1038-00002 · Cascade Retail Holdings · documents

officers-certificate-borrower.docx DOCUMENT Finance & Banking

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OFFICER'S CERTIFICATE

Delivered Pursuant to Section 4.02 of the Credit Agreement

$300,000,000 Senior Secured Asset-Based Revolving Credit Facility

May 19, 2023

This Officer's Certificate (this "Certificate") is delivered pursuant to Section 4.02 of that certain Credit Agreement, dated as of May 4, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Cascade Retail Holdings Inc., a Delaware corporation ("CRH"), Cascade Retail Operating Company LLC, a Delaware limited liability company ("CROC" and, together with CRH, the "Borrowers"), Cascade Digital Commerce Inc., a Delaware corporation ("CDC"), Cascade Outlet Stores LLC, a Washington limited liability company ("COS"), and Cascade Fulfillment Services Inc., a Delaware corporation ("CFS" and, together with CDC and COS, collectively, the "Guarantors"), the Lenders from time to time party thereto (the "Lenders"), and Crescent Harbor Bank, N.A., in its capacity as Administrative Agent and Collateral Agent for the Lenders (in such capacities, the "Administrative Agent" and the "Collateral Agent," respectively).

Section 1 — Identification of Certifying Officer

I, Elena Kowalski, hereby certify that I am the duly elected, qualified, and acting Chief Financial Officer of Cascade Retail Holdings Inc. and that I am delivering this Certificate on behalf of each of Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC, in my capacity as Chief Financial Officer of CRH and as an authorized representative of CROC, pursuant to Section 4.02 of the Credit Agreement in connection with the initial borrowing of Revolving Loans and the closing under the Credit Agreement occurring on the date hereof (the "Closing Date").

I further certify that I am familiar with the transactions contemplated by the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement), and that I have made such inquiries and reviewed such documents, records, certificates, and other instruments as I have deemed necessary or appropriate in order to provide the certifications set forth in this Certificate. In the course of my review and due diligence, I have consulted with the officers, employees, outside advisors, and legal counsel of the Borrowers and the Guarantors as I have considered necessary to form the basis for the certifications herein.

Capitalized terms used but not otherwise defined in this Certificate shall have the respective meanings ascribed to such terms in the Credit Agreement.

Section 2 — Certification of Representations and Warranties

I hereby certify, on behalf of each of the Borrowers, that each of the representations and warranties made by the Borrowers and the Guarantors in Article V of the Credit Agreement and in each other Loan Document to which any Borrower or Guarantor is a party is true and correct in all material respects on and as of May 19, 2023, with the same effect as though such representations and warranties had been made on and as of such date; provided, however, that in the case of any representation or warranty that is qualified by reference to "materiality" or "Material Adverse Effect," such representation or warranty is true and correct in all respects (without duplication of any materiality qualifier) on and as of May 19, 2023; and provided, further, that to the extent any such representation or warranty expressly relates to an earlier date, such representation or warranty is true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, true and correct in all respects) as of such earlier date.

Without limiting the generality of the foregoing, I specifically certify the truth and correctness of the representations and warranties set forth in the Credit Agreement and the other Loan Documents relating to the following matters:

(a) Due Organization and Good Standing. Each Loan Party (including CRH, CROC, CDC, COS, and CFS) is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and is duly qualified and authorized to do business in each jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

(b) Corporate Power and Authority. Each Loan Party has full corporate, limited liability company, or other organizational power and authority to execute, deliver, and perform its obligations under the Credit Agreement and each other Loan Document to which it is a party, including the power and authority to borrow hereunder and to grant the security interests and liens contemplated by the Loan Documents.

(c) No Conflicts. The execution, delivery, and performance by each Loan Party of the Credit Agreement and the other Loan Documents to which it is a party, and the consummation of the transactions contemplated thereby, do not and will not (i) violate any provision of the organizational documents of such Loan Party, (ii) conflict with or result in a breach of any material agreement or instrument to which such Loan Party is a party or by which its properties are bound, or (iii) violate any applicable law, rule, regulation, order, writ, judgment, or decree of any governmental authority.

(d) No Required Governmental Approvals. No authorization, consent, approval, license, exemption, or filing or registration with any governmental authority is required in connection with the execution, delivery, or performance by any Loan Party of any Loan Document to which it is a party, or for the validity or enforceability thereof, except such as have been obtained or made and are in full force and effect.

(e) Financial Statements. The audited consolidated financial statements of CRH and its subsidiaries for the fiscal year ended December 31, 2022 (audited by Kessler & Hodge LLP) and the unaudited interim consolidated financial statements for the fiscal quarter ended March 31, 2023, copies of which have been delivered to the Administrative Agent and the Lenders, fairly present in all material respects the consolidated financial condition, results of operations, and cash flows of CRH and its subsidiaries as of the dates thereof and for the periods covered thereby, in accordance with GAAP (subject, in the case of unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes).

(f) No Material Adverse Effect. Since December 31, 2022, there has been no event, circumstance, development, change, or condition that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

(g) Compliance with Laws. Each Loan Party is in compliance with all applicable laws, rules, regulations, and orders of any governmental authority, except where the failure to be in compliance could not reasonably be expected to have a Material Adverse Effect.

(h) Environmental Matters. Each Loan Party is in compliance in all material respects with all applicable Environmental Laws, has obtained all Environmental Permits necessary for its operations, and is not subject to any pending or, to the knowledge of the Borrowers, threatened Environmental Claims that could reasonably be expected to have a Material Adverse Effect.

(i) ERISA Compliance. Each Loan Party and each ERISA Affiliate is in compliance in all material respects with all applicable requirements of ERISA and the Internal Revenue Code with respect to each Plan, and no ERISA Event has occurred or is reasonably expected to occur that could reasonably be expected to have a Material Adverse Effect.

(j) Tax Matters. Each Loan Party has filed all federal, state, local, and foreign tax returns required to be filed and has paid all taxes, assessments, and governmental charges due and payable, except those being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.

(k) Title to Properties and Collateral. Each Loan Party has good and marketable title to, or valid leasehold interests in, all of its properties and assets, free and clear of all Liens except Permitted Liens, including good title to all Collateral purported to be owned by it.

(l) Accuracy of Information. All information, reports, financial statements, exhibits, and schedules furnished in writing by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation, preparation, or delivery of the Credit Agreement or the other Loan Documents, or included therein or delivered pursuant thereto, when taken as a whole, did not, as of the date furnished, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(m) No Litigation. There are no actions, suits, proceedings, claims, or disputes pending or, to the knowledge of any Loan Party, threatened or contemplated at law, in equity, in arbitration, or before any governmental authority, by or against any Loan Party or against any of its properties or revenues that could reasonably be expected to have a Material Adverse Effect or that purport to affect or pertain to the Credit Agreement or any other Loan Document or any of the transactions contemplated thereby.

(n) Solvency. After giving effect to the transactions contemplated by the Credit Agreement on the Closing Date (including the initial borrowing and the application of proceeds thereof), CRH and its subsidiaries, on a consolidated basis, are Solvent.

(o) Security Interest in Collateral. The Security Agreement and the Pledge Agreement, together with the filing of the UCC-1 financing statements referred to in Section 4 below, are effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a valid and perfected first-priority Lien on and security interest in all of the Collateral described therein, subject only to Permitted Liens.

Section 3 — Certification of No Default or Event of Default

I hereby certify, on behalf of each of the Borrowers, that as of the date hereof:

(a) No Default or Event of Default (as each term is defined in Article VIII of the Credit Agreement) has occurred and is continuing on the date hereof, and no Default or Event of Default will result from, or exist immediately after giving effect to, the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 on the date hereof and the application of the proceeds thereof as described in Section 6 of this Certificate.

(b) This certification encompasses both (i) payment defaults under Section 8.01(a) of the Credit Agreement (including any failure to pay principal, interest, fees, or other amounts when due) and (ii) covenant defaults under Section 8.01(b) and Section 8.01(c) of the Credit Agreement (including any failure to comply with the affirmative covenants set forth in Article VI and the negative covenants set forth in Article VII of the Credit Agreement), as well as any other Events of Default described in Section 8.01 of the Credit Agreement.

(c) With respect to the springing financial covenant set forth in Section 7.11 of the Credit Agreement, requiring a minimum Fixed Charge Coverage Ratio of not less than 1.10 to 1.00, I certify that such financial covenant is not currently subject to testing as of the date hereof. Pursuant to Section 7.11, the Fixed Charge Coverage Ratio covenant is tested only during a FCCR Trigger Period, which commences when Availability (as calculated in accordance with the Credit Agreement) falls below the FCCR Trigger Threshold of $30,000,000 (representing 10.0% of the lesser of (x) the Aggregate Commitments and (y) the Borrowing Base). As of the date hereof, after giving pro forma effect to the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000, Availability is $150,000,000, which exceeds the FCCR Trigger Threshold of $30,000,000 by $120,000,000. Accordingly, no FCCR Trigger Period is in effect, and the Fixed Charge Coverage Ratio covenant does not require testing at this time.

Section 4 — Certification of Satisfaction of Conditions Precedent

I hereby certify, on behalf of each of the Borrowers, that all conditions precedent to the effectiveness of the Credit Agreement set forth in Section 4.01 (Conditions to Effectiveness) and all conditions precedent to the initial Credit Extension set forth in Section 4.02 (Conditions to Each Credit Extension) of the Credit Agreement have been satisfied (or, where applicable, waived by the Administrative Agent with the consent of the Required Lenders) as of the date hereof. Without limiting the generality of the foregoing, I certify that each of the following conditions has been satisfied:

(a) Credit Agreement. The Credit Agreement has been duly executed and delivered by all parties thereto, including each of the Borrowers, each of the Guarantors, each of the Lenders, and the Administrative Agent. The Credit Agreement has been executed in sufficient counterparts for distribution to each party and is in full force and effect as of the date hereof.

(b) Guaranty Agreement. The Guaranty Agreement, dated as of May 4, 2023, has been duly executed and delivered by each of the Guarantors, namely Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc., in favor of the Administrative Agent for the benefit of the Secured Parties. Each Guarantor has unconditionally guaranteed all of the Obligations of the Borrowers under the Credit Agreement and the other Loan Documents, and such Guaranty Agreement is in full force and effect.

(c) Security Agreement. The Security Agreement, dated as of May 4, 2023, has been duly executed and delivered by each of the Grantors (CRH, CROC, CDC, COS, and CFS) in favor of the Collateral Agent for the benefit of the Secured Parties, granting the Collateral Agent a first-priority security interest in substantially all of the personal property and assets of each Grantor (including, without limitation, accounts, chattel paper, deposit accounts, equipment, general intangibles, inventory, instruments, investment property, and letter-of-credit rights), subject to certain customary exclusions set forth therein.

(d) Pledge Agreement. The Pledge Agreement, dated as of May 4, 2023, has been duly executed and delivered by (i) CRH, pledging 100% of the issued and outstanding equity interests in CROC to the Collateral Agent for the benefit of the Secured Parties, and (ii) CROC, pledging (A) 100% of the issued and outstanding equity interests in each of CDC, COS, and CFS, and (B) 65% of the voting equity interests in Cascade Retail Canada ULC, a British Columbia unlimited liability company and indirect subsidiary of CRH, to the Collateral Agent for the benefit of the Secured Parties. All certificated equity interests subject to the Pledge Agreement have been delivered to the Collateral Agent, together with executed but undated stock powers or other transfer instruments, as applicable.

(e) Revolving Loan Notes. The Revolving Loan Notes have been duly executed by the Borrowers and delivered to each of the following Lenders in the following principal amounts, reflecting each Lender's Revolving Commitment:

Each Revolving Loan Note is in the form attached as Exhibit B-1 to the Credit Agreement and has been duly executed and delivered by the Borrowers to the respective Lender named therein.

(f) Swingline Note. The Swingline Note in the principal amount of $25,000,000 has been duly executed by the Borrowers and delivered to Crescent Harbor Bank, N.A. in its capacity as Swingline Lender, in the form attached as Exhibit B-2 to the Credit Agreement.

(g) Perfection Certificate. The Perfection Certificate has been duly executed by authorized officers of each Loan Party and delivered to the Administrative Agent. The Perfection Certificate sets forth, among other things, the exact legal names, jurisdictions of organization, organizational identification numbers, chief executive office locations, and prior names of each Loan Party, as well as the locations of all Collateral and all other information necessary to enable the Administrative Agent to perfect its Liens on the Collateral.

(h) UCC-1 Financing Statements. UCC-1 financing statements have been duly prepared and filed in the following filing offices, each naming Crescent Harbor Bank, N.A., as Collateral Agent, as secured party:

With respect to the remaining Loan Parties organized in Delaware (CDC and CFS), UCC-1 financing statements naming Crescent Harbor Bank, N.A., as Collateral Agent, as secured party have also been filed with the Delaware Secretary of State, and evidence of such filings has been provided to the Administrative Agent. All such financing statements are effective to perfect the Collateral Agent's security interest in the Collateral to the extent that such security interest may be perfected by filing under the Uniform Commercial Code.

(i) Deposit Account Control Agreements. Deposit Account Control Agreements have been duly executed and delivered with respect to four deposit accounts maintained by the Loan Parties, as follows:

(i) Deposit Account Control Agreement among CROC, as depositor, Crescent Harbor Bank, N.A., as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the operating account of CROC maintained at Crescent Harbor Bank, N.A. (Account No. ending in -4021);

(ii) Deposit Account Control Agreement among CRH, as depositor, Crescent Harbor Bank, N.A., as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the concentration account of CRH maintained at Crescent Harbor Bank, N.A. (Account No. ending in -4038);

(iii) Deposit Account Control Agreement among CROC, as depositor, Northgate Capital Bank, as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the collections account of CROC maintained at Northgate Capital Bank (Account No. ending in -7712); and

(iv) Deposit Account Control Agreement among CDC, as depositor, Meridian Trust Company, N.A., as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the e-commerce receivables account of CDC maintained at Meridian Trust Company, N.A. (Account No. ending in -3356).

Each Deposit Account Control Agreement is in form and substance satisfactory to the Administrative Agent and is effective to perfect the Collateral Agent's security interest in the applicable deposit account.

(j) Secretary's Certificates. Secretary's Certificates have been delivered with respect to each Loan Party (CRH, CROC, CDC, COS, and CFS), each executed by the Secretary or an Assistant Secretary (or equivalent officer) of such Loan Party and attaching the following: (i) certified copies of the certificate of incorporation or formation (or equivalent organizational document) of such Loan Party, as currently in effect; (ii) certified copies of the bylaws, limited liability company agreement, or other governing document of such Loan Party, as currently in effect; (iii) certified copies of resolutions of the board of directors, board of managers, or sole member of such Loan Party authorizing the execution, delivery, and performance of the Credit Agreement and the other Loan Documents to which such Loan Party is a party and the transactions contemplated thereby; and (iv) an incumbency certificate identifying the name, title, and specimen signature of each officer or authorized person of such Loan Party authorized to execute the Loan Documents and to act on behalf of such Loan Party in connection with the Credit Agreement. The CRH Board of Directors authorization resolution was duly adopted on February 27, 2023, by unanimous written consent.

(k) Officer's Certificate. This Officer's Certificate is being delivered on the date hereof, satisfying the condition set forth in Section 4.02(b) of the Credit Agreement.

(l) Solvency Certificate. The Solvency Certificate, in the form attached as Exhibit F to the Credit Agreement, has been duly executed by the undersigned in her capacity as Chief Financial Officer of CRH and delivered concurrently herewith to the Administrative Agent. The Solvency Certificate certifies, among other things, that after giving effect to the transactions contemplated by the Credit Agreement (including the initial borrowing and the payoff of the Harborview facility), the Borrowers and their subsidiaries, on a consolidated basis, are Solvent (as more fully described in Section 8 below).

(m) Legal Opinion. The legal opinion of Calderwood & Harkness LLP, counsel to the Borrowers and the Guarantors, addressed to the Administrative Agent and the Lenders, dated as of the date hereof, has been delivered to the Administrative Agent. Such opinion covers, among other matters, due organization, valid existence, corporate authority, due execution, enforceability, no conflicts, no required governmental approvals, perfection of security interests, and such other matters as the Administrative Agent has reasonably requested.

(n) Field Examination and Inventory Appraisal. The Administrative Agent has received the field examination and inventory appraisal report prepared by Ridgeline Asset Advisors LLC, an independent appraisal and field examination firm acceptable to the Administrative Agent. Such report is dated March 31, 2023, and covers, among other things, a review of the Borrowers' accounts receivable, inventory management and valuation practices, systems and controls, and net orderly liquidation value of Eligible Inventory. The results of such report are satisfactory to the Administrative Agent and have been used in determining the advance rates and reserves reflected in the Borrowing Base Certificate described in Section 5 below.

(o) Borrowing Base Certificate. The closing Borrowing Base Certificate, dated as of May 19, 2023, has been duly executed and delivered to the Administrative Agent, as more fully described in Section 5 of this Certificate.

(p) Payoff of Existing Indebtedness. The Administrative Agent has received the payoff letter from Harborview Lending Group, LLC, dated as of May 17, 2023, setting forth the aggregate payoff amount required to repay in full all outstanding indebtedness under the existing $175,000,000 Senior Secured Asset-Based Revolving Credit Facility between the Borrowers and Harborview Lending Group, LLC (the "Existing Facility"), and to release all Liens granted in connection therewith. As of the Closing Date, the aggregate payoff amount under the Existing Facility is $112,450,000 (comprised of $111,750,000 in outstanding principal, $625,000 in accrued and unpaid interest, and $75,000 in administrative fees). Arrangements have been made for the wire transfer of the payoff amount to Harborview Lending Group, LLC simultaneously with the initial borrowing on the date hereof. In addition, Harborview Lending Group, LLC has delivered, or will deliver upon receipt of the payoff amount, duly executed UCC-3 termination statements with respect to all UCC-1 financing statements previously filed by Harborview Lending Group, LLC against the Borrowers and the Guarantors, and has confirmed that upon receipt of the payoff amount, all Liens in favor of Harborview Lending Group, LLC on the assets of the Loan Parties will be automatically released and terminated.

(q) Insurance. The Administrative Agent has received evidence of insurance coverage satisfactory to the Administrative Agent, including:

(i) property and casualty insurance provided by Pinnacle Assurance Company, with Crescent Harbor Bank, N.A., as Collateral Agent, named as loss payee and additional insured with respect to all insured Collateral; and

(ii) umbrella liability and business interruption insurance provided by Kelvantis Mutual Insurance Group, with Crescent Harbor Bank, N.A., as Collateral Agent, named as additional insured,

in each case, as arranged through Strathmore Corporation Greaves & Co., the insurance broker of the Borrowers. All insurance policies are in form and substance satisfactory to the Administrative Agent and comply with the requirements of Section 6.07 of the Credit Agreement.

(r) Funds Flow Memorandum. The Administrative Agent has received the funds flow memorandum, dated as of May 19, 2023, detailing all closing date wire transfers, including the source and application of all loan proceeds, the payoff of the Existing Facility, the payment of all closing fees and expenses, and the deposit of remaining proceeds into the operating accounts of the Borrowers. The funds flow memorandum has been reviewed and approved by the Administrative Agent and the Borrowers.

(s) Payment of Fees and Expenses. All fees and expenses required to be paid on or before the Closing Date under the Credit Agreement and the related Fee Letter have been paid in full (or arrangements satisfactory to the Administrative Agent have been made for such payment from the proceeds of the initial borrowing), including the following:

The aggregate upfront/arrangement fees paid to the Lenders total $1,500,000. All closing costs and expenses have been paid, or are being paid from the proceeds of the initial borrowing on the date hereof, in accordance with the funds flow memorandum referenced in paragraph (r) above.

Section 5 — Certification Regarding Borrowing Base

I hereby certify that the Borrowing Base Certificate dated May 19, 2023 (the "Closing Date Borrowing Base Certificate"), certified by Priya Anand, Treasurer of Cascade Retail Holdings Inc., has been duly executed and delivered to the Administrative Agent in accordance with Section 6.02(b) of the Credit Agreement. The Closing Date Borrowing Base Certificate was prepared in accordance with the methodology and definitions set forth in Article I and Section 2.01 of the Credit Agreement and is based upon the books and records of the Borrowers as of the date thereof.

The following is a summary of the Borrowing Base calculation as of the Closing Date, as set forth in the Closing Date Borrowing Base Certificate:

The Available Commitment under the Credit Agreement is calculated as the lesser of (x) the Aggregate Commitments of $300,000,000 and (y) the Net Borrowing Base of $326,400,000. Accordingly, the Available Commitment as of the Closing Date is $300,000,000.

I further certify that the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 on the Closing Date does not exceed the Available Commitment of $300,000,000, and therefore complies with the borrowing limitations set forth in Section 2.01 of the Credit Agreement.

After giving pro forma effect to the initial borrowing of $150,000,000, Undrawn Availability under the Credit Agreement is as follows:

Section 6 — Certification Regarding Use of Proceeds

I hereby certify that the proceeds of the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 on the Closing Date are being applied solely as follows:

I further certify that the foregoing use of proceeds is consistent with, and authorized by, Section 6.11 (Use of Proceeds) of the Credit Agreement, which provides that the proceeds of the Revolving Loans shall be used by the Borrowers (i) to refinance existing indebtedness, (ii) to pay fees, costs, and expenses incurred in connection with the transactions contemplated by the Credit Agreement, and (iii) for working capital and general corporate purposes of the Borrowers and their subsidiaries. No portion of the proceeds of the initial borrowing will be used, directly or indirectly, for any purpose that would violate, or be inconsistent with, Regulation U of the Board of Governors of the Federal Reserve System, the provisions of Section 6.11 of the Credit Agreement, or any applicable law.

Section 7 — Certification Regarding Material Adverse Effect

I hereby certify, on behalf of each of the Borrowers, that since December 31, 2022 (the date of the most recent audited consolidated financial statements of CRH and its subsidiaries, audited by Kessler & Hodge LLP, the independent registered public accounting firm of CRH), there has been no event, circumstance, development, change, or condition that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect on:

(a) the business, assets, properties, liabilities (actual or contingent), operations, condition (financial or otherwise), or prospects of the Borrowers and their subsidiaries, taken as a whole;

(b) the ability of any Loan Party to perform its obligations under the Credit Agreement or any other Loan Document to which it is a party;

(d) the rights, remedies, and benefits available to, or conferred upon, the Administrative Agent, the Collateral Agent, or any Lender under the Credit Agreement or any other Loan Document; or

(e) the validity, perfection, or priority of any Lien granted pursuant to the Security Agreement, the Pledge Agreement, or any other Loan Document.

This certification is provided in satisfaction of the condition set forth in Section 4.02(c) of the Credit Agreement and in confirmation of the representation and warranty set forth in Section 5.06 of the Credit Agreement.

Section 8 — Certification Regarding Solvency

I hereby certify that, concurrently with the delivery of this Certificate, I have executed and delivered to the Administrative Agent a separate Solvency Certificate in the form attached as Exhibit F to the Credit Agreement (the "Solvency Certificate"). The Solvency Certificate certifies that, after giving effect to the transactions contemplated by the Credit Agreement on the Closing Date (including, without limitation, the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 and the application of the proceeds thereof, including the payoff in full of the Existing Facility with Harborview Lending Group, LLC), the Borrowers and their subsidiaries, on a consolidated basis, are Solvent.

For the avoidance of doubt, as set forth in the Solvency Certificate, "Solvent" means, with respect to the Borrowers and their subsidiaries on a consolidated basis, that as of the date of determination: (a) the fair value of the assets of the Borrowers and their subsidiaries on a consolidated basis exceeds their total liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities) on a consolidated basis; (b) the present fair salable value of the assets of the Borrowers and their subsidiaries on a consolidated basis is not less than the amount that will be required to pay their probable liability on their debts and other liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities) as such debts and liabilities become absolute and matured; (c) the Borrowers and their subsidiaries on a consolidated basis are able to pay their debts and liabilities as they become absolute and matured in the ordinary course of business; and (d) the Borrowers and their subsidiaries on a consolidated basis do not have unreasonably small capital with which to conduct their businesses as presently conducted.

The Solvency Certificate is incorporated herein by reference, and the certifications set forth therein are made as of the date hereof.

I have executed and delivered this Certificate as of the date first set forth above. This Certificate may be relied upon by the Administrative Agent and the Lenders in connection with the Credit Agreement.

[Signature Page Follows]

SIGNATURE PAGE TO OFFICER'S CERTIFICATE

IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as of May 19, 2023.

CASCADE RETAIL HOLDINGS INC. and CASCADE RETAIL OPERATING COMPANY LLC

By: ________

Name: Elena Kowalski

Title: Chief Financial Officer

Date: May 19, 2023

ACKNOWLEDGMENT

Acknowledged and received as of the date first written above:

CRESCENT HARBOR BANK, N.A., as Administrative Agent

By: ________

Name: Thomas Reiland

Title: Managing Director

Date: ________

Lender	Revolving Commitment	Note Principal Amount
Crescent Harbor Bank, N.A.	$135,000,000	$135,000,000
Northgate Capital Bank	$90,000,000	$90,000,000
Bridgevale Financial Corporation	$75,000,000	$75,000,000
Total	$300,000,000	$300,000,000
Debtor	Filing Office	Filing Number
Cascade Retail Holdings Inc.	Delaware Secretary of State	2023-1947291
Cascade Retail Operating Company LLC	Delaware Secretary of State	2023-1947283
Cascade Outlet Stores LLC	Washington Secretary of State	2023-204-8176
Fee/Expense	Payee	Amount
Upfront/Arrangement Fee	Crescent Harbor Bank, N.A.	$675,000
Upfront/Arrangement Fee	Northgate Capital Bank	$450,000
Upfront/Arrangement Fee	Bridgevale Financial Corporation	$375,000
Annual Administrative Agent Fee	Crescent Harbor Bank, N.A.	$150,000
Legal Fees — Borrowers' Counsel	Calderwood & Harkness LLP	$785,000
Legal Fees — Administrative Agent's Counsel	Whitfield, Greer & Holloway LLP	$510,000
Other Closing Costs and Expenses (including field exam, appraisal, filing fees, title searches, recording fees, and miscellaneous costs)	Various	$230,000
Total Fees and Expenses	$3,175,000
Borrowing Base Component	Amount
(i) Eligible Receivables	$187,000,000
(ii) Receivables Advance Rate	85%
(iii) Receivables Component (85% × $187,000,000)	$158,950,000
(iv) Eligible Inventory (at Net Orderly Liquidation Value)	$294,000,000
(v) Inventory Advance Rate	65%
(vi) Inventory Component (65% × $294,000,000)	$191,100,000

(vii) Gross Borrowing Base [(iii) + (vi)]	$350,050,000
(viii) Less: Availability Reserves	($23,650,000)
(ix) Net Borrowing Base [(vii) + (viii)]	$326,400,000

Amount

Available Commitment	$300,000,000
Less: Outstanding Revolving Loans (after initial borrowing)	($150,000,000)
Less: Outstanding Swingline Loans	$0
Less: Outstanding Letters of Credit	$0
Undrawn Availability	$150,000,000
Application of Proceeds	Amount
(a) Payoff of the Existing Facility with Harborview Lending Group, LLC (including outstanding principal of $111,750,000, accrued interest of $625,000, and administrative fees of $75,000)	$112,450,000
(b) Payment of closing costs, fees, and expenses (as described in Section 4(s) above)	$3,175,000
(c) Working capital and general corporate purposes of the Borrowers	$34,375,000
Total	$150,000,000

OFFICER'S CERTIFICATE
Delivered Pursuant to Section 4.02 of the Credit Agreement
$300,000,000 Senior Secured Asset-Based Revolving Credit Facility
May 19, 2023
This Officer's Certificate (this "Certificate") is delivered pursuant to Section 4.02 of that certain Credit Agreement, dated as of May 4, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Cascade Retail Holdings Inc., a Delaware corporation ("CRH"), Cascade Retail Operating Company LLC, a Delaware limited liability company ("CROC" and, together with CRH, the "Borrowers"), Cascade Digital Commerce Inc., a Delaware corporation ("CDC"), Cascade Outlet Stores LLC, a Washington limited liability company ("COS"), and Cascade Fulfillment Services Inc., a Delaware corporation ("CFS" and, together with CDC and COS, collectively, the "Guarantors"), the Lenders from time to time party thereto (the "Lenders"), and Crescent Harbor Bank, N.A., in its capacity as Administrative Agent and Collateral Agent for the Lenders (in such capacities, the "Administrative Agent" and the "Collateral Agent," respectively).
Section 1 — Identification of Certifying Officer
I, Elena Kowalski, hereby certify that I am the duly elected, qualified, and acting Chief Financial Officer of Cascade Retail Holdings Inc. and that I am delivering this Certificate on behalf of each of Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC, in my capacity as Chief Financial Officer of CRH and as an authorized representative of CROC, pursuant to Section 4.02 of the Credit Agreement in connection with the initial borrowing of Revolving Loans and the closing under the Credit Agreement occurring on the date hereof (the "Closing Date").
I further certify that I am familiar with the transactions contemplated by the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement), and that I have made such inquiries and reviewed such documents, records, certificates, and other instruments as I have deemed necessary or appropriate in order to provide the certifications set forth in this Certificate. In the course of my review and due diligence, I have consulted with the officers, employees, outside advisors, and legal counsel of the Borrowers and the Guarantors as I have considered necessary to form the basis for the certifications herein.
Capitalized terms used but not otherwise defined in this Certificate shall have the respective meanings ascribed to such terms in the Credit Agreement.
Section 2 — Certification of Representations and Warranties
I hereby certify, on behalf of each of the Borrowers, that each of the representations and warranties made by the Borrowers and the Guarantors in Article V of the Credit Agreement and in each other Loan Document to which any Borrower or Guarantor is a party is true and correct in all material respects on and as of May 19, 2023, with the same effect as though such representations and warranties had been made on and as of such date; provided, however, that in the case of any representation or warranty that is qualified by reference to "materiality" or "Material Adverse Effect," such representation or warranty is true and correct in all respects (without duplication of any materiality qualifier) on and as of May 19, 2023; and provided, further, that to the extent any such representation or warranty expressly relates to an earlier date, such representation or warranty is true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, true and correct in all respects) as of such earlier date.
Without limiting the generality of the foregoing, I specifically certify the truth and correctness of the representations and warranties set forth in the Credit Agreement and the other Loan Documents relating to the following matters:
(a) Due Organization and Good Standing. Each Loan Party (including CRH, CROC, CDC, COS, and CFS) is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and is duly qualified and authorized to do business in each jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.
(b) Corporate Power and Authority. Each Loan Party has full corporate, limited liability company, or other organizational power and authority to execute, deliver, and perform its obligations under the Credit Agreement and each other Loan Document to which it is a party, including the power and authority to borrow hereunder and to grant the security interests and liens contemplated by the Loan Documents.
(c) No Conflicts. The execution, delivery, and performance by each Loan Party of the Credit Agreement and the other Loan Documents to which it is a party, and the consummation of the transactions contemplated thereby, do not and will not (i) violate any provision of the organizational documents of such Loan Party, (ii) conflict with or result in a breach of any material agreement or instrument to which such Loan Party is a party or by which its properties are bound, or (iii) violate any applicable law, rule, regulation, order, writ, judgment, or decree of any governmental authority.
(d) No Required Governmental Approvals. No authorization, consent, approval, license, exemption, or filing or registration with any governmental authority is required in connection with the execution, delivery, or performance by any Loan Party of any Loan Document to which it is a party, or for the validity or enforceability thereof, except such as have been obtained or made and are in full force and effect.
(e) Financial Statements. The audited consolidated financial statements of CRH and its subsidiaries for the fiscal year ended December 31, 2022 (audited by Kessler & Hodge LLP) and the unaudited interim consolidated financial statements for the fiscal quarter ended March 31, 2023, copies of which have been delivered to the Administrative Agent and the Lenders, fairly present in all material respects the consolidated financial condition, results of operations, and cash flows of CRH and its subsidiaries as of the dates thereof and for the periods covered thereby, in accordance with GAAP (subject, in the case of unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes).
(f) No Material Adverse Effect. Since December 31, 2022, there has been no event, circumstance, development, change, or condition that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.
(g) Compliance with Laws. Each Loan Party is in compliance with all applicable laws, rules, regulations, and orders of any governmental authority, except where the failure to be in compliance could not reasonably be expected to have a Material Adverse Effect.
(h) Environmental Matters. Each Loan Party is in compliance in all material respects with all applicable Environmental Laws, has obtained all Environmental Permits necessary for its operations, and is not subject to any pending or, to the knowledge of the Borrowers, threatened Environmental Claims that could reasonably be expected to have a Material Adverse Effect.
(i) ERISA Compliance. Each Loan Party and each ERISA Affiliate is in compliance in all material respects with all applicable requirements of ERISA and the Internal Revenue Code with respect to each Plan, and no ERISA Event has occurred or is reasonably expected to occur that could reasonably be expected to have a Material Adverse Effect.
(j) Tax Matters. Each Loan Party has filed all federal, state, local, and foreign tax returns required to be filed and has paid all taxes, assessments, and governmental charges due and payable, except those being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.
(k) Title to Properties and Collateral. Each Loan Party has good and marketable title to, or valid leasehold interests in, all of its properties and assets, free and clear of all Liens except Permitted Liens, including good title to all Collateral purported to be owned by it.
(l) Accuracy of Information. All information, reports, financial statements, exhibits, and schedules furnished in writing by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation, preparation, or delivery of the Credit Agreement or the other Loan Documents, or included therein or delivered pursuant thereto, when taken as a whole, did not, as of the date furnished, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(m) No Litigation. There are no actions, suits, proceedings, claims, or disputes pending or, to the knowledge of any Loan Party, threatened or contemplated at law, in equity, in arbitration, or before any governmental authority, by or against any Loan Party or against any of its properties or revenues that could reasonably be expected to have a Material Adverse Effect or that purport to affect or pertain to the Credit Agreement or any other Loan Document or any of the transactions contemplated thereby.
(n) Solvency. After giving effect to the transactions contemplated by the Credit Agreement on the Closing Date (including the initial borrowing and the application of proceeds thereof), CRH and its subsidiaries, on a consolidated basis, are Solvent.
(o) Security Interest in Collateral. The Security Agreement and the Pledge Agreement, together with the filing of the UCC-1 financing statements referred to in Section 4 below, are effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a valid and perfected first-priority Lien on and security interest in all of the Collateral described therein, subject only to Permitted Liens.
Section 3 — Certification of No Default or Event of Default
I hereby certify, on behalf of each of the Borrowers, that as of the date hereof:
(a) No Default or Event of Default (as each term is defined in Article VIII of the Credit Agreement) has occurred and is continuing on the date hereof, and no Default or Event of Default will result from, or exist immediately after giving effect to, the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 on the date hereof and the application of the proceeds thereof as described in Section 6 of this Certificate.
(b) This certification encompasses both (i) payment defaults under Section 8.01(a) of the Credit Agreement (including any failure to pay principal, interest, fees, or other amounts when due) and (ii) covenant defaults under Section 8.01(b) and Section 8.01(c) of the Credit Agreement (including any failure to comply with the affirmative covenants set forth in Article VI and the negative covenants set forth in Article VII of the Credit Agreement), as well as any other Events of Default described in Section 8.01 of the Credit Agreement.
(c) With respect to the springing financial covenant set forth in Section 7.11 of the Credit Agreement, requiring a minimum Fixed Charge Coverage Ratio of not less than 1.10 to 1.00, I certify that such financial covenant is not currently subject to testing as of the date hereof. Pursuant to Section 7.11, the Fixed Charge Coverage Ratio covenant is tested only during a FCCR Trigger Period, which commences when Availability (as calculated in accordance with the Credit Agreement) falls below the FCCR Trigger Threshold of $30,000,000 (representing 10.0% of the lesser of (x) the Aggregate Commitments and (y) the Borrowing Base). As of the date hereof, after giving pro forma effect to the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000, Availability is $150,000,000, which exceeds the FCCR Trigger Threshold of $30,000,000 by $120,000,000. Accordingly, no FCCR Trigger Period is in effect, and the Fixed Charge Coverage Ratio covenant does not require testing at this time.
Section 4 — Certification of Satisfaction of Conditions Precedent
I hereby certify, on behalf of each of the Borrowers, that all conditions precedent to the effectiveness of the Credit Agreement set forth in Section 4.01 (Conditions to Effectiveness) and all conditions precedent to the initial Credit Extension set forth in Section 4.02 (Conditions to Each Credit Extension) of the Credit Agreement have been satisfied (or, where applicable, waived by the Administrative Agent with the consent of the Required Lenders) as of the date hereof. Without limiting the generality of the foregoing, I certify that each of the following conditions has been satisfied:
(a) Credit Agreement. The Credit Agreement has been duly executed and delivered by all parties thereto, including each of the Borrowers, each of the Guarantors, each of the Lenders, and the Administrative Agent. The Credit Agreement has been executed in sufficient counterparts for distribution to each party and is in full force and effect as of the date hereof.
(b) Guaranty Agreement. The Guaranty Agreement, dated as of May 4, 2023, has been duly executed and delivered by each of the Guarantors, namely Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc., in favor of the Administrative Agent for the benefit of the Secured Parties. Each Guarantor has unconditionally guaranteed all of the Obligations of the Borrowers under the Credit Agreement and the other Loan Documents, and such Guaranty Agreement is in full force and effect.
(c) Security Agreement. The Security Agreement, dated as of May 4, 2023, has been duly executed and delivered by each of the Grantors (CRH, CROC, CDC, COS, and CFS) in favor of the Collateral Agent for the benefit of the Secured Parties, granting the Collateral Agent a first-priority security interest in substantially all of the personal property and assets of each Grantor (including, without limitation, accounts, chattel paper, deposit accounts, equipment, general intangibles, inventory, instruments, investment property, and letter-of-credit rights), subject to certain customary exclusions set forth therein.
(d) Pledge Agreement. The Pledge Agreement, dated as of May 4, 2023, has been duly executed and delivered by (i) CRH, pledging 100% of the issued and outstanding equity interests in CROC to the Collateral Agent for the benefit of the Secured Parties, and (ii) CROC, pledging (A) 100% of the issued and outstanding equity interests in each of CDC, COS, and CFS, and (B) 65% of the voting equity interests in Cascade Retail Canada ULC, a British Columbia unlimited liability company and indirect subsidiary of CRH, to the Collateral Agent for the benefit of the Secured Parties. All certificated equity interests subject to the Pledge Agreement have been delivered to the Collateral Agent, together with executed but undated stock powers or other transfer instruments, as applicable.
(e) Revolving Loan Notes. The Revolving Loan Notes have been duly executed by the Borrowers and delivered to each of the following Lenders in the following principal amounts, reflecting each Lender's Revolving Commitment:
Each Revolving Loan Note is in the form attached as Exhibit B-1 to the Credit Agreement and has been duly executed and delivered by the Borrowers to the respective Lender named therein.
(f) Swingline Note. The Swingline Note in the principal amount of $25,000,000 has been duly executed by the Borrowers and delivered to Crescent Harbor Bank, N.A. in its capacity as Swingline Lender, in the form attached as Exhibit B-2 to the Credit Agreement.
(g) Perfection Certificate. The Perfection Certificate has been duly executed by authorized officers of each Loan Party and delivered to the Administrative Agent. The Perfection Certificate sets forth, among other things, the exact legal names, jurisdictions of organization, organizational identification numbers, chief executive office locations, and prior names of each Loan Party, as well as the locations of all Collateral and all other information necessary to enable the Administrative Agent to perfect its Liens on the Collateral.
(h) UCC-1 Financing Statements. UCC-1 financing statements have been duly prepared and filed in the following filing offices, each naming Crescent Harbor Bank, N.A., as Collateral Agent, as secured party:
With respect to the remaining Loan Parties organized in Delaware (CDC and CFS), UCC-1 financing statements naming Crescent Harbor Bank, N.A., as Collateral Agent, as secured party have also been filed with the Delaware Secretary of State, and evidence of such filings has been provided to the Administrative Agent. All such financing statements are effective to perfect the Collateral Agent's security interest in the Collateral to the extent that such security interest may be perfected by filing under the Uniform Commercial Code.
(i) Deposit Account Control Agreements. Deposit Account Control Agreements have been duly executed and delivered with respect to four deposit accounts maintained by the Loan Parties, as follows:
(i) Deposit Account Control Agreement among CROC, as depositor, Crescent Harbor Bank, N.A., as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the operating account of CROC maintained at Crescent Harbor Bank, N.A. (Account No. ending in -4021);
(ii) Deposit Account Control Agreement among CRH, as depositor, Crescent Harbor Bank, N.A., as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the concentration account of CRH maintained at Crescent Harbor Bank, N.A. (Account No. ending in -4038);
(iii) Deposit Account Control Agreement among CROC, as depositor, Northgate Capital Bank, as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the collections account of CROC maintained at Northgate Capital Bank (Account No. ending in -7712); and
(iv) Deposit Account Control Agreement among CDC, as depositor, Meridian Trust Company, N.A., as depository bank, and Crescent Harbor Bank, N.A., as Collateral Agent, with respect to the e-commerce receivables account of CDC maintained at Meridian Trust Company, N.A. (Account No. ending in -3356).
Each Deposit Account Control Agreement is in form and substance satisfactory to the Administrative Agent and is effective to perfect the Collateral Agent's security interest in the applicable deposit account.
(j) Secretary's Certificates. Secretary's Certificates have been delivered with respect to each Loan Party (CRH, CROC, CDC, COS, and CFS), each executed by the Secretary or an Assistant Secretary (or equivalent officer) of such Loan Party and attaching the following: (i) certified copies of the certificate of incorporation or formation (or equivalent organizational document) of such Loan Party, as currently in effect; (ii) certified copies of the bylaws, limited liability company agreement, or other governing document of such Loan Party, as currently in effect; (iii) certified copies of resolutions of the board of directors, board of managers, or sole member of such Loan Party authorizing the execution, delivery, and performance of the Credit Agreement and the other Loan Documents to which such Loan Party is a party and the transactions contemplated thereby; and (iv) an incumbency certificate identifying the name, title, and specimen signature of each officer or authorized person of such Loan Party authorized to execute the Loan Documents and to act on behalf of such Loan Party in connection with the Credit Agreement. The CRH Board of Directors authorization resolution was duly adopted on February 27, 2023, by unanimous written consent.
(k) Officer's Certificate. This Officer's Certificate is being delivered on the date hereof, satisfying the condition set forth in Section 4.02(b) of the Credit Agreement.
(l) Solvency Certificate. The Solvency Certificate, in the form attached as Exhibit F to the Credit Agreement, has been duly executed by the undersigned in her capacity as Chief Financial Officer of CRH and delivered concurrently herewith to the Administrative Agent. The Solvency Certificate certifies, among other things, that after giving effect to the transactions contemplated by the Credit Agreement (including the initial borrowing and the payoff of the Harborview facility), the Borrowers and their subsidiaries, on a consolidated basis, are Solvent (as more fully described in Section 8 below).
(m) Legal Opinion. The legal opinion of Calderwood & Harkness LLP, counsel to the Borrowers and the Guarantors, addressed to the Administrative Agent and the Lenders, dated as of the date hereof, has been delivered to the Administrative Agent. Such opinion covers, among other matters, due organization, valid existence, corporate authority, due execution, enforceability, no conflicts, no required governmental approvals, perfection of security interests, and such other matters as the Administrative Agent has reasonably requested.
(n) Field Examination and Inventory Appraisal. The Administrative Agent has received the field examination and inventory appraisal report prepared by Ridgeline Asset Advisors LLC, an independent appraisal and field examination firm acceptable to the Administrative Agent. Such report is dated March 31, 2023, and covers, among other things, a review of the Borrowers' accounts receivable, inventory management and valuation practices, systems and controls, and net orderly liquidation value of Eligible Inventory. The results of such report are satisfactory to the Administrative Agent and have been used in determining the advance rates and reserves reflected in the Borrowing Base Certificate described in Section 5 below.
(o) Borrowing Base Certificate. The closing Borrowing Base Certificate, dated as of May 19, 2023, has been duly executed and delivered to the Administrative Agent, as more fully described in Section 5 of this Certificate.
(p) Payoff of Existing Indebtedness. The Administrative Agent has received the payoff letter from Harborview Lending Group, LLC, dated as of May 17, 2023, setting forth the aggregate payoff amount required to repay in full all outstanding indebtedness under the existing $175,000,000 Senior Secured Asset-Based Revolving Credit Facility between the Borrowers and Harborview Lending Group, LLC (the "Existing Facility"), and to release all Liens granted in connection therewith. As of the Closing Date, the aggregate payoff amount under the Existing Facility is $112,450,000 (comprised of $111,750,000 in outstanding principal, $625,000 in accrued and unpaid interest, and $75,000 in administrative fees). Arrangements have been made for the wire transfer of the payoff amount to Harborview Lending Group, LLC simultaneously with the initial borrowing on the date hereof. In addition, Harborview Lending Group, LLC has delivered, or will deliver upon receipt of the payoff amount, duly executed UCC-3 termination statements with respect to all UCC-1 financing statements previously filed by Harborview Lending Group, LLC against the Borrowers and the Guarantors, and has confirmed that upon receipt of the payoff amount, all Liens in favor of Harborview Lending Group, LLC on the assets of the Loan Parties will be automatically released and terminated.
(q) Insurance. The Administrative Agent has received evidence of insurance coverage satisfactory to the Administrative Agent, including:
(i) property and casualty insurance provided by Pinnacle Assurance Company, with Crescent Harbor Bank, N.A., as Collateral Agent, named as loss payee and additional insured with respect to all insured Collateral; and
(ii) umbrella liability and business interruption insurance provided by Kelvantis Mutual Insurance Group, with Crescent Harbor Bank, N.A., as Collateral Agent, named as additional insured,
in each case, as arranged through Strathmore Corporation Greaves & Co., the insurance broker of the Borrowers. All insurance policies are in form and substance satisfactory to the Administrative Agent and comply with the requirements of Section 6.07 of the Credit Agreement.
(r) Funds Flow Memorandum. The Administrative Agent has received the funds flow memorandum, dated as of May 19, 2023, detailing all closing date wire transfers, including the source and application of all loan proceeds, the payoff of the Existing Facility, the payment of all closing fees and expenses, and the deposit of remaining proceeds into the operating accounts of the Borrowers. The funds flow memorandum has been reviewed and approved by the Administrative Agent and the Borrowers.
(s) Payment of Fees and Expenses. All fees and expenses required to be paid on or before the Closing Date under the Credit Agreement and the related Fee Letter have been paid in full (or arrangements satisfactory to the Administrative Agent have been made for such payment from the proceeds of the initial borrowing), including the following:
The aggregate upfront/arrangement fees paid to the Lenders total $1,500,000. All closing costs and expenses have been paid, or are being paid from the proceeds of the initial borrowing on the date hereof, in accordance with the funds flow memorandum referenced in paragraph (r) above.
Section 5 — Certification Regarding Borrowing Base
I hereby certify that the Borrowing Base Certificate dated May 19, 2023 (the "Closing Date Borrowing Base Certificate"), certified by Priya Anand, Treasurer of Cascade Retail Holdings Inc., has been duly executed and delivered to the Administrative Agent in accordance with Section 6.02(b) of the Credit Agreement. The Closing Date Borrowing Base Certificate was prepared in accordance with the methodology and definitions set forth in Article I and Section 2.01 of the Credit Agreement and is based upon the books and records of the Borrowers as of the date thereof.
The following is a summary of the Borrowing Base calculation as of the Closing Date, as set forth in the Closing Date Borrowing Base Certificate:
The Available Commitment under the Credit Agreement is calculated as the lesser of (x) the Aggregate Commitments of $300,000,000 and (y) the Net Borrowing Base of $326,400,000. Accordingly, the Available Commitment as of the Closing Date is $300,000,000.
I further certify that the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 on the Closing Date does not exceed the Available Commitment of $300,000,000, and therefore complies with the borrowing limitations set forth in Section 2.01 of the Credit Agreement.
After giving pro forma effect to the initial borrowing of $150,000,000, Undrawn Availability under the Credit Agreement is as follows:
Section 6 — Certification Regarding Use of Proceeds
I hereby certify that the proceeds of the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 on the Closing Date are being applied solely as follows:
I further certify that the foregoing use of proceeds is consistent with, and authorized by, Section 6.11 (Use of Proceeds) of the Credit Agreement, which provides that the proceeds of the Revolving Loans shall be used by the Borrowers (i) to refinance existing indebtedness, (ii) to pay fees, costs, and expenses incurred in connection with the transactions contemplated by the Credit Agreement, and (iii) for working capital and general corporate purposes of the Borrowers and their subsidiaries. No portion of the proceeds of the initial borrowing will be used, directly or indirectly, for any purpose that would violate, or be inconsistent with, Regulation U of the Board of Governors of the Federal Reserve System, the provisions of Section 6.11 of the Credit Agreement, or any applicable law.
Section 7 — Certification Regarding Material Adverse Effect
I hereby certify, on behalf of each of the Borrowers, that since December 31, 2022 (the date of the most recent audited consolidated financial statements of CRH and its subsidiaries, audited by Kessler & Hodge LLP, the independent registered public accounting firm of CRH), there has been no event, circumstance, development, change, or condition that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect on:
(a) the business, assets, properties, liabilities (actual or contingent), operations, condition (financial or otherwise), or prospects of the Borrowers and their subsidiaries, taken as a whole;
(b) the ability of any Loan Party to perform its obligations under the Credit Agreement or any other Loan Document to which it is a party;
(c) the legality, validity, binding effect, or enforceability of the Credit Agreement or any other Loan Document;
(d) the rights, remedies, and benefits available to, or conferred upon, the Administrative Agent, the Collateral Agent, or any Lender under the Credit Agreement or any other Loan Document; or
(e) the validity, perfection, or priority of any Lien granted pursuant to the Security Agreement, the Pledge Agreement, or any other Loan Document.
This certification is provided in satisfaction of the condition set forth in Section 4.02(c) of the Credit Agreement and in confirmation of the representation and warranty set forth in Section 5.06 of the Credit Agreement.
Section 8 — Certification Regarding Solvency
I hereby certify that, concurrently with the delivery of this Certificate, I have executed and delivered to the Administrative Agent a separate Solvency Certificate in the form attached as Exhibit F to the Credit Agreement (the "Solvency Certificate"). The Solvency Certificate certifies that, after giving effect to the transactions contemplated by the Credit Agreement on the Closing Date (including, without limitation, the initial borrowing of Revolving Loans in the aggregate principal amount of $150,000,000 and the application of the proceeds thereof, including the payoff in full of the Existing Facility with Harborview Lending Group, LLC), the Borrowers and their subsidiaries, on a consolidated basis, are Solvent.
For the avoidance of doubt, as set forth in the Solvency Certificate, "Solvent" means, with respect to the Borrowers and their subsidiaries on a consolidated basis, that as of the date of determination: (a) the fair value of the assets of the Borrowers and their subsidiaries on a consolidated basis exceeds their total liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities) on a consolidated basis; (b) the present fair salable value of the assets of the Borrowers and their subsidiaries on a consolidated basis is not less than the amount that will be required to pay their probable liability on their debts and other liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities) as such debts and liabilities become absolute and matured; (c) the Borrowers and their subsidiaries on a consolidated basis are able to pay their debts and liabilities as they become absolute and matured in the ordinary course of business; and (d) the Borrowers and their subsidiaries on a consolidated basis do not have unreasonably small capital with which to conduct their businesses as presently conducted.
The Solvency Certificate is incorporated herein by reference, and the certifications set forth therein are made as of the date hereof.
I have executed and delivered this Certificate as of the date first set forth above. This Certificate may be relied upon by the Administrative Agent and the Lenders in connection with the Credit Agreement.
[Signature Page Follows]
SIGNATURE PAGE TO OFFICER'S CERTIFICATE
IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as of May 19, 2023.
CASCADE RETAIL HOLDINGS INC. and CASCADE RETAIL OPERATING COMPANY LLC
By: ________
Name: Elena Kowalski
Title: Chief Financial Officer
Date: May 19, 2023
ACKNOWLEDGMENT
Acknowledged and received as of the date first written above:
CRESCENT HARBOR BANK, N.A., as Administrative Agent
By: ________
Name: Thomas Reiland
Title: Managing Director
Date: ________
Lender | Revolving Commitment | Note Principal Amount
Crescent Harbor Bank, N.A. | $135,000,000 | $135,000,000
Northgate Capital Bank | $90,000,000 | $90,000,000
Bridgevale Financial Corporation | $75,000,000 | $75,000,000
Total | $300,000,000 | $300,000,000
Debtor | Filing Office | Filing Number
Cascade Retail Holdings Inc. | Delaware Secretary of State | 2023-1947291
Cascade Retail Operating Company LLC | Delaware Secretary of State | 2023-1947283
Cascade Outlet Stores LLC | Washington Secretary of State | 2023-204-8176
Fee/Expense | Payee | Amount
Upfront/Arrangement Fee | Crescent Harbor Bank, N.A. | $675,000
Upfront/Arrangement Fee | Northgate Capital Bank | $450,000
Upfront/Arrangement Fee | Bridgevale Financial Corporation | $375,000
Annual Administrative Agent Fee | Crescent Harbor Bank, N.A. | $150,000
Legal Fees — Borrowers' Counsel | Calderwood & Harkness LLP | $785,000
Legal Fees — Administrative Agent's Counsel | Whitfield, Greer & Holloway LLP | $510,000
Other Closing Costs and Expenses (including field exam, appraisal, filing fees, title searches, recording fees, and miscellaneous costs) | Various | $230,000
Total Fees and Expenses | $3,175,000
Borrowing Base Component | Amount
(i) Eligible Receivables | $187,000,000
(ii) Receivables Advance Rate | 85%
(iii) Receivables Component (85% × $187,000,000) | $158,950,000
(iv) Eligible Inventory (at Net Orderly Liquidation Value) | $294,000,000
(v) Inventory Advance Rate | 65%
(vi) Inventory Component (65% × $294,000,000) | $191,100,000
(vii) Gross Borrowing Base [(iii) + (vi)] | $350,050,000
(viii) Less: Availability Reserves | ($23,650,000)
(ix) Net Borrowing Base [(vii) + (viii)] | $326,400,000
Amount
Available Commitment | $300,000,000
Less: Outstanding Revolving Loans (after initial borrowing) | ($150,000,000)
Less: Outstanding Swingline Loans | $0
Less: Outstanding Letters of Credit | $0
Undrawn Availability | $150,000,000
Application of Proceeds | Amount
(a) Payoff of the Existing Facility with Harborview Lending Group, LLC (including outstanding principal of $111,750,000, accrued interest of $625,000, and administrative fees of $75,000) | $112,450,000
(b) Payment of closing costs, fees, and expenses (as described in Section 4(s) above) | $3,175,000
(c) Working capital and general corporate purposes of the Borrowers | $34,375,000
Total | $150,000,000

OFFICER'S CERTIFICATE

SIGNATURE PAGE TO OFFICER'S CERTIFICATE

ACKNOWLEDGMENT

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