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EXHIBIT 10.56
SECOND SUPPLEMENTAL SERIES B NOTE AGREEMENT
This SECOND SUPPLEMENTAL SERIES B NOTE AGREEMENT dated as of December
18, 1996, between HANOVER DIRECT, INC., a Delaware corporation (the "Borrower"),
and NORWEST BANK MINNESOTA, N.A., a national banking association organized under
the laws of the United States of America and having its principal office in
Minneapolis, Minnesota, as trustee and paying agent (the "Trustee" or the
"Paying Agent", as applicable);
W I T N E S S E T H :
WHEREAS, the Borrower and the Trustee entered into the Series B Note
Agreement dated as of April 27, 1995 (the "Series B Note Agreement") pursuant to
which the Borrower issued and sold its interest bearing Flexible Term Notes,
Series B (the "Series B Notes") in the aggregate principal amount of
$10,000,000; and
WHEREAS, the Series B Note Agreement was modified on December 29, 1995
by the First Supplemental Series B Note Agreement by and between Borrower and
Trustee (the "First Supplemental Series B Note Agreement") to reflect the
delivery of a substitute Letter of Credit;
WHEREAS, the Borrower has this day, delivered to the Trustee a
Substitute Series B Letter of Credit in substitution for the Series B Letter of
Credit (each as defined in the Series B Note Agreement); and
WHEREAS, in order to more fully evidence the delivery of the Substitute
Series B of Letter of Credit referenced above, the Borrower and the Trustee
desire to further amend the Series B Note Agreement, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. All capitalized terms used in this First
Supplemental Series B Note Agreement and not otherwise herein defined shall have
the meaning ascribed to them in the Series B Note Agreement.
SECTION 2. AMENDMENT TO SECOND RECITAL OF THE SERIES B NOTE AGREEMENT.
The second recital of the Series B Note Agreement on page 1 thereof is hereby
amended by deleting the reference to the "L/C Issuer" in the third line thereof
and replacing it with a reference to the "Bank".
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SECTION 3. AMENDMENTS TO SECTION 1.01 OF THE SERIES B NOTE AGREEMENT.
(a) The definition of "BANK" set forth in Section 1.01 of the
Series B Note Agreement is hereby deleted in its entirety and replaced with the
following:
"BANK" means the issuer of the Series B Letter of
Credit, initially NationsBank of North Carolina, N.A.
(predecessor to NationsBank, N.A.) and upon the issuance and
delivery of a Substitute Series B Letter of Credit, shall mean
the issuer of such Substitute Series B Letter of Credit.
(b) The definition of "BANK NOTES" set forth in Section 1.01 of
the Series B Note Agreement is hereby deleted in its entirety and replaced with
the following:
"BANK NOTES" means any Series B Notes purchased with
proceeds from a draw under the Series B Letter of Credit and
pledged to the Bank under the Reimbursement Agreement,
including, in the event a book-entry system with respect to
the Series B Notes is in effect, any beneficial ownership
interest therein; provided that in the event that the Bank
fails to honor a drawing under the Series B Letter of Credit
to fund such a purchase and the Borrower purchases such Series
B Notes with its own funds, "Bank Notes" shall include such
Series B Notes, except that such Series B Notes shall not be
pledged to the Bank under the Reimbursement Agreement.
(c) The definition of "BUSINESS DAY" set forth in Section 1.01 of
the Series B Note Agreement is amended by deleting the last sentence thereof in
its entirety and replacing it with the following:
For purposes of this definition, "paying office of the Bank"
means the Bank office responsible for making payments under
any Series B Letter of Credit.
(d) The definition of "OPINION OF COUNSEL" set forth in Section
1.01 of the Series B Note Agreement is hereby deleted in its entirety and
replaced with the following:
"OPINION OF COUNSEL" means a written opinion of
counsel who is reasonably acceptable to the Trustee, the Bank,
the Placement Agent and Remarketing Agent. The counsel may be
an employee of or counsel to the Borrower, the Placement
Agent, the Remarketing Agent, the Bank or the Trustee.
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(e) The definition of "REIMBURSEMENT AGREEMENT" set forth in
Section 1.01 of the Series B Note Agreement is hereby deleted in its entirety
and replaced with the following:
"REIMBURSEMENT AGREEMENT" means, individually and
collectively, the Reimbursement Agreement dated as of December
18, 1996, by and among the Borrower and certain subsidiaries
of the Borrower, and the Bank, pursuant to which, among other
things, the Bank has issued the Series B Letter of Credit, and
any and all modifications, alterations, amendments and
supplements thereto, and any similar agreements between or
among the Borrower and the issuer of a Substitute Series B
Letter of Credit or Lender providing credit support to such
issuer.
(f) The definition of "SERIES B LETTER OF CREDIT" set forth in
Section 1.01 of the Series B Note Agreement is amended by (a) deleting the words
"Commonwealth of Pennsylvania" in the third line thereof and replacing them with
"State of New York" and (b) by deleting the word "L/C Issuer" in the fourteenth
line thereof and replacing it with "Bank".
(g) Section 1.01 of the Series B Note Agreement is hereby amended
by deleting the following definitions thereto:
"ACCOUNT PARTIES" means Hanover Direct Pennsylvania,
Inc., Hanover Direct Virginia Inc. and Gump's Corp., and their
successors and assigns.
"L/C ISSUER" means the issuer of the Series B Letter
of Credit, initially CoreStates Bank, N.A., and upon the
issuance and delivery of a Substitute Series B Letter of
Credit, shall mean the issuer of such Substitute Series B
Letter of Credit.
"LENDER" means Congress Financial Corporation, its
successors and assigns, or other lender that refinances the
obligations to Lender under the Reimbursement Agreement and
replaces all credit support given by Lender to the L/C Issuer
in respect of the Series B Letter of Credit or any Substitute
Series B Letter of Credit.
SECTION 4. AMENDMENT TO SECTION 2.07 OF THE SERIES B NOTE AGREEMENT.
Subsection (b) of Section 2.07 of the Series B Note Agreement is amended by
deleting the third sentence thereof in its entirety and replacing it with the
following:
Subject to the provisions of Section 7.09, the Borrower, the
Trustee and the Paying Agent will recognize the Securities
Depository Nominee, while the
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registered owner of the Series B Notes so held, as the owner
of the Series B Notes for all purposes, including (i) payments
of principal and Purchase Price of, and interest on, the
Series B Notes, (ii) notices and (iii) voting.
SECTION 5. AMENDMENT TO SECTION 2.08 OF THE SERIES B NOTE AGREEMENT.
Subsection (a) of Section 2.08 of the Series B Note Agreement is amended by
deleting the reference to the "Lender" in the sixth line thereof and replacing
it with a reference to the "Bank".
SECTION 6. AMENDMENT TO SECTION 3.01 OF THE SERIES B NOTE AGREEMENT.
Subsection (a)(ii) of Section 3.01 of the Series B Note Agreement is amended by
deleting the reference to the "Lender" in the second line thereof and replacing
it with a reference to the "Bank". It is acknowledged that the purported
amendment to Subsection (c) of Section 3.10 of the Series B Note Agreement
pursuant to the First Supplemental Series B Note Agreement was a scrivener's
error and is of no force and effect.
SECTION 7. AMENDMENT TO SECTION 3.04 OF THE SERIES B NOTE AGREEMENT.
Section 3.04 of the Series B Note Agreement is amended by deleting the reference
to the "Lender" in the third line thereof and replacing it with a reference to
the "Bank".
SECTION 8. AMENDMENT TO SECTION 3.08 OF THE SERIES B NOTE AGREEMENT.
Subsection (d)(ii) of Section 3.08 of the Series B Note Agreement is hereby
deleted in its entirety and replaced with the following:
(ii) All Bank Notes (other than Bank Notes purchased
with the Borrower's own funds and not with the proceeds of a
draw on the Series B Letter of Credit) will be registered in
the name of the Trustee, as agent and bailee of the Bank and
subject to the pledge by the Borrower to the Bank, and shall
be held by the Trustee pursuant to this Agreement and the
Reimbursement Agreement. Upon receipt of Remarketing Proceeds
in respect of Bank Notes, the Remarketing Agent shall notify,
the Bank, the Trustee and the Borrower of such receipt. Upon
its receipt of such notice, the Bank shall, pursuant to the
Reimbursement Agreement, notify the Remarketing Agent and the
Trustee by telephone, telecopy or telex, promptly confirmed in
writing, that the Series B Notes have ceased to be Bank Notes
and that the amount of the Letter of Credit has been
automatically reinstated as provided therein, whereupon the
Remarketing Agent will remit such Remarketing Proceeds as
directed by the Bank. The Trustee shall not release the Bank
Notes until it receives from the Bank the notice referred to
in the
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preceding sentence. The Remarketing Agent shall hold such
Remarketing Proceeds in a segregated account of the
Remarketing Agent for the benefit of the Bank, except that if
the Series B Letter of Credit is not reinstated by an amount
equal to the Remarketing Proceeds, then the Remarketing Agent
shall hold such funds for the benefit of the purchasers which
provided such Remarketing Proceeds.
SECTION 9. AMENDMENTS TO SECTION 4.03 OF THE SERIES B NOTE AGREEMENT.
(a) Subsection (c) of Section 4.03 of the Series B Note Agreement is
amended by deleting all references to the "Lender" therein and replacing them
with references to the "Bank".
(b) Subsection (e) of Section 4.03 of the Series B Note Agreement is
amended by deleting the reference to the "Lender" in the last line thereof and
replacing it with a reference to the "Bank".
SECTION 10. AMENDMENT TO SECTION 5.02 OF THE SERIES B NOTE AGREEMENT.
Subsection (c) of Section 5.02 of the Series B Note Agreement is amended by
deleting all references therein to the "Lender" and replacing them with
references to the "Bank".
SECTION 11. AMENDMENT TO SECTION 5.03 OF THE SERIES B NOTE AGREEMENT.
Subsection (b) of Section 5.03 of the Series B Note Agreement is amended by
deleting the reference to the "Lender" in the last line thereof and replacing it
with a reference to the "Bank".
SECTION 12. AMENDMENT TO SECTION 5.04 OF THE SERIES B NOTE AGREEMENT.
Section 5.04 of the Series B Note Agreement is amended by deleting the second
and third paragraphs thereof in their entirety and replacing them with the
following:
When the Series B Letter of Credit terminates or expires in
accordance with its terms or a Substitute Series B Letter of Credit
therefor is accepted hereunder, the Trustee shall immediately surrender
the Series B Letter of Credit to the Bank. The Trustee hereby agrees
that, except in the case of a redemption in part pursuant to Article
III hereof or any other reduction in the principal amount of Series B
Notes Outstanding, it will not under any circumstances request that the
Bank reduce the amount of the Series B Letter of Credit. If at any
time, all Series B Notes shall cease to be Outstanding, the Trustee
shall surrender the Series B Letter of Credit to the Bank, in
accordance with the terms thereof.
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If at any time, the Bank shall fail to honor a draft presented
under the Series B Letter of Credit, in conformity with the terms
thereof, the Trustee shall give immediate telephonic notice thereof to
the Remarketing Agent and the Borrower.
SECTION 13. AMENDMENT TO SECTION 7.01 OF THE SERIES B NOTE AGREEMENT.
Subsection (d) of Section 7.01 of the Series B Note Agreement is hereby deleted
in its entirety and replaced with the following:
(d) Receipt by the Trustee of written notice from the Bank
that an Event of Default has occurred under the Reimbursement
Agreement accompanied by a demand by the Bank that the Trustee
declare the Series B Notes to be immediately due and payable.
SECTION 14. AMENDMENTS TO SECTION 7.02 OF THE SERIES B NOTE AGREEMENT.
(a) Subsection (a) of Section 7.02 of the Series B Note Agreement is
amended by deleting the reference to the "Lender" in the second line thereof and
replacing it with a reference to the "Bank".
(b) Subsection (b) of Section 7.02 of the Series B Note Agreement is
hereby deleted in its entirety and replaced with the following:
(b) Upon the occurrence of any Event of Default
specified in Section 7.01(c), the Trustee shall notify the
Bank of such Event of Default and shall, by notice to the
Borrower, the Paying Agent (who shall promptly give such
notice to the holders) and the Remarketing Agent declare the
entire unpaid principal of and interest on the Series B Notes
immediately due and payable, but only if directed to do so by
the Bank, unless the Bank has dishonored a valid draw under
the Series B Letter of Credit, in which event the Trustee may
declare the entire unpaid principal of and interest on the
Series B Notes immediately due and payable and, thereupon, in
either case, the entire unpaid principal of and interest on
the Series B Notes shall forthwith become due and payable.
SECTION 15. AMENDMENT TO SECTION 7.03 OF THE SERIES B NOTE AGREEMENT.
Section 7.03 of the Series B Note Agreement is amended (a) by deleting the
reference to the "Lender" in the first sentence thereof and replacing it with a
reference to the "Bank" and (b) by deleting the second sentence thereof in its
entirety and replacing it with the following:
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If such instructions are received by, the Trustee, such draw
proceeds and, if necessary, the moneys on deposit in the
Interest Reserve Account, shall be immediately applied to the
purchase of the Series B Notes, the acceleration of the Series
B Notes shall be cancelled, the Series B Notes shall become
Bank Notes and the Series B Notes shall be registered in the
name of the Trustee, as agent and bailee of the Bank, and
pledged under the Reimbursement Agreement as additional
security for repayment of the Borrower's obligations under the
Reimbursement Agreement.
SECTION 16. AMENDMENT TO SECTION 7.05 OF THE SERIES B NOTE AGREEMENT.
Section 7.05 of the Series B Note Agreement is amended by deleting the phrase
"and the Account Parties" between the words "Borrower" and "to" in the seventh
line thereof.
SECTION 17. AMENDMENT TO SECTION 7.06 OF THE SERIES B NOTE AGREEMENT.
Section 7.06 of the Series B Note Agreement is amended (a) by deleting the
references to the "Lender" in the second and fourth lines thereof and replacing
therein with references to the "Bank" and (b) by deleting the reference to the
"Lender" in the second line of subsection (b) thereof and replacing it with a
reference to the "Bank".
SECTION 18. AMENDMENT TO SECTION 7.09 OF THE SERIES B NOTE AGREEMENT.
It is acknowledged that reference to Section 7.03 in the first line of Section
19 of the First Supplemental Series B Note Agreement entitled "Amendment to
Section 7.09 of the Series B Note Agreement" was a scrivener's error and that
the correct reference should have been to Section 7.09. Section 7.09 of the
Series B Note Agreement is deleted in its entirety and replaced with the
following:
SECTION 7.09 BANK DEEMED HOLDER. For all purposes of this
Article VII (other than receipt of payments), the Bank shall, so long
as the Series B Letter of Credit shall not have been dishonored (other
than for failure to receive a drawing in strict compliance with the
terms thereof or other reason permitted by the Series B Letter of
Credit), be deemed the holder and registered owner of all Series B
Notes. As such, the Bank may take all actions permitted by this Article
VII to be taken by the holders or registered owners of the Series B
Notes, to the exclusion of the actual beneficial owners and registered
owners of the Series B Notes. NOTWITHSTANDING ANY PROVISION TO THE
CONTRARY HEREIN, ON OR AFTER THE EFFECTIVE DATE OF A SUBSTITUTE SERIES
B LETTER OF CREDIT WHICH RESULTS IN A CREDIT MODIFICATION, THE BANK, AS
ISSUER OF THE SERIES B LETTER OF CREDIT REPLACED BY SUCH SUBSTITUTE
SERIES B LETTER OF CREDIT, SHALL BE DEEMED THE "BANK" HEREUNDER FOR
PURPOSES OF GIVING NOTICE OF DEFAULT UNDER SECTION 7.01(D) AND FOR
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PURPOSES OF EXERCISING REMEDIES HEREUNDER, BUT ONLY SO LONG AS (I)
OBLIGATIONS REMAIN OWING TO THE BANK UNDER THE REIMBURSEMENT AGREEMENT
OR THE LOAN DOCUMENTS (AS DEFINED IN THE REIMBURSEMENT AGREEMENT) OR
(II) THERE REMAIN OUTSTANDING HEREUNDER ANY BANK NOTES PLEDGED TO THE
BANK UNDER THE REIMBURSEMENT AGREEMENT.
SECTION 19. AMENDMENT TO SECTION 8.05 OF THE SERIES B NOTE AGREEMENT.
Section 8.05 of the Series B Notes Agreement is amended by deleting the
references to the "Lender" in the sixth and tenth lines thereof and replacing
therein with references to the "Bank".
SECTION 20. AMENDMENT TO SECTION 8.08 OF THE SERIES B NOTE AGREEMENT.
Section 8.08 of the Series B Note Agreement is amended (a) by deleting all
references therein to the "Lender" or "Lenders" and replacing them with
references to the "Bank" or "Bank's", as applicable, and (b) by deleting the
following sentence after the last paragraph thereof:
No resignation or removal of the Trustee shall be binding upon
the L/C Issuer for purposes of the Series B Letter of Credit, and no
successor Trustee shall have any rights to draw, except upon compliance
with the transfer provisions therein set forth.
SECTION 21. AMENDMENT TO SECTION 8.10 OF THE SERIES B NOTE AGREEMENT.
Section 8.10 of the Series B Note Agreement is amended (a) by deleting all
references therein to the "Lender" and replacing them with references to the
"Bank" and (b) by deleting the following sentence after the last paragraph
thereof:
No such resignation or removal of the Remarketing
Agent or appointment of or assignment to a successor
Remarketing Agent shall be binding upon the L/C Issuer for
purposes of the Series B Letter of Credit, unless set forth in
an amendment to the Series B Letter of Credit issued by the
L/C Issuer.
SECTION 22. AMENDMENT TO SECTION 8.11 OF THE SERIES B NOTE AGREEMENT.
Subsection (c) of Section 8.11 of the Series B Note Agreement is amended by
deleting the reference to the "Lender" in the fourth line thereof and replacing
it with a reference to the "Bank".
SECTION 23. AMENDMENT TO SECTION 8.12 OF THE SERIES B NOTE AGREEMENT.
Section 8.12 of the Series B Note Agreement is amended by deleting all
references to the "Lender" therein and replacing them with references to the
"Bank".
SECTION 24. AMENDMENT TO SECTION 8.13 OF THE SERIES B NOTE AGREEMENT.
Section 8.13 of the Series B Note Agreement is
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amended by deleting all references to the "Lender" therein and replacing them
with references to the "Bank".
SECTION 25. AMENDMENT TO SECTION 8.14 OF THE SERIES B NOTE AGREEMENT.
Section 8.14 of the Series B Note Agreement is amended by deleting all
references to the "Lender" or "Lender's" therein and replacing therein with
references to the "Bank" or "Bank's", as applicable.
SECTION 26. AMENDMENT TO SECTION 8.16 OF THE SERIES B NOTE AGREEMENT.
Section 8.16 of the Series B Note Agreement is amended (a) by deleting the
phrase ", to the extent provided in the Reimbursement Agreement," after the word
"shall" at the end of the fourth line thereof and (b) by deleting the reference
to the "Lender" in the fifth line thereof and replacing it with a reference to
the "Bank".
SECTION 27. AMENDMENT TO SECTION 9. 01 OF THE SERIES B NOTE AGREEMENT.
Subsection (f) of Section 9.01 of the Series B Note Agreement is amended by
deleting the reference to the "Lender" in the fifth line thereof and replacing
it with a reference to the "Bank".
SECTION 28. AMENDMENT TO SECTION 9.02 OF THE SERIES B NOTE AGREEMENT.
Section 9.02 of the Series B Note Agreement is amended by deleting the reference
to the "Lender" in the fourteenth line thereof and replacing it with a reference
to the "Bank".
SECTION 29. AMENDMENT TO SECTION 9.06 OF THE SERIES B NOTE AGREEMENT.
The heading and the first sentence of Section 9.06 of the Series B Note
Agreement are hereby deleted in their entirety and replaced with the following:
Section 9.06. BANK AND REMARKETING AGENT CONSENT
REQUIRED. Except to the extent that the consent of the
Remarketing Agent or the Bank is not required for the action
that is the subject of the amendment (e.g., removal of the
Remarketing Agent, the Trustee or the Paying Agent by the
Borrower upon the terms specified herein), an amendment to
this Agreement or the Series B Notes shall not become
effective unless the Remarketing Agent (but only to the extent
that such amendment affects the rights, duties or obligations
of the Remarketing Agent hereunder) and the Lender deliver to
the Trustee their written consents to the amendment.
SECTION 30. AMENDMENT TO SECTION 10.01 OF THE SERIES B NOTE AGREEMENT.
Subsection (b) of Section 10.01 of the Series B Note Agreement is amended by
deleting the reference to, and the address of, the "L/C Issuer" and the "Lender"
therein and replacing them with the following:
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If to the Bank: Swiss Bank Corporation
New York Branch
222 Broadway
New York, New York, 10038
Attention:
Telephone No.:
Fax No.:
SECTION 31. AMENDMENT TO SECTION 10.09 OF THE SERIES B NOTE AGREEMENT.
Section 10.09 of the Series B Note Agreement is amended by deleting the
reference to the "Lender" in the fourth line thereof and replacing it with a
reference to the "Bank".
SECTION 32. AMENDMENTS TO EXHIBIT A TO THE SERIES B NOTE AGREEMENT -
FORM OF SERIES B NOTE. Exhibit A to the Series B Note Agreement (the "Form of
Series B Note") is hereby amended as follows:
(a) The second boldface paragraph on the first page of the Form of
Series B Note (prior to the text thereof) is hereby deleted in its entirety and
replaced with the following:
THIS SERIES B NOTE IS NOT A DEPOSIT OR OBLIGATION OF, OR
GUARANTEED BY, SWISS BANK CORPORATION, NEW YORK BRANCH (THE
"BANK"), IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, AND IS SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. ALTHOUGH NOT
GUARANTEED BY THE BANK, PAYMENTS OF PRINCIPAL AND INTEREST ON
THIS SERIES B NOTE AND, IF REMARKETING PROCEEDS ARE NOT
AVAILABLE, THE PURCHASE PRICE OF THIS SERIES B NOTE, WILL BE
MADE FROM DRAWINGS UNDER THE SERIES B LETTER OF CREDIT ISSUED
BY THE BANK. THE FAILURE OF THE BANK TO HONOR ANY DRAWING
UNDER THE SERIES B LETTER OF CREDIT WILL NOT GIVE RISE TO ANY
CLAIM OTHER THAN AGAINST THE BANK.
(b) The second paragraph of the text of the Form of Series B Note,
beginning on page A-2 thereof, is amended by deleting the first sentence thereof
and replacing it with the following:
This Series B Note is one of an issue not to exceed
$10,000,000 Hanover Direct, Inc. Flexible Term Notes, Series B
(the "Series B Notes"), issued pursuant to a Series B Note
Agreement dated as of April 27, 1995 (the "Series B Note
Agreement"), as amended by the First Supplemental Series B
Note Agreement dated December 29, 1995 and the Second
Supplemental Note Agreement dated December 18, 1996 between
the Borrower and Norwest Bank Minnesota, N.A., as trustee (in
such capacity, the "Trustee") and Paying Agent, for the
purpose of refinancing and/or financing certain construction,
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refurbishment and related costs of an approximately 530,000
square foot distribution facility of the Borrower located in
Roanoke, Virginia and a new retail store of Gump's, Inc., a
subsidiary of the Borrower located in San Francisco,
California. Pursuant to the Series B Note Agreement, the
Borrower has caused Swiss Bank Corporation, New York Branch
(the "Bank") to issue its irrevocable Series B Letter of
Credit dated the Date of Issuance (as hereinafter defined and
as set forth above) of the Series B Notes (the "Series B
Letter of Credit") in favor of the Trustee, in an amount
sufficient to pay the Series B Facility Amount and unpaid
interest on or Purchase Price of the Series B Notes, but not
to exceed $9,638,541, pursuant to a Reimbursement Agreement
dated as of December 18, 1996 (the "Reimbursement Agreement")
by and among the Borrower and the Bank, which Series B Letter
of Credit initially expires (subject to extension or earlier
termination as provided in the Reimbursement Agreement and the
Series B Note Agreement) on February 18, 1998. Substitute
letters of credit may be delivered in accordance with the
Series B Note Agreement.
(c) The seventh paragraph of the text of the Form of Series B
Note, beginning on page A-4 thereof, is amended by deleting the third sentence
thereof in its entirety and replacing it with the following:
Subject to the provisions of Section 7.09 of the Series B Note
Agreement relating to the Bank as holder of the Series B
Notes, the Borrower, the Trustee and the Paying Agent will
recognize the Securities Depository Nominee, as hereinafter
defined, while the registered owner of the Series B Notes so
held, as the owner of the Series B Notes for all purposes,
including (i) payments of principal and Purchase Price of, and
interest on, the Series B Notes, (ii) notices and (iii)
voting, subject to certain qualifications as stated in the
Series B Note Agreement.
(d) Section 1 of the Form of Series B Note, beginning on page A-5
thereof, is amended by deleting the following definition:
"BANK" means, individually and collectively, the Lender and
the L/C Issuer.
(e) Subsection (f) of Section 3 of the Form of Series B Note,
beginning on page A-9 thereof, is amended by deleting the reference to the
"Lender" in the third line thereof and replacing it with a reference to the
"Bank."
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(f) Subsection (a) of Section 4 of the Form of Series B Note,
beginning on page A-10 thereof, is amended by deleting the reference to the
"Lender" in the fourth line of the last paragraph thereof and replacing it with
a reference to the "Bank."
(g) Section 7 of the Form of Series B Note, beginning on page A-13
thereof, is amended by deleting the second sentence of the first paragraph
thereof in its entirety and replacing them with the following:
The Series B Note Agreement directs the Trustee to declare an
acceleration upon written notice by the Bank of the occurrence
and continuance of an event of default under the Reimbursement
Agreement and upon the occurrence of certain other Events of
Default under the Series B Note Agreement. The Trustee has the
right to accelerate the entire unpaid principal of and
interest on the Series B Notes in certain events only with the
Bank's consent, all as provided in more detail in Article VII
of the Series B Note Agreement to which reference is hereby
made.
SECTION 33. DELETION OF EXHIBIT C TO SERIES B NOTE AGREEMENT. The
Series B Note Agreement is amended by deleting Exhibit C thereto.
SECTION 34. EFFECT OF SECOND SUPPLEMENTAL SERIES B NOTE AGREEMENT.
Except as modified hereby, all of the terms and provisions of the Series B Note
Agreement shall remain in full force and effect.
SECTION 35. GOVERNING LAW. This Second Supplemental Series B Note
Agreement and the Series B Note Agreement, as amended hereby, shall be deemed to
be contracts made under, and for all purposes shall be construed in accordance
with, the laws of the State of New York.
SECTION 36. SEVERABILITY. If any provision of this Second Supplemental
Series B Note Agreement shall be determined to be unenforceable by a court of
law, that shall not affect any other provision of this Second Supplemental
Series B Note Agreement.
SECTION 38. COUNTERPARTS. This Agreement may be signed in several
counterparts, each of which will be an original and all of which together will
constitute the same instrument.
[Signatures on following page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Series B Note Agreement to be duly executed as of the day and year
first above written.
HANOVER DIRECT, INC.
By: /s/ Edward J. O'Brien
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Name: Edward J. O'Brien
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Title: Senior Vice President
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[CORPORATE SEAL]
NORWEST BANK MINNESOTA, N.A.
as Trustee and Paying Agent
By: /s/ Marianna C. Sterson
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Name: Marianna C. Sterson
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Title: Corporate Trust Officer
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