANIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH PENNSYLVANIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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 IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE.

THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 10.11. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

(d) SERVICE OF PROCESS.

EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.5 [NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

- 87 -

(e) WAIVER OF JURY TRIAL.

EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.12 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Loan Parties that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of Loan Parties and other information that will allow such Lender or Administrative Agent, as applicable, to identify the Loan Parties in accordance with the USA Patriot Act.

- 88 -

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written.

BORROWER: GSI COMMERCE SOLUTIONS, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
GUARANTORS: GSI COMMERCE, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
935 KOP ASSOCIATES, LLC
By:	GSI Commerce, Inc., its sole member and manager
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
1075 FIRST GLOBAL ASSOCIATES, LLC
By:	GSI Commerce, Inc., its sole member and manager
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
GSI LEGACY HOLDINGS, INC.
By:	/s/ Michael R. Conn
	Title: President

ASFD, INC.
By:	/s/ Michael R. Conn
	Title: President
GSI COMMERCE CALL CENTER, INC.
By:	/s/ Michael R. Conn
	Title: President
GSI COMMERCE SOUTH, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President
GSI EQUIPMENT, INC.
By:	/s/ Michael R. Conn
	Title: President
7601 TRADE PORT DRIVE, LLC
By:	GSI Commerce Solutions, Inc., its sole member and manager
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
ONLINE DIRECT, INC.
By:	/s/ Michael R. Conn
	Title: President

PROMOTIONS DISTRIBUTOR SERVICES CORPORATION
By:	/s/ Michael R. Conn
	Title: President
GSI INTERACTIVE, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
KOP PROMOTIONS, LLC
By:	/s/ Michael R. Conn
	Title: President
SILVERLIGN GROUP, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
GSI MEDIA, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President, Finance
RETAIL CONVERGENCE, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President

SMARTBARGAINS, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President
SMARTBARGAINS SECURITY CORPORATION
By:	/s/ Michael R. Conn
	Title: Executive Vice President
SB.com, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President
RETAIL CONVERGENCE.com, LP
By:	SB.com, Inc., its general partner
By:	/s/ Michael R. Conn
	Title: Executive Vice President
SHOPRUNNER, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President
E-DIALOG, INC.
By:	/s/ Michael R. Conn
	Title: Executive Vice President

PNC BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent
By:	/s/ John M. DiNapoli
	Name:	John M. DiNapoli
	Title:	Sr. Vice President

BANK OF AMERICA, N.A.
By:	/s/ Andrew Richards
	Name:	Andrew Richards
	Title:	Senior Vice President

HSBC BANK USA, N.A.
By:	/s/ Susan A. Waters
	Name:	Susan A. Waters
	Title:	VP, Senior Relationship Manager

SOVEREIGN BANK
By:	/s/ Dennis Wasilewski
	Name:	Dennis Wasilewski
	Title:	Senior Vice President

TD BANK, N.A.
By:	/s/ Thomas M. McGrory
	Name:	Thomas M. McGrory
	Title:	Vice President

MORGAN STANLEY BANK
By:	/s/ Sherrese Clarke
	Name:	Sherrese Clarke
	Title:	Authorized Signatory

DEUTSCHE BANK AG NEW YORK BRANCH
By:	/s/ Stefan Freckmann
	Name:	Stefan Freckmann
	Title:	Vice President
By:	/s/ Oliver Schwarz
	Name:	Oliver Schwarz
	Title:	Director

UBS LOAN FINANCE LLC
By:	/s/ Ifja R. Otsa
	Name:	Ifja R. Otsa
	Title:	Associate Director, Banking Products Services, US
By:	/s/ Mary E. Evans
	Name:	Mary E. Evans
	Title:	Associate Director, Banking Products Services, US

JPMORGAN CHASE BANK, N.A.
By:	/s/ James A. Knight
	Name:	James A. Knight
	Title:	Vice President

SCHEDULE 1.1(A)

PRICING GRID—
VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO
(PRICING EXPRESSED IN BASIS POINTS)

		Commitment			Base Rate			LIBOR Rate
Level	Leverage Ratio	Fee			Spread			Spread
I	Positive, but less than or equal to 2.0 to 1.0		0.4	%		1.0	%		2.0	%
II	Greater than 2.0 to 1.0 but less than or equal to 2.5 to 1.0		0.4	%		1.25	%		2.25	%
III	Greater than 2.5 to 1.0 but less than or equal to 3.0 to 1.0		0.4	%		1.5	%		2.5	%
IV	Greater than 3.0 to 1.0 but less than or equal to 3.5 to 1.0		0.4	%		1.75	%		2.75	%
V	Greater than 3.5 to 1.0 or negative		0.4	%		2.25	%		3.25	%

For purposes of determining the Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate:

(a) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be determined on the Closing Date based on the Leverage Ratio computed on such date pursuant to a Compliance Certificate to be delivered on the Closing Date.

(b) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be recomputed as of the end of each fiscal quarter ending after the Closing Date based on the Leverage Ratio as of such quarter end. Any increase or decrease in the Applicable Margin, the Applicable Commitment Fee Rate or the Applicable Letter of Credit Fee Rate computed as of a quarter end shall be effective on the date on which the Compliance Certificate evidencing such computation is due to be delivered under Section 7.3(c) [Compliance Certificate], provided that any increase or decrease in the Applicable Margin relating to any Borrowing Tranche in an Optional Currency shall become effective at the end of the Interest Period therefor.

(c) If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the Issuing Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the Issuing Lender, as the case may be, under Section 2.8 [Letter of Credit Subfacility] or Section 3.3 [Interest After Default] or Section 8 [Default]. The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

SCHEDULE 1.1(A) — 2

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 1 of 3

Part 1 — Commitments of Lenders and Addresses for Notices to Lenders

	Amount of Commitment
	for Revolving Credit
Lender	Loans		Ratable Share
Name: PNC Bank, National Association Address: 1000 Westlakes Drive, Suite 200 Berwyn PA 19312 Attention: John DiNapoli Telephone: (610) 725-5760 Telecopy:   (610) 725-5799	$	31,250,000.00		20.833333333	%
Name: Bank of America, N.A. Address: 1600 John F. Kennedy Boulevard, 11th FL. Philadelphia, PA 19103 Attention: Andrew Richards III Telephone: (267) 675-0385 Telecopy:   (267) 675-0219	$	31,250,000.00		20.833333333	%
Name: Deutsche Bank AG New York Branch Address: 225 Franklin Street 24th Fl. Boston, MA 02110 Attention: David Dickinson Telephone: (617) 217-6381 Telecopy:   (617) 217-6300	$	15,000,000.00		10.000000000	%

	Amount of Commitment
	for Revolving Credit
Lender	Loans		Ratable Share
Name: JPMorgan Chase Bank, N.A. Address: 277 Park Ave., 23rd Fl. New York, NY 10172 Attention: James Knight Telephone: (212) 622-8486 Telecopy:   (646) 534-3081	$	15,000,000.00		10.000000000	%
Name: TD Bank, N.A. Address: 2005 Market Street, 2nd Floor Philadelphia, PA 19103 Attention: Thomas M. McGrory Telephone: (215) 282-3851 Telecopy:   (215) 557-6209	$	15,000,000.00		10.000000000	%
Name: HSBC Bank USA Address: 1515 Market Street, Suite 110 Philadelphia, PA 19102 Attention: Colleen Glackin Telephone: (215) 575-9103 Telecopy:   (215) 563-1901	$	15,000,000.00		10.000000000	%
Name: Sovereign Bank Address: 1500 Market Street, Philadelphia, PA 19102 Attention: Dennis Wasilewski Telephone: (267) 256-2828 Telecopy:   (215) 568-5914	$	15,000,000.00		10.000000000	%
Name: UBS Loan Finance LLC Address: 677 Washington Blvd. Stamford, CT 06901 Attention: Jenny E. Milioti Telephone: (203) 719-5993 Telecopy:   (203) 719-3888	$	7,500,000.00		5.000000000	%

	Amount of Commitment
	for Revolving Credit
Lender	Loans		Ratable Share
Name: Morgan Stanley Bank Address: One Pierrepont Plaza 7th Fl. 300 Camden Plaza West Brooklyn, NY 11201 Attention: Daniel Twenge Telephone: (718) 754-7285 Telecopy:   (718) 754-7250	$	5,000,000.00		3.333333334	%
Total	$	150,000,000.00		100.000000000	%

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 1 of 5

Part 2 — Addresses for Notices to Borrower and Guarantors:

BORROWER:

Name: GSI Commerce Solutions, Inc.
Address:935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

GUARANTORS:

Name: GSI Commerce, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: 935 KOP Associations, LLC.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: 1075 First Global Associates, LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Legacy Holdings, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: ASFD, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Commerce Call Center, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Commerce South, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Equipment, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: 7601 Trade Port Drive, LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: Online Direct, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: Promotions Distributor Services Corporation
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: E-Dialog, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Interactive, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: KOP Promotions, LLC.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: Silverlign Group, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Media, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: Retail Convergence, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: SmartBargains, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: SmartBargains Security Corporation
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: SB.com, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: Retail Convergence.com, LP
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: ShopRunner, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: M3 Mobile, Incorporated
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: MBS Insight, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: VendorNet, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: GSI Marketing Services, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

Name: Fetchback, Inc.

Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy:   (610) 265-1730

SCHEDULE 1.1(P)

PERMITTED LIENS

GSI Commerce Solutions, Inc.

Pledge to PNC Bank, National Association of securities account # **, titled “PNC Bank, National Association, Pledgee f/b/o GSI Commerce Solutions, Inc.” held at BlackRock Institutional Management Corporation, and all assets in such account, pursuant to that certain Second Amended and Restated Pledge Agreement between PNC Bank, National Association and GSI Commerce Solutions, Inc., dated December 22, 2006.

UCC Debtor
Pennsylvania	Department of State, Uniform Commercial Code Section	1/12/2007 2007011201980 PNC Equipment Finance, LLC Collateral: equipment lease (lessee/lessor)
		4/11/2007 2007041107227 Marlin Leasing Corp. Collateral: equipment lease
		11/25/2009 2009112504104 Raymond Leasing Corporation Collateral: specified equipment (lessee/ lessor)
GSI Commerce, Inc.
UCC Debtor
Delaware	Secretary of State	3/13/2009 90875127 First Western Bank and Trust Collateral: specified equipment

GSI Equipment, Inc.
UCC Debtor
New York	Secretary of State	11/24/2009 200911246055446 IBM Credit LLC Collateral: specified equipment (lessee/ lessor)
GSI Commerce Call Center, Inc.
UCC Debtor
Florida	Secured Transaction Registry	10/27/2006 200603998303 GFC Leasing, a Division of Gordon Flesch Co., Inc. Collateral: equipment lease (lessee/lessor)
		10/27/2006 200603998281 GFC Leasing, a Division of Gordon Flesch Co., Inc. Collateral: equipment lease (lessee/lessor)
		2/9/2009 200909990849 Eau Claire County Collateral: all assets
GSI Commerce South, Inc. (formerly known as Accretive Commerce, Inc. and NewRoads, Inc.)
UCC Debtor
Delaware	Secretary of State	4/1/2005 50997271 Crown Credit Company Collateral: equipment 8/21/2006 62904266 IBM Credit LLC Collateral: equipment 12/13/2006 64413373 First Western Bank & Trust Collateral: equipment

10/10/2008
83438569
BB&T Equipment Finance Corporation
Collateral: specified equipment

11/13/2008
83804448
BB&T Equipment Finance Corporation
Collateral: leased equipment

11/20/2009
93730477
Ikon Financial Svcs
Collateral: leased equipment (lessee/ lessor)
4/1/2005
50997271
Crown Credit Company
Collateral: equipment

Amendment (debtor name change to Accretive Commerce, Inc.)

9/1/2006

5/11/2005
51443051
BBH Financial Services Company
Collateral: equipment

5/11/2005
51443176
BBH Financial Services Company
Collateral: equipment

6/15/2005
51834655
IOS Capital
Collateral: equipment lease (lessee/lessor)

10/17/2007
73908414
Ikon Financial Services
Collateral: equipment lease (lessee/lessor)

935 HQ Associates, LLC

Mortgage, Assignment of Leases and Rents and Security Agreement, in the amount of $13,000,000 by 935 HQ Associates, LLC in favor of CIBC Inc., dated June 9, 2004.

E-Dialog, Inc.

UCC Debtor
Delaware	Secretary of State	7/22/2005 52268713 Vencore Solutions LLC Collateral: Equipment Lease (Lessee/Lessor)
		Assignment (Boston Financial & Equity Corporation) 7/27/2005
		9/13/2005 52908326 Banc of America Leasing & Capital, LLC Collateral: Equipment and specified rights, third party claims, software, proceeds and books and records in connection therewith
		9/13/2005 52908557 Banc of America Leasing & Capital, LLC Collateral: Equipment and specified rights, third party claims, software, proceeds and books and records in connection therewith

9/14/2005
52921295
General Electric Capital Corporation

Collateral: In lieu for 4/21/2004 MA SOS filing (equipment)

10/4/2005
53116762
Banc of America Leasing & Capital, LLC

Collateral: Equipment and specified rights, third party claims, software, proceeds and books and records in connection therewith

10/4/2005
53116820
Banc of America Leasing & Capital, LLC

Collateral: Equipment and specified rights, third party claims, software, proceeds and books and records in connection therewith

11/14/2005
53594711
General Electric Capital Corporation
Collateral: Equipment Lease

11/22/2005
53613065
Banc of America Leasing & Capital, LLC

Collateral: Equipment and specified rights, third party claims, software, proceeds and books and records in connection therewith

11/22/2005
53613230
Banc of America Leasing & Capital, LLC

Collateral: Equipment and specified rights, third party claims, software, proceeds and books and records in connection therewith

4/23/2007
71512952
De Lage Landen Financial Services Corporation
Collateral: Equipment

4/16/2008
81328630
US Express Leasing, Inc.
Collateral: leased equipment

Retail Convergence, Inc.
UCC Debtor
Delaware	Secretary of State	9/17/2008 83140884 John Hardy USA Inc. Collateral: rights in specified trademarks that have been consigned by Secured Party to Debtor
Retail Convergence.com, LP
UCC Debtor
Delaware	Secretary of State	7/18/2008 82539433 De Lage Landen Financial Services, Inc. Collateral: equipment lease (lessee/ lessor)

SmartBargains, Inc.
UCC Debtor
Delaware	Secretary of State	2/26/2007 70721935 Eugene Biro Borp. [sic] Collateral: diamond jewelry (consigned merchandise) 7/18/2008 82539425 De Lage Landen Financial Services, Inc. Collateral: lease guaranty (for Retail Convergence.com, LP; lessee/ lessor)
MBS Insight, Inc.
UCC Debtor
New York	Secretary of State	4/2/2003 200304020732239 American Express Business Finance Corporation Collateral: equipment lease (lessee/ lessor) 10/15/2009 200910150594554 De Lage Landen Financial Services, Inc. Collateral: equipment lease (lessee/ lessor)

Fetchback, Inc.
UCC Debtor
Delaware	Secretary of State	4/1/2008 20081130390 Bank of America Lease & Capital, LLC Collateral: equipment lease (lessee/ lessor) 5/20/2008
		20081732005 Dell Financial Services L.L.C. Collateral: equipment lease (lessee/ lessor) 4/27/2010 200101468135 US Bancorp Collateral: equipment lease (lessee/ lessor) Security interest granted by Equipment Lease/Finance Agreement dated March 31, 2009 between Axis Capital Inc. and Fetchback, Inc. Security interest granted by Equipment Lease Agreement No. 915077, dated May 9, 2007 between Axis Capital Inc. and Fetchback, Inc. Security interest granted by Equipment Lease Agreement No. 915077, dated June 6, 2007 between Axis Capital Inc. and Fetchback, Inc.

SCHEDULE 2.8 TO CREDIT AGREEMENT

EXISTING LETTERS OF CREDIT

AMOUNT	LC#	EXPIRY DATE
136,000.00	**	1/22/2011
129,862.60	**	11/11/2010
38,059.80	**	2/25/2011
106,708.50	**	3/17/2011
1,000,000.00	**	6/8/2010
91,000.00	**	7/15/2010
4,686,630.75	**	5/20/2011
250,000.00	**	3/30/2011
500,000.00	**	3/30/2011
250,000.00	**	3/30/2011

SCHEDULE 5.1(a) TO CREDIT AGREEMENT

QUALIFICATIONS TO DO BUSINESS

1. GSI Commerce, Inc.: Pennsylvania

2. GSI Commerce Solutions, Inc.: Kentucky, California, Massachusetts, Georgia, and Virginia, New Jersey, Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, Prince Edward Island, Quebec, Saskatchewan

3. GSI Equipment, Inc.: New Jersey.

4. ASFD, Inc.: Pennsylvania

5. GSI Commerce Call Center, Inc.: Wisconsin and Pennsylvania

6. GSI Commerce South, Inc.: California, Connecticut, Tennessee, Georgia, North Carolina, and Virginia

7. Online Direct, Inc.: Georgia and Tennessee

8. E-Dialog, Inc.: Massachusetts, New York, California, Texas and Washington

9. GSI Interactive, Inc: Pennsylvania , New York, and California

10. KOP Promotions, LLC: Pennsylvania

11. GSI Media, Inc.: Pennsylvania

12. Retail Convergence, Inc.: Massachusetts and New York

13. SmartBargains, Inc.: Kentucky, Massachusetts, New York and Washington

14. SB.com, Inc.: Massachusetts

15. Retail Convergence.com, LP: Kentucky, Massachusetts and Washington

16. Silverlign Group, Inc.: Oregon and Washington

17. Fetchback, Inc.: Arizona

SCHEDULE 5.1(b)(i) TO CREDIT AGREEMENT

SUBSIDIARY EQUITY INTERESTS

				Percentage of Equity
				Interest Owned
	Jurisdiction of	Type of Equity	Amount of	Directly or Indirectly
Name	Organization	Interest	Equity Interest	by Parent
GSI Commerce Solutions, Inc.	Pennsylvania	Common Stock	100 shares		100	%
GSI Equipment, Inc.	New York	Common Stock	100 shares		100	%**
7601 Trade Port Drive, LLC	Kentucky	Limited Liability Company Interest	10 units		100	%**
935 KOP Associates, LLC	Pennsylvania	Limited Liability Company Interest	10 units		100	%
935 HQ Associates, LLC	Delaware	Limited Liability Company Interest	10 units		100	%
1075 First Global Associates, LLC	Pennsylvania	Limited Liability Company Interest	10 units		100	%
GSI Legacy Holdings, Inc.	Pennsylvania	Common Stock	100 shares		100	%
ASFD, Inc.	Delaware	Common Stock	100 shares		100	%
GSI Commerce Call Center, Inc.	Florida	Common Stock	100 shares		100	%
GSI Luxembourg S.à.r.l	Luxembourg	Limited Liability Company (Societe a Responsabilite Limitee) Interest	125 shares		100	%

				Percentage of Equity
				Interest Owned
	Jurisdiction of	Type of Equity	Amount of	Directly or Indirectly
Name	Organization	Interest	Equity Interest	by Parent
GSI Commerce Solutions International, S.L.	Spain	Limited Liability Company (Sociedad de Responsabilidad Limitada) Interest	46,480 shares		100	%**
Zendor/GSI Commerce Limited	United Kingdom	Limited Company Interest	1,010 shares comprising 750 A Shares, 250 B Shares, and 10 C Shares		100	%**
GSI Commerce South, Inc.	Delaware	Common Stock	100 shares		100	%
Online Direct, Inc.	Delaware	Common Stock	100 shares		100	%**
Promotions Distributor Services Corporation	California	Common Stock	1,000 shares		100	%**
E-Dialog, Inc.	Delaware	Common Stock	100 shares		100	%
E-Dialog UK Limited	England and Wales	Limited Company Interest	1 ordinary share		100	%**
GSI Interactive, Inc.	Delaware	Common Stock	100 shares		100	%**
KOP Promotions, LLC	Virginia	Limited Liability Company Interest	100 units		100	%**
Silverlign Group, Inc.	California	Common Stock	400,000 shares		100	%**
GSI Commerce Solutions Canada Corp.	New Brunswick, Canada	Common Shares	100 shares		100	%

				Percentage of Equity
				Interest Owned
	Jurisdiction of	Type of Equity	Amount of	Directly or Indirectly
Name	Organization	Interest	Equity Interest	by Parent
GSI Media, Inc. (f/k/a Peanut Butter Corporation)	Delaware	Common Stock	100 shares		100	%**
Retail Convergence, Inc.	Delaware	Common Stock	964.4635 shares		100	%
		Preferred Stock	35.5365 shares
SmartBargains, Inc.	Delaware	Common Stock	100 shares		100	%**
SmartBargains Security Corporation	Massachusetts	Common Stock	1000 shares		100	%**
SB.com, Inc.	Delaware	Common Stock	1000 shares		100	%**
Retail Convergence.com, LP	Delaware	Partnership interests	99% limited partner interest and 1% general partner interest		100	%**
ShopRunner, Inc.	Pennsylvania	Common Stock	100 shares		100	%
M3 Mobile, Incorporated	Pennsylvania	Common Stock	10,000 shares		100	%**
MBS Insight, Inc.	Delaware	Common Stock	1,000 shares	100% (through E-Dialog, Inc.)
VendorNet, Inc.	Delaware	Common Stock	100 shares		100	%**
GSI Marketing Solutions, Inc.	Pennsylvania	Common Stock	100 shares		100	%
Fetchback, Inc.	Delaware	Common Stock	100 shares		100	%**
GSI Commerce Japan K.K.	Japan	Common Stock	100 common shares		100	%
e-Dialog Singapore Private Ltd.	Singapore	Limited Company Interest	100 shares		100	%**

SCHEDULE 5.1(b)(ii)

BORROWER EQUITY INTERESTS

			Percentage of
	Type of Equity	Amount of	Equity Interest
Name	Interest	Equity Interest	Owned by Parent
GSI Commerce Solutions, Inc.	Common Stock	100 shares		100	%

SCHEDULE 5.1(b)(iii)

OTHER LOAN PARTY EQUITY INTERESTS

	Jurisdiction of	Public
Name	Organization	Company	Owner
GSI Commerce, Inc.	Delaware	Yes	Publicly Held

SCHEDULE 5.1(b)(iv)

OUTSTANDING OPTIONS, WARRANTS, AND OTHER RIGHTS TO PURCHASE EQUITY
INTERESTS OF LOAN PARTIES

1. There are outstanding options and warrants to acquire equity interests in GSI Commerce, Inc., as disclosed from time to time in its filings with the Securities and Exchange Commission.

SCHEDULE 5.1(e)

LITIGATION

The Borrower, the other Loan Parties and the subsidiaries of the Borrower and the other Loan Parties (collectively, the “Company”) are involved in various litigation incidental to their business, including alleged contractual claims, claims relating to infringement of intellectual property rights of third parties claims relating to the manner in which goods are sold through its e-commerce platform, and claims relating to the Company’s collection of sales taxes in certain states. The Company currently collects sales taxes for goods owned and sold by the Company and shipped into certain states. As a result, the Company is subject from time to time to claims from other states alleging that we failed to collect and remit sales taxes for sales and shipments of products to customers in those states. Based on the merits of the cases and/or the amounts claimed, the Company does not believe that any claims are likely to have a material adverse effect on its business, financial position or results of operations. The Company may, however, incur substantial expenses and devote substantial time to defend these claims whether or not such claims are meritorious. In addition, litigation is inherently unpredictable. In the event of a determination adverse to us, the Company may incur substantial monetary liability and may be required to implement expensive changes in our business practices, enter into costly royalty or licensing agreements, or begin to collect sales taxes in states in which it previously did not. An adverse determination could have a material adverse effect on the Company’s business, financial position or results of operations.

The Company discloses material legal proceedings in its quarterly and annual reports on Forms 10-Q and 10-K filed with the Securities and Exchange Commission

SCHEDULE 5.1(n)

ENVIRONMENTAL DISCLOSURES

None.

SCHEDULE 6.1(a)

OPINION OF COUNSEL

PNC Bank, National Association,
as Administrative Agent and
The Lenders
1600 Market Street
Philadelphia, PA 19103

Re: $150,000,000 Amended and Restated Credit Agreement/GSI Commerce Solutions, Inc.

Ladies and Gentlemen:

We have acted as counsel to GSI Commerce Solutions, Inc., a Pennsylvania corporation (“Borrower”), GSI Commerce, Inc., a Delaware corporation (the “Parent”) and the subsidiaries of Borrower listed on Schedule I hereto (together with the Parent, individually each a “Guarantor” and collectively, the “Guarantors”), in connection with the execution and delivery of the Amended and Restated Credit Agreement dated as of the date hereof (the “Credit Agreement”) among Borrower, the Guarantors, the lenders party thereto (collectively, the “Lenders”) and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative Agent”), and the transactions contemplated thereby. This opinion is furnished to you pursuant to Section 6.1(a)(iv) of the Credit Agreement.

Unless defined in this opinion, capitalized terms are used herein as defined in the Credit Agreement. The term “UCC” as used herein means the Uniform Commercial Code as in effect in the Commonwealth of Pennsylvania (sometimes referred to as the “State”). Uncapitalized terms that are defined in Division 9 of the UCC are used herein as defined in the UCC. Borrower, GSI Legacy Holdings, Inc. and ShopRunner, Inc. are each referred to herein individually as a “Pennsylvania Corporate Loan Party” and collectively as “Pennsylvania Corporate Loan Parties.” The Parent, ASFD, Inc., GSI Commerce South, Inc., Online Direct, Inc., GSI Interactive, Inc., e-Dialog, Inc., GSI Media, Inc., Retail Convergence, Inc., SmartBargains, Inc., and SB.com, Inc. are each referred to herein individually as a “Delaware Corporate Loan Party” and collectively as “Delaware Corporate Loan Parties.” 935 KOP Associates, LLC and 1075 First Global Associates, LLC are each referred to herein individually as a “Pennsylvania LLC Loan Party” and collectively as “Pennsylvania LLC Loan Parties.” Retail Convergence.com, LP is referred to herein as a “Delaware Partnership Loan Party.” Promotions Distributor Services Corporation and Silverlign Group, Inc. are each referred to herein individually as a “California Corporate Loan Party” and collectively as “California Loan Parties.”

In so acting, we have examined executed originals or counterparts of the following documents, each dated the date hereof (the “Loan Documents”):

1. the Credit Agreement;

2. the Notes;

3. the Reaffirmation Agreement by the Loan Parties in favor of the Administrative Agent; and

4. the Amended and Restated Patent, Trademark and Copyright Collateral Assignment by the Loan Parties in favor of the Administrative Agent.

We have reviewed such other documents and made such examinations of law as we have deemed appropriate to give the opinions set forth below. We have relied, without independent verification, on certificates or comparable documents of public officials and as to matters of fact material to our opinions, also without independent verification, on representations and warranties made in the Loan Documents and on certificates and other inquiries of officers, members and representatives of Borrower and the Guarantors.

We have assumed the legal capacity and competence of natural persons, the genuineness of all signatures (other than the signatures of Borrower and Guarantors), the authenticity of all documents submitted to us as originals and the conformity to original documents of documents submitted to us as certified, conformed, photostatic, electronic or facsimile copies. We have not examined any records of any court, administrative tribunal or other similar entity in connection with our opinion.

When an opinion or confirmation is given to our knowledge or to the best of our knowledge or with reference to matters of which we are aware or which are known to us, or with another similar qualification, the relevant knowledge or awareness is limited to the actual contemporaneous knowledge or awareness of facts, without investigation, by the individual lawyers in this firm who have participated in the specific transaction to which this opinion relates.

We have also assumed, without verification, (i) that the parties to the Loan Documents and the other agreements, instruments and documents executed in connection therewith, other than Borrower and Guarantors, have the power (including, without limitation, corporate or limited liability company power where applicable) and authority to enter into and perform the Loan Documents and such other agreements, instruments and documents, (ii) the due authorization, execution and delivery by such parties other than Borrower and Guarantors, of each Loan Document and such other agreements, instruments and documents and (iii) that the Loan Documents and such other agreements, instruments and documents constitute legal, valid and binding obligations of each such party other than Borrower and the Guarantors, enforceable against each such other party in accordance with their respective terms.

We have also assumed, without verification for purposes of opinion 13 (i) with respect to each of GSI Commerce Call Center, Inc., GSI Equipment, Inc., and SmartBargains Security Corporation that such corporation has the power (including, without limitation, corporate power) and authority to enter into and perform the Loan Documents and its due authorization, execution and delivery of each Loan Document, and (ii) with respect to each of 7601 Trade Port Drive, LLC and KOP Promotions, LLC, that such limited liability company has the power (including, without limitation, limited liability power) and authority to enter into and perform the Loan Documents and its due authorization, execution and delivery of each Loan Document.

Based upon the foregoing and subject to the assumptions, exceptions, limitations and qualifications set forth herein, we are of the opinion that:

(a) The Pennsylvania Corporate Loan Parties are each a corporation, validly existing and, based solely on the respective Subsistence Certificates issued by the Secretary of the Commonwealth of Pennsylvania each dated February 18, 2010, presently subsisting under the laws of the Commonwealth of Pennsylvania.

(b) The Pennsylvania LLC Loan Parties are each a limited liability company validly existing and, based solely on the respective Subsistence Certificates issued by the Secretary of the Commonwealth of Pennsylvania each dated February 18, 2010, subsisting as a limited liability company under the laws of the Commonwealth of Pennsylvania.

(c) The Delaware Corporate Loan Parties are each a corporation validly existing and, based solely on the respective Good Standing Certificates issued by the Delaware Secretary of State each dated February 17, 2010 or February 18, 2010, as applicable, in good standing under the laws of the State of Delaware.

(d) The Delaware Partnership Loan Party is a limited partnership validly existing and, based solely on the respective Good Standing Certificate issued by the Delaware Secretary of State dated February 17, 2010, in good standing under the laws of the State of Delaware

(e) The California Corporate Loan Parties are each a corporation validly existing and, based solely on the respective Certificates of Status issued by the California Secretary of State each dated February 17, 2010, in good standing under the laws of the State of California.

(f) Each of the Pennsylvania Corporate Loan Parties has the corporate power to enter into and perform its obligations under the Loan Documents to which it is a party and to incur the obligations provided therein, and has taken all corporate action necessary to authorize the execution, delivery and performance of such Loan Documents.

(g) Each of the Pennsylvania LLC Loan Parties has the limited liability company power to enter into and perform its obligations under the Loan Documents to which it is a party and to incur the obligations provided therein, and has taken all limited liability company action necessary to authorize the execution, delivery and performance of such Loan Documents.

(h) Each of the Delaware Corporate Loan Parties has the corporate power to enter into and perform its obligations under the Loan Documents to which it is a party and to incur the obligations provided therein, and has taken all corporate action necessary to authorize the execution, delivery and performance of such Loan Documents.

(i) The Delaware Partnership Loan Party has the limited partnership power to enter into and perform its obligations under the Loan Documents to which it is a party and to incur the obligations provided therein, and has taken all limited partnership action necessary to authorize the execution, delivery and performance of such Loan Documents.

(j) Each of the California Corporate Loan Parties has the corporate power to enter into and perform its obligations under the Loan Documents to which it is a party and to incur the obligations provided therein, and has taken all corporate action necessary to authorize the execution, delivery and performance of the Loan Documents.

(k) (a) The execution and delivery by each of the Pennsylvania Corporate Loan Parties, the Pennsylvania LLC Loan Parties, the Delaware Corporate Loan Parties, the Delaware Partnership Loan Party and California Corporate Loan Parties of the respective Loan Documents to which it is a party do not and the performance of the obligations thereunder will not (i) violate such Person’s Certificate of Incorporation, Articles of Incorporation, Certificate of Formation, Bylaws, Operating Agreement, Limited Liability Company Agreement and/or Limited Partnership Agreement, as applicable or (ii) violate any present statute, rule or regulation promulgated by the United States, the Commonwealth of Pennsylvania, the General Corporation Law of the State of Delaware, the Delaware Revised Uniform Limited Partnership Act or the California General Corporation Law, which in our experience is normally applicable both to entities that are not engaged in regulated business activities and to transactions of the type contemplated by the Loan Documents.

(b) The execution and delivery by the Borrower and the Guarantors of the Loan Documents will not breach or result in a default under those agreements listed on Schedule II hereto.

(l) Each Loan Document to which it is a party has been duly executed and delivered on behalf of Borrower, each Pennsylvania Corporate Loan Party, Pennsylvania LLC Loan Party, Delaware Corporate Loan Party, Delaware Partnership Loan Party and California Corporate Loan Party.

(m) Each Loan Document to which it is a party constitutes the legal, valid and binding obligation of Borrower and each Guarantor enforceable in accordance with its respective terms.

(n) No consent or approval of, or notice to or filing with, any federal or state regulatory authority of the United States or the Commonwealth of Pennsylvania is required by any of the Pennsylvania Corporate Loan Parties or Pennsylvania LLC Loan Parties in connection with the execution or delivery by the Pennsylvania Corporate Loan Parties or Pennsylvania LLC Loan Parties of any of the Loan Documents or the payment of the Pennsylvania Corporate Loan Parties’ or Pennsylvania LLC Loan Parties’ obligations under the Loan Documents.

(o) No consent or approval of, or notice to or filing with, any federal or state regulatory authority of the United States or the State of Delaware under the General Corporation Law of the State of Delaware is required by the Delaware Corporate Loan Parties in connection with the execution or delivery by the Delaware Corporate Loan Parties of any of the Loan Documents or the payment of the Delaware Corporate Loan Parties’ obligations under the Loan Documents. No consent or approval of, or notice to or filing with, any federal or state regulatory authority of the United States or the State of Delaware under the Delaware Revised Uniform Limited Partnership Act is required by the Delaware Partnership Loan Party in connection with the execution or delivery by the Delaware Partnership Loan Party of any of the Loan Documents or the payment of the Delaware Partnership Loan Party’s obligations under the Loan Documents.

(p) No consent or approval of, or notice to or filing with, any federal or state regulatory authority of the United States or the State of California under the California General Corporation Law is required by the California Corporate Loan Parties in connection with the execution or delivery by the California Corporate Loan Parties of any of the Loan Documents or the payment of the California Corporate Loan Parties’ obligations under the Loan Documents.

(q) Assuming the representations and warranties in Section 5.1(g) of the Credit Agreement are correct, the borrowing on the date hereof of the Loans under the Credit Agreement and the Notes, and the application of the proceeds thereof as contemplated by the Credit Agreement and the other Loan Documents, do not violate any of the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

We do not have knowledge of any action, suit or litigation proceeding against Borrower or any Guarantor that is either pending or overtly threatened in writing with respect to the Loan Documents other than as set forth in Schedule 5.1(e) to the Credit Agreement.

The foregoing opinions are subject to the following exceptions, limitations and qualifications:

Our opinion is subject to the effect of applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, marshalling or similar laws affecting creditors’ rights and remedies generally; the rights of account debtors, claims and defenses of account debtors and the terms of agreements with account debtors; general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether such enforceability is considered in a proceeding in equity or at law); and limitations on enforceability of rights to indemnification or contribution by federal or state securities laws or regulations or by public policy.

5. We draw to your attention the provisions of Section 911(b) of the Pennsylvania Crimes Code (the “Crimes Code”), 18 Pa. C.S. § 911(b), in connection with the fact that the Loans bear floating rates of interest. Section 911(b) of the Crimes Codes makes it unlawful to use or invest income derived from a pattern of “racketeering activity” in the establishment or operation of any enterprise. “Racketeering activity,” as defined in the Crimes Code, includes the collection of money or other property in full or partial satisfaction of a debt which arose as the result of the lending of money or other property at a rate of interest exceeding 25% per annum where not otherwise authorized by law.

6. We express no opinion as to the application or requirements of federal or state securities (except with respect to opinion 17), patent, trademark, copyright, antitrust and unfair competition, pension or employee benefit, labor, environmental, health and safety or tax laws in respect of the transactions contemplated by or referred to in the Loan Documents.

7. We express no opinion as to the validity or enforceability of any provision of the Loan Documents which (i) permits the Lenders to increase the rate of interest or to collect a late charge in the event of delinquency or default to the extent deemed to be penalties or forfeitures; (ii) purports to grant the Administrative Agent or any Lender a power-of-attorney; (iii) purports to entitle the Administrative Agent or any Lender to take possession of collateral in any manner other than peaceably and by reason of the peaceable surrender of such possession by Borrower or the Guarantors or by reason of appropriate judicial proceedings; (iv) purports to require that waivers must be in writing to the extent that an oral agreement or implied agreement by trade practice or course of conduct modifying provisions of the Loan Documents has been made; (v) purports to require that certain waivers are irrevocable and cannot be subsequently waived, including by written waiver; (vi) purports to be a waiver of the right to a jury trial, a waiver of any right to object to jurisdiction or venue, a waiver of any right to claim damages or to service of process or a waiver of any provisions of Divisions 8 or 9 of the UCC that may not be waived, or a waiver of any other rights or benefits bestowed by operation of law or the waiver of which is limited by applicable law; (vii) purports to be a waiver of the obligations of good faith, fair dealing, diligence, mitigation of damages or commercial reasonableness; (viii) purports to exculpate any party from its own negligent acts or limit any party from certain liabilities; (ix) purports to require the payment of attorneys’ fees to the extent such fees exceed reasonable attorneys’ fees; and (x) purports to authorize the Administrative Agent, any Lender or any Affiliate thereof to set off and apply any deposits at any time held, and any other indebtedness at any time owing, by it to or for the account of Borrower or any Guarantor or which purports to provide that any purchaser of a participation from a Lender may exercise setoff or similar rights with respect to such participation.

8. We express no opinion as to the enforceability of forum selection clauses upon the courts in the forum selected.

We express no opinion as to the law of any jurisdiction other than (a) the federal law of the United States, (b) the law of the Commonwealth of Pennsylvania, (c) the General Corporation Law of the State of Delaware, (d) the Delaware Revised Uniform Limited Partnership Act, and (e) the California General Corporation Law.

A copy of this opinion may be delivered by you to each financial institution that may become a Lender under the Credit Agreement, and such persons may rely on this opinion to the same extent as, but to no greater extent than, the addressee. This opinion may be relied upon by you and such persons to whom you may deliver copies as provided in the preceding sentence only in connection with the consummation of the transactions described herein and may not be used or relied upon by you or any other person for any other purpose, without in each instance our prior written consent; provided, however, that a copy of this opinion may be furnished to your regulators and attorneys for the purposes of confirming its existence, and this opinion may be disclosed in connection with any legal or regulatory proceeding relating to the subject matter hereof (but in each such case may not be relied upon by any such parties).

This opinion is limited to the matters expressly stated herein. No implied opinion may be inferred to extend this opinion beyond the matters expressly stated herein. We do not undertake to advise you or anyone else of any changes in the opinions expressed herein resulting from changes in law, changes in facts or any other matters that hereafter might occur or be brought to our attention.

This opinion shall be interpreted in accordance with the Legal Opinion Principles issued by the Committee on Legal Opinions of the American Bar Association’s Section of Business Law as published in 53 Business Lawyer 831 (May 1998).

Very truly yours,

SCHEDULE 7.1(c)

INSURANCE REQUIREMENTS RELATING TO THE COLLATERAL

COVENANTS:

At the request of the Administrative Agent, the Loan Parties shall deliver to the Administrative Agent and each of the Lenders (x) on the Closing Date and annually thereafter an original certificate of insurance signed by the Loan Parties’ independent insurance broker describing and certifying as to the existence of the insurance on the Collateral required to be maintained by this Agreement and the other Loan Documents, together with a copy of the endorsement described in the next sentence attached to such certificate and (y) from time to time a summary schedule indicating all insurance then in force with respect to each of the Loan Parties. Such policies of insurance shall contain special endorsements, in form and substance acceptable to the Administrative Agent, which shall include the provisions set forth below. The applicable Loan Parties shall notify the Administrative Agent promptly of any occurrence causing a material loss or decline in value of the Collateral and the estimated (or actual, if available) amount of such loss or decline. Any monies received by the Administrative Agent constituting insurance proceeds or condemnation proceeds may, at the option of the Administrative Agent, (i) be applied by the Administrative Agent to the payment of the Loans in such manner as the Administrative Agent may reasonably determine, or (ii) be disbursed to the applicable Loan Parties on such terms as are deemed appropriate by the Administrative Agent for the repair, restoration and/or replacement of property in respect of which such proceeds were received.

ENDORSEMENT:

(i) specify the Administrative Agent as an additional insured and lender loss payee as its interests may appear, with the understanding that any obligation imposed upon the insured (including the liability to pay premiums) shall be the sole obligation of the applicable Loan Parties and not that of the insured,

(ii) provide that the interest of the Lenders shall be insured regardless of any breach or violation by the applicable Loan Parties of any warranties, declarations or conditions contained in such policies or any action or inaction of the applicable Loan Parties or others insured under such policies,

(iii) provide a waiver of any right of the insurers to set off or counterclaim or any other deduction, whether by attachment or otherwise,

(iv) provide that any and all rights of subrogation which the insurers may have or acquire shall be, at all times and in all respects, junior and subordinate to the prior payment in full of the Indebtedness hereunder and that no insurer shall exercise or assert any right of subrogation until such time as the Indebtedness hereunder has been paid in full and the Commitments have terminated,

(v) provide, except in the case of public liability insurance and workmen’s compensation insurance, that all insurance proceeds for losses of less than $2,500,000.00 shall be adjusted with and payable to the applicable Loan Parties and that all insurance proceeds for losses of $2,500,000.00 or more shall be adjusted with and payable to the Administrative Agent,

(vi) include effective waivers by the insurer of all claims for insurance premiums against the Administrative Agent,

(vii) provide that no cancellation of such policies for any reason (including non-payment of premium) nor any change therein shall be effective until at least thirty (30) days after receipt by the Administrative Agent of written notice of such cancellation or change,

(viii) be primary without right of contribution of any other insurance `carried by or on behalf of any additional insureds with respect to their respective interests in the Collateral, and

(ix) provide that inasmuch as the policy covers more than one insured, all terms, conditions, insuring agreements and endorsements (except limits of liability) shall operate as if there were a separate policy covering each insured.

SCHEDULE 7.2(a)

PERMITTED INDEBTEDNESS

1. GSI Commerce, Inc. 3% Convertible Notes due 2025 in the aggregate amount of $57,500,000, issued pursuant to an Indenture from GSI Commerce, Inc. to JPMorgan Chase Bank, N.A., dated June 1, 2005.

2. GSI Commerce, Inc. 2.5% Convertible Notes due 2027 in the aggregate amount of $150,000,000, issued pursuant to an Indenture from GSI Commerce, Inc. to The Bank of New York, dated July 2, 2007.

3. Master Lease Agreement in the amount of $14,500,000 between GSI Commerce Solutions, Inc. and PNC Equipment Finance, LLC, dated December 22 2006, as amended, including without limitation, that certain Schedule of Leased Equipment No. ** dated June 30, 2008 assigned to Commerce Commercial Leasing, LLC and that certain assignment of a particpation interest to Sovereign Bankon January 10, 2008.

4. Capital Lease in the amount of $2,800,000 between Accretive Commerce and BB&T Equipment Finance, dated May 18, 2007, and any amendments thereto.

5. Letter Agreement for $2,000,000 Committed Line of Credit and $1,000,000 Existing Standby Letter of Credit between PNC Bank, National Association and GSI Commerce Solutions, Inc., dated January 11, 2008.

6. Mortgage, Assignment of Leases and Rents and Security Agreement, in the amount of $13,000,000 by 935 HQ Associates, LLC in favor of CIBC Inc., dated June 9, 2004.

7. Promissory Note in the amount of $13,000,000 by 935 HQ Associates, LLC in favor of CIBC Inc., dated June 9, 2004.

8. Lease Agreement (Lease #**) between Bank of America Leasing & Capital, LLC and e-Dialog, Inc., dated August 31, 2005.

9. Master Lease Agreement (Contract # **) between Fleet Business Credit, LLC and e-Dialog, Inc., dated August 31, 2005.

10. Master Lease Agreement Number ** between VenCore Solutions LLC and e-Dialog, Inc., dated August 27, 2004.

11. Master Lease Agreement (Lease #**) between EMC Corporation and e-Dialog, Inc., dated March 28, 2007.

12. Master Lease Agreement between Hewlett Packard Financial Services Company and Retail Converge, Inc. dated March 11, 2010.

13. Master Lease Agreement (Contract #**) between Delage Landen Financial Services Inc. and Retail Convergence, Inc., dated July 16, 2008.

14. Master Lease Agreement between Raymond Storage Concepts, Inc. and GSI Commerce, Inc., dated July 8, 2009.

15. Master Lease Agreement between Ikon Financial Services and GSI Commerce South, Inc., dated August 18, 2009.

16. Wisconsin Community Development Block Grant Agreement between the Wisconsin Department of Commerce, Eau Claire County and GSI Commerce Call Center, Inc., effective October 1, 2007 and Promissory Note in the amount of $1,000,000 by GSI Commerce Call Center in favor of Wisconsin Department of Commerce, Eau Claire County, dated July 10, 2007.

17. Master Lease Agreement (Contract #**) between De Lage Landen Financial Services Inc. and MBS Insight, Inc.

18. Equipment Lease/Finance Agreement dated March 31, 2009 between Axis Capital Inc. and Fetchback, Inc.

19. Equipment Lease Agreement No. **, dated May 9, 2007 between Axis Capital Inc. and Fetchback, Inc.

20. Equipment Lease Agreement No. **, dated June 6, 2007 between Axis Capital Inc. and Fetchback, Inc.

21. Installment Payment Agreement No. **, dated March 12, 2008, by and between Fetchback, Inc. and Bank of America Leasing & Capital, LLC and its supplier, ADG Communications.

22. Master Lease Agreement #** dated 6/01/09 by and between Fetchback, Inc. and US Bancorp

23. Master Lease Agreement #** dated 6/22/09 by and between Fetchback, Inc and US Bancorp

24. Master Lease Agreement No. **, dated May 16, 2008 by and between Fetchback, Inc. and Dell Financial Services, L.L.C. and the related Schedules setting forth equipment leased.

25. Equipment Lease Agreement No. **, dated February 5, 2008, by and between Fetchback, Inc. and Fidelity Capital Partners, LLC

26. Equipment Lease Agreement dated February 5, 2008, by and between Fetchback, Inc. and Fidelity Capital Partners, LLC

SCHEDULE 7.2(d)

EXISTING INVESTMENTS

1. ** shares of ** Stock of WebCollage, Inc.

2. ** shares of ** Stock of WebCollage, Inc.

3. ** shares of** Stock of Allurent, Inc.

4. **

5. **

SCHEDULE 8.1(j)

EXISTING 5% SHAREHOLDERS

1. Michael G. Rubin

2. Fred Alger Management, Inc. and affiliates

3. Wells Fargo & Co. and affiliates

EXHIBIT 1.1(a)

ASSIGNMENT AND ASSUMPTION AGREEMENT

Reference is made to the Amended and Restated Credit Agreement dated as of  _____, 2010 (as amended, supplemented, restated or modified from time to time, the “Credit Agreement”) among GSI COMMERCE SOLUTIONS, INC., a Delaware corporation (“Borrower”), certain Guarantors from time to time parties thereto, Lenders now or hereafter party thereto, and PNC BANK, NATIONAL ASSOCIATION, as Agent for Lenders (“Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein with the same meanings. The rules of construction set forth in Section 1.2 of the Credit Agreement shall apply to this Assignment and Assumption Agreement. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Agent as contemplated below, the interest in and to all of the Assignor’s rights and obligations under the Credit Agreement and any other documents or instruments delivered pursuant thereto that represents the amount and percentage interest identified below of all of the Assignor’s outstanding rights and obligations under the credit facility identified below (including, to the extent included in any such facilities, letters of credit and swingline loans) (the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment, without representation or warranty by the Assignor.

1. Assignor:

2. Assignee:

3. Borrower: GSI COMMERCE SOLUTIONS, INC.

4. Agent:      PNC BANK, NATIONAL ASSOCIATION

5. Assigned Interest:

	Aggregate
	Amount of			Percentage
	Commitment/Loans		Amount of Revolving	Assigned of Revolving
	of such Facility for		Credit Commitment	Credit
Facility Assigned	all Lenders		Assigned	Commitment
Revolving Credit Commitment	$	150,000,000.00	$		%

6. Effective Date:

[NAME OF ASSIGNOR]
By:
	Name:
	Title:
[NAME OF ASSIGNEE]
By:
	Name:
	Title:
Notice Address:
Telephone No.:
Telecopier No.:
Attn:

CONSENTED TO this  _____ 
day of  _____,  _____ 

PNC BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with any Credit Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document delivered pursuant thereto, other than this Assignment (herein collectively the “Credit Documents”), or any collateral thereunder, (iii) the financial condition of the Borrower, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Borrower, any of their Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Credit Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements, if any, of an eligible assignee under the Credit Agreement, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1(f) and Section 7.3 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and to purchase the Assigned Interest on the basis of which it has made such analysis and decision, and (v) if Assignee is not incorporated or organized under the laws of the United States of America or any State thereof, attached to the Assignment is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

3. General Provisions. This Assignment shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment. This Assignment shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania.

EXHIBIT 1.1(G)

GUARANTOR JOINDER AND ASSUMPTION AGREEMENT

THIS GUARANTOR JOINDER AND ASSUMPTION AGREEMENT is made as of  _____, 20____, by  _____, a  _____  [corporation/partnership/limited liability company] (the “New Guarantor”).

Background

Reference is made to (i) the Amended and Restated Credit Agreement, dated as of  _____, 2010 as the same may be amended, restated, supplemented or modified from time to time (the “Credit Agreement”), by and among GSI COMMERCE SOLUTIONS, INC., a Delaware corporation, (the “Borrower”), each of the Guarantors now or hereafter party thereto, the Lenders now or hereafter party thereto (the “Lenders”) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for itself and the Lenders (the “Administrative Agent”), (ii) the Continuing Agreement of Guaranty and Suretyship, dated January 11, 2008, as the same has been and may be amended, restated, supplemented or modified from time to time (the “Guaranty Agreement”) of Guarantors given to the Administrative Agent, as administrative agent for the Lenders, (iii) the Pledge Agreement, dated as of January 11, 2008, as the same has been and may be amended, restated, supplemented or modified from time to time (the “Pledge Agreement”) made by certain Loan Parties and certain of their Subsidiaries in favor of the Administrative Agent; (iv) the Security Agreement, dated as of January 11, 2008, as the same has been and may be amended, restated, supplemented or modified from time to time (the “Security Agreement”) made by the Loan Parties in favor of the Administrative Agent; and (v) the other Loan Documents referred to in the Credit Agreement, as the same may be amended, restated, supplemented or modified from time to time (collectively, the “Loan Documents”).

Agreement

Capitalized terms defined in the Credit Agreement are used herein as defined therein.

New Guarantor hereby becomes a Guarantor under the terms of the Credit Agreement and in consideration of the value of the synergistic and other benefits received by New Guarantor as a result of being or becoming affiliated with the Borrower and the Guarantors, New Guarantor hereby agrees that effective as of the date hereof it hereby is, and shall be deemed to be, and assumes the obligations of, a “Loan Party” and a “Guarantor”, jointly and severally, under the Credit Agreement, a “Guarantor,” jointly and severally with the existing Guarantors under the Guaranty Agreement, a “Pledgor”, jointly and severally, under the Pledge Agreement, a “Debtor” jointly and severally, under the Security Agreement, and a Loan Party or Guarantor, as the case may be, under each of the other Loan Documents to which the Lenders or Guarantors are a party; and, New Guarantor hereby agrees that from the date hereof and so long as any Loan, Letter of Credit or any Revolving Credit Commitment of the Administrative Agent or any Lender shall remain outstanding and until the payment in full of the Loans and the Notes, the expiration of all Letters of Credit, and the performance of all other obligations of the Lenders under the Loan Documents, New Guarantor shall perform, comply with, and be subject to and bound by each of the terms and provisions of the Credit Agreement, the Guaranty Agreement, the Pledge Agreement, the Security Agreement and each of the other Loan Documents, jointly and severally, with the existing parties thereto. Without limiting the generality of the foregoing, New Guarantor hereby represents and warrants that (i) each of the representations and warranties set forth in Section 5 of the Credit Agreement applicable to a Loan Party are true and correct as to New Guarantor on and as of the date hereof and (ii) New Guarantor has heretofore received a true and correct copy of the Credit Agreement, Guaranty Agreement, Pledge Agreement, Security Agreement and each of the other Loan Documents (including any modifications thereof or supplements or waivers thereto) in effect on the date hereof.

New Guarantor hereby makes, affirms, and ratifies in favor of the Administrative Agent and the Lenders, the Credit Agreement, Guaranty Agreement, the Pledge Agreement, the Security Agreement and each of the other Loan Documents given by the Guarantors to the Administrative Agent and the Lenders.

New Guarantor is simultaneously delivering to the Administrative Agent and the Lenders the documents, together with this Guarantor Joinder and Assumption Agreement, required under Sections 6.1 and 7.2(i).

In furtherance of the foregoing, New Guarantor shall execute and deliver or cause to be executed and delivered at any time and from time to time such further instruments and documents and do or cause to be done such further acts as may be reasonably necessary in the reasonable opinion of the Administrative Agent or the Lenders to carry out more effectively the provisions and purposes of this Guarantor Joinder and Assumption Agreement and the other Loan Documents.

New Guarantor acknowledges and agrees that a telecopy transmission to the Administrative Agent and the Lenders of signature pages hereof purporting to be signed on behalf of New Guarantor shall constitute effective and binding execution and delivery hereof by New Guarantor.

In connection with its becoming a Debtor under the Security Agreement, New Guarantor grants to and creates in favor of the Administrative Agent a first priority security interest under the Code in and to the Collateral to secure the due and punctual payment and performance of the Debt in full. Such security interest shall be subject to the terms and conditions set forth in the Security Agreement. (Capitalized terms used in this paragraph and not otherwise defined have the meanings given to them in the Security Agreement).

In connection with becoming a Pledgor under the Pledge Agreement, New Guarantor grants to the Administrative Agent a first priority security interest in New Guarantor’s now existing and hereafter acquired and/or arising right, title and interest in, to and under the Pledged Collateral owned by New Guarantor, whether now or hereafter existing and wherever located. Such security interest shall be subject to the terms and conditions set forth in the Pledge Agreement. (Capitalized terms used in this paragraph and not otherwise defined have the meanings given to them in the Pledge Agreement).

NEW GUARANTOR SHALL CAUSE BORROWER TO PROVIDE SUCH ADDITIONAL DOCUMENTS AS REQUIRED BY SECTION 7.2(i) OF THE CREDIT AGREEMENT.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the New Guarantor has duly executed this Guarantor Joinder and Assumption Agreement and delivered the same to the Administrative Agent for the benefit of the Lenders, as of the date and year first above written with the intention that this Guarantor Joinder and Assumption Agreement constitute a sealed instrument.

ATTEST:
	By:		(SEAL)
Name:		Name:
Title:		Title:

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent

By:
	Name:
	Title:

EXHIBIT 1.1(N)(1)

FORM OF
REVOLVING CREDIT NOTE

$                     Pittsburgh, Pennsylvania
Original date: January 11, 2008
Amended and restated:                     , 2010

FOR VALUE RECEIVED, the undersigned, GSI COMMERCE SOLUTIONS, INC., a Pennsylvania corporation (herein called the “Borrower”), hereby promises to pay to the order of                      (the “Lender”) the lesser of (1) the principal sum of                      U.S. Dollars (U.S. $_____), or (2) the aggregate unpaid principal balance of all Revolving Credit Loans made by the Lender to the Borrower pursuant to Section 2 of the Amended and Restated Credit Agreement dated as of                     , 2010, between the Borrower, PNC Bank, National Association as Administrative Agent, Guarantors (as therein defined) and the Lenders party thereto, including the Lender (the “Credit Agreement”), whichever is less, payable on the Expiration Date. All capitalized terms used herein shall, unless otherwise defined herein, have the same meanings given to such terms in the Credit Agreement.

The Borrower shall pay interest on the unpaid principal balance hereof from time to time outstanding from the date hereof at the rate or rates per annum specified by the Borrower pursuant to Section 3.1(a) of, or as otherwise provided in, the Credit Agreement.

Upon the occurrence and during the continuation of an Event of Default, at the direction of the Required Lenders, the Borrower shall pay interest on the entire principal amount of the then outstanding Revolving Credit Loans evidenced by this Revolving Credit Note at a rate in accordance with Section 3.3 of, or as otherwise provided in, the Credit Agreement. Such interest rate will accrue before and after any judgment has been entered.

Borrower shall pay interest on and principal of this Revolving Credit Note at the times set forth in the Credit Agreement.

If any payment or action to be made or taken hereunder shall be stated to be or become due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action.

Subject to the provisions of the Credit Agreement, payments of both principal and interest shall be made without setoff, counterclaim or other deduction of any nature at the office of the Administrative Agent located at 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222, in lawful money of the United States of America in immediately available funds, for further distribution to the Lender as set forth in the Credit Agreement.

This Note is one of the Revolving Credit Notes referred to in, and is entitled to the benefits of, the Credit Agreement and other Loan Documents, including the representations, warranties, covenants, conditions, security interests or Liens contained or granted therein to the Administrative Agent for the benefit of the Lenders. The Credit Agreement among other things contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayment, in certain circumstances, on account of principal hereof prior to maturity upon the terms and conditions therein specified.

Except as otherwise provided in the Credit Agreement, the Borrower waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Credit Agreement.

This Note shall bind the Borrower and its successors and assigns, and the benefits hereof shall inure to the benefit of the Lender and its successors and assigns. All references herein to the “Borrower” and the “Lender” shall be deemed to apply to the Borrower and the Lender, respectively, and their respective successors and assigns.

This Note and any other documents delivered in connection herewith and the rights and obligations of the parties hereto and thereto shall for all purposes be governed by and construed and enforced in accordance with the internal laws of the Commonwealth of Pennsylvania without giving effect to its conflicts of law principles.

This Note amends and restates in its entirety, but does not constitute a novation of the indebtedness evidenced by, that certain Revolving Credit Note dated as of January 11, 2008 of Borrower to the order of Lender.

IN WITNESS WHEREOF, the undersigned has executed this Note by its duly authorized officers with the intention that it constitute a sealed instrument.

ATTEST:	GSI COMMERCE SOLUTIONS, INC.
	By:
Title:	Title:
[Seal]

EXHIBIT 1.1(N)(2)

SWING LOAN NOTE

$15,000,000 Pittsburgh, Pennsylvania
Original date: January 11, 2008
Amended and restated:                     , 2010

FOR VALUE RECEIVED, the undersigned, GSI COMMERCE SOLUTIONS, INC., a Pennsylvania corporation (the “Borrower”), hereby promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the “Bank”), as provided below the lesser of the principal sum of Fifteen Million U.S. Dollars (U.S. $15,000,000.00) or the aggregate unpaid principal amount of all “Swing Loans” in the currencies in which such Swing Loans were made by the Bank to the Borrower pursuant to the Amended and Restated Credit Agreement dated as of                     , 2010, as amended from time to time, among the Borrower, the Guarantors, the Lenders, and PNC Bank, National Association, as Administrative Agent (the “Credit Agreement”), together with interest on the unpaid principal balance hereof from time to time outstanding from the date hereof at the rate provided in Section 3.1(b) of the Credit Agreement.

After request for payment of any principal hereof or interest hereon shall have been made by the Bank, or upon the occurrence and continuance of an Event of Default at the direction of the Required Lenders, such amount shall thereafter bear interest at a rate per annum as set forth in Section 3.3 of the Credit Agreement. Such interest will accrue before and after any judgment has been entered with respect to this Swing Loan Note.

Interest hereon will be payable at the times specified in the Credit Agreement.

Subject to the provisions of the Credit Agreement, payments of both principal and interest shall be made without setoff, counterclaim or other deduction of any nature at the office of the Administrative Agent located at 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222, in lawful money of the United States of America in immediately available funds.

This Note is the Swing Loan Note referred to in, is subject to the provisions of, and is entitled to the benefits of, the Credit Agreement and the other Loan Documents, including the representations, warranties, covenants conditions and Liens contained or granted therein. This Swing Loan Note shall be payable ON DEMAND and regardless of whether or not an Event of Default has occurred and is continuing.

The Borrower waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Swing Loan Note and the Credit Agreement.

All capitalized terms used herein shall, unless otherwise defined herein, have the same meanings assigned to such terms in the Credit Agreement.

This Swing Loan Note shall bind the Borrower and its successors and assigns, and the benefits hereof shall inure to the benefit of the Administrative Agent, the Bank and their successors and assigns; provided, that any assignment of this Swing Loan Note by the Borrower or the Bank shall be subject to the provisions of Section 10.8 of the Credit Agreement. All references herein to the “Borrower,” the “Administrative Agent” and the “Bank” shall be deemed to apply to the Borrower, the Administrative Agent and the Bank, respectively, and their respective successors and assigns.

This Swing Loan Note and any other documents delivered in connection herewith and the rights and obligations of the parties hereto and thereto shall for all purposes be governed by and construed and enforced in accordance with the substantive law of the Commonwealth of Pennsylvania without giving effect to the principles of conflict of laws.

This Swing Loan Note amends and restates in its entirety, but does not constitute a novation of the indebtedness evidenced by, that certain Swing Loan Note dated January 11, 2008 of Borrower to the order of Bank.

IN WITNESS WHEREOF, the undersigned has executed this Note by its duly authorized officers with the intention that it constitute a sealed instrument.

GSI COMMERCE SOLUTIONS, INC.
By:		[Seal]
	Name:
	Title:

EXHIBIT 2.1

LENDER JOINDER AND ASSUMPTION AGREEMENT

THIS LENDER JOINDER AND ASSUMPTION AGREEMENT is made as of                     , 20 _____, by                     , a                      (the “New Lender”).

Background

Reference is made to (i) the Amended and Restated Credit Agreement, dated as of                     , 2010, as the same may be amended, restated, supplemented or modified from time to time (the “Credit Agreement”), by and among GSI COMMERCE SOLUTIONS, INC., a Pennsylvania corporation, (the “Borrower”), each of the Guarantors now or hereafter party thereto, the Lenders now or hereafter party thereto (the “Lenders”) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for itself and the Lenders (the “Administrative Agent”), and (ii) the other Loan Documents referred to in the Credit Agreement, as the same may be amended, restated, supplemented or modified from time to time (collectively, the “Loan Documents”).

Agreement

Capitalized terms defined in the Credit Agreement are used herein as defined therein.

New Lender hereby becomes a Lender under the terms of the Credit Agreement pursuant to the operation of Section 2.1(b) thereof. On the effective date of the increase in the aggregate Revolving Credit Commitments pursuant to such Section 2.1(b) as set forth in written notice from the Administrative Agent to the New Lender, New Lender shall remit to the Administrative Agent in immediately available funds an amount equal to the sum of (i) the New Lender’s Ratable Share of then outstanding Revolving Credit Loans plus (ii) the New Lender’s Ratable Share of any new Revolving Credit Loan being advanced to the Borrower on such effective date. From and after the effective date of the increase in aggregate Revolving Credit Commitments (a) the New Lender shall be responsible to the Administrative Agent for funding its Ratable Share of any Revolving Credit Loan under Section 2 of the Credit Agreement, whether in response to a Loan Request, a demand by PNC Bank for repayment of the Swing Loan, repayment of any Reimbursement Obligation or otherwise; (b) the New Lender shall have a participation interest equal to its Ratable Share of any Letters of Credit then outstanding or thereafter issued and any Letter of Credit Borrowing then outstanding or thereafter incurred; and (c) the New Lender shall have all of the rights and duties of a Lender under the Credit Agreement and the other Loan Documents.

The New Lender hereby represents and warrants that it has heretofore received a true and correct copy of the Credit Agreement, an original Revolving Credit Note in the amount of its Revolving Credit Commitment and a true and correct copy of each of the other Loan Documents (including any modifications thereof or supplements or waivers thereto) in effect on the date hereof.

In furtherance of the foregoing, New Lender shall execute and deliver or cause to be executed and delivered at any time and from time to time such further instruments and documents and do or cause to be done such further acts as may be reasonably necessary in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Lender Joinder and Assumption Agreement and the other Loan Documents.

New Lender acknowledges and agrees that a telecopy transmission to the Administrative Agent of signature pages hereof purporting to be signed on behalf of New Lender shall constitute effective and binding execution and delivery hereof by New Lender.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the New Lender has duly executed this Lender Joinder and Assumption Agreement and delivered the same to the Administrative Agent, as of the date and year first above written with the intention that this Lender Joinder and Assumption Agreement constitute a sealed instrument.

ATTEST:
	By:	(SEAL)
Name:	Name:
Title:	Title:

Acknowledged and accepted: PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent
By:
	Name:
	Title:

Commitments of New Lender and Address for Notices

	Amount of Revolving Credit
New Lender	Commitment	Ratable Share
Name:	$		%
Address:
Telephone:
Telecopy:

EXHIBIT 2.4

LOAN REQUEST FORM

TO:	PNC Bank, National Association, as Administrative Agent
	Telephone No.: (412) 762-7196
	Telecopier No.: (412) 705-2006
	Attention: Andrea Gibb
FROM:	GSI Commerce Solutions, Inc.
RE:	Amended and Restated Credit Agreement (as it may have been or may hereafter be amended from time to time, the “Agreement”) dated as of                     , 2010 by and between GSI Commerce Solutions, Inc., (the “Borrower”), the Guarantors now or hereafter party thereto, PNC Bank, National Association, as administrative agent for the Lenders, (the “Administrative Agent”) and the Lenders now or hereafter party thereto.

A. Pursuant to Section 2.4 of the Agreement, the undersigned hereby makes the following Revolving Credit Loan Request:

1. Aggregate Principal Amounts of the Loans Requested Hereunder

	(a)	Amount to be advanced in US Dollars	$
	(b)	in British Pounds Sterling
	(c)	in Euros
	(d)	in Canadian Dollars
	(e)	in Japanese Yen
	(f)	in Danish Kroner
	(g)	in Swedish Krona
	(h)	in Swiss Franc
	(i)	in Norwegian Krone
	(j)	in Australian Dollars
	(k)	in another currency (requires all Lenders’ consent)
2.	Aggregate Amount of Loans Subject to LIBOR Rate Option
	(a)	subject to One Month Interest Period (only option available for Optional Currency Advance)
	(b)	subject to Two Month Interest Period
	(c)	subject to Three Month Interest Period
	(d)	subject to Six Month Interest Period

3.	Aggregate Amount of Loans Subject to Base Rate Option (US Dollar advances only)
4.	Proposed Borrowing Date:

B. Pursuant to Section 3.1 of the Agreement, the undersigned requests that the following Loans presently outstanding be converted to the Interest Rate Option indicated below on the dates indicated below, which dates, the undersigned represents and warrants, as to any Loans previously earning interest at the LIBOR Rate Option, are the last days of the then current Interest Periods.

1. Convert $                     earning interest at the Base Rate Option to the LIBOR Rate Option with an Interest Period of                      Month(s), commencing                     .

(Repeat as necessary)

( ) Convert                      (identify currency) earning interest at the LIBOR Rate Option with a current Interest Period ending                      to the LIBOR Rate Option with an Interest Period of                      Month(s) (only one month periods available for Optional Currency), commencing on such date.

(Repeat as necessary)

( ) Convert $                     earning interest at the LIBOR Rate Option with a current Interest Period ending                      to the Base Rate Option on such date.

C. As of the date hereof and the date of making of the Loans: the representations and warranties contained in Section 5 of the Agreement are and will be true (except representations and warranties that expressly relate solely to an earlier date or time, which representations and warranties were true on and as of the specific date referred to therein) in all material respects; the Borrower has performed and complied with all covenants of the Agreement; all conditions for the making of the Loans under the Agreement have been satisfied; no Event of Default or Potential Default has occurred and is continuing or shall exist; and the making of the Loans shall not contravene any Law applicable to the Borrower.

Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement.

The undersigned certifies to the accuracy of the foregoing.

	GSI COMMERCE SOLUTIONS, INC.
Date:	By:
		Its:

EXHIBIT 2.4(B)

SWING LOAN REQUEST FORM

TO:	PNC Bank, National Association, as Administrative Agent
	Telephone No.: (412) 762-7196
	Telecopier No.: (412) 705-2006
	Attention: Andrea Gibb
FROM:	GSI Commerce Solutions, Inc.
RE:	Amended and Restated Credit Agreement (as it may have been or may hereafter be amended from time to time, the “Agreement”) dated as of _____, 2010 by and between GSI Commerce Solutions, Inc., (the “Borrower”), the Guarantors now or hereafter party thereto, PNC Bank, National Association, as administrative agent for the Lenders, (the “Administrative Agent”) and the Lenders now or hereafter party thereto.

A. Pursuant to Section 2.4(c) of the Agreement, the undersigned hereby makes the following Swing Loan Request:

1.	Aggregate Principal Amount of the Loans Requested Hereunder	$___________
2.	Proposed Borrowing Date:	____________

B. As of the date hereof and the date of making of the Loans: the representations and warranties contained in Section 5 of the Agreement are and will be true (except representations and warranties that expressly relate solely to an earlier date or time, which representations and warranties were true on and as of the specific date referred to therein) in all material respects; the Borrower has performed and complied with all covenants of the Agreement; all conditions for the making of the Loans under the Agreement have been satisfied; no Event of Default or Potential Default has occurred and is continuing or shall exist; and the making of the Loans shall not contravene any Law applicable to the Borrower.

Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement.

The undersigned certifies to the accuracy of the foregoing.

	GSI COMMERCE SOLUTIONS, INC.
Date:	By:
		Its:

EXHIBIT 7.3(C)

FORM OF QUARTERLY COMPLIANCE CERTIFICATE

In accordance with the provisions of Section 7.3(c) of the Amended and Restated Credit Agreement dated as of ___________, 2010, as amended, restated and otherwise modified through the date hereof (the “Credit Agreement”) by and among GSI Commerce Solutions, Inc. (the “Borrower”), GSI Commerce, Inc. (the “Company”), PNC Bank, National Association, as Administrative Agent (the “Agent”), and the other parties thereto from time to time, I, ___________, the ___________ and authorized officer of the Company, on behalf of all of the Loan Parties (as defined in the Credit Agreement), do hereby certify to the Agent and Lenders (as defined in the Credit Agreement) as follows:

(a) I am familiar with, and have reviewed, the provision of the Credit Agreement and the other Loan Documents, and have done such investigations as is necessary to support the statements made in this certificate.

(b) The representations and warranties made by the Loan Parties in the Credit Agreement and other Loan Documents are true with the same effect as though such representations and warranties are made on and as of this date (except representations and warranties which expressly relate solely to an earlier date or time, which remain true as of such date or time) and the Loan Parties have performed and complied with all covenants and conditions set forth in the Credit Agreement and other Loan Documents;

(c) No Event of Default or Potential Default has occurred or now exists; and

(d) The Loan Parties, on a consolidated basis, are in compliance with the financial covenants set forth in Section 7.2 of the Credit Agreement as more fully set forth below and on Annex 1 hereto:

	Actual	Required
Prepayment of Indebtedness	___________	not more than $___________ 1
Leverage Ratio
ratio of consolidated Indebtedness divided by	___________
Consolidated Adjusted EBITDA	___________
Leverage Ratio	___________	not more than 4.00 to 1.00

¹ Refer to Section 7.2(n) of Credit Agreement to determine applicable maximum amount.

Fixed Coverage Ratio
ratio of Consolidated EBITDA divided by	___________
Fixed Charges	___________
Fixed Charge Coverage Ratio	___________	not less than 2.5 to 1.00
Cash and Cash Equivalents	___________	not less than $30,000,000.002
Senior Leverage Ratio
ratio of secured consolidated Indebtedness divided by	___________
Consolidated Adjusted EBITDA	___________
Senior Leverage Ratio	___________	not to exceed 2.5 to 1.00
Foreign Subsidiaries
The Company’s Foreign Subsidiaries
own consolidated assets equal to	___________
The Company’s consolidated total assets	___________
Percentage owned by Foreign Subsidiaries	___________	not more than ___________%3
Maximum repayment, redemptions, dividends, distribution, and subordinate indebtedness maturing prior to April 1, 2013.
Aggregate repayments, redemptions and repurchase of Indebtedness (other than the first $57,500,000 of 3% Convertible Notes due 2025)	___________
plus
Aggregate Subordinated Indebtedness due prior to April 1, 2013	___________
plus

2	of which not less than $25,000,000.00 shall be owned by the Parent, the Borrower and/or the Domestic Subsidiaries and maintained in the United States. Refer to Section 7.2(q) of Credit Agreement.
3	refer to Section 7.2(r) for applicable percentage.

Aggregate dividends, distributions and stock repurchases (other than payable to another Loan Party)	___________
Total	___________	not to exceed $50,000,000.00

Attached hereto as Annex 1 are calculations supporting the figures reported above.

Any capitalized terms which are used in this Certificate and which are not defined herein, but which are defined in the above-described Credit Agreement, shall have the meanings given to those terms in the Credit Agreement.

IN WITNESS WHEREOF, I have executed this Certificate the ___________ day of ___________.

By:
	___________ of GSI Commerce, Inc. on behalf of all of the Loan Parties

EX-10.3

Exhibit 10.3

INDEMNITY AGREEMENT

This Indemnity Agreement (this “Agreement”) dated as of  _____  , is made by and between GSI Commerce, Inc., a Delaware corporation (the “Company”), and  _____  (“Indemnitee”).

Recitals

A. The Company desires to attract and retain the services of highly qualified individuals as directors, officers, employees and other fiduciaries.

B. The Company’s bylaws (the “Bylaws”) require that the Company indemnify its directors, and empowers the Company to indemnify its officers, employees and other fiduciaries, as authorized by the Delaware General Corporation Law, as amended (the “DGCL”), under which the Company is organized and such Bylaws expressly provide that the indemnification provided therein is not exclusive and contemplates that the Company may enter into separate agreements with its directors, officers and other persons to set forth specific indemnification provisions.

C. Indemnitee does not regard the protection currently provided by applicable law, the Company’s governing documents and available insurance as adequate under the present circumstances, and the Company has determined that Indemnitee and other directors, officers, employees and other fiduciaries of the Company may not be willing to serve or continue to serve in such capacities without additional protection.

D. The Company desires and has requested Indemnitee to serve or continue to serve as a director, officer, employee or other fiduciary of the Company or any subsidiary at the request and on behalf of the Company, as the case may be, and has proffered this Agreement to Indemnitee as an additional inducement to serve or continue to serve in such capacity.

E. Indemnitee is willing to serve, or to continue to serve, as a director, officer, employee or other fiduciary of the Company or a director of any subsidiary, as the case may be, only if Indemnitee is furnished the indemnity provided for herein by the Company.

Agreement

Now Therefore, in consideration of the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Definitions.

(a) Agent. For purposes of this Agreement, the term “agent” of the Company means any person who: (i) is or was a director, officer, employee, agent, trustee or other fiduciary of the Company or a subsidiary of the Company; or (ii) is or was serving at the request or for the convenience of, or representing the interests of, the Company or a subsidiary of the Company, as a director, officer, employee or other fiduciary of a foreign or domestic corporation, partnership, joint venture, trust or other enterprise.

1

(b) Board. For purposes of this Agreement, the term “Board” means the Board of Directors of the Company.

(c) Expenses. For purposes of this Agreement, the term “expenses” shall be broadly construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’, witness or other professional fees and related disbursements, and other out-of-pocket costs of whatever nature), actually and reasonably incurred by Indemnitee or on his behalf in connection with the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement, the DGCL or otherwise, and amounts paid in settlement by or on behalf of Indemnitee, but shall not include any judgments, fines or penalties actually levied against Indemnitee for such individual’s violations of law. The term “expenses” shall also include (i) expenses incurred in connection with asserting compulsory counterclaims that negate a plaintiff’s claims, (ii) reasonable compensation for time spent by Indemnitee for which he is not compensated by the Company or any subsidiary or third party (x) for any period during which Indemnitee is not an agent, in the employment of, or providing services for compensation to, the Company or any subsidiary, and (y) if the rate of compensation and estimated time involved is approved by the directors of the Company who are not parties to any action with respect to which expenses are incurred, for Indemnitee while an agent of, employed by, or providing services for compensation to, the Company or any subsidiary and (iii) expenses incurred in connection with any appeal resulting from any proceeding, including without limitation the principal, premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent.

(d) Proceedings. For purposes of this Agreement, the term “proceeding” shall be broadly construed and shall include, without limitation, any threatened, pending, or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, and whether formal or informal in any case, in which Indemnitee was, is, or will reasonably likely be involved as a party or otherwise by reason of: (i) the fact that Indemnitee is or was an agent of the Company; (ii) the fact that any action taken (or failed to be taken) by Indemnitee or of any action (or failure to act) on Indemnitee’s part while acting as an agent of the Company; or (iii) the fact that Indemnitee is or was serving at the request of the Company as an agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and in any such case described above, whether or not serving in any such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses may be provided under this Agreement.

(e) Subsidiary. For purposes of this Agreement, the term “subsidiary” means any corporation or limited liability company of which more than 50% of the outstanding voting securities or equity interests are owned, directly or indirectly, by the Company and one or more of its subsidiaries, and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as an agent.

2

(f) Independent Counsel. For purposes of this Agreement, the term “independent counsel” means a law firm, or a partner (or, if applicable, member) of such a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “independent counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

2. Agreement to Serve. Indemnitee will serve, or continue to serve, as a director, officer, employee or other fiduciary of the Company or any subsidiary, as the case may be, faithfully and to the best of his or her ability, at the will of such entity (or under separate agreement, if such agreement exists), in the capacity Indemnitee currently serves as an agent of such entity, so long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of the bylaws or other applicable charter documents of such entity, or until such time as Indemnitee tenders his or her resignation in writing; provided, however, that nothing contained in this Agreement is intended as an employment agreement between Indemnitee and the Company or any of its subsidiaries or to create any right to continued employment of Indemnitee with the Company or any of its subsidiaries in any capacity.

The Company acknowledges that it has entered into this Agreement and assumes the obligations imposed on it hereby, in addition to and separate from its obligations to Indemnitee under the Bylaws, to induce Indemnitee to serve, or continue to serve, as a director, officer, employee, agent, trustee or other fiduciary of the Company or any subsidiary, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving, or continuing to serve, as a director, officer, employee, agent, trustee or other fiduciary of the Company or any subsidiary.

3. Indemnification.

(a) Indemnification in Third Party Proceedings. Subject to Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the DGCL, as the same may be amended from time to time (but, only to the extent that such amendment permits broader indemnification rights to Indemnitee than the DGCL permitted prior to adoption of such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise involved, in any proceeding, for any and all expenses actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of such proceeding. For the avoidance of doubt, the foregoing indemnification obligation includes, without limitation, claims for monetary damages against Indemnitee in respect of an alleged breach of fiduciary duties, to the fullest extent permitted under Section 102(b)(7) of the DGCL as in existence on the date hereof.

(b) Indemnification in Derivative Actions and Direct Actions by the Company. Subject to Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the DGCL, as the same may be amended from time to time (but, only to the extent that such amendment permits broader indemnification rights to Indemnitee than the DGCL permitted prior to adoption of such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any proceeding by or in the right of the Company to procure a judgment in its favor, for any and all expenses actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement, or appeal of such proceedings.

3

(c) Supplemental Indemnitor. The Company hereby acknowledges that the Indemnitee may have certain rights to indemnification, advancement of expenses or insurance, provided by an employer or by another entity at whose request the Indemnitee serves as a director and/or certain affiliates of such employer or other entity (collectively, the “Supplemental Indemnitor”). In the event that the Indemnitee is, or is threatened to be made, a party to or a participant in any proceeding to the extent resulting from any claim based on the Indemnitee’s service to the Company as a director or other fiduciary of the Company, then the Company shall (i) be an indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Supplemental Indemnitor to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) be required to advance expenses incurred by Indemnitee, and (iii) be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and any provision of the Bylaws or the Certificate of Incorporation of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Supplemental Indemnitor. The Company irrevocably waives, relinquishes and releases the Supplemental Indemnitor from any and all claims against the Supplemental Indemnitor for contribution, subrogation or any other recovery of any kind in respect thereof. No advancement or payment by the Supplemental Indemnitor on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Supplemental Indemnitor shall have a right of contribution or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Supplemental Indemnitor is a third party beneficiary of the terms of this Section.

(d) Reliance as Safe Harbor. The Indemnitee shall be entitled to indemnification for any action or omission to act undertaken (a) in good faith reliance upon the records of the Company or any subsidiary, including its financial statements, or upon information, opinions, reports or statements furnished to the Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board or of any subsidiary, or by any other person as to matters the Indemnitee reasonably believes are within such other person’s professional or expert competence, or (b) on behalf of the Company or any subsidiary in furtherance of the interests of the Company or any subsidiary in good faith in reliance upon, and in accordance with, the advice of legal counsel or accountants, provided such legal counsel or accountants were selected with reasonable care by or on behalf of the Company or any subsidiary. In addition, the knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the Company or any subsidiary shall not be imputed to the Indemnitee for purposes of determining the right to indemnity hereunder.

4

4. Indemnification of Expenses of Successful Party. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any proceeding or in defense of any claim, issue or matter therein, including the dismissal of any action without prejudice, the Company shall indemnify Indemnitee against all expenses actually and reasonably incurred in connection with the investigation, defense or appeal of such proceeding.

5. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any expenses actually and reasonably incurred by Indemnitee in the investigation, defense, settlement or appeal of a proceeding, but is precluded by applicable law or the specific terms of this Agreement from obtaining indemnification for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

6. Advancement of Expenses. To the extent not prohibited by law, the Company shall advance the expenses incurred by Indemnitee in connection with any proceeding, and such advancement shall be made within twenty (20) days after the receipt by the Company of a statement or statements requesting such advances (which shall include invoices received by Indemnitee in connection with such expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the invoice). Advances shall be unsecured, interest free and without regard to Indemnitee’s ability to repay the expenses. Advances shall include any and all expenses actually and reasonably incurred by Indemnitee pursuing an action to enforce Indemnitee’s right to indemnification under this Agreement, or otherwise and this right of advancement, including expenses incurred preparing and forwarding statements to the Company to support the advances claimed. Indemnitee acknowledges that the execution and delivery of this Agreement shall constitute an undertaking providing that Indemnitee shall, to the fullest extent required by law, repay the advance (without interest) if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, the Certificate of Incorporation, the Bylaws of the Company, applicable law or otherwise. No other form of undertaking shall be required other than the execution of this Agreement. The right to advances under this Section shall continue until final disposition of any proceeding, including any appeal therein. This Section 6 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 10(b)..

7. Notice and Other Indemnification Procedures.

(a) Notification of Proceeding. Indemnitee will notify the Company in writing promptly upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any proceeding or matter which may be subject to indemnification or advancement of expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.

5

(b) Request for Indemnification and Indemnification Payments. Indemnitee shall notify the Company promptly in writing upon receiving notice of any demand, judgment or other requirement for payment that Indemnitee reasonably believes to be subject to indemnification under the terms of this Agreement, and shall request payment thereof by the Company. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise to the extent that the Company is not materially prejudiced by such failure to notify. Indemnification payments requested by Indemnitee under Section 3 hereof shall be made by the Company no later than sixty (60) days after receipt of the written request of Indemnitee. Claims for advancement of expenses shall be made under the provisions of Section 6 hereof.

(c) Application for Enforcement. In the event the Company fails to make timely payments as set forth in Section 6 or Section 7(b) above, Indemnitee shall have the right to apply to any court of competent jurisdiction for the purpose of enforcing Indemnitee’s right to indemnification or advancement of expenses pursuant to this Agreement. In such an enforcement hearing or proceeding, the burden of proof shall be on the Company to prove that indemnification or advancement of expenses to Indemnitee is not required under this Agreement or the Company’s Certificate of Incorporation or Bylaws or permitted by applicable law. Any determination by the Company (including the Board, stockholders or independent counsel) that Indemnitee is not entitled to indemnification hereunder, shall not be a defense by the Company to the action nor create any presumption that Indemnitee is not entitled to indemnification or advancement of expenses hereunder.

(d) Indemnification of Certain Expenses. The Company shall indemnify Indemnitee against all expenses incurred in connection with any hearing or proceeding under this Section 7 unless the Company prevails in such hearing or proceeding on the merits in all material respects.

8. Assumption of Defense. In the event the Company shall be requested by Indemnitee to pay the expenses of any proceeding, the Company, if appropriate, shall be entitled to assume the defense of such proceeding, or to participate to the extent permissible in such proceeding, with counsel reasonably acceptable to Indemnitee. Upon assumption of the defense by the Company and the retention of such counsel by the Company, the Company shall not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same proceeding, provided that Indemnitee shall have the right to employ separate counsel in such proceeding at Indemnitee’s sole cost and expense. Notwithstanding the foregoing, if Indemnitee’s counsel delivers a written notice to the Company stating that such counsel has reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or the Company shall not, in fact, have employed counsel or otherwise actively pursued the defense of such proceeding within a reasonable time, then in any such event the fees and expenses of Indemnitee’s counsel to defend such proceeding shall be subject to the indemnification and advancement of expenses provisions of this Agreement.

6

9. Insurance. To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees or other fiduciaries of the Company or of any subsidiary (“D&O Insurance”), Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or other fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies. If the Company is named as an insured under the D&O Insurance, then the insurance program or policy shall include a “Priority of Payments” or “Order of Payments” clause requiring coverage proceeds to be paid first to the insured who are natural persons.

10. Exceptions.

(a) Certain Matters. Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee on account of any proceeding with respect to: (i) remuneration paid to Indemnitee if it is determined by final judgment or other final adjudication that such remuneration was in violation of law (and, in this respect, both the Company and Indemnitee have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication, as indicated in Section 10(d) below); (ii) a final judgment rendered against Indemnitee for an accounting, disgorgement or repayment of profits made from the purchase or sale by Indemnitee of securities of the Company against Indemnitee or in connection with a settlement by or on behalf of Indemnitee to the extent it is acknowledged by Indemnitee and the Company that such amount paid in settlement resulted from Indemnitee’s conduct from which Indemnitee received monetary personal profit, pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other provisions of any federal, state or local statute or rules and regulations thereunder; (iii) a final judgment or other final adjudication that Indemnitee’s conduct was in bad faith, knowingly fraudulent or deliberately dishonest or constituted willful misconduct (but only to the extent of such specific determination); or (iv) on account of conduct that is established by a final judgment as constituting a breach of Indemnitee’s duty of loyalty to the Company or resulting in any personal profit or advantage to which Indemnitee is not legally entitled. For purposes of the foregoing sentence, a final judgment or other adjudication may be reached in either the underlying proceeding or action in connection with which indemnification is sought or a separate proceeding or action to establish rights and liabilities under this Agreement.

(b) Claims Initiated by Indemnitee. Any provision herein to the contrary notwithstanding, the Company shall not be obligated to indemnify or advance expenses to Indemnitee with respect to proceedings or claims initiated or brought by Indemnitee against the Company or any subsidiary or its respective directors, officers, employees or other fiduciaries and not by way of defense, except (i) with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or under any other agreement, provision in the Bylaws or the Company’s Certificate of Incorporation or any subsidiary’s governing documents or applicable law, or (ii) with respect to any other proceeding initiated by Indemnitee that is either approved by the Board or where Indemnitee’s participation is required by applicable law. However, indemnification or advancement of expenses may be provided by the Company in specific cases if the Board determines it to be appropriate.

7

(c) Unauthorized Settlements. Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee under this Agreement for any amounts paid in settlement of a proceeding effected without the Company’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold consent to any proposed settlement; provided, however, that the Company may in any event decline to consent to (or to otherwise admit or agree to any liability for indemnification hereunder in respect of) any proposed settlement if the Company is also a party in such proceeding and determines in good faith that such settlement is not in the best interests of the Company and its stockholders. The Company shall not settle any action, claim or proceeding (in whole or in part) which would impose any expense, judgment, fine, penalty or limitation of any kind on the Indemnitee which is not subject to indemnification by the Company hereunder.

(d) Securities Act Liabilities. Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee or otherwise act in violation of any undertaking appearing in and required by the rules and regulations promulgated under the Securities Act of 1933, as amended (the “Act”), or in any registration statement filed with the SEC under the Act. Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K currently generally requires the Company to undertake in connection with any registration statement filed under the Act to submit the issue of the enforceability of Indemnitee’s rights under this Agreement in connection with any liability under the Act on public policy grounds to a court of appropriate jurisdiction and to be governed by any final adjudication of such issue. Indemnitee specifically agrees that any such undertaking shall supersede the provisions of this Agreement and to be bound by any such undertaking.

11. Nonexclusivity and Survival of Rights. The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may at any time be entitled under any provision of applicable law, the Company’s Certificate of Incorporation, the Bylaws or other agreements, both as to action in Indemnitee’s official capacity and Indemnitee’s action as an agent of the Company or any subsidiary, in any court in which a proceeding is brought, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Company or any subsidiary and shall inure to the benefit of the heirs, executors, administrators and assigns of Indemnitee. The obligations and duties of the Company to Indemnitee under this Agreement shall be binding on the Company and its successors and assigns until terminated in accordance with its terms. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

8

No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her corporate status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification, hold harmless or exoneration rights, or advancement of expenses than would be afforded currently under the Company’s Certificate of Incorporation, the Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, by Indemnitee shall not prevent the concurrent assertion or employment of any other right or remedy by Indemnitee.

12. Change in Control. If, at any time subsequent to the date of this Agreement, continuing directors do not constitute a majority of the members of the Board, or there is otherwise a change in control of the Company (as contemplated by Item 403(c) of Regulation S-K under the Securities Act and the Exchange Act), then upon the request of Indemnitee, the Company shall cause the determination of indemnification and advances required by Section 3 hereof to be made by independent counsel. The fees and expenses incurred by independent counsel in making the determination of indemnification and advances shall be borne solely by the Company. If independent counsel is unwilling and/or unable to make the determination of indemnification and advances, then the Company shall cause the indemnification and advances to be made by a majority vote or consent of a committee of the Board consisting solely of continuing directors. For purposes of this Agreement, a “continuing director” means either a member of the Board as of the date of this Agreement or a person nominated to serve as a member of the Board by a majority of the then-continuing directors.

13. Legal Action by the Company. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against an Indemnitee or an Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of five (5) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such five-year period; provided, however, that if any shorter period of limitations is otherwise applicable to such cause of action, such shorter period shall govern.

14. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who, at the request and expense of the Company, shall execute all papers required and shall do everything that may be reasonably necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

15. Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

9

16. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable and to give effect to Section 14 hereof.

17. Amendment and Waiver. No supplement, modification, amendment, or cancellation of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

18. Specific Performance, Etc. The parties recognize that if any provision of this Agreement is violated by the parties hereto, the Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, the Indemnitee shall be entitled, if the Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as the Indemnitee may elect to pursue. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the court, and the Company hereby waives any such requirement of such a bond or undertaking.

19. Notice. Except as otherwise provided herein, any notice or demand which, by the provisions hereof, is required or which may be given to or served upon the parties hereto shall be in writing and, if by telegram, telecopy or telex, shall be deemed to have been validly served, given or delivered when sent, if by overnight delivery, courier or personal delivery, shall be deemed to have been validly served, given or delivered upon actual delivery and, if mailed, shall be deemed to have been validly served, given or delivered three (3) business days after deposit in the United States mail, as registered or certified mail, with proper postage prepaid and addressed to the party or parties to be notified at the addresses set forth on the signature page of this Agreement (or such other address(es) as a party may designate for itself by like notice). If to the Company, notices and demands shall be delivered to the attention of the Secretary of the Company.

20. Governing Law. This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.

21. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement.

22. Headings. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

10

23. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, written and oral, between the parties with respect to the subject matter of this Agreement, including without limitation any existing agreement between the Company and Indemnitee providing for indemnification of the type provided for herein; provided, however, that (a) this Agreement is a supplement to and in furtherance of the Company’s Certificate of Incorporation, the Bylaws, the DGCL and any other applicable law, and shall not be deemed a substitute therefor, and does not diminish or abrogate any rights of Indemnitee thereunder, and (b) in no event shall any of Indemnitee’s rights hereunder be diminished by reason of the fact that this Agreement supersedes any other agreements, understandings or negotiations.

11

In Witness Whereof, the parties hereto have entered into this Agreement effective as of the date first above written.

GSI Commerce, Inc.
By:
	Name:
	Title:
Indemnitee
Signature of Indemnitee
Print or Type Name of Indemnitee
Address for Notices

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael G. Rubin, certify that:

1. I have reviewed this report on Form 10-Q of GSI Commerce, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 4, 2010

By:	/s/ Michael G. Rubin
	Michael G. Rubin
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael R. Conn, certify that:

1. I have reviewed this report on Form 10-Q of GSI Commerce, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 4, 2010

By:	/s/ Michael R. Conn
	Michael R. Conn
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), each of the undersigned officers of GSI Commerce, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report on Form 10-Q for the period ended October 2, 2010 (the “Report”) that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Michael G. Rubin
	Michael G. Rubin
	Chief Executive Officer

November 4, 2010

By:	/s/ Michael R. Conn
	Michael R. Conn
	Chief Financial Officer

November 4, 2010

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.