DEPOSIT ACCOUNT CONTROL AGREEMENT
(Concentration Account)
Dated as of May 19, 2023
among
CASCADE RETAIL HOLDINGS INC., a Delaware corporation, as Account Holder
and
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, a national banking association, as Depository Bank and as Collateral Agent
DEPOSIT ACCOUNT CONTROL AGREEMENT
(Concentration Account)
This DEPOSIT ACCOUNT CONTROL AGREEMENT (Concentration Account) (this "Agreement"), dated as of May 19, 2023, is entered into by and among:
(1) CASCADE RETAIL HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (the "Account Holder" or "Customer"), having its principal office at 2200 Elliott Avenue, Suite 1400, Seattle, Washington 98121; and
(2) CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States (acting in its dual capacity as "Depository Bank" and "Collateral Agent," as more fully described herein), having offices at 780 Park Avenue, 30th Floor, New York, New York 10021.
This Agreement is entered into with reference to that certain Credit Agreement, dated as of May 4, 2023 (with an effective date of May 19, 2023) (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC, as Borrowers, Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc., as Guarantors, the Lenders from time to time party thereto, and Crescent Harbor Bank, National Association, as Administrative Agent and Collateral Agent (in such capacity, the "Collateral Agent"), pursuant to which the Lenders have agreed to provide a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $300,000,000 (the "Credit Facility").
The parties hereto acknowledge that Crescent Harbor Bank, National Association acts in the dual capacity of both the Depository Bank at which the Account (as defined below) is maintained and the Collateral Agent under the Credit Agreement and the Security Agreement (as defined below), and that certain provisions of this Agreement have been adapted accordingly to reflect such dual capacity.
RECITALS
A. Account Holder maintains a deposit account at Depository Bank designated as the concentration account (the "Account"), bearing the account name "Cascade Retail Holdings Inc. — Concentration Account" and more particularly described in Schedule I attached hereto and incorporated herein by reference, including the account number set forth therein.
B. Reference is made to that certain Security Agreement, dated as of May 4, 2023 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Security Agreement"), by and among Cascade Retail Holdings Inc., Cascade Retail Operating Company LLC, Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc., as Grantors, and Crescent Harbor Bank, National Association, as Collateral Agent for the benefit of the Secured Parties (as defined in the Credit Agreement), pursuant to which Account Holder has granted to Collateral Agent, for the ratable benefit of the Secured Parties, a first-priority security interest in, among other things, all deposit accounts of Account Holder and all proceeds thereof.
C. The Credit Facility, in the aggregate principal amount of $300,000,000, constitutes a senior secured asset-based revolving credit facility and is secured by, among other collateral, first-priority liens on and security interests in accounts receivable, inventory, deposit accounts (subject to control agreements, including this Agreement), investment property, instruments, chattel paper, general intangibles, and all related assets of the Borrowers and the Guarantors, in each case as more particularly described in the Security Agreement.
D. This Agreement is being entered into to perfect the Collateral Agent's security interest in the Account by providing "control" within the meaning of Section 9-104 of the Uniform Commercial Code as in effect in the State of New York (the "UCC"). It is the intent of the parties that, upon execution and delivery of this Agreement, Collateral Agent shall have "control" of the Account, and that the security interest of Collateral Agent in the Account shall be perfected by control to the fullest extent provided under applicable law.
E. The parties acknowledge and agree that Crescent Harbor Bank, National Association is acting in the dual capacity of Depository Bank and Collateral Agent, and that certain provisions of this Agreement have been adapted to reflect such dual-capacity structure. Notwithstanding such dual capacity, the rights and obligations of Crescent Harbor Bank, National Association in its capacity as Depository Bank are distinct from its rights and obligations in its capacity as Collateral Agent, and the parties intend that the terms of this Agreement shall be interpreted and applied in a manner consistent with such distinction.
F. This Agreement constitutes a "Loan Document" as defined in the Credit Agreement and is being entered into as a condition precedent to the initial funding of the Credit Facility on the Closing Date (as defined herein), being May 19, 2023, as required by Section 4.01(m) of the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the following meanings:
"Account" means the concentration deposit account maintained by Account Holder at Depository Bank, as more particularly described in Schedule I attached hereto and incorporated herein by reference, including all successor or replacement accounts established in accordance with the terms of this Agreement, the Credit Agreement, and the Security Agreement, and all funds, monies, and other amounts now or hereafter on deposit therein, together with all interest, dividends, and other earnings thereon and all proceeds thereof.
"Account Holder" means Cascade Retail Holdings Inc., a corporation organized and existing under the laws of the State of Delaware, and its permitted successors and assigns.
"Activation Notice" means a written notice, substantially in the form of Exhibit A attached hereto, from Collateral Agent to Depository Bank (which, given that Depository Bank and Collateral Agent are the same entity, shall constitute an internal direction documented in writing by an authorized officer of Crescent Harbor Bank, N.A. in its capacity as Collateral Agent) and communicated to Account Holder, instructing Depository Bank to comply exclusively with the instructions of Collateral Agent regarding the disposition of funds in the Account, without further consent or direction of Account Holder. An Activation Notice shall be triggered under the cash dominion provisions of the Credit Agreement and this Agreement upon the commencement of a Cash Dominion Period.
"Availability" has the meaning ascribed to such term in the Credit Agreement (generally, the excess, if any, of the lesser of (i) the Aggregate Commitments under the Credit Agreement and (ii) the Borrowing Base, over the aggregate outstanding amount of all Revolving Credit Loans, Swing Line Loans, and Letter of Credit Obligations at such time, in each case as calculated in accordance with the terms of the Credit Agreement).
"Borrowing Base" has the meaning ascribed to such term in the Credit Agreement.
"Cash Dominion Period" means a period commencing on any date on which (a) Availability falls below the greater of (i) an amount equal to 12.5% of the lesser of (x) the Aggregate Commitments (initially $300,000,000) and (y) the Borrowing Base, which amount is initially $37,500,000, and (ii) such other threshold as may be specified in the Credit Agreement, or (b) an Event of Default has occurred and is continuing under the Credit Agreement. A Cash Dominion Period shall terminate at such time as Availability has been at or above $37,500,000 (or such other applicable threshold) for thirty (30) consecutive calendar days and no Event of Default exists or is continuing under the Credit Agreement.
"Closing Date" means May 19, 2023, being the date on which the conditions precedent set forth in Article IV of the Credit Agreement have been satisfied or waived and the initial funding of the Credit Facility has occurred.
"Collateral Agent" means Crescent Harbor Bank, National Association, in its capacity as Collateral Agent under the Credit Agreement and the Security Agreement, and its successors and assigns in such capacity.
"Credit Agreement" has the meaning ascribed to such term in the Recitals to this Agreement.
"Depository Bank" means Crescent Harbor Bank, National Association, in its capacity as the bank at which the Account is maintained, and its successors and assigns in such capacity.
"Entitlement Order" has the meaning ascribed to such term in UCC § 9-104.
"Event of Default" has the meaning ascribed to such term in the Credit Agreement, and includes, without limitation, the events specified in Article VIII thereof.
"Lien" means any lien, pledge, hypothecation, assignment, security interest, charge, or encumbrance of any kind (including any conditional sale or other title retention agreement, any easement, right of way, or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) and any option, trust, or other preferential arrangement having the practical effect of any of the foregoing.
"Obligations" has the meaning ascribed to such term in the Credit Agreement and includes, without limitation, all obligations of the Borrowers and the Guarantors under the Credit Agreement, the Security Agreement, the Guaranty Agreement, each other Loan Document, and all hedging obligations and bank product obligations, in each case whether for principal, interest (including interest accruing after the commencement of any bankruptcy, insolvency, or similar proceeding, whether or not allowed as a claim therein), fees, expenses, indemnities, or other amounts.
"Security Agreement" has the meaning ascribed to such term in the Recitals to this Agreement.
"Secured Parties" has the meaning ascribed to such term in the Credit Agreement and includes, without limitation, the Administrative Agent, the Collateral Agent, each Lender, each Issuing Bank, and each other Person entitled to the benefits of the Credit Agreement and the other Loan Documents.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if, by reason of mandatory provisions of law, perfection, the effect of perfection or non-perfection, or the priority of a security interest in any collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, the effect of perfection or non-perfection, or priority.
Section 1.2 — UCC Terms
Terms used but not otherwise defined in this Agreement that are defined in the UCC as in effect in the State of New York shall have the meanings ascribed to such terms under the UCC. Terms defined in the Credit Agreement and used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Credit Agreement, unless the context otherwise requires.
Section 1.3 — Construction
Unless the context otherwise requires: (a) the singular shall include the plural and the plural shall include the singular; (b) references to "Articles," "Sections," "Schedules," and "Exhibits" shall refer to Articles, Sections, Schedules, and Exhibits of and to this Agreement; (c) all references to any party shall include such party's successors and permitted assigns; (d) the words "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular provision hereof; (e) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (f) all references to statutes and related regulations shall include any amendments or successor statutes and regulations; and (g) all headings and captions contained in this Agreement are for convenience of reference only, do not form a part of this Agreement, and shall not affect in any way the meaning or interpretation of this Agreement.
ARTICLE II — THE ACCOUNT
Section 2.1 — Identification of the Account
The Account that is the subject of this Agreement is described in Schedule I attached hereto and incorporated herein by reference. Schedule I sets forth the following information with respect to the Account: (a) the account title, being "Cascade Retail Holdings Inc. — Concentration Account"; (b) the account number (to be inserted upon establishment or confirmation of the Account); and (c) the ABA routing number of Crescent Harbor Bank, National Association. The Account is a demand deposit account maintained at Crescent Harbor Bank, National Association, located at 780 Park Avenue, 30th Floor, New York, New York 10021.
The Account serves as the concentration account into which funds from the various collections accounts maintained by the Borrowers and the Guarantors are swept or transferred, including, without limitation, (i) the Cascade Retail Operating Company LLC collections account maintained at Crescent Harbor Bank, N.A. and (ii) the Cascade Digital Commerce Inc. collections account maintained at Northgate Capital Bank. The Account is used for the aggregation of such collections and for the application of such funds to revolving loans outstanding under the Credit Agreement in accordance with the terms thereof.
Section 2.2 — Existing Funds
All funds on deposit in the Account as of the date hereof, together with all funds hereafter deposited into the Account, all interest, dividends, and other earnings thereon, and all proceeds of any of the foregoing, constitute collateral subject to the first-priority security interest of Collateral Agent granted pursuant to the Security Agreement and perfected by control pursuant to this Agreement. Account Holder acknowledges that such funds are subject to the terms and conditions of this Agreement, the Security Agreement, and the Credit Agreement, and that Collateral Agent's security interest attaches to all such funds immediately upon deposit into the Account.
Section 2.3 — No Other Liens
Account Holder hereby represents, warrants, and covenants that, other than the security interest of Collateral Agent, no person or entity has "control" (within the meaning of UCC § 9-104) over the Account, and no other person or entity holds a Lien on, or security interest in, the Account or any funds therein. Account Holder shall not grant any other Lien or security interest in the Account, or permit any other person or entity to obtain "control" over the Account, without the prior written consent of Collateral Agent. Account Holder acknowledges and confirms that all prior liens of Harborview Lending Group, LLC on the Account, and on all other deposit accounts of Account Holder and its subsidiaries, have been terminated as of the Closing Date pursuant to UCC-3 termination statements filed in connection with the payoff and discharge of the existing $175,000,000 revolving asset-based lending facility previously maintained with Harborview Lending Group, LLC. Copies of such UCC-3 termination statements have been delivered to Collateral Agent in connection with the closing of the Credit Facility.
ARTICLE III — CONTROL
Section 3.1 — Establishment of Control
Depository Bank acknowledges and agrees that Collateral Agent has "control" over the Account within the meaning of UCC § 9-104(a)(1). The parties acknowledge that, because Depository Bank and Collateral Agent are the same entity — namely, Crescent Harbor Bank, National Association — control is established automatically under UCC § 9-104(a)(1), which provides that a secured party has control of a deposit account if the secured party is the bank with which the deposit account is maintained. Notwithstanding the identity of Depository Bank and Collateral Agent, the parties confirm and agree that Collateral Agent is entitled to exercise control over the Account to the fullest extent permitted under the UCC and applicable law, and that the security interest of Collateral Agent in the Account is perfected by control as of the date hereof. No further action, filing, or agreement is required to establish or maintain such control, although this Agreement is entered into to document the parties' understanding and agreement regarding the terms and conditions upon which such control shall be exercised.
Section 3.2 — Collateral Agent's Instructions
(a) Prior to Activation Notice / Outside of Cash Dominion Period. At all times prior to the delivery of an Activation Notice and outside of any Cash Dominion Period, Account Holder shall have the right to direct the disposition of funds in the Account in the ordinary course of Account Holder's business, subject to and in accordance with the terms of the Credit Agreement, the Security Agreement, and this Agreement. During such periods, Depository Bank shall comply with instructions originated by Account Holder with respect to the Account, including instructions to transfer funds, issue payments, and otherwise direct the disposition of funds on deposit therein, in each case in accordance with Depository Bank's standard terms and conditions for demand deposit accounts.
(b) Upon Delivery of Activation Notice / Commencement of Cash Dominion Period. Upon the delivery of an Activation Notice (or, in the case of the dual-capacity structure, upon the internal determination and documentation thereof by Collateral Agent and the communication thereof to Account Holder) and during any Cash Dominion Period, Depository Bank shall comply solely and exclusively with the instructions of Collateral Agent (acting in its capacity as such) with respect to the disposition of funds in the Account, without further consent, direction, or approval of Account Holder. During any Cash Dominion Period, Account Holder shall have no right to direct the disposition of funds in the Account, and all funds deposited into the Account shall be applied to reduce the outstanding Obligations under the Credit Agreement in accordance with the payment waterfall and application provisions set forth in Section 2.05 and Section 8.03 of the Credit Agreement.
(c) Cash Dominion Period Triggers and Termination. A Cash Dominion Period shall commence when Availability (as calculated in accordance with the Credit Agreement) falls below $37,500,000 (being 12.5% of $300,000,000, the Aggregate Commitments under the Credit Agreement), or upon the occurrence and during the continuance of an Event of Default under the Credit Agreement. A Cash Dominion Period shall terminate at such time as Availability has been at or above $37,500,000 for thirty (30) consecutive calendar days and no Event of Default exists or is continuing under the Credit Agreement. For the avoidance of doubt, a Cash Dominion Period may commence and terminate multiple times during the term of this Agreement, and each such commencement and termination shall be governed by the provisions of this Section 3.2 and Section 3.3.
Section 3.3 — Activation Notice Mechanics
Given the dual-capacity structure under which Depository Bank and Collateral Agent are the same entity, the Activation Notice shall be an internal determination documented in writing by an authorized officer of Crescent Harbor Bank, N.A. in its capacity as Collateral Agent. Such determination shall be evidenced by a written memorandum or notice substantially in the form of Exhibit A attached hereto, which shall be executed by an authorized officer of Crescent Harbor Bank, N.A. acting in its capacity as Collateral Agent and shall be promptly communicated to Account Holder. Account Holder shall receive prompt written notice of the commencement of any Cash Dominion Period and the delivery of any Activation Notice, and shall similarly receive prompt written notice (substantially in the form of Exhibit B attached hereto) of the termination of any Cash Dominion Period and the termination of any Activation Notice. The failure of Collateral Agent to deliver such notice to Account Holder shall not affect the validity or enforceability of the Activation Notice or the commencement or termination of any Cash Dominion Period.
Section 3.4 — Subordination of Depository Bank's Rights
To the extent that Crescent Harbor Bank, National Association, in its capacity as Depository Bank, has or may have any lien, security interest, right of setoff, right of recoupment, or other claim against the Account or the funds therein (including, without limitation, any banker's lien, common law lien, or contractual right of offset arising under Depository Bank's standard deposit account agreement or otherwise), such rights are hereby expressly subordinated to the first-priority security interest of Collateral Agent in the Account and all funds therein, and Depository Bank shall not exercise any such rights to the detriment of Collateral Agent's security interest; provided, however, that the foregoing subordination shall not apply with respect to (i) customary fees, charges, and expenses for maintaining the Account that are deducted in the ordinary course in accordance with Depository Bank's standard fee schedule, and (ii) the reversal or charge-back of items deposited into the Account that are returned unpaid, dishonored, or otherwise reversed in accordance with applicable law and standard banking practices.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES
Section 4.1 — Account Holder Representations
Account Holder hereby represents and warrants to Collateral Agent and Depository Bank, as of the date hereof, as follows:
(a) Account Holder is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Account Holder is duly qualified to do business and is in good standing in each jurisdiction where the nature of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).
(b) Account Holder has the corporate power and authority to execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by Account Holder do not and will not (i) contravene the terms of Account Holder's certificate of incorporation or bylaws, (ii) conflict with or result in any breach or contravention of, or the creation of any Lien (other than in favor of Collateral Agent) under, any contractual obligation to which Account Holder is a party, or (iii) violate any applicable law, rule, regulation, order, writ, judgment, injunction, decree, or award binding on or affecting Account Holder.
(c) The execution and delivery of this Agreement has been duly authorized by all necessary corporate action on the part of Account Holder, including, without limitation, pursuant to resolutions of the Board of Directors of Cascade Retail Holdings Inc. duly adopted on February 27, 2023, authorizing the execution, delivery, and performance of the Credit Agreement, the Security Agreement, this Agreement, and the other Loan Documents, and no further corporate action or authorization is required.
(d) This Agreement constitutes a legal, valid, and binding obligation of Account Holder, enforceable against Account Holder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(e) The Account is maintained solely in the name of Cascade Retail Holdings Inc. and is not maintained jointly with any other person or entity. Account Holder is the sole owner of all funds deposited into the Account, except as otherwise disclosed to Collateral Agent in writing.
(f) Account Holder has not assigned, transferred, pledged, or otherwise encumbered the Account or any funds therein, or granted any person or entity control over the Account, other than in favor of Collateral Agent as contemplated by this Agreement and the Security Agreement.
(g) Account Holder's Employer Identification Number (EIN) issued by the Internal Revenue Service is 91-1847263.
Section 4.2 — Depository Bank / Collateral Agent Representations
Crescent Harbor Bank, National Association, in its dual capacity as Depository Bank and Collateral Agent, hereby represents and warrants to Account Holder, as of the date hereof, as follows:
(a) Crescent Harbor Bank, National Association is a national banking association duly organized, validly existing, and in good standing under the laws of the United States, with full power and authority to maintain the Account and to act as Depository Bank and as Collateral Agent hereunder.
(b) The Account has been established and is maintained at Depository Bank in accordance with Depository Bank's standard deposit account agreements, policies, and procedures. The Account is an active deposit account in good standing.
(c) Depository Bank has not received written notice of any competing claim, lien, security interest, or encumbrance on the Account or any funds therein, other than the security interest of Collateral Agent as described herein and in the Security Agreement.
(d) The account number, account title, ABA routing number, and related information set forth in Schedule I attached hereto are accurate and complete as of the date hereof.
ARTICLE V — COVENANTS
Section 5.1 — Account Holder Covenants
Account Holder hereby covenants and agrees as follows:
(a) Account Holder shall not close the Account or change the account name, account number, or account type, or transfer the Account to another depository institution, without the prior written consent of Collateral Agent. Any successor or replacement account established with the consent of Collateral Agent shall be subject to a deposit account control agreement in form and substance satisfactory to Collateral Agent.
(b) Account Holder shall not grant any other person or entity "control" (within the meaning of UCC § 9-104) over the Account or any Lien on, or security interest in, the Account or any funds therein, without the prior written consent of Collateral Agent.
(c) Account Holder shall maintain the Account at Depository Bank at all times during the term of this Agreement and shall not permit the Account to be closed, terminated, or transferred to any other depository institution.
(d) Account Holder shall comply in all respects with all terms and conditions of the Credit Agreement and the Security Agreement with respect to the Account, including, without limitation, all borrowing base reporting, compliance certificate, and financial reporting obligations, and shall direct all collections and receipts required to be deposited into the Account pursuant to the terms of the Credit Agreement to be so deposited.
(e) Account Holder shall promptly notify Collateral Agent and Depository Bank of any levy, garnishment, attachment, lien, or judicial process served upon Account Holder or, to Account Holder's knowledge, upon Depository Bank, affecting the Account or any funds therein.
Section 5.2 — Depository Bank / Collateral Agent Covenants
Crescent Harbor Bank, National Association, in its capacity as Depository Bank and Collateral Agent, as applicable, hereby covenants and agrees as follows:
(a) Depository Bank shall not change the account number assigned to the Account without prior written notice to Account Holder, and shall promptly provide Account Holder and Collateral Agent with written notice of any such change, together with an updated Schedule I reflecting the new account number.
(b) Depository Bank shall maintain records identifying the Account, including the security interest of Collateral Agent therein, and shall not remove or alter any notation or coding in its systems reflecting such security interest without the prior written consent of Collateral Agent.
(c) Depository Bank shall not honor any instruction from Account Holder to close the Account, transfer all funds therein, or otherwise effect a withdrawal or disposition of all funds in the Account during a Cash Dominion Period, unless Collateral Agent (in its capacity as such) has provided its prior written consent to such instruction.
(d) Depository Bank shall provide Account Holder with monthly account statements in the ordinary course of business, in accordance with Depository Bank's standard practices, reflecting all deposits, withdrawals, debits, credits, and balances with respect to the Account. Such statements shall be provided in the same manner and with the same frequency as Depository Bank provides statements to its other commercial deposit customers.
ARTICLE VI — CONCERNING THE DEPOSITORY BANK
Section 6.1 — Standard of Care
Depository Bank shall exercise reasonable care with respect to the Account, consistent with its obligations under the UCC and its standard depository agreement terms applicable to demand deposit accounts of similar type. Reasonable care shall be deemed to include, without limitation, the maintenance of commercially reasonable security measures with respect to the Account and compliance with applicable law and regulations governing the maintenance of deposit accounts. Depository Bank shall not be liable for any losses, damages, claims, or liabilities arising from Depository Bank's compliance with an Activation Notice or any instructions of Collateral Agent delivered in accordance with this Agreement, except to the extent that such losses, damages, claims, or liabilities are caused by Depository Bank's own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final, non-appealable judgment).
Section 6.2 — Fees and Expenses
Account Holder shall pay all customary fees, charges, and expenses associated with the establishment, maintenance, and administration of the Account in accordance with Depository Bank's standard fee schedule as in effect from time to time. Such fees shall include, without limitation, account maintenance fees, wire transfer fees, ACH processing fees, and returned item fees. Depository Bank may debit the Account for any unpaid fees, charges, and expenses in accordance with its standard practices, and such right of debit shall not be subordinated to the security interest of Collateral Agent as provided in Section 3.4 hereof. Account Holder shall also be responsible for and shall pay all fees, costs, and expenses incurred by Depository Bank in connection with the negotiation, execution, and administration of this Agreement.
Section 6.3 — Dual Capacity Acknowledgment
The parties acknowledge and agree that Crescent Harbor Bank, National Association is acting in the dual capacity of Depository Bank and Collateral Agent under this Agreement. In its capacity as Depository Bank, Crescent Harbor Bank, N.A. is responsible for maintaining the Account and providing deposit account services in accordance with its standard terms and conditions and applicable law. In its capacity as Collateral Agent, Crescent Harbor Bank, N.A. is responsible for administering the security interest in the Account for the ratable benefit of the Secured Parties in accordance with the Credit Agreement, the Security Agreement, and this Agreement.
Crescent Harbor Bank, N.A. shall not be required to take any action in one capacity that would conflict with its obligations in the other capacity, except as expressly provided in this Agreement. In the event of any conflict between the obligations or duties of Crescent Harbor Bank, N.A. in its capacity as Depository Bank and its obligations or duties in its capacity as Collateral Agent for the benefit of the Secured Parties under the Credit Agreement, the obligations of Crescent Harbor Bank, N.A. in its capacity as Collateral Agent shall prevail, and Depository Bank shall act in accordance with the instructions of Collateral Agent without further consent or approval of Account Holder.
Section 6.4 — No Obligation to Monitor
Depository Bank shall have no obligation to monitor the use of funds in the Account, to determine whether funds deposited therein are properly categorized or allocated, or to determine whether any Cash Dominion Period has commenced or terminated. Collateral Agent shall make all determinations regarding the commencement and termination of any Cash Dominion Period in accordance with the terms of the Credit Agreement, and Depository Bank shall be entitled to rely conclusively on any such determination made by Collateral Agent. Depository Bank shall not be liable for any losses or damages arising from its reliance on any such determination.
Section 6.5 — Indemnification
Account Holder shall indemnify and hold harmless Crescent Harbor Bank, National Association, in its capacity as Depository Bank (which indemnification is distinct from any indemnification obligations Account Holder may have to Crescent Harbor Bank, N.A. in its capacity as Collateral Agent under the Credit Agreement or the Security Agreement), and its respective officers, directors, employees, agents, and representatives (each, an "Indemnified Party") from and against any and all claims, losses, liabilities, damages, penalties, actions, judgments, suits, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements) (collectively, "Losses") arising out of, relating to, or resulting from Depository Bank's compliance with this Agreement, any Activation Notice, or any instructions of Collateral Agent delivered in accordance with this Agreement, except to the extent that such Losses are caused by such Indemnified Party's own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final, non-appealable judgment). This indemnification obligation shall survive the termination of this Agreement.
ARTICLE VII — TERMINATION
Section 7.1 — Termination Events
This Agreement shall terminate upon the earliest to occur of:
(a) Written notice from Collateral Agent to Depository Bank and Account Holder (which, in light of the dual-capacity structure, may be an internal memorandum documented by an authorized officer of Crescent Harbor Bank, N.A. in its capacity as Collateral Agent and communicated to Account Holder) that all Obligations under the Credit Agreement and the other Loan Documents have been indefeasibly paid in full in cash, all commitments of the Lenders under the Credit Agreement have been permanently terminated, and all letters of credit issued under the Credit Agreement have expired, been terminated, or been cash collateralized to the satisfaction of the applicable Issuing Bank (the scheduled maturity date of the Credit Facility being May 19, 2028, or such earlier date as all Obligations are satisfied and all commitments are terminated);
(b) The written agreement of all parties hereto to terminate this Agreement; or
(c) The replacement of this Agreement with a successor deposit account control agreement in form and substance satisfactory to Collateral Agent, which successor agreement provides Collateral Agent with "control" (within the meaning of UCC § 9-104) over the Account or a successor or replacement account.
Section 7.2 — Effect of Termination
Upon the effective date of termination of this Agreement, Collateral Agent's control over the Account shall cease and Collateral Agent shall have no further rights with respect to the Account or the funds therein under this Agreement. Following termination, Depository Bank shall thereafter follow only the instructions of Account Holder with respect to the Account, and Account Holder shall have the unrestricted right to direct the disposition of funds in the Account in accordance with Depository Bank's standard terms and conditions for demand deposit accounts.
Notwithstanding the foregoing, the following provisions shall survive the termination of this Agreement: (a) Section 6.5 (Indemnification); (b) Section 8.1 (Governing Law); (c) Section 8.2 (Jurisdiction; Submission); and (d) Section 8.8 (Waiver of Jury Trial). The termination of this Agreement shall not affect the validity or enforceability of any rights, obligations, or liabilities that have accrued prior to such termination.
ARTICLE VIII — MISCELLANEOUS
Section 8.1 — Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict-of-laws principles thereof that would require the application of the laws of another jurisdiction. The parties agree that the UCC as in effect in the State of New York shall govern all questions relating to the perfection, the effect of perfection or non-perfection, and the priority of the security interest of Collateral Agent in the Account, to the extent not preempted by federal law.
Section 8.2 — Jurisdiction; Submission
Each party hereto irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court for the Southern District of New York and the Supreme Court of the State of New York, County of New York, and any appellate court from either thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each party hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such courts. Each party hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereto irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, (a) any objection which it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in this Section, and (b) the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
Section 8.3 — Notices
All notices, requests, demands, directions, consents, and other communications provided for in this Agreement shall be in writing and shall be delivered by hand, by overnight courier service (providing proof of delivery), by United States registered or certified mail (postage prepaid, return receipt requested), or by electronic mail (with confirmation of receipt) to the parties at the following addresses (or at such other address as any party may designate by written notice to the other parties):
If to Account Holder:
Cascade Retail Holdings Inc. 2200 Elliott Avenue, Suite 1400 Seattle, Washington 98121
Attention: Derek Tanaka, General Counsel & Corporate Secretary
Email: dtanaka@cascaderetail.com
with a copy to:
Elena Kowalski, Chief Financial Officer Cascade Retail Holdings Inc. 2200 Elliott Avenue, Suite 1400 Seattle, Washington 98121
Email: ekowalski@cascaderetail.com
and a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 599 Lexington Avenue, 42nd Floor New York, New York 10022
Attention: Claudia Merritt
Email: cmerritt@calderwoodharkness.com
If to Depository Bank / Collateral Agent:
Crescent Harbor Bank, National Association 780 Park Avenue, 30th Floor New York, New York 10021
Attention: Thomas Reiland, Managing Director, ABL Origination
Email: thomas.reiland@crescentharbor.com
with a copy to:
Julianne Strickland, Vice President, Portfolio Management Crescent Harbor Bank, National Association 780 Park Avenue, 30th Floor New York, New York 10021
Email: julianne.strickland@crescentharbor.com
and a copy (which shall not constitute notice) to:
Whitfield, Greer & Holloway LLP 51 West 52nd Street, 35th Floor New York, New York 10019
Attention: Bernard Ashford
Email: bashford@wghlegal.com
All such notices and other communications shall be deemed to have been duly given or made when delivered by hand, one (1) Business Day after being deposited with an overnight courier service, three (3) Business Days after being deposited in the United States mail (registered or certified, postage prepaid, return receipt requested), or upon confirmation of receipt if delivered by electronic mail, in each case addressed as aforesaid.
Section 8.4 — Amendments and Waivers
No amendment, modification, supplement, or waiver of any provision of this Agreement, and no consent to any departure by any party from the terms hereof, shall be effective unless such amendment, modification, supplement, waiver, or consent is in writing and signed by all of the parties hereto. Any such amendment, modification, supplement, waiver, or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No failure or delay by any party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Section 8.5 — Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Account Holder may not assign its rights or obligations hereunder without the prior written consent of Collateral Agent, and any purported assignment in violation of this Section shall be null and void. Collateral Agent may assign its rights and obligations hereunder in connection with an assignment of its role as Collateral Agent under the Credit Agreement in accordance with the terms thereof, and upon any such assignment, the successor Collateral Agent shall be entitled to all of the rights and benefits of Collateral Agent hereunder. Depository Bank may not assign its rights or obligations hereunder without the prior written consent of Account Holder and Collateral Agent.
Section 8.6 — Severability
If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and such invalid, illegal, or unenforceable provision shall be deemed modified to the minimum extent necessary to make it valid, legal, and enforceable. If such modification is not possible, the relevant provision shall be deemed deleted, and the remaining provisions shall continue in full force and effect.
Section 8.7 — Counterparts; Electronic Execution
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission or by electronic transmission in portable document format (PDF) or any other electronic format shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "execute," "signed," "signature," and words of like import in or related to this Agreement shall be deemed to include electronic signatures, deliveries, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature, physical delivery thereof, or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 8.8 — Waiver of Jury Trial
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.9 — Entire Agreement
This Agreement, together with the Credit Agreement, the Security Agreement, the Guaranty Agreement, and the other Loan Documents, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, among the parties hereto with respect to the subject matter hereof. There are no warranties, representations, or other agreements among the parties in connection with the subject matter hereof except as specifically set forth or referred to herein or in the other Loan Documents.
Section 8.10 — Conflict with Other Agreements
In the event of any conflict or inconsistency between the terms of this Agreement and any deposit account agreement, account terms and conditions, or other agreement between Account Holder and Depository Bank governing the Account, the terms of this Agreement shall govern and prevail to the extent of such conflict or inconsistency.
In the event of any conflict or inconsistency between this Agreement and the Credit Agreement or the Security Agreement with respect to the rights, remedies, or obligations of Collateral Agent, the Credit Agreement or the Security Agreement, as applicable, shall govern and control to the extent of such conflict or inconsistency.
Section 8.11 — Relationship to Credit Agreement
This Agreement constitutes a "Loan Document" as defined in, and for all purposes under, the Credit Agreement. The rights and remedies of Collateral Agent hereunder are in addition to, and not in limitation of, any rights and remedies available to Collateral Agent under the Security Agreement, the Credit Agreement, or any other Loan Document, or at law or in equity. Nothing in this Agreement shall be construed to limit, restrict, or otherwise impair Collateral Agent's rights under the Security Agreement, the Credit Agreement, or any other Loan Document.
For LSTA trading identification purposes, reference is made to CUSIP 14762MAA3; provided, however, that no representation or warranty is made as to the accuracy or completeness of such CUSIP number, and such number is included solely for the convenience of the Lenders and other parties to the Credit Agreement.
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[Signature pages follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Deposit Account Control Agreement (Concentration Account) to be duly executed and delivered by their respective authorized officers as of the date first written above.
CASCADE RETAIL HOLDINGS INC., as Account Holder
By: ________
Name: Elena Kowalski
Title: Chief Financial Officer
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Depository Bank
By: ________
Name: Thomas Reiland
Title: Managing Director, ABL Origination
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Collateral Agent
By: ________
Name: Julianne Strickland
Title: Vice President, Portfolio Management
SCHEDULE I
ACCOUNT INFORMATION
The following sets forth the information relating to the Account that is the subject of this Agreement:
EXHIBIT A
FORM OF ACTIVATION NOTICE
ACTIVATION NOTICE
Date: [___], 20[]
To: Cascade Retail Holdings Inc. ("Account Holder") 2200 Elliott Avenue, Suite 1400 Seattle, Washington 98121
Attention: Derek Tanaka, General Counsel & Corporate Secretary
From: Crescent Harbor Bank, National Association ("Collateral Agent") 780 Park Avenue, 30th Floor New York, New York 10021
Attention: Thomas Reiland, Managing Director, ABL Origination
Re: Activation Notice under Deposit Account Control Agreement (Concentration Account) dated as of May 19, 2023 (the "DACA")
Ladies and Gentlemen:
Reference is made to the Deposit Account Control Agreement (Concentration Account), dated as of May 19, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "DACA"), by and among Cascade Retail Holdings Inc., as Account Holder, and Crescent Harbor Bank, National Association, as Depository Bank and as Collateral Agent. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the DACA.
Pursuant to Section 3.2(b) and Section 3.3 of the DACA, Collateral Agent hereby notifies Account Holder that a Cash Dominion Period has commenced under the Credit Agreement, dated as of May 4, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), because [check applicable box]:
Availability (as calculated in accordance with the Credit Agreement) has fallen below $37,500,000, being 12.5% of the lesser of the Aggregate Commitments of $300,000,000 and the Borrowing Base (as most recently calculated and reported).
An Event of Default has occurred and is continuing under the Credit Agreement.
Effective immediately upon the date hereof, and in accordance with Section 3.2(b) of the DACA, Depository Bank shall comply exclusively with the instructions of Collateral Agent with respect to the disposition of funds in the Account described in Schedule I to the DACA (the "Account"), without further consent, direction, or approval of Account Holder. Account Holder shall have no right to direct the disposition of funds in the Account during the Cash Dominion Period, and all funds deposited into the Account shall be applied in accordance with the terms of the Credit Agreement.
This Activation Notice shall remain in effect until Collateral Agent delivers a Termination of Activation Notice in accordance with the DACA.
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Collateral Agent
By: ________