Exhibit 10.2

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT,

MARKED BY [***], HAS BEEN OMITTED PURSUANT TO REGULATION S-K, ITEM 601(b)(10)
BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE
REGISTRANT IF PUBLICLY DISCLOSED.

 

 

CREDIT AGREEMENT

 

Dated as of February 27, 2020,

 

among

 

CHRISTOPHER & BANKS CORPORATION,

 

as the Lead Borrower

 

For

 

The Borrowers Named Herein,

 

The Guarantors from time to time party hereto, and

 

ALCC, LLC,

 

as Lender

 

 

 

 

 

Table of Contents

 

  Page Article I DEFINITIONS AND ACCOUNTING TERMS 1 1.01 Defined Terms 1 1.02
Other Interpretive Provisions 27 1.03 Accounting Terms 27 1.04 Rounding 28 1.05
Times of Day 28 1.06 [Reserved] 28 1.07 Currency Equivalents Generally 28 1.08
Divisions 28 Article II THE COMMITMENT AND LOANS 28 2.01 Delayed Draw Term Loans
28 2.02 [Reserved] 29 2.03 [Reserved] 29 2.04 Prepayments 29 2.05 [Reserved] 29
2.06 Repayment of Loans 29 2.07 Interest 30 2.08 Fees 30 2.09 Computation of
Interest and Fees 30 2.10 Evidence of Debt 30 2.11 Payments Generally 31 Article
III TAXES, YIELD PROTECTION AND ILLEGALITY;  APPOINTMENT OF LEAD BORROWER 31
3.01 Taxes 31 3.02 [Reserved] 32

 

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Table of Contents

 

    Page 3.03 [Reserved] 32 3.04 [Reserved] 32 3.05 [Reserved] 32 3.06
Mitigation Obligations; Replacement of Lender 32 3.07 Survival 32 3.08
Designation of Lead Borrower as Borrowers’ Agent 32 Article IV CONDITIONS
PRECEDENT TO LOANS 33 4.01 Conditions of Initial Delayed Draw Term Loan 33 4.02
Conditions to all Loans 35 Article V REPRESENTATIONS AND WARRANTIES 36 5.01
Existence, Qualification and Power 36 5.02 Authorization; No Contravention 36
5.03 Governmental Authorization; Other Consents 36 5.04 Binding Effect 37 5.05
Financial Statements; No Material Adverse Effect 37 5.06 Litigation 37 5.07 No
Default 38 5.08 Ownership of Property; Liens 38 5.09 Environmental Compliance 38
5.10 Insurance 39 5.11 Taxes 39 5.12 ERISA Compliance 39 5.13 Subsidiaries;
Equity Interests 40 5.14 Margin Regulations; Investment Company Act 40 5.15
Disclosure 41

 

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Table of Contents

 

    Page 5.16 Compliance with Laws 41 5.17 Intellectual Property; Licenses, Etc.
41 5.18 Labor Matters 41 5.19 Security Documents 42 5.20 Solvency 42 5.21
Deposit Accounts; Credit Card Arrangements 42 5.22 Brokers 43 5.23 Customer and
Trade Relations 43 5.24 Material Contracts 43 5.25 Casualty 43 5.26 OFAC;
Sanctions 43 Article VI AFFIRMATIVE COVENANTS 43 6.01 Financial Statements 43
6.02 Certificates; Other Information 44 6.03 Notices 46 6.04 Payment of
Obligations 47 6.05 Preservation of Existence, Etc. 47 6.06 Maintenance of
Properties 47 6.07 Maintenance of Insurance 47 6.08 Compliance with Laws 49 6.09
Books and Records; Accountants 49 6.10 Inspection Rights 49 6.11 Use of Proceeds
49 6.12 Additional Loan Parties 50 6.13 Cash Management 50

 

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Table of Contents

 

    Page 6.14 Information Regarding the Collateral 52 6.15 Physical Inventories
52 6.16 Environmental Laws 53 6.17 Further Assurances 53 6.18 Compliance with
Terms of Leaseholds 54 6.19 Material Contracts 54 6.20 OFAC; Sanctions 54 6.21
Credit Card Processors 55 Article VII NEGATIVE COVENANTS 55 7.01 Liens 55 7.02
Investments 55 7.03 Indebtedness; Disqualified Stock 55 7.04 Fundamental Changes
55 7.05 Dispositions 56 7.06 Restricted Payments 56 7.07 Prepayments of
Indebtedness 56 7.08 Change in Nature of Business 57 7.09 Transactions with
Affiliates 57 7.10 Burdensome Agreements 57 7.11 Use of Proceeds 57 7.12
Amendment of Material Documents 57 7.13 Fiscal Year 58 7.14 Deposit Accounts;
Credit Card Processors 58 7.15 Financial Covenants 58 (a)   58 (b)   58

 

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Table of Contents

 

  Page Article VIII EVENTS OF DEFAULT AND REMEDIES 58 8.01 Events of Default 58
8.02 Remedies Upon Event of Default 61 8.03 Application of Funds 61 Article IX
MISCELLANEOUS 62 9.01 Amendments, Etc. 62 9.02 Notices; Effectiveness;
Electronic Communications 62 9.03 No Waiver; Cumulative Remedies 63 9.04
Expenses; Indemnity; Damage Waiver 63 9.05 Payments Set Aside 64 9.06 Successors
and Assigns 64 9.07 Treatment of Certain Information; Confidentiality 66 9.08
Right of Setoff 66 9.09 Interest Rate Limitation 67 9.10 Counterparts;
Integration; Effectiveness 67 9.11 Survival 67 9.12 Severability 67 9.13
Governing Law; Jurisdiction; Etc. 67 9.14 Waiver of Jury Trial 68 9.15 No
Advisory or Fiduciary Responsibility 69 9.16 USA PATRIOT Act Notice 69 9.17
Foreign Asset Control Regulations 69 9.18 Time of the Essence 70 9.19 Publicity
70 9.20 Additional Waivers 70 9.21 No Strict Construction 71 9.22 Attachments 72

 

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SCHEDULES

 

1.01Borrowers 5.01Loan Parties Organizational Information 5.05Supplement to
Interim Financial Statements 5.06Litigation 5.08(b)(1)Owned Real Estate
5.08(b)(2)Leased Real Estate 5.09Environmental Matters 5.10Insurance
5.13Subsidiaries; Other Equity Investments 5.17Intellectual Property Matters
5.18Collective Bargaining Agreements 5.24Material Contracts 6.02Financial and
Collateral Reporting 7.01Existing Liens 7.02Existing Investments 7.03Existing
Indebtedness 7.09Affiliate Transactions 9.02Lender’s Office; Certain Addresses
for Notices

 

EXHIBITS

 

Form of

 

ARequest for Loan BNote CCompliance Certificate DAssignment and Assumption

 

 

 

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of February 27, 2020
among CHRISTOPHER & BANKS CORPORATION, a Delaware corporation (the “Lead
Borrower”), the Persons named on Schedule 1.01 hereto (collectively, the
“Borrowers”), the Persons from time to time party hereto as Guarantors
(collectively, the “Guarantors”), and ALCC, LLC, as lender (the “Lender”).

 

The Borrowers have requested that the Lender provide a term loan credit facility
in the maximum principal amount of up to $10,000,000 and the Lender is willing
to do so on the terms and subject to the conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

Article I
DEFINITIONS AND ACCOUNTING TERMS

 

1.01           Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:

 

“ACH” means automated clearing house transfers.

 

“Accommodation Payment” as defined in Section 9.20(d).

 

“Account” means “accounts” as defined in the UCC.

 

“Acquisition” means, with respect to any Person (a) an investment in, or a
purchase of, a Controlling interest in the Equity Interests of any other Person,
(b) a purchase or other acquisition of all or substantially all of the assets or
properties of another Person or of any business unit of another Person, (c) any
merger or consolidation of such Person with any other Person or other
transaction or series of transactions resulting in the acquisition of all or
substantially all of the assets, or a Controlling interest in the Equity
Interests, of any Person, or (d) any acquisition of any Store locations from any
Person (but not the opening of new individual Stores), in each case in any
transaction or group of transactions which are part of a common plan.

 

“Act” shall have the meaning provided in Section 9.16.

 

“Affiliate” means, with respect to any Person, (i) another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified, (ii) any director,
officer, managing member, partner, trustee, or beneficiary of that Person, (iii)
any other Person directly or indirectly holding twenty percent (20%) or more of
any class of the Equity Interests of that Person, and (iv) any other Person
twenty percent (20%) or more of any class of whose Equity Interests is held
directly or indirectly by that Person.

 

“Agreement” means this Credit Agreement.

 

“Allocable Amount” has the meaning specified in Section 9.20(d).

 

 

 

 

“Anti-Corruption Laws” means the FCPA and all other applicable laws and
regulations or ordinances concerning or relating to bribery, money laundering or
corruption in any jurisdiction in which any Loan Party or any of its
Subsidiaries or Affiliates is located or is doing business.

 

“Anti-Money Laundering Laws” means the applicable laws or regulations in any
jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is
located or is doing business that relates to money laundering, any predicate
crime to money laundering, or any financial record keeping and reporting
requirements related thereto.

 

“Approved Fund” means any Fund that is administered or managed by (a) the
Lender, (b) an Affiliate of the Lender, (c) an entity or an Affiliate of an
entity that administers or manages the Lender or (d) the same investment advisor
or an advisor under common control with the Lender, Affiliate or advisor, as
applicable.

 

“Assignment and Assumption” means an assignment and assumption entered into by
the Lender and an Eligible Assignee, in substantially the form of Exhibit D or
any other form approved by the Lender.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease Obligation of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease,
agreement or instrument were accounted for as a capital lease. Each lease that
would have been classified and accounted for as an operating lease under GAAP as
in effect on July 12, 2012 shall be excluded for purposes of the definition of
Attributable Indebtedness, notwithstanding that such lease may be classified and
accounted for as a capital lease after such date under GAAP due to the effect of
FAS 13/ASC 840.

 

“Audited Financial Statements” means the audited consolidated balance sheet of
the Lead Borrower and its Subsidiaries for the Fiscal Year ended February 2,
2019, and the related consolidated statements of income or operations,
Shareholders’ Equity and cash flows for such Fiscal Year of the Lead Borrower
and its Subsidiaries, including the notes thereto.

 

“Blocked Account” has the meaning provided in Section 6.13(a)(ii).

 

“Blocked Account Agreement” means with respect to an account established by a
Loan Party, an agreement, in form and substance satisfactory to the Lender,
establishing control (as defined in the UCC) of such account by the Lender or
Revolving Loan Lender, as applicable, and whereby the bank maintaining such
account agrees, upon receipt of notice from the Lender following the occurrence
and during the continuance of a Cash Dominion Event, to comply only with the
instructions originated by the Lender or Revolving Loan Lender, as applicable,
without the further consent of any Loan Party.

 

“Blocked Account Bank” means each bank with which deposit accounts are
maintained in which any funds of any of the Loan Parties from one or more DDAs
are concentrated and with whom a Blocked Account Agreement has been, or is
required to be, executed in accordance with the terms hereof or the Revolving
Loan Agreement, as applicable.

 

“Borrowers” has the meaning specified in the introductory paragraph hereto.

 

“Borrowing” means a borrowing consisting of a Loan pursuant to Section 2.01.

 

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“Business” means designing, sourcing, marketing and selling women’s apparel,
accessories, personal care products and fragrances.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of New York.

 

“Capital Expenditures” means, with respect to any Person for any period, (a) all
expenditures made (whether made in the form of cash or other property) or costs
incurred for the acquisition or improvement of fixed or capital assets of such
Person (excluding normal replacements and maintenance which are properly charged
to current operations), in each case that are (or should be) set forth as
capital expenditures in a Consolidated statement of cash flows of such Person
for such period, in each case prepared in accordance with GAAP, and (b) Capital
Lease Obligations incurred by a Person during such period.

 

“Capital Lease Obligations” means, with respect to any Person for any period,
the obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be classified and
accounted for as liabilities on a balance sheet of such Person under GAAP and
the amount of which obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

 

“Cash Dominion Event” has the meaning ascribed to such term under the Revolving
Loan Agreement as in effect on the Closing Date or as amended (including for
such purpose all amendments that may affect the determination thereof and giving
effect to any waiver or forbearance by the Revolving Loan Lender, in each case
in a manner permitted under the terms of the Intercreditor Agreement).

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. § 9601 et seq.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and
Liability Information System maintained by the United States Environmental
Protection Agency.

 

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

 

“Change of Control” means an event or series of events by which:

 

(a)               any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent, or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an
“option right”)), directly or indirectly, of forty percent (40%) or more of the
Equity Interests of the Lead Borrower entitled to vote for members of the board
of directors or equivalent governing body of the Lead Borrower on a
fully-diluted basis (and taking into account all such Equity Interests that such
“person” or “group” has the right to acquire pursuant to any option right); or

 

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(b)              during any period of twelve (12) consecutive months, a majority
of the members of the board of directors or other equivalent governing body of
the Lead Borrower cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

 

(c)               any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Lead Borrower, or control over
the Equity Interests of the Lead Borrower entitled to vote for members of the
board of directors or equivalent governing body of the Lead Borrower on a
fully-diluted basis (and taking into account all such securities that such
Person or Persons have the right to acquire pursuant to any option right)
representing forty percent (40%) or more of the combined voting power of such
securities; or

 

(d)               any “change in control” or “sale” or “disposition” or similar
event as defined in any Organization Document of any Loan Party; or

 

(e)               the Lead Borrower fails at any time to own, directly or
indirectly, one hundred percent (100%) of the Equity Interests of each other
Loan Party free and clear of all Liens (other than the Liens in favor of the
Lender pursuant to the Security Documents and the Revolving Loan Lender pursuant
to the Revolving Loan Documents), except where such failure is as a result of a
transaction permitted by the Loan Documents.

 

“Closing Date” means February 27, 2020.

 

“Code” means the Internal Revenue Code of 1986, and the regulations promulgated
thereunder, as amended and in effect.

 

“Collateral” means any and all “Collateral” as defined in any applicable
Security Document and all other property that is or is intended under the terms
of the Security Documents to be subject to Liens in favor of the Lender.

 

“Collateral Access Agreement” means an agreement reasonably satisfactory in form
and substance to the Lender executed by (a) a bailee or other Person in
possession of Collateral, or (b) any landlord of Real Estate leased by any Loan
Party, other than Stores, pursuant to which such Person (i) acknowledges the
Lender’s Lien on the Collateral, (ii) releases or subordinates such Person’s
Liens in the Collateral held by such Person or located on such Real Estate,
(iii) provides the Lender with access to the Collateral held by such bailee or
other Person or located in or on such Real Estate, (iv) as to any landlord,
provides the Lender with a reasonable time to sell and dispose of the Collateral
from such Real Estate, and (v) makes such other agreements with the Lender as
the Lender may reasonably require.

 

“Commitments” means the obligation of the Lender to make Delayed Draw Term Loans
to the Borrowers pursuant to Section 2.01 in an aggregate amount of $10,000,000.

 

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“Competitor” means a Person, other than a Loan Party, who directly provides
products or services that are the same or substantially similar to the products
or services provided by, and that constitute a material part of the business of,
the Loan Parties taken as a whole.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

“Concentration Account” has the meaning provided in Section 6.13(c).

 

“Consolidated” means, when used to modify a financial term, test, statement, or
report of a Person, the application or preparation of such term, test, statement
or report (as applicable) based upon the consolidation, in accordance with GAAP,
of the financial condition or operating results of such Person and its
Subsidiaries.

 

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Lead Borrower and its Subsidiaries on a
Consolidated basis for the most recently completed Measurement Period, plus (a)
the following to the extent deducted in calculating such Consolidated Net
Income: (i) Consolidated Interest Charges, (ii) the provision for Federal,
state, local and foreign income Taxes, (iii) depreciation and amortization
expense, (iv) non-cash stock compensation, (v) Pro Forma Cost Savings and (vi)
other non-recurring expenses reducing such Consolidated Net Income which do not
represent a cash item (in each case of or by Lead Borrower and its Subsidiaries
for such Measurement Period), minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local and foreign
income tax credits and (ii) all non-recurring, non-cash items increasing
Consolidated Net Income (in each case of or by Lead Borrower and its
Subsidiaries for such Measurement Period), all as determined on a Consolidated
basis in accordance with GAAP.

 

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs
under Swap Contracts, but excluding any non-cash or deferred interest financing
costs, (b) all interest paid or payable with respect to discontinued operations
and (c) the portion of rent expense with respect to such period under Capital
Lease Obligations that is treated as interest in accordance with GAAP, in each
case of or by Lead Borrower and its Subsidiaries for such Measurement Period,
all as determined on a Consolidated basis in accordance with GAAP.

 

“Consolidated Net Income” means, as of any date of determination, the net income
of Lead Borrower and its Subsidiaries for the most recently completed
Measurement Period, all as determined on a Consolidated basis in accordance with
GAAP; provided, however, that there shall be excluded therefrom (a)
extraordinary gains and extraordinary losses for such Measurement Period, (b)
the income (or loss) of such Person during such Measurement Period in which any
other Person has a joint interest, except to the extent of the amount of cash
dividends or other distributions actually paid in cash to such Person during
such period, (c) the income (or loss) of any Person during such Measurement
Period accrued prior to the date it becomes a Subsidiary of the Lead Borrower or
any of its Subsidiaries or is merged into or consolidated with the Lead Borrower
or any of its Subsidiaries or that Person’s assets are acquired by the Lead
Borrower or any of its Subsidiaries, and (d) the income of any direct or
indirect Subsidiary of a Person to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its Organization Documents or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, except that Lead
Borrower’s equity in any net loss of any such Subsidiary for such Measurement
Period shall be included in determining Consolidated Net Income.

 

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“Contractual Obligation” means, as to any Person, any provision of any
agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Card Issuer” means any person (other than a Borrower or other Loan
Party) who issues or whose members issue credit cards, including, without
limitation, MasterCard or VISA bank credit or debit cards or other bank credit
or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc.
or Visa International and American Express, Discover, Diners Club, Carte
Blanche, World Financial Bank, and other non-bank credit or debit cards,
including, without limitation, credit or debit cards issued by or through
American Express Travel Related Services Company, Inc., and Novus Services, Inc.
and other issuers approved by the Lender.

 

“Credit Card Processor” means any servicing or processing agent or any factor or
financial intermediary who facilitates, services, processes or manages the
credit authorization, billing transfer and/or payment procedures with respect to
any Borrower’s sales transactions involving credit card or debit card purchases
by customers using credit cards or debit cards issued by any Credit Card Issuer.

 

“Credit Card Notifications” has the meaning provided in Section 6.13(a)(i)

 

“Credit Party” or “Credit Parties” means (a) individually, (i) the Lender and
its Affiliates, (ii) any beneficiary of each indemnification obligation
undertaken by any Loan Party under any Loan Document, (iii) any other Person to
whom Obligations under this Agreement and other Loan Documents are owing, and
(iv) the successors and assigns of each of the foregoing, and (b) collectively,
all of the foregoing.

 

“Credit Party Expenses” means, without limitation, (a) all reasonable
out-of-pocket expenses incurred by the Lender and its Affiliates, in connection
with this Agreement and the other Loan Documents, including without limitation
(i) the reasonable fees, charges and disbursements of (A) counsel for the
Lender, (B) outside consultants for the Lender, (C) appraisers, (D) commercial
finance examinations, and (E) all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of the Obligations, (ii)
in connection with (A) the preparation, negotiation, administration, management,
execution and delivery of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (B) the
enforcement or protection of their rights in connection with this Agreement or
the Loan Documents or efforts to preserve, protect, collect, or enforce the
Collateral, or (C) any workout, restructuring or negotiations in respect of any
Obligations; and (b) all customary fees and charges (as adjusted from time to
time) of Lender with respect to the disbursement of funds (or the receipt of
funds) to or for the account of Loan Parties (whether by wire transfer or
otherwise), together with any out-of-pocket costs and expenses incurred in
connection therewith.

 

“DDA” means each checking, savings or other demand deposit account maintained by
any of the Loan Parties. All funds in each DDA shall be conclusively presumed to
be Collateral and proceeds of Collateral and the Lender shall have no duty to
inquire as to the source of the amounts on deposit in any DDA.

 

“DDA Notification” has the meaning provided therefor in Section 6.13(a)(iii).

 

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“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Delayed Draw Term Loan” has the meaning specified in Section 2.01.

 

“Delayed Draw Availability Termination Date” means the date that is the second
anniversary of the Closing Date.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (whether in one transaction or in a series of transactions, and
including any sale and leaseback transaction and any sale, transfer, license or
other disposition) of any property (including, without limitation, any Equity
Interests) by any Person (or the granting of any option or other right to do any
of the foregoing), including any sale, assignment, transfer or other disposal,
with or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.

 

“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is ninety-one (91)
days after the date on which the Loans mature; provided, however, that (i) only
the portion of such Equity Interests which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such date shall be deemed to be Disqualified
Stock and (ii) with respect to any Equity Interests issued to any employee or to
any plan for the benefit of employees of the Lead Borrower or its Subsidiaries
or by any such plan to such employees, such Equity Interest shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Lead Borrower or one of its Subsidiaries in order to satisfy applicable
statutory or regulatory obligations or as a result of such employee’s
termination, resignation, death or disability and if any class of Equity
Interest of such Person that by its terms authorizes such Person to satisfy its
obligations thereunder by delivery of an Equity Interest that is not
Disqualified Stock, such Equity Interests shall not be deemed to be Disqualified
Stock. Notwithstanding the preceding sentence, any Equity Interest that would
constitute Disqualified Stock solely because the holders thereof have the right
to require a Loan Party to repurchase such Equity Interest upon the occurrence
of a change of control or an asset sale shall not constitute Disqualified Stock.
The amount of Disqualified Stock deemed to be outstanding at any time for
purposes of this Agreement will be the maximum amount that the Lead Borrower and
its Subsidiaries may become obligated to pay upon maturity of, or pursuant to
any mandatory redemption provisions of, such Disqualified Stock or portion
thereof, plus accrued dividends.

 

“Dollars” and “$” mean lawful money of the United States.

 

“Eligible Assignee” means (a) a Credit Party or any of its Affiliates; (b) a
bank, insurance company, or company engaged in the business of making commercial
loans, which Person, together with its Affiliates, has a combined capital and
surplus in excess of $1,000,000,000; (c) an Approved Fund; (d) any Person to
whom a Credit Party assigns its rights and obligations under this Agreement as
part of an assignment and transfer of such Credit Party’s rights in and to a
material portion of such Credit Party’s portfolio of term loan credit
facilities, and (e) any other Person (other than a natural person) approved by
(i) the Lender, and (ii) unless a Default or Event of Default has occurred and
is continuing, the Lead Borrower (each such approval not to be unreasonably
withheld or delayed); provided, that notwithstanding the foregoing, “Eligible
Assignee” shall not include a Loan Party or any of the Loan Parties’ Affiliates,
Subsidiaries or (other than after the occurrence and during the continuance of a
Specified Event of Default) Competitors.

 

-7- 

 

 

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental Liability” means any liability, obligation, damage, loss, claim,
action, suit, judgment, order, fine, penalty, fee, expense, or cost, contingent
or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal or presence of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Equipment” has the meaning set forth in the UCC.

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Lead Borrower within the meaning of Section 414(b)
or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Lead Borrower or any 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 Lead 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 Lead
Borrower or any ERISA Affiliate.

 

-8- 

 

 

“Event of Default” has the meaning specified in Section 8.01. An Event of
Default shall be deemed to be continuing unless and until that Event of Default
has been duly waived as provided in Section 9.01 hereof.

 

“Excluded Taxes” means, with respect to the Lender or any other recipient of any
payment to be made by or on account of any obligation of the Loan Parties
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,
(b) any branch profits taxes imposed by the United States or any similar tax
imposed by any other jurisdiction in which any Loan Party is located, (c) any
U.S. federal, state or local backup withholding tax, and (d) any U.S. federal
withholding tax imposed under FATCA.

 

“Executive Order” has the meaning set forth in Section 9.17.

 

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person not in the ordinary course of business, including tax refunds,
pension plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustments.

 

“Facility Guaranty” means any Guarantee made by a Guarantor in favor of the
Lender and the other Credit Parties, in form reasonably satisfactory to the
Lender, as amended, modified, supplemented, renewed, restated or replaced.

 

“FATCA” means current Section 1471 through 1474 of the Code or any amended
version or successor provision that is substantively similar to and, in each
case, any regulations promulgated thereunder and any interpretation and other
guidance issued in connection therewith.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

 

“Fee Letter” means the letter agreement, dated of even date herewith, among the
Borrowers and Lender.

 

“Fiscal Month” means any fiscal month of any Fiscal Year, which month shall
generally end on the Saturday nearest to the last day of each calendar month in
accordance with the fiscal accounting calendar of the Loan Parties.

 

“Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarters
shall generally end on the Saturday nearest to the last day of each April, July,
October and January of such Fiscal Year in accordance with the fiscal accounting
calendar of the Loan Parties.

 

“Fiscal Year” means the fiscal year ended February 1, 2020 and any subsequent
period of fifty-two (52) or fifty-three (53) consecutive weeks ending on the
Saturday nearest to January 31 of each calendar year.

 

“Foreign Assets Control Regulations” has the meaning set forth in Section 9.17.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

-9- 

 

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States 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).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person (or any right, contingent or otherwise, of any
holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantor” has the meaning specified in the introductory paragraph hereto and
includes each Subsidiary of the Lead Borrower that shall be required to execute
and deliver a Facility Guaranty pursuant to Section 6.12.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a)                all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

 

-10- 

 

 

(b)                the maximum amount of all direct or contingent obligations of
such Person arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)                net obligations of such Person under any Swap Contract;

 

(d)                all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business and, in each case, not past due for more than sixty (60) days
after the date on which such trade account payable was created);

 

(e)                indebtedness (excluding prepaid interest thereon) secured by
a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;

 

(f)                 all Attributable Indebtedness of such Person;

 

(g)                all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in such
Person or any other Person (including, without limitation, Disqualified Stock),
or any warrant, right or option to acquire such Equity Interest, valued, in the
case of a redeemable preferred interest, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; and

 

(h)                all Guarantees of such Person in respect of any of the
foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the termination value thereof as
of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning specified in Section 9.04(b).

 

“Information” has the meaning specified in Section 9.07.

 

“Intellectual Property” means all present and future: trade secrets, know-how
and other proprietary information; trademarks, trademark applications, internet
domain names, service marks, trade dress, trade names, business names, designs,
logos, slogans (and all translations, adaptations, derivations and combinations
of the foregoing) indicia and other source and/or business identifiers, and all
registrations or applications for registrations which have heretofore been or
may hereafter be issued thereon throughout the world; copyrights and copyright
applications; (including copyrights for computer programs) and all tangible and
intangible property embodying the copyrights, unpatented inventions (whether or
not patentable); patents and patent applications; industrial design applications
and registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; all other
intellectual property; and all common law and other rights throughout the world
in and to all of the foregoing.

 

-11- 

 

 

“Intercreditor Agreement” means the Intercreditor Agreement dated as of the date
hereof, between the Lender and the Revolving Loan Lender, and acknowledged by
the Loan Parties, as amended, restated, or otherwise modified from time to time.

 

“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Lead
Borrower’s and/or its Subsidiaries’ internal controls over financial reporting,
in each case as described in the Securities Laws.

 

“Inventory” has the meaning given that term in the UCC.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, (c) any
Acquisition, or (d) any other investment of money or capital in order to obtain
a profitable return. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“Joinder” means an agreement, in form satisfactory to the Lender, pursuant to
which, among other things, a Person becomes a party to, and bound by the terms
of, this Agreement and/or the other Loan Documents in the same capacity and to
the same extent as either a Borrower or a Guarantor, as the Lender may
determine.

 

“Laws” means each international, foreign, Federal, state and local statute,
treaty, rule, guideline, regulation, ordinance, code and administrative or
judicial precedent or authority, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and each applicable administrative
order, directed duty, license, authorization and permit of, and agreement with,
any Governmental Authority, in each case whether or not having the force of law.

 

“Lead Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Lease” means any agreement, whether written or oral, no matter how styled or
structured, pursuant to which a Loan Party is entitled to the use or occupancy
of any space in a structure, land, improvements or premises for any period of
time.

 

“Lender” has the meaning specified in the introductory paragraph hereto.

 

“Lender’s Office” means, the office or offices of the Lender’s address and as
appropriate, account as set forth on Schedule 9.02 or such other address or
account as the Lender may from time to time notify the Lead Borrower.

 

“Lien” means (a) any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever (including
any conditional sale, Capital Lease Obligation, Synthetic Lease Obligation, or
other title retention agreement, any easement, right of way or other encumbrance
on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing) and (b) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

 

-12- 

 

 

“Loan” means the Delayed Draw Term Loans.

 

“Loan Account” has the meaning assigned to such term in Section 2.10(a).

 

“Loan Documents” means this Agreement, the Note, the Security Documents, the
Intercreditor Agreement, any Facility Guaranty, the Fee Letter, and any other
instrument or agreement now or hereafter executed and delivered in connection
herewith, each as amended and in effect from time to time,

 

“Loan Parties” means, collectively, the Borrowers and the Guarantors.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, properties, liabilities
(actual or contingent), or condition (financial or otherwise) of the Lead
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party; or (c) a material impairment of the rights and remedies of
the Lender under any Loan Document or a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party. In determining whether any individual
event would result in a Material Adverse Effect, notwithstanding that such event
in and of itself does not have such effect, a Material Adverse Effect shall be
deemed to have occurred if the cumulative effect of such event and all other
than existing events would result in a Material Adverse Effect.

 

“Material Contract” means, with respect to any Loan Party, each contract or
agreement to which such Loan Party is a party (a) that is deemed to be a
material contract or material definitive agreement under any Securities Laws
applicable to such Loan Party, or (b) under which the Loan Parties receive a
material portion of their revenue in the ordinary course of business.

 

“Material Indebtedness” means (a) the Revolving Loan Obligations (it being
understood that the Revolving Loan Obligations shall be deemed to be “Material
Indebtedness” for so long as any Revolving Loan Obligations remain outstanding),
and (b) any other Indebtedness (other than the Obligations) of the Loan Parties
in an aggregate principal amount exceeding $5,000,000. For purposes of
determining the amount of Material Indebtedness at any time, (a) the amount of
the obligations in respect of any Swap Contract at such time shall be calculated
at the termination value thereof, (b) undrawn committed or available amounts
shall be included, and (c) all amounts owing to all creditors under any combined
or syndicated credit arrangement shall be included.

 

“Maturity Date” means August 3, 2023.

 

“Maximum Rate” has the meaning provided therefor in Section 9.09.

 

“Measurement Period” means, at any date of determination, the most recently
completed twelve (12) Fiscal Months of the Lead Borrower.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Lead Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

 

-13- 

 

 

“Net Proceeds” means (a) with respect to any Disposition by any Loan Party or
any of its Subsidiaries, or any Extraordinary Receipt received or paid to the
account of any Loan Party or any of its Subsidiaries, the excess, if any, of (i)
the sum of cash and cash equivalents received in connection with such
transaction (including any cash or cash equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by a Lien permitted hereunder on the applicable
asset which is senior to the Lender’s Lien on such asset and that is required to
be repaid (or to establish an escrow for the future repayment thereof) in
connection with such transaction (other than Indebtedness under the Loan
Documents), and (B) the reasonable and customary out-of-pocket expenses incurred
by such Loan Party or such Subsidiary in connection with such transaction
(including, without limitation, appraisals, and brokerage, legal, title and
recording or transfer tax expenses, other taxes paid in cash in connection with
the consummation of such transaction, and commissions) paid by any Loan Party to
third parties (other than Affiliates); and (b) with respect to the sale or
issuance of any Equity Interest by any Loan Party or any of its Subsidiaries, or
the incurrence or issuance of any Indebtedness by any Loan Party or any of its
Subsidiaries, the excess of (i) the sum of the cash and cash equivalents
received in connection with such transaction over (ii) the underwriting
discounts and commissions, and other reasonable and customary out-of-pocket
expenses, incurred by such Loan Party or such Subsidiary in connection
therewith.

 

“Note” means a promissory note made by the Borrowers in favor of the Lender
evidencing the Loans made by the Lender, substantially in the form of Exhibit B,
as may be amended, restated, supplemented or modified from time to time.

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligations” means all advances to, and debts (including principal, interest,
fees, costs, and expenses), liabilities, obligations, covenants, indemnities,
and duties of, any Loan Party (including payments in respect of reimbursement of
disbursements and interest thereon), whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest, fees, costs, expenses and
indemnities that accrue after the commencement by or against any Loan Party or
any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest,
fees, costs, expenses and indemnities are allowed claims in such proceeding,
arising under (a) any Loan Document or otherwise with respect to any Loan, and
(b) any other financing, sales, or other commercial arrangements between Lender
or any of its Affiliates, on the one hand, and any of the Loan Parties and/or
any Affiliate thereof, on the other hand.

 

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“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.

 

-14- 

 

 

“Participant” has the meaning specified in Section 9.06(b).

 

“Payment Conditions” has the meaning ascribed thereto in the Revolving Loan
Agreement as in effect on the Closing Date or as amended (including for such
purpose all amendments that may affect the determination thereof and giving
effect to any waiver or forbearance by the Revolving Loan Lender, on each case
in a manner permitted under the terms of the Intercreditor Agreement).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“PCAOB” means the Public Company Accounting Oversight Board.

 

“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 Lead Borrower
or any ERISA Affiliate or to which the Lead 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 time during the immediately preceding five plan years.

 

“Permitted Acquisition” means an Acquisition in which all of the following
conditions are satisfied:

 

(a)                No Default or Event of Default then exists or would arise
from the consummation of such Acquisition;

 

(b)                Such Acquisition shall have been approved by the board of
directors of the Person (or similar governing body if such Person is not a
corporation) which is the subject of such Acquisition and such Person shall not
have announced that it will oppose such Acquisition or shall not have commenced
any action which alleges that such Acquisition shall violate applicable Law;

 

(c)                The Lead Borrower shall have furnished the Lender with ten
(10) days’ prior written notice of such intended Acquisition and shall have
furnished the Lender with a current draft of the acquisition documents (and
final copies thereof as and when executed), a summary of any due diligence
undertaken by the Loan Parties in connection with such Acquisition, appropriate
financial statements of the Person which is the subject of such Acquisition, pro
forma projected financial statements for the twelve (12) month period following
such Acquisition after giving effect to such Acquisition (including balance
sheets, cash flows and income statements by month for the acquired Person,
individually, and on a Consolidated basis with all Loan Parties), and such other
information as the Lender may reasonably require, all of which shall be
reasonably satisfactory to the Lender;

 

(d)                Either (i) the legal structure of the Acquisition shall be
acceptable to the Lender in its discretion, or (ii) the Loan Parties shall have
provided the Lender with a favorable solvency opinion from an unaffiliated third
party valuation firm reasonably satisfactory to the Lender;

 

(e)                After giving effect to the Acquisition, if the Acquisition is
an Acquisition of the Equity Interests, a Loan Party shall acquire and own,
directly or indirectly, a majority of the Equity Interests in the Person being
acquired and shall Control a majority of any voting interests or shall otherwise
Control the governance of the Person being acquired;

 

-15- 

 

 

(f)                 Any assets acquired shall be utilized in, and if the
Acquisition involves a merger, consolidation or Acquisition of Equity Interests,
the Person which is the subject of such Acquisition shall be engaged in, a
business otherwise permitted to be engaged in by a Borrower under this
Agreement;

 

(g)                If the Person which is the subject of such Acquisition will
be maintained as a Subsidiary of a Loan Party, or if the assets acquired in an
acquisition will be transferred to a Subsidiary which is not then a Loan Party,
such Subsidiary shall have been joined as a “Borrower” hereunder or as a
Guarantor, as the Lender shall determine, and the Lender shall have received a
first priority security interest (or, while the Revolving Loan Obligations or
any commitment to extend credit under the Revolving Loan Agreement remains
outstanding, second priority security interest, subject to the Intercreditor
Agreement) in such Subsidiary’s Equity Interests, Inventory, Accounts, and other
personal property of the same nature as constitutes collateral under the
Security Documents; and

 

(h)                The Loan Parties shall have satisfied the Payment Conditions.

 

“Permitted Disposition” means any of the following:

 

(a)                Dispositions of inventory in the ordinary course of business;

 

(b)                bulk sales or other Dispositions of the Inventory of a Loan
Party not in the ordinary course of business in connection with Store closings,
at arm’s length; provided, that such Store closings and related Inventory
Dispositions shall not exceed (i) in any Fiscal Year of the Lead Borrower and
its Subsidiaries, ten percent (10%) of the number of the Loan Parties’ Stores as
of the beginning of such Fiscal Year (net of new Store openings in such Fiscal
Year) and (ii) in the aggregate, twenty-five percent (25%) of the number of the
Loan Parties’ Stores in existence as of August 3, 2018 (net of cumulative new
Store openings since such date); provided, further, that all sales of Inventory
in connection with Store closings which exceed, in any Fiscal Year of the Lead
Borrower and its Subsidiaries, five percent (5%) of the number of the Loan
Parties’ Stores as of the beginning of such Fiscal Year shall be in accordance
with liquidation agreements in form and substance reasonably satisfactory to the
Lender; provided, however, that the consolidation of Christopher & Banks Stores
and CJ Banks Stores into MPW Stores shall be excluded from such limits set forth
in the foregoing provisos; provided, further that, to the extent permitted under
the Intercreditor Agreement, all Net Proceeds received in connection with Store
closings and related sales of Inventory are applied to the Obligations if then
required in accordance with Section 2.04 hereof;

 

(c)                non-exclusive licenses of Intellectual Property of a Loan
Party or any of its Subsidiaries in the ordinary course of business;

 

(d)                licenses for the conduct of licensed departments within the
Loan Parties’ Stores in the ordinary course of business; provided, that, if
requested by the Lender, the Lender shall have entered into an intercreditor
agreement with the Person operating such licensed department on terms and
conditions reasonably satisfactory to the Lender;

 

(e)                Dispositions of Equipment in the ordinary course of business
that is substantially worn, damaged, obsolete or, in the judgment of a Loan
Party, no longer useful or necessary in its business or that of any Subsidiary
and is replaced with similar property having at least equivalent value;

 

-16- 

 

 

 

(f)                sales, transfers and Dispositions among the Loan Parties or
by any Subsidiary to a Loan Party;

 

(g)               sales, transfers and Dispositions by any Subsidiary which is
not a Loan Party to another Subsidiary that is not a Loan Party; and

 

(h)               as long as no Default or Event of Default then exists or would
arise therefrom, sales of Real Estate of any Loan Party (or sales of any Person
or Persons created to hold such Real Estate or the Equity Interests in such
Person or Persons), including sale-leaseback transactions involving any such
Real Estate pursuant to leases on market terms, as long as, (A) such sale is
made for fair market value, and (B) the proceeds of such sale are utilized to
repay the Obligations.

 

“Permitted Encumbrances” means:

 

(a)                Liens imposed by law for Taxes that are not yet due or are
being contested in compliance with Section 6.04;

 

(b)               Carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s and other like Liens imposed by applicable Law, arising in the
ordinary course of business and securing obligations that are not overdue or are
being contested in compliance with Section 6.04;

 

(c)               Pledges and deposits made in the ordinary course of business
in compliance with workers’ compensation, unemployment insurance and other
social security laws or regulations, other than any Lien imposed by ERISA;

 

(d)               Deposits to secure the performance of bids, trade contracts
and leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(e)                Liens in respect of judgments that would not constitute an
Event of Default hereunder;

 

(f)                Easements, covenants, conditions, restrictions, building code
laws, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from the value
of the affected property or materially interfere with the ordinary conduct of
business of a Loan Party and such other minor title defects or survey matters
that are disclosed by current surveys that, in each case, do not materially
interfere with the current use of the real property;

 

(g)               Liens existing on the Closing Date and listed on Schedule 7.01
and any Permitted Refinancings thereof;

 

(h)               Liens on fixed or capital assets acquired by any Loan Party
which are permitted under clause (c) of the definition of Permitted Indebtedness
so long as (i) such Liens and the Indebtedness secured thereby are incurred
prior to or within ninety (90) days after such acquisition, (ii) the
Indebtedness secured thereby does not exceed the cost of acquisition of such
fixed or capital assets and (iii) such Liens shall not extend to any other
property or assets of the Loan Parties;

 

-17-

 

 

(i)                 Liens in favor of the Lender;

 

(j)                 Statutory Liens of landlords and lessors in respect of rent
not in default;

 

(k)                Possessory Liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of Investments owned as of the
Closing Date and Permitted Investments, provided that such liens (a) attach only
to such Investments and (b) secure only obligations incurred in the ordinary
course and arising in connection with the acquisition or disposition of such
Investments and not any obligation in connection with margin financing;

 

(l)                 Liens arising solely by virtue of any statutory or common
law provisions relating to banker’s liens, liens in favor of securities
intermediaries, rights of setoff or similar rights and remedies as to deposit
accounts or securities accounts or other funds maintained with depository
institutions or securities intermediaries;

 

(m)               Liens arising from precautionary UCC filings regarding “true”
operating leases or and the consignment of goods to a Loan Party; provided,
however, with respect to the consignment of goods to a Loan Party, (x) the
aggregate cost of goods which may be consigned to a Loan Party at any time shall
not exceed $10,000,000 in the aggregate and (y) if so requested by the Lender,
the Loan Party shall cause the consignor to enter into an agreement, in form and
substance satisfactory to the Lender, with the Lender and the applicable Loan
Party related to such consigned goods and proceeds thereof;

 

(n)               voluntary Liens on property in existence at the time such
property is acquired pursuant to a Permitted Acquisition or on such property of
a Subsidiary of a Loan Party in existence at the time such Subsidiary is
acquired pursuant to a Permitted Acquisition; provided, that such Liens are not
incurred in connection with or in anticipation of such Permitted Acquisition and
do not attach to any other assets of any Loan Party or any Subsidiary;

 

(o)               Liens in favor of customs and revenues authorities imposed by
applicable Law arising in the ordinary course of business in connection with the
importation of goods and securing obligations that are being contested in good
faith by appropriate proceedings, (B) the applicable Loan Party or Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (C) such contest effectively suspends collection of the contested
obligation and enforcement of any Lien securing such obligation; and

 

(p)               subject to the Intercreditor Agreement, Liens granted by the
Loan Parties under the Revolving Loan Facility (and any Permitted Refinancings
thereof) in favor of the Revolving Loan Lender.

 

“Permitted Indebtedness” means each of the following as long as no Default or
Event of Default exists or would arise from the incurrence thereof:

 

(a)                Indebtedness outstanding on the Closing Date and listed on
Schedule 7.03 and any Permitted Refinancing thereof;

 

(b)                Indebtedness of any Loan Party to any other Loan Party;

 

(c)                Purchase money Indebtedness of any Loan Party to finance the
acquisition of any personal property consisting solely of fixed or capital
assets, including Capital Lease Obligations, and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and Permitted Refinancings
thereof; provided, however, that the aggregate principal amount of Indebtedness
permitted by this clause (c) shall not exceed $5,000,000 at any time
outstanding;

 

-18-

 

 

(d)               obligations (contingent or otherwise) of any Loan Party or any
Subsidiary thereof existing or arising under any Swap Contract; provided, that,
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated with
fluctuations in interest rates or foreign exchange rates, and not for purposes
of speculation or taking a “market view;” provided, further, that, the aggregate
termination value with respect thereto shall not exceed $2,000,000 at any time
outstanding;

 

(e)               Contingent liabilities under surety bonds or similar
instruments incurred in the ordinary course of business in connection with the
construction or improvement of Stores or other Real Estate;

 

(f)                Indebtedness incurred for the construction or acquisition or
improvement of, or to finance or to refinance, any Real Estate owned by any Loan
Party (including therein any Indebtedness incurred in connection with
sale-leaseback transactions permitted hereunder and any Synthetic Lease
Obligations);

 

(g)               Indebtedness with respect to the deferred purchase price for
any Permitted Acquisition, provided that such Indebtedness does not require the
payment in cash of principal (other than in respect of working capital
adjustments) prior to the Maturity Date, has a maturity which extends beyond the
Maturity Date, and is subordinated to the Obligations on terms reasonably
acceptable to the Lender;

 

(h)                Indebtedness of any Person that becomes a Subsidiary of a
Loan Party in a Permitted Acquisition, which Indebtedness is existing at the
time such Person becomes a Subsidiary of a Loan Party (other than Indebtedness
incurred solely in contemplation of such Person’s becoming a Subsidiary of a
Loan Party);

 

(i)                 The Obligations;

 

(j)                 Unsecured Indebtedness not otherwise specifically described
herein in an aggregate principal amount not to exceed $10,000,000 at any time
outstanding; and

 

(k)                Indebtedness under the Revolving Loan Facility and any
Permitted Refinancing thereof.

 

“Permitted Investments” means each of the following as long as no Default or
Event of Default exists or would arise from the making of such Investment:

 

(a)                Readily marketable obligations issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 360 days from the
date of acquisition thereof; provided, that, the full faith and credit of the
United States of America is pledged in support thereof;

 

(b)               Commercial paper issued by any Person organized under the laws
of any state of the United States of America and rated at least “Prime-1” (or
the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent
grade) by S&P, in each case with maturities of not more than 180 days from the
date of acquisition thereof;

 

-19-

 

 

(c)                Time deposits with, or insured certificates of deposit or
bankers’ acceptances of, any commercial bank that (i) (A) is the Lender or (B)
is organized under the laws of the United States of America, any state thereof
or the District of Columbia or is the principal banking subsidiary of a bank
holding company organized under the laws of the United States of America, any
state thereof or the District of Columbia, and is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial paper
rated as described in clause (c) of this definition and (iii) has combined
capital and surplus of at least $1,000,000,000, in each case with maturities of
not more than 180 days from the date of acquisition thereof;

 

(d)               Fully collateralized repurchase agreements with a term of not
more than thirty (30) days for securities described in clause (a) above (without
regard to the limitation on maturity contained in such clause) and entered into
with a financial institution satisfying the criteria described in clause (c)
above or with any primary dealer and having a market value at the time that such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such counterparty entity with whom such repurchase agreement has
been entered into;

 

(e)               Investments, classified in accordance with GAAP as current
assets of the Loan Parties, in any money market fund, mutual fund, or other
investment companies that are registered under the Investment Company Act of
1940, as amended, which are administered by financial institutions that have the
highest rating obtainable from either Moody’s or S&P, and which invest solely in
one or more of the types of securities described in clauses (a) through (d)
above;

 

(f)                 Investments existing on the Closing Date, and set forth on
Schedule 7.02, but not any increase in the amount thereof or any other
modification of the terms thereof;

 

(g)               (i) Investments by any Loan Party and its Subsidiaries in
their respective Subsidiaries outstanding on the Closing Date, (ii) additional
Investments by any Loan Party and its Subsidiaries in Loan Parties (other than
the Lead Borrower), (iii) additional Investments by Subsidiaries of the Loan
Parties that are not Loan Parties in other Subsidiaries that are not Loan
Parties and (iv) so long as no Default or Event of Default has occurred and is
continuing or would result from such Investment and the Payment Conditions are
satisfied, additional Investments by the Loan Parties in wholly-owned
Subsidiaries that are not Loan Parties in an aggregate amount not to exceed
$2,000,000;

 

(h)               Investments consisting of extensions of credit in the nature
of accounts receivable or notes receivable arising from the grant of trade
credit in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(i)                 Guarantees constituting Permitted Indebtedness;

 

(j)                 Investments by any Loan Party in Swap Contracts entered into
in the ordinary course of business and for bona fide business (and not
speculative) purposes to protect against fluctuations in interest rates in
respect of the Revolving Loan Obligations;

 

(k)                Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;

 

-20-

 

 

(l)                 advances to officers, directors and employees of the Loan
Parties and Subsidiaries in the ordinary course of business in an amount not to
exceed $250,000 to any individual at any time or in an aggregate amount not to
exceed $500,000 at any time outstanding;

 

(m)               Investments constituting Permitted Acquisitions;

 

(n)                Capital contributions made by any Loan Party to another Loan
Party;

 

(o)                Investments in accordance with that certain Christopher &
Banks Corporation and Subsidiaries Investment Policy dated December 3, 2014,
approved by the Audit Committee and attached hereto as part of Schedule 7.02;
and

 

(p)                Other Investments not otherwise specifically described herein
and not exceeding $1,000,000 in the aggregate at any time outstanding.

 

“Permitted Refinancing” means, with respect to any Person, any Indebtedness
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”), the
Indebtedness being Refinanced (or previous refinancings thereof constituting a
Permitted Refinancing); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premiums thereon and underwriting
discounts, defeasance costs, fees, commissions and expenses), provided, that, in
the case only of a refinancing of the Revolving Loan Obligations, the principal
amount thereof may be increased by an amount not to exceed $10,000,000, so long
as the borrowing base under the credit facility with respect to such refinancing
does not include advance rates, eligibility criteria, or other provisions which
have the direct or indirect effect of providing more “availability” to Borrowers
than would be afforded to them under the Revolving Loan Agreement, unless
otherwise expressly permitted by the Intercreditor Agreement or consented to by
the Lender in writing prior to the effectiveness of any such provisions, (b) the
weighted average life to maturity of such Permitted Refinancing is greater than
or equal to the weighted average life to maturity of the Indebtedness being
Refinanced, (c) such Permitted Refinancing shall not require any scheduled
principal payments due prior to the Maturity Date if the amount of such payments
in any Fiscal Year would be greater than the scheduled principal payments due
with respect to the Indebtedness so Refinanced during such Fiscal Year, (d) if
the Indebtedness being Refinanced is subordinated in right of payment to the
Obligations under this Agreement, such Permitted Refinancing shall be
subordinated in right of payment to such Obligations on terms at least as
favorable to the Credit Parties as those contained in the documentation
governing the Indebtedness being Refinanced, (e) no Permitted Refinancing shall
have direct or indirect obligors who were not also obligors of the Indebtedness
being Refinanced, or greater guarantees or security, than the Indebtedness being
Refinanced, (f) such Permitted Refinancing shall be otherwise on terms not
materially less favorable to the Credit Parties than those contained in the
documentation governing the Indebtedness being Refinanced, including, without
limitation, with respect to financial and other covenants and events of default,
(g) the interest rate applicable to any such Permitted Refinancing shall not
exceed the then applicable market interest rate, (h) at the time thereof, no
Default or Event of Default shall have occurred and be continuing, and (i) in
the case of a refinancing of the Revolving Loan Obligations and the Revolving
Loan Documents, all such Persons refinancing such Indebtedness shall be
reasonably acceptable to the Lender and agree to be bound by the terms of the
Intercreditor Agreement.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, limited partnership,
Governmental Authority or other entity.

 

-21-

 

 

“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by the Lead Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Prepayment Event” means:

 

(a)                Any Disposition (including pursuant to a sale and leaseback
transaction but excluding Permitted Dispositions of the type described in clause
(a) of the definition of “Permitted Dispositions”) of any property or asset of a
Loan Party other than to another Loan Party (provided that any Disposition in an
amount less than $2,000,000 prior to the occurrence of a Cash Dominion Event
shall not be deemed a Prepayment Event);

 

(b)                Any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of (and
payments in lieu thereof), any property or asset of a Loan Party in an amount in
excess of $2,000,000, unless (i) the proceeds therefrom are required to be paid
to the holder of a Lien on such property or asset having priority over the Lien
of the Lender or (ii) prior to the occurrence of a Cash Dominion Event, the
proceeds therefrom are deposited into a segregated account and utilized for
purposes of replacing or repairing the assets in respect of which such proceeds,
awards or payments were received within two hundred and seventy (270) days of
the occurrence of the damage to or loss of the assets being repaired or
replaced;

 

(c)                The issuance by a Loan Party of any Equity Interests, other
than any such issuance of Equity Interests (i) to a Loan Party, (ii) as
consideration for a Permitted Acquisition or (iii) to any employee, director, or
consultant (including under any option plan) (provided that the issuance by the
Loan Parties of any Equity Interests in an amount less than $2,000,000 prior to
the occurrence of a Cash Dominion Event shall not be deemed a Prepayment Event);

 

(d)                The incurrence by a Loan Party of any Indebtedness for
borrowed money other than Permitted Indebtedness (provided that the incurrence
by the Loan Parties of any Indebtedness in an amount less than $2,000,000 prior
to the occurrence of a Cash Dominion Event shall not be deemed a Prepayment
Event); or

 

(e)                The receipt by any Loan Party of any Extraordinary Receipts
(provided that any receipt by the Loan Parties of any Extraordinary Receipts in
an amount less than $1,000,000 prior to the occurrence of a Cash Dominion Event
shall not be deemed a Prepayment Event).

 

“Pro Forma Cost Savings” means, with respect to the 12-Fiscal Month period ended
after the date of any pro forma event, the amount of “run rate” cost savings,
operating expense reductions, other operating improvements and synergies
relating to Permitted Dispositions, Permitted Acquisitions, or the
implementation of operational changes and operational initiatives (including but
not limited to reductions in Store count, occupancy reductions, and wholesale
cost reductions) for which specified actions have been taken or are reasonably
expected to be taken (in the good faith determination of the Borrowers) during
such 12-Fiscal Month period that are reasonably identifiable, factually
supportable and projected by the Borrowers in good faith to result from such
actions, as if all such reductions in costs had been effected as of the
beginning of such period, net of the amount of actual benefits realized during
such period from such actions to the extent that the Lender is satisfied, in its
reasonable discretion, that such cost savings, operating expense reductions,
other operating improvements and synergies relating to Permitted Dispositions,
Permitted Acquisitions, or the implementation of operational changes and
operational initiatives is reasonably likely to result on a continuing basis in
the cost savings anticipated by Borrowers. Lender hereby acknowledges and agrees
that satisfactory evidence of such Pro Forma Cost Savings will be deemed to have
been provided in accordance with the requirements hereof, in the case of any
such savings attributable to the renegotiation of real property leases, upon the
delivery by Borrower to Lender of true, correct, and complete copies of the
applicable amended or replacement leases, as the case may be, with respect to
the Pro Forma Cost Savings reflected therein.

 

-22-

 

 

“Real Estate” means all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned by any Loan Party
or subject to any Lease, including all easements, rights-of-way, and similar
rights relating thereto and all leases, tenancies, and occupancies thereof.

 

“Receipts and Collections” has the meaning specified in Section 6.13(c).

 

“Registered Public Accounting Firm” has the meaning specified by the Securities
Laws and shall be independent of the Lead Borrower and its Subsidiaries as
prescribed by the Securities Laws.

 

“Related Intellectual Property” means such rights with respect to the
Intellectual Property of the Loan Parties as are reasonably necessary to permit
the Lender to enforce its rights and remedies under the Loan Documents with
respect to the Collateral, or the disposition of which would otherwise
materially adversely affect the value of the Collateral of the Loan Parties.

 

“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.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty (30) day notice period has been
waived.

 

“Request for Loan” means with respect to a Borrowing, a notice of a Borrowing
which shall be substantially in the form annexed hereto as Exhibit A.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, chief accounting officer, or assistant treasurer
of a Loan Party or any of the other individuals designated in writing to the
Lender by an existing Responsible Officer of a Loan Party as an authorized
signatory of any certificate or other document to be delivered hereunder. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to such Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment. Without limiting the foregoing, “Restricted Payments”
with respect to any Person shall also include all payments made by such Person
with any proceeds of a dissolution or liquidation of such Person.

 

“Revolving Loan Agreement” means the Second Amended and Restated Revolving Loan
Agreement, dated as of July 12, 2012, as amended, as the same may be further
amended, restated or otherwise modified as permitted by the Intercreditor
Agreement.

 

-23-

 

 

“Revolving Loan Documents” means the “Loan Documents”, as defined in the
Revolving Loan Agreement.

 

“Revolving Loan Facility” means the revolving loan and letter of credit facility
under the Revolving Loan Documents and any Permitted Refinancing thereof.

 

“Revolving Loan Lender” means Wells Fargo Bank, National Association, as lender,
and any successor lender under the Revolving Loan Facility.

 

“Revolving Loan Obligations” means the “ABL Obligations” as defined in the
Intercreditor Agreement.

 

“Revolving Loan Priority Collateral” means any “ABL Priority Collateral” as
defined in the Intercreditor Agreement.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, or (d) a Person resident
in or determined to be resident in a country, in each case of clauses (a)
through (d) that is a target of Sanctions, including a target of any country
sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means, at any time (a) any Person named on the list of
Specially Designated Nationals and Blocked Persons maintained by OFAC (“SDN”),
OFAC’s consolidated Non-SDN list or any other Sanctions-related list maintained
by any Governmental Authority, (b) a Person or legal entity that is a target of
Sanctions, (c) any Person operating, organized or resident in a Sanctioned
Entity, or (d) any Person directly or indirectly owned or controlled
(individually or in the aggregate) by or acting on behalf of any such Person or
Persons described in clauses (a) through (c) above.

 

“Sanctions” means individually and collectively, respectively, any and all
economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions
laws, regulations or embargoes, including those imposed, administered or
enforced from time to time by: (a) the United States of America, including those
administered by OFAC, the U.S. Department of State, the U.S. Department of
Commerce, or through any existing or future executive order, (b) the United
Nations Security Council, or (c) any other Governmental Authority with
jurisdiction over any Credit Party or any Loan Party or any of their respective
Subsidiaries or Affiliates.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

 

-24-

 

 

“Security Agreement” means the Security Agreement dated as of the Closing Date
among the Loan Parties and the Lender, as the same now exists or may hereafter
be amended, modified, supplemented, renewed, restated or replaced.

 

“Security Documents” means the Security Agreement, the Blocked Account
Agreements, the DDA Notifications, the Credit Card Notifications, and each other
security agreement or other instrument or document executed and delivered to the
Lender pursuant to this Agreement or any other Loan Document granting a Lien to
secure any of the Obligations.

 

“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Lead Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.

 

“Solvent” and “Solvency” means, with respect to any Person on a particular date,
that on such date (a) at fair valuation, excluding the impact of intercompany
assets and liabilities which are eliminated in consolidation, all of the
properties and assets of such Person are greater than the sum of the debts,
including contingent liabilities, of such Person, (b) the present fair saleable
value of the properties and assets of such Person is not less than the amount
that would be required to pay the probable liability of such Person on its debts
as they become absolute and matured, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person’s ability to pay as such debts mature, and (e)
such Person is not engaged in a business or a transaction, and is not about to
engage in a business or transaction, for which such Person’s properties and
assets would constitute unreasonably small capital after giving due
consideration to the prevailing practices in the industry in which such Person
is engaged. The amount of all guarantees at any time shall be computed as the
amount that, in light of all the facts and circumstances existing at the time,
can reasonably be expected to become an actual or matured liability.

 

“Specified Event of Default” means the occurrence of (a) any Event of Default
described in Sections 8.01(f) or (b) the Lender’s exercise of any of its
remedies pursuant to Section 8.02 following any other Event of Default.

 

“Spot Rate” has the meaning given to such term in Section 1.07 hereof.

 

“Store” means any retail store (which may include any owned or leased real
property, fixtures, equipment, inventory and other property related thereto)
operated, or to be operated, by any Loan Party.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
Equity Interests having ordinary voting power for the election of directors or
other governing body are at the time beneficially owned, or the management of
which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of a Loan Party.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

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“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

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

 

“Termination Date” means the earliest to occur of (i) the Maturity Date, and
(ii) the date on which the maturity of the Obligations is accelerated (or deemed
accelerated) and the Commitments are irrevocably terminated (or deemed
terminated) in accordance with Article VIII.

 

“Trading with the Enemy Act” has the meaning set forth in Section 9.17.

 

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, however, that if a
term is defined in Article 9 of the Uniform Commercial Code differently than in
another Article thereof, the term shall have the meaning set forth in Article 9;
provided, further, that if by reason of mandatory provisions of law, perfection,
or the effect of perfection or non-perfection, of a security interest in any
Collateral or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “Uniform Commercial Code” means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or availability of
such remedy, as the case may be.

 

“UFCA” has the meaning specified in Section 9.20(d).

 

“UFTA” has the meaning specified in Section 9.20(d).

 

“UVTA” has the meaning specified in Section 9.20(d).

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

“United States” and “U.S.” mean the United States of America.

 

“Wells Fargo” means Wells Fargo Bank, National Association and its successors.

 

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1.02           Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

 

(a)          The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include,” “includes” and “including” shall be deemed to be followed
by the phrase “without limitation.” The word “will” shall be construed to have
the same meaning and effect as the word “shall.” Unless the context requires
otherwise, (i) any definition of or reference to any agreement, instrument or
other document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, restated, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) 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.

 

(b)          In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

(c)          Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

 

(d)          Any reference herein or in any other Loan Document to the
satisfaction, repayment, or payment in full of the Obligations shall mean the
repayment in Dollars in full in cash or immediately available funds of such
Obligations other than unasserted contingent indemnification Obligations.

 

1.03           Accounting Terms.

 

(a)          Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

 

(b)          Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and the Lead Borrower shall so request, the Lender and the Lead
Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP; provided,
that until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and (ii) the Lead
Borrower shall provide to the Lender financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.

 

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1.04           Rounding. Any financial ratios required to be maintained by the
Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

 

1.05           Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).

 

1.06           [Reserved].

 

1.07           Currency Equivalents Generally. Any amount specified in this
Agreement (other than in Article II and Article IX,) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount thereof in the
applicable currency to be determined by the Lender at such time on the basis of
the Spot Rate (as defined below) for the purchase of such currency with Dollars.
For purposes of this Section 1.07, the “Spot Rate” for a currency means the rate
determined by the Lender to be the rate quoted by the Person acting in such
capacity as the spot rate for the purchase by such Person of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date of such
determination; provided, that the Lender may obtain such spot rate from another
financial institution designated by the Lender if the Person acting in such
capacity does not have as of the date of determination a spot buying rate for
any such currency.

 

1.08           Divisions. For all purposes under the Loan Documents, in
connection with any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws): (a) if any asset,
right, obligation or liability of any Person becomes the asset, right,
obligation or liability of a different Person, then it shall be deemed to have
been transferred from the original Person to the subsequent Person, and (b) if
any new Person comes into existence, such new Person shall be deemed to have
been organized on the first date of its existence by the holders of its Equity
Interests at such time.

 

Article II

THE COMMITMENT AND LOANS

 

2.01            Delayed Draw Term Loans. Subject to the terms and conditions set
forth herein, Lender severally agrees to fund one or more term loans in
accordance with the instructions for such disbursement set forth in the
applicable Request for Loan (each, a “Delayed Draw Term Loan”) prior to the
Delayed Draw Availability Termination Date in an aggregate amount not to exceed
$10,000,000 with respect to all Delayed Draw Term Loans; provided, that, the
Lead Borrower shall have provided not less than five (5) Business Days’ prior
written notice to Lender of its desire to borrow any Delayed Draw Term Loan
other than the Loan advanced on the Closing Date. Any portion of each Delayed
Draw Term Loan that is repaid or prepaid may not be re-borrowed. Each Borrowing
of a Delayed Draw Term Loan shall be in a principal amount of $1,000,000 or a
whole multiple thereof. There may not be more than ten (10) Borrowings of
Delayed Draw Term Loans hereunder. The Commitment of Lender with respect to
Delayed Draw Term Loans shall be automatically and permanently reduced (i) on
the date of each Delayed Draw Term Borrowing by the amount of such Borrowing,
and (ii) to zero on the Delayed Draw Availability Termination Date.

 

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2.02           [Reserved].

 

2.03           [Reserved].

 

2.04           Prepayments.

 

(a)       The Borrowers may, upon irrevocable notice from the Lead Borrower to
the Lender, at any time or from time to time voluntarily prepay Loans in whole
or in part without premium or penalty; provided, that (i) such notice must be
received by the Lender not later than 11:00 a.m. two (2) Business Days prior to
any date of prepayment, (ii) any prepayment shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if
less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Lead Borrower, the Borrowers shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein.

 

(b)       Subject to the terms of the Intercreditor Agreement, the Borrowers
shall prepay the Loan in an amount equal to the Net Proceeds received by a Loan
Party on account of a Prepayment Event described in clause (a) of the definition
of Prepayment Event; provided that, so long as any Revolving Loan Obligations
remain outstanding or there are any commitments to lend under the Revolving Loan
Agreement, Net Proceeds of Revolving Loan Priority Collateral may be applied as
required under the Revolving Loan Agreement to the extent such proceeds are
actually applied to repay the Revolving Loan Obligations, and the amount of any
required prepayment of the Loan will be reduced by the amount so applied.
Subject to the terms of the Intercreditor Agreement, the Borrowers shall prepay
the Loan with the Net Proceeds received by a Loan Party on account of a
Prepayment Event resulting from any casualty, condemnation or other loss as set
forth in clause (b) of the definition of Prepayment Event; provided that, so
long as the Revolving Loan Agreement remains in effect, Net Proceeds of
Revolving Loan Priority Collateral may be applied as required under the
Revolving Loan Agreement to the extent that such proceeds are actually applied
to repay the Revolving Loan Obligations, and the amount of any required
prepayment of the Loan will be reduced by the amount so applied. So long as no
Revolving Loan Obligations remain outstanding, the Borrowers shall prepay the
Obligations with the Net Proceeds received by a Loan Party on account of a
Prepayment Event resulting from any sale or issuance by any Loan Party or any of
its Subsidiaries of any of its Equity Interests as set forth in clause (c) of
the definition of Prepayment Event. So long as no Revolving Loan Obligations
remain outstanding, the Borrowers shall prepay the Obligations with the Net
Proceeds received by a Loan Party on account of a Prepayment Event resulting
from any incurrence or issuance by any Loan Party or any of its Subsidiaries of
any Indebtedness as set forth in clause (d) of the definition of Prepayment
Event. Subject to the terms of the Intercreditor Agreement, the Borrowers shall
prepay the Obligations with the Net Proceeds received by a Loan Party on account
of a Prepayment Event resulting from the receipt by any Loan Parties or any of
its Subsidiaries of Extraordinary Receipts as set forth in clause (e) of the
definition of Prepayment Event; provided that, so long as the Revolving Loan
Agreement remains in effect, Net Proceeds of Revolving Loan Priority Collateral
may be applied as required under the Revolving Loan Agreement to the extent that
such proceeds are actually applied to repay the Revolving Loan Obligations, and
the amount of any required prepayment of the Loan will be reduced by the amount
so applied.

 

2.05           [Reserved].

 

2.06           Repayment of Loans. Commencing on the first Business Day of the
thirteenth month following the making of a Delayed Draw Term Loan and continuing
on the first Business Day of each month thereafter, the Borrower shall repay to
the Lender the principal amount of the applicable Delayed Draw Term Loan in an
amount which is the monthly payment required to amortize the then current
outstanding principal balance of the applicable Delayed Draw Term Loan, on a
straight-line basis based upon a five (5) year amortization period. In all
events, the Borrower shall repay to the Lender on the Termination Date the
aggregate principal amount of Loans outstanding on such date.

 

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2.07           Interest.

 

(a)       Subject to the provisions of Section 2.07(b) below, each Loan shall
bear interest on the outstanding principal amount thereof at a rate per annum of
ten percent (10%).

 

(b)       If any amount payable under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a rate
three percentage points (3%) in excess of the otherwise applicable rate of
interest hereunder to the fullest extent permitted by applicable Laws.

 

(c)       Interest on each Loan shall be due and payable in arrears on the first
Business Day of each month, commencing April 1, 2020 and at such other times as
may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law. Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.

 

2.08           Fees. The Borrower shall pay to the Lender the fees set forth in
the Fee Letter. Such fees shall be fully earned when paid and shall not be
refundable for any reason or under any circumstances whatsoever.

 

2.09           Computation of Interest and Fees. All computations of fees and
interest shall be made on the basis of a 365/366-day year and actual days
elapsed. Interest shall accrue on each Loan for the day on which the Loan is
made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.11, bear interest
for one day. Each determination by the Lender of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

2.10           Evidence of Debt.

 

(a)       The Loans made by the Lender shall be evidenced by one or more
accounts or records maintained by the Lender (the “Loan Account”) in the
ordinary course of business. The accounts or records maintained by the Lender
shall be conclusive absent manifest error of the amount of the Loans made by the
Lender to the Borrowers and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrowers hereunder to pay any amount owing with respect
to the Obligations. Upon the request of the Lender, the Borrowers shall execute
and deliver to the Lender a Note, which shall evidence the Lender’s Loans in
addition to such accounts or records. The Lender may attach schedules to the
Note and endorse thereon the date, amount and maturity of the Loans and payments
with respect thereto. Upon receipt of an affidavit of the Lender as to the loss,
theft, destruction or mutilation of the Lender’s Note and upon cancellation of
such Note, the Borrowers will issue, in lieu thereof, a replacement Note in
favor of the Lender, in the same principal amount thereof and otherwise of like
tenor.

 

(b)       Lender shall render monthly statements regarding the Loan Account to
the Lead Borrower including principal, interest, fees, and including an
itemization of all charges and expenses constituting Credit Party Expenses
owing, and such statements, absent manifest error, shall be conclusively
presumed to be correct and accurate and constitute an account stated between
Borrowers and the Credit Parties unless, within thirty (30) days after receipt
thereof by the Lead Borrower, the Lead Borrower shall deliver to Lender written
objection thereto describing the error or errors contained in any such
statements.

 

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2.11           Payments Generally. All payments to be made by the Borrowers
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrowers hereunder shall be made to the Lender, at the Lender’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. All payments received by the Lender after 2:00 p.m.,
at the option of the Lender, shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any
payment to be made by the Borrowers shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.

 

Article III

TAXES, YIELD PROTECTION AND ILLEGALITY;
APPOINTMENT OF LEAD BORROWER

 

3.01           Taxes.

 

(a)       Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrowers 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 Borrowers 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 Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions and (iii) the Borrowers shall timely pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

 

(b)       Payment of Other Taxes by the Borrowers. Without limiting the
provisions of subsection (a) above, the Borrowers shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)       Indemnification by the Loan Parties. The Loan Parties shall indemnify
the Lender within fifteen (15) 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 Lender, 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
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Lead Borrower by the 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 Borrowers to a Governmental Authority
pursuant to this Section, the Lead Borrower shall deliver to the Lender the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Lender.

 

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(e)       Treatment of Certain Refunds. If the Lender determines in its
reasonable discretion that it has received a refund of any Taxes or Other Taxes
as to which it has been indemnified by the Borrowers or with respect to which
the Borrowers have paid additional amounts pursuant to this Section, it shall
pay to the Borrowers an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrowers under this
Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Lender and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrowers, upon the request of the Lender, agree to
repay the amount paid over to the Borrowers (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Lender in
the event the Lender is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Lender to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrowers or any other Person.

 

3.02           [Reserved].

 

3.03           [Reserved].

 

3.04           [Reserved].

 

3.05           [Reserved].

 

3.06           Mitigation Obligations; Replacement of Lender. If Borrowers are
required to pay any additional amount to the Lender or any Governmental
Authority for the account of the Lender pursuant to Section 3.01, then the
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of the Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 in the future, and (ii) in each case,
would not subject the Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to the Lender. The Borrowers hereby agree to pay
all reasonable costs and expenses incurred by the Lender in connection with any
such designation or assignment.

 

3.07           Survival. All of the Borrowers’ obligations under this Article
III shall survive termination of the Commitment and repayment of all Obligations
hereunder.

 

3.08           Designation of Lead Borrower as Borrowers’ Agent.

 

(a)       Each Borrower hereby irrevocably designates and appoints the Lead
Borrower as such Borrower’s agent to obtain Loans, the proceeds of which shall
be available to each Borrower for such uses as are permitted under this
Agreement. As the disclosed principal for its agent, each Borrower shall be
obligated to each Credit Party on account of Loans so made as if made directly
by the applicable Credit Party to such Borrower, notwithstanding the manner by
which such Loans are recorded on the books and records of the Lead Borrower and
of any other Borrower. In addition, each Loan Party other than the Borrowers
hereby irrevocably designates and appoints the Lead Borrower as such Loan
Party’s agent to represent such Loan Party in all respects under this Agreement
and the other Loan Documents.

 

(b)       Each Borrower recognizes that credit available to it hereunder is in
excess of and on better terms than it otherwise could obtain on and for its own
account and that one of the reasons therefor is its joining in the credit
facility contemplated herein with all other Borrowers. Consequently, each
Borrower hereby assumes and agrees to discharge all Obligations of each of the
other Borrowers.

 

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(c)       The Lead Borrower shall act as a conduit for each Borrower (including
itself, as a “Borrower”) on whose behalf the Lead Borrower has requested a
Delayed Draw Term Loan. Neither the Lender nor any other Credit Party shall have
any obligation to see to the application of such proceeds therefrom.

 

Article IV

CONDITIONS PRECEDENT TO LOANS

 

4.01           Conditions of Initial Delayed Draw Term Loan. The obligation of
the Lender to make its initial Delayed Draw Term Loan hereunder and the
effectiveness of this Agreement is subject to satisfaction of the following
conditions precedent:

 

(a)       The Lender’s receipt of the following, each of which shall be
originals or other electronic image scan transmission (e.g., “pdf” or “tif” via
e-mail) (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party or the
Lender, as applicable, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Lender:

 

(i)         executed counterparts of this Agreement sufficient in number for
distribution to the Lender and the Lead Borrower;

 

(ii)        the Intercreditor Agreement, executed and delivered by the parties
thereto;

 

(iii)       a Note executed by the Borrowers in favor of the Lender;

 

(iv)       [reserved];

 

(v)        such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Lender may require evidencing (A) the authority of each Loan Party
to enter into this Agreement and the other Loan Documents to which such Loan
Party is a party or is to become a party and (B) the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party or is to become a party;

 

(vi)      copies of each Loan Party’s Organization Documents and such other
documents and certifications as the Lender may reasonably require to evidence
that each Loan Party is duly organized or formed, and that each Loan Party is
validly existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to so qualify in such jurisdiction could not reasonably be expected to
have a Material Adverse Effect;

 

(vii)      a favorable opinion of Dorsey & Whitney LLP, counsel to the Loan
Parties, addressed to the Lender, as to such matters concerning the Loan Parties
and the Loan Documents as the Lender may reasonably request;

 

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(viii)     a certificate signed by a Responsible Officer of the Lead Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and 4.02(b)
have been satisfied, (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect, (C) to the Solvency of the Loan Parties as of the Closing Date after
giving effect to the transactions contemplated hereby, and (D) either that (1)
no consents, licenses or approvals are required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, or (2) that all
such consents, licenses and approvals have been obtained and are in full force
and effect;

 

(ix)       evidence that all insurance required to be maintained pursuant to the
Loan Documents and all endorsements in favor of the Lender required under the
Loan Documents have been obtained and are in effect;

 

(x)        [reserved];

 

(xi)       all other Loan Documents required to be executed pursuant to the
terms hereof as of such date, each duly executed by the applicable Loan Parties;

 

(xii)       results of searches or other evidence reasonably satisfactory to the
Lender (in each case dated as of a date reasonably satisfactory to the Lender)
indicating the absence of Liens on the assets of the Loan Parties, except for
Permitted Encumbrances;

 

(xiii)      all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Lender to
be filed, registered or recorded to create or perfect the second priority, or in
the case of Term Priority Collateral (as defined in the Intercreditor Agreement)
first priority (subject to the Intercreditor Agreement) Liens intended to be
created under the Loan Documents and all such documents and instruments shall
have been so filed, registered or recorded to the satisfaction of the Lender,
(B) the DDA Notifications, Credit Card Notifications, and Blocked Account
Agreements required pursuant to Section 6.13 hereof, (C) control agreements with
respect to the Loan Parties’ material securities and investment accounts, and
(D) Collateral Access Agreements as required by the Lender (but in no event with
respect to any Store); and

 

(xiv)     such other assurances, certificates, documents, consents or opinions
as the Lender reasonably may require.

 

(b)       The Lender shall be reasonably satisfied that any financial statements
delivered to it fairly present the business and financial condition of the Loan
Parties and that there has been no Material Adverse Effect since the date of the
Audited Financial Statements.

 

(c)       [Reserved].

 

(d)       There shall not be pending any litigation or other proceeding, the
result of which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

(e)       There shall not have occurred any default of any Material Contract of
any Loan Party the result of which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

 

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(f)        The consummation of the transactions contemplated hereby shall not
violate any applicable Law or any Organization Document.

 

(g)       All fees and expenses required to be paid to the Lender on or before
the Closing Date shall have been paid in full.

 

(h)       The Borrowers shall have paid all fees, charges and disbursements of
counsel to the Lender to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of such fees, charges and disbursements as shall
constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the Closing Date (provided that such
estimate shall not thereafter preclude a final settling of accounts between the
Borrowers and the Lender).

 

(i)        The Lender shall have received all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the USA PATRIOT Act.

 

(j)        No material changes in governmental regulations or policies affecting
any Loan Party or any Credit Party shall have occurred prior to the Closing
Date.

 

(k)       There shall not have occurred any disruption or material adverse
change in the United States financial or capital markets in general that has
had, in the reasonable opinion of the Lender, a material adverse effect on the
market for loan syndications or adversely affecting the syndication of the
Loans.

 

(l)        The Closing Date shall have occurred on or before February 27, 2020.
The Lender shall notify the Lead Borrower of the Closing Date, and such notice
shall be conclusive and binding on the Loan Parties.

 

4.02           Conditions to all Loans. The obligation of the Lender to honor
any Request for Loan is subject to the following conditions precedent:

 

(a)       The representations and warranties of each Loan Party contained in
Article V or in any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects on and as of the date of such Delayed
Draw Term Loan, except (i) to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date, (ii) in the
case of any representation or warranty qualified by materiality, such
representation or warranty shall be true and correct in all respects, (subject
to such qualification), (iii) for purposes of this Section 4.02, the
representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01, and (iv) for
purposes of this Section 4.02, the representations and warranties with respect
to any Schedules shall be deemed to refer to the most recently updated Schedules
furnished by the Lead Borrower pursuant to Section 6.14(b) and accepted by the
Lender in writing;

 

(b)       No Default or Event of Default shall exist, or would result from such
proposed Delayed Draw Term Loan or from the application of the proceeds thereof;

 

(c)       Borrowers shall be in compliance on a pro forma basis with the
financial covenants set forth in Section 7.15 hereof, if applicable, for the
four consecutive Fiscal Quarter period most recently then ended as if the
requested Delayed Draw Term Loan had been made on the last day of such four (4)
consecutive Fiscal Quarter period.

 

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(d)       The Lender shall have received a Request for Loan in accordance with
the requirements hereof; and

 

(e)       No event or circumstance which could reasonably be expected to result
in a Material Adverse Effect shall have occurred since the date of the Audited
Financial Statements.

 

Article V

REPRESENTATIONS AND WARRANTIES

 

To induce the Credit Parties to enter into this Agreement and to make Loans,
each Loan Party represents and warrants to the Credit Parties that:

 

5.01           Existence, Qualification and Power. Each Loan Party (a) is a
corporation, limited liability company, partnership or limited partnership, duly
incorporated, organized or formed, validly existing and, where applicable, in
good standing under the Laws of the jurisdiction of its incorporation,
organization, or formation, (b) has all requisite power and authority and all
requisite governmental licenses, permits, authorizations, consents and approvals
to (i) own or lease its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party, and (c) is duly qualified and is licensed and, where applicable, in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect. Schedule 5.01 annexed hereto sets forth, as of
the Closing Date, each Loan Party’s name as it appears in official filings in
its state of incorporation or organization, its state of incorporation or
organization, organization type, organization number, if any, issued by its
state of incorporation or organization, and its federal employer identification
number.

 

5.02           Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is a
party has been duly authorized by all necessary corporate or other
organizational action, and does not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach, termination, or contravention of, or constitute a default under, or
require any payment to be made under (i) any Material Contract or any Material
Indebtedness to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; (c) result in or require the
creation of any Lien upon any asset of any Loan Party (other than Liens in favor
of the Lender under the Security Documents); or (d) violate any Law.

 

5.03           Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, except for
(a) the perfection or maintenance of the Liens created under the Security
Documents (including the first or second priority (as applicable and subject to
the Intercreditor Agreement) nature thereof) or (b) such as have been obtained
or made and are in full force and effect.

 

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5.04           Binding Effect. This Agreement has been, and each other Loan
Document, when delivered, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

 

5.05           Financial Statements; No Material Adverse Effect.

 

(a)       The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Lead Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all Material Indebtedness and other
material liabilities, direct or contingent, of the Lead Borrower and its
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness, in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein.

 

(b)       The unaudited Consolidated and consolidating balance sheet of the Lead
Borrower and its Subsidiaries dated November 2, 2019, and the related
Consolidated and consolidating statements of income or operations, and cash
flows for the Fiscal Quarter ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Lead Borrower and its Subsidiaries as of the date thereof and
their results of operations for the period covered thereby, subject, in the case
of clauses (i) and (ii), to the absence of footnotes and to normal year-end
audit adjustments. Schedule 5.05 sets forth all Material Indebtedness.

 

(c)       Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

(d)       To the best knowledge of the Lead Borrower, no Internal Control Event
exists or has occurred since the date of the Audited Financial Statements that
has resulted in or could reasonably be expected to result in a misstatement in
any material respect (i) in any financial information delivered or to be
delivered to the Lender, (ii) [reserved], (iii) of covenant compliance
calculations provided hereunder or (iv) of the assets, liabilities, financial
condition or results of operations of the Lead Borrower and its Subsidiaries on
a Consolidated basis.

 

(e)       The Consolidated and consolidating forecasted balance sheet and
statements of income and cash flows of the Lead Borrower and its Subsidiaries
delivered pursuant to Section 6.01(c) were prepared in good faith on the basis
of the assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery, the Loan Parties’ best estimate of its future financial
performance.

 

5.06           Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Loan Parties, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against any Loan Party or any of its Subsidiaries or against
any of its properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) except as specifically disclosed in Schedule 5.06, either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect, and since the Closing Date, there
has been no adverse change in the status, or financial effect on any Loan Party
or any Subsidiary thereof, of the matters described on Schedule 5.06.

 

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5.07           No Default. No Loan Party is in default under or with respect to,
or party to, any Material Contract or any Material Indebtedness. No Default or
Event of Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Loan Document.

 

5.08           Ownership of Property; Liens.

 

(a)       Each of the Loan Parties has good record and marketable title in fee
simple to or valid leasehold interests in, all Real Estate necessary or used in
the ordinary conduct of its business. Each of the Loan Parties has good and
marketable title to, valid leasehold interests in, or valid licenses to use all
personal property and assets material to the ordinary conduct of its business.

 

(b)       Schedule 5.08(b)(1) sets forth the address (including street address,
county and state) of all Real Estate that is owned by the Loan Parties, together
with a list of the holders of any mortgage or other Lien thereon as of the
Closing Date. Each Loan Party has good, marketable and insurable fee simple
title to the Real Estate owned by such Loan Party, free and clear of all Liens,
other than Permitted Encumbrances. Schedule 5.08(b)(2) sets forth the address
(including street address, county and state) of all Leases of the Loan Parties,
together with a list of the lessor and its contact information with respect to
each such Lease as of the Closing Date. Each of such Leases is in full force and
effect and the Loan Parties are not in default of the terms thereof, except as
could not reasonably be expected to have a Material Adverse Effect.

 

(c)       Schedule 7.01 sets forth a complete and accurate list of all Liens on
the property or assets of each Loan Party, other than statutory or common law
Liens against or by landlords of the Stores, showing as of the Closing Date the
lienholder thereof, the principal amount of the obligations secured thereby and
the property or assets of such Loan Party subject thereto. The property of each
Loan Party is subject to no Liens, other than Permitted Encumbrances.

 

(d)       Schedule 7.02 sets forth a complete and accurate list of all
Investments held by any Loan Party on the Closing Date, showing as of the
Closing Date the amount, obligor or issuer and maturity, if any, thereof.

 

(e)       Schedule 7.03 sets forth a complete and accurate list of all
Indebtedness of each Loan Party on the Closing Date, showing as of the Closing
Date the amount, obligor or issuer and maturity thereof.

 

5.09           Environmental Compliance.

 

(a)       Except as specifically disclosed in Schedule 5.09, no Loan Party (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) has a
Responsible Officer with knowledge of any basis for any Environmental Liability,
except, in each case, as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

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(b)       Except as otherwise set forth in Schedule 5.09, (i) none of the
properties currently owned by any Loan Party is listed or proposed for listing
on the NPL or on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property, and (ii) to the knowledge of any Responsible
Officer of any Loan Party none of the properties currently operated or formerly
owned by any Loan Party is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to any such
property in connection with any matter for which any Loan Party would have any
material liability; there are not and never have been any underground or
above-ground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed by any Loan Party in violation of any Environmental Laws on
any property currently owned or operated by any Loan Party or, to the knowledge
of any Responsible Officer of any Loan Party, on any property formerly owned by
any Loan Party; there is no friable asbestos or friable asbestos-containing
material on any property currently owned or operated by any Loan Party; and
Hazardous Materials have not been released, discharged or disposed of by any
Loan Party in violation of any Environmental Laws on any property currently
owned or operated or formerly owned by any Loan Party.

 

(c)       Except as otherwise set forth on Schedule 5.09, no Loan Party is
undertaking, and no Loan Party has completed, either individually or together
with other potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party have been disposed of
in a manner not reasonably expected to result in material liability to any Loan
Party.

 

5.10           Insurance. The properties of the Loan Parties are insured with
financially sound and reputable insurance companies which are not Affiliates of
the Loan Parties, in such amounts, with such deductibles and covering such risks
(including, without limitation, workmen’s compensation, public liability,
business interruption and property damage insurance) as are customarily carried
by companies engaged in similar businesses and owning similar properties in
localities where the Loan Parties operate. Schedule 5.10 sets forth a
description of all insurance maintained by or on behalf of the Loan Parties as
of the Closing Date. Each insurance policy listed on Schedule 5.10 is in full
force and effect and all premiums in respect thereof that are due and payable
have been paid.

 

5.11           Taxes. The Loan Parties have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings being diligently conducted, for which adequate
reserves have been provided in accordance with GAAP, as to which Taxes no Lien
has been filed and which contest effectively suspends the collection of the
contested obligation and the enforcement of any Lien securing such obligation.
There is no proposed tax assessment against any Loan Party that would, if made,
have a Material Adverse Effect. No Loan Party is a party to any tax sharing
agreement.

 

5.12           ERISA Compliance.

 

(a)       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 qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Lead Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification. The Loan Parties 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 Lien imposed under the Code or ERISA exists or is likely
to arise on account of any Plan.

 

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(b)       There are no pending or, to the best knowledge of the Lead Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

 

(c)       (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither any Loan
Party 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); (iv) neither any
Loan Party 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 (v) neither any Loan
Party nor any ERISA Affiliate has engaged in a transaction that could be subject
to Sections 4069 or 4212(c) of ERISA, in each case except as could not
reasonably be expected to result in a Material Adverse Effect.

 

5.13           Subsidiaries; Equity Interests. The Loan Parties have no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, which Schedule sets forth the legal name, jurisdiction of incorporation or
formation and authorized Equity Interests of each such Subsidiary. All of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and non-assessable and are owned by a Loan Party (or a Subsidiary of
a Loan Party) in the amounts specified on Part (a) of Schedule 5.13 free and
clear of all Liens except for those created under the Security Documents and
those in favor of the Revolving Loan Lender created under the Revolving Loan
Documents. Except as set forth in Schedule 5.13, there are no outstanding rights
to purchase any Equity Interests in any Subsidiary. The Loan Parties have no
equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13. All of the outstanding
Equity Interests in the Loan Parties have been validly issued, and are fully
paid and non-assessable and are owned in the amounts specified on Part (c) of
Schedule 5.13 free and clear of all Liens except for those created under the
Security Documents and those in favor of the Revolving Loan Lender under the
Revolving Loan Documents. The copies of the Organization Documents of each Loan
Party and each amendment thereto provided pursuant to Section 4.01 are true and
correct copies of each such document, each of which is valid and in full force
and effect.

 

5.14           Margin Regulations; Investment Company Act.

 

(a)       No Loan Party is engaged or will be engaged, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. None of the proceeds of the
Loans shall be used directly or indirectly for the purpose of purchasing or
carrying any margin stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any margin stock
or for any other purpose that might cause any of the Loans to be considered a
“purpose credit” within the meaning of Regulations T, U, or X issued by the FRB.

 

(b)       None of the Loan Parties, any Person Controlling any Loan Party, or
any Subsidiary is or is required to be registered as an “investment company”
under the Investment Company Act of 1940.

 

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5.15           Disclosure. Each Loan Party has disclosed to the Lender all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No report, financial statement, certificate or other information furnished
(whether in writing or orally) by or on behalf of any Loan Party to the Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each
case, as modified or supplemented by other information so furnished) contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, that with respect to projected
financial information, the Loan Parties represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time of preparation thereof.

 

5.16          Compliance with Laws. Each of the Loan Parties is in compliance
(a) in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its properties, except in
such instances in which (i) such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings diligently
conducted or (ii) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
and (b) with Sections 9.16 and 9.17 hereof.

 

5.17           Intellectual Property; Licenses, Etc. The Loan Parties own, or
possess the right to use, all of the Intellectual Property, licenses, permits
and other authorizations that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person. To the knowledge of the Lead Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by any Loan Party infringes upon
any rights held by any other Person. Except as specifically disclosed in
Schedule 5.17, no claim or litigation regarding any of the foregoing is pending
or, to the best knowledge of the Lead Borrower, threatened, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

5.18           Labor Matters. There are no strikes, lockouts, slowdowns or other
material labor disputes against any Loan Party pending or, to the knowledge of
any Loan Party, threatened. The hours worked by and payments made to employees
of the Loan Parties comply with the Fair Labor Standards Act and any other
applicable federal, state, local or foreign Law dealing with such matters. No
Loan Party has incurred any liability or obligation under the Worker Adjustment
and Retraining Act or similar state Law. All payments due from any Loan Party,
or for which any claim may be made against any Loan Party, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
properly accrued in accordance with GAAP as a liability on the books of such
Loan Party. Except as set forth on Schedule 5.18, no Loan Party is a party to or
bound by any collective bargaining agreement. There are no representation
proceedings pending or, to any Loan Party’s knowledge, threatened to be filed
with the National Labor Relations Board, and no labor organization or group of
employees of any Loan Party has made a pending demand for recognition. There are
no complaints, unfair labor practice charges, grievances, arbitrations, unfair
employment practices charges or any other claims or complaints against any Loan
Party pending or, to the knowledge of any Loan Party, threatened to be filed
with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment of any employee of any Loan Party. The consummation of the
transactions contemplated by the Loan Documents will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Loan Party is bound.

 

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5.19           Security Documents.

 

(a)       The Security Agreement creates in favor of the Lender, for the benefit
of the Secured Parties (as defined in the Security Agreement) referred to
therein, a legal, valid, continuing and enforceable security interest in the
Collateral (as defined in the Security Agreement), the enforceability of which
is subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law. The financing statements, releases and other filings are in
appropriate form and have been or will be filed in the offices specified in
Schedule II of the Security Agreement. Upon such filings and/or the obtaining of
“control” (as defined in the UCC), the Lender will have a perfected Lien on, and
security interest in, to and under all right, title and interest of the grantors
thereunder in all Collateral that may be perfected by filing, recording or
registering a financing statement or analogous document (including without
limitation the proceeds of such Collateral subject to the limitations relating
to such proceeds in the UCC) or by obtaining control, under the UCC (in effect
on the date this representation is made) in each case prior and superior in
right to any other Person (other than to the extent subject to the Intercreditor
Agreement, the Revolving Loan Lender with respect to the Revolving Loan Priority
Collateral).

 

(b)       When the Security Agreement (or a short form thereof) is filed in the
United States Patent and Trademark Office and when financing statements,
releases and other filings in appropriate form are filed in the offices
specified in Schedule II of the Security Agreement, the Lender shall have a
fully perfected Lien on, and security interest in, all right, title and interest
of the applicable Loan Parties in the Intellectual Property (as defined in the
Security Agreement) in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or analogous
document in the United States Patent and Trademark Office in each case prior and
superior in right to any other Person (it being understood that subsequent
recordings in the United States Patent and Trademark Office may be necessary to
perfect a Lien on registered trademarks and trademark applications acquired by
the Loan Parties after the Closing Date).

 

5.20           Solvency. After giving effect to the transactions contemplated by
this Agreement, and before and after giving effect to each Delayed Draw Term
Loan, as well as the extensions of credit to be made under the Revolving Loan
Agreement, the Loan Parties, on a Consolidated basis, are Solvent. No transfer
of property has been or will be made by any Loan Party and no obligation has
been or will be incurred by any Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of any Loan Party.

 

5.21           Deposit Accounts; Credit Card Arrangements.

 

(a)       Annexed to the Revolving Loan Agreement (in effect as of the Closing
Date) as Schedule 5.21(a) is a list of all DDAs maintained by the Loan Parties
as of the Closing Date, which Schedule includes, with respect to each DDA (i)
the name and address of the depository; (ii) the account number(s) maintained
with such depository; (iii) a contact person at such depository, and (iv) the
identification of each Blocked Account Bank.

 

(b)       Annexed to the Revolving Loan Agreement (in effect as of the Closing
Date) as Schedule 5.21(b) is a list describing all arrangements as of the
Closing Date to which any Loan Party is a party with respect to the processing
and/or payment to such Loan Party of the proceeds of any credit card charges and
debit card charges for sales made by such Loan Party.

 

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5.22           Brokers. No broker or finder brought about the obtaining, making
or closing of the Loans or transactions contemplated by the Loan Documents, and
no Loan Party or Affiliate thereof has any obligation to any Person in respect
of any finder’s or brokerage fees in connection therewith.

 

5.23           Customer and Trade Relations. There exists no actual or, to the
knowledge of any Loan Party, threatened, termination or cancellation of, or any
material adverse modification or change in the business relationship of any Loan
Party with any supplier material to its operations.

 

5.24           Material Contracts. Schedule 5.24 sets forth all Material
Contracts to which any Loan Party is a party or is bound as of the Closing Date.
The Loan Parties have delivered true, correct and complete copies of such
Material Contracts to the Lender on or before the Closing Date or the Closing
Date, as applicable. The Loan Parties are not in breach or in default in any
material respect of or under any Material Contract and have not received any
notice of the intention of any other party thereto to terminate any Material
Contract.

 

5.25           Casualty. Neither the businesses nor the properties of any Loan
Party or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

5.26           OFAC; Sanctions.

 

No Loan Party nor any of its Subsidiaries is in violation of any Sanctions. No
Loan Party nor any of its Subsidiaries nor, to the knowledge of such Loan Party,
any director, officer, employee, agent or Affiliate of such Loan Party or such
Subsidiary (a) is a Sanctioned Person or a Sanctioned Entity, (b) has any assets
located in Sanctioned Entities, or (c) to the knowledge of such Loan Party,
derives revenues from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities. Each of the Loan Parties and its Subsidiaries has
implemented and maintains in effect policies and procedures designed to ensure
compliance by the Loan Parties and their Subsidiaries and their respective
directors, officers, employees, agents and Affiliates with all Sanctions,
Anti-Corruption Laws and Anti-Money Laundering Laws. Each of the Loan Parties
and its Subsidiaries, and to the knowledge of each such Loan Party, each
director, officer, employee, agent and Affiliate of each such Loan Party and
each such Subsidiary, is in compliance with all applicable Sanctions,
Anti-Corruption Laws and Anti-Money Laundering Laws in all material respects. No
proceeds of any Loan made will be used directly, or to the knowledge of any Loan
Party, indirectly, to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Entity, or otherwise used in any manner that would result in a violation of any
applicable Sanctions, Anti-Corruption Laws or Anti-Money Laundering Laws by any
Person (including any Credit Party or other individual or entity participating
in any transaction).

 

Article VI
AFFIRMATIVE COVENANTS

 

So long as the Lender shall have any Commitment hereunder, or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnification obligations for which a claim has not been asserted), the Loan
Parties shall:

 

6.01           Financial Statements. Deliver to the Lender, in form and detail
satisfactory to the Lender:

 

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(a)       as soon as available, but in any event within ninety (90) days after
the end of each Fiscal Year of the Lead Borrower, a Consolidated and
consolidating balance sheet of the Lead Borrower and its Subsidiaries as at the
end of such Fiscal Year, and the related consolidated and consolidating
statements of income or operations, Shareholders’ Equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be audited and accompanied by (i) a report
and unqualified opinion of Deloitte & Touche LLP or another Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Lender, which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any “going concern” or
like qualification or exception or any qualification or exception as to the
scope of such audit and (ii) if required by the SEC, an opinion of Deloitte &
Touche LLP or such other Registered Public Accounting Firm independently
assessing Loan Parties’ internal controls over financial reporting in accordance
with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No. 2, and
Section 404 of Sarbanes-Oxley expressing a conclusion that contains no statement
that there is a material weakness in such internal controls, except for such
material weaknesses as to which the Lender do not object, and such consolidating
statements to be certified by a Responsible Officer of the Lead Borrower to the
effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of the Lead
Borrower and its Subsidiaries;

 

(b)       as soon as available, but in any event on or before the third Friday
(or if such day is not a Business Day, on the next succeeding Business Day)
after the end of each of the Fiscal Months of each Fiscal Year of the Lead
Borrower, a Consolidated and consolidating balance sheet of the Lead Borrower
and its Subsidiaries as at the end of such Fiscal Month, and the related
Consolidated and consolidating statements of income or operations, and cash
flows for such Fiscal Month, and for the portion of the Lead Borrower’s Fiscal
Year then ended, setting forth in each case in comparative form the figures for
(A) such period set forth in the budget delivered pursuant to Section 6.01(c)
hereof, (B) the corresponding Fiscal Month of the previous Fiscal Year and (C)
the corresponding portion of the previous Fiscal Year, all in reasonable detail,
such consolidated statements to be certified by a Responsible Officer of the
Lead Borrower as fairly presenting the financial condition, results of
operations, and cash flows of the Lead Borrower and its Subsidiaries as of the
end of such Fiscal Month in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes, and such consolidating
statements to be certified by a Responsible Officer of the Lead Borrower to the
effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of the Lead
Borrower and its Subsidiaries; and

 

(c)        as soon as available, but in any event no more than forty-five (45)
days after the end of each Fiscal Year of the Lead Borrower, budgets prepared by
management of the Lead Borrower and approved by the board of directors of the
Lead Borrower, in form satisfactory to the Lender, of consolidated balance
sheets and statements of income or operations and cash flows of the Lead
Borrower and its Subsidiaries on a monthly basis for the immediately following
Fiscal Year (including the Fiscal Year in which the Maturity Date occurs), and
as soon as available, any significant revisions to such budget with respect to
such Fiscal Year.

 

6.02           Certificates; Other Information. Deliver to the Lender, in form
and detail satisfactory to the Lender:

 

(a)        [Reserved];

 

(b)       concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and 6.01(b), a duly completed Compliance Certificate signed
by a Responsible Officer of the Lead Borrower, and in the event of any change in
generally accepted accounting principles used in the preparation of such
financial statements, the Lead Borrower shall also provide a statement of
reconciliation conforming such financial statements to GAAP;

 

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(c)        [Reserved];

 

(d)        promptly upon receipt, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of any Loan Party by its
Registered Public Accounting Firm in connection with the accounts or books of
the Loan Parties, or any audit of any of them, including, without limitation,
specifying any Internal Control Event;

 

(e)        promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Lead Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which any Loan Party may file or
be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934 or with any national securities exchange, and in any case
not otherwise required to be delivered to the Lender pursuant hereto;

 

(f)         the financial and collateral reports described on Schedule 6.02
hereto, at the times set forth in such Schedule;

 

(g)        promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of any Loan Party or any
Subsidiary thereof pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the Lender
pursuant to Section 6.01 or any other clause of this Section 6.02;

 

(h)        as soon as available, but in any event within thirty (30) days after
the end of each Fiscal Year of the Loan Parties, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for each Loan
Party and its Subsidiaries and containing such additional information as the
Lender may reasonably specify;

 

(i)         promptly after the Lender’s request therefor, copies of all Material
Contracts and documents evidencing Material Indebtedness;

 

(j)         promptly, and in any event within five (5) Business Days after
receipt thereof by any Loan Party, copies of each notice or other correspondence
received from any Governmental Authority (including, without limitation, the SEC
(or comparable agency in any applicable non-U.S. jurisdiction)) concerning any
proceeding with, or investigation or possible investigation or other inquiry by
such Governmental Authority regarding financial or other operational results of
any Loan Party or any other matter which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;

 

(k)        [Reserved]; and

 

(l)         promptly, such additional information regarding the business
affairs, financial condition or operations of any Loan Party, or compliance with
the terms of the Loan Documents, as the Lender may from time to time reasonably
request.

 

Documents required to be delivered pursuant to Sections 6.01(a) or 6.01(b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Lead Borrower posts such documents, or provides a link thereto on the Lead
Borrower’s website on the Internet at the website address listed on Schedule
9.02; or (ii) on which such documents are posted on the Lead Borrower’s behalf
on an Internet or intranet website, if any, to which the Lender has access
(whether a commercial, third-party website or whether sponsored by the Lender);
provided, that: (i) the Lead Borrower shall deliver paper copies of such
documents to the Lender upon request to deliver such paper copies until a
written request to cease delivering paper copies is given by the Lender and (ii)
the Lead Borrower shall notify the Lender (by electronic mail) of the posting of
any such documents and provide to the Lender by electronic mail electronic
versions (i.e., soft copies) of such documents. Notwithstanding anything
contained herein, in every instance the Lead Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.02(b)
to the Lender.

 

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6.03           Notices. Promptly notify the Lender:

 

(a)        of the occurrence of any Default or Event of Default;

 

(b)       of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect;

 

(c)        of any breach or non-performance of, or any default under, a
consignment agreement or a Material Contract or with respect to Material
Indebtedness of any Loan Party thereof;

 

(d)       of any material dispute, litigation, investigation, proceeding or
suspension between any Loan Party or any Subsidiary thereof and any Governmental
Authority or the commencement of, or any material development in, any litigation
or proceeding affecting any Loan Party or any Subsidiary thereof, including
pursuant to any applicable Environmental Laws;

 

(e)        of the occurrence of any ERISA Event;

 

(f)        of any material change in accounting policies or financial reporting
practices by any Loan Party;

 

(g)       of any change in any Loan Party’s senior executive officers;

 

(h)       of the discharge by any Loan Party of its present Registered Public
Accounting Firm or any withdrawal or resignation by such Registered Public
Accounting Firm;

 

(i)        of any collective bargaining agreement or other labor contract to
which a Loan Party becomes a party, or the application for the certification of
a collective bargaining agent;

 

(j)         of the filing of any Lien for unpaid Taxes against any Loan Party;

 

(k)        of any casualty or other insured damage to any material portion of
the Collateral or the commencement of any action or proceeding for the taking of
any interest in a material portion of the Collateral under power of eminent
domain or by condemnation or similar proceeding or if any material portion of
the Collateral is damaged or destroyed;

 

(l)         of any transaction of the nature contained in Article VII hereof;
and

 

(m)      of any failure by any Loan Party to pay rent at (i) any distribution
centers or warehouses; (ii) ten percent (10%) or more of such Loan Party’s
locations; or (iii) any of such Loan Party’s locations if such failure continues
for more than ten (10) days following the day on which such rent first came due
and such failure would be reasonably likely to result in a Material Adverse
Effect.

 

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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Lead Borrower setting forth details of the occurrence
referred to therein and stating what action the Lead Borrower has taken and
proposes to take with respect thereto. Each notice pursuant to Section 6.03(a)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.

 

6.04           Payment of Obligations. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, (b) all lawful claims (including, without limitation,
claims of landlords, warehousemen, customs brokers, freight forwarders,
consolidators and carriers) which, if unpaid, would by law become a Lien upon
its property; and (c) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness, except, in each case, where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
such Loan Party has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and enforcement of any Lien securing such
obligation, (d) no Lien has been filed with respect thereto and (e) the failure
to make payment pending such contest could not reasonably be expected to result
in a Material Adverse Effect.

 

6.05           Preservation of Existence, Etc. Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization or formation except in a transaction
permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its Intellectual Property, except to the extent such
Intellectual Property is no longer used or useful in the conduct of the business
of the Loan Parties.

 

6.06           Maintenance of Properties. (a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

6.07           Maintenance of Insurance.

 

(a)        Maintain with financially sound and reputable insurance companies
reasonably acceptable to the Lender not Affiliates of the Loan Parties,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business and operating in the same or similar locations or as is required by
applicable Law, of such types and in such amounts as are customarily carried
under similar circumstances by such other Persons and as are reasonably
acceptable to the Lender.

 

(b)        Cause fire and extended coverage policies maintained with respect to
any Collateral to be endorsed or otherwise amended to include (i) a
non-contributing mortgage clause (regarding improvements to Real Estate) and
lenders’ loss payable clause (regarding personal property), as Lender’s interest
may appear, in form and substance satisfactory to the Lender, which endorsements
or amendments shall provide that the insurer shall pay all proceeds otherwise
payable to the Loan Parties under the policies directly to the Lender or the
Revolving Loan Lender, as applicable, pursuant to and in accordance with the
Intercreditor Agreement, (ii) a provision to the effect that none of the Loan
Parties, Credit Parties or any other Person shall be a co-insurer and (iii) such
other provisions as the Lender may reasonably require from time to time to
protect the interests of the Credit Parties.

 

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(c)        Cause commercial general liability policies to be endorsed to name
the Lender as an additional insured.

 

(d)       Cause business interruption policies to name the Lender as a loss
payee, as its interests may appear, and to be endorsed or amended to include (i)
a provision that, from and after the Closing Date, the insurer shall pay all
proceeds otherwise payable to the Loan Parties under the policies directly to
the Lender, (ii) a provision to the effect that none of the Loan Parties, the
Lender or any other Credit Party shall be a co-insurer and (iii) such other
provisions as the Lender may reasonably require from time to time to protect the
interests of the Credit Parties.

 

(e)        Cause each such policy referred to in this Section 6.07 to also
provide that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium except upon not less than ten (10) days’ prior written
notice thereof by the insurer to the Lender (giving the Lender the right to cure
defaults in the payment of premiums) or (ii) for any other reason except upon
not less than thirty (30) days’ prior written notice thereof by the insurer to
the Lender.

 

(f)        Deliver to the Lender, prior to the cancellation, modification or
non-renewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Lender, including an insurance binder) together with evidence satisfactory to
the Lender of payment of the premium therefor.

 

(g)       [Reserved].

 

(h)       Maintain for themselves, a Directors and Officers insurance policy,
and a “Blanket Crime” policy including employee dishonesty, forgery or
alteration, theft, disappearance and destruction, robbery and safe burglary,
property, and computer fraud coverage with responsible companies in such amounts
as are customarily carried by business entities engaged in similar businesses
similarly situated, and will upon request by the Lender furnish the Lender
certificates evidencing renewal of each such policy.

 

(i)         Permit any representatives that are designated by the Lender to
inspect the insurance policies maintained by or on behalf of the Loan Parties
and to inspect books and records related thereto and any properties covered
thereby.

 

(j)         None of the Credit Parties, or their agents or employees shall be
liable for any loss or damage insured by the insurance policies required to be
maintained under this Section 6.07. Each Loan Party shall look solely to its
insurance companies or any other parties other than the Credit Parties for the
recovery of such loss or damage and such insurance companies shall have no
rights of subrogation against any Credit Party or its agents or employees. If,
however, the insurance policies do not provide waiver of subrogation rights
against such parties, as required above, then the Loan Parties hereby agree, to
the extent permitted by law, to waive their right of recovery, if any, against
the Credit Parties and their agents and employees. The designation of any form,
type or amount of insurance coverage by any Credit Party under this Section 6.07
shall in no event be deemed a representation, warranty or advice by such Credit
Party that such insurance is adequate for the purposes of the business of the
Loan Parties or the protection of their properties.

 

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6.08           Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been set aside and maintained by the
Loan Parties in accordance with GAAP; (b) such contest effectively suspends
enforcement of the contested Laws, and (c) the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.

 

6.09           Books and Records; Accountants.

 

(a)        (i) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Loan Parties; and (ii) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Loan Parties.

 

(b)       At all times retain Deloitte & Touche LLP or another Registered Public
Accounting Firm which is reasonably satisfactory to the Lender and shall
instruct Deloitte & Touche LLP or such other Registered Public Accounting Firm
to cooperate with, and be available to, the Lender or its representatives to
discuss the Loan Parties’ financial performance, financial condition, operating
results, controls, and such other matters, within the scope of the retention of
Deloitte & Touche LLP or such other Registered Public Accounting Firm, as may be
raised by the Lender.

 

6.10           Inspection Rights. Permit representatives and independent
contractors of the Lender to visit and inspect any of its properties, to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and Registered Public Accounting Firm, and permit the
Lender or professionals (including investment bankers, consultants, accountants,
and lawyers) retained by the Lender to conduct evaluations of the Loan Parties’
business plan, forecasts and cash flows, all at the expense of the Loan Parties
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Lead Borrower;
provided, however, that when a Default or Event of Default exists the Lender (or
any of its representatives or independent contractors) may do any of the
foregoing at the expense of the Loan Parties at any time during normal business
hours and without advance notice.

 

6.11           Use of Proceeds. Use the proceeds of the Loans (a) to finance the
acquisition of assets of the Borrowers in the ordinary course of business,
including the purchase of inventory and equipment, (b) to finance Capital
Expenditures of the Borrowers in an amount for any Fiscal Year not to exceed the
projected annual amount set forth in Borrowers’ Capital Expenditures budget for
that Fiscal Year (including with respect to any and all new store openings),
plus $500,000; provided, that the Capital Expenditures budget shall be in form
and substance substantially similar to Borrowers’ Capital Expenditure budget for
the Fiscal Year ending January 30, 2021 and acceptable to the Lender (it being
understood and agreed that (i) Lender has reviewed and accepted the Borrowers’
Capital Expenditures budgets for the Fiscal Years 2020 and 2021, as delivered by
the Borrowers prior to the Closing Date, and (ii) Lender shall not unreasonably
withhold, condition, or delay its acceptance of an amendment or modifications in
the normal course of the Borrowers’ business to the Borrowers’ Capital
Expenditures budgets for the Fiscal Years ending 2020 and 2021), (c) for general
corporate purposes of the Loan Parties, in each case to the extent not
prohibited under applicable Law or the Loan Documents, (d) redeem or otherwise
acquire Equity Interests in the Lead Borrower in accordance with Section 7.06,
provided, that such Equity Interests are promptly retired immediately upon such
redemption or acquisition; and (e) repayment of the FILO Loan (as defined in the
Revolving Loan Agreement) prior to giving effect to the amendment of such
Revolving Loan Agreement being entered into on the date hereof.

 

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6.12           Additional Loan Parties. Notify the Lender at the time that any
Person (x) becomes a Subsidiary, and in each case promptly thereafter (and in
any event within fifteen (15) days), cause any such Person (a) which is not a
CFC, to (i) become a Loan Party by executing and delivering to the Lender a
Joinder to this Agreement or a Facility Guaranty or such other documents as the
Lender shall deem appropriate for such purpose, (ii) grant a Lien to the Lender
on such Person’s assets of the same type that constitute Collateral to secure
the Obligations, and (iii) deliver to the Lender documents of the types referred
to in clauses (iii) and (iv) of Section 4.01(a) and, upon the reasonable request
of the Lender, customary opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to in clause (a)), and (b) if any Equity Interests or
Indebtedness of such Person are owned by or on behalf of any Loan Party, to
pledge such Equity Interests and promissory notes evidencing such Indebtedness
(except that, if such Subsidiary is a CFC, the Equity Interests of such
Subsidiary to be pledged may be limited to 65% of the outstanding voting Equity
Interests of such Subsidiary and 100% of the non-voting Equity Interests of such
Subsidiary) in each case in form, content and scope reasonably satisfactory to
the Lender. In no event shall compliance with this Section 6.12 waive or be
deemed a waiver or consent to any transaction giving rise to the need to comply
with this Section 6.12 if such transaction was not otherwise expressly permitted
by this Agreement or constitute or be deemed to constitute, with respect to any
Subsidiary, an approval of such Person as a Borrower or permit the inclusion of
any acquired assets in the computation of the Borrowing Base.

 

6.13           Cash Management.

 

(a)        Comply in all respects with Section 6.13 of the Revolving Loan
Agreement, provided, however, that if the Revolving Loan Facility is terminated,
contemporaneously with or within five (5) Business Days after the termination of
the Revolving Loan Facility, the Loan Parties shall:

 

(i)               deliver to the Lender true, correct, and complete copies of
notifications (each, a “Credit Card Notification”) in form and substance
reasonably satisfactory to the Lender which have been executed on behalf of such
Loan Party and delivered to such Loan Party’s Credit Card Issuers and Credit
Card Processors as of such date; and

 

(ii)               deliver to the Lender true, correct, and complete copies of
each Blocked Account Agreement executed on behalf of such Loan Party with each
Blocked Account Bank (collectively, the “Blocked Accounts”) pursuant to the
Revolving Loan Agreement; and

 

(iii)            deliver to the Lender true, correct, and complete copies of
notifications (each, a “DDA Notification”) in form and substance reasonably
satisfactory to the Lender which have been executed on behalf of such Loan Party
and delivered to each depository institution with which the Borrowers have one
or more DDAs as of such date.

 

(b)       If the Revolving Loan Facility is terminated, the Loan Parties shall
continue to maintain cash management arrangements, reporting, and remittance in
each case pursuant to and in accordance with the terms of Section 6.13 of the
Revolving Loan Agreement as in effect immediately prior to such termination,
except that the Borrowers shall not be required to ACH or wire transfer to
Lender, except as otherwise provided in this Agreement or unless an Event of
Default has occurred and is continuing, the following:

 

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(i)               amounts on deposit in its DDAs, payments from Credit Card
Processors and Credit Card Issuers and proceeds of all credit card charges;

 

(ii)               cash receipts from the Disposition of Inventory and other
assets (whether or not constituting Collateral) (other than cash kept in Stores
in the ordinary course of business consistent with the Borrowers’ policies as in
effect on the Closing Date); and

 

(iii)             proceeds of Accounts, Net Proceeds, or other cash payments
received by a Loan Party from any Person or from any source or on account of any
Disposition or other transaction or event, including, without limitation, any
Prepayment Event.

 

(c)        Each Blocked Account Agreement shall require that if the Revolving
Loan Facility is terminated, upon notice from Lender, which notice shall be
delivered only after the occurrence and during the continuance of an Event of
Default, the ACH or wire transfer no less frequently than daily (and whether or
not there are then any outstanding Obligations) to the concentration account
maintained by the Lender (such account, the “Concentration Account”), of all
cash receipts and collections received by each Loan Party from all sources (the
“Receipts and Collections”), including, without limitation, the following:

 

(i)               the then entire ledger balance of each Blocked Account (net of
any minimum balance, not to exceed $5,000.00, as may be kept in the subject
Blocked Account under the Borrowers’ policies as in effect on the Closing Date);

 

(ii)               all amounts required to be deposited into the Blocked
Accounts pursuant to clause (b) above; and

 

(iii)             any other cash amounts received by any Loan Party from any
other source, on account of any type of transaction or event;

 

provided, however, the Lender may, in its sole discretion, permit the Loan
Parties to maintain one or more “intermediate” Blocked Account Agreements,
pursuant to the terms of which, upon notice from the Lender to the blocked
account bank (which notice shall be delivered only after the occurrence and
during the continuance of a Cash Dominion Event), the ACH or wire transfer of
all Receipts and Collections to another Blocked Account (as distinguished from
the Concentration Account) shall be effective (irrespective of whether any
Obligations are then outstanding) no less frequently than daily.

 

(d)        If the Revolving Loan Facility is terminated, the Concentration
Account shall at all times be subject to a control agreement in favor of the
Lender. The Loan Parties hereby acknowledge and agree that, if the Revolving
Loan Facility is terminated and an Event of Default has occurred and is
continuing, (i) the Loan Parties have no right of withdrawal from the
Concentration Account, (ii) the funds on deposit in the Concentration Account
shall at all times be collateral security for all of the Obligations hereunder
and of the Obligations (as defined in the Revolving Credit Agreement), and (iii)
to the extent determined by the Lender, the funds on deposit in the
Concentration Account shall be applied to the Obligations. In the event that,
notwithstanding the provisions of this Section 6.13, if the Revolving Loan
Facility is terminated and an Event of Default has occurred and is continuing,
any Loan Party receives or otherwise has dominion and control of any such cash
receipts or collections, such receipts and collections shall be held in trust by
such Loan Party for the Lender, shall not be commingled with any of such Loan
Party’s other funds or deposited in any account of such Loan Party and shall,
not later than the Business Day after receipt thereof, be deposited into the
Concentration Account or dealt with in such other fashion as such Loan Party may
be instructed by the Lender.

 

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(e)       If the Revolving Loan Facility is terminated, contemporaneously with
or within five (5) Business Days after the termination of the Revolving Loan
Facility, the Loan Parties shall cause bank statements and/or other reports to
be delivered to the Lender not less often than monthly, accurately setting forth
all amounts deposited in each Blocked Account to ensure the proper transfer of
funds as set forth above.

 

6.14           Information Regarding the Collateral.

 

(a)        Furnish to the Lender at least thirty (30) days prior written notice
of any change in: (i) any Loan Party’s name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties; (ii) the location of any Loan Party’s chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
owned by it is located (including the establishment of any such new office or
facility), excluding Store locations; (iii) any Loan Party’s organizational
structure or jurisdiction of incorporation or formation; or (iv) any Loan
Party’s Federal Taxpayer Identification Number or organizational identification
number assigned to it by its state of organization. The Loan Parties agree not
to effect or permit any change referred to in the preceding sentence unless all
filings have been made under the UCC or otherwise that are required in order for
the Lender to continue at all times following such change to have a valid, legal
and perfected first or second priority (as applicable and subject to the
Intercreditor Agreement) security interest in all the Collateral for its own
benefit and the benefit of the other Credit Parties.

 

(b)        Should any of the information on any of the Schedules hereto (other
than Schedule 5.08(b)(2)) become inaccurate or misleading in any material
respect as a result of changes after the Closing Date, the Lead Borrower shall
advise the Lender in writing of such revisions or updates as may be necessary or
appropriate to update or correct the same. From time to time as may be
reasonably requested by the Lender (which request shall not be made (i) more
than one (1) time in each Fiscal Quarter with respect to Schedule 5.08(b)(2) and
(ii) more than two (2) times in any Fiscal Year with respect to all other
Schedules, in each case so long as no Default or Event of Default has occurred
and is continuing), the Lead Borrower shall supplement each Schedule hereto, or
any representation herein or in any other Loan Document, with respect to any
matter arising after the Closing Date that, if existing or occurring on the
Closing Date, would have been required to be set forth or described in such
Schedule or as an exception to such representation or that is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to any
Schedule, such Schedule shall be appropriately marked to show the changes made
therein). Notwithstanding the foregoing, no supplement or revision to any
Schedule or representation shall be deemed the Credit Parties’ consent to the
matters reflected in such updated Schedules or revised representations nor
permit the Loan Parties to undertake any actions otherwise prohibited hereunder
or fail to undertake any action required hereunder from the restrictions and
requirements in existence prior to the delivery of such updated Schedules or
such revision of a representation; nor shall any such supplement or revision to
any Schedule or representation be deemed the Credit Parties’ waiver of any
Default or Event of Default resulting from the matters disclosed therein.

 

6.15           Physical Inventories.

 

(a)        Cause not less than one (1) physical inventory to be undertaken, at
the expense of the Loan Parties, in each Fiscal Year, and cycle counts, in each
case consistent with past practices, conducted by such inventory takers as are
satisfactory to the Revolving Loan Lender and following such methodology as is
consistent with past practices. The Revolving Loan Lender, at the expense of the
Loan Parties, may participate in and/or observe each scheduled physical count of
Inventory which is undertaken on behalf of any Loan Party. The Lead Borrower,
within thirty (30) days following the completion of such inventory, shall
provide the Revolving Loan Lender with a reconciliation of the results of such
inventory (as well as of any other physical inventory or cycle counts undertaken
by a Loan Party) and shall post such results to the Loan Parties’ stock ledgers
and general ledgers, as applicable.

 

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(b)       Permit the Revolving Loan Lender, in its discretion, if any Default or
Event of Default exists, to cause additional such inventories to be taken as the
Revolving Loan Lender determines (each, at the expense of the Loan Parties).

 

(c)       Request that the Revolving Loan Lender provide to Lender all
information, reports, compilations, and materials received and/or prepared by
Revolving Loan Lender or its agents pursuant to Sections 6.15(a) and 6.15(b) of
the Revolving Loan Agreement (as in effect on the date hereof or as otherwise
amended in accordance with the terms of the Revolving Loan Agreement), in each
case within five (5) Business Days after its receipt or preparation thereof, as
the case may be.

 

6.16           Environmental Laws. (a) Conduct its operations and keep and
maintain its Real Estate in material compliance with all Environmental Laws; (b)
obtain and renew all environmental permits necessary for its operations and
properties; and (c) implement any and all investigation, remediation, removal
and response actions that are required to comply with Environmental Laws
pertaining to the presence, generation, treatment, storage, use, disposal,
transportation or release of any Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate; provided, however, that neither a Loan
Party nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and adequate
reserves have been set aside and are being maintained by the Loan Parties with
respect to such circumstances in accordance with GAAP.

 

6.17           Further Assurances.

 

(a)       Execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions including the
filing and recording of financing statements and other documents (with respect
to, among other things, any filing with the United Stated Copyright Office in
connection with the Borrowers’ copyrights), that may be required under any
applicable Law, or which the Lender may request, to grant, preserve, protect,
perfect or enforce the Liens created or intended to be created by the Security
Documents or the validity or priority of any such Lien, all at the expense of
the Loan Parties. The Loan Parties also agree to provide to the Lender, from
time to time upon request, evidence satisfactory to the Lender as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.

 

(b)       If any material assets are acquired by any Loan Party after the
Closing Date (other than assets constituting Collateral under the Security
Documents that become subject to the perfected first-priority Lien (or, with
respect to the Revolving Loan Priority Collateral, second-priority) subject to
Permitted Encumbrances) under the Security Documents upon acquisition thereof),
notify the Lender thereof, and the Loan Parties will cause such assets to be
subjected to a Lien securing the Obligations and will take such actions as shall
be necessary or shall be requested by the Lender to grant and perfect such
Liens, including actions described in paragraph (a) of this Section 6.17, all at
the expense of the Loan Parties. In no event shall compliance with this
Section 6.17(b) waive or be deemed a waiver or consent to any transaction giving
rise to the need to comply with this Section 6.17 if such transaction was not
otherwise expressly permitted by this Agreement.

 

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(c)       Upon the request of the Lender, cause any of its landlords to deliver
a Collateral Access Agreement to the Lender in such form as the Lender may
reasonably require; provided, that, (i) the foregoing will not apply to Store
locations, and (ii) modification of existing Collateral Access Agreements for
the Borrowers’ distribution centers located in Plymouth, Minnesota and
Shepardsville, Kentucky in favor of Revolving Loan Lender to add provisions that
account for the interest of the Lender consistent with the terms of the
Intercreditor Agreement shall satisfy the requirements of this Section 6.17(c).

 

(d)       Upon the request of the Lender, execute any and all further documents,
agreements and instruments, and take all such further actions (including the
filing of the Security Agreement or a short form thereof in the United States
Copyright Office or United States Patent and Trademark Office), that may be
required under any applicable Law or which the Lender may request in order for
the Lender to have a fully perfected Lien on, and security interest in, all
right, title and interest of the applicable Loan Parties in any registered
copyright and copyright application that is material to the Business.

 

(e)       Borrowers shall establish not later than sixty (60) days after the
Closing Date a designated account, subject to an account control agreement in
form and substance reasonably satisfactory to the Lender (the “Term Loan
Priority Account”), pursuant to which all Net Proceeds of Term Loan Priority
Collateral shall be applied first to the Obligations hereunder pursuant to and
in accordance with the terms of the Intercreditor Agreement.

 

6.18           Compliance with Terms of Leaseholds. Except as otherwise
expressly permitted hereunder, (a) make all payments and otherwise perform all
obligations in respect of all Leases to which any Loan Party is a party, and
keep such Leases in full force and effect, (b) not allow such Leases to lapse or
be terminated or any rights to renew such Leases to be forfeited or cancelled,
and (c) notify the Lender of any default by any party with respect to such
Leases and cooperate with the Lender in all respects to cure any such default,
in each case to the extent failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

6.19           Material Contracts. (a) Perform and observe all material terms
and provisions of each Material Contract to be performed or observed by it, (b)
maintain each such Material Contract in full force and effect (except to the
extent such Person elects to terminate the same in accordance with its terms and
so notifies the Lender and, unless the failure to do so could not reasonably be
expected to have a Material Adverse Effect, makes reasonable arrangements for a
suitable replacement of the same), (c) enforce each such Material Contract in
accordance with such Person’s reasonable business judgment, (d) take all such
action to such end as may be from time to time reasonably requested by the
Lender in its permitted discretion, and (e) upon the reasonable request of the
Lender, make to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Loan Party is entitled
to make under such Material Contract.

 

6.20           OFAC; Sanctions. Each Loan Party will, and will cause each of its
Subsidiaries to comply with all applicable Sanctions, Anti-Corruption Laws and
Anti-Money Laundering Laws. Each of the Loan Parties and its Subsidiaries shall
implement and maintain in effect policies and procedures designed to ensure
compliance by the Loan Parties and their Subsidiaries and their respective
directors, officers, employees, agents and Affiliates with all applicable
Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.

 

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6.21           Credit Card Processors. The Loan Parties shall comply in all
respects with Section 6.21 of the Revolving Loan Agreement, provided, however,
that if the Revolving Loan Facility is terminated, contemporaneously with or
within five (5) Business Days of the termination of the Revolving Loan Facility,
the Lead Borrower will, and will cause its Subsidiaries to (a) comply in all
material respects with all obligations of such Person under each credit card
processing agreement to which such Person is a party, (b) maintain each credit
card processing agreement as in effect prior to such termination in full force
and effect (except to the extent such Person elects to terminate the same in
accordance with the terms thereof and so notifies the Lender) and take or cause
to be taken all actions necessary to maintain, preserve and protect the rights
and interests of the Lender in all material respects with respect to all such
agreements, and (c) promptly notify the Lender of the entry by such Person into
any credit card processing agreement with any Credit Card Processor or Credit
Card Issuer after such date and deliver to the Lender a copy of the Credit Card
Notification delivered to each such Credit Card Processor or Credit Card Issuer
contemporaneously with the entry by such Person into such credit processing
agreement.

 

Article VII

NEGATIVE COVENANTS

 

So long as the Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnification obligations for which a claim has not been asserted), no Loan
Party shall, directly or indirectly:

 

7.01           Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets (including, among other things, any of the Borrowers’
copyrights) or revenues, whether now owned or hereafter acquired or sign or file
or suffer to exist under the UCC or any similar Law or statute of any
jurisdiction a financing statement that names any Loan Party as debtor; sign or
suffer to exist any security agreement authorizing any Person thereunder to file
such financing statement; sell any of its property or assets subject to an
understanding or agreement (contingent or otherwise) to repurchase such property
or assets with recourse to it; or assign or otherwise transfer any accounts or
other rights to receive income, other than, as to all of the above, Permitted
Encumbrances.

 

7.02           Investments. Make any Investments, except Permitted Investments.

 

7.03           Indebtedness; Disqualified Stock. (a) Create, incur, assume,
guarantee, suffer to exist or otherwise become or remain liable with respect to,
any Indebtedness, except Permitted Indebtedness; (b) issue Disqualified Stock;
or (c) issue and sell any other Equity Interests unless (i) such Equity
Interests shall be issued solely by the Lead Borrower and not by a Subsidiary of
a Loan Party, (ii) such Equity Interests shall not be subject to redemption
other than redemption at the option of the Loan Party issuing such Equity
Interests and in accordance with the limitations contained in this Agreement,
and (iii) all Restricted Payments in respect of such Equity Interests are
permitted pursuant to Section 7.06.

 

7.04           Fundamental Changes. Merge, dissolve, divide, liquidate,
consolidate with or into another Person, (or agree to do any of the foregoing),
except that, so long as no Default or Event of Default shall have occurred and
be continuing prior to or immediately after giving effect to any action
described below or would result therefrom:

 

(a)       any Subsidiary which is not a Loan Party may merge with (i) a Loan
Party, provided that the Loan Party shall be the continuing or surviving Person,
or (ii) any one or more other Subsidiaries which are not Loan Parties, provided
that when any wholly-owned Subsidiary is merging with another Subsidiary, the
wholly-owned Subsidiary shall be the continuing or surviving Person;

 

(b)       any Subsidiary which is a Loan Party may merge into any Subsidiary
which is a Loan Party or into a Borrower, provided that in any merger involving
a Borrower, such Borrower shall be the continuing or surviving Person;

 

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(c)       in connection with a Permitted Acquisition, any Subsidiary of a Loan
Party may merge with or into or consolidate with any other Person or permit any
other Person to merge with or into or consolidate with it; provided, that (i)
the Person surviving such merger shall be a wholly-owned Subsidiary of a Loan
Party and such Person shall become a Loan Party in accordance with the
provisions of Section 6.12 hereof, and (ii) in the case of any such merger to
which any Loan Party is a party, such Loan Party is the surviving Person; and

 

(d)       any CFC that is not a Loan Party may merge into any CFC that is not a
Loan Party.

 

7.05           Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except Permitted Dispositions.

 

7.06           Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default or Event of Default shall have occurred and
be continuing prior to or immediately after giving effect to any action
described below or would result therefrom:

 

(a)       each Subsidiary of a Loan Party may make Restricted Payments to any
Loan Party, including at such time as a Default or an Event of Default shall
have occurred and is continuing;

 

(b)       the Loan Parties and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person;

 

(c)       if the Payment Conditions are satisfied, the Loan Parties and each
Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by
it;

 

(d)       if the Payments Conditions are satisfied, the Lead Borrower may
declare or pay cash dividends to its stockholders;

 

(e)       [Reserved];

 

(f)        any transaction expressly permitted pursuant to Section 7.09(f); and

 

(g)       so long as no Default or Event of Default has occurred and is
continuing or would result from the making of any such Restricted Payment, the
Loan Parties may make Restricted Payments in an amount not to exceed $2,000,000
in the aggregate during the term of the Loan.

 

7.07           Prepayments of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness (other than Revolving Loan Obligations, which the Loan Parties
shall be permitted, without condition, to prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity), except (i) as long as no
Default or Event of Default then exists, regularly scheduled or mandatory
repayments, repurchases, redemptions or defeasances of Permitted Indebtedness
(other than Revolving Loan Obligations), (ii) voluntary prepayments,
repurchases, redemptions or defeasances of Permitted Indebtedness (excluding on
account of the Revolving Loan Obligations) as long as the Payment Conditions are
satisfied, and (iii) Permitted Refinancings of any such Indebtedness.

 

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7.08           Change in Nature of Business. Engage in any line of business
substantially different from the Business conducted by the Loan Parties on the
Closing Date or any business substantially related or incidental thereto.

 

7.09           Transactions with Affiliates. Enter into, renew, extend or be a
party to any transaction of any kind with any Affiliate of any Loan Party,
whether or not in the ordinary course of business, other than on fair and
reasonable terms substantially as favorable to the Loan Parties or such
Subsidiary as would be obtainable by the Loan Parties or such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate; provided, that, the foregoing restriction shall not apply to (a) a
transaction between or among the Loan Parties, (b) transactions described on
Schedule 7.09 hereto, (c) advances for commissions, travel and other similar
purposes in the ordinary course of business to directors, officers and
employees, (d) the issuance of Equity Interests in the Lead Borrower to any
officer, director, employee or consultant of the Lead Borrower or any of its
Subsidiaries, (e) the payment of reasonable fees and out-of-pocket costs to
directors, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of the
Lead Borrower or any of its Subsidiaries, and (f) any issuances of securities of
the Lead Borrower (other than Disqualified Stock and other Equity Interests not
permitted hereunder) or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, severance agreements, retention plans,
employment agreements, deferred compensation agreements, stock options,
restricted stock agreements and stock ownership plans (in each case in respect
of Equity Interests in the Lead Borrower) of the Lead Borrower or any of its
Subsidiaries.

 

7.10           Burdensome Agreements. Enter into or permit to exist any
Contractual Obligation (other than this Agreement, any other Loan Document or
the Revolving Loan Documents (subject to and in accordance with the
Intercreditor Agreement)) that: (a) limits the ability (i) of any Subsidiary to
make Restricted Payments or other distributions to any Loan Party or to
otherwise transfer property to or invest in a Loan Party, (ii) of any Subsidiary
to Guarantee the Obligations, (iii) of any Subsidiary to make or repay loans to
a Loan Party, or (iv) of the Loan Parties or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person in favor of the
Lender; provided, however, that this clause (iv) shall not prohibit any negative
pledge incurred or provided in favor of any holder of Indebtedness permitted
under clauses (c) or (f) of the definition of Permitted Indebtedness solely to
the extent any such negative pledge relates to the property financed by or the
subject of such Indebtedness; or (b) requires the grant of a Lien to secure an
obligation of such Person if a Lien is granted to secure another obligation of
such Person.

 

7.11           Use of Proceeds. Use the proceeds of any Delayed Draw Term Loan,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (a) to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund Indebtedness originally
incurred for such purpose, (b) to make any payments to a Sanctioned Entity or a
Sanctioned Person, to finance any investments in a Sanctioned Entity or a
Sanctioned Person, to fund any operations of a Sanctioned Entity or a Sanctioned
Person, or in any other manner that would result in a violation of Sanctions by
any Person, (c) for any purpose which would breach any Anti-Corruption Laws or
Anti-Money Laundering Laws, or (d) for purposes other than those permitted under
this Agreement.

 

7.12           Amendment of Material Documents. Amend, modify or waive any of a
Loan Party’s rights under (a) its Organization Documents in a manner adverse to
the Credit Parties, or (b) any Material Contract or Material Indebtedness (other
than on account of any refinancing thereof otherwise permitted hereunder) to the
extent that such amendment, modification or waiver would result in a Default or
Event of Default under any of the Loan Documents, would be materially adverse to
the Credit Parties or otherwise would be reasonably likely to have a Material
Adverse Effect; provided, that, the foregoing restrictions shall not apply to
the Revolving Loan Documents, which may be amended and modified solely to the
extent in accordance with the terms of the Intercreditor Agreement.

 

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7.13           Fiscal Year. Change the Fiscal Year of any Loan Party, or the
accounting policies or reporting practices of the Loan Parties, except as
required by GAAP.

 

7.14           Deposit Accounts; Credit Card Processors. Open new DDAs or
Blocked Accounts unless the Loan Parties shall have delivered to the Revolving
Loan Lender appropriate DDA Notifications (to the extent requested by Revolving
Loan Lender pursuant to the provisions of Section 6.13 of the Revolving Loan
Agreement as in effect on the Closing Date or as amended in a manner permitted
under the terms of the Intercreditor Agreement) or Blocked Account Agreements
consistent with the provisions of Section 6.13 of the Revolving Loan Agreement
as in effect on the Closing Date or as amended in a manner permitted under the
terms of the Intercreditor Agreement, and otherwise satisfactory to the
Revolving Loan Lender.

 

7.15           Financial Covenants.

 

(a)       Minimum Availability. Permit Availability (as defined in the Revolving
Loan Agreement as in effect on the Closing Date or as otherwise amended after
the Closing Date in accordance with the terms of the Intercreditor Agreement) at
any time to be less than the greater of (a) ten percent (10%) of the Loan Cap
(as defined in the Revolving Loan Agreement as in effect on the Closing Date or
as otherwise amended after the Closing Date in accordance with the terms of the
Intercreditor Agreement) and (b) $3,000,000; and

 

(b)       Minimum Consolidated EBITDA. For any period when the outstanding
principal balance of the Obligations to the Lender exceeds $5,000,000, permit
Consolidated EBITDA measured on a Fiscal Quarter-end basis to be less than the
required amount set forth in the following table for the applicable period set
forth opposite thereto:

 

Applicable Period  Minimum Consolidated
EBITDA  For the twelve-Fiscal Month period ending May 2, 2020  $(5,000,000) For
the twelve-Fiscal Month period ending August 1, 2020  $(5,000,000) For the
twelve-Fiscal Month period ending October 31, 2020  $(5,000,000) For the
twelve-Fiscal Month period ending January 30, 2021  $(5,000,000) For the
twelve-Fiscal Month period ending May 1, 2021  $(4,500,000) For the
twelve-Fiscal Month period ending July 31, 2021  $(4,000,000) For the
twelve-Fiscal Month period ending October 30, 2021  $(3,500,000) For the
twelve-Fiscal Month period ending January 29, 2022 and for the twelve-Fiscal
Month period ending each subsequent Fiscal Quarter thereafter  $(3,000,000)

 

 

Article VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01           Events of Default. Any of the following shall constitute an Event
of Default:

 

(a)       Non-Payment. The Borrowers or any other Loan Party fails to pay when
and as required to be paid herein, (i) any amount of principal of any Loan, or
(ii) any interest on any Loan or any fee due hereunder, or (iii) any other
amount payable hereunder or under any other Loan Document; or

 

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(b)       Specific Covenants. Any Loan Party fails to perform or comply with any
term, covenant or agreement contained in any of Section 6.01, 6.02 (other than
subsection (f) thereof), 6.03, 6.05, 6.07, 6.10, 6.11, 6.12, 6.13 or 6.14 or
Article VII; or

 

(c)       Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for fifteen (15) days; or

 

(d)       Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or

 

(e)       Cross-Default. Any Loan Party or any Subsidiary thereof fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Material Indebtedness
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement), or (B) fails
to observe or perform any other agreement or condition relating to any such
Material Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such
Material Indebtedness or the beneficiary or beneficiaries of any Guarantee
thereof (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or

 

(f)        Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or a proceeding shall be commenced or a
petition filed, without the application or consent of such Person, seeking or
requesting the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed and the appointment
continues undischarged, undismissed or unstayed for thirty (30) calendar days or
an order or decree approving or ordering any of the foregoing shall be entered;
or any proceeding under any Debtor Relief Law relating to any such Person or to
all or any material part of its property is instituted without the consent of
such Person and continues undismissed or unstayed for thirty (30) calendar days,
or an order for relief is entered in any such proceeding; or

 

(g)       Inability to Pay Debts; Attachment. (i) Any Loan Party or any
Subsidiary thereof becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due in the ordinary course of
business, or (ii) any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the property of
any such Person; or

 

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(h)       Judgments. There is entered against any Loan Party or any Subsidiary
thereof (i) one or more judgments or orders for the payment of money in an
aggregate amount (as to all such judgments and orders) exceeding $4,000,000 (to
the extent not covered by independent third-party insurance as to which the
insurer is rated at least “A” by A.M. Best Company, has been notified of the
potential claim and does not dispute coverage), or (ii) any one or more
non-monetary judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of thirty (30) consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, is not in effect; or

 

(i)        ERISA. (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 $4,000,000 or
which would reasonably likely result in a Material Adverse Effect, or (ii) a
Loan Party 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 $4,000,000 or which would reasonably likely
result in a Material Adverse Effect; or

 

(j)        Invalidity of Loan Documents. (i) Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
Affiliate thereof contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any provision of any Loan Document, or
purports to revoke, terminate or rescind any provision of any Loan Document or
seeks to avoid, limit or otherwise adversely affect any Lien purported to be
created under any Security Document; or (ii) except as permitted by the Loan
Documents and the Intercreditor Agreement, any Lien purported to be created
under any Security Document shall cease to be, or shall be asserted by any Loan
Party or any Affiliate thereof not to be, a valid and perfected Lien on any
Collateral, with the priority required by the applicable Security Document; or

 

(k)       Change of Control. There occurs any Change of Control; or

 

(l)        Cessation of Business. Except as otherwise expressly permitted
hereunder (including, without limitation, in connection with a Permitted
Disposition), any Loan Party shall take any action to suspend the operation of
its business in the ordinary course, liquidate all or a material portion of its
assets or Store locations, or employ an agent or other third party to conduct a
program of closings, liquidations or “Going-Out-Of-Business” sales of any
material portion of its business; or

 

(m)     Loss of Collateral. There occurs any uninsured loss to any portion of
the Collateral with a fair market value in excess of $5,000,000; or

 

(n)       Indictment. The indictment or institution of any legal process or
proceeding against, any Loan Party or any Subsidiary thereof, under any federal
or state criminal statute, rule, regulation, order, or other requirement having
the force of law for a felony; or

 

(o)       Guaranty. The termination or attempted termination of any Facility
Guaranty except as expressly permitted hereunder or under any other Loan
Document; or

 

(p)       Subordination. (i) The provisions of the Intercreditor Agreement (or
any other intercreditor agreement entered into by Lender after the date hereof,
any such provisions being referred to collectively as the “Intercreditor
Provisions”), shall, without Lender consent, in whole or in part, terminate,
cease to be effective or cease to be legally valid, binding and enforceable
against any holder of the applicable Indebtedness, in each case other than in
accordance with its terms; or (ii) any Borrower or any other Loan Party shall,
directly or indirectly, disavow or contest in any manner (A) the effectiveness,
validity or enforceability of any of the Intercreditor Provisions, or (B) that
the Intercreditor Provisions exist for the benefit of the Credit Parties.

 

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8.02           Remedies Upon Event of Default. If any Event of Default occurs
and is continuing, the Lender may take any or all of the following actions:

 

(a)       declare the Commitments of the Lender to make Loans to be terminated,
whereupon such Commitments and obligation shall be terminated;

 

(b)       declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other Obligations to be immediately
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Loan Parties; and

 

(c)        whether or not the maturity of the Obligations shall have been
accelerated pursuant hereto, proceed to protect, enforce and exercise all rights
and remedies of the Credit Parties under this Agreement, any of the other Loan
Documents or applicable Law, including, but not limited to, by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Credit Parties;

 

provided, however, that upon the occurrence of any Event of Default with respect
to any Loan Party under Section 8.01(f), the obligation of the Lender to make
Loans shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, in each case without further act of the
Lender.

 

No remedy herein is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of Law.

 

8.03           Application of Funds. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable), any amounts received on account of the Obligations shall be
applied by the Lender for its own account in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, Credit Party Expenses and other amounts (including fees, charges
and disbursements of counsel to the Lender and amounts payable under Article
III);

 

Second, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations;

 

Third, to the payment of that portion of the Obligations constituting unpaid
principal of the Loans;

 

Fourth, to payment of all other Obligations; and

  

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Loan Parties or as otherwise required by Law.

 

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Article IX

MISCELLANEOUS

 

9.01           Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by any
Loan Party therefrom, shall be effective unless in writing signed by the Lender
and the Lead Borrower or the applicable Loan Party, as the case may be, and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

 

9.02           Notices; Effectiveness; Electronic Communications.

 

(a)                Notices Generally.

 

(i)                 Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), 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 as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, to the address, electronic mail address
or telephone number specified for such person on Schedule 9.02:

 

(ii)               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 delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

(b)       Electronic Communications. Notices and other communications to the
Loan Parties and the Lender hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Lender; provided, that, approval of such
procedures may be limited to particular notices or communications.

 

Unless the Lender otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the intended recipient’s
receipt of the notice or communication, which shall be evidenced by an
acknowledgment from the intended recipient (such as by the “delivery receipt”
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 provided further that if the sender receives an
“out-of-office” reply e-mail, that notice or other communication shall be deemed
received upon the sender’s compliance with the instructions in such
“out-of-office” reply e-mail regarding notification to another person in the
intended recipient’s absence, 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. Each of the Loan Parties and the Lender may
change its address or telephone number for notices and other communications
hereunder by notice to the other parties hereto.

 

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(d)       Reliance by Lender. The Lender shall be entitled to rely and act upon
any notices (including telephonic Request for Loan) purportedly given by or on
behalf of the Loan Parties even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof, except to the extent reliance
on the same would constitute gross negligence or willful misconduct. The Loan
Parties shall indemnify the Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Loan Parties. All
telephonic notices to and other telephonic communications with the Lender may be
recorded by the Lender, and each of the parties hereto hereby consents to such
recording.

 

9.03           No Waiver; Cumulative Remedies. No failure by any Credit Party to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or
under any other Loan Document preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided herein and in the other Loan Documents
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. Without limiting the generality of the foregoing, the making of
a Loan shall not be construed as a waiver of any Default or Event of Default,
regardless of whether any Credit Party may have had notice or knowledge of such
Default or Event of Default at the time.

 

9.04           Expenses; Indemnity; Damage Waiver.

 

(a)       Costs and Expenses. The Borrowers shall pay all Credit Party Expenses.

 

(b)       Indemnification by the Loan Parties. The Loan Parties shall indemnify
the Lender (and any sub-agent thereof), each other Credit Party, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless (on an after tax basis)
from, any and all losses, claims, causes of action, damages, liabilities,
settlement payments, costs, and related expenses (including the fees, charges
and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee
or asserted against any Indemnitee by any third party or by any 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, or, in the case
of the Lender (and any sub-agents thereof) and their Related Parties only, the
administration of this Agreement and the other Loan Documents, (ii) any Loan or
the use or proposed use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by any Loan Party or any of its Subsidiaries, or any Environmental
Liability related in any way to any Loan Party or any of its Subsidiaries, (iv)
any claims of, or amounts paid by any Credit Party to, a Blocked Account Bank or
other Person which has entered into a control agreement with any Credit Party
hereunder, or (v) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party or by any Borrower or any
other Loan Party or any of the Loan Parties’ directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto, in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnitee; provided, that,
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are determined
by a court of competent jurisdiction by final and non-appealable judgment to
have resulted from the gross negligence or willful misconduct of such Indemnitee
or (y) result from a claim brought by a 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 Borrowers or such Loan Party has
obtained a final and non-appealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.

 

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(c)       Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable Law, the Loan Parties shall not assert, and hereby waive, 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 the use of the proceeds
thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee 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
other than for direct or actual damages resulting from the gross negligence or
willful misconduct of such Indemnitee as determined by a final and
non-appealable judgment of a court of competent jurisdiction.

 

(d)       Payments. All amounts due under this Section shall be payable on
demand therefor.

 

(e)       Survival. The agreements in this Section shall survive the assignment
of any Commitment or Loan by the Lender, the termination of the Commitments and
the repayment, satisfaction or discharge of all the other Obligations.

 

9.05           Payments Set Aside. To the extent that any payment by or on
behalf of the Loan Parties is made to any Credit Party, or any Credit Party
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by such Credit Party in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor
Relief Law or otherwise, then to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such setoff had
not occurred.

 

9.06           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 no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder or
under any other Loan Document without the prior written consent of the Lender.
The Lender may at any time, without consent of, or notice to, the Loan Parties,
assign or otherwise transfer any of its rights or obligations hereunder (i) to
an Eligible Assignee pursuant to an Assignment and Assumption, (ii) by way of
participation in accordance with the provisions of subsection Section 9.06(b),
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 9.06(d); provided however, that the Lender may not
assign or otherwise transfer any of its rights and obligations hereunder if the
result of such assignment or transfer would be to require payment by any Loan
Party of additional amounts under Section 3.01; and provided further, to the
extent that the Lender assigns any portion of its rights and/or obligations
under this Agreement, the Borrowers agree to enter into any such amendments to
this Agreement or the other Loan Documents as may be reasonably required by
Lender in connection therewith, including, but not limited to, accommodating for
multiple lenders and agents, as necessary. Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective

 

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successors and assigns permitted hereby, Participants to the extent provided in
subsection (b) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Credit Parties) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

 

(b)       Participations. Lender may at any time, without the consent of, or
notice to, the Loan Parties, sell participations to any Person (each, a
“Participant”) in all or a portion of the 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) the Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the Loan Parties shall continue to deal solely and directly with Lender in
connection with Lender’s rights and obligations under this Agreement, and (iv)
so long as no Specified Event of Default shall have occurred and be continuing,
the Lender shall not sell participations to any Person that is a Competitor of
the Loan Parties. Any Participant shall agree in writing to comply with all
confidentiality obligations set forth in Section 9.07 as if such Participant was
the Lender hereunder.

 

Any agreement or instrument pursuant to which the Lender sells such a
participation shall provide that the 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 the Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification that would reduce the principal
of or the interest rate on the Loans, extend the term or increase the amount of
the Commitment, as it relates to such Participant, or reduce the amount of any
commitment fee payable pursuant to Section 2.08(a) to which such Participant is
entitled. Subject to subsection (c) of this Section, the Loan Parties agree that
each Participant shall be entitled to the benefits of Section 3.01 to the same
extent as if it were the Lender and had acquired its interest by assignment
pursuant to Section 9.06(a)

 

(c)       Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 than the 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 Lead Borrower’s prior written consent.

 

(d)      Certain Pledges. The Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of the Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided,
that, no such pledge or assignment shall release the Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for the Lender
as a party hereto.

 

(e)       Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

  

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9.07           Treatment of Certain Information; Confidentiality. Each of the
Credit Parties agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, funding sources, attorneys, advisors and representatives in
connection with the transactions contemplated hereby (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), (b) 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), (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) 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, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to any Loan Party and its obligations, (g) with the consent of the Lead
Borrower, or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
any Credit Party or any of their respective Affiliates on a non-confidential
basis from a source other than the Loan Parties.

 

For purposes of this Section, “Information” means all information received from
the Loan Parties or any Subsidiary thereof relating to the Loan Parties or any
Subsidiary thereof or their respective businesses pursuant to the terms of the
Loan Documents, other than any such information that is available to any Credit
Party on a non-confidential basis prior to disclosure by the Loan Parties or any
Subsidiary thereof. 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.

 

Each of the Credit Parties acknowledges that (a) the Information may include
material non-public information concerning the Loan Parties or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws.

 

9.08           Right of Setoff. If an Event of Default shall have occurred and
be continuing or if the Lender shall have been served with a trustee process or
similar attachment relating to property of a Loan Party, the Lender, and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest 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 Lender or any such Affiliate to or for the credit
or the account of the Borrowers or any other Loan Party against any and all of
the Obligations now or hereafter existing under this Agreement or any other Loan
Document to the Lender, regardless of the adequacy of the Collateral, and
irrespective of whether or not the Lender shall have made any demand under this
Agreement or any other Loan Document and although such obligations of the
Borrowers or such Loan Party may be contingent or unmatured or are owed to a
branch or office of the Lender different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of the Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that the Lender or its Affiliates may have.
The Lender agree to notify the Lead Borrower 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.

 

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9.09           Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If the Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrowers. In determining whether the interest
contracted for, charged, or received by the Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

 

9.10           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 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. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Lender and when the Lender 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 .pdf or other electronic transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.

 

9.11           Survival. All representations and warranties made hereunder and
in any other Loan Document or other document delivered pursuant hereto or
thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Credit Parties, regardless of any investigation made
by any Credit Party or on their behalf and notwithstanding that any Credit Party
may have had notice or knowledge of any Default or Event of Default at the time
of any Delayed Draw Term Loan, and shall continue in full force and effect as
long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied. Further, the provisions of Sections 3.01 and 9.04 shall survive and
remain in full force and effect regardless of the repayment of the Obligations
or the termination of this Agreement or any provision hereof. In connection with
the termination of this Agreement and the release and termination of the
security interests in the Collateral, the Lender may require such indemnities
and collateral security as they shall reasonably deem necessary or appropriate
to protect the Credit Parties against (x) loss on account of credits previously
applied to the Obligations that may subsequently be reversed or revoked, and (y)
any Obligations that may thereafter arise under Section 9.04.

 

9.12           Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

9.13           Governing Law; Jurisdiction; Etc.

 

(a)        GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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(b)        SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
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 LOAN PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE LOAN 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 LENDER
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION IF REQUIRED TO REALIZE UPON ANY COLLATERAL.

 

(c)       WAIVER OF VENUE. EACH 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 PARAGRAPH (B) OF THIS SECTION. EACH OF THE LOAN 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.

 

(d)      SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.02, EXCLUDING SERVICE
OF PROCESS BY E-MAIL. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY
PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(e)       ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AND, EXCEPT AS
PROVIDED IN THE LAST SENTENCE OF SECTION 9.13(b), EACH CREDIT PARTY, AGREES THAT
ANY ACTION COMMENCED BY IT ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
SOLELY IN A COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH
COURTS WITH RESPECT TO ANY SUCH ACTION.

 

9.14           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 (A) CERTIFIES THAT NO REPRESENTATIVE, 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 (B) 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.

 

-68-

 

 

9.15           No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby, the Loan Parties each
acknowledge and agree that: (i) the credit facility provided for hereunder and
any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the Loan
Parties, on the one hand, and the Credit Parties, on the other hand, and each of
the Loan Parties is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents (including any amendment, waiver or other
modification hereof or thereof); (ii) in connection with the process leading to
such transaction, each Credit Party is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary, for the Loan Parties or
any of their respective Affiliates, stockholders, creditors or employees or any
other Person; (iii) none of the Credit Parties has assumed or will assume an
advisory, agency or fiduciary responsibility in favor of the Loan Parties with
respect to any of the transactions contemplated hereby or the process leading
thereto, including with respect to any amendment, waiver or other modification
hereof or of any other Loan Document (irrespective of whether any of the Credit
Parties has advised or is currently advising any Loan Party or any of its
Affiliates on other matters) and none of the Credit Parties has any obligation
to any Loan Party or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; (iv) the Credit Parties and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Loan Parties and their respective
Affiliates, and none of the Credit Parties has any obligation to disclose any of
such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) the Credit Parties have not provided and will not provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of the Loan Parties has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate. Each of the Loan Parties hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against each of the
Credit Parties with respect to any breach or alleged breach of agency or
fiduciary duty.

 

9.16           USA PATRIOT Act Notice. The Lender hereby notifies the Loan
Parties that, pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow the Lender, as applicable, to identify each Loan
Party in accordance with the Act. Each Loan Party is in compliance, in all
material respects, with the Act. No part of the proceeds of the Loans will be
used by the Loan Parties, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

9.17           Foreign Asset Control Regulations. Neither of the advance of the
Loans nor the use of the proceeds of any thereof will violate the Trading With
the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy
Act”) or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign
Assets Control Regulations”) or any enabling legislation or executive order
relating thereto (which for the avoidance of doubt shall include, but shall not
be limited to, (a) Executive Order 13224 of September 21, 2001 Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b)
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)). Furthermore,
none of the Borrowers or their Affiliates (a) is or will become a “blocked
person” as described in the Executive Order, the Trading with the Enemy Act or
the Foreign Assets Control Regulations or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such “blocked
person” or in any manner violative of any such order.

 

-69-

 

 

9.18           Time of the Essence. Time is of the essence of the Loan
Documents.

 

9.19           Publicity. Each Loan Party consents to the publication by the
Lender of advertising material, including any “tombstone” or comparable
advertising, on its website or in other marketing materials of Lender, relating
to the financing transactions contemplated by this Agreement using any Loan
Party’s name, product photographs, logo, trademark or other insignia. The Lender
shall provide a draft reasonably in advance of any advertising material to the
Lead Borrower for review and comment prior to the publication thereof. The
Lender reserves the right to provide to industry trade organizations and loan
syndication and pricing reporting services information necessary and customary
for inclusion in league table measurements. Notwithstanding the foregoing or
anything in the Loan Documents to the contrary, the Lender consents to the
disclosure by the Loan Parties of all information required to be disclosed in
accordance with applicable Securities Laws, as determined by the Lead Borrower
in good faith.

 

9.20           Additional Waivers.

 

(a)       The Obligations are the joint and several obligations of each Loan
Party. To the fullest extent permitted by Applicable Law, the obligations of
each Loan Party shall not be affected by (i) the failure of any Credit Party to
assert any claim or demand or to enforce or exercise any right or remedy against
any other Loan Party under the provisions of this Agreement, any other Loan
Document or otherwise, (ii) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of, this Agreement or any
other Loan Document, or (iii) the failure to perfect any security interest in,
or the release of, any of the Collateral or other security held by or on behalf
of the Lender or any other Credit Party.

 

(b)       The obligations of each Loan Party shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations after the termination of
the Commitment), including any claim of waiver, release, surrender, alteration
or compromise of any of the Obligations, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Loan Party hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Lender or any other Credit Party to assert any
claim or demand or to enforce any remedy under this Agreement, any other Loan
Document or any other agreement, by any waiver or modification of any provision
of any thereof, any default, failure or delay, willful or otherwise, in the
performance of any of the Obligations, or by any other act or omission that may
or might in any manner or to any extent vary the risk of any Loan Party or that
would otherwise operate as a discharge of any Loan Party as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations after the termination of the Commitment).

 

-70-

 

 

(c)       To the fullest extent permitted by applicable Law, each Loan Party
waives any defense based on or arising out of any defense of any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other Loan Party,
other than the indefeasible payment in full in cash of all the Obligations and
the termination of the Commitment. The Lender and the other Credit Parties may,
at their election, foreclose on any security held by one or more of them by one
or more judicial or non-judicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with any other Loan Party, or exercise
any other right or remedy available to them against any other Loan Party,
without affecting or impairing in any way the liability of any Loan Party
hereunder except to the extent that all the Obligations have been indefeasibly
paid in full in cash and the Commitment has been terminated. Each Loan Party
waives any defense arising out of any such election even though such election
operates, pursuant to applicable Law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Loan Party against
any other Loan Party, as the case may be, or any security.

 

(d)       Each Borrower is obligated to repay the Obligations as joint and
several obligors under this Agreement. Upon payment by any Loan Party of any
Obligations, all rights of such Loan Party against any other Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Obligations and the termination of the Commitment. In addition, any indebtedness
of any Loan Party now or hereafter held by any other Loan Party is hereby
subordinated in right of payment to the prior indefeasible payment in full of
the Obligations and no Loan Party will demand, sue for or otherwise attempt to
collect any such indebtedness; provided, that, payment of such indebtedness on
ordinary business terms is permitted except after the occurrence and during the
continuance of an Event of Default. If any amount shall erroneously be paid to
any Loan Party on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such indebtedness of any Loan Party, such
amount shall be held in trust for the benefit of the Credit Parties and shall
forthwith be paid to the Lender to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of this
Agreement and the other Loan Documents. Subject to the foregoing, to the extent
that any Borrower shall, under this Agreement as a joint and several obligor,
repay any of the Obligations constituting Loans made to another Borrower
hereunder or other Obligations incurred directly and primarily by any other
Borrower (an “Accommodation Payment”), then the Borrower making such
Accommodation Payment shall be entitled to contribution and indemnification
from, and be reimbursed by, each of the other Borrowers in an amount, for each
of such other Borrowers, equal to a fraction of such Accommodation Payment, the
numerator of which fraction is such other Borrower’s Allocable Amount and the
denominator of which is the sum of the Allocable Amounts of all of the
Borrowers. As of any date of determination, the “Allocable Amount” of each
Borrower shall be equal to the maximum amount of liability for Accommodation
Payments which could be asserted against such Borrower hereunder without (a)
rendering such Borrower “insolvent” within the meaning of Section 101 (31) of
the Bankruptcy Code, Section 2 of the Uniform Voidable Transactions Act
(“UVTA”), Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2
of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such Borrower
with unreasonably small capital or assets, within the meaning of Section 548 of
the Bankruptcy Code, Section 4 of the UVTA, Section 4 of the UFTA, or Section 5
of the UFCA, or (c) leaving such Borrower unable to pay its debts as they become
due within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the
UVTA, Section 4 of the UFTA, or Section 5 of the UFCA.

 

9.21           No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

 

-71-

 

 

9.22           Attachments. The exhibits, schedules and annexes attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail. 

 

[ Signature pages follow ]

 

-72-

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.

 

  BORROWERS:       CHRISTOPHER & BANKS CORPORATION           By: /s/ Luke R.
Komarek   Name: Luke R. Komarek   Title: Senior Vice President, General Counsel
and Corporate Secretary       CHRISTOPHER & BANKS, INC.       By: /s/ Luke R.
Komarek   Name: Luke R. Komarek   Title: Senior Vice President, General Counsel
and Corporate Secretary       CHRISTOPHER & BANKS COMPANY       By: /s/ Luke R.
Komarek   Name: Luke R. Komarek   Title: Senior Vice President, General Counsel
and Corporate Secretary

 

[Signature page to Credit Agreement]

 

 

 

 

  LENDER:       ALCC, LLC           By: /s/ Frank Stadelmaier   Name: Frank
Stadelmaier   Title: Authorized Signatory

  

[Signature page to Credit Agreement]

 

 

 

 

AG SCHEDULE 1.01

 

Borrowers

 

Christopher & Banks Corporation

Christopher & Banks, Inc.

Christopher & Banks Company

  

 

 

   

AG SCHEDULE 5.01

 

organizational information

 

Christopher & Banks Corporation

State of Incorporation: Delaware

Organization Type: Corporation

Organization Number: 2108619

Federal Employer Identification Number: 061195422

 

Christopher & Banks, Inc.

State of Incorporation: Minnesota

Organization Type: Corporation

Organization Number: 1B-321

Federal Employer Identification Number: 410851237

 

Christopher & Banks Company

State of Incorporation: Minnesota

Organization Type: Corporation

Organization Number: 11X-528

Federal Employer Identification Number: 412022506

 

 

 

 

 

AG SCHEDULE 5.05

 

supplement to interim financial statements
(MATERIAL INDEBTEDNESS)

 

None.

 

 

 

AG SCHEDULE 5.06

 

Litigation

 

On August 14, 2019, Mark Gottlieb, a Company stockholder, filed a purported
class action proceeding against Jonathan Duskin; Seth Johnson; Keri Jones; Kent
Kleeberger; William Sharpe, III; Joel Waller and Laura Weil (the “Named
Directors”), B. Riley FBR, Inc. and B. Riley Financial Inc., in the Court of
Chancery in the State of Delaware, on behalf of himself and all stockholders who
held shares as of December 20, 2018.  The lawsuit alleges that the Named
Directors breached their duty of loyalty in connection with the Company’s
rejection in December of 2018, of an unsolicited bid to acquire the Company. 
The lawsuit further alleges that the B. Riley firms aided and abetted the
asserted breach of the duty of loyalty by the Named Directors.  The Company
believes the Complaint is without merit.  The Named Directors and the Company on
their behalf, together with the B. Riley firms, intend to defend the lawsuit
vigorously. On September 18, 2019, the Named Defendants filed a motion to
dismiss the Plaintiff’s complaint for failure to state a claim upon which relief
can be granted. The motion has been briefed by Plaintiff and the Defendants and
oral argument on the motion was held before the Court of Chancery on February
13, 2020.

 

 

  

AG SCHEDULE 5.08(b)(1)

 

owned Real Estate

 

None

 

 

 

AG SCHEDULE 5.08(b)(2)

 

leased Real estate

 

2400 Xenium Lane North, Plymouth, MN 55441

 

See attached “Store Locations” list, current as of February 19, 2020

 

 

  

AG SCHEDULE 5.09

 

environmental matters

 

None.

 

 

 

AG SCHEDULE 5.10

 

insurance

 

See attached schedule.

 

 

 

 

Christopher & Banks Insurance Policy Schedule
Effective 2/19/2020

 

Insurance Coverage Insurance Provider Policy Dates Broker Commercial Property
Affiliated FM 2/1/20 – 2/1/21 Willis Towers Watson Cargo Travelers Property
Casualty Company 2/1/20 – 2/1/21 Willis Towers Watson Commercial General
Liability Crum & Forster – The North River Insurance Company (United States Fire
Insurance Company) 2/1/20 – 2/1/21 Willis Towers Watson Commercial Auto Crum &
Forster – The North River Insurance Company (United States Fire Insurance
Company) 2/1/20 – 2/1/21 Willis Towers Watson Workers’ Compensation, and General
Liability Crum & Forster – The North River Insurance Company (United States Fire
Insurance Company) 2/1/20 – 2/1/21 Willis Towers Watson International Package
Continental Insurance Company (CNA) 2/1/20 – 2/1/21 Willis Towers Watson
Commercial Umbrella Crum & Forster – The North River Insurance Company (United
States Fire Insurance Company) – Primary - $10M   Liberty Insurance (Ohio
Casualty Insurance Company) - $15M x $10M   2/1/20 – 2/1/21 Willis Towers Watson
Excess Follow Form liability Continental Insurance Company (CNA) - $25M x $25M
2/1/20 – 2/1/21 Willis Towers Watson Surety – Custom’s Bond International
Fidelity Insurance Company (IFIC) 12/8/19 – 12/7/20 Willis Towers Watson Cyber
Insurance Coverage Beazley - $10M   AIG - $10M x $10M 2/1/20 – 1/31/21 Willis
Towers Watson Primary Directors & Officers Liability National Union Fire Ins. Co
of Pittsburgh (AIG) – Extension - $10M 2/1/20 – 2/1/21 Willis Towers Watson 1st
Excess Directors & Officers Liability Endurance Risk Solutions Assurance Co
(Sompo) – Extension $10M x $10M 2/1/20 – 2/1/21 Willis Towers Watson

 

 

  

Insurance Coverage Insurance Provider Policy Dates Broker 2nd Excess Directors &
Officers Liability Continental Casualty Company (CNA) – Extension - $10M x $20M
2/1/20 – 2/1/21 Willis Towers Watson 3rd Excess Directors & Officers Liability
XL Specialty Insurance Company – Extension - $5M x $30M 2/1/20 – 2/1/21 Willis
Towers Watson 4th Excess Directors & Officers Liability Beazley Insurance
Company – Extension - $10M x $35M 2/1/20 – 2/1/21 Willis Towers Watson 5th
Excess Directors & Officers Liability National Union Fire Insurance Co of
Pittsburgh (AIG) – Extension - $10M x $45M 2/1/20 – 2/1/21 Willis Towers Watson
Primary Employment Practices Liability National Union Fire Ins. Co of Pittsburgh
(AIG) - $5M 2/1/20 – 2/1/21 Willis Towers Watson 1st Excess Employment Practices
Liability AXIS Insurance Company - $5M x $5M 2/1/20 – 2/1/21 Willis Towers
Watson Fiduciary Liability National Union Fire Ins. Co of Pittsburgh 2/1/20 –
2/1/21 Willis Towers Watson Crime Coverage AXIS 2/28/20 – 2/28/21 Willis Towers
Watson

 

 

 

AG SCHEDULE 5.13

 

subsidiaries; other equity investments

 

(a)       Ownership of Christopher & Banks, Inc. and Christopher & Banks
Company:

 

Owner Issuer Type of
Equity
Interests # of
Equity
Interests Certificate Number Percentage
Ownership Christopher & Banks Corporation Christopher & Banks, Inc. Common Stock
1,000 Shares 3 100% Christopher & Banks, Inc. Christopher & Banks Company Common
Stock 1,000 Shares 1 100%

  

(b)       None.

 

 

 

SCHEDULE 5.17

 

intellectual property matters

 

None.

 

 

 

AG SCHEDULE 5.18

 

Labor matters

 

None.

 

 

  

AG SCHEDULE 5.24

 

material contracts

 

[***]

 

 

 

Schedule 6.02

Financial and Collateral Reporting

 

Concurrently with the delivery of Borrowing Base Certificates (as defined in the
Revolving Loan Agreement) to the Revolving Loan Lender in accordance with
Section 6.02(c) of the Revolving Loan Agreement, the Loan Parties shall provide
to Lender:

 

1.       a copy of the Borrowing Base Certificate;

 

2.       a consigned inventory report (in form and detail as the Lender from
time to time may specify), which report shall include (i) the aggregate cost of
goods which are consigned to a Loan Party as of the close of business as of the
last day of the immediately preceding Fiscal Month and (ii) the aggregate amount
of payables owed to consignors as of the close of business as of the last day of
the immediately preceding Fiscal Month; provided, that at any time that an
Accelerated Borrowing Base Delivery Event (as defined in the Revolving Loan
Agreement) has occurred and is continuing, at the election of the Lender, such
consigned inventory report shall specify the required information as of the
close of business on the immediately preceding Saturday; and

 

3.       a PMSI Inventory (as defined in the Revolving Loan Agreement) report
(in form and detail as the Lender from time to time may specify), which report
shall include (i) the aggregate cost of PMSI Inventory which the Loan Party owns
as of the close of business as of the last day of the immediately preceding
Fiscal Month and (ii) the aggregate amount of payables owed to the creditors of
any PMSI Inventory Indebtedness (as defined in the Revolving Loan Agreement) as
of the close of business as of the last day of the immediately preceding Fiscal
Month; provided, that at any time that an Accelerated Borrowing Base Delivery
Event has occurred and is continuing, at the election of the Lender, such
consigned PMSI Inventory report shall specify the required information as of the
close of business on the immediately preceding Saturday.

 

Within three (3) Business Days following the close of each fiscal week of the
Loan Parties, for the prior retail week just ended, copies of the following
internally prepared reports: (a) Facilities Management Report – Merchandise
within Facilities (Stock Ledger) reflecting inventory at retail, cost, and units
including in-transit inventory; (b) a sales driver report reflecting: (i) for
stores with traffic counters, traffic and conversion trends by store by format
(including eCommerce); (ii) for all stores by format (including e-Commerce),
number of transactions and average size of basket and (c) an inventory on order
report showing inventory on order by department by vendor and number of units at
cost and retail cost and (d) a sales and margin report by department and by
channel reflecting sales dollars, sales units, gross margin dollars, EOP
inventory units and cost.

 

On or before the third Friday following the close of each Fiscal Month of the
Loan Parties, for the prior retail month just ended, a copy of the following
internally prepared report, an accounts payable aging report by vendor.

 

Within ten (10) Business Days of receipt, any report or analysis prepared by a
third-party at the request of a Loan Party assessing the Loan Parties future
liquidity or involving a proposed restructuring or turnaround of its business.

 

 

 

 

SCHEDULE 7.01

EXISTING LIENS

 

Christopher & Banks Corporation Lienholder Amount of Obligation Secured
Property/Asset Secured N/A    

 

Christopher & Banks, Inc. Lienholder Amount of Obligation Secured Property/Asset
Secured N/A    

 

Christopher & Banks Company Lienholder Amount of Obligation Secured
Property/Asset Secured N/A    

 

 

  

AG SCHEDULE 7.02

 

InvestmentS

 

None.

  

INVESTMENT policy

 

See attached.

 

 

 

CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES

 

INVESTMENT POLICY

 

Approved by the Audit Committee on December 3, 2014 and supersedes all prior
Investment Policies and Addendums thereto.

 

Contents   Statement of Purpose 22 Policy Review & Approval 22 Investment
Objectives 22 Investment Committee 22 Investment Advisers 22 Legal & Regulatory
Compliance 23 Investment Guidelines 23

 

 

 

 

1.                   Statement of Purpose

 

The purpose of this Investment Policy (the “Policy”) is to establish guidelines
for the investment of the general funds of Christopher & Banks Corporation and
its subsidiaries (“the Company”).

 

Specifically, the Policy:

 

1.Identifies investment objectives; 2.Specifies investment authority and
responsibility; and 3.Establishes investment portfolio guidelines.

 

The Company believes a sound Investment Policy is essential to developing
strategies that ensure the investment objectives of the Company are achieved.

 

2.                   Policy Review & Approval

 

Senior management, with the assistance of its investment advisers, if any, shall
annually review the Policy with the Audit Committee of the Company’s Board of
Directors. Changes in this Policy must be approved by the Audit Committee of the
Board of Directors, and following any such revisions or approvals, the updated
Policy will be provided to the other members of the Company’s Board of
Directors.

 

3.                   Investment Objectives

 

The Company’s primary investment objectives are, in order of importance, as
follows:

 

4.Safety of principal; 5.Maintenance of adequate liquidity; and 6.Maximization
of after-tax, after-fees return on investment.

 

7.                   Investment Committee

 

There shall be an Investment Committee consisting of (i) the Chief Executive
Officer (“CEO”), (ii) the Chief Financial Officer (“CFO”), (iii) the Vice
President, Controller (“Controller”) and (iv) the Vice President, Tax and
Treasury (“VP Tax”) (collectively, the “Committee”). The Committee shall meet
periodically and at any meeting at which the CEO and two (2) or more other
members are present the Committee shall have the authority to retain investment
advisers, open securities accounts, and transfer cash or securities between
sub-portfolios, securities custodial accounts or the Company’s cash
concentration account. Any one member of the Committee may transfer cash between
the Company’s cash concentration account and its money market account or other
operating account utilized for meeting the Company’s immediate liquidity needs,
consistent with the Company’s internal control procedures. The Committee also
may take one or more of the above actions by unanimous written consent.

 

8.                   Investment Advisers

 

The Company may choose to hire the services of one or more investment management
firms and give such parties discretionary authority over individual security
selection and transaction execution, provided that each such firm and its
affiliates may not have more than seventy-five percent (75%) of the Company’s
investable assets under its management at any one time and that they agree in
writing to:

 

 

 

 

1.Manage the Company’s assets in accordance with all applicable laws and
regulations and this Policy;

2.Promptly inform the Company of material events related to the credit markets
as a whole as well as those matters effecting the safety or liquidity of any of
the Company’s specific investments;

3.Contact a member of the Committee promptly upon the occurrence of any of the
following events:

(i)a security held in the portfolio is placed on “Negative Outlook” or
“CreditWatch with Negative Implications”;

(ii)a security held in the portfolio is downgraded and note whether or not it
causes the credit quality of that security to fall below the minimum standards
stated in this Policy; or

(iii)the value of the investments under its management decreases by the lesser
of $500,000 or five percent (5%).*

4.Conduct the purchase and sale of securities designed to receive the best price
and execution, provided that, in any individually managed portfolio, no
securities shall be sold that result in a loss of $10,000 or more without the
prior written approval of the CEO and either the CFO or VP Tax;

5.Provide monthly written reports within 10 days following the last trading day
of the month describing portfolio holdings, transactions, and performance. Such
reports must be made available to the Company via the manager’s or custodian’s
website or in paper copy;

6.In the event of a change in the Company’s tax status, the Company will inform
the managers of the portfolios effected who will then be responsible for
factoring such change into the portfolio’s reported after-tax yield;

7.Promptly inform the Company of matters pertinent to the placement of its
assets with the investment management firm such as significant changes in
ownership and relevant personnel changes;

8.Meet in person with Company management at least quarterly or more often if
deemed necessary by the Company;

9.Attend the Company’s Audit Committee meetings if requested by management or
the Committee;

10.At least annually, review and recommend changes to this Investment Policy as
appropriate; and

11.Limit fund transfers to and from the Company’s securities custodial accounts
to its designated cash concentration account.

 

*Note: Promptly following any notice under Section 3(iii) above, a member of the
Investment Committee shall promptly notify the members of the Audit Committee.
In addition, a member of the Investment Committee shall also promptly notify the
members of the Audit Committee if the value in the aggregate of the investable
assets covered by this Policy decreases by the lesser of $500,000 or five
percent (5%).

 

9.                   Legal & Regulatory Compliance

 

The management and investment of Company funds is to be done in full compliance
with all applicable laws and regulations and shall be reviewed and modified as
necessary to comply with changes in laws and regulations.

 

 

 

 

10.               Investment Guidelines

 

The Company will maintain adequate cash to meet its daily, weekly, and monthly
liquidity needs in bank accounts or money market funds.

 

Remaining corporate funds shall be invested only in Eligible Investments and
further classified into one of three sub-portfolios – Enhanced Cash, Short
Duration and Intermediate Duration – each as further described in Tables I and
II below. The amount of funds allocated to each sub-portfolio may change over
time as directed by the Company.

 

Table I. Eligible Investments Instrument (Abbreviation)

Minimum Credit Rating (Note 1)

(S&P/Moody’s/Fitch)

Short Term Long Term Money Market Mutual Funds MMF N/A Other Mutual Funds MF
Notes 2, 4 Repurchase Agreements Repo Note 3 Derivatives -- Note 4 U.S.
Treasuries UST N/A Federal Agencies USA N/A FDIC Insured Certificates of Deposit
CD N/A N/A Commercial Paper – Taxable CCP A-1/P-1/F-1 N/A Commercial Paper – Tax
Exempt MCP A-1/MIG 1 or VMIG 1/F-1 N/A Sovereigns (dollars only) SOV N/A
AA-/Aa3/AA- Corporate Bonds Corp N/A A-/A3/A- Municipal Bonds Muni N/A A-/A3/A-

 

1.       Investments will be considered to have the highest rating if there is
more than rating agency rating the investment.

2.       An open-end mutual fund may be an Eligible Investment provided that its
stated investment objectives are consistent with the Company’s investment
objectives and portfolio guidelines as described herein and it complies with all
applicable requirements of the Investment Company Act of 1940, as amended,
including the provision of a daily liquidity feature at net asset value.

3.       Repurchase agreements must be collateralized with U.S. Treasury or
Agency securities.

4.       Prohibited Investments: Direct investment in derivatives is prohibited;
however a qualifying Mutual Fund as defined in Note 2 may use interest rate
swaps, futures, or options to hedge against changes in interest rates and lock
in yields.

 

 

 

 

Table II. Portfolio Guidelines

Min Wtd Avg Portfolio Quality

(Notes 1 & 2)

Investment Sub-Portfolio Sub-Portfolio Yield Benchmarks Max Duration
Sub-Portfolio Concentration Limits Instrument

Per Issue

(Note 3)

Sub-Portfolio Max Name Max Maturity

AA-/

Aa3/AA-

Enhanced Cash Note 4 N/A MMFs N/A none Up to 100% USTs 1 year Up to 100% USAs 1
year Up to 75% Repos 7 days Up to 50% CDs 1 year 5% or less of sub-portfolio Up
to 25% CCP or MCP 1 year Up to 75% Corps 1 year Up to 25% Munis 1 year Up to
100%

Short Duration

(~1-3 yr maturities)

BAML 1-3 Year Treasury Index

or

Barclays Capital 1 Year Municipal Bond Index

2 years or less USTs N/A none Up to 100% USAs Up to 75% MFs Up to 100% SOVs 5%
or less of sub-portfolio Up to 25% MRS Up to 25% ABS Up to 25% Corps Up to 25%
Munis Up to 100%

Intermediate Duration

(~4-7 yr maturities)

BAML 1-3 Year Treasury Index

or

Barclays Capital 5 Year Municipal Bond Index

4 years or less USTs N/A none Up to 100% USAs Up to 75% MFs Up to 100% SOVs 5%
or less of sub-portfolio Up to 25% MRS Up to 25% ABS Up to 25% Corps Up to 25%
Munis Up to 100%

 

1.       Initial Quality: At the time of purchase, no more than 10% of the
securities in a sub-portfolio may be rated A-/A3/A- or less. Also at the time of
purchase, no more than 5% of the securities in a sub-portfolio may be unrated.

2.       Downgrades: In the event a security in an individually managed
sub-portfolio is downgraded subsequent to purchase and causes a violation of
minimum weighted average portfolio quality, the downgraded security may be held
by the manager only after obtaining the Company’s written approval. If such
approval is not obtained, the security must be sold as soon as practical but in
all instances within 30 days of the downgrade.

3.       Per Issue Limit: The “per issue limit” of 5% or less is determined at
time of purchase, for example, if $50 million is allocated to a given
sub-portfolio, then the maximum investment in any one municipal or corporate
issue would be $2.5 million.

4.       Yield Benchmarks: Acceptable yield benchmarks for the Enhanced Cash
sub-portfolio include the Lipper Money Market Fund Index, the Lipper Short US
Treasury Index, the Barclays 1-3 Month Treasury Index, the Bank of America
Merrill Lynch (“BAML”) 1-3 Month Treasury Index, and the BAML 6 Month Treasury
Index.

 

 

 

 

AG SCHEDULE 7.03

 

Existing indebtedness

 

None.

 

 

 

 

AG SCHEDULE 7.09

 

affiliate Transactions

 

None.

 

 

 

 

Schedule 9.02

Lenders Officer; Certain Addresses for Notices

 

ALCC, LLC   c/o Angelo Gordon Management, LLC   245 Park Avenue   New York, New
York 10167   Attn: Robert Barnhard     Michael Fantasia   E-Mail:
rbarnhard@angelogordon.com     mfantasia@angelogordon.com  

 

With a copy to (which shall not constitute notice)       Riemer & Braunstein LLP
  100 Cambridge Street, 22nd Floor   Boston, Massachusetts 02114-2527   Attn:
Donald E. Rothman   E-Mail: DRothman@riemerlaw.com  

 

 

 

 

 

EXHIBIT A

 

FORM OF REQUEST FOR LOAN

 

___________, _____

 

To:ALCC, LLC, as Lender  245 Park Avenue  New York, New York 10167

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement dated as of February 27, 2020 (as
amended, modified, supplemented or restated hereafter, the “Credit Agreement”)
by and among (i) Christopher & Banks Corporation, a Delaware corporation, for
itself and as Lead Borrower (in such capacity, the “Lead Borrower”) for the
other Borrowers party thereto from time to time (individually, a “Borrower” and,
collectively, the “Borrowers”), (ii) the Borrowers party thereto from time to
time, (iii) the Guarantors party thereto from time to time, and (iv) ALCC, LLC
(the “Lender”). All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Credit Agreement.

 

11. 1. The Lead Borrower hereby requests a Borrowing:      

12.       13.(a) On ______________ (a Business Day)1     14.(b) In the amount of
$_____________________2

 

The Lead Borrower hereby represents and warrants (for itself and on behalf of
the other Borrowers) that (a) the Borrowing requested herein complies with
Section 2.01 and the other provisions of the Credit Agreement and (b) the
conditions specified in Section 4.02 of the Credit Agreement have been satisfied
on and as of the date specified in Item 1(a) above.

 

[Signature Page to Follow]

 

 

 

1 Each notice of a Borrowing must be received by the Lender not later than 11:00
a.m. (i) five (5) Business Days prior to the requested date of any Borrowing.

 

2 Each Borrowing must be in a principal amount of $1,000,000 or a whole multiple
of $1,000,000 in excess thereof.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has caused this Notice to be duly executed
as of the date set forth above.

 

  CHRISTOPHER & BANKS CORPORATION, as Lead Borrower       By:     Name:
                          Title:  

 

[Signature Page to Request for Loan]

 

 

 

 

EXHIBIT B

 

[FORM OF NOTE]

 

NOTE

 

$10,000,000.00 February 27, 2020

 

FOR VALUE RECEIVED, the undersigned (individually, a “Borrower” and,
collectively, the “Borrowers”), jointly and severally promise to pay to the
order of ALCC, LLC, (hereinafter, with any subsequent holders, the “Lender”),
245 Park Avenue, New York, New York 10167, the principal sum of Ten Million and
00/100 Dollars ($10,000,000.00), or, if less, the aggregate outstanding
principal balance of each Delayed Draw Term Loan made by the Lender to or for
the account of any Borrower pursuant to the Credit Agreement dated as of
February 27, 2020 (as amended, modified, supplemented or restated and in effect
from time to time, the “Credit Agreement”) by and among the Borrowers, the
Lender, and the guarantors from time to time party thereto.

 

This is a “Note” to which reference is made in the Credit Agreement and is
subject to all terms and provisions thereof. The principal of, and interest on,
this Note shall be payable at the times, in the manner, and in the amounts as
provided in the Credit Agreement and shall be subject to prepayment and
acceleration as provided therein. Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Credit Agreement.

 

The Lender’s books and records concerning the Delayed Draw Term Loan, the
accrual of interest thereon, and the repayment of such Delayed Draw Term Loan,
shall be prima facie evidence of the indebtedness to the Lender hereunder.

 

No delay or omission by the Lender in exercising or enforcing any of such
Lender’s powers, rights, privileges, remedies, or discretions hereunder shall
operate as a waiver thereof on that occasion nor on any other occasion. No
waiver of any Event of Default shall operate as a waiver of any other Event of
Default, nor as a continuing waiver of any such Event of Default.

 

Each Borrower, and each endorser and guarantor of this Note, waives presentment,
demand, notice, and protest, and also waives any delay on the part of the holder
hereof. Each Borrower assents to any extension or other indulgence (including,
without limitation, the release or substitution of Collateral) permitted by the
Lender with respect to this Note and/or any Collateral or any extension or other
indulgence with respect to any other liability or any collateral given to secure
any other liability of any Borrower or any other Person obligated on account of
this Note.

 

This Note shall be binding upon each Borrower, and each endorser and guarantor
hereof, and upon their respective successors, assigns, and representatives, and
shall inure to the benefit of the Lender and its successors, endorsees, and
assigns.

 

The liabilities of each Borrower, and of any endorser or guarantor of this Note,
are joint and several, provided, however, the release by the Lender of any one
or more such Persons shall not release any other Person obligated on account of
this Note. Each reference in this Note to any Borrower, any endorser, and any
guarantor, is to such Person individually; each reference to the Borrowers, the
endorsers or the guarantors is to all such Persons jointly. No Person obligated
on account of this Note may seek contribution from any other Person also
obligated unless and until all of the Obligations have been paid in full in
cash.

 

 

 

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

Each of the Borrowers iRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
BORROWERS IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT. EACH OF THE BORROWERS 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
NOTE OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS NOTE OR ANY
OTHER LOAN DOCUMENT AGAINST ANY OF THE BORROWERS OR ITS PROPERTIES IN THE COURTS
OF ANY JURISDICTION IF REQUIRED TO REALIZE UPON ANY COLLATERAL.

 

EACH OF THE Borrowers 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 NOTE OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO ABOVE.
EACH OF THE BORROWERS 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.

 

Each Borrower makes the following waiver knowingly, voluntarily, and
intentionally, and understands that the Lender, in the establishment and
maintenance of their respective relationship with the Borrowers contemplated by
this Note, are each relying thereon. EACH BORROWER, EACH GUARANTOR, ENDORSER AND
SURETY, AND THE LENDER, BY ITS ACCEPTANCE HEREOF, 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 NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, 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 (B) ACKNOWLEDGES THAT THE LENDER HAS BEEN INDUCED TO ENTER INTO THE
CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS HEREIN.

 

[Signature Page to Follow]

 

31

 

 

IN WITNESS WHEREOF, the Borrowers have caused this Note to be duly executed as
of the date set forth above.

 

  BORROWERS:       CHRISTOPHER & BANKS CORPORATION       By:     Name:   Title: 
      CHRISTOPHER & BANKS, INC.       By:     Name:   Title:       CHRISTOPHER &
BANKS COMPANY       By:                    Name:   Title:

 

[Signature Page to Note]

 

 

 

 

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

_____________, ______

 

To:ALCC, LLC, as Lender  245 Park Avenue  New York, New York 10167

 

Re: COMPLIANCE CERTIFICATE

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement dated as of February 27, 2020 (as
amended, modified, supplemented or restated hereafter, the “Credit Agreement”)
by and among (i) Christopher & Banks Corporation, a Delaware corporation, for
itself and as Lead Borrower (in such capacity, the “Lead Borrower”) for the
other Borrowers party thereto from time to time (individually, a “Borrower” and,
collectively, the “Borrowers”), (ii) the Borrowers party thereto from time to
time, (iii) the Guarantors party thereto from time to time, and (iv) ALCC, LLC
(the “Lender”). All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Credit Agreement.

 

The undersigned, a duly authorized and acting Responsible Officer of the Lead
Borrower, hereby certifies to you as follows:

 

No Default.

 

To the knowledge of the undersigned Responsible Officer, except as set forth in
Appendix I, no Default or Event of Default has occurred and is continuing.

 

If a Default or Event of Default has occurred and is continuing, the Borrowers
propose to take action as set forth in Appendix I with respect to such Default
or Event of Default.

 

Financial Calculations. Attached hereto as Appendix II are reasonably detailed
calculations necessary to determine:

 

whether Availability was less than the greater of (a) ten percent (10%) of the
Loan Cap (as defined in the Revolving Loan Agreement as in effect on the Closing
Date or as otherwise amended after the Closing Date in accordance with the terms
of the Intercreditor Agreement) and (b) $3,000,000; and

 

for any period when the outstanding principal balance of the Obligations to the
Lender exceeds $5,000,000, whether Consolidated EBITDA measured on a Fiscal
Quarter-end basis is less than the required amount set forth in the table
appearing in Section 7.15(b) of the Credit Agreement for the applicable period.

 

No Material Accounting Changes, Etc. The consolidated financial statements
furnished to the Lender for the [Fiscal Month/Fiscal Year] ending [_____] fairly
present in all material respects the financial condition, results of operations
and cash flows of the Lead Borrower and its Subsidiaries as of the end of such
[Fiscal Month/Fiscal Year] in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes, and the consolidating
statements fairly present in all material respects the financial condition,
results of operations and cash flows of the Lead Borrower and its Subsidiaries
when considered in relation to the consolidated financial statements. There has
been no change in GAAP or the application thereof since the date of the audited
financial statements furnished to the Lender for the year ending [_____], other
than the material accounting changes as disclosed on Appendix III hereto.

 

[Signature Page to Follow]

 

 

 

 

IN WITNESS WHEREOF, I have executed this certificate as of the date first
written above.

 

  By:       Responsible Officer of Lead Borrower         Name:     Title:  

 

[Signature Page to Compliance Certificate]

 

 

 

 

Appendix I

 

Except as set forth below, no Default or Event of Default presently exists. [If
a Default or Event of Default exists, the following describes the nature of the
Default in reasonable detail and the steps being taken or contemplated by the
Borrowers to be taken on account thereof.]

 

 

 

 

Appendix II

 

Calculation of Availability

 

1. The Loan Cap (as defined in the Revolving Loan Agreement as in effect on the
Closing Date or as otherwise amended after the Closing Date in accordance with
the terms of the Intercreditor Agreement):       2. Total Outstandings (as
defined in the Revolving Loan Agreement as in effect on the Closing Date or as
otherwise amended after the Closing Date in accordance with the terms of the
Intercreditor Agreement):       3. Availability (Line 1 minus Line 2):      

 

In compliance with Section 7.15(a) of the Credit Agreement? [Yes/No]

 

Calculation of Consolidated EBITDA

 

1.Consolidated Net Income of Lead Borrower and Subsidiaries:      
2.Consolidated Interest Charges:       3.provision for Federal, state, local and
foreign income Taxes:       4.depreciation and amortization expenses:      
5.non-cash stock compensation:       6.Pro Forma Cost Savings:       7.Other
non-recurring expenses which do not represent a cash item:       8.Total of
Lines 2 through 7 (to the extent deducted in calculating such Consolidated Net
Income):       9.Federal, state, local and foreign income tax credits:      
10.non-recurring, non-cash items increasing Consolidated Net Income:      
11.Total of Lines 9 through 10 (to the extent included in calculating such
Consolidated Net Income):       12.Consolidated EBITDA (Line 1 plus Line 8 minus
Line 11):       13.Required Minimum Consolidated EBITDA for the 12 Fiscal Month
period ending [__________], 20[___] (or N/A if the outstanding Principal balance
of the Obligations equals or is less than $5,000,000):      

 

In compliance with Section 7.15(b) of the Credit Agreement? [Yes/No]

 

 

 

 

Appendix III

 

Except as set forth below, no material changes in GAAP or the application
thereof have occurred since [the date of the most recently delivered financial
statements to the Lender prior to the date of this Certificate]. [If material
changes in GAAP or in application thereof have occurred, the following describes
the nature of the changes in reasonable detail and the effect, if any, of each
such material change in GAAP or in application thereof in the determination of
the calculation of the financial statements described in the Credit Agreement].

 

2592103.2

 

 

 

 

EXHIBIT D

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

Reference is made to the Credit Agreement dated as of February 27, 2020 (as
amended, modified, supplemented or restated hereafter, the “Credit Agreement”)
by and among (i) Christopher & Banks Corporation, a Delaware corporation, for
itself and as Lead Borrower (in such capacity, the “Lead Borrower”) for the
other Borrowers party thereto from time to time (individually, a “Borrower” and,
collectively, the “Borrowers”), (ii) the Borrowers party thereto from time to
time, (iii) the Guarantors party thereto from time to time, and (iv) ALCC, LLC,
(the “Lender”). All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Credit Agreement.

 

______________________________ (the “Assignor”) and ___________________ (the
“Assignee”) agree as follows:

 

The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, that interest in and to the Assignor’s
rights and obligations as a Lender under the Credit Agreement as of the date
hereof (including, without limitation, such interest in each of the Assignor’s
outstanding Commitments, if any, and the Loans (and related Obligations) owing
to it) specified in Section 1 of Schedule I hereto. After giving effect to such
sale and assignment, the Assignor’s and the Assignee’s Commitments and the
amount of the Loans owing to the Assignor and the Assignee and the amount of
Letters of Credit participated in by the Assignor and the Assignee will be as
set forth in Section 2 of Schedule I hereto.

 

The Assignor: (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any Liens and that it is legally authorized to enter into this
Assignment and Assumption; (b) makes no representation or warranty and assumes
no responsibility with respect to (i) any statements, warranties or
representations made in, or in connection with, the Credit Agreement or any
other Loan Document or any other instrument or document furnished pursuant
thereto, or (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of their respective obligations under the Credit Agreement or
any other Loan Document or any other instrument or document furnished pursuant
thereto; and (d) confirms, in the case of an Assignee who is not a Lender, an
Affiliate of a Lender, or an Approved Fund, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if
the Commitment is not then in effect, the principal outstanding balance of the
Loans of the Assignor subject to this Assignment and Assumption, is not less
than $____________, or, if less, the entire remaining amount of the Assignor’s
Commitment and the Loans at any time owing to it, unless the Lender otherwise
consents (such consent not to be unreasonably withheld or delayed).

 

 

 

 

 

The Assignee: (a) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in Section 6.01
thereof 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
Assumption; (b) agrees that it will, independently and without reliance upon the
Assignor, 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 Agreement; (c) agrees that it will perform in
accordance with their terms all of the obligations which, by the terms of the
Credit Agreement, are required to be performed by it as a Lender; (d) specifies
as its lending office (and address for notices) the office set forth beneath its
name on the signature pages hereof; (e) agrees that, if the Assignee is a
Foreign Lender entitled to an exemption from, or reduction of, withholding tax
under the law of the jurisdiction in which the applicable Loan Party is resident
for tax purposes, it shall deliver to the Loan Parties (in such number of copies
as shall be requested by the recipient) whichever of the following is
applicable: (i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party, (ii) duly completed copies of Internal Revenue Service 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 Loan Parties 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 Internal Revenue Service 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 Borrowers to determine the withholding or
deduction required to be made; and (f) represents and warrants that it is an
Eligible Assignee.

 

The effective date of this Assignment and Assumption shall be the date specified
on Schedule I hereto (the “Effective Date”).

 

From and after the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent of the interest assigned by this Assignment
and Assumption, shall have the rights and obligations of a Lender under the
Credit Agreement, and (b) the Assignor shall, to the extent of the interest
assigned by this Assignment and Assumption, be released from its obligations
under the Credit Agreement.

 

This Assignment and Assumption shall be governed by, and be construed in
accordance with, the laws of the State of New York.

 

[Signature Page to Follow]

 

2

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

 

  [ASSIGNOR]       By:     Name:     Title:         [ASSIGNEE]       By:    
Name:     Title:         Lending Office (and address for notices):      
[Address]

 

 

 

 

Schedule I

 

Section 1.       Percentage/Amount of Commitments/Loans Assigned by Assignor to
Assignee.

 

Applicable Percentage assigned by Assignor: ______%     Commitment assigned by
Assignor: $_______________     Aggregate Outstanding Principal Amount of Loans
assigned by Assignor: $_______________

 

Section 2.       Percentage/Amount of Commitments/Loans by Assignor and Assignee
after giving effect to Assignment and Assumption.

 

Assignor’s Applicable Percentage ______%     Assignee’s Applicable Percentage:
______%     Assignor’s Commitment: $_______________     Assignee’s Commitment:
$_______________     Aggregate Outstanding Principal Amount of   Loans Owing to
Assignor: $_______________     Aggregate Outstanding Principal Amount of Loans
Owing to Assignee: $_______________

 

Section 3.       Effective Date

 

Effective Date: _______________, _____