Marcus and Sophie,
On behalf of Bernard Ashford and our client, Crescent Harbor Bank, N.A., in its capacity as Administrative Agent, I am circulating for final review the execution versions of the Credit Agreement and related Loan Documents in connection with the $300,000,000 Senior Secured Asset-Based Revolving Credit Facility among Cascade Retail Holdings Inc. ("CRH") and Cascade Retail Operating Company LLC ("CROC"), as Borrowers, the Guarantors party thereto, the Lenders party thereto, and Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent (the "Facility"). These documents reflect all agreed revisions from the most recent round of negotiations, including the resolution of the springing FCCR and cash dominion provisions confirmed on the April 21, 2023 call.
Please find attached the following execution versions for your review:
1. **Credit Agreement** — dated as of May 4, 2023 (with the effective date to be the closing date, currently expected to be May 19, 2023), including all exhibits and schedules. The Credit Agreement is governed by New York law. Key terms reflected in the execution version include: (a) Adjusted Term SOFR + 300 bps; (b) SOFR credit spread adjustments of 10 bps (1-month) and 15 bps (3-month); (c) springing fixed charge coverage ratio of 1.10:1.00, tested when Availability falls below the greater of (x) 10% of the lesser of Aggregate Commitments and the Borrowing Base and (y) $25,000,000; (d) cash dominion trigger at 12.5% of the lesser of Aggregate Commitments and the Borrowing Base ($37,500,000); (e) maturity date of May 19, 2028; (f) LC sublimit of $40,000,000; and (g) swingline sublimit of $25,000,000.
2. **Guaranty Agreement** — executed by Cascade Digital Commerce Inc. ("CDC"), Cascade Outlet Stores LLC ("COS"), and Cascade Fulfillment Services Inc. ("CFS") in favor of Crescent Harbor Bank, N.A., as Administrative Agent.
3. **Security Agreement** — among CRH, CROC, CDC, COS, and CFS, as Grantors, and Crescent Harbor Bank, N.A., as Collateral Agent, granting a first-priority security interest in accounts receivable, inventory (including in-transit and distribution center inventory), deposit accounts, supporting obligations, chattel paper, instruments, letter-of-credit rights, commercial tort claims, general intangibles, and proceeds thereof; excluding real property (other than fixtures), equity interests in foreign subsidiaries exceeding 65% of voting stock, and registered intellectual property (subject to a negative pledge).
4. **Pledge Agreement** — CRH pledging 100% of the equity interests in CROC; CROC pledging 100% of the equity interests in each of CDC, COS, and CFS, and 65% of the voting equity interests in Cascade Retail Canada ULC, in each case in favor of Crescent Harbor Bank, N.A., as Collateral Agent.
5. **Revolving Loan Notes** — three notes in the following amounts: - Crescent Harbor Bank, N.A.: $135,000,000 - Northgate Capital Bank: $90,000,000 - Bridgevale Financial Corporation: $75,000,000
6. **Swingline Note** — $25,000,000 in favor of Crescent Harbor Bank, N.A., as Swingline Lender.
7. **Form of Borrowing Base Certificate** (Exhibit to Credit Agreement).
8. **Form of Compliance Certificate** (Exhibit to Credit Agreement).
**Signature Pages.** Separate signature pages are attached for each signing party, as follows: (a) Borrowers: Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC; (b) Guarantors: Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc.; (c) Administrative Agent / Collateral Agent / Swingline Lender / Issuing Bank: Crescent Harbor Bank, N.A.; and (d) Lenders: Crescent Harbor Bank, N.A., Northgate Capital Bank, and Bridgevale Financial Corporation. We ask that each party arrange for execution by authorized signatories and return executed signature pages to both WGH and Calderwood & Harkness.
**Review and Confirmation.** Marcus and Sophie — we would ask that Calderwood & Harkness and the Cascade team (Derek and Elena) review the execution versions and confirm that they are in agreed form, or flag any remaining comments, by no later than **Wednesday, May 3, 2023**, so that the parties can target signing on May 4, 2023. The anticipated closing date remains May 19, 2023, subject to satisfaction of all conditions precedent set forth in the Credit Agreement.
**Remaining Closing Deliverables.** The remaining closing deliverables — including officer's and secretary's certificates, the perfection certificate, solvency certificate, legal opinions, borrowing base certificate, insurance certificates, UCC filings, deposit account control agreements, and the Harborview payoff letter — are being separately coordinated and will be addressed on the closing checklist. We will circulate an updated closing checklist early next week.
Thank you, and please do not hesitate to reach out with any questions. I am available over the weekend if needed.
Best regards,
**Megan Proctor** Associate Whitfield, Greer & Holloway LLP 51 West 52nd Street, 35th Floor New York, NY 10019 T: (212) 554-7183 E: mproctor@wghlegal.com WGH Matter No. 1038-00002
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