Document:

cbsecondamendmentfinal

                                                                                                                          Exhibit 10.1                                 SECOND AMENDMENT TO                 SECOND AMENDED AND RESTATED CREDIT AGREEMENT         This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT  AGREEMENT dated as of August 3, 2018 (this “Second Amendment”), is by and among (i) Christopher  & Banks Corporation, a Delaware corporation (the “Lead Borrower”), (ii) the Persons named on Schedule  1.01 to the Credit Agreement referred to below (collectively, the “Borrowers”) and (iii) Wells Fargo  Bank, National Association, as Lender and as L/C Issuer.                                         W I T N E S S E T H:           WHEREAS, the Borrowers, the Lender and the L/C Issuer are party to that certain Second  Amended and Restated Credit Agreement dated as of July 12, 2012 (as amended, supplemented or  otherwise modified from time to time in accordance with the terms thereof, the “Credit Agreement”),  pursuant to which the Lender agreed, subject to the terms and conditions contained therein, to extend  credit to the Borrowers in the form of a revolving credit facility; and                   WHEREAS, the Loan Parties and the Lender have agreed to amend the Credit Agreement as set  forth herein, including without limitation, to add a new $5,000,000 revolving “first-in, last-out” tranche  and to extend the maturity date of the credit facility.           NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein  contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, the parties signatory hereto agree as follows:   1.     Defined Terms.  All capitalized terms used herein and not otherwise defined shall have the same        meaning herein as in the Credit Agreement.   2.    Representations and Warranties.  Each Loan Party hereby represents and warrants that (a) no        Default or Event of Default has occurred and is continuing, and (b) after giving effect to this        Second Amendment, all representations and warranties contained in the Credit Agreement and        each other Loan Document are true and correct in all material respects on and as of the date        hereof except (i) to the extent that such representations and warranties specifically refer to an         earlier date, in which case they are  true and correct in all material respects as of such earlier date,         (ii) in the case of any representation or warranty qualified by materiality, such representation or         warranty is true and correct in all respects (subject to such qualification) and (iii) in the case of         any representation or warranty qualified by knowledge, such representation or warranty is true        and correct in all respects subject to such qualification.   3.    Amendments to Credit Agreement.           (a)    The Credit Agreement is hereby amended to delete the stricken text (indicated textually               in the same manner as the following example: stricken text) and to add the double-              underlined text (indicated textually in the same manner as the following example: double-              underlined text) as set forth in the agreement attached as Annex I hereto.         (b)    The Schedules attached as Annex II hereto hereby amend and restate the corresponding               Schedules to the Credit Agreement in their entirety.         (c)    The Exhibits attached as Annex III hereto hereby amend and restate the corresponding               Exhibits to the Credit Agreement in their entirety.     

 

                                                                                         4.     Conditions to Effectiveness.  This Second Amendment shall not be effective until each of the        following conditions precedent have been fulfilled to the satisfaction of the Lender:         (a)    the Lender shall have received this Second Amendment and the Second Amendment Fee               Letter, each duly executed by each of the parties thereto;          (b)    the Lender shall have received a Borrowing Base Certificate dated the Second               Amendment Effective Date, relating to the month ended on July 7, 2018, and executed by               a Responsible Officer of the Lead Borrower.         (c)    the Loan Parties shall have paid all fees required to be paid to the Lender on or before the               Second Amendment Effective Date, including, without limitation, pursuant to the Second               Amendment Fee Letter (with all such fees described in this paragraph being fully earned               as of the Second Amendment Effective Date, and no portion thereof shall be refunded or               returned to the Loan Parties under any circumstances);         (d)    the Loan Parties shall have paid in full all invoiced Credit Party Expenses in connection               with the preparation, execution, delivery and administration of this Second Amendment               and the other instruments and documents to be delivered hereunder (with such fees and               expenses described in this paragraph being fully earned as of the Second Amendment               Effective Date, and no portion thereof shall be refunded or returned to the Loan Parties               under any circumstances);         (e)    the Lender shall have received a secretary’s certificate from each of the Loan Parties               certifying the recent passage and continued effectiveness of resolutions from the Loan               Parties approving the transactions contemplated by this Second Amendment and the               incumbency of the officers executing this Second Amendment and the documents               delivered in connection therewith, in each case in form and substance satisfactory to the               Lender;         (f)    the Lender shall have received and reviewed lien search results for the jurisdiction of               incorporation and organization of each of the Loan Parties and judgment search results               for the jurisdiction of the chief executive office of each of the Loan Parties, which search               results shall be in form and substance reasonably satisfactory to the Lender;          (g)   the Lender shall have received duly executed opinions, in each case addressed to the               Lender, of counsel to the Loan Parties addressing such matters as the Lender shall               reasonably request;          (h)   the Lender shall have received all documentation and other information required by               regulatory authorities under applicable “know your customer” and anti-money laundering               rules and regulations, including without limitation the USA PATRIOT Act;          (i)   after giving effect to this Second Amendment, no Default or Event of Default shall have               occurred and be continuing; and          (j)   all action on the part of the Loan Parties necessary for the valid execution, delivery and               performance by the Loan Parties of this Second Amendment shall have been duly and               effectively taken.   5.     Effect on Loan Documents.  The Credit Agreement and the other Loan Documents, after giving        effect to this Second Amendment, shall be and remain in full force and effect in accordance with                                            - 2 -    

 

                                                                                               their terms and hereby are ratified and confirmed in all respects.  Except as expressly set forth        herein, the execution, delivery, and performance of this Second Amendment shall not operate as a        waiver of any right, power, or remedy of the Lender or any other Credit Party under the Credit        Agreement or any other Loan Document, as in effect prior to the date hereof.  Each Loan Party        hereby ratifies and confirms in all respects all of its obligations under the Loan Documents to        which it is a party and each Loan Party hereby ratifies and confirms in all respects any prior grant        of a security interest under the Loan Documents to which it is party.   6.    Release.  In consideration of the agreements of the Lender  contained herein and for other good        and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each        Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby        absolutely, unconditionally and irrevocably releases, remises and forever discharges the Lender        and its respective successors and assigns, and their respective present and former shareholders,        Affiliates, trustees, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees,        agents and other representatives (the Lender and all such other Persons being hereinafter referred        to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands,        actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums        of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims,        defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and        collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected,        both at law and in equity, which such Loan Party or any of its successors, assigns or other legal        representatives may now or hereafter own, hold, have or claim to have against the Releasees or        any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which        arises at any time on or prior to the day and date of this Second Amendment, including, without        limitation, for or on account of, or in relation to, or in any way in connection with any of the        Credit Agreement, or any of the other Loan Documents or transactions thereunder or related        thereto.  Each Loan Party understands, acknowledges and agrees that the release set forth above        may be pleaded as a full and complete defense and may be used as a basis for an injunction        against any action, suit or other proceeding which may be instituted, prosecuted or attempted in        breach of the provisions of such release.  Each Loan Party agrees that no fact, event,        circumstance, evidence or transaction which could now be asserted or which may hereafter be        discovered shall affect in any manner the final, absolute and unconditional nature of the release        set forth herein.   7.    No Novation; Entire Agreement.  This Second Amendment evidences solely the amendment of        certain specified terms and obligations of the Loan Parties under the Credit Agreement and is not        a novation or discharge of any of the other obligations of the Loan Parties under the Credit        Agreement.  There are no other understandings, express or implied, among the Loan Parties or the        Lender regarding the subject matter hereof or thereof.   8.    Choice of Law.  This Second Amendment shall be governed by, and construed in accordance        with, the laws of the State of New York, without giving effect to the conflicts of law principles        thereof, but including Section 5-1401 of the New York General Obligations Law.    9.    Counterparts; Facsimile Execution.  This Second Amendment may be executed in any number of        counterparts and by different parties and separate counterparts, each of which when so executed        and delivered shall be deemed an original, and all of which, when taken together, shall constitute        one and the same instrument.  Delivery of an executed counterpart of a signature page to this        Second Amendment by facsimile, .pdf, or other electronic transmission shall be as effective as        delivery of a manually executed counterpart of this Second Amendment.  Any party delivering an        executed counterpart of this Second Amendment by facsimile also shall deliver a manually        executed counterpart of this Second Amendment but the failure to deliver a manually executed                                           - 3 -    

 

                                                                                               counterpart shall not affect the validity, enforceability, and binding effect of this Second        Amendment.   10.    Construction.  This Second Amendment is a Loan Document.  This Second Amendment and the        Credit Agreement shall be construed collectively and in the event that any term, provision or        condition of any of such documents is inconsistent with or contradictory to any term, provision or         condition of any other such document, the terms, provisions and conditions of this Second         Amendment shall supersede and control the terms, provisions and conditions of the Credit         Agreement.     11.    Miscellaneous.  The terms and provisions hereof shall be binding upon and inure to the benefit of        the parties hereto and their successors and assigns.                                    [Signature Pages Follow]                                            - 4 -    

 

                                                                                                IN WITNESS WHEREOF, this Second Amendment has been duly executed and delivered by  each of the parties hereto as of the date first above written.                                              BORROWERS::                                           CHRISTOPHER & BANKS CORPORATION                                                                                                                                                                        By:  /s/ Luke R. Komarek                                                   Name:  Luke R. Komarek                                                     Title: SVP, General Counsel & Corporate Secretary                                                                                                                              CHRISTOPHER & BANKS, INC.                                                                                                                                                                        By:  /s/ Luke R. Komarek                                                   Name:  Luke R. Komarek                                                     Title: SVP, General Counsel & Corporate Secretary                                                                                                                               CHRISTOPHER & BANKS COMPANY                                                                                                                                                                        By:  /s/ Luke R. Komarek                                                   Name:  Luke R. Komarek                                                     Title: SVP, General Counsel & Corporate Secretary                                                                           [Signature Page to Second Amendment]  

 

                                                                         LENDER AND L/C ISSUER:                            WELLS FARGO BANK, NATIONAL              ASSOCIATION                                                        By:  /s/ Michael S. Watson                     Name: Michael S. Watson              Title: Director    [Signature Page to Second Amendment]  

 

                                                                                                                                ANNEX I                                     Credit Agreement    See attached.                                                 

 

                                                                                                             SECOND AMENDED AND RESTATED CREDIT AGREEMENT1                                    Dated as of July 12, 2012,                                           among                          CHRISTOPHER & BANKS CORPORATION,                                     as the Lead Borrower                                             For                                  The Borrowers Named Herein,                         The Guarantors from time to time party hereto, and                      WELLS FARGO BANK, NATIONAL ASSOCIATION,                                          as Lender                                                              1 As of the Second Amendment Effective Date.     

 

                                Table of Contents                                                                                                                     Page  Article I DEFINITIONS AND ACCOUNTING TERMS .............................................................. 1               1.01  Defined Terms ............................................................................................ 1               1.02  Other Interpretive Provisions .................................................................... 42               1.03  Accounting Terms ..................................................................................... 43               1.04  Rounding ................................................................................................... 43               1.05  Times of Day............................................................................................. 43               1.06  Letter of Credit Amounts .......................................................................... 43               1.07  Currency Equivalents Generally ............................................................... 43   Article II THE COMMITMENTS AND CREDIT EXTENSIONS ............................................. 44               2.01  Loans; Reserves ........................................................................................ 44               2.02  Borrowings, Conversions and Continuations of Loans ............................ 44               2.03  Letters of Credit ........................................................................................ 46               2.04  Prepayments .............................................................................................. 52               2.05  Termination or Reduction of the Commitment ......................................... 53               2.06  Repayment of Loans ................................................................................. 54               2.07  Interest....................................................................................................... 54               2.08  Fees ........................................................................................................... 54               2.09  Computation of Interest and Fees ............................................................. 55               2.10  Evidence of Debt....................................................................................... 55               2.11  Payments Generally .................................................................................. 55   Article III TAXES, YIELD PROTECTION AND ILLEGALITY;  APPOINTMENT OF              LEAD BORROWER ............................................................................................ 56               3.01  Taxes ......................................................................................................... 56               3.02  Illegality .................................................................................................... 57               3.03  Inability to Determine Rates ..................................................................... 57                                          i  

 

                                Table of Contents                                                                                                                     Page              3.04  Increased Costs; Reserves on LIBO Rate Loans ...................................... 58               3.05  Compensation for Losses .......................................................................... 59               3.06  Mitigation Obligations; Replacement of Lender ...................................... 59               3.07  Survival ..................................................................................................... 60               3.08  Designation of Lead Borrower as Borrowers’ Agent ............................... 60   Article IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS ..................................... 60               4.01  Conditions of Initial Credit Extension ...................................................... 60               4.02  Conditions to all Credit Extensions .......................................................... 63   Article V REPRESENTATIONS AND WARRANTIES............................................................. 64               5.01  Existence, Qualification and Power .......................................................... 64               5.02  Authorization; No Contravention ............................................................. 64               5.03  Governmental Authorization; Other Consents .......................................... 64               5.04  Binding Effect ........................................................................................... 64               5.05  Financial Statements; No Material Adverse Effect .................................. 64               5.06  Litigation ................................................................................................... 65               5.07  No Default ................................................................................................. 65               5.08  Ownership of Property; Liens ................................................................... 66               5.09  Environmental Compliance ...................................................................... 66               5.10  Insurance ................................................................................................... 67               5.11  Taxes ......................................................................................................... 67               5.12  ERISA Compliance ................................................................................... 67               5.13  Subsidiaries; Equity Interests .................................................................... 68               5.14  Margin Regulations; Investment Company Act ....................................... 68               5.15  Disclosure ................................................................................................. 68               5.16  Compliance with Laws ............................................................................. 69                                          ii  

 

                                Table of Contents                                                                                                                     Page              5.17  Intellectual Property; Licenses, Etc .......................................................... 69               5.18  Labor Matters ............................................................................................ 69               5.19  Security Documents .................................................................................. 69               5.20  Solvency .................................................................................................... 70               5.21  Deposit Accounts; Credit Card Arrangements ......................................... 70               5.22  Brokers ...................................................................................................... 70               5.23  Customer and Trade Relations .................................................................. 70               5.24  Material Contracts ..................................................................................... 70               5.25  Casualty..................................................................................................... 71               5.26  OFAC; Sanctions ...................................................................................... 71               5.27  Beneficial Ownership Certification .......................................................... 71   Article VI AFFIRMATIVE COVENANTS ................................................................................. 71               6.01  Financial Statements ................................................................................. 71               6.02  Certificates; Other Information ................................................................. 72               6.03  Notices ...................................................................................................... 74               6.04  Payment of Obligations ............................................................................. 75               6.05  Preservation of Existence, Etc .................................................................. 75               6.06  Maintenance of Properties ........................................................................ 75               6.07  Maintenance of Insurance ......................................................................... 76               6.08  Compliance with Laws ............................................................................. 77               6.09  Books and Records; Accountants ............................................................. 77               6.10  Inspection Rights ...................................................................................... 77               6.11  Use of Proceeds ......................................................................................... 78               6.12  Additional Loan Parties ............................................................................ 78               6.13  Cash Management ..................................................................................... 79                                          iii  

 

                                Table of Contents                                                                                                                     Page              6.14  Information Regarding the Collateral ....................................................... 81               6.15  Physical Inventories .................................................................................. 81               6.16  Environmental Laws ................................................................................. 82               6.17  Further Assurances.................................................................................... 82               6.18  Compliance with Terms of Leaseholds ..................................................... 83               6.19  Material Contracts ..................................................................................... 83               6.20  OFAC; Sanctions ...................................................................................... 83               6.21  Credit Card Processors .............................................................................. 83   Article VII NEGATIVE COVENANTS ...................................................................................... 83               7.01  Liens .......................................................................................................... 83               7.02  Investments ............................................................................................... 84               7.03  Indebtedness; Disqualified Stock .............................................................. 84               7.04  Fundamental Changes ............................................................................... 84               7.05  Dispositions............................................................................................... 84               7.06  Restricted Payments .................................................................................. 84               7.07  Prepayments of Indebtedness .................................................................... 85               7.08  Change in Nature of Business ................................................................... 85               7.09  Transactions with Affiliates ...................................................................... 85               7.10  Burdensome Agreements .......................................................................... 86               7.11  Use of Proceeds ......................................................................................... 86               7.12  Amendment of Material Documents ......................................................... 86               7.13  Fiscal Year ................................................................................................ 86               7.14  Deposit Accounts; Credit Card Processors ............................................... 86               7.15  Financial Covenant ................................................................................... 86               7.16  Maintenance of FILO Reserve .................................................................. 86                                          iv  

 

                                Table of Contents                                                                                                                     Page  Article VIII EVENTS OF DEFAULT AND REMEDIES ........................................................... 87               8.01  Events of Default ...................................................................................... 87               8.02  Remedies Upon Event of Default ............................................................. 89               8.03  Application of Funds................................................................................. 89               8.04  Separate Claims and Separate Classifications .......................................... 90   Article IX MISCELLANEOUS .................................................................................................... 91               9.01  Amendments, Etc ...................................................................................... 91               9.02  Notices; Effectiveness; Electronic Communications ................................ 91               9.03  No Waiver; Cumulative Remedies ........................................................... 92               9.04  Expenses; Indemnity; Damage Waiver ..................................................... 92               9.05  Payments Set Aside................................................................................... 93               9.06  Successors and Assigns ............................................................................. 94               9.07  Treatment of Certain Information; Confidentiality ................................... 95               9.08  Right of Setoff........................................................................................... 96               9.09  Interest Rate Limitation ............................................................................ 96               9.10  Counterparts; Integration; Effectiveness ................................................... 97               9.11  Survival ..................................................................................................... 97               9.12  Severability ............................................................................................... 97               9.13  Governing Law; Jurisdiction; Etc ............................................................. 97               9.14  Waiver of Jury Trial .................................................................................. 98               9.15  No Advisory or Fiduciary Responsibility ................................................. 99               9.16  USA PATRIOT Act Notice ...................................................................... 99               9.17  Foreign Asset Control Regulations ........................................................... 99               9.18  Time of the Essence ................................................................................ 100               9.19  Publicity .................................................................................................. 100                                          v  

 

                    Table of Contents                                                                                             Page  9.20  Additional Waivers ................................................................................. 100   9.21  No Strict Construction ............................................................................ 101   9.22  Attachments ............................................................................................ 101   9.23  Amendment and Restatement ................................................................. 102   9.24  Keepwell ................................................................................................. 102                              vi  

 

       SCHEDULES           1.01         Borrowers         1.03         Existing Letters of Credit         5.01         Loan Parties Organizational Information         5.05         Supplement to Interim Financial Statements         5.06         Litigation         5.08(b)(1)   Owned Real Estate         5.08(b)(2)   Leased Real Estate         5.09         Environmental Matters         5.10         Insurance         5.13         Subsidiaries; Other Equity Investments         5.17         Intellectual Property Matters         5.18         Collective Bargaining Agreements         5.21(a)      DDAs         5.21(b)      Credit Card Arrangements         5.24         Material Contracts         6.02         Financial and Collateral Reporting         7.01         Existing Liens         7.02         Existing Investments         7.03         Existing Indebtedness         7.09         Affiliate Transactions         9.02         Lender’s Office; Certain Addresses for Notices    EXHIBITS                 Form of                        A     Committed Loan Notice         B-1   Revolving Note         B-2   FILO Note         C     Compliance Certificate         D     Assignment and Assumption         E     Borrowing Base Certificate         F     Credit Card Notification         G     DDA Notification        

 

                    SECOND AMENDED AND RESTATED CREDIT AGREEMENT           This  SECOND  AMENDED  AND  RESTATED  CREDIT  AGREEMENT  (“Agreement”)  is  entered  into  as  of  July  12,  2012,  among  CHRISTOPHER  &  BANKS  CORPORATION,  a  Delaware  corporation  (the  “Lead  Borrower”),  the  Persons  named  on  Schedule  1.01  hereto  (collectively,  the  “Borrowers”), the Persons from time to time party hereto as Guarantors (collectively, the “Guarantors”),  and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender and as L/C Issuer.          The  Borrowers  and  the  Lender  are  party  to  that  certain  Amended  and  Restated  Credit  and  Security Agreement dated as of November 4, 2005 (as amended, modified and supplemented from time to  time prior to the date hereof, the “Existing Credit Agreement”).          The Borrowers have requested that the Lender agree to amend and restate the Existing Credit  Agreement as set forth herein, and the Lender is willing to do so on the terms and conditions set forth  herein.          In  consideration  of  the  mutual  covenants  and  agreements  herein  contained,  the  parties  hereto  covenant and agree as follows:                                         ARTICLE I                       DEFINITIONS AND ACCOUNTING TERMS          1.01  Defined Terms.  As used in this Agreement, the following terms shall have the meanings  set forth below:          “Accelerated Borrowing Base Delivery Event” means either (i) the occurrence and continuance of  any Default or Event of Default, or (ii) the failure of the Borrowers to maintain Availability at least equal  to the greater of (a) thirty percent (30%) of the Revolving Loan Cap (calculated without giving effect to  the  FILO  Reserve), or  (b)  $10,000,000.   For  purposes  of  this  Agreement,  the  occurrence  of  an  Accelerated Borrowing Base Delivery Event shall be deemed continuing at the Lender’s option (i) so long  as such Default or Event of Default has not been waived, and/or (ii) if the Accelerated Borrowing Base  Delivery Event arises as a result of the Borrowers’ failure to achieve Availability as required hereunder,  until  Availability  has  exceeded  the  greater  of  (x)  thirty  percent  (30%)  of  the Revolving Loan  Cap  (calculated without giving effect to the FILO Reserve), or (y) $10,000,000, in each case, for sixty (60)  consecutive calendar days, in which case an Accelerated Borrowing Base Delivery Event shall no longer  be deemed to be continuing for purposes of this Agreement; provided, that in the discretion of the Lender  an Accelerated Borrowing Base Delivery Event shall be deemed continuing (even if a Default or an Event  of Default is no longer continuing and/or Availability exceeds the required amount for such sixty (60)  consecutive calendar days) at all times after an Accelerated Borrowing Base Delivery Event has occurred  and has been discontinued on two (2) occasions in any one 12-month period after the Closing Date.  The  termination of an Accelerated Borrowing Base Delivery Event as provided herein shall in no way limit,  waive or delay the occurrence of a subsequent Accelerated Borrowing Base Delivery Event in the event  that the conditions set forth in this definition again arise.          “Acceptable Document of Title” means, with respect to any Inventory, a tangible or electronic  negotiable bill of lading or other Document (as defined in the UCC) that (a) is issued by a common carrier  which  is  not  an  Affiliate  of  the  Approved  Foreign  Vendor or  any  Loan  Party  and  which  is  in  actual  possession of such Inventory, (b) is issued to the order of a Loan Party or, if so requested by the Lender  after  the  occurrence  and  during  the  continuance  of  a  Default  or  Event  of  Default,  to  the  order  of  the      

 

   Lender, (c) is not subject to any Lien (other than in favor of the Lender), and (d) is on terms otherwise  reasonably acceptable to the Lender.          “ACH” means automated clearing house transfers.          “Accommodation Payment” as defined in Section 9.20(d).             “Account” means “accounts” as defined in the UCC.          “Acquisition”  means,  with  respect  to  any  Person  (a)  an  investment  in,  or  a  purchase  of,  a  Controlling interest in the Equity Interests of any other Person, (b) a purchase or other acquisition of all or  substantially all of the assets or properties of another Person or of any business unit of another Person, (c)  any  merger  or  consolidation  of  such  Person  with  any  other  Person  or  other  transaction  or  series  of  transactions resulting in the acquisition of all or substantially all of the assets, or a Controlling interest in  the Equity Interests, of any Person, or (d) any acquisition of any Store locations from any Person (but not  the opening of new individual Stores), in each case in any transaction or group of transactions which are  part of a common plan.          “Act” shall have the meaning provided in Section 9.16.          “Adjusted LIBO Rate” means:                (a)    for any Interest Period with respect to any LIBO Borrowing, an interest rate per         annum (rounded upwards, if necessary, to the next 1/16 of one percent) equal to (i) the LIBO         Rate for such Interest Period multiplied by (ii) the Statutory Reserve Rate; and                (b)    for any interest rate calculation with respect to any Base Rate Loan, an interest         rate per annum (rounded upwards, if necessary, to the next 1/100 of one percent) equal to (i) the         LIBO Rate for an Interest Period commencing on the date of such calculation and ending on the         date that is thirty (30) days thereafter multiplied by (ii) the Statutory Reserve Rate.          The Adjusted LIBO Rate will be adjusted automatically as of the effective date of any change in  the Statutory Reserve Rate.          “Adjusted Payment Conditions” means, at the time of determination with respect to any specified  transaction or payment, that (a) no Default or Event of Default then exists or would arise as a result of  entering into such transaction or the making of such payment, (b) the specified transaction or payment  shall be funded solely with cash on hand (and not, for the avoidance of doubt, with the proceeds of any  Loans), (c) immediately after giving effect to such transaction or payment, Pro Forma Excess Availability  will be greater than $10,000,000, (d) no Loans shall have been outstanding during the twelve (12) months  immediately preceding the date of such transaction or the making of such payment, and (e) no Loans are  projected  to  be  outstanding  during  the  twelve  (12)  months  immediately  following  the  date  of  such  transaction or the making of such payment.          “Adjustment Date” means the first day of each Fiscal Quarter, commencing October 28, 2012.           “Affiliate”  means,  with  respect  to  any  Person,  (i)  another  Person  that  directly,  or  indirectly  through one or more intermediaries, Controls or is Controlled by or is under common Control with the  Person  specified,  (ii)  any  director,  officer,  managing  member,  partner,  trustee,  or  beneficiary  of  that  Person, (iii) any other Person directly or indirectly holding twenty percent (20%) or more of any class of                                              -2-  

 

   the Equity Interests of that Person, and (iv) any other Person twenty percent (20%) or more of any class of  whose Equity Interests is held directly or indirectly by that Person.          “Agreement” means this Credit Agreement.          “Allocable Amount” has the meaning specified in Section 9.20(d).          “Anti-Corruption  Laws”  means  the  FCPA  and  all  other  applicable  laws  and  regulations  or  ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which  any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business.          “Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in  which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to  money  laundering,  any  predicate  crime  to  money  laundering,  or  any  financial  record  keeping  and  reporting requirements related thereto.          “Applicable Margin” means:                 (a)    From and after the Second Amendment Effective Date until the first Adjustment         Date following such date, the percentages set forth in Level II of the pricing grid below; and                (b)    From  and  after  the  first  Adjustment Date  following  the  Second  Amendment         Effective Date  and  on  each  Adjustment  Date  thereafter,  the  Applicable  Margin  shall  be         determined  from  the  following  pricing  grid  based  upon  the  Average  Daily  Availability  for  the         Fiscal  Quarter  immediately  preceding  such  Adjustment  Date; provided,  that  notwithstanding         anything to the contrary set forth herein, upon the occurrence of an Event of Default, the Lender         may  immediately  increase  the  Applicable  Margin  to  that  set  forth  in  Level  I  (even  if  the         requirements for a different Level have been met) and interest shall accrue at the Default Rate;         provided, further, that if any Borrowing Base Certificates are at any time restated or otherwise         revised (including as a result of an audit) or if the information set forth in such Borrowing Base         Certificates otherwise proves to be false or incorrect such that the Applicable Margin would have         been higher than was otherwise in effect during any period, without constituting a waiver of any         Default or Event of Default arising as a result thereof, interest due under this Agreement shall be         immediately  recalculated  at  such  higher  rate  for  any  applicable  periods  and  shall  be  due  and         payable on demand.                       Applicable  Applicable   Applicable                    Margin for  Margin for   Margin for  Applicable                     Revolving   Revolving  FILO Loans   Margin for              Standby         Average    Loans that  Loans that    that are  FILO Loans   Commercial  Letter of           Daily     are LIBO  are Base Rate LIBO Rate  that are Base Letter of   Credit  Level Availability Rate Loans   Loans        Loans     Rate Loans  Credit Fee    Fee                       1.75%       0.75%        3.00%       2.00%       1.25%      1.75%    I  < $20,000,000                       1.50%       0.50%        3.00%       2.00%       1.00%      1.50%    II > $20,000,000                  “Appraisal Percentage” means ninety percent (90%).                                             -3-  

 

          “Appraised Value”  means with  respect  to  Eligible  Inventory,  the  appraised  orderly  liquidation  value, net of costs and expenses to be incurred in connection with any such liquidation, which value is  expressed as a percentage of Cost of Eligible Inventory as set forth in the inventory stock ledger of the  Borrowers, which value shall be determined from time to time by the most recent appraisal undertaken by  an independent appraiser engaged by the Lender.          “Approved  Fund” means  any  Fund  that  is  administered  or  managed  by  (a)  the  Lender,  (b)  an  Affiliate of the Lender, (c) an entity or an Affiliate of an entity that administers or manages the Lender or  (d)  the  same  investment  advisor  or  an  advisor  under  common  control  with  the  Lender,  Affiliate  or  advisor, as applicable.          “Approved  Foreign  Vendor”  means  a  Foreign  Vendor  which  (a)  is  located  in  any  country  acceptable to the Lender in its discretion, (b) has not asserted and has no right to assert any reclamation,  repossession, diversion, stoppage in transit, Lien or title retention rights in respect of such Inventory, and  (c)  if  so  requested  by  the  Lender  (which  request  may  be  made  by  the  Lender  only  with  respect  to  a  Foreign Vendor from which the Loan Parties received more than ten percent (10%) of their Inventory in  the prior Fiscal Year or with respect to which the Loan Parties have more than ten percent (10%) of their  Inventory in transit at any time), has entered into and is in full compliance with the terms of a Foreign  Vendor Agreement.          “Assignment and Assumption” means an assignment and assumption entered into by the Lender  and  an  Eligible  Assignee,  in  substantially  the  form  of Exhibit  D or  any  other  form  approved  by  the  Lender.          “Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease Obligation of  any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared  as  of  such  date  in  accordance  with  GAAP,  and  (b)  in  respect  of  any  Synthetic  Lease  Obligation,  the  capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable  agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in  accordance with GAAP if such lease, agreement or instrument were accounted for as a capital lease.          “Audited  Financial  Statements”  means  the  audited  consolidated  balance  sheet  of  the  Lead  Borrower and its Subsidiaries for the Fiscal Year ended February 1, 2014, and the related consolidated  statements of income or operations, Shareholders’ Equity and cash flows for such Fiscal Year of the Lead  Borrower and its Subsidiaries, including the notes thereto.          “Auto-Extension Letter of Credit” shall have the meaning specified in Section 2.03(b)(iii).          “Availability”  means,  as  of  any  date  of  determination  thereof  by  the  Lender,  the  result,  if  a  positive number, of:                 (a)    The Revolving Loan Cap                       minus                (b)    Total Revolving Outstandings.          In  calculating  Availability  at  any  time  and  for  any  purpose  under  this Agreement,  the  Lead  Borrower shall certify to the Lender that all accounts payable more than thirty (30) days past due and all  Taxes  (other  than  such  accounts  payable  and  Taxes  being  contested  in  good  faith  not  to  exceed                                              -4-  

 

   $1,000,000 in the aggregate at any time) are being paid in the ordinary course of the Borrowers’ business  consistent with practices in effect on the Second Amendment Effective Date.          “Availability Period” means the period from and including the Closing Date to the earliest of (a)  the Maturity Date, (b) the date of termination of the Commitments pursuant to Section 2.05, and (c) the  date  of  termination  of  the Commitments and  of  the  obligation  of  the  L/C  Issuer  to  make  L/C  Credit  Extensions pursuant to Section 8.02.          “Availability Reserves” means, without duplication of any other Reserves or items to the extent  such items are otherwise addressed in calculating Appraised Value or otherwise or are excluded through  eligibility criteria, such reserves as the Lender from time to time determines in its Permitted Discretion as  being appropriate (a) to reflect the impediments to the Lender’s ability to realize upon the Collateral, (b)  to reflect claims and liabilities that the Lender determines will need to be satisfied in connection with the  realization  upon  the  Collateral,  (c)  to  reflect  criteria,  events,  conditions,  contingencies  or  risks  which  adversely  affect  any  component  of  the Revolving Borrowing  Base,  or  the  financial  performance  or  financial condition of any Loan Party, or (d) to reflect that a Default or an Event of Default then exists.   Without  limiting  the  generality  of  the  foregoing,  Availability  Reserves  may  include,  in  the  Lender’s  Permitted Discretion, reserves based on: (i) rent at leased locations subject to landlords liens, past due  rent, and up to three months future rent that would be payable to a landlord that has not executed and  delivered a Collateral Access Agreement; (ii) customs duties, and other costs to release Inventory which  is  being  imported  into  the  United  States;  (iii)  outstanding  Taxes  and  other  governmental  charges,  including, without limitation, ad valorem, real estate, personal property, sales, claims of the PBGC and  other Taxes which may have priority over the interests of the Lender in the Collateral; (iv) salaries, wages  and benefits due to employees of any Borrower; (v) fifty percent (50%) of all Customer Credit Liabilities;  (vi)  Customer  Deposits;  (vii)  reserves  for  reasonably  anticipated  changes  in  the  Appraised  Value  of  Eligible  Inventory  between  appraisals;  (viii)  warehousemen’s  or  bailee’s  charges  and  other  Permitted  Encumbrances which may have priority over the interests of the Lender in the Collateral; (ix) amounts  due to vendors on account of consigned goods or on account of purchase money or “floor plan financing”  payables (provided, that the Lender shall only implement Reserves pursuant to this clause (ix) after the  occurrence of a Cash Dominion Event); (x) Cash Management Reserves; (xi) Bank Products Reserves;  and (xii) royalties payable in respect of licensed merchandise.          “Average Daily Availability” means, for any period of determination, an amount equal to the sum  of  Availability  for  each  day  of  such  period  divided  by  the  actual  number  of  days  in  such  period,  as  determined by the Lender, which determination shall be conclusive absent manifest error.          “Bank Products” means any services of facilities provided to any Loan Party by the Lender or any  of its Affiliates (but excluding Cash Management Services) including, without limitation, on account of  (a)  Swap  Contracts,  (b)  merchant  services  constituting  a  line  of  credit,  (c)  leasing,  (d)  Factored  Receivables, and (e) supply chain finance services including, without limitation, trade payable services  and supplier accounts receivable purchases.          “Bank Product Reserves” means such reserves as the Lender from time to time determines in its  discretion as being appropriate to reflect the liabilities and obligations of the Loan Parties with respect to  Bank Products then provided or outstanding.          “Base  Rate”   means,  for  any  day,  a  fluctuating  rate  per  annum  equal  to  the  highest  of  (a)  the  Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%), (b) the Adjusted  LIBO  Rate  plus  one  percent  (1.00%),  or  (c)  the  rate of  interest  in  effect  for  such  day  as  publicly  announced from time to time by Wells Fargo as its “prime rate” (and if such announced rate is below  zero, the rate pursuant to this clause (c) shall be deemed to be zero).  The “prime rate” is a rate set by                                             -5-  

 

   Wells  Fargo  based  upon  various  factors  including  Wells  Fargo’s  costs  and  desired  return,  general  economic conditions and other factors, and is used as a reference point for pricing some loans, which may  be priced at, above, or below such announced rate.  Any change in such rate announced by Wells Fargo  shall  take  effect  at  the  opening  of  business  on  the  day  specified  in  the  public  announcement  of  such  change.          “Base Rate Loan” means a Loan that bears interest based on the Base Rate.          “Beneficial Ownership Certificate” means a certification regarding beneficial ownership required  by  the  Beneficial  Ownership  Regulation,  which  certification  shall  be  substantially  similar  in  form  and  substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published  jointly,  in  May  2018,  by  the  Loan  Syndications  and  Trading  Association  and  Securities  Industry  and  Financial Markets Association.          “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.          “Blocked Account” has the meaning provided in Section 6.13(a)(ii).          “Blocked Account Agreement” means with respect to an account established by a Loan Party, an  agreement, in form and substance satisfactory to the Lender, establishing control (as defined in the UCC)  of such account by the Lender and whereby the bank maintaining such account agrees, upon receipt of  notice from the Lender following the occurrence and during the continuance of a Cash Dominion Event,  to comply only with the instructions originated by the Lender without the further consent of any Loan  Party.          “Blocked Account Bank” means each bank with whom deposit accounts are maintained in which  any funds of any of the Loan Parties from one or more DDAs are concentrated and with whom a Blocked  Account Agreement has been, or is required to be, executed in accordance with the terms hereof.          “Borrowers” has the meaning specified in the introductory paragraph hereto.          “Borrowing” means a borrowing consisting of a Loan or Loans of the same Type and, in the case  of LIBO Rate Loans, having the same Interest Period made by the Lender pursuant to Section 2.01.          “Borrowing Base” means the Revolving Borrowing Base plus the FILO Borrowing Base.          “Borrowing Base  Certificate”  means  a  certificate  substantially  in  the  form  of Exhibit  E hereto  (with such changes therein as may be required by the Lender to reflect the components of and reserves  against  the  Borrowing  Base  as  provided  for  hereunder  from  time  to  time),  executed  and  certified  as  accurate and complete by a Responsible Officer of the Lead Borrower which shall include appropriate  exhibits,  schedules,  supporting  documentation,  and  additional reports  as  reasonably  requested  by  the  Lender.          “Business”  means  designing,  sourcing,  marketing  and  selling  women’s  apparel,  accessories,  personal care products and fragrances.          “Business Day” means any day other than a Saturday, Sunday or other day on which commercial  banks are authorized to close under the Laws of, or are in fact closed in, the state where the Lender’s  Office is located and, if such day relates to any LIBO Rate Loan, means any such day on which dealings  in Dollar deposits are conducted by and between banks in the London interbank market.                                               -6-  

 

          “Capital  Expenditures”  means,  with  respect  to  any  Person  for  any  period,  (a)  all  expenditures  made  (whether  made  in  the  form  of  cash  or  other  property)  or  costs  incurred  for  the  acquisition  or  improvement of fixed or capital assets of such Person (excluding normal replacements and maintenance  which are properly charged to current operations), in each case that are (or should be) set forth as capital  expenditures  in  a  Consolidated  statement  of  cash  flows  of such  Person  for  such  period,  in  each  case  prepared in accordance with GAAP, and (b) Capital Lease Obligations incurred by a Person during such  period.          “Capital Lease Obligations” means, with respect to any Person for any period, the obligations of  such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to  use) real or personal property, or a combination thereof, which obligations are required to be classified  and accounted for as liabilities on a balance sheet of such Person under GAAP and the amount of which  obligations shall be the capitalized amount thereof determined in accordance with GAAP.          “Cash Collateral Account” means a non-interest bearing account established by one or more of  the  Loan  Parties  with  Wells  Fargo,  and  in  the  name  of  the  Lender  (or  as  the  Lender  shall  otherwise  direct),  and  under  the  sole  and  exclusive  dominion  and  control  of  the  Lender,  in  which  deposits  are  required to be made in accordance with Section 2.03(f) or 8.02(c).          “Cash Collateralize” has the meaning specified in Section 2.03(f).  Derivatives of such term have  corresponding meanings.          “Cash Dominion Event” means either (i) the occurrence and continuance of any Default or Event  of Default, or (ii) the failure of the Borrowers to maintain Availability at least equal to the greater of (a)  $10,000,000, or (b) thirty percent (30%) of the Revolving Loan Cap (calculated without giving effect to  the FILO Reserve).  For purposes of this Agreement, the occurrence of a Cash Dominion Event shall be  deemed continuing at the Lender’s option (i) so long as such Default or Event of Default has not been  waived,  and/or  (ii)  if  the  Cash  Dominion  Event  arises  as  a  result  of  the  Borrowers’  failure  to  achieve  Availability as required hereunder, until Availability has exceeded the greater of (x) $10,000,000, or (y)  thirty percent (30%) of the Revolving Loan Cap (calculated without giving effect to the FILO Reserve),  in each case, for sixty (60) consecutive calendar days, in which case a Cash Dominion Event shall no  longer be deemed to be continuing for purposes of this Agreement; provided, that a Cash Dominion Event  shall  be  deemed  continuing  (even  if  a  Default  or  an  Event of  Default  is  no  longer  continuing  and/or  Availability  exceeds  the  required  amount  for  sixty  (60)  consecutive  calendar  days)  at  all  times  after  a  Cash  Dominion  Event  has  occurred  and  been  discontinued  on  three  (3)  occasion(s)  after  the Second  Amendment Effective Date. The termination of a Cash Dominion Event as provided herein shall in no  way  limit,  waive  or  delay  the  occurrence  of  a  subsequent  Cash  Dominion  Event  in  the  event  that  the  conditions set forth in this definition again arise.          “Cash Management Reserves” means such reserves as the Lender, from time to time, determines  in  its  Permitted  Discretion  as  being  appropriate  to  reflect  the  reasonably  anticipated  liabilities  and  obligations of the Loan Parties with respect to Cash Management Services then provided or outstanding.          “Cash Management Services” means any cash management services or facilities provided to any  Loan Party by the Lender or any of its Affiliates, including, without limitation: (a) ACH transactions, (b)  controlled disbursement services, treasury, depository, overdraft, and electronic funds transfer services,  (c) credit or debit cards, (d) credit card processing services, and (e) purchase cards.          “CERCLA”  means  the  Comprehensive  Environmental  Response,  Compensation,  and  Liability  Act, 42 U.S.C. § 9601 et seq.                                              -7-  

 

          “CERCLIS”  means  the  Comprehensive  Environmental  Response,  Compensation,  and  Liability  Information System maintained by the United States Environmental Protection Agency.          “CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.          “Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule,  regulation or treaty or in the administration, interpretation or application thereof by any Governmental  Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the  force of law) by any Governmental Authority; provided, however, for the purposes of this Agreement: (x)  the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or  directives thereunder or issued in connection therewith and (y) 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 in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted  or issued.          “Change of Control” means an event or series of events by which:                (a)    any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of         the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or         its subsidiaries, and any person or entity acting in its capacity as trustee, agent, or other fiduciary         or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and         13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed         to have “beneficial ownership” of all securities that such person or group has the right to acquire,         whether such right is exercisable immediately or only after the passage of time (such right, an         “option right”)), directly or indirectly, of forty percent (40%) or more of the Equity Interests of         the Lead Borrower entitled to vote for members of the board of directors or equivalent governing         body  of  the  Lead  Borrower  on  a  fully-diluted  basis  (and  taking  into  account  all  such  Equity         Interests that such “person” or “group” has the right to acquire pursuant to any option right); or                (b)    during any period of twelve (12) consecutive months, a majority of the members         of the board of directors or other equivalent governing body of the Lead Borrower cease to be         composed of individuals (i) who were members of that board or equivalent governing body on the         first day of such period, (ii) whose election or nomination to that board or equivalent governing         body was approved by individuals referred to in clause (i) above constituting at the time of such         election  or  nomination  at  least  a  majority  of  that  board  or  equivalent  governing  body  or  (iii)         whose election or nomination to that board or other equivalent governing body was approved by         individuals  referred  to  in clauses  (i)  and  (ii)  above constituting at  the  time  of  such  election  or         nomination at least a majority of that board or equivalent governing body (excluding, in the case         of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of         office as, a member of that board or equivalent governing body occurs as a result of an actual or         threatened solicitation of proxies or consents for the election or removal of one or more directors         by any person or group other than a solicitation for the election of one or more directors by or on         behalf of the board of directors); or                (c)    any  Person  or  two  or  more  Persons  acting  in  concert  shall  have  acquired  by         contract  or  otherwise,  or  shall  have  entered  into  a  contract  or  arrangement  that,  upon         consummation thereof, will result in its or their acquisition of the power to exercise, directly or         indirectly,  a  controlling  influence  over  the  management  or  policies  of  the Lead  Borrower,  or         control over the Equity Interests of the Lead Borrower entitled to vote for members of the board                                             -8-  

 

          of  directors  or  equivalent  governing  body  of  the  Lead  Borrower  on  a  fully-diluted  basis  (and         taking  into  account  all  such  securities  that  such  Person  or  Persons  have  the  right  to  acquire         pursuant to any option right) representing forty percent (40%) or more of the combined voting         power of such securities; or                (d)    any “change in control” or “sale” or “disposition” or similar event as defined in         any Organization Document of any Loan Party; or                (e)    the Lead Borrower fails at any time to own, directly or indirectly, one hundred         percent (100%) of the Equity Interests of each other Loan Party free and clear of all Liens (other         than the Liens in favor of the Lender), except where such failure is as a result of a transaction         permitted by the Loan Documents.          “Closing Date” means July 12, 2012.          “Code” means the Internal Revenue Code of 1986, and the regulations promulgated thereunder,  as amended and in effect.          “Collateral” means any and all “Collateral” as defined in any applicable Security Document and  all other property that is or is intended under the terms of the Security Documents to be subject to Liens in  favor of the Lender.          “Collateral  Access  Agreement”  means  an  agreement  reasonably  satisfactory  in  form  and  substance to the Lender executed by (a) a bailee or other Person in possession of Collateral, and (b) any  landlord of Real Estate leased by any Loan Party, other than Stores, pursuant to which such Person (i)  acknowledges the Lender’s Lien on the Collateral, (ii) releases or subordinates such Person’s Liens in the  Collateral held by such Person or located on such Real Estate, (iii) provides the Lender with access to the  Collateral held by such bailee or other Person or located in or on such Real Estate, (iv) as to any landlord,  provides the Lender with a reasonable time to sell and dispose of the Collateral from such Real Estate,  and (v) makes such other agreements with the Lender as the Lender may reasonably require.          “Commercial Letter of Credit” means any Letter of Credit issued for the purpose of providing the  primary payment mechanism in connection with the purchase of any  materials, goods or services by a  Loan Party in the ordinary course of business of such Loan Party.          “Commercial  Letter  of  Credit  Agreement”  means  the  Commercial  Letter  of  Credit  Agreement  relating to the issuance of a Commercial Letter of Credit in the form from time to time in use by the L/C  Issuer.          “Commitments” means the Revolving Commitment and the FILO Commitment.          “Committed Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one  Type  to  the  other,  or  (c)  a  continuation  of  LIBO  Rate  Loans,  pursuant  to Section 2.02,  which,  if  in  writing, shall be substantially in the form of Exhibit A.          “Commodity  Exchange  Act”  means  the  Commodity  Exchange  Act  (7  U.S.C.  §  1  et  seq.),  as  amended from time to time, and any successor statute.          “Competitor” means a Person, other than a Loan Party, who directly provides products or services  that are the same or substantially similar to the products or services provided by, and that constitute a  material part of the business of, the Loan Parties taken as a whole.                                              -9-  

 

          “Compliance Certificate” means a certificate substantially in the form of Exhibit C.          “Concentration Account” has the meaning provided in Section 6.13(c).          “Consolidated”  means,  when  used  to  modify  a  financial  term,  test,  statement,  or  report  of  a  Person, the application or preparation of such term, test, statement or report (as applicable) based upon  the  consolidation,  in  accordance  with  GAAP,  of  the  financial  condition  or  operating  results  of  such  Person and its Subsidiaries.          “Consolidated EBITDA” means, at any date of determination, an amount equal to Consolidated  Net  Income  of  the  Lead  Borrower  and  its  Subsidiaries on  a  Consolidated  basis  for  the  most  recently  completed  Measurement  Period,  plus  (a)  the  following  to  the  extent  deducted  in  calculating  such  Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and  foreign income Taxes, (iii) depreciation and amortization expense and (iv) other non-recurring expenses  reducing such Consolidated Net Income which do not represent a cash item (in each case of or by Lead  Borrower  and  its  Subsidiaries  for  such  Measurement  Period),  minus  (b)  the  following  to  the  extent  included  in  calculating  such  Consolidated  Net  Income:  (i)  Federal,  state,  local  and  foreign  income  tax  credits and (ii) all non-recurring, non-cash items increasing Consolidated Net Income (in each case of or  by Lead Borrower and its Subsidiaries for such Measurement Period), all as determined on a Consolidated  basis in accordance with GAAP.          “Consolidated Fixed Charge Coverage Ratio” means, at any date of determination, the ratio of (a)  (i) Consolidated EBITDA minus (ii) unfinanced Capital Expenditures made during such period minus (iii)  the aggregate amount of Federal, state, local and foreign income taxes paid in cash during such period, to  (b) the sum of (i) Debt Service Charges plus (ii) the aggregate amount of all Restricted Payments, in each  case, of or by Lead Borrower and its Subsidiaries for the most recently completed Measurement Period,  all as determined on a Consolidated basis in accordance with GAAP.          “Consolidated Interest Charges” means, for any Measurement Period, the sum of (a) all interest,  premium payments, debt discount, fees, charges and related expenses in connection with borrowed money  (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to  the extent treated as interest in accordance with GAAP, including, without limitation, all commissions,  discounts  and  other  fees  and  charges  owed  with  respect  to  letters  of  credit  and  bankers’  acceptance  financing and net costs under Swap Contracts, but excluding any non-cash or deferred interest financing  costs, (b) all interest paid or payable with respect to discontinued operations and (c) the portion of rent  expense  with  respect  to  such  period  under  Capital  Lease  Obligations  that  is  treated  as  interest  in  accordance with GAAP, in each case of or by Lead Borrower and its Subsidiaries for such Measurement  Period, all as determined on a Consolidated basis in accordance with GAAP.          “Consolidated  Net  Income”  means,  as  of  any  date  of  determination,  the  net  income  of  Lead  Borrower and its Subsidiaries for the most recently completed Measurement Period, all as determined on  a  Consolidated  basis  in  accordance  with  GAAP; provided, however, that  there  shall  be  excluded  therefrom (a) extraordinary gains and extraordinary losses for such Measurement Period, (b) the income  (or loss) of such Person during such Measurement Period in which any other Person has a joint interest,  except to the extent of the amount of cash dividends or other distributions actually paid in cash to such  Person  during  such  period,  (c)  the  income  (or  loss)  of  any  Person  during  such  Measurement  Period  accrued prior to the date it becomes a Subsidiary of the Lead Borrower or any of its Subsidiaries or is  merged into or consolidated with the Lead Borrower or any of its Subsidiaries or that Person’s assets are  acquired by the Lead Borrower or any of its Subsidiaries, and (d) the income of any direct or indirect  Subsidiary of a Person to the extent that the declaration or payment of dividends or similar distributions  by that Subsidiary of that income is not at the time permitted by operation of the terms of its Organization                                            -10-  

 

   Documents  or  any  agreement,  instrument,  judgment,  decree,  order,  statute,  rule  or  governmental  regulation applicable to that Subsidiary, except that Lead Borrower’s equity in any net loss of any such  Subsidiary for such Measurement Period shall be included in determining Consolidated Net Income.          “Contractual Obligation” means, as to any Person, any provision of any agreement, instrument or  other undertaking to which such Person is a party or by which it or any of its property is bound.          “Control”  means  the  possession,  directly  or  indirectly,  of  the  power  to  direct  or  cause  the  direction of the management or policies of a Person, whether through the ability to exercise voting power,  by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.          “Cost”  means  the  lower  of  cost  or  market value  of  Inventory,  based  upon  the  Borrowers’  accounting practices in effect on the Second Amendment Effective Date.          “Credit Card Advance Rate” means ninety percent (90%).          “Credit Card Issuer” means any person (other than a Borrower or other Loan Party) who issues or  whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit  cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc.  or  Visa  International  and  American  Express,  Discover,  Diners  Club,  Carte  Blanche,  World  Financial  Bank, and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued  by or through American Express Travel Related Services Company, Inc.,  and Novus Services, Inc. and  other issuers approved by the Lender.          “Credit  Card  Processor” means any  servicing  or  processing  agent  or  any  factor  or  financial  intermediary  who  facilitates,  services, processes  or  manages  the  credit  authorization,  billing  transfer  and/or  payment  procedures  with  respect  to  any  Borrower’s  sales  transactions  involving  credit  card  or  debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.          “Credit Card Notifications” has the meaning provided in Section 6.13(a)(i).          “Credit  Card  Receivables”  means  each  “Account”  (as  defined  in  the  UCC)  together  with  all  income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to a Loan  Party resulting from charges by a customer of a Loan Party on credit or debit cards issued by such issuer  in connection with the sale of goods by a Loan Party, or services performed by a Loan Party, in each case  in the ordinary course of its business.          “Credit  Extensions”  mean  each  of  the  following:  (a)  a  Borrowing  and  (b)  an  L/C  Credit  Extension.          “Credit Party” or “Credit Parties” means (a) individually, (i) the Lender and its Affiliates, (ii) the  L/C Issuer, (iii) any beneficiary of each indemnification obligation undertaken by any Loan Party under  any Loan Document, (iv) any other Person to whom Obligations under this Agreement and other Loan  Documents are owing, and (v) the successors and assigns of each of the foregoing, and (b) collectively, all  of the foregoing.          “Credit  Party  Expenses”  means,  without  limitation,  (a)  all  reasonable  out-of-pocket  expenses  incurred  by  the  Lender  and  its  Affiliates,  in  connection  with  this  Agreement  and  the  other  Loan  Documents,  including  without  limitation  (i)  the  reasonable  fees,  charges  and  disbursements  of  (A)  counsel for the Lender, (B) outside consultants for the Lender, (C) appraisers, (D) commercial finance  examinations,  and  (E)  all  such  out-of-pocket  expenses  incurred  during  any  workout,  restructuring  or                                             -11-  

 

   negotiations  in  respect  of  the  Obligations,  (ii)  in  connection  with  (A)  the  preparation,  negotiation,  administration, management, execution and delivery of this Agreement and the other Loan Documents or  any  amendments,  modifications  or  waivers  of  the  provisions  thereof  (whether  or  not  the  transactions  contemplated hereby or thereby shall be consummated), (B) the enforcement or protection of their rights  in  connection  with  this  Agreement  or  the  Loan  Documents  or  efforts  to  preserve,  protect,  collect,  or  enforce the Collateral, or (C) any workout, restructuring or negotiations in respect of any Obligations, and  (b)  with  respect  to  the  L/C  Issuer  and  its  Affiliates,  all  reasonable  out-of-pocket  expenses  incurred  in  connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for  payment thereunder; and (c) all customary fees and charges (as adjusted from time to time) of Lender  with respect to the disbursement of funds (or the receipt of funds) to or for the account of Loan Parties  (whether by wire transfer or otherwise), together with any out-of-pocket costs and expenses incurred in  connection therewith.          “Customer Credit Liabilities” means at any time, the aggregate remaining value at such time of  (a) outstanding gift certificates and gift cards of the Borrowers entitling the holder thereof to use all or a  portion of the certificate or gift card to pay all or a portion of the purchase price for any Inventory, and (b)  outstanding merchandise credits of the Borrowers.          “Customer Deposits” means at any time, the aggregate amount at such time of (a) deposits made  by  customers  with  respect  to  the  purchase  of  goods  or  the  performance  of  services  and  (b)  layaway  obligations of the Borrowers.           “Customs Broker/Carrier Agreement” means an agreement in form and substance satisfactory to  the  Lender  among  a  Borrower,  a  customs  broker,  freight  forwarder,  consolidator  or  carrier,  and  the  Lender, in which the customs broker, freight forwarder, consolidator or carrier acknowledges that it has  control over and holds the documents evidencing ownership of the subject Inventory for the benefit of the  Lender and agrees, upon notice from the Lender, to hold and dispose of the subject Inventory solely as  directed by the Lender.           “DDA” means each checking, savings or other demand deposit account maintained by any of the  Loan Parties.  All funds in each DDA shall be conclusively presumed to be Collateral and proceeds of  Collateral and the Lender shall have no duty to inquire as to the source of the amounts on deposit in any  DDA.          “DDA Notification” has the meaning provided therefor in Section 6.13(a)(iii).          “Debt Service Charges” means, for any Measurement Period, the sum of (a) Consolidated Interest  Charges paid or required to be paid for such Measurement Period, plus (b) principal payments made or  required  to  be  made  on  account  of  Indebtedness  (excluding  the  Obligations  and  any  Synthetic  Lease  Obligations but including, without limitation, Capital Lease Obligations) for such Measurement Period, in  each case determined on a Consolidated basis in accordance with GAAP.          “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation,  conservatorship,  bankruptcy,  assignment  for  the  benefit  of  creditors,  moratorium,  rearrangement,  receivership,  insolvency,  reorganization,  or  similar  debtor  relief  Laws  of  the  United  States  or  other  applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.          “Default”  means  any  event  or  condition  that  constitutes  an  Event  of  Default  or  that,  with  the  giving of any notice, the passage of time, or both, would be an Event of Default.                                             -12-  

 

          “Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees,  an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if any, applicable to Base Rate  Loans, plus (iii) two percent (2%) per annum; provided, however, that with respect to a LIBO Rate Loan,  the  Default  Rate  shall  be  an  interest  rate  equal  to  the  interest  rate  (including  any  Applicable  Margin)  otherwise applicable to such Loan plus two percent (2%) per annum, and (b) when used with respect to  Letter of Credit Fees, a rate equal to the Applicable Margin for Standby Letters of Credit or Commercial  Letters of Credit, as applicable, plus two percent (2%) per annum.          “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (whether in  one transaction or in a series of transactions, and including any sale and leaseback transaction and any  sale,  transfer,  license  or  other  disposition)  of  any  property  (including,  without  limitation,  any  Equity  Interests) by any Person (or the granting of any option or other right to do any of the foregoing), including  any  sale,  assignment,  transfer  or  other  disposal,  with  or  without  recourse,  of  any  notes  or  accounts  receivable or any rights and claims associated therewith.          “Disqualified Stock” means any Equity Interest that, by its terms (or by the terms of any security  into  which  it  is  convertible,  or  for  which  it  is  exchangeable,  in  each  case  at  the  option  of  the  holder  thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking  fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or  prior to the date that is ninety-one (91) days after the date on which the Loans mature; provided, however,  that (i) only the portion of such Equity Interests which so matures or is mandatorily redeemable, is so  convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall  be deemed to be Disqualified Stock and (ii) with respect to any Equity Interests issued to any employee or  to any plan for the benefit of employees of the Lead Borrower or its Subsidiaries or by any such plan to  such  employees,  such  Equity  Interest  shall  not  constitute  Disqualified  Stock  solely  because  it  may  be  required to be repurchased by the Lead Borrower or one of its Subsidiaries in order to satisfy applicable  statutory  or  regulatory  obligations  or  as  a  result  of  such  employee’s  termination,  resignation,  death  or  disability and if any class of Equity Interest of such Person that by its terms authorizes such Person to  satisfy  its  obligations  thereunder  by  delivery  of  an  Equity  Interest  that  is  not  Disqualified  Stock,  such  Equity Interests shall not be deemed to be Disqualified Stock. Notwithstanding the preceding sentence,  any Equity Interest that would constitute Disqualified Stock solely because the holders thereof have the  right  to  require  a  Loan  Party  to  repurchase  such  Equity  Interest  upon  the  occurrence  of  a  change  of  control or an asset sale shall not constitute Disqualified Stock.  The amount of Disqualified Stock deemed  to be outstanding at any time for purposes of this Agreement will be the maximum amount that the Lead  Borrower  and  its  Subsidiaries  may  become  obligated  to  pay  upon  maturity  of,  or  pursuant  to  any  mandatory redemption provisions of, such Disqualified Stock or portion thereof, plus accrued dividends.          “Dollars” and “$” mean lawful money of the United States.          “Eligible  Assignee”  means  (a)  a  Credit  Party  or  any  of  its  Affiliates;  (b)  a  bank,  insurance  company, or company engaged in the business of making commercial loans, which Person, together with  its Affiliates, has a combined capital and surplus in excess of $1,000,000,000; (c) an Approved Fund; (d)  any Person to whom a Credit Party assigns its rights and obligations under this Agreement as part of an  assignment and transfer of such Credit Party’s rights in and to a material portion of such Credit Party’s  portfolio of asset based credit facilities, and (e) any other Person (other than a natural person) approved  by (i) the Lender, and (ii) unless a Default or Event of Default has occurred and is continuing, the Lead  Borrower  (each  such  approval  not  to  be  unreasonably  withheld  or  delayed); provided,  that  notwithstanding  the  foregoing,  “Eligible  Assignee”  shall  not  include  a  Loan  Party  or  any  of  the  Loan  Parties’  Affiliates,  Subsidiaries  or  (other  than  after  the  occurrence  and  during  the  continuance  of  a  Specified Event of Default) Competitors.                                             -13-  

 

          “Eligible Credit Card Receivables” means at the time of any determination thereof, each Credit  Card Receivable that satisfies the following criteria at the time of creation and continues to meet the same  at the time of such determination: such Credit Card Receivable (i) has been earned by performance and  represents the bona fide amounts due to a Borrower from a Credit Card Issuer or Credit Card Processor,  and in each case originated in the ordinary course of business of such Borrower, and (ii) in each case is  acceptable to the Lender in its Permitted Discretion, and is not ineligible for inclusion in the calculation of  the Borrowing Base pursuant to any of clauses (a) through (j) below.  Without limiting the foregoing, to  qualify as an Eligible Credit Card Receivable, an Account shall indicate no Person other than a Borrower  as payee or remittance party.  In determining the amount to be so included, the face amount of an Account  shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of  all  accrued  and  actual  discounts,  claims,  credits  or  credits  pending,  promotional  program  allowances,  price adjustments, finance charges or other allowances (including any amount that a Borrower may be  obligated to rebate to a customer, a Credit Card Issuer or Credit Card Processor pursuant to the terms of  any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in  respect of such Account but not yet applied by the Loan Parties to reduce the amount of such Credit Card  Receivable.  Except as otherwise agreed by the Lender, any Credit Card Receivable included within any  of the following categories shall not constitute an Eligible Credit Card Receivable:                 (a)    Credit Card Receivable which do not constitute an “Account” (as defined in the         UCC);                (b)    Credit  Card  Receivables  that have  been  outstanding  for  more  than  five  (5)         Business Days from the date of sale;                (c)    Credit  Card  Receivables  (i)  that  are  not  subject  to  a  perfected  first  priority         security interest in favor of the Lender, or (ii) with respect to which a Borrower does not have         good, valid and marketable title thereto, free and clear of any Lien (other than Liens granted to         the Lender pursuant to the Security Documents);                (d)    Credit Card Receivables which are disputed, as to which the Credit Card Issuer         or  Credit  Card  Processor  has  recourse  to  a  Loan  Party  due  to  the  creditworthiness  of  the         cardholder, or with respect to which a claim, counterclaim, offset or chargeback has been asserted         (to the extent of such claim, counterclaim, offset or chargeback);                 (e)    Credit  Card  Receivables  as to  which  the  Credit  Card  Issuer  or  Credit  Card         Processor has the right due to the creditworthiness of the cardholder to require a Loan Party to         repurchase the Accounts from such Credit Card Issuer or Credit Card Processor;                 (f)    Credit Card Receivables due from a Credit Card Issuer or Credit Card Processor         of the applicable credit card which is the subject of any bankruptcy or insolvency proceedings;                (g)    Credit Card Receivables which are not a valid, legally enforceable obligation of         the applicable Credit Card Issuer or Credit Card Processor with respect thereto;                (h)    Credit Card Receivables which do not conform to all representations, warranties         or other provisions in the Loan Documents relating to Credit Card Receivables;                 (i)    Credit  Card  Receivables  which  are  evidenced  by “chattel  paper”  or  an         “instrument” of any kind unless such “chattel paper” or “instrument” is in the possession of the         Lender, and to the extent necessary or appropriate, endorsed to the Lender; or                                             -14-  

 

                (j)    Credit  Card  Receivables  which  the  Lender  determines  in  its  discretion  to  be         uncertain of collection or which do not meet such other reasonable eligibility criteria for Credit         Card Receivables as the Lender may determine.                (k)    “Eligible In-Transit Inventory”  means, as of any date of determination thereof,         without duplication of other Eligible Inventory, In-Transit Inventory:                (l)    Which has been shipped from a foreign location for receipt by a Borrower, but         which has not yet been delivered to such Borrower, which In-Transit Inventory has been in transit         for sixty (60) days or less from the date of shipment of such Inventory;                (m)    For which the purchase order is in the name of a Borrower and title and risk of         loss has passed to such Borrower;                (n)    For which an Acceptable Document of Title has been issued, and in each case as         to which at all times on and after September 15, 2012, the Lender has control (as defined in the         UCC) over the documents of title which evidence ownership of the subject Inventory pursuant to         a Customs Broker/Carrier Agreement;                 (o)    Which is insured to the reasonable satisfaction of the Lender (including, without         limitation, marine cargo insurance);                 (p)    the  Foreign  Vendor  with  respect  to  such  In-Transit  Inventory  is  an  Approved         Foreign Vendor;  and                (q)    Which otherwise would constitute Eligible Inventory;          provided,  that  the  Lender  may,  in  its  discretion,  exclude  any  particular  Inventory  from  the         definition  of  “Eligible  In-Transit  Inventory”  in  the  event  the  Lender  determines  that  such         Inventory is subject to any Person’s right of reclamation, repudiation, stoppage in transit or any         event  has  occurred  or  is  reasonably  anticipated  by  the  Lender  to  arise  which  may  otherwise         adversely impact the ability of the Lender to realize upon such Inventory.          “Eligible  Inventory”  means,  as  of  the  date  of  determination  thereof,  without  duplication,  (i)  Eligible  In-Transit  Inventory,  and  (ii)  items  of  Inventory  of  a  Borrower  that  are  finished  goods,  merchantable  and  readily  saleable  to  the  public  in  the  ordinary  course  of  the  Borrowers’  business  and  deemed  by  the  Lender  in  its  Permitted  Discretion  to  be  eligible  for  inclusion  in  the  calculation  of  the  Borrowing Base, in each case that, except as otherwise agreed by the Lender, (A) complies with each of  the representations and warranties respecting Inventory made by the Borrowers in the Loan Documents,  and (B) is not excluded as ineligible by virtue of one or more of the criteria set forth below.  Except as  otherwise agreed by the Lender, in its discretion, the following items of Inventory shall not be included in  Eligible Inventory:                (a)    Inventory that is not solely owned by a Borrower or a Borrower does not have         good and valid title thereto;                (b)    Inventory  that  is  leased  by  or  is  on  consignment  to  a  Borrower  or  which  is         consigned by a Borrower to a Person which is not a Loan Party;                (c)    Inventory  (other  than  Eligible  In-Transit  Inventory)  that  is  not  located  in  the         United States of America (excluding territories or possessions of the United States);                                             -15-  

 

                (d)    Inventory that is not located at a location that is owned or leased by a Borrower         or at a warehouse with respect to which there exists an executed Collateral Access Agreement,         except (i) Inventory in transit between such locations or locations which meet the criteria set forth         in clause (ii) below, or (ii) to the extent that the Borrowers have furnished the Lender with (A)         any UCC financing statements or other documents that the Lender may determine to be necessary         to  perfect  its  security  interest  in  such  Inventory  at  such  location,  and  (B)  a  Collateral  Access         Agreement executed by the Person owning any such location on terms reasonably acceptable to         the Lender;                (e)    Inventory  that  is  located:  (i)  in  a  warehouse  or  distribution  center  leased  by  a         Borrower unless the applicable lessor has delivered to the Lender a Collateral Access Agreement,         or (ii) at any leased location in a Landlord Lien State unless the applicable lessor has delivered to         the  Lender  a  Collateral  Access  Agreement  or  the  Lender  has  implemented  Reserves  for  such         location;                (f)    Inventory  that  is  comprised  of  goods  which  (i)  are  damaged,  defective,         “seconds,” or otherwise unmerchantable, (ii) are to be returned to the vendor, (iii) are obsolete or         slow moving, or custom items, work in process, raw materials, or that constitute samples, spare         parts,  promotional,  marketing,  labels,  bags  and  other  packaging  and  shipping  materials  or         supplies used or consumed in a Borrower’s business, (iv) are seasonal in nature and which have         been  packed  away  for  sale  in  the  subsequent  season,  (v)  not  in  compliance  with  all  standards         imposed by any Governmental Authority having regulatory authority over such Inventory, its use         or sale, or (vi) are bill and hold goods;                (g)    Inventory that is not subject to a perfected first priority security interest in favor         of the Lender;                (h)    Inventory that is not insured in compliance with the provisions of Section 5.10         hereof;                (i)    Inventory that has been sold but not yet delivered or as to which a Borrower has         accepted a deposit;                 (j)    Inventory  that  is  subject  to  any  material  licensing,  patent,  royalty,  trademark,         trade name or copyright agreement with any third party from which any Borrower or any of its         Subsidiaries has received notice of a material dispute in respect of any such agreement; or                (k)    Inventory acquired in a Permitted Acquisition or which is not of the type usually         sold in the ordinary course of the Borrowers’ business, unless and until the Lender has completed         or  received  (A)  an  appraisal  of  such  Inventory  from  appraisers  satisfactory  to  the  Lender  and         establishes Inventory Reserves (if applicable) therefor, and otherwise agrees that such Inventory         shall be deemed Eligible Inventory, and (B) such other due diligence as the Lender may require,         all of the results of the foregoing to be reasonably satisfactory to the Lender.          “Environmental  Laws”  means  any  and  all  Federal,  state,  local,  and  foreign  statutes,  laws,  regulations,  ordinances,  rules,  judgments,  orders,  decrees,  permits,  concessions,  grants,  franchises,  licenses,  agreements  or  governmental  restrictions  relating  to  pollution  and  the  protection  of  the  environment or the release of any materials into the environment, including those related to hazardous  substances or wastes, air emissions and discharges to waste or public systems.                                             -16-  

 

          “Environmental  Liability”  means  any  liability,  obligation,  damage,  loss,  claim,  action,  suit,  judgment, order, fine, penalty, fee, expense, or cost, contingent or otherwise (including any liability for  damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower, any other  Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a)  violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment  or  disposal  or  presence  of  any  Hazardous  Materials,  (c)  exposure  to  any  Hazardous  Materials,  (d)  the  release  or  threatened  release  of  any  Hazardous  Materials  into  the  environment  or  (e)  any  contract,  agreement  or  other  consensual  arrangement  pursuant  to  which  liability  is  assumed  or  imposed  with  respect to any of the foregoing.          “Equipment” has the meaning set forth in the UCC.          “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other  ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase  or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in)  such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other  ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition  from such Person of such shares (or such other interests), and all of the other ownership or profit interests  in such Person (including partnership, member or trust interests therein), whether voting or nonvoting,  and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of  determination.          “ERISA” means the Employee Retirement Income Security Act of 1974.          “ERISA  Affiliate”  means  any  trade  or  business  (whether  or  not  incorporated)  under  common  control with the Lead Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections  414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).          “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by  the Lead Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during  a  plan  year  in  which  it  was  a  substantial  employer  (as  defined  in  Section 4001(a)(2) of  ERISA)  or  a  cessation  of  operations  that  is  treated  as  such  a  withdrawal  under  Section 4062(e)  of  ERISA;  (c)  a  complete or partial withdrawal by the Lead Borrower or any ERISA Affiliate from a Multiemployer Plan  or  notification  that  a  Multiemployer  Plan is  in  reorganization;  (d)  the  filing  of  a  notice  of  intent  to  terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA,  or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;  (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of,  or  the  appointment  of  a  trustee  to  administer,  any  Pension  Plan  or  Multiemployer  Plan;  or  (f)  the  imposition  of  any  liability  under  Title  IV  of  ERISA,  other  than  for  PBGC  premiums  due  but  not  delinquent under Section 4007 of ERISA, upon the Lead Borrower or any ERISA Affiliate.          “Event  of  Default”  has  the  meaning  specified  in Section 8.01.  An  Event  of  Default  shall  be  deemed  to  be  continuing  unless  and  until  that Event  of  Default  has  been  duly  waived  as  provided  in  Section 9.01 hereof.          “Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and  to the extent that, all or a portion of the Guarantee of such Loan Party of, or the grant by such Loan Party  of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal  under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading  Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s  failure  for  any  reason  to  constitute  an  “eligible  contract  participant”  as defined  in  the  Commodity                                            -17-  

 

   Exchange Act and the regulations thereunder at the time the Guarantee of such Loan Party or the grant of  such  security  interest  becomes  effective  with  respect  to  such  Swap  Obligation.   If  a  Swap  Obligation  arises under a master agreement governing more than one swap, such exclusion shall apply only to the  portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest  is or becomes illegal.          “Excluded Taxes” means, with respect to the Lender, the L/C Issuer or any other recipient of any  payment to be made by or on account of any obligation of the Loan Parties hereunder, (a) taxes imposed  on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in  lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which  such recipient is organized or in which its principal office is located, (b) any branch profits taxes imposed  by  the  United  States  or  any  similar  tax  imposed  by  any  other  jurisdiction  in  which  any  Loan  Party  is  located, (c) any U.S. federal, state or local backup withholding tax, and (d) any U.S. federal withholding  tax imposed under FATCA.          “Executive Order” has the meaning set forth in Section 9.17.          “Existing Credit Agreement” has the meaning specified in the introductory paragraph hereto.           “Existing Letters of Credit” means those letters of credit identified on Schedule 1.03.          “Extraordinary Receipt” means any cash received by or paid to or for the account of any Person  not  in  the ordinary  course  of  business,  including  tax  refunds,  pension  plan  reversions,  proceeds  of  insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute  compensation  for  lost  earnings),  condemnation  awards  (and  payments  in  lieu  thereof),  indemnity  payments and any purchase price adjustments.           “Facility Guaranty” means any Guarantee made by a Guarantor in favor of the Lender and the  other Credit Parties, in form reasonably satisfactory to the Lender, as amended, modified, supplemented,  renewed, restated or replaced.          “FATCA”  means  current  Section 1471  through  1474  of  the  Code  or  any  amended  version  or  successor  provision  that  is  substantively  similar  to  and,  in  each  case,  any  regulations  promulgated  thereunder and any interpretation and other guidance issued in connection therewith.          “Factored Receivables” means any Accounts owed by a Loan Party which have been factored or  sold by an account debtor of a Loan Party to Wells Fargo or any of its Affiliates pursuant to a factoring  arrangement or otherwise.          “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the  rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by  Federal  funds  brokers  on such  day,  as  published  by  the  Federal  Reserve  Bank  of  New  York  on  the  Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Federal  Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so  published  on  the  next  succeeding  Business  Day,  and  (b)  if  no  such  rate  is  so  published  on  such  next  succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward,  if  necessary,  to  a  whole  multiple  of  1/100  of  1%)  charged  to  Wells  Fargo  on  such  day  on  such  transactions as determined by the Lender.          “Fee  Letter” means  the  letter agreement,  dated  as of July  12,  2012,  among  the  Borrowers  and  Lender.                                             -18-  

 

          “FILO  Advance  Rate”  means,  with  respect  to the applicable  period  set  forth  below,  the  percentage set forth below opposite such period:           Period                                    FILO Advance Rate          From the Second Amendment Effective            10.00%          Date until September 30, 2018          From October 1, 2018 until December 31,         9.75%          2018          From January 1, 2019 until March 31,            9.50%          2019          From April 1, 2019 until June 30, 2019          9.25%          From July 1, 2019 until September 30,           9.00%          2019          From October 1, 2019 until December 31,         8.75%          2019          From January 1, 2020 until March 31,            8.50%          2020          From April 1, 2020 until June 30, 2020          8.25%          From July 1, 2020 until September 30,           8.00%          2020          From October 1, 2020 until December 31,         7.75%          2020          From January 1, 2021 until March 31,            7.50%          2021          From April 1, 2021 until June 30, 2021          7.25%          From July 1, 2021 until September 30,           7.00%          2021          From October 1, 2021 until December 31,         6.75%          2021          From January 1, 2022 until March 31,            6.50%          2022          From April 1, 2022 until June 30, 2022          6.25%          From July 1, 2022 until September 30,           6.00%          2022          From October 1, 2022 until December 31,         5.75%          2022          From January 1, 2023 until March 31,            5.50%          2023          From April 1, 2023 until June 30, 2023          5.25%                                             -19-  

 

           From July 1, 2023 until the Maturity Date       5.00%                   “FILO Borrowing Base” means, at any time of calculation, an amount equal to:                (a)    the  face  amount  of  Eligible  Credit  Card  Receivables  multiplied  by  the  FILO         Advance Rate;                plus                (b)    the  Cost  of  Eligible  Inventory,  net  of  Inventory Reserves,  multiplied  by  the         product  of  the  FILO  Advance  Rate  multiplied  by  the  Appraised  Value  of  Eligible  Inventory         (expressed as a percentage of Cost of Eligible Inventory) (provided that in no event shall Eligible         In-Transit Inventory be included in the calculation of the Eligible Inventory for purposes of the         FILO Borrowing Base).          “FILO  Commitment”  means,  the  obligation  of  the  Lender  to  make  the  FILO  Loans  to  the  Borrowers pursuant to Section 2.01(a), in an aggregate principal amount not to exceed $5,000,000.          “FILO Loan” has the meaning specified in Section 2.01(a).          “FILO Note” means a promissory note made by the Borrowers in favor of the Lender evidencing  the FILO Loans made by the Lender, substantially in the form of Exhibit B-2.           “FILO Reserve” means the amount, if any, by which the outstanding amount of the FILO Loans  exceed the FILO Borrowing Base as the Lender determines in its reasonable discretion.          “First Amendment” means that certain First Amendment to Second Amended and Restated Credit  Agreement  entered  into  by  and  among  the  Borrowers,  the  Lender  and  the  L/C  Issuer  dated  as  of  September 8, 2014.          “First Amendment Effective Date” means September 8, 2014.          “Fiscal Month” means any fiscal month of any Fiscal Year, which month shall generally end on  the  Saturday  nearest  to  the  last  day  of  each  calendar  month  in  accordance  with  the  fiscal  accounting  calendar of the Loan Parties.          “Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarters shall generally end  on the Saturday nearest to the last day of each April, July, October and January of such Fiscal Year in  accordance with the fiscal accounting calendar of the Loan Parties.          “Fiscal Year” means the fiscal year ended January 28, 2012 and any subsequent period of fifty- two  (52)  or  fifty-three  (53)  consecutive  weeks  ending  on  the  Saturday  nearest  to  January  31  of  each  calendar year.          “Foreign Assets Control Regulations” has the meaning set forth in Section 9.17.          “Foreign Vendor” means a Person that sells In-Transit Inventory to a Borrower.          “Foreign Vendor Agreement” means an agreement between a Foreign Vendor and the Lender in  form and substance satisfactory to the Lender and pursuant to which, among other things, the parties shall                                            -20-  

 

   agree upon their relative rights with respect to In-Transit Inventory of a Borrower purchased from such  Foreign Vendor.          “FRB” means the Board of Governors of the Federal Reserve System of the United States.          “Fund” means any Person (other than a natural person) that is (or will be) engaged in making,  purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the  ordinary course of its business.          “GAAP”  means  generally  accepted  accounting  principles  in  the  United  States  set  forth  in  the  opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified  Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or  such other principles as may be approved by a significant segment of the accounting profession in the  United  States,  that  are  applicable  to  the  circumstances  as  of  the  date  of  determination,  consistently  applied.          “Governmental Authority” means the government of the United States or any other nation, or of  any  political  subdivision  thereof,  whether  state  or  local,  and  any  agency,  authority,  instrumentality,  regulatory  body,  court,  central  bank  or  other  entity  exercising  executive,  legislative,  judicial,  taxing,  regulatory  or  administrative  powers  or  functions  of  or  pertaining  to  government  (including any  supra- national bodies such as the European Union or the European Central Bank).          “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person  guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable  or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly,  and  including  any  obligation  of  such  Person,  direct  or  indirect,  (i)  to  purchase  or  pay  (or  advance  or  supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or  lease  property,  securities  or  services  for  the  purpose  of  assuring  the  obligee  in  respect  of  such  Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation,  (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or  level  of  income  or  cash  flow  of  the  primary  obligor  so  as  to  enable  the  primary  obligor  to  pay  such  Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the  obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to  protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of  such Person securing any Indebtedness or other obligation of any other Person (or any right, contingent or  otherwise, of any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee  shall  be  deemed  to  be  an  amount  equal  to  the  stated  or  determinable  amount  of  the  related  primary  obligation,  or  portion  thereof,  in  respect  of  which  such  Guarantee  is  made  or,  if  not  stated  or  determinable,  the  maximum  reasonably  anticipated  liability  in respect  thereof  as  determined  by  the  guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.          “Guarantor”  has  the  meaning  specified  in  the  introductory  paragraph  hereto  and  includes  each  Subsidiary of the Lead Borrower that shall be required to execute and deliver a Facility Guaranty pursuant  to Section 6.12.           “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous  or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or  asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all  other substances or wastes of any nature regulated pursuant to any Environmental Law.          “Honor Date” has the meaning specified in Section 2.03(c)(i).                                            -21-  

 

          “Indebtedness”  means,  as  to  any  Person  at  a  particular  time,  without  duplication,  all  of  the  following, whether or not included as indebtedness or liabilities in accordance with GAAP:                (a)    all  obligations  of  such  Person  for  borrowed  money  and  all  obligations  of  such         Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;                (b)    the  maximum  amount  of  all  direct  or  contingent  obligations  of  such  Person         arising  under  letters  of  credit  (including  standby  and  commercial),  bankers’  acceptances,  bank         guaranties, surety bonds and similar instruments;                (c)    net obligations of such Person under any Swap Contract;                (d)    all obligations of such Person to pay the deferred purchase price of property or         services (other than trade accounts payable in the ordinary course of business and, in each case,         not past due for more than sixty (60) days after the date on which such trade account payable was         created);                (e)    indebtedness (excluding prepaid interest thereon) secured by a Lien on property         owned or being purchased by such Person (including indebtedness arising under conditional sales         or other title retention agreements), whether or not such indebtedness shall have been assumed by         such Person or is limited in recourse;                (f)    All Attributable Indebtedness of such Person;                (g)    all obligations of such Person to purchase, redeem, retire, defease or otherwise         make  any  payment  in  respect  of  any  Equity  Interest  in  such  Person  or  any  other  Person         (including, without limitation, Disqualified Stock), or any warrant, right or option to acquire such         Equity  Interest,  valued,  in  the  case  of  a  redeemable  preferred  interest,  at  the  greater  of  its         voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and                (h)    all Guarantees of such Person in respect of any of the foregoing.          For  all  purposes  hereof,  the  Indebtedness  of  any  Person  shall  include  the  Indebtedness  of  any  partnership  or  joint  venture  (other  than  a  joint  venture  that  is  itself  a  corporation  or  limited  liability  company)  in  which  such  Person  is  a  general  partner  or  a  joint  venturer,  unless  such  Indebtedness  is  expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract  on any date shall be deemed to be the Swap Termination Value thereof as of such date.          “Indemnified Taxes” means Taxes other than Excluded Taxes.          “Indemnitee” has the meaning specified in Section 9.04(b).          “Information” has the meaning specified in Section 9.07.          “Intellectual  Property”  means  all  present  and  future:   trade  secrets,  know-how  and  other  proprietary information; trademarks, trademark applications, internet domain names, service marks, trade  dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations  and  combinations  of  the  foregoing)  indicia  and  other  source  and/or  business  identifiers,  and  all  registrations  or  applications  for  registrations  which  have  heretofore  been  or  may  hereafter  be  issued  thereon throughout the world; copyrights and copyright applications; (including copyrights for computer  programs) and  all  tangible  and  intangible  property  embodying  the  copyrights,  unpatented  inventions                                             -22-  

 

   (whether or not patentable); patents and patent applications; industrial design applications and registered  industrial  designs;  license  agreements  related  to  any  of  the  foregoing  and  income  therefrom;  books,  records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source  codes, object codes, executable code, data, databases and other physical manifestations, embodiments or  incorporations  of  any  of  the  foregoing;  all  other  intellectual  property;  and  all  common  law  and  other  rights throughout the world in and to all of the foregoing.          “Interest  Payment  Date”  means:  (a)  as  to  any  LIBO  Rate  Loan,  the  last  day  of  each  Interest  Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a  LIBO  Rate  Loan  exceeds  three  months,  the  respective  dates  that  fall  every  three  months  after  the  beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan,  the first day after the end of each month and the Maturity Date.          “Interest Period” means, as to each LIBO Rate Loan, the period commencing on the date such  LIBO Rate Loan is disbursed or converted to or continued as a LIBO Rate Loan and ending on the date  one, two, three or six months thereafter, as selected by the Lead Borrower in its Committed Loan Notice;  provided, that:                (a)    any Interest Period that would otherwise end on a day that is not a Business Day         shall be extended to the next succeeding Business Day unless such Business Day falls in another         calendar month, in which case such Interest Period shall end on the next preceding Business Day;                (b)    any Interest Period that begins on the last Business Day of a calendar month (or         on a day for which there is no numerically corresponding day in the calendar month at the end of         such Interest Period) shall end on the last Business Day of the calendar month at the end of such         Interest Period;                 (c)    no Interest Period shall extend beyond the Maturity Date; and                 (d)    notwithstanding  the  provisions  of  clause  (iii)  no  Interest  Period  shall  have  a         duration of less than one (1) month, and if any Interest Period applicable to a LIBO Borrowing         would be for a shorter period, such Interest Period shall not be available hereunder.    For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made  and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.          “Internal  Control  Event”  means  a  material  weakness  in,  or  fraud  that  involves  management  or  other  employees  who  have  a  significant  role  in,  the  Lead  Borrower’s  and/or  its  Subsidiaries’  internal  controls over financial reporting, in each case as described in the Securities Laws.          “In-Transit Inventory” means Inventory of a Borrower which is in the possession of a common  carrier and is in transit from a Foreign Vendor of a Borrower from a location outside of the continental  United States to a location of a Borrower that is within the continental United States.          “Inventory” has the meaning given that term in the UCC.          “Inventory Reserves” means such reserves as may be established from time to time by the Lender  in its Permitted Discretion with respect to the determination of the saleability, at retail, of the Eligible  Inventory, which reflect factors that affect the market value of the Eligible Inventory to the extent not  reflected in Appraised Value or which reflect claims and liabilities that the Lender determines will need to  be satisfied in connection with the realization upon the Inventory.                                             -23-  

 

          “Investment” means, as to any Person, any direct or indirect acquisition or investment by such  Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person,  (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other  acquisition  of  any  other  debt  or  interest  in,  another  Person,  or  (c)  any  Acquisition,  or  (d)  any  other  investment  of  money  or  capital  in  order  to  obtain  a  profitable  return.   For  purposes  of  covenant  compliance, the amount of any Investment shall be the amount actually invested, without adjustment for  subsequent increases or decreases in the value of such Investment.          “IRS” means the United States Internal Revenue Service.          “ISP”  means,  with  respect  to  any  Letter  of  Credit,  the  “International  Standby  Practices  1998”  published by the Institute of International Banking Law & Practice (or such later version thereof as may  be in effect at the time of issuance).          “Issuer Documents” means with respect to any Letter of Credit, the Letter Credit Application, the  Standby Letter of Credit Agreement or Commercial Letter of Credit Agreement, as applicable, and any  other  document, agreement  and  instrument  entered  into  by  the  L/C  Issuer  and  a  Borrower  (or  any  Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of Credit.          “Joinder”  means  an  agreement,  in  form  satisfactory  to  the  Lender,  pursuant  to  which,  among  other things, a Person becomes a party to, and bound by the terms of, this Agreement and/or the other  Loan Documents in the same capacity and to the same extent as either a Borrower or a Guarantor, as the  Lender may determine.          “Landlord Lien State” means such state(s) in which a landlord’s claim for rent may have priority  over the Lien of the Lender in any of the Collateral.          “Laws” means each international, foreign, Federal, state and local statute, treaty, rule, guideline,  regulation,  ordinance,  code  and  administrative  or  judicial  precedent  or  authority,  including  the  interpretation  or  administration  thereof  by  any  Governmental  Authority  charged  with  the  enforcement,  interpretation or administration thereof, and each applicable administrative order, directed duty, license,  authorization and permit of, and agreement with, any Governmental Authority, in each case whether or  not having the force of law.          “L/C  Credit  Extension”  means,  with  respect  to  any  Letter  of  Credit,  the  issuance  thereof  or  extension of the expiry date thereof, or the increase of the amount thereof.          “L/C  Issuer”  means  (a)  solely  with  respect  to  the  Existing  Letters  of  Credit  and  until  such  Existing  Letters  of  Credit  expire  or  are  returned  undrawn,  Wells  Fargo,  and  (b)  in  all  other  instances,  Wells Fargo in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of  Credit hereunder.  The L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to be  issued  by  Affiliates  of  the  L/C  Issuer  and/or  for  such  Affiliate  to  act  as  an  advising,  transferring,  confirming and/or nominated bank in connection with the issuance or administration of any such Letter of  Credit,  in  which case  the term  “L/C  Issuer”  shall  include any  such  Affiliate  with  respect to  Letters  of  Credit issued by such Affiliate.           “L/C  Obligations”  means,  as  at  any  date  of  determination,  the  aggregate  undrawn  amount  available to be drawn under all outstanding Letters of Credit.  For purposes of computing the amounts  available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined  in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a  Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the                                             -24-  

 

   operation of any “rule” under the ISP or any article of UCP 600, such Letter of Credit shall be deemed to  be “outstanding” in the amount so remaining available to be drawn.          “Lead Borrower” has the meaning specified in the introductory paragraph hereto.          “Lease”  means  any  agreement,  whether  written  or  oral,  no  matter  how  styled  or  structured,  pursuant  to  which  a  Loan  Party  is  entitled  to  the  use  or  occupancy  of  any  space  in  a  structure,  land,  improvements or premises for any period of time.          “Lender” has the meaning specified in the introductory paragraph hereto.          “Lender’s Office” means, the office or offices of the Lender’s address and as appropriate, account  as set forth on Schedule 9.02 or such other address or account as the Lender may from time to time notify  the Lead Borrower.          “Letter  of Credit”  means  each  Standby  Letter of Credit and each  Commercial  Letter of Credit  issued hereunder and shall include the Existing Letters of Credit.          “Letter of Credit Application” means an application for the issuance or amendment of a Letter of  Credit in the form from time to time in use by the L/C Issuer.          “Letter of Credit Expiration Date” means the day that is five days prior to the Maturity Date then  in effect (or, if such day is not a Business Day, the next preceding Business Day).          “Letter of Credit Fee” has the meaning specified in Section 2.03(h).          “Letter of Credit Sublimit” means an amount equal to $12,500,000.  The Letter of Credit Sublimit  is part of, and not in addition to, the Revolving Commitment.  A permanent reduction of the Revolving  Commitment  shall  not  require  a  corresponding  pro  rata  reduction  in  the  Letter  of  Credit  Sublimit;  provided, however, that if the Revolving Commitment is reduced to an amount less than the Letter of  Credit Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal to (or, at Lead  Borrower’s option, less than) the Revolving Commitment.          “LIBO Borrowing” means a Borrowing comprised of LIBO Rate Loans.          “LIBO Rate” means, the rate per annum as published by ICE Benchmark Administration Limited  (or any successor page or other commercially available source as the Lender may designate from time to  time) as  of 11:00 a.m.,  London  time,  two  Business Days  prior  to  the commencement  of the  requested  Interest Period, for a term, and in an amount, comparable to the Interest Period and the amount of the  LIBO Rate Loan requested (whether as an initial LIBO Rate Loan or as a continuation of a LIBO Rate  Loan or as a conversion of a Base Rate Loan to a LIBO Rate Loan) by Borrowers in accordance with this  Agreement (and, if any such published rate is below zero, then the rate shall be deemed to be zero). Each  determination of the LIBO Rate shall be made by the Lender and shall be conclusive in the absence of  manifest error.          “LIBO Rate Loan” means a Loan that bears interest at a rate based on the Adjusted LIBO Rate.          “Lien”  means  (a)  any  mortgage,  deed  of  trust,  pledge,  hypothecation,  assignment,  deposit  arrangement,  encumbrance,  lien  (statutory  or  other),  charge,  or  preference,  priority  or  other  security  interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever  (including  any  conditional  sale,  Capital  Lease  Obligation,  Synthetic  Lease  Obligation,  or  other  title                                             -25-  

 

   retention agreement, any easement, right of way or other encumbrance on title to real property, and any  financing lease having substantially the same economic effect as any of the foregoing) and (b) in the case  of securities, any purchase option, call or similar right of a third party with respect to such securities.          “Loan” means, individually, a Revolving Loan or a FILO Loan, and collectively, all Revolving  Loans and FILO Loans.          “Loan Account” has the meaning assigned to such term in Section 2.10(a).          “Loan Cap” means, at any time of determination, (i) the lesser of (a) the Revolving Commitment  and (b) the Revolving Borrowing Base (without giving effect to the FILO Reserve) plus (ii) the lesser of  (a) the FILO Commitment and (b) the FILO Borrowing Base.          “Loan  Documents”  means  this  Agreement,  the First  Amendment,  the  Second  Amendment,  the  Revolving  Note,  the  FILO Note,  each  Issuer  Document,  all  Borrowing  Base  Certificates,  the  Blocked  Account Agreements, the DDA Notifications, the Credit Card Notifications, the Security Documents, any  Facility  Guaranty,  the  Fee  Letter, the  Second  Amendment  Fee  Letter and  any  other  instrument  or  agreement  now  or  hereafter  executed  and  delivered  in  connection  herewith,  or  in  connection  with  any  transaction arising out of any Cash Management Services and Bank Products provided by the Lender or  any of its Affiliates, each as amended and in effect from time to time,          “Loan Parties” means, collectively, the Borrowers and the Guarantors.          “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect  upon, the operations, business, assets, properties, liabilities (actual or contingent), or condition (financial  or otherwise) of the Lead Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the  ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c)  a material impairment of the rights and remedies of the Lender under any Loan Document or a material  adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any  Loan Document to which it is a party.  In determining whether any individual event would result in a  Material  Adverse  Effect,  notwithstanding  that  such  event  in  and  of  itself  does  not  have  such  effect,  a  Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all  other then existing events would result in a Material Adverse Effect.          “Material Contract” means, with respect to any Loan Party, each contract or agreement to which  such Loan Party is a party (a) that is deemed to be a material contract or material definitive agreement  under any Securities Laws applicable to such Loan Party, or (b) under which the Loan Parties receive a  material portion of their revenue in the ordinary course of business.          “Material Indebtedness” means Indebtedness (other than the Obligations) of the Loan Parties in  an  aggregate  principal amount  exceeding  $5,000,000.   For  purposes  of  determining  the  amount  of  Material Indebtedness at any time, (a) the amount of the obligations in respect of any Swap Contract at  such time shall be calculated at the Swap Termination Value thereof, (b) undrawn committed or available  amounts shall be included, and (c) all amounts owing to all creditors under any combined or syndicated  credit arrangement shall be included.          “Maturity Date” means August 3, 2023.          “Maximum Rate” has the meaning provided therefor in Section 9.09.                                             -26-  

 

          “Measurement Period” means, at any date of determination, the most recently completed twelve  (12) Fiscal Months of the Lead Borrower.          “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.          “Multiemployer  Plan”  means  any  employee  benefit  plan  of  the  type  described  in  Section  4001(a)(3) of ERISA, to which the Lead Borrower or any ERISA Affiliate makes or is obligated to make  contributions, or during the preceding five plan years, has made or been obligated to make contributions.          “Net  Proceeds”  means  (a)  with  respect  to  any  Disposition  by  any  Loan  Party  or  any  of  its  Subsidiaries, or any Extraordinary Receipt received or paid to the account of any Loan Party or any of its  Subsidiaries, the excess, if any, of (i) the sum of cash and cash equivalents received in connection with  such transaction (including any cash or cash equivalents received by way of deferred payment pursuant  to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the  sum of (A) the principal amount of any Indebtedness that is secured by a Lien permitted hereunder on the  applicable asset which is senior to the Lender’s Lien on such asset and that is required to be repaid (or to  establish  an  escrow  for  the  future  repayment  thereof)  in  connection  with  such  transaction  (other  than  Indebtedness under the Loan Documents), and (B) the reasonable and customary out-of-pocket expenses  incurred by such Loan Party or such Subsidiary in connection with such transaction (including, without  limitation, appraisals, and brokerage, legal, title and recording or transfer tax expenses, other taxes paid in  cash in connection with the consummation of such transaction, and commissions) paid by any Loan Party  to third parties (other than Affiliates); and (b) with respect to the sale or issuance of any Equity Interest by  any Loan Party or any of its Subsidiaries, or the incurrence or issuance of any Indebtedness by any Loan  Party or any of its Subsidiaries, the excess of (i) the sum of the cash and cash equivalents received in  connection  with  such  transaction  over  (ii)  the  underwriting  discounts  and  commissions,  and  other  reasonable  and  customary  out-of-pocket  expenses,  incurred  by  such  Loan  Party  or  such  Subsidiary  in  connection therewith.          “Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).          “Note” means (a) the Revolving Note, and (b) the FILO Note, as each may be amended, restated,  supplemented or modified from time to time.          “NPL” means the National Priorities List under CERCLA.          “Obligations” means (a) all advances to, and debts (including principal, interest, fees, costs, and  expenses), liabilities, obligations, covenants, indemnities, and duties of, any Loan Party arising under any  Loan Document or otherwise with respect to any Loan or Letter of Credit (including payments in respect  of reimbursement of disbursements, interest thereon and obligations to provide cash collateral therefor),  whether  direct  or  indirect  (including  those  acquired  by  assumption),  absolute  or  contingent,  due  or  to  become due, now existing or hereafter arising and including interest, fees, costs, expenses and indemnities  that  accrue  after  the  commencement  by  or  against  any  Loan  Party  or  any  Affiliate  thereof  of  any  proceeding  under  any  Debtor  Relief  Laws  naming  such  Person  as  the  debtor  in  such  proceeding,  regardless  of  whether such  interest,  fees,  costs,  expenses  and  indemnities  are  allowed  claims  in  such  proceeding, and (b) any Other Liabilities; provided that the Obligations shall not include any Excluded  Swap Obligations.          “OFAC”  means  the  Office  of  Foreign  Assets  Control  of  the  United  States  Department  of  the  Treasury.                                             -27-  

 

          “Organization Documents” means, (a) with respect to any corporation, the certificate or articles  of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any  non-U.S.  jurisdiction);  (b)  with  respect  to  any  limited  liability  company,  the  certificate  or  articles  of  formation or organization and operating agreement; and (c) with respect to any partnership, joint venture,  trust  or  other  form  of  business  entity,  the  partnership,  joint  venture  or  other  applicable  agreement  of  formation  or  organization  and  any  agreement,  instrument,  filing  or  notice  with  respect  thereto  filed  in  connection  with  its  formation  or  organization  with  the  applicable  Governmental  Authority  in  the  jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or  organization of such entity.          “Other  Liabilities”  means  (a)  any  obligation on account of (i)  any  Cash  Management  Services  furnished  to  any  of  the  Loan  Parties  or  any  of  their  Subsidiaries  and/or  (ii)  any  transaction  with  the  Lender or any of its Affiliates that arises out of any Bank Product entered into with any Loan Party and  any such Person, as each may be amended from time to time.           “Other  Taxes”  means  all  present  or  future  stamp  or  documentary  taxes  or  any  other  excise  or  property taxes, charges or similar levies arising from any payment made hereunder or under any other  Loan  Document  or  from  the  execution,  delivery  or  enforcement  of,  or  otherwise  with  respect  to,  this  Agreement or any other Loan Document.          “Outstanding Amount” means (i) with respect to Loans on any date, the aggregate outstanding  principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans  occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C  Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any  other changes in the aggregate amount of the L/C Obligations as of such date.          “Overadvance”  means  a  Credit  Extension  to  the  extent  that,  immediately  after  its  having  been  made, Availability is less than zero.          “Participant” has the meaning specified in Section 9.06(b).          “Payment  Conditions”  means,  at  the  time  of  determination  with  respect to  any  specified  transaction or payment, that (a) no Default or Event of Default then exists or would arise as a result of  entering into such transaction or the making of such payment, and (b) immediately after giving effect to  such transaction or payment, either (x) (i) the Pro Forma Availability Condition has been satisfied, (ii) the  Trailing Twelve Month Availability Condition has been satisfied, (iii) Availability as of the date of such  transaction or payment will be greater than thirty percent (30%) of the Revolving Loan Cap, and (iv) the  Consolidated Fixed Charge Coverage Ratio for the twelve (12) months immediately preceding the date of  such transaction or payment for which the Lender has received financial statements shall be equal to or  greater than 1.10:1.00 after giving pro forma effect to such transaction or payment as if such transaction  had been entered into or such payment had been made as of the first day of such twelve-month period, or  (y) (i) Pro Forma Excess Availability following, and after giving effect to, such transaction or payment,  will be greater than fifty percent (50%) of the Revolving Loan Cap, (ii) Trailing Twelve Month Excess  Availability following, and after giving effect to, such transaction or payment, will be greater than fifty  percent  (50%)  of  the  Revolving  Loan  Cap,  and  (iii)  Availability  as  of  the  date  of  such  transaction  or  payment will be greater than fifty percent (50%) of the Revolving Loan Cap.  Prior to undertaking any  transaction or payment which is subject to the Payment Conditions, the Loan Parties shall deliver to the  Lender  evidence  of  satisfaction  of  the  conditions  contained  in  clause  (b)  above  on  a  basis  (including,  without  limitation,  giving  due  consideration  to  results  for  prior  periods)  reasonably  satisfactory  to  the  Lender.                                             -28-  

 

          “PBGC” means the Pension Benefit Guaranty Corporation.          “PCAOB” means the Public Company Accounting Oversight Board.          “Pension  Plan”  means  any  “employee  pension  benefit  plan”  (as  such  term  is  defined  in  Section 3(2)  of ERISA),  other  than  a Multiemployer  Plan,  that is  subject  to Title  IV  of ERISA  and  is  sponsored or maintained by the Lead Borrower or any ERISA Affiliate or to which the Lead Borrower or  any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer  or  other  plan  described  in  Section  4064(a)  of  ERISA,  has  made  contributions  at  any  time  during  the  immediately preceding five plan years.          “Permitted  Acquisition”  means  an  Acquisition  in  which  all  of  the  following  conditions  are  satisfied:                (a)    No  Default  or  Event  of  Default  then  exists  or  would  arise  from  the         consummation of such Acquisition;                (b)    Such  Acquisition  shall  have  been  approved  by  the  Board  of  Directors  of  the         Person (or similar governing body if  such Person is not a corporation) which is the subject of         such Acquisition and such Person shall not have announced that it will oppose such Acquisition         or  shall  not  have  commenced  any  action  which  alleges  that  such  Acquisition  shall  violate         applicable Law;                (c)    The  Lead  Borrower  shall  have  furnished  the Lender  with  ten  (10)  days’  prior         written notice of such intended Acquisition and shall have furnished the Lender with a current         draft of the acquisition documents (and final copies thereof as and when executed), a summary of         any  due  diligence  undertaken  by the  Loan  Parties  in  connection  with  such  Acquisition,         appropriate financial statements of the Person which is the subject of such Acquisition, pro forma         projected financial statements for the twelve (12) month period following such Acquisition after         giving effect to such Acquisition (including balance sheets, cash flows and income statements by         month for the acquired Person, individually, and on a Consolidated basis with all Loan Parties),         and such other information as the Lender may reasonably require, all of which shall be reasonably         satisfactory to the Lender;                (d)    Either (i) the legal structure of the Acquisition shall be acceptable to the Lender         in its discretion, or (ii) the Loan Parties shall have provided the Lender with a favorable solvency         opinion from an unaffiliated third party valuation firm reasonably satisfactory to the Lender;                  (e)    After giving effect to the Acquisition, if the Acquisition is an Acquisition of the         Equity  Interests,  a  Loan  Party  shall  acquire  and  own,  directly  or  indirectly,  a  majority  of  the         Equity Interests in the Person being acquired and shall Control a majority of any voting interests         or shall otherwise Control the governance of the Person being acquired;                (f)    Any assets acquired shall be utilized in, and if the Acquisition involves a merger,         consolidation  or  Acquisition  of  Equity  Interests,  the  Person  which  is  the  subject  of  such         Acquisition shall be engaged in, a business otherwise permitted to be engaged in by a Borrower         under this Agreement;                (g)    If  the  Person  which  is  the  subject  of  such  Acquisition  will  be  maintained  as  a         Subsidiary  of  a  Loan  Party,  or  if  the  assets  acquired  in  an  acquisition  will  be  transferred  to  a         Subsidiary  which  is  not  then  a  Loan  Party,  such  Subsidiary  shall  have  been  joined  as  a                                             -29-  

 

          “Borrower” hereunder or as a Guarantor, as the Lender shall determine, and the Lender shall have         received  a  first  priority  security  interest  in  such  Subsidiary’s  Equity  Interests,  Inventory,         Accounts,  and  other  personal  property  of  the  same  nature  as  constitutes  collateral  under  the         Security Documents;                (h)    [Reserved]; and                (i)    The Loan Parties shall have satisfied the Payment Conditions.          “Permitted  Discretion”  means  a  determination  made  in  good  faith  and  in  the  exercise  of  reasonable (from the perspective of a secured, asset-based lender in the retail industry) business or credit  judgment.          “Permitted Disposition” means any of the following:                (a)    Dispositions of inventory in the ordinary course of business;                (b)    bulk  sales  or  other  Dispositions  of  the  Inventory  of  a  Loan  Party  not  in  the         ordinary course of business in connection with Store closings, at arm’s length; provided, that such         Store closings and related Inventory Dispositions shall not exceed (i) in any Fiscal Year of the         Lead Borrower and its Subsidiaries, ten percent (10%) of the number of the Loan Parties’ Stores         as of the beginning of such Fiscal Year (net of new Store openings in such Fiscal Year) and (ii) in         the aggregate from and after the Second Amendment Effective Date, twenty-five percent (25%)         of the number of the Loan Parties’ Stores in existence as of the Second Amendment Effective         Date (net  of  cumulative  new  Store  openings  since  the Second  Amendment  Effective Date);         provided, further, that all sales of Inventory in connection with Store closings which exceed, in         any Fiscal Year of the Lead Borrower and its Subsidiaries, five percent (5%) of the number of the         Loan  Parties’  Stores  as  of  the  beginning  of  such  Fiscal  Year shall  be  in  accordance  with         liquidation  agreements in  form and  substance  reasonably  satisfactory  to  the  Lender; provided,         however, that the consolidation of Christopher & Banks Stores and CJ Banks Stores into MPW         Stores shall be excluded from such limits set forth in the foregoing provisos; provided, further         that all Net Proceeds received in connection with Store closings and related sales of Inventory are         applied to the Obligations if then required in accordance with Section 2.04 hereof;                (c)    non-exclusive  licenses  of  Intellectual  Property  of  a  Loan  Party  or  any  of  its         Subsidiaries in the ordinary course of business;                (d)    licenses for the conduct of licensed departments within the Loan Parties’ Stores         in the ordinary course of business; provided, that, if requested by the Lender, the Lender shall         have entered into an intercreditor agreement with the Person operating such licensed department         on terms and conditions reasonably satisfactory to the Lender;                (e)    Dispositions of Equipment in the ordinary course of business that is substantially         worn, damaged, obsolete or, in the judgment of a Loan Party, no longer useful or necessary in its         business or that of any Subsidiary and is replaced with similar property having at least equivalent         value;                (f)    sales, transfers and Dispositions among the Loan Parties or by any Subsidiary to         a Loan Party;                                              -30-  

 

                       (g)    sales, transfers and Dispositions by any Subsidiary which is not a Loan Party to  another Subsidiary that is not a Loan Party; and         (h)    as long as no Default or Event of Default then exists or would arise therefrom,  sales of Real Estate of any Loan Party (or sales of any Person or Persons created to hold such  Real  Estate  or  the  Equity  Interests  in  such  Person  or  Persons),  including  sale-leaseback  transactions involving any such Real Estate pursuant to leases on market terms, as long as, (A)  such sale is made for fair market value, (B) the proceeds of such sale are utilized to repay the  Obligations, and (C) in the case of any sale-leaseback transaction permitted hereunder, the Lender  shall  have  received  from  each  such  purchaser  or  transferee  a  Collateral  Access  Agreement  on  terms and conditions reasonably satisfactory to the Lender.   “Permitted Encumbrances” means:         (a)    Liens imposed by law for Taxes that are not yet due or are being contested in  compliance with Section 6.04;         (b)    Carriers’,  warehousemen’s,  mechanics’,  materialmen’s,  repairmen’s  and  other  like Liens imposed by applicable Law, arising in the ordinary course of business and securing  obligations that are not overdue or are being contested in compliance with Section 6.04;         (c)    Pledges and deposits made in the ordinary course of business in compliance with  workers’ compensation, unemployment insurance and other social security laws or regulations,  other than any Lien imposed by ERISA;         (d)    Deposits to secure the performance of bids, trade contracts and leases (other than  Indebtedness),  statutory  obligations,  surety  and  appeal  bonds,  performance  bonds  and  other  obligations of a like nature incurred in the ordinary course of business;          (e)    Liens  in  respect  of  judgments  that  would  not  constitute  an  Event  of  Default  hereunder;         (f)    Easements,  covenants,  conditions,  restrictions,  building  code  laws,  zoning  restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising  in  the  ordinary course  of  business  that  do  not  secure  any  monetary  obligations  and  do  not  materially detract from the value of the affected property or materially interfere with the ordinary  conduct of business of a Loan Party and such other minor title defects or survey matters that are  disclosed by current surveys that, in each case, do not materially interfere with the current use of  the real property;          (g)    Liens existing on the Second Amendment Effective Date and listed on Schedule  7.01 and any Permitted Refinancings thereof;         (h)    Liens on fixed or capital assets acquired by any Loan Party which are permitted  under  clause  (c)  of  the  definition  of  Permitted  Indebtedness  so  long  as  (i)  such  Liens  and  the  Indebtedness  secured  thereby  are  incurred  prior  to  or  within  ninety  (90)  days  after  such  acquisition, (ii) the Indebtedness secured thereby does not exceed the cost of acquisition of such  fixed or capital assets and (iii) such Liens shall not extend to any other property or assets of the  Loan Parties;         (i)    Liens in favor of the Lender;                                      -31-  

 

                (j)    Statutory Liens of landlords and lessors in respect of rent not in default;                (k)    Possessory Liens in favor of brokers and dealers arising in connection with the         acquisition or disposition of Investments owned as of the Second Amendment Effective Date and         Permitted Investments, provided that such liens (a) attach only to such Investments and (b) secure         only obligations incurred in the ordinary course and arising in connection with the acquisition or         disposition of such Investments and not any obligation in connection with margin financing;                 (l)    Liens arising solely by virtue of any statutory or common law provisions relating         to banker’s liens, liens in favor of securities intermediaries, rights of setoff or similar rights and         remedies as to deposit accounts or securities accounts or other funds maintained with depository         institutions or securities intermediaries;                (m)    Liens arising from precautionary UCC filings regarding “true” operating leases         or, to the extent permitted under the Loan Documents, the consignment of goods to a Loan Party;                (n)    voluntary  Liens  on  property  (other  than  property  of  the  type  included  in  the         Borrowing  Base)  in  existence  at  the  time  such  property  is  acquired  pursuant  to  a  Permitted         Acquisition  or on  such property  of a  Subsidiary  of  a  Loan  Party  in  existence  at  the  time  such         Subsidiary  is  acquired  pursuant  to  a  Permitted  Acquisition; provided,  that  such  Liens  are  not         incurred in connection with or in anticipation of such Permitted Acquisition and do not attach to         any other assets of any Loan Party or any Subsidiary; and                (o)    Liens in favor of customs and revenues authorities imposed by applicable Law         arising  in  the  ordinary  course  of  business  in  connection  with  the  importation  of  goods  and         securing obligations that are being contested in good faith by appropriate proceedings, (B) the         applicable  Loan  Party  or  Subsidiary  has  set  aside  on  its  books  adequate  reserves  with  respect         thereto  in  accordance  with  GAAP  and  (C)  such  contest  effectively  suspends  collection  of  the         contested obligation and enforcement of any Lien securing such obligation.          “Permitted Indebtedness” means each of the following as long as no Default or Event of Default  exists or would arise from the incurrence thereof:                (a)    Indebtedness outstanding on the Second Amendment Effective Date and listed on         Schedule 7.03 and any Permitted Refinancing thereof;                (b)    Indebtedness of any Loan Party to any other Loan Party;                (c)    Purchase money Indebtedness of any Loan Party to finance the acquisition of any         personal property consisting solely of fixed or capital assets, including Capital Lease Obligations,         and any Indebtedness assumed in connection with the acquisition of any such assets or secured by         a Lien on any  such assets prior to the acquisition thereof, and Permitted Refinancings thereof;         provided, however, that the aggregate principal amount of Indebtedness permitted by this clause         (c) shall not exceed $5,000,000 at any time outstanding; provided, further, that, if requested by         the Lender, the Loan Parties shall cause the holders of such Indebtedness secured by Real Estate         or  other  personal  property  material  to  the  operation  of  the  Business  to  enter  into  a  Collateral         Access Agreement on terms reasonably satisfactory to the Lender;                (d)    obligations (contingent or otherwise) of any Loan Party or any Subsidiary thereof         existing or arising under any Swap Contract, provided that such obligations are (or were) entered         into by such Person in the ordinary course of business for the purpose of directly mitigating risks                                             -32-  

 

                 associated with fluctuations in interest rates or foreign exchange rates, and not for purposes of  speculation  or  taking  a  “market  view;” provided,  that  the  aggregate  Swap  Termination  Value  thereof shall not exceed $2,000,000 at any time outstanding;         (e)    Contingent  liabilities  under  surety  bonds  or  similar  instruments  incurred  in  the  ordinary course of business in connection with the construction or improvement of Stores or other  Real Estate;          (f)    Indebtedness incurred for the construction or acquisition or improvement of, or to  finance  or  to  refinance,  any  Real  Estate  owned  by  any  Loan  Party  (including  therein  any  Indebtedness incurred in connection with sale-leaseback transactions permitted hereunder and any  Synthetic Lease  Obligations),  provided  that, the  Loan  Parties  shall  cause  the  holders  of  such  Indebtedness  and  the  lessors  under  any  sale-leaseback  transaction  to  enter  into  a  Collateral  Access Agreement on terms reasonably satisfactory to the Lender;         (g)    Indebtedness  with  respect  to  the  deferred  purchase  price  for  any  Permitted  Acquisition, provided that such Indebtedness does not require the payment in cash of principal  (other than in respect of working capital adjustments) prior to the Maturity Date, has a maturity  which  extends  beyond  the  Maturity  Date,  and  is  subordinated  to  the  Obligations  on  terms  reasonably acceptable to the Lender;          (h)    Indebtedness  of  any  Person  that  becomes  a  Subsidiary  of  a  Loan  Party  in  a  Permitted  Acquisition,  which  Indebtedness  is  existing  at  the  time  such  Person  becomes  a  Subsidiary  of  a  Loan  Party  (other  than  Indebtedness  incurred  solely  in  contemplation  of  such  Person’s becoming a Subsidiary of a Loan Party);         (i)    The Obligations; and         (j)    Unsecured  Indebtedness  not  otherwise  specifically  described  herein  in  an  aggregate principal amount not to exceed $10,000,000 at any time outstanding.         “Permitted Investments” means each of the following as long as no Default or Event of  Default exists or would arise from the making of such Investment:         (a)    readily marketable obligations issued or directly and fully guaranteed or insured  by the United States of America or any agency or instrumentality thereof having maturities of not  more than 360 days from the date of acquisition thereof; provided, that the full faith and credit of  the United States of America is pledged in support thereof;         (b)    commercial paper issued by any Person organized under the laws of any state of  the  United  States  of  America  and  rated  at  least  “Prime-1”  (or  the  then  equivalent  grade)  by  Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of  not more than 180 days from the date of acquisition thereof;         (c)    time deposits with, or insured certificates of deposit or bankers’ acceptances of,  any commercial bank that (i) (A) is the Lender or (B) is organized under the laws of the United  States  of  America,  any  state  thereof  or  the  District  of  Columbia  or  is  the  principal  banking  subsidiary of a bank holding company organized under the laws of the United States of America,  any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii)  issues (or the parent of which issues) commercial paper rated as described in clause (c) of this                                      -33-  

 

                 definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with  maturities of not more than 180 days from the date of acquisition thereof;          (d)    Fully  collateralized  repurchase  agreements  with  a  term  of  not more  than  thirty  (30) days for securities described in clause (a) above (without regard to the limitation on maturity  contained  in  such  clause)  and  entered  into  with  a  financial  institution  satisfying  the  criteria  described in clause (c) above or with any primary dealer and having a market value at the time  that such repurchase agreement is entered into of not less than 100% of the repurchase obligation  of such counterparty entity with whom such repurchase agreement has been entered into;          (e)    Investments, classified in accordance with GAAP as current assets of the Loan  Parties,  in  any  money  market  fund,  mutual  fund,  or  other  investment  companies  that  are  registered under the Investment Company Act of 1940, as amended, which are administered by  financial  institutions  that  have  the  highest  rating  obtainable  from  either  Moody’s  or  S&P,  and  which invest solely in one or more of the types of securities described in clauses (a) through (d)  above;         (f)    Investments existing on the Second Amendment Effective Date, and set forth on  Schedule 7.02, but not any increase in the amount thereof or any other modification of the terms  thereof;         (g)    (i)  Investments  by  any  Loan  Party  and  its  Subsidiaries  in  their  respective  Subsidiaries outstanding on the Second Amendment Effective Date, (ii) additional Investments by  any  Loan  Party  and  its  Subsidiaries  in  Loan  Parties  (other  than  the  Lead  Borrower),  (iii)  additional  Investments  by  Subsidiaries  of  the  Loan  Parties  that  are  not  Loan  Parties  in  other  Subsidiaries  that  are  not  Loan  Parties  and  (iv)  so  long  as  no  Default  or  Event  of  Default  has  occurred and is continuing or would result from such Investment and the Payment Conditions are  satisfied, additional Investments by the Loan Parties in wholly-owned Subsidiaries that are not  Loan Parties in an aggregate amount invested after the Second Amendment Effective Date not to  exceed $2,000,000;         (h)    Investments  consisting  of  extensions  of  credit  in  the  nature  of  accounts  receivable  or  notes  receivable  arising  from  the  grant of  trade  credit  in  the  ordinary  course  of  business, and Investments received in satisfaction or partial satisfaction thereof from financially  troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;         (i)    Guarantees constituting Permitted Indebtedness;         (j)    Investments  by  any  Loan Party  in  Swap  Contracts entered  into  in  the  ordinary  course of business and for bona fide business (and not speculative) purposes to protect against  fluctuations in interest rates in respect of the Obligations;         (k)    Investments received in connection with the bankruptcy or reorganization of, or  settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the  ordinary course of business;          (l)    advances  to  officers,  directors  and  employees  of  the  Loan  Parties  and  Subsidiaries  in  the  ordinary  course  of  business  in  an  amount  not  to  exceed  $250,000  to  any  individual at any time or in an aggregate amount not to exceed $500,000 at any time outstanding;         (m)    Investments constituting Permitted Acquisitions;                                       -34-  

 

                (n)    Capital contributions made by any Loan Party to another Loan Party;                 (o)    Investments  in  accordance  with  that  certain  Christopher  &  Banks  Corporation         and Subsidiaries Investment Policy dated December 3, 2014, approved by the Audit Committee         and attached hereto as part of Schedule 7.02; and                (p)    Other Investments not otherwise specifically described herein and not exceeding         $1,000,000 in the aggregate at any time outstanding.   provided, however,  that  notwithstanding  the  foregoing,  no  such  Investments  specified  in  clauses  (a)  through (e) and clauses (o) and (p) shall be permitted unless (i) either (A) no Loans are then outstanding  and,  if  required  hereunder,  all  Letters  of  Credit  required  to  be  Cash  Collateralized,   are  Cash  Collateralized, or (B) the Investment is a temporary Investment pending expiration of an Interest Period  for  a  LIBO  Rate  Loan,  the  proceeds  of  which  Investment  will  be  applied  to  the  Obligations  after  the  expiration of such Interest Period,  and (ii) such Investments shall be pledged to the Lender as additional  collateral for the Obligations pursuant to such agreements as may be reasonably required by the Lender.          “Permitted Refinancing” means, with respect to any Person, any Indebtedness issued in exchange  for,  or  the  net  proceeds  of  which  are  used  to  extend,  refinance,  renew,  replace,  defease  or  refund  (collectively,  to  “Refinance”),  the  Indebtedness  being  Refinanced  (or  previous  refinancings  thereof  constituting  a  Permitted  Refinancing); provided,  that  (a)  the  principal  amount  (or  accreted  value,  if  applicable)  of  such  Permitted  Refinancing  does  not  exceed  the  principal  amount  (or  accreted  value,  if  applicable) of the Indebtedness so Refinanced (plus unpaid accrued interest and premiums thereon and  underwriting discounts, defeasance costs, fees, commissions and expenses), (b) the weighted average life  to maturity of such Permitted Refinancing is greater than or equal to the weighted average life to maturity  of  the  Indebtedness  being  Refinanced  (c)  such  Permitted  Refinancing  shall  not  require  any  scheduled  principal payments  due  prior  to  the  Maturity  Date  if  the  amount  of such  payments  in  any  Fiscal  Year  would  be  greater  than  the  scheduled  principal  payments  due  with  respect  to  the  Indebtedness  so  Refinanced during such Fiscal Year, (d) if the Indebtedness being Refinanced is subordinated in right of  payment to the Obligations under this Agreement, such Permitted Refinancing shall be subordinated in  right of payment to such Obligations on terms at least as favorable to the Credit Parties as those contained  in the documentation governing the Indebtedness being Refinanced, (e) no Permitted Refinancing shall  have  direct  or  indirect  obligors  who  were  not  also  obligors  of  the  Indebtedness  being  Refinanced,  or  greater guarantees or security, than the Indebtedness being Refinanced, (f) such Permitted Refinancing  shall be otherwise on terms not materially less favorable to the Credit Parties than those contained in the  documentation governing the Indebtedness being Refinanced, including, without limitation, with respect  to  financial  and  other  covenants  and  events  of  default,  (g)  the  interest  rate  applicable  to  any  such  Permitted  Refinancing  shall  not  exceed  the  then  applicable  market  interest  rate,  and  (h)  at  the  time  thereof, no Default or Event of Default shall have occurred and be continuing.          “Person” means any natural person, corporation, limited liability company, trust, joint venture,  association, company, partnership, limited partnership, Governmental Authority or other entity.          “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)  established by the Lead Borrower or, with respect to any such plan that is subject to Section 412 of the  Code or Title IV of ERISA, any ERISA Affiliate.          “Prepayment Event” means:                (a)    Any Disposition (including pursuant to a sale and leaseback transaction) of any         property or asset of a Loan Party other than to another Loan Party (provided that any Disposition                                            -35-  

 

          in an amount less than $2,000,000 prior to the occurrence of a Cash Dominion Event shall not be         deemed a Prepayment Event);                (b)    Any casualty or other insured damage to, or any taking under power of eminent         domain or by condemnation or similar proceeding of (and payments in lieu thereof), any property         or asset of a Loan Party in an amount in excess of $2,000,000, unless (i) the proceeds therefrom         are required to be paid to the holder of a Lien on such property or asset having priority over the         Lien  of  the  Lender  or  (ii)  prior  to  the  occurrence  of  a  Cash  Dominion  Event,  the  proceeds         therefrom  are  deposited  into  a  segregated  account  and  utilized  for  purposes  of  replacing  or         repairing the assets in respect of which such proceeds, awards or payments were received within         two hundred and seventy (270) days of the occurrence of the damage to or loss of the assets being         repaired or replaced;                (c)    The  issuance  by  a  Loan  Party  of  any  Equity  Interests,  other  than  any  such         issuance of Equity Interests (i) to a Loan Party, (ii) as consideration for a Permitted Acquisition         or (iii) to any employee, director, or consultant (including under any option plan) (provided that         the issuance by the Loan Parties of any Equity Interests in an amount less than $2,000,000 prior         to the occurrence of a Cash Dominion Event shall not be deemed a Prepayment Event);                 (d)    The incurrence by a Loan Party of any Indebtedness for borrowed money other         than Permitted Indebtedness(provided that the incurrence by the Loan Parties of any Indebtedness         in an amount less than $2,000,000 prior to the occurrence of a Cash Dominion Event shall not be         deemed a Prepayment Event); or                (e)    The receipt by any Loan Party of any Extraordinary Receipts (provided that any         receipt by the Loan Parties of any Extraordinary Receipts in an amount less than $1,000,000 prior         to the occurrence of a Cash Dominion Event shall not be deemed a Prepayment Event).          “Pro  Forma  Availability  Condition” means,  for  any  date  of  calculation  with  respect  to  any  transaction  or  payment,  the  Pro  Forma  Excess  Availability  following,  and  after  giving  effect  to,  such  transaction or payment, will be greater than thirty percent (30%) of the Revolving Loan Cap.          “Pro Forma Excess Availability” means, for any date of calculation, after giving pro forma effect  to the transaction then to be consummated, the projected Availability at all times during any subsequent  projected twelve (12) Fiscal Months.          “Qualified  ECP  Guarantor”  means,  in  respect  of  any  Swap  Obligation,  any  Borrower,  any  Guarantor or any other guarantor of the Obligations that has total assets exceeding $10,000,000 at the  time  such  Swap  Obligation  is  incurred  or  such  other  person  as  constitutes  an  “Eligible  Contract  Participant” (an “ECP”) as that term is defined under the Commodity Exchange Act or any regulations  promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at  such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.          “Real  Estate”  means  all  land,  together  with  the  buildings,  structures,  parking  areas,  and  other  improvements thereon, now or hereafter owned by any Loan Party or subject to any Lease, including all  easements,  rights-of-way,  and  similar  rights  relating  thereto  and  all  leases,  tenancies,  and  occupancies  thereof.          “Receipts and Collections” has the meaning specified in Section 6.13(c).                                             -36-  

 

          “Registered Public Accounting Firm” has the meaning specified by the Securities Laws and shall  be independent of the Lead Borrower and its Subsidiaries as prescribed by the Securities Laws.          “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners,  directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.          “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than  events for which the thirty (30) day notice period has been waived.          “Request  for  Credit  Extension”  means  (a)  with  respect  to  a  Borrowing,  conversion  or  continuation  of  Loans,  a  Committed  Loan  Notice,  and  (b)  with  respect  to  an  L/C  Credit  Extension,  a  Letter of Credit Application and, if required by the L/C Issuer, a Standby Letter of Credit Agreement or  Commercial Letter of Credit Agreement, as applicable.          “Reserves” means all Inventory Reserves, Availability Reserves and the FILO Reserve.          “Responsible  Officer”  means  the  chief  executive  officer,  president,  chief  financial  officer,  treasurer, chief accounting officer, or assistant treasurer of a Loan Party or any of the other individuals  designated in writing to the Lender by an existing Responsible Officer of a Loan Party as an authorized  signatory  of  any  certificate  or  other  document  to  be  delivered  hereunder.   Any  document  delivered  hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have  been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party  and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.          “Restricted  Payment”  means  any  dividend  or  other  distribution  (whether  in  cash,  securities  or  other  property)  with  respect  to  any  capital  stock  or  other  Equity  Interest  of  any  Person  or  any  of  its  Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or  similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation  or termination of any such capital stock or other Equity Interest, or on account of any return of capital to  such Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant  or  other  right  to  acquire  any  such  dividend  or  other  distribution  or  payment.   Without  limiting  the  foregoing, “Restricted Payments” with respect to any Person shall also include all payments made by such  Person with any proceeds of a dissolution or liquidation of such Person.          “Revolving Borrowing Base” means, at any time of calculation, an amount equal to:                (a)    the  face  amount  of  Eligible  Credit  Card  Receivables  multiplied  by  the  Credit         Card Advance Rate;                plus                (b)    the  Cost  of  Eligible  Inventory,  net  of  Inventory  Reserves,  multiplied  by  the         product  of  the  Appraisal  Percentage  multiplied  by  the Appraised  Value  of  Eligible  Inventory         (expressed as a percentage of Cost of Eligible Inventory) (provided that in no event shall Eligible         In-Transit  Inventory  included  in  Eligible  Inventory  included  in  the  Revolving  Borrowing  Base         exceed $7,500,000);                minus                (c)    the FILO Reserve;                                             -37-  

 

                minus                 (d)    the then amount of all Availability Reserves.           “Revolving Commitment” means the obligation of the Lender to (a) make Revolving Loans to the  Borrowers pursuant to Section 2.01(a) and (b) purchase participations in L/C Obligations, in an aggregate  principal amount at any one time outstanding not to exceed $50,000,000, as such amount may be adjusted  from time to time in accordance with this Agreement.          “Revolving Loan” has the meaning set forth in Section 2.01(a).          “Revolving  Loan  Cap”  means,  at  any  time  of determination,  the  lesser  of  (a)  the  Revolving  Commitment and (b) the Revolving Borrowing Base.          “Revolving  Note”  means  a  promissory  note  made  by  the  Borrowers  in  favor  of  the  Lender  evidencing the Revolving Loans made by the Lender, substantially in the form of Exhibit B-1.           “Sanctioned  Entity”  means  (a)  a  country  or  a  government  of  a  country,  (b)  an  agency  of  the  government  of  a  country,  (c)  an  organization  directly  or  indirectly  controlled  by  a  country  or  its  government, or (d) a Person resident in or determined to be resident in a country, in each case of clauses  (a)  through  (d)  that  is  a  target  of  Sanctions,  including  a  target  of  any  country  sanctions  program  administered and enforced by OFAC.          “Sanctioned Person” means, at any time (a) any Person named on the list of Specially Designated  Nationals and Blocked Persons maintained by OFAC (“SDN”), OFAC’s consolidated Non-SDN list or  any other Sanctions-related list maintained by any Governmental Authority, (b) a Person or legal entity  that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d)  any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on  behalf of any such Person or Persons described in clauses (a) through (c) above.          “Sanctions”  means  individually  and  collectively,  respectively,  any  and  all  economic  sanctions,  trade  sanctions,  financial  sanctions,  sectoral  sanctions,  secondary  sanctions,  trade  embargoes  anti- terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered  or  enforced  from  time  to  time  by:   (a)  the  United  States  of  America,  including  those  administered  by  OFAC,  the  U.S.  Department  of  State,  the  U.S.  Department  of  Commerce,  or  through  any  existing  or  future executive order, (b) the United Nations Security Council, or (c) any other Governmental Authority  with  jurisdiction  over  any  Credit  Party  or  any  Loan  Party  or  any  of  their  respective  Subsidiaries  or  Affiliates.          “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,  Inc. and any successor thereto.          “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.          “SEC”  means  the  Securities  and  Exchange  Commission,  or  any  Governmental  Authority  succeeding to any of its principal functions.          “Second Amendment” means that certain Second Amendment to Second Amended and Restated  Credit Agreement entered into by and among the Borrowers, the Lender and the L/C Issuer dated as of  August 3, 2018.                                             -38-  

 

          “Second Amendment Effective Date” means August 3, 2018.          “Second Amendment Fee Letter” means the letter agreement, dated as of August 3, 2018, among  the Borrowers and Lender.          “Securities  Laws”  means  the  Securities  Act  of  1933,  the  Securities  Exchange  Act  of  1934,  Sarbanes-Oxley,  and  the  applicable accounting  and  auditing  principles,  rules,  standards  and  practices  promulgated, approved or incorporated by the SEC or the PCAOB.          “Security  Agreement”  means  the  Security  Agreement  dated  as  of  the  Closing  Date  among  the  Loan  Parties  and  the  Lender,  as  the  same  now  exists  or  may  hereafter  be  amended,  modified,  supplemented, renewed, restated or replaced.           “Security  Documents”  means  the  Security  Agreement,  the  Blocked  Account  Agreements,  the  DDA Notifications, the Credit Card Notifications, and each other security agreement or other instrument  or  document  executed  and  delivered  to  the  Lender  pursuant  to  this  Agreement  or  any  other  Loan  Document granting a Lien to secure any of the Obligations.          “Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity  of the Lead Borrower and its Subsidiaries as of that date determined in accordance with GAAP.          “Solvent” and “Solvency” means, with respect to any Person on a particular date, that on such  date (a) at fair valuation, excluding the impact of intercompany assets and liabilities which are eliminated  in  consolidation,  all of the  properties  and  assets  of such  Person are  greater  than  the  sum  of  the  debts,  including contingent liabilities, of such Person, (b) the present fair saleable value of the properties and  assets of such Person is not less than the amount that would be required to pay the probable liability of  such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its  properties and assets and pay its debts and other liabilities, contingent obligations and other commitments  as they mature in the normal course of business, (d) such Person does not intend to, and does not believe  that it will, incur debts beyond such Person’s ability to pay as such debts mature, and (e) such Person is  not engaged in a business or a transaction, and is not about to engage in a business or transaction, for  which such Person’s properties and assets would constitute unreasonably small capital after giving due  consideration to the prevailing practices in the industry in which such Person is engaged.  The amount of  all guarantees at any time shall be computed as the amount that, in light of all the facts and circumstances  existing at the time, can reasonably be expected to become an actual or matured liability.          “Specified  Event  of  Default”  means  the  occurrence  of  (a)  any  Event  of  Default  described  in  Sections 8.01(f) or (b) the Lender’s exercise of any of its remedies pursuant to Section 8.02 following any  other Event of Default.          “Spot Rate” has the meaning given to such term in Section 1.07 hereof.          “Standby Letter of Credit” means any Letter of Credit that is not a Commercial Letter of Credit  and that (a) is used in lieu or in support of performance guaranties or performance, surety or similar bonds  (excluding appeal bonds) arising in the ordinary course of business, (b) is used in lieu or in support of  stay or appeal bonds, (c) supports the payment of insurance premiums for reasonably necessary casualty  insurance  carried  by  any of  the  Loan  Parties,  or  (d)  supports  payment  or  performance  for  identified  purchases or exchanges of products or services in the ordinary course of business.          “Standby Letter of Credit Agreement” means the Standby Letter of Credit Agreement relating to  the issuance of a Standby Letter of Credit in the form from time to time in use by the L/C Issuer.                                             -39-  

 

          “Stated Amount” means at any time the maximum amount for which a Letter of Credit may be  honored.          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the  number  one  and  the  denominator  of  which  is  the  number  one  minus  the  aggregate  of  the  maximum  reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a  decimal established by the FRB to which the Lender is subject with respect to the Adjusted LIBO Rate,  for  eurocurrency  funding  (currently  referred  to  as  “Eurocurrency  Liabilities”  in  Regulation  D  of  the  Board). Such reserve percentages shall include those imposed pursuant to such Regulation D.  LIBO Rate  Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements  without benefit of or credit for proration, exemptions or offsets that may be available from time to time to  the Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be  adjusted automatically on and as of the effective date of any change in any reserve percentage.          “Store” means any retail store (which may include any owned or leased real property, fixtures,  equipment, inventory and other property related thereto) operated, or to be operated, by any Loan Party.           “Subsidiary”  of  a  Person  means  a  corporation,  partnership,  joint  venture,  limited  liability  company  or  other  business  entity of  which  a  majority  of  the  Equity  Interests  having  ordinary  voting  power  for  the  election  of  directors  or  other  governing  body  are  at  the  time  beneficially  owned,  or  the  management of which is otherwise controlled, directly, or indirectly through one or more intermediaries,  or  both,  by  such  Person.   Unless  otherwise  specified,  all  references  herein  to  a  “Subsidiary”  or  to  “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Loan Party.          “Swap  Contract”  means  (a)  any  and  all  rate  swap  transactions, basis  swaps,  credit  derivative  transactions,  forward  rate  transactions,  commodity  swaps,  commodity  options,  forward  commodity  contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or  forward  bond  or  forward bond price or forward  bond  index  transactions,  interest  rate  options,  forward  foreign  exchange  transactions,  cap  transactions,  floor  transactions,  collar  transactions,  currency  swap  transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar  transactions or any combination of any of the foregoing (including any options to enter into any of the  foregoing), whether or not any such transaction is governed by or subject to any master agreement, and  (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and  conditions of, or governed by, any form of master agreement published by the International Swaps and  Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master  agreement  (any  such  master  agreement,  together  with  any  related  schedules,  a  “Master  Agreement”),  including any such obligations or liabilities under any Master Agreement.          “Swap  Obligation”  means  any  obligation  to pay  or  perform  under  any  agreement,  contract  or  transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange  Act.          “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking  into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a)  for  any  date  on  or  after  the  date  such  Swap  Contracts  have  been  closed  out  and  termination  value(s)  determined  in  accordance  therewith,  such  termination  value(s),  and  (b)  for  any  date  prior  to  the  date  referenced  in  clause  (a),  the  amount(s)  determined  as  the  mark-to-market  value(s)  for  such  Swap  Contracts,  as  determined  based  upon  one  or  more  mid-market  or  other  readily  available  quotations  provided by any recognized dealer in such Swap Contracts (which may include the Lender or any of its  Affiliates).                                             -40-  

 

          “Synthetic  Lease  Obligation”  means  the  monetary  obligation of a  Person  under  (a) a  so-called  synthetic,  off-balance  sheet  or  tax  retention  lease,  or  (b)  an  agreement  for  the  use  or  possession  of  property (including sale and leaseback transactions), in each case, creating obligations that do not appear  on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such  Person,  would  be  characterized  as  the  indebtedness  of  such  Person  (without  regard  to  accounting  treatment).          “Taxes”  means  all  present  or  future  taxes,  levies,  imposts,  duties,  deductions,  withholdings,  assessments,  fees  or  other  charges  imposed  by  any  Governmental  Authority,  including  any  interest,  additions to tax or penalties applicable thereto.          “Termination Date” means the earliest to occur of (i) the Maturity Date,  (ii) the date on which  the  maturity  of  the  Obligations  is  accelerated  (or  deemed  accelerated)  and  the Commitments  are  irrevocably terminated (or deemed terminated) in accordance with Article VIII, or (iii) the termination of  the Commitments in accordance with the provisions of Section 2.05(a) hereof.          “Total  Outstandings”  means  the  aggregate  Outstanding  Amount  of  all  Loans  and  all  L/C  Obligations.          “Total  Revolving  Outstandings”  means  the  aggregate  Outstanding  Amount  of  all  Revolving  Loans and all L/C Obligations.          “Trading with the Enemy Act” has the meaning set forth in Section 9.17.          “Trailing Twelve Month Availability Condition” means, for any date of calculation with respect  to any transaction or payment, the Trailing Twelve Month Excess Availability following, and after giving  effect to, such transaction or payment, will be greater than thirty percent (30%) of the Revolving Loan  Cap.          “Trailing Twelve Month Excess Availability” means, for any date of calculation, after giving pro  forma effect to the transaction then to be consummated, the Average Daily Availability for each of the  twelve (12) Fiscal Months immediately preceding the date of such transaction or payment for which the  Lender has received financial statements.          “Type” means, with respect to a Loan, its character as a Base Rate Loan or a LIBO Rate Loan.          “UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from  time to time in the State of New York; provided, however, that if a term is defined in Article 9 of the  Uniform Commercial Code differently than in another Article thereof, the term shall have the meaning set  forth in Article 9; provided, further, that if by reason of mandatory provisions of law, perfection, or the  effect of perfection or non-perfection, of a security interest in any Collateral or the availability of any  remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than  the State of New York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect  in  such  other  jurisdiction for  purposes  of  the  provisions  hereof  relating  to  such  perfection  or  effect  of  perfection or non-perfection or availability of such remedy, as the case may be.          “UCP 600” means the rules of the Uniform Customs and Practice for Documentary Credits, as  most recently published by the International Chamber of Commerce and in effect as of July 1, 2007 (or  such later version thereof as may be in effect at the time of issuance).          “UFCA” has the meaning specified in Section 9.20(d).                                             -41-  

 

          “UFTA” has the meaning specified in Section 9.20(d).          “UVTA” has the meaning specified in Section 9.20(d).           “Unfunded  Pension  Liability”  means  the  excess  of  a  Pension  Plan’s  benefit  liabilities  under  Section  4001(a)(16)  of  ERISA,  over  the  current  value  of  that  Pension  Plan’s  assets,  determined  in  accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code  for the applicable plan year.          “United States” and “U.S.” mean the United States of America.          “Wells Fargo” means Wells Fargo Bank, National Association and its successors.          1.02  Other Interpretive Provisions.  With reference to this Agreement and each other Loan  Document, unless otherwise specified herein or in such other Loan Document:                (a)    The  definitions  of  terms  herein  shall  apply  equally  to  the  singular  and  plural  forms  of  the  terms  defined.   Whenever  the  context  may  require,  any  pronoun shall  include  the  corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including”  shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to  have  the  same  meaning and effect  as  the  word “shall.”   Unless the context  requires otherwise,  (i) any  definition of or reference to any agreement, instrument or other document (including any Organization  Document) shall be construed as referring to such agreement, instrument or other document as from time  to  time  amended,  restated,  supplemented  or  otherwise  modified  (subject  to  any  restrictions  on  such  amendments,  supplements  or  modifications  set  forth  herein  or  in  any  other  Loan  Document),  (ii)  any  reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the  words  “herein,”  “hereof”  and  “hereunder,”  and  words  of  similar  import  when  used  in  any  Loan  Document, shall be construed to refer to such Loan Document in its entirety and not to any particular  provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules  shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document  in which such references appear, (v) any reference to any law shall include all statutory and regulatory  provisions consolidating, amending replacing or interpreting such law and any reference to any law or  regulation  shall,  unless  otherwise  specified,  refer  to  such  law  or  regulation  as  amended,  modified  or  supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the  same  meaning  and  effect  and  to  refer  to  any  and  all  tangible  and  intangible  assets  and  properties,  including cash, securities, accounts and contract rights.                (b)    In the computation of periods of time from a specified date to a later specified  date,  the  word  “from”  means  “from  and  including;”  the  words  “to”  and  “until”  each  mean  “to  but  excluding;” and the word “through” means “to and including.”                (c)    Section  headings  herein  and  in  the  other  Loan  Documents  are  included  for  convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan  Document.                (d)    Any  reference  herein  or  in  any  other  Loan  Document  to  the satisfaction,  repayment, or payment in full of the Obligations shall mean the repayment in Dollars in full in cash or  immediately  available  funds  (or,  in  the  case  of  contingent  reimbursement  obligations  with  respect  to  Letters of Credit and Bank Products (other than Swap Contracts) and any other contingent Obligations,  providing  Cash  Collateralization  or  other  collateral  as  may  be  requested  by  the  Lender)  of  all  of  the  Obligations (including the payment of any termination amount then applicable (or which would or could                                             -42-  

 

   become applicable as a result of the repayment of the other Obligations) under Swap Contracts) other than  (i)  unasserted  contingent  indemnification  Obligations,  (ii)  any  Obligations  relating  to  Bank  Products  (other than Swap Contracts) that, at such time, are allowed by the applicable Bank Product provider to  remain outstanding without being required to be repaid or Cash Collateralized or otherwise collateralized  as may be requested by the Lender, and (iii) any Obligations relating to Swap Contracts that, at such time,  are  allowed  by  the  applicable  provider  of  such  Swap  Contracts  to  remain  outstanding  without  being  required to be repaid.          1.03  Accounting Terms.                  (a)    Generally.   All  accounting  terms  not  specifically  or  completely  defined  herein  shall be construed in conformity with, and all financial data (including financial ratios and other financial  calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with,  GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with  that  used  in  preparing  the  Audited  Financial  Statements,  except  as  otherwise  specifically  prescribed  herein.                (b)    Changes  in  GAAP.  If  at  any  time  any  change  in  GAAP  would  affect  the  computation  of  any  financial  ratio  or  requirement  set  forth  in  any  Loan  Document,  and   the  Lead  Borrower shall so request, the Lender and the Lead Borrower shall negotiate in good faith to amend such  ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided, that  until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP  prior to such change therein and (ii) the Lead Borrower shall provide to the Lender financial statements  and other documents required under this Agreement or as reasonably requested hereunder setting forth a  reconciliation between calculations of such ratio or requirement made before and after giving effect to  such change in GAAP.          1.04  Rounding.  Any financial ratios required to be maintained by the Borrowers pursuant to  this  Agreement  shall  be  calculated  by  dividing  the  appropriate  component  by  the  other  component,  carrying the result to one place more than the number of places by which such ratio is expressed herein  and  rounding  the  result  up  or  down  to  the  nearest  number  (with  a  rounding-up  if  there  is  no  nearest  number).          1.05  Times of Day.  Unless otherwise specified, all references herein to times of day shall be  references to Eastern time (daylight or standard, as applicable).          1.06  Letter  of  Credit  Amounts.  Unless  otherwise  specified,  all  references  herein  to  the  amount of a Letter of Credit at any time shall be deemed to be the Stated Amount of such Letter of Credit  in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms of any  Issuer  Documents  related  thereto, provides  for  one  or  more  automatic  increases  in  the  Stated  Amount  thereof, the amount of such Letter of Credit shall be deemed to be the maximum Stated Amount of such  Letter of Credit after giving effect to all such increases, whether or not such maximum Stated Amount is  in effect at such time.          1.07  Currency Equivalents Generally.  Any amount specified in this Agreement (other than  in Article II, and Article IX,) or any of the other Loan Documents to be in Dollars shall also include the  equivalent  of  such  amount  in  any  currency  other  than  Dollars,  such  equivalent  amount  thereof  in  the  applicable currency to be determined by the Lender at such time on the basis of the Spot Rate (as defined  below) for the purchase of such currency with Dollars.  For purposes of this Section 1.07, the “Spot Rate”  for a currency means the rate determined by the Lender to be the rate quoted by the Person acting in such  capacity as the spot rate for the purchase by such Person of such currency with another currency through                                            -43-  

 

   its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days  prior to the date of such determination; provided, that the Lender may obtain such spot rate from another  financial institution designated by the Lender if the Person acting in such capacity does not have as of the  date of determination a spot buying rate for any such currency.                                        ARTICLE II                   THE COMMITMENTS AND CREDIT EXTENSIONS          2.01  Loans; Reserves.                  (a)    Subject to the terms and conditions set forth herein, (i) the Lender agrees to make  loans (each such loan, a “Revolving Loan”) to the Borrowers from time to time, on any Business Day  during  the  Availability  Period,  in  an  aggregate  amount  not  to  exceed  at  any  time  outstanding  the  Revolving Loan Cap and (ii) the Lender agrees to make loans (each such loan, a “FILO Loan”) to the  Borrowers from time to time, on any Business Day during the Availability Period, in an aggregate amount  not  to  exceed  at  any  time  outstanding  the FILO Commitment;  subject  in  each  case  to  the  following  limitations:                       (i)    after  giving  effect  to  any  Borrowing,  the  Total  Outstandings  shall  not         exceed the Loan Cap,                        (ii)   after giving effect to any Borrowing, the Total Revolving Outstandings         shall not exceed the Revolving Loan Cap,                        (iii)  after giving effect to any Borrowing, the aggregate Outstanding Amount         of the FILO Loans shall not exceed the FILO Commitment; and                       (iv)   The  Outstanding  Amount  of  all  L/C  Obligations  shall  not  at  any  time         exceed the Letter of Credit Sublimit.    Within  the  limits  of  the Commitments,  and  subject  to  the  other  terms  and  conditions  hereof,  the  Borrowers may  borrow  under  this Section 2.01,  prepay  under Section 2.04,  and  reborrow  under  this  Section 2.01.  Loans may be Base Rate Loans or LIBO Rate Loans, as further provided herein.                (b)    The Inventory Reserves and Availability Reserves as of July 7, 2018 are set forth  in the Borrowing Base Certificate delivered pursuant to Section 4(b) of the Second Amendment.                (c)    The  Lender  shall  have  the  right,  at  any  time  and  from  time  to  time  after  the  Closing Date in its Permitted Discretion to establish, modify or eliminate Reserves.          2.02  Borrowings, Conversions and Continuations of Loans.                (a)    Loans shall be either Base Rate Loans or LIBO Rate Loans as the Lead Borrower  may request subject to and in accordance with this Section 2.02.  Subject to the other provisions of this  Section 2.02, Borrowings of more than one Type may be incurred at the same time.                 (b)    Each Borrowing, each conversion of Loans from one Type to the other, and each  continuation  of  LIBO  Rate  Loans  shall  be  made  upon  the  Lead  Borrower’s  irrevocable  notice  to  the  Lender, which may be given by telephone.  Each such notice must be received by the Lender not later  than 11:00 a.m. (i) two (2) Business Days prior to the requested date of any Borrowing of, conversion to  or continuation of LIBO Rate Loans or of any conversion of LIBO Rate Loans to Base Rate Loans, and                                             -44-  

 

   (ii)  one  (1)  Business  Day  prior  to  the  requested  date  of  any  Borrowing  of  Base  Rate  Loans.   Each  telephonic notice by the Lead Borrower pursuant to this Section 2.02(b) must be confirmed promptly by  delivery  to  the  Lender  of  a  written  Committed  Loan  Notice,  appropriately  completed  and  signed  by  a  Responsible Officer of the Lead Borrower.  Each Borrowing of, conversion to or continuation of LIBO  Rate  Loans  shall  be  in  a  principal  amount  of  $1,000,000  or  a  whole  multiple  of  $500,000  in  excess  thereof.  Except as provided in Section 2.03(c), each Borrowing of or conversion to Base Rate Loans shall  be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed  Loan Notice (whether telephonic or written) shall specify (i) whether the Lead Borrower is requesting a  Borrowing, a conversion of Loans from one Type to the other, or a continuation of LIBO Rate Loans, (ii)  the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a  Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type  of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration  of the Interest Period with respect thereto.  If the Lead Borrower fails to specify a Type of Loan in a  Committed Loan Notice or if the Lead Borrower fails to give a timely notice requesting a conversion or  continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such  automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in  effect with respect to the applicable LIBO Rate Loans.  If the Lead Borrower requests a Borrowing of,  conversion  to,  or  continuation  of  LIBO  Rate  Loans  in  any  such  Committed  Loan  Notice,  but  fails  to  specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month.                (c)    Notwithstanding  anything  to  the  contrary  contained  in  this  Agreement,  the  Borrowers shall not request, and the Lender shall be under no obligation to fund, any Revolving Loan  unless the Borrowers have borrowed the full amount available under the FILO Commitment.  If any FILO  Loan  is  prepaid  in  whole  or  in  part  pursuant  to Section 2.04,  any  Loans  to  the  Borrowers  thereafter  requested  shall  be  FILO  Loans  until  the  maximum  principal  amount  of  the  FILO  Loans  outstanding  equals the FILO Commitment and thereafter shall be Revolving Loans.                (d)    Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if  such Borrowing is the initial Credit Extension, Section 4.01), the Lender shall use reasonable efforts to  make funds available to the Borrowers by no later than 4:00 p.m. on the day of such requested Borrowing  either by (i) crediting the account of the Lead Borrower on the books of Wells Fargo with the amount of  such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to  (and reasonably acceptable to) the Lender by the Lead Borrower.                (e)    The Lender, without the request of the Lead Borrower, may advance any interest,  fee, service charge (including direct wire fees), Credit Party Expenses, or other payment to which any  Credit  Party  is  entitled  from  the  Loan  Parties  pursuant  hereto  or  any  other  Loan  Document  and  may  charge  the  same  to  the  Loan  Account  notwithstanding  that  an  Overadvance  may  result  thereby.   The  Lender shall advise the Lead Borrower of any such advance or charge promptly after the making thereof.   Such  action  on  the  part  of  the  Lender  shall  not  constitute  a  waiver  of  the  Lender’s  rights  and  the  Borrowers’ obligations under Section 2.04(b).  Any amount which is added to the principal balance of the  Loan Account as provided in this Section 2.02(e) shall bear interest at the interest rate then and thereafter  applicable to Base Rate Loans.                (f)    Except  as  otherwise  provided  herein,  a  LIBO  Rate  Loan  may  be  continued  or  converted only on the last day of an Interest Period for such LIBO Rate Loan.  During the existence of a  Default or an Event of Default, no Loans may be requested as, converted to or continued as LIBO Rate  Loans unless the Lender otherwise consents.                (g)    The  Lender  shall  promptly  notify  the  Lead  Borrower  of  the interest  rate  applicable to any Interest Period for LIBO Rate Loans upon determination of such interest rate.  At any                                            -45-  

 

   time that Base Rate Loans are outstanding, the Lender shall notify the Lead Borrower of any change in  the Base Rate promptly following the public announcement of such change.                (h)    After giving effect to all Borrowings, all conversions of Loans from one Type to  the other, and all continuations of Loans as the same Type, there shall not be more than six (6) Interest  Periods in effect with respect to LIBO Rate Loans.                (i)    The Lender and the L/C Issuer shall have no obligation to make any Loan or to  provide any Letter of Credit if an Overadvance would result.  The Lender may, in its discretion, make  Overadvances without the consent of the Borrowers, and the L/C Issuer and the Borrowers and L/C Issuer  shall be bound thereby.  Any Overadvance shall constitute a Loan.  An Overadvance is for the account of  the  Borrowers  and  shall  constitute  a  Base  Rate  Loan  and  an  Obligation  and  shall  be  repaid  by  the  Borrowers in accordance with the provisions of Section 2.04(b).  The making of any such Overadvance  on  any  one  occasion  shall  not  obligate  the  Lender  to  make  or  permit  any  Overadvance  on  any  other  occasion  or  to  permit  such  Overadvances  to  remain  outstanding.  The  making  by  the  Lender  of  an  Overadvance shall not modify or abrogate any of the provisions of Section 2.03 regarding the Lender’s  obligations to purchase participations with respect to Letter of Credits.          2.03  Letters of Credit.                (a)    The Letter of Credit Commitment.                       (i)    Subject  to  the  terms  and  conditions  set  forth  herein,  the  L/C  Issuer         agrees, (1) from time to time on any Business Day during the period from the Closing Date until         the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrowers,         and  to  amend  or  extend  Letters  of  Credit  previously  issued  by  it,  in  accordance  with         Section 2.03(b) below, and (2) to honor drawings under the Letters of Credit; provided, that after         giving  effect  to  any  L/C  Credit  Extension  with  respect  to  any  Letter  of  Credit,  (x)  the  Total         Revolving Outstandings  shall  not  exceed the  Revolving Loan  Cap,  and  (y)  the  Outstanding         Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit.  Each request by         the Lead Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a         representation  by  the  Borrowers  that  the  L/C  Credit  Extension  so  requested  complies  with  the         conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and         subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall         be  fully  revolving,  and  accordingly  the  Borrowers  may,  during  the  foregoing  period,  obtain         Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and         reimbursed.  All Existing Letters of Credit shall be deemed to have been issued pursuant hereto,         and from and after the Closing Date shall be subject to and governed by the terms and conditions         hereof.                       (ii)   No Letter of Credit shall be issued if:                              (A)   subject  to Section (b)(iii),  the  expiry  date  of  such  requested         Standby Letter of Credit would occur more than twelve (12) months after the date of issuance or         last extension, unless the Lender has approved such expiry date; or                              (B)   subject  to Section (b)(iii),  the  expiry  date  of  such  requested         Commercial Letter of Credit would occur more than one hundred and twenty (120) days after the         date of issuance or last extension, unless the Lender has approved such expiry date; or                                             -46-  

 

                              (C)   the expiry  date  of such  requested  Letter  of Credit  would occur         after  the  Letter  of  Credit  Expiration  Date,  unless  either  such  Letter  of  Credit  is  Cash         Collateralized on or prior to the date of issuance of such Letter of Credit (or such later date as to         which the Lender may agree) or the Lender has approved such expiry date.                       (iii)  No  Letter  of  Credit  shall  be  issued  without  the  prior  consent  of  the         Lender if:                               (A)   any order, judgment or decree of any Governmental Authority or         arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of         Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having         the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall         prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or         such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter         of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise         compensated hereunder) not in effect on the Second Amendment Effective Date, or shall impose         upon  the  L/C  Issuer  any  unreimbursed  loss,  cost  or  expense  which  was  not  applicable  on  the         Second Amendment Effective Date and which the L/C Issuer in good faith deems material to it;                               (B)   the issuance of such Letter of Credit would violate one or more         policies of the L/C Issuer applicable to letters of credit generally;                               (C)   such  Letter  of  Credit  is  to  be  denominated  in  a  currency  other         than  Dollars; provided,  that  if  the  L/C Issuer,  in  its  discretion,  issues  a  Letter  of  Credit         denominated  in  a  currency  other  than  Dollars,  all  reimbursements  by  the  Borrowers  of  the         honoring of any drawing under such Letter of Credit shall be paid in Dollars based on the Spot         Rate;                              (D)   such  Letter of  Credit  contains  any  provisions  for  automatic         reinstatement of the Stated Amount after any drawing thereunder.                        (iv)   The L/C Issuer shall not amend any Letter of Credit if (A) the L/C Issuer         would not be permitted at such time to issue such Letter of Credit in its amended form under the         terms  hereof  or  (B)  the  beneficiary  of  such  Letter  of  Credit  does  not  accept  the  proposed         amendment to such Letter of Credit.                (b)    Procedures  for  Issuance  and  Amendment  of  Letters  of  Credit;  Auto-Extension  Letters of Credit.                       (i)    Each Letter  of  Credit  shall  be  issued  or  amended,  as  the  case  may  be,         upon the request of the Lead Borrower delivered to the L/C Issuer (with a copy to the Lender) in         the form of a Letter of Credit Application, appropriately completed and signed by a Responsible         Officer of the Lead Borrower.  Such Letter of Credit Application must be received by the L/C         Issuer and the Lender not later than 11:00 a.m. at least two (2) Business Days (or such other later         date and time as the Lender and the L/C Issuer may agree in a particular instance in their sole         discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the         case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application         shall specify in form and detail satisfactory to the Lender and the L/C Issuer: (A) the proposed         issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount         thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the         documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text                                            -47-  

 

                 of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G)  such  other  matters  as  the  Lender  or  L/C  Issuer may  require.   In  the  case  of  a  request  for  an  amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in  form  and  detail  satisfactory  to  the  Lender  and  the  L/C  Issuer  (A)  the  Letter  of  Credit  to  be  amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the  nature of the proposed amendment; and (D) such other matters as the Lender or the L/C Issuer  may require.  Additionally, the Lead Borrower shall furnish to the L/C Issuer and the Lender such  other  documents  and  information  pertaining  to  such  requested  Letter  of  Credit  issuance  or  amendment,  and  any  Issuer  Documents  (including,  if  requested  by  the  L/C  Issuer,  a  Standby  Letter of Credit Agreement or Commercial Letter of Credit Agreement, as applicable), as the L/C  Issuer or the Lender may require.                (ii)   Promptly after receipt of any Letter of Credit Application, the L/C Issuer  will confirm with the Lender (by telephone or in writing) that the Lender has received a copy of  such Letter of Credit Application from the Lead Borrower and, if not, the L/C Issuer will provide  the Lender with a copy thereof.  Unless the L/C Issuer has received written notice from Lender or  any Loan Party, at least one Business Day prior to the requested date of issuance or amendment  of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV  shall  not  then  be  satisfied  or  unless  the  L/C  Issuer  would  not  be  permitted,  or  would  have  no  obligation, at such time to issue such Letter of Credit under the terms hereof (by reason of the  provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), then, subject to the terms and  conditions  hereof,  the  L/C  Issuer shall,  on  the  requested  date,  issue  a  Letter  of  Credit  for  the  account of the applicable Borrower or enter into the applicable amendment, as the case may be, in  each case in accordance with the L/C Issuer’s usual and customary business practices.                (iii)  If  the  Lead  Borrower  so  requests  in  any  applicable  Letter  of  Credit  Application,  the  L/C  Issuer  may,  in  its  sole  and  absolute  discretion,  agree  to  issue  a  Standby  Letter  of  Credit  that  has  automatic  extension  provisions  (each,  an  “Auto-Extension  Letter  of  Credit”); provided, that any such Auto-Extension Letter of Credit must permit the L/C Issuer to  prevent any such extension at least once in each twelve-month period (commencing with the date  of issuance of such Standby Letter of Credit) by giving prior notice to the beneficiary thereof not  later  than  a  day  (the  “Non-Extension  Notice  Date”)  in  each  such  twelve-month  period  to  be  agreed upon at the time such Standby Letter of Credit is issued.  Unless otherwise directed by the  Lender or the L/C Issuer, the Lead Borrower shall not be required to make a specific request to  the Lender or the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has  been issued, the Lender shall be deemed to have authorized (but may not require) the L/C Issuer  to permit the extension of such Standby Letter of Credit at any time to an expiry date not later  than the Letter of Credit Expiration Date; provided, however, that the Lender shall instruct the  L/C Issuer not to permit any such extension if (A) the L/C Issuer has determined that it would not  be permitted, or would have no obligation, at such time to issue such Standby Letter of Credit in  its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or  (iii) of Section 2.03(a) or otherwise), or (B) the L/C Issuer has received notice (which may be by  telephone  or  in  writing)  on  or  before  the  day  that  is  five  (5)  Business  Days  before  the  Non- Extension Notice Date (1) from the Lender that it has elected not to permit such extension or (2)  from the Lender or the Lead Borrower that one or more of the applicable conditions specified in  Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit  such extension.                (iv)   Promptly after its delivery of any Letter of Credit or any amendment to a  Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C                                      -48-  

 

          Issuer will also deliver to the Lead Borrower and the Lender a true and complete copy of such         Letter of Credit or amendment.                (c)    Drawings and Reimbursements.                       (i)    Upon receipt from the beneficiary of any Letter of Credit of any notice of         a  drawing  under  such  Letter  of  Credit,  the  L/C  Issuer  shall  notify  the  Lead  Borrower  and  the         Lender thereof not less than two (2) Business Days prior to the Honor Date (as defined below);         provided, however, that any  failure to give or delay in giving such notice shall not relieve the         Borrowers of their obligation to reimburse the L/C Issuer and the Lender with respect to any such         payment.  On the date of any payment by the L/C Issuer under a Letter of Credit (each such date,         an  “Honor  Date”),  unless  (i)  the  Lead  Borrower,  in  accordance  with Section  2.02(b),  has         requested  a  Borrowing  of  LIBO  Rate  Loans  to  be  disbursed  on  such  date  to  reimburse  such         payment by the L/C Issuer, or (ii) on or before such date the Borrowers have deposited with the         L/C Issuer cash in an amount sufficient to reimburse such payment by the L/C Issuer and directed         the L/C Issuer that such cash is to be used to satisfy such payment, then the Borrowers shall be         deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in         an amount equal to the amount of such payment, without regard to the minimum and multiples         specified in Section 2.02(b) for the principal amount of Base Rate Loans, and without regard to         whether  the  conditions  set  forth  in Section 4.02 have  been  met.  Any  notice  given  by  the  L/C         Issuer or the Lender pursuant to this Section 2.03(c)(i) may be given by telephone if immediately         confirmed in writing; provided, that the lack of such an immediate confirmation shall not affect         the conclusiveness or binding effect of such notice.                       (ii)   The Lender’s obligation to make Loans to reimburse the L/C Issuer for         amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute         and  unconditional  and  shall  not  be  affected  by  any  circumstance,  including  (A)  any  setoff,         counterclaim,  recoupment,  defense  or  other  right  which  the  Lender  may  have  against  the  L/C         Issuer,  any  Borrower  or  any  other  Person  for  any  reason  whatsoever;  (B)  the  occurrence or         continuance of a Default or Event of Default, or (C) any other occurrence, event or condition,         whether or not similar to any of the foregoing, and without regard to whether the conditions set         forth in Section 4.02 have been met.                (d)    Obligations  Absolute.   The  obligation  of  the  Borrowers  to  reimburse  the  L/C  Issuer for each drawing under each Letter of Credit shall be absolute, unconditional and irrevocable, and  shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including  the following (provided that nothing herein shall prevent any Borrower from pursuing any claim it may  have against the L/C Issuer as provided in Section 2.03(e)):                       (i)    any  lack  of  validity  or  enforceability  of  such  Letter  of  Credit,  this         Agreement, or any other Loan Document;                       (ii)   the  existence  of  any  claim,  counterclaim,  setoff,  defense  or  other  right         that  the  Borrowers  or  any  Subsidiary  may  have  at  any  time  against  any  beneficiary  or  any         transferee of such Letter of Credit (or any Person for whom any  such beneficiary or any such         transferee may be acting), the L/C Issuer or any other Person, whether in connection with this         Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or         instrument relating thereto, or any unrelated transaction;                       (iii)  any  draft,  demand,  certificate  or  other  document  presented  under  such         Letter  of  Credit  proving  to  be  forged,  fraudulent,  invalid  or  insufficient  in  any  respect  or  any                                            -49-  

 

          statement  therein  being  untrue  or  inaccurate  in  any  respect;  or  any loss  or  delay  in  the         transmission or otherwise of any document required in order to make a drawing under such Letter         of Credit;                       (iv)   any  payment  by  the  L/C  Issuer  under  such  Letter  of  Credit  against         presentation of a draft or certificate that does not strictly comply with the terms of such Letter of         Credit;  or  any  payment  made  by  the  L/C  Issuer  under  such  Letter  of  Credit  to  any  Person         purporting  to  be  a  trustee  in  bankruptcy,  debtor-in-possession,  assignee  for  the  benefit  of         creditors,  liquidator,  receiver  or  other  representative  of  or  successor  to  any  beneficiary  or  any         transferee of such Letter of Credit, including any arising in connection with any proceeding under         any Debtor Relief Law;                        (v)    any other circumstance or happening whatsoever, whether or not similar         to  any  of  the  foregoing,  including  any  other  circumstance  that  might  otherwise  constitute  a         defense available to, or a discharge of, the Borrowers or any of their Subsidiaries; or                       (vi)   the fact that any Default or Event of Default shall have occurred and be         continuing.          The Lead Borrower shall promptly examine a copy of each Letter of Credit and each amendment  thereto that is delivered to it and, in the event of any claim of noncompliance with the Lead Borrower’s  instructions  or  other  irregularity,  the  Lead  Borrower  will  immediately  notify  the  Lender  and  the  L/C  Issuer.   The  Borrowers  shall  be  conclusively  deemed  to  have  waived  any  such  claim  against  the  L/C  Issuer and its correspondents unless such notice is given as aforesaid.                (e)    Role  of  L/C  Issuer.   The  Lender  and the  Borrowers  agree  that,  in  paying  any  drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document  (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to  ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person  executing or delivering any such document.  None of the L/C Issuer, the Lender, any of their respective  Related  Parties  nor  any  correspondent,  participant or  assignee  of  the  L/C  Issuer  shall  be  liable  to  the  Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the  Lender,  as  applicable;  (ii)  any  action  taken  or  omitted  in  the  absence  of  gross  negligence  or willful  misconduct; (iii) any error, omission, interruption, loss or delay in transmission or delivery of any draft,  notice or other communication under or relating to any Letter of Credit or any error in interpretation of  technical  terms;  or  (iv)  the  due execution,  effectiveness,  validity  or  enforceability  of  any  document  or  instrument related to any Letter of Credit or Issuer Document.  The Borrowers hereby assume all risks of  the  acts  or  omissions  of  any  beneficiary  or  transferee  with  respect  to  its  use of  any  Letter  of  Credit;  provided, however,  that  this  assumption  is  not  intended  to,  and  shall  not,  preclude  the  Borrowers’  pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any  other  agreement.   None  of the  L/C  Issuer,  the  Lender,  any  of  their  respective  Related  Parties  nor  any  correspondent,  participant  or  assignee  of  the  L/C  Issuer  shall  be  liable  or  responsible  for  any  of  the  matters described in clauses (i) through (v) of Section 2.03(d) or for any action, neglect or omission under  or  in  connection  with  any  Letter  of  Credit  or  Issuer  Documents,  including,  without  limitation,  the  issuance or any amendment of any Letter of Credit, the failure to issue or amend any Letter of Credit, or  the  honoring  or  dishonoring  of  any  demand  under  any  Letter  of  Credit,  and  such  action  or  neglect  or  omission  will  bind  the  Borrowers; provided, however,  that anything  in Section  2.03(d) to  the  contrary  notwithstanding, but subject to any applicable rules of the ISP and the UCP 600, the Borrowers may have  a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrowers, to the extent, but only  to the extent, of any direct, as opposed to consequential, exemplary or punitive damages suffered by the  Borrowers  which  the  Borrowers  prove  were  caused  by  the  L/C  Issuer’s  willful  misconduct  or  gross                                            -50-  

 

   negligence  in  (A)  making  payment  under  any  Letter  of  Credit  against  presentation  of  a  draft  or  other  document that on its face does not comply with the terms of such Letter of Credit, or (B) failing to pay  under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s)  strictly complying with the terms and conditions of a Letter of Credit; provided, further, that any claim  against  the  L/C  Issuer  by  the  Borrowers  for  any  loss  suffered  or  incurred  by  the  Borrowers  shall  be  reduced by an amount equal to the sum of (i) the amount (if any) saved by the Borrowers as a result of the  breach or other wrongful conduct that allegedly caused such loss, and (ii) the amount (if any) of the loss  that  would  have  been  avoided  had  the  Borrowers  taken  all  reasonable  steps  to  mitigate  such  loss,  including, without limitation, by enforcing their rights against any beneficiary and, in case of a claim of  wrongful  dishonor,  by  specifically  and  timely  authorizing  the  L/C  Issuer  to  cure  such  dishonor.   In  furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on  their  face  to  be  in  order,  without  responsibility  for  further  investigation,  regardless  of  any  notice  or  information  to  the  contrary  (or  the  L/C  Issuer  may  refuse  to  accept  and  make  payment  upon  such  documents if such documents are not in strict compliance with the terms of such Letter of Credit), and the  L/C  Issuer  shall  not  be  responsible  for  the  validity  or  sufficiency  of  any  instrument  transferring  or  assigning  or  purporting  to  transfer  or  assign  a  Letter  of  Credit  or  the  rights  or  benefits  thereunder  or  proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.  The  L/C Issuer shall not be responsible for the wording of any Letter of Credit (including, without limitation,  any drawing conditions or any terms or conditions that are ineffective, ambiguous, inconsistent, unduly  complicated  or  reasonably  impossible  to  satisfy),  notwithstanding  any  assistance  the  L/C  Issuer  may  provide to the Borrowers with drafting or recommending text for any Letter of Credit Application or with  the structuring of any transaction related to any Letter of Credit, and the Borrowers hereby acknowledge  and  agree  that  any  such  assistance  will  not  constitute  legal  or  other  advice  by  the  L/C  Issuer  or  any  representation  or  warranty  by  the  L/C  Issuer  that  any  such  wording  or  such Letter  of  Credit  will  be  effective.  Without limiting the foregoing, the L/C Issuer may, as it deems appropriate, modify or alter  and use in any Letter of Credit the terminology contained on the Letter of Credit Application for such  Letter of Credit.                (f)    Cash Collateral.   Upon  the  request  of  the  Lender,  (i)  if  the  L/C  Issuer  has  honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an  L/C Obligation not paid in cash by the Borrowers or by a Loan in accordance with Section 2.03(c)(i), or  (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding,  the Borrowers shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C  Obligations.  Sections 2.04(b) and 8.02(c) set  forth  certain  additional  requirements  to  deliver  Cash  Collateral  hereunder.   For  purposes  of  this Section 2.03, Section 2.04(b) and Section 8.02(c),  “Cash  Collateralize” means to pledge and deposit with or deliver to the Lender, for its benefit and the benefit of  the L/C Issuer and the Lender, as collateral for the L/C Obligations, cash or deposit account balances in  an amount equal to 105% of the Outstanding Amount of all L/C Obligations (other than L/C Obligations  with respect to Letters of Credit denominated in a currency other than Dollars, which L/C Obligations  shall  be  Cash  Collateralized  in  an  amount  equal  to  115%  of  the  Outstanding  Amount  of  such  L/C  Obligations),  pursuant  to  documentation  in  form  and  substance  satisfactory  to  the  Lender  and  the  L/C  Issuer.  The Borrowers hereby grant to the Lender a security interest in all such cash, deposit accounts and  all  balances  therein  and  all  proceeds  of  the  foregoing.   Cash  Collateral  shall  be  maintained  in  a  Cash  Collateral Account at Wells Fargo.  If  at any time the Lender determines that any  funds held as Cash  Collateral are subject to any right or claim of any Person other than the Lender or that the total amount of  such  funds  is  less  than  the  aggregate  Outstanding  Amount  of  all  L/C  Obligations,  the  Borrowers  will,  forthwith upon demand by the Lender, pay to the Lender, as additional funds to be deposited as Cash  Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total  amount of funds, if any, then held as Cash Collateral that the Lender determines to be free and clear of  any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit as                                             -51-  

 

   Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse  the L/C Issuer and, to the extent not so applied, shall thereafter be applied to satisfy other Obligations.                (g)    Applicability  of  ISP  and  UCP  600.   Unless  otherwise  expressly  agreed  by  the  L/C  Issuer  and  the  Lead  Borrower  when  a  Letter  of  Credit  is  issued  (including  any  such  agreement  applicable to an Existing Letter of Credit), the rules of the UCP 600 shall apply to each Letter of Credit,  provided that solely to the extent the rules of the UCP 600 do not address an issue relating to a Standby  Letter of Credit, the rules of the ISP shall apply.                (h)    Letter of Credit Fees.  The Borrowers shall pay to the Lender a Letter of Credit  fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Margin times the daily  Stated Amount under each such Letter of Credit (whether or not such maximum amount is then in effect  under such Letter of Credit).  For purposes of computing the daily amount available to be drawn under  any  Letter  of  Credit,  the  amount  of  the  Letter  of  Credit  shall  be  determined  in  accordance  with  Section 1.06.  Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of  each month commencing with the first such date to occur after the issuance of such Letter of Credit and  thereafter  on  demand,  and  (ii)  computed  on  a  monthly  basis  in  arrears.   If  there  is  any  change  in  the  Applicable Margin during any quarter, the daily amount available to be drawn under of each Letter of  Credit shall be computed and multiplied by the Applicable Margin separately for each period during such  quarter that such Applicable Margin was in effect.  Notwithstanding anything to the contrary contained  herein, while any Event of  Default exists, all Letter of Credit Fees shall accrue at the Default Rate as  provided in Section 2.07(b) hereof.                (i)    Documentary  and  Processing  Charges  Payable  to  L/C  Issuer.   The  Borrowers  shall pay directly to the L/C Issuer, for its own account, the customary issuance, presentation, amendment  and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of  credit as from time to time in effect.  Such customary fees and standard costs and charges are due and  payable on demand and are nonrefundable.                (j)    Conflict with Issuer Documents.  In the event of any conflict between the terms  hereof and the terms of any Issuer Document, the terms hereof shall control.          2.04  Prepayments.                  (a)    The  Borrowers  may,  upon  irrevocable  notice  from  the  Lead  Borrower  to  the  Lender, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or  penalty; provided, that (i) such notice must be received by the Lender not later than 11:00 a.m. (A) two  (2)  Business  Days  prior  to  any  date  of  prepayment  of  LIBO  Rate  Loans  and  (B)  on  the  date  of  prepayment of Base Rate Loans; (ii) any prepayment of LIBO Rate Loans shall be in a principal amount  of $1,000,000 or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate  Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in  each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the  date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if LIBO Rate Loans, the  Interest Period(s) of such Loans.  If such notice is given by the Lead Borrower, the Borrowers shall make  such prepayment and the payment amount specified in such notice shall be due and payable on the date  specified therein.  Any prepayment of a LIBO Rate Loan shall be accompanied by all accrued interest on  the  amount prepaid,  together  with  any  additional  amounts  required  pursuant  to Section 3.05.   All  payments pursuant to this Section 2.04(a) shall first be applied to the Revolving Loans, and upon payment  of the Revolving Loans in full, shall be applied next to the FILO Loans.                                             -52-  

 

                (b)    If  for  any  reason  the  Total Revolving Outstandings  at  any  time  exceed  the  Revolving Loan  Cap  as  then  in  effect,  the  Borrowers  shall  immediately  prepay the  Revolving Loans  and/or  Cash Collateralize the  L/C  Obligations  in  an aggregate amount  equal to  such excess; provided,  however, that the Borrowers shall not be required to Cash Collateralize the L/C Obligations pursuant to  this Section 2.04(b) unless,  after  the  prepayment  in  full  of  the  Revolving  Loans  the  Total  Revolving  Outstandings exceed the Revolving Loan Cap as then in effect.  If for any reason the Total Outstandings  exceed the  Loan  Cap,  the  Borrowers  shall  immediately  prepay  the  Loans  in  an  aggregate  amount  necessary to eliminate such excess, which amounts shall be applied in the following order: (i) first, the  principal amount of the Revolving Loans, (ii) second, if there remains an excess after payments  made  under clause (i) above, the principal amount of the FILO Loans, and (iii) third, if there remains an excess  after the payments made under clauses (i) and (ii) above, to Cash Collateralize the L/C Obligations.                (c)    If for any reason the aggregate Outstanding Amount of the FILO Loans at any  time exceeds the FILO Commitment as then in effect, the Borrowers shall, after making any payments  required pursuant to Section 2.04(b), immediately repay the FILO Loans in an aggregate amount equal to  such excess.                (d)    After the occurrence and during the continuance of a Cash Dominion Event, the  Borrower  shall  prepay  the  Loans  and  Cash  Collateralize  the  L/C  Obligations  with  proceeds  and  collections received by the Loan Parties to the extent so required under the provisions of Section 6.13  hereof.                  (e)    The  Borrowers  shall  prepay  the  Loans  in  an  amount  equal  to  the  Net  Cash  Proceeds received by a Loan Party on account of a Prepayment  Event, irrespective of whether a Cash  Dominion Event then exists and is continuing, and, if an Event of Default has occurred and is continuing,  apply any remaining Net Cash Proceeds to the Cash Collateralization of the L/C Obligations.                (f)    Prepayments  made  pursuant  to Section 2.04(d) and (e) above,  first,  shall  be  applied ratably to the outstanding Revolving Loans, second, shall be applied ratably to the outstanding  FILO  Loans,  third,  shall  be  used  to  Cash  Collateralize  the  remaining  L/C  Obligations  if  an  Event  of  Default has occurred and is continuing, and, fourth, the amount remaining, if any, after the prepayment in  full of Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in  full may be retained by the Borrowers for use in the ordinary course of its business.  Upon the drawing of  any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied  (without any further action by or notice to or from the Borrowers or any other Loan Party) to reimburse  the L/C Issuer or the Lender, as applicable.          2.05  Termination or Reduction of the Commitment.                  (a)    The  Borrowers  may,  upon  irrevocable  notice  from  the  Lead  Borrower  to  the  Lender,  terminate  the Revolving Commitment  or  the  Letter  of  Credit  Sublimit  or  from  time  to  time  permanently reduce the Revolving Commitment or the Letter of Credit Sublimit; provided, that (i) any  such notice shall be received by the Lender not later than 11:00 a.m. five (5) Business Days prior to the  date  of  termination  or  reduction,  (ii)  any  such  partial  reduction  shall  be  in  an  aggregate  amount  of  $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not terminate  or  reduce  (A)  the Revolving Commitment  if,  after  giving  effect  thereto  and  to  any  concurrent  prepayments hereunder, the Total Revolving Outstandings would exceed the Revolving Commitment and  (B)  the  Letter  of  Credit  Sublimit  if,  after  giving  effect  thereto,  the  Outstanding  Amount  of  L/C  Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit.                                             -53-  

 

                (b)    If,  after  giving effect  to  any  reduction  of  the Revolving Commitment  or  the  Letter  of  Credit  Sublimit,  the  Letter  of  Credit  Sublimit  exceeds  the  amount  of  the Revolving  Commitment, such Letter of Credit Sublimit shall be automatically reduced by the amount of such excess.                  (c)    In the event that the Revolving Commitment is terminated or reduced to zero, the  FILO Commitment shall automatically be terminated.                (d)    All  fees  (including,  without  limitation,  commitment  fees  and  Letter  of  Credit  Fees) and interest in respect of the Revolving Commitment or FILO Commitment, as applicable, accrued  until the effective date of any termination of the Commitments shall be paid on the effective date of such  termination.          2.06  Repayment of Loans.  The Borrower shall repay to the Lender on the Termination Date  the aggregate principal amount of Loans outstanding on such date.          2.07  Interest.                (a)    Subject  to  the  provisions  of Section 2.07(b) below,  (i)  each  LIBO  Rate  Loan  shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum  equal to the Adjusted LIBO Rate for such Interest Period plus the Applicable Margin; and (ii) each Base  Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing  date at a rate per annum equal to the Base Rate plus the Applicable Margin.                (b)    (i)    If any amount payable under any Loan Document is not paid when due         (without regard to any applicable grace periods), whether at stated maturity, by acceleration or         otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all         times equal to the Default Rate to the fullest extent permitted by applicable Laws.                       (ii)   If  any  other  Event  of  Default  exists,  at  the  option  of  the  Lender  all         outstanding  Obligations  shall  bear  interest  at  a  fluctuating  interest  rate  per  annum  at  all  times         equal to the Default Rate to the fullest extent permitted by applicable Laws.                       (iii)  Accrued and unpaid interest on past due amounts (including interest on         past due interest) shall be due and payable upon demand.                (c)    Interest  on  each  Loan  shall  be  due  and  payable  in  arrears  on  each  Interest  Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder  shall be due and payable in accordance with the terms hereof before and after judgment, and before and  after the commencement of any proceeding under any Debtor Relief Law.          2.08  Fees.  In addition to certain fees described in Sections 2.03(h) and 2.03(i):                (a)    Revolving Commitment  Fee.   The  Borrowers  shall  pay  to  the  Lender  a  commitment fee calculated on a per annum basis equal to 0.250% times the actual daily amount by which  the Revolving Commitment exceeds the Total Revolving Outstandings during the immediately preceding  Fiscal Quarter.  The commitment fee shall accrue at all times during the Availability Period, including at  any time during which one or more of the conditions in Article IV is not met, and shall be calculated and  due and payable quarterly in arrears on the first day after the end of each Fiscal Quarter, commencing  with the first such date to occur after the Closing Date, and on the last day of the Availability Period.                                             -54-  

 

                (b)    FILO Commitment Fee.  The Borrowers shall pay to the Lender a commitment  fee calculated on a per annum basis equal to 0.250% times the actual daily amount by which the FILO  Commitment  exceeds  the  Outstanding  Amount  of  the  FILO  Loans  during  the  immediately  preceding  Fiscal Quarter.  The commitment fee shall accrue at all times during the Availability Period, including at  any time during which one or more of the conditions in Article IV is not met, and shall be calculated and  due and payable quarterly in arrears on the first day after the end of each Fiscal Quarter, commencing  with the first such date to occur after the Second Amendment Effective Date, and on the last day of the  Availability Period.                (c)    Other Fees.  The Borrower shall pay to the Lender the fees set forth in the Fee  Letter and the Second Amendment Fee Letter in the amounts and at the times specified in the Fee Letter  or Second Amendment Fee Letter, as applicable.  Such fees shall be fully earned when paid and shall not  be refundable for any reason or under any circumstances whatsoever.          2.09  Computation of Interest and Fees.  All computations of fees and interest shall be made  on the basis of a 360-day year and actual days elapsed.  Interest shall accrue on each Loan for the day on  which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the  Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made  shall,  subject  to Section 2.11(a),  bear  interest  for  one  day.   Each  determination  by  the  Lender  of  an  interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.          2.10  Evidence of Debt.                  (a)    The Credit Extensions made by the Lender shall be evidenced by one or more  accounts or records maintained by the Lender (the “Loan Account”) in the ordinary course of business.   The accounts or records maintained by the Lender shall be conclusive absent manifest error of the amount  of the Credit Extensions made by the  Lender to the Borrowers and the interest and payments thereon.   Any  failure  to  so  record  or  any  error  in  doing  so  shall not,  however,  limit  or  otherwise  affect  the  obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations.  Upon  the  request  of  the  Lender,  the  Borrowers  shall  execute  and  deliver  to  the  Lender  a  Note,  which  shall  evidence the Lender’s Loans in addition to such accounts or records.  The Lender may attach schedules to  the  Note  and  endorse  thereon  the  date,  Type  (if  applicable),  amount  and  maturity  of  the  Loans  and  payments with respect thereto.  Upon receipt of an affidavit of the Lender as to the loss, theft, destruction  or mutilation of the Lender’s Note and upon cancellation of such Note, the Borrowers will issue, in lieu  thereof, a replacement Note in favor of the Lender, in the same principal amount thereof and otherwise of  like tenor.                (b)    Lender shall render monthly statements regarding the Loan Account to the Lead  Borrower  including  principal,  interest,  fees,  and  including  an  itemization  of  all  charges  and  expenses  constituting  Credit  Party  Expenses  owing,  and  such  statements,  absent  manifest  error,  shall  be  conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and  the  Credit  Parties  unless,  within  thirty  (30)  days  after  receipt  thereof  by  the  Lead  Borrower,  the  Lead  Borrower shall deliver to Lender written objection thereto describing the error or errors contained in any  such statements.          2.11  Payments Generally.                (a)    General.   All  payments  to  be  made  by  the  Borrowers  shall  be  made  without  condition  or  deduction  for  any  counterclaim,  defense,  recoupment  or  setoff.   Except  as  otherwise  expressly provided herein, all payments by the Borrowers hereunder shall be made to the Lender, at the  Lender’s  Office  in  Dollars  and  in  immediately  available  funds  not  later  than  2:00  p.m.  on  the  date                                            -55-  

 

   specified herein.  All payments received by the Lender after 2:00 p.m., at the option of the Lender, shall  be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue  to accrue.  If any payment to be made by the Borrowers shall come due on a day other than a Business  Day, payment shall be made on the next following Business Day, and such extension of time shall be  reflected in computing interest or fees, as the case may be.                (b)    Presumptions by Lender.  Unless the Lender shall have received notice from the  Lead Borrower prior to the time at which any payment is due to the Lender or the L/C Issuer hereunder  that the Borrowers will not make such payment, the Lender may assume that the Borrowers have made  such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute  to the L/C Issuer the amount due.  In such event, if the Borrowers have not in fact made such payment,  then the L/C Issuer agrees to repay to the Lender forthwith on demand the amount so distributed to the  L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date  such amount is distributed to it to but excluding the date of payment to the Lender, at the greater of the  Federal Funds Rate and a rate determined by the Lender in accordance with banking industry rules on  interbank compensation.          A  notice  of  the  Lender  to  the  Lead  Borrower  with  respect  to  any  amount  owing  under  this  subsection (b) shall be conclusive, absent manifest error.                (c)    Funding Source.  Nothing herein shall be deemed to obligate the Lender to obtain  the funds for any Loan in any particular place or manner or to constitute a representation by the Lender  that it has obtained or will obtain the funds for any Loan in any particular place or manner.                                        ARTICLE III                   TAXES, YIELD PROTECTION AND ILLEGALITY;                          APPOINTMENT OF LEAD BORROWER          3.01  Taxes.                  (a)    Payments  Free  of  Taxes.   Any  and  all  payments  by  or  on  account  of  any  obligation of the Borrowers hereunder or under any other Loan Document shall be made free and clear of  and  without  reduction  or  withholding  for  any  Indemnified  Taxes  or  Other  Taxes,  provided  that  if  the  Borrowers  shall  be  required  by  applicable  law  to  deduct  any  Indemnified  Taxes  (including  any  Other  Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making  all required deductions (including deductions applicable to additional sums payable under this Section)  the Lender or the L/C Issuer, as the case  may be, receives an amount equal to the sum it would have  received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the  Borrowers  shall  timely  pay  the  full  amount  deducted  to  the  relevant  Governmental  Authority  in  accordance with applicable law.                (b)    Payment of Other Taxes by the Borrowers.  Without limiting the provisions of  subsection  (a)  above,  the  Borrowers  shall  timely  pay  any  Other  Taxes  to  the  relevant  Governmental  Authority in accordance with applicable law.                (c)    Indemnification  by  the  Loan  Parties.   The  Loan  Parties  shall  indemnify  the  Lender  and  the  L/C  Issuer,  within  fifteen  (15)  days  after  demand  therefor,  for  the  full  amount  of  any  Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on  or attributable to amounts payable under this Section) paid by the Lender or the L/C Issuer, as the case  may  be,  and  any  penalties,  interest  and  reasonable  expenses  arising  therefrom  or  with  respect  thereto,  whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by                                            -56-  

 

   the  relevant  Governmental  Authority.   A  certificate  as  to  the  amount  of  such  payment  or  liability  delivered to the Lead Borrower by the Lender or the L/C Issuer, or by the Lender on behalf of the L/C  Issuer, shall be conclusive absent manifest error.                (d)    Evidence of Payments.  As soon as practicable after any payment of Indemnified  Taxes or Other Taxes by the Borrowers to a Governmental Authority pursuant to this Section, the Lead  Borrower  shall  deliver  to  the  Lender  the  original  or  a  certified  copy  of  a  receipt  issued  by  such  Governmental Authority evidencing such payment, a copy of the return reporting such payment or other  evidence of such payment reasonably satisfactory to the Lender.                (e)    Treatment of Certain Refunds.  If the Lender or the L/C Issuer determines, in its  Permitted Discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been  indemnified  by  the  Borrowers  or  with  respect  to  which  the  Borrowers  have  paid  additional  amounts  pursuant to this Section, it shall pay to the Borrowers an amount equal to such refund (but only to the  extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section with  respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the  Lender or the L/C Issuer, as the case may be, and without interest (other than any interest paid by the  relevant  Governmental  Authority  with  respect  to  such  refund),  provided  that  the  Borrowers,  upon  the  request of the Lender or the L/C Issuer, agree to repay the amount paid over to the Borrowers (plus any  penalties, interest or other charges imposed by the relevant Governmental Authority) to the Lender or the  L/C  Issuer  in  the  event  the  Lender  or the  L/C  Issuer  is  required  to  repay  such  refund  to  such  Governmental Authority.  This subsection shall not be construed to require the Lender or the L/C Issuer to  make available its tax returns (or any other information relating to its taxes that it deems confidential) to  the Borrowers or any other Person.          3.02  Illegality.  If the Lender determines that any Change in Law has made it unlawful, or that  any Governmental Authority has asserted that it is unlawful, for the Lender to make, maintain or fund  LIBO  Rate  Loans,  or  to  determine  or  charge  interest  rates  based  upon  the  LIBO  Rate,  or  any  Governmental Authority has imposed material restrictions on the authority of the Lender to purchase or  sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by the Lender  to the Lead Borrower, any obligation of the Lender to make or continue LIBO Rate Loans or to convert  Base Rate Loans to LIBO Rate Loans shall be suspended until the Lender notifies the Lead Borrower that  the  circumstances  giving  rise  to  such  determination  no  longer  exist.   Upon  receipt  of  such  notice,  the  Borrowers shall, upon demand from the Lender, prepay or, if applicable, convert all LIBO Rate Loans of  the Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if the Lender may  lawfully continue to maintain such LIBO Rate Loans to such day, or immediately, if the Lender may not  lawfully  continue  to  maintain  such  LIBO  Rate  Loans.  Upon  any  such  prepayment  or  conversion,  the  Borrowers shall also pay accrued interest on the amount so prepaid or converted.          3.03  Inability  to  Determine  Rates.  If  the  Lender  determines  that  for  any  reason  in  connection  with  any  request  for  a  LIBO  Rate  Loan  or  a  conversion  to  or continuation  thereof that  (a)  Dollar deposits are not being offered to banks in the London interbank market for the applicable amount  and  Interest  Period  of  such  LIBO  Rate  Loan,  (b)  adequate  and  reasonable  means  do  not  exist  for  determining the LIBO Rate for any requested Interest Period with respect to a proposed LIBO Rate Loan,  or (c) the LIBO Rate for any requested Interest Period with respect to a proposed LIBO Rate Loan does  not adequately and fairly reflect the cost to the Lender of funding such Loan, the Lender will promptly so  notify the Lead Borrower.  Thereafter, the obligation of the Lender to make or maintain LIBO Rate Loans  shall be suspended until the Lender revokes such notice.  Upon receipt of such notice, the Lead Borrower  may revoke any pending request for a Borrowing of, conversion to or continuation of LIBO Rate Loans  or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base  Rate Loans in the amount specified therein.                                            -57-  

 

          3.04  Increased Costs; Reserves on LIBO Rate Loans.                  (a)    Increased Costs Generally.  If any Change in Law shall:                       (i)    impose,  modify  or  deem  applicable  any  reserve,  special  deposit,         compulsory loan, insurance charge or similar requirement against assets of, deposits with or for         the  account  of,  or  credit  extended  or  participated  in  by,  the  Lender  (except  any  reserve         requirement reflected in the LIBO Rate) or the L/C Issuer;                        (ii)   subject the Lender or the L/C Issuer to any tax of any kind whatsoever         with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any         LIBO Rate Loan made by it, or change the basis of taxation of payments to the Lender or the L/C         Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01         and the imposition of, or any change in the rate of, any Excluded Tax payable by the Lender or         the L/C Issuer); or                       (iii)  impose on the Lender or the L/C Issuer or the London interbank market         any other condition, cost or expense affecting this Agreement or LIBO Rate Loans made by the         Lender or any Letter of Credit or participation therein;   and the result of any of the foregoing shall be to increase the cost to the Lender of making or maintaining  any LIBO Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to  the  Lender  or  the  L/C  Issuer  of  participating  in,  issuing  or  maintaining  any  Letter  of  Credit  (or  of  maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any  sum received or receivable by the Lender or the L/C Issuer hereunder (whether of principal, interest or  any  other  amount)  then,  upon  request  of  the  Lender  or  the  L/C  Issuer,  the  Borrowers  will  pay  to  the  Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate the  Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.                (b)    Capital  Requirements.   If  the  Lender  or  the  L/C  Issuer  determines  that  any  Change in Law affecting the Lender or the L/C Issuer or the Lender’s Office or the Lender’s or the L/C  Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing  the rate of return on the Lender’s or the L/C Issuer’s capital or on the capital of the Lender’s or the L/C  Issuer’s holding company, if any, as a consequence of this Agreement, the Commitment of the Lender or  the  Loans  made  by,  or  participations  in  Letters  of Credit  held by,  the  Lender,  or  the  Letters  of Credit  issued by the L/C Issuer, to a level below that which the Lender or the L/C Issuer or the Lender’s or the  L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration  the  Lender’s  or  the  L/C  Issuer’s  policies  and  the  policies  of  the  Lender’s  or  the  L/C  Issuer’s  holding  company with respect to capital adequacy), then from time to time the Borrowers will pay to the Lender  or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate the Lender  or the L/C Issuer or the Lender’s or the L/C Issuer’s holding company for any such reduction suffered.                (c)    Certificates  for  Reimbursement.   A  certificate  of  the  Lender  or  the  L/C  Issuer  setting forth the amount or amounts necessary to compensate the Lender or the L/C Issuer or its holding  company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the  Lead Borrower shall be conclusive absent manifest error.  The Borrowers shall pay the Lender or the L/C  Issuer, as the case may be, the amount shown as due on any such certificate within ten (10) days after  receipt thereof.                (d)    Delay in Requests.  Failure or delay on the part of the Lender or the L/C Issuer to  demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of                                            -58-  

 

   the Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrowers shall  not be required to compensate the Lender or the L/C Issuer pursuant to the foregoing provisions of this  Section for any increased costs incurred or reductions suffered more than six (6) months prior to the date  that the Lender or the L/C Issuer, as the case may be, notifies the Lead Borrower of the Change in Law  giving rise to such increased costs or reductions and of the Lender’s or the L/C Issuer’s intention to claim  compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions  is  retroactive,  then  the six-month  period  referred  to  above  shall  be  extended  to  include  the  period  of  retroactive effect thereof).                (e)    Reserves on LIBO Rate Loans.  The Borrowers shall pay to the Lender, as long  as the Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or  including  Eurocurrency  funds  or  deposits  (currently  known  as  “Eurocurrency  liabilities”),  additional  interest on the unpaid principal amount of each LIBO Rate Loan equal to the actual costs of such reserves  allocated to such Loan by the Lender (as determined by the Lender in good faith, which determination  shall be conclusive), which shall be due and payable on each date on which interest is payable on such  Loan,  provided  the  Lead  Borrower  shall  have  received  at  least  ten  (10)  days’  prior  notice  of  such  additional interest from the Lender.  If the Lender fails to give notice ten (10) days prior to the relevant  Interest Payment Date, such additional interest shall be due and payable ten (10) days from receipt of such  notice.          3.05  Compensation  for  Losses.  Upon  demand  of  the  Lender  from  time  to  time,  the  Borrowers shall promptly compensate the Lender for and hold the Lender harmless from any loss, cost or  expense incurred by it as a result of:                (a)    any continuation, conversion, payment or prepayment of any Loan other than a  Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary,  mandatory, automatic, by reason of acceleration, or otherwise); or                (b)    any  failure by  the  Borrowers  to  prepay,  borrow, continue  or convert any  Loan  other than a Base Rate Loan on the date or in the amount notified by the Lead Borrower;    including  any  loss  of  anticipated  profits  and  any  loss  or  expense  arising  from  the  liquidation  or  reemployment  of  funds  obtained  by  it  to  maintain  such  Loan  or from  fees  payable  to  terminate  the  deposits  from  which  such  funds  were  obtained.   The  Borrowers  shall  also  pay  any  customary  administrative fees charged by the Lender in connection with the foregoing.          For  purposes  of  calculating  amounts  payable  by  the  Borrowers  to  the  Lender  under  this  Section 3.05, Lender shall be deemed to have funded each LIBO Rate Loan made by it at the LIBO Rate  for such Loan by a matching deposit or other borrowing in the London interbank market for a comparable  amount and for a comparable period, whether or not such LIBO Rate Loan was in fact so funded.          3.06  Mitigation Obligations; Replacement of Lender.  If the Lender requests compensation  under Section 3.04,  or  the  Borrowers  are  required to  pay  any  additional  amount  to  the  Lender  or  any  Governmental Authority for the account of the Lender pursuant to Section 3.01, or if the Lender gives a  notice  pursuant  to Section 3.02,  then  the  Lender  shall  use  reasonable  efforts  to  designate  a  different  lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder  to  another  of  its  offices,  branches  or  affiliates,  if,  in  the  judgment  of  the  Lender,  such  designation  or  assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case  may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii)  in each case, would not subject the Lender to any unreimbursed cost or expense and would not otherwise                                             -59-  

 

   be disadvantageous to the Lender.  The Borrowers hereby agree to pay all reasonable costs and expenses  incurred by the Lender in connection with any such designation or assignment.          3.07  Survival.  All  of  the  Borrowers’  obligations  under  this Article  III shall  survive  termination of the Commitment and repayment of all Obligations hereunder.          3.08  Designation of Lead Borrower as Borrowers’ Agent.                (a)    Each Borrower hereby irrevocably designates and appoints the Lead  Borrower  as such Borrower’s agent to obtain Credit Extensions, the proceeds of which shall be available to each  Borrower for such uses as are permitted under this Agreement.  As the disclosed principal for its agent,  each Borrower shall be obligated to each Credit Party on account of Credit Extensions so made as if made  directly  by  the  applicable  Credit  Party  to  such  Borrower,  notwithstanding  the  manner  by  which  such  Credit  Extensions  are  recorded  on  the  books  and  records  of  the  Lead  Borrower  and  of  any  other  Borrower.   In  addition,  each  Loan  Party  other  than  the  Borrowers  hereby  irrevocably  designates  and  appoints the Lead  Borrower as such Loan Party’s agent to represent such Loan Party in all respects under  this Agreement and the other Loan Documents.                (b)    Each Borrower recognizes that credit available to it hereunder is in excess of and  on  better  terms  than  it  otherwise  could  obtain  on  and  for  its  own  account  and  that  one  of  the  reasons  therefor is its joining in the credit facility contemplated herein with all other Borrowers.  Consequently,  each Borrower hereby assumes and agrees to discharge all Obligations of each of the other Borrowers.                (c)    The Lead Borrower shall act as a conduit for each Borrower (including itself, as a  “Borrower”) on whose behalf the Lead Borrower has requested a Credit Extension.  Neither the Lender  nor any other Credit Party shall have any obligation to see to the application of such proceeds therefrom.                                        ARTICLE IV                 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS          4.01  Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and the Lender  to  make  its  initial  Credit  Extension  hereunder  is  subject  to  satisfaction  of  the  following  conditions  precedent:                (a)    The  Lender’s  receipt  of  the  following,  each  of  which  shall  be  originals,  facsimiles or other electronic image scan transmission (e.g., “pdf” or “tif” via e-mail) (followed promptly  by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing  Loan Party or the Lender, as applicable, each dated the Closing Date (or, in the case of certificates of  governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory  to the Lender:                       (i)    executed  counterparts  of  this  Agreement  sufficient  in  number  for         distribution to the Lender and the Lead Borrower;                       (ii)   a Note executed by the Borrowers in favor of the Lender;                       (iii)  such  certificates  of  resolutions  or  other  action,  incumbency  certificates         and/or other certificates of Responsible Officers of each Loan Party as the Lender may require         evidencing (A) the authority of each Loan Party to enter into this Agreement and the other Loan         Documents  to  which  such  Loan  Party  is  a  party  or  is  to  become  a  party  and  (B)  the  identity,         authority  and  capacity  of  each  Responsible  Officer  thereof  authorized  to  act  as  a  Responsible                                            -60-  

 

                 Officer in connection with this Agreement and the other Loan Documents to which such Loan  Party is a party or is to become a party;                (iv)   copies  of  each  Loan  Party’s  Organization  Documents  and  such  other  documents and certifications as the Lender may reasonably require to evidence that each Loan  Party is duly organized or formed, and that each Loan Party is validly existing, in good standing  and qualified to engage in business in each jurisdiction where its ownership, lease or operation of  properties  or  the  conduct  of  its  business  requires  such  qualification,  except  to  the  extent  that  failure  to  so  qualify  in  such  jurisdiction  could  not  reasonably  be  expected  to  have  a  Material  Adverse Effect;                (v)    a  favorable  opinion  of  Dorsey  &  Whitney  LLP,  counsel to  the  Loan  Parties, addressed  to  the  Lender, as  to such  matters  concerning  the  Loan  Parties  and  the  Loan  Documents as the Lender may reasonably request;                (vi)   a  certificate  signed  by  a  Responsible  Officer  of  the  Lead  Borrower  certifying (A) that the conditions specified in Sections 4.02(a) and 4.02(b) have been satisfied,  (B)  that  there  has  been  no  event  or  circumstance  since  the  date  of  the  Audited  Financial  Statements  that  has  had  or  could  be  reasonably  expected  to  have,  either  individually  or  in  the  aggregate, a Material Adverse Effect, (C) to the Solvency of the Loan Parties as of the Closing  Date  after  giving  effect  to  the  transactions  contemplated  hereby,  and  (D)  either  that  (1)  no  consents,  licenses  or  approvals  are  required  in  connection  with  the  execution,  delivery  and  performance by such Loan Party and the validity against such Loan Party of the Loan Documents  to which it is a party, or (2) that all such consents, licenses and approvals have been obtained and  are in full force and effect;                (vii)  evidence  that  all  insurance  required  to  be  maintained  pursuant  to  the  Loan Documents and all endorsements in favor of the Lender required under the Loan Documents  have been obtained and are in effect;                (viii) the  Security  Agreement,  the  Blocked  Account  Agreements,  the  DDA  Notifications, the Credit Card Notifications and certificates evidencing any stock being pledged  under  any  of  the  foregoing,  together  with  undated  stock  powers  executed  in  blank,  each  duly  executed by the applicable Loan Parties;                (ix)   all other Loan Documents required to be executed pursuant to the terms  hereof as of such date, each duly executed by the applicable Loan Parties;                (x)    results  of  searches  or  other  evidence  reasonably  satisfactory  to  the  Lender  (in  each  case  dated  as  of  a  date  reasonably satisfactory  to  the  Lender)  indicating  the  absence of Liens on the assets of the Loan Parties, except for Permitted Encumbrances;                (xi)   (A)   all  documents  and  instruments,  including  Uniform  Commercial  Code financing statements, required by law or reasonably requested by the Lender to be filed,  registered or recorded to create or perfect the first priority Liens intended to be created under the  Loan Documents and all such documents and instruments shall have been so filed, registered or  recorded to the satisfaction of the Lender, (B) the DDA Notifications, Credit Card Notifications,  and  Blocked  Account  Agreements  required  pursuant  to Section 6.13 hereof,  (C)  control  agreements with respect to the Loan Parties’ material securities and investment accounts, and (D)  Collateral  Access  Agreements  as  required  by  the  Lender  (but  in  no  case  with  respect  to  any  Store); and                                     -61-  

 

                       (xii)  such  other  assurances,  certificates,  documents,  consents  or  opinions  as         the Lender reasonably may require.                (b)    After giving effect to (i) the first funding under the Loans, (ii) any charges to the  Loan Account made in connection with the establishment of the credit facility contemplated hereby and  (iii) all Letters of Credit to be issued at, or immediately subsequent to, such establishment, Availability  shall be not less than $15,000,000.                (c)    The Lender shall have received a Borrowing Base Certificate dated the Closing  Date, relating to the month ended on May 26, 2012, and executed by a Responsible Officer of the Lead  Borrower.                (d)    The Lender shall be reasonably satisfied that any financial statements delivered  to  it  fairly  present the  business and  financial  condition  of the  Loan  Parties  and  that  there has  been no  Material Adverse Effect since the date of the Audited Financial Statements.                (e)    The Lender shall have received and be satisfied with (i) a detailed forecast for the  Fiscal Year ending February 2, 2013, which shall include an Availability  model, Consolidated income  statement, balance sheet, and statement of cash flow, by month, each prepared in conformity with GAAP  and consistent with the Loan Parties’ then current practices and (b) such other information (financial or  otherwise) reasonably requested by the Lender.                (f)    There shall not be pending any litigation or other proceeding, the result of which,  either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.                (g)    There shall not have occurred any default of any Material Contract of any Loan  Party the result of which, either individually or in the aggregate, could reasonably be expected to have a  Material Adverse Effect.                (h)    The consummation of the transactions contemplated hereby shall not violate any  applicable Law or any Organization Document.                (i)    All fees and expenses required to be paid to the Lender on or before the Closing  Date shall have been paid in full.                (j)    The Borrowers shall have paid all fees, charges and disbursements of counsel to  the Lender to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such  fees,  charges  and  disbursements  as  shall  constitute  its  reasonable  estimate of  such  fees,  charges  and  disbursements incurred or to be incurred by it through the Closing Date (provided that such estimate shall  not thereafter preclude a final settling of accounts between the Borrowers and the Lender).                (k)    The Lender shall have received all documentation and other information required  by  regulatory  authorities  under  applicable “know  your  customer”  and anti-money  laundering  rules and  regulations, including without limitation the USA PATRIOT Act.                (l)    No material changes in governmental regulations or policies affecting any Loan  Party or any Credit Party shall have occurred prior to the Closing Date.                (m)    There shall not have occurred any disruption or material adverse change in the  United States financial or capital markets in general that has had, in the reasonable opinion of the Lender,                                             -62-  

 

   a material adverse effect on the market for loan syndications or adversely affecting the syndication of the  Loans.                (n)    The Closing Date shall have occurred on or before July 31, 2012.  The Lender  shall notify the Lead Borrower of the Closing Date, and such notice shall be conclusive and binding on  the Loan Parties.          4.02  Conditions to all Credit Extensions.  The obligation of the Lender to honor any Request  for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the  other Type, or a continuation of LIBO Rate Loans) and the L/C Issuer to issue each Letter of Credit is  subject to the following conditions precedent:                (a)    The representations and warranties of each Loan Party contained in Article V or  in any other Loan Document, or which are contained in any document furnished at any time under or in  connection herewith or therewith, shall be true and correct in all material respects on and as of the date of  such Credit Extension, except (i) to the extent that such representations and warranties specifically refer  to an earlier date, in which case they shall be true and correct in all material respects as of such earlier  date,  (ii)  in  the  case  of  any  representation  or  warranty  qualified  by  materiality,  such  representation  or  warranty shall be true and correct in all respects, (subject to such qualification), (iii) for purposes of this  Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall  be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of  Section 6.01, and (iv) for purposes of this Section 4.02, the representations and warranties with respect to  any Schedules shall be deemed to refer to the  most recently updated Schedules furnished by the Lead  Borrower pursuant to Section 6.14(b) and accepted by the Lender in writing;                (b)    No Default or Event of Default shall exist, or would result from such proposed  Credit Extension or from the application of the proceeds thereof;                (c)    The Lender and, if applicable, the L/C Issuer shall have received a Request for  Credit Extension in accordance with the requirements hereof;                (d)    No  event  or  circumstance  which  could  reasonably  be  expected  to  result  in  a  Material Adverse Effect shall have occurred since the date of the Audited Financial Statements; and                (e)    No Overadvance shall result from such Credit Extension:   provided, that without limiting the foregoing, the Lender shall have no obligation to honor a Request for  Credit Extension on or after the Closing Date, until the Lender shall have received from the Borrowers a  written report regarding the results of a commercial finance examination of the Loan Parties, which shall  be satisfactory to the Lender, and until the delivery thereof the decision to honor any Request for Credit  Extension shall be made in the sole discretion of the Lender or the L/C Issuer, as applicable.   Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of  Loans to the other Type or a continuation of LIBO Rate Loans) submitted by the Lead Borrower shall be  deemed  to  be  a  representation  and  warranty  by  the  Borrowers  that  the  conditions  specified  in  Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.                                             -63-  

 

                                         ARTICLE V                        REPRESENTATIONS AND WARRANTIES          To induce the Credit Parties to enter into this Agreement and to make Loans and to issue Letters  of Credit hereunder, each Loan Party represents and warrants to the Credit Parties that:          5.01  Existence,  Qualification  and  Power.  Each  Loan  Party  (a)  is  a  corporation,  limited  liability  company,  partnership  or  limited  partnership,  duly  incorporated,  organized  or  formed,  validly  existing and, where applicable, in good standing under the Laws of the jurisdiction of its incorporation,  organization,  or  formation  (b)  has  all  requisite  power  and  authority  and  all  requisite  governmental  licenses,  permits,  authorizations,  consents  and  approvals  to  (i)  own  or  lease  its  assets  and  carry  on  its  business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a  party, and (c) is duly qualified and is licensed and, where applicable, in good standing under the Laws of  each  jurisdiction  where  its  ownership,  lease  or  operation  of  properties  or  the  conduct  of  its  business  requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent  that failure to do so could not reasonably be expected to have a Material Adverse Effect.  Schedule 5.01  annexed  hereto  sets  forth,  as  of  the Second  Amendment  Effective Date,  each  Loan  Party’s  name  as  it  appears  in  official  filings  in  its  state  of  incorporation  or  organization,  its  state  of  incorporation  or  organization,  organization  type,  organization  number,  if  any,  issued  by  its  state  of  incorporation  or  organization, and its federal employer identification number.          5.02  Authorization; No Contravention.  The execution, delivery and performance by each  Loan  Party  of  each  Loan  Document  to  which  such  Person  is  a  party  has  been  duly  authorized  by  all  necessary corporate or other organizational action, and does not and will not (a) contravene the terms of  any of such Person’s Organization Documents; (b) conflict with or result in any breach, termination, or  contravention of, or constitute a default under, or require any payment to be made under (i) any Material  Contract or any Material Indebtedness to which such Person is a party or affecting such Person or the  properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any  Governmental Authority or any arbitral award to which such Person or its property is subject; (c) result in  or require the creation of any Lien upon any asset of any Loan Party (other than Liens in favor of the  Lender under the Security Documents); or (d) violate any Law.            5.03  Governmental  Authorization;  Other  Consents.  No  approval,  consent,  exemption,  authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other  Person  is  necessary  or  required  in  connection  with  the  execution,  delivery  or  performance  by,  or  enforcement against, any Loan Party of this Agreement or any other Loan Document, except for (a) the  perfection or maintenance of the Liens created under the Security Documents (including the first priority  nature thereof) or (b) such as have been obtained or made and are in full force and effect.           5.04  Binding  Effect.  This  Agreement  has  been,  and  each  other  Loan  Document,  when  delivered,  will  have been,  duly  executed and  delivered  by  each  Loan Party  that  is  party  thereto.   This  Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid  and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in  accordance  with  its  terms,  subject  to applicable  bankruptcy,  insolvency,  reorganization,  moratorium  or  other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of  whether considered in a proceeding in equity or at law.          5.05  Financial Statements; No Material Adverse Effect.                  (a)    The Audited Financial Statements (i) were prepared in accordance with GAAP  consistently applied throughout the period covered thereby, except as otherwise expressly noted therein;                                            -64-  

 

   (ii) fairly present the financial condition of the Lead Borrower and its Subsidiaries as of the date thereof  and  their  results  of  operations  for  the  period  covered  thereby  in  accordance  with  GAAP  consistently  applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show  all Material Indebtedness and other material liabilities, direct or contingent, of the Lead Borrower and its  Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness,  in  accordance  with  GAAP  consistently  applied  throughout  the  period  covered  thereby,  except  as  otherwise expressly noted therein.                (b)    The  unaudited  Consolidated  and  consolidating  balance  sheet  of  the  Lead  Borrower  and  its  Subsidiaries  dated  April  28,  2012,  and  the  related  Consolidated  and  consolidating  statements  of  income  or  operations,  and  cash  flows  for  the  Fiscal  Quarter  ended  on  that  date  (i)  were  prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as  otherwise expressly noted therein, and (ii) fairly present the financial condition of the Lead Borrower and  its  Subsidiaries  as  of  the  date  thereof  and  their  results  of  operations  for  the  period  covered  thereby,  subject,  in  the  case  of  clauses  (i)  and  (ii),  to  the  absence  of  footnotes  and  to  normal  year-end  audit  adjustments.  Schedule 5.05 sets forth all Material Indebtedness.                (c)    Since the date of the Audited Financial Statements, there has been no event or  circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have  a Material Adverse Effect.                (d)    To the best knowledge of the Lead Borrower, no Internal Control Event exists or  has occurred since the date of the Audited Financial Statements that has resulted in or could reasonably be  expected to result in a misstatement in any material respect (i) in any financial information delivered or to  be delivered to the Lender, (ii) of the Borrowing Base, (iii) of covenant compliance calculations provided  hereunder or (iv) of the assets, liabilities, financial condition or results of operations of the Lead Borrower  and its Subsidiaries on a Consolidated basis.                (e)    The Consolidated and consolidating forecasted balance sheet and statements of  income and cash flows of the Lead Borrower and its Subsidiaries delivered pursuant to Section 6.01(c)  were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in  light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of  delivery, the Loan Parties’ best estimate of its future financial performance.          5.06  Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the  knowledge of the Loan Parties, threatened or contemplated, at law, in equity, in arbitration or before any  Governmental  Authority,  by  or  against  any  Loan  Party  or  any  of  its  Subsidiaries  or  against  any  of  its  properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document,  or any of the transactions contemplated hereby, or (b) except as specifically disclosed in Schedule 5.06,  either individually or in the aggregate, if determined adversely, could reasonably be expected to have a  Material  Adverse  Effect,  and  since  the Second  Amendment  Effective Date,  there  has  been  no  adverse  change  in  the  status,  or  financial  effect  on  any  Loan  Party  or  any  Subsidiary  thereof,  of  the  matters  described on Schedule 5.06.          5.07  No  Default.  No  Loan  Party  is  in  default  under  or  with  respect  to,  or  party  to,  any  Material  Contract  or  any  Material  Indebtedness.   No  Default  or  Event  of  Default  has  occurred  and  is  continuing or would result from the consummation of the transactions contemplated by this Agreement or  any other Loan Document.                                             -65-  

 

          5.08  Ownership of Property; Liens.                (a)    Each of the Loan Parties has good record and marketable title in fee simple to or  valid leasehold interests in, all Real Estate necessary or used in the ordinary conduct of its business.  Each  of the Loan Parties has good and marketable title to, valid leasehold interests in, or valid licenses to use  all personal property and assets material to the ordinary conduct of its business.                (b)    Schedule 5.08(b)(1) sets forth the address (including street address, county and  state)  of  all  Real  Estate  that  is  owned  by  the  Loan  Parties,  together  with  a  list  of  the  holders  of  any  mortgage or other Lien thereon as of the Second Amendment Effective Date.  Each Loan Party has good,  marketable and insurable fee simple title to the Real Estate owned by such Loan Party, free and clear of  all Liens, other than Permitted Encumbrances.  Schedule 5.08(b)(2) sets forth the address (including street  address,  county  and  state)  of  all  Leases  of  the  Loan  Parties,  together  with  a  list  of  the  lessor  and  its  contact information with respect to each such Lease as of the Second Amendment Effective Date.  Each  of  such  Leases  is  in  full  force  and  effect  and  the  Loan  Parties  are  not  in  default  of  the  terms  thereof,  except as could not reasonably be expected to have a Material Adverse Effect.                 (c)    Schedule 7.01 sets forth a complete and accurate list of all Liens on the property  or assets of each Loan Party, other than statutory or common law Liens against or by landlords of the  Stores, showing as of the Second Amendment Effective Date the lienholder thereof, the principal amount  of the  obligations  secured  thereby  and  the  property  or  assets  of  such  Loan  Party  subject  thereto.   The  property of each Loan Party is subject to no Liens, other than Permitted Encumbrances.                (d)    Schedule 7.02 sets forth a complete and accurate list of all Investments held by  any  Loan  Party  on  the Second  Amendment  Effective Date,  showing  as  of  the Second  Amendment  Effective Date the amount, obligor or issuer and maturity, if any, thereof.                (e)    Schedule 7.03 sets forth a complete and accurate list of all Indebtedness of each  Loan Party on the Second Amendment Effective Date, showing as of the Second Amendment Effective  Date the amount, obligor or issuer and maturity thereof.          5.09  Environmental Compliance.                (a)    Except as specifically disclosed in Schedule 5.09, no Loan Party (i) has failed to  comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other  approval required under any Environmental Law, (ii) has become subject to any Environmental Liability,  (iii)  has  received  notice  of  any  claim  with  respect  to  any  Environmental  Liability  or  (iv)  has  a  Responsible Officer with knowledge of any basis for any Environmental Liability, except, in each case, as  could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.                (b)    Except  as  otherwise  set  forth  in  Schedule  5.09,  (i)  none  of  the  properties  currently owned by any Loan Party is listed or proposed for listing on the NPL or on the CERCLIS or any  analogous foreign, state or local list or is adjacent to any such property, and (ii) to the knowledge of any  Responsible Officer of any Loan Party none of the properties currently operated or formerly owned by  any Loan Party is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign,  state or local list or is adjacent to any such property in connection with any matter for which any Loan  Party would have any material liability; there are not and never have been any underground or above- ground  storage  tanks  or  any  surface  impoundments,  septic  tanks,  pits,  sumps  or  lagoons  in  which  Hazardous Materials are being or have been treated, stored or disposed by any Loan Party in violation of  any  Environmental  Laws  on  any  property  currently  owned  or  operated  by  any  Loan  Party  or,  to  the  knowledge of any Responsible Officer of any Loan Party, on any property formerly owned by any Loan                                            -66-  

 

   Party; there is no friable asbestos or friable asbestos-containing material on any property currently owned  or operated by any Loan Party; and Hazardous Materials have not been released, discharged or disposed  of  by  any  Loan  Party  in  violation  of  any  Environmental  Laws  on  any  property  currently  owned  or  operated or formerly owned by any Loan Party.                (c)    Except  as  otherwise  set  forth  on  Schedule  5,09,  no  Loan  Party  is  undertaking,  and  no  Loan  Party  has  completed,  either  individually  or  together  with  other  potentially  responsible  parties, any investigation or assessment or remedial or response action relating to any actual or threatened  release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily  or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law;  and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any  property currently or formerly owned or operated by any Loan Party have been disposed of in a manner  not reasonably expected to result in material liability to any Loan Party.          5.10  Insurance.  The  properties  of  the  Loan  Parties  are  insured  with  financially  sound  and  reputable insurance companies which are not Affiliates of the Loan Parties, in such amounts, with such  deductibles  and  covering  such  risks  (including,  without  limitation,  workmen’s  compensation,  public  liability, business interruption and property damage insurance) as are customarily carried by companies  engaged in similar businesses and owning similar properties in localities where the Loan Parties operate.   Schedule 5.10 sets forth a description of all insurance maintained by or on behalf of the Loan Parties as of  the Second Amendment Effective Date. Each insurance policy listed on Schedule 5.10 is in full force and  effect and all premiums in respect thereof that are due and payable have been paid.          5.11  Taxes.  The Loan Parties have filed all Federal, state and other material tax returns and  reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and  other governmental charges levied or imposed upon them or their properties, income or assets otherwise  due and payable, except those which are being contested in good faith by appropriate proceedings being  diligently conducted, for which adequate reserves have been provided in accordance with GAAP, as to  which Taxes no Lien has been filed and which contest effectively suspends the collection of the contested  obligation  and  the  enforcement  of  any  Lien  securing  such  obligation.   There  is  no  proposed  tax  assessment against any Loan Party that would, if made, have a Material Adverse Effect.  No Loan Party is  a party to any tax sharing agreement.          5.12  ERISA Compliance.                (a)    Each Plan is in compliance in all material respects with the applicable provisions  of  ERISA, the  Code  and  other  Federal  or  state  Laws.   Each  Plan  that  is  intended  to  qualify  under  Section 401(a) of the Code has received a favorable determination letter from the IRS or an application  for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of  the Lead Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification.   The Loan Parties and each ERISA Affiliate have made all required contributions to each Plan subject to  Section 412 of the  Code, and no application  for  a  funding  waiver  or  an extension  of any  amortization  period pursuant to Section 412 of the Code has been made with respect to any Plan.  No Lien imposed  under the Code or ERISA exists or is likely to arise on account of any Plan.                (b)    There are no pending or, to the best knowledge of the Lead Borrower, threatened  claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could  reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or  violation  of  the  fiduciary  responsibility  rules  with  respect  to  any  Plan  that  has  resulted  or  could  reasonably be expected to result in a Material Adverse Effect.                                             -67-  

 

                (c)    (i)    No ERISA Event has occurred or is reasonably expected to occur; (ii) no  Pension Plan has any Unfunded Pension Liability; (iii) neither any Loan Party nor any ERISA Affiliate  has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any  Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither  any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no  event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such  liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither  any Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections  4069 or 4212(c) of ERISA, in each case except as could not reasonably be expected to result in a Material  Adverse Effect.          5.13  Subsidiaries; Equity Interests.  The Loan Parties have no Subsidiaries other than those  specifically disclosed in Part (a) of Schedule 5.13, which Schedule sets forth the legal name, jurisdiction  of  incorporation  or  formation  and  authorized  Equity  Interests  of  each  such  Subsidiary.   All  of  the  outstanding  Equity  Interests  in  such  Subsidiaries  have  been  validly  issued,  are  fully  paid  and  non- assessable and are owned by a Loan Party (or a Subsidiary of a Loan Party) in the amounts specified on  Part  (a)  of  Schedule  5.13  free  and  clear  of  all  Liens  except  for  those  created  under  the  Security  Documents.  Except as set forth in Schedule 5.13, there are no outstanding rights to purchase any Equity  Interests  in  any  Subsidiary.   The  Loan  Parties  have  no  equity  investments  in  any  other  corporation  or  entity other than those specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity  Interests  in  the  Loan  Parties  have  been  validly  issued,  and  are  fully  paid  and  non-assessable  and  are  owned in the amounts specified on Part (c) of Schedule 5.13 free and clear of all Liens except for those  created under the Security Documents.  The copies of the Organization Documents of each Loan Party  and each amendment thereto provided pursuant to Section 4.01 are true and correct copies of each such  document, each of which is valid and in full force and effect.          5.14  Margin Regulations; Investment Company Act.                  (a)    No  Loan  Party  is  engaged  or  will  be  engaged,  principally  or  as  one  of  its  important  activities,  in  the  business  of  purchasing  or  carrying  margin  stock  (within  the  meaning  of  Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin  stock.  None of the proceeds of the Credit Extensions shall be used directly or indirectly for the purpose  of purchasing or carrying any margin stock, for the purpose of reducing or retiring any Indebtedness that  was originally incurred to purchase or carry any margin stock or for any other purpose that might cause  any of the Credit Extensions to be considered a “purpose credit” within the meaning of Regulations T, U,  or X issued by the FRB.                 (b)    None  of  the  Loan  Parties,  any  Person  Controlling  any  Loan  Party,  or  any  Subsidiary is or is required to be registered as an “investment company” under the Investment Company  Act of 1940.          5.15  Disclosure.  Each Loan Party has disclosed to the Lender all agreements, instruments and  corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or  in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No report, financial  statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any  Loan Party to the Lender in connection with the transactions contemplated hereby and the negotiation of  this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or  supplemented by other information so furnished) contains any material misstatement of fact or omits to  state any material fact necessary to make the statements therein, in the light of the circumstances under  which they were made, not misleading; provided, that with respect to projected financial information, the                                             -68-  

 

   Loan  Parties  represent  only  that  such  information  was  prepared  in  good  faith  based  upon  assumptions  believed to be reasonable at the time of preparation thereof.          5.16  Compliance with Laws.  Each of the Loan Parties is in compliance (a) in all material  respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or  to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction  or  decree  is  being  contested  in  good  faith  by  appropriate  proceedings  diligently  conducted  or  (b)  the  failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to  have a Material Adverse Effect, and (b) with Sections 9.16 and 9.17 hereof.          5.17  Intellectual Property; Licenses, Etc.  The Loan Parties own, or possess the right to use,  all of the Intellectual Property, licenses, permits and other authorizations that are reasonably necessary for  the operation of their respective businesses, without conflict with the rights of any other Person.  To the  knowledge  of  the  Lead  Borrower,  no  slogan  or  other  advertising  device,  product,  process,  method,  substance, part or other material now employed, or now contemplated to be employed, by any Loan Party  infringes upon any rights held by any other Person.  Except as specifically disclosed in Schedule 5.17, no  claim  or  litigation  regarding  any  of  the  foregoing  is  pending  or,  to  the  best  knowledge  of  the  Lead  Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have  a Material Adverse Effect.          5.18  Labor  Matters.  There  are  no  strikes,  lockouts,  slowdowns  or  other  material  labor  disputes against any Loan Party pending or, to the knowledge of any Loan Party, threatened. The hours  worked by and payments made to employees of the Loan Parties comply with the Fair Labor Standards  Act and any other applicable federal, state, local or foreign Law dealing with such matters. No Loan Party  has incurred any liability or obligation under the Worker Adjustment and Retraining Act or similar state  Law.  All payments due from any Loan Party, or for which any claim may be made against any Loan  Party, on account of wages and employee health and welfare insurance and other benefits, have been paid  or properly accrued in accordance with GAAP as a liability on the books of such Loan Party. Except as  set forth on Schedule 5.18, no Loan Party is a party to or bound by any collective bargaining agreement.  There  are  no  representation  proceedings  pending  or,  to  any  Loan  Party’s  knowledge,  threatened  to  be  filed with the National Labor Relations Board, and no labor organization or group of employees of any  Loan Party has made a pending demand for recognition. There are no complaints, unfair labor practice  charges, grievances, arbitrations, unfair employment practices charges or any other claims or complaints  against any Loan Party pending or, to the knowledge of any Loan Party, threatened to be filed with any  Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to  the employment or termination of employment of any employee of any Loan Party. The consummation of  the transactions contemplated by the Loan Documents will not give rise to any right of termination or  right of renegotiation on the part of any union under any collective bargaining agreement to which any  Loan Party is bound.          5.19  Security Documents.                  (a)    The  Security  Agreement  creates  in  favor  of  the  Lender,  for  the  benefit  of  the  Secured Parties (as defined in the Security Agreement) referred to therein, a legal, valid, continuing and  enforceable security interest in the Collateral (as defined in the Security Agreement), the enforceability of  which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting  creditors’ rights generally and subject to general principles of equity, regardless of whether considered in  a proceeding in equity or at law.  The financing statements, releases and other filings are in appropriate  form and have been or will be filed in the offices specified in Schedule II of the Security Agreement.   Upon  such  filings  and/or  the  obtaining  of  “control”  (as  defined  in  the  UCC),  the  Lender  will  have  a  perfected  Lien  on,  and  security  interest  in,  to  and  under  all  right,  title  and  interest  of  the  grantors                                            -69-  

 

   thereunder in all Collateral that may be perfected by filing, recording or registering a financing statement  or  analogous  document  (including  without  limitation  the  proceeds  of  such  Collateral  subject  to  the  limitations relating to such proceeds in the UCC) or by obtaining control, under the UCC (in effect on the  date this representation is made) in each case prior and superior in right to any other Person.                (b)    When  the  Security  Agreement  (or  a  short  form  thereof)  is  filed  in  the  United  States  Patent  and  Trademark  Office  and  when  financing  statements,  releases  and  other  filings  in  appropriate form are filed in the offices specified in Schedule II of the Security Agreement, the Lender  shall have a fully perfected Lien on, and security interest in, all right, title and interest of the applicable  Loan  Parties  in  the  Intellectual  Property  (as  defined  in  the  Security  Agreement)  in  which  a  security  interest may be perfected by filing, recording or registering a security agreement, financing statement or  analogous document in the United States Patent and Trademark Office in each case prior and superior in  right to any other Person (it being understood that subsequent recordings in the United States Patent and  Trademark Office may be necessary to perfect a Lien on registered trademarks and trademark applications  acquired by the Loan Parties after the Closing Date).          5.20  Solvency.  After giving effect to the transactions contemplated by this Agreement, and  before and  after  giving effect  to each Credit  Extension,  the  Loan  Parties,  on  a  Consolidated basis, are  Solvent. No transfer of property has been or will be made by any Loan Party and no obligation has been  or will be incurred by any Loan Party in connection with the transactions contemplated by this Agreement  or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors  of any Loan Party.          5.21  Deposit Accounts; Credit Card Arrangements.                (a)    Annexed hereto as Schedule 5.21(a) is a list of all DDAs maintained by the Loan  Parties as of the Second Amendment Effective Date, which Schedule includes, with respect to each DDA  (i) the name and address of the depository; (ii) the account number(s) maintained with such depository;  (iii) a contact person at such depository, and (iv) the identification of each Blocked Account Bank.                (b)    Annexed hereto as Schedule 5.21(b) is a list describing all arrangements as of the  Second  Amendment  Effective Date  to  which  any  Loan  Party  is  a  party  with  respect to  the  processing  and/or payment to such Loan Party of the proceeds of any credit card charges and debit card charges for  sales made by such Loan Party.          5.22  Brokers.  No  broker  or  finder  brought  about  the  obtaining,  making  or  closing  of  the  Loans or transactions contemplated by the Loan Documents, and no Loan  Party or Affiliate thereof has  any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.          5.23  Customer  and  Trade  Relations.  There  exists  no  actual  or,  to  the  knowledge  of  any  Loan Party, threatened, termination or cancellation of, or any material adverse modification or change in  the business relationship of any Loan Party with any supplier material to its operations.          5.24  Material Contracts.  Schedule 5.24 sets forth all Material Contracts to which any Loan  Party is a party or is bound as of the Second Amendment Effective Date.  The Loan Parties have delivered  true, correct and complete copies of such Material Contracts to the Lender on or before the Closing Date  or the Second Amendment Effective Date, as applicable.  The Loan Parties are not in breach or in default  in any material respect of or under any Material Contract and have not received any notice of the intention  of any other party thereto to terminate any Material Contract.                                             -70-  

 

          5.25  Casualty.  Neither  the  businesses  nor  the  properties  of  any  Loan  Party  or  any  of  its  Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought,  storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not  covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a  Material Adverse Effect.          5.26  OFAC; Sanctions.          No Loan Party nor any of its Subsidiaries is in violation of any Sanctions.  No Loan Party nor any  of its Subsidiaries nor, to the knowledge of such Loan Party, any director, officer, employee, agent or  Affiliate of such Loan Party or such Subsidiary (a) is a Sanctioned Person or a Sanctioned Entity, (b) has  any assets located in Sanctioned Entities, or (c) to the knowledge of such Loan Party, derives revenues  from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  Each of the Loan  Parties and its Subsidiaries has implemented and maintains in effect policies and procedures designed to  ensure  compliance  by  the  Loan  Parties  and  their  Subsidiaries  and  their  respective  directors,  officers,  employees, agents and Affiliates with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering  Laws.  Each of the Loan Parties and its Subsidiaries, and to the knowledge of each such Loan Party, each  director, officer, employee, agent and Affiliate of each such Loan Party and each such Subsidiary, is in  compliance with all applicable Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws in all  material  respects.  No  proceeds  of  any  Loan  made  or  Letter  of  Credit  issued  hereunder  will  be  used  directly,  or  to  the  knowledge  of  any  Loan  Party,  indirectly,  to  fund  any  operations  in,  finance any  investments  or  activities  in,  or  make  any  payments  to,  a  Sanctioned  Person or  a  Sanctioned  Entity,  or  otherwise  used  in  any  manner  that  would  result  in  a  violation  of  any  applicable  Sanctions,  Anti- Corruption Laws or Anti-Money Laundering Laws by any Person (including any Credit Party or other  individual or entity participating in any transaction).          5.27  Beneficial Ownership Certification.          As  of  the  Second  Amendment  Effective  Date,  the  information  included  in  the  Beneficial  Ownership Certification is true and correct in all respects.                                        ARTICLE VI                              AFFIRMATIVE COVENANTS          So  long  as  the  Lender  shall  have  any  Commitment  hereunder,  any  Loan  or  other  Obligation  hereunder shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which  a claim has not been asserted), or any Letter of Credit shall remain outstanding, the Loan Parties shall:          6.01  Financial  Statements.  Deliver  to  the  Lender,  in  form  and  detail  satisfactory  to  the  Lender:                (a)    as  soon  as  available,  but in any  event  within  ninety  (90)  days  after  the  end  of  each  Fiscal  Year  of  the  Lead  Borrower,  a  Consolidated  and  consolidating  balance  sheet  of  the  Lead  Borrower  and  its  Subsidiaries  as  at  the  end  of  such  Fiscal  Year,  and  the  related  consolidated  and  consolidating statements of income or operations, Shareholders’ Equity and cash flows for such Fiscal  Year,  setting  forth  in  each  case  in  comparative  form  the  figures  for  the  previous  Fiscal  Year,  all  in  reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and  accompanied  by  (i)  a  report  and  unqualified  opinion  of  KPMG  LLP  or  another  Registered  Public  Accounting Firm of nationally recognized standing reasonably acceptable to the Lender, which report and  opinion  shall  be prepared  in  accordance  with  generally  accepted  auditing  standards  and  shall  not  be  subject to any “going concern” or like qualification or exception or any qualification or exception as to                                            -71-  

 

   the scope of such audit and (ii) an opinion of KPMG LLP or such other Registered Public Accounting  Firm independently assessing Loan Parties’ internal controls over financial reporting in accordance with  Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No. 2, and Section 404 of Sarbanes-Oxley  expressing  a  conclusion  that  contains  no  statement  that  there  is  a  material  weakness  in  such  internal  controls,  except  for  such  material  weaknesses  as  to  which  the  Lender  do  not  object,  and  such  consolidating statements to be certified by a Responsible Officer of the Lead Borrower to the effect that  such statements are fairly stated in all material respects when considered in relation to the consolidated  financial statements of the Lead Borrower and its Subsidiaries;                 (b)    as soon as available, but in any event on or before the third Friday (or if such day  is not a Business Day, on the next succeeding Business Day) after the end of each of the Fiscal Months of  each  Fiscal  Year  of  the  Lead  Borrower,  a  Consolidated  and  consolidating  balance  sheet  of  the  Lead  Borrower  and  its  Subsidiaries  as  at  the  end  of  such  Fiscal  Month,  and  the  related  Consolidated  and  consolidating  statements  of  income  or  operations,  and  cash  flows  for  such  Fiscal  Month,  and  for  the  portion of the Lead Borrower’s Fiscal Year then ended, setting forth in each case in comparative form the  figures for (A) such period set forth in the budget delivered pursuant to Section 6.01(c) hereof, (B) the  corresponding Fiscal Month of the previous Fiscal Year and (C) the corresponding portion of the previous  Fiscal Year, all in reasonable detail, such consolidated statements to be certified by a Responsible Officer  of the Lead Borrower as fairly presenting the financial condition, results of operations, and cash flows of  the Lead Borrower and its Subsidiaries as of the end of such Fiscal Month in accordance with GAAP,  subject only to normal year-end audit adjustments and the absence of footnotes, and such consolidating  statements to be certified by a Responsible Officer of the Lead Borrower to the effect that such statements  are  fairly  stated  in  all  material  respects  when  considered  in  relation  to  the  consolidated  financial  statements of the Lead Borrower and its Subsidiaries;                (c)    as soon as available, but in any event no more than forty-five (45) days after the  end of each Fiscal Year of the Lead Borrower, budgets prepared by management of the Lead Borrower  and  approved  by  the  board  of  directors  of  the  Lead  Borrower,  in  form  satisfactory  to  the  Lender,  of  consolidated balance sheets and statements of income or operations and cash flows of the Lead Borrower  and its Subsidiaries on a monthly basis for the immediately following Fiscal Year (including the Fiscal  Year  in  which  the  Maturity  Date  occurs),  and  as  soon  as  available,  any  significant  revisions  to  such  budget with respect to such Fiscal Year.          6.02  Certificates; Other Information.  Deliver to the Lender, in form and detail satisfactory  to the Lender:                (a)    concurrently  with  the  delivery  of  the  financial  statements  referred  to  in  Section 6.01(a), a certificate of its Registered Public Accounting Firm certifying such financial statements  and stating that in making the examination necessary for their certification of such financial statements,  such Registered Public Accounting Firm has not obtained any knowledge of the existence of any Default  or Event of Default or, if any such Default or Event of Default shall exist, stating the nature and status of  such event;                (b)    concurrently  with  the  delivery  of  the  financial  statements  referred  to  in  Sections 6.01(a) and 6.01(b), a duly completed Compliance Certificate signed by a Responsible Officer of  the Lead Borrower, and in the event of any change in generally accepted accounting principles used in the  preparation  of  such  financial  statements,  the  Lead  Borrower  shall  also  provide  a  statement  of  reconciliation conforming such financial statements to GAAP;                (c)    on  or  before  the third  Friday of  each  Fiscal  Month  (or,  if  such  day  is  not  a  Business  Day,  on  the  next  succeeding  Business  Day),  a  Borrowing  Base  Certificate  showing  the                                            -72-  

 

   Borrowing Base as of the close of business as of the last day of the immediately preceding Fiscal Month  (provided  that  the  Appraised  Value  percentage  applied  to  the  Eligible  Inventory  set  forth  in  each  Borrowing Base Certificate shall be the percentage set forth in the most recent appraisal obtained by the  Lender  pursuant  to Section 6.10 hereof  for  the  applicable  month  in  which  such  Borrowing  Base  Certificate  is  delivered),  each  Borrowing  Base  Certificate  to  be  certified  as  complete  and  correct  by  a  Responsible Officer of the Lead Borrower; provided, that at any time that an Accelerated Borrowing Base  Delivery  Event  has  occurred  and  is  continuing,  at  the  election  of  the  Lender,  such  Borrowing  Base  Certificate shall be delivered on Wednesday of each week (or, if Wednesday is not a Business Day, on the  next  succeeding  Business  Day),  as  of  the  close  of  business  on  the  immediately  preceding  Saturday;  provided, further,  that  should  any  of  the  information  contained  in  any  Borrowing  Base  Certificate  be  incorrect or misleading in any material respect, the Lead Borrower shall advise the Lender in writing of  such revisions or updates as may be necessary or appropriate to update or correct the same, in which case  such revision or update shall be deemed to the have modified the applicable Borrowing Base Certificate if  accepted by the Lender in writing; provided, further, that notwithstanding the foregoing proviso, no such  revision or update to any Borrowing Base Certificate shall be deemed the Credit Parties’ waiver of any  Default or Event or Default resulting from the matters disclosed therein;                (d)    promptly upon receipt, copies of any detailed audit reports, management letters  or recommendations submitted to the board of directors (or the audit committee of the board of directors)  of any Loan Party by its Registered Public Accounting Firm in connection with the accounts or books of  the  Loan  Parties,  or  any  audit  of  any  of  them,  including,  without  limitation,  specifying  any  Internal  Control Event;                (e)    promptly  after  the  same  are  available,  copies  of  each  annual  report,  proxy  or  financial statement or other report or communication sent to the stockholders of the Lead Borrower, and  copies  of  all  annual,  regular,  periodic  and  special  reports  and  registration  statements  which  any  Loan  Party may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange  Act  of  1934  or  with  any  national  securities  exchange,  and  in  any  case  not  otherwise  required  to  be  delivered to the Lender pursuant hereto;                 (f)    The  financial  and  collateral  reports  described  on  Schedule  6.02  hereto,  at  the  times set forth in such Schedule;                (g)    promptly after the furnishing thereof, copies of any statement or report furnished  to any holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to the terms of any  indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lender  pursuant to Section 6.01 or any other clause of this Section 6.02;                 (h)    as soon as available, but in any event within thirty (30) days after the end of each  Fiscal Year of the Loan Parties, a report summarizing the insurance coverage (specifying type, amount  and carrier) in effect for each Loan Party and its Subsidiaries and containing such additional information  as the Lender may reasonably specify;                 (i)    promptly after the Lender’s request therefor, copies of all Material Contracts and  documents evidencing Material Indebtedness;                 (j)    promptly, and in any event within five (5) Business Days after receipt thereof by  any  Loan  Party,  copies  of  each  notice  or  other  correspondence  received  from  any  Governmental  Authority  (including,  without  limitation,  the  SEC  (or  comparable  agency  in  any  applicable  non-U.S.  jurisdiction)) concerning any proceeding with, or investigation or possible investigation or other inquiry  by such Governmental Authority regarding financial or other operational results of any Loan Party or any                                            -73-  

 

   other matter which, if adversely determined, could reasonably be expected to have a Material Adverse  Effect;                 (k)    promptly,  following  any  request  therefor,  information  and  documentation  reasonably requested by the Lender for purposes of compliance with applicable “know your customer”  requirements  under  the  act,  the  Beneficial  Ownership  Regulation  or  other  applicable  Anti-Corruption  Laws and Anti-Money Laundering Laws; and                (l)    promptly,  such  additional  information  regarding  the  business  affairs,  financial  condition or operations of any Loan Party, or compliance with the terms of the Loan Documents, as the  Lender may from time to time reasonably request.   Documents  required  to  be  delivered  pursuant  to Sections 6.01(a) or 6.01(b) or Section 6.02(d) (to  the  extent  any  such  documents  are  included  in  materials  otherwise  filed  with  the  SEC)  may  be  delivered  electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the  Lead Borrower posts such documents, or provides a link thereto on the Lead Borrower’s website on the  Internet at the website address listed on Schedule 9.02; or (ii) on which such documents are posted on the  Lead  Borrower’s  behalf  on  an  Internet  or  intranet  website,  if  any,  to  which  the  Lender  has  access  (whether a commercial, third-party website or whether sponsored by the Lender); provided, that: (i) the  Lead Borrower shall deliver paper copies of such documents to the Lender upon request to deliver such  paper copies until a written request to cease delivering paper copies is given by the Lender and (ii) the  Lead  Borrower  shall  notify  the  Lender  (by  facsimile  or  electronic  mail)  of  the  posting  of  any  such  documents  and  provide  to  the  Lender  by  electronic  mail  electronic  versions  (i.e.,  soft  copies)  of  such  documents.   Notwithstanding  anything  contained  herein,  in  every  instance  the  Lead  Borrower  shall  be  required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Lender.           6.03  Notices.  Promptly notify the Lender:                (a)    of the occurrence of any Default or Event of Default;                (b)    of  any  matter  that  has  resulted  or  could reasonably  be  expected  to  result  in  a  Material Adverse Effect;                (c)    of any breach or non-performance of, or any default under, a Material Contract or  with respect to Material Indebtedness of any Loan Party thereof;                (d)    of  any  material  dispute,  litigation,  investigation,  proceeding  or  suspension  between  any  Loan  Party  or  any  Subsidiary  thereof  and  any  Governmental  Authority  or  the  commencement of, or any material development in, any litigation or proceeding affecting any Loan Party  or any Subsidiary thereof, including pursuant to any applicable Environmental Laws;                (e)    of the occurrence of any ERISA Event;                (f)    of any material change in accounting policies or financial reporting practices by  any Loan Party;                 (g)    of any change in any Loan Party’s senior executive officers;                (h)    of the discharge by any Loan Party of its present Registered Public Accounting  Firm or any withdrawal or resignation by such Registered Public Accounting Firm;                                             -74-  

 

                (i)    of any collective bargaining agreement or other labor contract to which a Loan  Party becomes a party, or the application for the certification of a collective bargaining agent;                (j)    of the filing of any Lien for unpaid Taxes against any Loan Party;                (k)    of any casualty or other insured damage to any material portion of the Collateral  or the commencement of any action or proceeding for the taking of any interest in a material portion of  the  Collateral  under  power  of  eminent  domain  or  by  condemnation  or  similar  proceeding  or  if  any  material portion of the Collateral is damaged or destroyed;                (l)    of any transaction of the nature contained in Article VII hereof;                (m)    of  any  failure  by  any  Loan  Party  to  pay  rent  at  (i)  any  distribution  centers  or  warehouses; or (ii) ten percent (10%) or more of such Loan Party’s locations or (ii) any of such Loan  Party’s locations if such failure continues for more than ten (10) days following the day on which such  rent first came due and such failure would be reasonably likely to result in a Material Adverse Effect; and                (n)    any change in the information provided in the Beneficial Ownership Certification  that  would result  in  a  change  to  the  list  of  beneficial  owners  identified  in  parts  (c)  or  (d)  of  such  certification.   Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the  Lead Borrower setting forth details of the occurrence referred to therein and stating what action the Lead  Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a)  shall describe with particularity any and all provisions of this Agreement and any other Loan Document  that have been breached.          6.04  Payment of Obligations.  Pay and discharge as the same shall become due and payable,  all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or  levies  upon  it or  its  properties  or  assets,  (b)  all  lawful  claims  (including,  without  limitation,  claims  of  landlords,  warehousemen,  customs  brokers,  freight  forwarders,  consolidators  and  carriers)  which,  if  unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and  payable, but subject to any subordination provisions contained in any instrument or agreement evidencing  such Indebtedness, except, in each case, where (a) the validity or amount thereof is being contested in  good faith by appropriate proceedings, (b) such Loan Party has set aside on its books adequate reserves  with  respect  thereto  in  accordance  with  GAAP,  (c)  such  contest  effectively  suspends  collection  of  the  contested obligation and enforcement of any Lien securing such obligation, (d) no Lien has been filed  with respect thereto and (e) the failure to make payment pending such contest could not reasonably be  expected to result in a Material Adverse Effect. Nothing contained herein shall be deemed to limit the  rights of the Lender with respect to determining Reserves pursuant to this Agreement.          6.05  Preservation of Existence, Etc.  Preserve, renew and maintain in full force and effect its  legal  existence  and  good  standing  under  the  Laws  of  the  jurisdiction  of  its  organization  or  formation  except in a transaction permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain all  rights,  privileges,  permits,  licenses  and  franchises  necessary  or  desirable  in  the  normal  conduct  of  its  business, except to the extent that failure to do so could not reasonably be expected to have a Material  Adverse  Effect;  and  (c)  preserve  or  renew  all  of  its  Intellectual  Property,  except  to  the  extent  such  Intellectual Property is no longer used or useful in the conduct of the business of the Loan Parties.          6.06  Maintenance of Properties.  Maintain, preserve and protect all of its material properties  and equipment necessary in the operation of its business in good working order and condition, ordinary                                             -75-  

 

   wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof  except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.          6.07  Maintenance of Insurance.                  (a)    Maintain  with  financially  sound  and  reputable  insurance  companies  reasonably  acceptable to the Lender not Affiliates of the Loan Parties, insurance with respect to its properties and  business against loss or damage of the kinds customarily insured against by Persons engaged in the same  or similar business and operating in the same or similar locations or as is required by applicable Law, of  such  types  and  in  such  amounts  as  are  customarily  carried  under  similar  circumstances  by  such  other  Persons and as are reasonably acceptable to the Lender.                 (b)    Cause  fire  and  extended  coverage  policies  maintained  with  respect  to  any  Collateral  to  be  endorsed  or  otherwise  amended  to  include  (i)  a  non-contributing  mortgage  clause  (regarding improvements to Real Estate) and lenders’ loss payable clause (regarding personal property),  in form and substance satisfactory to the Lender, which endorsements or amendments shall provide that  the insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to the  Lender, (ii) a provision to the effect that none of the Loan Parties, Credit Parties or any other Person shall  be a co-insurer and (iii) such other provisions as the Lender may reasonably require from time to time to  protect the interests of the Credit Parties.                 (c)    Cause commercial general liability policies to be endorsed to name the Lender as  an additional insured.                 (d)    Cause business interruption policies to name the Lender as a loss payee and to be  endorsed or amended to include (i) a provision that, from and after the Closing Date, the insurer shall pay  all  proceeds  otherwise  payable  to  the  Loan  Parties  under  the policies  directly  to  the  Lender,  (ii)  a  provision to the effect that none of the Loan Parties, the Lender or any other Credit Party shall be a co- insurer and (iii) such other provisions as the Lender may reasonably require from time to time to protect  the interests of the Credit Parties.                 (e)    Cause each such policy referred to in this Section 6.07 to also provide that it shall  not be canceled, modified or not renewed (i) by reason of nonpayment of premium except upon not less  than ten (10) days’ prior written notice thereof by the insurer to the Lender (giving the Lender the right to  cure defaults in the payment of premiums) or (ii) for any other reason except upon not less than thirty (30)  days’ prior written notice thereof by the insurer to the Lender.                 (f)    Deliver to the Lender, prior to the cancellation, modification or non-renewal of  any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a  policy  previously  delivered  to  the  Lender,  including  an  insurance  binder)  together  with  evidence  satisfactory to the Lender of payment of the premium therefor.                (g)    [Reserved].                (h)    Maintain  for  themselves,  a  Directors  and  Officers  insurance  policy,  and  a  “Blanket  Crime”  policy  including  employee  dishonesty,  forgery  or  alteration,  theft,  disappearance  and  destruction,  robbery  and  safe  burglary,  property,  and  computer  fraud  coverage  with  responsible  companies in such amounts as are customarily carried by business entities engaged in similar businesses  similarly situated, and will upon request by the Lender furnish the Lender certificates evidencing renewal  of each such policy.                                             -76-  

 

                (i)    Permit  any  representatives  that  are  designated  by  the  Lender  to  inspect  the  insurance policies maintained by or on behalf of the Loan Parties and to inspect books and records related  thereto and any properties covered thereby.                (j)    None of the Credit Parties, or their agents or employees shall be liable for any  loss or damage insured by the insurance policies required to be maintained under this Section 6.07.  Each  Loan Party shall look solely to its insurance companies or any other parties other than the Credit Parties  for the recovery of such loss or damage and such insurance companies shall have no rights of subrogation  against any Credit Party or its agents or employees.  If, however, the insurance policies do not provide  waiver of subrogation rights against such parties, as required above, then the Loan Parties hereby agree,  to the extent permitted by law, to waive their right of recovery, if any, against the Credit Parties and their  agents and employees.  The designation of any form, type or amount of insurance coverage by any Credit  Party under this Section 6.07 shall in no event be deemed a representation, warranty or advice by such  Credit Party that such insurance is adequate for the purposes of the business of the Loan Parties or the  protection of their properties.          6.08  Compliance  with Laws.  Comply in all  material respects with the requirements of all  Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in  such  instances  in  which  (a)  such  requirement  of  Law  or  order,  writ,  injunction  or decree  is  being  contested  in  good  faith  by  appropriate  proceedings  diligently  conducted  and  with  respect  to  which  adequate reserves have been set aside and maintained by the Loan Parties in accordance with GAAP; (b)  such  contest  effectively  suspends  enforcement  of  the  contested  Laws,  and  (c)  the  failure  to  comply  therewith could not reasonably be expected to have a Material Adverse Effect.           6.09  Books and Records; Accountants.                (a)    (i) Maintain proper books of record and account, in which full, true and correct  entries  in  conformity  with  GAAP  consistently  applied  shall  be  made  of  all  financial  transactions  and  matters involving the assets and business of the Loan Parties; and (ii) maintain such books of record and  account in material conformity with all applicable requirements of any Governmental Authority having  regulatory jurisdiction over the Loan Parties.                (b)    At  all  times  retain Deloitte  Touche  Tohmatsu  Limited or  another  Registered  Public Accounting Firm which is reasonably satisfactory to the Lender and shall instruct Deloitte Touche  Tohmatsu Limited or such other Registered Public Accounting Firm to cooperate with, and be available  to,  the  Lender  or  its  representatives  to  discuss  the  Loan  Parties’  financial  performance,  financial  condition, operating results, controls, and such other matters, within the scope of the retention of Deloitte  Touche  Tohmatsu  Limited or  such  other  Registered  Public  Accounting  Firm, as  may  be  raised  by  the  Lender.          6.10  Inspection Rights.                  (a)    Permit  representatives  and  independent  contractors  of  the  Lender  to  visit  and  inspect any of its properties, to examine its corporate, financial and operating records, and make copies  thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers,  and  Registered  Public  Accounting  Firm,  and  permit  the  Lender  or  professionals  (including  investment  bankers, consultants, accountants, and lawyers) retained by the Lender to conduct evaluations of the Loan  Parties’  business  plan,  forecasts  and  cash  flows,  all  at  the  expense  of  the  Loan  Parties  and  at  such  reasonable  times  during  normal  business hours  and  as  often  as  may  be  reasonably  desired,  upon  reasonable  advance  notice  to  the  Lead  Borrower; provided, however,  that  when  a  Default  or  Event  of  Default  exists  the  Lender  (or  any  of its  representatives  or  independent contractors)  may  do  any  of the                                            -77-  

 

   foregoing  at  the  expense  of  the  Loan  Parties  at  any  time  during  normal  business  hours  and  without  advance notice.                (b)    Upon the request of the Lender after reasonable prior notice, permit the Lender or  professionals  (including  investment  bankers,  consultants,  accountants,  and  lawyers)  retained  by  the  Lender to conduct commercial finance examinations and other evaluations, including, without limitation,  of  (i)  the  Lead  Borrower’s  practices  in  the  computation  of  the  Borrowing  Base, and  (ii)  the  assets  included in the Borrowing Base and related financial information such as, but not limited to, sales, gross  margins, payables, accruals and reserves.  During any two (2) successive Fiscal Years in which (i) no  Loans are outstanding and (ii) the aggregate balance of cash deposits in Blocked Accounts maintained at  Wells Fargo is equal to or greater than $5,000,000, the Loan Parties shall pay the fees and expenses of the  Lender and such professionals with respect to one (1) such commercial finance examination undertaken  by the Lender during such two Fiscal Years; provided, that the Lender may, in its discretion undertake  two (2) commercial finance examinations at the Loan Parties’ expense in any Fiscal Year in which (i) the  outstanding  principal  amount  of  the  Loans is  greater  than  zero or  (ii)  the  aggregate  balance  of  cash  deposits in Blocked Accounts maintained at Wells Fargo is less than $5,000,000; provided, further, that  the Lender may in its discretion undertake three (3) commercial finance examinations at the Loan Parties’  expense in any Fiscal Year in which Availability is less than thirty percent (30%) of the Revolving Loan  Cap.  Notwithstanding the foregoing, the Lender may cause additional commercial finance examinations  to be undertaken (i) as it in its discretion deems necessary or appropriate, at its own expense or, (ii) if  required by Law or if a Default or Event of Default shall have occurred and be continuing, at the expense  of the Loan Parties.                (c)    Upon the request of the Lender after reasonable prior notice, permit the Lender or  professionals  (including  appraisers)  retained  by  the  Lender  to  conduct  appraisals  of  the  Collateral,  including,  without  limitation, the  assets  included  in  the  Borrowing  Base.   During  any  Fiscal  Year  in  which no Loans are outstanding, the Loan Parties shall pay the fees and expenses of the Lender and such  professionals  with  respect  to  one  (1)  such  inventory  appraisal  undertaken  by  the Lender  during  such  Fiscal Year; provided, that the Lender may in its discretion undertake two (2) inventory appraisals at the  Loan  Parties’  expense  in  any  Fiscal  Year  in  which  the  outstanding  principal  amount  of  the  Loans  is  greater than zero; provided, further, that the Lender may in its discretion undertake three (3) inventory  appraisals at the Loan Parties’ expense in any Fiscal Year in which Availability is less than thirty percent  (30%) of the Revolving Loan Cap.          6.11  Use of Proceeds.  Use the proceeds of the Credit Extensions (a) to finance the acquisition  of assets of the Borrowers in the ordinary course of business, including the purchase of inventory and  equipment, (b) to finance Capital Expenditures of the Borrowers, and (c) for general corporate purposes  of  the  Loan  Parties,  in  each  case  to  the  extent  not  prohibited  under  applicable  Law  or  the  Loan  Documents.            6.12  Additional Loan Parties.  Notify the Lender at the time that any Person (x) becomes a  Subsidiary, and in each case promptly thereafter (and in any event within fifteen (15) days), cause any  such Person (a) which is not a CFC, to (i) become a Loan Party by executing and delivering to the Lender  a  Joinder  to this  Agreement  or a  Facility  Guaranty  or  such other  documents  as  the  Lender shall deem  appropriate for such purpose, (ii) grant a Lien to the Lender on such Person’s assets of the same type that  constitute  Collateral  to  secure  the  Obligations,  and  (iii)  deliver  to  the  Lender  documents  of  the  types  referred  to  in  clauses  (iii)  and  (iv)  of Section 4.01(a) and,  upon  the  reasonable  request  of  the  Lender,  customary  opinions  of  counsel  to  such  Person  (which  shall  cover,  among  other  things,  the  legality,  validity, binding effect and enforceability of the documentation referred to in clause (a)), and (b) if any  Equity Interests or Indebtedness of such Person are owned by or on behalf of any Loan Party, to pledge  such Equity Interests and promissory notes evidencing such Indebtedness (except that, if such Subsidiary                                            -78-  

 

   is a CFC, the Equity Interests of such Subsidiary to be pledged may be limited to 65% of the outstanding  voting  Equity  Interests  of  such  Subsidiary  and  100%  of  the  non-voting  Equity  Interests  of  such  Subsidiary) in each case in form, content and scope reasonably satisfactory to the Lender.  In no event  shall compliance with this Section 6.12 waive or be deemed a waiver or consent to any transaction giving  rise to the need to comply with this Section 6.12 if such transaction was not otherwise expressly permitted  by this Agreement or constitute or be deemed to constitute, with respect to any Subsidiary, an approval of  such  Person  as  a  Borrower  or  permit  the  inclusion  of  any  acquired  assets  in  the  computation  of  the  Borrowing Base.          6.13  Cash Management.                (a)    On or prior to the Closing Date:                        (i)    deliver  to  the  Lender  copies  of  notifications  (each,  a  “Credit  Card         Notification”) substantially in the form attached hereto as Exhibit F which have been executed on         behalf of such Loan Party and delivered to such Loan Party’s Credit Card Issuers and Credit Card         Processors listed on Schedule 5.21(b); and                        (ii)   enter  into  a  Blocked  Account  Agreement  satisfactory  in  form  and         substance to the Lender with each Blocked Account Bank (collectively, the “Blocked Accounts”);         and                       (iii)  at the request of the Lender, deliver to the Lender copies of notifications         (each, a “DDA Notification”) substantially in the form attached hereto as Exhibit G which have         been executed on behalf of such Loan Party and delivered to each depository institution listed on         Schedule 5.21(a).                (b)    From and after the Closing Date, the Loan Parties shall ACH or wire transfer no  less frequently than each Business Day (or, in the case of subclause (iii) below, on Monday, Wednesday  and Friday of each week (to the extent such Monday, Wednesday or Friday is a Business Day and, if such  day is not a Business Day, on the next succeeding Business Day) so long as a Cash Dominion Event has  not occurred and is continuing and on each Business Day if a Cash Dominion Event has occurred and is  continuing) and whether or not there are then any outstanding Obligations, to a Blocked Account all of  the following:                       (i)    all amounts on deposit in each DDA (net of any minimum balance, not to         exceed $5,000.00, as may be kept in the subject DDA under the Borrowers’ policies as in effect         on the Second Amendment Effective Date);                       (ii)   all  payments  from  Credit  Card  Processors  and  Credit  Card  Issuers  and         proceeds of all credit card charges;                        (iii)  all  cash  receipts  from  the  Disposition  of  Inventory  and  other  assets         (whether or not constituting Collateral) (other than cash kept in Stores in the ordinary course of         business consistent with the Borrowers’ policies as in effect on the Second Amendment Effective         Date;                       (iv)   all proceeds of Accounts; and                                             -79-  

 

                       (v)    all Net Proceeds, and all other cash payments received by a Loan Party         from  any  Person  or  from  any  source  or  on  account  of  any  Disposition  or  other  transaction  or         event, including, without limitation, any Prepayment Event.                (c)    Each Blocked Account Agreement shall require upon notice from Lender, which  notice shall be delivered only after the occurrence and during the continuance of a Cash Dominion Event,  the ACH or wire transfer no less frequently than daily (and whether or not there are then any outstanding  Obligations) to the concentration account maintained by the Lender at Wells Fargo (the “Concentration  Account”),  of  all  cash  receipts  and  collections  received  by  each  Loan  Party  from  all  sources  (the  “Receipts and Collections”), including, without limitation, the following:                       (i)    the  then  entire  ledger  balance  of  each  Blocked  Account  (net  of  any         minimum balance, not to exceed $5,000.00, as may be kept in the subject Blocked Account under         the Borrowers’ policies as in effect on the Second Amendment Effective Date);                       (ii)   all amounts required to be deposited into the Blocked Accounts pursuant         to clause (b) above; and                       (iii)  any  other  cash  amounts  received  by  any  Loan  Party  from  any  other         source, on account of any type of transaction or event;    provided, however, the Lender may, in its sole discretion, permit the Loan Parties to have one or more  “intermediate” Blocked Account Agreements, whereby such agreements would provide, upon notice from  the  Lender,  which  notice  shall  be  delivered  only  after  the  occurrence  and  during  the  continuance  of  a  Cash Dominion Event, the ACH or wire transfer no less frequently than daily (and whether or not there  are  then  any  outstanding  Obligations)  of  all  Receipts  and  Collections  to  another  Blocked  Account,  as  opposed to the Concentration Account.                (d)    The  Concentration  Account  shall  at  all  times  be  under  the  sole  dominion  and  control of the Lender.  The Lender shall cause all funds on deposit in the Concentration Account to be  applied to the Obligations, which amounts shall be applied to the Obligations in the order proscribed in  either Section 2.04(f) or Section 8.03 of  this  Agreement,  as  applicable.   The  Loan  Parties  hereby  acknowledge  and  agree  that  (i)  the  Loan  Parties  have  no  right  of  withdrawal  from  the  Concentration  Account, and (ii) the funds on deposit in the Concentration Account shall at all times be collateral security  for all of the Obligations.  In the event that, notwithstanding the provisions of this Section 6.13, any Loan  Party  receives  or  otherwise  has  dominion  and  control  of  any  such  cash receipts  or  collections,  such  receipts and collections shall be held in trust by such Loan Party for the Lender, shall not be commingled  with any of such Loan Party’s other funds or deposited in any account of such Loan Party and shall, not  later than the Business Day after receipt thereof, be deposited into the Concentration Account or dealt  with in such other fashion as such Loan Party may be instructed by the Lender.                (e)    Upon  the  request  of  the  Lender,  the  Loan  Parties  shall  cause  bank  statements  and/or other reports to be delivered to the Lender not less often than monthly, accurately setting forth all  amounts deposited in each Blocked Account to ensure the proper transfer of funds as set forth above.                (f)    If the Lender does not require DDA Notifications to be delivered on the Closing  Date in accordance with Section 6.13(a)(iii) above, then the Loan Parties shall, upon the request of the  Lender at any time after the Closing Date, deliver to the Lender copies of DDA Notifications, which have  been executed on behalf of the applicable Loan Party and delivered to each depository institution listed on  Schedule 5.21(a).                                             -80-  

 

          6.14  Information Regarding the Collateral.                (a)    Furnish to the Lender at least thirty (30) days prior written notice of any change  in: (i) any Loan Party’s name or in any trade name used to identify it in the conduct of its business or in  the ownership of its properties; (ii) the location of any Loan Party’s chief executive office, its principal  place of business, any office in which it maintains books or records relating to Collateral owned by it or  any office or facility at which Collateral owned by it is located (including the establishment of any such  new  office  or  facility),  excluding  Store  locations;  (iii)  any  Loan  Party’s  organizational  structure  or  jurisdiction  of  incorporation  or  formation;  or  (iv)  any  Loan  Party’s  Federal  Taxpayer  Identification  Number  or  organizational  identification  number  assigned  to  it  by  its  state  of  organization.  The  Loan  Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings  have been made under the UCC or otherwise that are required in order for the Lender to continue at all  times following such change to have a valid, legal and perfected first priority security interest in all the  Collateral for its own benefit and the benefit of the other Credit Parties.                (b)    Should  any  of  the  information  on  any  of  the  Schedules  hereto  (other  than  Schedule 5.08(b)(2)) become inaccurate or misleading in any material respect as a result of changes after  the Closing Date, the Lead Borrower shall advise the Lender in writing of such revisions or updates as  may be necessary or appropriate to update or correct the same.  From time to time as may be reasonably  requested  by  the  Lender  (which  request  shall  not  be  made  (i) more  than  one  (1)  time  in  each  Fiscal  Quarter  with  respect  to Schedule  5.08(b)(2) and  (ii)  more  than  two  (2)  times  in  any  Fiscal  Year  with  respect to all other Schedules, in each case so long as no Default or Event of Default has occurred and is  continuing), the Lead Borrower shall supplement each Schedule hereto, or any representation herein or in  any other Loan Document, with respect to any matter arising after the Closing Date that, if existing or  occurring on the Closing Date, would have been required to be set forth or described in such Schedule or  as an exception to such representation or that is necessary to correct any information in such Schedule or  representation which has been rendered inaccurate thereby (and, in the case of any supplements to any  Schedule,  such  Schedule  shall  be  appropriately  marked  to  show  the  changes  made  therein).   Notwithstanding  the  foregoing,  no  supplement  or  revision  to  any  Schedule  or  representation  shall  be  deemed  the  Credit  Parties’  consent  to  the  matters  reflected  in  such  updated  Schedules  or  revised  representations nor permit the Loan Parties to undertake any actions otherwise prohibited hereunder or  fail to undertake any action required hereunder from the restrictions and requirements in existence prior to  the  delivery  of  such  updated  Schedules  or  such  revision  of  a  representation;  nor  shall  any  such  supplement or revision to any Schedule or representation be deemed the Credit Parties’ waiver of any  Default or Event of Default resulting from the matters disclosed therein.          6.15  Physical Inventories.                (a)    Cause not less than one (1) physical inventory to be undertaken, at the expense of  the  Loan  Parties,  in  each  Fiscal  Year,  and  cycle  counts,  in  each  case  consistent  with  past  practices,  conducted by such inventory takers as are satisfactory to the Lender and following such methodology as  is consistent with past practices. The Lender, at the expense of the Loan Parties, may participate in and/or  observe each scheduled physical count of Inventory which is undertaken on behalf of any Loan Party.   The Lead Borrower, within thirty (30) days following the completion of such inventory, shall provide the  Lender with a reconciliation of the results of such inventory (as well as of any other physical inventory or  cycle counts undertaken by a Loan Party) and shall post such results to the Loan Parties’ stock ledgers  and general ledgers, as applicable.                (b)    Permit the Lender, in its discretion, if any Default or Event of Default exists, to  cause additional such inventories to be taken as the Lender determines (each, at the expense of the Loan  Parties).                                            -81-  

 

          6.16  Environmental Laws.  (a) Conduct its operations and keep and maintain its Real Estate  in  material  compliance  with  all  Environmental  Laws;  (b)  obtain  and  renew  all  environmental  permits  necessary  for  its  operations  and  properties;  and  (c)  implement  any  and  all  investigation,  remediation,  removal  and  response  actions  that  are required  to  comply  with  Environmental  Laws  pertaining  to  the  presence,  generation,  treatment,  storage,  use,  disposal,  transportation  or release  of  any  Hazardous  Materials on, at, in, under, above, to, from or about any of its Real Estate, provided, however, that neither  a  Loan  Party  nor  any  of  its  Subsidiaries  shall  be  required  to  undertake  any  such  cleanup,  removal,  remedial or other action to the extent that its obligation to do so is being contested in good faith and by  proper  proceedings  and  adequate  reserves  have  been  set  aside  and  are  being  maintained  by  the  Loan  Parties with respect to such circumstances in accordance with GAAP.          6.17  Further Assurances.                (a)    Execute  any  and  all  further  documents,  financing  statements,  agreements  and  instruments, and take all such further actions (including the filing and recording of financing statements  and other documents), that may be required under any applicable Law, or which the Lender may request,  to grant, preserve, protect, perfect or enforce the Liens created or intended to be created by the Security  Documents or the validity or priority of any such Lien, all at the expense of the Loan Parties. The Loan  Parties also agree to provide to the Lender, from time to time upon request, evidence satisfactory to the  Lender as to the perfection and priority of the Liens created or intended to be created by  the Security  Documents.                (b)    If  any  material  assets  are  acquired  by  any  Loan  Party  after  the  Closing  Date  (other  than assets  constituting  Collateral  under  the  Security  Documents  that  become  subject  to  the  perfected  first-priority  Lien  (subject  to  Permitted  Encumbrances)  under  the  Security  Documents  upon  acquisition thereof), notify the Lender thereof, and the Loan Parties will cause such assets to be subjected  to a Lien securing the Obligations and will take such actions as shall be necessary or shall be requested by  the  Lender  to  grant  and  perfect  such  Liens,  including  actions  described  in  paragraph  (a)  of  this  Section 6.17, all at the expense of the Loan Parties. In no event shall compliance with this Section 6.17(b)  waive or be deemed a waiver or consent to any transaction giving rise to the need to comply with this  Section 6.17 if such transaction was not otherwise expressly permitted by this Agreement or constitute or  be  deemed  to  constitute  consent  to  the  inclusion  of  any  acquired  assets  in  the  computation  of  the  Borrowing Base.                (c)    Upon  the  request  of  the  Lender,  cause  each  of  its  customs  brokers,  freight  forwarders, consolidators and/or carriers in possession of a material portion of its Eligible Inventory to  deliver an agreement (including, without limitation, a Customs Broker/Carrier Agreement) to the Lender  covering such matters and in such form as the Lender may reasonably require.                (d)    Upon the request of the Lender, cause any of its landlords to deliver a Collateral  Access Agreement to the Lender in such form as the Lender may reasonably require; provided, that the  foregoing will not apply to Store locations.                (e)    Upon  the  request  of  the  Lender,  execute  any  and  all  further  documents,  agreements  and  instruments,  and  take  all  such  further  actions  (including  the  filing  of  the Security  Agreement or a short form thereof in the United States Copyright Office), that may be required under any  applicable Law or which the Lender may request in order for the Lender to have a fully perfected Lien on,  and  security  interest  in,  all  right,  title  and  interest  of  the  applicable  Loan  Parties  in  any  registered  copyright and copyright application that is material to the Business.                                             -82-  

 

          6.18  Compliance  with  Terms  of  Leaseholds.  Except  as  otherwise  expressly  permitted  hereunder, (a) make all payments and otherwise perform all obligations in respect of all Leases to which  any Loan Party is a party, and keep such Leases in full force and effect, (b) not allow such Leases to lapse  or be terminated or any rights to renew such Leases to be forfeited or cancelled, and (c) notify the Lender  of any default by any party with respect to such Leases and cooperate with the Lender in all respects to  cure any such default, in each case to the extent failure to do so could not reasonably be expected to have  a Material Adverse Effect.          6.19  Material Contracts.  (a) Perform and observe all material terms and provisions of each  Material  Contract  to  be  performed  or  observed  by  it,  (b)  maintain  each  such  Material  Contract  in  full  force and effect (except to the extent such Person elects to terminate the same in accordance with its terms  and so notifies the Lender and, unless the failure to do so could not reasonably be expected to have a  Material  Adverse  Effect,  makes  reasonable  arrangements  for  a  suitable  replacement  of  the  same),  (c)  enforce each such Material Contract in accordance with such Person’s reasonable business judgment, (d)  take all such action to such end as may be from time to time reasonably requested by the Lender in its  Permitted Discretion, and (e) upon the reasonable request of the Lender, make to each other party to each  such Material Contract such demands and requests for information and reports or for action as any Loan  Party is entitled to make under such Material Contract.          6.20  OFAC; Sanctions.          Each  Loan  Party  will,  and  will  cause  each  of  its  Subsidiaries  to  comply  with  all  applicable  Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.  Each of the Loan Parties and its  Subsidiaries  shall  implement  and  maintain  in  effect  policies  and  procedures  designed  to  ensure  compliance by the Loan Parties and their Subsidiaries and their respective directors, officers, employees,  agents and Affiliates with all applicable Sanctions, Anti-Corruption Laws and Anti-Money Laundering  Laws.          6.21  Credit Card Processors.  The Lead Borrower will, and will cause its Subsidiaries to (a)  comply  in  all  material  respects  with  all  obligations  of  such  Person  under  each  credit  card  processing  agreement to which such Person is a party, (b) maintain each credit card processing agreement set forth  on Schedule 5.21(b) and each credit card processing agreement entered into after the Closing Date in full  force and  effect  (except to  the extent such  Person elects  to  terminate  the  same  in  accordance  with  the  terms thereof and so notifies the Lender) and take or cause to be taken all actions necessary to maintain,  preserve and protect the rights and interests of the Lender in all material respects with respect to all such  agreements,  and  (c)  promptly  notify  the  Lender  of  the  entry  by  such  Person  into  any  credit  card  processing agreement with any Credit Card Processor or Credit Card Issuer after the Closing Date and  deliver to the Lender a copy of the Credit Card Notification delivered to each such Credit Card Processor  or  Credit  Card  Issuer  contemporaneously  with  the  entry  by  such  Person  into  such  credit  processing  agreement.                                        ARTICLE VII                                NEGATIVE COVENANTS          So  long  as  the  Lender  shall  have  any  Commitment  hereunder,  any  Loan  or  other  Obligation  hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (other than  contingent  indemnification  obligations  for which  a  claim  has  not  been  asserted),  no  Loan  Party  shall,  directly or indirectly:          7.01  Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets  or revenues, whether now owned or hereafter acquired or sign or file or suffer to exist under the UCC or                                            -83-  

 

   any similar Law or statute of any jurisdiction a financing statement that names any Loan Party as debtor;  sign or suffer to exist any security agreement authorizing any Person thereunder to file such financing  statement;  sell  any  of  its  property  or  assets  subject  to  an  understanding  or  agreement  (contingent  or  otherwise) to repurchase such property or assets with recourse to it; or assign or otherwise transfer any  accounts or other rights to receive income, other than, as to all of the above, Permitted Encumbrances.           7.02  Investments.  Make any Investments, except Permitted Investments.          7.03  Indebtedness; Disqualified Stock.  (a) Create, incur, assume, guarantee, suffer to exist  or otherwise become or remain liable with respect to, any Indebtedness, except Permitted Indebtedness;  (b)  issue  Disqualified  Stock,  or  (c)  issue  and  sell  any  other  Equity  Interests  unless  (i)  such  Equity  Interests shall be issued solely by the Lead Borrower and not by a Subsidiary of a Loan Party, (ii) such  Equity Interests shall not be subject to redemption other than redemption at the option of the Loan Party  issuing such Equity Interests and in accordance with the limitations contained in this Agreement, and (iii)  all Restricted Payments in respect of such Equity Interests are permitted pursuant to Section 7.06.          7.04  Fundamental  Changes.  Merge,  dissolve,  liquidate,  consolidate  with  or  into  another  Person, (or agree to do any of the foregoing), except that, so long as no Default or Event of Default shall  have occurred and be continuing prior to or immediately after giving effect to any action described below  or would result therefrom:                (a)    any  Subsidiary  which  is  not  a  Loan  Party  may  merge  with  (i)  a  Loan  Party,  provided that the Loan Party shall be the continuing or surviving Person, or (ii) any one or more other  Subsidiaries which are  not  Loan  Parties,  provided  that  when  any wholly-owned  Subsidiary  is  merging  with another Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving Person;                 (b)    any Subsidiary which is a Loan Party may merge into any Subsidiary which is a  Loan Party or into a Borrower, provided that in any merger involving a Borrower, such Borrower shall be  the continuing or surviving Person;                (c)    in connection with a Permitted Acquisition, any Subsidiary of a Loan Party may  merge with or into or consolidate with any other Person or permit any other Person to merge with or into  or  consolidate  with  it; provided,  that  (i)  the  Person  surviving  such  merger  shall  be  a  wholly-owned  Subsidiary of a Loan Party and such Person shall become a Loan Party in accordance with the provisions  of Section 6.12 hereof, and (ii) in the case of any such merger to which any Loan Party is a party, such  Loan Party is the surviving Person; and                (d)    any CFC that is not a Loan Party may merge into any CFC that is not a Loan  Party.          7.05  Dispositions.  Make  any  Disposition  or  enter  into  any  agreement  to  make  any  Disposition, except Permitted Dispositions.          7.06  Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment,  or incur any obligation (contingent or otherwise) to do so, except that, so long as no Default or Event of  Default shall have occurred and be continuing prior to or immediately after giving effect  to any action  described below or would result therefrom:                (a)    each  Subsidiary  of  a  Loan  Party  may  make  Restricted  Payments  to  any  Loan  Party, including at such time as a Default or an Event of Default shall have occurred and is continuing;                                             -84-  

 

                (b)    the Loan Parties and each Subsidiary may declare and make dividend payments  or  other  distributions  payable  solely  in  the  common  stock  or  other  common  Equity  Interests  of  such  Person;                (c)    if  the  Payment  Conditions  are  satisfied, the  Loan  Parties  and  each  Subsidiary  may purchase, redeem or otherwise acquire Equity Interests issued by it;                (d)    if the Payments Conditions are satisfied, the Lead Borrower may declare or pay  cash dividends to its stockholders;                (e)    at any time following the date that is eighteen (18) months after the Closing Date  and  if  the  Adjusted  Payment  Conditions  are  satisfied,  the  Lead  Borrower,  in  addition  to  the  dividend  payments described in clause (d) above, may pay a one-time dividend to its shareholders (as announced in  a filing with the SEC) in an aggregate amount not to exceed $5,000,000;                 (f)    any transaction expressly permitted pursuant to Section 7.09(f); and                (g)    so  long  as  no  Default  or Event  of  Default  has  occurred  and  is  continuing  or  would  result  from  the  making  of  any  such  Restricted  Payment,  the  Loan  Parties  may  make  Restricted  Payments in an amount not to exceed $2,000,000 in the aggregate during any Fiscal Year.          7.07  Prepayments of Indebtedness.  Prepay, redeem, purchase, defease or otherwise satisfy  prior to the scheduled maturity thereof in any manner any Indebtedness, except (a) as long as no Default  or Event of Default then exists, regularly scheduled or mandatory repayments, repurchases, redemptions  or  defeasances  of  Permitted  Indebtedness,  (b)  voluntary  prepayments,  repurchases,  redemptions  or  defeasances of Permitted Indebtedness as long as the Payment Conditions are satisfied, and (c) Permitted  Refinancings of any such Indebtedness.          7.08  Change in Nature of Business.  Engage in any line of business substantially different  from  the  Business  conducted  by  the  Loan  Parties  on  the Second  Amendment  Effective Date  or  any  business substantially related or incidental thereto.          7.09  Transactions with Affiliates.  Enter into, renew, extend or be a party to any transaction  of any kind with any Affiliate of any Loan Party, whether or not in the ordinary course of business, other  than  on  fair  and  reasonable  terms  substantially  as  favorable  to  the  Loan  Parties  or  such  Subsidiary  as  would  be  obtainable  by  the  Loan  Parties  or  such  Subsidiary  at  the  time  in  a  comparable  arm’s  length  transaction with a Person other than an Affiliate; provided, that the foregoing restriction shall not apply to  (a) a transaction between or among the Loan Parties, (b) transactions described on Schedule 7.09 hereto,  (c)  advances  for  commissions,  travel  and  other  similar  purposes  in  the  ordinary  course  of  business  to  directors, officers and employees, (d) the issuance of Equity Interests in the Lead Borrower to any officer,  director,  employee  or  consultant  of  the  Lead  Borrower  or  any  of  its  Subsidiaries,  (e)  the  payment  of  reasonable  fees  and  out-of-pocket  costs  to  directors,  and  compensation  and  employee  benefit  arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the  Lead Borrower or any of its Subsidiaries, and (f) any issuances of securities of the Lead Borrower (other  than Disqualified Stock and other Equity Interests not permitted hereunder) or other payments, awards or  grants  in  cash,  securities  or  otherwise  pursuant  to,  or  the  funding  of,  severance  agreements,  retention  plans,  employment  agreements,  deferred  compensation  agreements,  stock  options,  restricted  stock  agreements and stock ownership plans (in each case in respect of Equity Interests in the Lead Borrower)  of the Lead Borrower or any of its Subsidiaries.                                             -85-  

 

          7.10  Burdensome  Agreements.  Enter  into  or  permit to  exist  any  Contractual  Obligation  (other than this Agreement or any other Loan Document) that:  (a) limits the ability (i) of any Subsidiary  to make Restricted Payments or other distributions to any Loan Party or to otherwise transfer property to  or invest in a Loan Party, (ii) of any Subsidiary to Guarantee the Obligations, (iii) of any Subsidiary to  make or repay loans to a Loan Party, or (iv) of the Loan Parties or any Subsidiary to create, incur, assume  or suffer to exist Liens on property of such Person in favor of the Lender; provided, however, that this  clause  (iv)  shall  not  prohibit  any  negative  pledge  incurred  or  provided  in  favor  of  any  holder  of  Indebtedness permitted under clauses (c) or (f) of the definition of Permitted Indebtedness solely to the  extent any such negative pledge relates to the property financed by or the subject of such Indebtedness; or  (b)  requires  the  grant  of  a  Lien  to  secure  an  obligation  of  such  Person  if  a  Lien  is  granted  to  secure  another obligation of such Person.          7.11  Use  of  Proceeds.  Use  the  proceeds  of  any  Credit  Extension,  whether  directly  or  indirectly,  and  whether  immediately,  incidentally  or  ultimately,  (a)  to  purchase  or  carry  margin  stock  (within the  meaning  of  Regulation  U  of  the  FRB)  or  to  extend  credit  to  others  for  the  purpose  of  purchasing or carrying margin stock or to refund Indebtedness originally incurred for such purpose, (b) to  make  any  payments  to  a  Sanctioned  Entity  or  a  Sanctioned  Person,  to  finance  any  investments  in  a  Sanctioned Entity or a Sanctioned Person, to fund any operations of a Sanctioned Entity or a Sanctioned  Person, or in any other manner that would result in a violation of Sanctions by any Person, (c) for any  purpose  which  would  breach  any  Anti-Corruption  Laws  or  Anti-Money  Laundering  Laws,  or  (d)  for  purposes other than those permitted under this Agreement.          7.12  Amendment of Material Documents.  Amend, modify or waive any of a Loan Party’s  rights under (a) its Organization Documents in a manner adverse to the Credit Parties, or (b) any Material  Contract or Material Indebtedness (other than on account of any refinancing thereof otherwise permitted  hereunder) to the extent that such amendment, modification or waiver would result in a Default or Event  of  Default  under  any  of  the  Loan  Documents,  would  be  materially  adverse  to  the  Credit  Parties  or  otherwise would be reasonably likely to have a Material Adverse Effect.          7.13  Fiscal Year.  Change the Fiscal Year of any Loan Party, or the accounting policies or  reporting practices of the Loan Parties, except as required  by GAAP.          7.14  Deposit Accounts;  Credit  Card  Processors.  Open  new  DDAs  or  Blocked  Accounts  unless the Loan Parties shall have delivered to the Lender appropriate DDA Notifications (to the extent  requested  by  Lender  pursuant  to  the  provisions  of Section 6.13)  or  Blocked  Account  Agreements  consistent with the provisions of Section 6.13 and otherwise satisfactory to the Lender.  No Loan Party  shall maintain any bank accounts or enter into any agreements with Credit Card Issuers or Credit Card  Processors other than the ones expressly contemplated herein or in Section 6.13 hereof.          7.15  Financial Covenant.  Permit Availability at any time to be less than the greater of (a) ten  percent (10%) of the Revolving Loan Cap and (b) $3,000,000.          7.16  Maintenance  of  FILO  Reserve.   Fail  to  deliver  a  Borrowing  Base  Certificate  as  and  when required hereunder which contains the FILO Reserve (if any), including a calculation thereof.                                             -86-  

 

                                       ARTICLE VIII                        EVENTS OF DEFAULT AND REMEDIES           8.01  Events of Default.  Any of the following shall constitute an Event of Default:                (a)    Non-Payment.  The Borrowers or any other Loan Party fails to pay when and as  required to be paid herein, (i) any amount of principal of any Loan or any L/C Obligation, or deposit any  funds as Cash Collateral in respect of L/C Obligations, or (ii) any interest on any Loan or on any L/C  Obligation,  or  any  fee  due  hereunder,  or  (iii)  any  other  amount  payable  hereunder  or  under  any  other  Loan Document; or                (b)    Specific Covenants.  Any Loan Party fails to perform or comply with any term,  covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.07, 6.10, 6.11, 6.12, 6.13 or  6.14 or Article VII; or                (c)    Other Defaults.  Any Loan Party fails to perform or observe any other covenant  or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to  be performed or observed and such failure continues for fifteen (15) days; or                (d)    Representations  and  Warranties.   Any  representation,  warranty,  certification  or  statement of fact made or deemed made by or on behalf of any Borrower or any other Loan Party herein,  in  any  other  Loan  Document,  or  in  any  document  delivered  in  connection  herewith  or  therewith  (including, without limitation, any Borrowing Base Certificate) shall be incorrect or  misleading in any  material respect when made or deemed made; or                (e)    Cross-Default.  (i) Any Loan Party or any Subsidiary thereof (A) fails to make  any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or  otherwise) in respect of any Material Indebtedness (including undrawn committed or available amounts  and including amounts owing to all creditors under any combined or syndicated credit arrangement), or  (B)  fails  to  observe  or  perform  any  other  agreement  or  condition  relating  to  any  such  Material  Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any  other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders  of such Material Indebtedness or the beneficiary or beneficiaries of any Guarantee thereof (or a trustee or  agent  on  behalf  of  such  holder  or  holders  or  beneficiary  or  beneficiaries)  to  cause,  with  the  giving  of  notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid,  defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem  such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash  collateral  in  respect  thereof  to  be  demanded;  or  (ii)  there  occurs  under  any  Swap  Contract  an  Early  Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such  Swap Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in  such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which  a Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap  Termination  Value  owed  by  the  Loan  Party  or  such  Subsidiary  as  a  result  thereof  is  greater  than  $5,000,000; or                (f)    Insolvency Proceedings, Etc.  Any Loan Party or any of its Subsidiaries institutes  or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for  the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian,  conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property;  or a proceeding shall be commenced or a petition filed, without the application or consent of such Person,  seeking  or  requesting  the  appointment  of  any  receiver,  trustee,  custodian,  conservator, liquidator,                                            -87-  

 

   rehabilitator or similar officer is appointed and the appointment continues undischarged, undismissed or  unstayed for thirty (30) calendar days or an order or decree approving or ordering any of the foregoing  shall be entered; or any proceeding under any Debtor Relief Law relating to any such Person or to all or  any  material  part  of  its  property  is  instituted  without  the  consent  of  such  Person  and  continues  undismissed  or  unstayed  for  thirty  (30)  calendar  days,  or  an  order  for  relief  is  entered in  any  such  proceeding; or                (g)    Inability to Pay Debts; Attachment.  (i) Any Loan Party or any Subsidiary thereof  becomes unable or admits in writing its inability or fails generally to pay its debts as they become due in  the ordinary course of business, or (ii) any writ or warrant of attachment or execution or similar process is  issued or levied against all or any material part of the property of any such Person; or                (h)    Judgments.  There is entered against any Loan Party or any Subsidiary thereof (i)  one  or  more  judgments  or  orders  for  the  payment  of  money  in  an  aggregate  amount  (as  to  all  such  judgments  and  orders)  exceeding  $4,000,000  (to  the  extent  not  covered  by  independent  third-party  insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the  potential  claim  and  does  not  dispute  coverage),  or  (ii)  any  one  or  more  non-monetary  judgments  that  have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect  and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or  order, or (B) there is a period of thirty (30) consecutive days during which a stay of enforcement of such  judgment or order, by reason of a pending appeal or otherwise, is not in effect; or                 (i)    ERISA.   (i)  An  ERISA  Event  occurs  with  respect  to  a  Pension  Plan  or  Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Loan  Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate  amount in excess of $4,000,000 or which would reasonably likely result in a Material Adverse Effect, or  (ii)  a  Loan  Party  or  any  ERISA  Affiliate  fails  to pay  when  due,  after  the  expiration  of any  applicable  grace  period,  any  installment  payment  with  respect  to  its  withdrawal  liability  under  Section  4201  of  ERISA  under  a  Multiemployer  Plan  in  an  aggregate  amount  in  excess  of  $4,000,000  or  which  would  reasonably likely result in a Material Adverse Effect; or                (j)    Invalidity of Loan Documents.  (i)  Any provision of any Loan Document, at any  time after its execution and delivery and for any reason other than as expressly permitted hereunder or  thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan  Party or any Affiliate thereof contests in any manner the validity or enforceability of any provision of any  Loan  Document;  or  any  Loan  Party  denies  that  it  has  any  or  further  liability  or  obligation  under  any  provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan  Document or seeks to avoid, limit or otherwise adversely affect any Lien purported to be created under  any Security Document; or (ii) any Lien purported to be created under any Security Document shall cease  to be, or shall be asserted by any Loan Party or any Affiliate thereof not to be, a valid and perfected Lien  on any Collateral, with the priority required by the applicable Security Document; or                (k)    Change of Control.  There occurs any Change of Control; or                (l)    Cessation  of  Business.   Except  as  otherwise  expressly  permitted  hereunder  (including, without limitation, in connection with a Permitted Disposition), any Loan Party shall take any  action to suspend the operation of its business in the ordinary course, liquidate all or a material portion of  its assets or Store locations, or employ an agent or other third party to conduct a program of closings,  liquidations or “Going-Out-Of-Business” sales of any material portion of its business; or                                             -88-  

 

                (m)    Loss of  Collateral.   There  occurs  any  uninsured  loss  to  any  portion  of  the  Collateral with a fair market value in excess of $5,000,000; or                (n)    Indictment.   The  indictment  or  institution  of  any  legal  process  or  proceeding  against,  any  Loan  Party  or  any  Subsidiary thereof,  under  any  federal  or  state  criminal  statute,  rule,  regulation, order, or other requirement having the force of law for a felony; or                (o)    Guaranty.   The  termination  or  attempted  termination  of  any  Facility  Guaranty  except as expressly permitted hereunder or under any other Loan Document.          8.02  Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, the  Lender may take any or all of the following actions:                (a)    declare the Commitments of the Lender to make Loans and any obligation of the  L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such Commitments and obligation  shall be terminated;                 (b)    declare the unpaid principal amount of all outstanding Loans, all interest accrued  and unpaid thereon, and all other Obligations to be immediately due and payable, without presentment,  demand, protest or other notice of any kind, all of which are hereby expressly waived by the Loan Parties;                 (c)    require that the Loan Parties Cash Collateralize the L/C Obligations; and                (d)    whether  or  not  the  maturity  of  the  Obligations  shall  have  been  accelerated  pursuant  hereto,  proceed  to  protect,  enforce  and  exercise  all  rights  and  remedies  of  the  Credit  Parties  under this Agreement, any of the other Loan Documents or applicable Law, including, but not limited to,  by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of  any covenant or agreement contained in this Agreement and the other Loan Documents or any instrument  pursuant  to  which  the  Obligations  are  evidenced,  and,  if  such  amount  shall  have  become  due,  by  declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of  the Credit Parties;   provided, however,  that  upon  the  occurrence  of  any  Event  of  Default  with  respect  to  any  Loan  Party  under Section 8.01(f), the obligation of the Lender to make Loans and any obligation of the L/C Issuer to  make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding  Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and  the  obligation  of  the  Loan  Parties  to  Cash  Collateralize  the  L/C  Obligations  as  aforesaid  shall  automatically become effective, in each case without further act of the Lender.          No remedy herein is intended to be exclusive of any other remedy and each and every remedy  shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter  existing at law or in equity or by statute or any other provision of Law.          8.03  Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or  after the Loans have automatically become immediately due and payable and the L/C Obligations have  automatically  been  required  to  be  Cash  Collateralized  as  set  forth  in  the  proviso  to Section 8.02),  any  amounts received on account of the Obligations shall be applied by the Lender in the following order:                First,  to  payment  of  that  portion  of  the  Obligations  (excluding  the  Other  Liabilities)         constituting fees, indemnities, Credit Party Expenses and other amounts (including fees, charges                                             -89-  

 

          and disbursements of counsel to the Lender and amounts payable under Article III) payable to the         Lender;                Second, to payment of that portion of the Obligations (excluding the Other Liabilities)         constituting indemnities, Credit Party Expenses, and other amounts (other than principal, interest         and fees) payable to the L/C Issuer (including fees, charges and disbursements of counsel to the         L/C Issuer and amounts payable under Article III);                Third,  to  payment  of  that  portion  of  the  Obligations  constituting  accrued  and  unpaid         interest on the Revolving Loans and other Obligations, and fees (including Letter of Credit Fees),         ratably among the Lender and the L/C Issuer in proportion to the respective amounts described in         this clause Third payable to them;                Fourth, to the payment of that portion of the Obligations constituting unpaid principal of         the Revolving Loans;                Fifth, to the Lender for the account of the L/C Issuer, to Cash Collateralize that portion of         L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit;                 Sixth,  to  payment  of that  portion  of  the  Obligations  constituting  accrued  and  unpaid         interest on the FILO Loans;                Seventh, to payment of that portion of the Obligations constituting unpaid principal of the         FILO Loans;                 Eighth,  to  payment  of all  other  Obligations  (including  without  limitation  the  cash         collateralization  of  asserted  but  unliquidated  indemnification  obligations  of  the  Loan  Parties         under Section 9.04,  but  excluding  any  Other  Liabilities),  ratably  among  the  Credit  Parties  in         proportion to the respective amounts described in this clause Eighth held by them;                Ninth,  to  payment  of  that  portion  of  the  Obligations  arising  from  Cash  Management         Services to the extent secured under the Security Documents, ratably among the Credit Parties in         proportion to the respective amounts described in this clause Ninth held by them;                Tenth, to payment of that portion of the Obligations arising from Bank Products to the         extent secured under the Security Documents, ratably among the Credit Parties in proportion to         the respective amounts described in this clause Tenth held by them; and                Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to         the Loan Parties or as otherwise required by Law.   Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters  of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit  as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either  been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in  the order set forth above.          8.04  Separate  Claims  and  Separate  Classifications.   Each  of  the  Credit  Parties  hereto  acknowledges and agrees that because of, among other things, their differing rights and priorities in the  Collateral, the claims of the Revolving Loans and the FILO Loans in respect of any Collateral must be  separately classified in any bankruptcy or other insolvency proceeding.  To further effectuate the intent of                                             -90-  

 

   the  parties  as  provided  in  the  immediately  preceding  sentence,  if  it  is  held  that,  in  respect  of  any  Collateral, the Revolving Loans and/or the FILO Loans in respect of such Collateral constitute only one  secured claim (rather than separate classes of secured claims), then all distributions shall be made as if  there were separate classes of secured claims in respect of any Collateral and, to the extent that any holder  of the Revolving Loans and/or the FILO Loans receives distributions in respect of the Collateral, such  distributions shall be held in trust by the receiving party and distributed giving effect to the foregoing.                                        ARTICLE IX                                   MISCELLANEOUS          9.01  Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any  other Loan Document, and no consent to any departure by any Loan Party therefrom, shall be effective  unless in writing signed by the Lender and the Lead Borrower or the applicable Loan Party, as the case  may  be,  and  each  such  waiver  or  consent  shall  be  effective  only  in  the  specific  instance  and  for  the  specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless  in writing and signed by the L/C Issuer, affect the rights or duties of the L/C Issuer under this Agreement  or any Issuer Document relating to any Letter of Credit issued or to be issued by it.          Notwithstanding  anything  to  the  contrary  in  this  Agreement  or  any  other  Loan  Document,  no  provider or holder of any Bank Products or Cash Management Services shall have any voting or approval  rights hereunder (or be deemed the Lender) solely by virtue of its status as the provider or holder of such  agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or  holder  be  required  (other  than  in  its  capacity  as  the  Lender,  to  the  extent  applicable)  for  any  matter  hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral  or the release of Collateral or any Loan Party.          9.02  Notices; Effectiveness; Electronic Communications.                  (a)    Notices Generally.                         (i)    Except  in  the  case  of  notices and  other  communications  expressly         permitted to be given by telephone (and except as provided in subsection (b) below), all notices         and other communications provided for herein shall be in writing and shall be delivered by hand         or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows,         and all notices and other communications expressly permitted hereunder to be given by telephone         shall be made to the applicable telephone number, to the address, facsimile number, electronic         mail address or telephone number specified for such person on Schedule 9.02:                       (ii)   Notices sent by hand or overnight courier service, or mailed by certified         or registered mail, shall be deemed to have been given when received; notices sent by facsimile         shall be deemed to have been given when sent (except that, if not given during normal business         hours for the recipient, shall be deemed to have been given at the opening of business on the next         Business  Day  for  the  recipient).   Notices  delivered  through  electronic  communications  to  the         extent provided in subsection (b) below, shall be effective as provided in such subsection (b).                (b)    Electronic  Communications.   Notices  and  other  communications  to  the  Loan  Parties,  the  Lender  and  the  L/C  Issuer  hereunder  may  be  delivered  or  furnished  by  electronic  communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by  the  Lender,  provided  that  approval  of  such  procedures  may  be  limited  to  particular  notices  or  communications.                                             -91-  

 

          Unless the Lender otherwise prescribes, (i) notices and other communications sent to an e-mail  address shall be deemed received upon the intended recipient’s receipt of the notice or communication,  which shall be evidenced by an acknowledgment from the intended recipient (such as by the “delivery  receipt”  function,  as  available,  return  e-mail  or  other  written  acknowledgement),  provided  that  if  such  notice or other communication is not sent during the normal business hours of the recipient, such notice  or communication shall be deemed to have been sent at the opening of business on the next Business Day  for  the  recipient,  and  provided  further  that  if  the  sender  receives  an  “out-of-office”  reply  e-mail,  that  notice  or  other  communication  shall  be  deemed  received  upon  the  sender’s  compliance  with  the  instructions in such “out-of-office” reply e-mail regarding notification to another person in the intended  recipient’s absence, and (ii) notices or communications posted to an Internet or intranet website shall be  deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in  the foregoing clause (i) of notification that such notice or communication is available and identifying the  website address therefor.                (c)    Change  of  Address,  Etc.   Each  of  the  Loan  Parties,  the  Lender,  and  the  L/C  Issuer  may  change  its  address,  facsimile  or  telephone  number  for  notices  and  other  communications  hereunder by notice to the other parties hereto.                (d)    Reliance  by  Lender  and  L/C  Issuer.   The  Lender  and  the  L/C  Issuer  shall  be  entitled  to  rely  and  act  upon  any  notices  (including  telephonic  Committed  Loan  Notices)  purportedly  given by or on behalf of the Loan Parties even if (i) such notices were not made in a manner specified  herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or  (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof, except to the  extent reliance on the same would constitute gross negligence or willful misconduct.  The Loan Parties  shall indemnify the Lender and the L/C Issuer, and the Related Parties of each of them from all losses,  costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given  by or on behalf of the Loan Parties.  All telephonic notices to and other telephonic communications with  the  Lender  may  be  recorded  by  the  Lender,  and  each  of  the  parties  hereto  hereby  consents  to  such  recording.          9.03  No Waiver; Cumulative Remedies.  No failure by any Credit Party to exercise, and no  delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a  waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder  or under any other Loan Document preclude any other or further exercise thereof or the exercise of any  other right, remedy, power or privilege.  The rights, remedies, powers and privileges provided herein and  in  the  other  Loan Documents  are  cumulative  and  not  exclusive  of  any  rights,  remedies,  powers  and  privileges provided by law.  Without limiting the generality of the foregoing, the making of a Loan or  issuance  of  a  Letter  of  Credit  shall  not  be  construed  as  a  waiver  of  any Default  or  Event  of  Default,  regardless of whether any Credit Party may have had notice or knowledge of such Default or Event of  Default at the time.          9.04  Expenses; Indemnity; Damage Waiver.                  (a)    Costs and Expenses.  The Borrowers shall pay all Credit Party Expenses.                 (b)    Indemnification  by  the  Loan  Parties.   The  Loan  Parties  shall  indemnify  the  Lender  (and  any  sub-agent  thereof),  each  other  Credit  Party,  and  each  Related  Party  of any  of  the  foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee  harmless (on an after tax basis) from, any and all losses, claims, causes of action, damages, liabilities,  settlement payments, costs, and related expenses (including the fees, charges and disbursements of any  counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third                                            -92-  

 

   party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i)  the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument  contemplated  hereby  or  thereby,  the  performance  by  the  parties  hereto  of  their  respective  obligations  hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in  the case of the Lender (and any sub-agents thereof) and their Related Parties only, the administration of  this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed  use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment  under  a  Letter  of  Credit  if  the  documents  presented  in  connection  with  such  demand  do  not  strictly  comply with the terms of such Letter of Credit, any bank advising or confirming a Letter of Credit or any  other  nominated  person  with  respect  to  a  Letter  of  Credit  seeking  to  be  reimbursed  or  indemnified  or  compensated,  and  any  third  party  seeking  to  enforce  the  rights  of  a  Borrower,  beneficiary,  nominated  person, transferee, assignee of Letter of Credit proceeds, or holder of an instrument or document related  to any Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from  any  property  owned  or  operated  by  any  Loan  Party  or  any  of  its  Subsidiaries,  or  any  Environmental  Liability related in any way to any Loan Party or any of its Subsidiaries, (iv) any claims of, or amounts  paid by any Credit Party to, a Blocked Account Bank or other Person which has entered into a control  agreement with any Credit Party hereunder, or (v) any actual or prospective claim, litigation, investigation  or  proceeding  relating  to  any  of  the  foregoing,  whether  based  on  contract,  tort  or  any  other  theory,  whether brought by a third party or by any Borrower or any other Loan Party or any of the Loan Parties’  directors,  shareholders or creditors, and  regardless of  whether any  Indemnitee  is  a party  thereto,  in all  cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole  negligence of the Indemnitee; provided, that such indemnity shall not, as to any Indemnitee, be available  to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court  of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence  or willful misconduct of such Indemnitee or (y) result from a claim brought by a Borrower or any other  Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or  under  any  other  Loan  Document,  if  the  Borrowers  or  such  Loan  Party  has  obtained  a  final  and  nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.                (c)    Waiver  of  Consequential  Damages,  Etc.   To  the  fullest  extent  permitted  by  applicable Law, the Loan Parties shall not assert, and hereby waive, any claim against any Indemnitee, on  any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or  actual  damages)  arising  out  of,  in  connection  with,  or  as  a  result  of,  this  Agreement,  any  other  Loan  Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or  thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee shall be liable for  any  damages  arising  from  the  use  by  unintended  recipients  of  any  information  or  other  materials  distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or  other information transmission systems in connection with this Agreement or the other Loan Documents  or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from  the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable  judgment of a court of competent jurisdiction.                (d)    Payments.   All  amounts  due  under  this  Section  shall  be  payable  on  demand  therefor.                (e)    Survival.   The  agreements  in  this  Section  shall  survive  the  assignment  of  any  Commitment or Loan by the Lender, the termination of the Commitments and the repayment, satisfaction  or discharge of all the other Obligations.          9.05  Payments Set Aside.  To the extent that any payment by or on behalf of the Loan Parties  is  made to any Credit Party, or any Credit Party exercises its right of setoff, and such payment or the                                            -93-  

 

   proceeds  of  such  setoff  or  any  part  thereof  is  subsequently  invalidated,  declared  to  be  fraudulent  or  preferential, set aside or required (including pursuant to any settlement entered into by such Credit Party  in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding  under  any  Debtor  Relief  Law  or  otherwise,  then  to  the  extent  of  such  recovery,  the  obligation  or  part  thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such  payment had not been made or such setoff had not occurred.          9.06  Successors and Assigns.                (a)    Successors  and  Assigns  Generally.   The  provisions  of  this  Agreement  shall  be  binding  upon  and  inure  to the  benefit  of the  parties  hereto and  their  respective successors and assigns  permitted  hereby,  except  that  no  Loan  Party  may  assign  or  otherwise  transfer  any  of  its  rights  or  obligations hereunder or under any other Loan Document without the prior written consent of the Lender.   The  Lender  may  at  any  time,  without  consent  of,  or  notice  to,  the  Loan  Parties,  assign  or  otherwise  transfer any of its rights or obligations hereunder (i) to an Eligible Assignee, (ii) by way of participation  in accordance with the provisions of subsection Section 9.06(b), or (iii) by way of pledge or assignment  of a security interest subject to the restrictions of Section 9.06(d); provided however, that the Lender may  not assign or otherwise transfer any of its rights and obligations hereunder if the result of such assignment  or transfer would be to require payment by any Loan Party of additional amounts under Sections 3.01 or  3.04, or if the assignee or transferee of such rights or obligations would be entitled to invoke rights under  Sections 3.02 or 3.03 and the Lender has not already invoked such rights; and provided further, to the  extent  that  the  Lender  assigns  any  portion  of  its  rights  and/or  obligations  under  this  Agreement,  the  Borrowers agree to enter into any such amendments to this Agreement or the other Loan Documents as  may  be  reasonably  required  by  Lender  in  connection  therewith,  including,  but  not  limited  to,  accommodating for multiple lenders and agents, as necessary.  Nothing in this Agreement, expressed or  implied,  shall  be  construed  to  confer  upon  any  Person  (other  than  the  parties  hereto,  their  respective  successors  and  assigns  permitted  hereby,  Participants  to  the  extent  provided  in  subsection  (b)  of  this  Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Credit Parties)  any legal or equitable right, remedy or claim under or by reason of this Agreement.                (b)    Participations.  Lender may at any time, without the consent of, or notice to, the  Loan Parties, sell participations to any Person (each, a “Participant”) in all or a portion of the Lender’s  rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the  Loans  (including  the  Lender’s  participations in  L/C  Obligations)  owing  to  it); provided,  that  (i)  the  Lender’s obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely  responsible to the other parties hereto for the performance of such obligations, (iii) the Loan Parties and  the L/C Issuer shall continue to deal solely and directly with Lender in connection with Lender’s rights  and  obligations  under  this  Agreement,  and  (iv)  so  long  as  no  Specified  Event  of  Default  shall  have  occurred and be continuing, the Lender shall not sell participations to any Person that is a Competitor of  the Loan Parties.  Any Participant shall agree in writing to comply with all confidentiality obligations set  forth in Section 9.07 as if such Participant was the Lender hereunder.          Any agreement or instrument pursuant to which the Lender sells such a participation shall provide  that  the  Lender  shall  retain  the  sole  right  to  enforce  this  Agreement  and  to  approve  any  amendment,  modification or waiver of any provision of this Agreement; provided, that such agreement or instrument  may provide that the Lender will not, without the consent of the Participant, agree to any amendment,  waiver or other modification that would reduce the principal of or the interest rate on the Loans, extend  the term or increase the amount of the Commitment, as it relates to such Participant, or reduce the amount  of any commitment fee payable pursuant to Section 2.08(a) to which such Participant is entitled.  Subject  to  subsection  (e)  of  this  Section,  the  Loan  Parties  agree  that  each  Participant  shall  be  entitled  to  the                                             -94-  

 

   benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were the Lender and had acquired its  interest by assignment pursuant to Section 9.06(a)                  (c)    Limitations upon Participant Rights.  A Participant shall not be entitled to receive  any greater payment under Section 3.01 or 3.04 than the Lender would have been entitled to receive with  respect to the participation sold to such Participant, unless the sale of the participation to such Participant  is made with the Lead Borrower’s prior written consent.                  (d)    Certain Pledges.  The Lender may at any time pledge or assign a security interest  in  all  or  any  portion of  its  rights  under  this  Agreement  (including  under  its  Note,  if  any)  to  secure  obligations of the Lender, including any pledge or assignment to secure obligations to a Federal Reserve  Bank; provided, that no such pledge or assignment shall release the Lender from any of its obligations  hereunder or substitute any such pledgee or assignee for the Lender as a party hereto.                (e)    Electronic  Execution  of  Assignments.   The  words  “execution,”  “signed,”  “signature,”  and  words  of  like  import  in  any  Assignment  and  Assumption  shall  be  deemed  to  include  electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal  effect,  validity  or  enforceability  as  a  manually  executed  signature  or  the  use  of  a  paper-based  recordkeeping  system,  as  the  case  may  be,  to  the  extent  and  as  provided  for  in  any  applicable  law,  including the Federal Electronic Signatures in Global and National Commerce Act, the New York State  Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic  Transactions Act.                (f)    Resignation  as  L/C  Issuer  after  Assignment.   Notwithstanding  anything  to  the  contrary contained herein, if at any time the Lender assigns all of its Commitment and Loans pursuant to  subsection (a) above, Wells Fargo may resign as L/C Issuer upon thirty (30) days prior written notice to  the  Lead  Borrower.   In  the  event  of  any  such  resignation  as  L/C  Issuer,  the  Lead  Borrower  shall  be  entitled to appoint from among the Lenders a successor L/C Issuer; provided, however, that no failure by  the Lead Borrower to appoint any such successor shall affect the resignation of Wells Fargo as L/C Issuer  unless  none  of  the  other  Lenders  has  the  capabilities  to  issue  letters  of  credit  sufficient  to  meet  the  reasonable business needs of the Borrowers and is willing to accept such appointment.  If Wells Fargo  resigns  as  L/C  Issuer,  it  shall  retain  all  the  rights,  powers,  privileges  and  duties  of  the  L/C  Issuer  hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C  Issuer and all L/C Obligations with respect thereto (including the right to require the Lender to make Base  Rate  Loans  pursuant  to Section 2.03(c)).  Upon  the  appointment  of  a  successor  L/C  Issuer,  (a)  such  successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the  retiring  L/C  Issuer,  and  (b)  the  successor  L/C  Issuer  shall  issue  letters  of credit  in  substitution  for  the  Letters  of  Credit,  if  any,  outstanding  at  the  time  of  such  succession  or  make  other  arrangements  satisfactory  to  Wells  Fargo  to  effectively  assume  the  obligations  of  Wells  Fargo  with  respect  to  such  Letters of Credit.          9.07  Treatment of Certain Information; Confidentiality.  Each of the Credit Parties agrees  to  maintain  the  confidentiality  of  the  Information  (as  defined  below),  except  that  Information  may  be  disclosed  (a)  to  its  Affiliates  and  to  its  and  its  Affiliates’  respective  partners,  directors,  officers,  employees,  agents,  funding  sources,  attorneys,  advisors  and  representatives  in  connection  with  the  transactions contemplated hereby (it being understood that the Persons to whom such disclosure is made  will be informed of the confidential nature of such Information and instructed to keep such Information  confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it  (including any self-regulatory authority, such as the National Association of Insurance Commissioners),  (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process,  (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any                                            -95-  

 

   other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document  or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions  substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective  assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or  prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Loan Party  and its obligations, (g) with the consent of the Lead Borrower, or (h) to the extent such Information (x)  becomes publicly available other than as a result of a breach of this Section or (y) becomes available to  any Credit Party or any of their respective Affiliates on a non-confidential basis from a source other than  the Loan Parties.            For purposes of this Section, “Information” means all information received from the Loan Parties  or  any  Subsidiary  thereof  relating  to  the  Loan  Parties  or  any  Subsidiary  thereof  or  their  respective  businesses pursuant to the terms of the Loan Documents, other than any such information that is available  to any Credit Party on a non-confidential basis prior to disclosure by the Loan Parties or any Subsidiary  thereof.  Any Person required to maintain the confidentiality of Information as provided in this Section  shall be considered to have complied with its obligation to do so if such Person has exercised the same  degree of care to maintain the confidentiality of such Information as such Person would accord to its own  confidential information.          Each of the Credit Parties acknowledges that (a) the Information may include material non-public  information  concerning  the  Loan  Parties  or  a  Subsidiary,  as  the  case  may  be,  (b)  it  has  developed  compliance procedures regarding the use of material non-public information and (c) it will handle such  material non-public information in accordance with applicable Law, including Federal and state securities  Laws.          9.08  Right of Setoff.  If an Event of Default shall have occurred and be continuing or if the  Lender shall have been served with a trustee process or similar attachment relating to property of a Loan  Party, the Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time  and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all  deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held  and other obligations (in whatever currency) at any time owing by Lender, the L/C Issuer or any such  Affiliate to or for the credit or the account of the Borrowers or any other Loan Party against any and all of  the  Obligations  now  or  hereafter  existing  under  this  Agreement  or  any  other  Loan  Document  to  the  Lender or the L/C Issuer, regardless of the adequacy of the Collateral, and irrespective of whether or not  the  Lender  or  the  L/C  Issuer  shall  have  made  any  demand  under  this  Agreement  or  any  other  Loan  Document  and  although  such  obligations  of  the  Borrowers  or  such  Loan  Party  may  be  contingent  or  unmatured or are owed to a branch or office of the Lender or the L/C Issuer different from the branch or  office holding such deposit or obligated on such indebtedness.  The rights of the Lender, the L/C Issuer  and their respective Affiliates under this Section are in addition to other rights and remedies (including  other rights of setoff) that the Lender, the L/C Issuer or their respective Affiliates may have.  The Lender  and  the  L/C  Issuer  agree  to  notify  the  Lead  Borrower  promptly  after  any  such  setoff  and  application,  provided that the failure to give such notice shall not affect the validity of such setoff and application.          9.09  Interest  Rate  Limitation.  Notwithstanding  anything  to  the  contrary  contained  in  any  Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the  maximum  rate  of  non-usurious  interest  permitted  by  applicable  Law  (the  “Maximum  Rate”).   If  the  Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be  applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers.  In  determining whether the interest contracted for, charged, or received by the Lender exceeds the Maximum  Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not  principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the                                            -96-  

 

   effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of  interest throughout the contemplated term of the Obligations hereunder.          9.10  Counterparts;  Integration;  Effectiveness.  This  Agreement  may  be  executed  in  counterparts (and by different parties hereto in different counterparts), each of which shall constitute an  original, but all of which when taken together shall constitute a single contract.  This Agreement and the  other  Loan  Documents  constitute  the  entire  contract  among  the  parties  relating  to  the  subject  matter  hereof and supersede any and all previous agreements and understandings, oral or written, relating to the  subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it  shall have been executed by the Lender and when the Lender shall have received counterparts hereof that,  when  taken  together,  bear  the  signatures  of  each  of  the  other  parties  hereto.   Delivery  of  an  executed  counterpart of a signature page of this Agreement by facsimile, pdf., or other electronic transmission shall  be as effective as delivery of a manually executed counterpart of this Agreement.          9.11  Survival.  All  representations  and  warranties  made  hereunder  and  in  any  other  Loan  Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith  shall survive the execution and delivery hereof and thereof.  Such representations and warranties have  been or will be relied upon by the Credit Parties, regardless of any investigation made by any Credit Party  or on their behalf and notwithstanding that any Credit Party may have had notice or knowledge of any  Default or Event of Default at the time of any Credit Extension, and shall continue in full force and effect  as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of  Credit  shall  remain  outstanding.   Further,  the  provisions  of Sections 3.01, 3.04, 3.05 and 9.04 shall  survive and remain in full force and effect regardless of the repayment of the Obligations, the expiration  or termination of the Letters of Credit and the Commitment or the termination of this Agreement or any  provision hereof.  In connection with the termination of this Agreement and the release and termination of  the security interests in the Collateral, the Lender may require such indemnities and collateral security as  they  shall  reasonably  deem  necessary  or  appropriate  to  protect  the  Credit  Parties  against  (x)  loss  on  account of credits previously applied to the Obligations that may subsequently be reversed or revoked, (y)  any obligations that may thereafter arise with respect to the Other Liabilities and (z) any Obligations that  may thereafter arise under Section 9.04.          9.12  Severability.  If any provision of this Agreement or the other Loan Documents is held to  be  illegal,  invalid  or  unenforceable,  (a)  the  legality,  validity  and  enforceability  of  the  remaining  provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and  (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable  provisions with valid provisions the economic effect of which comes as close as possible to that of the  illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall  not invalidate or render unenforceable such provision in any other jurisdiction.          9.13  Governing Law; Jurisdiction; Etc.                  (a)    GOVERNING  LAW.   THIS  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF  NEW  YORK,  WITHOUT  GIVING  EFFECT  TO  THE  CONFLICTS  OF  LAWS  PRINCIPLES  THEREOF,  BUT  INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.                (b)    SUBMISSION TO JURISDICTION.  EACH LOAN PARTY IRREVOCABLY  AND  UNCONDITIONALLY  SUBMITS,  FOR  ITSELF  AND  ITS  PROPERTY,  TO  THE  NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN  NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN  DISTRICT  OF  NEW  YORK,  AND  ANY  APPELLATE  COURT  FROM  ANY  THEREOF,  IN  ANY                                            -97-  

 

   ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY  OTHER  LOAN  DOCUMENT,  OR  FOR  RECOGNITION  OR  ENFORCEMENT                 OF  ANY  JUDGMENT,  AND  EACH  OF  THE  LOAN  PARTIES  HERETO  IRREVOCABLY  AND  UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR  PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR,  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.   EACH OF THE LOAN PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH  ACTION  OR  PROCEEDING  SHALL  BE  CONCLUSIVE  AND  MAY  BE  ENFORCED  IN  OTHER  JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY  LAW.   NOTHING  IN  THIS  AGREEMENT  OR  IN  ANY  OTHER  LOAN  DOCUMENT  SHALL  AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION  OR  PROCEEDING  RELATING  TO  THIS  AGREEMENT  OR  ANY  OTHER  LOAN  DOCUMENT  AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION  IF REQUIRED TO REALIZE UPON ANY COLLATERAL.                (c)    WAIVER  OF  VENUE.   EACH  LOAN  PARTY  IRREVOCABLY  AND  UNCONDITIONALLY  WAIVES,  TO  THE  FULLEST  EXTENT  PERMITTED  BY  APPLICABLE  LAW,  ANY  OBJECTION  THAT  IT  MAY  NOW  OR  HEREAFTER  HAVE  TO  THE  LAYING  OF  VENUE  OF  ANY  ACTION  OR  PROCEEDING  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT  OR  ANY  OTHER  LOAN  DOCUMENT  IN  ANY  COURT  REFERRED  TO  IN  PARAGRAPH  (B)  OF  THIS  SECTION.   EACH  OF  THE  LOAN  PARTIES  HERETO  HEREBY  IRREVOCABLY  WAIVES,  TO  THE  FULLEST  EXTENT  PERMITTED  BY       APPLICABLE  LAW,  THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION  OR PROCEEDING IN ANY SUCH COURT.                (d)    SERVICE  OF  PROCESS.   EACH  PARTY  HERETO  IRREVOCABLY  CONSENTS  TO  SERVICE  OF  PROCESS  IN  THE  MANNER  PROVIDED  FOR  NOTICES  IN  SECTION 9.02,  EXCLUDING  SERVICE  OF  PROCESS  BY  E-MAIL.   NOTHING  IN  THIS  AGREEMENT  WILL  AFFECT  THE  RIGHT  OF  ANY PARTY  HERETO  TO  SERVE  PROCESS  IN  ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.                (e)    ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AND,  EXCEPT AS PROVIDED IN THE LAST SENTENCE OF SECTION 9.13(b), EACH CREDIT PARTY,  AGREES  THAT  ANY  ACTION  COMMENCED  BY  IT  ASSERTING  ANY  CLAIM  OR  COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY  OTHER LOAN DOCUMENT SHALL BE BROUGHT SOLELY IN A COURT OF THE STATE OF  NEW YORK SITTING IN NEW YORK COUNTY OR ANY FEDERAL COURT SITTING THEREIN  AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT TO  ANY SUCH ACTION.          9.14  Waiver  of  Jury  Trial.  EACH  PARTY  HERETO  HEREBY  IRREVOCABLY  WAIVES,  TO  THE  FULLEST  EXTENT  PERMITTED  BY  APPLICABLE  LAW,  ANY  RIGHT  IT  MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY  ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT  OR  THE  TRANSACTIONS  CONTEMPLATED  HEREBY  OR  THEREBY  (WHETHER  BASED  ON  CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT  NO  REPRESENTATIVE,  AGENT  OR  ATTORNEY  OF  ANY  OTHER  PERSON  HAS  REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN  THE  EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER  AND  (B)  ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO                                             -98-  

 

   ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER  THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.          9.15  No  Advisory  or  Fiduciary  Responsibility.  In  connection  with  all  aspects  of  each  transaction contemplated hereby, the Loan Parties each acknowledge and agree that: (i) the credit facility  provided for hereunder and any related arranging or other services in connection therewith (including in  connection with any amendment, waiver or other modification hereof or of any other Loan Document) are  an arm’s-length commercial transaction between the Loan Parties, on the one hand, and the Credit Parties,  on  the  other  hand,  and  each  of  the  Loan  Parties  is  capable  of  evaluating  and  understanding  and  understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by  the other Loan Documents (including any amendment, waiver or other modification hereof or thereof);  (ii) in connection with the process leading to such transaction, each Credit Party is and has been acting  solely as a principal and is not the financial advisor, agent or fiduciary, for the Loan Parties or any of their  respective Affiliates, stockholders, creditors or employees or any other Person; (iii) none of the Credit  Parties has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Loan  Parties  with  respect  to  any  of  the  transactions  contemplated  hereby  or  the  process  leading  thereto,  including  with  respect  to  any  amendment,  waiver  or  other  modification  hereof  or  of  any  other  Loan  Document (irrespective of whether any of the Credit Parties has advised or is currently advising any Loan  Party or any of its Affiliates on other matters) and none of the Credit Parties has any obligation to any  Loan  Party  or  any  of  its  Affiliates  with  respect  to  the  transactions  contemplated  hereby  except  those  obligations expressly set forth herein and in the other Loan Documents; (iv) the Credit Parties and their  respective  Affiliates  may  be  engaged  in  a  broad  range  of  transactions  that  involve  interests  that  differ  from  those  of  the  Loan  Parties  and  their  respective  Affiliates,  and  none  of  the  Credit  Parties  has  any  obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and  (v)  the  Credit  Parties  have  not  provided  and  will  not  provide  any  legal,  accounting,  regulatory  or  tax  advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or  other modification hereof or of any other Loan Document) and each of the Loan Parties has consulted its  own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  Each of the  Loan Parties hereby waives and releases, to the fullest extent permitted by law, any claims that it may  have against each of the Credit Parties with respect to any breach or alleged breach of agency or fiduciary  duty.          9.16  USA PATRIOT Act Notice.  The Lender hereby notifies the Loan Parties that, pursuant  to  the  requirements  of  the  USA  Patriot  Act  (Title  III  of  Pub.  L.  107-56  (signed  into  law  October  26,  2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Loan Party,  which  information  includes  the  name  and  address  of  each  Loan  Party  and  other  information  that  will  allow the Lender, as applicable, to identify each Loan Party in accordance with the Act. Each Loan Party  is in compliance, in all material respects, with the Act.  No part of the proceeds of the Loans will be used  by the Loan Parties, directly or indirectly, for any payments to any governmental official or employee,  political  party,  official  of  a  political  party,  candidate  for  political  office,  or  anyone  else  acting  in  an  official  capacity,  in  order  to  obtain,  retain  or  direct  business  or  obtain  any  improper  advantage,  in  violation of the United States Foreign Corrupt Practices Act of 1977, as amended.          9.17  Foreign Asset Control Regulations.  Neither of the advance of the Loans nor the use of  the  proceeds  of  any  thereof  will  violate  the  Trading  With  the  Enemy  Act  (50  U.S.C.  §  1  et seq.,  as  amended)  (the  “Trading  With  the  Enemy  Act”)  or  any  of  the  foreign  assets  control  regulations  of  the  United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets  Control  Regulations”)  or  any  enabling  legislation  or  executive  order  relating  thereto  (which  for  the  avoidance of doubt shall include, but shall not be limited to, (a) Executive Order 13224 of September 21,  2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit,  or  Support  Terrorism  (66  Fed.  Reg.  49079  (2001))  (the  “Executive  Order”)  and  (b)  the  Uniting  and                                            -99-  

 

   Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act  of  2001  (Public  Law  107-56)).   Furthermore,  none  of  the  Borrowers  or  their  Affiliates  (a)  is  or  will  become a “blocked person” as described in the Executive Order, the Trading With the Enemy Act or the  Foreign Assets Control Regulations or (b) engages or will engage in any dealings or transactions, or be  otherwise associated, with any such “blocked person” or in any manner violative of any such order.          9.18  Time of the Essence.  Time is of the essence of the Loan Documents.          9.19  Publicity.  Each  Loan  Party  consents  to  the  publication  by  the  Lender  of  advertising  material,  including  any  “tombstone”  or  comparable  advertising,  on  its  website  or  in  other  marketing  materials  of  Lender,  relating  to  the  financing  transactions  contemplated  by  this Agreement  using  any  Loan Party’s name, product photographs, logo, trademark or other insignia.  The Lender shall provide a  draft reasonably in advance of any advertising material to the Lead Borrower for review and comment  prior to the publication thereof.  The Lender reserves the right to provide to industry trade organizations  and loan syndication and pricing reporting services information necessary and customary for inclusion in  league table measurements.   Notwithstanding the foregoing or anything in the Loan Documents to the  contrary,  the  Lender  consents  to  the  disclosure  by  the  Loan  Parties  of  all  information  required  to  be  disclosed in accordance with applicable Securities Laws, as determined by the Lead Borrower in good  faith.          9.20  Additional Waivers.                (a)    The Obligations are the joint and several obligation of each Loan Party. To the  fullest extent permitted by Applicable Law, the obligations of each Loan Party shall not be affected by (i)  the failure of any Credit Party to assert any claim or demand or to enforce or exercise any right or remedy  against  any  other  Loan  Party  under  the  provisions  of  this  Agreement,  any  other  Loan  Document  or  otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms  or provisions of, this Agreement or any other Loan Document, or (iii) the failure to perfect any security  interest in, or the release of, any of the Collateral or other security held by or on behalf of the Lender or  any other Credit Party.                (b)    The  obligations  of  each  Loan  Party  shall  not  be  subject  to  any  reduction,  limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash  of  the  Obligations  after  the  termination  of  the  Commitment),  including  any  claim  of  waiver,  release,  surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense or  setoff,  counterclaim,  recoupment  or  termination  whatsoever  by  reason  of  the  invalidity,  illegality  or  unenforceability of any of the Obligations or otherwise. Without limiting the generality of the foregoing,  the obligations of each Loan Party hereunder shall not be discharged or impaired or otherwise affected by  the failure of the Lender or any other Credit Party to assert any claim or demand or to enforce any remedy  under this Agreement, any other Loan Document or any other agreement, by any waiver or modification  of any provision of any thereof, any default, failure or delay, willful or otherwise, in the performance of  any of the Obligations, or by any other act or omission that may or might in any manner or to any extent  vary the risk of any Loan Party or that would otherwise operate as a discharge of any Loan Party as a  matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations after the  termination of the Commitment).                 (c)    To the fullest extent permitted by applicable Law, each Loan Party waives any  defense  based  on  or  arising  out  of any  defense  of any  other  Loan  Party  or  the  unenforceability  of  the  Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any  other  Loan  Party,  other  than  the  indefeasible  payment  in  full  in  cash  of  all  the  Obligations  and  the  termination of the Commitment. The Lender and the other Credit Parties may, at their election, foreclose                                            -100-  

 

   on  any  security  held  by  one  or  more  of  them  by  one  or  more  judicial  or  non-judicial  sales,  accept  an  assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations,  make  any  other  accommodation  with  any  other  Loan  Party,  or  exercise  any  other  right  or  remedy  available to them against any other Loan Party, without affecting or impairing in any way the liability of  any Loan Party hereunder except to the extent that all the Obligations have been indefeasibly paid in full  in cash and the Commitment has been terminated.  Each Loan Party waives any defense arising out of any  such election even though such election operates, pursuant to applicable Law, to impair or to extinguish  any right of reimbursement or subrogation or other right or remedy of such Loan Party against any other  Loan Party, as the case may be, or any security.                (d)    Each Borrower is obligated to repay the Obligations as joint and several obligors  under this Agreement.  Upon payment by any Loan Party of any Obligations, all rights of such Loan Party  against  any  other  Loan  Party  arising  as  a  result  thereof  by  way  of  right  of  subrogation,  contribution,  reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment  to  the  prior  indefeasible  payment  in  full  in  cash  of  all  the  Obligations  and  the  termination  of  the  Commitment. In addition, any indebtedness of any Loan Party now or hereafter held by any other Loan  Party  is  hereby  subordinated  in  right  of  payment  to  the  prior  indefeasible  payment  in  full  of  the  Obligations  and  no  Loan  Party  will  demand,  sue  for  or  otherwise  attempt  to  collect  any  such  indebtedness; provided, that payment of such indebtedness on ordinary business terms is permitted except  after the occurrence and during the continuance of an Event of Default.  If any amount shall erroneously  be paid to any Loan Party on account of (i) such subrogation, contribution, reimbursement, indemnity or  similar right or (ii) any such indebtedness of any Loan Party, such amount shall be held in trust for the  benefit of the Credit Parties and shall forthwith be paid to the Lender to be credited against the payment  of the Obligations, whether matured or unmatured, in accordance with the terms of this Agreement and  the other Loan Documents.  Subject to the foregoing, to the extent that any Borrower shall, under this  Agreement as a joint and several obligor, repay any of the Obligations constituting Loans made to another  Borrower  hereunder  or  other  Obligations  incurred  directly  and  primarily  by  any  other  Borrower  (an  “Accommodation Payment”), then the Borrower making such Accommodation Payment shall be entitled  to  contribution  and  indemnification  from,  and  be  reimbursed  by,  each  of  the  other  Borrowers  in  an  amount,  for  each  of  such  other  Borrowers,  equal  to  a  fraction  of  such  Accommodation  Payment,  the  numerator of which fraction is such other Borrower’s Allocable Amount and the denominator of which is  the  sum  of  the  Allocable  Amounts  of  all  of  the  Borrowers.   As  of  any  date  of  determination,  the  “Allocable  Amount”  of  each  Borrower  shall  be  equal  to  the  maximum  amount  of  liability  for  Accommodation  Payments  which  could  be  asserted against  such  Borrower  hereunder  without  (a)  rendering such Borrower “insolvent” within the meaning of Section 101 (31) of the Bankruptcy Code,  Section 2 of  the Uniform Voidable Transactions Act (“UVTA”), Section 2 of the Uniform Fraudulent  Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving  such  Borrower  with  unreasonably  small  capital  or  assets,  within  the  meaning  of  Section  548  of  the  Bankruptcy  Code,  Section  4  of the UVTA,  Section  4  of the UFTA,  or  Section  5 of the UFCA,  or  (c)  leaving such Borrower unable to pay its debts as they become due within the meaning of Section 548 of  the Bankruptcy Code, Section 4 of the UVTA, Section 4 of the UFTA, or Section 5 of the UFCA.          9.21  No Strict Construction.  The parties hereto have participated jointly in the negotiation  and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises,  this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden  of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this  Agreement.          9.22  Attachments.  The  exhibits,  schedules  and  annexes  attached  to  this  Agreement  are  incorporated herein and shall be considered a part of this Agreement for the purposes stated herein, except                                             -101-  

 

   that in the event of any conflict between any of the provisions of such exhibits and the provisions of this  Agreement, the provisions of this Agreement shall prevail.          9.23  Amendment and Restatement.  Effective immediately upon the Closing Date, the terms  and conditions of the Existing Credit Agreement shall be amended and restated as set forth herein and the  Existing Credit Agreement shall be superseded by this Agreement.  On the Closing Date, the rights and  obligations  of  the  parties  evidenced  by  the  Existing  Credit  Agreement  shall  be  evidenced  by  this  Agreement and the other Loan Documents and the grant of security interests and Liens in the Collateral  by  the  Borrowers  and  the  Guarantors  under  the  Existing  Credit  Agreement  and  the  other  “Loan  Documents” (as defined in the Existing Credit Agreement) shall continue under this Agreement and the  other  Loan  Documents,  and  shall  not  in  any  event  be  terminated,  extinguished  or  annulled  but  shall  hereafter continue to be in full force and effect and be governed by this Agreement and the other Loan  Documents.   All  Obligations  (as  defined  in  the  Existing  Credit  Agreement)  under  the  Existing  Credit  Agreement and the other “Loan Documents” (as defined in the Existing Credit Agreement) shall continue  to be outstanding except as expressly modified by this Agreement and shall be governed in all respects by  this Agreement and the other Loan Documents, it being agreed and understood that this Agreement does  not  constitute  a  novation,  satisfaction,  payment  or  reborrowing  of  any  Obligation  (as  defined  in  the  Existing  Credit  Agreement)  under  the  Existing  Credit  Agreement  or  any  other  “Loan  Document”  (as  defined in the Existing Credit Agreement), nor does it operate as a waiver of any right, power or remedy  of the Lender under any “Loan Document” (as defined in the Existing Credit Agreement).  All references  to the Existing Credit Agreement in any Loan Document or other document or instrument delivered in  connection therewith shall be deemed to refer to this Agreement and the provisions hereof.          9.24  Keepwell.   Each  Qualified  ECP  Guarantor  hereby  jointly  and  severally  absolutely,  unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from  time to time by each other Loan Party to honor all of its obligations under the Facility Guaranty in respect  of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under  this Section 9.24 for the maximum amount of such liability that can be hereby incurred without rendering  its  obligations  under  this Section 9.24,  or  otherwise  under  the  Facility  Guaranty,  voidable  under  applicable Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).   The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect  until payment in full of the Obligations.  Each Qualified ECP Guarantor intends that this Section 9.24  constitutes, and this Section 9.24 shall be deemed to constitute, a “keepwell, support, or other agreement”  for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity  Exchange Act.                                    [ Signature pages follow ]                                               -102-  

 

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by  their respective authorized officers as of the date first above written.                                                   BORROWERS:                                           CHRISTOPHER & BANKS CORPORATION                                                                                                                              By:                                                                               Name:                                                                      Title:                                                                                                                                                                CHRISTOPHER & BANKS, INC.                                                                                                                              By:                                                                               Name:                                                                      Title:                                                                                                                                                                 CHRISTOPHER & BANKS COMPANY                                                                                                                              By:                                                                               Name:                                                                      Title:                                                                                                                                                      Signature Page to Credit Agreement    

 

                              LENDER AND L/C ISSUER:                              WELLS FARGO BANK, NATIONAL               ASSOCIATION                                             By:                                                    Name:                Its Authorized Signatory                                                       Signature Page to Credit Agreement                  

 

                                                                                                                               ANNEX II                                Schedules to Credit Agreement    See attached.                                                 

 

                               SCHEDULE 5.05               SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS                           (MATERIAL INDEBTEDNESS)   None.      

 

                               SCHEDULE 5.06                                   LITIGATION      None.      

 

                             SCHEDULE 5.08(b)(1)                              OWNED REAL ESTATE                                             None.      

 

                             SCHEDULE 5.08(b)(2)                              LEASED REAL ESTATE      2400 Xenium Lane North, Plymouth, MN 55441      See attached “Store Locations” list, current as of July 27, 2018.  

 

                                                                        Christopher & Banks                                                              Store Count as of 7/27/2018                                                                                                                                                             Store #     Division         Center Name                             Address                             City          State    Zip Code       Open Date    103         CBK    Woodbury Lakes              9100 Hudson Road, Ste #112 Bldg A               Woodbury              MN        55125         9/14/2005    130         CBK    Kirkwood Mall               630 Kirkwood Mall                               Bismarck               ND       58504          2/1/2006    140         CBK    Bay Park Square             251 Bay Park Square                             Green Bay              WI       54304         7/29/1981    172         CBK    Forest Mall                 835 West Johnson Street, Spc #E01               Fond du Lac            WI       54935         2/28/1984    178         CBK    Fox River Mall              4301 West  Wisconsin Avenue, Spc 146            Appleton               WI       54913         7/18/1984    179         CBK    Valley West Mall            1551 Valley West Drive, #235                    West Des Moines        IA       50266          8/6/1984    183         CBK    Conestoga Mall              3404 West 13th Street, Unit D33                 Grand Island           NE       68803          9/6/1985    186         CBK    Lindale Mall                4444 First Avenue NE, #142                      Cedar Rapids           IA       52402         3/10/1986    187         CBK    Montclair on Center         13029 West Center Road                          Omaha                  NE       68144         7/31/1986    192         CBK    Central Mall                2259 South 9th Street, #127                     Salina                 KS       67401         2/24/1987    202         CBK    White Oaks Mall             2501 Wabash Avenue, #A03A                       Springfield            IL       62704         6/14/2001    208         CBK    Brookfield Square Mall      95 North Moorland Road, #D‐42                   Brookfield             WI       53005          3/5/1988    217         CBK    Empire Mall                 4001 West 41st Street, #904                     Sioux Falls            SD     57106‐6512      7/27/1988    226         CBK    Ashland Town Center         500 Winchester Avenue, #178                     Ashland                KY       41101         5/29/1999    254         CBK    Boise Towne Square          350 North Milwaukee, #1041                      Boise                  ID       83704          3/5/1993    303         CBK    Bangor Mall                 663 Stillwater Avenue, #F9/F10                  Bangor                 ME       04401          3/9/2001    310         CBK    West Ridge Mall             1801 Wanamaker Road, #F17                       Topeka                 KS       66604         8/23/2002    318         CBK    Apple Blossom Mall          1850 Apple Blossom Drive, #S149                 Winchester             VA       22601          3/9/2001    320         CBK    Tippecanoe Mall             2415 Sagamore Parkway South, #B09               Lafayette              IN       47905          4/6/2001    383         CBK    Animas Valley Mall          4601 East Main Street, #470                     Farmington            NM        87402         11/8/2002    387         CBK    The Shops At Boardwalk      8630 North Boardwalk Avenue, #SP18              Kansas City           MO        64154         8/15/2003    401         CBK    West Park Mall              3049 William Street, Ste 183                    Cape Girardeau        MO        63703         6/18/1999    404         CBK    Layton Hills Mall           1201 N Hill Field Road, Ste 2088                Layton                 UT       84041          8/4/1994    406         CBK    Charleston Town Center      3000 Charleston Town Center, #1015              Charleston            WV        25389         6/11/1999    430         CBK    Westland Mall               35000 West Warren Road, #401                    Westland               MI       48185         1/12/1998    436         CBK    Muncie Mall                 3501 N Granville Avenue, #K06                   Muncie                 IN       47303         9/27/2002    467         CBK    Kentucky Oaks Mall          5101 Hinkleville Road, #720                     Paducah                KY       42001         3/18/2000    473         CBK    Lansing Mall                5324 W Saginaw Highway, #171                    Lansing                MI       48917          3/9/2001    549         CBK    The Town Center at Levis Comm 4170 Levis Commons Blvd, Spc 18‐A             Perrysburg             OH       43551         10/26/2004    559         CBK    The Greene Town Center      106 Plum Street                                 Beavercreek            OH       45440         11/3/2006                                                                                                                                                                1  

 

                                                                        Christopher & Banks                                                              Store Count as of 7/27/2018                                                                                                                                                Store #     Division         Center Name                             Address                             City          State    Zip Code       Open Date    619         CBK    The Orchard                 8653 Clinton Street, Spc #8653                  New Hartford           NY       13413         11/2/2007    635         CBK    Mall at Fairfield Commons   2727 Fairfield Commons, #W170                   Beavercreek            OH       45431          9/8/2005    656         CBK    The Promenade Shops at Cente  5855 Sky Pond Drive, Ste #F118                Loveland               CO       80538         11/18/2005    669         CBK    Shadow Lake Towne Center    7474 Towne Center Pkwy, Ste T‐117               Papillion              NE       68046         5/26/2007    678         CBK    Aspen Grove                 7301 S Santa Fe Drive, #222                     Littleton              CO       80120          6/9/2006    684         CBK    The Orchard Town Center     14587 Delaware Street, Ste 100                  Westminster            CO       80023          4/3/2008    804         CJB    Fox River Mall              4301 West Wisconsin Ave, Spc 912                Appleton               WI       54913         10/6/2000    807         CJB    Forest Mall                 835 West Johnson Street, Spc #E02               Fond du Lac            WI       54935         8/18/2000    812         CJB    White Oaks Mall             2501 Wabash Avenue, #A‐01                       Springfield            IL       62704         8/25/2000    813         CJB    Lindale Mall                4444 First Avenue NE, Ste 36                    Cedar Rapids           IA       52402         9/15/2000    815         CJB    Empire Mall                 4001 West 41st Street, #540                     Sioux Falls            SD     57106‐6523      9/15/2000    826         CJB    Montclair on Center         13023 West Center Road                          Omaha                  NE       68144         3/23/2001    845         CJB    Boise Towne Square          350 N Milwaukee, #2323                          Boise                  ID       83704         4/20/2001    853         CJB    Tippecanoe Mall             2415 Sagamore Parkway South, #G12A              Lafayette              IN       47905         8/10/2001    855         CJB    Brookfield Square Mall      95 North Moorland Road, #D1B                    Brookfield             WI       53005         8/10/2001    860         CJB    Conestoga Mall              3404 West 13th Street, #A3A                     Grand Island           NE       68803         10/10/2001    871         CJB    Ashland Town Center         500 Winchester Avenue, #250                     Ashland                KY       41101         4/12/2002    900         CJB    Charleston Town Center      3000 Charleston Town Center Mall, #1017         Charleston            WV        25389          6/4/2004    905         CJB    Muncie Mall                 3501 Granville Avenue, #M03                     Muncie                 IN       47303         9/26/2002    912         CJB    Central Mall                2259 South 9th Street, #46                      Salina                 KS       67401         3/21/2003    916         CJB    Kentucky Oaks Mall          5101 Hinkleville Road, #730                     Paducah                KY       42001         8/22/2003    920         CJB    West Park Mall              3049 William Street, Ste 182                    Cape Girardeau        MO        63703          9/5/2003    934         CJB    Apple Blossom Mall          1850 Apple Blossom Drive, #S171                 Winchester             VA       22601         3/12/2004    938         CJB    Kirkwood Mall               642 Kirkwood Mall                               Bismarck               ND       58504         5/21/2004    949         CJB    Bangor Mall                 663 Stillwater Avenue, #1082                    Bangor                 ME       04401         9/24/2004    962         CJB    Bay Park Square             303 Bay Park Square                             Green Bay              WI       54304         5/13/2005    963         CJB    Layton Hills Mall           1201 N Hill Field Road, Ste 2056                Layton                 UT       84041         4/15/2005    979         CJB    The Shops At Boardwalk      8638 North Boardwalk Avenue, #14                Kansas City           MO        64154         9/16/2005    982         CJB    The Town Center at Levis Comm 4175 Levis Commons Blvd                       Perrysburg             OH       43551         10/7/2005    988         CJB    West Ridge Mall             1801 Wanamaker Road, #OC18A                     Topeka                 KS       66604         5/12/2006                                                                                                                                                                             2  

 

                                                                        Christopher & Banks                                                              Store Count as of 7/27/2018                                                                                                                                                             Store #     Division         Center Name                             Address                             City          State    Zip Code       Open Date    997         CJB    Shadow Lake Towne Center    7474 Towne Center Pkwy, Ste T‐115               Papillion              NE       68046         5/26/2007   1005         CJB    Woodbury Lakes              9100 Hudson Road, Ste 110                       Woodbury              MN        55125          5/5/2006   1025         CJB    Valley West Mall            1551 Valley West Drive, #281                    West Des Moines        IA       50266         4/13/2007   1029         CJB    The Greene Town Center      110 Plum Street                                 Beavercreek            OH       45440         11/3/2006   1042         CJB    The Orchard Town Center     14587 Delaware Street, #150                     Westminster            CO       80023          4/3/2008   1043         CJB    Westland Mall               35000 West Warren Road, #205                    Westland               MI       48185         9/28/2007   1046         CJB    The Orchard                 8651 Clinton Street, #8651                      New Hartford           NY       13413         11/2/2007   1067         CJB    The Promenade Shops at Cente  5971 Sky Pond Drive, Ste C148                 Loveland               CO       80538         10/11/2007   1101         CJB    Aspen Grove                 7301 South Santa Fe Drive, # 528                Littleton              CO       80120         8/13/2010   3200        Outlet  Albertville Premium Outlet  6415 Labeaux Avenue NE, Spc #A030               Albertville           MN        55301         9/24/2010   3201        Outlet  The Legends                 1813 Village West Parkway, Ste Q‐102            Kansas City            KS       66111         9/24/2010   3202        Outlet  Birch Run Premium Outlets   12240 South Beyer Road, Spc V032                Birch Run              MI       48415         4/15/2011   3203        Outlet  Tanger Outlets ‐ Jeffersonville  8315 Factory Shops Boulevard               Jeffersonville         OH       43128         4/15/2011   3204        Outlet  Grove City Premium Outlets  1911 Leesburg Grove City Road, Spc 1255         Grove City             PA       16127         4/15/2011   3205        Outlet  Pleasant Prairie Premium Outle  11211 120th Avenue, Spc 06                  Pleasant Prairie       WI       53158         4/15/2011   3206        Outlet  Tanger Outlets Branson      300 Tanger Boulevard, Ste 304                   Branson               MO        65616          7/8/2011   3207        Outlet  Edinburgh Premium Outlet    3200 Outlet Drive, #F050                        Edinburgh              IN       46124          9/9/2011   3208        Outlet  Wisconsin Dells Outlet Center  210 N Gasser Road, Ste 1004                  Baraboo                WI       53913         10/7/2011   3209        Outlet  North Branch Outlets        38500 Tanger Drive, Ste 113                     North Branch          MN        55056          5/6/2011   3210        Outlet  The Outlet Shoppes at Oklahom 7654 West Reno Avenue, Ste 730                Oklahoma City          OK       73127          8/4/2011   3211        Outlet  Tanger Outlets Howell       1475 N. Burkhart Road, Ste G170                 Howell                 MI       48855          5/6/2011   3212        Outlet  Tanger Outlets Williamsburg  502 Tanger Drive                               Williamsburg           IA     52361‐9653       5/6/2011   3213        Outlet  Outlets at Tuscola          D700 Tuscola Blvd                               Tuscola                IL       61953          5/6/2011   3214        Outlet  North Bend Premium Outlets  461 S Fork Avenue SW, Unit I                    North Bend            WA        98045          9/9/2011   3215        Outlet  Lebanon Premium Outlets     One Outlet Village Blvd, Spc 350                Lebanon                TN       37090          9/9/2011   3216        Outlet  Tanger Outlets Myrtle Beach  4635 Factory Stores Boulevard, #C210           Myrtle Beach           SC       29579         6/10/2011   3217        Outlet  Lincoln City Outlet         1500 SE East Devils Lake Road, Ste 202          Lincoln City           OR       97367         6/10/2011   3218        Outlet  Centralia Outlets           110 West High Street, Spc 110                   Centralia             WA        98531         6/10/2011   3219        Outlet  Ohio Station Outlets        9911 Avon Lake Road, Unit 200                   Burbank                OH       44214         7/22/2011   3220        Outlet  The Outlet Shoppes at Oshkosh  3001 South Washburn Street, Spc D240         Oshkosh                WI       54904         6/10/2011                                                                                                                                                                3  

 

                                                                        Christopher & Banks                                                              Store Count as of 7/27/2018                                                                                                                                                Store #     Division         Center Name                             Address                             City          State    Zip Code       Open Date   3221        Outlet  Johnson Creek Premium Outlets 575 Linmar Lane, Spc A110                     Johnson Creek          WI       53038         7/22/2011   3222        Outlet  The Outlet Shoppes at Gettysbu 1863 Gettysburg Village Drive, Spc 740       Gettysburg             PA       17325         3/16/2012   3225        Outlet  Osage Beach Premium Outlets  4540 Osage Beach Parkway, Spc #H‐5             Osage Beach           MO        65065         8/23/2013   3229        Outlet  Medford Outlet Center       6750 West Frontage Road, Spc B033               Medford               MN        55049         3/23/2012   3231        Outlet  Outlets at West Branch      2990 Cook Road, Ste 108                         West Branch            MI       48661         6/28/2013   3234        Outlet  Tanger Outlets Pittsburgh   2200 Tanger Blvd, Ste #513                      Washington             PA       15301         11/7/2013   3235        Outlet  Tanger Outlets Tilton       120 Laconia Road, Spc 220                       Tilton                 NH       03276         3/31/2016   3236        Outlet  The Outlet Shoppes at Burlingto 200 Fashion Way                             Burlington            WA        98233         5/24/2013   3237        Outlet  Waterloo Premium Outlets    655 State Route 318, Spc #A049                  Waterloo               NY       13165          8/1/2013   3238        Outlet  St. Louis Premium Outlets   18533 Outlet Blvd, Spc #103                     Chesterfield          MO        63005         8/22/2013   3239        Outlet  Rockvale Outlets            35 South Willowdale Drive, #312                 Lancaster              PA       17602          5/1/2014   3240        Outlet  Columbia Gorge Outlets      450 NW 257th Way, #512                          Troutdale              OR       97060          5/2/2014   3241        Outlet  The Outlet Shoppes of the Blueg1155 Buck Creek Road, Spc A110               Simpsonville           KY       40067         7/30/2014   3242        Outlet  Log Jam Outlet              1476 State Route 9, #H14                        Lake George            NY       12845          5/8/2014   3243        Outlet  Bend Factory Outlets        61334 South Hwy 97, Spc #150                    Bend                   OR       97702          5/9/2014   3246        Outlet  Outlets at Anthem           4250 W Anthem Way, #0720                        Anthem                 AZ       85086          3/5/2015   3247        Outlet  Tanger Outlets Grand Rapids  350 84th Street SW, Spc 1025                   Byron Township         MI       49315         7/30/2015   3248        Outlet  Twin Cities Premium Outlets  3965 Eagan Outlets Parkway, Ste 335            Eagan                 MN        55122         8/14/2014   3249        Outlet  Tanger Outlets Columbus     400 S. Wilson Road, Space 1040                  Sunbury                OH       43074         6/23/2016   3250        Outlet  The Outlet Shoppes at Fremont  6245 Old US 27, #E020                        Fremont                IN       46737          7/3/2014   3251        Outlet  Charlotte Premium Outlets   5416 New Fashion Way, Spc #890                  Charlotte              NC       28278         7/31/2014   3253        Outlet  Pigeon River Crossings      2616 Teaster Lane, Spc 2616                     Pigeon Forge           TN       37863         8/29/2014   3254        Outlet  Essex Outlets               21 Essex Way, Ste #214                          Essex Junction         VT       05452         8/28/2014   3255        Outlet  Tanger Outlets at Memphis   5205 Airways Boulevard, Suite 1045              Southaven              MS       38671         11/19/2015   3257        Outlet  Tucson Premium Outlets      6401 W. Marana Center Blvd, Ste 920             Tucson                 AZ       85742         10/1/2015   3259        Outlet  Fashion Outlets of Niagara Falls  1900 Military Road, Spc #223              Niagara Falls          NY       14304         10/23/2014   3260        Outlet  Tampa Premium Outlets       2224 Grand Cypress Drive, Spc #728              Lutz                   FL       33559         10/28/2015   3264        Outlet  Carolina Premium Outlets    1223B Industrial Park Drive                     Smithfield             NC       27577         7/17/2015   3265        Outlet  Tanger Outlets Blowing Rock  310 Shoppes on the Parkway Road, Ste #18       Blowing Rock           NC       28605          4/3/2015   3266        Outlet  Sanibel Outlets             20350 Summerlin Road, Spc #6110                 Fort Myers             FL       33908          7/3/2015                                                                                                                                                                                                4  

 

                                                                        Christopher & Banks                                                              Store Count as of 7/27/2018                                                                                                                                                             Store #     Division         Center Name                             Address                             City          State    Zip Code       Open Date   3267        Outlet  Outlets at Kittery          283 US Route 1, Ste 102                         Kittery                ME       03904          4/3/2015   3268        Outlet  Settlers Green Outlet Village  2 Common Court, #D‐54                        North Conway           NH       03860         2/25/2015   3269        Outlet  Asheville Outlets           800 Brevard Road, Ste #864                      Asheville              NC       28806          5/1/2015   3270        Outlet  Westbrook Outlets           314 Flat Rock Place, Ste #C140                  Westbrook              CT       06498          4/3/2015   3271        Outlet  St. Augustine Outlets       500 Outlet Mall Boulevard, Ste #320             St. Augustine          FL       32084         7/17/2015   3272        Outlet  Seaside Factory Outlet Center  1111 N. Roosevelt Drive, Spc #336            Seaside                OR       97138         5/29/2015   3274        Outlet  Williamsburg Premium Outlets  5699‐50 Richmond Road                         Williamsburg           VA       23188         11/25/2015   3275        Outlet  The Outlets of Little Rock  11201 Bass Pro Parkway, Spc #B‐M155             Little Rock            AR       72210         10/15/2015   3276        Outlet  Destiny USA                 9090 Destiny USA Drive, Spc L204                Syracuse               NY       13204         7/31/2015   3277        Outlet  Tanger Outlet at Five Oaks  1645 Parkway, Ste #740                          Sevierville            TN       37862         9/18/2015   3278        Outlet  Tanger Outlets Commerce     800 Steven B. Tanger Blvd, Ste #112             Commerce               GA       30529          6/5/2015   3279        Outlet  Tanger Outlets Terrell      301 Tanger Drive, Ste #217                      Terrell                TX       75160         5/29/2015   3280        Outlet  Tanger Outlets Rehoboth Beach 36470 Seaside Outlet Drive, Suite #1820       Rehoboth Beach         DE       19971         10/30/2015   3282        Outlet  The Outlets at Sands Bethlehem 77 Sands Blvd, Spc #117                      Bethlehem              PA       18015         8/14/2015   3285        Outlet  Ellenton Premium Outlets    5375 Factory Shops Blvd, Spc 585                Ellenton               FL       34222         7/31/2015   3286        Outlet  Tanger Outlets Locust Grove  1000 Tanger Drive, Spc #211                    Locust Grove           GA       30248         7/31/2015   3287        Outlet  Tanger Outlets Ocean City   12741 Ocean Gateway, Ste #960                   Ocean City            MD        21842         7/31/2015   3288        Outlet  Phoenix Premium Outlets     4976 Premium Outlets Way, Spc #746              Chandler               AZ       85226         10/30/2015   3289        Outlet  Calhoun Premium Outlets     455 Belwood Road, Spc #A107                     Calhoun                GA       30701          1/8/2016   3290        Outlet  Lighthouse Place Premium Outl  511 Lighthouse Place, Spc E110               Michigan City          IN       46360         7/31/2015   3293        Outlet  Gloucester Premium Outlets  100 Premium Outlets Drive, Spc #500             Blackwood              NJ       08012         8/13/2015   3294        Outlet  Outlets at Traverse Mountain  3700 North Cabelas Blvd, Spc 343              Lehi                   UT       84043         3/18/2016   3295        Outlet  Gaffney Premium Outlets     1 Factory Shops Blvd, Spc 655                   Gaffney                SC       29341          4/1/2016   3296        Outlet  Cincinnati Premium Outlets  400 Premium Outlet Drive, Spc 968               Monroe                 OH       45050          4/1/2016   3302        Outlet  Outlets of Des Moines       801 Bass Pro Drive NW, Spc #415                 Altoona                IA       50009         4/20/2018   3303        Outlet  Outlets at Castle Rock      5050 Factory Shops Blvd., Spc 1020              Castle Rock            CO       80108          6/3/2016   3305        Outlet  Colorado Mills Mall         14500 West Colfax Avenue, #456                  Lakewood               CO       80401         11/12/2012   3306        Outlet  Tanger Outlets @ Foxwoods   455 Trolley Line Blvd                           Mashantucket           CT       06338         2/23/2018   4001        MPW     Shoppes at Montage          2131 Shoppes Boulevard                          Moosic                 PA       18507         7/31/2009   4003        MPW     NewMarket Square            2441 North Maize Road, Ste 1807                 Wichita                KS       67205         8/26/2011                                                                                                                                                                5  

 

                                                                        Christopher & Banks                                                              Store Count as of 7/27/2018                                                                                                                                                             Store #     Division         Center Name                             Address                             City          State    Zip Code       Open Date   4005        MPW     East Hills Mall             3702 Frederick Blvd, Spc 16                     St. Joseph            MO        64505         4/15/2011   4006        MPW     Rushmore Crossing           1335 Eglin Street, Ste #100                     Rapid City             SD       57701          3/7/2012   4007        MPW     Lakeport Commons            5001 Sergeant Road, Ste 295                     Sioux City             IA       51106          3/4/2011   4008        MPW     Summit Fair                 930‐V Northwest Blue Pkwy                       Lees Summit           MO        64086         10/7/2011   4010        MPW     The Shoppes of Oak Park Height 5825 Krueger Lane                            Oak Park Heights      MN        55082         10/7/2011   4011        MPW     Derby Marketplace           1930 N. Rock Road, Spc D‐13                     Derby                  KS       67037         9/16/2011   4012        MPW     Chillicothe Mall            1075 North Bridge Street, Ste 165               Chillicothe            OH       45601          4/1/2011   4013        MPW     Cedar Mall                  2900 South Main, #E5                            Rice Lake              WI       54868         8/10/2012   4014        MPW     Mall of America             270 South Boulevard                             Bloomington           MN        55425         8/11/1992   4015        MPW     Crossroads Mall             89 Crossroads Mall                              Mt. Hope              WV        25880         8/17/2001   4016        MPW     Columbia Center             1321 N Columbia Center Blvd, #408               Kennewick             WA        99336          4/3/2014   4017        MPW     Marketplace Mall            751 Miracle Mile Drive, #A1‐2                   Rochester              NY       14623          3/8/2002   4019        MPW     Rimrock Mall                300 South 24th Street West, #B‐1                Billings               MT       59102          4/6/2001   4020        MPW     Mesa Mall                   2424 US Hwy 6 & 50, #110                        Grand Junction         CO       81505         8/17/2001   4022        MPW     Crossroads Commons          1120 Meridian Drive, Spc A                      Plover                 WI       54467         5/25/2012   4026        MPW     Central Square Mall         201 NW 4th Street, #100                         Grand Rapids          MN        55744          5/8/1991   4029        MPW     Palouse Mall                2018 West Pullman Road, #D7                     Moscow                 ID       83843         10/3/2003   4033        MPW     Great Northern Mall         116 Great Northern Mall                         North Olmsted          OH       44070         5/23/2003   4037        MPW     Midtown Mall                1084 South Stephenson Avenue                    Iron Mountain          MI       49801         11/2/1994   4040        MPW     Alton Square                116 Alton Square, #A09A                         Alton                  IL       62002          3/9/2001   4047        MPW     Crossroads Mall             2060 Crossroads Boulevard                       Waterloo               IA       50702          6/8/2001   4053        MPW     Eden Prairie Center         8251 Flying Cloud Drive, #1210                  Eden Prairie          MN        55344         9/27/2013   4054        MPW     Aberdeen Mall               3315 6th Avenue SE, #21                         Aberdeen               SD       57402         11/13/1990   4059        MPW     Stones River Mall           1720 Old Fort Pkwy, #B‐140                      Murfreesboro           TN       37129         8/22/2003   4061        MPW     Janesville Mall             2500 Milton Ave, #119                           Janesville             WI       53545         9/28/2007   4062        MPW     The Mall at Greece Ridge    257 Greece Ridge Center Drive, H‐19a            Rochester              NY       14626         12/12/1998   4063        MPW     Pyramid Mall Ithaca         40 Catherwood Road, #B06                        Ithaca                 NY       14850         8/16/2002   4064        MPW     Valley River Center         538 Valley River Center                         Eugene                 OR       97401         10/31/2002   4065        MPW     Village Mall                2917 North Vermilion                            Danville               IL       61832         8/18/1987   4066        MPW     Crossroads Mall             217 South 25th Street, Unit C23                 Fort Dodge             IA       50501          3/1/1980                                                                                                                                                                6  

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4069       MPW     Eastview Mall               150 Eastview Mall                               Victor                 NY        14564         12/4/1998        4074       MPW     CoolSprings Galleria        1800 Galleria Blvd, #2240                       Franklin               TN        37067         5/23/2003        4075       MPW     The Streets of Indian Lake  300 Indian Lake Blvd, Bldg A, Ste 220           Hendersonville         TN        37075         3/13/2008        4077       MPW     The Mall at Whitney Field   100 Commercial Road, #64                        Leominster             MA        01453         8/15/2003        4079       MPW     Hickory Point Mall          1350 Hickory Point Mall, Spc #1120              Forsyth                 IL       62535         1/3/2014        4081       MPW     The Shops at CenterPoint    3647 28th Street SE                             Grand Rapids           MI        49512         2/24/2001        4082       MPW     Northpark Mall              320 West Kimberly Road, Spc 90                  Davenport              IA        52806         2/26/2013        4083       MPW     Richland Mall               687 Richland Mall                               Mansfield              OH        44906         4/13/2001        4084       MPW     Crest Plaza                 1620 N Cedar Crest Blvd, Spc G                  Allentown              PA        18104         4/26/2013        4085       MPW     Glenbrook Square            4201 Coldwater, #E10                            Fort Wayne             IN        46805        10/12/2001        4086       MPW     Riverdale Village           12771 Riverdale Blvd, #101‐#102                 Coon Rapids            MN        55448         9/21/2001        4087       MPW     Northtown Mall              4750 North Division, #1216                      Spokane                WA        99207         10/4/2013        4088       MPW     Pavilion Shopping Center    4344 South College Avenue, Unit 5               Fort Collins           CO        80525         10/3/2013        4089       MPW     Boulevard Mall              1281 Niagara Falls Boulevard, #733              Amherst                NY        14226         3/30/1999        4090       MPW     Rosedale Commons            2480 Fairview Avenue North, Ste #163 A&B        Roseville              MN        55113         1/24/2014        4091       MPW     Novi Town Center            26040 Ingersol Drive                            Novi                   MI        48375         6/5/2014        4092       MPW     Clackamas Town Center       12000 SE 82nd Avenue, #L203                     Happy Valley           OR        97086         4/4/2014        4093       MPW     Westmoreland Mall           5256 Route 30, Ste #NL4                         Greensburg             PA        15601         5/9/2014        4094       MPW     Bellis Fair                 One Bellis Fair Parkway, #616                   Bellingham             WA        98226         6/6/2014        4095       MPW     Spokane Valley Mall         14700 East Indiana Avenue, #1104                Spokane Valley         WA        99216         6/20/2014        4098       MPW     Columbia Mall               2300 Bernadette Drive, #0302                    Columbia               MO        65203         4/4/2014        4099       MPW     Orchard Crossing            914 Thomas Road, #106                           Fort Wayne             IN        46804         4/25/2014        4100       MPW     Birchwood Mall              4350 24th Avenue, #228                          Port Huron             MI        48059         4/11/2003        4101       MPW     Peru Mall                   3940 Route 251, Spc #H2                         Peru                    IL       61354         5/2/2003        4102       MPW     SouthPark Mall              4500 16th Street, #630                          Moline                  IL       61265         3/21/1981        4103       MPW     Westwood Mall               1850 W Michigan Ave, #808                       Jackson                MI        49202         3/5/2004        4104       MPW     New Towne Mall              400 Mill Avenue SE, #317                        New Philadelphia       OH        44663         5/6/1999        4105       MPW     SouthPointe Pavilions       2940 Pine Lake Road, #I‐18                      Lincoln                NE        68516         4/11/2003        4106       MPW     Logan Valley Mall           5580 Goods Lane, Ste 1141                       Altoona                PA        16602         8/13/2014        4107       MPW     Polaris Fashion Place       1500 Polaris Parkway, #2008                     Columbus               OH        43240         5/9/2014                                                                                                                                                            7    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4108       MPW     Mission Mart Shopping Center  5327 Johnson Drive                            Mission                KS        66205         1/9/2015        4109       MPW     Holiday Village Mall        1200 10th Avenue South, #1                      Great Falls            MT        59405         3/13/2001        4110       MPW     Chambersburg Mall           864 Chambersburg Mall, #739                     Chambersburg           PA        17202        11/19/2004        4111       MPW     Shenango Valley Mall        3275 East State Street, #625                    Hermitage              PA        16148         8/23/2002        4112       MPW     Wausau Center               C324 Wausau Center                              Wausau                 WI        54403         8/16/1978        4113       MPW     Mall St. Matthews           5000 Shelbyville Road, #1125                    Louisville             KY        40207         5/9/2014        4114       MPW     Wilton Mall at Saratoga     3065 Route 50, #B011a                           Saratoga Springs       NY        12866         6/17/2005        4115       MPW     Central Mall                5111 Rogers Avenue, Spc #28                     Fort Smith             AR        72903         8/23/1994        4116       MPW     Prescott Gateway Mall       3250 Gateway Blvd, Spc 1064                     Prescott               AZ        86303         11/8/2002        4117       MPW     Sunrise Mall                6145 Sunrise Mall                               Citrus Heights         CA        95610         4/8/2005        4118       MPW     Mt. Shasta Mall             900 Dana Drive, Ste #C44                        Redding                CA        96003        11/19/2004        4119       MPW     Montgomery Village          731 Village Court, #731                         Santa Rosa             CA        95405         9/26/2003        4120       MPW     Arapahoe Crossings          6616 Parker Road, Ste #101                      Aurora                 CO        80016         3/14/2003        4123       MPW     The Promenade at Evergreen W 101 Evergreen Way, #115                        South Windsor          CT        06074        10/29/2004        4124       MPW     Concord Mall                4737 Concord Pike, #740                         Wilmington             DE        19803         5/13/2005        4125       MPW     Port Charlotte Town Center  1441 Tamiami Trail, #215                        Port Charlotte         FL        33948        11/15/2002        4126       MPW     Tyrone Square               6924 Tyrone Square Mall                         St. Petersburg         FL        33710         9/27/2002        4127       MPW     Westgate Mall               515 North Adams, Ste 223                        Carroll                IA        51401         3/1/1994        4128       MPW     Marshalltown Mall           2500 South Center Street                        Marshalltown           IA        50158         9/27/1983        4129       MPW     Quincy Place Mall           1110 Quincy Avenue, #84                         Ottumwa                IA        52501         11/2/1991        4130       MPW     Westland Mall               550 South Gear Avenue, Ste #1360                West Burlington        IA        52655         9/16/1981        4131       MPW     Grand Teton Mall            2300 East 17th Street, Ste 54                   Idaho Falls            ID        83404         3/5/1993        4132       MPW     Greenwood Park Mall         1251 US Highway 31 North, #F11A                 Greenwood              IN        46142         5/20/2005        4133       MPW     Markland Mall               1220 South 17th Street, B03                     Kokomo                 IN        46902         9/7/2001        4134       MPW     Fayette Mall                3401 Nicholasville Road, Ste 432                Lexington              KY        40503         5/21/2004        4135       MPW     TownMall of Westminster     400 North Center Street, Ste 147                Westminster            MD        21157         8/22/2003        4137       MPW     Southland Center            23000 Eureka Road, #1655                        Taylor                 MI        48180         8/25/2006        4138       MPW     Cary Towne Center           1105 Walnut Street, #150                        Cary                   NC     27511‐4791      10/17/2003        4140       MPW     Oakdale Mall                601‐635 Harry L Drive, Ste 74                   Johnson City           NY        13790         9/17/2004        4142       MPW     Eastern Hills Mall          4545 Transit Road, #734                         Williamsville          NY        14221        11/17/2006                                                                                                                                                            8    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4143       MPW     Midway Mall                 3250 Midway Mall                                Elyria                 OH        44035         9/26/2003        4144       MPW     Great Lakes Mall            7850 Mentor Avenue, #514                        Mentor                 OH        44060         6/1/2001        4148       MPW     The Galleria                500 Galleria Drive, #218                        Johnstown              PA        15904        10/11/2002        4149       MPW     Coventry Mall               351 West Schuylkill Road, #H2                   Pottstown              PA        19465         11/8/2002        4150       MPW     Uniontown Mall              1728 Mall Run Road, #728                        Uniontown              PA        15401         11/1/2002        4156       MPW     Northland Mall              954 West Northland Avenue                       Appleton               WI        54914         11/1/1983        4157       MPW     East Town Mall              2350 East Mason, #15                            Green Bay              WI        54302        10/14/1982        4158       MPW     Morgantown Mall             9915 Mall Road, #915                            Morgantown             WV        26501         3/29/2002        4159       MPW     Columbia Mall               2800 South Columbia Road, #335                  Grand Forks            ND        58201         7/25/2014        4160       MPW     River Hills Mall            1850 Adams Street, #518                         Mankato                MN     56001‐4840       3/20/2002        4161       MPW     Chapel Hills Mall           1710 Briargate Blvd, #117                       Colorado Springs       CO        80920         4/6/2001        4162       MPW     Champlain Centre North      60 Smithfield Blvd, #C‐115                      Plattsburgh            NY        12901         2/13/2014        4163       MPW     The Village at Jordan Creek  6925 Mills Civic Pkwy, #130                    West Des Moines        IA        50266         6/13/2014        4164       MPW     Kalispell Center Mall       20 North Main Street, #B090                     Kalispell              MT        59901         8/1/2014        4165       MPW     Cherryvale Mall             7200 Harrison Avenue, #H‐04                     Rockford                IL       61112         8/22/2014        4166       MPW     Skyway Regional Shopping Cent 2013 Cromwell Dixon Lane, Ste 105             Helena                 MT        59602         10/8/2015        4167       MPW     Northpark Mall              101 N. Range Line Rd, #350                      Joplin                 MO        64801         7/11/2014        4168       MPW     Kennedy Mall                555 John F Kennedy Road, #445                   Dubuque                IA        52002         4/13/2001        4169       MPW     Meadowbrook Mall            2399 Meadowbrook Road, #330                     Bridgeport             WV        26330         4/13/2001        4170       MPW     Ohio Valley Mall            67800 Mall Road, #570                           St. Clairsville        OH        43950         3/29/2002        4171       MPW     Findlay Village Mall        1800 Tiffin Avenue, #469                        Findlay                OH        45840         8/27/2004        4172       MPW     Sandusky Mall               4314 Milan Road, #180                           Sandusky               OH        44870         8/16/2002        4173       MPW     Millcreek Mall              725 Millcreek Mall                              Erie                   PA        16565         3/8/2002        4174       MPW     Nittany Mall                2900 East College Avenue, Spc #326              State College          PA        16801         3/6/2015        4175       MPW     RiverTown Crossings         3700 Rivertown Pkwy, #1218                      Grandville             MI        49418         8/1/2014        4176       MPW     Mercer Mall                 261 Mercer Mall Road, Ste 720                   Bluefield              WV        24701         9/1/2001        4177       MPW     Moorhead Center Mall        512 Center Avenue                               Moorhead               MN        56560         2/23/1994        4178       MPW     Paul Bunyan Mall            1401 Paul Bunyan Drive NW                       Bemidji                MN        56601         9/1/1978        4179       MPW     Watertown Mall              1300 9th Avenue SE, #57                         Watertown              SD        57201        10/30/1991        4180       MPW     Carolina Mall               1480 US Highway 29 N, #275                      Concord                NC        28025         4/23/2004                                                                                                                                                            9    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4181       MPW     Utica Corners               13291 Hall Road, Spc C140                       Utica                  MI        48315         8/1/2014        4182       MPW     The Shoppes at Dawley Farms  905 South Highline Place, Spc 102              Sioux Falls            SD        57110         9/26/2014        4183       MPW     Hampton Village Centre      2685 South Rochester Road, Spc #11              Rochester Hills        MI        48307         9/12/2014        4184       MPW     Maple Grove Crossing        8046 Wedgewood Lane North, Unit 10              Maple Grove            MN        55369         9/19/2014        4185       MPW     Vancouver Mall              8700 NE Vancouver Mall Dr, Spc #210             Vancouver              WA        98662         9/12/2014        4186       MPW     The Pinnacle at Turkey Creek  11437 Parkside Drive, Ste #603                Farragut               TN        37934         8/21/2015        4188       MPW     Monroeville Mall            200 Monroeville Mall, #212                      Monroeville            PA        15146         9/5/2014        4189       MPW     Kitsap Mall                 10315 Silverdale Way NW, #F01                   Silverdale             WA        98383         1/7/2015        4190       MPW     Mid Rivers Mall             2004 Mid Rivers Mall Drive                      St. Peters             MO        63376        11/14/2014        4191       MPW     Valley View Mall            4802 Valley View Blvd NW, #LA‐5                 Roanoke                VA        24012         1/29/2015        4192       MPW     Bay City Mall               4101 Wilder Road, #E517                         Bay City               MI        48706         8/18/2000        4193       MPW     Northland Mall              2900 East Lincolnway, #10                       Sterling                IL       61081         4/3/1998        4194       MPW     Salmon Run Mall             21182 Salmon Run Mall Loop West, Spc #A104      Watertown              NY        13601         10/3/2014        4195       MPW     Laurel Park Place           37700 West Six Mile Road, #D‐280                Livonia                MI        48152         10/3/2014        4196       MPW     Westridge Court             256 South Route 59, Ste #104                    Naperville              IL       60540         8/28/2014        4197       MPW     Carriage Crossing           4670 Merchants Park Circle, #660                Collierville           TN        38017         10/3/2014        4198       MPW     University Mall             1237 East Main Street, #1052                    Carbondale              IL       62901         4/30/2004        4199       MPW     Park City Center            575 Park City Center, E0575                     Lancaster              PA        17601         11/8/2002        4200       MPW     Thunderbird Mall            1427 South 12th Avenue, Ste 27                  Virginia               MN     55792‐3247       7/12/1992        4201       MPW     The Crossroads              6650 S Westnedge Ave, #255                      Portage                MI        49024         1/27/2015        4202       MPW     West County Center          72 West County Center, #1300                    Des Peres              MO        63131         6/5/2015        4203       MPW     Greenwood Mall              2625 Scottsville Road, #100                     Bowling Green          KY        42104        11/21/2014        4204       MPW     Market Place Shopping Center  2000 North Neil Street, Spc 104               Champaign               IL       61820        11/14/2014        4205       MPW     Shoppes on Ford Avenue      1603 Ford Avenue, Ste A                         Effingham               IL       62401         1/30/2015        4206       MPW     North Grand Mall            2801 Grand Avenue, #1090                        Ames                   IA        50010         9/9/2005        4207       MPW     Clearview Mall              101 Clearview Circle, Room #730                 Butler                 PA        16001         9/26/2003        4209       MPW     Centrum Plaza               915 Short Street                                Decorah                IA        52101         2/22/1994        4210       MPW     South Park Mall             901 11th Street SW, Unit #48                    Spencer                IA        51301         8/17/1993        4211       MPW     Coral Ridge Mall            1451 Coral Ridge Ave, #118                      Coralville             IA        52241         2/2/2018        4212       MPW     Holiday Mall                425 College Drive South, Ste #6                 Devils Lake            ND        58301         8/19/1979                                                                                                                                                          10    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4213       MPW     Buffalo Mall                2400 8th Avenue SW, Ste E4                      Jamestown              ND        58401         8/19/1993        4214       MPW     Lufkin Mall                 4600 S Medford Drive, #1124                     Lufkin                 TX        75901         10/8/2004        4215       MPW     Collin Creek Mall           811 North Central Expressway, Spc 2190          Plano                  TX        75075         11/8/2007        4217       MPW     Mall of Abilene             4310 Buffalo Gap Road, #1404                    Abilene                TX        79606         6/24/2005        4218       MPW     Westgate Mall               7701 West Interstate 40, Ste #548               Amarillo               TX        79121         3/28/2003        4220       MPW     Firewheel Town Center       155 Cedar Sage Drive, #D11                      Garland                TX        75040         5/8/2009        4221       MPW     Auburn Mall                 550 Center Street, #1108                        Auburn                 ME        04210        10/20/2014        4222       MPW     Marketplace at Augusta      2 Stephen King Drive, Suite 4                   Augusta                ME        04330        11/15/2007        4223       MPW     Pinnacle Hills Promenade    2203 Promenade Blvd, #2130                      Rogers                 AR        72758         10/4/2006        4227       MPW     Wenatchee Valley Mall       511 Valley Mall Parkway, Spc B08                East Wenatchee         WA        98802         8/16/1994        4228       MPW     Kent Station                438 Ramsey Way, Ste 105                         Kent                   WA        98032         11/1/2006        4229       MPW     Cache Valley Mall           1300 North Main Street, #1110                   Logan                  UT        84341         10/8/2004        4230       MPW     Provo Towne Center          1200 Provo Towne Center Blvd, #1000             Provo                  UT        84601        10/28/1998        4231       MPW     Red Cliffs Mall             1770 East Red Cliffs Drive, #1168               St. George             UT        84790         3/12/2004        4234       MPW     Mall of New Hampshire       1500 South Willow Street, #E111                 Manchester             NH        03103        11/15/2002        4235       MPW     Village at Sandhill         631 Promenade Place, Ste 12                     Columbia               SC        29229         5/26/2006        4236       MPW     Mall of Georgia             3333 Buford Drive, #2049A                       Buford                 GA        30519         8/15/2003        4237       MPW     College Square              2550 East Morris Blvd, #56                      Morristown             TN        37813         6/6/2003        4238       MPW     Northgate Mall              271 Northgate Mall                              Chattanooga            TN        37415         6/13/2003        4239       MPW     Dover Mall                  1365 N Dupont Hwy, #1110                        Dover                  DE        19901        10/14/2005        4241       MPW     Valley Mall                 1925 East Market Street, #0416                  Harrisonburg           VA        22801         5/8/2015        4242       MPW     Heritage Mall               2137 14th Avenue SE, #A117                      Albany                 OR        97322         3/12/2015        4243       MPW     Eastridge Mall              601 SE Wyoming Boulevard, #1258                 Casper                 WY        82609         5/1/2011        4244       MPW     Grand Traverse Mall         3200 S Airport Road West, #411                  Traverse City          MI        49684         4/11/2003        4245       MPW     Greenway Station Shopping Cen 1661 Deming Way, Suite 138                    Middleton              WI        53562         3/6/2015        4247       MPW     The Monroe Marketplace      330 Marketplace Blvd, #C6                       Selinsgrove            PA        17870         2/13/2015        4248       MPW     River Ridge Mall            3405 Candlers Mountain Road, #F265              Lynchburg              VA        24502         8/23/2002        4249       MPW     University Mall             575 East University Pkwy, #A8A                  Orem                   UT        84097         3/10/2006        4250       MPW     Magic Valley Mall           1485 Pole Line Lane #195                        Twin Falls             ID        83301         8/19/2005        4251       MPW     Washington Park Mall        2350 SE Washington Blvd                         Bartlesville           OK        74006         6/1/2007                                                                                                                                                          11    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                         Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4252       MPW     The Lakes Mall              5600 Harvey Street, #2072                       Muskegon               MI        49444         8/15/2001        4253       MPW     West Acres Shopping Center  3902 13th Avenue South, #233                    Fargo                  ND        58103         8/20/1979        4254       MPW     Hamilton Town Center        14002 Hoard Dr, Ste 300                         Noblesville            IN        46060         5/1/2008        4255       MPW     Midland Mall                6800 Eastman Avenue, #240                       Midland                MI        48642        11/12/2004        4256       MPW     The Arboretum of South Barring 100 West Higgins Road, Ste Q65               South Barrington        IL       60010         4/10/2015        4257       MPW     Germantown Plaza III        N96 W19160 County Line Road, Unit #2            Germantown             WI        53022         4/17/2015        4258       MPW     Corbin Park                 6501 West 135th Street, Ste F‐8                 Overland Park          KS        66223         4/24/2015        4259       MPW     Shoppes on Six              205 County Road 6 East, Suite F                 Elkhart                IN        46514         9/4/2015        4260       MPW     Superstition Springs Mall   6555 East Southern Avenue, Ste 1210             Mesa                   AZ        85206         4/15/2015        4261       MPW     Durango Mall                800 South Camino del Rio, #F5 & #F6             Durango                CO        81301         2/6/2015        4262       MPW     Arrowhead Towne Center      7700 W. Arrowhead Towne Center Dr, Spc #1253    Glendale               AZ        85308         5/8/2015        4263       MPW     Capital Mall                3600 Country Club Drive, #306                   Jefferson City         MO        65109         2/10/1982        4264       MPW     The Shops at Perry Crossing  314 Marketplace Mile, Suite 115                Plainfield             IN        46168         8/28/2015        4266       MPW     College Mall                2916 East 3rd Street, #M‐12                     Bloomington            IN        47401         4/5/2002        4267       MPW     Chautauqua Mall             318 East Fairmount Avenue, #644                 Lakewood               NY        14750         9/24/2004        4268       MPW     Patrick Henry Mall          12300 Jefferson Avenue, #412                    Newport News           VA        23602         4/18/2003        4269       MPW     New River Valley Mall       782 New River Road, #831                        Christiansburg         VA        24073         8/10/2001        4270       MPW     Short Pump Town Center      11800 W Broad Street, #2138                     Richmond               VA        23233         8/19/2005        4272       MPW     Salem Center                480 Center Street, #2220                        Salem                  OR        97301         6/11/2004        4273       MPW     The Tower Shops at The Pinnacl 562 Pinnacle Parkway, Spc #518               Bristol                TN        37620         5/12/2016        4274       MPW     Alderwood Mall              3000 184 Street SW, Spc #398                    Lynnwood               WA        98037         6/12/2015        4275       MPW     Northwoods Mall             2200 West War Memorial Drive, #CU‐9             Peoria                  IL       61613         4/12/2002        4276       MPW     Green Oak Village Place     9736 Village Place Blvd, #F                     Brighton               MI        48116         9/29/2006        4277       MPW     River Valley Mall           1635 River Valley Circle South, #331            Lancaster              OH        43130         5/17/2002        4278       MPW     Indian Mound Mall           771 South 30th Street, #721                     Heath                  OH        43056         3/15/2002        4279       MPW     Eastland Mall               1615 East Empire Street, #1048                  Bloomington             IL       61701        10/15/2004        4280       MPW     Lycoming Mall               300 Lycoming Mall Circle, Ste #257              Pennsdale              PA        17756         9/20/2002        4281       MPW     Southgate Mall              2901 Brooks Street, #B2                         Missoula               MT        59801         7/3/2015        4283       MPW     Genesee Valley Mall         3341 South Linden Road, #620                    Flint                  MI        48507         11/5/2004        4284       MPW     Colonie Center              131 Colonie Center, #280                        Albany                 NY        12205         5/4/2015                                                                                                                                                            12    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                         Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4285       MPW     Garden City Plaza           2214 East Kansas Avenue, Suite 6 & 7            Garden City            KS        67846        10/27/1993        4286       MPW     Frontier Mall               1400 Dell Range Boulevard                       Cheyenne               WY        82009         4/7/1982        4287       MPW     Miami Valley Centre         987 East Ash Street, Spc C6                     Piqua                  OH        45356        10/28/2004        4289       MPW     Arnot Mall                  3300 Chambers Road South, Ste 5146              Horseheads             NY        14845         3/12/2004        4290       MPW     Johnson City Crossing       3211 Peoples Street, Ste #700                   Johnson City           TN        37604         8/7/2015        4291       MPW     Liberal Plaza Shopping Center  1505 North Kansas Avenue                     Liberal                KS        67901         10/9/2015        4293       MPW     The Shoppes on Burbank      4369 Burbank Road, Unit 20                      Wooster                OH        44691         3/18/2016        4294       MPW     Wilshire Plaza              5530 Grape Road                                 Mishawaka              IN        46545         9/15/2016        4296       MPW     Washington Square Mall      815 Lake Avenue, #5                             Detroit Lakes          MN        56501         4/30/1991        4298       MPW     Viking Plaza                3015 Highway 29 South, Ste 4095                 Alexandria             MN        56308         4/15/1992        4299       MPW     Greeley Mall                1955 Greeley Mall                               Greeley                CO        80631         5/18/1983        4300       MPW     Manhattan Town Center       100 Manhattan Town Center, #270                 Manhattan              KS        66502        10/25/1983        4301       MPW     Time Square                 7605 148th Street                               Apple Valley           MN        55124         11/1/1977        4302       MPW     Beaver Valley Mall          344 Route 18, #344                              Monaca                 PA        15061         4/23/1999        4304       MPW     Miller Hill Mall            1600 Miller Trunk Hwy, #E02D                    Duluth                 MN        55811        11/15/2007        4306       MPW     Westgate Mall               14136 Baxter Drive, Ste 36                      Baxter                 MN        56425         11/5/1991        4307       MPW     Hilltop Mall                5003 North 2nd Avenue, Ste 5                    Kearney                NE        68848        10/15/1992        4308       MPW     Hutchinson Mall             1060 Hwy 15 South, #36                          Hutchinson             MN        55350        11/12/1992        4309       MPW     Monument Mall               2302 Frontage Road, #2                          Scottsbluff            NE        69361         3/30/1993        4310       MPW     Northridge Plaza            1615 North Harrison, #13                        Pierre                 SD        57501         4/7/1993        4311       MPW     Yankton Mall                2101 Broadway, #130                             Yankton                SD        57078         7/26/2018        4312       MPW     Winona Mall                 1213 Gilmore                                    Winona                 MN        55987        10/26/1993        4314       MPW     Delta Plaza Mall            301 North Lincoln Road                          Escanaba               MI        49829         2/16/1994        4315       MPW     Pueblo Mall                 3539 Dillon Drive                               Pueblo                 CO        81008         5/3/1994        4316       MPW     Market Street Mall          1420 East College Drive                         Marshall               MN        56258         8/31/1994        4317       MPW     Karcher Mall                1509 Caldwell Boulevard, Ste #1174              Nampa                  ID        83651         8/2/1994        4318       MPW     Marshfield Mall             503 East Ives Street                            Marshfield             WI        54449         8/23/1994        4319       MPW     Francis Scott Key Mall      5500 Buckeystown Pike, #255                     Frederick              MD        21703         4/12/2002        4321       MPW     Rotterdam Square Mall       93 West Campbell Road, #6050                    Schenectady            NY        12306         3/9/2001        4323       MPW     Platte River Mall           1000 South Dewey, #40/50                        North Platte           NE        69101         5/18/2001                                                                                                                                                            13    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                         Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4324       MPW     Rockford Road Plaza         4190 Vinewood Lane North, #127                  Plymouth               MN        55442         10/7/2011        4326       MPW     Marketplace at Northglenn   331 West 104th Avenue, Unit A                   Northglenn             CO        80234         5/3/2002        4328       MPW     Towne East Square           7700 East Kellogg Drive, #P05                   Wichita                KS        67207         4/8/2004        4329       MPW     Petoskey Town Center        1319 Spring Street                              Petoskey               MI        49770         6/28/1995        4330       MPW     Sooner Mall                 3301 West Main Street, #305                     Norman                 OK        73072         6/13/2003        4332       MPW     Eastwood Mall               5555 Youngstown‐Warren Road, #1155              Niles                  OH        44446         9/22/2000        4333       MPW     Grand Central Mall          100 Grand Central Avenue, #263                  Vienna                 WV        26105         3/22/2002        4334       MPW     South Hills Village         301 South Hills Village, #2030A                 Pittsburgh             PA        15241         9/29/2000        4335       MPW     Eastwood Towne Center       3016 Towne Centre Blvd, #D4                     Lansing                MI        48912         3/7/2003        4337       MPW     Stroud Mall                 344 Stroud Mall Road, Ste 274                   Stroudsburg            PA        18360         6/6/2003        4338       MPW     Harford Mall                670 Bel Air Road, #6                            Bel Air                MD        21014         10/3/2003        4339       MPW     Towne Square Mall           5000 Frederica Street, H10 & H12                Owensboro              KY        42301        10/24/2003        4340       MPW     Village Centre              122 East 24th Street, A11                       Columbus               NE        68601         8/15/2003        4341       MPW     Pine Ridge Mall             4155 Yellowstone Hwy, #1152                     Chubbuck               ID        83202         11/7/2003        4342       MPW     Cottonwood Mall             10000 Coors Blvd Bypass NW, #C206               Albuquerque            NM        87114         5/7/2004        4343       MPW     Towne Mall                  1704 N Dixie Hwy, #A003                         Elizabethtown          KY        42701        11/21/2003        4344       MPW     Diamond Run Mall            Route 7 South, #230                             Rutland                VT        05701         6/11/2004        4345       MPW     Richmond Square             3801 National Road East, #541                   Richmond               IN        47374         3/25/2005        4346       MPW     Capitola Mall               1855 41st Avenue, #E09                          Capitola               CA        95010         8/13/2004        4347       MPW     University Mall             155 Dorset Street, #H8                          South Burlington       VT        05403         9/10/2004        4348       MPW     Somerset Mall               4150 US Hwy 27 S, #12b                          Somerset               KY        42501         10/1/2004        4349       MPW     Cross County Mall           700 Broadway East, #3                           Mattoon                 IL       61938         10/1/2004        4350       MPW     Shawnee Mall                4901 North Kickapoo Street, #1556               Shawnee                OK        74804        11/12/2004        4353       MPW     Berkshire Mall              1665 State Hill Road, #350                      Wyomissing             PA        19610        11/18/2005        4354       MPW     Country Club Mall           1262 Vocke Road, Suite 444                      LaVale                 MD        21502         3/16/2007        4355       MPW     Mall at Tuttle Crossing     5043 Tuttle Crossing Blvd, #268                 Dublin                 OH        43016         9/16/2005        4357       MPW     Streets of Cranberry        20430 Route 19, #160                            Cranberry Township     PA        16066         3/23/2007        4358       MPW     DuBois Mall                 5522 Shaffer Road, Unit 3A                      DuBois                 PA        15801         8/18/2006        4359       MPW     Volusia Mall                1700 W International Speedway, #414             Daytona Beach          FL        32114         8/25/2006        4361       MPW     Quail Springs Mall          2501 W Memorial Road, Spc 153                   Oklahoma City          OK        73134         11/8/2007                                                                                                                                                            14    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4362       MPW     Parkway Place               2801 Memorial Pkwy SW, Spc 162                  Huntsville             AL        35801         3/6/2008        4364       MPW     Southtown Center            7833 Southtown Center, #511                     Bloomington            MN        55431         3/9/2001        4365       MPW     Fashion Place               6191 South State Street, #1585                  Murray                 UT        84107         3/11/2016        4366       MPW     Willow Creek Crossing       532  Indianhead Drive                           Mason City             IA        50401         7/3/2015        4367       MPW     Belden Village              4129 Belden Village Mall, Spc B40               Canton                 OH        44718         4/14/2016        4368       MPW     Valley Mall                 17301 Valley Road Mall, #462                    Hagerstown             MD        21740         3/11/2016        4369       MPW     Valley View Mall            3800 State Road 16, #178                        La Crosse              WI        54601         1/29/2016        4370       MPW     Fashion Square Mall         4895 Fashion Square Mall, Spc 402               Saginaw                MI     48604‐2796       5/30/2003        4371       MPW     Yorktown Shopping Center    260 Yorktown Shopping Center                    Lombard                 IL       60148         9/28/2007        4375       MPW     Battlefield Mall            2825 South Glenstone Ave, Spc #F04A             Springfield            MO        65804         3/25/2016        4376       MPW     Galleria at Pittsburgh Mills  210 Pittsburgh Mills Circle                   Tarentum               PA        15084         7/14/2005        4378       MPW     Northfield Square Mall      1600 N State Route 50, #424a                    Bourbonnais             IL       60914        11/25/2005        4385       MPW     St. Clair Square            134 St. Clair Square, Spc 180                   Fairview Heights        IL       62208        12/16/2016        4386       MPW     McKinley Mall               3701 McKinley Pkway #736                        Buffalo                NY        14219         1/27/2016        4387       MPW     Branson Landing             1105 Branson Landing Boulevard                  Branson                MO        65616         3/4/2016        4388       MPW     York Galleria               2899 Whiteford Road, Ste 234                    York                   PA        17402         6/4/1999        4389       MPW     Gateway Mall                516 Gateway Mall                                Lincoln                NE     68505‐2462       2/1/2007        4392       MPW     Burnsville Center           2016 Burnsville Center                          Burnsville             MN        55306         8/18/2000        4393       MPW     Dakota Square               218 Dakota Square                               Minot                  ND        58701        10/13/2000        4394       MPW     Towne West Square           4600 West Kellogg Drive, #Q08                   Wichita                KS        67209         9/28/1993        4395       MPW     Huntington Mall             500 Mall Road, Unit 850                         Barboursville          WV        25504         3/10/2017        4396       MPW     Apache Mall                 333 Apache Mall, Ste 1020                       Rochester              MN        55902         4/21/2017        4397       MPW     Bechtle Crossing            1642 N Bechtle Ave, Space 60                    Springfield            OH        45504         3/3/2017        4398       MPW     Crossroads Center           4101 West Division Street, Space C0012          St. Cloud              MN        56301         4/14/2017        4399       MPW     Southern Park Mall          7401 Market Street, #221A                       Youngstown             OH        44512         6/2/2000        4400       MPW     Quincy Mall                 3347 Quincy Mall                                Quincy                  IL       62301         5/5/2006        4401       MPW     Eastland Mall               800 North Green River Road, #146                Evansville             IN        47715        11/18/2016        4402       MPW     Oakwood Mall                4800 Golf Road, Spc 88                          Eau Claire             WI        54701         1/27/2017        4403       MPW     South Hill Mall             3500 South Meridian, Spc 440                    Puyallup               WA        98373         4/14/2017        4404       MPW     Honey Creek Mall            3401 South US Hwy 41, #H3                       Terre Haute            IN        47802         8/10/2001                                                                                                                                                          15    

 

                                                            Christopher & Banks                                                               Store Count as of 7/27/2018                                                                                                                                                           Store #    Division         Center Name                             Address                             City          State     Zip Code       Open Date        4405       MPW     Lima Mall                   2400 Elida Road, #158                           Lima                   OH        45805         3/20/1998        4406       MPW     Sunset Plaza                1700 Market Lane, #200                          Norfolk                NE        68701        10/10/2003        4407       MPW     Big Creek Crossing (fka ‐ The Ma 2918 Vine Street, #60                      Hays                   KS        67601         5/1/1998        4409       MPW     Metro Crossing Shopping Cente 3606 Metro Drive, Ste 200                     Council Bluffs         IA        51501         9/10/2009        4410       MPW     South County Center         316 South County Center Way                     St. Louis              MO        63129         9/28/2017        4411       MPW     The Shops at South Town     10450 South State Street, Space 1110            Sandy                  UT        84070         9/14/2017        4412       MPW     Great Northern Mall         4155 State Route 31, #B106                      Clay                   NY        13041         9/28/2001        4413       MPW     Kandi Mall                  1605 South 1st Street, #C10/11                  Willmar                MN        56201         5/18/2007        4414       MPW     Foothills Mall              145 Foothills Mall Drive, #48/#50               Maryville              TN        37801        10/13/2006        4415       MPW     Crestview Hills Town Center  2815 Town Center Boulevard, #2020              Crestview Hills        KY        41017         3/1/2006        4419       MPW     Rogue Valley Mall           1600 N Riverside Drive, #2041                   Medford                OR        97501         10/8/1999                                                                                                                                                                   16    

 

                                  SCHEDULE 5.09                           ENVIRONMENTAL MATTERS   None.                                                                                         

 

                                  SCHEDULE 5.10                                    INSURANCE   See attached schedule.                                                                                            

 

                    Christopher & Banks Insurance Policy Schedule          Effective 2/1/2018     Insurance Coverage           Insurance Provider              Policy Dates             Broker  Commercial Property   Affiliated FM                       2/1/18 – 1/31/19           Willis Towers Watson  Cargo                 Travelers Property Casualty Company  2/1/18 – 1/31/19          Willis Towers Watson  Commercial General    Crum & Forster – The North River Insurance 2/1/18 – 1/31/19    Willis Towers Watson  Liability             Company                        (United States Fire Insurance Company)  Commercial Auto       Crum & Forster – The North River Insurance 2/1/18 – 1/31/19    Willis Towers Watson                        Company                        (United States Fire Insurance Company)  Workers’ Compensation Crum & Forster – The North River Insurance 2/1/18 – 1/31/19    Willis Towers Watson  and Employers Liability Company                        (United States Fire Insurance Company)  International Package  Continental Insurance Company (CNA)  2/1/18 – 1/31/19         Willis Towers Watson  Commercial Umbrella   Everest (Primary Layer) - $25M      2/1/18 – 1/31/19           Willis Towers Watson                        Continental Insurance Company (CNA)                        (Secondary Layer) - $25M                          Excess Follow Form    Continental Insurance Company (CNA)  2/1/18 – 1/31/19          Willis Towers Watson  liability  Surety – Fundraising  Westfield Insurance Company         September 30, 2018 –       Willis Towers Watson  Bond - Alabama                                            September 30, 2019  Surety – Fundraising  Westfield Insurance Company         December 31, 2017 –        Willis Towers Watson  Bond – Massachusetts                                      December 31, 2018  Surety – Custom’s Bond  C.A. Shea – OneBeacon  Atlantic Specialty June 2018 – June 2019  Willis Towers Watson                        Insurance  Cyber Insurance Coverage  Lloyds of London Syndicates     10/1/17 – 10/31/18         Willis Towers Watson  Primary Directors &   National Union Fire Ins. Co of Pittsburgh 2/1/18 – 1/31/19     Willis Towers Watson  Officers Liability    (AIG) - $10M  1st Excess Directors & Endurance Risk Solutions Assurance Co 2/1/18 – 1/31/19        Willis Towers Watson  Officers Liability    (Sompo) - $10M x $10M  2nd Excess Directors & Continental Casualty Company (CNA) 2/1/18 – 1/31/19           Willis Towers Watson  Officers Liability    $10M x $20M  3rd Excess Directors & XL Specialty Insurance Company     2/1/18 – 1/31/19           Willis Towers Watson  Officers Liability    $5M x $30M  4th Excess Directors & Beazley Insurance Company          2/1/18 – 1/31/19           Willis Towers Watson  Officers Liability    $10M x $35M  5th Excess Directors & National Union Fire Insurance Co of 2/1/18 – 1/31/19          Willis Towers Watson  Officers Liability    Pittsburgh (AIG) $10M x $45M  Primary Employment    National Union Fire Ins. Co of Pittsburgh - 2/1/18 – 1/31/19   Willis Towers Watson  Practices Liability   $5M  1st Excess Employment AXIS Insurance Company - $5M x $5M  2/1/18 – 1/31/19           Willis Towers Watson  Practices Liability  Fiduciary Liability   National Union Fire Ins. Co of Pittsburgh  2/1/18 – 1/31/19    Willis Towers Watson  Crime Coverage        Federal Insurance Company (Chubb)   2/1/18 – 1/31/19           Willis Towers Watson                                                                                                                                    

 

                                            SCHEDULE 5.13                        SUBSIDIARIES; OTHER EQUITY INVESTMENTS                                                       (a)   Ownership of Christopher & Banks, Inc. and Christopher & Banks Company:                Owner              Issuer         Type of     # of Equity  Certificate  Percentage                                         Equity       Interests    Number      Ownership                                        Interests  Christopher & Banks Christopher &     Common      1,000 Shares      3          100%  Corporation       Banks, Inc.           Stock  Christopher &     Christopher &       Common      1,000 Shares      1          100%  Banks, Inc.       Banks Company         Stock               (b) None.                                                                                                        

 

                                  SCHEDULE 5.17                       INTELLECTUAL PROPERTY MATTERS   Trademarks   See attached “Trademarks” list.   Patents   None.   Claims and Litigation   None.                                                                                         

 

                                             ATTACHMENT 1                                             Trademarks                                                                                                          Trademark                     Owner        Registration Date   Status   Registration No.                                      Christopher &    May 29, 2018       Registered    5,481,754                                      Banks Company                                                                 Christopher &    July 17, 2012      Registered    4,176,007                                      Banks Company                                                                 Christopher &    December 8, 2009   Registered    3,723,759                                      Banks Company                                      Christopher &    June 1, 2010       Registered    3,797,571                                      Banks Company                                                                      Christopher &    November 29, 2011  Registered    4,062,718                                      Banks Company                cj banks               Christopher &    May 4, 2010        Registered    3,786,187                                      Banks Company             C.J. BANKS               Christopher &    July 3, 2001       Registered    2,466,691                                      Banks Company          christopher & banks         Christopher &    December 8, 2009   Registered    3,723,169                                      Banks Company       CHRISTOPHER & BANKS            Christopher &    April 19, 1988     Registered    1,485,374                                      Banks Company                                      Christopher &    January 25, 2000   Registered    2,311,711                                      Banks Company                                      Christopher &    March 21, 2000     Registered    2,331,821                                      Banks Company     EASY WEAR. EVERY WEAR.           Christopher &    August 19, 2014    Registered    4,590,384                                      Banks Company  EVERY DAY, WOMEN DO AMAZING         Christopher &    July 2, 2013       Registered    4,361,752              THINGS                  Banks Company                                                       March 12, 2013     Registered    4,302,044            FRIENDSHIP                Christopher &    December 7, 2010   Registered    3,887,711                                      Banks Company                                      Christopher &    March 14, 2017     Registered    5,159,900                                      Banks Company                                                                       Christopher &    October 16, 2012   Registered    4,227,243                                      Banks Company                                             HERITAGE CORD               Christopher &    August 12, 2014    Registered    4,585,770                                      Banks Company                                                                                                                                           

 

                                                                                                            Trademark                     Owner        Registration Date   Status   Registration No.  IT’S A PROPORTION NOT A SIZE       Christopher &    December 1, 2009   Registered    3,719,274                                     Banks Company        Life. You Wear It Well.      Christopher &    May 15, 2012       Registered    4,144,120                                     Banks Company       RELAXED. RESTYLED.            Christopher &    August 19, 2014    Registered    4,590,293                                     Banks Company      SIGNATURE COMFORT              Christopher &    May 20, 2014       Registered    4,533,748                                     Banks Company                                     Christopher &    October 29, 2013   Registered    4,425,549                                     Banks Company                                           Signature Slimming          Christopher &    August 12, 2014    Registered    4,585,757                                     Banks Company                                     Christopher &    September 8, 2015  Registered    4,809,457                                     Banks Company                                                                  Christopher &    September 8, 2015  Registered    4,809,455                                     Banks Company                                                                 Christopher &    September 8, 2015  Registered    4,809,458                                     Banks Company                                                                   Christopher &    September 8, 2015  Registered    4,809,456                                     Banks Company          TUMMY SLIMMER               Christopher &    July 30, 2013      Registered    4,375,557                                     Banks Company                                                                                                                                                           

 

                                  SCHEDULE 5.18                                 LABOR MATTERS   None.                                                                                          

 

                                 SCHEDULE 5.21(a)                                       DDAS   Information is on file with Lender.                                                                                         

 

                                 SCHEDULE 5.21(b)                          CREDIT CARD ARRANGEMENTS   Information is on file with Lender.                                                                                         

 

                                        SCHEDULE 5.24                                  MATERIAL CONTRACTS    1.   Bank Card Merchant Agreement, dated February 21, 2007, between Fifth Third Processing Solutions        and Christopher & Banks Corporation (“Bank Card Merchant Agreement”).          2.    First Amendment to Bank Card Merchant Agreement, dated September 26, 2007, between Fifth Third        Bank and Christopher & Banks Corporation.          3.    Second Amendment to Bank Card Merchant Agreement, dated August 29, 2008, between Fifth Third        Bank and Christopher & Banks Corporation.          4.    Third Amendment to Bank Card Merchant Agreement, dated June 18, 2010, among Fifth Third        Processing Solutions, Fifth Third Bank and Christopher & Banks Corporation.          5.    Fourth Amendment to Bank Card Merchant Agreement, dated August 26, 2011, among Vantiv, LLC        and Fifth Third Bank and Christopher & Banks Corporation.          6.    Fifth Amendment to Bank Merchant Agreement, dated June 27, 2013, among Vantiv, LLC, Fifth Third        Bank and Christopher & Banks Corporation.          7.    Special Amendment to the Bank Merchant Agreement, dated September 14, 2015, among Vantiv, LLC        and Fifth Third Bank and Christopher & Banks Corporation.          8.    Second Special Amendment to Bank Card Merchant Agreement, dated April 9, 2016, among Vantiv,        LLC f/k/a Fifth Third Processing Solutions, LLC and Fifth Third Bank and Christopher & Banks        Corporation.          9.    Restated and Amended Master Services Agreement, dated October 25, 2007, between Accretive        Commerce, Inc. and Christopher & Banks, Inc.          10.   Restated and Amended Statement of Work, dated October 25, 2007, between Accretive Commerce,        Inc. and Christopher & Banks, Inc.          11.    Amendment to Restated and Amended Master Services Agreement, effective as of March 17, 2008, by         and between GSI Commerce South, Inc. and Christopher & Banks, Inc.            12.   Amendment No. 1 to Restated and Amended Statement of Work and to the Amended and Restated         Master Services Agreement, effective as of February 28, 2011, by and between GSI Commerce South,         Inc. and Christopher & Banks, Inc.            13.   Amendment No. 2 to Restated and Amended Statement of Work, effective as of April 20, 2012, by and         between GSI Commerce South, Inc. and Christopher & Banks, Inc.            14.   Amendment No. 3 to Restated and Amended Master Services Agreement and Restated and Amended         Statement of Work, effective as of July 6, 2015, by and between eBay Enterprise, Inc. and Christopher         & Banks, Inc.                                                                                                                          

 

    15.   Amendment No. 4 to Restated and Amended Master Services Agreement and Restated and Amended        Statement of Work, effective as of March 23, 2016, by and between eBay Enterprise, Inc. and        Christopher & Banks, Inc.          16.   Private Label Credit Card Plan Agreement, dated September 19, 2011, between World Financial        Network Bank and Christopher & Banks, Inc.          17.   First Amendment to Private Label Credit Card Plan Agreement, effective as of March 31, 2017, by and        between Comenity Bank and Christopher & Banks, Inc.          18.   Second Amendment to Private Label Credit Card Plan Agreement, effective as of April 21, 2017, by        and between Christopher & Banks, Inc. and Comenity Bank.          19.   Global Master Services Agreement, effective as of January 1, 2016, by and between ADP, LLC and        Christopher & Banks Corporation.          20.   First Amendment to Global Master Services Agreement, effective as of August 11, 2016, by and        between ADP, LLC and Christopher & Banks Corporation.          21.   Third Amendment to Global Master Services Agreement, effective as of November 1, 2016, by and        between ADP, LLC and Christopher & Banks Corporation.          22.   Master Subscription and Services Agreement, effective as of March 16, 2015, by and between        Demandware, Inc. and Christopher & Banks, Inc.          23.   Lease Agreement, dated as of April 27, 2018, by and between 2400 Xenium, LLC and Christopher &        Banks Corporation.          24.   Escrow Agreement, dated as of April 27, 2018, by and between 2400 Xenium, LLC, Christopher &        Banks Corporation and Republic National Title Insurance Company.                                                                                                            

 

                                  SCHEDULE 7.01                                 EXISTING LIENS                                                                                                                   Christopher & Banks Corporation                                                    Lienholder        Amount of                Property/Asset Secured                           Obligation                            Secured  N/A                                                                                                                Christopher & Banks, Inc.                                                    Lienholder        Amount of                Property/Asset Secured                           Obligation                            Secured  N/A                                                                     Christopher & Banks Company                                                    Lienholder        Amount of                Property/Asset Secured                           Obligation                            Secured  N/A                                                                                                                                                                      

 

                                  SCHEDULE 7.02                                  INVESTMENTS   None.                               INVESTMENT POLICY                                             See attached.                                                                                         

 

          CHRISTOPHER & BANKS CORPORATION                          AND SUBSIDIARIES                         INVESTMENT POLICY  Approved by the Audit Committee on December 3, 2014 and supersedes all prior Investment  Policies and Addendums thereto.  Contents Statement of Purpose..................................................................................................................................2 Policy Review & Approval .........................................................................................................................2 Investment Objectives.................................................................................................................................2 Investment Committee................................................................................................................................2 Investment Advisers....................................................................................................................................2 Legal & Regulatory Compliance ...............................................................................................................3 Investment Guidelines ................................................................................................................................3 

 

Statement of Purpose  The purpose of this Investment Policy (the “Policy”) is to establish guidelines for the investment of the  general funds of Christopher & Banks Corporation and its subsidiaries (“the Company”).  Specifically, the Policy:  1.    Identifies investment objectives; 2.    Specifies investment authority and responsibility; and 3.    Establishes investment portfolio guidelines.  The Company believes a sound Investment Policy is essential to developing strategies that ensure the  investment objectives of the Company are achieved.  Policy Review & Approval  Senior management, with the assistance of its investment advisers, if any, shall annually review the Policy  with the Audit Committee of the Company’s Board of Directors. Changes in this Policy must be approved  by the Audit Committee of the Board of Directors, and following any such revisions or approvals, the  updated Policy will be provided to the other members of the Company’s Board of Directors.  Investment Objectives  The Company’s primary investment objectives are, in order of importance, as follows:  1.    Safety of principal; 2.    Maintenance of adequate liquidity; and 3.    Maximization of after-tax, after-fees return on investment.  Investment Committee  There shall be an Investment Committee consisting of (i) the Chief Executive Officer (“CEO”), (ii) the  Chief Financial Officer (“CFO”), (iii) the Vice President, Controller (“Controller”) and (iv) the Vice  President, Tax and Treasury (“VP Tax”) (collectively, the “Committee”).  The Committee shall meet  periodically and at any meeting at which the CEO and two (2) or more other members are present the  Committee shall have the authority to retain investment advisers, open securities accounts, and transfer  cash or securities between sub-portfolios, securities custodial accounts or the Company’s cash  concentration account.  Any one member of the Committee may transfer cash between the Company’s  cash concentration account and its money market account or other operating account utilized for meeting  the Company’s immediate liquidity needs, consistent with the Company’s internal control procedures.   The Committee also may take one or more of the above actions by unanimous written consent.  Investment Advisers  The Company may choose to hire the services of one or more investment management firms and give  such parties discretionary authority over individual security selection and transaction execution, provided  that each such firm and its affiliates may not have more than seventy-five percent (75%) of the  Company’s investable assets under its management at any one time and that they agree in writing to:  1.    Manage the Company’s assets in accordance with all applicable laws and regulations and this        Policy;                                        - 2 - 

 

2.    Promptly inform the Company of material events related to the credit markets as a whole as well        as those matters effecting the safety or liquidity of any of the Company’s specific investments; 3.    Contact a member of the Committee promptly upon the occurrence of any of the following        events:       (i)   a security held in the portfolio is placed on “Negative Outlook” or “CreditWatch with              Negative Implications”;       (ii)  a security held in the portfolio is downgraded and note whether or not it causes the credit              quality of that security to fall below the minimum standards stated in this Policy; or       (iii) the value of the investments under its management decreases by the lesser of $500,000 or              five percent (5%).* 4.    Conduct the purchase and sale of securities designed to receive the best price and execution,        provided that, in any individually managed portfolio, no securities shall be sold that result in a        loss of $10,000 or more without the prior written approval of the CEO and either the CFO or VP        Tax; 5.    Provide monthly written reports within 10 days following the last trading day of the month        describing portfolio holdings, transactions, and performance. Such reports must be made        available to the Company via the manager’s or custodian’s website or in paper copy; 6.    In the event of a change in the Company’s tax status, the Company will inform the managers of        the portfolios effected who will then be responsible for factoring such change into the portfolio’s        reported after-tax yield; 7.    Promptly inform the Company of matters pertinent to the placement of its assets with the        investment management firm such as significant changes in ownership and relevant personnel        changes; 8.    Meet in person with Company management at least quarterly or more often if deemed necessary        by the Company; 9.    Attend the Company’s Audit Committee meetings if requested by management or the Committee; 10.   At least annually, review and recommend changes to this Investment Policy as appropriate; and 11.   Limit fund transfers to and from the Company’s securities custodial accounts to its designated        cash concentration account.  *  Note:  Promptly following any notice under Section 3(iii) above, a member of the Investment     Committee shall promptly notify the members of the Audit Committee.  In addition, a member of the     Investment Committee shall also promptly notify the members of the Audit Committee if the value in     the aggregate of the investable assets covered by this Policy decreases by the lesser of $500,000 or     five percent (5%).  Legal & Regulatory Compliance  The management and investment of Company funds is to be done in full compliance with all applicable  laws and regulations and shall be reviewed and modified as necessary to comply with changes in laws and  regulations.  Investment Guidelines  The Company will maintain adequate cash to meet its daily, weekly, and monthly liquidity needs in bank  accounts or money market funds.  Remaining corporate funds shall be invested only in Eligible Investments and further classified into one  of three sub-portfolios – Enhanced Cash, Short Duration and Intermediate Duration – each as further  described in Tables I and II below. The amount of funds allocated to each sub-portfolio may change over  time as directed by the Company.                                       - 3 - 

 

                           Table I. Eligible Investments                                             Minimum Credit Rating (Note 1)         Instrument (Abbreviation)                (S&P/Moody’s/Fitch)                                             Short Term          Long Term Money Market Mutual Funds     MMF                       N/A Other Mutual Funds             MF                     Notes 2, 4 Repurchase Agreements          Repo                    Note 3 Derivatives                     --                     Note 4 U.S. Treasuries                UST                      N/A Federal Agencies               USA                      N/A FDIC Insured Certificates of                                 CD              N/A                 N/A Deposit Commercial Paper – Taxable     CCP          A-1/P-1/F-1            N/A Commercial Paper – Tax Exempt  MCP     A-1/MIG 1 or VMIG 1/F-1     N/A Sovereigns (dollars only)      SOV             N/A              AA-/Aa3/AA- Corporate Bonds                Corp            N/A               A-/A3/A- Municipal Bonds                Muni            N/A               A-/A3/A- 1. Investments will be considered to have the highest rating if there is more than rating agency rating     the investment.  2. An open-end mutual fund may be an Eligible Investment provided that its stated investment     objectives are consistent with the Company’s investment objectives and portfolio guidelines as     described herein and it complies with all applicable requirements of the Investment Company Act     of 1940, as amended, including the provision of a daily liquidity feature at net asset value.  3. Repurchase agreements must be collateralized with U.S. Treasury or Agency securities. 4. Prohibited Investments: Direct investment in derivatives is prohibited; however a qualifying Mutual    Fund as defined in Note 2 may use interest rate swaps, futures, or options to hedge against changes     in interest rates and lock in yields.                                        - 4 - 

 

                                Table II. Portfolio Guidelines   Min Wtd                             Sub-                     Sub-Portfolio Concentration Limits     Avg     Investment                           Portfolio   Max    Portfolio    Sub-                             Instrument                           Yield    Duration                     Per Issue   Sub-Portfolio    Quality    Portfolio                                Max                          Benchmarks           Name               (Note 3)       Max (Notes 1 & 2)                                        Maturity                                              MMFs      N/A                   Up to 100%                                              USTs     1 year                 Up to 100%                                                                   none                                              USAs     1 year                 Up to 75%                                              Repos    7 days                 Up to 50%              Enhanced                            Note 4     N/A      CDs     1 year                 Up to 25%                Cash                                              CCP or                                                        1 year   5% or less of Up to 75%                                               MCP                                                                sub-portfolio                                              Corps    1 year                 Up to 25%                                              Munis    1 year                 Up to 100%                         BAML 1-3             USTs                            Up to 100%                            Year              USAs                 none       Up to 75%                          Treasury             MFs                            Up to 100%                Short      Index              SOVs                            Up to 25%               Duration      or      2 years     AA-/                                       MRS      N/A                   Up to 25%   Aa3/AA-     (~1-3 yr   Barclays    or less              maturities) Capital 1            ABS              5% or less of Up to 25%                            Year              Corps             sub-portfolio Up to 25%                          Municipal           Munis                           Up to 100%                         Bond Index                         BAML 1-3             USTs                            Up to 100%                            Year              USAs                 none       Up to 75%                          Treasury             MFs                            Up to 100%             Intermediate  Index              SOVs                            Up to 25%               Duration      or      4 years                                                MRS      N/A                   Up to 25%               (~4-7 yr   Barclays    or less              maturities) Capital 5            ABS              5% or less of Up to 25%                            Year              Corps             sub-portfolio Up to 25%                          Municipal           Munis                           Up to 100%                         Bond Index 1. Initial Quality: At the time of purchase, no more than 10% of the securities in a sub-portfolio may be rated A-    /A3/A- or less. Also at the time of purchase, no more than 5% of the securities in a sub-portfolio may be unrated. 2. Downgrades: In the event a security in an individually managed sub-portfolio is downgraded subsequent to     purchase and causes a violation of minimum weighted average portfolio quality, the downgraded security may be     held by the manager only after obtaining the Company’s written approval. If such approval is not obtained, the     security must be sold as soon as practical but in all instances within 30 days of the downgrade. 3. Per Issue Limit: The “per issue limit” of 5% or less is determined at time of purchase, for example, if $50 million    is allocated to a given sub-portfolio, then the maximum investment in any one municipal or corporate issue would     be $2.5 million. 4. Yield Benchmarks: Acceptable yield benchmarks for the Enhanced Cash sub-portfolio include the Lipper Money     Market Fund Index, the Lipper Short US Treasury Index, the Barclays 1-3 Month Treasury Index, the Bank of     America Merrill Lynch (“BAML”) 1-3 Month Treasury Index, and the BAML 6 Month Treasury Index.                                             - 5 - 

 

                                  SCHEDULE 7.03                             EXISTING INDEBTEDNESS   None.                                                                                        

 

                                                                                                                               ANNEX III                                Exhibits to Credit Agreement    See attached.                                                   

 

                                                                                                                                                                                                                      EXHIBIT B-1                                                                            FORM OF REVOLVING NOTE      REVOLVING NOTE      $_______________                                                  _______________, ____            FOR VALUE RECEIVED, the undersigned (individually, a “Borrower” and, collectively, the  “Borrowers”), jointly and severally promise to pay to the order of Wells Fargo Bank, National  Association (hereinafter, with any subsequent holders, the “Lender”), One Boston Place, 18th Floor,  Boston, MA 02108, the principal sum of ___________________ ($______________), or, if less, the  aggregate unpaid principal balance of Revolving Loans made by the Lender to or for the account of any  Borrower pursuant to the Second Amended and Restated Credit Agreement dated as of July 12, 2012 (as  amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by  and among the Borrowers and the Lender.          This is a “Revolving Note” to which reference is made in the Credit Agreement and is subject to  all terms and provisions thereof.  The principal of, and interest on, this Revolving Note shall be payable at  the times, in the manner, and in the amounts as provided in the Credit Agreement and shall be subject to  prepayment and acceleration as provided therein.  Capitalized terms used herein and not defined herein  shall have the meanings assigned to such terms in the Credit Agreement.            The Lender’s books and records concerning the Revolving Loans, the accrual of interest thereon,  and the repayment of such Revolving Loans, shall be prima facie evidence of the indebtedness to the  Lender hereunder.          No delay or omission by the Lender in exercising or enforcing any of such Lender’s powers,  rights, privileges, remedies, or discretions hereunder shall operate as a waiver thereof on that occasion nor  on any other occasion.  No waiver of any Event of Default shall operate as a waiver of any other Event of  Default, nor as a continuing waiver of any such Event of Default.          Each Borrower, and each endorser and guarantor of this Revolving Note, waives presentment,  demand, notice, and protest, and also waives any delay on the part of the holder hereof.  Each Borrower  assents to any extension or other indulgence (including, without limitation, the release or substitution of  Collateral) permitted by the Lender with respect to this Revolving Note and/or any Collateral or any  extension or other indulgence with respect to any other liability or any collateral given to secure any other  liability of any Borrower or any other Person obligated on account of this Revolving Note.          This Revolving Note shall be binding upon each Borrower, and each endorser and guarantor  hereof, and upon their respective successors, assigns, and representatives, and shall inure to the benefit of  the Lender and its successors, endorsees, and assigns.          The liabilities of each Borrower, and of any endorser or guarantor of this Revolving Note, are  joint and several, provided, however, the release by the Lender of any one or more such Persons shall not  release any other Person obligated on account of this Revolving Note.  Each reference in this Revolving  Note to any Borrower, any endorser, and any guarantor, is to such Person individually; each reference to     8734644  

 

   the Borrowers, the endorsers or the guarantors is to all such Persons jointly.  No Person obligated on  account of this Revolving Note may seek contribution from any other Person also obligated unless and  until all of the Obligations have been paid in full in cash.          THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN  ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT  TO CONFLICTS OF LAW PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE  NEW YORK GENERAL OBLIGATIONS LAW.          EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS,  FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS  OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED  STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY  APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT  OF OR RELATING TO THIS REVOLVING NOTE OR ANY OTHER LOAN DOCUMENT, OR FOR  RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE BORROWERS  IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY  SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK  STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH  FEDERAL COURT.  EACH OF THE BORROWERS AGREES THAT A FINAL JUDGMENT IN ANY  SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN  OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER  PROVIDED BY LAW.  NOTHING IN THIS REVOLVING NOTE OR IN ANY OTHER LOAN  DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO  BRING ANY ACTION OR PROCEEDING RELATING TO THIS REVOLVING NOTE OR ANY  OTHER LOAN DOCUMENT AGAINST ANY OF THE BORROWERS OR ITS PROPERTIES IN  THE COURTS OF ANY JURISDICTION.          EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO  THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY  NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS REVOLVING NOTE OR ANY OTHER LOAN  DOCUMENT IN ANY COURT REFERRED TO ABOVE.  EACH OF THE BORROWERS HEREBY  IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,  THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION  OR PROCEEDING IN ANY SUCH COURT.          Each Borrower makes the following waiver knowingly, voluntarily, and intentionally, and  understands that the Lender, in the establishment and maintenance of their respective relationship with the  Borrowers contemplated by this Revolving Note, are each relying thereon.  EACH BORROWER, EACH  GUARANTOR, ENDORSER AND SURETY, AND THE LENDER, BY ITS ACCEPTANCE HEREOF,  HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE  LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN  ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS REVOLVING NOTE  OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR  THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH  BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY  OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER  PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING  WAIVER AND (B) ACKNOWLEDGES THAT THE LENDER HAS BEEN INDUCED TO ENTER                                               2 

 

   INTO THE CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND  CERTIFICATIONS HEREIN.                                  [Signature Page to Follow]                                                 3 

 

                 IN WITNESS WHEREOF, the Borrowers have caused this Revolving Note to be duly executed  as of the date set forth above.                BORROWERS:          CHRISTOPHER & BANKS CORPORATION            By:  ___________________________        Name:          Title:                                                CHRISTOPHER & BANKS, INC.            By:  ___________________________        Name:         Title:            CHRISTOPHER & BANKS COMPANY            By:  ___________________________        Name:         Title:                                                   [Signature Page to Revolving Note]  

 

                                                                                                                                                                           EXHIBIT B-2                                                                                FORM OF FILO NOTE      FILO NOTE      $_______________                                                  _______________, ____            FOR VALUE RECEIVED, the undersigned (individually, a “Borrower” and, collectively, the  “Borrowers”), jointly and severally promise to pay to the order of Wells Fargo Bank, National  Association (hereinafter, with any subsequent holders, the “Lender”), One Boston Place, 18th Floor,  Boston, MA 02108, the principal sum of ___________________ ($______________), or, if less, the  aggregate unpaid principal balance of FILO Loans made by the Lender to or for the account of any  Borrower pursuant to the Second Amended and Restated Credit Agreement dated as of July 12, 2012 (as  amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”) by  and among the Borrowers and the Lender.          This is a “FILO Note” to which reference is made in the Credit Agreement and is subject to all  terms and provisions thereof.  The principal of, and interest on, this FILO Note shall be payable at the  times, in the manner, and in the amounts as provided in the Credit Agreement and shall be subject to  prepayment and acceleration as provided therein.  Capitalized terms used herein and not defined herein  shall have the meanings assigned to such terms in the Credit Agreement.            The Lender’s books and records concerning the FILO Loans, the accrual of interest thereon, and  the repayment of such FILO Loans, shall be prima facie evidence of the indebtedness to the Lender  hereunder.          No delay or omission by the Lender in exercising or enforcing any of such Lender’s powers,  rights, privileges, remedies, or discretions hereunder shall operate as a waiver thereof on that occasion nor  on any other occasion.  No waiver of any Event of Default shall operate as a waiver of any other Event of  Default, nor as a continuing waiver of any such Event of Default.          Each Borrower, and each endorser and guarantor of this FILO Note, waives presentment,  demand, notice, and protest, and also waives any delay on the part of the holder hereof.  Each Borrower  assents to any extension or other indulgence (including, without limitation, the release or substitution of  Collateral) permitted by the Lender with respect to this FILO Note and/or any Collateral or any extension  or other indulgence with respect to any other liability or any collateral given to secure any other liability  of any Borrower or any other Person obligated on account of this FILO Note.          This FILO Note shall be binding upon each Borrower, and each endorser and guarantor hereof,  and upon their respective successors, assigns, and representatives, and shall inure to the benefit of the  Lender and its successors, endorsees, and assigns.          The liabilities of each Borrower, and of any endorser or guarantor of this FILO Note, are joint  and several, provided, however, the release by the Lender of any one or more such Persons shall not  release any other Person obligated on account of this FILO Note.  Each reference in this FILO Note to  any Borrower, any endorser, and any guarantor, is to such Person individually; each reference to the     8734696  

 

   Borrowers, the endorsers or the guarantors is to all such Persons jointly.  No Person obligated on account  of this FILO Note may seek contribution from any other Person also obligated unless and until all of the  Obligations have been paid in full in cash.          THIS FILO NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS  OF LAW PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW YORK  GENERAL OBLIGATIONS LAW.          EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS,  FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS  OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED  STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY  APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT  OF OR RELATING TO THIS FILO NOTE OR ANY OTHER LOAN DOCUMENT, OR FOR  RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE BORROWERS  IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY  SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK  STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH  FEDERAL COURT.  EACH OF THE BORROWERS AGREES THAT A FINAL JUDGMENT IN ANY  SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN  OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER  PROVIDED BY LAW.  NOTHING IN THIS FILO NOTE OR IN ANY OTHER LOAN DOCUMENT  SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY  ACTION OR PROCEEDING RELATING TO THIS FILO NOTE OR ANY OTHER LOAN  DOCUMENT AGAINST ANY OF THE BORROWERS OR ITS PROPERTIES IN THE COURTS OF  ANY JURISDICTION.          EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO  THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY  NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS FILO NOTE OR ANY OTHER LOAN DOCUMENT IN  ANY COURT REFERRED TO ABOVE.  EACH OF THE BORROWERS HEREBY IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF  AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN  ANY SUCH COURT.          Each Borrower makes the following waiver knowingly, voluntarily, and intentionally, and  understands that the Lender, in the establishment and maintenance of their respective relationship with the  Borrowers contemplated by this FILO Note, are each relying thereon.  EACH BORROWER, EACH  GUARANTOR, ENDORSER AND SURETY, AND THE LENDER, BY ITS ACCEPTANCE HEREOF,  HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE  LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN  ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS FILO NOTE OR ANY  OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR  THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH  BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY  OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER  PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING  WAIVER AND (B) ACKNOWLEDGES THAT THE LENDER HAS BEEN INDUCED TO ENTER                                               2 

 

   INTO THE CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND  CERTIFICATIONS HEREIN.                                  [Signature Page to Follow]                                                 3 

 

                 IN WITNESS WHEREOF, the Borrowers have caused this FILO Note to be duly executed as of  the date set forth above.                BORROWERS:          CHRISTOPHER & BANKS CORPORATION            By:  ___________________________        Name:          Title:                                                CHRISTOPHER & BANKS, INC.            By:  ___________________________        Name:         Title:            CHRISTOPHER & BANKS COMPANY            By:  ___________________________        Name:         Title:                                                     [Signature Page to FILO Note]Exhibit

        

Exhibit 10.2
	
	
	 

	

	2400 Xenium Lane North, Plymouth, MN 55441 ▪ (763) 551-5000 ▪ www.christopherandbanks.com

Christopher & Banks Announces Extension of $50 Million Secured Credit Facility to 2023

Minneapolis, MN, August 6, 2018 -  Christopher & Banks Corporation (NYSE: CBK), a specialty women's apparel retailer, today announced it has extended, on substantially the same terms, its current senior secured revolving credit facility (the "Amended Credit Facility") in the amount of up to $50 million with Wells Fargo Capital Finance (“Wells”), part of Wells Fargo & Company (NYSE: WFC). The Amended Credit Facility provides committed revolving funding through August 3, 2023, as the prior facility was scheduled to expire in September 2019.  The Amended Credit Facility includes an additional $5 million FILO (“first-in, last out”) tranche.

Keri L. Jones, President & Chief Executive Officer of Christopher & Banks, commented, "We are very pleased to have extended our credit facility through 2023.  We also very much appreciate the support we received from Wells and value their business relationship.    Although we do not have any outstanding borrowings under this facility, the available funds will provide additional support for us as we execute on our operating and strategic plans.”
    
The amount of credit that is available under the Amended Credit Facility is determined as a percentage of the value of eligible inventory and credit card receivables as reduced by certain reserves, all as more fully described in the Amended Credit Facility. The funds from the Amended Credit Facility may be used for working capital, issuance of letters of credit, capital expenditures and other corporate purposes.  

Additional information regarding the Amended Credit Facility will be available in a Current Report on Form 8-K to be filed by the Company with the Securities and Exchange Commission on or prior to August 9, 2018.

About Christopher & Banks

Christopher & Banks Corporation is a Minneapolis-based national specialty retailer featuring exclusively designed privately branded women’s apparel and accessories.  As of August 6, 2018, the Company operates 461 stores in 45 states consisting of 313 MPW stores, 79 Outlet stores, 36 Christopher & Banks stores, and 33 stores in its women’s plus size clothing division CJ Banks.  The Company also operates the www.christopherandbanks.com eCommerce website.

Keywords:  Christopher & Banks, CJ Banks, Women’s Clothing, Plus Size Clothing, Petites, Extended Sizes, Outfits.

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Forward-Looking Statements 

Certain statements in this press release may constitute forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to certain events that could have an effect on our future performance. The forward-looking statements relate to expectations concerning matters that are not historical facts and may use the words “will”, "expect", "anticipate", "plan", "intend", "project", "believe", “should”, "drive" "in order to" and similar expressions.  Except for historical information, matters discussed in this press release may be considered forward-looking statements. 

These forward-looking statements are based largely on information currently available to our management and our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and are subject to a number of uncertainties and risks, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause the Company's future performance and financial results to differ materially from those expressed or implied by the forward-looking statements.  We cannot guarantee their accuracy or our future performance, and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.  Accordingly, there is no assurance that our expectations will, in fact, be achieved or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements.

Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to, those factors described in Item 1A, “Risk Factors” and in the “Forward-Looking Statements” disclosure in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our latest annual report on Form 10-K.  All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice.  The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.

	
	
	COMPANY CONTACT:

	Richard Bundy

	Chief Financial Officer

	(763) 551-5000

	 

	INVESTOR RELATIONS CONTACT:

	Jean Fontana

	ICR, Inc.

	(646) 277-1214

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