CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CREDIT AGREEMENT — BORROWER'S MARKUP
$300,000,000 Senior Secured Asset-Based Revolving Credit Facility
March 28, 2023
REDLINE — Calderwood & Harkness LLP Borrower Comments to Whitfield, Greer & Holloway LLP Draft dated March 20, 2023
Prepared by: Calderwood & Harkness LLP 599 Lexington Avenue, 42nd Floor New York, NY 10022
Prepared for: Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC
C&H Matter No.: 1038-00002
Base Document: WGH Draft dated March 20, 2023, WGH Matter No. 1038-00002
Marking Convention: Tracked changes are shown in redline/strikethrough format throughout this document. Calderwood & Harkness insertions are indicated by "" notation; Calderwood & Harkness deletions to the WGH draft text are indicated by "" notation. Marginal comments and open items are flagged with "[C&H Comment]" or "[Borrower Note]" as applicable. All comments and annotations are for discussion purposes only and remain subject to further review and revision by the Borrower and its counsel.
DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO FURTHER REVIEW AND REVISION
CREDIT AGREEMENT
dated as of
[●], 2023
among
CASCADE RETAIL HOLDINGS INC. as a Borrower
CASCADE RETAIL OPERATING COMPANY LLC as a Borrower
THE GUARANTORS PARTY HERETO
THE LENDERS PARTY HERETO
and
CRESCENT HARBOR BANK, N.A. as Administrative Agent, Collateral Agent, Sole Lead Arranger, and Sole Bookrunner
________________________________________
$300,000,000 SENIOR SECURED ASSET-BASED REVOLVING CREDIT FACILITY
________________________________________
[C&H Comment: No changes to cover page. Date to be inserted upon execution.]
ARTICLE I — DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Adjusted Term SOFR" means, for any Interest Period, an interest rate per annum equal to the sum of (a) Term SOFR for such Interest Period plus (b) the SOFR Adjustment; provided that if Adjusted Term SOFR as so determined would be less than the SOFR Floor, Adjusted Term SOFR shall be deemed to be the SOFR Floor.
[C&H Comment: No change to WGH draft language. SOFR Adjustment levels are 10 bps for 1-month and 15 bps for 3-month Interest Periods, consistent with current ARRC recommendations. These levels are market for new ABL facilities. Acceptable as drafted.]
"Administrative Agent" means Crescent Harbor Bank, N.A., in its capacity as administrative agent under the Loan Documents, together with its successors and assigns in such capacity.
"Aggregate Commitments" means the aggregate Commitments of all Lenders, which as of the Closing Date shall equal $300,000,000.
"Applicable Rate" means (a) with respect to any SOFR Loan, 300 basis points (3.00%) per annum, and (b) with respect to any Base Rate Loan,  .
[C&H Comment: Request confirmation that Base Rate margin will be 200 bps (i.e., 100 bps less than SOFR margin), consistent with market convention for ABL revolving credit facilities. We have inserted "200 basis points (2.00%) per annum" for Base Rate Loans in place of the placeholder. This reflects the customary 100 bps differential between SOFR and Base Rate margins observed across comparable recent ABL transactions.]
"Availability" means, as of any date of determination, the excess, if any, of (a) the lesser of (i) the Aggregate Commitments and (ii) the Borrowing Base over (b) the Total Revolving Outstandings .
[C&H Comment: No substantive change to the Availability formula. The added language makes explicit that the calculation is pro forma — i.e., giving effect to outstandings on the date of determination, including any borrowings being requested. This is a clarifying addition consistent with the intended operation of the Borrowing Base construct.]
"Availability Reserves" means, as of any date of determination, such reserves as the Administrative Agent may from time to time establish and maintain in its Permitted Discretion, including rent reserves, gift card reserves, dilution reserves, and other customary reserves . The initial amount of the Availability Reserves as of the Closing Date shall be $23,650,000.
[C&H Comment: The 5 Business Days' notice period in the WGH draft is insufficient for the Borrower to evaluate the basis for and respond to proposed reserve changes, which can have a material impact on Availability and, consequently, on the Borrower's liquidity position. We are requesting 10 Business Days' notice. In addition, we have added language requiring that reserves be "commercially reasonable and consistent with those imposed on similarly situated asset-based borrowers" to ensure that the Administrative Agent's Permitted Discretion is exercised in a manner that is tethered to a market standard rather than being an unconstrained unilateral right. The right to request a discussion meeting is procedural and does not require the Agent to delay the imposition of the reserve beyond the 10 Business Day notice period. These are standard borrower-side requests in comparable ABL facilities.]
"Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1.00%, and (c) the Adjusted Term SOFR for a one-month Interest Period in effect on such day plus 1.00%; provided that if the Base Rate as so determined would be less than 0.00%, the Base Rate shall be deemed to be 0.00%.
"Borrowers" means, collectively, Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC, and "Borrower" means either of them, as the context requires.
"Borrowing Base" means, as of any date of determination, an amount equal to (a) 85% of the face amount of Eligible Receivables as of such date, plus (b) the lesser of (i) 65% of the NOLV of Eligible Inventory as of such date and (ii) 75% of the net book value of Eligible Inventory as of such date, minus (c) Availability Reserves as of such date.
[C&H Comment: Advance rates of 85% for Eligible Receivables and 65% of NOLV for Eligible Inventory are acceptable and consistent with the term sheet. We are focusing our comments on the eligibility criteria definitions and the reserve methodology rather than the headline advance rates.]
"Cascade Digital Commerce Inc." or "CDC" means Cascade Digital Commerce Inc., a Delaware corporation and a wholly owned subsidiary of Cascade Retail Operating Company LLC.
"Cascade Fulfillment Services Inc." or "CFS" means Cascade Fulfillment Services Inc., a Delaware corporation and a wholly owned subsidiary of Cascade Retail Operating Company LLC.
"Cascade Outlet Stores LLC" or "COS" means Cascade Outlet Stores LLC, a Washington limited liability company and a wholly owned subsidiary of Cascade Retail Operating Company LLC.
"Cascade Retail Canada ULC" or "CRC" means Cascade Retail Canada ULC, an unlimited liability company formed under the laws of the Province of British Columbia, Canada, and a wholly owned subsidiary of Cascade Retail Operating Company LLC. CRC is an Excluded Foreign Subsidiary.
"Cash Dominion Event" means any period (a) commencing on the date that (i) Availability is less than   of the lesser of the Aggregate Commitments and the Borrowing Base   or (ii) an Event of Default has occurred and is continuing and (b) ending on the date on which (x) Availability has exceeded   of the lesser of the Aggregate Commitments and the Borrowing Base for 30 consecutive  days and (y) no Event of Default then exists and is continuing. For the avoidance of doubt, a Cash Dominion Event shall cease in accordance with clause (b) only when both conditions (x) and (y) are simultaneously satisfied for the entirety of the 30 consecutive  day period.
[C&H Comment: The 12.5% Cash Dominion trigger in the WGH draft ($37,500,000 based on a $300M facility) is aggressive for a borrower of Cascade's size and credit profile. Market standard for large ABL facilities — particularly those for investment-grade-adjacent or publicly traded borrowers — is 10.0%. We are requesting a reduction to 10.0% ($30,000,000), which would also align the Cash Dominion trigger with the FCCR Trigger Threshold. Alignment of these triggers is a key priority for the Borrower, as misalignment creates operational confusion and could result in cash dominion being imposed at Availability levels that do not raise genuine credit concerns. We note that this point is expected to be heavily negotiated. The Borrower's fallback position, if the Agent insists on 12.5%, is to accept 12.5% if the cure period for exiting cash dominion is reduced from 30 days to 20 days, to minimize operational disruption to the Borrower's treasury management. We have also clarified that the 30-day exit period runs in "calendar days" rather than "Business Days" to avoid ambiguity.]
"Collateral" means all assets and property of any kind of the Loan Parties, whether real, personal, or mixed, and whether now owned or hereafter acquired, upon which a Lien is granted or purported to be granted in favor of the Collateral Agent pursuant to the Collateral Documents, but excluding Excluded Assets.
"Collateral Agent" means Crescent Harbor Bank, N.A., in its capacity as collateral agent under the Loan Documents, together with its successors and assigns in such capacity.
"Collateral Documents" means, collectively, the Security Agreement, the Pledge Agreement, each DACA, and each other agreement, instrument, or document from time to time delivered to the Collateral Agent to create, evidence, or perfect a Lien on any Collateral.
"Compliance Certificate" means a certificate substantially in the form of Exhibit D hereto.
"Consolidated EBITDA" means, for any period, an amount equal to Consolidated Net Income for such period plus, without duplication, the following amounts to the extent deducted (and not added back) in calculating Consolidated Net Income for such period:
(i) Consolidated Interest Expense for such period;
(ii) the provision for federal, state, local, and foreign income taxes for such period;
(iii) depreciation and amortization expense for such period;
(iv) all other non-cash charges reducing Consolidated Net Income for such period (excluding any non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash charge that was paid in a prior period);
minus, without duplication, the following amounts to the extent included in calculating Consolidated Net Income for such period:
(A) all non-cash items increasing Consolidated Net Income for such period (excluding any non-cash item to the extent it represents the reversal of an accrual of, or cash reserve for, anticipated cash charges in any prior period);
[C&H Comment: The WGH draft EBITDA definition is too narrow and lacks customary addbacks that are standard in comparable ABL credit agreements for borrowers of Cascade's size and profile. The Borrower specifically requires the restructuring charge addback (clause (vi)) given the ongoing supply chain optimization initiative announced in Q3 2022, which is expected to generate restructuring charges of approximately $8–12 million through FY2024. The stock-based compensation addback (clause (vii)) is market standard and should be noncontroversial. The transaction cost addback (clause (v)) protects the FY2023 FCCR calculation from the impact of closing costs associated with this facility. The $15 million annual cap on restructuring charges and the $5 million aggregate cap on transaction costs provide the Agent with reasonable limits on these addbacks. All proposed addbacks are consistent with those observed in recent precedent ABL credit agreements for similarly situated retail borrowers.]
"Default Rate" means an interest rate per annum at all times equal to the Applicable Rate plus 200 basis points (2.00%); provided that the Default Rate shall apply .
[C&H Comment: The Default Rate should not automatically apply upon any Default or upon the occurrence of non-payment Events of Default without notice. The addition of a notice requirement for non-monetary Events of Default is a standard borrower protection. For payment defaults under Sections 8.01(a) and 8.01(b), the Default Rate would apply automatically upon occurrence without the need for separate notice, which is the customary approach.]
"Eligible Inventory" means, at any time, Inventory of the Loan Parties (other than CRC) that the Administrative Agent, in its Permitted Discretion, deems eligible as the basis for the extension of Revolving Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent's Permitted Discretion, Eligible Inventory shall not include any Inventory that:
(a) is not owned by a Loan Party free and clear of all Liens (other than Permitted Liens and the Lien of the Collateral Agent);
(b) is not located in the United States at one of the locations listed on Schedule 5.19, or is located at a third-party location for which a landlord waiver or collateral access agreement acceptable to the Administrative Agent has not been delivered (subject to post-closing delivery obligations under Section 6.13);
(c) is obsolete, damaged, defective, returned, or otherwise not saleable in the ordinary course of business;
(d) consists of packaging materials, supplies, or other items that are not held for sale;
(e) is consigned to a Loan Party by a third party or is held by a Loan Party on consignment for a third party;
(f) is in transit from a vendor or supplier and has been in transit for more than   days from the shipping date ;
(h) has not been sold or is otherwise slow-moving and has not had a sale in excess of   months;
or
(j) is otherwise not acceptable to the Administrative Agent in its Permitted Discretion.
[C&H Comment: Several points regarding the Eligible Inventory definition:
In-transit inventory (clause (f)): We are proposing a 45-day in-transit period measured from the shipping date, with appropriate documentation requirements. In-transit goods are critical to Cascade's supply chain, particularly during seasonal build periods (spring/summer outdoor lifestyle merchandise and fall/winter home goods). A 30-day limit, which we understand may be the Agent's initial position, would exclude a substantial portion of seasonal merchandise shipped from overseas suppliers (particularly from Southeast Asian manufacturing partners with ocean transit times of 21–35 days). A 45-day window is more appropriate and consistent with Cascade's business model.
E-commerce fulfillment inventory (clause (g)): The three CFS-operated fulfillment centers in Kent, WA, Reno, NV, and Columbus, OH are integral to Cascade's omnichannel distribution strategy and hold approximately $47 million in inventory at any given time. Excluding this inventory from the Borrowing Base would be commercially unreasonable. We have conditioned eligibility on the delivery of landlord waivers or collateral access agreements, which is appropriate.
Slow-moving inventory (clause (h)): We are proposing an 18-month exclusion threshold rather than 12 months. Cascade's product mix includes home goods and outdoor lifestyle products with retail cycles that commonly extend beyond 12 months. An 18-month threshold is more appropriate for this business model and is within the range observed in ABL facilities for specialty retail borrowers.
Outlet location inventory (clause (i)): We have added clarifying language to confirm that inventory held at COS's 64 outlet retail locations is eligible, provided standard eligibility criteria are met and the locations are listed on Schedule 5.19. This reflects the commercial understanding of the parties.
Consigned goods (clause (e)): The WGH draft exclusion of consigned goods is acceptable and we have not proposed any changes.]
"Eligible Receivables" means, at any time, Accounts of the Loan Parties (other than CRC) that the Administrative Agent, in its Permitted Discretion, deems eligible as the basis for the extension of Revolving Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent's Permitted Discretion, Eligible Receivables shall not include any Account that:
(a) has remained unpaid for more than 90 days after the original invoice date;
(b) is owed by an account debtor if more than   of the aggregate Accounts owed by such account debtor have remained unpaid for more than 90 days after the original invoice date (cross-aging);
(c) is owed by any Loan Party or any Affiliate of any Loan Party (intercompany);
(d) is owed by an account debtor that is a Governmental Authority,  ;
(e) is owed by an account debtor located outside the United States (unless supported by a letter of credit or credit insurance acceptable to the Administrative Agent);
(f) is owed by an account debtor if the aggregate face amount of all Accounts owed by such account debtor exceeds   of the aggregate face amount of all Eligible Receivables  (concentration limit);
(g) is subject to any counterclaim, deduction, defense, dispute, or offset asserted by the applicable account debtor, to the extent of such counterclaim, deduction, defense, dispute, or offset;
(h) is owed by an account debtor that is the subject of any bankruptcy, insolvency, or similar proceeding;
or
(j) is otherwise not acceptable to the Administrative Agent in its Permitted Discretion.
[C&H Comment: Several points regarding the Eligible Receivables definition:
Cross-aging threshold (clause (b)): We are proposing a 50% cross-aging threshold, meaning that all receivables from an account debtor would be excluded only if more than 50% of that debtor's receivables are past due 90+ days. We understand the Agent's initial position may be 25%, which is too aggressive and would disproportionately affect seasonal wholesale accounts that occasionally have a small number of disputed invoices. A 50% threshold is consistent with comparable ABL facilities for retail borrowers.
Government receivables (clause (d)): We are proposing a 120-day past-due threshold for government account debtors. Government accounts routinely pay beyond standard 90-day commercial terms due to procurement and appropriations cycle delays. A 120-day threshold is widely used in ABL facilities where the borrower has government receivables exposure.
Concentration limit (clause (f)): We are proposing 15% for any single account debtor and 20% for the top three account debtors in the aggregate. These limits provide appropriate diversification protections while accommodating Cascade's wholesale distribution relationships.
E-commerce receivables (clause (i)): We have added language confirming that credit card receivables and receivables from third-party payment processors (net of processing fees) constitute Eligible Receivables so long as collected within 5 Business Days. E-commerce receivables represent a growing and important component of Cascade's receivables base and should be expressly addressed in the eligibility criteria.]
"Excluded Assets" means (i) any fee interest in owned real property (other than fixtures), (ii) equity interests in any Foreign Subsidiary in excess of 65% of the voting stock of such Foreign Subsidiary, (iii) intellectual property registered with the United States Patent and Trademark Office or the United States Copyright Office (subject to the negative pledge provisions of the Security Agreement),  .
[C&H Comment: The additions of clauses (iv) and (v) are standard borrower-side carve-outs for assets where pledging would be either legally impermissible or counterproductive. Clause (iv) respects existing contractual restrictions that are not overridden by the UCC's anti-assignment provisions. Clause (v) protects intent-to-use trademark applications from invalidation under the Lanham Act, where a pledge of an ITU application prior to the filing of a statement of use may be deemed an impermissible assignment. Both exclusions are narrowly tailored and widely accepted in comparable facilities.]
"FCCR Trigger Threshold" means the greater of (a) 10.0% of the lesser of (x) the Aggregate Commitments and (y) the Borrowing Base and (b) $25,000,000.
[C&H Comment: No change requested at this time. At closing, the FCCR Trigger Threshold equals $30,000,000 (10% × $300,000,000). This is acceptable. Note that if the Borrowing Base falls below $250,000,000, the $25,000,000 floor becomes operative, which provides a reasonable floor. We are comfortable with this formulation. We reserve the right to revisit this definition if the Cash Dominion Event trigger remains at 12.5% — alignment of the Cash Dominion trigger and the FCCR Trigger Threshold is a priority for the Borrower.]
"Fixed Charge Coverage Ratio" or "FCCR" means, for any period, the ratio of (a) Consolidated EBITDA for such period minus unfinanced Capital Expenditures made during such period minus cash taxes paid during such period, to (b) Fixed Charges for such period; in each case, calculated on a trailing four consecutive fiscal quarter basis.
[C&H Comment: Tie numerator to revised Consolidated EBITDA definition (with addbacks as proposed above). No change to the formula structure. Based on FY2022 financials, Consolidated EBITDA of approximately $148,500,000 and Fixed Charges of approximately $87,200,000 produce an FCCR of approximately 1.70:1.00, which provides substantial cushion above the 1.10:1.00 minimum covenant level. However, we note that seasonal fluctuations in the retail business could compress the FCCR in a testing period, particularly if Availability drops during seasonal inventory build-up. This underscores the importance of the equity cure right proposed for Section 7.11.]
"Fixed Charges" means, for any period, the sum (without duplication) of (a) all scheduled payments of principal of funded Indebtedness of the Loan Parties and their Subsidiaries during such period, (b) all cash Interest Expense of the Loan Parties and their Subsidiaries during such period, (c) all Restricted Payments made in cash by the Loan Parties during such period , and (d) all capital lease obligations paid during such period.
[C&H Comment: One-time refinancing costs associated with the payoff of the existing Harborview facility ($112,450,000 outstanding) should not penalize the FCCR calculation. Any prepayment premium or breakage cost is a non-recurring expense of the closing transaction and should be excluded from Fixed Charges. Additionally, required tax distributions under Section 7.06(b) are mandatory payments that the Borrower cannot avoid; including them in Fixed Charges effectively penalizes the Borrower for making distributions that are necessary to enable the equity holders to satisfy tax obligations attributable to the pass-through entity's income. Exclusion of tax distributions from Fixed Charges is increasingly standard in ABL facilities for pass-through structures.]
"Guarantors" means, collectively, Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc., and each other Person that becomes a Guarantor pursuant to Section 6.12, together with their respective successors and assigns.
"Guaranty" means the guaranty set forth in Article X of this Agreement.
"Interest Period" means, with respect to any SOFR Loan, a period of one month or three months; provided that (a) the initial Interest Period for any SOFR Loan shall commence on the date of the making, conversion, or continuation of such SOFR Loan and (b) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date.
"Issuing Bank" means Crescent Harbor Bank, N.A., in its capacity as the issuer of Letters of Credit under this Agreement, together with its successors and assigns in such capacity.
"Lenders" means the Persons identified on Schedule 1.01(a) as "Lenders" and any other Person that shall have become a party hereto as a Lender pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
"Loan Documents" means, collectively, this Agreement, the Notes, the Guaranty, the Security Agreement, the Pledge Agreement, the DACAs, the Fee Letters, and each other agreement, instrument, certificate, or document executed and delivered by or on behalf of any Loan Party in connection with or pursuant to any of the foregoing.
"Loan Parties" means, collectively, the Borrowers and the Guarantors.
"Maturity Date" means the date that is five years after the Closing Date.
[C&H Comment: No change proposed. Anticipated maturity of May 19, 2028, assuming a late-May 2023 closing, is acceptable and consistent with the term sheet.]
"NOLV" means net orderly liquidation value, as determined by the most recent appraisal of Inventory conducted by Ridgeline Asset Advisors LLC or another nationally recognized appraisal firm acceptable to the Administrative Agent.
"Notes" means, collectively, the Revolving Loan Notes and the Swingline Note.
"Obligations" means all obligations of the Loan Parties to the Secured Parties arising under or in connection with the Loan Documents, including all obligations in respect of principal, interest, fees, premiums, reimbursement obligations, indemnification obligations, and other amounts, whether direct or indirect, absolute or contingent, due or to become due.
"Permitted Discretion" means  .
[C&H Comment: The addition of a comparability standard to the definition of "Permitted Discretion" is a standard borrower-side request. It does not eliminate the Agent's discretion or good faith judgment standard, but ensures that such discretion is exercised in a manner that is consistent with market practice. This is particularly important for decisions regarding Availability Reserves, eligibility criteria, and field examinations, where the Agent's discretion has a direct impact on the Borrower's liquidity.]
"Pledge Agreement" means the Pledge Agreement, dated as of the Closing Date, among the Loan Parties and the Collateral Agent, substantially in the form of Exhibit B.
"Restricted Payment" means any dividend, distribution, redemption, repurchase, retirement, or return of capital in respect of any equity interests of any Loan Party or any Subsidiary, or any payment on account of any Indebtedness that is subordinated to the Obligations.
"Revolving Loan" means any loan made by a Lender pursuant to Section 2.01.
"Security Agreement" means the Security Agreement, dated as of the Closing Date, among the Loan Parties and the Collateral Agent, substantially in the form of Exhibit A.
"SOFR" means a rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
"SOFR Adjustment" means (a) 0.10% (10 basis points) for an Interest Period of one month and (b) 0.15% (15 basis points) for an Interest Period of three months.
"SOFR Floor" means a rate of interest per annum equal to 0.00%.
"Swingline Lender" means Crescent Harbor Bank, N.A., in its capacity as lender of Swingline Loans.
"Swingline Loan" means any loan made by the Swingline Lender pursuant to Section 2.04.
"Swingline Sublimit" means $25,000,000.
"Term SOFR" means, for any Interest Period, the Term SOFR Reference Rate for a tenor comparable to such Interest Period on the day that is two U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the CME Term SOFR Administrator.
"Total Revolving Outstandings" means, at any time, the aggregate amount of all outstanding Revolving Loans, Swingline Loans, and LC Obligations at such time.
[C&H Comment: No substantive changes to the foregoing definitions or to the following additional definitions accepted as drafted by WGH: "Collateral," "Collateral Agent," "Collateral Documents," "Compliance Certificate," "Guarantors," "Guaranty," "Interest Period," "Issuing Bank," "Lenders," "Loan Documents," "Loan Parties," "NOLV," "Notes," "Obligations," "Pledge Agreement," "Restricted Payment," "Revolving Loan," "Security Agreement," "SOFR," "SOFR Adjustment," "SOFR Floor," "Swingline Lender," "Swingline Loan," "Swingline Sublimit," "Term SOFR," and "Total Revolving Outstandings." All accepted with no or minor conforming changes only.]
Section 1.02 — Other Interpretive Provisions
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument, or other document herein shall be construed as referring to such agreement, instrument, or other document as from time to time amended, supplemented, or otherwise modified (subject to any restrictions on such amendments, supplements, or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words "herein," "hereof," and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections, Exhibits, and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (v) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights.
[C&H Comment: No changes from WGH draft.]
Section 1.03 — Accounting Terms
(a) All accounting terms not specifically defined herein shall be construed in accordance with GAAP.
[C&H Comment: A GAAP freeze date provision is standard borrower-side protection against adverse GAAP changes that could affect covenant calculations. The adoption of new accounting standards — for example, changes in lease accounting under ASC 842 — can materially alter the calculation of ratios such as the FCCR, Consolidated EBITDA, and capital expenditures. This provision allows the Borrower to elect to "freeze" GAAP as of the date of any such change and provides for good faith negotiations to amend the affected provisions.]
Section 1.04 — Rounding
Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein, and rounding the result up or down to the nearest number.
[C&H Comment: No changes.]
Section 1.05 — References to Agreements and Laws
Unless otherwise expressly provided herein, (a) references to any agreement, instrument, or other document shall include all subsequent amendments, restatements, supplements, and other modifications thereto, but only to the extent that such amendments, restatements, supplements, and other modifications are not prohibited by any Loan Document, and (b) references to any law or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such law or regulation.
[C&H Comment: No changes.]
Section 1.06 — Times of Day
Unless otherwise specified, all references herein to times of day shall be references to New York City time (Eastern Time).
[C&H Comment: No changes.]
Section 1.07 — Letter of Credit Amounts
Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to be the Stated Amount of such Letter of Credit at such time.
[C&H Comment: No changes.]
Section 1.08 — Rates; SOFR Notification
The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, (a) the continuation of, administration of, submission of, calculation of, or any other matter related to SOFR, Term SOFR, Adjusted Term SOFR, or any component definition thereof, or any alternative, successor, or replacement rate therefor, or (b) the effect of any of the foregoing. The Borrowers acknowledge and agree that any benchmark replacement rate may not be equivalent to or produce the same value as the benchmark being replaced.
[C&H Comment: No changes to benchmark replacement provisions.]
ARTICLE II — THE COMMITMENTS AND BORROWINGS
Section 2.01 — Revolving Commitments
Subject to the terms and conditions set forth herein, each Lender severally agrees to make Revolving Loans to the Borrowers from time to time during the Availability Period in an aggregate principal amount at any time outstanding that will not result in (a) such Lender's Revolving Exposure exceeding such Lender's Commitment or (b) the Total Revolving Outstandings exceeding the lesser of (i) the Aggregate Commitments and (ii) the Borrowing Base. The initial Commitments of the Lenders are as set forth on Schedule 1.01(a):
Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, repay, and reborrow Revolving Loans.
[C&H Comment: Commitment amounts and pro rata shares confirmed. No changes proposed.]
Section 2.02 — Borrowings, Conversions and Continuations of Revolving Loans
(a) Each Revolving Borrowing, each conversion of Revolving Loans from one Type to the other, and each continuation of SOFR Loans shall be made upon the Borrower Representative's irrevocable notice to the Administrative Agent, which may be given by (i) telephone or (ii) a Loan Notice. Each such notice must be received by the Administrative Agent not later than 1:00 p.m. (x) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of, SOFR Loans or of any conversion of SOFR Loans to Base Rate Loans, and (y) on the requested date of any Borrowing of Base Rate Loans.
(b) Each Revolving Borrowing shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.
(c) The Borrowers may elect Interest Periods of one month or three months for SOFR Loans, subject to the availability of such Interest Periods under the definition of "Interest Period."
[C&H Comment: No substantive changes from WGH draft. Election mechanics for SOFR vs. Base Rate Loans are acceptable. Interest Period options (1-month, 3-month) confirmed.]
Section 2.03 — Letters of Credit
(a) General. Subject to the terms and conditions set forth herein, the Borrowers may request the issuance of Letters of Credit for their own account or for the account of any Subsidiary, in a form reasonably acceptable to the Issuing Bank, at any time and from time to time during the Availability Period. Letters of Credit issued hereunder shall constitute usage of the Commitments for purposes of determining Availability.
(b) LC Sublimit. The aggregate Stated Amount of all outstanding Letters of Credit at any time shall not exceed $40,000,000 (the "LC Sublimit"). The LC Sublimit is part of, and not in addition to, the Aggregate Commitments.
(c) Issuance, Amendment and Renewal of Letters of Credit. The issuance, amendment, or renewal of any Letter of Credit shall be subject to the satisfaction of the conditions set forth in Section 4.02.
(d) 
(e) LC Fees. The Borrowers shall pay to the Administrative Agent, for the ratable benefit of the Revolving Lenders (other than any Defaulting Lender), a Letter of Credit fee with respect to each Letter of Credit equal to the Applicable Rate for SOFR Loans (300 basis points per annum) times the daily Stated Amount of such Letter of Credit.
(f) Fronting Fee. The Borrowers shall pay directly to the Issuing Bank a fronting fee equal to 12.5 basis points per annum on the Stated Amount of each Letter of Credit.
[C&H Comment: We have inserted a provision allowing the Borrower to request the designation of at least one additional Issuing Bank, subject to Administrative Agent's reasonable consent. This provides flexibility in the event that Crescent Harbor Bank is unable or unwilling to issue particular types of Letters of Credit (e.g., performance standby LCs for certain categories of trade obligations or retail lease obligations). No change to the LC Sublimit of $40,000,000, the LC Fee rate of 300 bps, or the Fronting Fee rate of 12.5 bps.]
Section 2.04 — Swingline Loans
(a) General. Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time during the Availability Period in an aggregate principal amount at any time outstanding not to exceed the Swingline Sublimit ($25,000,000); provided that the making of any Swingline Loan shall not result in the Total Revolving Outstandings exceeding the lesser of the Aggregate Commitments and the Borrowing Base.
(b) Borrowing Procedures. Each Swingline Borrowing shall be made upon the Borrower Representative's irrevocable notice to the Swingline Lender (with a copy to the Administrative Agent), which may be given by telephone or by a Loan Notice. Each such notice must be received by the Swingline Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date. Swingline Loans shall bear interest at the Base Rate plus the Applicable Rate.
[C&H Comment: Swingline mechanics are acceptable. No substantive changes proposed.]
Section 2.05 — Prepayments
(a) Optional Prepayments. The Borrowers may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans and Swingline Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 1:00 p.m. (x) three Business Days prior to any date of prepayment of SOFR Loans and (y) on the date of prepayment of Base Rate Loans or Swingline Loans, (ii) any prepayment of SOFR Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof, and (iii) the Borrowers shall compensate the Lenders for any SOFR breakage costs pursuant to Section 3.05.
(b) Mandatory Prepayments. If at any time the Total Revolving Outstandings exceed the lesser of (i) the Aggregate Commitments and (ii) the Borrowing Base, the Borrowers shall   prepay Revolving Loans and Swingline Loans, and/or cash collateralize LC Obligations, in an aggregate amount sufficient to reduce the Total Revolving Outstandings to an amount not in excess of the lesser of the Aggregate Commitments and the Borrowing Base.
[C&H Comment: An immediate mandatory prepayment obligation upon Agent-imposed reserve changes is unduly punitive and operationally impractical. When Availability Reserves are increased by the Administrative Agent, the resulting reduction in the Borrowing Base may create an immediate excess that requires prepayment. The Borrower needs time to arrange funds, particularly if the reserve increase is unexpected or occurs during a period of seasonal inventory build-up when cash resources are constrained. We are requesting a 2 Business Day cure period for ordinary-course mandatory prepayments and a 5 Business Day cure period where the mandatory prepayment obligation arises from Agent-imposed reserve changes. This is a reasonable accommodation that does not prejudice the Lenders' security position.]
(c) Application of Prepayments. Mandatory prepayments under Section 2.05(b) shall be applied first to outstanding Swingline Loans, second to outstanding Revolving Loans, and third to cash collateralize outstanding LC Obligations.
Section 2.06 — Termination or Reduction of Commitments
(a) The Borrowers may, upon not less than 3 Business Days' prior irrevocable written notice to the Administrative Agent, terminate the Commitments or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such reduction shall be in an amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof, (ii) the Borrowers shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayment of Revolving Loans, the Total Revolving Outstandings would exceed the Aggregate Commitments, and (iii) if, after giving effect to any reduction of the Aggregate Commitments, the LC Sublimit or the Swingline Sublimit exceeds the amount of the Aggregate Commitments, such sublimit shall be automatically reduced by the amount of such excess.
[C&H Comment: No changes.]
Section 2.07 — Repayment of Loans
The Borrowers shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Loans and Swingline Loans outstanding on such date.
[C&H Comment: No changes. All outstanding Revolving Loans and Swingline Loans are due and payable on the Maturity Date (anticipated to be May 19, 2028).]
Section 2.08 — Interest
(a) SOFR Loans. Each SOFR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Adjusted Term SOFR for such Interest Period plus the Applicable Rate (300 basis points); provided that if Adjusted Term SOFR is less than the SOFR Floor (0.00%), Adjusted Term SOFR shall be deemed to be the SOFR Floor.
(b) Base Rate Loans. Each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate .
[C&H Comment: See Applicable Rate definition comments above. We have inserted 200 bps as the Base Rate margin consistent with the customary 100 bps differential below the SOFR margin.]
(c) Default Rate. Upon the occurrence and during the continuance of an Event of Default, all outstanding Obligations shall bear interest at the Default Rate (Applicable Rate plus 200 basis points).
[C&H Comment: See Default Rate definition comments above.]
(d) Payment. Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.
Section 2.09 — Fees
(a) Unused Line Fee. The Borrowers shall pay to the Administrative Agent, for the ratable benefit of the Revolving Lenders, an unused line fee equal to 37.5 basis points (0.375%) per annum on the average daily unused amount of the Aggregate Commitments (calculated as the Aggregate Commitments minus the average daily Total Revolving Outstandings) during the applicable period, payable quarterly in arrears on the last Business Day of each March, June, September, and December and on the Maturity Date.
(b) LC Fees. As set forth in Sections 2.03(e) and 2.03(f).
(c) Administrative Agent Fee. The Borrowers shall pay to Crescent Harbor Bank, N.A., solely in its capacity as Administrative Agent, an annual administrative agency fee of $150,000, payable in advance on the Closing Date and on each anniversary thereof during the term of this Agreement.
(d) Upfront / Arrangement Fee. The Borrowers shall pay to each Lender, through the Administrative Agent, an upfront fee equal to 50 basis points (0.50%) on each such Lender's Commitment, payable on the Closing Date:
[C&H Comment: Fee structure confirmed per mandate letter dated March 6, 2023. No changes.]
Section 2.10 — Computation of Interest and Fees
All computations of interest and fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) elapsed.
[C&H Comment: No changes.]
Section 2.11 — Evidence of Indebtedness
The Revolving Loan Notes to be executed by the Borrowers and delivered to each Lender shall evidence the Revolving Loans made by such Lender:
Revolving Loan Note — Crescent Harbor Bank, N.A.: $135,000,000
Revolving Loan Note — Northgate Capital Bank: $90,000,000
Revolving Loan Note — Bridgevale Financial Corporation: $75,000,000
Swingline Note — Crescent Harbor Bank, N.A.: $25,000,000
[C&H Comment: No changes.]
Section 2.12 — Payments Generally; Administrative Agent's Clawback
All payments to be made by the Borrowers hereunder shall be made to the Administrative Agent at its office located at 780 Park Avenue, 30th Floor, New York, NY 10021 (or such other office as the Administrative Agent may designate by written notice to the Borrower Representative), in immediately available funds, not later than 2:00 p.m. New York City time on the date due. Any payment received by the Administrative Agent after 2:00 p.m. shall be deemed to have been received on the next succeeding Business Day.
[C&H Comment: No changes.]
Section 2.13 — Sharing of Payments
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any Revolving Loan or Swingline Loan, or in respect of any other Obligation, that results in such Lender receiving payment of a proportion of the aggregate amount of its Revolving Loans, Swingline Loans, and participations in LC Obligations and Swingline Loans greater than its pro rata share thereof, then the Lender receiving such greater proportion shall apply the proceeds of such excess ratably among the Lenders.
[C&H Comment: No changes.]
Section 2.14 — Borrowing Base
(a) Formula. The Borrowing Base shall be calculated as the sum of (i) 85% of the face amount of Eligible Receivables, plus (ii) the lesser of (x) 65% of the NOLV of Eligible Inventory and (y) 75% of the net book value of Eligible Inventory, minus (iii) Availability Reserves.
(b) Borrowing Base Certificate Delivery.
(i) The Borrower Representative shall deliver to the Administrative Agent a Borrowing Base Certificate, in form and substance satisfactory to the Administrative Agent, not later than the   day of each calendar month (or, if such day is not a Business Day, the next succeeding Business Day), setting forth the Borrowing Base as of the last Business Day of the immediately preceding calendar month.
(ii) If at any time Availability is less than  , the Borrower Representative shall deliver to the Administrative Agent a Borrowing Base Certificate on a weekly basis, not later than the second Business Day of each calendar week, setting forth the Borrowing Base as of the last Business Day of the immediately preceding calendar week. Such weekly reporting obligation shall continue until Availability has equaled or exceeded   for 20 consecutive Business Days.
[C&H Comment: The 15th-of-month deadline for delivery of monthly Borrowing Base Certificates is operationally burdensome for Cascade's accounting department given the company's fiscal month-end close timing. The Borrower's finance team typically completes the month-end close by the 12th–13th of the following month, and the preparation of the Borrowing Base Certificate requires an additional 3–5 business days for reconciliation and review. A deadline of the 20th of the following month is more realistic and will result in more accurate Borrowing Base Certificates. With respect to the weekly reporting trigger, we are requesting that the threshold be aligned with the Cash Dominion Event trigger ($37,500,000, or $30,000,000 if our proposed 10% trigger is accepted) rather than being set at the higher level of $45,000,000 proposed in the WGH draft. Setting the weekly reporting trigger above the Cash Dominion trigger would mean that enhanced reporting obligations are imposed at Availability levels that do not otherwise trigger heightened lender protections, which is inconsistent.]
(c) Availability Reserves Adjustment. See Availability Reserves definition comments. All changes to Availability Reserves shall be subject to   "commercially reasonable" standard set forth in the definition of "Availability Reserves."
(d) Eligible Receivables Criteria. As set forth in the definition of "Eligible Receivables," as amended by Calderwood & Harkness's proposed revisions (cross-aging threshold at 50%, government receivables past-due threshold of 120 days, concentration limit of 15%/20%, and express inclusion of e-commerce receivables).
(e) Eligible Inventory Criteria. As set forth in the definition of "Eligible Inventory," as amended by Calderwood & Harkness's proposed revisions (in-transit period of 45 days, e-commerce fulfillment inventory at Kent, Reno, and Columbus, 18-month slow-moving threshold, and clarification regarding outlet location inventory).
(f) NOLV. The NOLV of Eligible Inventory shall be determined by appraisal conducted by Ridgeline Asset Advisors LLC or another nationally recognized appraisal firm acceptable to the Administrative Agent.
[C&H Comment: No change to the NOLV determination methodology.]
Section 2.15 — Cash Management; Cash Dominion
(a) Deposit Account Control Agreements. Each Loan Party shall maintain deposit account control agreements ("DACAs") in favor of the Collateral Agent with respect to each deposit account maintained by such Loan Party, in form and substance satisfactory to the Collateral Agent.
(b) Cash Dominion Event.
(i) Upon the occurrence and during the continuance of a Cash Dominion Event, the Administrative Agent shall have exclusive dominion and control over all deposit accounts of the Loan Parties subject to DACAs, and all amounts deposited therein shall be swept on a daily basis and applied  .
(ii) A Cash Dominion Event shall be triggered when (x) Availability is less than   of the lesser of the Aggregate Commitments and the Borrowing Base   or (y) an Event of Default has occurred and is continuing.
[C&H Comment: See Cash Dominion Event definition comments. In addition to the trigger reduction, we have added a specified application waterfall for swept funds during a Cash Dominion Event. The WGH draft would grant the Administrative Agent unfettered discretion over the application of swept funds, which could result in overpaybment or the creation of credit balances. The specified waterfall (interest → Swingline → Revolving → LC cash collateral) is standard and orderly. The proviso preventing application to future obligations or creation of excess credit balances is a standard borrower protection.]
(c) Cessation of Cash Dominion. A Cash Dominion Event shall cease on the date on which (i) Availability has exceeded the threshold set forth in clause (b)(ii)(x) above for 30 consecutive  days and (ii) no Event of Default then exists and is continuing.
[C&H Comment: Clarification that the 30-day exit period runs in "calendar days" (not Business Days). A Business Day interpretation would effectively extend the cure period to approximately 42 calendar days when accounting for weekends, which is excessive.]
Section 2.16 — Benchmark Replacement Setting
In the event that the Administrative Agent determines that Term SOFR has been permanently or indefinitely discontinued or is no longer representative, the benchmark replacement provisions set forth in this Section 2.16 shall apply. The benchmark replacement waterfall, conforming changes, and related administrative provisions are accepted as drafted by WGH.
[C&H Comment: No changes to SOFR benchmark replacement waterfall.]
ARTICLE III — TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01 — Taxes
(a) All payments made by or on account of any obligation of the Loan Parties under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Tax from any such payment by a Loan Party, then the applicable Loan Party shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 3.01), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b) Each Loan Party shall timely pay to the relevant Governmental Authority in accordance with applicable law all Other Taxes.
(c) Each Loan Party shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient, together with any reasonable expenses arising therefrom.
[C&H Comment: No substantive changes to the gross-up and withholding indemnity provisions. Accepted as drafted.]
Section 3.02 — Illegality
If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to make, maintain, or fund SOFR Loans, such Lender shall promptly notify the Borrower Representative and the Administrative Agent, and the obligation of such Lender to make or continue SOFR Loans shall be suspended.
[C&H Comment: No changes.]
Section 3.03 — Inability to Determine Rates
If the Administrative Agent determines that adequate and reasonable means do not exist for ascertaining Adjusted Term SOFR for any requested Interest Period, the Administrative Agent shall promptly notify the Borrower Representative and the Lenders, and all subsequent Borrowings shall be made as Base Rate Loans until the Administrative Agent revokes such notice.
[C&H Comment: No changes.]
Section 3.04 — Increased Costs; Reserves on SOFR Loans
(a) If any Change in Law shall (i) impose, modify, or deem applicable any reserve, special deposit, compulsory loan, insurance charge, or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender or Issuing Bank, (ii) subject any Recipient to any Taxes on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or (iii) impose on any Lender or Issuing Bank any other condition, cost, or expense affecting this Agreement or Loans made by such Lender or any Letter of Credit, and the result of any of the foregoing shall be to increase the cost to such Lender or Issuing Bank of making, converting to, continuing, or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or Issuing Bank of participating in, issuing, or maintaining any Letter of Credit, or to reduce the amount of any sum received or receivable by such Lender or Issuing Bank hereunder, then the Borrowers will pay to such Lender or Issuing Bank such additional amount or amounts as will compensate such Lender or Issuing Bank for such additional costs incurred or reduction suffered.
[C&H Comment: We have added a requirement that any Lender seeking increased costs provide reasonably detailed supporting calculations (rather than merely a bare demand for payment). We have also cross-referenced the Borrower's right to replace a Lender seeking increased costs under Section 3.06, which provides an efficient mechanism for the Borrower to address persistent increased cost claims.]
Section 3.05 — Compensation for Losses
Upon demand of any Lender, the Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost, or expense incurred by it as a result of (a) any continuation, conversion, payment, or prepayment of any SOFR Loan on a day other than the last day of the Interest Period for such Loan, (b) any failure by the Borrowers to prepay, borrow, continue, or convert any SOFR Loan on the date or in the amount notified by the Borrower Representative, or (c) any assignment of a SOFR Loan other than on the last day of the Interest Period therefor.
[C&H Comment: No changes. Standard SOFR breakage cost provision.]
Section 3.06 — Mitigation Obligations; Replacement of Lenders
(a) If any Lender requests compensation under Section 3.04, or requires the Borrowers to pay any Indemnified Taxes or additional amounts under Section 3.01, or any Lender's obligation to make or continue SOFR Loans has been suspended pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different lending office or to take such other actions as may avoid the need for such compensation or suspension.
(b) If any Lender requests compensation under Section 3.04 or Section 3.01 and such Lender has failed to designate a different lending office pursuant to Section 3.06(a), or if any Lender becomes a Defaulting Lender, the Borrower Representative may, at its sole expense and effort, upon notice to the Administrative Agent and such Lender, require such Lender to assign and delegate all of its interests, rights (other than its existing rights to payments under Section 3.04 or Section 3.01), and obligations under the Loan Documents to an assignee  that shall assume such obligations (which assignee may be another Lender, if such Lender accepts such assignment), provided that such assignment shall be at par (i.e., for a purchase price equal to the outstanding principal amount of the Loans of such Lender plus accrued and unpaid interest and fees).
[C&H Comment: We have strengthened the Borrower's replacement right by specifying a 30 Business Day window within which the replacement must be effected. The WGH draft was silent on timing, which could result in indefinite delay and leave the Borrower subject to ongoing increased cost claims with no practical remedy. The replacement at par is consistent with the WGH draft.]
ARTICLE IV — CONDITIONS PRECEDENT
Section 4.01 — Conditions of Initial Credit Extension (Closing)
The obligation of each Lender to make the initial Revolving Loan hereunder and of the Issuing Bank to issue the initial Letter of Credit hereunder is subject to satisfaction (or waiver in accordance with Section 11.01) of the following conditions precedent:
(a) Credit Agreement. The Administrative Agent shall have received counterparts of this Agreement duly executed by each Borrower, each Guarantor, and each Lender.
(b) Notes. The Administrative Agent shall have received for the account of each Lender requesting a Note, a Revolving Loan Note duly executed by the Borrowers, and the Swingline Note duly executed by the Borrowers.
(c) Guaranty. The Administrative Agent shall have received the Guaranty duly executed by each Guarantor (CDC, COS, and CFS).
(d) Security Agreement. The Collateral Agent shall have received the Security Agreement duly executed by each Loan Party, granting to the Collateral Agent a first-priority security interest in substantially all personal property of the Loan Parties (subject to Permitted Liens and Excluded Assets).
(e) Pledge Agreement. The Collateral Agent shall have received the Pledge Agreement duly executed by each Loan Party, together with (i) certificates representing 100% of the issued and outstanding equity interests in Cascade Retail Operating Company LLC owned by Cascade Retail Holdings Inc., (ii) certificates representing 100% of the issued and outstanding equity interests in each of CDC, COS, and CFS owned by CROC, and (iii) certificates representing 65% of the voting equity interests in Cascade Retail Canada ULC owned by CROC, in each case accompanied by undated stock or membership interest transfer powers duly executed in blank.
(f) Perfection Certificate. The Collateral Agent shall have received a Perfection Certificate duly executed by the Borrower Representative, containing all information necessary or appropriate fo