Exhibit 10.1

 


	
BANK OF AMERICA, N.A.

MERRILL LYNCH, PIERCE,

FENNER & SMITH

INCORPORATED

One Bryant Park

New York, NY 10036
    	
 
    	
JPMORGAN CHASE BANK,   N.A.

J.P. MORGAN SECURITIES   LLC

383 Madison Avenue

New York, New York 10179
    




 

March 11, 2014

 

The Men’s Wearhouse, Inc.
 6380 Rogerdale

Houston, Texas  77072

 

Attention:  Mr. Jon Kimmins

 

Project Dapper
  Commitment Letter

 

Ladies and Gentlemen:

 

The Men’s Wearhouse, Inc. (“you” or the “Borrower”) has advised Bank of America, N.A. (“Bank of America”),  Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates, “MLPFS”), JPMorgan Chase Bank, N.A. (“JPMCB”) and J.P. Morgan Securities LLC (“J.P. Morgan” and, together with Bank of America, MLPFS and JPMCB, the “Commitment Parties”, “we” or “us”) that you intend to acquire (the “Acquisition”) an entity identified to us as “Dapper” (“Dapper” or the “Target”; the Target collectively with its subsidiaries, the “Acquired Business”).  The Acquisition will be effected through (i) the purchase of shares of common stock of the Target by Java Corp. (a newly formed wholly owned subsidiary of the Borrower) (“Merger Sub”) in the Offer (as defined in the Acquisition Agreement (as defined below)) and (ii) promptly following the closing of the Offer, the merger (the “Merger”) of Merger Sub with and into the Target pursuant to Section 251(h) of the Delaware General Corporation Law, with the Target surviving the Merger as your direct or indirect wholly-owned subsidiary (the date of consummation of the Merger, the “Merger Closing Date”).  In connection with the Acquisition, the Borrower’s and its’ subsidiaries’ existing revolving and term loan credit facilities (the “Existing Credit Facilities”) and all existing indebtedness of the Acquired Business (other than Retained Debt, as defined in Annex IV hereto), will, in each case, be repaid in full, all commitments thereunder will be terminated and the security interests with respect thereto will be released (the “Refinancing”).  The Borrower, the Acquired Business and their respective subsidiaries are sometimes collectively referred to herein as the “Companies”.

 

You have also advised us that you intend to finance the Acquisition, the Refinancing, the costs and expenses related to the Transaction (as hereinafter defined) and the ongoing working capital and other general corporate purposes of the Companies after consummation of the Acquisition from the following sources (and that no financing other than the financing described herein will be required in connection with the Transaction):  (a) (i) $1,100,000,000 aggregate principal amount of senior secured term B loans (the “Term Loan Facilities”), (b) a $500,000,000 asset-based revolving facility of the Borrower and 

 











 

certain of its subsidiaries (the “ABL Facility”) and (c) $600,000,000 in gross proceeds from the issuance and sale by the Borrower of senior unsecured notes (the “Notes”) or, if the Notes are not issued and sold on or prior to the date of consummation of the Acquisition, $600,000,000 in senior unsecured bridge loans (the “Bridge Loans” and together with any Rollover Loans and Exchange Notes (each, as defined in Annex III-A hereto), the “Bridge Facility” and, collectively with the Term Loan Facilities and the ABL Facility, the “Facilities”) made available to the Borrower as interim financing to the Permanent Securities (as defined in Annex III-A hereto), in each case, less the aggregate amount of equity proceeds received by the Borrower since the date of execution of this Commitment Letter (other than pursuant to management equity incentive plans).  The Acquisition, the Refinancing, the entering into and initial funding of the Term Loan Facilities and the ABL Facility and the issuance of the Notes and/or the entering into of the Bridge Facility, as applicable, and all related transactions are hereinafter collectively referred to as the “Transaction”.  The date of consummation of the Offer is referred to herein as the “Closing Date”.

 

1.                                      Commitments.  In connection with the foregoing, (a) each of Bank of America and JPMCB is pleased to advise you of its several and not joint commitment to provide 50% of the principal amount of the ABL Facility (in such capacities, the “Initial ABL Lenders”), in each case, subject to the conditions set forth in Annexes I and IV hereto (the “ABL Facility Summary of Terms”); (b)(i) each of Bank of America and JPMCB is pleased to advise you of its several and not joint commitment to provide 50% of the principal amount of the Term Loan Facilities (in such capacities, the “Initial Term Loan Lenders”), in each case, subject to the conditions set forth in Annexes II and IV hereto (the “Term Loan Facilities Summary of Terms”); (c)(i) each of Bank of America and JPMCB is pleased to advise you of its several and not joint commitment to provide 50% of the principal amount of the Bridge Facility (in such capacities, the “Initial Bridge Lenders” ) and, collectively with the Initial ABL Lenders and Initial Term Loan Lenders, the “Initial Lenders”), in each case, subject to the conditions set forth in Annexes III and IV hereto (the “Bridge Summary of Terms” and, collectively with the ABL Facility Summary of Terms and the Term Loan Facilities Summary of Terms, the “Summaries of Terms” and, together with this letter, the “Commitment Letter”); (d)(i) each of J.P. Morgan and MLPFS is pleased to advise you of its willingness, and you hereby engage J.P. Morgan and MLPFS to act as joint lead arrangers and joint bookrunning managers (in such capacity, the “ABL Lead Arrangers”) for  the ABL Facility, and in connection therewith to form a syndicate of lenders for the ABL Facility (collectively, the “ABL Lenders”), in consultation with you and reasonably acceptable to you, (ii) each of J.P. Morgan and MLPFS is pleased to advise you of its willingness, and you hereby engage each of J.P. Morgan and MLPFS to act as joint lead arrangers and joint bookrunning managers (in such capacities, the “Term Lead Arrangers”) for the Term Loan Facilities, and in connection therewith to form a syndicate of lenders for the Term Loan Facilities (collectively, the “Term Lenders”), in consultation with you and reasonably acceptable to you and (iii) each of J.P. Morgan and MLPFS is pleased to advise you of its willingness, and you hereby engage each of J.P. Morgan and MLPFS to act as joint lead arrangers and joint bookrunning managers (in such capacities, the “Bridge Lead Arrangers”), and collectively with the ABL Lead Arrangers and Team Lead Arrangers, the “Arrangers”) for the Bridge Facility, and in connection therewith to form a syndicate of lenders for the Bridge Facility (collectively, the “Bridge Lenders” and, collectively with the ABL Lenders and the Term Lenders, the “Lenders”).  It is understood and agreed that (u) J.P. Morgan shall have “top left” placement and Merrill Lynch shall have “top right” placement in any listing of the ABL Lead Arrangers, (v) J.P. Morgan shall have “top left” placement and Merrill Lynch shall have “top right” placement in any listing of the Term Lead Arrangers, (w) Merrill Lynch shall have “top left” placement and J.P. Morgan shall have “top right” placement in any listing of the Bridge Lead Arrangers, (x) JPMCB shall act as administrative agent for the ABL Facility (in such capacity, the “ABL Administrative Agent”), (y) JPMCB shall act as administrative agent for the Term Loan Facilities (in such capacity, the “Term Administrative Agent”) and (z) Bank of America shall act as administrative agent for the Bridge Facility (in such capacity, the “Bridge Administrative Agent” and, collectively with the ABL Administrative Agent and the Term Administrative Agent, the “Administrative Agents”).  Notwithstanding anything to the contrary contained herein, the commitments of the Initial Lenders with respect to the initial 

 

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fundings of the Facilities will be subject only to the satisfaction (or waiver by the Initial Lenders) of the conditions precedent set forth in paragraph 5 hereof.  All capitalized terms used and not otherwise defined herein shall have the same meanings as specified therefor in the Summaries of Terms.

 

You agree that no other agents, co-agents, arrangers or bookrunners will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid to any Lender (as defined below) in order to obtain its commitment to participate in the Facilities unless you and we shall so agree.

 

2.                                      Syndication.  The Lead Arrangers intend to commence syndication of the Facilities promptly after your acceptance of the terms of this Commitment Letter and the Fee Letter (as hereinafter defined); provided that we agree not to syndicate our commitments to certain banks, financial institutions and other institutional lenders and any competitors (or Known Affiliates (as defined below) of competitors) of the Companies, in each case, that have been specified to us by you in writing prior to the date hereof (collectively, “Disqualified Lenders”); provided, further, that you, upon reasonable notice to us after the date hereof, shall be permitted to supplement in writing the list of persons that are Disqualified Lenders to the extent such supplemented person is or becomes a competitor or a Known Affiliate of a competitor of the Companies, which supplement shall be in the form of a list provided to us and become effective upon delivery to us, but which supplement shall not apply retroactively to disqualify any parties that have previously acquired an assignment in the loans under any of the Facilities.  As used herein, “Known Affiliates” of any person means, as to such person, known affiliates readily identifiable by name, but excluding any affiliate that is a bona fide debt fund or investment vehicle that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds or similar extensions of credit or securities in the ordinary course and with respect to which the Disqualified Lender does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity.  Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that the Initial Lenders’ commitments hereunder are not conditioned upon the syndication of, or receipt of commitments or participations in respect of, the Facilities and in no event shall the commencement or successful completion of syndication of the Facilities constitute a condition to the availability of the Facilities on the Closing Date.  You agree, prior to the Syndication Date (as hereinafter defined), to actively assist, and to use your commercially reasonable efforts to cause the Acquired Business to actively assist, the Lead Arrangers in achieving a syndication of each of the Facilities that is reasonably satisfactory to the Lead Arrangers and you until the Syndication Date (as defined below); provided that, notwithstanding each Lead Arranger’s right to syndicate the Facilities and receive commitments with respect thereto, it is agreed that (i) syndication of, or receipt of commitments or participations in respect of, all or any portion of an Initial Lender’s commitments hereunder prior to the date of the consummation of the Acquisition and the date of the initial funding under the Facilities shall not be a condition to such Initial Lender’s commitments and (ii) (a) except as you in your sole discretion may otherwise agree in writing,  no Initial Lender shall be relieved, released or novated from its obligations hereunder (including its obligation to fund the Facilities on the Closing Date) in connection with any syndication, assignment or participation of the Facilities, including its commitments in respect thereof, until after the initial funding of the Facilities has occurred; (b) no assignment or novation shall become effective with respect to all or any portion of any Initial Lender’s commitments in respect of the Facilities until after the initial funding of the Facilities; and (c) each Initial Lender shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Facilities, including all rights with respect to consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred and the initial funding under the Facilities has been made.  Such assistance shall include (a) your providing and (subject to customary non-reliance agreements) causing your advisors to provide, and using your commercially reasonable efforts to cause the Acquired Business, its subsidiaries and its advisors to provide, the Lead Arrangers and the Lenders upon request with all information reasonably deemed necessary by the Lead Arrangers to complete such 

 

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syndication, including, but not limited to (x) information and evaluations prepared by you, the Acquired Business and your and its advisors, or on your or its behalf, relating to the Transaction as may be reasonably requested by us (including the Projections (as hereinafter defined), (y) customary forecasts prepared by management of the Borrower of balance sheets, income statements and cash flow statements for each fiscal quarter for the first twelve months following the Closing Date and for each year commencing with the first fiscal year following the Closing Date and for each of the succeeding five fiscal years thereafter, and (z) your using commercially reasonable efforts to prepare customary availability forecasts of the Companies for the ABL Facility as of the last day of each fiscal month for the first twelve months following the Closing Date; (b) your preparation of a customary information memorandum with respect to each of the Facilities (each, an “Information Memorandum”) and other customary materials to be used in connection with the syndication of each such Facility (collectively with the Summaries of Terms and any additional summary of terms prepared for distribution to Lenders, the “Information Materials”); (c) your using your commercially reasonable efforts to provide Information Memoranda for each of the Facilities no later than 15 business days after the date of the Commitment Letter and making your management available to participate in the marketing of the Facilities promptly following completion of such Information Memoranda; (d) your using commercially reasonable efforts to ensure that the syndication efforts of the Lead Arrangers benefit materially from your existing lending relationships and the existing banking relationships of the Acquired Business; (e) your using commercially reasonable efforts to obtain, prior to April 4, 2014, monitored public corporate credit or family ratings (but not any specific rating) for you after giving effect to the Transaction and ratings of the Term Loan Facilities, the Bridge Facility and the Notes from Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (“S&P”) (collectively, the “Ratings”); (f) until the Syndication Date, your ensuring, and with respect to the Acquired Business, using your commercially reasonable efforts to ensure, that none of the Companies shall syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any competing debt of the Companies (other than the Facilities), including any renewals or refinancings of any existing debt or consummate any acquisition or disposition outside the ordinary course of business (it being understood that (i) any disposition made for purposes of financing a portion of the Transaction shall be deemed to be outside the ordinary course of business, (ii) the disposition of K&G Men’s Company, Inc. shall be permitted and (iii) a disposition expressly required pursuant to Section 6.4 of the Acquisition Agreement as in effect on the date hereof shall be permitted), in each case, that, in the reasonable judgment of the Lead Arrangers, could reasonably be expected to materially and adversely affect the syndication of the Facilities without the prior written consent (not to be unreasonably withheld) of the Lead Arrangers (it being understood that ordinary course working capital borrowings under the existing revolving credit facility of the Borrower shall be permitted); and (f) your otherwise assisting the Lead Arrangers in their syndication efforts, including by making appropriate officers and advisors of you, and using your commercially reasonable efforts to make the officers and advisors of the Acquired Business, available from time to time upon reasonable advance notice to attend and make presentations regarding the business and prospects of the Companies and the Transaction at one or more meetings of prospective Lenders.  Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, neither the obtaining of the Ratings referenced above nor the compliance with any of the other provisions set forth in clauses (a) through (f) above or any other provision of this paragraph shall constitute a condition to the commitments hereunder or the funding of the Facilities on the Closing Date.

 

It is understood and agreed that the Lead Arrangers will manage and control all aspects of the syndication of the Facilities in consultation with you and, as to the selection of Lenders under the ABL Facility, with your approval (such approval not to be unreasonably withheld or delayed), and any titles offered to prospective Lenders, when commitments will be accepted and the final allocations of the commitments among the Lenders.  It is understood that no Lender participating in the Facilities will receive 

 

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compensation from you in order to obtain its commitment, except on the terms contained herein and in the Summaries of Terms, without the consent of the Lead Arrangers.  It is also understood and agreed that the amount and distribution of the fees among the Lenders will be at the sole and absolute discretion of the Lead Arrangers.  It is further understood that the Initial Lenders’ commitments hereunder are not conditioned upon the syndication of, or receipt of commitments in respect of, the Facilities and in no event shall the commencement of successful completion of syndication of the Facilities constitute a condition to availability of the Facilities on the Closing Date.

 

3.                                      Information Requirements.  You hereby represent, warrant and covenant (with respect to Information relating to the Acquired Business, to the best of your knowledge) that (a) all written factual information, other than Projections (as defined below) and other forward-looking information or information of a general economic or industry nature, that has been or is hereafter made available to the Lead Arrangers or any of the Lenders by or on behalf of you or any of your representatives in connection with any aspect of the Transaction (including such information, to the best of your knowledge, relating to the Acquired Business) (the “Information”) is and will be complete and correct when taken as a whole, in all material respects, and does not and will not, taken as a whole, contain any untrue statement of a fact or omit to state a fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not materially misleading (after giving effect to all supplements and updates with respect thereto) and (b) all financial projections concerning the Companies that have been or are hereafter made available to the Lead Arrangers or any of the Lenders by or on behalf of you or any of your representatives (the “Projections”) (to the best of your knowledge, in the case of Projections provided by the Acquired Business) have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time provided (it being understood and agreed that the Projections are as to future events and are not to be viewed as facts or a guarantee of financial performance or achievement, that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, and that actual results may differ from the Projections and such differences may be material).  You agree that if at any time prior to the later of (a) the earlier of (i) the date on which a Successful Syndication (as defined in the Fee Letter) is achieved and (ii) 60 days following the Closing Date (the earlier of such dates, the “Syndication Date”) and (b) the Closing Date, any of the representations in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will promptly supplement, or cause to be supplemented (or in the case of Information or Projections relating to the Acquired Business, you will promptly notify the Lead Arrangers upon becoming aware that any such Information or Projections are incorrect in any material respect and will use commercially reasonable efforts to supplement), the Information and Projections so that such representations (to the best of your knowledge, in the case of the Acquired Business) will be correct in all material respects at such time. In issuing this commitment and in arranging and syndicating each of the Facilities, the Commitment Parties are and will be using and relying on the Information and the Projections without independent verification thereof.  For the avoidance of doubt, nothing in this paragraph will constitute a condition to the availability of the Facilities on the Closing Date.

 

You acknowledge that (a) the Lead Arrangers on your behalf will make available Information Materials to the proposed syndicates of Lenders by posting the Information Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain prospective Lenders (such Lenders, “Public Lenders”; all other Lenders, “Private Lenders”) may have personnel that do not wish to receive material non-public information (within the meaning of the United States federal securities laws, “MNPI”) with respect to the Companies, their respective affiliates or any other entity, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such entities’ securities.  If requested, you will assist the Lead Arrangers in preparing an additional version of the Information Materials not containing MNPI (the “Public Information Materials”) to be distributed to prospective Public Lenders.

 

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Before distribution of any Information Materials (a) to prospective Private Lenders, you shall provide the Lead Arrangers with a customary letter authorizing the dissemination of the Information Materials; and (b) to prospective Public Lenders, you shall provide the Lead Arrangers with a customary letter authorizing the dissemination of the Public Information Materials and confirming the absence of MNPI therefrom.  In addition, you hereby agree that (x) you will use commercially reasonable efforts to identify (and, at the request of the Lead Arrangers or any Administrative Agent (or their respective affiliates), shall identify) that portion of the Information Materials that may be distributed to the Public Lenders by clearly and conspicuously marking the same as “PUBLIC”; (y) all Information Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and (z) the Lead Arrangers and the Administrative Agents (and their respective affiliates) shall be entitled to treat any Information Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

You agree that the Lead Arrangers and the Administrative Agents (and their respective affiliates) on your behalf may distribute the following documents to all prospective Lenders, unless you advise the Lead Arrangers and Administrative Agents in writing (including by email) within a reasonable time prior to their intended distributions that such material should only be distributed to prospective Private Lenders:  (a) administrative materials for prospective Lenders such as lender meeting invitations and funding and closing memoranda, (b) notifications of changes to the terms of the Facilities and (c) drafts approved in writing by you and the Administrative Agents (or their respective affiliates) and final versions of definitive documents with respect to the Facilities.  If you advise the Lead Arrangers and the Administrative Agents that any of the foregoing items should be distributed only to Private Lenders, then the Lead Arrangers and the Administrative Agents will not distribute such materials to Public Lenders without further discussions with you.  You agree that Information Materials made available to prospective Public Lenders in accordance with this Commitment Letter shall not contain MNPI.

 

4.             Fees and Indemnities.

 

(a)           You agree to reimburse the Commitment Parties from time to time upon receipt of a reasonably detailed invoice therefor for all reasonable and documented out-of-pocket fees and expenses (including, but not limited to, the reasonable and documented out-of-pocket fees, disbursements and other out-of-pocket expenses of (x) one firm of lead counsel to the Commitment Parties (it being understood and agreed that Cahill Gordon & Reindel LLP shall act as counsel to the Commitment Parties), (y) one firm of local counsel in each relevant jurisdiction reasonably retained by the Administrative Agents and (z) solely in the case of a conflict of interest, one additional counsel in each relevant jurisdiction to the affected Commitment Parties similarly situated and reasonable and documented out-of-pocket due diligence expenses) incurred in connection with the Facilities, the syndication thereof, the preparation of the Credit Documentation (as defined below) therefor and the other transactions contemplated hereby, whether or not the Closing Date occurs or any of the Credit Documentation is executed and delivered or any extensions of credit are made under either of the Facilities. Such amounts shall be paid on the earlier of (i) the Closing Date or (ii) three (3) business days following the termination of this Commitment Letter as provided below.  You acknowledge that the Administrative Agents may receive a benefit, including without limitation, a discount, credit or other accommodation, from any of such counsel based on the fees such counsel may receive on account of their relationship with us including, without limitation, fees paid pursuant hereto.  You agree to pay the fees set forth in the separate fee letter addressed to you dated the date hereof from the Commitment Parties (the “Fee Letter”).

 

(b)           You also agree to indemnify and hold harmless each of the Commitment Parties, each other Lender and each of their affiliates, successors and assigns and their respective partners, officers, directors, employees, trustees, agents, advisors, controlling persons and other representatives (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party as the same are

 

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incurred for) any and all claims, damages, losses, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, the reasonable and documented fees, disbursements and other charges of counsel to any Indemnified Party) (without duplication) of amounts payable by you pursuant to clause (a) above) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) any aspect of the Transaction or any of the other transactions contemplated thereby or (b) the Facilities, or any use made or proposed to be made with the proceeds thereof, except to the extent such claim, damage, loss, liability or expense (A) is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence, bad faith or willful misconduct, (B) arises from a material breach of such Indemnified Party’s obligations hereunder or (C) arises from a proceeding by an Indemnified Party against an Indemnified Party (other than an action involving (i) alleged conduct by you or any of your affiliates or (ii) against an arranger or administrative agent in its capacity as such).  In the case of any claim, litigation, investigation or proceeding (any of the foregoing, a “Proceeding”) to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such Proceeding is brought by you, your equity holders or creditors or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto and whether or not any aspect of the Transaction is consummated.  You also agree that (x) no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to you, the Acquired Business, or your or their subsidiaries or affiliates or to your or their respective equity holders or creditors or any other person arising out of, related to or in connection with any aspect of the Transaction, except to the extent of direct (as opposed to special, indirect, consequential or punitive) damages determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s (i) gross negligence, bad faith or willful misconduct or (ii) a material breach of such Indemnified Party’s obligations hereunder. It is further agreed that the Commitment Parties shall only have liability to you (as opposed to any other person), and that the Commitment Parties shall be severally liable solely in respect of their respective commitments to the Facilities and agreements set forth herein, on a several, and not joint, basis with any other Lender.  Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained through electronic telecommunications or other information transmission systems, other than for direct, actual damages resulting from the gross negligence, bad faith or willful misconduct of such Indemnified Party as determined by a final non-appealable judgment of a court of competent jurisdiction. You shall not, without the prior written consent of an Indemnified Party, such consent not to be unreasonably withheld, effect any settlement of any pending or threatened Proceeding against an Indemnified Party in respect of which indemnity could have been sought hereunder by such Indemnified Party unless (i) such settlement includes an unconditional release of such Indemnified Party from all liability or claims that are the subject matter of such Proceeding and (ii) does not include any statement as to any admission of liability. You shall not be liable for any settlement of any Proceeding affected without your written consent (which consent shall not be unreasonably withheld).

 

It is acknowledged that you and MLPFS and J.P. Morgan have entered into an Engagement Letter dated October 9, 2013 (the “Financial Advisor Engagement Letter”) whereby MLPFS and J.P. Morgan have been retained by you as your financial advisors in connection with the Acquisition.  You agree not to assert any claim you might allege based on any actual or potential conflicts of interest that might be asserted to arise or result from, on the one hand, the engagement of MLPFS and J.P. Morgan under the Financial Advisory Engagement Letter, and on the other hand, MLPFS, J.P. Morgan and their respective affiliates’ relationships with you as described and referred to in this Commitment Letter.

 

5.             Conditions to Financing.  The commitment of each Initial Lender with respect to the initial funding of each Facility is subject solely to (a) the satisfaction of each of the conditions set forth in Annex IV hereto and (b) the execution and delivery of definitive credit documentation by all 

 

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parties thereto with respect to each such Facility consistent with this Commitment Letter and the Fee Letter and subject to the Funds Certain Provisions and giving effect to the ABL Documentation Standard (as defined in Annex I), the Term Loan Documentation Standard (as defined in Annex II) and the Bridge Loan Documentation Standard (as defined in Annex III, collectively, the “Documentation Standards”) (the “Credit Documentation”) prior to such initial funding.

 

Notwithstanding anything in this Commitment Letter, the Fee Letter, the Credit Documentation or any other letter agreement or other undertaking concerning the financing of the Transaction to the contrary, (a) the Credit Documentation shall be in a form such that the terms thereof do not impair availability of the Facilities on the Closing Date if the conditions in this paragraph 5 shall have been satisfied, (b) the only representations and warranties the accuracy of which shall be a condition to the availability of the Facilities on the Closing Date shall be those set forth in paragraph (ii) of Annex IV hereto and (c) the only collateral the provision or perfection of a security interest in which will be a condition to the availability of the Facilities on the Closing Date shall be the collateral described in paragraph (ii) of Annex IV hereto.  The provisions of this paragraph are referred to herein as the “Funds Certain Provisions”.

 

Each of the parties hereto agrees that each of this Commitment Letter and the Fee Letter is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law)) with respect to the subject matter contained herein, including an agreement to negotiate in good faith the Credit Documentation by the parties hereto in a manner consistent with this Commitment Letter and, to the extent applicable, the Fee Letter, it being acknowledged and agreed that the funding of the Facilities is subject only to the conditions precedent as provided herein.  For clarity, all terms referenced herein to being defined in the Credit Documentation shall be defined in accordance with the Documentation Standards.

 

6.             Confidentiality and Other Obligations.  This Commitment Letter and the Fee Letter and the contents hereof and thereof are confidential and may not be disclosed in whole or in part to any person or entity without the prior written consent of the Commitment Parties except (i) this Commitment Letter and the Fee Letter may be disclosed (A) on a confidential basis to your directors, officers, employees, accountants, attorneys and other representatives and professional advisors who need to know such information in connection with the Transaction and are informed of the confidential nature of such information, (B) pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or otherwise as required by applicable law or stock exchange requirement or compulsory legal process (in which case you agree to inform the Commitment Parties promptly thereof prior to such disclosure to the extent permitted by applicable law), and (C) on a confidential basis to the directors, officers, employees, accountants, attorneys and other representatives and professional advisors of the Acquired Business; provided that the Fee Letter is redacted in a manner reasonably satisfactory to the Commitment Parties, (ii) Annex I, Annex II and Annex III and the existence of this Commitment Letter and the Fee Letter (but not the contents of the Commitment Letter and the Fee Letter) may be disclosed to Moody’s, S&P and any other rating agency on a confidential basis, (iii) the aggregate amount of the fees (including upfront fees and original issue discount) payable under the Fee Letter may be disclosed as part of generic disclosure regarding sources and uses for closing of the Acquisition (but without disclosing any specific fees, market flex or other economic terms set forth therein or to whom such fees or other amounts are owed), (iv) the Commitment Letter and the Fee Letter may be disclosed on a confidential basis to your auditors for customary accounting purposes, including accounting for deferred financing costs, (v) to the directors, officers, attorneys and other professional advisors of the Target on a confidential “need to know” basis in connection with the Transaction; provided that any disclosure of the Fee Letter and the contents thereof shall be redacted in a manner satisfactory to the Commitment Parties, (vi) you may disclose the Commitment Letter (but not the Fee Letter) and its contents in any information memorandum or syndication distribution, as well as in any proxy statement or other public filing relating to the

 

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Acquisition or the Facilities, and (vii) the Commitment Letter and Fee Letter may be disclosed to a court, tribunal or any other applicable administrative agency or judicial authority in connection with the enforcement of your rights hereunder (in which case you agree to inform the Commitment Parties promptly thereof prior to such disclosure to the extent permitted by applicable law).

 

The Commitment Parties shall use all confidential information provided to them by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and otherwise in connection with the Transaction and shall treat confidentially all such information; provided, however, that nothing herein shall prevent any Commitment Party from disclosing any such information (i) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case such Commitment Party agrees to inform you promptly thereof to the extent not prohibited by law, rule or regulation), (ii) upon the request or demand of any regulatory authority having jurisdiction over such Commitment Party or any of its affiliates, (iii) to the extent that such information becomes publicly available other than by reason of disclosure in violation of this agreement by such Commitment Party, (iv) to such Commitment Party’s affiliates, employees, legal counsel, independent auditors and other experts, professionals or agents who need to know such information in connection with the Transaction and are informed of the confidential nature of such information, (v) for purposes of establishing a “due diligence” defense, (vi) to the extent that such information is received by such Commitment Party from a third party that is not to such Commitment Party’s knowledge subject to confidentiality obligations to you, (vii) to the extent that such information is independently developed by such Commitment Party, (viii) to potential Lenders, participants, assignees or any direct or indirect contractual counterparties to any swap or derivative transaction relating to you or your obligations under the Facilities (other than a Disqualified Lender), in each case, who agree to be bound by the terms of this paragraph (or language not less restrictive than this paragraph or as otherwise reasonably acceptable to you and such Commitment Party, including as may be agreed in any confidential information memorandum or other marketing material), (ix) to Moody’s and S&P and to Bloomberg, LSTA and similar market data collectors with respect to the syndicated lending industry; provided that such information is limited to Annex I, Annex II and Annex III and is supplied only on a confidential basis, or (x) with your prior written consent.  This paragraph shall terminate on the earlier of (a) the initial funding under the Facilities and (b) the second anniversary of the date of the Commitment Letter.

 

You acknowledge that the Commitment Parties or their affiliates may be providing financing or other services to parties whose interests may conflict with yours.  The Commitment Parties agree that they will not furnish confidential information obtained from you to any of their other customers and will treat confidential information relating to the Companies and their respective affiliates with the same degree of care as they treat their own confidential information.  The Commitment Parties further advise you that they will not make available to you confidential information that they have obtained or may obtain from any other customer.

 

In connection with all aspects of each transaction contemplated by this Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’ understanding, that:  (i) each of the Facilities and any related arranging or other services described in this Commitment Letter is an arm’s-length commercial transaction between you and your affiliates, on the one hand, and the Commitment Parties, on the other hand, (ii) the Commitment Parties have not provided any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, (iii) you are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby, (iv) in connection with the financing transactions contemplated hereby and the process leading to such transactions, each of the Commitment Parties has been, is, and will be acting solely as a principal and has not been, is not, and will not be acting as an advisor, agent or fiduciary for you or any of your

 

9











 

affiliates, stockholders, creditors or employees or any other party, (v) the Commitment Parties have not assumed and will not assume an advisory, agency or fiduciary responsibility in your or your affiliates’ favor with respect to any of the financing transactions contemplated hereby or the process leading thereto, and the Commitment Parties have no obligation to you or your affiliates with respect to the financing transactions contemplated hereby except those obligations expressly set forth in this Commitment Letter, and (vi) the Commitment Parties and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and the Commitment Parties have no obligation to disclose any of such interests to you or your affiliates. To the fullest extent permitted by law and without limiting the provisions of paragraph 4(b), you hereby waive and release any claims that you may have against the Commitment Parties with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any financing transaction contemplated by this Commitment Letter.

 

The Commitment Parties hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “U.S.A. Patriot Act”), each of them is required to obtain, verify and record information that identifies you and the Guarantors, which information includes the name and address of such person and other information that will allow the Commitment Parties, as applicable, to identify each such person in accordance with the U.S.A. Patriot Act.

 

7.             Survival of Obligations.  The provisions of paragraphs 2, 3, 4, 6 and 8 shall remain in full force and effect regardless of whether any Credit Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of the Commitment Parties hereunder, provided that (i) the provisions of paragraphs 2 and 3 shall not survive if the commitments and undertakings of the Commitment Parties are terminated by any party hereto prior to the effectiveness of any of the Facilities, (ii) if any of the Facilities close and the Credit Documentation is executed and delivered the provisions of paragraphs 2 and 3 shall survive only until the Syndication Date.

 

8.             Miscellaneous.  This Commitment Letter and the Fee Letter may be executed in multiple counterparts and by different parties hereto in separate counterparts, all of which, taken together, shall constitute an original.  Delivery of an executed counterpart of a signature page to this Commitment Letter or the Fee Letter by telecopier, facsimile or other electronic transmission (e.g., a “pdf” or “tiff”) shall be effective as delivery of a manually executed counterpart thereof.  Headings are for convenience of reference only and shall not affect the construction of, or be taken into consideration when interpreting, this Commitment Letter or the Fee Letter.

 

This Commitment Letter and the Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflict of law principles that would result in the application of any other laws other than the state of New York; provided that, notwithstanding the foregoing, it is understood and agreed that (a) interpretation the definition of “Target Material Adverse Effect” (as defined in Annex IV) or the equivalent term under the Acquisition Agreement and whether a Target Material Adverse Effect (or the equivalent term) has occurred, (b) the determination of the accuracy of any Acquisition Agreement Representation (as defined in Annex IV) and whether as a result of any inaccuracy thereof you have the right (taking into account any applicable cure provisions) to terminate your obligations under the Acquisition Agreement or decline to consummate the Acquisition and (c) the determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement, in each case shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.  Each party hereto hereby irrevocably waives any and all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating 

 

10











 

to this Commitment Letter, the Fee Letter, the Transaction and the other transactions contemplated hereby and thereby or the actions of the Commitment Parties in the negotiation, performance or enforcement hereof.  Each party hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter, the Fee Letter, the Transaction and the other transactions contemplated hereby and thereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court.  The parties hereto agree that service of any process, summons, notice or document by registered mail addressed to you shall be effective service of process against you for any suit, action or proceeding relating to any such dispute.  Each party hereto waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction the applicable party is or may be subject by suit upon judgment.

 

This Commitment Letter, together with the Fee Letter, embodies the entire agreement and understanding among the parties hereto and your affiliates with respect to the Facilities and supersedes all prior agreements and understandings relating to the subject matter hereof.  No party has been authorized by the Commitment Parties to make any oral or written statements that are inconsistent with this Commitment Letter.  Neither this Commitment Letter (including the attachments hereto) nor the Fee Letter may be amended or any term or provision hereof or thereof waived or modified except by an instrument in writing signed by each of the parties hereto.

 

This Commitment Letter may not be assigned by you without our prior written consent (and any purported assignment without such consent will be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and the Indemnified Parties).  Each Commitment Party may assign its commitment hereunder, in whole or in part, to any of its affiliates or, subject to the provisions of this Commitment Letter, to any Lender; provided that, other than with respect to an assignment to which you otherwise consent in writing (which consent, in the case of an assignment by a Commitment Party to its affiliates, shall not be unreasonably withheld by you), such Commitment Party shall not be released from the portion of its commitment hereunder so assigned to the extent such assignee fails to fund the portion of the commitment assigned to it on the Closing Date notwithstanding the satisfaction of the conditions to funding set forth herein.

 

Please indicate your acceptance of the terms of the Facilities set forth in this Commitment Letter and the Fee Letter by returning to the Lead Arrangers executed counterparts of this Commitment Letter and the Fee Letter not later than 5:00 p.m. (New York City time) on March 11, 2014, whereupon the undertakings of the parties with respect to the Facilities shall become effective to the extent and in the manner provided hereby.  This offer shall terminate with respect to the Facilities if not so accepted by you at or prior to that time.  Thereafter, all commitments and undertakings of the Commitment Parties hereunder will expire, unless extended by us in our sole discretion, on the earliest of (a) 11:59 p.m., New York City time, on September 30, 2014, unless the Closing Date occurs on or prior thereto, (b) as to any Facility, the consummation of the Offer without the use of such Facility and (c) the termination of the Acquisition Agreement.

 

[The remainder of this page intentionally left blank.]

 

11











 

We are pleased to have the opportunity to work with you in connection with this important financing.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
BANK OF AMERICA, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Adam Cady
    
	
 
    	
 
    	
Name:
    	
Adam Cady
    
	
 
    	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
MERRILL LYNCH, PIERCE, FENNER &   SMITH INCORPORATED
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Adam Cady
    
	
 
    	
 
    	
Name:
    	
Adam Cady
    
	
 
    	
 
    	
Title:
    	
Managing Director
    


 

Signature Page to Commitment Letter - 1











 

	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Kushnerick
    
	
 
    	
 
    	
Name:
    	
John Kushnerick
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
J.P.   MORGAN SECURITIES LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ J.W. Price
    
	
 
    	
 
    	
Name:
    	
J. W. Price
    
	
 
    	
 
    	
Title:
    	
Managing Director
    


 

Signature Page to Commitment Letter - 2











 

The provisions of this Commitment Letter are accepted and agreed to as of the date first written above:

 

 

THE MEN’S WEARHOUSE, INC.

 

 

	
By:
    	
/s/ Jon W. Kimmins
    	
 
    
	
 
    	
Name:
    	
Jon W. Kimmins
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    	
 
    


 

Signature Page to Commitment Letter - 3




 









 

ANNEX I

 

SUMMARY OF INDICATIVE TERMS AND CONDITIONS
 $500,000,000 ABL FACILITY

 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex I is attached.

 

	
BORROWERS:
    	
 
    	
The Men’s Wearhouse,   Inc., a Texas corporation (the “Lead Borrower”)   and Moores The Suit People Inc., a corporation organized under the laws of New   Brunswick, (the “Canadian Borrower”   and, together with the Lead Borrower, the “Borrowers”).  The Lead Borrower shall be jointly and severally   liable for all obligations of the Canadian Borrower.
    
	
 
    	
 
    	
 
    
	
GUARANTORS:
    	
 
    	
The obligations of the Borrowers under the   ABL Facility (including cash management, interest rate protection, other   hedging arrangements, and other bank products entered into with a Lender (or   any affiliate thereof) will be jointly and severally guaranteed by each of   the existing and future direct and indirect wholly-owned U.S. subsidiaries of   the Lead Borrower (but excluding (i) unrestricted subsidiaries, (ii) immaterial   subsidiaries (to be defined in a mutually acceptable manner as to individual   and aggregate revenues or assets excluded), (iii) any subsidiary that is   prohibited, but only so long as such subsidiary would be prohibited, by   applicable law, rule or regulation or by any contractual obligation   existing on the Closing Date or existing at the time of acquisition thereof   after the Closing Date (so long as such prohibition did not arise as part of   such acquisition), in each case, from guaranteeing the ABL Facility or which   would require governmental (including regulatory) consent, approval, license   or authorization to provide a guarantee under the ABL Facility unless such   consent, approval, license or authorization has been received (but without   obligation to seek the same), (iv) any direct or indirect subsidiary of   a “controlled foreign corporation” within the meaning of Section 957 of   the Code (a “CFC”), (v) any   domestic subsidiary with no material assets other than equity interests of   one or more foreign subsidiaries that are CFCs (a “Disregarded   Domestic Person”), (vi) not-for-profit subsidiaries   (collectively, the “U.S. Guarantors”).   In addition, the ABL Facility Documentation will contain carve outs for   “non-ECP Guarantors”, consistent with the standard LSTA provisions.   Additionally, wholly-owned Canadian subsidiaries of the Lead Borrower   (excluding the Canadian Borrower and those subsidiaries described in clauses   (i), (ii), (iii) and (vi) above) shall guarantee the obligations of   the Canadian Borrower (the “Canadian Guarantors”   and, together with the U.S. Guarantors, the “Guarantors”).   All guarantees will be guarantees of payment and not of collection. The   Target and its subsidiaries included in the Acquired Business that are not   excluded from the foregoing requirements pursuant to the terms described   above shall be required to become Guarantors (and grant liens in their assets   constituting Collateral that can be perfected by filing UCC financing   statements) on the Closing Date. Notwithstanding 
    


 

Annex I-1











 

	
 
    	
 
    	
the foregoing, it is understood and agreed   that neither the Target nor any of its subsidiaries shall be required to be   Guarantors until the Merger is consummated on the Merger Closing Date.
    
	
 
    	
 
    	
 
    
	
ABL   ADMINISTRATIVE
    	
 
    	
 
    
	
AGENT   AND
    	
 
    	
 
    
	
COLLATERAL AGENT:
    	
 
    	
JPMCB (including acting through its branches   and affiliates) will act as sole administrative agent and as collateral agent   for the ABL Facility (in such capacities, the “ABL   Administrative Agent”).
    
	
 
    	
 
    	
 
    
	
JOINT   LEAD ARRANGERS
    	
 
    	
 
    
	
AND BOOKRUNNERS:
    	
 
    	
J.P. Morgan and Merrill Lynch will act as   joint lead arrangers and joint bookrunners for the ABL Facility (the “ABL Lead Arrangers”).
    
	
 
    	
 
    	
 
    
	
LENDERS:
    	
 
    	
Bank of America, JPMCB and a syndicate of   other banks and financial institutions selected by the ABL Lead Arrangers and   agreed to by the Lead Borrower, excluding any Disqualified Lenders   (collectively, the “ABL Lenders”).
    
	
 
    	
 
    	
 
    
	
LETTER OF CREDIT ISSUER:
    	
 
    	
JPMCB and any other ABL Lender that consents   to issuing Letters of Credit that is designated by the Lead Borrower with the   consent of the ABL Administrative Agent.
    
	
 
    	
 
    	
 
    
	
ABL
    	
 
    	
 
    
	
FACILITY:
    	
 
    	
An aggregate principal amount of up to   $500,000,000 (as increased or reduced in accordance with the terms hereof,   the “Loan Cap”) will be available   to the Borrowers through a senior secured revolving credit facility (the “ABL Facility”),   which will include (i) a $150,000,000 sublimit for the issuance of   letters of credit on customary terms (each a “Letter of Credit”), and (ii) a   $50,000,000 sublimit for swing line loans on customary terms (each a “Swing Line Loan”).   A sublimit to be agreed will be available for Loans and Letters of Credit in   Canadian Dollars, Euro and Sterling.
    
	
 
    	
 
    	
 
    
	
AVAILABILITY:
    	
 
    	
Up to $150,000,000 of advances will, subject   to the Loan Limit, be available under the ABL Facility on the Closing Date   and the Merger Closing Date to finance the Acquisition and the Refinancing plus,   at the Lead Borrower’s election, an additional amount sufficient to fund any   original issue discount or upfront fees required to be funded in connection   with the exercise of the “Market Flex” provisions set forth in the Fee   Letter; provided that the Borrowers may,   subject to the Loan Limit, issue Letters of Credit under the ABL Facility on   the Closing Date solely to replace (including by grandfathering) or backstop   existing letters of credit under the applicable Existing Credit Facility.
    
	
 
    	
 
    	
 
    
	
ABL   DOCUMENTATION
    	
 
    	
 
    
	
STANDARD:
    	
 
    	
The Credit Documentation for the ABL   Facility (i) shall be based upon senior secured asset-based revolving   credit facilities for similar borrowers with appropriate modifications to   baskets and materiality thresholds to reflect the size, leverage and ratings   of the Lead Borrower after giving effect to the Acquisition, (ii) shall   contain the terms and conditions set 
    


 

Annex I-2











 

	
 
    	
 
    	
forth in this ABL Summary of Terms,   (iii) shall reflect the operational and strategic requirements of the   Lead Borrower and its subsidiaries in light of their size, industries and   practices and (iv) shall reflect the customary agency and operational   requirements of the ABL Administrative Agent (collectively, the “ABL Documentation Standard”), in   each case, subject to the Funds Certain Provisions. The Credit Documentation   shall, subject to the “market flex” provisions contained in the Fee Letter,   contain only those conditions to borrowing, mandatory prepayments,   representations and warranties, covenants and events of default expressly set   forth in this ABL Summary of Terms, in each case, applicable to the Lead   Borrower and its subsidiaries and, subject to the ABL Documentation Standard   and certain other limitations as set forth herein, with standards,   qualifications, exceptions and grace and cure periods consistent with the ABL   Documentation Standard.
    
	
 
    	
 
    	
 
    
	
SWINGLINE OPTION:
    	
 
    	
Swing Line Loans will be made available by   the ABL Administrative Agent on a same day basis for the Borrowers and in   minimum amounts to be agreed. Each ABL Lender shall be irrevocably and   unconditionally obligated to purchase, under certain circumstances, a   participation in each Swing Line Loan on a pro rata basis based on its   commitment under the ABL Facility.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If any ABL Lender becomes a Defaulting   Lender, then the letter of credit and swing line exposure of such Defaulting   Lender will automatically be reallocated among the non-Defaulting Lenders pro   rata in accordance with their commitments under the ABL Facility up to an   amount but only to the extent that, after such reallocation, the revolving   credit exposure of each non-Defaulting Lender does not exceed its respective   commitment. The Letter of Credit Issuer and Swing Line Lender may require the   Borrowers to repay such “uncovered” exposure in respect of the letters of   credit and Swing Line Loans and will have no obligation to issue new letters   of credit or Swing Line Loans to the extent such letters of credit or Swing   Line Loans would exceed the commitments of the non-Defaulting Lenders.
    
	
 
    	
 
    	
 
    
	
INCREASE OPTION:
    	
 
    	
Provided that no default or event of default then exists or would arise   therefrom, upon notice to the ABL Administrative Agent, the Borrowers may   request from the existing ABL Lenders and/or prospective lenders that are   eligible assignees under the ABL Facility increases from time to time in the   ABL Facility by an aggregate amount for all such increases not exceeding   $150,000,000 (any such increase, a “Commitment Increase”);   provided that any such request for a   Commitment Increase shall be in a minimum amount to be agreed. Any Commitment   Increase shall be on the same terms and conditions as the ABL Facility (other   than the payment of any upfront or other fees paid to the ABL Lenders   participating in the Commitment Increase in amounts agreed to between the   Borrowers and such ABL Lenders). None of the existing ABL Lenders shall have   an obligation to increase their respective commitments to satisfy the   Borrowers’ requested increase in the ABL Facility. Any Commitment Increase   shall be subject to, among other conditions: (i) the execution 
    


 

Annex I-3











 

	
 
    	
 
    	
and delivery of joinder documentation by any   new ABL Lender in form and substance reasonably acceptable to the ABL   Administrative Agent, (ii) delivery by legal counsel to the Borrowers of   any legal opinions to the extent reasonably requested by ABL Administrative   Agent, and (iii) payment by the Borrowers of all fees and expenses   incurred in connection with such Commitment Increase (including any customary   breakage costs, as applicable). Outstandings under the ABL Facility shall be   reallocated among the ABL Lenders in accordance with their new percentage   shares following any exercise of the Increase Option.
    
	
 
    	
 
    	
 
    
	
PURPOSE:
    	
 
    	
The proceeds of the ABL Facility shall be   used (i) for working capital, capital expenditures, and other lawful   corporate purposes (including but not limited to acquisitions, investments   and restricted payments to the extent permitted under the ABL Credit   Documentation); (ii) to consummate the Refinancing; and (iii) for   transaction costs in connection with the Acquisition.
    
	
 
    	
 
    	
 
    
	
INTEREST RATES:
    	
 
    	
As set forth in Addendum I.
    
	
 
    	
 
    	
 
    
	
MATURITY:
    	
 
    	
The ABL Facility shall terminate and all   amounts outstanding thereunder shall be due and payable in full five   (5) years after the Closing Date.
    
	
 
    	
 
    	
 
    
	
AVAILABILITY:
    	
 
    	
The aggregate principal amount of loans,   including Swing Line Loans and Letters of Credit outstanding under the ABL   Facility, shall not exceed the lesser of the Loan Cap and the Borrowing Base   (as defined below) (the lesser of the Loan Cap and the Borrowing Base, the “Loan Limit”).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Availability”   shall mean, at any given time, an amount equal to the Loan Limit, less the   principal amount of the loans, including Swing Line Loans and Letters of   Credit, outstanding under the ABL Facility.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Borrowing Base”   shall mean the sum of (i) 90% of the appraised net orderly liquidation   value of eligible inventory (including eligible in-transit inventory) owned   by the Lead Borrower and the U.S. Guarantors, plus (ii) 85% of   eligible accounts receivable owned by the Lead Borrower and the Guarantors, plus   (iii) 90% of the eligible credit card receivables owned by the Borrower   and the Guarantors, plus (iv) 100% of qualified cash that is   under the sole dominion of the ABL Administrative Agent (and which may not be   withdrawn unless the Borrowers are in pro forma compliance with the Loan   Cap), less (v) such Reserves (to be defined in the ABL Credit   Documentation) as the ABL Administrative Agent may establish in its   Reasonable Credit Judgment from time to time. Additionally, assets of the   Canadian Borrower and the Canadian Guarantors shall, subject to the Loan Cap,   be available as the basis for additional Loans and Letters of Credit to the   Canadian Borrower under the formula set forth above. “Reasonable   Credit Judgment” means a determination made in good faith and   in the exercise of reasonable business judgment from the perspective of an   asset-based lender.
    


 

Annex I-4











 

	
 
    	
 
    	
The initial reserves on the Closing Date and   the definitions of “eligible credit card receivables”, “eligible inventory”   and “eligible in-transit inventory” shall be mutually and reasonably agreed   by the ABL Administrative Agent and the Borrowers based upon the results of   the ABL Administrative Agent’s due diligence, including, without limitation,   a commercial finance examination and an inventory appraisal.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, to the extent   the ABL Administrative Agent has not completed a field examination of,    and has not received an inventory appraisal for, the Borrower or any   Guarantor prior to the Closing Date (any such entity an “Affected Entity”),   assets of such Affected Entity that would otherwise be eligible for inclusion   of the Borrowing Base shall not be subject to the advance rates set forth   above until such field examination and appraisal are completed but instead   the Borrowing Base shall be calculated separately for the Borrower and the   Guarantors that are not Affected Entities and then shall be increased by the   an amount equal to the sum of (i) 50% of the book value of inventory of   such Affected Entity so long as the ABL Facility has a first priority   security interest in such inventory, (ii) 70% of the accounts receivable   of such Affected Entity so long as the ABL Facility has a first priority   security interest in such accounts receivable, and (iii) 70% of the face   amount of credit card receivables of such Affected Entity so long as the ABL   Facility has a first priority security interest in such credit card receivables   for up to 60 days less (iv) such Reserves (to be defined in the   ABL Credit Documentation) as the ABL Administrative Agent may establish in   its Reasonable Credit Judgment; provided that   if the field examination and inventory appraisal with the respect to each   Affected Entity have not been completed by the 60th day after the Closing   Date, the Borrowing Base shall thereafter not include any amount in respect   of the assets of such Affected Entity until such field examination and   inventory appraisal are completed.
    
	
 
    	
 
    	
 
    
	
OPTIONAL   PREPAYMENTS
    	
 
    	
 
    
	
AND   COMMITMENT
    	
 
    	
 
    
	
REDUCTIONS:
    	
 
    	
The Borrowers may repay the loans under the   ABL Facility at any time and from time to time without premium or penalty   (other than breakage costs (but not loss of margin) with respect to LIBOR loans,   if applicable), in minimum principal amounts and with customary notice   requirements to be mutually agreed upon.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Borrowers may reduce the unutilized   portion of the commitments in respect of the ABL Facility at any time and   from time to time, or terminate the ABL Facility, in each case, without   premium or penalty, in minimum principal amounts to be mutually agreed upon   by the Borrowers and the ABL Administrative Agent and subject to customary   notice requirements to be mutually agreed upon.
    
	
 
    	
 
    	
 
    
	
MANDATORY
    	
 
    	
 
    
	
PREPAYMENTS:
    	
 
    	
If at any time the sum of the principal   amount of outstanding borrowings and outstanding Letters of Credit under the   ABL Facility exceeds the 
    


 

Annex I-5











 

	
 

 
    	
 
    	
lesser of (i) the Borrowing Base as in   effect at such time and (ii) the Loan Cap, the Borrowers shall prepay   the loans (and cash collateralize Letters of Credit) in an amount necessary   to eliminate such excess.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Upon any sale or other disposition of any   assets of the Borrower or any Guarantor, in each case to the extent   constituting ABL Priority Collateral, outside of the ordinary course of   business or the receipt by the Borrower of any proceeds from casualty   insurance or a condemnation of ABL Priority Collateral (in each case, with   exceptions and materiality levels to be agreed in the ABL Credit   Documentation), above a threshold to be agreed, the Borrowers shall provide   an updated calculation of the Borrowing Base.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If a Cash Dominion Event (as defined below)   has occurred and is continuing, all amounts deposited in each Collection   Account (as defined below) will be promptly applied by the ABL Administrative   Agent to repay outstanding loans under the ABL Facility and, if an event of   default exists, to cash collateralize outstanding Letters of Credit.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Mandatory prepayments shall not reduce the   commitments of the ABL Lenders under the ABL Facility.
    
	
 
    	
 
    	
 
    
	
SECURITY:
    	
 
    	
Subject to the Funds Certain Provisions, the   ABL Facility (including cash management services, interest rate protection,   other hedging arrangements, and other bank products provided to the Lead   Borrower or its Subsidiaries by any of the ABL Lenders or their respective   affiliates) will be secured by: (a) perfected first priority (subject to   permitted liens, including in respect of the Term Facility, and other   customary exceptions) security interests in substantially all tangible and   intangible assets of the Lead Borrower and the U.S. Guarantors consisting of   accounts receivable, inventory, tax refunds, cash, deposit accounts,   securities accounts, investment property (other than (x) capital stock   and (y) any deposit account or securities account (or amount on deposit   therein) established solely to hold identified proceeds of Term Loan Priority   Collateral (as defined below)), general intangibles (other than equity   interests and intellectual property), chattel paper, documents, supporting   obligations, certain other assets and books and records related to the   foregoing and, in each case, proceeds thereof, subject to customary   exceptions (the “ABL Priority Collateral”);   and (b) a second priority (subject to permitted liens, including in   respect of the Term Facility, and other customary exceptions) security   interest in (i) 100% of the capital stock held by the Lead Borrower and   the U.S. Guarantors (but limited in the case of the voting capital stock of   any first-tier CFC or Disregarded Domestic Person, to 65% of such capital   stock), (ii) substantially all material owned real property and   equipment of the Lead Borrower and the U.S. Guarantors and (iii) all   other personal property of the Lead Borrower and the U.S. Guarantors to the   extent not constituting ABL Priority Collateral, including, without   limitation, contracts, patents, copyrights, trademarks, other general intangibles   and all proceeds of the foregoing (in each case, other than those relating to   ABL Priority Collateral) (the property in 
    


 

Annex I-6











 

	
 
    	
 
    	
clauses (b)(i) through   (b)(iii) above, the “Term Loan Priority   Collateral”, and together with the ABL Priority Collateral,   the “Collateral”), in each case,   excluding the Excluded Assets (as defined below).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding anything to the contrary,   the Collateral shall exclude the following: (i) any fee-owned real   property with a fair market value of less than an amount to be agreed (with   all required mortgages being permitted to be delivered post-closing) and all   leasehold interests in real property; (ii) motor vehicles, aircrafts and   other assets subject to certificates of title (except to the extent   perfection can be accomplished through the filing of UCC-1 financing   statements); (iii) letter of credit rights with a value of less than an   amount to be agreed (except to the extent perfection can be accomplished   through the filing of UCC-1 financing statements) and commercial tort claims   with a value of less than an amount to be agreed; (iv) pledges and   security interests prohibited by applicable law, rule or regulation   (including the requirement to obtain consent of any governmental authority);   (v) equity interests in any person other than wholly-owned subsidiaries   to the extent not permitted by the terms of such person’s organizational or   joint venture documents; (vi) any lease, permit, license or other   agreement or any property subject to a purchase money security interest or   similar arrangement to the extent that a grant of a security interest therein   would violate or invalidate such lease, permit, license or agreement or   purchase money arrangement or create a right of termination in favor of, or   require the consent of, any other party thereto (other than the Lead Borrower   or any of its subsidiaries) after giving effect to the applicable   anti-assignment provisions of the Uniform Commercial Code, other than proceeds   and receivables thereof, the assignment of which is expressly deemed   effective under the Uniform Commercial Code notwithstanding such prohibition;   (vii) those assets as to which the ABL Administrative Agent and the Lead   Borrower reasonably agree that the cost of obtaining such a security interest   or perfection thereof are excessive in relation to the benefit to the Lenders   of the security to be afforded thereby; (viii) voting capital stock in   excess of 65% of any first-tier CFC or Disregarded Domestic Person;   (ix) any of the capital stock of a subsidiary of a CFC or Disregarded   Domestic Person, (x) any governmental licenses or state or local   franchises, charters and authorizations, to the extent security interests in   such licenses, franchises, charters or authorizations are prohibited or   restricted thereby after giving effect to the applicable anti-assignment   provisions of the Uniform Commercial Code; (xi) “intent-to-use”   trademark or service mark applications; (xii) (a) payroll and other   employee wage and benefit accounts, (b) sales tax accounts,   (c) escrow accounts, and (d) fiduciary or trust accounts, and, in   the case of clauses (a) through (d), the funds or other property held in   or maintained in any such account (collectively, the “Excluded   Accounts”); (xiii) any acquired property (including   property acquired through acquisition or merger of another entity, but   excluding any Collateral included in the Borrowing Base and other assets to   be mutually agreed) if at the time of such acquisition the granting of a   security interest therein or the pledge thereof is prohibited by any contract   or other agreement (in each case, not created in contemplation thereof) to   the 
    


 

Annex I-7











 

	
 
    	
 
    	
extent and for so long as such contract or   other agreement prohibits such security interest or pledge; and   (xiv) other exceptions to be mutually agreed upon (the foregoing   described in clauses (i) through (xiv) are, collectively, the “Excluded Assets”). In addition, in   no event shall (a) notices be required to be sent to account debtors or   other contractual third parties (other than credit card notifications) prior   to the occurrence and during the continuance of an event of default,   (b) perfection (except to the extent perfected through the filing of   Uniform Commercial Code financing statements) be required with respect to   letter of credit rights and commercial tort claims, in each case with a value   of less than an amount to be agreed, or (c) security documents governed   by the laws of a jurisdiction other than the United States or any state   thereof be required. Notwithstanding anything to the contrary, no foreign   local law pledges, landlord lien waivers, estoppels or collateral access   letters will be required.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, collateral   provided by the Canadian Borrower and the Canadian Guarantors shall consist   of usual and customary collateral (similar in scope to the Collateral of the   Lead Borrower and the U.S. Guarantors as provided above with customary   modifications) and exceptions.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All the above-described pledges, security   interests and mortgages shall be created on terms to be set forth in the ABL   Facility Documentation and otherwise consistent with the ABL Sponsor   Precedent; and none of the Collateral shall be subject to other pledges,   security interests or mortgages (except in favor of the Term Facility and   other permitted liens and exceptions and baskets to be set forth in the ABL   Facility Documentation).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The relative rights and priorities in the   ABL Priority Collateral among the ABL Administrative Agent and the Term   Administrative Agent will be set forth in customary intercreditor agreements   in form and substance satisfactory to the ABL Administrative Agent and the   Term Administrative Agent (the “Intercreditor Agreement”).   Without limiting the foregoing, the Intercreditor Agreement with the Term   Administrative Agent and the security documents with the Borrowers and   Guarantors shall provide that the ABL Administrative Agent shall have a   license allowing the use of such of the Term Priority Collateral as may be   necessary or desirable for the liquidation of the ABL Priority Collateral.
    
	
 
    	
 
    	
 
    
	
REPRESENTATIONS
    	
 
    	
 
    
	
AND WARRANTIES:
    	
 
    	
Subject to the ABL   Documentation Standard, with customary exceptions, thresholds and baskets to   be reasonably and mutually agreed, representations and warranties applicable to the Lead Borrower and   its restricted subsidiaries (with materiality qualifiers to be mutually   agreed), limited to the following: (i) legal existence, qualification   and power; (ii) due authorization and no contravention of law, contracts   or organizational documents; (iii) governmental and third party   approvals and consents; (iv) enforceability; (v) accuracy and   completeness of specified financial 
    


 

Annex I-8











 

	
 
    	
 
    	
statements and other information and no   event or circumstance, either individually or in the aggregate, that has had   or could reasonably be expected to have a Material Adverse Effect (to be   defined in the ABL Credit Documentation); (vi) no material litigation;   (vii) no default; (viii) ownership of property; (ix) insurance   matters; (x) environmental matters; (xi) tax matters;   (xii) ERISA; (xiii) identification of loan parties and subsidiaries   of loan parties, and equity interests owned by loan parties; (xiv) use   of proceeds and not engaging in business of purchasing/carrying margin stock;   (xv) status under Investment Company Act; (xvi) material compliance   with laws; (xvii) intellectual property; (xviii) consolidated   solvency as of the Closing Date; (xix) collateral documents;   (xx) labor matters; (xxi) disclosure of depositary and securities   accounts and credit card issuers and processors of the Borrowers and   Guarantors; and (xxii) foreign assets control regulations and related   matters.
    
	
 
    	
 
    	
 
    
	
CASH MANAGEMENT:
    	
 
    	
The Borrowers and the Guarantors will   establish lockbox and blocked account arrangements reasonably acceptable to   the ABL Administrative Agent and shall cause all cash receipts to be   forwarded to one or more deposit accounts which is subject to a control   agreement in favor of the ABL Administrative Agent (excluding (i) the   Excluded Accounts and (ii) certain other accounts with deposits up to an   aggregate amount to be agreed) with respect to accounts owned by the U.S.   Borrower, the Canadian Borrower and the Guarantors, within 90 days after the   Closing Date (or such longer period as the ABL Administrative Agent may   reasonably agree) (each a “Controlled Account”).   Without limiting the foregoing, the Borrowers will instruct their account   debtors to make payments directly to a Controlled Account.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During the continuance of a Cash Dominion   Event (as defined below), all cash proceeds of ABL Priority Collateral   (subject to exceptions to be mutually agreed) received by the Borrowers and/or their Subsidiaries in a   Controlled Account or otherwise shall be swept daily to a collection account   maintained at the Administrative Agent (each such account, a “Collection Account”) and shall be   applied daily in reduction of the obligations under the ABL Facility.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
As used herein, “Cash   Dominion Event” shall mean either (i) the occurrence and   continuance of any event of default, or (ii) the failure of the   Borrowers to maintain for five (5) consecutive business days Availability   at least equal to the greater of (x) $55 million and (y) 12.5% of   the Loan Limit. A Cash Dominion Event shall continue unless and until, as   applicable, such event of default is waived or Availability is greater than   the amounts required above for thirty (30) consecutive days; provided that, for purposes of this cash   management requirement, a Cash Dominion Event may be discontinued only twice   in any 12 consecutive month period notwithstanding that the event of default   has been waived or that Availability shall have been greater than the amounts   required above for thirty (30) consecutive days.
    


 

Annex I-9




 









 

	
FINANCIAL COVENANTS:
    	
 
    	
If, at any time, Availability is less than   the greater of (x) $40 million and (y) 10% of the Loan Limit, then   the Borrowers will be required to maintain a minimum Consolidated Fixed   Charge Coverage Ratio (to be defined in the ABL Credit Documentation),   calculated on a trailing four-quarter basis as of the end of the most recent   fiscal quarter prior to such event and as the last day of each subsequent   fiscal quarter ending during a test period, of 1.0:1.0 until Availability   again equals or exceeds such threshold for thirty (30) consecutive calendar   days.
    
	
 
    	
 
    	
 
    
	
FINANCIAL REPORTING:
    	
 
    	
The Borrowers shall provide the financial   reporting usual and customary for transactions of this type, each comprising:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 if Availability is less than the greater   of 20% of the Line Cap and $85 million, monthly consolidated and, except in   the case of cash flows, consolidating financial statements of the Lead   Borrower and its Subsidiaries, including a balance sheet, income statement,   and a statement of cash, within 30 days after the end of each fiscal month   end or, with respect to the last fiscal month of each fiscal quarter, 45   days;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)                                 quarterly consolidated and, except in the   case of cash flows, consolidating financial statements of the Lead Borrower   and its Subsidiaries, including a balance sheet, income statement, and a   statement of cash flow, within 45 days after the end of each fiscal quarter;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)                                  consolidated annual audited financial   statements of the Lead Borrower and its Subsidiaries (within 90 days after   each fiscal year end);
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d)                                 annually (i) consolidated forecasts   and projections, including monthly balance sheets, income statements and   statements of cash flow, and (ii) an availability model (in each case,   within 90 days after each fiscal year end);
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e)                                  monthly borrowing base certificates and   supporting documentation no later than the fifteenth (15th) business day   after the end of each fiscal month, unless Availability at any time does not   exceed the greater of (x) $55 million and (y) 12.5% of the Loan   Limit, in which case borrowing base certificates and supporting documentation   shall be delivered weekly; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f)                                   Other customary requirements including   quarterly compliance certificates, inventory and receivables reports, notices   of defaults, litigation and other material events, and other information   customarily supplied in a transaction of this type.
    
	
 
    	
 
    	
 
    
	
COLLATERAL MONITORING:
    	
 
    	
Field examinations and inventory appraisals   will be conducted on an ongoing basis at the discretion of the ABL   Administrative Agent. The Borrowers shall be required to pay the fees and   expenses for one (1) field examination and one (1) inventory   appraisal in any twelve (12) month
    


 

Annex I-10











 

	
 
    	
 
    	
period; provided   that, if Availability at any time is less than the greater of (x) $85   million and (y) 20% of the Loan Limit, the Borrowers shall be required   to pay for two (2) field examinations and two appraisals in each twelve   (12) month period, provided further,   that if an event of default exists, the Borrowers shall be required to pay   all fees and expenses for all field examinations and inventory appraisals   reasonably undertaken by the ABL Administrative Agent. Nothing herein shall   limit the ABL Administrative Agent’s right to conduct one additional field   examination and one additional inventory appraisal in any fiscal year (as   determined in the discretion of the ABL Administrative Agent) at the ABL   Lenders’ expense.
    
	
 
    	
 
    	
 
    
	
OTHER COVENANTS:
    	
 
    	
Affirmative and negative covenants   applicable to the Lead Borrower and its restricted subsidiaries with such   exceptions, thresholds, baskets, and materiality qualifications as may be   reasonably and mutually agreed upon in the ABL Credit Documentation, limited to   the following:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 Affirmative Covenants. (i) delivery of certificates and   other information; (ii) delivery of customary notices (including,   without limitation, of any default, material adverse condition, ERISA,   material change in accounting or financial reporting practices, or sale of   equity); (iii) payment and performance of obligations;   (iv) preservation of existence; (v) maintenance of properties;   (vi) maintenance of insurance; (vii) compliance with laws; (viii) maintenance   of books and records; (ix) inspection rights; (x) covenant to   guarantee obligations and give security; (xi) compliance with   environmental laws; (xii) conduct of physical inventories;   (xiii) further assurances; (xiv)  maintenance of governmental   approvals and authorizations, (xv) maintenance of acceptable cash   management systems; (xvi) compliance with pension plan requirements; and   (xvii) labor matters.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
b)                                     Negative Covenants. Restrictions on (i) liens;   (ii) indebtedness, (including guarantees and other contingent obligations);   (iii) investments (including loans and advances); (iv) mergers and   other fundamental changes; (v) sales and other dispositions of property   or assets; (vi) payments of dividends and other distributions;   (vii) changes in the nature of business; (viii) transactions with   affiliates; (ix) burdensome agreements; (x) use of proceeds, OFAC   and AML; (xi) amendments of organizational documents in a manner   materially adverse to the Lenders; (xii) changes in fiscal year and   changes in accounting policies unless required by GAAP;   (xiii) prepayments of other indebtedness; and (xiv) modification or   termination of documents related to certain material indebtedness and   material contracts, in each case with such exceptions as may be agreed upon   in the ABL Credit Documentation.
    


 

Annex I-11











 

	
 
    	
 
    	
Notwithstanding the foregoing,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(1)                                 The Borrower may make cash dividends or   repurchase its capital stock (a “Restricted   Payment”) if (a) no Default or Event of Default exists or   would arise as a result of the subject Restricted Payment,   (b) immediately after giving pro forma effect to such Restricted Payment   and on a pro forma basis for each of the 90 days preceding such Restricted   Payment, Availability shall be greater than the greater of (x) $65   million and (y) 17.5% of the Loan Cap, (c) the Consolidated Fixed   Charge Coverage Ratio for the trailing twelve (12) month period immediately   preceding such Restricted Payment shall be greater than or equal to 1.1 to   1.0; provided that the   provisions of this clause (c) shall not be applicable if Availability,   calculated in accordance with clause (b) hereof, immediately after   giving pro forma effect to such Restricted Payment on a pro forma basis for   each of the 90 days preceding such Restricted Payment is greater than or   equal to the greater of (x) $85 million and (y) 25% of the Loan   Cap; and (d) the Borrower shall have delivered a certificate to the ABL   Administrative Agent including a reasonably detailed calculation of such   Availability and, if applicable, Consolidated Fixed Charge Coverage Ratio.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(2)                                 The Borrower may make Permitted   Acquisitions and other investments and prepay Indebtedness if the Payment   Conditions are satisfied.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
As used herein, “Payment   Conditions” shall mean that (a) no Default or Event of   Default exists or would arise as a result of the subject transaction or   payment, (b) immediately after giving pro forma effect to such   transaction or payment and on a pro forma basis for each of the 90 days   preceding such investment or prepayment, Availability shall be greater than   the greater of (x) $50 million and (y) 15% of the Loan Cap,   (c) the Consolidated Fixed Charge Coverage Ratio for the trailing twelve   (12) month period immediately preceding such transaction or payment shall be   greater than or equal to 1.0 to 1.0, provided that   the provisions of this clause (c) shall not be applicable if   Availability, calculated in accordance with clause (b) hereof,   immediately after giving pro forma effect to such acquisition, investment or   prepayment and on a pro forma basis for each of the 90 days preceding such   acquisition, investment or prepayment is greater than or equal to the greater   of (x) $65 million and (y) 20% of the Loan Cap; and (d) the   Borrower shall have delivered a Compliance Certificate to the ABL   Administrative Agent including a reasonably detailed calculation of such   Availability and, if applicable, Consolidated Fixed Charge Coverage Ratio.
    
	
 
    	
 
    	
 
    
	
UNRESTRICTED
    	
 
    	
 
    
	
SUBSIDIARIES:
    	
 
    	
The ABL Facility Documentation will contain   provisions pursuant to which, subject to customary limitations on   investments, loans, advances to, and other investments in, unrestricted   subsidiaries, a Borrower will be
    


 

Annex I-12











 

	
 
    	
 
    	
permitted, subject to compliance with the   Payment Conditions, to designate any existing or subsequently acquired or   organized subsidiary as an “unrestricted subsidiary” and subsequently   re-designate any such unrestricted subsidiary as a restricted subsidiary, it   being understood that (x) the designation of any unrestricted subsidiary   as a restricted subsidiary shall constitute the incurrence at the time of   designation of any indebtedness or liens of such subsidiary existing at such   time and (y) the fair market value of such subsidiary at the time it is   designated as an “unrestricted subsidiary” shall be treated as an investment   by the Borrower at such time. Unrestricted subsidiaries will not be subject   to the representations and warranties, affirmative or negative covenants or   event of default provisions of the ABL Facility Documentation and the   Commitment Letter and results of operations and indebtedness of unrestricted   subsidiaries will not be taken into account for purposes of determining any   financial ratio or covenant contained in the ABL Facility Documentation. No   restricted subsidiary may be designated as an unrestricted subsidiary under   the ABL Facility if it is a “restricted subsidiary” under the Term Facility,   the Notes or the Bridge Facility.
    
	
 
    	
 
    	
 
    
	
EVENTS OF DEFAULT:
    	
 
    	
Limited to the following (with grace periods   and thresholds as mutually and reasonably agreed): (i) non-payment of   principal; (ii) non-payment of interest, fees or other amounts which   continues for five (5) days after the date when due; (iii) failure   to perform or observe covenants set forth in the ABL Credit Documentation   within a specified period of time, where customary and appropriate, after   such failure; (iv) any representation or warranty proving to have been   incorrect in any material respect (or, in the case of any representation and   warranty qualified by materiality, in all respects) when made or confirmed;   (v) cross-default to other indebtedness in an amount to be agreed;   (vi) bankruptcy and insolvency defaults (with grace period for involuntary   proceedings); (vii) inability to pay debts; (viii) monetary   judgment defaults in an amount to be agreed and non-monetary judgment   defaults which would reasonably likely have a Material Adverse Effect;   (ix) ERISA; (x) actual or asserted invalidity or impairment of any   material ABL Credit Documentation; (xi) change of control (to be defined   in a mutually agreed and reasonable manner), (xii) cessation of   business, (xiii) breach of intercreditor or subordination agreements, if   any, (xiv) failure to maintain financial covenant; and (xv) failure   of the Merger to be consummated within 1 business day after the Closing Date.
    
	
 
    	
 
    	
 
    
	
CONDITIONS   PRECEDENT
    	
 
    	
 
    
	
TO CLOSING:
    	
 
    	
Limited to those conditions specified in   paragraph 5 of the Commitment Letter.
    
	
 
    	
 
    	
 
    
	
CONDITIONS   PRECEDENT
    	
 
    	
 
    
	
TO   EXTENSIONS OF CREDIT
    	
 
    	
 
    
	
AFTER THE CLOSING DATE:
    	
 
    	
Limited to the following: (i) all of   the representations and warranties in the ABL Credit Documentation shall be   true and correct as of the date of such extension of credit in all material   respects (except to the extent such representation and warranty expressly   relates to an earlier date or if such
    


 

Annex I-13











 

	
 
    	
 
    	
representations and warranties are qualified   by materiality, in which case they shall be true and correct in all   respects); (ii) no default or event of default shall have occurred and   be continuing, or would result from such extension of credit; and   (iii) in the case of any extension of credit under the ABL Facility, the   aggregate principal amount of all loans outstanding under the ABL Facility   and the aggregate undrawn amount of all Letters of Credit outstanding on such   date, after giving effect to the applicable borrowing or issuance or renewal   of a Letter of Credit, shall not exceed the Loan Limit on such date.
    
	
 
    	
 
    	
 
    
	
ASSIGNMENTS   AND
    	
 
    	
 
    
	
PARTICIPATIONS:
    	
 
    	
Subject to the consents described below   (which consents will not be unreasonably withheld or delayed), each ABL   Lender will be permitted to make assignments to other eligible financial institutions   (but not any Disqualified Lender) in respect of the ABL Facility in a minimum   amount equal to $5 million; provided that   the Lead Borrower’s consent shall be deemed to have been given if the Lead   Borrower shall not have responded to a request for consent within 10 business   days. The consent of the ABL Administrative Agent, the Letter of Credit   issuer and the swing line lender will be required for any assignment under   the ABL Facility.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The consent of the Lead Borrower will be   required unless (i) a payment or bankruptcy Event of Default has   occurred and is continuing, or (ii) the assignment is to an ABL Lender,   an affiliate of an ABL Lender or an Approved Fund (as such term shall be   defined in the ABL Credit Documentation).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
An assignment fee payable by the assigning   ABL Lender in the amount of $3,500 will be charged with respect to each   assignment unless waived by the ABL Administrative Agent in its sole   discretion. Each ABL Lender will also have the right, without consent of the   Lead Borrower or the ABL Administrative Agent, to assign as security all or   part of its rights under the ABL Credit Documentation to any Federal Reserve   Bank.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ABL Lenders will be permitted to sell   participations with voting rights limited to significant matters such as   changes in amount, rate, maturity date and releases of all or substantially   all of the collateral securing the ABL Facility.
    
	
 
    	
 
    	
 
    
	
WAIVERS   AND
    	
 
    	
 
    
	
AMENDMENTS:
    	
 
    	
Amendments and waivers of the provisions of   the ABL Credit Documentation will require the approval of ABL Lenders holding   loans and commitments representing more than 50% of the aggregate amount of   the loans and commitments under the ABL Facility (the “Required Lenders”),   except that (a) the consent of each ABL Lender shall be required with   respect to certain matters, including, without limitation, the amendment of   certain of the pro rata sharing provisions; and (b) the consent of each   ABL Lender affected thereby shall be required with respect to
    


 

Annex I-14











 

	
 
    	
 
    	
certain matters, including, without   limitation, (i) increases or extensions in the commitment of such ABL   Lender, (ii) reductions of principal, interest or fees,   (iii) extensions of scheduled maturities or times for payment,   (iv) the release of all or substantially all of the collateral securing   the ABL Facility, (v) increase in the advance rates in the Borrowing   Base or the inclusion of additional classes of assets in the Borrowing Base,   (vi) the release of the guaranties of the Borrowers’ obligations made by   the Guarantors representing all or substantially all of the value thereof, and (vii) the amendment of   the voting percentages of the Lenders.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The ABL Facility Documentation shall contain   a customary “yank-a-bank” provision.
    
	
 
    	
 
    	
 
    
	
GOVERNING LAW:
    	
 
    	
State of New York.
    
	
 
    	
 
    	
 
    
	
ABL   ADMINISTRATIVE
    	
 
    	
 
    
	
AGENT’S COUNSEL:
    	
 
    	
Cahill Gordon & Reindel LLP.
    
	
 
    	
 
    	
 
    
	
OTHER:
    	
 
    	
Each of the parties shall (i) waive its   right to a trial by jury and (ii) submit to New York jurisdiction.
    


 

Annex I-15











 

	
ADDENDUM I
    	
 
    	
 
    
	
PRICING, FEES AND EXPENSES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
INTEREST RATES:
    	
 
    	
The interest rates per annum applicable to   the ABL Facility (other than in respect of Swing Line Loans) will be LIBOR plus the Applicable Margin (as hereinafter   defined) or, at the option of the Borrowers, the Base Rate (to be defined for   Loans to the Borrowers as the highest of (x) the ABL Administrative   Agent’s prime rate, (y) the Federal Funds rate plus 0.50%, and (z) the sum of   1.00% per annum plus LIBOR for a 30 day interest period) plus the Applicable Margin. “Applicable Margin” means a   percentage per annum to be determined based upon the Availability for the   three -month period ended immediately preceding each Adjustment Date in   accordance with the pricing grid set forth below; provided that Level II   pricing shall apply until the end of the first full fiscal quarter ending   after the Closing Date. Each Swing Line Loan shall bear interest at the Base   Rate plus the Applicable Margin for Base Rate loans. “Adjustment   Date” means the first day of each fiscal quarter.
    
	
 
    	
 
    	
 
    
	
PRICING GRID:
    	
 
    	
The Applicable Margin shall be based on the   average daily Availability (expressed as a percentage of the aggregate   commitments under the ABL Facility) as set forth below:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Level
    	
 
    	
Average Daily Excess 
   Availability
    	
 
    	
LIBOR 
   Rate Loans
    	
 
    	
Base Rate Loans
    	
 
    
	
 
    	
 
    	
I
    	
 
    	
> 66 2/3
    	
 
    	
1.50
    	
%
    	
0.50
    	
%
    
	
 
    	
 
    	
II
    	
 
    	
> 33 1/3 but < 66 2/3
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    
	
 
    	
 
    	
III
    	
 
    	
<33 1/3
    	
 
    	
2.00
    	
%
    	
1.00
    	
%
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Borrower may select interest periods,   subject to availability, of one, two, three or six months, and, if agreed to   by all ABL Lenders, 12 months, for LIBOR loans, provided   that that the total number of outstanding LIBOR loans will not exceed a   number to be mutually agreed upon. Interest shall be payable at the end of   the selected interest period, but no less frequently than quarterly. Interest   on Base Rate Loans and Swing Line Loans shall be paid monthly.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During the continuance of any event of   default under the ABL Credit Documentation, the Applicable Margin on overdue   obligations under the loan documentation shall increase by 2% per annum.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“LIBOR” is the rate for eurodollar   deposits for the respective interest period appearing on Reuters Screen   LIBOR01 Page (or otherwise on the Reuters Screen) (as adjusted for   statutory reserve requirements for eurocurrency liabilities).
    
											


 

Annex I-16











 

	
COMMITMENT FEE:
    	
 
    	
Commencing on (and subject to the occurrence   of) the Closing Date, a commitment fee of 0.375% per annum on the daily   unutilized commitments during the immediately preceding quarter; provided that such fee shall be subject to reduction to   0.25% per annum commencing after the first full fiscal quarter ending after   the Closing Date if the average daily utilization of the ABL Facility during   the preceding quarter was at least 50% of the aggregate commitments under the   ABL Facility. Such fee shall be payable to the ABL Lenders quarterly in   arrears, commencing on the first quarterly payment date to occur after the Closing   Date.
    
	
 
    	
 
    	
 
    
	
LETTER   OF
    	
 
    	
 
    
	
CREDIT FEES:
    	
 
    	
Letter of Credit fees shall be payable on   the maximum amount available to be drawn under each Letter of Credit at a   rate per annum equal to the Applicable Margin from time to time applicable to   LIBOR Rate loans under the ABL Facility. Such fees will be (a) payable   quarterly in arrears, commencing on the first quarterly payment date to occur   after the Closing Date, and (b) shared proportionately by the ABL   Lenders. In addition, a fronting fee   shall be payable to the Letter of Credit Issuer in an amount equal to 0.125%   per annum for all Letters of Credit quarterly in arrears and the Borrowers   shall also pay each Letter of Credit Issuer’s customary fees and charges in   connection with the negotiation, amendment, and extension of Letters of   Credit.
    
	
 
    	
 
    	
 
    
	
CALCULATION   OF
    	
 
    	
 
    
	
INTEREST AND FEES:
    	
 
    	
All interest on all advances (to the extent   interest is determined with respect to the LIBOR Rate) and per annum fees   will be calculated on the basis of actual number of days elapsed in a year of   360 days. All other interest will be calculated on the basis of actual number   of days elapsed in a year of 365/366 days.
    
	
 
    	
 
    	
 
    
	
COST   AND YIELD
    	
 
    	
 
    
	
PROTECTION:
    	
 
    	
Customary for transactions and facilities of   this type, including, without limitation, in respect of breakage or   redeployment costs incurred in connection with prepayments (other than loss   of margin), changes in capital adequacy and capital requirements or their   interpretation, illegality, unavailability, reserves without proration or offset   and payments free and clear of withholding or other taxes.
    
	
 
    	
 
    	
 
    
	
EXPENSES:
    	
 
    	
The Borrowers will pay all reasonable and   documented out-of-pocket costs and expenses associated with the preparation,   due diligence, administration, syndication and closing of all Credit   Documentation, including, without limitation, the reasonable and documented   out-of-pocket legal fees of counsel to the ABL Administrative Agent and the   ABL Lead Arrangers (including, without limitation, the reasonable and   documented fees and out-of-pocket expenses of Cahill Gordon &   Reindel LLP and of any local counsel to the ABL Lenders retained by the ABL   Lead Arrangers or the ABL Administrative Agent, limited to one counsel in   each relevant jurisdiction), regardless of whether or not the ABL Facility is   closed. The Borrowers will also pay the reasonable and documented   out-of-pocket expenses of the ABL Administrative Agent and one other
    


 

Annex I-17











 

	
 
    	
 
    	
counsel (in total) to all of the ABL Lenders   (in the absence of conflict) in connection   with the enforcement of any of the Credit   Documentation.
    


 

Annex I-18












 

ANNEX II

 

SUMMARY OF TERMS AND CONDITIONS
 $1,100,000,000 TERM LOAN FACILITIES

 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex II is attached.

 

	
Borrower:
    	
 
    	
The Men’s Wearhouse, Inc. a Texas   corporation (the “Borrower”).
    
	
 
    	
 
    	
 
    
	
Guarantors:
    	
 
    	
The obligations of the Borrower under the   Term Loan Facilities (as hereinafter defined) will be unconditionally guaranteed   jointly and severally on a senior basis (the “Term   Guarantees”) by Holdings and each of the Borrower’s   wholly-owned material restricted U.S. subsidiaries (and consistent with the   principles set forth herein) (collectively, the “Guarantors”),   provided that Guarantors shall not   include, (i) unrestricted subsidiaries, (ii) immaterial   subsidiaries (to be defined in a mutually acceptable manner as to individual   and aggregate revenues or assets excluded), (iii) any subsidiary that is   prohibited, but only so long as such subsidiary would be prohibited, by   applicable law, rule or regulation or by any contractual obligation   existing on the Closing Date or existing at the time of acquisition thereof   after the Closing Date (so long as such prohibition did not arise as part of   such acquisition), in each case, from guaranteeing the Term Facility or which   would require governmental (including regulatory) consent, approval, license   or authorization to provide an Term Guarantee unless such consent, approval,   license or authorization has been received (but without obligation to seek the   same), (iv) any direct or indirect subsidiary of a “controlled foreign   corporation” within the meaning of Section 957 of the Code (a “CFC”), (v) any domestic   subsidiary with no material assets other than equity interests of one or more   foreign subsidiaries that are CFCs (a “Disregarded Domestic   Person”) and (vi) not-for-profit subsidiaries. In addition, the Term Facility Documentation will contain carve outs   for “non-ECP Guarantors”, consistent with the LSTA provisions. All guarantees   will be guarantees of payment and not of collection. The Target and its   subsidiaries included in the Acquired Business that are not excluded from the   foregoing requirements pursuant to the terms described above shall be   required to become Guarantors (and grant liens in their assets constituting   Collateral that can be perfected by filing UCC financing statements) on the   Closing Date. Notwithstanding the forgoing, it is understood and agreed that   neither the Target nor any of its subsidiaries shall be required to be   Guarantors until the Merger is consummated on the Merger Closing Date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   the foregoing, additional subsidiaries may be excluded from the guarantee   requirements in circumstances where the Borrower and the Term Administrative   Agent reasonably agree that the cost of providing such a guarantee is   excessive in relation to the value afforded thereby.
    


 

Annex II-1











 

	
Term Administrative and
    	
 
    	
 
    
	
Collateral Agent:
    	
 
    	
JPMCB will act as sole and exclusive   administrative and collateral agent for the Term Loan Lenders (the “Term Administrative Agent”).
    
	
 
    	
 
    	
 
    
	
Joint Lead Arrangers
    	
 
    	
 
    
	
and Joint Bookrunners:
    	
 
    	
J.P. Morgan and Merrill Lynch will act as   joint lead arrangers and joint bookrunners for the Term Loan Facilities (in   such capacities, the “Term Lead Arrangers”).
    
	
 
    	
 
    	
 
    
	
Term Loan Lenders:
    	
 
    	
Banks, financial institutions and   institutional lenders selected by the Term Lead Arrangers in consultation   with the Borrower and excluding any Disqualified Lenders and, after the initial   funding of the Term Loan Facilities, subject to the restrictions set forth in   the Assignments and Participations section below (the “Term   Loan Lenders”).
    
	
 
    	
 
    	
 
    
	
Term Loan Facilities:
    	
 
    	
A senior secured first lien term loan B   facility (the “Term Loan Facilities”) in   an aggregate principal amount of $1,100 million.
    
	
 
    	
 
    	
 
    
	
Purpose:
    	
 
    	
The proceeds of the borrowings under the   Term Loan Facilities, together with cash on the balance sheet of the   Companies and borrowings under the ABL Facility, shall be used (i) to finance   the Acquisition and the Refinancing and (ii) to pay fees and expenses   incurred in connection therewith.
    
	
 
    	
 
    	
 
    
	
Availability:
    	
 
    	
The Term Loan Facilities will be available   in a single drawing on the Closing Date; provided that in the event   the Merger Date does not occur on the Closing Date, a portion of the proceeds   of the Term Loan Facilities sufficient to pay the consideration in the Merger   shall be deposited in escrow pending consummation of the Merger. Amounts   borrowed under the Term Loan Facilities that are repaid or prepaid may not be   reborrowed.
    
	
 
    	
 
    	
 
    
	
Interest Rates:
    	
 
    	
The interest rates per annum applicable to   the Term Loan Facilities will be, at the option of the Borrower   (i) LIBOR plus the Applicable Margin (as hereinafter defined) or   (ii) the Base Rate plus the Applicable Margin. The Applicable Margin   means 3.75% per annum, in the case of LIBOR advances, and 2.75% per annum, in   the case of Base Rate advances.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Borrower may select interest periods of   one, two, three or six months (and, if agreed to by all Term Loan Lenders,   twelve months) for LIBOR advances. Interest shall be payable at the end of   the selected interest period, but no less frequently than quarterly.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“LIBOR”   and “Base Rate” will have   meanings customary and appropriate for financings of this type; provided that (x) LIBOR will be deemed to be not less   than 1.00% per annum (the “LIBOR Floor”)   and (y) the Base Rate will be deemed to be not less than 100 basis   points higher than one-month LIBOR (after giving effect to the LIBOR Floor).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During the continuance of an event of   default for non-payment of principal, interest or fees, interest will accrue   on such overdue principal,
    


 

Annex II-2











 

	
 
    	
 
    	
interest or fees at the Default Rate (as   defined below). During the continuance of a bankruptcy event of default, the   principal amount of all outstanding obligations will bear interest at the   Default Rate. As used herein, “Default Rate”   means (i) on the principal of any loan at a rate of 200 basis points in   excess of the rate otherwise applicable to such loan and (ii) on any   other overdue amount at a rate of 200 basis points in excess of the   non-default rate of interest then applicable to Base Rate loans.
    
	
 
    	
 
    	
 
    
	
Calculation of Interest
    	
 
    	
 
    
	
and fees:
    	
 
    	
Other than calculations in respect of   interest at the Base Rate (which shall be made on the basis of actual number   of days elapsed in a 365/366 day year), all calculations of interest and fees   shall be made on the basis of actual number of days elapsed in a 360-day   year.
    
	
 
    	
 
    	
 
    
	
Cost and Yield Protection:
    	
 
    	
Subject to the Term Loan Documentation   Standard (as defined below) and customary for transactions and facilities of   this type, including, without limitation, in respect of breakage or   redeployment costs incurred in connection with prepayments (other than loss   of margin), changes in capital adequacy and capital requirements or their   interpretation, illegality, unavailability, reserves without proration or   offset and payments free and clear of withholding or other taxes; provided that for all purposes of the Credit   Documentation, (i) the Dodd-Frank Wall Street Reform and Consumer   Protection Act and all requests, rules, guidelines and directives promulgated   thereunder and (ii) all requests, rules, guidelines or directives   promulgated by the Bank for International Settlements, the Basel Committee on   Banking Supervision (or any successor or similar authority) or the United   States regulatory authorities, in each case, pursuant to Basel III, shall be   deemed introduced or adopted after the Closing Date, so long as, in each   case, any amounts with respect thereto assessed by any Lender shall also be   so assessed by such Lender against its similarly situated customers generally   under agreements containing comparable gross-up provisions.
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
The Term Loan Facilities will mature on the   date that is 7 years after the Closing Date.
    
	
 
    	
 
    	
 
    
	
Incremental Term
    	
 
    	
 
    
	
Facilities:
    	
 
    	
The Credit Documentation will permit the   Borrower to add one or more incremental term loan facilities to the Term Loan   Facilities (each, an “Incremental Term   Facility”) in an aggregate principal amount of up to   $250,000,000 so long as on a pro forma basis the Senior Secured Net Leverage   Ratio (to be defined in the Credit Documentation) would not exceed 2.50:1.00;   provided that (i) no Term Loan   Lender will be required to participate in any such Incremental Term Facility,   (ii) no event of default or default exists or would exist after giving   effect thereto, (iii) the representations and warranties in the Credit   Documentation (in the case of an Incremental Term Facility to finance a   Permitted Acquisition (as defined below), limited to the Specified   Representations (as defined in Annex IV)) shall be true and correct in all   material respects,
    


 

Annex II-3











 

	
 
    	
 
    	
(iv) the maturity date of any such   Incremental Term Facility shall be no earlier than the maturity date for the   Term Loan Facilities, (v) the weighted average life to maturity of any   Incremental Term Facility shall be no shorter than the weighted average life   to maturity of the Term Loan Facilities, (vi) the interest margins for   the Incremental Term Facility shall be determined by the Borrower and the   lenders of the Incremental Term Facility; provided that   in the event that the interest margins for any Incremental Term Facility are   greater than the Applicable Margin for the Term Loan Facilities by more than   50 basis points, then the Applicable Margin for the Term Loan Facilities   shall be increased to the extent necessary so that the interest margins for   the Incremental Term Facility are not more than 50 basis points higher than   the Applicable Margin for the Term Loan Facilities; provided,   further, that in determining the   interest margins applicable to the Term Loan Facilities and the Applicable   Margins for any Incremental Term Facility, (x) original issue discount   (“OID”) or upfront fees (which shall   be deemed to constitute like amounts of OID) payable by the Borrower for the   account of the Term Loan Lenders of the Term Loan Facilities or the   Incremental Term Facility in the primary syndication thereof shall be   included (with OID being equated to interest based on an assumed four-year   life to maturity), (y) customary arrangement, structuring, underwriting,   amendment or commitment fees payable to one or more arrangers of any   Incremental Term Facility shall be excluded, and (z) if the LIBOR or   Base Rate floor for any Incremental Term Facility is greater than the LIBOR   or Base Rate floor, respectively, for the existing Term Loan Facilities, the   difference between such floor for the Incremental Term Facility and the Term   Loan Facilities shall be equated to an increase in the Applicable Margin for   purposes of this clause (vi), (vii) each Incremental Term Facility shall   be secured by pari passu liens on the Collateral (as hereinafter defined)   securing the Term Loan Facilities and (ix) any Incremental Term Facility   shall be on terms and pursuant to documentation to be determined, provided that, to the extent such terms and documentation   are not consistent with the Term Loan Facilities (except to the extent   permitted by clause (iv), (v) or (vi) above), they shall be   reasonably satisfactory to the Term Administrative Agent. The Borrower shall   seek commitments in respect of any Incremental Term Facility from existing   Term Loan Lenders or from additional banks, financial institutions and other   institutional lenders reasonably acceptable to the Term Administrative Agent   who will become Term Loan Lenders in connection therewith.
    
	
 
    	
 
    	
 
    
	
Refinancing Facilities:
    	
 
    	
The Credit Documentation will permit the   Borrower to refinance loans under the Term Loan Facilities or loans under any   Incremental Term Facility (each, “Refinanced Debt”)   from time to time, in whole or part, with (x) one or more new term   facilities (each, a “Refinancing   Term Facility”) under the Credit Documentation with the   consent of the Borrower, the Term Administrative Agent and the institutions   providing such Refinancing Term Facility or (y) one or more series of unsecured   notes or loans, notes secured by the Collateral on a pari passu basis with the Term Loan   Facilities or notes or loans secured by the Collateral on a subordinated   basis to the Term Loan Facilities, which will be subject to
    


 

Annex II-4











 

	
 
    	
 
    	
customary intercreditor terms reasonably   acceptable to the Term Administrative Agent and the Borrower (any such notes   or loans, “Refinancing    Notes”   and together with the Refinancing Term Facilities, the “Refinancing Indebtedness”);   provided that (i) any   Refinancing Term Facility or Refinancing Notes do not mature prior to the   maturity date of, or have a shorter weighted average life than, the   applicable Refinanced Debt, (ii) any Refinancing Notes consisting of   notes do not mature prior to the maturity date of the applicable Refinanced   Debt or have any scheduled amortization, (iii) there shall be no   issuers, borrowers or guarantors in respect of any Refinancing Indebtedness   that are not the Borrower or a Guarantor, (iv) any Refinancing Notes   shall not contain any mandatory prepayment provisions (other than related to   customary asset sale and change of control offers or events of default) that   could result in prepayments of such Refinancing Notes prior to the maturity   date of the applicable Refinanced Debt, (v) the other terms and   conditions of such Refinancing Indebtedness (excluding pricing, interest rate   margins, rate floors, discounts, fees and optional prepayment or optional   redemption provisions) are not materially more favorable (when taken as a   whole) to the lenders or investors providing such Refinancing Indebtedness   than the terms of the applicable Refinanced Debt and (vi) the proceeds   of such Refinancing Indebtedness (a) shall not be in an aggregate principal   amount greater than the aggregate principal amount of the applicable   Refinanced Debt plus any fees and premiums associated therewith, and costs   and expenses related thereto and (b) shall be immediately applied to   permanently prepay in whole or in part the applicable Refinanced Debt.
    
	
 
    	
 
    	
 
    
	
Term Loan
    	
 
    	
 
    
	
Documentation Standard:
    	
 
    	
The Credit Documentation for the Term Loan   Facilities (i) shall be based upon senior secured term loan facilities   for similar borrowers with appropriate modifications to baskets and materiality   thresholds to reflect the size, leverage and ratings of the Borrower after   giving effect to the Acquisition, (ii) shall contain the terms and   conditions set forth in this Term Loan Facilities Summary of Terms,   (iii) shall reflect the operational and strategic requirements of the   Borrower and its subsidiaries in light of their size, industries and   practices and (iv) shall reflect the customary agency and operational   requirements of the Term Administrative Agent (collectively, the “Term Loan Documentation Standard”),   in each case, subject to the Funds Certain Provisions. The Credit   Documentation shall, subject to the “market flex” provisions contained in the   Fee Letter, contain only those conditions to borrowing, mandatory   prepayments, representations and warranties, covenants and events of default   expressly set forth in this Term Loan Facilities Summary of Terms, in each   case, applicable to the Borrower and its subsidiaries and, subject to the   Term Loan Documentation Standard and certain other limitations as set forth   herein, with standards, qualifications, exceptions and grace and cure periods   consistent with the Term Loan Documentation Standard.
    
	
 
    	
 
    	
 
    
	
Scheduled Amortization:
    	
 
    	
The Term Loan Facilities shall be subject to   quarterly amortization of principal equal to 0.25% of the original aggregate   principal amount of
    


 

Annex II-5











 

	
 
    	
 
    	
the Term Loan Facilities, with the balance   payable on the final maturity date.
    
	
 
    	
 
    	
 
    
	
Mandatory Prepayments:
    	
 
    	
In addition to the amortization set forth   above and subject to the Term Loan Documentation Standard and the next   paragraph, mandatory prepayments shall be required (i) subject to   customary exceptions and thresholds, from the receipt of net cash proceeds by   the Borrower or any of its subsidiaries from any disposition of assets   outside the ordinary course of business or casualty event by the Borrower or   any of its subsidiaries, in each case, to the extent such proceeds are not   reinvested (or committed to be reinvested) in assets useful in the business   of the Borrower or any of its subsidiaries within twelve months of the date   of such disposition or casualty event (and, in the case of ABL Priority   Collateral, to the extent such amounts are not required to repay the ABL   Facility) and, if so committed to be reinvested, reinvested   no later than 180 days after the end of such twelve month period; (ii) following the receipt of net cash proceeds from the   issuance or incurrence after the Closing Date of additional debt of the   Borrower or any of its subsidiaries (other than debt permitted under the   Credit Documentation other than Refinancing Indebtedness); and (iii) in   an amount equal to 50% of Excess Cash Flow (to be defined in the Credit   Documentation) of the Borrower and its subsidiaries, beginning with the first   full fiscal year commencing after the Closing Date, with step downs to 25%   and 0% based on the Senior Secured Net Leverage Ratios (to be defined to   allow netting of unrestricted cash of up to an amount to be agreed) at levels   to be agreed, of the Borrower (with a dollar-for-dollar credit for optional   prepayments of the Term Loan Facilities subsequent to the first day of the   relevant year), in each case of clauses (i) - (iii), subject to the   limitations set forth in the paragraph immediately following, such amounts   shall be applied in forward order to the prepayment of the next eight   (8) installments of the Term Loan Facilities, and then on a pro rata   basis and to scheduled amortization of the Term Loan Facilities on a pro rata   basis.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Any Term Loan Lender may elect not to accept   its pro rata portion of any mandatory prepayment other than a prepayment made   with the proceeds of a Refinancing Debt (each a “Declining   Lender”). Any prepayment amount declined by a Declining Lender   shall first be offered to prepay Term Loans of Term Loan Lenders who were not   Declining Lenders and, if declined by such Term Loan Lenders, may be retained   by the Borrower (such amount, a “Declined Amount”).
    
	
 
    	
 
    	
 
    
	
Optional Prepayments:
    	
 
    	
The Term Loan Facilities may be prepaid at   any time in whole or in part without premium or penalty, upon written notice,   at the option of the Borrower, except (x) that any prepayment of LIBOR   advances other than at the end of the applicable interest periods therefor   shall be made with reimbursement for any funding losses and redeployment   costs (but not loss of margin) of the Term Loan Lenders resulting therefrom   and (y) as set forth in “Soft-Call Premium” below. Each optional   prepayment of the Term Loan Facilities shall be applied as directed by the   Borrower.
    


 

Annex II-6












 

	
Soft-Call Premium:
    	
 
    	
In the event that all or any portion of the   Term Loan Facilities is (i) repaid, prepaid, refinanced or replaced with   term loan indebtedness with a lower effective yield (to be defined) than the   effective yield of such Term Loan Facility or (ii) repriced through any   waiver, consent or amendment that has the effect of reducing the effective   yield of the Term Loan Facilities (a “Repricing Transaction”),   in each case, on or prior to the six-month anniversary of the Closing Date   and other than in connection with a change of control, such repayment,   prepayment, refinancing, replacement or repricing will be accompanied by a   premium of 1% of the principal amount so repaid, prepaid, refinanced,   replaced or repriced. If all or any portion of the Term Loan Facilities held   by any Term Loan Lender is required to be assigned pursuant to a   “yank-a-bank” provision in the Credit Documentation as a result of, or in   connection with a Repricing Transaction, such Term Loan Lender not agreeing   or otherwise consenting to any waiver, consent or amendment referred to in   clause (ii) above (or otherwise in connection with a Repricing   Transaction), such replacement will be accompanied by a premium equal to 1%   of the principal amount so required to be assigned.
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
Subject to the Funds Certain Provisions, the   Borrower and each of the Guarantors shall grant the Term Administrative Agent   (for its benefit and for the benefit of the Term Loan Lenders) (a) a   first-priority (subject to permitted liens and other customary exceptions)   security interest in the Term Loan Priority Collateral (as defined in Annex   I hereto) and (b) a second-priority (subject to permitted liens,   including in respect of the ABL Facility, and other customary exceptions)   security interest in the ABL Priority Collateral (as defined in Annex I   hereto), in each case, excluding the Excluded Assets (as defined in Annex   I hereto) (collectively, the “Collateral”).   Notwithstanding anything to the contrary, except to the extent delivered   pursuant to the ABL Facility, no control agreements, landlord lien waivers,   estoppels or collateral access letters will be required.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All the above-described pledges, security   interests and mortgages shall be created on terms to be set forth in the Term   Facility Documentation and otherwise consistent with the Term Facility   Documentation Principles; and none of the Collateral shall be subject to   other pledges, security interests or mortgages (except in favor of the ABL   Facility and other permitted liens and exceptions and baskets to be set forth   in the Term Facility Documentation).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All the above-described pledges, security   interests and mortgages shall be created on terms, and pursuant to   documentation, subject to the Term Loan Documentation Standard and reasonably   satisfactory to the Term Administrative Agent and the Borrower. Assets will   be excluded from the Collateral in circumstances to be agreed and in   circumstances where the Term Administrative Agent reasonably determines in   consultation with the Borrower that the cost of obtaining a security interest   in such assets is excessive in relation to the value afforded thereby, and in   any event such exclusions shall include vehicles, trust, payroll and escrow
    


 

Annex II-7











 

	
 
    	
 
    	
accounts, certain leasehold interests   (except as noted above), assets subject to capital leases and purchase money   arrangements, cash which secures permitted letters of credit, assets held in   jurisdictions outside the U.S. (solely to the extent action would be required   in such other jurisdictions to obtain such security interests) and assets   sold in accordance with the Credit Documentation.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent
    	
 
    	
 
    
	
to Initial Borrowing:
    	
 
    	
Limited to those conditions specified in   paragraph 5 of the Commitment Letter.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to
    	
 
    	
 
    
	
Borrowings after Closing
    	
 
    	
 
    
	
Date:
    	
 
    	
Delivery of a customary borrowing notice,   accuracy of representations and warranties in all material respects and   absence of defaults or events of defaults.
    
	
 
    	
 
    	
 
    
	
Representations and
    	
 
    	
 
    
	
Warranties:
    	
 
    	
Subject to the Term Loan Documentation   Standard, with customary exceptions, thresholds and baskets to be reasonably   and mutually agreed, representations and warranties applicable to the   Borrower and its restricted subsidiaries (with materiality qualifiers to be   mutually agreed), limited to the following: (i) legal existence,   qualification and power; (ii) due authorization and no contravention of   law, contracts or organizational documents; (iii) governmental and third   party approvals and consents; (iv) enforceability; (v) accuracy and   completeness of specified financial statements and other information and no   event or circumstance, either individually or in the aggregate, that has had   or would reasonably be expected to have a Material Adverse Effect (to be   defined in the Term Facility Documentation); (vi) no material   litigation; (vii) no default; (viii) ownership of property;   (ix) insurance matters; (x) environmental matters; (xi) tax   matters; (xii) ERISA; (xiii) identification of loan parties and   subsidiaries of loan parties, and equity interests owned by loan parties;   (xiv) use of proceeds and not engaging in business of   purchasing/carrying margin stock; (xv) status under Investment Company   Act; (xvi) material compliance with laws; (xvii) intellectual   property; (xviii) consolidated solvency as of the Closing Date;   (xix) collateral documents; (xx) labor matters; (xxi) brokers;   and (xxii) foreign assets control regulations and related matters.
    
	
 
    	
 
    	
 
    
	
Covenants:
    	
 
    	
Subject to the Term Loan Documentation   Standard, with customary exceptions, thresholds and baskets to be reasonably   and mutually agreed, covenants shall be limited to the following:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)
    	
Affirmative Covenants: (i) financial statements;   (ii) certificates, budgets and other information   (iii) notification; (iv) payment of obligations;   (v) preservation of existence; (vi) maintenance of properties;   (vii) maintenance of insurance; (viii) material compliance with   laws and material obligations; ERISA; (ix) books and records;   (x) inspection rights;(xi) use 
    


 

Annex II-8











 

	
 
    	
 
    	
 
    	
of proceeds;   (xii) joinder of subsidiaries as guarantors; (xiii) pledge of   capital stock and other property; (xiv) further assurances;   (xv) commercially reasonable efforts to maintain facility and corporate   ratings from Moody’s and S&P (but not any specific ratings) and   (xvi) annual Lender conference calls.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)
    	
Negative Covenants: Restrictions on (i) liens;   (ii) investments; (iii) indebtedness; (iv) mergers and   dissolutions; (v) dispositions; (vi) restricted payments (subject   to, among other things, an exception allowing quarterly dividends on the   Borrower’s common stock of up to $10 million); (vii) change in nature of   business; (viii) change in fiscal year; (ix) transactions with   affiliates; (x) use of proceeds; (xi) prepaying, redeeming or   repurchasing certain debt; (xii) granting negative pledges that limit or   restrict the Term Administrative Agent from taking or perfecting its lien in   the intended Collateral, subject to exceptions to be agreed;   (xiii) amending (x) organizational documents in a manner that would   be materially adverse to the Term Loan Lenders or (y) certain debt   instruments in a manner that would otherwise be materially adverse to the Term   Loan Lenders; (xiv) limitation on restrictions on subsidiary   distributions and (xv) OFAC and AML. The foregoing limitations shall be   subject to exceptions and baskets to be mutually and reasonably agreed as are   consistent with the Term Loan Documentation Standard.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
The negative   covenants will be subject, in the case of each of the foregoing covenants, to   exceptions, qualifications and “baskets” to be set forth in the Credit   Documentation including an available basket amount (the “Available Amount Basket”) that will be in   the amount of (a) $25 million, plus (b) 100% of retained   Excess Cash Flow, plus (c) net cash proceeds of new equity raised   by the Borrower (which in each case shall be common equity interests or other   qualified equity interests), plus (d) net cash proceeds of debt   and disqualified equity of the Borrower, in each case issued after the   Closing Date that have been converted to “qualified equity” of the Borrower, plus   (e) the net cash proceeds of sales of investments made under the Available   Amount Basket not otherwise included but only up to the original amount   invested and only to the extent such proceeds are not required to be applied   as a mandatory prepayment pursuant to the Term Facilities Documentation, plus   (f) returns, profits, distributions and similar amounts received in cash   or cash equivalents on investments made under the Available Amount Basket, plus   (g) the investments of the Borrower and its restricted subsidiaries in   any unrestricted subsidiary that has been re-designated as a restricted   subsidiary or that has been merged or consolidated into the Borrower or any   of its restricted subsidiaries or the fair market value of the assets of any   unrestricted subsidiary that have been transferred to the Borrower 
    


 

 

Annex II-9











 

	
 
    	
 
    	
 
    	
or any of its   restricted subsidiaries (in each case, not to exceed the amount of investment   made in such unrestricted subsidiary utilizing the Available Amount Basket), plus   (h) any Declined Amounts, which may be used, if there is no continuing   event of default and, in the case of usage for restricted payments and   prepayment of other debt, subject to compliance with a leverage-based   restriction to be agreed, for among other things, acquisitions and certain other   investments, restricted payments and the prepayment or redemption of debt.   The Credit Documentation shall provide for (i) the ability to consummate   acquisitions of entities that become restricted subsidiaries subject to   (x) no event of default, (y) the acquired entity engaging in a   permitted business and (z) a sublimit to be agreed for acquisitions of   entities that do not become Guarantors (“Permitted   Acquisitions”) and (ii) the ability to designate or   re-designate subsidiaries as “unrestricted subsidiaries” (which subsidiaries   shall not be subject to the negative covenants and events of default in the   Credit Documentation) subject to customary restrictions including no event of   default, pro forma compliance with a leverage-based test to be agreed and usage   of investment capacity and to subsequently redesignate unrestricted   subsidiaries as restricted subsidiaries subject to customary conditions.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)
    	
Financial Covenants: None.
    
	
 
    	
 
    	
 
    	
 
    
	
Events of Default:
    	
 
    	
Subject to the Term Loan Documentation   Standard, with thresholds and grace periods to be mutually agreed, events of   default shall be limited to the following: (i) nonpayment of principal,   and nonpayment of interest, fees or other amounts for five (5) days;   (ii) any representation or warranty proving to have been inaccurate in   any material respect when made or confirmed; (iii) failure to perform or   observe covenants set forth in the Credit Documentation;   (iv) cross-defaults to other indebtedness in an amount to be agreed;   (v) bankruptcy and insolvency defaults; (vi) monetary judgment   defaults in an amount to be agreed and material non-monetary judgment   defaults; (vii) actual or asserted impairment of Credit Documentation or   security; (viii) Change of Control (to be defined in a customary and   mutually agreeable reasonable manner); (ix) ERISA and (x) failure   to consummate the Merger within 1 business day after the Closing Date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The occurrence of an event of default under   the ABL Facility (other than a payment event of default) shall not constitute   an event of default under the cross-default provisions of the Term Facility   until the earliest of (x) 30 days after the date of such event of   default (during which period such event of default is not waived or cured),   (y) the acceleration of the obligations under the ABL Facility or   (z) the exercise of secured creditor remedies by the ABL Administrative   Agent and/or the ABL Lenders as a result of such event of default.
    


 

Annex II-10











 

	
Assignments and
    	
 
    	
 
    
	
Participations:
    	
 
    	
Each Term Loan Lender will be permitted to   make assignments in minimum amounts to be agreed to other entities approved   by (x) the Term Administrative Agent and (y) so long as no payment   or bankruptcy default has occurred and is continuing, the Borrower, each such   approval not to be unreasonably withheld or delayed; provided, however, that (i) no approval of the Borrower shall   be required in connection with assignments in connection with the primary   syndication of the Term Loan Facilities or assignments to other Term Loan   Lenders or any of their affiliates or approved funds, (ii) the Borrower   shall be deemed to have given consent to an assignment if they shall have   failed to respond to a written notice thereof within 5 business days and   (iii) no approval of the Term Administrative Agent shall be required in   connection with assignments to other Term Loan Lenders or any of their   affiliates or approved funds. Each Term Loan Lender will also have the right,   without consent of the Borrower or the Term Administrative Agent, to assign   as security all or part of its rights under the Credit Documentation to any   Federal Reserve Bank. Term Loan Lenders will be permitted to sell   participations with voting rights limited to customary significant matters.   An assignment fee in the amount of $3,500 will be charged with respect to   each assignment unless waived by the Term Administrative Agent in its sole   discretion.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Assignments of loans under the Term Loan   Facilities to the Borrower or any of their subsidiaries shall be permitted   subject to satisfaction of conditions to be set forth in the Credit   Documentation, including that (i) no default or event of default shall   exist or result therefrom, (ii) the Borrower or such subsidiary shall   make an offer to all Term Loan Lenders in accordance with “Dutch auction”   procedures to be agreed, (iii) the Borrower must provide a customary   representation and warranty as to disclosure of information, (iv) upon   the effectiveness of any such assignment, such loans shall be retired and   (v) no borrowings under the ABL Facility shall be used to fund any such   assignment.
    
	
 
    	
 
    	
 
    
	
Waivers and Amendments:
    	
 
    	
Amendments and waivers of the provisions of   the Credit Documentation will require the approval of Term Loan Lenders   holding more than 50% of the aggregate Term Loan Facilities (the “Required Lenders”), except that   (a) the consent of each Term Loan Lender directly and adversely affected   thereby will also be required with respect to (i) increases in   commitment amount of such Term Loan Lender, (ii) reductions of   principal, interest, or fees payable to such Term Loan Lender,   (iii) extensions of scheduled maturities or times for payment of amounts   payable to such Term Loan Lender and (iv) changes in certain pro rata   provisions and (b) the consent of each Term Loan Lender shall be   required with respect to (i) releases of all or substantially all of the   Collateral or the release of all or substantially all of the value of any   guaranties and (ii) the definition of Required Lenders or other voting   provisions.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Credit Documentation shall contain a   customary “yank-a-bank” provision.
    


 

Annex II-11











 

	
 
    	
 
    	
Notwithstanding anything to the contrary set   forth herein, the Credit Documentation shall provide that the Borrower may at   any time and from time to time request that all or a portion of any loans   under the Term Loan Facilities be converted to extend the scheduled maturity   date of any payment of principal with respect to all or a portion of any   principal amount of such loans (any such loans which have been so converted,   “Extended Loans”) and upon such   request of the Borrower any individual Term Loan Lender shall have the right   to agree to extend the maturity date of its outstanding loans without the   consent of any other Term Loan Lender; provided that   all such requests shall be made pro rata to all Term Loan Lenders within the   applicable Term Loan Facilities. The terms of Extended Loans shall be   identical to the loans of the existing class from such Extended Loans are   converted except for interest rates, fees, amortization (so long as the   weighted average life to maturity of the Extended Loans exceeds the then   remaining weighted average life to maturity of the Term Loan Facilities),   final maturity date or final termination date, provisions permitting optional   and mandatory prepayments to be directed first to the non-extended loans   prior to being applied to Extended Loans and certain other customary   provisions to be agreed.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, Term Loans may be purchased by   and assigned to the Borrower or any of its subsidiaries on a non-pro rata   basis through (a) open market purchases subject to a cap of 20% of the   original principal amount of the Term Loans or (b) Dutch auctions open   to all applicable Lenders on a pro rata basis in accordance with customary   procedures, so long as (1) no default or event of default is has   occurred and is continuing, (2) any such loans are permanently cancelled   immediately upon acquisition thereof, (3) no proceeds of loans under the   ABL Facility are used to fund such purchases and (4) such purchases   shall be subject to customary provisions regarding the treatment of material   non-public information with respect to the business of the Borrower and its   subsidiaries.
    
	
 
    	
 
    	
 
    
	
Indemnification:
    	
 
    	
Consistent with the Term Loan Documentation   Standard.
    
	
 
    	
 
    	
 
    
	
Governing Law:
    	
 
    	
New York.
    
	
 
    	
 
    	
 
    
	
Expenses:
    	
 
    	
The Borrower will pay all reasonable and   documented out-of-pocket costs and expenses associated with the preparation,   due diligence, administration, syndication and closing of all Credit   Documentation, including, without limitation, the reasonable and documented   out-of-pocket legal fees of counsel to the Term Administrative Agent and the   Term Lead Arrangers (including, without limitation, the reasonable and   documented fees and out-of-pocket expenses of Cahill Gordon &   Reindel LLP and of any local counsel to the Term Loan Lenders retained by the   Term Lead Arrangers or the Term Administrative Agent, limited to one counsel   in each relevant jurisdiction), regardless of whether or not the Closing Date   occurs. The Borrower will also pay the reasonable and documented   out-of-pocket expenses of the Term Administrative Agent and one other 
    


 

Annex II-12











 

	
 
    	
 
    	
counsel (in total) to all of the Term Loan   Lenders (in the absence of conflict) in connection   with the enforcement of any of the Credit   Documentation.
    
	
Counsel to the
    	
 
    	
 
    
	
Commitment Parties:
    	
 
    	
Cahill Gordon & Reindel LLP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Miscellaneous:
    	
 
    	
Each of the parties shall (i) waive its   right to a trial by jury and (ii) submit to New York jurisdiction. The   Credit Documentation shall contain customary “defaulting lender” provisions.
    


 

Annex II-13












 

ANNEX III-A

 

SUMMARY OF TERMS AND CONDITIONS
 $600,000,000 BRIDGE LOANS

 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex III-A is attached.

 

	
Borrower:
    	
 
    	
The Men’s Wearhouse, Inc., a Texas   corporation (the “Borrower”).
    
	
 
    	
 
    	
 
    
	
Guarantors:
    	
 
    	
Same as the Term Loan Facilities.
    
	
 
    	
 
    	
 
    
	
Bridge Administrative Agent:
    	
 
    	
Bank of America will act as sole and   exclusive administrative agent for the Bridge Lenders (the “Bridge Administrative Agent”).
    
	
 
    	
 
    	
 
    
	
Joint Lead Arrangers
    	
 
    	
 
    
	
and Joint Bookrunning
    	
 
    	
 
    
	
Managers:
    	
 
    	
Merrill Lynch and J.P. Morgan will act as   joint lead arrangers and joint bookrunners for the Bridge Loans (in such   capacities, the “Bridge Lead Arrangers”).
    
	
 
    	
 
    	
 
    
	
Bridge Lenders:
    	
 
    	
Banks, financial institutions and   institutional lenders selected by the Bridge Lead Arrangers in consultation   with the Borrower (the “Bridge Lenders”).
    
	
 
    	
 
    	
 
    
	
Bridge Loans:
    	
 
    	
$600,000,000 of senior unsecured bridge   loans (the “Bridge Loans”), less the aggregate gross proceeds of Notes or any other   debt securities of the Companies (collectively, “Permanent   Securities”) issued on or prior to the Closing Date (it being   understood that if an offering of debt securities is consummated into escrow   (with the consent of the Borrower), the amount of commitments in respect of   the Bridge Loans shall be reduced by the gross proceeds thereof at the time   such proceeds are deposited into escrow) and less   the aggregate amount of equity proceeds received by the Borrower since the date   of execution of this Commitment Letter (other than pursuant to management   equity incentive plans). The Bridge Loans will be available to the Borrower   in one drawing upon consummation of the Acquisition.
    
	
 
    	
 
    	
 
    
	
Ranking:
    	
 
    	
The Bridge Loans will be senior unsecured   obligations of the Borrower and rank pari passu in right of payment with or   senior to all other unsecured obligations of the Borrower. The guarantees   will be senior unsecured obligations of each Guarantor, ranking pari passu in   right of payment with or senior to all other unsecured obligations of such   Guarantor.
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Purpose:
    	
 
    	
The proceeds of the Bridge Loans, together   with borrowings under the Term Loan Facilities and ABL Facility on the   Closing Date and cash on the balance sheet of the Companies, shall be used   (i) to finance the Acquisition and the Refinancing and (ii) to pay   fees and expenses incurred in connection therewith.
    


 

Annex III-A-1











 

	
Interest Rate:
    	
 
    	
Interest shall be payable quarterly in   arrears at a rate per annum equal to three-month LIBOR plus the Applicable   Margin.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Applicable Margin”   shall initially be 675 basis points and will increase by an additional 50   basis points at the end of each three-month anniversary of the Closing Date   for as long as the Bridge Loans are outstanding; provided   that the interest rate shall not exceed the Total Cap (as defined in the Fee   Letter).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“LIBOR”   shall be deemed to be not less than 1.00% per annum.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During the continuance of a payment or   bankruptcy event of default, interest will accrue on the overdue principal of   the Bridge Loans and on any other overdue amount at a rate of 200 basis   points in excess of the rate otherwise applicable to the Bridge Loans (except   that following the Rollover Date (as defined below), interest on the Bridge   Loans will accrue at a per annum rate equal to 200 basis points in excess of   the Total Cap), and will be payable on demand.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All calculations of interest shall be made   on the basis of actual number of days elapsed in a 360-day year.
    
	
 
    	
 
    	
 
    
	
Cost and Yield Protection:
    	
 
    	
Subject to the Term Loan Documentation   Standard (as defined below) and customary for transactions and facilities of   this type, including, without limitation, in respect of breakage or   redeployment costs incurred in connection with prepayments (other than loss   of margin), changes in capital adequacy and capital requirements or their   interpretation, illegality, unavailability, reserves without proration or   offset and payments free and clear of withholding or other taxes; provided that for all purposes of the Bridge Loans,   (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and   all requests, rules, guidelines and directives promulgated thereunder and   (ii) all requests, rules, guidelines or directives promulgated by the   Bank for International Settlements, the Basel Committee on Banking   Supervision (or any successor or similar authority) or the United States   regulatory authorities, in each case, pursuant to Basel III, shall be deemed   introduced or adopted after the Closing Date, so long as, in each case, any   amounts with respect thereto assessed by any Lender shall also be so assessed   by such Lender against its similarly situated customers generally under agreements   containing comparable gross-up provisions.
    
	
 
    	
 
    	
 
    
	
Amortization:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Optional Prepayments:
    	
 
    	
The Bridge Loans may be prepaid prior to the   first anniversary of the Closing Date (the “Rollover   Date”), without premium or penalty, in whole or in part, upon   written notice, at the option of the Borrower, at any time, together with   accrued interest to the prepayment date.
    
	
 
    	
 
    	
 
    
	
Mandatory Prepayments:
    	
 
    	
The Borrower shall prepay the Bridge Loans   without premium or penalty, together with accrued interest to the prepayment,   (a) following the receipt of net cash proceeds by the Borrower or any of   its subsidiaries from
    


 

Annex III-A-2











 

	
 
    	
 
    	
any asset disposition outside of the   ordinary course of business or casualty event net of amounts applied to   reinvestment as permitted by the Term Loan Facilities or applied to repay the   Term Loan Facilities or the ABL Facilities (to the extent accompanied by a   corresponding commitment reduction) and (b) following the receipt of net   cash proceeds by the Borrower or any of its subsidiaries from the issuance or   incurrence after the Closing Date of additional debt of the Borrower or any   of its subsidiaries (other than the Term Loan Facilities, the ABL Facility   and certain other exceptions to be mutually agreed) or equity of the   Borrower, other than stock options issued under a management incentive plan.
    
	
 
    	
 
    	
 
    
	
Change of Control:
    	
 
    	
In the event of a Change of Control (to be   defined in a mutually agreeable and reasonable manner), each Bridge Lender   will have the right to require the Borrower, and the Borrower must offer, to   prepay the outstanding principal amount of the Bridge Loans at the principal   amount thereof, plus accrued and unpaid interest thereon to the date of   prepayment.
    
	
 
    	
 
    	
 
    
	
Conversion into Rollover
    	
 
    	
 
    
	
Loans:
    	
 
    	
If the Bridge Loans have not been previously   prepaid in full for cash on or prior to the Rollover Date, the principal   amount of the Bridge Loans outstanding on the Rollover Date may, subject to   the conditions precedent set forth in Annex III-B, be converted into senior   unsecured rollover loans with a maturity of 8 years from the Closing Date and   otherwise having the terms set forth in Annex III-B (the “Rollover Loans”). Any Bridge Loans   not converted into Rollover Loans shall be repaid in full on the Rollover   Date.
    
	
 
    	
 
    	
 
    
	
Exchange into
    	
 
    	
 
    
	
Exchange Notes:
    	
 
    	
Each Bridge Lender that is (or will   immediately transfer its Exchange Notes to) an Eligible Holder (as defined in   Annex III-C) will have the right, at any time on or after the Rollover   Date, to exchange Rollover Loans held by it for senior unsecured exchange   notes of the Borrower having the terms set forth in Annex III-C (the “Exchange Notes”). Notwithstanding   the foregoing, the Borrower will not be required to exchange Rollover Loans   for Exchange Notes unless at least $150 million of Exchange Notes would be   outstanding immediately after such exchange.
    
	
 
    	
 
    	
 
    
	
Bridge Loan Documentation
    	
 
    	
 
    
	
Standard:
    	
 
    	
The Credit Documentation for the Bridge Loan   Facilities (i) shall be based upon senior unsecured interim loan   facilities for similar borrowers with appropriate modifications to baskets   and materiality thresholds to reflect the size and leverage of the Borrower   and its subsidiaries and the ratings of the Borrower, in each case, after   giving effect to the Acquisition, (ii) shall contain the terms and   conditions set forth in this Bridge Summary of Terms, (iii) shall   reflect the operational and strategic requirements of the Borrower and its   subsidiaries in light of their size, industries and practices and   (iv) shall reflect the customary agency and operational requirements of   the Bridge Administrative Agent (collectively,
    


 

Annex III-A-3











 

	
 
    	
 
    	
the “Bridge Loan   Documentation Standard”), in each case, subject to the Funds   Certain Provisions. The Credit Documentation shall, subject to the “market   flex” provisions contained in the Fee Letter, contain only those conditions   to borrowing, mandatory prepayments, representations and warranties,   covenants and events of default expressly set forth in this Bridge Summary of   Terms, in each case, applicable to the Borrower and its subsidiaries and,   subject to the Bridge Loan Documentation Standard and certain other   limitations as set forth herein, with standards, qualifications, exceptions   and grace and cure periods consistent with the Bridge Loan Documentation   Standard.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent:
    	
 
    	
Limited to those conditions specified in   paragraph 5 of the Commitment Letter.
    
	
 
    	
 
    	
 
    
	
Affirmative Covenants:
    	
 
    	
In accordance with the Bridge Loan   Documentation Standard, affirmative covenants that are customary for bridge   facilities of borrowers of similar size and credit quality. In addition, the   Borrower will be required to comply with the Fee Letter and to use its   commercially reasonable efforts.
    
	
 
    	
 
    	
 
    
	
Negative Covenants:
    	
 
    	
In accordance with the Bridge Loan   Documentation Standard, negative covenants that are customary for high yield   debt securities of issuers of similar size and credit quality in light of   prevailing market conditions, but no more restrictive than the negative   covenants set forth in the Term Loan Facilities; provided   that prior to the Rollover Date, the limitation on restricted payments and   the limitation on debt may be more restrictive than customary high yield debt   covenants and the Term Loan Facilities.
    
	
 
    	
 
    	
 
    
	
Representations and
    	
 
    	
 
    
	
Warranties, Events of
    	
 
    	
 
    
	
Default, Waivers and
    	
 
    	
 
    
	
Consents:
    	
 
    	
Based on those contained in the Term Loan   Facilities with customary modifications.
    
	
 
    	
 
    	
 
    
	
Assignments and
    	
 
    	
 
    
	
Participations:
    	
 
    	
Each Bridge Lender will be permitted to make   assignments in minimum amounts to be agreed to other entities approved by the   Bridge Administrative Agent, which approval shall not be unreasonably   withheld or delayed; provided, however, that no such approval shall be required in   connection with assignments to other Bridge Lenders or any of their   affiliates or approved funds; provided further   that, prior to the Rollover Date, the consent of the Borrower shall be   required with respect to any assignment if the Initial Bridge Lenders (and   their respective affiliates) would hold, in the aggregate after giving effect   to such assignment, less than 50.1% of the Bridge Loans. Each Bridge Lender   will also have the right, without any consent, to assign as security all or   part of its rights under the Credit Documentation to any Federal Reserve   Bank. Bridge Lenders will be permitted to sell participations with voting   rights limited to significant matters such as changes in amount, rate and   maturity date. An assignment fee in the amount of $3,500 will be charged with   respect to
    


 

Annex III-A-4











 

	
 
    	
 
    	
each assignment unless waived by the Bridge   Administrative Agent in its sole discretion.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If any Initial Bridge Lender makes an assignment   of Bridge Loans at a price less than par, the assignment agreement may   provide that, upon any repayment or prepayment of such Bridge Loans with the   proceeds of an issuance of securities of the Borrower or any of its   subsidiaries in which such Initial Bridge Lender or an affiliate thereof   acted as underwriter or initial purchaser (an “Applicable   Offering”), (i) the Borrower shall pay the holder of such   Bridge Loans the price set forth in the assignment agreement as the price   (which may be the price at which such Initial Bridge Lender assigned such   Bridge Loans but in any event may not be greater than par) at which the   holder of such Bridge Loans will be repaid by the Borrower with the proceeds   of an Applicable Offering (the “Agreed Price”)   and (ii) the Borrower shall pay such Initial Bridge Lender the   difference between par and the Agreed Price. Such payments by the Borrower   shall be in full satisfaction of such Bridge Loans in the case of a repayment   or prepayment with proceeds of an Applicable Offering. For the avoidance of   doubt, the provisions of this paragraph do not apply to any repayments or   prepayments other than with proceeds of an Applicable Offering.
    
	
 
    	
 
    	
 
    
	
Governing Law:
    	
 
    	
New York.
    
	
 
    	
 
    	
 
    
	
Indemnification and
    	
 
    	
 
    
	
Expenses:
    	
 
    	
Same as the Term Loan Facilities.
    
	
 
    	
 
    	
 
    
	
Counsel to the
    	
 
    	
 
    
	
Commitment Parties:
    	
 
    	
Cahill Gordon & Reindel LLP.
    


 

Annex III-A-5












 

ANNEX III-B

 

SUMMARY OF TERMS AND CONDITIONS
 SENIOR UNSECURED ROLLOVER LOANS

 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex III-B is attached.

 

	
Borrower:
    	
 
    	
Same as the Borrower of the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Guarantors:
    	
 
    	
Same as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Rollover Loans:
    	
 
    	
Rollover Loans in an initial principal   amount equal to 100% of the outstanding principal amount of the Bridge Loans   on the Rollover Date. Subject to the conditions precedent set forth below,   the Rollover Loans will be available to the Borrower to refinance the Bridge   Loans on the Rollover Date. The Rollover Loans will be governed by the Credit   Documentation for the Bridge Loans and, except as set forth below, shall have   the same terms as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Ranking:
    	
 
    	
Same as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
Interest shall be payable quarterly in   arrears at a rate per annum equal to the Total Cap.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During the continuance of a payment or   bankruptcy event of default, interest will accrue on the overdue principal of   the Rollover Loans and on any other overdue amount at a rate of 200 basis   points in excess of the rate otherwise applicable to the Rollover Loans, and   will be payable on demand.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All calculations of interest shall be made   on the basis of actual number of days elapsed in a 360-day year.
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
8 years after the Closing Date (the “Rollover Maturity Date”).
    
	
 
    	
 
    	
 
    
	
Amortization:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Optional Prepayments:
    	
 
    	
For so long as the Rollover Loans have not   been exchanged for Exchange Notes of the Borrower as provided in Annex   III-C, they may be prepaid at the option of the Borrower, in whole or in   part, at any time, together with accrued and unpaid interest to the   prepayment date (but without premium or penalty).
    
	
 
    	
 
    	
 
    
	
Mandatory Prepayments:
    	
 
    	
Same as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to
    	
 
    	
 
    
	
Rollover:
    	
 
    	
The ability of the Borrower to convert any   Bridge Loans into Rollover Loans is subject to the following conditions being   satisfied:
    


 

Annex III-B-1











 

	
 
    	
 
    	
(i)             at the time of any such refinancing,   there shall exist no payment or bankruptcy event of default; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii)          all fees due to the Bridge Lead Arrangers   and the Initial Bridge Lenders shall have been paid in full.
    
	
 
    	
 
    	
 
    
	
Covenants:
    	
 
    	
From and after the Rollover Date, the   covenants applicable to the Rollover Loans will conform to those applicable   to the Exchange Notes, except for covenants relating to the obligation of the   Borrower to refinance the Rollover Loans and others to be agreed (which   shall, in any event, not be more restrictive than the covenants applicable to   the Bridge Loans).
    
	
 
    	
 
    	
 
    
	
Assignments and
    	
 
    	
 
    
	
Participations:
    	
 
    	
Same as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Governing Law:
    	
 
    	
New York.
    
	
 
    	
 
    	
 
    
	
Indemnification and
    	
 
    	
 
    
	
Expenses:
    	
 
    	
Same as the Bridge Loans.
    


 

Annex III-B-2











 

ANNEX III-C

 

SUMMARY OF TERMS AND CONDITIONS
 SENIOR UNSECURED EXCHANGE NOTES

 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex III-C is attached.

 

	
Issuer:
    	
 
    	
Same as the Borrower of the Bridge Loans   (the “Issuer”).
    
	
 
    	
 
    	
 
    
	
Guarantors:
    	
 
    	
Same as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Exchange Notes:
    	
 
    	
The Borrower will issue the Exchange Notes   under an indenture that complies with the Trust Indenture Act of 1939, as   amended (the “Indenture”). The Borrower   will appoint a trustee reasonably acceptable to the Bridge Administrative   Agent. The Indenture will be in substantially the form attached as an exhibit   to the Credit Documentation for the Bridge Facility. The Indenture will   include provisions customary for an indenture governing publicly traded high   yield debt securities. Except as expressly set forth above, the Exchange   Notes shall have the same terms as the Rollover Loans.
    
	
 
    	
 
    	
 
    
	
Ranking:
    	
 
    	
Same as the Bridge Loans.
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
Interest shall be payable semi-annually in   arrears at a per annum rate equal to the Total Cap.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During the continuance of a payment or   bankruptcy event of default, interest will accrue on the overdue principal of   the Exchange Notes and on any other overdue amount at a rate of 200 basis   points in excess of the rate otherwise applicable to the Exchange Notes, and   will be payable on demand.
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
Same as the Rollover Loans.
    
	
 
    	
 
    	
 
    
	
Amortization:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Optional Redemption:
    	
 
    	
Until the third anniversary of the Closing   Date, the Exchange Notes will be redeemable at a customary “make-whole”   premium calculated using a discount rate equal to the yield on comparable   Treasury securities plus 50 basis points. Thereafter, the Exchange Notes will   be redeemable at the option of the Issuer at a premium equal to 75% of the   coupon on the Exchange Notes, declining ratably to par on the date which is   six years after the Closing Date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, the Exchange Notes will be   redeemable at the option of the Issuer prior to the third anniversary of the   Closing Date with the net cash proceeds of qualified equity offerings of a   the Borrower at a premium equal to the coupon on the Exchange Notes; provided that after giving
    


 

Annex III-C-1











 

	
 
    	
 
    	
effect to such redemption at least 65% of   the aggregate original principal amount of Exchange Notes shall remain   outstanding.
    
	
 
    	
 
    	
 
    
	
Mandatory
    	
 
    	
 
    
	
Offer to Purchase:
    	
 
    	
The Issuer will be required to offer to   purchase the Exchange Notes upon a Change of Control at 101% of the principal   amount thereof plus accrued interest to the date of purchase. In addition,   the Exchange Notes will be subject to a customary offer to purchase upon   dispositions by the Borrower or any of its subsidiaries.
    
	
 
    	
 
    	
 
    
	
Right to Transfer
    	
 
    	
 
    
	
Exchange Notes:
    	
 
    	
Each holder of Exchange Notes shall have the   right to transfer its Exchange Notes in whole or in part, at any time to an   Eligible Holder (as defined below); provided that   if the Issuer or any of its affiliates holds Exchange Notes, such Exchange   Notes shall be disregarded in any voting. “Eligible   Holder” will mean (a) an institutional “accredited   investor” within the meaning of Rule 501 under the Securities Act,   (b) a “qualified institutional buyer” within the meaning of   Rule 144A under the Securities Act, (c) a person acquiring the   Exchange Notes pursuant to an offer and sale occurring outside of the United   States within the meaning of Regulation S under the Securities Act or   (d) a person acquiring the Exchange Notes in a transaction that is, in   the opinion of counsel reasonably acceptable to the Issuer, exempt from the   registration requirements of the Securities Act; provided   that in each case such Eligible Holder represents that it is acquiring the   Exchange Notes for its own account and that it is not acquiring such Exchange   Notes with a view to, or for offer or sale in connection with, any   distribution thereof (within the meaning of the Securities Act) that would be   in violation of the securities laws of the United States or any state   thereof.
    
	
 
    	
 
    	
 
    
	
Registration Rights:
    	
 
    	
The Exchange Notes shall be subject to usual   and customary registration rights for facilities of this type.
    
	
 
    	
 
    	
 
    
	
Governing Law:
    	
 
    	
New York.
    
	
 
    	
 
    	
 
    
	
Indemnification and
    	
 
    	
 
    
	
Expenses:
    	
 
    	
Same as the Bridge Loans.
    


 

Annex III-C-2











 

ANNEX IV

 

CONDITIONS PRECEDENT TO CLOSING

 

Capitalized terms not otherwise defined herein have the same meanings as specified therefor in the Commitment Letter to which this Annex IV is attached.

 

The initial extensions of credit under the Facilities will, subject to the Funds Certain Provisions, be subject to satisfaction of the following conditions precedent:

 

(i)                                     The Offer shall have been, or shall substantially concurrently be, consummated in accordance with the terms of the Agreement and Plan of Merger, dated March 11, 2014 among Merger Sub, the Borrower and the Target (together with all Schedules and Exhibits thereto, the “Acquisition Agreement”) without giving effect to any amendment, change or supplement or waiver of any provision thereof (including any change in the purchase price) in any manner that is materially adverse to the interests of the Lenders or the Lead Arrangers without the prior written consent (not to be unreasonably withheld) of the Commitment Parties (it being understood that any reduction of the purchase price in respect of the Offer will be materially adverse to the Lenders and the Lead Arrangers, unless (x) such reduction is in the aggregate less than 10% of the purchase price payable on the date of the Commitment Letter pursuant to the Acquisition Agreement and (y) there is a concurrent reduction in the aggregate principal amount of the commitments in respect of the Term Loan Facilities and the Bridge Facility in an amount equal to such reduction (to be allocated amongst such Facilities on a pro rata basis).

 

(ii)                                  All representations and warranties under the Credit Documentation shall be made on the Closing Date; provided, however, the only representations and warranties the accuracy of which shall be a condition to the initial availability of the Facilities shall be (A) the Acquisition Agreement Representations (as defined below) and (B) the Specified Representations (as defined below) in all material respects.  “Acquisition Agreement Representations” shall mean such of the representations made by the Target in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the breach of any such representations results in you or any of your affiliates having the right to terminate your or its obligations under the Acquisition Agreement (after giving effect to any applicable notice and cure period) or results in the failure of a condition precedent to your obligation to consummate the Acquisition pursuant to the Acquisition Agreement.  “Specified Representations” shall mean the representations and warranties in the Credit Documentation relating to:  (i) (A) corporate status of the Borrower and the Guarantors and (B) corporate power and authority to enter into the Credit Documentation by the Borrower and the other Guarantors, (ii) due authorization, execution, delivery and enforceability of the Credit Documentation by the Borrower and the Guarantors, (iii) no conflicts of the Credit Documentation with (x) charter documents of the Borrower and the Guarantors or (y) material laws, (iv) compliance with Federal Reserve margin regulations, OFAC, FCPA, the U.S.A. Patriot Act and Investment Company Act, (v) solvency of the Borrower and the Guarantors on a consolidated basis and on a pro forma basis for the Transaction (such representations to be substantially identical to those set forth in the Solvency Certificate attached as Annex V to the Commitment Letter (the “Solvency Certificate”)), and (vi) the creation, validity, priority and perfection of the security interests granted in the Collateral by the Borrower and the Guarantors on the Closing Date substantially concurrently with the initial funding of the Facilities (it being understood that to the extent any security interest in the Collateral (other than any Collateral of the Borrower and the Guarantors the security interest in which may be perfected by the filing of a UCC financing statement or the delivery of certificates evidencing equity interests of any material wholly-owned

 

Annex IV-1











 

domestic subsidiary of the Borrower) is not perfected on the Closing Date after your use of commercially reasonable efforts to do so without undue burden or expense, the perfection of such security interest shall not constitute a condition precedent to the availability of the Facilities on the Closing Date but shall be required to be perfected not later than 90 days (subject to extensions as may be agreed to by the applicable Administrative Agent in its sole discretion) after the Closing Date pursuant to arrangements to be mutually agreed).

 

(iii)                               Since November 2, 2013, there has not have been or occurred, any Target Material Adverse Effect.  “Target Material Adverse Effect” means any change, effect, event, occurrence or development which results in any change or effect that, individually or in the aggregate, (a) is materially adverse to the business, assets, financial condition, liabilities or results of operations of the Target and its Subsidiaries (as defined in the Acquisition Agreement), taken as a whole; provided that none of the following shall constitute or be deemed to contribute to a Target Material Adverse Effect or shall otherwise be taken into account in determining whether a Target Material Adverse Effect has occurred: any adverse effect arising out of, resulting from or attributable to (A) changes in general economic, business, labor or regulatory conditions, or changes in securities, credit or other financial markets, in the United States or globally, (B) changes generally affecting the industries or markets in which the Target or its Subsidiaries operate in the United States or globally, (C) changes or proposed changes in any applicable Law or GAAP (each as defined in the Acquisition Agreement), or the interpretations or enforcement thereof, (D) changes in global or national political conditions (including the outbreak or escalation of war, military action, sabotage or acts of terrorism) or changes due to natural disasters, (E) the effects of the actions or omissions specifically required of the Target under the Acquisition Agreement; (F) the effects of any breach, violation or non-performance of the Acquisition Agreement by Borrower or Merger Sub, (G) the negotiation, execution and delivery, announcement or pendency of the Acquisition Agreement and the Offer, the Merger (in each case defined in the Acquisition Agreement) and the transactions contemplated hereby or the consummation of the Offer, the Merger and the transactions contemplated hereby, including (i) the failure to deliver any notice, (ii) the failure to obtain any consent or approval, (iii) the failure to satisfy certain conditions or (iv) for violations, in each case of clauses (i) – (iv), under any Company Lease as contemplated by Section 4.4 of the Company Disclosure Letter, (as defined in the Acquisition Agreement), or the effect of any matters disclosed in Section 4.4 of the Company Disclosure Letter, or the loss of the service of any employees or officers of the Target or its Subsidiaries (which loss of service after the date of the Acquisition Agreement shall be deemed to arise out of, result from and be attributable to the announcement or pendency of the Acquisition Agreement and the Offer, the Merger and the transactions contemplated thereby unless such employee or officer shall have been terminated without cause by the Target or its Subsidiary or unless Borrower is able to prove that such loss of service was not in any way related to the negotiation, execution or delivery, announcement or pendency of the Acquisition Agreement, the Offer, the Merger or the transactions contemplated hereby or the consummation of the Offer, the Merger or the transactions contemplated hereby), or the taking of any action required or contemplated by the Acquisition Agreement or any Litigation (as defined in the Acquisition Agreement) resulting therefrom, and including the identity of, or the effect of any fact or circumstance relating to, Borrower or any of its Affiliates (as defined in the Acquisition Agreement), (H) the effects of termination of the Eddie Bauer Purchase Agreement (as defined in the Acquisition Agreement), including any Litigation resulting therefrom, (I) changes in the trading price or trading volume of Shares (as defined in the Acquisition Agreement) or change or announcement of potential change in the credit rating of the Target or its Subsidiaries, provided that the underlying cause of such changes may be taken into account in determining whether a Target Material Adverse Effect has occurred, and (J) any failure by the Target or its Subsidiaries to meet any revenue, earnings or other financial projections or forecasts,

 

Annex IV-2











 

although the underlying cause of such failure may be taken into account in determining whether a Target Material Adverse Effect has occurred, in the case of clauses (A), (B) and (D), to the extent that any such change, event, effect, occurrence, state of facts or development materially and disproportionately affects the Target and its Subsidiaries when compared with other Persons (as defined in the Acquisition Agreement) operating in the same industries or markets in which the Target and its Subsidiaries operate or (b) would prevent or materially impair or materially delay the ability of the Target to perform its obligations under the Acquisition Agreement or to consummate the transactions contemplated hereby.

 

(iv)                              The Administrative Agent under each Facility shall have received the Solvency Certificate from the Borrower’s chief financial officer in substantially the form attached hereto on Annex V.

 

(v)                                 The Administrative Agent under each Facility shall have received (A) customary opinions of counsel to the Borrower and the Guarantors, (B) customary corporate resolutions, customary closing date officer’s certificates certifying as to the satisfactions of the conditions precedent to the Facilities, customary secretary’s certificates appending such resolutions, charter documents and an incumbency certificate and information necessary for the Senior Administrative Agent to perform customary UCC lien searches prior to closing and compliance with flood hazard regulations and (C) a customary borrowing notice under each applicable Facility.

 

(vi)                              The Administrative Agent under each Facility shall have received:  (A) the audited consolidated balance sheets and related consolidated statements of operations, cash flows and shareholders’ equity of each of the Borrower and the Target for the three most recently completed fiscal years of the Borrower and the Target, respectively, ended at least 90 days before the Closing Date, accompanied by an unqualified report thereon by their respective independent registered public accountants; (B) the unaudited consolidated balance sheets and related statements of operations and cash flows of each of the Borrower and the Target for each subsequent fiscal quarter of the Borrower and the Target, respectively, ended at least 45 days before the Closing Date (the “Quarterly Financial Statements”); and (C) a pro forma balance sheet and related statement of operations of the Borrower and its subsidiaries (including the Acquired Business) as of and for the twelve-month period ending with the latest quarterly period of the Borrower covered by the Quarterly Financial Statements, in each case after giving effect to the Transaction (the “Pro Forma Financial Statements”), all of which financial statements shall be prepared in accordance with generally accepted accounting principles in the United States and comply with in all material respects the requirements of Regulation S-X under the Securities Act. The Lead Arrangers confirm receipt of the financial statements referred to in clause (A) for the Borrower and the Target for the fiscal years ended January 28, 2012 and February 2, 2013.

 

(vii)                           The Lead Arrangers under each Facility shall have received from the Borrower all information customarily provided by a borrower for inclusion in an Information Memorandum (the “Required Information”) not later than 15 consecutive business days prior to the Closing Date; provided that such 15 consecutive business day period shall (i) exclude July 3, 2014 which for purposes of such calculation shall not constitute a business day (the “Marketing Period”); provided further that if the Marketing Period has not been completed on or prior to August 15, 2014, then the Marketing Period shall not commence prior to September 2, 2014; provided that if Borrower in good faith reasonably believes that it has delivered the Required Information, Borrower may (but shall not be obligated to) deliver to the Administrative Agent written notice to that effect (stating when it believes it completed such delivery), in which case the required information shall be deemed to have been delivered on the date of such notice, unless Administrative

 

Annex IV-3











 

Agent in good faith reasonably believes that Borrower has not completed such delivery and, within three (3) business days after its receipt of such notice from Borrower, Administrative Agent delivers a written notice to Borrower to that effect (stating with specificity the portion or portions of the required information that Administrative Agent believes have not yet been delivered or are not complete or sufficient), in which case the required information shall be deemed to be delivered immediately upon the delivery by Borrower of provisions reasonably addressing the points contained in the notice.

 

(viii)                        With respect to the Bridge Facility, (a) one or more investment banks reasonably satisfactory to the Bridge Lead Arrangers (collectively, the “Investment Bank”) shall have been engaged to privately place the Notes, (b) the Investment Bank shall have received (i) a prospectus, offering memorandum or private placement memorandum (an “Offering Memorandum”) which shall be in customary complete form or which, with respect to the description of the Notes and any other parts thereof for which the Investment Bank’s or its advisors’ cooperation or approval is required for them to be complete, the Borrower shall have used its commercially reasonable efforts to cause it to be complete, and in either case, which Offering Memorandum shall contain information regarding the Borrower and the Acquired Business of the type and form customarily included in private placements under Rule 144A of the Securities Act and including financial statements, pro formas, business and other financial data of the type required in a registered offering on Form S-1 and otherwise containing information customary for Rule 144A offerings by first time issuers and, in the case of the annual financial statements, the auditors’ reports thereon, which financial information shall, at all times during the Bond Marketing Period (as defined below) be in compliance with the requirements of the Securities and Exchange Commission to permit a registration statement on Form S-1 to be declared effective (excluding information required by Rule 3-09, Rule 3-10 and Rule 3-16 of Regulation S-X and other information not customarily provided in an offering memorandum for a Rule 144A offering), and (ii) drafts of customary “comfort” letters (including “negative assurance” comfort) that independent accountants of the Borrower and the Acquired Business would be prepared to deliver upon completion of customary procedures in connection with the offering of the Notes (the “Required Bond Information”); provided that if Borrower in good faith reasonably believes that it has delivered the Required Bond Information, Borrower may (but shall not be obligated to) deliver to the Administrative Agent written notice to that effect (stating when it believes it completed such delivery), in which case the required information shall be deemed to have been delivered on the date of such notice, unless Administrative Agent in good faith reasonably believes that Borrower has not completed such delivery and, within three (3) business days after its receipt of such notice from Borrower, Administrative Agent delivers a written notice to Borrower to that effect (stating with specificity the portion or portions of the required information that Administrative Agent believes have not yet been delivered or are not complete or sufficient), in which case the required information shall be deemed to be delivered immediately upon the delivery by Borrower of provisions reasonably addressing the points contained in the notice, and (c) the Investment Bank shall have been afforded a period of at least 15 consecutive business days following the satisfaction of the condition set forth in clause (b) above to seek to offer and sell or privately place the Notes with qualified purchasers thereof (the “Bond Marketing Period”); provided that (i) such 15 consecutive business day period shall exclude July 3, 2014 (which shall not be included as a business day) and (ii) if the Bond Marketing Period has not been completed on or prior to August 15, 2014, then the Bond Marketing Period shall not commence prior to September 2, 2014.

 

(viii)                        All fees due to the Administrative Agents, the Lead Arrangers and the Lenders under the Fee Letter and the Commitment Letter to be paid on or prior to the Closing Date, and all expenses to be paid or reimbursed under the Commitment Letter to the Administrative Agents

 

Annex IV-4











 

and the Lead Arrangers on or prior to the Closing Date that have been invoiced at least three business days prior to the Closing Date, shall have been paid, in each case, from the proceeds of the initial funding under the applicable Facilities.

 

(ix)                              The Refinancing shall have been, or shall concurrently with the initial funding of the Facilities be, consummated or arrangements for such Refinancing (reasonably satisfactory to the Administrative Agents) shall have been established substantially concurrently with the initial funding of the Facilities; provided that capital leases, intercompany indebtedness, letters of credit, indebtedness of the Acquired Business permitted by the Acquisition Agreement and capital leases and other ordinary course debt of the Borrower and its subsidiaries not to exceed $10.0 million and other indebtedness reasonably agreed to by the Arranger (collectively, the “Retained Debt”), will be allowed to remain outstanding after the Closing Date.

 

(x)                                 The Borrower and each of the Guarantors shall have provided the documentation and other information to the Administrative Agents that are required by regulatory authorities under applicable “know-your-customer” rules and regulations, including the Patriot Act, at least 5 business days prior to the Closing Date to the extent such information has been requested at least 10 business days prior to the Closing Date.

 

(xi)                              With respect to the ABL Facility, the ABL Administrative Agent shall have received a completed Borrowing Base certificate as of the last day of the most recent month ending at least 15 days prior to the Closing Date.

 

Annex IV-5












 

ANNEX V

 

SOLVENCY CERTIFICATE(1)

 

[          ], 201[  ]

 

This SOLVENCY CERTIFICATE (this “Certificate”) is delivered in connection with that certain Credit Agreement dated as of [          ], 201[  ] (as amended, supplemented, amended and restated, replaced, or otherwise modified from time to time, the “Credit Agreement”) among The Men’s Wearhouse, Inc., a Texas corporation (the “Borrower”), [                        ], as administrative agent and collateral agent, the financial institutions from time to time party thereto as lenders and the other parties thereto.  Capitalized terms used herein without definition have the same meanings as in the Credit Agreement.

 

In my capacity as a Responsible Officer of Company (as defined below), and not in my individual or personal capacity, I believe that:

 

1.             Company (as used herein “Company” means the Borrower and its subsidiaries, taken as a whole) is not now, nor will the incurrence of the obligations under the Credit Agreement and the consummation of the Acquisition on the Closing Date, on a pro forma basis, render Company “insolvent” as defined in this paragraph; in this context, “insolvent” means that (i) the fair value of assets is less than the amount that will be required to pay the total liability on existing debts as they become absolute and matured, (ii) the present fair salable value of assets is less than the amount that will be required to pay the probable liability on existing debts as they become absolute and matured (iii) it is unable to meet its obligations as they generally become due, or (iv) it ceases to pay its current obligations in the ordinary course of business as they generally become due, or (v) its aggregate property is not, at a fair valuation, sufficient, or if disposed of at a fairly conducted sale under legal process, would not be, sufficient to enable payment of all obligations, due and accruing due.  The term “debts” as used in this Certificate includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent and “values of assets” shall mean the amount of which the assets (both tangible and intangible) in their entirety would change hands between a willing buyer and a willing seller, with a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under compulsion to act.

 

2.             As of the date hereof, after giving effect to the incurrence of the obligations under the Credit Agreement and the consummation of the other Transactions on the Closing Date, the Company is able to pay its debts as they become absolute and mature.

 

3.             The incurrence of the obligations under the Credit Agreement and the consummation of the other Transactions on the Closing Date, on a pro forma basis, will not leave Company with property remaining in its hands constituting “unreasonably small capital.”  I understand that “unreasonably small capital” depends upon the nature of the particular business or businesses conducted or to be conducted, and I have reached my conclusion based on my current assumptions regarding the needs and anticipated needs

 




(1)                                 Defined terms to be aligned with those in the applicable definitive Credit Agreement, but consistent with this form of solvency certificate.

 

Annex V-1











 

for capital of the businesses conducted or anticipated to be conducted by Company in light of projected financial statements and available credit capacity, which current assumption I do not believe to be unreasonable in light of the circumstances applicable thereto.

 

Annex V-2











 

I represent the foregoing information is provided to the best of my knowledge and belief and execute this Certificate as of the date first above written.

 

	
 
    	
THE MEN’S WEARHOUSE, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    


 

Signature Page to Solvency Certificate