Document:

Exhibit 10.2

    

     

    

     Execution Version

    

    

    

    
      This instrument and the rights and obligations evidenced hereby, including any liens granted pursuant thereto, are subordinate in the manner and
          to the extent set forth in that certain Subordination and Intercreditor Agreement dated as of March 30, 2020 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Subordination Agreement”) among (i) TWEC
          Loan Collateral Agent, LLC, for itself and the other lenders party to the Junior Loan Agreement referred to therein, (ii) each of Alimco Re Ltd., Kick-Start III, LLC, Kick-Start IV, LLC and RJHDC, LLC, as subordinated lenders, (iii) Etailz Inc.
          and each of the other Borrowers now or hereafter party thereto (the “Borrowers”), (iv) Trans World Entertainment Corporation and each of the other Guarantors now or hereafter party thereto (the “Guarantors”), and (v) Encina Business Credit, LLC,
          as Agent (in such capacity, together with its successors and assigns in such capacity, the “Agent”), and the lenders party thereto (the “Senior Lenders”), to (i) the Obligations (as defined in the Loan Agreement referred to therein) owed by the
          Borrowers pursuant to such Loan Agreement, and to indebtedness refinancing the indebtedness under such agreement as contemplated by the Subordination Agreement, and (ii) the Liens (as defined in such Loan Agreement) granted to the Agent to secure
          the Obligations, and to the Liens securing the indebtedness refinancing such Obligations; and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.

       

      SUBORDINATED LOAN AND SECURITY AGREEMENT

       

      This Subordinated Loan and Security Agreement (as may be amended, restated or otherwise modified from time to time, this “Agreement”) is entered into on March 30, 2020, by and among ETAILZ INC., a Washington corporation (the “Borrower”), TRANS WORLD ENTERTAINMENT CORPORATION, a New York corporation (the “Parent”), any Loan Party Obligor
        party hereto from time to time, as Loan Party Obligors,  the lenders party hereto from time to time (collectively, the “Lenders”), and TWEC LOAN COLLATERAL AGENT, LLC, as collateral agent for the
        Lenders (in such capacity, the “Collateral Agent”). The Schedules and Exhibits to this Agreement, as well as the Perfection Certificate attached to this Agreement, are an integral part of this Agreement and are incorporated herein by
        reference.

       

      1.           Definitions.

       

      1.1        In addition to those capitalized terms otherwise defined in this Agreement, the following capitalized terms shall have the meanings set forth below:

       

      
        
          	

                	(a)	
                  “Closing Date” shall mean March 30, 2020.

                

        

      

       

      
        
          	

                	(b)	
                  “Collateral Assignment” means the Collateral Assignment of Agreements, dated as of the Closing Date, by Etailz in favor of the Collateral Agent for the benefit of the Lenders, as amended, supplemented or otherwise modified
                    from time to time.

                

        

      

       

      
        
          	

                	(c)	
                  “Discharge of Senior Indebtedness” shall mean the indefeasible payment in full, in cash of the Senior Credit Facility Obligations (other than unasserted contingent indemnification claims) and the permanent termination or
                    expiration of any commitment to make advances under the Senior Secured Credit Agreement.

                

        

      

       

      
        
          	

                	(d)	
                  “Guaranty” shall mean that certain Limited Guaranty dated as of the date hereof made by Parent in favor of Collateral Agent for the benefit of the Lenders, as amended, supplemented or otherwise modified from time to time.

                

        

      

       

      
        
          	

                	(e)	
                  “Insolvency Proceeding” shall mean any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of
                    creditors, or proceedings seeking reorganization, arrangement, or other similar relief

                

        

      

       

      
        

        
          

        

      

      
      
        
          	

                	(f)	
                  “Intercompany Subordination Agreement” shall mean that certain Intercompany Subordination Agreement dated as of the date hereof between Collateral Agent and Parent, as amended, supplemented or otherwise modified from time to
                    time.

                

        

      

       

      
        
          	

                	(g)	
                  “Intercreditor Agreement” shall mean (a) that certain Subordination and Intercreditor Agreement dated as of the date hereof by and among Borrower, Parent, Senior Agent, Senior Lenders, Collateral Agent, and Lenders and (b) any
                    other subordination agreement in form and substance satisfactory to Collateral Agent between Senior Agent, Collateral Agent and any other holder of the Obligations.

                

        

      

       

      
        
          	

                	(h)	
                  “Loan Documents” shall mean, collectively, this Agreement (including all attachments, schedules and exhibits hereto) and all guaranties, security agreements, mortgages, other certificates, pledge agreements, landlord’s
                    agreements, Lock Box and Blocked Account agreements, the Collateral Assignment, the Guaranty, the Pledge Agreement, the Intercompany Subordination Agreement, the Intercreditor Agreement, and all
                    other agreements, documents and instruments now or hereafter executed or delivered by the Borrower, any Loan Party or any Other Obligor in connection with, or to evidence the transactions contemplated by, this Agreement.

                

        

      

       

      
        
          	

                	(i)	
                  “Maturity Date” means the earliest of (i) the Scheduled Maturity Date, or (ii) such earlier date as the Obligations may be accelerated in accordance with the terms of this Agreement.

                

        

      

       

      
        
          	

                	(j)	
                  “Obligations” shall mean the Loan and all other debts, liabilities, fees, expenses, obligations, guaranties, covenants, duties and indebtedness at any time owing by the Borrower, any Loan Party or any Obligor to the Collateral
                    Agent or any Lender, whether evidenced by this Agreement, any other Loan Document or otherwise, whether arising from an extension of credit, guaranty, indemnification or otherwise, whether direct or indirect (including those acquired by
                    assignment and any participation by any Lender in any Borrower’s indebtedness owing to others), whether absolute or contingent, whether due or to become due and whether arising before or after the commencement of a proceeding under the
                    Bankruptcy Code or any similar statute.

                

        

      

       

      
        
          	

                	(k)	
                  “Perfection Certificate” shall mean the Perfection Certificate dated as of the Closing Date attached hereto as Exhibit A, together with any updates thereto as contemplated by this Agreement or otherwise.

                

        

      

       

      
        

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                	(l)	
                   “Permitted Indebtedness” shall mean: (a) the Obligations; (b) the Senior Credit Facility Obligations; (c) the Indebtedness existing on the date hereof described in Section 7 of the Perfection Certificate; in each case along
                    with extensions, refinancings, modifications, amendments and restatements thereof; provided that, (i) the principal amount thereof is not increased, (ii) if secured by a Permitted Lien, no additional collateral beyond that existing as
                    of the Closing Date is granted to secure such Indebtedness; (iii) if such Indebtedness is subordinated to any or all of the Obligations, the applicable subordination terms shall not be modified without the prior written consent of
                    Collateral Agent and (iv) the terms thereof are not modified to impose more burdensome terms upon any Loan Party; (d) Capitalized Leases and purchase-money Indebtedness secured by Permitted Liens in an aggregate amount not exceeding
                    $250,000 at any time outstanding; (e) Indebtedness incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business; (f) the Intercompany Subordinated Debt owing by Borrowers in an aggregate principal
                    amount not exceeding $10,356,140.65 at any time following the Closing Date; and (g) any other unsecured Indebtedness in an aggregate amount of up to $1,000,000 outstanding from time to time, so long as such Indebtedness is subject to a
                    subordination agreement in form and substance satisfactory to Collateral Agent in its sole discretion, in each case under this clause (g) along with extensions, refinancings, modifications, amendments and restatements thereof; provided
                    that (i)  the principal amount thereof is not increased, (ii) the final scheduled maturity date is no earlier than 91 days after the Scheduled Maturity Date, (iii) the applicable subordination terms shall not be modified without the
                    prior written consent of Collateral Agent, and (iv) the terms thereof are not modified to impose more burdensome terms upon any Loan Party.

                

        

      

       

      
        
          	

                	(m)	
                  “Permitted Lien” shall mean (a) Liens securing the Senior Credit Facility Obligations or any obligations permitted to be secured on a senior basis pursuant to the Intercreditor Agreement; (b) purchase-money security interests
                    in specific items of Equipment securing Permitted Indebtedness described under clause (d) of the definition of “Permitted Indebtedness”; (c) liens for taxes, fees, assessments, or other governmental charges or levies, either not
                    delinquent or being contested in good faith by appropriate proceedings (which proceedings have the effect of preventing the enforcement of such lien) for which adequate reserves in accordance with GAAP are being maintained provided the
                    same have no priority over any of Collateral Agent’s security interests; (d) liens of materialmen, mechanics, carriers, or other similar liens arising in the Ordinary Course of Business and securing obligations which are not delinquent
                    or are being contested in good faith by appropriate proceedings (which proceedings have the effect of preventing the enforcement of such lien) for which adequate reserves in accordance with GAAP are being maintained; (e) liens which
                    constitute banker’s liens, rights of set-off, or similar rights as to deposit accounts or other funds maintained with a bank or other financial institution (but only to the extent such banker’s liens, rights of set-off or other rights
                    are in respect of customary service charges relative to such deposit accounts and other funds, and not in respect of any loans or other extensions of credit by such bank or other financial institution to any Loan Party); (f) cash
                    deposits or pledges of an aggregate amount not to exceed $50,000 to secure the payment of worker’s compensation, unemployment insurance, or other social security benefits or obligations, public or statutory obligations, surety or appeal
                    bonds, bid or performance bonds, or other obligations of a like nature incurred in the Ordinary Course of Business; (g) judgment Liens in respect of judgments that do not constitute an Event of Default; and (h) Liens or rights of setoff
                    against credit balances of Borrower with Credit Card Issuers or Credit Card Processors or amounts owing by such Credit Card Issuers or Credit Card Processors to Borrower in the Ordinary Course of Business, but not Liens on or rights of
                    setoff against any other property or assets of Borrower, pursuant to the Credit Card Agreements to secure the obligations of Borrower to the Credit Card Issuers or Credit Card Processors as a result of fees and chargebacks.

                

        

      

       

      
        

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                	(n)	
                  “Pledge Agreement” shall mean that certain Pledge Agreement dated as of the date hereof by Parent in favor of the Collateral Agent for the benefit of the Lenders, as amended, supplemented or otherwise modified from time to
                    time.

                

        

      

       

      
        
          	

                	(a)	
                  “Required Lenders” shall mean at any time Lenders then holding Loans representing more than two-thirds of the Loans then outstanding.

                

        

      

       

      
        
          	

                	(b)	
                  “Restricted Account” shall mean Deposit Accounts (a) established and used (and at all times will be used) solely for the purpose of paying current payroll obligations of Loan Parties or the Parent, payroll taxes, worker’s
                    compensation or unemployment compensation, pension benefits and other similar expenses to or for the benefit of any employees and accrued and unpaid employee compensation (including salaries, wages, benefits and expense reimbursement)
                    (and which do not (and will not at any time) contain any deposits other than those necessary to fund current payroll or expenses to or for the benefit of employees), in each case in the Ordinary Course of Business, (b) maintained (and
                    at all times will be maintained) solely in connection with an employee benefit plan, but solely to the extent that all funds on deposit therein are solely held for the benefit of, and owned by, employees (and will continue to be so held
                    and owned) pursuant to such plan, (c) used specifically and exclusively for taxes required to be collected or withheld (including, without limitation, federal and state withholding taxes (including the employer’s share thereof), taxes
                    owing to any governmental unit thereof, sales, use and excise taxes, customs duties, import duties and independent customs brokers’ charges) for which the Loan Parties or Parent may become liable, (d) which, individually or in the
                    aggregate with all other accounts under this clause (d), does not have an aggregate balance which exceeds $100,000 at any time, or (e) solely with respect to the Parent, used solely in connection with a rabbi trust.

                

        

      

       

      
        
          	

                	(c)	
                  “Scheduled Maturity Date” means May 22, 2023.

                

        

      

       

      
        
          	

                	(d)	
                  “Senior Agent” shall mean Encina Business Credit, LLC, as agent for the lenders under the Senior Secured Credit Agreement, together with its successors and assigns.

                

        

      

       

      
        
          	

                	(e)	
                  “Senior Credit Facility Obligations” shall mean the Obligations as defined in the Senior Secured Credit Agreement.

                

        

      

       

      
        
          	

                	(f)	
                  “Senior Secured Credit Agreement” shall mean that certain Loan and Security Agreement entered into on February 20, 2020, by and among the Borrower, the Loan Party Obligors party thereto from time to time, the lenders party
                    thereto from time to time, and Senior Agent, as amended, restated or otherwise modified from time to time.

                

        

      

       

      
        
          	

                	(g)	
                  “Senior Secured Loan Documents” shall mean the Loan Documents as defined in the Senior Secured Credit Agreement.

                

        

      

       

      
        
          	

                	(h)	
                   “Termination Date” means the date on which all of the Obligations (other than contingent obligations for which no claims have been made) have been paid in full in cash.

                

        

      

       

      
        

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                	(i)	
                  “Voting Agreement” means that certain Voting Agreement, dated as of the Closing Date, by and among the Parent and certain shareholders of the Parent.

                

        

      

       

      1.2          Other Definitional Provisions.

       

      
        
          	

                	(a)	
                  With respect to each capitalized term used but not otherwise defined herein (including any capitalized term used in any definition or Section that is incorporated into this Agreement mutatis
                      mutandis), the definition for such capitalized term as set forth in Section 1.1 (Certain Defined Terms) of the Senior Secured Credit Agreement shall be deemed to be incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

                

        

      

       

      
        
          	

                	(b)	
                  Unless otherwise defined herein, the following terms are used herein as defined in the UCC: Accounts, Account Debtor, Certificated Security, Chattel Paper, Commercial Tort Claims, Debtor, Deposit Accounts, Documents, Electronic
                    Chattel Paper, Equipment, Financing Statement, Fixtures, General Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights, Money, Payment Intangible, Proceeds, Secured Party, Securities Accounts, Security Agreement,
                    Supporting Obligations and Tangible Chattel Paper.

                

        

      

       

      1.3        Other Definitional Provisions and References.  Sections 1.2 (Accounting Terms and Determinations) and 1.3 (Other Definitional Provisions and
        References) of the Senior Secured Credit Agreement shall be deemed to be incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      2.            Loan and Use of Proceeds.

       

      2.1        Loan.  Subject to the satisfaction of the terms and conditions hereof, each Lender agrees to make a loan in Dollars to the Borrower on the
        Closing Date in a principal amount equal to the commitment set forth opposite such Lender’s name on Schedule 2.1 (collectively, the “Loan”), and each Lender shall deposit, via wire-transfer or direct deposit, into an account or accounts
        designated by Borrower an amount equal to the net proceeds of its portion of the Loan; provided that no Lender shall be liable for the failure of any other Lender to fund any portion of the Loan and no Lender will be required to fund any portion of
        the Loan amount in excess of the commitment set forth opposite such Lender’s name on Schedule 2.1.  Amounts repaid or prepaid on the Loan may not be reborrowed.

       

      2.2         Use of Proceeds.  The Borrower hereby agrees that it shall not use the proceeds of such Loan for any purpose other than to repay a portion
        of the amount due under the Intercompany Subordinated Note and to pay transaction expenses (including attorneys fees and expenses) payable to the Collateral Agent or the Lenders in connection with this Agreement and the other Loan Documents or as
        otherwise allowed by the following sentence. The Parent agrees to use all proceeds received on account of the Loan to (i) fund the Parent’s operating expenses and/or, the extent permitted under the Senior Secured Credit Agreement and the
        Intercreditor Agreement, contribute any proceeds not used to fund Parent’s operating expenses back to the Borrower, and the Borrower may immediately prepay the Obligations in the amount of such contributed amounts.  All proceeds of the Loan will be
        used solely for lawful business purposes.

       

      
        

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      3.           Interest.

       

      (a)        Interest on the Loan shall accrue at the rate of twelve percent (12.0%) per annum, calculated on the basis of number of days elapsed in a 360-day year; provided, that upon the
        occurrence and during the continuation of an Event of Default, the Loan and all other monetary Obligations shall bear interest at a rate per annum equal to two (2) percentage points (2.00%) in excess of the rate otherwise applicable thereto. 
        Accrued interest shall be compounded on the last day of each calendar quarter and automatically paid in kind by becoming a part of the principal amount of the Loan.  The deposit of the proceeds of the Loan under this Agreement in the account
        designated by the Borrower on the Closing Date shall be prima facie evidence of Borrower’s indebtedness to the Lenders for such Loan, and interest shall begin to accrue on the principal amount of such Loan on the Business Day following such
        deposit.

       

      (b)        Collateral Agent shall maintain a loan account for Borrowers reflecting the Loan, along with interest accrued thereon and such other items reflected therein (the “Loan Account”), which Loan Account shall be deemed accurate and complete absent manifest error.  However, Collateral Agent’s failure to maintain the Loan Account shall not affect the legality
        or binding nature of any of the Obligations.

       

      4.           Payment; Prepayment.

       

      4.1        Payments Generally.  All outstanding monetary Obligations shall be payable in full in cash Dollars on the Maturity Date to such account or
        accounts as each Lender may designate in writing to the Borrower from time to time.  The Borrower may, at any time or from time to time, subject to the terms of the Intercreditor Agreement, prepay the Loan in whole or in part without premium or
        penalty. Payments of all amounts due hereunder shall be made on a Business Day.  Any payment due on a day that is not a Business Day shall be made on the next Business Day, together with all interest (if any) accrued in the interim.

       

      4.2         Application of Payments; Sharing of Payments. Subject to the terms of the Intercreditor Agreement, any payment made under this Agreement and
        any proceeds of the Collateral realized by the Collateral Agent shall be applied as follows: (i) first, to pay any expenses then due to the Collateral Agent under this Agreement or any other Loan Document, until paid in full, (ii) second, pro rata
        to pay any expenses then due to any Lender under this Agreement or any Loan Document, until paid in full, (iii) third, pro rata to pay any accrued and unpaid interest then due to any Lender on the Loan, until paid in full, (iii) fourth, pro rata to
        pay the unpaid principal amount of the Loan due to each Lender, until paid in full, (iv) fifth, pro rata to pay any other Obligations, until paid in full, and (v) sixth, to Borrower (to an account designated by the Borrower) or such other Person
        entitled thereto under applicable law. For purposes of the foregoing, “paid in full” means payment of all amounts owing under the Loan Documents according to the terms thereof, including attorneys fees, other professional fees, interest (and
        specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not the same would be or is allowed or disallowed in whole or in part in
        any Insolvency Proceeding, but excluding contingent obligations for which no claims have been made.  Each Lender hereby agrees that to the extent it receives any payment or proceeds of any Collateral in excess of its pro rata share as contemplated
        by this Section 4.2, such Lender agrees to promptly turn over any such excess amount to the Collateral Agent or the other Lenders, as applicable.

       

      4.3        Obligations Unconditional; Reversal of Payments; Notes; Joint and Several Liability.  Sections 2.7(a) (other than the last sentence thereof),
        2.7(c), 2.8, 2.9 and 2.12 of the Senior Secured Credit Agreement shall be deemed to be incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      
        

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      5.           Security.

       

      5.1        Grant of Security Interest.  To secure the full payment and performance of all of the Obligations, each Loan Party Obligor and the Parent
        hereby assigns to the Collateral Agent, a continuing security interest in all property of each such Loan Party Obligor and the Parent, whether tangible or intangible, real or personal, now or hereafter owned, existing, acquired or arising and
        wherever now or hereafter located, including: (a) all Accounts and Credit Card Receivables and all Goods whose sale, lease or other disposition by any Loan Party Obligor or the Parent has given rise to Accounts and have been returned to, or
        repossessed or stopped in transit by, any Loan Party Obligor or the Parent; (b) all Chattel Paper (including Electronic Chattel Paper), Instruments, Documents, and General Intangibles (including all patents, patent applications, trademarks,
        trademark applications, trade names, trade secrets, goodwill, copyrights, copyright applications, registrations, licenses, software, franchises, customer lists, tax refund claims, claims against carriers and shippers, guaranty claims, contracts
        rights, payment intangibles, security interests, security deposits and rights to indemnification); (c) all Inventory; (d) all Goods (other than Inventory), including Equipment, vehicles, and Fixtures; (e) all Investment Property, including all
        rights, privileges, authority, and powers of each Loan Party Obligor and the Parent as an owner or as a holder of Pledged Equity, including all economic rights, all control rights, authority and powers, and all status rights of each Loan Party
        Obligor and the Parent as a member, equity holder or shareholder, as applicable, of each Issuer; (f) all Deposit Accounts, bank accounts, deposits, money and cash; (g) all Letter-of-Credit Rights; (h) all Commercial Tort Claims (if any); (i) all
        Supporting Obligations; (j) all Intellectual Property; (k) any other property (including, without limitation, the Intercompany Subordinated Note) of any Loan Party Obligor or the Parent now or hereafter in the possession, custody or control of the
        Senior Agent, the Collateral Agent or any bailee, agent or any parent, Affiliate or Subsidiary of the Collateral Agent, for any purpose (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise); and (l) all
        additions and accessions to, substitutions for, and replacements, products and Proceeds of the foregoing property, including proceeds of all insurance policies insuring the foregoing property (including hazard, flood and credit insurance), and all
        of each Loan Party Obligor’s books and records relating to any of the foregoing and to any Loan Party’s business (collectively, the “Collateral”).  Notwithstanding anything to the contrary contained in clauses (a) through (l) above, the
        security interest created by this Agreement shall not extend to, and the term “Collateral” shall not include, any Excluded Property.

       

      5.2        Possessory Collateral. Promptly, but in any event no later than thirty (30) days after any Loan Party Obligor’s or Parent’s receipt of any
        portion of the Collateral in an amount in excess of $100,000 in the aggregate evidenced by an agreement, Instrument or Document, including any Tangible Chattel Paper and any Investment Property consisting of certificated securities, subject to the
        Discharge of Senior Indebtedness, such Loan Party Obligor or the Parent, as applicable, shall deliver the original thereof to Collateral Agent together with an appropriate endorsement or other specific evidence of assignment thereof to Collateral
        Agent (in form and substance reasonably acceptable to Collateral Agent). If an endorsement or assignment of any such items shall not be made for any reason, Collateral Agent is hereby irrevocably authorized, subject to the Discharge of Senior
        Indebtedness, as attorney and agent-in-fact (coupled with an interest) for each Loan Party Obligor, to endorse or assign the same on such Loan Party Obligor’s behalf.  Notwithstanding anything to the contrary herein or in any other Loan Document,
        prior to the Discharge of Senior Indebtedness, the delivery or transfer of any Collateral to, or the control of any Collateral by, the Senior Agent, shall satisfy any delivery, transfer or control requirement herein or in any Loan Document.

       

      
        

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      5.3       Further Assurances.  Each Loan Party Obligor and the Parent shall, at its own cost and expense, promptly and duly take, execute, acknowledge
        and deliver (and/or use commercially reasonable efforts to cause each other applicable Person to take, execute, acknowledge and deliver) all such further acts, documents, agreements and instruments as Collateral Agent may from time to time
        reasonably require in order to (a) carry out the intent and purposes of the Loan Documents and the transactions contemplated thereby, (b) establish, create, preserve, protect and perfect a first priority lien (subject only to Permitted Liens) in
        favor of the Collateral Agent in all the Collateral (wherever located) from time to time owned by the Loan Party Obligors and in all capital stock and other equity from time to time issued by the Loan Parties (other than Parent) constituting
        Collateral (including appraisals of real property in compliance with FIRREA), (c) cause each domestic Subsidiary of a Borrower to guaranty all of the Obligations, all pursuant to documentation that is in form and substance reasonably satisfactory
        to the Collateral Agent, and (d) facilitate the collection of the Collateral.  Without limiting the foregoing, each Loan Party Obligor and Parent shall, at its own cost and expense, promptly and duly take, execute, acknowledge and deliver (and/or
        use commercially reasonable efforts to cause each other applicable Person to take, execute, acknowledge and deliver) to Collateral Agent all promissory notes, security agreements, agreements with landlords, mortgagees and processors and other
        bailees, subordination and intercreditor agreements, credit card processor agreements, credit card notification agreements and other agreements, instruments and documents, in each case in form and substance reasonably acceptable to Collateral
        Agent, as Collateral Agent may reasonably request from time to time to perfect, protect and maintain Collateral Agent’s security interests in the Collateral, including the required priority thereof, and to fully carry out the transactions
        contemplated by the Loan Documents.

       

      5.4       UCC Financing Statements.  Each Loan Party Obligor and Parent authorizes Collateral Agent to file, transmit or communicate, as applicable,
        from time to time, UCC Financing Statements, along with amendments and modifications thereto, in all filing offices selected by Collateral Agent, listing such Loan Party Obligor or Parent, as applicable, as the Debtor and Collateral Agent as the
        Secured Party, and describing the collateral covered thereby in such manner as Collateral Agent may elect, including using descriptions such as “all personal property of debtor” or “all assets of debtor,” or words of similar effect, in each case
        without such Loan Party Obligor’s signature.

       

      5.5        Release.  Section 5.5 (Releases) of the Senior Secured Credit Agreement shall be deemed to be incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      6.          Certain Provisions Regarding Accounts, Inventory, and Collections.

       

      6.1        Deposit Accounts and Lockboxes.  Each Loan Party Obligor and the Parent hereby represents and warrants that all Deposit Accounts and all
        other depository and other accounts maintained by each Loan Party Obligor or the Parent as of the Closing Date are described in Section 3 of the Perfection Certificate, which description includes for each such account the name of the Loan Party
        Obligor or Parent maintaining the account, the name of the financial institution at which the account is maintained, the account number and the purpose of the account. After the Closing Date, no Loan Party Obligor or Parent shall open any new
        Deposit Account or any other depository or other account without the prior written consent of Senior Agent (prior to the Discharge of Senior Indebtedness) or the Collateral Agent and without updating Section 3 of the Perfection Certificate to
        reflect such Deposit Account or other account and, unless such account is a Restricted Account, entering into a control agreement in favor of the Collateral Agent, which control agreement is in form and substance acceptable to the Collateral Agent.
        No Deposit Account or other account of any Loan Party Obligor or the Parent shall at any time constitute a Restricted Account other than accounts expressly indicated on Section 3 of the Perfection Certificate as being Restricted Accounts (and each
        Loan Party Obligor hereby represents and warrants that each such account shall at all times meet the requirements set forth in the definition of “Restricted Account” to qualify as a Restricted Account).  Following the Discharge of Senior
        Indebtedness, each Loan Party Obligor and Parent will, at its expense, establish (and revise from time to time as the Collateral Agent may reasonably require) procedures acceptable to the Collateral Agent, in the Collateral Agent’s reasonable
        discretion, for the collection of checks, wire transfers and all other proceeds of all of such Loan Party Obligor’s Accounts and other Collateral (“Collections”), which shall include (a) directing all Account Debtors to send all Account
        proceeds directly to a post office box designated by the Collateral Agent, either in the name of such Loan Party Obligor (but as to which the Collateral Agent has exclusive access) or, at the Collateral Agent’s option, in the name of the Collateral
        Agent, as applicable (a “Lock Box”) and (b) depositing all Collections received by such Loan Party Obligor  into one or more bank accounts maintained in the name of such Loan Party Obligor (but as to which the Collateral Agent has exclusive
        access) or, at the Collateral Agent’s option, in the name of the Collateral Agent, as applicable (each, a “Blocked Account”), under an arrangement reasonably acceptable to the Collateral Agent, in the name of the Collateral Agent, as
        applicable, with a depository bank reasonably acceptable to the Collateral Agent, pursuant to which all funds deposited into each Blocked Account are to be transferred to the Collateral Agent in such manner, and with such frequency, as the
        Collateral Agent shall specify, and/or (c) a combination of the foregoing. Following the Discharge of Senior Indebtedness, each Loan Party Obligor agrees to execute, and to cause its depository banks and other account holders to execute, such Lock
        Box and Blocked Account control agreements and other documentation as the Collateral Agent shall require from time to time in connection with the foregoing, all in form and substance reasonably satisfactory to the Collateral Agent, and in any event
        such arrangements and documents must be in place on the date hereof with respect to accounts in existence on the date hereof, or prior to any such account being opened with respect to any such account opened after the date hereof, in each case
        excluding Restricted Accounts.

       

      
        

        8

        
          

        

      

      6.2       Credit Card Processing and Limitations on Accounts.  Clauses (b) and (c) of Section 6.1 (Lock Boxes and Blocked Accounts) of the Senior
        Secured Credit Agreement shall be deemed to be incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      6.3       Power of Attorney.  Section 6.4 (Power of Attorney) of the Senior Secured Credit Agreement shall be deemed to be incorporated into this
        Agreement, mutatis mutandis, as a part hereof for all purposes; provided that each reference to Loan Party Obligors contained therein shall be deemed to include the Parent.

       

      6.4        Disputes.  Each Loan Party Obligor shall promptly notify the Collateral Agent of all disputes or claims relating to its Accounts, Credit Card
        Receivables and Chattel Paper in excess of $50,000. Each Loan Party Obligor agrees that following the Discharge of Senior Indebtedness, it will not, without Collateral Agent’s prior written consent (which consent shall not be unreasonably withheld,
        conditioned or delayed), compromise or settle any of its Accounts, Credit Card Receivables or Chattel Paper for less than the full amount thereof, grant any extension of time for payment of any of its Accounts, Credit Card Receivables or Chattel
        Paper, release (in whole or in part) any Account Debtor or other person liable for the payment of any of its Accounts or Chattel Paper or grant any credits, discounts, allowances, deductions, return authorizations or the like with respect to any of
        its Accounts, Credit Card Receivables or Chattel Paper; except (unless otherwise directed by the Collateral Agent during the existence of a Default or an Event of Default) such Loan Party Obligor may take any of such actions in the Ordinary Course
        of Business consistent with past practices, provided that Borrower promptly reports the same to the Collateral Agent if the aggregate amount in any month exceeds $10,000.

       

      6.5        Invoices. Following the Discharge of Senior Indebtedness, at Collateral Agent’s request after the occurrence and during the continuance of a
        Default or Event of Default, each Loan Party Obligor will cause all invoices and statements that it sends to Account Debtors or other third parties to be marked and authenticated, in a manner reasonably satisfactory to Collateral Agent, to reflect
        the Collateral Agent’s security interest therein and payment instructions (including, but not limited to, in a manner to meet the requirements of Section 9-404(a)(2) of the UCC).

       

      6.6         Inventory.

       

      
        
          	

                	(a)	
                  Returns. No Loan Party Obligor will accept returns of any Inventory from any Account Debtor except in the Ordinary Course of Business.

                

           

          

        

      

      
        

        9

        
          

        

      

      
        
          	

                	(b)	
                  Third Party Locations. No Loan Party Obligor will, without Senior Agent’s prior written consent (or the prior written consent of the Collateral Agent following a Discharge of Senior Indebtedness), at any time, store any
                    Inventory with any warehouseman or other third party other than as set forth in Section 1(d) of the Perfection Certificate.

                

        

      

      

      

      
        
          	

                	(c)	
                  Sale on Return, etc. No Loan Party Obligor will, without Senior Agent’s prior written consent (or the written consent of the Collateral Agent following a Discharge of Senior Indebtedness), at any time, sell any Inventory on a
                    sale-or-return, guaranteed sale, consignment, or other contingent basis.

                

        

      

      

      

      
        
          	

                	(d)	
                  Fair Labor Standards Act. Each Loan Party Obligor represents, warrants and covenants that, at all times, all of the Inventory of each Loan Party Obligor has been, at all times will be, produced only in accordance with the Fair
                    Labor Standards Act of 1938 and all rules, regulations and orders promulgated thereunder.

                

        

      

       

      7.         Conditions Precedent to Loan.  Each Lender’s obligation to fund its portion of the Loan under this Agreement is subject to the following
        conditions precedent (as well as any other conditions set forth in this Agreement or any other Loan Document), all of which must be satisfied in a manner acceptable to such Lender (and as applicable, pursuant to documentation which in each case is
        in form and substance acceptable to such Lender):

       

      7.1        Each Loan Party Obligor and the Parent shall have duly executed and/or delivered, or, as applicable, shall have caused such other applicable Persons
        to have duly executed and or delivered, to such Lender each of the items listed on closing checklist attached hereto as Exhibit B;

       

      7.2       Parent shall have adopted a “poison pill” plan to discourage changes in ownership that would trigger limitations on the use of net operating loss
        carryforwards pursuant to Section 382 of the Code, in form and substance acceptable to the Lenders;

       

      7.3         Since February 2, 2019, no event shall have occurred which has had, or could reasonably be expected to have, a Material Adverse Effect on any Loan
        Party or the Parent;

       

      7.4        The Parent shall have adopted resolutions (i) setting the size of the board of directors of the Parent (the “Board”) at three (3) directors
        and (ii) taking necessary steps to appoint to the Board, to the extent not already members thereof, the individuals identified in the Voting Agreement;

       

      7.5       No Default or Event of Default under the Senior Secured Credit Agreement, or any related loan document shall have occurred and be continuing as of the
        Closing Date, immediately before and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents;

       

      7.6        Each of the representations and warranties set forth in this Agreement and in the other Loan Documents shall be true and correct in all respects as
        of the date such Loan is made (or, to the extent any representations or warranties are expressly made solely as of an earlier date, such representations and warranties shall be true and correct as of such earlier date), both before and after giving
        effect thereto;

       

      7.7        Borrowers shall have paid all out-of-pocket expenses of the Collateral Agent and the Lenders invoiced through the Closing Date; and

       

      
        

        10

        
          

        

      

      7.8        No Default or Event of Default shall be in existence, both before and after giving effect thereto.

       

      8.          Representations and Warranties and Affirmative Covenants.

       

      8.1       Loan Party Obligors and Parent.  To induce the Collateral Agent and the Lenders to enter into this Agreement, the representations, warranties,
        and covenants made by each Loan Party Obligor and Parent under Section 7 (Representations, Warranties and Affirmative Covenants) of the Senior Secured Credit Agreement (other than Sections 7.4 (Accounts,  Credit Card Receivables and Chattel Paper),
        7.5 (Electronic Chattel Paper), 7.13 (Use of Proceeds), 7.15(c) (Financial, Collateral and Other Reporting/Notices), the last sentence of Section 7.23(b), Sections 7.24 (Access to Collateral, Books and Records), 7.25 (Appraisals), 7.27 (Reserved),
        7.28 (Reserved) and 7.29 (Post-Closing Matters) thereto) are incorporated herein mutatis mutandis (it being understood and agreed that (a) each such representation and warranty (i) will be made as of the
        date hereof (except to the extent any such representation or warranty expressly relates only to any earlier or specified date, in which case such representation or warranty will be made as of such earlier or specified date) and (ii) shall not be
        affected by any knowledge of, or any investigation by, the Collateral Agent, any Lender or the Senior Agent or any lender under the Senior Secured Credit Facility, (b) each such covenant shall continuously apply with respect to all times commencing
        on the date hereof and continuing until the Termination Date, and (c) Parent’s and each Loan Party Obligor’s obligations hereunder in respect of Section 7.14 (Insurance) of the Senior Secured Credit Agreement, as incorporated herein mutatis mutandis, shall be subject to Section 8.4 hereof.

       

      8.2        Electronic Chattel Paper.  To the extent that any Loan Party Obligor or Parent obtains or maintains any Electronic Chattel Paper in an
        aggregate amount in excess of $100,000, such Loan Party Obligor or Parent, as applicable, shall at all times create, store and assign the record or records comprising the Electronic Chattel Paper in such a manner that (a) a single authoritative
        copy of the record or records exists which is unique, identifiable and except as otherwise provided below, unalterable, (b) the authoritative copy identifies the Senior Agent (or after the Discharge of Senior Indebtedness, the Collateral Agent) as
        the assignee of the record or records, (c) the authoritative copy is communicated to and maintained by Senior Agent (or after the Discharge of Senior Indebtedness, the Collateral Agent) or its designated custodian, (d) copies or revisions that add
        or change an identified assignee of the authoritative copy can only be made with the participation of Senior Agent (or after the Discharge of Senior Indebtedness, the Collateral Agent), (e) each copy of the authoritative copy and any copy of a copy
        is readily identifiable as a copy that is not the authoritative copy and (f) any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.

       

      8.3        Access to Collateral, Books and Records.  At reasonable times and, so long as no Event of Default has occurred and is continuing, upon
        reasonable prior notice, Collateral Agent and its representatives or agents shall have the right to inspect the Collateral and to examine and copy each Loan Party’s and the Parent’s books and records. Each Loan Party Obligor and Parent agrees to
        give Collateral Agent access to any or all of Parent’s, Loan Party Obligor’s, and each of its Subsidiaries’, premises to enable Collateral Agent to conduct such inspections and examinations.  Following an Event of Default, such examinations shall
        be at the Borrower’s expense.  Upon the occurrence and during the continuance of an Event of Default, subject to the Discharge of Senior Indebtedness, the Collateral Agent may, at Borrowers’ expense, use each Loan Party’s and Parent’s personnel,
        computer and other equipment, programs, printed output and computer readable media, supplies and premises for the collection, sale or other disposition of Collateral to the extent Collateral Agent, in its reasonable discretion, deems appropriate.
        Each Loan Party Obligor and Parent hereby irrevocably authorizes all accountants and third parties to disclose and deliver to the Collateral Agent, at Borrowers’ expense, all financial information, books and records, work papers, management reports
        and other information in their possession regarding the Loan Parties or the Parent.

       

      
        

        11

        
          

        

      

      8.4        Post-Closing Matters.  Loan Party Obligors and the Parent, as applicable, shall satisfy the requirements set forth on Schedule 8.4
        hereof on or before the dates specified therein or such later date to be determined by Collateral Agent, at its sole option, each of which shall be completed or provided in form and substance reasonably satisfactory to the Collateral Agent. The
        failure to satisfy any such requirement on or before the date when due (or within such longer period as the Collateral Agent may agree at its sole option) shall be an Event of Default, except as otherwise agreed to by the Collateral Agent at its
        sole option.

       

      8.5        Voting Agreement.  From and after the first shareholder meeting of Parent held after the Closing Date, the board of the Parent shall consist
        of three directors appointed in accordance with the terms and provisions of the Voting Agreement.

       

      8.6       Warrants or Options.  Except as set forth on Schedule 8.6, as of the Closing Date, there are no outstanding contracts, options,
        warrants, instruments, documents or agreements binding upon the Parent granting to any Person or group of Persons any right to purchase or acquire shares of the Parent’s capital stock.

       

      9.          Negative Covenants.

       

      9.1      Loan Party Obligors.  The negative covenants set forth in Section 8(a) (Negative Covenants) of the Senior Secured Credit Agreement are
        incorporated herein mutatis mutandis; provided that, the reference to the “Alimco Subordinated Debt Documents” in Section 8(a)(xxi) shall be deemed to be a reference to the “Senior Secured Loan Documents”
        for purposes of this Section 9.1 only.

       

      9.2        Parent. The negative covenants set forth in Section 8(b) (Negative Covenants) of the Senior Secured Credit Agreement are incorporated herein
        mutatis mutandis.

       

      10.        Release, Limitation of Liability and Indemnity.  Section 10 (Release, Limitation of Liability and Indemnity) of the Senior Secured Credit
        Agreement shall be deemed to be incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      11.        Default. Each of the following shall constitute an “Event of Default” under this Agreement:

       

      11.1       Payment. If any Loan Party Obligor or Other Obligor fails to pay when due, any principal or interest payment or other monetary Obligation
        required under this Agreement or any other Loan Document;

       

      11.2       Breaches of Representations and Warranties. If any warranty, representation, statement, report or certificate made or delivered to the
        Collateral Agent or any Lender by or on behalf of any Loan Party or Other Obligor is untrue or misleading in any material respect (except where such warranty or representation is already qualified by Material Adverse Effect, materiality, dollar
        thresholds or similar qualifications, in which case such warranty or representation shall be accurate in all respects);

       

      11.3      Breaches of Covenants.

       

      
        
          	

                	(a)	
                  If any Loan Party defaults in the due observance or performance of any covenant, condition or agreement contained in Sections 2.2, 5.2, 6.1, 6.2, 6.5, 6.6, 8.1 (but solely in respect of Sections 7.2 (limited to the last sentence
                    thereof), 7.3, 7.14 (but subject to Section 8.4 hereof), 7.15 (excluding Section 7.15(c)), and 7.26 of the Senior Secured Credit Agreement that are incorporated by reference therein), 8.3, 8.4, or 9.1 hereto;

                

        

      

       

      
        

        12

        
          

        

      

      
        
          	

                	(b)	
                  If the Parent defaults in the due observance or performance of any covenant, condition or agreement contained in Sections 2.2, 5.2, 6.1, 8.1 (but solely in respect of Sections 7.2 (limited to the last sentence thereof), 7.3, 7.14
                    (but subject to Section 8.4 hereof), and 7.15 (excluding Section 7.15(c)) of the Senior Secured Credit Agreement that are incorporated by reference therein), 8.4, or 9.2 hereto; or

                

        

      

       

      
        
          	

                	(c)	
                  If any Loan Party or Parent defaults in the due observance or performance of any covenant, condition or agreement contained in any provision of this Agreement or any other Loan Document and not addressed in clauses Sections 11.1,
                    11.2, 11.3(a), or 11.3(b) hereto, and the continuance of such default unremedied for a period of fifteen (15) Business Days; provided that such fifteen (15) Business Day
                    grace period shall not be available for any default that is not reasonably capable of being cured within such period or for any intentional default;

                

        

      

       

      11.4       Judgment. If one or more judgments aggregating in excess of $250,000 is obtained against any Loan Party or Parent which remains unstayed for
        more than thirty (30) days or is enforced;

       

      11.5      Cross-Default. If any default occurs with respect to any Indebtedness (other than the Obligations, the Senior Credit Facility Obligations, or
        the Intercompany Subordinated Debt) of any Loan Party or Parent in an aggregate principal amount in excess of $250,000 if (i) such default shall consist of the failure to pay such Indebtedness when due, whether by acceleration or otherwise or (ii)
        the effect of such default is to permit the holder, with or without notice or lapse of time or both, to accelerate the maturity of any such Indebtedness or to cause such Indebtedness to become due prior to the stated maturity thereof (without
        regard to the existence of any subordination or intercreditor agreements);

       

      

      11.6      Cross Acceleration to Senior Secured Credit Agreement. There occurs any “Event of Default” under the Senior Secured Credit Agreement and the
        Senior Credit Facility Obligations are declared to be due and payable, or required to be prepaid (other than by a regularly scheduled prepayment or mandatory prepayment in accordance with the terms of the Senior Secured Loan Documents), redeemed,
        purchased or defeased, in each case, prior to the Scheduled Maturity Date (as defined in the Senior Secured Credit Agreement);

       

      11.7       Dissolution; Cessation of Business. The dissolution, termination of existence or suspension or cessation of business as usual of any Loan
        Party or Parent;

       

      11.8      Voluntary Bankruptcy or Similar Proceedings.  If any Loan Party or Other Obligor shall apply for or consent to the
        appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, admit in writing its inability to pay its debts as they mature, make a general assignment for the benefit of creditors, be adjudicated a bankrupt or
        insolvent or be the subject of an order for relief under the Bankruptcy Code or under any bankruptcy or insolvency law of a foreign jurisdiction, or file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an
        arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any
        proceeding under any such law, or take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;

       

      11.9       Involuntary Bankruptcy or Similar Proceedings. The commencement of an
        involuntary case or other proceeding against any Loan Party or Other Obligor seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar applicable law or seeking the
        appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or if an order for relief is entered against any Loan Party or Other Obligor under any bankruptcy, insolvency or
        other similar applicable law as now or hereafter in effect; provided that if such commencement of proceedings is involuntary, such action shall not constitute an Event of Default unless
        such proceedings are not dismissed within sixty (60) days after the commencement of such proceedings;

       

      
        

        13

        
          

        

      

      11.10     Revocation or Termination of Guaranty or Security Documents. The actual or attempted revocation or termination of, or
        limitation or denial of liability under, any guaranty of any of the Obligations, or any security document securing any of the Obligations, by any Loan Party or Other Obligor;

       

      11.11     Subordinated Indebtedness.

       

      
        
          	

                	(a)	
                  A Default or Event of Default (as such terms are defined in the Intercompany Subordinated Debt Documents) with respect to the Intercompany Subordinated Debt or the occurrence of any condition or event that results in the Intercompany
                    Subordinated Debt becoming due prior to its scheduled maturity as of the Closing Date or permits any holder or holders of the Intercompany Subordinated Debt or any trustee or agent on its or their behalf to cause the Intercompany
                    Subordinated Debt to become due, or require the prepayment, repurchase, redemption of defeasance thereof, prior to its scheduled maturity as of the Closing Date; or

                

        

      

       

      
        
          	

                	(b)	
                  If any Loan Party makes any payment on account of the Intercompany Subordinated Debt or any Indebtedness or obligation which has been contractually subordinated to the Obligations other than payments which are permitted hereunder or
                    by the applicable subordination provisions pertaining thereto, or if any Person who has subordinated such Indebtedness or obligations attempts to limit or terminate any applicable subordination provisions pertaining thereto, in each
                    case, including the Intercompany Subordination Agreement;

                

        

      

       

      11.12     Criminal Indictment or Proceedings. If there is any actual indictment or conviction of any Loan Party or Parent or any of their respective
        senior officers, under any criminal statute in each case related to a felony committed in the direct conduct of any Loan Party’s or Parent’s business;

       

      11.13    Change of Control. If (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
        Act as in effect on the Closing Date), other than the Permitted Holders, acquires, or shall be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) of, 35% or more of the outstanding
        direct or indirect equity interests of Parent on a fully diluted basis unless the Permitted Holders own more than 50% of the outstanding direct or indirect equity interests of Parent on a fully diluted basis, (ii) Parent ceases to possess the right
        to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board of directors (or similar governing body) of Borrower and to direct the management policies and decisions of Borrower, (iii) Parent ceases
        to directly own and control 100% of each class of the outstanding equity interests of Borrower or (iv) Borrower ceases to, directly or indirectly, own and control 100% of each class of the outstanding equity interests of each other Loan Party;

       

      11.14     Change of Management. If (i) Kunal B. Chopra ceases to be employed as, and actively perform the duties of, the chief
        executive officer of each Loan Party, or (ii) Brock J. Kowalchuk ceases to be employed as, and actively perform the duties of, the chief financial officer of each Loan Party, in each case unless a successor (or interim successor) is appointed
        within ninety (90) days after the termination of such individual’s employment and such successor (or interim successor) is reasonably satisfactory to the Senior Agent (or after the Discharge of Senior Indebtedness, the Collateral Agent);

       

      
        

        14

        
          

        

      

      11.15     Invalid Liens. If any Lien purported to be created by any Loan Document shall cease to be a valid perfected first
        priority Lien (subject only to Permitted Liens) on any material portion of the Collateral, or any Loan Party or Parent shall assert in writing that any Lien purported to be created by any Loan Document is not a valid perfected first-priority lien
        (subject only to Permitted Liens) on the assets or properties purported to be covered thereby, except, in each case, (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under any Loan Document,
        (ii) the release by Collateral Agent of any Liens on the Collateral pursuant to this Agreement, (iii) as a result of the failure of the Collateral Agent (or, prior to the Discharge of Senior Indebtedness, Senior Agent) to maintain possession of any
        Collateral or (iv) as a result of the failure of the Collateral Agent to file continuation statements with respect to any financing statement;

       

      11.16    Termination of Loan Documents. If any of the Loan Documents shall cease to be in full force and effect (other than as a
        result of the discharge thereof in accordance with the terms thereof or by written agreement of all parties thereto);

       

      11.17    Liquidation Sales. The determination by any Loan Party or Parent to employ an
        agent or other third party or otherwise engage any Person or solicit proposals for the engagement of any Person (i) in connection with the proposed liquidation of all or a material portion of its assets, or (ii) to conduct any so-called liquidation
        or “Going-Out-Of-Business” sales;

       

      11.18    Loss of Collateral. The (i) uninsured loss, theft, damage or destruction of any of the Collateral in an amount in excess
        of $250,000 in the aggregate for all such events during any Fiscal Year, or (ii) except as permitted hereby, the sale, lease or furnishing under a contract of service of, any of the Collateral; or

       

      11.19     Plans. (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 or Parent or any Subsidiary under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $250,000, (ii) the existence of any Lien
        under Section 430(k) or Section 303(k) or Section 4068 of ERISA on any assets of a Loan Party or Parent, or (iii) a Loan Party or Parent 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 $250,000.

       

      12.         Rights and Remedies upon an Event of Default.

       

      12.1      Should any one or more Events of Default occur and continue to exist under this Agreement as provided above, in addition to other rights and remedies
        provided for herein or otherwise available at law, Collateral Agent may (in its sole discretion), or at the direction of the Required Lenders, shall: (i) accelerate the payments due under, and/or maturity of, this Agreement and insist upon
        immediate payment in full in cash of the Obligations; and (ii) take any and all other and further actions and avail itself of any and all rights and remedies available to the Lender under this Agreement, any other Loan Document, under law or in
        equity. Notwithstanding the foregoing sentence, upon the occurrence of any Event of Default described in Section 11.8 or Section 11.9, without notice, demand or other action by Collateral Agent all of the Obligations shall immediately become due
        and payable whether or not payable on demand prior to such Event of Default.

       

      12.2      Section 11.3 (Remedies with Respect to Collateral) of the Senior Secured Credit Agreement is hereby incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

      

      

      
        

        15

        
          

        

      

      
        12.3      During the continuance of one or more Events of Default, Collateral Agent may obtain the appointment of a Receiver as contemplated by pursuant to
          Section 12.2, without notice to, or demand of any Loan Party or any Other Obligor.

      

       

      13.         Loan Guaranty.  Section 12.1 (Loan Guaranty) of the Senior Secured Credit Agreement is hereby incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      14.         Payments Free of Taxes. Section 13 (Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes) of the Senior Secured
        Credit Agreement are hereby incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      15.        Notices.   Unless otherwise provided in this Agreement, all notices relating to this Agreement or any other Loan Document shall be in writing
        and shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as Borrower, any other Loan Party, any Other Obligor, Collateral
        Agent or any Lender, as applicable, may designate to each other in accordance herewith), or telefacsimile to Borrower, any other Loan Party, any Other Obligor, Collateral Agent or any Lender, as the case may be, at its address set forth below:

       

      If to Borrower, any other Loan Party or any Other Obligor:

      

      

      Etailz Inc.

      2818 N. Sullivan Road, Suite #130

      Spokane Valley, Washington 99216

      Attention: Kunal Chopra, Chief Executive Officer

      Email: Kunal@etailz.com

      

      

      with a copy to:

      

      

      Cahill Gordon & Reindel LLP

      80 Pine Street

      New York, NY 10005

      Attention: Marc Lashbrook

      Email: MLashbrook@cahill.com

      

      

      If to Collateral Agent or any Lender:

      

      

      Alimco Re Ltd.

      2336 SE Ocean Blvd., #400

      Stuart, FL 34996

      Attention: Jonathan Marcus, Chief Executive Officer

      Email: jon@limadvisory.com

      

      

      with a copy to:

      

      

      K&L Gates LLP

      1717 Main Street, Suite 2800

      Attention: Jonathan Vance

      Email: jonathan.vance@klgates.com

      

      

      and

       

      

      
        

        16

        
          

        

      

      RJHDC, LLC

      c/o Independent Family Office, LLC

      677 Broadway, 7th Floor

      Albany, NY 12207

      Tel: (518) 452-8050 ext. 1

      Fax: (518) 452-8053

      

      

      with a copy to:

      

      

      Schoeneck & King

      22 Corporate Woods, Suite 501

      Albany, NY 12211

      Attention: Jennifer Boll

      Email: jboll@bsk.com

      

      

      and

      

      

      Kick-Start III, LLC

      Kick-Start IV, LLC

      1925 S. Stevens

      Spokane, WA 99203

      Attention: Tom Simpson

      Email: tom@nwva.com

      

      

      Collateral Agent, any Lender, Borrower, any other Loan Party or any Other Obligor may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other
        parties. All notices or demands sent in accordance with this Section 15, other than notices by Collateral Agent in connection with enforcement rights against the Collateral under the provisions of the Code, shall be deemed received on the earlier
        of the date of actual receipt or 3 Business Days after the deposit thereof in the mail.  Borrower and Parent acknowledge and agree that notices sent by Collateral Agent in connection with the exercise of enforcement rights against Collateral under
        the provisions of the Code shall be deemed sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by telefacsimile or any other method set forth above.

      

      

      16.       Miscellaneous. Sections 15.2 (Severability), 15.3 (Integration), 15.4 (Waivers), 15.6 (Time of Essence), 15.7 (Expenses, Fee and Costs
        Reimbursement), 15.8 (Benefit of Agreement; Assignability) (it being understood that reference therein to Section 15.9 of the Senior Secured Credit Agreement shall be deemed a reference to Section 18 hereof), 15.10 (Participations), 15.11
        (Headings; Construction), 15.12 (USA PATRIOT Act Notification), 15.13 (Counterparts; Fax/Email Signatures), 15.14 (Governing Law), 15.15 (Consent to Jurisdiction; Waiver of Jury Trial; Consent to Service of Process), and 15.17 (Confidentiality) of
        the Senior Secured Credit Agreement are hereby incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes.

       

      
        

        17

        
          

        

      

      17.       Amendments.  No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents
        shall in any event be effective unless the same shall be in writing and acknowledged by the Loan Parties, Parent and the Required Lenders, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance
        and for the specific purpose for which given; provided that, no amendment, modification, waiver or consent shall (i) increase the commitment of any Lender without the written consent of
        such Lender, (ii) extend the date scheduled for payment of any principal of or interest on the Loan or any fees payable hereunder without the written consent of each Lender directly affected thereby, (iii) reduce the principal amount of any Loan,
        the rate of interest thereon or any fees payable hereunder, without the consent of each Lender directly affected thereby, or (iv) release any guarantor from its obligations under any Guaranty, other than as part of or in connection with any
        disposition permitted hereunder or under the Intercreditor Agreement, or release or subordinate its liens on all or any substantial part of the Collateral granted under any of the other Loan Documents (except as permitted pursuant to Section
        22(b)), or change the definition of “Required Lenders”, any provision of Section 4.2, any provision of Section 16 (but solely with respect to Section 15.4 of the Senior Secured Credit Agreement incorporated herein mutatis

          mutandis) or this Section 17, without, in each case set forth in this clause (iv), the written consent of all Lenders. No provision of Section 22 or other provision of this Agreement affecting Collateral Agent in its capacity as such shall
        be amended, modified or waived without the consent of the Collateral Agent.

       

      18.         Assignment.

       

      (a)          Subject to (i) the terms and conditions of the Intercreditor Agreement, and (ii) receipt of the prior written consent of the Borrower (which consent shall not be
        unreasonably withheld or delayed) (provided, that no consent of Borrower shall be required (1) if an Event of Default has occurred and is continuing, (2) in connection with an assignment or a delegation to a
        Person that is a Lender or an Affiliate (other than natural persons) of a Lender, or (3) such assignment or delegation is required or deemed advisable by any Governmental Authority to which any Lender is subject; provided,

          further, that Borrower shall be deemed to have consented to a proposed assignment unless it objects thereto by written notice to Lender within five (5) Business Days after having received notice thereof), each Lender may assign and
        delegate to one or more assignees (each an “Assignee”) all, or any ratable part of all, of the Obligations and the other rights and obligations of such Lender hereunder and under the other Loan Documents; provided, however,
        that Borrower may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information
        with respect to the Assignee, have been given to Borrower by such Lender and the Assignee, and (ii) such Lender and its Assignee (and Borrower, solely to the extent the Borrower’s consent is required pursuant to this clause (a)) have delivered to
        Borrower an Assignment and Assumption (with appropriate adjustments thereto to reflect this Agreement and the Obligations) (each, an “Assignment and Assumption”).

       

      (b)          From and after the date that (i) Senior Agent’s consent has been obtained in accordance with the terms and conditions of the Intercreditor Agreement, and (ii) the
        applicable Lender, Assignee, and Borrower (solely to the extent the Borrower’s consent is required pursuant to clause (a) above) execute an Assignment and Assumption, (x) the Assignee thereunder shall be a party hereto and, to the extent that
        rights and obligations hereunder have been assigned to it pursuant to such Assignment and Assumption, shall have the assigned and delegated rights and obligations of such Lender under the Loan Documents, and (y) such Lender shall, to the extent
        that rights and obligations hereunder and under the other Loan Documents have been assigned and delegated by it pursuant to such Assignment and Assumption, relinquish its rights (except with respect to rights to indemnification under this
        Agreement) and be released from its obligations under this Agreement (and in the case of an Assignment and Assumption covering all or the remaining portion of such Lender’s rights and obligations under this Agreement and the other Loan Documents,
        such Lender shall cease to be a party hereto and thereto), and such assignment shall affect a novation between Borrower and the Assignee.

       

      (c)          Immediately upon Borrower’s receipt of the fully executed Assignment and Assumption and other items required by Section 18(b), this Agreement shall be deemed to be
        amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the rights and duties of the applicable Lender arising therefrom.

       

      
        

        18

        
          

        

      

      19.       Interpretation.  This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against
        the party drafting an instrument or causing any instrument to be drafted. The Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim
        herein.

       

      20.        Savings Clause.  Notwithstanding any provision to the contrary contained in this Agreement or any other Loan Document, the Borrower shall not
        be required to pay, and no Lender shall be permitted to contract for, take, reserve, charge or receive, any compensation which constitutes interest under applicable law in excess of the maximum amount of interest permitted by law (“Excess
          Interest”).  If any Excess Interest is provided for or determined by a court of competent jurisdiction to have been provided for in this Agreement or in any other Loan Document or otherwise contracted for, taken, reserved, charged or
        received, then in such event:  (a) the provisions of this Section 20 shall govern and control; (b) the Borrower shall not be obligated to pay any Excess Interest; (c) any Excess Interest that any Lender may have contracted for, taken,
        reserved, charged or received hereunder shall be, at such Lenders’ option, (i) applied as a credit against the outstanding principal balance of the Obligations or accrued and unpaid interest (not to exceed the maximum amount permitted by law) owed
        to such Lender, (ii) refunded to the payor thereof, or (iii) any combination of the foregoing; (d) the interest provided for shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable law (the “Maximum
          Rate”), and this Agreement and the other Loan Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction; and (e) the Borrower shall have no action against the Collateral Agent or any Lender for any
        damages arising due to any Excess Interest.  If for any period of time interest on any Obligations is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the
        Maximum Rate, the rate of interest payable on such Obligations owed to any Lender shall remain at the Maximum Rate until such Lender shall have received the amount of interest which such Lender would have received during such period on such
        Obligations had the rate of interest not been limited to the Maximum Rate during such period.  All sums paid or agreed to be paid hereunder or under the other Loan Documents for the use, forbearance or detention of sums due shall, to the extent
        permitted by applicable law, be amortized, pro‐rated, allocated and spread throughout the full term of the Obligations until payment in full so that the rate or amounts of interest on account of the Obligations does not exceed the Maximum Rate. 
        The terms of this Section 20 shall be deemed incorporated into each other Loan Document, whether or not specific reference to this Section 20 is made.

       

      21.        Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the Obligations evidenced by this Agreement and the other Loan
        Documents, the Liens and security interests granted to the Collateral Agent pursuant to the terms hereof and thereof and the exercise of any right or remedy by the Collateral Agent or any Lender hereunder or thereunder are subject to the provisions
        of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and any other Loan Document, the terms of the Intercreditor Agreement shall govern. Notwithstanding anything that may be contained herein
        to the contrary, all of the provisions of the Loan Documents, including without limitation, the covenants of the Loan Parties and Parent contained herein and therein and all of the rights, remedies and powers for herein and therein, are subject to
        the provisions of the Intercreditor Agreement.

       

      

      
        

        19

        
          

        

      

      22.         Collateral Agent.

       

      (a)         Each of the Lenders hereby irrevocably appoints the Collateral Agent as its agent and authorizes the Collateral Agent to take such actions on its behalf, including execution of the
        other Loan Documents, and to exercise such powers as are delegated to the Collateral Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. Without limiting the generality of the
        foregoing, Collateral Agent shall have the sole and exclusive authority to (a) [reserved]; (b) execute and deliver as Collateral Agent, each Loan Document, including any intercreditor or subordination agreement, and accept delivery of each Loan
        Document; (c) act as collateral agent for Lenders for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein and execute or file any and all financing or similar statements or notices,
        amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents; (e) manage, supervise or otherwise deal with Collateral; (f) exclusively receive, apply, and
        distribute payments and proceeds of the Collateral as provided in the Loan Documents, (g) open and maintain such bank accounts and cash management arrangements as Collateral Agent deems necessary and appropriate in accordance with the Loan
        Documents, (h) take any enforcement action or otherwise exercise any rights or remedies with respect to any Collateral or under any Loan Documents, applicable law or otherwise, and (i) incur and pay such expenses as Collateral Agent may deem
        necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents, whether or not any Loan Party is obligated to reimburse Collateral Agent or Lenders for such expenses pursuant to the Loan
        Documents or otherwise.  The provisions of this Section 22 are solely for the benefit of Collateral Agent and the Lenders, and the Loan Parties and the Parent shall not have rights as a third-party beneficiary of any of such provisions. It is
        understood and agreed that the use of the term “agent” as used herein or in any other Loan Documents (or any similar term) with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations
        arising under agency doctrine of any applicable law.  Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

       

      (b)       The Lenders irrevocably authorize Collateral Agent, at its option and in its discretion, (a) to release any Lien granted to or held by Collateral Agent under any Loan Document (i) as
        required pursuant to the Intercreditor Agreement, (ii) upon payment in full of all Loans and all other Obligations (other than contingent obligations for which no claims have been made); (ii) constituting property sold or to be sold or disposed of
        as part of or in connection with any disposition permitted hereunder (including the release of any guarantor); or (iii) subject to Section 17 above, if approved, authorized or ratified in writing by the Required Lenders; or (b) to subordinate its
        interest in any Collateral to any holder of a Lien on such Collateral which is permitted by clause (a) or (b) of the definition of “Permitted Liens” (it being understood that the Collateral Agent may conclusively rely on a certificate from Borrower
        in determining whether the Indebtedness secured by any such Lien is permitted hereunder). Upon request by Collateral Agent at any time, the Lenders will confirm in writing Agent’s authority to release, or subordinate its interest in, particular
        types or items of Collateral pursuant to this Section 22(b). Collateral Agent may, and at the direction of Required Lenders shall, subject to the Intercreditor Agreement, give blockage notices in connection with the Intercompany Subordinated Debt
        and each Lender hereby authorizes the Collateral Agent to give such notices. Each Lender further agrees that it will not act unilaterally to deliver such notices.

       

      (c)        Sections 14.3 (Duties and Obligations), 14.4 (Reliance), 14.5 (Sub-Agents), 14.6 (Resignation), 14.7(a) (Non-Reliance), 14.8 (Not Partners or Co-Venturers; Collateral Agent as
        Representative of the Secured Parties) (other than the last sentence of Section 14.8(a)); 14.9 (Credit Bidding), 14.11 (Restrictions on Actions by Lenders), 14.12 (Expenses); 14.13 (Notice of Default or Event of Default), and 14.14 (Liability of
        Agent) of the Senior Secured Credit Agreement are hereby incorporated into this Agreement, mutatis mutandis, as a part hereof for all purposes (for the avoidance of doubt, with references to “Agent” in such
        provisions (and defined terms used in such provisions) being deemed for all purposes hereof to refer to Collateral Agent).

       

      
        

        20

        
          

        

      

      [Signatures on following page]

       

      
        

        21

        
          

        

      

      IN WITNESS WHEREOF, the undersigned have signed this Agreement as of the date first set forth above.

      

      

      	 	
              BORROWER:

            
	 	 	 
	 	
              ETAILZ INC.

            
	 	 	 
	 	
              By:

            	
              /s/ Kunal Chopra

            
	 	
              

              

            	
              
                Name: Kunal Chopra

              

            
	 	
              

              

            	
              
                Title: Chief Executive Officer

              

            
	 	 	 
	 	
              PARENT:

            
	 	 	 
	 	
              TRANS WORLD ENTERTAINMENT

              CORPORATION

            
	 	 	 
	 	
              By:

            	
              /s/ Edwin Sapienza

            
	 	
              

              

            	
              
                Name: Edwin Sapienza

              

            
	 	
              

              

            	
              
                Title: Chief Financial Officer

              

            

      

      

      
        [Signature Page to Subordinated Loan and Security Agreement]

         

        

      

      
        

        
          

        

      

      	 	
              COLLATERAL AGENT:

            
	 	  
	 	
              TWEC LOAN COLLATERAL AGENT, LLC

            
	 	  
	 	
              By:

            	
              ALIMCO RE LTD.

            
	 	
              Its: Member

            
	 	  
	 	
              By:

            	
              /s/ Jonathan Marcus

            
	 	
              Name: Jonathan Marcus

            
	 	
              Title: CEO

            
	 	  
	 	
              By:

            	
              RJHDC, LLC

            
	 	
              Its:

            	
              Member

            
	 	  
	 	
              By:

            	
              /s/ Anne Higgins

            
	 	
              

              

            	
              
                Name: Anne Higgins

              

            
	 	
              

              

            	
              
                Title: Sole Member / Manager

              

            

      

      

      
        [Signature Page to Subordinated Loan and Security Agreement]

         

        

      

      
        

        
          

        

      

      	 	
              LENDERS:

              
                ALIMCO RE LTD.

              

            
	 	
              

              

            
	 	
              By:

            	
              /s/ Jonathan Marcus

            
	 	 	
              Name: Jonathan Marcus

            
	 	 	
              Title: CEO

            

      

      

      
        [Signature Page to Subordinated Loan and Security Agreement]

         

        

      

      
        

        
          

        

      

      	 	
              RJHDC, LLC

            
	 	 	  
	 	
              By:

            	
              /s/ Anne Higgins

            
	 	 	
              Name: Anne Higgins

            
	 	 	
              Title: Sole Member / Manager

            

      

      

      
        
          [Signature Page to Subordinated Loan and Security Agreement]

        

         

        

      

      
        

        
          

        

      

      	 	
              KICK-START III, LLC

            
	 	 
	 	
              By:

            	
              /s/ Thomas C. Simpson

            
	 	 	
              Name:

            	
              Thomas C. Simpson

            
	 	 	
              Title:

            	
              Managing Member

            
	 	   
	 	
              KICK-START IV, LLC

            
	 	 
	 	
              By:

            	
              /s/ Thomas C. Simpson

            
	 	 	
              Name:

            	
              Thomas C. Simpson

            
	 	 	
              Title:

            	
              Managing Member

            

      

      

      
        
          
            [Signature Page to Subordinated Loan and Security Agreement]

          

        

         

        

      

      
        

        
          

        

      

      Schedule 2.1

      

      

      Lender Commitments

      

      

      
        	
                Lender

              	
                Commitment

              
	
                Alimco Re Ltd.

              	
                $2,718,000

              
	
                RJHDC, LLC

              	
                $2,006,800

              
	
                Kick-Start III, LLC

              	
                $300,000

              
	
                Kick-Start IV, LLC

              	
                $200,000

              

      

      

      

      
        [Schedule 2.1 to Subordinated Loan Agreement]

         

        

      

      
        

        
          

        

      

      Schedule 8.4

      

      

      Post-Closing Items

      

      

      
        
          	

                	1.	
                  Parent shall no later than 120 days after the Closing Date (or such later date as the Collateral Agent may agree in writing in its sole discretion), with respect to each Deposit Account (other than Restricted Accounts) that is not
                    subject to a control agreement in favor of the Collateral Agent as of the Closing Date, (i) enter into a control agreement in favor of the Collateral Agent, which control agreement is in form and substance reasonably acceptable to the
                    Collateral Agent, or (ii) close such Deposit Account.

                

        

      

      

      

      
        
          	

                	2.	
                  Borrower shall no later than 30 days after the Closing Date (or such later date as the Collateral Agent may agree in writing in its sole discretion), with respect to each Deposit Account that is not subject to
                    a control agreement in favor of the Collateral Agent, enter into a control agreement in form and substance reasonably acceptable to the Collateral Agent.

                

        

      

      

      

      
        
          	

                	3.	
                  Parent shall hold its next shareholder meeting no later than 60 days after the Closing Date (or such later date as the Collateral Agent may agree in writing in its sole discretion) and at such shareholder meeting shall submit to the
                    shareholders for approval (i) an amendment to the Certificate of Incorporation of the Parent providing for the reconstitution of the board of directors of the Parent in a manner consistent with the Voting Agreement, and (ii) a slate of
                    directors consistent with the terms of the Voting Agreement.

                

        

      

      

      

      
        
          	

                	4.	
                  Borrower shall deliver to Collateral Agent no later than 30 days after the Closing Date (or such later date as the Collateral Agent may agree in writing in its sole discretion) all applicable insurance certificates and endorsements
                    required under Section 7.14(a) of the Senior Secured Credit Agreement, as incorporated herein, mutatis mutandis pursuant to Section 8.1 hereof.

                

        

      

      

      

      
        
          	

                	5.	
                  Borrower shall deliver to Collateral Agent no later than 45 days after the Closing Date (or such later date as the Collateral Agent may agree in writing in its sole discretion) (i) a duly executed consent and waiver agreement in
                    connection with the lease between Borrower and Park SPE, LLC, and (ii) a duly executed landlord’s waiver and agreement in connection with the lease between Borrower and S&L Sullivan LLC.

                

        

      

      

      

      
        [Schedule 8.4 to Subordinated Loan Agreement]

         

        

      

      
        

        
          

        

      

      Schedule 8.6

      

      

      Warrants and Options

      

      

      
        
          	

                	1.	
                  Common Stock Purchase Warrants, issued on the Closing Date by Parent to each of the Lenders

                

        

      

      
        

        

        
          	
                  Trans World Entertainment Corporation - Award Summary Report

                	 	
                   

                	  
	
                  Employee

                  First Name

                	
                  Employee

                  Last Name

                	
                  Award Type

                	
                  Grant Date

                	
                   Expiration Date

                	 	
                  Grant

                  Price

                	 	 	
                  Outstanding

                	 	
                   Adjusted Releasable

                	 
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  01-Mar-2011

                	
                  26-Feb-2021

                	 	
                  $

                	
                  34.60

                	 	 	 	
                  1,000.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  07-May-2012

                	
                  05-May-2022

                	 	
                  $

                	
                  50.60

                	 	 	 	
                  1,000.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  21-Jun-2013

                	
                  19-Jun-2023

                	 	
                  $

                	
                  97.40

                	 	 	 	
                  1,000.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  03-Jun-2014

                	
                  31-May-2024

                	 	
                  $

                	
                  67.20

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  01-Apr-2015

                	
                  29-Mar-2025

                	 	
                  $

                	
                  74.40

                	 	 	 	
                  5,000.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  04-May-2026

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  6,750.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  19-May-2017

                	
                  17-May-2027

                	 	
                  $

                	
                  37.00

                	 	 	 	
                  6,000.00

                	 	
                   

                	  
	
                  John

                	
                  Anderson

                	
                  Options (NQ)

                	
                  27-Jun-2018

                	
                  24-Jun-2028

                	 	
                  $

                	
                  19.60

                	 	 	 	
                  6,000.00

                	 	
                   

                	  
	
                  Mitch

                	
                  Bailey

                	
                  Options (NQ)

                	
                  17-Oct-2016

                	
                  15-Oct-2026

                	 	
                  $

                	
                  75.00

                	 	 	 	
                  1,500.00

                	 	
                   

                	  
	
                  Mitch

                	
                  Bailey

                	
                  Options (NQ)

                	
                  17-Jan-2018

                	
                  15-Jan-2028

                	 	
                  $

                	
                  36.60

                	 	 	 	
                  1,500.00

                	 	
                   

                	  
	
                  Song

                	
                  Daniel

                	
                  Options (NQ)

                	
                  24-Jul-2017

                	
                  22-Jul-2027

                	 	
                  $

                	
                  36.00

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Jeffrey

                	
                  Davis

                	
                  Options (NQ)

                	
                  07-May-2012

                	
                  05-May-2022

                	 	
                  $

                	
                  50.60

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Jeffrey

                	
                  Davis

                	
                  Options (NQ)

                	
                  21-Jun-2013

                	
                  19-Jun-2023

                	 	
                  $

                	
                  97.40

                	 	 	 	
                  500.00

                	 	
                   

                	  
	
                  Jeffrey

                	
                  Davis

                	
                  Options (NQ)

                	
                  03-Jun-2014

                	
                  31-May-2024

                	 	
                  $

                	
                  67.20

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                  Jeffrey

                	
                  Davis

                	
                  Options (NQ)

                	
                  15-May-2015

                	
                  12-May-2025

                	 	
                  $

                	
                  77.60

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                  Jeffrey

                	
                  Davis

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  04-May-2026

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                  Michael

                	
                  Feurer

                	
                  Options (NQ)

                	
                  13-Oct-2014

                	
                  10-Oct-2024

                	 	
                  $

                	
                  70.00

                	 	 	 	
                  15,000.00

                	 	
                   

                	  
	
                  Michael

                	
                  Feurer

                	
                  Options (NQ)

                	
                  14-Apr-2016

                	
                  12-Apr-2026

                	 	
                  $

                	
                  77.00

                	 	 	 	
                  7,858.20

                	 	
                   

                	  
	
                  Michael

                	
                  Feurer

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  04-May-2026

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  5,000.00

                	 	
                   

                	  
	
                  Michael

                	
                  Feurer

                	
                  Options (NQ)

                	
                  19-May-2017

                	
                  17-May-2027

                	 	
                  $

                	
                  37.00

                	 	 	 	
                  7,500.00

                	 	
                   

                	  
	
                  Michael

                	
                  Feurer

                	
                  Options (NQ)

                	
                  27-Jun-2018

                	
                  24-Jun-2028

                	 	
                  $

                	
                  19.60

                	 	 	 	
                  7,500.00

                	 	
                   

                	  
	
                  Hastings

                	
                  Jeff

                	
                  Options (NQ)

                	
                  08-Aug-2019

                	
                  05-Aug-2029

                	 	
                  $

                	
                  5.40

                	 	 	 	
                  750.00

                	 	
                   

                	  
	
                  Chopra

                	
                  Kunal

                	
                  Options (NQ)

                	
                  03-Sep-2019

                	
                  31-Aug-2029

                	 	
                  $

                	
                  3.51

                	 	 	 	
                  5,000.00

                	 	
                   

                	  
	
                  Robert

                	
                  Marks

                	
                  Options (NQ)

                	
                  12-Jul-2012

                	
                  10-Jul-2022

                	 	
                  $

                	
                  60.00

                	 	 	 	
                  750.00

                	 	
                   

                	  
	
                  Michael

                	
                  Nahl

                	
                  Options (NQ)

                	
                  17-Feb-2011

                	
                  14-Feb-2021

                	 	
                  $

                	
                  35.80

                	 	 	 	
                  750.00

                	 	
                   

                	  
	
                  Michael

                	
                  Reickert

                	
                  Options (NQ)

                	
                  06-Jul-2016

                	
                  04-Jul-2026

                	 	
                  $

                	
                  73.40

                	 	 	 	
                  750.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  01-Mar-2011

                	
                  26-Feb-2021

                	 	
                  $

                	
                  34.60

                	 	 	 	
                  400.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  07-May-2012

                	
                  05-May-2022

                	 	
                  $

                	
                  50.60

                	 	 	 	
                  500.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  21-Jun-2013

                	
                  19-Jun-2023

                	 	
                  $

                	
                  97.40

                	 	 	 	
                  500.00

                	 	
                   

                	  

          

          

        

        
           

        

        
          [Schedule 8.6 to Subordinated Loan Agreement]

           

          

        

        
          

          
            

          

        

        
          	
                  Trans World Entertainment Corporation - Award Summary Report

                	 	 
	
                  Employee

                  First Name

                	
                  Employee

                  Last Name

                	
                  Award Type

                	
                  Grant Date

                	
                  Expiration Date

                	 	 	
                  Grant

                  Price

                	 	 	 	
                  Outstanding 

                  

                	 	
                   Adjusted Releasable

                	 
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  03-Jun-2014

                	
                  31-May-2024

                	 	
                  $

                	
                  67.20

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  15-May-2015

                	
                  12-May-2025

                	 	
                  $

                	
                  77.60

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  04-May-2026

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  19-May-2017

                	
                  17-May-2027

                	 	
                  $

                	
                  37.00

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  27-Jun-2018

                	
                  24-Jun-2028

                	 	
                  $

                	
                  19.60

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Edwin

                	
                  Sapienza

                	
                  Options (NQ)

                	
                  23-Oct-2018

                	
                  20-Oct-2028

                	 	
                  $

                	
                  20.80

                	 	 	 	
                  2,500.00

                	 	
                   

                	  
	
                  John

                	
                  Choe

                	
                  Options (NQ)

                	
                  17-Oct-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  75.00

                	 	 	 	
                  63.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  06-May-2010

                	
                  5/20/2020

                	 	
                  $

                	
                  42.20

                	 	 	 	
                  5,000.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  06-May-2010

                	
                  5/20/2020

                	 	
                  $

                	
                  42.20

                	 	 	 	
                  5,000.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  21-Jun-2013

                	
                  5/20/2020

                	 	
                  $

                	
                  97.40

                	 	 	 	
                  2,500.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  03-Jun-2014

                	
                  5/20/2020

                	 	
                  $

                	
                  67.20

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  15-May-2015

                	
                  5/20/2020

                	 	
                  $

                	
                  77.60

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  19-May-2017

                	
                  5/20/2020

                	 	
                  $

                	
                  37.00

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  Bruce

                	
                  Eisenberg

                	
                  Options (NQ)

                	
                  27-Jun-2018

                	
                  5/20/2020

                	 	
                  $

                	
                  19.60

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  01-Mar-2011

                	
                  5/20/2020

                	 	
                  $

                	
                  34.60

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  07-May-2012

                	
                  5/20/2020

                	 	
                  $

                	
                  50.60

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  21-Jun-2013

                	
                  5/20/2020

                	 	
                  $

                	
                  97.40

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  03-Jun-2014

                	
                  5/20/2020

                	 	
                  $

                	
                  67.20

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  01-Apr-2015

                	
                  5/20/2020

                	 	
                  $

                	
                  74.40

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  19-May-2017

                	
                  5/20/2020

                	 	
                  $

                	
                  37.00

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Jodie

                	
                  Evans

                	
                  Options (NQ)

                	
                  27-Jun-2018

                	
                  5/20/2020

                	 	
                  $

                	
                  19.60

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Richard

                	
                  Flaherty

                	
                  Options (NQ)

                	
                  06-Jun-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  78.00

                	 	 	 	
                  750.00

                	 	
                   

                	  
	
                  James

                	
                  Frering

                	
                  Options (NQ)

                	
                  28-Jun-2012

                	
                  5/20/2020

                	 	
                  $

                	
                  60.60

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  James

                	
                  Frering

                	
                  Options (NQ)

                	
                  03-Jun-2014

                	
                  5/20/2020

                	 	
                  $

                	
                  67.20

                	 	 	 	
                  500.00

                	 	
                   

                	  
	
                  James

                	
                  Frering

                	
                  Options (NQ)

                	
                  15-May-2015

                	
                  5/20/2020

                	 	
                  $

                	
                  77.60

                	 	 	 	
                  750.00

                	 	
                   

                	  
	
                  James

                	
                  Frering

                	
                  Options (NQ)

                	
                  06-May-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  76.20

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  James

                	
                  Frering

                	
                  Options (NQ)

                	
                  19-May-2017

                	
                  5/20/2020

                	 	
                  $

                	
                  37.00

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  James

                	
                  Frering

                	
                  Options (NQ)

                	
                  27-Jun-2018

                	
                  5/20/2020

                	 	
                  $

                	
                  19.60

                	 	 	 	
                  1,750.00

                	 	
                   

                	  
	
                  Timothy

                	
                  Lopes

                	
                  Options (NQ)

                	
                  15-Feb-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  72.80

                	 	 	 	
                  250.00

                	 	
                   

                	  
	
                  Ordeshook

                	
                  Michael

                	
                  Options (NQ)

                	
                  05-Jun-2017

                	
                  5/20/2020

                	 	
                  $

                	
                  32.00

                	 	 	 	
                  1,250.00

                	 	
                   

                	  
	
                  Jesse

                	
                  Wilner

                	
                  Options (NQ)

                	
                  16-Feb-2016

                	
                  5/20/2020

                	 	
                  $

                	
                  72.60

                	 	 	 	
                  375.00

                	 	
                   

                	  
	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                	 	 	 	 	 	 	
                  129,196.20

                	 	
                   

                	  
	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                	 	 	 	 	 	 	 	 	
                   

                	         

          

          

          
            [Schedule 8.6 to Subordinated Loan Agreement]

             

            

          

          
            

            
              

            

          

          	
                  Trans World Entertainment Corporation - Award Summary Report

                	 	 
	
                  Employee

                  First Name

                	
                  Employee

                  Last Name

                	
                  Award Type

                	
                  Grant Date

                	
                  Expiration Date

                	 	 	
                  Grant

                  Price

                	 	 	 	
                  Outstanding

                   

                	 	 Adjusted Releasable	 
	
                  Robert

                	
                  Marks

                	
                  Restricted Stock Award

                	
                  27-May-2014

                	
                   

                	 	 	 	 	 	 	 	 	
                        1,250.00

                	
                  To be issued upon separation from the board

                
	
                  Michael

                	
                  Solow

                	
                  Restricted Stock Award

                	
                  01-Jun-2004

                	
                   

                	 	 	 	 	 	 	 	 	
                            483.00

                	
                  To be issued upon separation from the board

                
	
                  Michael

                	
                  Solow

                	
                  Restricted Stock Award

                	
                  26-Dec-2012

                	
                   

                	 	 	 	 	 	 	 	 	
                               65.00

                	
                  To be issued upon separation from the board

                
	
                  Michael

                	
                  Solow

                	
                  Restricted Stock Award

                	
                  02-Apr-2014

                	
                   

                	 	 	 	 	 	 	 	 	
                               74.00

                	
                  To be issued upon separation from the board

                
	
                  Robert

                	
                  Marks

                	
                  Share Units (RSU)

                	
                  02-May-2016

                	
                   

                	 	 	 	 	 	 	 	 	
                             531.00

                	
                  To be issued upon separation from the board

                
	
                  Robert

                	
                  Marks

                	
                  Share Units (RSU)

                	
                  01-May-2018

                	
                   

                	 	 	 	 	 	 	 	 	
                          3,200.00

                	
                  To be issued upon separation from the board

                
	
                  Michael

                	
                  Nahl

                	
                  Share Units (RSU)

                	
                  02-May-2016

                	
                   

                	 	 	 	 	 	 	 	 	
                               83.00

                	
                  To be issued upon separation from the board

                
	
                  Michael

                	
                  Nahl

                	
                  Share Units (RSU)

                	
                  01-May-2018

                	
                   

                	 	 	 	 	 	 	 	 	
                               75.00

                	
                  To be issued upon separation from the board

                
	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                	 	 	 	 	 	 	 	 	
                              5,761.00

                	 

           

          

          
            [Schedule 8.6 to Subordinated Loan Agreement]

             

            

          

        

      

      
        

        
          

        

      

       

      Exhibit A

      

      

      Perfection Certificate

      

      

      [See attached]

      

      

      
        [Exhibit A to Subordinated Loan Agreement]

      

      

      

      
        

        
          

        

      

      Exhibit B

      

      

      Closing Checklist

      

      

      [See attached]

      

      

      
        [Exhibit B to Subordinated Loan Agreement]Exhibit 10.3
      

      

      Execution Version

       

      

    

    
      CONTINGENT VALUE RIGHTS AGREEMENT

       

      THIS CONTINGENT VALUE RIGHTS AGREEMENT (this “Agreement”), dated as of March 30, 2020 (the “Effective Date”), is entered into by and among TRANS
          WORLD ENTERTAINMENT CORPORATION, a New York corporation (the “Parent”), ALIMCO RE LTD., a Bermuda limited corporation (“Alimco”), KICK-START III, LLC, a Washington limited liability company (“Kick-Start III”), KICK-START IV, LLC, a Washington limited liability company (“Kick-Start IV”),
        and RJHDC, LLC, a New York corporation, (“RJHDC”, and together with Alimco, Kick-Start III and Kick-Start IV, collectively, the “Holders”). Parent and Holders are sometimes referred to herein collectively as the “Parties.”

       

      RECITALS

       

      WHEREAS, Holders have made a $5,224,800 loan (the “Etailz Loan”) to Etailz, Inc. (“Borrower”), a wholly-owned subsidiary of Parent;

       

      WHEREAS, Borrower has executed a promissory note (the “Intercompany Note”), dated February 20, 2020, in favor of Parent in an original principal amount of $13,956,001.82;
        and

       

      WHEREAS, in consideration for value received in connection with Etailz Loan, Parent desires to grant to Holders certain contingent value rights, as hereinafter
        described (collectively, the “CVRs”).

       

      NOW, THEREFORE, for and in consideration of the premises and the consummation of the transactions referred to above, it is mutually covenanted and agreed as follows:

       

      AGREEMENT

       

      1.            Definitions.

      

      

      (a)          “Business Day” means a day other than a Saturday or Sunday or any other day on which banks in New York are authorized to close.

       

      (b)          “CVR Payment Amounts” means the
          amounts payable to Holders pursuant to Section 4(a) of this Agreement.

       

      (c)         “Disposal” means the sale, transfer,
          grant of an option or other interest in, or other disposal of, all or substantially all of the business or assets of Borrower, whether by one transaction or a series of related transactions or arrangements; provided, however, that any transaction or series of related transactions or arrangements in which the stockholders of Borrower
          immediately prior to the transaction own 50.1% or more of the voting stock of the acquiring corporation or parent of the acquiring corporation following such transaction (taking into account only stock of Borrower held by such stockholders prior
          to the transaction) shall not be considered a Disposal.

       

      (d)          “Dispute Notice” shall have the
          meaning given in Section 6(a) of this Agreement.

       

      (e)          “Dividend” means a dividend, capital
          distribution or other distribution made by Borrower to Parent, whether in cash, property, or securities of Borrower and whether by liquidating distribution or otherwise; provided that none of the following shall be a Dividend: (a) any redemption or repurchase by Borrower of shares of Borrower; (b) any recapitalization or exchange of securities of Borrower; (c) any subdivision (by a split of shares
          or otherwise) or any combination (by a reverse split of shares or otherwise) of any outstanding shares or (d) any dividend or other distribution by Borrower to Parent permitted under Section 8(a)(xi)(2) of that certain Loan and Security Agreement
          entered into on February 20, 2020 by and among the Borrower, the Loan Party Obligors and Other Obligors (each as defined therein) party thereto from time to time, the lenders party thereto from time to time, and Encina Business Credit, LLC, as
          agent, as in effect on the date hereof (and regardless of whether such agreement is then in effect as of any date of determination).

       

      
        

        
          

        

      

      
      (f)           “Event” means any (i) Note Payment
          or (ii) receipt by Parent of Proceeds in respect of its shares of Borrower in connection with any Disposal, Dividend, Sale or Winding-Up; provided that “Event”
          shall not include the Note Payment made with the proceeds of the Etailz Loan on the Effective Date.

       

      (g)          “Note Payment” means the receipt by
          Parent of Proceeds of a payment by, or on behalf of, Borrower on the Intercompany Note; provided that “Note Payment” shall not include the receipt by Parent of
          Proceeds of a payment by, or on behalf of, Borrower on the Intercompany Note made with the proceeds of the Etailz Loan on the Effective Date.

       

      (h)          “Notice” shall have the meaning
          given in Section 5 of this Agreement.

       

      (i)          “Proceeds” means, with respect to
          any Event, the sum equal to the difference between (x) the total proceeds received and to be received,  by Parent after the Effective Date in connection with such Event consisting solely of  (i) cash actually received by Parent as a result of
          such Event; (ii) notes, debt or other obligations issued to Parent in connection with such Event and payable in installments or otherwise deferred (“Deferred Obligations”), including amounts held in escrow, but excluding, for purposes of this definition of Deferred Obligations, Earn-Out Payments as defined below; (iii) equity securities and other non-cash property; and (iv) contingent payments related
          to future earnings or operations (“Earn-Out Payments”)) (but excluding, for the avoidance of doubt, the amount of any decrease, repayment or extinguishment of, or
          assumption by an acquiring party in an acquisition of assets or equity of, any indebtedness of Parent or its affiliates (including, without limitation, the Borrower)), minus (y) the aggregate amount of all fees, costs, expenses, liabilities, obligations and other amounts (including, without limitation, investment banking fees, advisory or consultant fees, accountant’s or attorney’s fees, transfer or
          similar taxes or other taxes imposed by any jurisdiction, reimbursement of expenses and indemnity payments) incurred or payable (or estimated in good faith to be incurred or payable) by Parent or its subsidiaries in connection with such Event (“Event Expenses”); provided that, with respect to all non-cash proceeds (including, without
          limitation, Deferred Obligations, Earn-Out Payments, amounts held in escrow and other contingent payments) received or to be received by Parent in connection with an Event, such non-cash proceeds (or any portion thereof, as determined by the
          board of directors of Parent in its sole discretion) will either, as determined by the board of directors of Parent in its sole discretion, be (i) valued in good faith by the board of directors of Parent (and the value so determined will be
          treated as Proceeds as of the date such non-cash proceeds were received by Parent) or (ii) excluded from Proceeds until converted into or exchanged for or disposed of by Parent for cash, or otherwise actually paid to Parent in cash.

       

      (j)          “Required Holders” means, at any
          time, Holders then holding CVRs representing more than two-thirds of the aggregate Contingent Payment Amounts payable pursuant to Section 4(a).  By way of example
          only, a Holder holding a CVR entitling such Holder to receive 14 percent (14%) of the Proceeds received by Parent from an Event shall constitute the Required Holders.

       

      
        

        2

        
          

        

      

      (k)        “Sale” means any transaction or
          series of related transactions or arrangements pursuant to which any person(s), firm(s) or company(ies), whether acting alone or together (the “Acquiror"), acquires
          (whether by purchase, transfer, renunciation, subscription, option or otherwise) an interest, whether direct or indirect, in any shares in the capital of Borrower; provided, however, that the following shall not be considered a Sale: (i) a bona fide equity financing in which Borrower is the
          surviving corporation and not more than 50% of the stock of Borrower is issued to unrelated third parties in such transaction, or (ii) a transaction or series of related transactions or arrangements in which the stockholders of Borrower
          immediately prior to the transaction own 50.1% or more of the voting stock of the surviving corporation or parent of the surviving corporation following the transaction (taking into account only stock of Borrower held by such stockholders prior
          to the transaction).

       

      (l)           “Transaction Documents” shall have
          the meaning given in Section 5 of this Agreement.

       

      (m)       “Winding-Up” means the making of an
          order or the passing of a resolution for the winding-up of Borrower for any purpose whatsoever; provided, however, that any recapitalization or other transaction or series of related transactions or arrangements in which the stockholders of Borrower immediately prior to the transaction own 50.1% or more of the voting stock of the
          surviving corporation or parent of the surviving corporation following such transaction (taking into account only stock of Borrower held by such stockholders prior to the transaction) shall not be considered a Winding-Up.

       

      2.           Grant of CVRs. Parent hereby grants to Holders the CVRs described herein, which represent the rights of such
        Holders to receive contingent payments, if any, pursuant to Section 4 of this Agreement. 

       

      3.            No Certificate.  The CVRs shall not be evidenced by certificates or other instruments.

       

      4.            Payment Events; Termination.

       

      (a)          Payment Events.  If an Event shall occur prior to the date that is ten
          (10) years after the Effective Date (the “CVR Termination Date”), then on the date that is thirty (30) days following the date of such Event (or such longer period
          as may be agreed in writing between Parent and the Required Holders) (i) Alimco shall be entitled to receive, and Parent shall be obligated to pay, ten and 35/100 percent (10.35%) of the Proceeds received by Parent from such Event, (ii)
          Kick-Start III shall be entitled to receive, and Parent shall be obligated to pay, one and 14/100 percent (1.14%) of the Proceeds received by Parent from such Event, (iii) Kick-Start IV shall be entitled to receive, and Parent shall be obligated
          to pay, zero and 76/100 percent (0.76%) of the Proceeds received by Parent from such Event, and (iv) RJHDC shall be entitled to receive, and Parent shall be obligated to pay, seven and 64/100 percent (7.64%) of the Proceeds received by Parent
          from such Event, in each case payable in accordance with the terms of this Agreement; provided that the right to such payments shall be reduced, as needed from time
          to time, if and to the extent that Parent determines in its sole discretion that such right to payments would result in an “ownership change” of Parent within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended.  For the
          avoidance of doubt, the aggregate CVR Payment Amounts payable pursuant to this Agreement shall not in any event exceed 19.9% of the of the Proceeds received by Parent from Events.

       

      (b)          Termination.  Notwithstanding anything to the contrary herein, the CVRs
          and the rights of Holders to CVR Payment Amounts shall terminate, be extinguished and have no further force and effect, and this Agreement shall terminate and be of no further force or effect, and the Parties shall have no liability hereunder,
          upon the earlier to occur of (i) a Disposal, Sale or Winding-Up and the payment of the CVR Payment Amounts, if any, in connection therewith in accordance with Section 4(a) and (ii) the CVR Termination Date.

       

      
        

        3

        
          

        

      

      5.           Notice.  Parent shall, within five (5) Business Days following the occurrence of an Event
          (or, in the case of an Event in the form of a Dividend, within five (5) Business Days following the declaration of the Dividend), deliver a notice to Holders (the “Notice”), together with (subject to receipt by Parent of any requested customary confidentiality agreements in form and substance reasonably satisfactory to the Required Holders) a copy of each material written agreement entered into between
          Parent and its counterparty or counterparties that sets out the terms and conditions of such Event or, in the case of an Event in the form of a Dividend, the applicable corporate resolutions of Borrower (the “Transaction

            Documents”). The Notice shall specify, in reasonable detail, Parent’s calculations of (i) the Proceeds, including the amount and calculation of Event Expenses, and (ii) the CVR Payment Amounts.

       

      6.           Valuation Dispute.

       

      (a)         Within ten (10) Business Days following Holders’ receipt from Parent of the Notice and the Transaction Documents, the
          Required Holders may, in the event they have a good faith dispute with any of Parent’s valuations or other amounts set forth in the Notice, provide written notice of, and the grounds for, such dispute to Parent, accompanied by the information
          setting forth the grounds for such dispute in reasonable detail (a “Dispute Notice”). In the event the Required Holders do not deliver such Dispute Notice during
          such ten (10) Business Day period, Parent’s valuations and amounts set forth in the Notice shall be considered final and binding on the Parties.

       

      (b)         In the event the Required Holders deliver a Dispute Notice, the Required Holders and Parent shall seek in good faith
          to resolve any dispute identified therein as promptly as practicable within thirty (30) calendar days following Parent’s receipt thereof. In the event the Required Holders and Parent resolve the dispute, the Notice, including such revisions as
          agreed by the Required Holders and Parent pursuant to this Section 6(b), shall be final and binding on the Parties.

       

      (c)          In the event the Required Holders deliver a Dispute Notice and the Required Holders and Parent are unable to reach an
          agreement within thirty calendar (30) days thereafter, any such dispute shall be settled by an independent third party experienced in valuation matters that is mutually acceptable to the Required Holders and Parent. The determination of such
          third party shall, absent manifest error, be binding on each Party and the fees and expenses of such third party shall be borne pro rata by Parent and the Holders based on the amount by which Parent’s and the Required Holders’ respective
          valuations are different from the valuation as determined by such third party.

       

      (d)        Notwithstanding anything to the contrary herein, in the event that any Dispute Notice is delivered in connection with
          a Disposal, Sale or Winding-Up, the Parties shall use their commercially reasonable efforts to agree and implement substitute dispute resolution procedures to the extent necessary or advisable to ensure that resolution of such dispute set forth
          in such Dispute Notice does not impede or delay the timely consummation of such Disposal, Sale or Winding-Up.

       

      7.            Satisfaction of CVR Payment Amounts.

       

      (a)          Within ten (10) Business Days after the date the CVR Payment Amounts are determined in accordance with Section 6(b) or (c), Parent shall transfer to each Holder (or arrange for the transfer to each Holder of) an
          amount equal to the applicable CVR Payment Amount payable to such Holder less any amounts withheld pursuant to Section 8 of this Agreement; provided, however, that any portion of any CVR Payment Amount consisting of
          non-cash Proceeds valued by the board of directors of Parent in accordance with clause (i) of the proviso in the definition of “Proceeds” shall be payable to
          Holders in the form such non-cash proceeds are paid to Parent.

       

      (b)          If an Event is to occur in connection with any Disposal or Sale, Parent shall use its commercially reasonable efforts to ensure that any
          Transaction Documents entered into in connection with such Disposal or Sale provide for the payment to Holders of the CVR Payment Amounts, if any, payable in connection with such Event and in accordance with the terms of this Agreement.  If,
          despite Parent’s efforts, such Transaction Documents do not provide for the payment to Holders of the CVR Payment Amounts, if any, payable in connection with such Event and in accordance with the terms of this Agreement, such CVR Payment Amounts,
          while held by Parent, shall be held in trust by Parent for the benefit of the Holders until paid to the Holders in accordance with the terms of this Agreement.

       

      
        

        4

        
          

        

      

      (c)          Notwithstanding anything else to the contrary herein, other than the distribution of non-cash proceeds in accordance with the terms
          hereof, Parent shall not be required to pay, and no amounts shall be considered, CVR Payment Amounts to the extent Parent does not actually receive such amounts in cash or if such amounts are not permitted to be paid pursuant to applicable law.

       

      
        
          	8.	
                  Withholding.

                

        

      

       

      (a)         Parent shall be entitled to deduct and withhold, or cause to be deducted or withheld from, each CVR Payment Amount
          otherwise payable pursuant to this Agreement such amounts as Parent is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated thereunder
          or any provision of state, local or foreign tax law.

       

      (b)         To the extent that amounts so withheld pursuant to Section 8(a) above are paid over to or deposited with the relevant governmental entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Holder in respect of which such deduction and
          withholding was made.

       

      9.            No Voting, Dividends or Interest; No Equity or Ownership Interest.

       

      (a)          The CVRs shall not have any voting or dividend rights, and interest shall not accrue on any amounts payable on the
          CVRs to Holders.

       

      (b)         The CVRs shall not represent any equity or ownership interest in Parent or any of its affiliates (including, without
          limitation, the Borrower). Nothing contained in this Agreement shall be construed as conferring upon any Holder, by virtue of the CVRs, any rights or
          obligations of any kind or nature whatsoever as a stockholder of Parent, the Borrower or any of their respective subsidiaries, as applicable, either at law or in equity. The rights of the Holders and the obligations of Parent and its affiliates and their respective officers, directors and controlling Persons are contract rights limited to those expressly set forth in this Agreement.

       

      10.          Ability to Abandon CVR.  Any Holder may at any time, at its option, abandon all of
        its remaining rights in a CVR by an instrument in writing transferring such CVR to Parent without consideration therefor. Nothing in this Agreement is intended to prohibit Parent from offering to acquire any CVR from any Holder for consideration in
        its sole discretion.

       

      
        
          	11.	
                  Miscellaneous.

                

        

      

       

      (a)        Successors and Assigns; Transferability.  The terms and conditions of this
          Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the Parties.  Nothing in this Agreement, express or implied, is intended to confer upon any person other than the Parties hereto or
          their respective permitted successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.  Without the prior written consent of Parent, neither the
          CVRs (or any interest therein) nor any of the other rights, duties or obligations of the Holders hereunder may be sold, assigned, pledged, encumbered, delegated, sublicensed or in any other manner transferred or disposed of, in whole or in part,
          other than through a Permitted Transfer.  For purposes of this Section 11(a), a “Permitted Transfer” means (i) a transfer made pursuant to a court order (including in connection with a bankruptcy or liquidation), and (ii) if the applicable Holder is a corporation, partnership or limited liability company, a distribution
          by the transferring corporation, partnership or limited liability company to its stockholders, partners or members, as applicable (provided that (A) such distribution does not subject the CVRs to a requirement of registration under the Securities
          Act of 1933 or the Securities Exchange Act of 1934, each as amended, and (B) in the case of a transferring corporation, Parent shall have reasonably determined after consultation with counsel that such distribution does not subject the CVRs to a
          requirement of registration under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended).

       

      
        

        5

        
          

        

      

      (b)          Governing Law; Arbitration.

       

      (i)          This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless
          of the laws that might otherwise govern under applicable principles of conflicts of law.

       

      (ii)         Prior to any arbitration pursuant to Section 11(b)(iii), Parent and the Holders shall negotiate in good faith for a period of thirty (30) calendar days to resolve any controversy or
          claim arising out of or relating to this Agreement or the breach hereof (other than any dispute with any of Parent’s valuations or other amounts set forth in the Notice, which shall be governed by the procedures set forth in Section 6 instead of this Section 11(b)).

       

      (iii)        After expiration of the 30-day period contemplated by Section 11(b)(ii), such controversy or claim, including any claims for breach of this Agreement, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on
          the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  Parent and the Required Holders may initiate an arbitration for any matter relating to this Agreement; provided that any dispute with any of Parent’s valuations or other amounts set forth in the Notice shall be governed by the procedures set forth in Section 6 instead of this Section 11(b).  The number of arbitrators shall be three (3). Within fifteen (15) calendar days after the commencement of arbitration,
          each of Parent and the Required Holders shall select one (1) person to act as arbitrator, and the two (2) selected shall select a third arbitrator within fifteen (15) calendar days of their appointment. If the arbitrators selected by Parent and
          the Required Holders are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association. The place of the arbitration shall be New York, New York. The arbitrators shall be lawyers
          or retired judges with experience in the industry of Parent and the Borrower and with mergers and acquisitions. Except as may be required by law, neither a Party nor an arbitrator may disclose the existence, content or results of any arbitration
          hereunder without the prior written consent of Parent and the Required Holders.  Parent shall pay all fees and expenses incurred in connection with any arbitration, including the costs and expenses billed by the arbitrators in connection with the
          performance of their duties described herein; provided, however, that if the
          arbitrator rules in favor of Parent, the arbitrator’s fees and expenses shall be offset against the CVR Payment Amounts, if any.

       

      (c)        Counterparts; Facsimile Execution.  This Agreement may be executed in any
          number of counterparts, each of which shall be deemed an original and enforceable against the Parties that execute such counterparts, and all of which together shall constitute one instrument. A facsimile, telecopy, PDF or other reproduction of
          this Agreement may be executed by one or more Parties hereto and delivered by such Party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such Party can be seen. Such execution and
          delivery shall be considered valid, binding and effective for all purposes. At the request of any Parties hereto, all Parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other
          reproduction hereof.

       

        

      
        

        6

        
          

        

      

      (d)        Titles and Headings.  The titles, captions and headings of this Agreement
          are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” will mean “sections” to this Agreement.

       

      (e)         Amendments and Waivers.  Any term of this Agreement may be amended,
          terminated or waived only with the written consent of Parent and the Required Holders. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. No
          waiver granted under this Agreement as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance
          specifically waived.

       

      (f)         Severability.  If any provision of this Agreement is determined by any
          court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the Parties hereto. If such clause or provision cannot be so
          enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this
          Agreement; provided that the Parties hereto shall use their good faith reasonable efforts to find and employ an alternative means to achieve the same or
          substantially the same economic or other result as that contemplated by such provision.

       

      (g)         Delays or Omissions.  No delay or omission to exercise any right, power
          or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a
          waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore
          or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this
          Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any Party, shall be cumulative and not alternative.

       

      (h)         Entire Agreement.  This Agreement constitutes the entire agreement and
          understanding of the Parties with respect to the subject matter of this Agreement, and supersedes any and all prior understandings and agreements, whether oral or written, between or among the Parties hereto with respect to the specific subject
          matter hereof.

       

      (i)          Notices.  Any notice or other communication to be given under this
          Agreement shall be in writing and may either be delivered by hand, made by facsimile transmission, sent by electronic mail transmission, disclosed in all material respects and filed on EDGAR pursuant to the Securities Exchange Act of 1934, sent
          by overnight courier, or sent by registered mail, return receipt requested, postage prepaid, as follows: (a) if to any Holder, at such Holder’s address, facsimile number or electronic mail address set forth on the signature page hereof, or at
          such other address as such Holder shall have furnished to the other Parties in writing; and (b) if to Parent, at Parent’s address, facsimile number or electronic mail address set forth on the signature page hereof, or at such other address as
          Parent shall have furnished to the Holders in writing.

       

      
        

        7

        
          

        

      

      (j)          Further Assurances.  At any time or from time to time after the date
          hereof, the Parties agree to cooperate with each other, and at the request of any other Party, to execute and deliver any further instruments or documents and to take all such further action as the other Party may reasonably request in order to
          evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the Parties hereunder.

       

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

       

      

      
        

        8

        
          

        

      

      IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.

      

      

      	 	
              TRANS WORLD ENTERTAINMENT CORPORATION

            
	 	  
	 	
              By:

            	
              /s/ Edwin Sapienza

            
	 	
              Name:

            	
              Edwin Sapienza

            
	 	
              Title:

            	
              Chief Financial Officer

            
	 	  
	 	
              Trans World Entertainment Corporation

            
	 	
              38 Corporate Circle

            
	 	
              Albany, NY 12203

            
	 	
              Attention: Edwin Sapienza

            
	 	
              Email: esapienza@TWEC.com

            
	 	 
	 	
              with a copy to:

            
	 	 
	 	
              Cahill Gordon & Reindel LLP

            
	 	
              80 Pine Street

            
	 	
              New York, NY 10005

            
	 	
              Attention: Kimberly Petillo-Décossard

            
	 	
              Email: kpetillo-decossard@cahill.com

            

      

      

      
        

        9

        
          

        

      

      	 	
              ALIMCO RE LTD.

            
	 	 
	 	
              By:

            	
              /s/ Jonathan Marcus

            
	 	
              Name: Jonathan Marcus

            
	 	
              Title: CEO

            
	 	  
	 	
              Alimco Re Ltd.

            
	 	
              2336 SE Ocean Blvd., #400

            
	 	
              Stuart, FL 34996

            
	 	
              Attention: Jonathan Marcus, Chief Executive Officer

            
	 	
              Email: jon@limadvisory.com

            
	 	 
	 	
              with a copy to:

            
	 	 
	 	
              K&L Gates LLP

            
	 	
              1717 Main Street, Suite 2800

            
	 	
              Attention: Jonathan Vance

            
	 	
              Email: jonathan.vance@klgates.com

            

      

      

      
        [Signature Page to Contingent Value Rights Agreement]

         

      

      
        

        
          

        

      

      	 	
              RJHDC, LLC

            
	 	 
	 	
              By:

            	
              /s/ Anne Higgins

            
	 

            	
              Name: Anne Higgins

            
	 	
              Title: Sole Member/Manager

            
	 	  
	 	
              RJHDC, LLC

            
	 	
              c/o Independent Family Office, LLC

            
	 	
              677 Broadway, 7th Floor

            
	 	
              Albany, NY 12207

            
	 	 
	 	
              with a copy to:

            
	 	 
	 	
              Schoeneck & King

            
	 	
              22 Corporate Woods, Suite 501

            
	 	
              Albany, NY 12211

            
	 	
              Attention: Jennifer Boll

            
	 	
              Email: jboll@bsk.com

            

      

      

      
        [Signature Page to Contingent Value Rights Agreement]

         

      

      
        

        
          

        

      

      	 	
              KICK-START III, LLC

            
	 	  
	 	
              By:

            	
              /s/ Thomas C. Simpson

            
	 	
              Name: Thomas C. Simpson

            
	 	
              Title: Managing Member

            
	 	  
	 	
              KICK-START IV, LLC

            
	 	  
	 	
              By:

            	
              /s/ Thomas C. Simpson

            
	 	
              Name: Thomas C. Simpson

            
	 	
              Title: Managing Member

            
	 	  
	 	
              Kick-Start III, LLC

            
	 	
              Kick-Start IV, LLC

            
	 	
              1925 S. Stevens

            
	 	
              Spokane, WA 99203

            
	 	
              Attention: Tom Simpson

            
	 	
              Email: tom@nwva.com

            

      

      

      
        [Signature Page to Contingent Value Rights Agreement]

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