Dear All,
I am pleased to confirm that the closing of the $300,000,000 Senior Secured Asset-Based Revolving Credit Facility has been completed today, May 19, 2023. The Credit Agreement dated as of May 4, 2023, 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 party thereto, and Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent (the "Credit Agreement"), has been declared effective as of today's date. All conditions precedent under Article IV of the Credit Agreement have been satisfied or waived.
**Funding Confirmation**
The initial draw of $150,000,000 under the facility has been funded, and all closing-date wire transfers have been completed in accordance with the Funds Flow Memorandum. The components of the initial draw are as follows:
- **Payoff of Existing ABL Facility:** $112,450,000 — payoff of the existing $175,000,000 revolving ABL facility with Harborview Lending Group, LLC (inclusive of outstanding principal, accrued interest, and fees), wired to Harborview per the Payoff Letter dated May 17, 2023 - **Closing Costs, Fees, and Expenses:** $3,175,000 — inclusive of upfront/arrangement fees, administrative agent fee, legal fees, appraisal and field examination fees, and filing fees - **Working Capital:** $34,375,000 — deposited into CRH's operating account at Meridian Trust Company, N.A.
**Total Initial Draw: $150,000,000**
**Upfront Fee Disbursements**
Upfront/arrangement fees of $1,500,000 (50 bps on aggregate commitments) have been paid as follows:
- Crescent Harbor Bank, N.A.: $675,000 - Northgate Capital Bank: $450,000 - Bridgevale Financial Corporation: $375,000
In addition, the Year 1 Administrative Agent fee of $150,000 has been paid to Crescent Harbor Bank, N.A.
**Availability Summary**
Based on the closing-date Borrowing Base Certificate certified by Priya Anand (Treasurer), the Net Borrowing Base is $326,400,000, calculated as follows:
- Eligible Receivables of $187,000,000 at 85% advance rate = $158,950,000 - Eligible Inventory (NOLV) of $294,000,000 at 65% advance rate = $191,100,000 - Less Availability Reserves of ($23,650,000) - **Net Borrowing Base: $326,400,000**
Available Commitment equals the lesser of (a) Aggregate Commitments ($300,000,000) and (b) the Net Borrowing Base ($326,400,000), resulting in Available Commitment of $300,000,000. After giving effect to the initial draw of $150,000,000, undrawn availability under the facility is **$150,000,000**.
**Harborview Payoff and Lien Release**
We have received wire confirmation for the $112,450,000 payoff to Harborview Lending Group, LLC. Harborview has confirmed that it will deliver UCC-3 termination statements for its existing filings in accordance with the terms of the Payoff Letter. Calderwood & Harkness will follow up directly with Harborview to confirm receipt and filing of all UCC-3 terminations.
**UCC Filings**
UCC-1 financing statements have been filed in favor of Crescent Harbor Bank, N.A., as Collateral Agent, as follows:
- Delaware Secretary of State — Debtor: Cascade Retail Holdings Inc. (Filing No. 2023-1947291) - Delaware Secretary of State — Debtor: Cascade Retail Operating Company LLC (Filing No. 2023-1947283) - Washington Secretary of State — Debtor: Cascade Outlet Stores LLC (Filing No. 2023-204-8176)
**Deposit Account Control Agreements**
All four Deposit Account Control Agreements have been executed and delivered: two accounts at Crescent Harbor Bank, N.A., one account at Northgate Capital Bank, and one account at Meridian Trust Company, N.A.
**Key Terms Recap**
For ease of reference, the principal terms of the facility are summarized below:
- **Interest Rate:** Adjusted Term SOFR + 300 bps (SOFR credit spread adjustments of 10 bps for 1-month and 15 bps for 3-month) - **Maturity Date:** May 19, 2028 - **LC Sublimit:** $40,000,000 - **Swingline Sublimit:** $25,000,000 - **Springing FCCR Covenant:** Minimum 1.10:1.00, tested when Availability falls below $30,000,000 - **Cash Dominion Trigger:** Availability below $37,500,000 - **Governing Law:** New York
**Post-Closing Items**
A separate post-closing obligations letter will follow identifying all outstanding deliverables, including:
- Landlord waivers and collateral access agreements for 12 specified locations (due within 60 days of closing — **July 18, 2023**) - Updated insurance endorsements from Pinnacle Assurance Company and Kelvantis Mutual Insurance Group naming Crescent Harbor Bank, N.A. as loss payee and additional insured (due within 30 days of closing — **June 18, 2023**) - Intercompany note documentation for Cascade Retail Canada ULC
**Reporting Reminders**
For the CRH team's planning purposes, please note the following initial reporting deadlines:
- **First Post-Closing Borrowing Base Certificate:** due June 15, 2023 - **First Post-Closing Compliance Certificate:** due August 14, 2023 (within 60 days of Q2 2023 fiscal quarter-end)
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I would like to thank everyone for their collaboration and diligence in bringing this transaction to a successful close. A comprehensive closing memorandum with an index of all executed documents will be circulated separately in the coming days. In the meantime, please do not hesitate to contact me or Claudia Merritt with any questions.
Best regards,
**Marcus Leung** Calderwood & Harkness LLP 599 Lexington Avenue, 42nd Floor New York, NY 10022 Direct: (212) 558-4093 Email: mleung@calderwoodharkness.com Matter No. 1038-00002