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HANOVER DIRECT, INC.
UNSECURED LINE OF CREDIT & PROMISSORY NOTE
$25,000,000 New York, New York
March 1, 2000
FOR VALUE RECEIVED, the undersigned, HANOVER DIRECT, INC., a Delaware
corporation ("Borrower"), promises to pay to the order of RICHEMONT FINANCE,
S.A., or its assigns ("Lender"), on or before the Maturity Date referred to
below, TWENTY-FIVE MILLION DOLLARS ($25,000,000), or such lesser amount as shall
then be outstanding under this Line of Credit and Promissory Note as evidenced
by ▇▇▇▇▇▇'s record of the loans made hereunder.
Fees: The Borrower will pay the Lender a monthly fee of $62,500 each month
in arrears from the date of the Note up to the Maturity Date (as defined below).
Interest: The Borrower will pay the Lender monthly interest at a rate of
0.583% on the average monthly balance outstanding in arrears.
All outstanding principal, fees and interest not previously paid shall be
due and payable in full on the date (the "Maturity Date") which is the earlier
to occur of December 30, 2000 and the date on which Lender makes an equity
infusion in Borrower or any of Borrower's subsidiaries. Principal, fees and
interest on this Note are payable in lawful currency of the United States of
America to the Lender at its principal office at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, or as such other place as may be designated by ▇▇▇▇▇▇, in same
day funds.
A. Representations and Warranties
1. Borrower is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. ▇▇▇▇▇▇▇▇ has
the corporate power and authority to execute and deliver this Note and to
perform its obligations hereunder.
2. This Note has been duly authorized by all necessary corporate action on
the part of Borrower, and this Note constitutes a legal, valid and binding
obligation of Borrower enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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3. The execution, delivery and performance by Borrower of this Note will not
(i) violate, or result in the creation of any lien in respect of any
property of Borrower under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument by which Borrower is bound, (ii) conflict
with or result in a breach of any of the terms, conditions or provisions
of any order, judgment, decree, or ruling of any court, arbitrator or
governmental authority applicable to Borrower or (iii) violate any
provision of any statute or other rule or regulation of any governmental
authority applicable to Borrower.
4. No approval, consent, waiver, authorization, registration, declaration or
filing by, from or with any governmental authority or other person or
entity is required in connection with the execution, delivery or
performance by Borrower of this Note.
B. Covenants
1. Borrower shall at all times maintain its corporate existence and shall not
merge or consolidate with any other entity (unless Borrower shall be the
survivor) without ▇▇▇▇▇▇'s consent.
2. Borrower shall provide to Lender such information about its assets,
liabilities and business as Lender shall from time to time reasonably
request, including, without limitation, financial statements of Borrower
and its subsidiaries.
C. Events of Default
An "Event of Default" shall exist under this Note if any of the following
conditions or events shall occur and be continuing:
(a) Borrower defaults in the payment of any principal, fees or interest
on this Note when the same becomes due and payable, whether at
maturity or by declaration or otherwise; or
(b) Borrower defaults in the performance of any other obligation
hereunder or any representation or warranty made by Borrower in this
Note proves to have been false or incorrect in any material respect
on the date as of which made; or
(c) Borrower (i) is unable to pay, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents by answer
or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its
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creditors, (iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v)
is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(d) A court or governmental authority of competent jurisdiction enters
an order appointing, without consent by ▇▇▇▇▇▇▇▇, a custodian,
receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of Borrower, or any such petition shall be filed against
Borrower.
Upon the occurrence of an Event of Default, Lender may, at its
option, declare the entire unpaid principal balance of, and all accrued
fees and interest on, this Note to be immediately due and payable. If an
Event of Default described in paragraph (c) or (d) above has occurred,
this Note shall automatically become immediately due and payable. Upon
this Note becoming due and payable, whether automatically or by
declaration, this Note will forthwith mature and the entire unpaid
principal amount hereof, plus all accrued and unpaid interest hereon,
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby
waived.
D. General
In addition to the foregoing, ▇▇▇▇▇▇ may proceed to protect and
enforce its rights hereunder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any
agreement contained herein, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or by law or otherwise.
Lender or its assignee may assign this Note to any person or entity
without Borrower's consent. Lender or its assignee shall be entitled to
apply this Note in payment of the price payable in respect of any equity
infusion by ▇▇▇▇▇▇ in erizon.
Failure of Lender to exercise any of its rights and remedies shall
not constitute a waiver of the right to exercise the same at that or any
other time. All rights and remedies of Lender shall be cumulative to the
full extent permitted by law.
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The invalidity or unenforceability of any provision of this Note shall not
impair the validity or enforceability of any other provision of this Note.
This Note and the rights of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ are subject to the terms of a
Subordination Agreement between Lender and its subsidiaries and GECC.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS.
Accepted and Agreed to:
By Hanover Direct Inc.
Name: /s/ [ILLEGIBLE]
Print Name:
Title
Date
By Richemont Finance S.A.
Name: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Print Name: ▇▇▇▇ ▇▇▇▇▇▇
Title
Date
Name: /s/ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Print Name: ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Title
Date
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
My Commission Expires July 2, 2001
