Exhibit 10.88

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated
as of March 28, 2006, is entered into by and among CHELSEY FINANCE, LLC, a
Delaware limited liability company (“Lender”), BRAWN, LLC, a Delaware limited
liability company (“Brawn LLC”), HANOVER REALTY, INC., a Virginia corporation
(“Hanover Realty”), THE COMPANY STORE FACTORY, INC., a Delaware corporation
(“TCS Factory”), THE COMPANY OFFICE, INC., a Delaware corporation (“TCS
Office”), SILHOUETTES, LLC, a Delaware limited liability company (“Silhouettes
LLC”), HANOVER COMPANY STORE, LLC, a Delaware limited liability company (“HCS
LLC”), DOMESTICATIONS, LLC, a Delaware limited liability company
(“Domestications LLC”), KEYSTONE INTERNET SERVICES, LLC, a Delaware limited
liability company (“KIS LLC”), and THE COMPANY STORE GROUP, LLC, a Delaware
limited liability company (“CSG LLC” and, together with Brawn, Brawn LLC,
Hanover Realty, TCS Factory, TCS Office, Silhouettes LLC, HCS LLC,
Domestications LLC and KIS LLC, collectively, “Borrowers” and each,
individually, a “Borrower”), HANOVER DIRECT, INC., a Delaware corporation
(“Hanover”), CLEARANCE WORLD OUTLETS, LLC, a Delaware limited liability company
(“Clearance World”), SCANDIA DOWN, LLC, a Delaware limited liability company
(“Scandia Down LLC”), LACROSSE FULFILLMENT, LLC, a Delaware limited liability
company (“LaCrosse LLC”), D.M. ADVERTISING, LLC, a Delaware limited liability
company (“DM Advertising LLC”), AMERICAN DOWN & TEXTILE, LLC, a Delaware limited
liability company (“ADT LLC”), and HANOVER GIFTS, INC., a Virginia corporation
(“Hanover Gifts” and, together with Hanover, Clearance World, Scandia Down LLC,
LaCrosse LLC, DM Advertising LLC and ADT LLC, collectively, “Existing
Guarantors” and each, individually, an “Existing Guarantor”) and Hanover Direct
Memberships, Inc., a Delaware corporation (“HDMI”, as hereinafter further
defined) and Scandia Down Online, LLC, a Delaware limited liability company
(“Scandia Online”, as hereinafter further defined and together with HDMI and
Existing Guarantors, collectively, “Guarantors” and each individually , a
“Guarantor”).

W I T N E S S E T H:

WHEREAS, Borrowers, Guarantors and Lender are parties to the Loan and Security
Agreement, dated as of July 8, 2004, as amended (as so amended, the “Loan
Agreement”), pursuant to which Lender has made loans and advances to Borrowers;

WHEREAS, Borrowers and Guarantors have requested that Lender (a) revise the
amounts of EBITDA that Borrowers are required to maintain in the first and
second fiscal quarters of the fiscal year ending December 30, 2006, (b) so long
as no Event of Default exists, (i) permit certain intercompany transactions as
set forth herein, and (ii) permit the incurrence of contingent indebtedness
arising under surety bonds, (c) include HDMI and Scandia Online as a Guarantor
pursuant to the terms and conditions of the Loan Agreement and the other
Financing Agreements, as amended hereby, and (d) agree to certain other
amendments to and consents under the Financing Agreements;

 

 

 

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WHEREAS, the parties hereto desire to enter into this Amendment to evidence and
effectuate such consents and amendments, in each case subject to the terms and
conditions and to the extent set forth herein; and

 

WHEREAS, Lender is willing to agree to provide such consents and make such
amendments, subject to the terms and conditions and to the extent set forth
herein.

NOW, THEREFORE, in consideration of the premises and covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:

1.

Definitions.

1.1        Additional Definitions. As used herein or in any of the other
Financing Agreements, the following terms shall have the meanings given to them
below, and the Loan Agreement shall be deemed and is hereby amended to include,
in addition and not in limitation, the following definitions:

(a)   ”Hanover 2005 Intercompany Transactions” shall mean, individually and
collectively, the contributions, assumption and transactions effected under the
Hanover 2005 Intercompany Transaction Agreements.

(b)  “Hanover 2005 Intercompany Transaction Agreements” shall mean,
collectively, the agreements, documents and instruments listed in Schedule 1
hereto and all related agreements, documents and instruments executed, delivered
or filed in connection with, or otherwise evidencing, each of the transactions
consented to in Section 3 hereof as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

(c)  “HDMI” shall mean Hanover Direct Memberships, Inc., a Delaware corporation,
and its successors and assigns.

(d)  “Scandia Online” shall mean Scandia Down Online, LLC, a Delaware limited
liability company, and its successors and assigns.

(e)  “Wachovia” shall mean Wachovia Bank, National Association, as successor by
merger to Congress.

1.2

Amendments to Definitions.

(a)  Guarantors. All references to the term “Guarantor” or “Guarantors” in the
Loan Agreement and the other Financing Agreements shall be deemed and each such
reference is hereby amended to include, in addition and not in limitation, HDMI
and Scandia Online.

1.3        Interpretation. All capitalized terms used herein and not defined
herein shall have the meanings given to such terms in the Loan Agreement.

 

 

 

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2.

Amendments and Modifications to Loan Agreement.

 

 

2.1

Intercompany Contributions and Disbursements.

(a)  Notwithstanding anything to the contrary contained in Sections 6.5, 6.6 and
6.9 of the Loan Agreement or the other Financing Agreements, Borrowers and
Guarantors may contribute, sell, transfer or assign assets and properties of a
Borrower or Guarantor to another Borrower or Guarantor so long as (i) such
Borrower or Guarantor sends Lender five (5) days’ prior written notice of the
intention of such Borrower or Guarantor to effect such contribution describing
the proposed transaction, (ii) no Event of Default exists or has occurred and is
continuing, (iii) in the case of any contribution of an asset from a Borrower to
another Borrower, any Collateral attributable to any Loans made to the Borrower
that is transferring such Collateral to the other Borrower, such Loans shall be
assumed by the Borrower that is the assignee of such Collateral, and (iv) in the
case of any contribution of an asset from a Borrower to a Guarantor, any
Collateral attributable to any Loans made to the Borrower that is transferring
such Collateral to the Guarantor, (A) such Loans shall be repaid in full in cash
other immediately available funds on terms and conditions acceptable to Lender
or (B) such Guarantor shall be added as a Borrower on terms and conditions
acceptable to Lender.

(b)  Notwithstanding anything to the contrary contained in Sections 6.5, 6.6 6.9
of the Loan Agreement or the other Financing Agreements, Borrowers and
Guarantors may make payments of intercompany indebtedness owed by a Borrower or
Guarantor to another Borrower or Guarantor so long as (i) such Borrowers or
Guarantors send Lender five (5) days’ prior written notice of the intention of
such Borrowers or Guarantors to effect such contribution describing the proposed
payment, (ii) no Event of Default exists or has occurred and is continuing,
(iii) such payment shall constitute and be deemed a repayment of valid
intercompany indebtedness and (iv) such payments remain subject to the terms and
conditions of the Intercompany Subordination Agreement.

 

2.2

Surety Bonds.

(a)  Notwithstanding anything to the contrary contained in Section 6.3 or 6.4 of
the Loan Agreement, Borrowers and Guarantors may incur Indebtedness, and liens
or encumbrances securing such Indebtedness, in connection with the issuance of
surety bounds on behalf of Borrowers and Guarantors in the ordinary course of
business of such Borrowers and Guarantors; provided, that:

(i) the amount of such Indebtedness for all Borrowers and Guarantors at any one
time shall not exceed $500,000 in the aggregate;

(ii) such Borrower or Guarantor send Lender five (5) days’ prior written notice
of the intention of such Borrowers or Guarantor to arrange for the issuance of
such surety bonds setting forth the amount of the proposed bond and a
description of the transaction, and

(iii) no Event of Default exists or has occurred and is continuing.

If at any time an Event of Default exists or has occurred and is continuing,
Lender may require

 

 

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Borrower to eliminate the surety bond unless the person issuing such surety bond
has agreed to waive or subordinate in writing in favor of Lender any right to
payment of amounts owing to it.

 

3.    EBITDA. Sections 6.28 (c) of the Loan Agreement are hereby deleted in
their entirety and replaced with the following:

(c) Hanover and its Subsidiaries shall not, as to any fiscal quarter during the
fiscal year 2006 of Hanover and its Subsidiaries and for each fiscal quarter
thereafter in any fiscal year thereafter, permit EBITDA of Hanover and its
Subsidiaries commencing on the first day of such fiscal year and ending on the
last day of the applicable fiscal quarter set forth below on a cumulative YTD
basis to be less than the respective amount set forth below opposite such fiscal
quarter end YTD period:

 

Fiscal Quarter

End YTD Periods

for Fiscal Year 2006 

 

Cumulative

Minimum EBITDA

 

(i)           January 1, 2006 through April 1, 2006

$360,000

(ii)         January 1, 2006 through July 1, 2006

$3,600,000

(iii)        January 1, 2006 through September 30, 2006

$8,640,000

(iv)        January 1, 2006 through December 30, 2006

$13,950,000”

 

 

4.    Consents to Hanover 2005 Intercompany Transactions. Subject to the terms
and conditions contained herein and in the Loan Agreement and in the other
Financing Agreements, and notwithstanding anything to the contrary contained in
Section 6.5, 6.6 or 6.7 of the Loan Agreement, to the extent such consent may be
needed, Lender hereby consents, effective upon the earlier of the date hereof or
the effective date of the applicable transaction of the Hanover 2005
Intercompany Transactions, to the following transactions:

4.1        the contribution by CSG LLC of the intercompany receivable payable by
The Horn & Hardart Company, Inc. to CSG LLC in the amount of $330,025.73 and the
cancellation of indebtedness owed by Horn & Hardart Company, Inc. to CSG LLC in
the amount of $330,025.73 so long as such cancellation constitutes repayment of
valid intercompany indebtedness;

4.2        the contribution by CSG LLC of the intercompany receivable payable by
Hanover Realty to CSG LLC in the amount of $12,266,077.73 and the cancellation
of indebtedness owed by Hanover Realty to CSG LLC in the amount of
$12,266,077.73 so long as such cancellation constitutes repayment of valid
intercompany indebtedness;

4.3        the declaration and payment by Hanover Gifts to CSG LLC of a dividend
of in the amount of $175,000 in the form of an intercompany receivable payable
by CSG LLC to

 

 

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Hanover Gifts in the amount of $175,000 so long as such intercompany receivable
constitutes valid intercompany indebtedness and such indebtedness is cancelled;
and

4.4        the dissolution of LaCrosse LLC by reason of the merger of LaCrosse
LLC with and into CSG LLC, with CSG LLC as the surviving corporation of such
merger.

5.    Assumption of Obligations; Amendments to Guarantees and Financing
Agreements. Effective as of the earlier of the date hereof or effective date of
completion of the Hanover 2005 Intercompany Transactions as to the respective
parties thereto:

5.1        Each of HDMI and Scandia Online hereby expressly (a) assumes and
agrees to be directly liable for all Obligations under, contained in, or arising
out of the Loan Agreement, the Guarantee dated July 8, 2004 by Existing
Guarantors (other than Hanover and Existing Borrowers) as of such date in favor
of Lender, as heretofore amended, and the other Financing Agreements applicable
to all Guarantors and as applied to HDMI and Scandia Online as a Guarantor, (b)
agrees to perform, comply with and be bound by all terms, conditions and
covenants of the Loan Agreement, the Guarantee and the other Financing
Agreements applicable to all Guarantors and as applied to HDMI and Scandia
Online as a Guarantor with the same force and effect as if each of HDMI and
Scandia Online had originally executed and been an original Guarantor or Debtor,
as the case may be, party signatory to the Loan Agreement, the Guarantee and the
other Financing Agreements, and (c) agrees that Lender shall have all rights,
remedies and interests, including security interests in the Guarantor Collateral
granted pursuant to the Loan Agreement, the Guarantee, and the other Financing
Agreements, with respect to each of HDMI and Scandia Online and its and assets
with the same force and effect as if each of HDMI and Scandia Online had
originally executed and had been an original Guarantor or Debtor, as the case
may be, party signatory to the Loan Agreement, the Guarantee and the other
Financing Agreements, and such agreements shall be deemed so amended.

5.2        The Guarantee dated July 8, 2004, executed by the Existing Guarantors
(other than Hanover and the Existing Borrowers) as of such date, in favor of
Lender, as heretofore amended (the “Guarantee”), shall be deemed further amended
to include each of HDMI and Scandia Online as an additional Guarantor party
signatory thereto. Each of HDMI and Scandia Online hereby expressly (a) assumes
and agrees to be directly liable to Lender, jointly and severally with the other
Guarantors signatories thereto and the Borrowers, for all Obligations (as
defined in the Guarantee), (b) agrees to perform, comply with and be bound by
all terms, conditions and covenants of the Guarantee with the same force and
effect as if each of HDMI and Scandia Online had originally executed and been an
original party signatory to the Guarantee, and (c) agrees that Lender shall have
all rights, remedies and interests with respect to each of HDMI and Scandia
Online and its properties with the same force and effect as if each of HDMI and
Scandia Online had originally executed and been an original party signatory to
the Guarantee.

5.3        Each Guarantor and each of HDMI and Scandia Online as a Guarantor
pursuant hereto, hereby expressly and specifically ratifies, restates and
confirms the terms and conditions of the Guarantee in favor of Lender and its
liability for all of the Obligations (as defined in the Guarantee), and all
other obligations, liabilities, agreements and covenants thereunder.

 

 

 

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5.4        Each Guarantor, including, without limitation, each of HDMI and
Scandia Online, hereby agrees that all references to Guarantor or Guarantors or
other terms intended to refer to a Guarantor or Guarantors, such as Debtor or
Debtors, contained in any of the Financing Agreements are hereby amended to
include each of HDMI and Scandia Online and each other person or entity at any
time hereafter made a “Guarantor” under the Loan Agreement, as an additional
Guarantor or Debtor, or other appropriate term of similar import, as the case
may be.

6.

Collateral.

6.1        Grant of Security Interest. Without limiting the provisions of
Section 5 hereof, the Loan Agreement and the other Financing Agreements, to
secure payment and performance of all Obligations, each of HDMI and Scandia
Online hereby grants to Lender a continuing security interest in, a lien upon,
and a right of set off against, and hereby assigns to Lender as security, all
personal and real property and fixtures, and interests in property and fixtures,
of HDMI and Scandia Online, whether now owned or hereafter acquired or existing,
and wherever located including without limitation the following (together with
all other collateral security for the Obligations at any time granted to or held
or acquired by Lender, collectively, the “Collateral”):

(a)

all Accounts;

 

(b)

all general intangibles, including, without limitation, all Intellectual
Property;

(c)

all goods, including, without limitation, Inventory and Equipment;

 

(d)

all Real Property and fixtures;

 

(e)  all chattel paper, including, without limitation, all tangible and
electronic chattel paper;

(f)

all instruments, including, without limitation, all promissory notes;

(g)

all documents;

 

(h)

all deposit accounts;

 

(i)   all letters of credit, banker’s acceptances and similar instruments and
including all letter-of-credit rights;

(j)   all supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of
Receivables and other Collateral, including (A) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (B) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (C) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (D) deposits by and property of Account Debtors or
other persons securing the obligations of Account Debtors;

 

 

 

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(k)  all (A) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts
or commodity accounts) and (B) monies, credit balances, deposits and other
property of HDMI or Scandia Online now or hereafter held or received by or in
transit to Lender or its Affiliates or at any other depository or other
institution from or for the account of HDMI or Scandia Online, whether for
safekeeping, pledge, custody, transmission, collection or otherwise;

(l)

all commercial tort claims;

 

(m)

to the extent not otherwise described above, all Receivables;

(n)

all Records; and

 

(o)  all products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Collateral.

Notwithstanding the foregoing, the Collateral does not include any leasehold
interests of HDMI or Scandia Online in real property.

6.2        Acknowledgment. Each Borrower and Guarantor hereby acknowledges,
confirms and agrees that on the date hereof, the security interests in and liens
upon the assets and properties of each Borrower and Existing Guarantor in favor
of Lender shall continue to be, and the security interests in and liens upon the
assets and properties of HDMI and Scandia Online in favor of Lender shall be,
valid and perfected liens and security interests.

7.    Acknowledgment regarding Dissolution of LaCrosse LLC. Each of Borrowers
and Guarantors hereby acknowledges, confirms and agrees that, upon the
effectiveness of the dissolution of LaCrosse LLC consented to under Section 4.4
hereof:

7.1        CSG LLC, as the surviving corporation pursuant to the merger of
LaCrosse LLC with and into CSG LLC, has continued and shall continue to be
directly and primarily liable in all respects for the Obligations of LaCrosse
LLC arising prior to the effective time of such merger;

7.2        the dissolution of LaCrosse LLC shall not in any way limit, impair or
adversely affect the Obligations now or hereafter owed to Lender by any
continuing Borrower or Guarantor; and

7.3        Lender shall continue to have valid and perfected security interests,
liens and rights in and to all of the assets and properties owned and acquired
by CSG LLC as the surviving corporation of the merger of LaCrosse LLC with and
into CSG LLC. Such assets and properties shall continue to be deemed included in
the Collateral, and such security interests, liens and rights and their
perfection and priorities shall continue in all respects in full force and
effect.

8.    Representations, Warranties and Covenants. Borrowers and Guarantors
represent, warrant and covenant with and to Lender as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, the truth and

 

 

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accuracy of, or compliance with each, together with the representations,
warranties and covenants in the other Financing Agreements, being a condition of
the effectiveness of this Amendment and a continuing condition of the making or
providing of any Revolving Loans or Letter of Credit Accommodations by Lender to
Borrowers:

 

8.1           This Amendment and each other agreement or instrument to be
executed and delivered by Borrowers or Guarantors hereunder have been duly
authorized, executed and delivered by all necessary action on the part of
Borrowers and Guarantors which is a party hereto and thereto and, if necessary,
their respective stockholders (with respect to any corporation) or members (with
respect to any limited liability company), and is in full force and effect as of
the date hereof, as the case may be, and the agreements and obligations of
Borrowers or Guarantors, as the case may be, contained herein and therein
constitute legal, valid and binding obligations of Borrowers and Guarantors, as
the case may be, enforceable against them in accordance with their terms.

8.2           No action of, or filing with, or consent of any governmental or
public body or authority, and no approval or consent of any other party, other
than Chelsey, is required to authorize, or is otherwise required in connection
with, the execution, delivery and performance of this Amendment and each other
agreement or instrument to be executed and delivered pursuant hereto.Neither the
execution and delivery of the Hanover 2005 Intercompany Transaction Agreements,
nor the consummation of the transactions contemplated by the Hanover 2005
Intercompany Transaction Agreements, nor compliance with the provisions of the
Hanover 2005 Intercompany Transaction Agreements, shall result in the creation
or imposition of any lien, claim, charge or encumbrance upon any of the
Collateral or Guarantor Collateral, except in favor of Lender pursuant to this
Amendment and the Financing Agreements as amended hereby.

8.3           Neither the execution and delivery of the Hanover 2005
Intercompany Transaction Agreements, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof, (a)has
violated or shall violate any Bulk Sales Act, Bulk Transfer Act or Article 6 of
the UCC, if applicable, the Hart-Scott-Rodino Anti-Trust Improvements Act of
1976, as amended, if applicable, or any Federal or State securities laws or any
other law or regulation or any order or decree of any court or governmental
instrumentality in any respect or (b)does, or shall conflict with or result in
the breach of, or constitute a default in any respect under any material
mortgage, deed of trust, security agreement, agreement or instrument to which
any of Borrowers or Guarantor is a party or may be bound, other than conflicts
or defaults under certain real estate leases, intellectual property licenses and
equipment leases, or (c)shall violate any provision of the Certificate of
Incorporation or Certificate of Formation, as applicable, or By-Laws or
Operating Agreement, as applicable, of any Borrower or Guarantor.

8.4           None of the membership interests in Scandia Online have been
evidenced by a membership certificate or other certificate, document, instrument
or security. All of the membership interests in Scandia Online (a) are noted in
the respective books and records of each such company, (b) have been duly
authorized, validly issued and (c) are fully paid and non-assessable, free and
clear of all claims, liens, pledges and encumbrances of any kind, except those
security interests existing in favor of Lender and those permitted by the Loan
Agreement.

 

 

 

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8.5           All of the outstanding shares of capital stock of HDMI have been
duly authorized, validly issued and are fully paid and non-assessable, free and
clear of all claims, liens, pledges and encumbrances of any kind, except those
security interests existing in favor of Lender and those permitted by the Loan
Agreement.

8.6            As of the date hereof, (i) Scandia Online is a limited liability
company, duly formed and validly existing in good standing under the laws of the
State of Delaware, and HDMI is a corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware and (ii) each
of Scandia Online and HDMI (A) is duly licensed or qualified to do business as a
foreign limited liability company or foreign corporation, as the case may be,
and is in good standing in each of the jurisdictions set forth in Exhibit A
annexed hereto other than in any such jurisdiction which is designated as
“pending”, which are the all the jurisdictions wherein the character of the
properties owned or licensed or the nature of the business of Scandia Online or
HDMI makes such licensing or qualification to do business necessary and the
failure to so qualify would have a material adverse effect on Scandia Online or
HDMI or on the rights and interests of Lender in the Collateral; and (B) has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted and will be conducted in the
future.

8.7           The assets and properties of each of HDMI and Scandia Online are
owned by it, free and clear of all security interests, liens and encumbrances of
any kind, nature or description, as of the date hereof, except those security
interests existing in favor of Lender and those granted pursuant hereto in favor
of Lender, and except for Liens (if any) permitted under Section 6.4 of the Loan
Agreement or the other Financing Agreements.

8.8           All actions and proceedings required by the Hanover 2005
Intercompany Transaction Agreements, applicable law and regulation, have been or
shall be taken prior to the effectiveness of such transactions and all
transactions required thereunder have been and shall be, or will be duly and
validly consummated.

8.9           Neither the consummation of the transactions contemplated by the
Hanover 2005 Intercompany Transaction, nor the execution, delivery or filing of
the Hanover 2005 Intercompany Transaction Agreements or any other agreements,
documents or instruments in connection therewith, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
before the date hereof or upon the effectiveness of such mergers (i) has
violated or will violate any Federal or State securities laws, any State
corporation law, or any other law or regulation or any order or decree of any
court or governmental instrumentality in any respect, or (ii) does or will
conflict with or result in the breach of, or constitute a default in any respect
under any material mortgage, deed of trust, security agreement, agreement or
instrument to which any existing or former Guarantor or Borrower is a party or
may be bound, other than conflicts or defaults under certain real estate leases,
intellectual property licenses and equipment leases, or (iii) does or will
violate any provision of the Certificate of Incorporation or Certificate of
Formation, as applicable, or By-Laws or Operating Agreement, as applicable, of
any Borrower or Guarantor.

8.10         No action of, or filing with, or consent of any governmental or
public body or authority, other than the filing of UCC financing statements, and
no approval or consent of

 

 

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any other party, is required to authorize, or is otherwise required in
connection with, the execution, delivery and performance of this Amendment.

8.11         All of the representations and warranties set forth in the Loan
Agreement as amended hereby, and the other Financing Agreements, are true and
correct in all material respects after giving effect to the provisions of this
Amendment, except to the extent any such representation or warranty is made as
of a specified date, in which case such representation or warranty shall have
been true and correct as of such date.

8.12         After giving effect to the waivers and consents set forth in this
Amendment, no Incipient Default or Event of Default exists or has occurred on
the date hereof.

 

9.    Conditions Precedent. Concurrently with the execution and delivery hereof
(except to the extent otherwise indicated below), and as a further condition to
the effectiveness of this Amendment and the agreement of Lender to the
modifications and amendments set forth in this Amendment:

9.1    Lender shall have received a photocopy of an executed original or
executed original counterparts of this Amendment by electronic mail or facsimile
(with the originals to be delivered within five (5) Business Days after the date
hereof), as the case may be, duly authorized, executed and delivered by
Borrowers and Guarantors;

9.2    Lender shall have received a photocopy of an executed original or
executed original counterparts of the Guarantee and Waiver by HDMI and Scandia
Online in favor of Lender with respect to the Obligations of Borrowers by
electronic mail or facsimile (with the originals to be delivered within five (5)
Business Days after the date hereof), as the case may be, duly authorized,
executed and delivered by Borrowers and Guarantors;

9.3    Within sixty (60) days after the date hereof, Lender shall have received,
in form and substance satisfactory to Lender, from HDMI, a secretary’s
certificate evidencing the adoption and subsistence of corporate resolutions
approving the execution, delivery and performance by HDMI of this Amendment and
the agreements, documents and instruments to be delivered pursuant to this
Amendment;

9.4    Within sixty (60) days after the date hereof, Lender shall have received
from HDMI (a)a copy of the Certificate of Incorporation for HDMI, and all
amendments thereto, certificated by the Secretary of State of its jurisdiction
of incorporation as of the most recent practicable date certifying that each of
the foregoing documents remains in full force and effect and has not been
modified or amended, except as described therein, (b)a copy of its bylaws,
certified by the Secretary of HDMI, and (c)a certificate from the Secretary of
HDMI dated the date hereof certifying that each of the foregoing documents
remains in full force and effect and have not been modified or amended, except
as described therein;

9.5    Within sixty (60) days after the date hereof, Lender shall have received
from Scandia Online (i) a copy of its Certificate of Formation or Articles of
Organization, and all amendments thereto, certified by the Secretary of State of
the State of Delaware as of the most

 

 

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recent practicable date certifying that each of the foregoing documents remains
in full force and effect and has not been modified or amended, except as
described therein, (ii) a copy of its Operating Agreement, certified by the
Secretary or Assistant Secretary of the company, and (iii) a certificate from
its Secretary or Assistant Secretary dated the date hereof certifying that each
of the foregoing documents remains in full force and effect and has not been
modified or amended, except as described therein;

9.6    Within sixty (60) days after the date hereof, Lender shall have received
original good standing certificates (or its equivalent) from the Secretary of
State (or comparable official) from each jurisdiction where HDMI and Scandia
Online conducts business; and

9.7    each Borrower and Guarantor shall deliver, or cause to be delivered, to
Lender a true and correct copy of any consent, waiver or approval to or of this
Amendment, which any Borrower or Guarantor is required to obtain from any other
Person, and such consent, approval or waiver shall be in a reasonably acceptable
to Lender; and

9.8        As of the date of this Amendment and after giving effect hereto, no
Incipient Default or Event of Default shall exist or have occurred.

10.          Effect of this Amendment. This Amendment constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior oral or written communications, memoranda, proposals,
negotiations, discussions, term sheets and commitments with respect to the
subject matter hereof. Except as expressly provided herein, no other changes or
modifications to the Loan Agreement or any of the other Financing Agreements, or
waivers of or consents under any provisions of any of the foregoing, are
intended or implied by this Amendment, and in all other respects the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. To the extent that any provision
of the Loan Agreement or any of the other Financing Agreements conflicts with
any provision of this Amendment, the provision of this Amendment shall control.

11.  Further Assurances. Borrowers and Guarantors shall execute and deliver such
additional documents and take such additional action as may be reasonably
requested by Lender to effectuate the provisions and purposes of this Amendment.

12.  Governing Law. The validity, interpretation and enforcement of this
Amendment in any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise shall be governed by the
internal laws of the State of New York, without regard to any principle of
conflict of laws or other rule of law that would result in the application of
the law of any jurisdiction other than the State of New York.

13.  Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.

 

 

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14.  Counterparts. This Amendment may be executed in any number of counterparts,
but all of such counterparts shall together constitute but one and the same
agreement. In making proof of this Amendment, it shall not be necessary to
produce or account for more than one counterpart thereof signed by each of the
parties hereto.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
on the day and year first written.

 

 

CHELSEY FINANCE, LLC

 

 

 

By:

/s/ William Wachtel

 

Name:

William Wachtel

 

Title:

Manager

 

 

 

 

 

 

 

THE COMPANY STORE FACTORY, INC.

THE COMPANY OFFICE, INC.

 

 

 

By:

/s/ John Swatek

 

Name:

John Swatek

 

Title:

Senior Vice President &

Chief Financial Officer

 

 

 

 

 

 

 

BRAWN, LLC

SILHOUETTES, LLC

HANOVER COMPANY STORE, LLC

DOMESTICATIONS, LLC

KEYSTONE INTERNET SERVICES, LLC

THE COMPANY STORE GROUP, LLC

 

 

 

By:

/s/ John Swatek

 

Name:

John Swatek

 

Title:

Senior Vice President &

Chief Financial Officer

 

 

 

 

 

 

By their signatures below, the undersigned Guarantors acknowledge and agree to
be bound by the applicable provisions of this Amendment:

 

 

 

 

HANOVER DIRECT, INC.

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Chief Executive Officer

 

 

 

 

 

14

 

 

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

CLEARANCE WORLD OUTLETS, LLC

SCANDIA DOWN, LLC

D.M. ADVERTISING, LLC

AMERICAN DOWN & TEXTILE, LLC

 

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Manager

 

 

 

 

 

 

 

 

 

 

HANOVER GIFTS, INC.

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Chairman

 

 

 

 

 

 

 

 

 

 

SCANDIA ONLINE, LLC

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Manager

 

 

 

 

 

 

 

 

 

 

HANOVER DIRECT MEMBERSHIPS, INC.

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Chairman

 

 

 

 

 

 

 

 

 

 

THE COMPANY STORE GROUP, LLC, successor

by merger to LA CROSSE FULFILLMENT, LLC

 

 

 

 

 

By:

/s/ Wayne P.Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Manager

 

 

 

 

 

 

15