Common use of Guaranteed Amount Clause in Contracts

Guaranteed Amount. TWEC will guarantee that the Debtor will receive the sum of $1.8 million as consideration for the disposition of the Assets (hereinafter defined), exclusive of those costs and expenses to be borne by the Debtor, as specified in this Letter Agreement (the “Guaranteed Amount”); provided, however, that the Cost Value (hereinafter defined) of the Debtor’s inventory to be sold in accordance with this Letter Agreement shall be no less than $5.4 million. In the event that the Cost Value of the Inventory (hereinafter defined) is less than $5.4 million, then the Guaranteed Amount will be reduced in an amount equal to one-third of the difference between the Cost Value of the Inventory and $5.4 million. “Cost Value” shall mean, with respect to inventory (the “Inventory”) physically located at the Debtor’s retail stores set forth on Exhibit A attached hereto (the “Stores”) or the Debtors distribution center that is salable in the ordinary course, the cost previously represented to TWEC by Debtor in the cost file submitted by item, except for damaged, defective, display, or rental Inventory where TWEC shall mutually agree upon Cost Value. Prior to the date on which the transactions contemplated hereby are consummated (the “Closing Date”), a physical inventory (the “Physical Inventory”) shall be taken by an independent inventory service jointly designated by the Debtor and TWEC, and the costs of the Physical Inventory shall be paid equally by the Debtor and TWEC; provided, however, that in no event shall Debtor be required to pay in excess of $7,500 in respect of the Physical Inventory. If, in the course of taking the Physical Inventory, any items of Inventory are determined to be non-saleable, such items will be assigned no Cost Value for purposes of calculating the aggregate dollar value of the Inventory. In addition, to the extent that Debtor and TWEC are unable to agree on a Cost Value for damaged, defective, display, or rental Inventory, the Cost Value of such shall be zero. To the extent that the Debtor, with the prior Agreement of TWEC, receives additional Inventory on or before ten days after the Closing Date, such additional Inventory shall be valued in the same manner as the Inventory that was in the Debtor’s possession as of the Closing Date. In addition, TWEC shall post an irrevocable letter of credit in the face amount equal to $139,900.00. In the event that TWEC does not pay amounts due under a Lease as specified herein, Debtor shall be entitled to draw upon such letter of credit to satisfy Debtor’s obligations under such Lease. Upon payment by TWEC of all amounts due under the Leases as provided herein, Debtor shall cooperate with TWEC in order to terminate the letter of credit required to be posted under this paragraph.

Guaranteed Amount. TWEC will guarantee that the Debtor will receive CHT REIT’s liability under this Agreement shall be limited to the sum of $1.8 million as consideration for (a) the disposition then current outstanding principal balance of the Assets Mezzanine Loan together with any accrued and unpaid interest thereon and any exit fee imposed by Mezzanine Lender, and (hereinafter defined), exclusive of those b) all costs and expenses of Lender (including, but not limited to, attorneys’ fees and expenses) related to be borne by the Debtor, enforcement of this Agreement and collection of the sum described in clause (a) above (the sum of the amounts described in clauses (a) and (b) herein referred to as specified in this Letter Agreement (the “Guaranteed Amount”); provided, however, that the Cost Value (hereinafter defined) of the Debtor’s inventory to be sold in accordance with this Letter Agreement shall be no less than $5.4 million. In the event that the Cost Value of the Inventory (hereinafter defined) is less than $5.4 million, then the Guaranteed Amount will be reduced in an amount equal to one-third of the difference between the Cost Value of the Inventory and $5.4 million. “Cost Value” shall mean, with respect to inventory (the “Inventory”) physically located at the Debtor’s retail stores set forth on Exhibit A attached hereto (the “Stores”) or the Debtors distribution center that is salable in the ordinary course, the cost previously represented to TWEC by Debtor in the cost file submitted by item, except for damaged, defective, display, or rental Inventory where TWEC shall mutually agree upon Cost Value. Prior Notwithstanding anything to the date on which the transactions contemplated hereby are consummated (the “Closing Date”), a physical inventory (the “Physical Inventory”) shall be taken by an independent inventory service jointly designated by the Debtor and TWEC, and the costs of the Physical Inventory shall be paid equally by the Debtor and TWEC; provided, however, that in no event shall Debtor be required to pay in excess of $7,500 in respect of the Physical Inventory. If, in the course of taking the Physical Inventory, any items of Inventory are determined to be non-saleable, such items will be assigned no Cost Value for purposes of calculating the aggregate dollar value of the Inventory. In additioncontrary contained herein, to the extent that Debtor at any time hereafter there are then funds in the Capital Raise Account, including, without limitation, funds deposited therein and TWEC are unable interest earned thereon (collectively, the “Deposited Funds”) and either (i) (A) a Mezzanine Repayment Failure has occurred, and (B) Lender elects to agree on a Cost Value for damaged, defective, displaydeliver an Access Termination Notice and Disposition Instructions to ▇▇▇▇▇ Fargo causing the Deposited Funds (less the $5,000.00 minimum balance required by the Deposit Agreement) to be paid to Mezzanine Lender and applied against the amounts then due and owing under the Mezzanine Loan, or rental Inventory(ii) a Mezzanine Event of Default has occurred and Lender elects or is required in accordance with the terms hereof to deliver to ▇▇▇▇▇ Fargo an Access Termination Notice and Disposition Instructions causing the Deposited Funds (less the $5,000.00 minimum balance required by the Deposit Agreement) to be paid to Mezzanine Lender and applied against the amounts then due and owing under the Mezzanine Loan, then Lender agrees that the Cost Value portion of such the Guaranteed Amount described in clause (a) above shall be zeroreduced by the amount of the Deposited Funds actually paid to Mezzanine Lender. To It is hereby acknowledged and agreed that any and all of the extent Guaranteed Amount described in clause (a) herein that the Debtor, with the prior Agreement of TWEC, receives additional Inventory on or before ten days after the Closing Date, such additional Inventory is paid by CHT REIT to Lender shall be valued immediately paid by Lender to the Mezzanine Lender in accordance with Paragraph 2 of this Agreement for application by Mezzanine Lender towards the same manner as the Inventory that was in the Debtor’s possession as of the Closing Date. In addition, TWEC shall post an irrevocable letter of credit in the face amount equal to $139,900.00. In the event that TWEC does not pay amounts due under a Lease as specified herein, Debtor shall be entitled to draw upon such letter of credit to satisfy Debtor’s obligations under such Lease. Upon payment by TWEC of all amounts due under the Leases as provided herein, Debtor shall cooperate with TWEC in order to terminate the letter of credit required to be posted under this paragraphMezzanine Loan.