EXHIBIT 10.1


 


SECOND
AMENDMENT TO AMENDED AND RESTATED 

CREDIT AND SECURITY AGREEMENT


 


THIS SECOND AMENDMENT (the “Amendment”),
dated May 23, 2008, is entered into by and between CHRISTOPHER &
BANKS, INC. and CHRISTOPHER & BANKS COMPANY, each a
Minnesota corporation (jointly and severally, the “Borrower,”
and each a “Borrower” as the context
requires), and WELLS FARGO BANK, NATIONAL ASSOCIATION
(the “Lender”), acting through its Wells
Fargo Business Credit operating division.


 


RECITALS


 


A.            The
Borrower and the Lender are parties to that certain Amended and Restated Credit
and Security Agreement dated November 4, 2005, as amended by a First
Amendment to Amended and Restated Credit and Security Agreement dated as of August 28,
2007 (as amended from time to time, the “Credit Agreement”).
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.


 


B.            The
Borrower has requested that certain amendments be made to the Credit Agreement,
which the Lender is willing to make pursuant to the terms and conditions set
forth herein.


 


NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements herein contained, it is agreed as
follows:


 


1.             Defined Terms. Capitalized terms used in
this Amendment which are defined in the Credit Agreement shall have the same
meanings as defined therein, unless otherwise defined herein.  In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:


 


“Business Day” means a day on which the
Federal Reserve Bank of New York is open for business and, if such day relates
to a LIBOR Advance, a day on which dealings are carried on in the London
interbank eurodollar market.


 


“Default Rate” means an annual interest
rate in effect during a Default Period or following the Termination Date, which
interest rate shall be equal to two percent (2.0%) over the applicable Floating
Rate or the LIBOR Advance Rate, as the case may be, as such rate may change
from time to time.


 


“Floating Rate” means an annual interest
rate equal to the sum of the Prime Rate minus
one-quarter of one percent (0.25%), which interest rate shall change when and
as the Prime Rate changes.


 


“Interest Period” means the period that
commences on (and includes) the Business Day on which either a LIBOR Advance is
made or continued or on which a Floating Rate Advance is converted to a LIBOR
Advance and ending on (but excluding) 


 

















 


the Business Day numerically corresponding to such
date that is one, two, three or six months thereafter as designated by the
Borrower, during which period the outstanding principal balance of the LIBOR
Advance shall bear interest at the LIBOR Advance Rate; provided,
however, that:


 


(a)           No Interest Period may
be selected for an Advance for a principal amount less than One Million Dollars
($1,000,000), and no more than five (5) different Interest Periods may be
outstanding at any one time;


 


(b)           If an Interest Period
would otherwise end on a day which is not a Business Day, then the Interest
Period shall end on the next Business Day thereafter, unless that Business Day
is the first Business Day of a month, in which case the Interest Period shall
end on the last Business Day of the preceding month); and


 


(c)           No Interest Period
applicable to a Revolving Advance may end later than the Maturity Date.


 


“LIBOR” means the rate per annum
(rounded upward, if necessary, to the nearest whole 1/16th of one
percent (1%)) determined pursuant to the following formula:


 


	
  LIBOR =

  	
  Base LIBOR

  	
   

  
	
   

  	
  100% - LIBOR Reserve
  Percentage

  	
   

  



 


(i)            “Base LIBOR” means the rate per annum for
United States dollar deposits quoted by the Lender as the Inter-Bank Market
Offered Rate, with the understanding that such rate is quoted by the Lender for
the purpose of calculating effective rates of interest for loans making
reference thereto, on the first day of a Interest Period for delivery of funds
on said date for a period of time approximately equal to the number of days in
such Interest Period and in an amount approximately equal to the principal
amount to which such Interest Period applies. 
The Borrower understands and agrees that the Lender may base its
quotation of the Inter-Bank Market Offered Rate upon such offers or other
market indicators of the Inter-Bank Market as the Lender in its discretion
deems appropriate including the rate offered for U.S. dollar deposits on the
London Inter-Bank Market.


 


(ii)           “LIBOR Reserve Percentage” means the reserve
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for “Eurocurrency
Liabilities” (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by the Lender for expected changes in such reserve
percentage during the applicable Interest Period.


 


“LIBOR Advance” means an Advance bearing
interest at the LIBOR Advance Rate.


 


“LIBOR Advance Rate” means an annual
interest rate equal to the sum of LIBOR plus one and three-quarters of one
percent (1.75%).


 


2

















 


“Maturity Date” means June 30,
2011.


 


“Officer” means the Chief Executive
Officer, President, Chief Operating Officer, Chief Financial Officer, Vice
President-Treasury and Vice President-Finance of the Borrower.


 


“Premises” means all locations where the
Borrower conducts its business or has any rights of possession, including as of
the date set forth in Exhibit C
attached hereto, the locations described in Exhibit C.


 


2.             The definition of “Wells Fargo Bank Affiliate Obligations”
shall be deleted in its entirety from the Credit Agreement and shall not be
replaced, and each reference in the Credit Agreement to “Obligations” shall be deleted and replaced
with the term “Indebtedness”, and Section 1.1
of the Agreement shall further be amended to include the following definition:


 


“Indebtedness”
is used in its most comprehensive sense and means any debts, obligations and
liabilities of Borrower to Lender, whether incurred in the past, present or
future, whether voluntary or involuntary, and however arising, and whether due
or not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and including without limitation indebtedness arising under any
swap, derivative, foreign exchange, hedge, deposit, treasury management or any
similar transaction or arrangement that Borrower may enter into at any time
with Lender, whether or not Borrower may be liable individually or jointly with
others, or whether recovery upon such Indebtedness may subsequently become
unenforceable.


 


3.             Procedures for Requesting Advances.  Section 2.2 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:


 


Section 2.2            Procedures for Requesting
Advances.  The Borrower
shall comply with the following procedures in requesting Revolving Advances:


 


(a)           Type of Advances. 
Each Advance shall be funded as either a Floating Rate
Advance or a LIBOR Advance, as the Borrower shall specify in a request
delivered to the Lender conforming to the requirements of Section 2.2(b);
Floating Rate Advances and LIBOR Advances may be outstanding at the same
time.  Each request for a LIBOR Advance
shall be in multiples of $1,000,000, with a minimum request of at least $1,000,000.  LIBOR Advances shall not be available during
Default Periods.


 


(b)           Time for Requests.  The Borrower shall request each Advance so
that it is received by Lender not later than the Cut-off Time (i) with
respect to an Advance that is a Floating Rate Advance, on the Business Day on
which the Advance is to be made, and (ii) with respect to an Advance that
is a LIBOR Advance, on the Business Day that is two (2) Business Days
prior to the Business Day on which the Advance is to be made.  Each request that conforms to the terms of
this Agreement shall be effective upon receipt by the Lender, shall be in
writing or by telephone or telecopy transmission, and in the case of a request
by telephone or telecopy transmission, shall be confirmed in writing (including
e-mail) by the Borrower if so requested by the Lender, by (i) an Officer;
or (ii)


 


3

















 


a Person designated as the Borrower’s agent
by an Officer in a writing delivered to the Lender; or (iii) a Person whom
the Lender reasonably believes to be an Officer or such a designated agent,
which confirmation shall specify whether the Advance shall be a Floating Rate
Advance or a LIBOR Advance and, with respect to any LIBOR Advance, shall
specify the principal amount of the LIBOR Advance and the Interest Period
applicable thereto.  The Borrower shall
repay all Advances even if the Lender does not receive such confirmation and
even if the Person requesting an Advance was not in fact authorized to do
so.  Any request for an Advance, whether
written or telephonic, shall be deemed to be a representation by the Borrower
that the conditions set forth in Section 4.2 have been satisfied as of the
time of the request.


 


(c)           Disbursement.  Upon fulfillment of the applicable conditions
set forth in Article IV, the Lender shall disburse the proceeds of the
requested Advance by crediting the Borrower’s operating account maintained with
Lender  unless the Lender and the
Borrower shall agree to another manner of disbursement.


 


4.             LIBOR Advances.  Section 2.2A is hereby added to the
Credit Agreement as follows:


 


Section 2.2A         LIBOR Advances.


 


(a)           Converting Floating Rate Advances to LIBOR Advances;
Procedures.  So long as no
Default Period is in effect, the Borrower may convert all or any part of the
principal amount of any outstanding Floating Rate Advance into a LIBOR Advance
by requesting that the Lender convert same no later than the Cut-off Time on
the Business Day that is two (2) Business Days prior to the Business Day on
which the Borrower wishes the conversion to become effective.  Each request that conforms to the terms of
this Agreement shall be effective upon receipt by the Lender and shall be
confirmed in writing (including e-mail) by the Borrower if the Lender so
requests by any Officer or designated agent identified in Section 2.2(b) or
Person reasonably believed by the Lender to be such an Officer or designated
agent, which request shall specify the Business Day on which the conversion is
to occur, the total amount of the Floating Rate Advance to be converted, and
the applicable Interest Period.  Each
such conversion shall occur on a Business Day, and the aggregate amount of
Floating Rate Advances converted to LIBOR Advances shall be in multiples of $1,000,000,
with a minimum conversion amount of at least $1,000,000.


 


(b)           Procedures at End of an Interest Period.  Unless the Borrower requests a new LIBOR
Advance in accordance with the procedures set forth below, or prepays the
principal of an outstanding LIBOR Advance at the expiration of an Interest
Period, the Lender shall automatically and without request of the Borrower
convert each LIBOR Advance to a Floating Rate Advance on the last day of the
relevant Interest Period.  So long as no
Default exists, the Borrower may cause all or any part of any maturing LIBOR
Advance to be renewed as a new LIBOR Advance by requesting that the Lender
continue the maturing Advance as a LIBOR Advance no later than the Cut-off Time
on the Business Day that is two (2) Business Days prior to the Business
Day constituting the 


 


4

















 


first day of the new Interest Period.  Each such request shall be confirmed in
writing (including e-mail) by the Borrower upon the Lender’s request by any
Officer or designated agent identified in Section 2.2(b), or by a Person
reasonably believed by the Lender to be such an Officer or designated agent, which
confirmation shall be effective upon receipt by the Lender, and which shall
specify the amount of the expiring LIBOR Advance to be continued and the
applicable Interest Period.  Each new
Interest Period shall begin on a Business Day and the amount of each LIBOR
Advance shall be in multiples of $1,000,000, with a minimum Advance of at least
$1,000,000.


 


(c)           Setting and Notice of Rates.  The Lender shall, with respect to any request
for a LIBOR Advance under Section 2.2 or a conversion or renewal of a
LIBOR Advance under this Section 2.2A, provide the Borrower with a LIBOR
quote for each Interest Period identified by the Borrower on the Business Day
on which the request was made, if the request is received by the Lender prior
to the Cut-off Time, or for requests received by the Lender after the Cut-off
Time, on the next Business Day or on the Business Day on which the Borrower has
requested that the LIBOR Advance be made effective. If the Borrower does not
immediately accept a LIBOR quote, the quoted rate shall expire and any
subsequent request from Borrower for a LIBOR quote shall be subject to
redetermination by the Lender of the applicable LIBOR for the LIBOR Advance.


 


(d)           Taxes and Regulatory Costs.  The Borrower shall pay the Lender with
respect to any Advance, upon demand and in addition to any other amounts due or
to become due hereunder, any and all (i) withholdings, interest
equalization taxes, stamp taxes or other taxes (except income and franchise
taxes) imposed by any domestic or foreign governmental authority and related in
any manner to LIBOR, and (ii) future, supplemental, emergency or other
changes in the LIBOR Reserve Percentage, assessment rates imposed by the
Federal Deposit Insurance Corporation, or similar requirements or costs imposed
by any domestic or foreign governmental authority or resulting from compliance
by the Lender with any request or directive (whether or not having the force of
law) from any central bank or other governmental authority and related in any
manner to LIBOR to the extent they are not included in the calculation of
LIBOR.  In determining which of the
foregoing are attributable to any LIBOR option available to the Borrower
hereunder, any reasonable allocation made on a timely basis by the Lender among
its operations shall be conclusive and binding upon the Borrower.


 


5.             Contracted Funds Breakage Fees.  Section 2.6(g) is hereby added to
the Credit Agreement as follows:


 


(g)           Contracted Funds Breakage Fees.  The Borrower may prepay the principal amount
of the Revolving Note at any time in any amount, whether voluntarily or by
acceleration, provided, however,
that if the principal amount of any Revolving Note LIBOR Advance is prepaid,
the Borrower shall pay to the Lender immediately upon demand a contracted funds
breakage fee equal to the sum of the discounted monthly differences for each
month from the month of prepayment through the month in which such Interest
Period matures, calculated as follows for each such month:


 


5

















 


(i)            Determine
the amount of interest which would have accrued each month on the amount
prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the applicable Interest Period.


 


(ii)           Subtract
from the amount determined in (i) above the amount of interest which would
have accrued for the same month on the amount prepaid for the remaining term of
such Interest Period at LIBOR in effect on the date of prepayment for new loans
made for such term in a principal amount equal to the amount prepaid.


 


(iii)          If the result obtained
in (ii) for any month is greater than zero, discount that difference utilizing
the LIBOR set forth in (ii) above as the discount factor.


 


The Borrower acknowledges that prepayment of the
Revolving Note may result in the Lender incurring additional costs, expenses or
liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses or liabilities.  The
Borrower therefore agrees to pay the above-described contracted funds breakage
fee and agrees that said amount represents a reasonable estimate of the
contracted funds breakage costs, expenses and/or liabilities of the Lender.


 


6.             Time for Interest Payments.  Section 2.7(a) of the Credit
Agreement is hereby deleted in its entirety and replaced with the following:


 


(a)           Time For Interest Payments.  Accrued and unpaid interest accruing on
Floating Rate Advances shall be due and payable on the first day of each month
and on the Termination Date (each an “Interest
Payment Date”), or if any such day is not a Business Day, on the
next succeeding Business Day. Interest will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
advance to the Interest Payment Date.  If
an Interest Payment Date is not a Business Day, payment shall be made on the
next succeeding Business Day.  Interest
accruing on each LIBOR Advance shall be due and payable on the last day of the
applicable Interest Period; provided, however, for Interest Periods that are longer
than one month, interest shall nevertheless be due and payable monthly on the
last day of each month, and on the last day of the Interest Period.


 


7.             Grant of Security Interest.  Section 3.1 of the Credit Agreement
shall be deleted in its entirety and restated as follows:


 


Section 3.1            Grant of Security
Interest. The Borrower hereby pledges, assigns and grants to Lender, a
lien and security interest (collectively referred to as the “Security Interest”) in the Collateral, as
security for the payment and performance of: (a) all present and future
Indebtedness of the Borrower to Lender; (b) all obligations of the
Borrower and rights of Lender under this Agreement; and (c) all present
and future obligations of the Borrower to Lender of other kinds. Upon request
by Lender, the 


 


6

















 


Borrower will grant Lender a security
interest in all commercial tort claims that the Borrower may have against any
Person.


 


8.             Inventory and Equipment Locations. 
Section 5.1 of the Credit Agreement is hereby
amended to add the following immediately prior to the last sentence:


 


Notwithstanding the
foregoing, with respect to Inventory and Equipment located at the Borrower’s
store locations, such representation is made as of the date set forth on the
list of stores attached to Exhibit C and incorporated by reference to
Schedule 5.1.


 


9.             Capitalization.  Section 5.2
of the Credit Agreement is hereby deleted in its entirety and replaced with the
following:


 


Section 5.2            Capitalization.  Schedule 5.2 (a) constitutes a correct
and complete list of all Persons
holding ownership interests and rights to acquire ownership interests, which if
fully exercised would cause such Person to hold more than five percent (5%) of
all ownership interests of the Borrower on a fully diluted basis, and (b) sets
forth the ownership structure of all Subsidiaries of the Borrower, as of the
date set forth thereon.


 


10.           Subsidiaries.  Section 5.5 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:


 


Section 5.5            Subsidiaries.  Except as set forth on Schedule 5.2, the
Borrower has no subsidiaries.  Borrower
will provide Lender not less than ten (10) days’ notice prior to the
creation of any new Subsidiary, provided further that such Subsidiary shall
execute and deliver to Lender a guaranty in favor of the Lender, in form and
substance satisfactory to the Lender, guaranteeing the Obligations of the
Borrower, or, at Lender’s discretion, such Subsidiary shall become a Borrower,
in each case within thirty (30) days of the creation of such Subsidiary, if
such Subsidiary exists at such date.


 


11.           Litigation. 
Section 5.7 of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:


 


Section 5.7            Litigation.  Except as set forth on Schedule
5.7,  there are no actions, suits
or proceedings pending or, to the Borrower’s knowledge, threatened against or
affecting the Borrower or any of its Affiliates or the properties of the
Borrower or any of its Affiliates before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to the Borrower or any of its Affiliates, would
have a material adverse effect on the financial condition, properties or
operations of the Borrower or any of its Affiliates.


 


12.           Intellectual Property Rights.  Section 5.11 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:


 


7

















 


Section 5.11         Intellectual
Property Rights.  Except
for Owned Intellectual Property (as defined below) no longer necessary in the
operation of Borrower’s business, Schedule 5.11 is a complete list of all patents,
applications for patents, trademarks, applications to register trademarks,
service marks, applications to register service marks, mask works, trade dress
and copyrights for which the Borrower is the owner of record (the “Owned Intellectual Property”); provided,
however, that with respect to copyrights, the Borrower will
provide a then current list of all copyrights as soon as is practicable, but in
any event not later than thirty (30) days after request by the Lender, if the
Lender is unable to obtain such list, in form and substance acceptable to the
Lender, from the database maintained by the U.S. Copyright Office and
accessible via its website.  Except as
disclosed on Schedule 5.11, and except for Owned Intellectual Property no
longer necessary in the operation of Borrower’s business, (i) the Borrower
owns the Owned Intellectual Property free and clear of all restrictions
(including covenants not to sue a third party), court orders, injunctions,
decrees, writs or Liens, whether by written agreement or otherwise, (ii) no
Person other than the Borrower owns or has been granted any right in the Owned
Intellectual Property, (iii) all Owned Intellectual Property is valid,
subsisting and enforceable and (iv) the Borrower has taken all
commercially reasonable action necessary to maintain and protect the Owned
Intellectual Property.


 


13.           Reporting Requirements.  Section 6.1(h) of the
Credit Agreement is hereby deleted in its entirety and replaced with “Intentionally
Omitted”.


 


14.           Permitted Liens. 
Section 6.3(a)(iv) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:


 


(iv)          Purchase money
Liens relating to indebtedness or capitalized lease obligations for the
acquisition of machinery and equipment (including vehicles) of the Borrower not
exceeding the lesser of cost or fair market value thereof and so long as no
Default Period is then in existence and none would exist immediately after such
acquisition;


 


15.           Investments and Subsidiaries.  The reference to “Schedule 5.5”
contained in Section 6.6(d) of the Credit Agreement is hereby deleted
in its entirety and replaced with “Schedule 5.2,” and any and all other
references to Schedule 5.5 contained in the Credit Agreement are hereby deleted
in their entirety.  In addition, Section 6.6
of the Credit Agreement is hereby amended by adding the following subsection
(e)


 


(e)           Investments related to
a transaction permitted under Section 6.17, below.


 


16.           Consolidation and Merger; Asset Acquisitions.  Section 6.17 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:


 


Section 6.17         Consolidation and Merger;
Acquisitions.  Neither a Borrower
nor the Guarantor will consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in
purpose or effect to a 


 


8

















 


consolidation or merger) the stock or other equity
interests or all or substantially all the assets of any other Person unless:


 


(a)           the Person formed by
such consolidation or into which the Borrower or the Guarantor, as the case may
be, is merged (if the Borrower or the Guarantor is not the surviving entity),
the Person that acquires by conveyance or transfer all or substantially all of
the properties and assets of the Borrower or the Guarantor, as the case may be,
or the Person which is acquired (i) shall be a Person organized and
existing under the laws of the United States of America or any State or the
District of Columbia, (ii) shall expressly assume by an amendment to or
restatement of this Agreement, or the Guaranty, as applicable, the performance
of every covenant of this Agreement on the part of the Borrower or of the
Guaranty on the part the Guarantor to be performed or observed and (iii) if
such Person is a holding company with a significant portion of its operations
conducted and assets held by one or more subsidiaries, shall provide for
guaranties from such subsidiaries on substantially the same terms and
conditions as are set forth in the Guaranty;


 


(b)           immediately after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing;


 


(c)           immediately after
giving effect to such transaction, the Person formed by such consolidation or
into which the Borrower or the Guarantor, as the case may be, is merged or the
Person that acquired by conveyance or transfer the stock or other equity
interests, or all or substantially all of the properties and assets of the
Borrower or the Guarantor, as the case may be, shall have a tangible net worth
of not less than the consolidated tangible net worth of the Borrower and
Guarantor immediately preceding such transaction;


 


(d)           the Borrower and the
Guarantor have delivered to the Lender an officer’s certificate stating that
such consolidation, merger, conveyance, transfer or acquisition and such
amendment or restatement complies with this Section 6.17 and that all
conditions precedent herein relating to such transaction have been complied
with; and


 


(e)           such consolidation,
merger, conveyance, transfer or acquisition has been approved prior to the
transaction in writing by the Lender and such approval shall not be
unreasonably withheld; provided,
however, that no approval by the Lender is required for any
acquisition by a Borrower or Guarantor of all of the outstanding stock or other
equity interests, or all or substantially all of the assets of any other Person
and/or a consolidation or merger in which the Borrower or Guarantor is the
surviving Person, as long as the following conditions are satisfied:


 


(i)            the conditions
specified in subsections (a) through (d) above, as applicable, are
satisfied;


 


9

















 


(ii)           the line or lines of
business of the Person or assets to be acquired by, or merged or consolidated
into, such Borrower or Guarantor are substantially the same line of business
conducted by the Borrower; and


 


(iii)          the aggregate purchase
price of all acquisitions and value of any consideration for any merger or
consolidation (including, for any transaction, the assumption of any
liabilities) by the Borrowers and Guarantor for the current fiscal year to
date, including the proposed acquisition, merger or consolidation, is less than
or equal to $25,000,000.


 


Upon any consolidation or merger of the Borrower or
the Guarantor into another entity, or any conveyance or transfer of all or
substantially all of the properties and assets of the Borrower or the Guarantor
in accordance herewith, the successor entity formed by such consolidation or
into which the Borrower or the Guarantor, as the case may be, is merged or to
which such conveyance or transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of the Borrower under this
Agreement with the same effect as if such successor entity had been named as
the Borrower herein.


 


17.           Premises.  Exhibit C
of the Credit Agreement is hereby replaced with Exhibit C attached hereto.


 


18.           Credit Agreement Schedules.  Schedules 5.1, 5.2, 5.7, 5.11,
5.14, 6.3 and 6.4 to the Credit Agreement are hereby replaced with Schedules
5.1, 5.2, 5.7, 5.11, 5.14, 6.3 and 6.4 attached hereto.


 


19.           Dissolution of Christopher & Banks Services
Company.  The parties
acknowledge and agree that on or about November 2, 2007, Christopher &
Banks Services Company, a Minnesota corporation (“CBSC”), and a Borrower under the Credit Agreement, was
dissolved pursuant to Articles of Dissolution filed with the Minnesota
Secretary of State.  Borrowers hereby
represent and warrant that CBSC did not have any outstanding debts, obligations
or liabilities (other than the Indebtedness under the Credit Agreement) and
that any and all properties, assets and claims of CBSC were distributed to
Christopher & Banks Company, a Minnesota corporation and the sole
shareholder of CBSC.  Any and all
references to CBSC in the Credit Agreement and Loan Documents are hereby
removed from such documents.


 


20.           Waiver of Defaults. The dissolution of CBSC
discussed in Paragraph 19, above constitutes an Event of Default under Section 7.1(e) of
the Credit Agreement (the “Existing Default”).  Upon the terms and subject to the conditions
set forth in this Amendment, Lender hereby waives the Existing Default. This
waiver shall be effective only in this specific instance and for the specific
purpose for which it is given, and this waiver shall not entitle the Borrower
to any other or further waiver in any similar or other circumstances.


 


21.           No Other Changes. Except as explicitly
amended by this Amendment, all of the terms and conditions of the Credit
Agreement shall remain in full force and effect and shall apply to any advance
or letter of credit thereunder.


 


10

















 


22.           Conditions Precedent. This Amendment shall
be effective when the Lender shall have received an executed original hereof
together with the Acknowledgment and
Agreement of Guarantor  set forth
at the end of this Amendment, duly executed by the Guarantor.


 


23.           Undertakings.  Borrower hereby agrees that within sixty (60)
days of the date of this Amendment, Borrower shall deliver to Lender an
appropriate third-party disclaimer and consent or waiver related to Borrowers’
Inventory located at the Shepherdsville, Kentucky inventory location listed on
Schedule 5.1 attached hereto.


 


24.           Representations and Warranties. The
Borrower hereby represents and warrants to the Lender as follows:


 


(a)           The Borrower has all
requisite power and authority to execute this Amendment and any other
agreements or instruments required hereunder and to perform all of its
obligations hereunder, and this Amendment and all such other agreements and
instruments has been duly executed and delivered by the Borrower and constitute
the legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms.


 


(b)           The execution, delivery
and performance by the Borrower of this Amendment and any other agreements or
instruments required hereunder have been duly authorized by all necessary
corporate action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrower, or the articles of
incorporation or by-laws of the Borrower, or (iii) result in a breach of
or constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Borrower is a party or by
which it or its properties may be bound or affected.


 


(c)           After giving effect to
this Amendment, all of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof as though made
on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.


 


25.           References. 
All references in the Credit Agreement to “this Agreement” shall be
deemed to refer to the Credit Agreement as amended hereby; and any and all
references in the Security Documents to the Credit Agreement shall be deemed to
refer to the Credit Agreement as amended hereby.


 


26.           No Other Waiver. Except as set forth in
Paragraph 20 hereof, the execution of this Amendment and the acceptance of all
other agreements and instruments related hereto shall not be deemed to be a
waiver of any Default or Event of Default under the Credit Agreement or a
waiver of any breach, default or event of default under any Security Document
or other document held by the Lender, whether or not known to the Lender and
whether or not existing on the date of this Amendment.


 


11

















 


27.           Release. The Borrower, and each Guarantor
executing the Acknowledgment and Agreement of Guarantor set forth below, hereby
absolutely and unconditionally releases and forever discharges the Lender, and
any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents and
employees of any of the foregoing, from any and all claims, demands or causes
of action of any kind, nature or description, whether arising in law or equity
or upon contract or tort or under any state or federal law or otherwise, which
the Borrower or Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.


 


28.           Costs and Expenses. The Borrower hereby
reaffirms its agreement under the Credit Agreement to pay or reimburse the
Lender on demand for all costs and expenses incurred by the Lender in
connection with the Loan Documents, including without limitation all reasonable
fees and disbursements of legal counsel. Without limiting the generality of the
foregoing, the Borrower specifically agrees to pay all fees and disbursements
of counsel to the Lender for the services performed by such counsel in
connection with the preparation of this Amendment and the documents and
instruments incidental hereto. The Borrower hereby agrees that the Lender may,
at any time or from time to time in its sole discretion and without further
authorization by the Borrower, make a loan to the Borrower under the Credit
Agreement, or apply the proceeds of any loan, for the purpose of paying any
such fees, disbursements, costs and expenses.


 


29.           Miscellaneous. This Amendment and the
Acknowledgment and Agreement of Guarantor set forth below may be executed in
any number of counterparts and by facsimile or e-mail transmission, each of
which when so executed and delivered shall be deemed an original and all of
which counterparts, taken together, shall constitute one and the same
instrument.


 


[Remainder of Page Intentionally
Blank]


 


12
















 


IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first above written.


 


	
  LENDER:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WELLS
  FARGO BANK,  

  NATIONAL ASSOCIATION
  

  	
   

  	
  CHRISTOPHER &
  BANKS, INC. 

  
	
   

  	
   

  	
   

  
	
  By
  

  	
   /s/
  Kerri L. Otto  

  	
   

  	
  By:
  

  	
     /s/
  Andrew K. Moller  

  
	
  Kerri
  L. Otto  

  	
   

  	
  Andrew
  K. Moller  

  
	
  Its
  Vice President

  	
   

  	
  Executive
  Vice President &

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHRISTOPHER &
  BANKS COMPANY  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
     /s/
  Andrew K. Moller  

  
	
   

  	
   

  	
  Andrew
  K. Moller  

  Executive Vice President &
  
 Chief Financial Officer

  
					



 


 


[Signature Page to Second Amendment to
Amended and Restated Credit Agreement]


 

















 


ACKNOWLEDGMENT AND AGREEMENT
OF GUARANTOR


 


The
undersigned, a guarantor of the indebtedness of CHRISTOPHER &
BANKS, INC., and CHRISTOPHER & BANKS COMPANY, each a
Minnesota corporation (collectively referred to herein as, the “Borrower”) to WELLS FARGO BANK, NATIONAL
ASSOCIATION (the “Lender”),
acting through its Wells Fargo Business Credit operating division, pursuant to a Guaranty dated November 4, 2005 (the “Guaranty”), hereby (i) acknowledges receipt of the
foregoing Amendment; (ii) consents to the terms (including without
limitation the release set forth in Paragraph 28 of the Amendment) and
execution thereof; (iii) reaffirms all obligations to Lender pursuant to
the terms of the Guaranty; and (iv) acknowledges that Lender may amend,
restate, extend, renew or otherwise modify the
Agreement and any indebtedness or agreement of the Borrower, or enter into any
agreement or extend additional or other credit accommodations, without
notifying or obtaining the consent of the undersigned and without impairing the
liability of the undersigned under the  Guaranty for
all of the Borrower’s present and future indebtedness to the Lender.


 


	
   

  	
   

  	
  CHRISTOPHER & BANKS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Andrew K. Moller

  
	
   

  	
   

  	
  By  Andrew K. Moller

  
	
   

  	
   

  	
    Its Executive Vice President and

  
	
   

  	
   

  	
         Chief Financial Officer

  



 

















 


Exhibit C to Credit and Security Agreement


 


PREMISES


 


The
Premises referred to in the Credit and Security Agreement are
as follows:


 


1.  Headquarters and Distribution Center:


 


2400 Xenium Lane
North


Plymouth,
Minnesota 55441


 


2.  Stores:


 


See attached
spreadsheets.


 

















 


Schedule 5.1 to Credit and Security Agreement


 


TRADE NAMES, CHIEF EXECUTIVE
OFFICE, PRINCIPAL PLACE OF BUSINESS,

AND LOCATIONS OF COLLATERAL


TRADE NAMES


Christopher &
Banks


C.J.
Banks


Acorn


 


CHIEF EXECUTIVE OFFICE/PRINCIPAL
PLACE OF BUSINESS


 


2400
Xenium Lane North


Plymouth,
Minnesota 55441


 


OTHER INVENTORY AND EQUIPMENT
LOCATIONS


 


150 Omicron
Court, Shepherdsville, KY 40165


 


See
spreadsheets attached to Exhibit C.


 

















 


Schedule 5.2 to Credit and Security Agreement


 


CAPITALIZATION AND ORGANIZATIONAL
CHART


 


Christopher & Banks Corporation, a Delaware
corporation (“CBK”), is the parent organization and its stock is traded on the
New York Stock Exchange.  Christopher &
Banks, Inc., a Minnesota corporation (“CBI”) and wholly-owned subsidiary
of CBK, is the operating company and the Borrower under the Credit and Security
Agreement.  As of May 23, 2008, Christopher &
Banks Company, a Minnesota corporation (“CBC”), is a wholly owned subsidiary of
CBI.


 

















 


Schedule 5.7 to Credit and Security Agreement


 


LITIGATION MATTERS


 


None.


 

















 


Schedule 5.11 to Credit and Security Agreement


 


INTELLECTUAL PROPERTY DISCLOSURES


 


The Borrower has the following trademarks and applications
to register trademarks:


 


See the attached
list.


 


The Borrower files a copyright on many of its designs and
as of May 23, 2008 has in excess of 5,800 copyrights registered with the
U.S. Copyright Office.  This list is
subject to continual changes, and a current list of all recorded copyrights
owned by the Borrower and/or the Guarantor may be obtained by the Lender from
the U.S. Copyright Office’s website.


 

















 


Schedule 5.14 to Credit and Security Agreement


 


ENVIRONMENTAL MATTERS


 


None.


 

















 


Schedule 6.3 to Credit and Security Agreement


 


PERMITTED LIENS


 


None.


 

















 


Schedule 6.4 to Credit and Security Agreement


 


Permitted
Indebtedness and Guaranties


 


INDEBTEDNESS


 


NONE.


 


GUARANTIES


 


NONE.