Exhibit 10.90

FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of August 10, 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”), D.M. ADVERTISING, LLC, a Delaware limited liability
company (“DM Advertising LLC”), AMERICAN DOWN & TEXTILE, LLC, a Delaware limited
liability company (“ADT LLC”), HANOVER GIFTS, INC., a Virginia corporation
(“Hanover Gifts”) and HANOVER DIRECT MEMBERSHIPS, INC., a Delaware corporation
(“HDMI”), 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 revise the amounts
of EBITDA that Borrowers are required to maintain in the third and fourth fiscal
quarters of the fiscal year ending December 30, 2006;

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:

 

 

 

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1.    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

$4,500,000

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

$9,000,000”

 

 

2.    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 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:

 

2.1           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.

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

2.3           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

 

 

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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.

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.2.4      

3.    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:

3.1           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;

3.2           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

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

4.    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.

5.    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.

6.    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.

 

 

 

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7.    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.

8.    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

 

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

 

 

 

 

 

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

 

 

 

CLEARANCE WORLD OUTLETS, LLC

SCANDIA DOWN, LLC

D.M. ADVERTISING, LLC

AMERICAN DOWN & TEXTILE, LLC

SCANDIA ONLINE, LLC

 

 

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Manager

 

 

 

 

 

 

 

 

 

 

HANOVER GIFTS, INC.

HANOVER DIRECT MEMBERSHIPS, INC.

 

 

 

 

 

By:

/s/ Wayne P. Garten

 

 

Name:

Wayne P. Garten

 

 

Title:

Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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