REVOLVING LOAN PROMISSORY NOTE
$135,000,000.00
New York, New York
May 4, 2023
FOR VALUE RECEIVED, the undersigned, Cascade Retail Holdings Inc., a Delaware corporation ("CRH"), and Cascade Retail Operating Company LLC, a Delaware limited liability company ("CROC" and, together with CRH, jointly and severally, the "Borrowers"), hereby jointly and severally promise to pay to the order of Crescent Harbor Bank, National Association (the "Lender"), at the office of Crescent Harbor Bank, N.A., in its capacity as Administrative Agent (in such capacity, the "Administrative Agent"), located at 780 Park Avenue, 30th Floor, New York, New York 10021, or at such other place as the Administrative Agent may from time to time designate in writing, the principal sum of ONE HUNDRED THIRTY-FIVE MILLION AND NO/100 DOLLARS ($135,000,000.00), or, if less, the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Borrowers pursuant to the Credit Agreement (as defined below), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts set forth in the Credit Agreement.
This Revolving Loan Promissory Note (this "Note") is issued pursuant to that certain Credit Agreement dated as of May 4, 2023 (effective May 19, 2023) (as amended, restated, amended and restated, supplemented, refinanced, 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., a Delaware corporation, Cascade Outlet Stores LLC, a Delaware limited liability company, and Cascade Fulfillment Services Inc., a Delaware corporation, as Guarantors (collectively, the "Guarantors"), the lenders party thereto from time to time (collectively, the "Lenders"), and Crescent Harbor Bank, N.A., in its capacities as Administrative Agent and Collateral Agent for the Secured Parties.
Capitalized terms used but not otherwise defined in this Note shall have the respective meanings ascribed to such terms in the Credit Agreement. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall apply to this Note mutatis mutandis.
Section 1. Principal.
The Borrowers, jointly and severally, promise to pay to the Lender the principal amount of each Revolving Loan made by the Lender to the Borrowers pursuant to the Credit Agreement on May 19, 2028 (the "Maturity Date"), or on such earlier date on which the Revolving Loans become due and payable in accordance with the terms of the Credit Agreement, whether by acceleration pursuant to Section 8.02 of the Credit Agreement, mandatory prepayment pursuant to Section 2.06 of the Credit Agreement, or otherwise.
The aggregate unpaid principal amount of Revolving Loans evidenced by this Note at any time outstanding shall not exceed One Hundred Thirty-Five Million and No/100 Dollars ($135,000,000.00), which amount represents the Lender's Commitment, being forty-five percent (45%) of the Aggregate Commitments of Three Hundred Million and No/100 Dollars ($300,000,000.00) under the Credit Agreement.
The Lender is hereby authorized to record on the schedules annexed hereto and made a part hereof (or, at the Lender's option, in its internal records and information systems) (i) the date and amount of each Revolving Loan made by the Lender to the Borrowers, (ii) each repayment or prepayment of principal received by the Lender, (iii) each continuation or conversion of any Revolving Loan, and (iv) the principal balance from time to time outstanding hereunder; provided, however, that the failure of the Lender to make any such notation or any error in any such notation shall not affect the obligations of the Borrowers under this Note or under the Credit Agreement, and the Lender's records shall, absent manifest error, constitute prima facie evidence of the amounts owing under this Note.
Section 2. Interest.
(a) Interest Rate. The Borrowers, jointly and severally, promise to pay interest on the unpaid principal amount of each Revolving Loan from the date of such Revolving Loan until such principal amount is paid in full, at the rates and on the dates set forth in the Credit Agreement. As of the date hereof, the applicable interest rate for SOFR Loans is the Adjusted Term SOFR (as published by the CME Group Benchmark Administration Limited (or any successor administrator)) plus a margin of three hundred (300) basis points (3.00%) per annum, subject to adjustment as provided in the Credit Agreement.
(b) SOFR Credit Spread Adjustment. As set forth in the Credit Agreement, the following SOFR Credit Spread Adjustments shall apply: (i) for any Interest Period of one (1) month, ten (10) basis points (0.10%) per annum; and (ii) for any Interest Period of three (3) months, fifteen (15) basis points (0.15%) per annum.
(c) SOFR Floor. Notwithstanding anything to the contrary, in no event shall the Term SOFR rate used to calculate interest on any Revolving Loan be less than zero percent (0.00%) per annum (the "SOFR Floor").
(d) Default Rate. Upon the occurrence and during the continuance of any Event of Default under the Credit Agreement, interest on the unpaid principal amount of all Revolving Loans, and to the extent permitted by applicable law, on all overdue interest and other overdue amounts, shall accrue at an additional two hundred (200) basis points (2.00%) per annum above the rate of interest otherwise applicable to such Revolving Loans (the "Default Rate"), as more fully set forth in Section 2.08(b) of the Credit Agreement.
(e) Computation. Interest on each Revolving Loan shall be computed on the basis of a three hundred sixty (360)-day year for actual days elapsed (including the first day but excluding the last day) occurring during the applicable Interest Period or other period for which interest is payable.
(f) Payment Dates. Interest shall be payable on the dates specified in the Credit Agreement, including (i) on the last Business Day of each Interest Period applicable to SOFR Loans (and, in the case of any Interest Period exceeding three (3) months, on each day that would have been the last day of an Interest Period had successive three-month Interest Periods been applicable), (ii) on the last Business Day of each March, June, September, and December for Base Rate Loans, and (iii) upon the Maturity Date, acceleration, or prepayment of the applicable Revolving Loans.
Section 3. Payments.
(a) All payments of principal, interest, fees, and all other amounts due under this Note shall be made in United States Dollars and in immediately available funds, free and clear of and without any setoff, counterclaim, defense, recoupment, or deduction of any kind or nature whatsoever, except as may be expressly required by applicable law.
(b) All such payments shall be made to the Administrative Agent at its office at 780 Park Avenue, 30th Floor, New York, New York 10021 (or at such other office or account as the Administrative Agent may designate in writing to the Borrowers from time to time), for the account of the Lender, in accordance with the terms of the Credit Agreement. Payments received by the Administrative Agent shall be distributed to the Lender in accordance with the Credit Agreement.
(c) Whenever any payment hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of interest, and additional interest shall accrue during such extension at the applicable rate set forth herein and in the Credit Agreement.
(d) Each payment received by the Administrative Agent shall be applied in the order of priority set forth in the Credit Agreement.
Section 4. Prepayment.
(a) Voluntary Prepayment. The Borrowers may, at their option, prepay the Revolving Loans evidenced by this Note, in whole or in part, at any time and from time to time, without premium or penalty (other than customary SOFR breakage costs, if any, as provided in Section 3.05 of the Credit Agreement), upon prior written notice to the Administrative Agent in accordance with and subject to the terms and conditions of Section 2.05 of the Credit Agreement.
(b) Mandatory Prepayment. If at any time the aggregate outstanding principal amount of all Revolving Loans (including the Lender's pro rata share thereof) together with the aggregate amount of all outstanding Swingline Loans and the aggregate undrawn face amount of all outstanding Letters of Credit exceeds the lesser of (i) the Aggregate Commitments (being $300,000,000.00, as may be reduced from time to time in accordance with the Credit Agreement) and (ii) the Borrowing Base (as calculated and determined in accordance with Section 2.01(b) of the Credit Agreement), then the Borrowers shall immediately prepay the Revolving Loans in accordance with the mandatory prepayment provisions set forth in Section 2.06 of the Credit Agreement.
Section 5. Credit Agreement; Security.
(a) This Note is one of the "Notes" referred to in, and is entitled to the benefits of, the Credit Agreement and the other Loan Documents. The terms and provisions of the Credit Agreement are hereby incorporated herein by reference. Reference is made to the Credit Agreement for a more complete statement of the terms and conditions under which the Revolving Loans evidenced hereby were made and are to be repaid.
(b) This Note is secured by the Collateral described in that certain Security Agreement dated as of May 4, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Security Agreement"), among the Grantors (as defined therein) and Crescent Harbor Bank, N.A., in its capacity as Collateral Agent for the benefit of the Secured Parties. The Collateral securing this Note includes, without limitation, all of the following assets and property of the Grantors, whether now owned or hereafter acquired: (i) all accounts receivable; (ii) all inventory (including in-transit inventory, distribution center inventory, and goods held for sale or lease); (iii) all deposit accounts; (iv) all supporting obligations; (v) all chattel paper (whether tangible or electronic); (vi) all instruments; (vii) all letter-of-credit rights; (viii) all commercial tort claims identified in the Security Agreement; (ix) all general intangibles (including payment intangibles and software); and (x) all proceeds (including insurance proceeds) and products of any of the foregoing.
(c) This Note is further supported by that certain Guaranty Agreement dated as of May 4, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Guaranty Agreement"), executed by Cascade Digital Commerce Inc., Cascade Outlet Stores LLC, and Cascade Fulfillment Services Inc. (collectively, the "Guarantors"), in favor of the Administrative Agent for the benefit of the Secured Parties, pursuant to which the Guarantors have unconditionally guaranteed the full and punctual payment and performance of all Obligations of the Borrowers under the Credit Agreement, this Note, and the other Loan Documents.
(d) This Note is further supported by that certain Pledge Agreement dated as of May 4, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Pledge Agreement"), pursuant to which certain equity interests and other pledged collateral have been pledged to the Collateral Agent for the benefit of the Secured Parties to secure the Obligations.
(e) Reference is hereby made to the Credit Agreement, the Security Agreement, the Guaranty Agreement, the Pledge Agreement, and the other Loan Documents for a full description of the collateral securing this Note, the nature and extent of the security provided thereby, and the rights, duties, and obligations of the holder of this Note in respect thereof.
Section 6. Events of Default; Acceleration.
Upon the occurrence of any Event of Default under Article VIII of the Credit Agreement, the Administrative Agent may (or, at the direction of the Required Lenders, shall) declare the entire unpaid principal amount of this Note, together with all accrued and unpaid interest thereon and all other amounts owing under the Credit Agreement and the other Loan Documents, to be immediately due and payable, all as provided in Section 8.02 of the Credit Agreement. In the case of certain Events of Default arising under Section 8.01(h) or Section 8.01(i) of the Credit Agreement (relating to bankruptcy, insolvency, and similar events), the entire unpaid principal amount of this Note, together with all accrued and unpaid interest thereon and all other amounts owing under the Credit Agreement and the other Loan Documents, shall become automatically and immediately due and payable without any declaration, notice, presentment, demand, protest, or other action of any kind, all as more fully set forth in the Credit Agreement.
Section 7. Revolving Nature.
This Note evidences Revolving Loans made pursuant to the Credit Agreement and, accordingly, notwithstanding any payments or prepayments of principal hereunder, the Borrowers may from time to time borrow, repay, and reborrow amounts hereunder up to an aggregate principal amount at any time outstanding not to exceed the Lender's Commitment of One Hundred Thirty-Five Million and No/100 Dollars ($135,000,000.00), subject in all cases to the terms, conditions, and limitations set forth in the Credit Agreement, including the satisfaction of all conditions precedent to borrowing set forth therein and compliance with the Borrowing Base requirements, until the Maturity Date of May 19, 2028 or the earlier termination or reduction of the Commitments in accordance with the Credit Agreement.
Section 8. Waivers.
(a) The Borrowers and each endorser, surety, and guarantor of this Note hereby jointly and severally waive presentment for payment, demand for payment, notice of dishonor, protest, and notice of protest with respect to this Note, and all other notices or demands in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, to the fullest extent permitted by applicable law.
(b) No failure or delay on the part of the Lender, the Administrative Agent, or any other holder of this Note in exercising any right, power, remedy, or privilege hereunder or under the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, remedy, or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law, in equity, or under the Credit Agreement or any other Loan Document.
Section 9. Governing Law.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 10. Submission to Jurisdiction.
Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of (a) the United States District Court for the Southern District of New York, and (b) the Supreme Court of the State of New York, New York County, and any appellate court from any thereof, in any action, suit, or proceeding arising out of or relating to this Note, the Credit Agreement, or any other Loan Document, or for recognition or enforcement of any judgment, and each Borrower hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit, or proceeding may be heard and determined in such New York federal court or, to the fullest extent permitted by applicable law, in such New York state court. Each Borrower agrees that a final judgment in any such action, suit, 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 Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action, suit, or proceeding arising out of or relating to this Note, the Credit Agreement, or any other Loan Document in any court referred to above, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum.
Section 11. Waiver of Jury Trial.
THE BORROWERS AND THE LENDER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS NOTE, THE CREDIT AGREEMENT, ANY OTHER LOAN DOCUMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR THE ACTIONS OF THE LENDER OR THE ADMINISTRATIVE AGENT IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF OR THEREOF. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS NOTE AND THE CREDIT AGREEMENT, AMONG OTHER THINGS, BY THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 12. Successors and Assigns.
This Note shall be binding upon the Borrowers and their respective successors and permitted assigns, and shall inure to the benefit of the Lender and its successors and assigns, including any assignee or participant that acquires an interest in the Revolving Loans evidenced by this Note pursuant to the assignment and participation provisions of Section 10.06 of the Credit Agreement. The Borrowers may not assign or transfer any of their rights or obligations under this Note without the prior written consent of the Lender and the Administrative Agent.
Section 13. Amendments.
This Note may not be amended, modified, supplemented, or waived except in accordance with the provisions of Section 10.01 of the Credit Agreement, which provisions are incorporated herein by reference.
Section 14. Severability.
If any provision of this Note 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 Note shall not in any way be affected or impaired thereby, and such invalid, illegal, or unenforceable provision shall be reformed, construed, and enforced to the maximum extent permissible so as to render such provision valid, legal, and enforceable while giving effect to the intent of the parties.
[Signature Pages Follow]
[SIGNATURE PAGE TO REVOLVING LOAN PROMISSORY NOTE]
IN WITNESS WHEREOF, the Borrowers have executed and delivered this Revolving Loan Promissory Note as of the date first written above.
BORROWERS:
CASCADE RETAIL HOLDINGS INC.
By: ________
Name: Nathaniel Voss
Title: Chief Executive Officer
Address: 2200 Elliott Avenue, Suite 1400
Seattle, Washington 98121
EIN: 91-1847263
CASCADE RETAIL OPERATING COMPANY LLC
By: Cascade Retail Holdings Inc., its sole member
By: ________
Name: Nathaniel Voss
Title: Chief Executive Officer of Cascade Retail Holdings Inc., sole member
Address: 2200 Elliott Avenue, Suite 1400
Seattle, Washington 98121
EIN: 83-2951047
[ACKNOWLEDGMENT AND ACCEPTANCE PAGE TO REVOLVING LOAN PROMISSORY NOTE]
ACKNOWLEDGED AND ACCEPTED:
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as Lender
By: ________
Name: Thomas Reiland
Title: Managing Director, ABL Origination
Address: 780 Park Avenue, 30th Floor
New York, New York 10021
SCHEDULE A
LOANS AND PAYMENTS OF PRINCIPAL
CUSIP Number: 14762MAA3 (assigned at closing for LSTA trading purposes)
The Lender is authorized to record on this Schedule A (or in its internal records) the information set forth below with respect to Revolving Loans made to the Borrowers pursuant to the Credit Agreement and payments of principal received by the Lender in respect of such Revolving Loans. Any failure to record any such information, or any error in recording such information, shall not affect the obligations of the Borrowers hereunder or under the Credit Agreement.
Date