Exhibit 10.3
[Execution Version]
THIRTY-FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS THIRTY-FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of July 8, 2004, is entered into by and among CONGRESS
FINANCIAL CORPORATION, a Delaware corporation ("Lender"), BRAWN OF CALIFORNIA,
INC., a California corporation ("Brawn"), GUMP'S BY MAIL, INC., a Delaware
corporation ("GBM"), GUMP'S CORP., a California corporation ("Gump's"), HANOVER
REALTY, INC., a Virginia corporation ("Hanover Realty"), THE COMPANY STORE
FACTORY, INC., a Delaware corporation ("TCS Factory"), THE COMPANY OFFICE, INC.,
a Delaware corporation ("TCS Office"), SILHOUETTES, LLC, a Delaware limited
liability company ("Silhouettes LLC"), HANOVER COMPANY STORE, LLC, a Delaware
limited liability company ("HCS LLC"), DOMESTICATIONS, LLC, a Delaware limited
liability company ("Domestications LLC"), KEYSTONE INTERNET SERVICES, LLC, a
Delaware limited liability company ("KIS LLC"), and THE COMPANY STORE GROUP,
LLC, a Delaware limited liability company ("CSG LLC"; and, together with Brawn,
GBM, Gump's, Hanover Realty, TCS Factory, TCS Office, Silhouettes LLC, HCS LLC,
Domestications LLC and KIS LLC, collectively, "Borrowers" and each,
individually, a "Borrower"), HANOVER DIRECT, INC., a Delaware corporation
("Hanover"), HANOVER HOME FASHIONS GROUP, LLC, a Delaware limited liability
company ("HHFG LLC"), CLEARANCE WORLD OUTLETS, LLC, a Delaware limited liability
company ("Clearance World"), SCANDIA DOWN, LLC, a Delaware limited liability
company ("Scandia Down LLC"), LACROSSE FULFILLMENT, LLC, a Delaware limited
liability company ("LaCrosse LLC"), X.X. ADVERTISING, LLC, a Delaware limited
liability company ("DM Advertising LLC"), AMERICAN DOWN & TEXTILE, LLC, a
Delaware limited liability company ("ADT LLC"), and HANOVER GIFTS, INC., a
Virginia corporation ("Hanover Gifts"; and, together with Hanover, HHFG LLC,
Clearance World, Scandia Down LLC, LaCrosse LLC, DM Advertising LLC and ADT LLC,
collectively, "Guarantors" and each, individually, a "Guarantor").
W I T N E S S E T H:
WHEREAS, Borrowers, Guarantors and Lender are parties to the Loan and
Security Agreement, dated November 14, 1995, as amended by the First Amendment
to Loan and Security Agreement, dated February 22, 1996, the Second Amendment to
Loan and Security Agreement, dated April 16, 1996, the Third Amendment to Loan
and Security Agreement, dated May 24, 1996, the Fourth Amendment to Loan and
Security Agreement, dated May 31, 1996, the Fifth Amendment to Loan and Security
Agreement, dated September 11, 1996, the Sixth Amendment to Loan and Security
Agreement, dated as of December 5, 1996, the Seventh Amendment to Loan and
Security Agreement, dated as of December 18, 1996, the Eighth Amendment to Loan
and Security Agreement, dated as of March 26, 1997, the Ninth Amendment to Loan
and Security Agreement, dated as of April 18, 1997, the Tenth Amendment to Loan
and Security Agreement, dated as of October 31, 1997, the Eleventh Amendment to
Loan and Security Agreement, dated as of March 25, 1998, the Twelfth Amendment
to Loan and
Security Agreement, dated as of September 30, 1998, the Thirteenth Amendment to
Loan and Security Agreement, dated as of September 30, 1998, the Fourteenth
Amendment to Loan and Security Agreement, dated as of February 28, 2000, the
Fifteenth Amendment to Loan and Security Agreement, dated as of March 24, 2000,
the Sixteenth Amendment to Loan and Security Agreement, dated as of August 8,
2000, the Seventeenth Amendment to Loan and Security Agreement, dated as of
January 5, 2001, the Eighteenth Amendment to Loan and Security Agreement, dated
as of November 12, 2001, the Nineteenth Amendment to Loan and Security
Agreement, dated as of December 18, 2001 (as amended hereby, the "Nineteenth
Amendment to Loan Agreement"), the Twentieth Amendment to Loan and Security
Agreement, dated as of March 5, 2002, the Twenty-First Amendment to Loan and
Security Agreement, dated as of March 21, 2002, the Twenty-Second Amendment to
Loan and Security Agreement, dated as of August 16, 2002, the Twenty-Third
Amendment to Loan and Security Agreement, dated as of December 27, 2002, the
Twenty-Fourth Amendment to Loan and Security Agreement, dated as of February 27,
2003, the Twenty-Fifth Amendment to Loan and Security Agreement, dated as of
April 21, 2003, the Twenty-Sixth Amendment to Loan and Security Agreement, dated
as of August 29, 2003, the Twenty-Seventh Amendment to Loan and Security
Agreement, dated as of October 31, 2003, the Twenty-Eighth Amendment to Loan and
Security Agreement, dated as of November 4, 2003, the Twenty-Ninth Amendment to
Loan and Security Agreement, dated as of November 25, 2003 (as amended hereby,
the "Twenty-Ninth Amendment to Loan Agreement"), and the Thirtieth Amendment to
Loan and Security Agreement (the "Thirtieth Amendment to Loan and Security
Agreement"), dated as of March 25, 2004 (as so amended, the "Loan Agreement"),
pursuant to which Lender has made loans and advances to Borrowers;
WHEREAS, Borrowers and Guarantors have requested that Lender (a) consent
to the issuance by Hanover of the Common Stock Warrant (as hereinafter defined),
the Series D Preferred Warrant (as hereinafter defined), the common stock
pursuant to the Common Stock Warrant and the Series D Preferred Stock pursuant
to the Series D Preferred Warrant, (b) consent to the filing of the Certificate
of Designation of the Series D Preferred Stock, (c) consent to the Reverse Split
(as hereinafter defined) and to Hanover making payments in cash to holders of
Hanover's common stock to repurchase fractional shares of such shareholder as
contemplated by the Reverse Split, (d) consent to certain amendments to
Hanover's Certificate of Incorporation, (e) consent to the issuance by Hanover
of Capital Stock consisting of common stock to Xxxxxxx Finance, LLC ("Xxxxxxx",
as hereinafter further defined) in lieu of cash as payment of a waiver fee as
contemplated by the Xxxxxxx Commitment Letter (as hereinafter defined) on the
closing of the Xxxxxxx Term Loans (as hereinafter defined), (f) reduce the
amount of the Maximum Credit, the amount of the Revolving Loan Limit and the
amount of the Inventory and Accounts sublimits of Revolving Loan Borrowers, (g)
release certain existing Availability Reserves and remove the Excess Loan
Availability covenant, (h) temporarily defer the payment of principal with
respect to the Tranche A Term Loan, (i) permit certain secured indebtedness to
Xxxxxxx arising under term loans to be made by Xxxxxxx to Borrowers in the
principal amount of $20,000,000, a portion of which proceeds shall be used to
repay in full the Tranche B Term Loan, (j) modify certain provisions of the
Financing Agreements with respect to Asset Sales and the application of proceeds
thereof by Borrowers, (k) extend the term of the Loan Agreement until July 8,
2007, and (l) amend certain other provisions of the Loan Agreement; and
WHEREAS, Lender is willing to enter into such amendments and grant such
waivers subject to the terms and conditions and to the extent set forth herein;
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NOW, THEREFORE, in consideration of the premises and covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Additional Definitions. As used herein or in any of the other
Financing Agreements, the following terms shall have the meanings given to them
below, and the Loan Agreement shall be deemed and is hereby amended to include,
in addition and not in limitation, the following definitions:
(i) "Amendments to Hanover Certificate of Incorporation"
shall mean the amendments to the Certificate of Incorporation of Hanover to be
entered into upon approval of the shareholders of Hanover (A) to effect the
Reverse Split, (B) reduce the par value of each share of common stock from $0.66
2/3 per share to $0.01 per share and reclassify the outstanding shares of common
stock into such lower par value shares, (C) increase the number of shares of
Additional Preferred Stock which Hanover would have authority to issue from
5,000,000 shares to 15,000,000 shares and make a corresponding change in the
aggregate number of shares of all classes of stock in the aggregate which
Hanover has authority to issue, and (D) after giving effect to the Reverse
Split, increase the number of shares of common stock which Hanover would have
authority to issue from 30,000,000 shares to 50,000,000 shares and make a
corresponding change to the aggregate number of shares of all classes of stock
in the aggregate which Hanover has authority to issue.
(ii) "Certificate of Designation of the Series D Preferred
Stock" shall mean the Certificate of the Designations, Powers, Preferences and
Rights of Series D Participating Preferred Stock, dated as of July 8, 2004, of
Hanover Direct, Inc., as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(iii) "Xxxxxxx" shall mean Xxxxxxx Finance, LLC, a Delaware
limited liability company, and its successors and assigns.
(iv) "Xxxxxxx Commitment Letter" shall mean that certain
letter agreement, dated June 16, 2004, between Hanover and Xxxxxxx Direct, LLC.
(v) "Xxxxxxx Common Warrant" shall mean the Common Stock
Purchase Warrant, dated as of the date hereof, by Hanover in favor of Xxxxxxx,
as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(vi) "Xxxxxxx Intercreditor Agreement" shall mean the
Intercreditor and Subordination Agreement, dated as of the date hereof, between
Lender and Xxxxxxx, as acknowledged by Borrowers and Guarantors, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
(vii) "Xxxxxxx Series D Warrant" shall mean the Series D
Preferred Stock Purchase Warrant, dated as of the date hereof, by Hanover in
favor of Xxxxxxx with respect to the issuance of the Series D Preferred Warrant
and the exchange of the Series D Preferred Warrant
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for the Common Stock Warrant, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(viii) "Xxxxxxx Term Loans" shall mean the term loans made by
Xxxxxxx to Borrowers pursuant to the Xxxxxxx Term Loan Documents in the original
principal amount of $20,000,000.
(ix) "Xxxxxxx Term Loan Agreement" shall mean the Loan and
Security Agreement, dated as of the date hereof, by and among Xxxxxxx, Borrowers
and Guarantors, as the same now exists or may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced.
(x) "Xxxxxxx Term Loan Documents" shall mean, collectively,
the following (as the same now exist or may hereafter exist upon the execution
and delivery thereof and may hereafter or thereafter, as the case may be, be
amended, modified, supplemented, extended, renewed, restated or replaced): (A)
the Xxxxxxx Term Loan Agreement, (B) each of the documents listed on the
Schedule 1(a)(x) attached hereto, and (C) all agreements, documents,, and
instruments executed or delivered in connection with any of the foregoing.
(xi) "Xxxxxxx Warrants" shall mean, collectively (as the same
now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced): (A) the Xxxxxxx Series D Warrant, (B) the
Xxxxxxx Common Warrant, and (C) the related agreements, documents and
instruments to be executed, delivered or filed in connection therewith or with
respect to the Common Stock Warrant or the Series D Preferred Warrant
(xii) "Common Stock Warrant" shall mean the warrant to acquire
shares of Capital Stock of Hanover consisting of common stock at an exercise
price of $.01 per share in an amount equal to thirty (30%) percent of the
outstanding shares of common stock of Hanover on a fully diluted basis.
(xiii) "Reverse Split" shall mean the one-for-ten reverse
split of Hanover's Capital Stock consisting of common stock referred to in the
Revised Preliminary Proxy Statement of Hanover filed with the SEC on June 23,
2004.
(xiv) "Series D Preferred Warrant" shall mean the warrant to
acquire shares of Series D Preferred Stock at an exercise price of $.01 per
share.
(xv) "Series D Preferred Stock" shall mean the Capital Stock
of Hanover consisting of the Series D Participating Preferred Stock issued
pursuant to the Series D Preferred Warrant and the Certificate of Designation of
the Series D Preferred Stock.
(xvi) "Solvent" shall mean, at any time with respect to any
Person, that at such time such Person (A) is able to pay its debts as they
mature and has (and has a reasonable basis to believe it will continue to have)
sufficient capital (and not unreasonably small capital) to carry on its business
consistent with its practices as of the date hereof, and (B) the assets and
properties of such Person at a fair valuation (and including as assets for this
purpose at a fair valuation all rights of subrogation, contribution or
indemnification arising pursuant to any guarantees given by such Person) are
greater than the Indebtedness of such Person, and including subordinated
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and contingent liabilities computed at the amount which, such person has a
reasonable basis to believe, represents an amount which can reasonably be
expected to become an actual or matured liability (and including as to
contingent liabilities arising pursuant to any guarantee the face amount of such
liability as reduced to reflect the probability of it becoming a matured
liability).
(b) Amendment to Definitions.
(i) Banking Days. All references to the term "Banking Days"
in the Loan Agreement and the other Financing Agreements shall be deemed and
each such reference is hereby redesignated "Business Days" and hereby amended to
mean any day other than a Saturday, Sunday, or other day on which commercial
banks are authorized or required to close under the laws of the State of New
York or the State of North Carolina, and a day on which Lender is open for the
transaction of business, except that if a determination of a Business Day shall
relate to any Eurodollar Rate Loans, the term Business Day shall also exclude
any day on which banks are closed for dealings in dollar deposits in the London
interbank market or other applicable Eurodollar Rate market.
(ii) Eligible Fulfillment Contract Receivables. Section
1(a)(vi) of the Fifteenth Amendment to Loan Agreement is hereby amended by
deleting clauses (M) and (N) in their entirety and replacing them with the
following:
"(M) such Fulfillment Contract Receivables of a single
account debtor, other than Home Shopping Network, Inc., do not constitute
more than twenty (20%) percent of all otherwise Eligible Fulfillment
Contract Receivables (but the portion of the Fulfillment Contract
Receivables not in excess of such percentage may be deemed Eligible
Fulfillment Contract Receivables);
(N) such Fulfillment Contract Receivables of Home Shopping
Network, Inc. do not constitute more than forty (40%) percent of all
otherwise Eligible Fulfillment Contract Receivables (but the portion of
the Fulfillment Contract Receivables not in excess of such percentage may
be deemed Eligible Fulfillment Contract Receivables);"
(iii) Interest Rate. With respect to interest accruing on or
after July 1, 2004, all references to the term "Interest Rate" in the Loan
Agreement and the other Financing Agreements shall be deemed and each such
reference is hereby amended to mean (A) as to Prime Rate Revolving Loans, a rate
of one-half of one (.5%) percent per annum in excess of the Prime Rate, (B) as
to Prime Rate Term Loans, a rate of one-half of one (.5%) percent per annum in
excess of the Prime Rate, (C) as to Eurodollar Rate Revolving Loans, a rate of
two and one-half (2.5%) percent per annum in excess of the Adjusted Eurodollar
Rate, and (D) as to Eurodollar Rate Term Loans, a rate of three (3.0%) percent
per annum in excess of the Adjusted Eurodollar Rate (in each case under clauses
(C) or (D), based on the Eurodollar Rate applicable for the Interest Period
selected by or on behalf of the applicable Borrower as in effect three (3)
Business Days prior to the commencement of such Interest Period for such
Eurodollar Rate Loans in accordance with the terms of the Loan Agreement as
amended hereby, whether such rate is higher or lower than any rate previously
quoted to or for such Borrower); provided, that, the Interest Rate, as to Prime
Rate Loans and Eurodollar Rate Loans, shall mean the rate two percent (2%) per
annum more than the otherwise applicable variable Interest Rate provided under
clause (A), (B), (C), (D) or (E) above (as applicable), at Lender's option,
without notice, for the period
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from and after the date of the occurrence of any Event of Default, and for so
long as such Event of Default is continuing, or after termination or non-renewal
of the Loan Agreement and the other Financing Agreements. If the aggregate
amount of Revolving Loans and Letter of Credit Accommodations to one or more
Revolving Loan Borrowers exceeds the amounts determined by Lender to be
available pursuant to the Revolving Loan Formulas, net of reserves and subject
to the applicable lending sublimits as to each Revolving Loan Borrower, and
subject to the Revolving Loan Limit as to all Revolving Loan Borrowers
considered together, the Interest Rate, as to Prime Rate Revolving Loans and
Eurodollar Rate Revolving Loans, shall mean the rate two percent (2%) per annum
more than the otherwise applicable Interest Rate provided under clause (A) or
(D) above (as applicable) as to the amount of any such excess(es) (whether or
not such excess(es) arise or are made with or without Lender's knowledge or
consent and whether made before or after an Event of Default); provided, that,
if such excess(es) arise solely by reason of the exercise of Lender's discretion
under the Loan Agreement to reduce the Revolving Loan Formulas in the absence of
an Event of Default that is continuing, the Interest Rate, shall not be so
increased as to the amount of any such excess(es) for a period of five (5) days
after Lender notifies the affected Revolving Loan Borrowers of such
discretionary reduction in the Revolving Loan Formulas and, at and after the
expiration of such period of five (5) days, the Interest Rate, may be so
increased by Lender as to the amount of any such excess(es) then remaining.
(iv) Maximum Credit. Section 1.83 of the Loan Agreement is
hereby deleted and replaced with the following:
"1.83 `Maximum Credit' shall mean the aggregate principal
amount of $39,974,000."
(v) Net Orderly Liquidation Value. All references to the
term "Net Orderly Liquidation Value" in the Loan Agreement and the other
Financing Agreements shall be deemed, and each such reference is hereby amended,
to mean (A) as to Eligible Inventory other than Gump's Eligible Inventory or TCS
Eligible Inventory consisting of raw materials, an amount equal to eighty-five
(85%) percent of the gross proceeds that could be realized in cash if such
Inventory were sold within a six (6) to nine (9) month period in an orderly
liquidation sale, and (B) as to TCS Eligible Inventory consisting of raw
materials, an amount equal to eighty-five (85%) percent of the gross proceeds
that could be realized in cash if such Inventory were sold within a six (6) to
nine (9) month period in an orderly liquidation sale minus, in each case under
clauses (A) and (B), the estimated costs, expenses, fees, including reasonable
attorneys' fees, taxes and other charges which would be incurred in connection
with such sales, and estimated returns, all as set forth in, or calculated
using, the most recent Appraisal.
(vi) Net GOB Value. All references to the term "Net GOB
Value" in the Loan Agreement and the other Financing Agreements shall be deemed,
and each such reference is hereby amended, to mean, as to Gump's Eligible
Inventory, an amount equal to eighty-five percent (85%) of the gross proceeds
that could be realized in cash if such Inventory were sold within a ninety (90)
day period in a going out of business liquidation sale, as set forth or
calculated in the most recent Appraisal, minus the estimated costs, expenses,
fees, including reasonable attorneys' fees, taxes and other charges which would
be incurred in connection with such sale, and estimated returns, all as set
forth in, or calculated using, the most recent Appraisal.
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(vii) Revolving Loan Limit. Section 1.119 of the Loan
Agreement is hereby deleted and replaced with the following:
"1.119 `Revolving Loan Limit' shall mean, at any time, the
amount equal to $34,500,000."
(viii) Term Loans. All references to the "Term Loans" or the
"Tranche A Term Loans" in the Loan Agreement and the other Financing Agreements
are hereby redesignated "Term Loans" and hereby amended to mean, individually
and collectively, the Obligations evidenced by the Second Restated Hanover
Realty Term Note, the Restated TCS Factory Term Note and the Restated TCS Office
Term Note.
(c) Interpretation. All capitalized terms used herein and not
defined herein shall have the meanings given to such terms in the Loan
Agreement.
2. Consent to Issuance of Series D Preferred Warrant and Exchange of
Series D Preferred Warrant for Common Stock Warrant.
(a) Subject to the terms and conditions contained in this
Amendment and the Loan Agreement, Lender hereby consents to the issuance of the
Series D Preferred Warrant, the filing of the Certificate of Designation of the
Series D Preferred Stock, the issuance of Series D Preferred Stock upon the
exercise of the Series D Preferred Warrant, the exchange of the Series D
Preferred Warrant for the Common Stock Warrant pursuant to the Xxxxxxx Series D
Warrant, and the issuance of Capital Stock consisting of common stock upon the
exercise of the Common Stock Warrant, so long as each of the following
conditions shall have been satisfied as determined by Lender:
(i) the terms and conditions of the Certificate of
Designation of the Series D Preferred Stock, the Series D Preferred Warrant and
the Common Stock Warrant are satisfactory to Lender;
(ii) Lender shall have received, in form and substance
satisfactory to Lender, true, correct and complete photocopies of the
Certificate of Designation of the Series D Preferred Stock, the Xxxxxxx Series D
Warrant and a form of the Xxxxxxx Common Warrant prior to the date hereof;
(iii) neither the execution and delivery of the Xxxxxxx
Warrants or any other agreements, documents or instruments in connection
therewith, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof (A) shall violate any Federal or State
securities laws or any other law or regulation or any order or decree of any
court or governmental instrumentality in any respect, or (B) shall conflict with
or result in the breach of, or constitute a default in any respect under any
mortgage, deed of trust, security agreement, agreement or instrument to which
any Borrower or Guarantor is a party or may be bound, or (C) shall violate any
provision of the Certificate of Incorporation or By-Laws of any Borrower or
Guarantor;
(iv) Lender shall have received, in form and substance
satisfactory to Lender, Secretary's or Assistant Secretary's Certificates of
Directors' Resolutions evidencing the
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adoption and subsistence of corporate resolutions approving the execution,
delivery and performance by Hanover with respect to the Certificate of
Designation of the Series D Preferred Stock and the Xxxxxxx Warrants;
(v) on or before the consummation of the issuance of the
Series D Preferred Warrant, each of Borrowers and Guarantors shall have
delivered, or have caused to be delivered, to Lender a true and correct copy of
any consent, waiver or approval to or of the Series D Preferred Warrant, which
any Borrower or Guarantor is required to obtain from any Person other than
Lender in connection with the transactions contemplated by the Xxxxxxx Warrants,
and such consent, approval or waiver shall be in a form reasonably acceptable to
Lender;
(vi) as of the date of the consummation of the issuance of
the Series D Preferred Warrant, and after giving effect to such issuance, no
Event of Default or Incipient Default shall exist or have occurred and be
continuing; and
(vii) the closing of the issuance of the Series D Preferred
Warrant shall have occurred on the date hereof and the exchange of the Series D
Preferred Warrant for the Common Stock Warrant shall have occurred on or before
September 30, 2004, or such later date as Lender may agree to in writing.
(b) Effective on the effective date Lender determines that the
conditions set forth in Section 2(a) hereof have been satisfied, Borrowers and
Guarantors hereby acknowledge, confirm and agree that, notwithstanding anything
to the contrary that may be contained in Sections 6.3, 6.5 and 6.6 of the Loan
Agreement or in any other provisions of the Loan Agreement or in any of the
other Financing Agreements, or in any of the Xxxxxxx Warrants, without the prior
written consent of Lender, Borrowers and Guarantors shall not, and shall not
permit any of their Subsidiaries, directly or indirectly, to make any loans,
advances, dividends, redemptions or other payments in respect of the Capital
Stock of Hanover with respect to the Common Stock Warrant or the Series D
Preferred Warrant, whether in cash, property or otherwise; provided, that,
Hanover may make dividend payments in Capital Stock, but not cash, to Xxxxxxx
with respect to the Common Stock Warrant or the Series D Preferred Warrant, so
long as each of the following conditions shall have been satisfied as determined
by Lender:
(i) at the time of and after giving effect to both the
declaration and payment of such dividends, neither the declaration not the
payment of such dividend (A) shall violate any Federal or State securities laws
or any other law or regulation or any order or decree of any court or
governmental authority, (B) shall conflict with or result in the breach of, or
constitute a default under any mortgage, deed of trust, security agreement,
agreement or instrument to which any Borrower or Guarantor is a party or may be
bound, or (C) shall violate any provision of the Certificate of Incorporation or
By-Laws of any Borrower or Guarantor;
(ii) at the time of and after giving effect to both the
declaration and payment of such dividends, Borrowers and Guarantors are and
shall continue to be Solvent; and
(iii) as of the date of the declaration and payment of such
dividends and after giving effect thereto, no Event of Default or Incipient
Default shall exist or have occurred and be continuing.
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3. Consent to Reverse Split.
(a) Subject to the terms and conditions contained in this
Amendment and the Loan Agreement, Lender hereby consents to the Reverse Split,
so long as each of the following conditions shall have been satisfied as
determined by Lender:
(i) the terms and conditions of the Reverse Split are
satisfactory to Lender;
(ii) Lender shall have received, in form and substance
satisfactory to Lender, true, correct and complete forms of certain of the
agreements, documents and instruments related to the Reverse Split prior to the
date hereof and Lender shall have received, in form and substance satisfactory
to Lender, true, correct and complete photocopies of all of the agreements,
documents and instruments to be executed and delivered in connection with the
Reverse Split prior to the execution and delivery thereof;
(iii) neither the consummation of the transactions
contemplated by the Reverse Split, nor compliance with the provisions thereof
(A) shall violate any Federal or State securities laws or any other law or
regulation or any order or decree of any court or governmental instrumentality
in any respect, or (B) shall conflict with or result in the breach of, or
constitute a default in any respect under any mortgage, deed of trust, security
agreement, agreement or instrument to which any Borrower or Guarantor is a party
or may be bound, or (C) shall violate any provision of the Certificate of
Incorporation or By-Laws of any Borrower or Guarantor;
(iv) Lender shall have received, in form and substance
satisfactory to Lender, Secretary's or Assistant Secretary's Certificates of
Directors' Resolutions evidencing the adoption and subsistence of corporate
resolutions approving the performance by Hanover of the Reverse Split;
(v) on or before the consummation of the Reverse Split,
Hanover shall have delivered, or have caused to be delivered, to Lender a true
and correct copy of any consent, waiver or approval to or of the Reverse Split,
which Hanover is required to obtain from any Person other than Lender in
connection with the transactions contemplated by the Reverse Split, and such
consent, approval or waiver shall be in a form reasonably acceptable to Lender;
and
(vi) the closing of the Reverse Split shall have occurred on
or before September 30, 2004, or such later date as Lender may agree to in
writing.
(b) Effective on the effective date Lender determines that the
conditions set forth in Section 3(a) hereof have been satisfied, Hanover hereby
acknowledges, confirms and agrees that, notwithstanding anything to the contrary
that may be contained in Sections 6.3, 6.5 and 6.6 of the Loan Agreement or in
any other provisions of the Loan Agreement or in any of the other Financing
Agreements, without the prior written consent of Lender, Hanover shall not, and
shall not permit any of its Subsidiaries, directly or indirectly, to make any
loans, advances, dividends, redemptions or other payments in respect of the
Capital Stock of Hanover in connection with the Reverse Split, whether in cash,
property or otherwise; provided, that, Hanover may make
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payments to holders of Capital Stock of Hanover consisting of common stock to
repurchase the fractional shares of Hanover contemplated by and upon the
consummation of the Reverse Split, so long as each of the following conditions
shall have been satisfied as determined by Lender:
(i) the aggregate amount of such payments to repurchase such
fractional shares in cash shall not exceed $9,000 in the aggregate; and
(ii) at the time of and after giving effect to such payment,
such payment (A) shall not violate any Federal or State securities laws or any
other law or regulation or any order or decree of any court or governmental
authority, (B) shall not conflict with or result in the breach of, or constitute
a default under any mortgage, deed of trust, security agreement, agreement or
instrument to which any Borrower or Guarantor is a party or may be bound, or (C)
shall not violate any provision of the Certificate of Incorporation or By-Laws
of any Borrower or Guarantor.
4. Consent to Amendments to Hanover Certificate of Incorporation.
(a) Subject to the terms and conditions contained in this
Amendment and the Loan Agreement, Lender hereby consents to the Amendments to
the Hanover Certificate of Incorporation so long as each of the following
conditions shall have been satisfied as determined by Lender:
(i) the terms and conditions of the Amendments to the
Hanover Certificate of Incorporation are satisfactory to Lender;
(ii) Lender shall have received, in form and substance
satisfactory to Lender, true, correct and complete forms of certain of the
agreements, documents and instruments to be executed and delivered in connection
with the Amendments to the Hanover Certificate of Incorporation prior to the
date hereof and Lender shall have received, in form and substance satisfactory
to Lender, true, correct and complete photocopies of all of the agreements,
documents and instruments to be executed and delivered in connection with the
Amendments to the Hanover Certificate of Incorporation prior to the filing
thereof with the Secretary of State of the State of Delaware;
(iii) neither the execution and delivery of the agreements,
documents and instruments to be executed and delivered in connection with the
Amendments to the Hanover Certificate of Incorporation, nor the consummation of
the transactions therein contemplated, nor compliance with the provisions
thereof (A) shall violate any Federal or State securities laws or any other law
or regulation or any order or decree of any court or governmental
instrumentality in any respect, or (B) shall conflict with or result in the
breach of, or constitute a default in any respect under any mortgage, deed of
trust, security agreement, agreement or instrument to which any Borrower or
Guarantor is a party or may be bound, or (C) shall violate any provision of the
Certificate of Incorporation as so amended or By-Laws of any Borrower or
Guarantor;
(iv) Lender shall have received, in form and substance
satisfactory to Lender Secretary's or Assistant Secretary's Certificates of
Directors' Resolutions evidencing the adoption and subsistence of corporate
resolutions approving the execution, delivery and performance by Hanover with
respect to the agreements, documents and instruments to be
10
executed and delivered in connection with the Amendments to the Hanover
Certificate of Incorporation;
(v) on or before the effectiveness of the Amendments to the
Hanover Certificate of Incorporation, each of Borrowers and Guarantors shall
have delivered, or have caused to be delivered, to Lender a true and correct
copy of any consent, waiver or approval to or of the Amendments to the Hanover
Certificate of Incorporation, which any Borrower or Guarantor is required to
obtain from any Person other than Lender in connection with the transactions
contemplated by the Amendments to the Hanover Certificate of Incorporation, and
such consent, approval or waiver shall be in a form reasonably acceptable to
Lender; and
(vi) the closing of the transactions contemplated by the
Amendments to the Hanover Certificate of Incorporation shall have occurred on or
before September 30, 2004, or such later date as Lender may agree to in writing.
(b) To the extent that Lender determines that conditions set forth
in Section 4(a) hereof have been satisfied and after giving effect to the
Amendments to the Hanover Certificate of Incorporation, nothing contained in
this Section 4 shall modify or alter the applicability of any of the covenants
or other provisions of the Loan Agreement and the other Financing Agreements to
any of the Capital Stock of Hanover or its Subsidiaries.
5. Consent to Payment of Waiver Fee to Xxxxxxx. Subject to the terms
and conditions contained in this Amendment and the Loan Agreement, Lender hereby
consents to the issuance by Hanover of Capital Stock consisting of common stock
to Xxxxxxx Direct, LLC as payment in lieu of cash of a waiver fee as
contemplated by the Xxxxxxx Commitment Letter on the closing of the Xxxxxxx Term
Loans.
6. Release of Availability Reserves; Removal of Excess Loan
Availability Test.
(a) Borrowers and Guarantors acknowledge and agree that Lender has
heretofore established and maintained Availability Reserves from time to time
against the amount of Revolving Loans and Letter of Credit Accommodations
otherwise determined by Lender to be available to Revolving Loan Borrowers under
the Loan Agreement and the other Financing Agreements. Borrowers and Guarantors
have requested that Lender release a portion of such Availability Reserves of
Borrowers at this time in the amount of $6,850,000. Lender hereby releases
Availability Reserves in the amount of $6,850,000.
(b) Section 6.32 of the Loan Agreement regarding the requirement
that Borrowers at all times maintain Excess Loan Availability of not less than
$3,000,000 is hereby deleted and replaced with the following: "6.32
[Intentionally Omitted]".
(c) Notwithstanding anything to the contrary contained herein with
respect to the release of the Availability Reserve in the amount of $6,850,000
or the deletion of the requirement that Borrowers maintain Excess Loan
Availability of not less than $3,000,000, Lender shall have the right to
continue to establish and maintain from time to time any other and further
reserves against the availability of Revolving Loans and Letter of Credit
Accommodations under the Loan Agreement and the other Financing Agreements.
11
7. Lending Sublimits. Section 2.2 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(a) Subject to, and upon the terms and conditions contained
herein, the aggregate principal amount of Revolving Inventory Loans and
Letter of Credit Accommodations made available to Brawn shall not exceed
Two Million Dollars ($2,000,000) at any one time outstanding.
(b) Subject to, and upon the terms and conditions contained
herein, the aggregate principal amount of Revolving Inventory Loans and
Letter of Credit Accommodations made available to GBM shall not exceed One
Million Five Hundred Thousand Dollars ($1,500,000) at any one time
outstanding.
(c) Subject to, and upon the terms and conditions contained
herein, the aggregate principal amount of Revolving Inventory Loans and
Letter of Credit Accommodations made available to Gump's shall not exceed
Two Million Dollars ($2,000,000) at any one time outstanding.
(d) Subject to, and upon the terms and conditions contained herein,
the aggregate principal amount of Revolving Inventory Loans and Letter of
Credit Accommodations made available to HCS LLC shall not exceed Ten
Million Dollars ($10,000,000) at any one time outstanding.
(e) Subject to, and upon the terms and conditions contained herein,
the aggregate principal amount of Revolving Inventory Loans and Letter of
Credit Accommodations made available to Domestications LLC shall not
exceed Nine Million Dollars ($9,000,000) at any one time outstanding.
(f) Subject to, and upon the terms and conditions contained herein,
the aggregate principal amount of Revolving Inventory Loans and Letter of
Credit Accommodations made available to Silhouettes LLC shall not exceed
Three Million Dollars ($3,000,000) at any one time outstanding.
(g) Subject to, and upon the terms and conditions contained herein,
the aggregate principal amount of Revolving Inventory Loans and Letter of
Credit Accommodations made available to CSG LLC shall not exceed Zero
Dollars (-$0-) at any one time outstanding.
(h) Subject to, and upon the terms and conditions contained herein,
the aggregate principal amount of Revolving Inventory Loans and Letter of
Credit Accommodations made available to KIS LLC shall not exceed Zero
Dollars (-$0-) at any one time outstanding.
(i) Without limiting the foregoing lending sublimits, (i) the
aggregate amount of Revolving Loans shall not at any one time outstanding
exceed the Revolving Loan Limit for all Revolving Loan Borrowers and (ii)
the aggregate amount of Revolving Accounts Loans for all Deferred Billing
Borrowers, Installment Billing Borrowers, Fulfillment Contract Borrowers
and any other applicable Revolving Loan Borrowers shall not at any
12
one time outstanding exceed $7,000,000. Lender shall have the right, from
time to time, to establish and revise Revolving Accounts Loan sublimits
for each Deferred Billing Borrower, Installment Billing Borrower,
Fulfillment Contract Borrower and each other applicable Revolving Loan
Borrower within the overall $7,000,000 sublimit applicable to all
Revolving Accounts Loans."
8. Unused Line Fee. Section 2.7(c) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(c) Unused Line Fee. With respect to each calendar month (or part
thereof) during the Term, Borrowers shall pay to Lender monthly an unused
line fee, fully earned and payable on the first day of each month, at a
rate equal to one half of one percent (.5%) per annum, calculated upon the
excess, if any, of (i) Thirty-Four Million Five Hundred Thousand Dollars
($34,500,000) over (ii) the average of the daily aggregate principal
balances of the outstanding Revolving Loans and Letter of Credit
Accommodations during the preceding month (or part thereof); provided,
however, that if Lender, solely on the basis of the exercise of its
discretion, reduces any Inventory Loan Formula for any calendar month (or
part thereof) in the absence of an Event of Default or Incipient Default
which is continuing, the amount of the unused line fee shall be calculated
for such month by decreasing the base amount of Thirty-Four Million Five
Hundred Thousand Dollars ($34,500,000) set forth in clause (i) by a
percentage thereof equal to the difference between the Inventory Loan
Formula otherwise applicable under Section 2.1(b) hereof and the Inventory
Loan Formula as so reduced solely by virtue of Lender's discretion."
9. Modifications to Asset Sales Provisions.
(a) Asset Sale Lending Adjustments. Notwithstanding anything to
the contrary contained in the Nineteenth Amendment to Loan Agreement and the
Twenty-Ninth Amendment to Loan Agreement, subject to the terms and conditions
contained herein, the Asset Sale Lending Adjustments shall no longer be
applicable to Assets Sales and shall have no further force and effect.
(b) Amendments to Permitted Redemptions of Series C Participating
Preferred Stock. Notwithstanding anything to the contrary contained in Section
2(b) of the Twenty-Ninth Amendment to Loan Agreement, Borrowers and Guarantors
hereby acknowledge, confirm and agree that, notwithstanding anything to the
contrary that may be contained in Sections 6.3, 6.5 and 6.6 of the Loan
Agreement or in any other provisions of the Loan Agreement or in any of the
other Financing Agreements, or in any of the Series C Participating Preferred
Agreements, without the prior written consent of Lender, Borrowers and
Guarantors shall not, and shall not permit any of their Subsidiaries, directly
or indirectly, to make any loans, advances, dividends, redemptions or other
payments in respect of the Capital Stock of Hanover consisting of the Series C
Participating Preferred Stock, whether in cash, property or otherwise; provided,
that,
(i) Hanover may make dividend payments in Capital Stock, but
not cash, to the holders of the Series C Participating Preferred Stock, so long
as each of the following conditions shall have been satisfied as determined by
Lender:
13
(A) neither the declaration nor payment of such
dividends (1) shall violate any Federal or State securities laws or any other
law or regulation or any order or decree of any court or governmental authority,
(2) shall conflict with or result in the breach of, or constitute a default
under any mortgage, deed of trust, security agreement, agreement or instrument
to which any Borrower or Guarantor is a party or may be bound, or (3) shall
violate any provision of the Certificate of Incorporation or By-Laws of any
Borrower or Guarantor;
(B) at the time of and after giving effect to both the
declaration and payment of such dividends, Borrowers and Guarantors are and
shall continue to be Solvent; and
(C) as of the date of the declaration and payment of
such dividends and after giving effect thereto, no Event of Default or Incipient
Default shall exist or have occurred and be continuing.
(ii) Hanover may, subject to the terms and conditions
contained herein, repurchase, redeem or retire in cash, Capital Stock consisting
of the Series C Participating Preferred Stock, so long as each of the following
conditions shall have been satisfied as determined by Lender:
(A) Lender shall have received at least ten (10)
Business Days' prior written notice of the intention of Hanover to repurchase,
redeem or retire any of the Series C Participating Preferred Stock, which notice
shall set forth the proposed number of shares Hanover intends to repurchase,
redeem or retire, the price per share, the aggregate purchase price of such
shares and such other information related thereto that Lender may reasonably
request;
(B) Excess Availability of Borrowers for each of the
immediately preceding thirty (30) days before any such repurchase, redemption or
retirement shall have been not less than $7,000,000 and on the date of any such
repurchase, redemption or retirement and after giving effect thereto, Excess
Availability of Borrowers shall be not less than $7,000,000;
(C) Borrowers and Guarantors shall furnish to Lender,
upon Lender's request, any agreements, documents or instruments evidencing or
relating to any such repurchases, redemptions or retirements of Series C
Participating Preferred Stock;
(D) any such repurchase, redemption or retirement of
Series C Participating Preferred Stock shall be paid using only Net Proceeds of
Asset Sales and not any other funds of any Borrower or Guarantor and shall be
paid with legally available funds therefor;
(E) at the time of and after giving effect to any such
repurchase, redemption or retirement of Series C Participating Preferred Stock,
Borrowers and Guarantors are and shall continue to be Solvent;
(F) the aggregate amount of all repurchases,
redemptions and retirements of such Capital Stock shall not exceed the amount of
the Net Proceeds derived from the Asset Sales after application of the Net
Proceeds in accordance with the terms and conditions of Section 10 hereof;
(G) any such repurchase, redemption or retirement (1)
shall not violate any Federal or State securities laws or any other law or
regulation or any order or decree of any court
14
or governmental authority, (2) shall not conflict with or result in the breach
of, or constitute a default under any mortgage, deed of trust, security
agreement, agreement or instrument to which any Borrower or Guarantor is a party
or may be bound, or (3) shall not violate any provision of the Certificate of
Incorporation or By-Laws of any Borrower or Guarantor; and
(H) as of the date of any such repurchase, redemption
or retirement of such Capital Stock and after giving effect thereto, no Event of
Default or Incipient Default shall exist or have occurred and be continuing.
(iii) Borrowers, Hanover and the other Guarantors shall not
amend, modify or supplement any of the Series C Participating Preferred
Agreements without the prior written consent of Lender.
10. Amendments to Application of Proceeds from Asset Sales.
Notwithstanding anything to the contrary contained in Section 3 of the
Twenty-Ninth Amendment to Loan Agreement,
(a) Upon receipt of the Net Proceeds of any Asset Sale, Lender
shall prior to an Event of Default that has occurred and is continuing apply
such Net Proceeds as follows:
(i) first, to pay the Obligations of the Borrower or
Guarantor whose assets are being sold pursuant to such Asset Sale in the amount
equal to the amount of the Obligations consisting of Revolving Loans then
outstanding of such Borrower or Guarantor and, subject to Section 10(b) hereof,
to hold as cash collateral for the Obligations of such Borrower or Guarantor an
amount equal to one hundred and ten percent (110%) (or such greater amount in
accordance with Lender's policies and practices) of the Letter of Credit
Accommodations then outstanding of such Borrower or Guarantor;
(ii) second, to pay the Obligations of Borrowers and
Guarantors in such order and manner as Lender may determine in its sole
discretion (other than a prepayment of any of the Term Loans), and immediately
thereafter, the full remaining amount of such proceeds after application
pursuant to clause (i) of this Section 10 shall be credited on a dollar for
dollar basis to the loan account(s) of Revolving Loan Borrowers for purposes of
determining the amount of Revolving Loans that may be made available to
Revolving Loan Borrowers in accordance with the terms and conditions of the Loan
Agreement to then be used, subject to the conditions set forth in Section 9
hereof and in the Loan Agreement and the other Financing Agreements, for the
purpose of repurchasing, redeeming or retiring shares of the Series C
Participating Preferred Stock held by Xxxxxxx in accordance with the terms and
conditions of the Series C Participating Preferred Agreements as in effect on
the date of execution and delivery thereof; and
(iii) third, to pay the Obligations of Borrowers and
Guarantors in such order and manner as Lender may determine in its sole
discretion (other than a prepayment of any of the Term Loans), and immediately
thereafter, the full remaining amount of such proceeds after application
pursuant to clauses (i) and (ii) of this Section 10 shall be credited on a
dollar for dollar basis to the loan account(s) of Revolving Loan Borrowers for
purposes of determining the amount of Revolving Loans that may be made available
to Revolving Loan Borrowers in accordance with the terms and conditions of the
Loan Agreement to then be used, subject to the conditions set forth in Section 9
hereof and Section 6.4(j) of the Loan Agreement and the other Financing
Agreements, for the purpose of prepaying the principal amount of Indebtedness in
15
respect of the Xxxxxxx Term Loan Agreement and the other Term Loan Agreements as
in effect on the date of execution and delivery thereof.
(b) If Lender holds cash collateral with respect to any Letter of
Credit Accommodations as of the date of an Asset Sale as provided in Section
10(a)(i) hereof, then to the extent that the letters of credit with respect to
such Letter of Credit Accommodations expire and no reimbursement obligation on
the part of any Borrower or Guarantor (or Lender on behalf of any Borrower or
Guarantor) remains with respect to such letters of credit as determined by
Lender in its discretion, then the amount of such cash collateral shall be
released and made available for purposes of redeeming the Series C Participating
Preferred Stock in accordance with the terms and conditions of Section 10(a)(ii)
hereof and the other terms and conditions of the Loan Agreement. If such cash
collateral is so released, then the conditions set forth in Section 9 hereof
shall be satisfied as of the date of the release of such cash collateral.
(c) After an Event of Default that has occurred and is continuing,
Lender may apply Net Proceeds of any Asset Sales to any of the Obligations of
Borrowers and Guarantors in whatever order and manner Lender may in its
discretion determine.
11. Indebtedness. Section 6.3 of the Loan Agreement is hereby amended by
deleting the word "and" appearing at the end of Section 6.3(i), replacing the
period with a semicolon and the word "and" appearing at the end of Section
6.3(j) and adding a new Section 6.3(k) immediately thereafter as follows:
"(j) Indebtedness of Borrowers and Guarantors to Xxxxxxx consisting
of the Xxxxxxx Term Loans evidenced by or arising under the Xxxxxxx Term
Loan Documents; provided, that,
(i) the principal amount of such Indebtedness shall not in the
aggregate exceed $20,000,000,
(ii) such Indebtedness is and shall be subject and subordinate in
right of payment to the right of Lender to receive the prior indefeasible
payment in full of all of the Obligations in accordance with the terms and
conditions of the Xxxxxxx Intercreditor Agreement;
(iii) Borrowers and Guarantors shall not, directly or indirectly,
make any payments in respect of such Indebtedness, including, but not
limited to, any prepayments or other non-mandatory payments; provided,
that,
(A) Borrowers may pay to Xxxxxxx on July 8, 2004 the closing
fee in the amount of $200,000 out of the proceeds of the Xxxxxxx Term
Loans;
(B) Borrowers may make regularly scheduled payments of
interest in respect of such Indebtedness in accordance with the terms and
conditions of the Xxxxxxx Term Loan Agreement so long as no Incipient
Default or Event of Default shall exist or have occurred.
(B) during any fiscal quarter of Hanover and its
Subsidiaries commencing with the fiscal quarter of Hanover and its
Subsidiaries ending September 25, 2004,
16
Borrowers may make payments of principal in cash in respect of such
Indebtedness in accordance with the terms and conditions of the Xxxxxxx
Term Loan Agreement, so long as each of the following conditions shall
have been satisfied as determined by Lender:
(1) as of the date of any such payment and after
giving effect thereto, the aggregate amount of the Excess Availability of
Borrowers on such date and the immediately preceding thirty (30)
consecutive days before such payment shall be not less than $7,000,000;
(2) the cumulative EBITDA of Hanover and its
Subsidiaries calculated based on the immediately preceding four (4) fiscal
quarters immediately preceding the quarter in which the date of such
payment occurs and for which fiscal quarter Lender has received financial
statements of Hanover and its Subsidiaries, shall be not less than
$14,000,000;
(3) the aggregate amount of such principal prepayments
shall not exceed $2,000,000 in any such fiscal quarter;
(4) any such payment shall not be made earlier than
the date that is five (5) Business Days after receipt by Lender of
quarterly financial statements of Hanover and its Subsidiaries for such
immediately preceding fiscal quarter delivered to Lender in accordance
with the terms and conditions of Section 6.18(a)(ii) of the Loan
Agreement;
(5) as of the date of such payment and after giving
effect thereto, Borrowers and Guarantors are and shall continue to be
Solvent; and
(6) as of the date of such payment and after giving
effect thereto, no Incipient Default or Event of Default shall exist or
have occurred;
(C) Borrowers may make payments of principal in cash in
respect of such Indebtedness in accordance with the terms and conditions
of the Xxxxxxx Term Loan Agreement using Net Proceeds of Asset Sales, so
long as each of the following conditions shall have been satisfied as
determined by Lender:
(1) Lender shall have received at least ten (10)
Business Days' prior written notice of the intention of Hanover to repay
such Indebtedness, which notice shall set forth the proposed amount of
principal to be repaid and such other information related thereto that
Lender may reasonably request;
(2) Excess Availability of Borrowers for each of the
immediately preceding thirty (30) days before any such repayment shall
have been not less than $7,000,000 and on the date of any such repayment
and after giving effect thereto, Excess Availability of Borrowers shall be
not less than $7,000,000;
(3) any such repayment of such Indebtedness under this
clause (iii)(C) shall be paid using only Net Proceeds of Asset Sales and
not any other funds of Borrowers or Guarantors;
17
(4) all of the Series C Preferred Participating
Preferred Stock shall have been repurchased, redeemed or retired in
accordance with the terms and conditions of Section 10 hereof and the
aggregate amount of all repurchases, redemptions and retirements of such
Capital Stock shall not exceed the amount of the Net Proceeds derived from
the Asset Sales after application of the Net Proceeds in accordance with
the terms and conditions of Section 10 hereof;
(5) as of the date of such payment and after giving
effect thereto, Borrowers and Guarantors are and shall continue to be
Solvent; and
(6) as of the date of any such repayment and after
giving effect thereto, no Event of Default or Incipient Default shall
exist or have occurred and be continuing;
(D) Borrowers may make payments of reasonable fees and
expenses as determined by Lender in its discretion in respect of such
Indebtedness in accordance with the terms and conditions of the Xxxxxxx
Term Loan Documents, so long as each of the following conditions shall
have been satisfied as determined by Lender:
(1) Lender shall have received at least five (5)
Business Days' prior written notice of the intention of Borrowers to pay
such fees, which notice shall set forth the proposed amount of the fees,
and reason for the incurrence of such fees and such other information
related thereto that Lender may reasonably request; and
(2) as of the date of any such payment and after
giving effect thereto, no Event of Default or Incipient Default shall
exist or have occurred and be continuing;
(iv) such Indebtedness shall only be secured by security interests
in and liens upon the assets of Borrowers and Guarantor to the extent
permitted under Section 6.4(j) hereof;
(v) Borrowers and Guarantors shall not, directly or indirectly,
amend, modify, alter or change any terms of such Indebtedness or any
agreement, document or instrument related thereto, except, that, Borrowers
and Guarantors may, only after prior written notice to Lender, amend,
modify, alter or change the terms thereof so as to extend the maturity
thereof or defer the timing of any payments in respect thereof, or to
forgive or cancel any portion of such Indebtedness (other than pursuant to
payments thereof), or to reduce the interest rate or any fees in
connection therewith, or to release any liens or security interests in any
assets and properties of Borrowers and Guarantors, or to make any
covenants contained therein less restrictive or burdensome as to Borrowers
and Guarantors or otherwise more favorable to Borrowers and Guarantors or
redeem, retire, defease, purchase or otherwise acquire such Indebtedness,
or set aside or otherwise deposit or invest any sums for such purpose, and
(vi) Borrowers and Guarantors shall furnish to Lender all notices,
demands or other materials concerning such Indebtedness either received by
any of Borrowers or Guarantors or on its or their behalf, promptly after
receipt thereof, or sent by any of
18
Borrowers or Guarantors or on its or their behalf, concurrently with the
sending thereof, as the case may be."
12. Encumbrances. Section 6.4 of the Loan Agreement is hereby amended by
deleting the word "and" appearing at the end of Section 6.4(h), replacing the
period with a semicolon and the word "and" appearing at the end of Section
6.4(i) and adding new Section 6.4(j) immediately thereafter, as follows:
"(j) liens and security interests in favor of Xxxxxxx on the assets
and properties of Borrowers and Guarantors under the Xxxxxxx Term Loan
Documents as in effect on July 8, 2004; provided, that, (i) such security
interests in and mortgages and liens in favor of Xxxxxxx shall at all
times be subject to the terms and conditions set forth in the Xxxxxxx
Intercreditor Agreement, in form and substance satisfactory to Lender."
13. Appraisals. Section 6.15 of the Loan Agreement is hereby deleted and
replaced with the following:
"6.15 Appraisals
(a) Borrowers shall, at Borrowers' expense, upon the
request of Lender not more than once during any three (3) month period,
and at any time or times as Lender may request on and after an Event of
Default, deliver to Lender appraisals by the Appraiser of any or all of
the Inventory of Borrowers, in form, scope and methodology acceptable to
Lender, and including, but not limited to, a report as to the Net Orderly
Liquidation Value of the Inventory of Borrowers, other than Inventory of
Gump's at the Gump's Main Store, and of the Net GOB Value of the Inventory
of Gump's at the Gump's Main Store.
(b) Upon Lender's request, Borrowers shall, at their
expense, once in any calendar year during the Term (excluding any such
reports or appraisals delivered in connection with the closing hereunder)
and at any time or times as Lender may request on or after an Event of
Default, deliver or cause to be delivered to Lender written reports or
appraisals as to their Real Property or Equipment, in form, scope and
methodology acceptable to Lender and by an appraiser acceptable to
Lender."
14. Second Restated Hanover Realty Term Note.
(a) Each of Borrowers and Guarantors hereby acknowledges, confirms
and agrees that Hanover Realty is indebted to Lender as of July 8, 2004, in
respect of the Obligations evidenced by the Second Restated Hanover Realty Term
Note in the aggregate principal amount of $ 3,885,714 (the "Existing Hanover
Realty Term Loan Balance"), together with interest accrued and accruing thereon
and costs, expenses, fees (including attorneys' fees and legal expenses) and
other charges now or hereafter owed by Borrowers to Lender attributable to the
Existing Hanover Realty Term Loan Balance, all of which are unconditionally
owing by Hanover Realty to Lender, without offset, defense or counterclaim of
any kind, nature and description whatsoever.
19
(b) Effective as of the date hereof, the Second Restated Hanover
Realty Term Note is hereby amended to provide that, unless sooner payable in
accordance with the terms and conditions of the Loan Agreement, the Second
Restated Hanover Realty Term Note and any other Financing Agreement, Hanover
Realty shall pay to Lender principal in respect of the Second Restated Hanover
Realty Term Note on the dates and in the amounts as follows:
Principal Principal
Payment Date Amount Due
--------------------------- ----------
August 1, 2004 $-0-
September 1, 2004 $-0-
October 1, 2004 $-0-
November 1, 2004 and each
month thereafter $121,429
(c) Principal in respect of the Hanover Realty Term Loan Second
Amended and Restated Note shall be paid in immediately available funds and in
the manner of payment otherwise provided in the Second Amended and Restated
Note. All principal and interest (together with any fees, costs, expenses and
other charges in respect of the Hanover Realty Term Loan payable by Borrowers to
Lender) shall be automatically, without notice or demand, absolutely and
unconditionally due and payable on July 8, 2007.
(d) The amendment of the Second Restated Hanover Realty Term Note
as set forth herein, shall not, in any manner, be construed to constitute
payment of, or impair, limit, cancel or extinguish, or constitute a novation in
respect of, any of the obligations, liabilities or indebtedness evidenced by or
arising under the Second Restated Hanover Realty Term Note. Interest accrued and
accruing shall continue to be paid as provided in the Second Restated Hanover
Realty Term Note. The liens and security interests securing such obligations,
liabilities or indebtedness shall not in any manner be impaired, limited,
terminated, waived or released hereby and the Second Restated Hanover Realty
Term Note shall continue to be secured by all the Collateral.
15. Restated TCS Factory Term Note.
(a) Each of Borrowers and Guarantors hereby acknowledges, confirms
and agrees that TCS Factory is indebted to Lender as of July 8, 2004, in respect
of the Obligations evidenced by the Second Restated TCS Factory Term Note in the
aggregate principal amount of $1,062,857 (the "Existing TCS Factory Term Loan
Balance"), together with interest accrued and accruing thereon and costs,
expenses, fees (including attorneys' fees and legal expenses) and other charges
now or hereafter owed by TCS Factory to Lender attributable to the Existing TCS
Factory Term Loan Balance, all of which are unconditionally owing by TCS Factory
to Lender, without offset, defense or counterclaim of any kind, nature and
description whatsoever.
(b) Effective as of the date hereof, the Restated TCS Factory Term
Note is hereby amended to provide that, unless sooner payable in accordance with
the terms and conditions of the Loan Agreement, the Restated TCS Factory Term
Note and any other Financing Agreement, TCS Factory shall pay to Lender
principal in respect of the Restated TCS Factory Term Note on the dates and in
the amounts as follows:
20
Principal Principal
Payment Date Amount Due
------------------------- ----------
August 1, 2004 $-0-
September 1, 2004 $-0-
October 1, 2004 $-0-
November 1, 2004 and each
month thereafter $33,215
(c) Principal in respect of the TCS Factory Term Loan shall be
paid in immediately available funds and in the manner of payment otherwise
provided in the Restated TCS Factory Term Note. All principal and interest
(together with any fees, costs, expenses and other charges in respect of the TCS
Factory Term Loan payable by TCS Factory to Lender) shall be automatically,
without notice or demand, absolutely and unconditionally due and payable on July
8, 2007.
(d) The amendment of the Restated TCS Factory Term Note as set
forth herein, shall not, in any manner, be construed to constitute payment of,
or impair, limit, cancel or extinguish, or constitute a novation in respect of,
any of the obligations, liabilities or indebtedness evidenced by or arising
under the Restated TCS Factory Term Note. Interest accrued and accruing shall
continue to be paid as provided in the Restated TCS Factory Term Note. The liens
and security interests securing such obligations, liabilities or indebtedness
shall not in any manner be impaired, limited, terminated, waived or released
hereby and the Restated TCS Factory Term Note shall continue to be secured by
all the Collateral.
16. Restated TCS Office Term Note.
(a) Each of Borrowers and Guarantors hereby acknowledges, confirms
and agrees that TCS Office is indebted to Lender as of July 8, 2004, in respect
of the Obligations evidenced by the Second Restated TCS Office Term Note in the
aggregate principal amount of $360,000 (the "Existing TCS Office Term Loan
Balance"), together with interest accrued and accruing thereon and costs,
expenses, fees (including attorneys' fees and legal expenses) and other charges
now or hereafter owed by TCS Office to Lender attributable to the Existing TCS
Office Term Loan Balance, all of which are unconditionally owing by TCS Office
to Lender, without offset, defense or counterclaim of any kind, nature and
description whatsoever.
(b) Effective as of the date hereof, the Restated TCS Office Term
Note is hereby amended to provide that, unless sooner payable in accordance with
the terms and conditions of the Loan Agreement, the Restated TCS Office Term
Note and any other Financing Agreement, TCS Office shall pay to Lender principal
in respect of the Restated TCS Office Term Note on the dates and in the amounts
as follows:
Principal Principal
Payment Date Amount Due
------------------------- ----------
August 1, 2004 $-0-
September 1, 2004 $-0-
October 1, 2004 $-0-
21
November 1, 2004 and each
month thereafter $11,250
(c) Principal in respect of the TCS Office Term Loan shall be paid
in immediately available funds and in the manner of payment otherwise provided
in the Restated Factory Term Note. All principal and interest (together with any
fees, costs, expenses and other charges in respect of the TCS Office Term Loan
payable by TCS Office to Lender) shall be automatically, without notice or
demand, absolutely and unconditionally due and payable on July 8, 2007.
(d) The amendment of the Restated TCS Office Term Note as set
forth herein, shall not, in any manner, be construed to constitute payment of,
or impair, limit, cancel or extinguish, or constitute a novation in respect of,
any of the obligations, liabilities or indebtedness evidenced by or arising
under the Restated TCS Office Term Note. Interest accrued and accruing shall
continue to be paid as provided in the Restated TCS Office Term Note. The liens
and security interests securing such obligations, liabilities or indebtedness
shall not in any manner be impaired, limited, terminated, waived or released
hereby and the Restated TCS Office Term Note shall continue to be secured by all
the Collateral.
17. Term. The first sentence of Section 9.1(a) of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:
"(a) This Agreement and the other Financing Agreements shall become
effective as of the date hereof and this Agreement shall continue in full
force and effect for a term ending on July 8, 2007 (the "Renewal Date"),
and from year-to-year thereafter, unless sooner terminated pursuant to the
terms hereof."
(b) The first sentence of Section 9.1(f) of the Loan Agreement is
hereby deleted and replaced with the following, effective with respect to
any termination after the date hereof:
"(f) If Lender terminates this Agreement or the other Financing
Agreements after the occurrence and during the continuance of an Event of
Default or at the request of Borrowers prior to the Renewal Date, in view
of the impracticality and extreme difficulty of ascertaining actual
damages, and by mutual agreement of the parties as to a reasonable
calculation of Lender's lost profits as a result thereof, Borrowers hereby
agree to pay to Lender, upon the effective date of such termination, a fee
(the "Early Termination Fee") in the amount equal to:
Amount Period
------ ------
(i) 3% of Maximum Credit From the date hereof through and including July 7, 2005
(ii) 1% of Maximum Credit From and after July 8, 2005 through and including July 7, 2006
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(iii) 1% of Maximum Credit From and after July 8, 2006 to but not including July 8, 2007"
18. Fees. In addition to all other fees, charges, interest and expenses
payable by Borrowers to Lender under the Loan Agreement and the other Financing
Agreements, Borrowers shall pay to Lender, contemporaneously herewith, an
amendment fee in the amount of $400,000, which fee is fully earned as of the
date hereof and may be charged into the loan account(s) of any Borrower.
19. Use of Xxxxxxx Term Loans Proceeds. Borrowers shall use and hereby
direct Lender to apply the initial proceeds of the Xxxxxxx Term Loans provided
by Xxxxxxx: (a) to repay in full the outstanding Obligations in respect of the
Tranche B Term Loan, and (b) for general operating, working capital, and other
proper corporate purposes of Borrowers and Guarantors not otherwise prohibited
by the terms of the Loan Agreement, including fees and expenses of the
transactions contemplated hereunder set forth in the Xxxxxxx Commitment Letter.
20. Representations, Warranties and Covenants. Borrowers and Guarantors
represent, warrant and covenant with and to Lender as follows, which
representations, warranties and covenants (other than the representation,
warranty and covenant contained in Section 20(e) hereof, which is made as of the
date hereof) are continuing and shall survive the execution and delivery hereof,
the truth and accuracy of, or compliance with each, together with the
representations, warranties and covenants in the other Financing Agreements,
being a condition of the effectiveness of this Amendment and a continuing
condition of the making or providing of any Revolving Loans or Letter of Credit
Accommodations by Lender to Borrowers:
(a) This Amendment and each other agreement or instrument to be
executed and delivered by each Borrower or Guarantor hereunder have been duly
authorized, executed and delivered by all necessary action on the part of each
Borrower and each Guarantor which is a party hereto and thereto and, if
necessary, their respective stockholders (with respect to any corporation) or
members (with respect to any limited liability company), and is in full force
and effect as of the date hereof, as the case may be, and the agreements and
obligations of each Borrower and Guarantor, as the case may be, contained herein
and therein constitute legal, valid and binding obligations of each Borrower and
Guarantor, as the case may be, enforceable against them in accordance with their
terms.
(b) No action of, or filing with, or consent of any governmental
or public body or authority, and no consent of any party other than Xxxxxxx, is
required to authorize, or is otherwise required in connection with, the
execution, delivery and performance of this Amendment and each other agreement
or instrument to be executed and delivered pursuant hereto and thereto.
(c) Neither the execution and delivery of this Agreement, the
Xxxxxxx Warrants, the Xxxxxxx Term Loan Documents, the Amendments to the Hanover
Certificate of Incorporation, the Certification of Designation of Series D
Preferred Stock, or any other agreements, documents or instruments in connection
therewith, nor the consummation of the transactions herein and therein
contemplated, nor compliance with the provisions thereof (i) has violated or
shall violate any Federal or State securities laws or any other law or
regulation or any
23
order or decree of any court or governmental instrumentality in any respect, or
(ii) does, or shall conflict with or result in the breach of, or constitute a
default in any respect under any mortgage, deed of trust, security agreement,
agreement or instrument to which any Borrower or Guarantor is a party or may be
bound, or (iii) does or shall violate any provision of the Certificate of
Incorporation or By-Laws of any Borrower or Guarantor.
(d) Notwithstanding anything to the contrary that may be contained
in any of the Xxxxxxx Warrants, the Certification of Designation of Series D
Preferred Stock or the Amendments to the Hanover Certificate of Incorporation,
Borrowers and Guarantors shall not, and shall not permit any of their
Subsidiaries, directly or indirectly, to make any loans, advances, dividends,
redemptions or other payments in respect of the Capital Stock of Hanover with
respect to the Common Stock Warrant, the Certification of Designation of Series
D Preferred Stock or the Series D Preferred Warrant, or in connection with the
Reverse Split, whether in cash, property or otherwise, except for the payments
in the form of Capital Stock permitted hereunder or payments in cash permitted
hereunder in connection with the repurchase of the fractional shares held by
shareholders of Hanover pursuant to the Reverse Split.
(e) To the best knowledge of Borrowers and Guarantors as of the
date hereof, no court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the issuance of
the Xxxxxxx Warrants, the Certification of Designation of Series D Preferred
Stock, the Amendments to the Hanover Certificate of Incorporation, the Xxxxxxx
Term Loan Documents and the transactions related thereto and, except as
previously disclosed to Lender in writing pursuant to the letter dated as of
July 8, 2004, no governmental or other action or proceeding has been threatened
or commenced against Borrowers or Guarantors, seeking any injunction,
restraining order or other order which seeks to avoid or otherwise modify the
transactions contemplated by the Xxxxxxx Warrants, the Amendments to the Hanover
Certificate of Incorporation, the Certification of Designation of Series D
Preferred Stock or the Xxxxxxx Term Loan Documents.
(f) Neither the execution and delivery of the Xxxxxxx Warrants,
the Amendments to the Hanover Certificate of Incorporation, the Certification of
Designation of Series D Preferred Stock or the Xxxxxxx Term Loan Documents, nor
the consummation of the transactions contemplated by the Xxxxxxx Warrants, the
Amendments to the Hanover Certificate of Incorporation, the Certification of
Designation of Series D Preferred Stock or the Xxxxxxx Term Loan Documents, nor
compliance with the provisions thereof, shall result in the creation or
imposition of any lien, charge or encumbrance upon any of the Collateral, other
than pursuant to the Xxxxxxx Term Loan Documents to the extent permitted herein
and in the Xxxxxxx Intercreditor Agreement.
(g) The Xxxxxxx Warrants and the Certification of Designation of
Series D Preferred Stock have been duly authorized, issued and delivered by
Hanover and the transactions contemplated thereunder shall be performed in
accordance with their terms by the respective parties thereto in all respects,
including the fulfillment (not merely the waiver) of all conditions precedent
set forth therein.
(h) The Xxxxxxx Term Loan Documents have been duly authorized,
executed and delivered by Borrowers and Guarantors, as the case may be, and the
transactions contemplated thereunder shall be performed in accordance with their
terms by the respective parties thereto in
24
all respects, including the fulfillment (not merely the waiver) of all
conditions precedent set forth therein.
(i) The Amendments to the Hanover Certificate of Incorporation
shall be duly authorized, executed and delivered by Hanover and the transactions
contemplated thereunder shall be performed in accordance with their terms by the
respective parties thereto in all respects, including the fulfillment (not
merely the waiver) of all conditions precedent set forth therein.
(j) All actions and proceedings required by the Xxxxxxx Warrants,
the Amendments to the Hanover Certificate of Incorporation, the Certification of
Designation of Series D Preferred Stock, the Xxxxxxx Term Loan Documents, and
applicable law or regulations, including, without limitation, all Securities
Laws, shall have been taken, and the transaction required thereunder shall have
been duly and validly taken and consummated, other than with respect to the
exchange of the Series D Preferred Warrant for the Common Stock Warrant and the
Amendments to the Hanover Certificate of Incorporation on or before September
30, 2004 (at which time all such actions and proceedings shall have been taken,
and the transaction required thereunder shall have been duly and validly taken
and consummated).
(k) All of the representations and warranties set forth in the
Loan Agreement as amended hereby, and the other Financing Agreements, are true
and correct in all material respects after giving effect to the provisions of
this Amendment, except to the extent any such representation or warranty is made
as of a specified date, in which case such representation or warranty shall have
been true and correct as of such date.
(l) After giving effect to the provisions of this Agreement, the
consummation of the transactions contemplated by the Xxxxxxx Warrants, the
Certification of Designation of Series D Preferred Stock, the Xxxxxxx Term Loan
Documents, the Amendments to the Hanover Certificate of Incorporation, or any
other agreements, documents or instruments in connection therewith, when
consummated will not constitute an Incipient Event of Default or Event of
Default.
(m) After the date hereof, the Xxxxxxx Warrants, the Xxxxxxx Term
Loan Documents (except as permitted under the Loan Agreement as amended hereby),
the Amendments to the Hanover Certificate of Incorporation, or any other
agreements, documents or instruments in connection therewith, shall not be
amended, modified, supplemented, extended, renewed, restated or replaced with
the prior written consent of Lender.
(n) Notwithstanding the provisions of Section 8(d) of the
Thirtieth Amendment to Loan Agreement or the letter agreement, dated as of May
11, 2004, by Lender in favor of Brawn and Hanover, Borrowers and Guarantors
shall enter into, on or before August 15, 2004, an Amended and Restated Loan and
Security Agreement among Lender, Borrowers and Guarantors and an amendment and
restatement of such other Financing Agreements or amendments to or amendments
and restatements of any existing Financing Agreements as Lender shall request in
connection with the amendment and restatement of the Loan Agreement.
(o) After giving effect to the provisions of this Amendment, no
Event of Default or Incipient Default exists or has occurred and is continuing.
25
21. Conditions Precedent. Concurrently with the execution and delivery
hereof (except to the extent otherwise indicated below), and as a further
condition to the effectiveness of this Amendment and the agreement of Lender to
the modifications and amendments set forth in this Amendment:
(a) Lender shall have received a photocopy of an executed original
or executed original counterparts of this Amendment by facsimile (with the
originals to be delivered within five (5) Business Days after the date hereof),
as the case may be, duly authorized, executed and delivered by Borrowers and
Guarantors;
(b) Lender shall have received, in form and substance satisfactory
to Lender, true and complete copies of all of the Xxxxxxx Term Loan Documents,
the Certificate of Designation of the Series D Preferred Stock, the Xxxxxxx
Series D Warrant and the form of the Amendments to the Hanover Certificate of
Incorporation;
(c) Lender shall have received, in form and substance satisfactory
to Lender, the Xxxxxxx Intercreditor Agreement;
(d) Lender shall have received at the payment direction of
Borrowers for the account of Borrowers, the proceeds of the Xxxxxxx Term Loans
in the amount of not less than $19,800,000 from Xxxxxxx, a portion of which loan
proceeds shall be used to repay in full Tranche B Term Loan;
(e) as of the closing and after giving effect to the transactions
contemplated by this Amendment, Borrowers shall have Excess Availability of not
less than $20,000,000;
(f) Lender shall have received, in form and substance satisfactory
to Lender, Secretary's or Assistant Secretary's Certificates of Directors'
Resolutions and Shareholders' Consent evidencing the adoption and subsistence of
corporate resolutions approving the execution, delivery and performance by
Borrowers and Guarantors (other than the consent of the shareholders of Hanover)
that are corporations of this Amendment and the agreements, documents and
instruments to be delivered pursuant to this Amendment;
(g) Lender shall have received, in form and substance satisfactory
to Lender, the consent of all Participants to this Amendment and the
transactions contemplated hereby; and
(h) each of Borrowers and Guarantors shall deliver, or cause to be
delivered, to Lender a true and correct copy of any consent, waiver or approval
to or of this Amendment that any Borrower or Guarantor is required to obtain
from any other Person, and such consent, approval or waiver shall be in a form
reasonably acceptable to Lender.
22. Effect of this Amendment. This Amendment constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior oral or written communications, memoranda, proposals,
negotiations, discussions, term sheets and commitments with respect to the
subject matter hereof. Except as expressly provided herein, no other changes or
modifications to the Loan Agreement or any of the other Financing Agreements, or
waivers of or consents under any provisions of any of the foregoing, are
intended or implied by this Amendment, and in all other respects the Financing
Agreements are hereby
26
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent that any provision of the Loan Agreement or
any of the other Financing Agreements conflicts with any provision of this
Amendment, the provision of this Amendment shall control.
23. Further Assurances. Borrowers and Guarantors shall execute and
deliver such additional documents and take such additional action as may be
reasonably requested by Lender to effectuate the provisions and purposes of this
Amendment.
24. Governing Law. The validity, interpretation and enforcement of this
Amendment in any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise shall be governed by the
internal laws of the State of New York, without regard to any principle of
conflict of laws or other rule of law that would result in the application of
the law of any jurisdiction other than the State of New York.
25. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
26. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on the day and year first written.
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxx Xxxxx
-------------------------------------
Title: A/V/P
BRAWN OF CALIFORNIA, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
GUMP'S BY MAIL, INC.
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title: President
GUMP'S CORP.
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title: President
HANOVER REALTY, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: President
THE COMPANY STORE FACTORY, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
28
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE COMPANY OFFICE, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
SILHOUETTES, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------------
Name: Xxxxxxx X. Blue
Title: President
HANOVER COMPANY STORE, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------------
Name: Xxxxxxx X. Blue
Title: President
DOMESTICATIONS, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------------
Name: Xxxxxxx X. Blue
Title: Vice President
KEYSTONE INTERNET SERVICES, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------------
Name: Xxxxxxx X. Blue
Title: Vice President
THE COMPANY STORE GROUP, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------------
Name: Xxxxxxx X. Blue
Title: President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
29
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
By their signatures below, the
undersigned Guarantors acknowledge
and agree to be bound by the
applicable provisions of this
Amendment:
HANOVER DIRECT, INC.
By: /s/ Xxxxxxx X. Blue
-------------------------------
Name: Xxxxxxx X. Blue
Title: Senior Vice President and
Chief Financial Officer
HANOVER HOME FASHIONS GROUP, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------
Name: Xxxxxxx X. Blue
Title: Vice President
CLEARANCE WORLD OUTLETS, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------
Name: Xxxxxxx X. Blue
Title: President
SCANDIA DOWN, LLC
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: President
LA CROSSE FULFILLMENT, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------
Name: Xxxxxxx X. Blue
Title: President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
30
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
X.X. ADVERTISING, LLC
By: /s/ Xxxxxxx X. Blue
-------------------------------
Name: Xxxxxxx X. Blue
Title: President
AMERICAN DOWN & TEXTILE, LLC
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: President
HANOVER GIFTS, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: President
31
