TO THE ACCRUED VACATION
PAY OF THE MERCHANT'S EMPLOYEES AT THE STORES AND WAREHOUSE AS OF THE CLOSING
DATE; AND (V) MERCHANT'S EMPLOYEES RETAINED LIABILITIES RELATING TO MERCHANT'S
EMPLOYEE PAYROLL AND OTHER EMPLOYEE BENEFITS OF MERCHANT'S EMPLOYEES IN AN
AGGREGATE AMOUNT NOT TO EXCEED $1.1 MILLION.
SECTION 4.
CONSIDERATION TO MERCHANT.
4.1
PAYMENTS TO MERCHANT.
(A)
SUBJECT TO THE ADJUSTMENTS OF THE GUARANTEED AMOUNT DESCRIBED IN
SECTION 4.4 BELOW, AS A GUARANTY OF AGENT'S PERFORMANCE HEREUNDER, MERCHANT
SHALL RECEIVE FROM AGENT THE SUM OF THE $35,600,000 (THE "GUARANTEED AMOUNT").
(B)
AGENT SHALL PAY TO MERCHANT THE GUARANTEED AMOUNT IN THE MANNER AND AT THE
TIMES SPECIFIED IN SECTION 4.2 BELOW.
4.2
TIME OF PAYMENT.
(A)
PAYMENT OF MERCHANDISE GUARANTEED AMOUNT.
NO LATER THAN TWO (2) BUSINESS
DAYS AFTER ENTRY OF THE ORDER, AGENT SHALL (I) PAY 75% OF THE GUARANTEED AMOUNT
(LESS ANY DEPOSIT POSTED BY AGENT) IN CASH; (II) DELIVER TO MERCHANT AN
IRREVOCABLE STANDBY LETTER OF CREDIT, IN FORM AND SUBSTANCE SATISFACTORY, TO
MERCHANT IN THE ORIGINAL FACE AMOUNT OF 25% OF THE GUARANTEED AMOUNT; (III)
DELIVER TO MERCHANT THE LETTER OF CREDIT SPECIFIED IN SECTION 8.3; AND (IV) PAY
TO MERCHANT THE DIFFERENCE BETWEEN $1.1 MILLION AND THE LIABILITIES ASSUMED BY
AGENT PURSUANT TO SECTION 3.3(V) TO THE EXTENT THAT THE LIABILITIES ASSUMED
PURSUANT TO SECTION 3.3(IV) ARE
5
LESS THAN $1.1 MILLION.
SUBJECT TO THE ADJUSTMENTS OF THE GUARANTEED AMOUNT
DESCRIBED IN SECTION 4.4 BELOW, AGENT SHALL PAY THE UNPAID AND UNDISPUTED
BALANCE OF THE GUARANTEED AMOUNT IN CASH TO MERCHANT NO LATER THAN TWO (2)
BUSINESS DAYS FOLLOWING THE RECONCILIATION BY MERCHANT AND AGENT OF THE
INVENTORY TAKING.
IF MERCHANT AND AGENT DISAGREE AS TO THE AMOUNT OF THE UNPAID
GUARANTEED AMOUNT, MERCHANT AND AGENT SHALL ATTEMPT TO RESOLVE SUCH DISPUTE, IN
GOOD FAITH, WITHIN THIRTY (30) DAYS OF THE DATE ON WHICH THE DISPUTE ARISES.
IF
MERCHANT AND AGENT ARE UNABLE TO RESOLVE SUCH DISPUTE WITHIN SUCH THIRTY (30)
DAY PERIOD, THEN THE MERCHANT AND AGENT AGREE TO BRING SUCH DISPUTE BEFORE THE
EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT.
UPON PAYMENT OF THE GUARANTEED
AMOUNT, MERCHANT SHALL COOPERATE WITH AGENT IN ORDER TO TERMINATE THE LETTER OF
CREDIT REQUIRED TO BE POSTED UNDER CLAUSE (II) OF THIS PARAGRAPH.
TO THE EXTENT
THAT THE AMOUNT PAID PURSUANT TO CLAUSE (I) ABOVE IS IN EXCESS OF THE GUARANTEED
AMOUNT (AFTER ADJUSTMENT PURSUANT TO SECTION 4.4 HEREIN), MERCHANT SHALL PAY TO
AGENT SUCH EXCESS WITHIN TWO (2) BUSINESS DAYS FOLLOWING THE RECONCILIATION BY
MERCHANT AND AGENT OF THE INVENTORY TAKING.
4.3
ADDITIONAL MERCHANDISE.
AGENT SHALL BE PERMITTED TO
SUPPLEMENT THE STORE CLOSING SALES AT STORES (HEREINAFTER DEFINED) AT STORES
OTHER THAN TWEC STORES WITH ADDITIONAL INVENTORY FROM PARTIES OTHER THAN
MERCHANT ("ADDITIONAL MERCHANDISE").
ANY PROCEEDS OF THE SALE OF ADDITIONAL
MERCHANDISE SHALL BE TREATED AS SALES PROCEEDS, PROVIDED, HOWEVER, THAT MERCHANT
SHALL RECEIVE (I) TWO PERCENT (2%) OF ANY PROCEEDS OF ADDITIONAL MERCHANDISE
COMPRISED OF CATALOGUE GOODS OR NEW RELEASES AND (II) FIVE PERCENT (5%) OF