exhibit101

[Execution]

CREDIT AGREEMENT

by and among

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Lender

and

THE CATO

CORPORATION

CATOSOUTH

LLC

CATO

OF TEXAS L.P.

CATOWEST,

LLC

CATO

WO LLC CATO

GEORGIA, LLC

CATO

OF FLORIDA L.L.C.

CATO

OF ILLINOIS, LLC

CATO

OF NORTH CAROLINA, LLC

OHIO CATO

STORES, LLC

CATO

OF SOUTH CAROLINA,

LLC

CATO

OF TENNESSEE, LLC

CATO

OF VIRGINIA,

LLC as

Borrowers

CHW, LLC

CADEL LLC

catocorp.com, LLC

CATO

SOUTHWES

INC.

as Guarantors

Dated as of March 13, 2025

Table

of Contents

Page

DEFINITIONS AND CONSTRUCTION

............................................................................................

1.1

Definitions.....................................................................................................................................

1.2

Accounting Terms.......................................................................................................................

1.3

UCC Terms

.................................................................................................................................

1.4

Construction

................................................................................................................................

1.5

Time References .........................................................................................................................

1.6

Payment in Full

...........................................................................................................................

1.7

[Reserved]

...................................................................................................................................

1.8

Resolution of Drafting Ambiguities............................................................................................

1.9

Rates............................................................................................................................................

1.10

Schedules and Exhibits

...............................................................................................................

1.11

Divisions

.....................................................................................................................................

CREDIT FACILITY

...........................................................................................................................

2.1

Revolving Loans.

........................................................................................................................

2.2

Borrowing Procedures.................................................................................................................

2.3

Letter of Credit Facility...............................................................................................................

2.4

Payments; Prepayments.

.............................................................................................................

2.5

Interest and Fees. ........................................................................................................................

2.6

Intent to Limit Charges to

Maximum Lawful Rate.....................................................................

2.7

Illegality; Market Conditions

......................................................................................................

2.8

Increased Costs

...........................................................................................................................

2.9

Capital Requirements

..................................................................................................................

2.10

Certificates for Reimbursement

..................................................................................................

2.11

Delay in Requests .......................................................................................................................

2.12

Term SOFR Conforming Changes..............................................................................................

2.13

Increase in Maximum

Credit.......................................................................................................

2.14

Joint and Several Liability

of Borrowers.

...................................................................................

CONDITIONS; TERM OF

AGREEMENT

.......................................................................................

3.1

Conditions Precedent to the Initial Revolving

Loan

...................................................................

3.2

Conditions Precedent to all

Revolving Loans

.............................................................................

3.3

Maturity.......................................................................................................................................

3.4

Effect of Maturity .......................................................................................................................

3.5

Early Termination by Borrowers ................................................................................................

REPRESENTATIONS

AND WARRANTIES...................................................................................

4.1

Due Organization and Qualification

...........................................................................................

4.2

Due Authorization; No Conflict..................................................................................................

4.3

Binding Obligations; Perfected

Liens.

........................................................................................

4.4

Title to Assets; No Encumbrances

..............................................................................................

4.5

Litigation.....................................................................................................................................

4.6

Compliance with Laws................................................................................................................

4.7

No Material Adverse Effect

........................................................................................................

4.8

Solvency......................................................................................................................................

4.9

Environmental Condition

............................................................................................................

4.10

Complete Disclosure; Projections

...............................................................................................

4.11

Taxes ...........................................................................................................................................

4.12

Margin Stock; Investment Company

Act, Etc ............................................................................

4.13

OFAC; Sanctions; Anti-Corruption Laws;

Anti-Money Laundering

Laws;

Patriot Act ............

4.14

Employee and Labor Matters

......................................................................................................

4.15

ERISA

.........................................................................................................................................

4.16

Capitalization and Subsidiaries

...................................................................................................

4.17

Intellectual Property; Licenses....................................................................................................

4.18

Deposit Accounts; Credit Card Arrangements............................................................................

4.19

Material Contracts.......................................................................................................................

4.20

Reserved......................................................................................................................................

4.21

Eligible Credit Card Receivables

................................................................................................

4.22

Eligible Inventory

.......................................................................................................................

4.23

Brokers

........................................................................................................................................

AFFIRMATIVE COVENANTS.........................................................................................................

5.1

Financial Statements; Borrowing

Base Certificate; Other Information

......................................

5.2

Notices of Material Events..........................................................................................................

5.3

Existence

.....................................................................................................................................

5.4

Maintenance of Properties

..........................................................................................................

5.5

Taxes ...........................................................................................................................................

5.6

Insurance

.....................................................................................................................................

5.7

Field Examinations; Appraisals

..................................................................................................

5.8

Compliance with Laws; OFAC; Sanctions, Etc

..........................................................................

5.9

Cash Management; Collection

of Proceeds of Collateral.

..........................................................

5.10

Physical Inventories.

...................................................................................................................

5.11

Further Assurances......................................................................................................................

5.12

Formation of Subsidiaries.

..........................................................................................................

5.13

Costs and Expenses

.....................................................................................................................

5.14

Post-Closing Actions ..................................................................................................................

NEGATIVE COVENANTS ...............................................................................................................

6.1

Indebtedness................................................................................................................................

6.2

Liens............................................................................................................................................

6.3

Restrictions on Fundamental Changes

........................................................................................

6.4

Asset Dispositions.......................................................................................................................

6.5

Nature of Business

......................................................................................................................

6.6

Prepayments and Amendments

...................................................................................................

6.7

Restricted Payments

....................................................................................................................

6.8

Accounting Methods

...................................................................................................................

6.9

Investments

.................................................................................................................................

6.10

Transactions with Affiliates

........................................................................................................

6.11

Deposit Accounts; Credit Card Processors

.................................................................................

6.12

Use of Proceeds...........................................................................................................................

FINANCIA

COVENANT

................................................................................................................

7.1

Minimum Excess Availability ....................................................................................................

EVENTS OF DEFAULT

AND REMEDIES

.....................................................................................

8.1

Events of Default ........................................................................................................................

8.2

Remedies.....................................................................................................................................

NOTICES, AMENDMENTS,

WAIVERS, INDEMNIFICATION, ETC. .........................................

9.1

Demand; Protest; Counterclaims,

Etc

.........................................................................................

9.2

Indemnification

...........................................................................................................................

9.3

Notices ........................................................................................................................................

9.4

Assignments; Successors

............................................................................................................

9.5

Amendments; Waivers

................................................................................................................

10.

JURY TRIAL WA

IVER; OTHER WAIVERS CONSENTS; GOVERNING

AW.

....................

10.1

GOVERNING LAW...................................................................................................................

10.2

FORUM NON CONVENIENS

..................................................................................................

10.3

WAIVER OF JURY

TRIAL.......................................................................................................

10.4

SUBMISSION TO JURISDICTION

..........................................................................................

10.5

WAIVER OF CLAIMS ..............................................................................................................

11.

GENERA

PROVISIONS .............................................................................................................

11.1

Effectiveness; Section Headings; Severability............................................................................

11.2

Counterparts; Electronic

Execution

............................................................................................

11.3

Patriot Act

...................................................................................................................................

11.4

Integration

...................................................................................................................................

11.5

Confidentiality; Disclosure

.........................................................................................................

11.6

The Cato Corporation as Agent

for Borrowers

...........................................................................

11.7

Acknowledgement Regarding

Any Supported QFCs

.................................................................

Schedules

Schedule 1.1(a)

Definition of Eligible Credit

Card Receivables

Schedule 1.1(b)

Definition of Eligible Inventory

Schedule 1.1(c)

Excluded Subsidiaries

Schedule 1.1(d)

[Reserved]

Schedule 1.1(e)

Immaterial Subsidiaries

Schedule 1.1(f)

Investment Policy

Schedule 2.5

Fees

Schedule 2.7

SOFR Replacement

Schedule 3.1

Conditions Precedent to Initial Revolving

Loans

Schedule 4.5

Pending Litigation

Schedule 4.14

Collective Bargaining Agreements,

Etc.

Schedule 4.16

Subsidiaries

Schedule 4.18(a)

Deposit Accounts

Schedule 4.18(b)

Credit Card Arrangements

Schedule 4.19

Material Contracts

Schedule 5.1

Financial and Collateral Reporting

Schedule 5.14

Post-Closing Actions

Schedule 6.1

Existing Indebtedness

Schedule 6.2

Existing Liens

Schedule 6.9

Existing Investments

Exhibits

Exhibit A

Form of Borrowing Base Certificate

Exhibit B

Form of Compliance Certificate

Exhibit C

Form of Joinder Agreement

Exhibit D

Form of SOFR Loan Notice

Exhibit E

Form of Credit Card Notification

Exhibit F

Cash Management Structure

CREDIT AGREEMENT

THIS CREDIT AGREEMENT

is entered into as of March 13,

2025, by and among

, among

THE CATO

CORPORATION, a Delaware corporation (“Parent” or the “Administrative

Borrower”),

CATOSOUTH

LLC, a North Carolina

limited liability company

(“CatoSouth”), CATO OF TEXAS L.P.,

Texas limited partnership (“Cato of Texas”), CATOWEST LLC, a Nevada limited liability

company

(“CatoWest”), CATO WO LLC, a Delaware limited liability company

(“Cato WO”), CATO

GEORGIA, LLC, a Georgia limited liability

company (“Cato of Georgia”), CATO OF FLORIDA L.L.C.,

a Florida limited liability company

(“Cato of Florida”), CATO OF ILLINOIS, LLC, an Illinois limited

liability company (“Cato of Illinois”),

CATO

OF NORTH CAROLINA, LLC, a North Carolina

limited

liability company (“Cato of

North Carolina”), OHIO

CATO

STORES, LLC, an Ohio limited

liability

company (“Ohio Cato”), CATO OF SOUTH CAROLINA, LLC, a South

Carolina limited liability

company (“Cato of South

Carolina”), CATO OF TENNESSEE, LLC, a Tennessee limited liability

company (“Cato of Tennessee”), and CATO OF VIRGINIA, LLC, a Virginia limited liability company

(“Cato of Virginia,” and together with Administrative

Borrower, CatoSouth, Cato of Texas, CatoWest,

Cato WO, Cato of Georgia, Cato of Florida,

Cato of Illinois, Cato of North

Carolina, Ohio Cato, Cato

South Carolina, and Cato of

Tennessee, and together with

any entity that may

hereafter become party

hereto as a Borrower, individually, a “Borrower” and collectively, “Borrowers”), CATO SOUTHWES

INC., a Delaware corporation

(“Cato Southwest”), CHW

LLC, a Delaware limited liability

company

(“CHW”), CADEL LLC, a

Delaware limited liability company

(“CaDel”), catocorp.com, LLC,

Delaware limited liability company

(“catocorp”, and together with

Cato Southwest, CH

CaDel and any

entity that may hereafter become

party hereto as a Guarantor, individually, a “Guarantor” and

collectively, “Guarantors,” and together with Borrowers,

individually, a “Loan Party” and collectively,

“Loan Parties”) and WELLS

FARGO BANK, NATIONA

ASSOCIATION (“Lender”).

The parties agree as follows:

DEFINITIONS AND CONSTRUCTION

1.1

Definitions

As used in this Agreement,

the following terms shall have the

following

definitions:

“Accounting Changes” means changes

in accounting principles required

by the promulgation of

any rule, regulation, pronouncement

or opinion by the Financial Accounting

Standards Board of the

American Institute of Certified

Public Accountants (or successor

thereto or any agency with similar

functions).

“Acquisition” means the acquisition

of (a) a controlling

equity interest in another Person

(including the purchase of

an option, warrant or convertible

or similar type security

to acquire

such a controlling interest at the

time it becomes exercisable by

the holder thereof), whether by

purchase of such equity interest or

upon exercise of an option

or warrant for, or conversion of

securities into, such equity

interest, or (b) assets of another

Person which constitute all or any

material part of the assets of such Person

or of a line or lines of business

conducted by such

Person.

“Adjusted Term SOFR”

means, for

purposes of any

calculation, the

rate per

annum equal

to (a)

Term SOFR for

such calculation plus (b) the Term

SOFR Adjustment; provided, that, if Adjusted Term

SOFR as so determined shall ever be less

than the Floor, then Adjusted Term

SOFR shall be deemed to

be the Floor.

“Administrative Borrower” has the meaning

set forth in Section 11.6.

“Affiliate” means, as applied to any Person,

any other Person who controls,

is controlled by, or is

under common control with,

such Person.

For purposes of this definition,

“control” means the

possession, directly or indirectly

through one or more intermediaries,

of the power to direct the

management and policies of

a Person, whether through

the ownership of Equity Interests,

by contract, or

otherwise; provided, that, for

purposes of Section 6.10:

(a) if any Person owns directly

or indirectly 10%

or more of the Equity Interests

having ordinary voting power

for the election of directors or

equivalent

governing body of a Person,

then both such Persons shall be Affiliates

of each other, (b) each director (or

comparable manager) of a

Person shall be deemed to

be an Affiliate of such Person,

and (c) each

partnership in which a Person

is a general partner shall be deemed

an Affiliate of such Person.

“Agreement” means this Credit Agreement.

“Anti-Corruption Laws” means: (a)

the U.S.

Foreign Corrupt Practices Act

of 1977, (b)

the U.K.

Bribery Act 2010, and (c) any other

anti-bribery or anti-corruption laws, regulations or ordinances in any

jurisdiction in which any member

of the Loan Party Group is located or

doing business.

“Anti-Money Laundering Laws” means applicable

laws or regulations in any

jurisdiction in

which any member of the Loan Party

Group is located or doing

business that relates to money

laundering,

any predicate crime to money

laundering, or any financial record

keeping and reporting

requirements

related thereto.

“Applicable Margin” means, as of any

date of determination and with

respect to SOFR Loans,

1.50% per annum, and with

respect to Base Rate Loans, 0.50%

per annum.

“Authorized Person” means

any one of the individuals

identified as an officer of a Loan Party

any other individual identified

by Administrative Borrower

in writing as an authorized person

and

authenticated through Lender’s electronic

platform or portal in accordance

with its procedures for such

authentication.

“Bank Product” means any one or more

of the following financial products

or accommodations

provided by Lender or its Affiliates

to a Loan Party: (a) credit cards

(including commercial cards

(including so-called “purchase

cards”, “procurement cards”

or “p-cards”)), (b) any

services related to the

acceptance and/or processing

of payment cards or devices, (c)

debit cards, (d) stored value

cards, (e) any

cash management or related

services, including treasury, depository, return items, overdraft, controlled

disbursement,

merchant store value cards, e-payables

services, electronic

funds transfer, interstate

depository network, automatic

clearing house transfer

(including the Automated Clearing

House

processing of electronic funds

transfers through the direct Federal

Reserve Fedline system)

and other cash

management arrangements,

or (f) transactions under Hedge

Agreements.

“Bank Product Obligations” means

all obligations, liabilities, reimbursement

obligations, fees, or

expenses owing by a Loan

Party to Lender or any of its Affiliates pursuant

to or in connection with a

Bank Product and irrespective

of whether for the payment of

money, and whether direct or indirect,

absolute or contingent, due

or to become due, now existing

or hereafter arising.

“Bankruptcy Code” means Title 11 of the United States

Code.

“Base Rate” means the greatest of (a) the Floor, (b)

the Federal Funds Rate plus

1/2%, (c)

Adjusted Term SOFR for a one (1) month tenor in

effect on such day, plus 1%, provided, that this clause

any period in which Adjusted

Term SOFR is unavailable or

unascertainable, and (d) the

rate of interest announced,

from time to time, within

Wells Fargo at its

principal office in San Francisco as its “prime

rate” in effect on such day, with the understanding that the

“prime rate” is one of Wells Fargo’s base rates (not necessarily

the lowest of such rates) and

serves as the

basis upon which effective rates of

interest are calculated for those loans

making reference thereto

and is

evidenced by the recording

thereof after its announcement

in such internal publications

as Wells Fargo

may designate.

“Base Rate Loan” means each

portion of the Revolving

Loans that bears interest at a rate

determined by reference to

the Base Rate.

“Beneficial Ownership Certification”

means a certification regarding

beneficial ownership as

required by the Beneficial

Ownership Regulation.

“Beneficial Ownership Regulation” means

31 C.F.R. § 1010.230.

“Benefit Plan” means a “defined benefit

plan” (as defined in Section

3(35) of ERISA) for which

any Loan Party or any of its

Subsidiaries or ERISA

Affiliates has been an “employer” (as defined

Section 3(5) of ERISA) within the

past six years.

“BHC Act Affiliate” of a Person means an “affiliate” (as

such term is defined under and

interpreted in accordance with,

12 U.S.C. 1841(k)) of such

Person.

“Borrower” and “Borrowers” have

the respective meanings

set forth in the preamble to this

Agreement.

“Borrowing Base” means, as of any

date of determination, the result

of:

(a)

90.0% multiplied by the Eligible

Credit Card Receivables;

plus

(b)

90.0% of the Net Recovery

Percentage in the most recent appraisal

of Eligible Inventory

that

is acceptable to Lender in its Permitted

Discretion multiplied by the

Value

of such Eligible Inventory

such time; minus

(c)

Reserves.

“Borrowing Base Certificate” means

a certificate setting forth the calculation

of the Borrowing Base

in the form of Exhibit A

to this Agreement, as such

form, subject to the terms

hereof, may from time

time be modified by Lender, which is duly

completed (including all schedules

thereto) and delivered by or

on behalf of Borrowers to Lender.

“Business Day” means any

day that is not a Saturday, Sunday, or other day on which banks are

authorized or required to close in

the State of New York or Massachusetts.

“Capital Lease” means a lease that is

required to be capitalized for

financial reporting purposes

accordance with GAAP, provided, that, all leases of any Person that

are or would be characterized as

operating lease in accordance

with GAAP on or prior to

the effectiveness of FASB ASC 842 as applicable

to Parent (whether or not such

operating lease were in effect on such date)

shall be accounted for as an

operating lease (and not as

a Capital Lease) for purposes of this Agreement.

“Cash Dominion Event” means

at any time on and after either

(a) Excess Availability is less than

the greater of (i) 15.0% of

the Loan Cap or (ii) $10,000,000 or (b)

an Event of Default exists; provided,

that, (i) to the extent that the Cash Dominion

Event has occurred due

to clause (a) of this definition,

Excess Availability is greater than the applicable amount

specified above for at least 30 consecutive

days,

the Cash Dominion Event shall

no longer be deemed to exist

until such time as Excess Availability may

again be less than the applicable

specified amount, and

(ii) to the extent that the Cash Dominion

Event

has occurred due to clause (b) of

this definition, if no Event

of Default exists, the Cash Dominion

Event

shall no longer be deemed

to exist until such time as an

Event of Default may thereafter occur

again.

“Cash Management Bank” has the meaning

set forth in Section 5.9.

“Cash Management Structure” means

the description of the deposit accounts

of Parent and its

Subsidiaries and transfers of

funds between such deposit accounts

set forth in Exhibit F.

“Cedar Hill” means Cedar Hill National

Bank, a wholly-owned

Subsidiary of Parent.

“Change in Law” means the occurrence

after the date of this Agreement

of:

(a) the adoption or

effectiveness of any law, rule, regulation, judicial ruling,

judgment or treaty, (b) any change in any law,

rule, regulation, judicial ruling,

judgment or treaty or in the administration,

interpretation, implementation

or application by any Governmental

Authority of any law, rule, regulation, guideline or treaty, (c) any

new, or adjustment to, requirements prescribed by

the Board of Governors of

the Federal Reserve System

(or any successor) for “Eurocurrency

Liabilities” (as defined in Regulation

D of the Board of Governors

of the Federal Reserve System),

requirements imposed by

the Federal Deposit Insurance Corporation,

similar requirements imposed

by any domestic or foreign

governmental authority or resulting

from

compliance by Lender with any

request or directive (whether or

not having the force of law)

from any

central bank or other Governmental

Authority and related in any manner

to SOFR, the Term SOFR

Reference Rate, Adjusted

Term SOFR or Term SOFR, or (d) the making or issuance by any

Governmental Authority of

any request, rule, guideline

or directive, whether or not

having the force of

law; provided, that, notwithstanding

anything in this Agreement

to the contrary, (i) the Dodd-Frank

Street Reform and Consumer Protection

Act

and all requests, rules, guidelines

or directives thereunder or

issued in connection therewith,

and (ii) all requests, rules, guidelines

or directives concerning

capital

adequacy promulgated by

the Bank for International Settlements,

the Basel Committee on Banking

Supervision (or any successor

or similar authority) or the United States

or foreign regulatory authorities,

in each case pursuant to Basel III,

shall, in each case, be deemed to be a “Change

in Law,” regardless of

the date enacted, adopted or issued.

“Change of Control” means

that (a) any Person or two

or more Persons acting in concert

(other

than John Cato) shall have

acquired beneficial ownership (within

the meaning of Rule 13d-3

of the SEC

under the Securities Exchange

Act of 1934) of 50% or more

of the outstanding shares of the voting

stock of Parent;

or (ii) as of any date a majority

of the Board of Directors of Parent

consists of individuals

who were not either (A) directors of

Parent as of the corresponding

date of the previous year, or (B)

approved or nominated to become

directors by the Board of Directors

of Parent of which a majority

consisted of individuals described

in clause (A), or (b) Parent fails

to own and control, directly or

indirectly, 100% of the Equity Interests of each other Loan

Party or (c) the occurrence

of any “Change of

Control” or equivalent term as defined

in any agreement with respect

to any Material Indebtedness.

“Closing Date” means the first date

all the conditions precedent

in Section 3.1 are satisfied (or

waived in accordance with

Section 9.5).

“Collateral”

shall have the meaning

given to such term in the Security

Agreement and shall

include any other assets subject to any other

security agreement entered

into after the Closing Date that

are or are intended under the

terms of such other security

agreement to be subject to a Lien

in favor of

Lender.

“Collateral Access Agreement” means an agreement

with a lessor, warehouseman, processor,

consignee, bailee, or other Person

in possession of, having

a Lien upon, or having rights or interests

any Collateral, duly authorized,

executed and delivery by

such Person, in each case, in form

and

substance reasonably satisfactory to Lender.

“Collection Account” means

each deposit account of a Borrower

identified on Schedule 4.18(a)

as a collection account and such other

deposit accounts as may

be established after the Closing Date in

accordance with the terms hereof

in each case used exclusively

to receive payments on Credit Card

Receivables, accounts and proceeds

of other Collateral.

“Commitment” means the commitment

of Lender to make Revolving

Loans or otherwise provide

any credit or services to a Borrower

under this Agreement.

“Commitment Increase” has the meaning

set forth in Section 2.13.

“Compliance Certificate” means

a certificate in the form

of Exhibit B to this Agreement, as such

form, subject to the terms

hereof, may from time

to time be modified by Lender, which is duly

completed

(including all schedules thereto),

and delivered by or on behalf

of Borrowers to Lender.

“Concentration Account” means

the deposit accounts at Lender set

forth on Schedule 4.18(a)

designated as the “Concentration Account”

and such other deposit account

of Parent at Lender as may

established after the Closing

Date in accordance with the terms

hereof to which funds received

in a

Collection Account are transferred

and is designated in writing

by Administrative Borrower

to Lender as

a “Concentration Account” with the consent

of Lender.

“Control Agreement” means a control

agreement, in form

and substance reasonably satisfactory

to Lender, executed and delivered by a Loan Party, Lender, and the applicable

securities intermediary

(with respect to a securities account)

or bank (with respect to a deposit

account).

“Covered Entity” means any of the

following:

(a)

a “covered entity” as that term

is defined in, and interpreted in accordance

with, 12 C.F.R. §

252.82(b);

(b)

a “covered bank” as that term

is defined in, and interpreted in accordance

with, 12 C.F.R. §

47.3(b); or

(c)

a “covered FSI” as that term

is defined in, and interpreted in accordance

with, 12 C.F.R. §

382.2(b).

“Covered Party” has the meaning set forth

in Section 11.7.

“Credit Card Issuer” means

any person (other than a Loan

Party or an Affiliate of a Loan Party)

who issues or whose members

issue credit cards, including,

without limitation, MasterCard or

VISA bank

credit or debit cards or other bank

credit or debit cards issued through

MasterCard International, Inc.,

Visa,

U.S.A., Inc. or Visa International and American

Express, Discover, Diners Club, Carte Blanche

and other

non-bank credit or debit cards,

including, without limitation, credit

or debit cards issued by or through

American Express Travel Related Services Company, Inc.,

and Novus Services, Inc. and

other issuers

approved by the Lender.

“Credit Card Notifications” has the meaning

specified in Section 5.9(d).

“Credit Card Processor” means

any servicing or processing

agent or any factor or financial

intermediary who facilitates, services,

processes or manages the

credit authorization, billing

transfer

and/or payment procedures

with respect to any Borrower’s sales

transactions involving

credit card or

debit card purchases by customers

using credit cards or

debit cards issued by any

Credit Card Issuer.

“Credit Card Receivables” means

each “payment intangible” (as defined

in the UCC) together with

all income, payments

and proceeds thereof, owed by

a Credit Card Issuer or Credit

Card Processor to a

Loan Party resulting from charges by

a customer of a Loan Party on credit

or debit cards issued by such

Credit Card Issuer in connection

with the sale of goods

by a Loan Party, or services performed by a Loan

Party, in each case in the ordinary course of its business.

“Credit Facility” means the Revolving

Loans provided to or for the benefit of each

Borrower

pursuant to Section 2.1 or other

financial accommodations provided

for under the Loan Documents.

“DDA Notification” has the

meaning specified in Section

5.9(b).

“Default” means any condition or

event which constitutes

an Event of Default or which

with the

giving of notice or lapse of

time or both would, unless

cured or waived in writing,

become an Event of

Default.

“Default Rate” means, for any

Revolving Loan (including,

to the extent permitted by law, interest

not paid when due), two percent

plus the interest rate otherwise

applicable thereto, or in the case

of the

Letter of Credit fee, two percent above

the per annum rate otherwise

applicable thereto.

“Default Right” has the meaning

assigned to that term in, and shall

be interpreted in accordance

with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Dollars” or “$” means United States

dollars.

“EBITDA” means, with respect to any

fiscal period and with respect

to any Person and its

Subsidiaries determined, in

each case, on a consolidated basis

in accordance with GAAP, (a) the

consolidated net income (or

loss), for such period, minus

(b) without duplication, the

sum of the

following amounts for such

period to the extent included

in determining consolidated

net income (or loss)

for such period: (i) unusual

or non-recurring gains and (ii)

interest income, plus (c) without duplication,

the sum of the following amounts

for such period to the extent

deducted in determining

consolidated net

income (or loss) for such period:

(i) non-cash unusual or non-cash

non-recurring losses, (ii) Interest

Expense, (iii) income taxes, and (iv)

depreciation and amortization.

“Eligible Credit Card Receivables”

has the meaning set forth

in Schedule 1.1(a).

“Eligible

Inventory” has the meaning

set forth in Schedule 1.1(b).

“Equity

Interests” means, with respect

to a Person, all of the shares,

options, warrants, interests,

participations, or other equivalents

(regardless of how designated)

of or in such Person, whether

voting or

nonvoting, including capital stock

or partnership, limited liability

company or other equity ownership

profit interests or units, preferred

stock, or any other “equity security”

(as such term is defined in Rule

3a11-1 of the General Rules and Regulations

promulgated by the SEC

under the Securities Exchange

Act

of 1934).

“ERISA” means the Employee

Retirement Income Security Act of

1974, as amended, and any

successor statute thereto.

“ERISA Affiliate” means (a) any

Person subject to ERISA

whose employees are treated as

employed by the same employer

as the employees of any

Loan Party or its Subsidiaries under

IRC

Section 414(b), (b) any trade

or business subject to ERISA

whose employees are treated as

employed by

the same employer as the employees

of any Loan Party or its Subsidiaries

under IRC Section 414(c),

(c)

solely for purposes of Section 302

of ERISA and Section 412 of

the IRC, any organization subject

ERISA that is a member

of an affiliated service group of

which any Loan Party or any

of its Subsidiaries

is a member under IRC

Section 414(m), or (d) solely

for purposes of Section 302

of ERISA and Section

412 of the IRC, any Person

subject to ERISA that is a party

to an arrangement with

any Loan Party or any

of its Subsidiaries and whose employees

are aggregated with the employees

of such Loan Party or its

Subsidiaries under IRC

Section 414(o).

“Event of Default” has the meaning

set forth in Section 8.1.

“Excess Availability” means, as of any

date of determination, the amount,

as determined by

Lender, equal to: (a) the lesser of: (i) the Borrowing

Base and (ii) the Maximum

Credit, minus, without

duplication, (b) the amount

of Revolving Loans and Letter of

Credit Usage.

“Excluded Deposit Account”

has the meaning set forth

in the Security Agreement.

“Excluded Property” has the meaning

set forth in the Security Agreement.

“Excluded Subsidiary” means:

Date);

(a)

Immaterial Subsidiary (other

than a Subsidiary that is a Loan

Party on or about the Closing

(b)

a Subsidiary of Parent to the extent

such Subsidiary has been

formed for the sole purpose

entering into a joint venture

with one or more third parties

to the extent, after engaging

in good faith

negotiations with such third

parties, a guarantee would not be permitted

by the terms of such Subsidiary’s

Governing Documents as in

effect on the Closing Date or the date

the applicable person becomes

a direct

or indirect Subsidiary of Parent;

(c)

a Subsidiary of Parent that is prohibited

by applicable law, rule or regulation or by any

contractual obligation with

a third party (with respect to

any such contractual obligations,

only to the

extent existing on the Closing

Date or the date the applicable person

becomes a direct or indirect

subsidiary of Parent and not

created or entered into in contemplation

of the Credit Facility) from

guaranteeing the Credit Facility

or which would require governmental

(including regulatory) consent,

approval, license or authorization

to provide a guarantee (unless

such consent, approval,

license or

authorization has been received),

including the guarantee

by any Loan Party of Excluded

Swap

Obligations;

(d)

any Subsidiary with respect

to which the guarantee therefrom would

reasonably be expected

to result in a material adverse

tax consequence to Parent and

its Subsidiaries (as determined

by the Parent

in good faith and in consultation

with Lender);

(e)

any Foreign Subsidiary;

(f)

any Subsidiary that owns any

portion of the Fort Mill Land so

long as such Subsidiary does

not directly or indirectly own

any assets consisting of the types

of assets at any time

included in the

Borrowing Base, any type

of Intellectual Property or Equity Interests

(other than Equity Interests of

another Subsidiary that constitutes an Excluded

Subsidiary under this clause

(f) because it owns any

portion of the Fort Mill Land

and does not directly or indirectly

own any assets consisting

of the types of

assets at any time included in the Borrowing

Base, any type of Intellectual Property

or Equity Interests,

other than Equity Interests

of such an Excluded Subsidiary);

(g)

any Subsidiary that only provides

employee services, acts

as employer to the employees

any Loan Party or its Subsidiaries, or

for other employment

related functions, consistent with

and

substantially the same as such

services and functions performed

by Cato Employee Services

Management, LLC and Cato

Employee Services, L.P. as of the date hereof, so long

as such Subsidiary

does not directly or indirectly

own any other assets or have

any other operations or business and

so long

as books and records relating

to employees are available

directly from Administrative

Borrower

another Loan Party.

Notwithstanding the foregoing,

no Subsidiary will be an “Excluded

Subsidiary” hereunder if such

Subsidiary guarantees or is

otherwise liable in respect of any

Material Indebtedness.

Upon any Subsidiary

ceasing to be an Excluded Subsidiary, such Subsidiary

shall comply with Section 5.11, to the extent

applicable.

As of the Closing Date, the

Subsidiaries of Parent listed

on Schedule 1.1(c) are

Excluded Subsidiaries.

“Excluded Swap Obligation” means,

with respect to any Loan Party, any Swap Obligation

if, and to

the extent that, all or a portion

of the guaranty of such Loan Party

of, or the grant by such Loan Party

of a

security interest to secure, such Swap

Obligation (or any

guaranty thereof) is or becomes

illegal under the

Commodity Exchange

Act (7 U.S.C. § 1 et seq.), and any

successor statute or any rule,

regulation or order

of the Commodity Futures

Trading Commission (or the application or

official interpretation of any thereof)

due to such Loan Party’s failure for any reason

to constitute an “eligible contract participant”

as defined in

the Commodity Exchange

Act (7 U.S.C. § 1 et seq.), and

any successor statute and the

regulations

thereunder at the time the guaranty

of such Loan Party or the grant

of such security interest becomes

effective with respect to such Swap

Obligation.

If a Swap Obligation arises

under a master agreement

governing more than one swap, such

exclusion shall apply

only to the portion of such

Swap Obligation that

is attributable to swaps for

which such guaranty or security

interest is or becomes illegal.

“Existing Letter of Credit” means

the Irrevocable Standby

Letter of Credit no. IS000516587U, dated

February 13, 2025, issued by

Lender payable to American Alternative

Insurance Corporation for

the

account of Parent in the amount

of $3,000,000.

“Federal Funds Rate” means,

for any period, a fluctuating

interest rate per annum equal to, for

each day during such period, the weighted

average of the rates on overnight

Federal funds transactions

with members of the Federal Reserve

System, as published on the

next succeeding Business Day

by the

Federal Reserve Bank of New

York, or,

if such rate is not so published

for any day which is a Business

Day, the average of the quotations for such day

on such transactions received by

Lender from three

Federal funds brokers of recognized

standing selected by it (and, if

any such rate is below zero,

then the

rate determined pursuant to this definition

shall be deemed to be zero).

“Floor” means a rate of interest equal

to 0.00%.

“Foreign Subsidiary” means

any Subsidiary of any Loan

Party that is organized under

the laws of

any jurisdiction other than

the United States, any

state thereof or the District of Columbia.

“Fort Mill Land” means the real

property owned by Parent or

any Subsidiary of Parent located

York County,

South Carolina, consisting

of approximately 310 gross

acres of land as of the Closing

Date.

“Funding Date” means the date on which

a Revolving Loan is made.

“FTZ” means a foreign trade

zone or special purpose sub-zone

established by the U.S.

Department of Commerce

Foreign Trade Zone Board in accordance with

the Foreign Trade Zone Act

1934.

“FTZ Fees” has the meaning

set forth in the definition of “Reserves.”

“GAAP”

means generally accepted accounting

principles as in effect from time

to time in the

United States, consistently

applied.

“Governing Documents” means, with

respect to any Person, the certificate

or articles of

incorporation, certificate of

formation, by-laws, limited

liability company agreement, operating

agreement

or other organizational or governing

documents of such

Person.

“Governmental Authority”

means the government of any

nation or any political subdivision

thereof, whether at the national, state,

territorial, provincial, county, municipal or any

other level, and any

agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising

executive, legislative, judicial,

taxing, regulatory or administrative

powers or functions of, or pertaining

to, government (including any

supra-national bodies such as

the European Union or the European

Central

Bank).

“Guarantor” has the meaning

given to such term in the introductory

paragraph hereof.

“Guaranty” means the Guaranty, dated of even date

herewith, by each Loan Party

in favor of

Lender and any other guarantee

of the Obligations at any

time executed and delivered by a Loan Party

favor of Lender.

“Hedge Agreement” means a “swap

agreement” as that term is defined

in Section 101(53B)(A) of

the Bankruptcy Code.

“Immaterial Subsidiary” means those

Subsidiaries of Parent specified

on Schedule 1.1(e) hereto

and each other Subsidiary of

Parent that has been designated

by Administrative Borrower

in writing to

Lender as an “Immaterial Subsidiary”

for purposes of this Agreement

and the other Loan Documents,

provided, that, for purposes

of this Agreement, at no time

shall (a) the assets of any Immaterial Subsidiary

as of the end of the most recent

fiscal month for which financial

statements have been delivered

pursuant

to Section 5.1 hereof, equal

or exceed 2.5% of the consolidated

total tangible assets of Parent

and its

Subsidiaries (and in the event

that the assets of any Immaterial

Subsidiary tested at any fiscal

month end

exceed such amount, such

Subsidiary shall no longer be deemed

to be an Immaterial Subsidiary

and

Administrative Borrower

shall cause such Subsidiary to become

a Loan Party as set forth in Section

5.12

hereof) or the total assets of all Immaterial

Subsidiaries, as of the end

of the most recent fiscal month

for

which financial statements have

been delivered pursuant to Section 5.1 hereof,

equal or exceed 5.0% of

the consolidated total tangible assets

of Parent and its Subsidiaries

(and in the event that the total assets

all Immaterial Subsidiaries as tested

at the end of any fiscal month

exceed such amount, Administrative

Borrower

shall promptly designate one or

more Immaterial Subsidiaries

to be a Loan Party as may

necessary such that the foregoing

5.0% limit shall not be exceeded, such designated

Subsidiaries shall no

longer be deemed to be Immaterial

Subsidiaries and Administrative

Borrower shall cause such designated

Subsidiary or Subsidiaries,

as the case may be, to become

a Loan Party as set forth in Section 5.12

hereof), or (b) the EBITDA of any

Immaterial Subsidiary for any

12 consecutive fiscal month period

equals or exceeds 2.5% of the

EBITDA of Parent and its Subsidiaries for

such period (and in the event

that the EBITDA of any Immaterial

Subsidiary for any 12 consecutive

fiscal month period exceeds such

amount, such Subsidiary shall no longer be deemed

to be an Immaterial Subsidiary

and Administrative

Borrower

shall cause such Subsidiary

to become a Loan Party as set

forth in Section 5.12 hereof)

or the

EBITDA of all Immaterial Subsidiaries

for any 12 consecutive fiscal

month period equals or

exceeds

5.0% of the EBITDA of Parent

and its Subsidiaries for

such period, in each case as

determined in

accordance with GAAP (and in

the event that the EBITDA

of all Immaterial Subsidiaries for

any 12

consecutive fiscal month period exceeds

such amounts, Administrative

Borrower

shall promptly designate

one or more Immaterial Subsidiaries

to be a Loan Party

as may be necessary such that the foregoing

5.0%

limit shall not be exceeded, such designated

Subsidiaries shall no longer be deemed

to be Immaterial

Subsidiaries and Administrative

Borrower shall cause such designated

Subsidiary or Subsidiaries,

as the

case may be, to become a Loan Party

as set forth in Section 5.12 hereof); provided,

that, no Loan Party

shall at any time be deemed

to be an Immaterial Subsidiary; provided,

further, that, Administrative

Borrower

may re-designate Subsidiaries

as Immaterial Subsidiaries so

long as in compliance with the

foregoing.

“Increase Effective Date” has

the meaning set forth in Section

2.13.

“Indebtedness” as to any Person means

(a) all obligations of such Person

for borrowed money, (b)

all obligations of such Person

evidenced by bonds, debentures,

notes, or other similar instruments

and all

reimbursement or other obligations

in respect of letters

of credit, bankers acceptances,

or other financial

products, (c) all obligations

of such Person as a lessee

under Capital Leases, (d) all obligations

liabilities of others secured

by a Lien on any asset of such

Person, irrespective of whether

such obligation

or liability is assumed, (e) all obligations

of such Person to pay the

deferred purchase price of

assets

(other than (i) trade payables incurred

in the ordinary course of business

and repayable in accordance

with

customary trade practices and (ii) royalty

payments payable in the ordinary

course of business in respect

of non-exclusive licenses),

(f) all monetary obligations

of such Person owing under

Hedge Agreements

(which amount shall be calculated

based on the amount that would

be payable by such Person

if the

Hedge Agreement were terminated

on the date of determination),

and (g) any obligation of

such Person

guaranteeing or intended to

guarantee (whether directly

or indirectly guaranteed, endorsed,

co-made,

discounted, or sold with recourse)

any obligation of any

other Person that constitutes Indebtedness

under

any of clauses (a) through

(f) above.

For purposes of this definition,

(i) the amount of any Indebtedness

represented by a guaranty

or other similar instrument shall be

the lesser of the principal amount

of the

obligations guaranteed and still outstanding

and the maximum amount

for which the guaranteeing

Person

may be liable pursuant to the terms

of the instrument embodying

such Indebtedness, and (ii) the amount

of any Indebtedness which is limited

or is non-recourse to a Person

or for which recourse is

limited to an

identified asset shall be valued at

the lesser of (A) if applicable,

the limited amount of such obligations,

and (B) if applicable, the fair market

value of such assets securing

such obligation.

“Indemnified Taxes” means all present or future taxes,

levies, imposts, duties, deductions,

withholdings (including backup

withholding), assessments, fees or other charges imposed

by any

Governmental Authority, including any interest, additions

to tax or penalties applicable thereto,

other than

Excluded Taxes, imposed on or with respect to any

payment made by or on account

of any obligation of

Borrowers under any Loan Document.

For purposes hereof, “Excluded

Taxes” means taxes imposed on

or with respect to Lender measured

by net income (however

denominated), franchise taxes,

and branch

profits taxes, in each case, (i)

imposed as a result of Lender

being organized under the laws

of, or having

its principal office located in the jurisdiction

imposing such tax (or any

political subdivision thereof)

(ii) that are taxes imposed as

a result of a present or former

connection between Lender and the

jurisdiction imposing such tax,

(b) U.S. federal

withholding taxes imposed on

amounts payable to or for

the account of Lender with

respect to an applicable interest

in a Loan or Commitment pursuant

to a law in

effect on the date on which (i) Lender has

acquired such interest in the Loan

or Commitment (other than

pursuant to an assignment request

by Administrative Borrower)

or (ii) Lender changes its lending

office,

and (c) any U.S. federal withholding

taxes imposed under Sections

1471 through 1474 of the Internal

Revenue Code, as of the date of

this Agreement (or any

amended or successor version that

substantively comparable and

not materially more onerous

to comply with), any

current or future

regulations or official interpretations

thereof and any agreement

entered into pursuant to Section

1471(b)(1) of the Internal Revenue

Code.

“Insolvency Proceeding” means any

proceeding commenced by

or against any Person under any

provision of the Bankruptcy

Code or under any other Federal or State

bankruptcy or insolvency

law,

assignments for the benefit of creditors,

formal or informal moratoria, compositions,

extensions generally

with creditors, or proceedings

seeking reorganization, arrangement,

or other similar relief.

“Intellectual Property” means all present

and future:

(a) trade secrets, know-how

and other

proprietary information; (b)

trademarks, trademark

applications, internet domain names,

service marks,

trade dress, trade names, business

names, designs, logos,

slogans (and all translations,

adaptations,

derivations and combinations

of the foregoing) indicia

and other source and/or business

identifiers, and

all registrations or applications for

registrations which have heretofore

been or may hereafter be issued

thereon throughout the world; (c)

copyrights and copyright

applications; (including copyrights

for

computer programs); (d) unpatented

inventions (whether or not

patentable), patents and patent

applications; (e) industrial

design applications and registered

industrial designs; (f) books,

customer lists,

records, writings, computer

tapes or disks, flow diagrams,

specification sheets, computer software,

source

codes, object codes, executable code,

data and databases; (g) all other intellectual

property; and (h) all

common law and other rights

throughout the world in

and to all of the foregoing.

“Intercompany

Subordination

Agreement”

means

the

intercompany

subordination

agreement,

dated as of

even date with this Agreement, executed and

delivered by each Loan Party and

each of its

Subsidiaries, and Lender, the form and substance

of which is reasonably satisfactory

to Lender.

“Interest Expense” means, for

any period, the aggregate

of the interest expense of a

Person and its

Subsidiaries for such period,

determined on a consolidated

basis in accordance with GAA

“Interest Payment Date” means,

(a) as to any SOFR Loan, the

last day of each Interest Period

applicable to such SOFR Loan

and the Maturity Date; provided,

that, if any Interest Period for a SOFR

Loan exceeds three months,

the respective dates that are

every three months after

the beginning of such

Interest Period shall also be Interest

Payment Dates; and (b)

as to any Base Rate Loan, the

first day after

the end of each month and

the Maturity Date.

“Interest Period” means, as to any

SOFR Loan, the period commencing

on the date such SOFR

Loan is disbursed or converted

to or continued as a SOFR

Loan and ending one, three or six

months

thereafter, as selected by the Administrative

Borrower in its SOFR Loan Notice;

provided that: (a) interest

shall accrue at the applicable

rate based upon Adjusted Term SOFR, from

and including the first day of

each Interest Period to, but

excluding, the day on which

any Interest Period expires; (b) any

Interest

Period that would otherwise

end on a day that is not a

Business Day shall be extended to the

succeeding Business Day unless such

Business Day falls in another

calendar month, in which

case such

Interest Period shall end on

the next preceding Business

Day; (c) any Interest Period that

begins on the

last Business Day of a calendar month

(or on a day for which there

is no numerically corresponding

day

in the calendar month at the

end of such Interest Period) shall

end on the last Business Day

of the calendar

month that is one, three or six months

after the date on which the Interest

Period began, as applicable;

(d)

no Interest Period shall extend

beyond the Maturity Date; and

(e) no tenor that has been removed

from

this definition pursuant to the terms

of Schedule 2.7 shall be available

for specification in any SOFR

Loan

Notice or conversion or continuation notice. For purposes

hereof, the date of a

Revolving Loan initially

shall be the date on

which such Revolving Loan is made and thereafter shall be the effective

date of the

most recent conversion or continuation

of such Revolving

Loan.

“Inventory Fees” has the meaning

set forth in the definition of

“Reserves.”

“Investment” means, with respect

to any Person, any investment

by such Person in any other

Person (including Affiliates) in the

form of loans, guarantees, advances,

capital contributions (excluding

(a) commission, travel, and

similar advances to officers and employees

of such Person made in

the

ordinary course of business,

and (b) bona fide accounts

receivable arising in the ordinary

course of

business), or acquisitions of Indebtedness,

Equity Interests, or all or

substantially all of the assets

of such

other Person (or of any division

or business line of such

other Person), and any other

items that are or

would be classified as investments

on a balance sheet prepared

in accordance with GAA

The amount of

any Investment shall be the

original cost of such Investment

plus the cost of all additions thereto, without

any adjustment for increases

or decreases in value, or write-ups,

write-downs, or write-offs with respect

such Investment.

Policy.

“

ent

Polic

’’

means the Investment

Policy attached hereto as Schedule

1.1(f) - Investment

“IRC” means the Internal Revenue

Code of 1986, as in effect from

time to time.

“John Cato” means John P. Derham Cato and any of his children and

trusts for their benefit.

“Joinder” means a joinder agreement

substantially in the form

of Exhibit C to this Agreement.

“Landlord Lien State” means

a State(s) in which a claim

for rent or other amounts at any time

owing to a landlord, owner, lessor or sublessor

of Real Property (including

any Store) may be pari passu

or have priority over the Lien

of Lender in any of the Collateral.

“Lender” has the meaning set forth

in the preamble to this Agreement.

“Lender Expenses” has the

meaning set forth in Section 5.12.

“Lender Payment Account”

means such account of Lender

as Lender may from

time to time

designate in writing to the

Administrative Borrower

as the Lender Payment

Account for purposes of the

Loan Documents.

“Letter of Credit” has the meaning

set forth in Section 2.3.

“Letter of Credit Usage” means,

as of any date, the sum

of (a) the aggregate undrawn

amount of all

outstanding Letters of Credit,

and (b) the aggregate

amount of outstanding reimbursement

obligations

with respect to Letters of Credit

which remain unreimbursed

or which have not been

paid through a

Revolving Loan.

“Lien” means any mortgage, deed

of trust, pledge, hypothecation,

assignment, charge, deposit

arrangement, encumbrance,

easement, lien (statutory or

other), security interest, or other

security

arrangement and any other

preference, priority, or preferential arrangement

of any kind or nature

whatsoever, including any conditional sale

contract or other title retention

agreement, the interest of a

lessor under a Capital Lease and any

synthetic or other financing

lease having substantially the

same

economic effect as any of the foregoing.

“Loan Account” has the meaning

set forth in Section 2.4(e).

“Loan Cap” means, at any time,

the lesser of (a) the Borrowing

Base at such time and (b) the

Maximum Credit.

“Loan Documents” means this Agreement,

the Control Agreements, each Borrowing

Base

Certificate, each Security Document,

each Guaranty, the DDA Notifications, the Credit Card

Notifications, any note or notes executed

by a Borrower in connection

with this Agreement

and payable

to Lender, any subordination agreement,

and any other instrument or agreement

entered into, now or in

the future, by any Loan Party

in connection with this Agreement

(but specifically excluding agreements

for Bank Products).

“Loan Party” means any Borrower or

any Guarantor.

“Loan Party Group” means (a) each Loan

Party, (b) any Affiliate or Subsidiary of any

Loan

Party, (c) any guarantor of the Obligations, (d)

the owner of any collateral securing

any part of the

Obligations, and (e) any officer, or director acting

on behalf of any of the parties

referred to in items (a)

through (d) with respect to the

Credit Facility.

“Margin Stock” as defined in Regulation

U of the Board of Governors

of the Federal Reserve

System as in effect from time

to time.

“Material Adverse Effect” means

(a) a material adverse effect in the business,

operations, results of

operations, assets, liabilities or

financial condition of the

Loan Parties, taken as a whole,

(b) a material

impairment of the ability of

Loan Parties to perform their obligations

under the Loan Documents

to which

they are a party or of Lender’s ability

to enforce the Obligations or

realize upon the Collateral (other

than

as a result of an action taken

or not taken that is solely in the

control of Lender), or

impairment of the enforceability

or priority of the Liens of Lender

with respect to all or a material portion

of the Collateral.

“Material Contract” means those material

definitive agreements disclosed

or required to be

disclosed by the Parent pursuant

to the rules and regulations of

the Securities and Exchange Commission.

“Material

Indebtedness” means Indebtedness

(other than the Revolving

Loans) of a Loan Party in

an aggregate principal amount

exceeding $5,000,000.

For purposes of determining

Material

Indebtedness, the “principal

amount” of the obligations

of a Loan Party in respect of any

Hedge

Agreement at any time shall be

the maximum aggregate amount

(giving effect to any netting agreements)

that a Loan Party would be

required to pay if such Hedge

Agreement were terminated at such

time.

“Material

Intellectual Property” means

(a) any Intellectual Property that

is material to the business

of the Loan Parties and (b)

any Intellectual Property that is affixed

to or incorporated or embedded

in any

inventory or other product

marketed, sold, licensed, or

distributed by a Loan Party or otherwise

material in

connection with the enforcement

of any rights or remedies of Lender

with respect to the Collateral

(other

than off-the-shelf, shrink-wrapped

or “click to accept” software licenses

or other licenses to generally

commercially available software).

“Maturity Date” means March 13,

2028.

2.13.

“

Credit

”

eans

$35,0

0,0

0, as

such

ount

be inc

ased

ided

in S

ction

“Net Recovery Percentage” means,

as of any date of determination, the

fraction, expressed as a

percentage (a) the numerator of which

is the amount equal to the estimated

recovery on the aggregate

amount of the applicable category

of eligible inventory at such time

based on the appraised net orderly

liquidation value (on the basis

customarily used for retailers), net

of costs and expenses to be

incurred in

connection with any such liquidation,

as set forth in the most

recent acceptable inventory appraisal

received by Lender in accordance

with the requirements

of the Loan Documents, and

(b) the denominator

of which is the estimated cost of

the aggregate amount

of the eligible inventory

subject to such appraisal.

“Obligations” means (a) all loans

(including the Revolving

Loans), debts, principal, interest

(including any interest that accrues

after the commencement

of an Insolvency Proceeding, regardless

whether allowed

or allowable in whole or in part

as a claim in any such Insolvency

Proceeding),

premiums, liabilities (including

all amounts charged to any

Loan Account), obligations (including

reimbursement and indemnification

obligations with respect

to Letters of Credit whether or

not

contingent), fees, expenses

(and any fees or expenses that accrue

after the commencement

of an

Insolvency Proceeding, regardless

of whether allowed or allowable

in whole or in part as a claim

in any

such Insolvency Proceeding),

guaranties, and all covenants and

duties of any other kind

and description

owing by any Loan Party arising

out of, under, pursuant to, in connection

with, or evidenced by any

Loan

Document and whether or not

for the payment of money,

whether direct or indirect, absolute or contingent,

due or to become due, now

existing or hereafter arising, and including

all interest not paid when due, and

all other expenses or other

amounts that any Loan Party

is required to pay or reimburse

by the Loan

Documents or by law or otherwise

in connection with the Loan Documents,

and (b) all Bank Product

Obligations, provided, that,

notwithstanding anything

to the contrary contained herein,

the Obligations

shall exclude any Excluded Swap

Obligation.

Without limiting the generality of the foregoing,

the

Obligations include the obligation

to pay (i) the principal of

the Revolving Loans, (ii) interest

accrued on

the Revolving Loans, (iii) the

amount necessary to reimburse

Lender for amounts paid or payable

pursuant

to Letters of Credit, (iv) Letter

of Credit commissions,

fees (including fronting

fees) and charges, (v)

Lender Expenses, (vi)

fees payable under any Loan Document,

and (vii) indemnities and

other amounts payable by any

Loan Party under any Loan Document.

Any reference in this Agreement

in the Loan Documents to the Obligations

shall include

all or any portion thereof and

any extensions,

modifications, renewals, or

alterations of the Obligations, both

prior and subsequent to any Insolvency

Proceeding.

“OFAC” means The Office of Foreign Assets Control

of the U.S. Department of the Treasury.

“Patriot Act” means the Uniting

and Strengthening America by

Providing Appropriate

Tools

Required to Intercept and Obstruct

Terrorism (USA Patriot Act of 2001, as amended).

“Payment Conditions” means, at

the time of determination with

respect to any specified

transaction or payment, the

following:

(a)

as of the date of any such transaction

or payment, and after giving

effect thereto, no Default

or Event of Default shall exist;

(b)

as of the date of any such transaction

or payment, and after giving

effect

thereto, (i) there are

no Revolving Loans outstanding

(provided, that, there may

be outstanding undrawn amounts

under

Letters of Credit) and (ii) the Loan Parties

have unrestricted cash

of greater than $20,000,000;

(c)

Lender shall have received

not less than three Business Days’

prior written notice of the

proposed payment or transaction

(or such shorter period

as determined by Lender),

including (i) the

estimated date and amount

of the payment and (ii) a reasonably

detailed description of the

transaction or

event giving rise to such payment;

and

(d)

Lender shall have received

a certificate of an Authorized Person

of the Administrative

Borrower

certifying as to compliance with

the preceding clauses and demonstrating

(in reasonable detail)

the calculations required thereby.

“Perfection Certificate” means the Perfection

Certificate, dated of even

date herewith, executed

by the Loan Parties.

“Permitted Acquisition” means

any Acquisition, provided,

that, as to any such Acquisition,

each

of the following conditions

is satisfied:

(a)

as of the date of such Acquisition

and after giving effect thereto,

except as the parties may

otherwise agree, each of the

Payment Conditions is satisfied;

(b)

the board of directors (or other

comparable governing body)

of the person to be acquired shall

have duly approved such acquisition

and such person shall

not have announced that it will

oppose such

Acquisition or shall not have

commenced any action which

alleges that such acquisition will

violate

applicable law;

(c)

the purchase consideration

payable in respect of all Permitted

Acquisitions (including

the

proposed Acquisition and

including deferred payment

obligations) shall not exceed $75,000,000

in the

aggregate in any fiscal year

and such consideration in

any single transaction or in a series

of related

transactions shall not exceed $50,000,000;

(d)

Administrative Borrower

shall have furnished Lender

not less than 10 Business Days

prior to

the consummation of any

Acquisition where the consideration

exceeds $10,000,000, (i) a current draft

the acquisition documents or

if a draft is not available, promptly

at such time as it is available (and

final

copies thereof as and when

executed), (ii) a summary

of any due diligence undertaken

by the Loan Parties

in connection with such Acquisition,

(iii) appropriate financial

statements of the Person which

is the

subject of such Acquisition, and pro forma

projected financial statements for

the twelve (12) month

period following such

Acquisition after giving effect

to such

Acquisition (including balance sheets, cash

flows and income statements by month for the

acquired Person, individually, and on a

consolidated basis

with all Loan Parties), and such other

information as Lender may

reasonably request;

(e)

the assets being acquired or

the Person whose Equity Interests are being

acquired did not

have negative EBITDA during

the 12 consecutive month period most

recently ended prior to the date

the proposed Acquisition for which

financial statements are then

available;

(f)

the assets being acquired, or

the Person whose Equity Interests are being

acquired, are useful

in or engaged in, as applicable,

the business of the Loan Parties or

a business reasonably related

thereto;

(g)

the assets being acquired are located

within the United States,

or the Person whose Equity

Interests are being acquired

is organized in a jurisdiction located

within the United States

or if the assets

are not located within the United

States, or the Person

whose Equity interests are being

acquired is

organized in a jurisdiction outside of

the United States, the purchase

consideration payable

in respect of

such Permitted Acquisition

(including deferred payment

obligations) shall not exceed

$3,000,000 in the

aggregate in any fiscal year;

and

(h)

the subject assets or Equity

Interests, as applicable, are

being acquired directly by

a Borrower

or other Loan Party, and, in connection therewith, the

applicable Loan Party shall

have complied with

Section 5.11 or 5.12, as applicable, and,

in the case of an acquisition of

Equity Interests, the Person

whose

Equity Interests are acquired shall

become a Loan Party, unless such Person is

an Excluded Subsidiary.

“Permitted Discretion” means

a determination made in

the exercise of reasonable (from

the

perspective of a secured asset-based

lender) business judgment.

“Permitted Dispositions” means

each of the following:

(a)

sales of inventory to buyers

in the ordinary course of business;

(b)

the sale, exchange or other disposition

of cash, cash equivalents and other

Investments, to the

extent not prohibited by the

terms of any Loan Document;

(c)

sales, abandonment, or other

dispositions of equipment that is

substantially worn, damaged,

or obsolete or no longer used or

useful in the ordinary course of business and leases or subleases of Real

Property not useful in the conduct

of the business of a Loan Party;

(d)

the licensing, on a non-exclusive

basis, of patents, trademarks,

copyrights, and other

intellectual property rights in

the ordinary course of business;

(e)

the granting of Permitted Liens;

(f)

the sale or discount, in each

case without recourse, of accounts

receivable (other than Credit

Card Receivables) arising

in the ordinary course of business,

but only in connection with

the compromise

or collection thereof;

(g)

any involuntary loss, damage

or destruction of property;

(h)

any involuntary condemnation,

seizure or taking, by

exercise of the power of eminent

domain

or otherwise, or confiscation

or requisition of use of property;

(i)

the making of Restricted Payments

that are expressly permitted to

be made pursuant to this

Agreement;

(j)

the making of Permitted Investments;

(k)

the lapse, abandonment or other disposition

of patents, trademarks,

copyrights, and other

intellectual property rights that are

not material and are no longer

used or useful in any material

respect in

the business of a Loan Party

and do not appear on and are not otherwise

affixed to or incorporated in any

inventory or necessary in connection

with the books and records

of a Loan Party or do not have

any

material value;

(l)

bulk sales or other Dispositions

of the inventory of a Loan

Party not in the ordinary

course of

business in connection with Store

closings, at arm’s length, provided,

that, such Store closures and

inventory dispositions shall

not exceed in any fiscal year of Parent

and its Subsidiaries or in any

consecutive fiscal month period, 15%

of the number of the Loan Parties’

Stores as of the beginning

such fiscal year or such 12

consecutive fiscal month period (in each

case net of new Store openings)

unless

within 30 days prior to such

sale, upon Lender’s request, it shall

have received a then current

appraisal of

the Inventory by an appraiser, and in scope

and methodology

acceptable to Lender, with respect to the

Inventory giving effect to such Store

closings, at the expense of

Borrowers (and which

appraisal shall not

be considered in the limitation

on the number of appraisals

provided for in Section 5.7

hereof); provided, that, (A)

all sales of Inventory in connection

with Store closings

in any fiscal year or 12

consecutive fiscal month period that exceed

15% of the number of the

Loan Parties’ Stores as of the

beginning of such fiscal year

or such 12 consecutive fiscal month

period, as applicable (in

each case net

of new Store openings) shall

be in accordance with liquidation

agreements and with professional

liquidators reasonably acceptable

to Lender, (B) all net proceeds received in connection

therewith are

applied to the Obligations and

of Stores subject to such closures

exceed

in the aggregate from

and after the Closing Date, 25%

of the number of Stores of

Loan Parties in

existence as of the Closing Date

(net of new Store openings);

(m)

sales or other dispositions of assets

of a Loan Party not otherwise

described in the provisions

set forth in this definition, provided,

that, as to any such sale or other

disposition, each of the following

conditions is satisfied: (i) as of the date

of such sale or other disposition,

and after giving effect thereto,

no Event of Default exists, (ii) each

such sale is an arms’ length

transaction and the applicable Loan

Party

receives at least the fair market

value of the assets disposed

of, (iii) the consideration

received by the

applicable Loan Party consists of at

least 75% cash and is paid

at the time of the consummation

of the

transaction, (iv) the aggregate fair market

value of all assets disposed

of in reliance on this clause

(m)

during any fiscal year of Parent

shall not exceed 10% of the total

assets of Parent and

its consolidated Subsidiaries, determined

on a consolidated basis, as

set forth or reflected on the

most recent consolidated balance

sheet of Parent and its

consolidated Subsidiaries,

at the end of the most

recent fiscal year of Parent

immediately preceding such fiscal year, (v)

such transaction does not involve

the sale or other disposition

of any Credit Card Receivables,

inventory, Material Intellectual Property or

Equity Interests, and (vi) the cash

proceeds from any such sale or

other disposition (net only

of reasonable

and customary direct costs

related thereto and amounts

required to be applied to any

Permitted

Indebtedness secured by such

assets as a result of such

sale or other disposition) shall be paid

to Lender

for application to the Obligations;

and

(n)

Sale-Leaseback Transactions.

“Permitted

Indebtedness” means:

(a)

the Obligations;

(b)

Indebtedness as of the Closing

Date set forth on Schedule 6.1;

(c)

Indebtedness (including

under any Capital Lease) arising

after the Closing Date to the extent

secured by Liens on equipment

or Real Property acquired after the Closing

Date in an aggregate

outstanding principal amount not

to exceed $15,000,000

at any time; provided, that, (i) such

Liens do not

apply to any property of a Loan

Party other than specific items

of equipment or Real Property, (ii) the

Indebtedness secured thereby

does not exceed the cost of the applicable

equipment or Real Property, as

the case may be and (iii) as

of the date any such Indebtedness

is incurred and after giving

effect thereto,

no Event of Default shall exist;

(d)

Indebtedness arising in connection

with the endorsement

of instruments or other payment

items for deposit and unsecured Indebtedness

incurred in respect of netting

services, overdraft protection,

and other like services, in each

case, incurred in the ordinary

course of business;

(e)

Indebtedness of a Loan Party

in respect of bid, payment

and performance bonds, workers

’

compensation claims, unemployment

insurance, health, disability and other

employee benefits or

property, casualty or liability insurance, or guarantees

of the foregoing types of

Indebtedness, in the

ordinary course of business

and consistent with current

practices as of the Closing

Date;

(f)

the incurrence by any Loan Party

of Indebtedness under Hedge

Agreements that is incurred

for the bona fide purpose of hedging

the interest rate, commodity, or foreign currency

risks associated

with such Loan Party’s operations and not for

speculative purposes;

(g)

Indebtedness incurred in the

ordinary course of business in

respect of credit cards,

credit card

processing services, debit cards,

stored value cards, commercial

cards (including so-called “purchase

cards”, “procurement cards”

or “p-cards”), or any cash

management or related services;

(h)

Subordinated Indebtedness; provided,

that, the aggregate principal amount

of such

Indebtedness shall not exceed $10,000,000

outstanding at any time;

(i)

contingent liabilities under surety

bonds or similar instruments incurred

in the ordinary

course of business in connection

with the construction

or improvement of Stores;

(j)

unsecured Indebtedness arising

pursuant to Permitted Intercompany

Advances;

(k)

Indebtedness of a Person whose

assets or Equity Interests are acquired by

a Loan Party in a

Permitted Acquisition; provided,

that, such Indebtedness (i) is either

purchase money Indebtedness

or a

Capital Lease with respect to Equipment

or mortgage financing

with respect to Real Property, (ii) was in

existence prior to the date of such

Permitted Acquisition,

and (iii) was not incurred

in connection with, or

in contemplation of, such Permitted

Acquisition; and

(l)

unsecured Indebtedness incurred

after the Closing Date

and not otherwise specifically

described in this definition

and guarantees of other Indebtedness

constituting Permitted Indebtedness

long as each of the following

conditions is satisfied: (i) any

such Indebtedness in excess of $5,000,000

shall have a maturity date that

is at least 91 days after the Maturity

Date, and (ii) the aggregate

principal

amount of all such Indebtedness

outstanding at any time shall not

exceed $25,000,000.

“Permitted

Intercompany Advances” means

loans made by (a) a Loan Party

to another Loan Party,

(b) a Subsidiary of a Loan Party that is not

a Loan Party to another Subsidiary

of a Loan Party that is not a

Loan Party, (c) a Loan Party to a Foreign Subsidiary

formed or acquired after the Closing

Date, provided,

that, the aggregate amount

of all such loans, together with Permitted

Investments under clause

(r) of the

definition of such term,

shall not exceed $5,000,000 at any

time outstanding, and (d) a Subsidiary

of a

Loan Party that is not a Loan

Party to a Loan Party, so long as the parties thereto

are party to the

Intercompany Subordination

Agreement.

“Permitted

Investments” means each

of the following:

(a)

cash and Investments made in

accordance with the Investment

Policy, as such Investment

Policy may be amended or

modified from time to time in Administrative

Borrower’s commercially

reasonable judgment and upon

notice to Lender, provided, that, on and after

a Default or Event of Default

exists and is continuing or

a Cash Dominion Event exists

and is continuing, Loan Parties

shall not

withdraw any funds from

any securities account without the consent of

Lender or take any other

actions

with respect to such securities

accounts except with the consent of

Lender;

(b)

Investments in negotiable instruments

deposited or to be deposited

for collection in the

ordinary course of business;

(c)

advances made in connection

with purchases of goods

or services in the ordinary

course of

business;

(d)

Investments received in settlement of amounts due to

any Loan Party effected in

the ordinary

course of business or owing to any Loan

Party as a result of

Insolvency Proceedings involving an account

debtor or upon the foreclosure or

enforcement of any Lien in favor

of a Loan Party;

(e)

Investments owned by any

Loan Party on the Closing

Date and set forth on Schedule 6.9;

(f)

Equity Interests or other securities

acquired in connection with the

satisfaction or enforcement

of Indebtedness

or claims due or owing

to a Loan Party (in bankruptcy

of customers or suppliers or

otherwise outside the ordinary

course of business) or as security

for any such Indebtedness or

claims;

leases;

(g)

deposits of cash made in the

ordinary course of business

to secure performance of

operating

(h)

loans and advances to employees

and officers of a Loan Party

in the ordinary course of

business for any business purpose

not to exceed $500,000

to any such employee

or officer, and in an

aggregate amount not to exceed

$1,000,000 outstanding

at any one time;

(i)

loans to officers, directors and

employees of a Loan Party

so that such officers, directors and

employees may acquire common

stock of Parent (so long as no cash is

actually advanced by any Loan

Party in connection with such

loans);

(j)

Investments resulting from

Bank Products permitted under clause

(f) and clause (g) of the

definition of Permitted Indebtedness;

(k)

Investments consisting of real

property and cash to pay

for incidental expenses in connection

with the Fort Mill Land;

(l)

Permitted Intercompany

Advances;

(m)

Permitted Acquisitions;

(n)

Investments (other than in respect

of Permitted Acquisitions)

made with cash after the

Closing Date by a Loan Party

in or to any Person not otherwise

described in the provisions

above;

provided, that, (i) as of the

date of any such Investment

and after giving effect thereto, each

of the

Payment Conditions is satisfied,

and (ii) the Investment

shall be in or to a Person that engages

in a line of

business substantially similar

to, or ancillary or related

to, or used in or useful to,

the business that a Loan

Party is engaged in on the Closing

Date;

(o)

Investments by Cato West in Cedar Hill pursuant

to the payment of the purchase price by

Cato West for the purchase of payment intangibles owed

to Cedar Hill arising from

charges by a customer

of a Loan Party on credit or

debit cards issued by Cedar Hill

in connection with the sale of goods

by a

Loan Party, or services performed by a Loan Party, in each case in the ordinary

course of its business;

(p)

credits issued by landlords or sellers of goods or services to a

Loan Party or Subsidiary in

respect of amounts otherwise owing by such Loan Party or Subsidiary to such landlord

or seller in the

ordinary course of business;

(q)

Investments by Cato Land Development

LLC so long as it is an Excluded

Subsidiary; and

(r)

Investments in the form of

capital contributions by

a Loan Party in, and the acquisition

by a

Loan Party of Equity Interests of,

any Foreign Subsidiary, provided, that, the aggregate

amount of all such

Investments, together with

loans permitted under clause

Advances, shall not exceed

$5,000,000 at any time outstanding.

“Permitted Liens” means:

(a)

Liens granted to, or for the benefit

of, Lender to secure the Obligations;

(b)

Liens for unpaid taxes, assessments,

or other governmental charges

or levies that either (i) are

not yet past due, or (ii) do not

have priority over the Liens

of Lender and the underlying

taxes,

assessments, or charges or levies are

being contested in good

faith by appropriate proceedings

diligently

pursued and available to a

Loan Party, which proceedings (or orders entered

in connection with such

proceedings) have the effect

of preventing the forfeiture

or sale of the property subject

to any such Lien

and with respect to which adequate

reserves have been set aside on

its books in accordance with GAAP;

(c)

judgment Liens in connection with court

proceedings that do not constitute an

Event of

Default; provided, that, (i) such

Liens are being contested

in good faith by appropriate proceedings

diligently pursued and available to a Loan

Party, in each case prior to the commencement of foreclosure

or other similar proceedings,

which proceedings (or orders entered

in connection with such proceeding)

have the effect of preventing the forfeiture or

sale of the property subject

to any such Lien, and (ii)

adequate reserves or other appropriate

provision, if any, as are required by GAAP

have been made

therefor;

(d)

Liens set forth on Schedule 6.2;

(e)

the interests of lessors under

operating leases and non-exclusive

licensors under license

agreements;

(f)

Liens on equipment and Real Property

arising after the Closing Date to

secure Indebtedness

permitted under clause (c) of

the definition of Permitted

Indebtedness, whether such Indebtedness

assumed or incurred by a Loan

Party;

(g)

Liens arising by operation of law

in favor of warehousemen,

landlords, carriers, mechanics,

materialmen, laborers, or suppliers,

incurred in the ordinary course

of business and not in connection

with

the borrowing of money, and which Liens either

(i) are for sums not yet past due,

or (ii) are being

contested in good faith by

appropriate proceedings diligently

pursued and available to a Loan Party, in

each case prior to the commencement

of foreclosure or other similar proceedings,

which proceedings (or

orders entered in connection

with such proceeding) have

the effect of preventing the forfeiture

or sale of

the property subject to any

such Lien and with respect to which

adequate reserves or other appropriate

provision, if any, as are required by GAAP have

been made therefor;

(h)

Liens on cash deposited to

secure a Loan Party’s obligations in connection

with worker’s

compensation or other unemployment insurance,

or to secure obligations in

connection with the making

or entering into of bids, tenders,

or leases in the ordinary

course of business and not in connection

with

the borrowing of money

or Liens on cash deposited to

secure its reimbursement obligations

with respect

to surety or appeal bonds obtained

in the ordinary course of business;

(i)

with respect to any Real Property, easements,

rights of way, and zoning restrictions that do

not materially

interfere with or impair the use

or operation thereof;

(j)

non-exclusive licenses of

patents, trademarks, copyrights,

and other intellectual property

rights in the ordinary course of business;

(k)

Liens securing any obligations

and liabilities arising

under or in connection with

any cash

management arrangements

entered into in the ordinary

course of business prior to,

on or after the date

hereof, including, without limitation,

any netting or set-off system

for the calculation of interest with

respect to debit balances and

credit balances under such arrangements;

provided that the assets subject

any such Lien shall be limited to

the assets held from time

to time at the financial institution providing

such cash management arrangements;

(l)

Liens in favor of customs

and revenue authorities arising

as a matter of law to secure

payment of customs duties in connection

with the importation of goods;

(m)

[reserved];

(n)

Liens arising in the ordinary

course of business solely with

respect to cash, cash equivalents

and Investments permitted

by clause (a) of the definition

of Permitted Investments in favor

of a creditor

depositary institution solely by

virtue of any statutory or common

law provision relating to banker’s liens,

rights of set-off or similar rights and

remedies as to deposit accounts or

other funds maintained with

such

creditor depository institution;

(o)

Liens assumed by any

Loan Party in connection with

a Permitted Acquisition

that secure

Indebtedness of a Person whose assets

or Equity Interests are

acquired by a Loan Party in a Permitted

Acquisition which Indebtedness

is permitted under clause (k)

of the definition of Permitted Indebtedness;

(p)

Liens arising out of conditional

sale, title retention, consignment

or similar arrangements for

sale of goods entered into by

any Loan Party in the ordinary course

of business to the extent such Liens

do not attach to any assets other than

the goods subject to such arrangements

and are not intended as

security for financing transactions;

and

(q)

Liens not described in subclauses

(a) through (p) above that do not

secure Indebtedness for

borrowed money or letters

of credit, and as to which the

aggregate amount of the obligations

secured

thereby does not exceed $2,500,000

in the aggregate.

“Person” means natural persons,

corporations, limited

liability companies, limited partnerships,

general partnerships, limited

liability partnerships, joint ventures,

trusts, land trusts, business trusts,

other organizations, irrespective of whether

they are legal entities, and governments

and agencies and

political subdivisions thereof.

“Projections” means forecasted

balance sheets, profit and loss

statements, and cash

flow

statements with respect to the Loan Parties,

all prepared on a basis

consistent with its historical

financial

statements, and projected amounts

available under the Borrowing

Base, together with appropriate

supporting details and a statement

of underlying assumptions.

“QFC” has the meaning assigned

to the term “qualified financial

contract” in, and shall be

interpreted in accordance with,

12 U.S.C. § 5390(c)(8)(D).

“QFC Credit Support” has the meaning

set forth in Section 11.7.

“Real Property” means any estates

or interests in

real property now

owned or hereafter

acquired

by any Loan Party

and the improvements located thereon

and all licenses, easements and

appurtenances

relating thereto, wherever located.

“Reserves” means, as of any

date of determination, those reserves

that Lender deems necessary

appropriate, in its Permitted Discretion

and subject to Section 2.1(b), to

establish and maintain, including

reserves with respect to (a) sums

that any Loan Party is required to pay

under any Loan Document (such

as taxes, assessments, insurance premiums,

freight, duties, tariffs, and fees or, in the case

of leased assets,

rents or other amounts payable

under such leases) (all such

payments, individually

and collectively,

“Inventory Fees”) and has not yet paid,

(b) all Inventory Fees in respect

of Inventory located in an FTZ

which are required to be paid, or

which Lender estimates will be

required to be paid, when such Inventory

arrives in, or leaves from, an

FTZ and have not been paid

(all such payments, individually

and collectively,

“FTZ Fees”), (c) amounts owing

by any Loan Party to any Person

to the extent secured by

a Lien on, or

trust over, any of the Collateral, which Lien

or trust, in the Permitted Discretion

of Lender likely would be

pari passu or have a priority

superior to Lender’s Liens (such as Liens

or trusts in favor of landlords,

warehousemen, carriers, mechanics,

materialmen, laborers, or

suppliers, or Liens or trusts

for

ad valorem, excise, sales, or

other taxes where given priority

under applicable law) in and to such

item of

the Collateral, (d) amounts to the

extent dilution calculated

by Lender in its Permitted Discretion

exceeds

five percent, (e) obligations

in respect of Bank Products, (f) reserves

as may be established from

time to

time by Lender in its discretion with

respect to the determination of

the saleability, at retail, of the Eligible

Inventory, or which reflect such other factors

as affect the market value of

the Eligible Inventory or which

reflect claims and liabilities that

Lender determines will need

to be satisfied in connection with

the

realization upon the inventory, including reserves based

on: (i) obsolescence;

(ii) seasonality; (iii) shrink;

(iv) imbalance; (v) change in

inventory character; (vi) change

in inventory composition; (vii)

change in

inventory mix;

(viii) markdowns (both permanent

and point of sale); (ix) markups

inconsistent with prior

period practice and performance,

industry standards, current business

plans or advertising

calendar and planned advertising

events, (f) amounts for (i)

salaries, wages and benefits

due to employees

of any Borrower, (ii) customer credit liabilities

consisting of the aggregate

remaining value at such time

of (A) outstanding gift certificates

and gift cards of the Borrowers

entitling the holder thereof to use

all or

a portion of the certificate or gift

card to pay all or a portion of

the purchase price for any inventory, (B)

outstanding merchandise credits of Borrowers,

and (C) liabilities in connection with

frequent shopping

programs of Borrowers, (iii) deposits

made by customers with

respect to the purchase of goods

or the

performance of services and

layaway obligations of Borrowers,

(iv) reserves for reasonably

anticipated

changes in the appraised value

of Eligible Inventory

between appraisals and (v) royalties

payable in

respect of licensed merchandise.

“Restricted Payment” means

any (a) dividend or other

distribution (whether in cash, securities

other property) with respect

to any Equity Interests of a Loan Party, or any payment

(whether in cash,

securities or other property),

including any sinking fund

or similar deposit, on account

of the purchase,

redemption, retirement, acquisition,

cancellation or termination of

any such Equity Interests or on

account

of any return of capital to the stockholders,

partners or members (or

the equivalent Person thereof) of

Loan Party, or payment made to redeem, purchase,

repurchase or retire, or to obtain

the surrender of, any

outstanding warrants, options or other

rights to acquire any Equity Interests

of a Loan Party, or any

setting apart of funds or property

for any of the foregoing,

or (b) the payment by a Loan Party

of any

management, advisory or consulting

fee to any Person or the payment

of any extraordinary salary, bonus

or other form of compensation

to any Person who is directly

or indirectly a significant partner,

shareholder, owner or executive officer of any such Person,

to the extent such extraordinary

salary, bonus

or other form of compensation

is not included in the corporate

overhead of a Loan Party.

In no event

shall any payments made

by a Loan Party to any Foreign

Subsidiary of Parent for services

provided by

such Subsidiary as a buying

agent for the purchase of inventory

by such Loan Party outside of

the United

States in the ordinary course

of business that are the same

or substantially similar or ancillary to the

types

of services with respect to such

purchases of inventory

as are provided for in the Sourcing

Agreement,

dated as of July 31, 2014, between

Cato Overseas Limited and Parent

as such agreement is in effect on

the date hereof (but including

services that are substantially similar

or ancillary to those provided

for in

the agreement and whether

or not pursuant to such agreement

or any other agreement with respect

to such

services) be construed to constitute

Restricted Payments.

“Revolving Loans” means the revolving

loans made by Lender to a Borrower

under this

Agreement.

“Sale and Leaseback Transaction” means, with

respect to any Loan Party or any

Subsidiary, any

arrangement, directly or indirectly, with any Person

whereby the Loan Party

or such Subsidiary shall sell

or transfer any Real Property

used or useful in its business, whether

now owned or hereafter acquired,

and

thereafter rent or lease such property

that it intends to use for substantially

the same purpose or purposes

the property being sold or

transferred.

“Sanction” or “Sanctions”

means any and all economic or

financial sanctions, sectoral sanctions,

secondary sanctions, trade embargoes

and anti-terrorism laws imposed,

administered or enforced

from

time to time by:

(a) the United States of America,

including those administered by OFAC, the U.S. State

Department, the U.S. Department of Commerce,

or through any existing or future

Executive Order, (b)

the United Nations Security

Council, (c) the European Union,

(d) the United Kingdom,

or (e) any other

Governmental Authority in

any jurisdiction in which (i)

any member of the Loan Party Group

is located

or conducts business, (ii) in which

any of the proceeds of the

Credit Facility will be used,

or (iii) from

which repayment of the Credit Facility

will be derived.

“Sanctioned Target” means any target of Sanctions, including: (a) Persons

on any list of targets

identified or designated pursuant

to any Sanctions, (b) Persons,

countries, or territories that

are the target

of any territorial or country-based

Sanctions program, (c) Persons

that are a target of Sanctions due

their ownership or control by

any Sanctioned Target(s), or (d) otherwise a target of Sanctions, including

vessels, planes and ships, that are

designated under any

Sanctions program.

“Security Agreement” means the Security

Agreement, dated of even date herewith,

by and among

each Loan Party and Lender.

“Security Documents” means the

Security Agreement

and any other agreement or instrument

any time executed by a Loan Party

or any other Person in connection

with this Agreement that

is intended

to (or purports to) create, perfect or

evidence a Lien to secure the Obligations.

“SOFR” means a rate per annum

equal to the secured overnight

financing rate as administered

the SOFR Administrator.

“SOFR Administrator” means the Federal

Reserve Bank

of New York (or a successor

administrator of the secured

overnight financing rate).

“SOFR Loan” means each portion

of a Revolving Loan that bears

interest at a rate determined by

reference to Adjusted Term SOFR (other than pursuant

to clause (c) of the definition of “Base

Rate”).

“SOFR Loan Notice” means a written notice

in the form of Exhibit D to this Agreement.

“Solvent” means, with respect

to any Person as of any date of

determination, that (a) at fair

valuations, the sum of such Person’s debts (including

contingent liabilities) is less

than all of such Person’s

assets, (b) such Person is not

engaged or about to engage

in a business or transaction for

which the

remaining assets of such Person

are unreasonably small

in relation to the business or transaction

or for

which the property remaining

with such Person is an unreasonably

small capital, (c) such Person

has not

incurred and does not intend

to incur, or reasonably believe that it will

incur, debts beyond its ability to

pay such debts as they become

due (whether at maturity or otherwise),

and (d) such Person is “solvent”

not “insolvent”, as applicable within

the meaning given

those terms and similar terms

under applicable

laws relating to voidable transfers,

fraudulent transfers and conveyances.

For purposes of this definition,

the amount of any contingent

liability at any time shall be computed

as the amount that, in light of

all of

the facts and circumstances

existing at such time, represents

the amount that can reasonably

be expected

to become an actual or matured liability

(irrespective of whether such contingent

liabilities meet the

criteria for accrual under Statement

of Financial Accounting Standard

No. 5).

“Store” means any retail store (which

may include any real property, fixtures, equipment,

inventory and other property

related thereto) operated, or to be operated,

by any Loan Party.

“Store Accounts” shall mean the

deposit accounts listed on Schedule

4.18(a) under the heading

“Store Deposit Accounts”

which are used only for the

deposit of receipts by a Store

and any other deposit

accounts established after the

date hereof in accordance

with Section 5.9 and that are used

only for such

purpose by a Store.

“Subordinated

Indebtedness” means any Indebtedness

of any Loan Party incurred

from time to

time that is subordinated in

right of payment to the Obligations

and is subject to a subordination

agreement in form and substance

satisfactory to Lender, and is otherwise

on terms (including maturity,

interest, fees, repayment, covenants

and subordination) satisfactory

to Lender.

“Subsidiary” means, with respect

to any Person, a corporation,

partnership, limited liability

company, or other entity in which that Person directly

or indirectly owns or controls

the Equity Interests

having ordinary voting power

to elect a majority of the

board of directors (or equivalent) of

such

corporation, partnership, limited

liability company, or other entity.

“Supported QFC” has the meaning

set forth in Section 11.7.

“Swap Obligation” means,

with respect to any Loan Party, any obligation

to pay or perform under

any agreement, contract or

transaction that constitutes a “swap”

within the meaning

of section 1a(47) of

the Commodity Exchange

Act.

“Termination Date” means the earliest to occur of (a)

the Maturity Date, (b) the date on which

the

maturity of the Obligations

is accelerated (or deemed accelerated)

and the Commitment

is terminated (or

deemed terminated), or (c)

the termination of the Commitment

in accordance with the provisions of

Section 3.5.

“Term SOFR” means,

(a)

for any calculation with respect

to a SOFR Loan, the Term SOFR Reference Rate for a

tenor

comparable to the applicable Interest

Period on the day (such

day, the “Periodic Term SOFR

Determination Day”) that is

two U.S. Government Securities

Business Days prior to

the first day of such

Interest Period, as such rate is published

by the Term SOFR Administrator; provided,

that, if as of 5:00

p.m. (New York City time) on any Periodic Term SOFR Determination Day the

Term SOFR Reference

Rate for the applicable tenor

has not been published by

the Term SOFR Administrator and a Benchmark

Replacement Date with respect to

the Term SOFR Reference Rate has not occurred, then

Term SOFR

will be the Term SOFR Reference Rate for such tenor

as published by the Term SOFR Administrator on

the first preceding U.S. Government

Securities Business Day for which

such

rm SOFR Reference Rate

for such tenor was published

by the Term SOFR Administrator so long as such first

preceding U.S.

Government Securities Business Day

is not more than three U.S. Government

Securities Business Days

prior to such Periodic Term SOFR Determination Day, and

(b)

for any calculation with respect

to a Base Rate Loan on any

day, the Term SOFR Reference

Rate for a tenor of one month

on the day (such day, the “Base Rate Term SOFR Determination Day”)

that

is two U.S. Government Securities

Business Days prior to

such day, as such rate is published by the Term

SOFR Administrator; provided,

however, that if as of 5:00 p.m. (New

York City time) on any Base Rate

Term SOFR Determination Day the Term SOFR Reference Rate for the applicable

tenor has not been

published by the Term SOFR Administrator and a Benchmark

Replacement Date with respect

to the Term

SOFR Reference Rate has not occurred,

then Term SOFR will be the Term SOFR Reference Rate for

such tenor as published by the

Term SOFR Administrator on the first preceding U.S. Government

Securities Business Day for which such

Term SOFR Reference Rate for such tenor was published

by the

Term SOFR Administrator so long as such first preceding

U.S. Government Securities Business

Day is

not more than three U.S. Government

Securities Business Days prior

to such Base Rate Term SOFR

Determination Day.

“Term SOFR Adjustment” means a percentage equal to 0.10%

per annum.

“Term SOFR Administrator” means CME Group Benchmark

Administration Limited (CBA) (or

successor administrator of

the Term SOFR Reference Rate selected by Lender

in its reasonable

discretion).

“Term SOFR Reference Rate” means the forward-looking

term rate based on SOFR.

“UCC” means the Uniform

Commercial Code as in effect in the State

of New York and any

successor statute, as in effect from

time to time (except that terms

used herein which are not otherwise

defined herein and defined

in the Uniform Commercial

Code as in effect in the State of New York on the

Closing Date shall continue to have

the same meaning notwithstanding

any replacement or amendment

such statute except as Lender may

otherwise determine).

“U.S. Government Securities

Business Day” means any

day except for (a) a Saturday, (b) a Sunday

or (c) a day on which the Securities

Industry and Financial Markets

Association recommends

that the fixed

income departments of its members

be closed for the entire day

for purposes of trading

in United States

government securities.

“U.S. Special Resolution Regimes”

has the meaning set forth in Section

11.7.

“Valu

e” means, the lower of (a) cost

computed on a first-in

first-out basis in accordance with

GAAP

or (b) market value; provided,

that, for purposes of the calculation

of the Borrowing

Base, (i) the

Value

of the inventory shall not

include:

(A) the portion of the value

of inventory equal to the profit

earned by any Affiliate on the sale thereof

to a Borrower or (B) write-ups

or write-downs in value with

respect to currency exchange

rates and (ii) notwithstanding

anything to the contrary

contained herein, the

cost of the inventory shall be computed

in the same manner and consistent

with the most recent appraisal

of the inventory that is received

by, and acceptable to, Lender prior to the Closing

Date, if any.

1.2

Accounting Terms

. All accounting terms

not specifically defined herein shall

be construed

in accordance with GAAP;

provided, that, if the Administrative

Borrower notifies Lender that Borrowers

request an amendment to any

provision hereof to eliminate

the effect of any Accounting Changes

occurring after the Closing Date

or in the application thereof

on the operation of such provision

(or if

Lender requests an amendment

to any provision hereof for such purpose),

regardless of whether any such

notice is given before or after

such Accounting Change

or in the application thereof, then

Lender and

Borrowers agree that they

will negotiate in good faith amendments

to the provisions of this Agreement

that are directly affected by such Accounting

Change with the intent of having

the respective positions of

Lender and Borrowers after such change conform

as nearly as possible to their respective

positions

immediately before such Accounting

Change took effect and, until any

such amendments have been

agreed upon and agreed to

by Lender, the provisions in this Agreement

shall be calculated as if no such

Accounting Change had occurred.

A Loan Party shall deliver to Lender

at the same time as the delivery

any financial statements given

in accordance with the provisions

of Section 5.1, (a) a description

reasonable detail of any material change

in the application of accounting

principles employed in the

preparation of such financial statements

from those applied in the most

recently preceding monthly,

quarterly or annual financial statements

and (b) a reasonable estimate

of the effect on the financial

statements on account of such

changes in application.

When used herein, the term

“financial statements”

shall include the notes and schedules thereto.

Notwithstanding anything

to the contrary contained herein,

(i) all financial statements delivered hereunder

shall be prepared, and all financial

covenants contained

herein shall be calculated,

without giving effect to any election under

the Statement of Financial

Accounting Standards Board’s Accounting Standards

Codification Topic 825 (or any similar accounting

principle) permitting a Person

to value its financial liabilities

or Indebtedness at the

fair value thereof, and

(ii) the term “unqualified opinion” as

used herein to refer to opinions

or reports provided by accountants

shall mean an opinion or report that

is (A) unqualified, and (B)

does not include any

explanation,

supplemental comment, or

other comment concerning the ability

of the applicable Person to continue

as a

going concern or concerning

the scope of the audit.

1.3

UCC Terms

Any terms used in this Agreement

that are defined in the UCC shall

construed and defined as set forth

in the UCC unless otherwise

defined herein; provided,

that, to the extent

that the UCC is used to define any

term herein and such term

is defined differently in different Articles of

the UCC, the definition of

such term contained in Article

9 of the UCC shall govern.

1.4

Construction

The definitions of terms

herein shall apply

equally to the singular and plural

forms of the terms defined.

Whenever the context may

require, any pronoun shall include

the

corresponding masculine, feminine

and neuter forms.

The words “include,” “includes” and “including”

shall be deemed to be followed

by the phrase “without limitation.”

The word “will” shall be construed

have the same meaning and

effect as the word “shall” and vice-versa.

Unless the context requires

otherwise, (a) any definition

of or reference to any agreement,

instrument or other document shall

construed as referring to such agreement,

instrument or other document

as from time to time amended,

modified, supplemented, extended, renewed,

restated or replaced (subject

to any restrictions on such

amendments, supplements

or modifications set forth in

any Loan Document), (b) any

reference herein to

any Person shall be construed

to include such Person’s successors and assigns,

“hereof” and “hereunder,” and words

of similar import when used

in any Loan Document, shall be

construed to refer to such Loan Document

in its entirety and not to any

particular provision thereof,

(d) all

references in a Loan Document

to Sections, Exhibits and Schedules shall

be construed to refer to Sections

of, and Exhibits and Schedules to, the Loan

Document in which such

references appear, (e) any reference

to any law shall include all statutory

and regulatory provisions consolidating,

amending, replacing,

recodifying, supplementing

or interpreting such law and

any reference to any law or regulation

shall,

unless otherwise specified, refer to

such law or regulation as amended,

modified or supplemented

from

time to time, and (f) the words “asset”

and “property” shall be construed

to have the same meaning

and

effect and to refer to any and all tangible

and intangible assets and properties,

including cash, securities,

accounts and contract rights.

Section headings in any

Loan Document are included for convenience

reference only and shall not

affect the interpretation of this Agreement

or any other Loan Document.

Each schedule and exhibit to

this Agreement is incorporated

by reference herein and

is made a part of this

Agreement.

Any capitalized term used in any

schedule or exhibit to this Agreement

shall have the

meaning assigned to such term

herein, unless otherwise defined in

such schedule or exhibit. An Event

Default shall exist or continue

until such Event of Default is waived

in accordance with Section 9.5

accordance with the terms hereof.

Each Loan Party shall

have the burden of establishing

any alleged

negligence, misconduct or

lack of good faith by Lender

under any Loan Document.

Any reference to an

obligation of a Borrower or

a Loan Party or to Borrowers or Loan

Parties, or to any

Borrower or any Loan

Party, as the case may be, shall mean that each Borrower

or each Loan Party, as the case may be, is

jointly and severally liable

with each other Borrower or

Loan Party in respect of such

obligation.

connection with any division

or plan of division under

Delaware law (or any comparable event under

different jurisdiction’s laws): (i) if any asset, right, obligation or

liability of any Person becomes

the asset,

right, obligation or liability

of a different Person, then it shall be deemed

to have been transferred from

the original Person to the subsequent

Person, and (ii) if any

new Person comes into existence,

such new

Person shall be deemed to

have been organized on the first date of

its existence by the holders of

its

Equity Interests at such time.

Any reference in any Loan

Document to a merger, transfer, consolidation,

assignment, sale, disposition

or transfer, or similar term,

shall be deemed to apply to a division of

or by a

limited liability company, or an allocation of assets

to a series of a limited liability

company (or the

unwinding of such a division

or allocation), as if it were

a merger, transfer, consolidation, assignment,

sale, disposition or transfer, or similar term,

as applicable, to, of or with a separate

Person.

No provision

of any Loan Documents shall be construed

against any party by reason

of such party having,

or being

deemed to have, drafted the provision.

Any reference to an agreement

or other matter being “reasonably

satisfactory” to Lender shall mean

a determination made in the exercise

of reasonable judgment

from the

perspective of a secured asset-based

lender.

Any reference to expenses of Lender

in any Loan Document

shall include all Lender Expenses.

Reference to a Loan Party’s “knowledge”

or similar concept means

actual knowledge of an Authorized

Person, or knowledge

that an Authorized Person would

have obtained

if he or she had engaged in

good faith and diligent performance

of his or her duties, including

reasonably

specific inquiries of employees

or agents and a good faith

attempt to ascertain the matter.

1.5

Time References

Unless the context of this Agreement

or any other Loan Document

clearly requires otherwise,

all references to time of day

refer to Eastern Time, as in effect in New York on

such day.

For purposes of the computation of

a period of time from

a specified date to a later specified

date, unless otherwise expressly

provided, the word “from” means

“from and including” and the words

“to” and “until” each means “to and

including”; provided, that, with

respect to a computation of fees

interest payable to Lender, such period shall

in any event consist of at least

one full day.

1.6

Payment in Full

. Any reference in any Loan Document

to the satisfaction, repayment,

payment in full of the Obligations

shall mean (a) the payment

in full in cash of the principal and accrued

and unpaid interest with respect to the Revolving

Loans, (b) the payment in full

in cash of all fees,

charges and expenses that have

accrued and are unpaid regardless

of whether payment has been

demanded or is otherwise due,

collateral, or at Lender’s option,

a letter

of credit payable to Lender issued by

a bank acceptable to Lender

and in form and substance

satisfactory

to Lender, in either case in respect of (i) 105% of

the then existing Letter of Credit

Usage, (ii) contingent

Obligations for which a claim

or demand for payment has been made

at such time or in respect of

matters

or circumstances known to

Lender at the time, and which are

reasonably expected to result

in any loss,

cost, damage or expense (including

attorneys’ fees and legal expenses)

to Lender for which Lender would

be entitled to indemnification by

a Loan Party hereunder and (iii) an amount

determined by Lender equal

to the reasonably estimated credit

exposure, operational risk

or processing risk with respect

to the then

existing Bank Product Obligations,

and (d) the termination of the Commitment

and the financing

arrangements provided by

Lender to each Borrower hereunder.

1.7

[Reserved]

1.8

Resolution of Drafting Ambiguities

Each Loan Party acknowledges

and agrees that it

was represented by counsel in connection

with the execution and delivery

of the Loan Documents, that

and its counsel reviewed and participated

in the preparation and negotiation

of the Loan Documents and

that any rule of construction to

the effect that ambiguities are

to be resolved against Lender

as the drafting

party shall not be applicable in

the interpretation of the Loan Documents.

1.9

Rates

Lender does not warrant

or accept any responsibility

for, and shall not have any

liability with respect to, (a)

the continuation of, administration

of, submission of, calculation

of or any

other matter related to the Term SOFR Reference Rate,

Adjusted Term SOFR, Term SOFR or any other

Benchmark, any component definition

thereof or rates referred to in the definition

thereof, or with respect

to any alternative, successor or

replacement rate thereto (including

any then-current Benchmark

or any

Benchmark Replacement), including

whether the composition

or characteristics of any such alternative,

successor or replacement rate (including

any Benchmark Replacement), as

it may or may not be adjusted

pursuant to the terms of Schedule

2.7, will be similar to, or produce

the same value or economic

equivalence of, or have the

same volume or liquidity as,

the Term SOFR Reference Rate, Adjusted Term

SOFR, Term SOFR or any other Benchmark,

prior to its discontinuance or unavailability, or (b) the

effect, implementation or composition

of any Conforming

Changes.

Lender and its affiliates or

other

related entities may engage

in transactions that affect the calculation

of the Term SOFR Reference Rate,

Adjusted Term SOFR, Term SOFR, any alternative, successor or replacement

rate (including any

Benchmark Replacement) or

any relevant adjustments

thereto and such transactions may

be adverse to a

Borrower.

Lender may select information

sources or services in its reasonable

discretion to ascertain the

Term SOFR Reference Rate, Adjusted Term SOFR, or Term SOFR, or any other Benchmark,

any

component definition thereof or

rates referred to in the definition

thereof, in each case pursuant

to the

terms of this Agreement, and

shall have no liability to any

Borrower or any other person or

entity for

damages of any kind, including

direct or indirect, special, punitive,

incidental or consequential damages,

costs, losses or expenses (whether

in tort, contract or otherwise and

whether at law or in equity),

for any

error or calculation of any

such rate (or component thereof) provided

by any such information source

service.

1.10

Schedules and Exhibits

All of the schedules and exhibits

attached to this Agreement

shall be deemed incorporated herein by

reference.

1.11

Divisions

For all purposes under the Loan

Documents, in connection

with any division or

plan of division under Delaware

law (or any comparable event

under a different jurisdiction’s laws): (a) if

any asset, right, obligation

or liability of any Person becomes

the asset, right, obligation or liability

of a

different Person, then it shall be deemed

to have been transferred from

the original Person to the

subsequent Person, and (b) if any

new Person comes into existence,

such new Person shall be deemed

have been organized on the first date

of its existence by the holders

of its Equity Interests at such time.

CREDIT FACILITY

2.1

Revolving Loans.

(a)

Subject to, and upon the

terms and conditions contained

herein, on and after the Closing

Date

until the Termination Date, Lender agrees to make

Revolving Loans to a Borrower

from time to time in

amounts requested by or on

behalf of such Borrower, provided, that, after

giving effect to any such

Revolving Loan, the aggregate

principal amount of the

Revolving Loans outstanding

plus the Letter of

Credit Usage shall not exceed

the lesser of the Borrowing

Base at such time or the Maximum

Credit.

(b)

Lender shall have the right

(but not the obligation) at any time,

in its Permitted Discretion, to

establish and increase or decrease

Reserves, provided, that, the

amount of any Reserve

established by

Lender shall have a reasonable

relationship to the event, condition,

other circumstance, or fact that

is the

basis for such Reserve. To the extent that an event, condition

or circumstance as to any

eligible asset is

addressed pursuant to the treatment

thereof within the applicable definition

of such

terms, Lender shall

not also establish a Reserve

to address the same event, condition

or circumstance.

Lender shall provide

prior written notice to the Administrative

Borrower

of the establishment of

any new categories of

Reserves, or any change in

the methodology for the calculation

of an existing Reserve

(in each case after

the Closing Date except that

such notice shall not be required

at any time an Event of Default

exists or at

any time if Lender, in its Permitted Discretion,

determines that it is necessary

to act

sooner to preserve or

protect the Collateral or its value

or the rights of Lender therein).

In such event, Lender shall

be available

to discuss the change. A Borrower

may take such action as may

be required so that the event, condition,

circumstance, or fact that is the basis

for such Reserve no longer

exists.

If Lender determines in its

Permitted Discretion that the event,

condition, other circumstance

or fact that is the basis

for the

establishment or change to

such Reserve no longer exists

or has otherwise been adequately

addressed by a

Borrower, Lender shall adjust or eliminate the Reserve

accordingly.

At any time that the Maximum

Credit is less than the amount of

the Borrowing Base, Reserves

in respect of amounts that may

be payable

to third parties may be deducted

from the Maximum

Credit.

2.2

Borrowing Procedures.

(a)

Each Revolving Loan shall

be made by a written request by

an Authorized Person delivered

to Lender (which may

be delivered through Lender’s electronic

platform or portal) and received

Lender no later than 11:00 a.m.

(provided, that Lender may, in its sole discretion, elect

to accept as timely

requests that are received later

than 11:00 a.m.) (i) on the Business

Day that is one Business Day

prior to

the requested Funding Date

in the case of a request for

a Base Rate Loan, and (ii) on the U.S.

Government

Securities Business Day that is three U.S. Government

Securities Business Days prior to

the requested

Funding Date in the case of a request

for a SOFR Loan (or the continuation

thereof or the conversion

thereof to a Base Rate Loan), specifying

(A) the amount of such Revolving

Loan (which in the case of a

SOFR Loan shall be in a principal

amount of $1,000,000 or a whole

multiple of $1,000,000 in

excess

thereof), (B) the requested

Funding Date (which shall

be a Business Day); and (C) in the case

of a SOFR

Loan, the duration of the Interest

Period with respect thereto.

In addition, each request

for a SOFR Loan

(or the continuation thereof or

the conversion thereof

to a Base Rate Loan) shall be

made pursuant to the

delivery to Lender of a SOFR

Loan Notice. If the Administrative

Borrower

fails to specify an Interest

Period, it will be deemed

to have specified an Interest Period

of one month.

If the Administrative

Borrower

fails to give a timely notice with

respect to any continuation of a SOFR

Loan, then the applicable

SOFR Loan shall be converted

to a Base Rate Loans effective as of

the last day of the Interest Period

then

in effect with respect to the applicable SOFR

Loans.

All requests for Revolving

Loans

which are not made on-line via

Lender’s electronic platform or portal

shall be subject to (and unless

Lender elects otherwise in the

exercise of its sole discretion, such Revolving

Loans shall not be made

until the completion of) Lender’s authentication

process (with results satisfactory

to Lender) prior to the

funding of any such requested

Revolving Loan.

(b)

Except as otherwise provided

herein, a SOFR Loan may

be continued or converted only on

the last day of an Interest Period

for such SOFR Loan.

During the existence of a

Default or an Event of

Default, no Revolving Loans may

be requested as, converted to or continued

as SOFR Loans without

the

consent of Lender.

(c)

Each SOFR Loan Notice shall

be irrevocable and binding

on Borrowers.

In connection with

each SOFR Loan, each Borrower

shall indemnify, defend, and hold Lender harmless

against any loss,

cost, or expense actually

incurred by Lender as a result

of (i) the payment or required assignment

of any

principal of any SOFR Loan

other than on the last day of an Interest

Period applicable thereto

(including

as a result of an Event of Default),

(ii) the conversion of any

SOFR Loan other than on the

last day of the

Interest Period applicable thereto, or

(iii) the failure to borrow, convert, continue or

prepay any SOFR

Loan on the date specified in any

SOFR Loan Notice delivered pursuant

hereto.

A certificate of Lender

delivered to the Administrative Borrower

setting forth in reasonable detail

any amount or amounts that

Lender is entitled to receive

pursuant to this Section 2.2(c) shall

be conclusive absent manifest

error.

Borrowers shall pay such amount

to Lender within 30 days of the

date of its receipt of such certificate.

(d)

After giving effect to all SOFR Loans, there

shall not be more than five

Interest Periods in

effect with respect to SOFR Loans.

(e)

All Revolving Loans shall be conclusively

presumed to have been made

to, and at the request

of and for the benefit of, a Borrower

when deposited to the credit

of a Borrower or otherwise disbursed

established in accordance with

the instructions of the Administrative

Borrower

to the deposit account

specified to Lender for such

purpose (which shall be at

a bank acceptable to Lender) or

in accordance

with the terms and conditions

of this Agreement.

2.3

Letter of Credit Facility

As a subfacility under the Credit Facility, subject to, and

upon

the terms and conditions contained

herein, on and after the Closing

Date until the Termination Date,

Lender agrees to issue or cause an Affiliate to

issue standby letters of credit

or sight commercial letters of

credit for the account of a Borrower

for purposes acceptable to Lender

(each a “Letter of Credit” and

collectively, “Letters of Credit”); provided, that, (a) the

aggregate Letter of Credit

Usage will not at any

time exceed $5,000,000 and

(b) as of the date of the issuance

of any Letter of Credit, and after

giving

effect thereto, the aggregate amount

of the Revolving Loans and the Letter

of Credit Usage will not

exceed the lesser of the Borrowing

Base or the Maximum

Credit.

Loan Parties and Lender hereby

acknowledge and agree that the

Existing Letter of Credit shall

constitute a Letter of Credit under

this

Agreement on and after the Closing

Date with the same effect as if such Existing

Letter of Credit was

issued by Lender at the request

of Administrative Borrower

on the Closing Date.

The form and substance

of each Letter of Credit will

be subject to approval by

Lender and each Borrower shall

execute and

deliver such additional letter of credit

agreements, applications and

category

can

the

total

portfolio's

value

the

time

a new

security's purchase,

regardless

of portfolio

division

Maturity

The

date

which

the

life

financial

instrument

ends

through

cash

physical

settlement

expiration

with

value

The

maturity

bond

refers

the

date

that

the

debt

will

cease

exist,

which

time

the

issuer

will

redeem

the

bond

paying

the

principal

(or

face

value).

PORTFOLIO

DIVISIONS

The

Company's

total

portfolio

will

divided

into

four

portfolio

divisions

each

with

progressively

longer

maximum

maturity

and

average

duration

and

a fifth

division

composed

any

investments described

Section

VI,

subsections

and

Revised Policy Effective

November 2021

The

securities

each

the

first

four

divisions

can

from

any

the

approved

category

limit:

None

B. Taxable

and

Tax

Advantaged Corporate Debt:

Instruments

issued

and

foreign

(only

foreign

corporate

bonds)

corporations.

Includes

corporate

notes,

corporate

bonds

floating

rate

notes,

mutual

funds

and

auction-rate preferred

stock,

USD

denominated

and

issued

the

US.

•

Rating

minimum

obligation

obligor

securities

with

minimum

security

ratings

Baa3/BBB-/BBB-

with

maximum

maturity

5 years

for

those

securities rated

lower

than

A3/A-/A-

Moody's

Standard

& Poor

For

securities

rated

A3/A

/A-

or higher,

permit

maximum

security

maturity

years.

•

Individual

security

limit:

the

Market

Value

of the

portfolio

•

Aggregate

category

limit:

None

C. Taxable

And

Tax

Advantaged Municipal

Issues:

Investments

in this

category

shall

consist

principally

obligations

States/Municipalities/1 nstitutions

•

Rating

minimum

of obligation

obligo

securities

with

minimum

security

ratings

Baa3/BBB-/BBB-

with

maximum

maturity

5 years

for

those

securities

rated

lower

than

A3/A-/A-

Moody's

Standard

& Poor

For

securities

rated

A3/A

Revised

licy Eff

tive Nov

mber 2021

/A- or

higher

permit

maximum

security maturity

of 10

years

The

implied

rating of

the underlying

Letter

of Credit

may be

used

if the

issue

is not

rate

•

First preference

should

be given

to states

in which

the Company

has taxable

income

for tax

advantaged

issues

•

Individual

security

limit:

of the Market

Value

of the

portfolio.

•

Aggregate

category

limit

None

Asset-Backed

Securities

Investments

in this

category

shall

include,

but

not

be limited

asset-backed

obligations

real estate

automobile

loans

and

credit

card

portfolios

•

In order

to qualify

as a permitted

ABS the

following

is required:

•

The bond

is to be

senior

in the

deal

capital

structure;

•

Trust

deal size

needs

to be greater

than $250MM

;

and

•

Tranche

size needs

to be greater

than

$50MM

•

Individual

security

limit:

of the Market

Value

of the

portfoli

•

Aggregate

category

limit:

None

Repurchase

Agreements:

Placed

through

recognized

broker/dealers

or banks

acting

as principal

and backed

direct

obligations

of the U.S

Government

having

a present

market

value

equal

to the

investment

2) obligations

of federal

agencies

having

a present

market

value

equal

to the

investment

or 3)

commercial

paper

of A2

or P2

or better

quality

having

present

market

value

equal

to the

investment.

•

Individual

security

limit:

25%

of the Market

Value

of the

portfolio.

•

Aggregate

category

limit:

None

Money

market

instruments

issued

by US

and

foreign

corporations

and

banks

issued

the

and

paid

in US

dollars

Includes

COs

Commercial

Paper

(including

Asset

Backed

Commercial

Paper)

Bankers

Acceptances

time

deposits.

•

Rating

minimum

of obligation

or obligor

of securities

with minimum

security

ratings

of P-1

by Moody

or A-1

by Standard

Poor's

•

Individual

security

limit:

of the Market

Value

of the

portfolio.

•

Aggregate

category

limit:

None

Sovereign

and supranational

debt

denominated

in US

dollars,

issued

under

securities

law,

may

be issued

by Foreign

agencies,

Sovereigns,

Supranational

entities

•

Rating minimum

of obligation

or obligor

of securities

with minimum

security

ratings

of P-1

by Moody's

or A-1

by Standard

Poor

•

Individual

security

limit:

of the Market

Value

of the

portfoli

•

Aggregate

category

limit:

None

U.S.

Government

and Government

category

limit:

None

Equities:

Common

Stocks

equivalents including

Unit

Investment

Trusts,

preferred

stocks,

securities

convertible

into

common

stock,

partnerships

investing

in equities

and

mutual

funds

•

Rating

minimum

obligation

obligor

Not

Applicable

•

Individual

security

limit:

•

Aggregate

category

limit:

10%

VII.

SECURITY

LIMITATIONS

Single

and

aggregate

security

limitations

apply

the

portfolio's

total

value

the

time

the

security

purchase.

It is

the

Company's

intention

monitor

the

overall

allocation

the

portfolio.

VIII.

INVESTMENTS

OUTSIDE

OF POLICY

It is

understood

that

there

may

corporate

investments

longer-term

nature

that

are

not

covered

under

this

policy.

These

investments

which

may

include

for

example,

equity-related acquisitions,

require

separate

Board

approval

and

are

not

intended

governed

under

this

Policy.

Likewise,

any

permanent

changes

these

guidelines

must

approved

the

Board

Directors.

SCHEDULE 2.5

CREDIT AGREEMENT

Fees and Expenses

Unused Line Fee.

Borrowers shall pay to Lender

monthly an unused line fee at

the applicable

rate (on a per annum basis)

determined as provided below

multiplied by the amount by

which the

Maximum Credit as then in

effect exceeds the daily average of

the principal balance of the outstanding

Revolving Loans and the Letters

of Credit during the immediately

preceding month (or part thereof)

until

payment in full of the Obligations.

Such fees shall be payable on

the first day of each calendar month

arrears and on the Termination Date.

The rate shall be the percentage set

forth in the following table

that

corresponds to the daily average

of the principal balance of

the Revolving Loans and

Letters of Credit for

the most recently completed

calendar quarter:

Tier

Quarterly Average Revolving Loans

Unused Line Fee

Greater than 50% of the Maximum

Credit

0.250%

Less than or equal to 50% of

the Maximum

Credit

0.375%

Provided, that, (i) the rate shall

be calculated and established once

each calendar quarter and shall

remain

in effect until adjusted for the next

calendar quarter, (ii) each adjustment

of the rate

shall be effective as of

the first day of each such calendar

quarter based on the daily average

of the principal balance of the

outstanding Revolving

Loans and Letters of Credit during the immediately

preceding quarter, and (iii)

notwithstanding anything to

the contrary contained herein,

for the period from the

Closing Date until the

last day of the second full calendar

quarter immediately

following the Closing Date, the rate shall

based on the applicable percentage

set forth in Tier 2.

Collateral Monitoring Fee.

Borrowers shall pay to Lender

a monthly collateral monitoring

and servicing fee in the amount

of $2,916.67 in respect

of Lender’s services for each year

(or part

thereof) which collateral monitoring

fee shall be payable monthly

in advance beginning on the Closing

Date and on the first day of each month

thereafter until payment

in full of the Obligations.

Closing Fee. Borrowers shall pay

to Lender a closing fee in an

amount equal to $105,000.

The entire closing fee shall be deemed

fully earned by Lender and

shall be due and payable in full

on the

Closing Date.

Letter of Credit Fees.

Borrowers shall pay

to Lender a Letter of Credit fee at

a rate

equal to the

Applicable Margin for SOFR Loans times

the daily balance of the undrawn

amount of all outstanding

Letters of Credit (calculated on

the basis of a 360-day

year and the actual number of days

elapsed),

payable monthly in arrears

on the first Business Day of

each month and on the Termination

Date and

continuing until all undrawn Letters of

Credit have expired or have

been returned for cancellation

in a

manner satisfactory to Lender. All fees upon

the occurrence of any other activity

with respect to any

Letter of Credit (including

the issuance, transfer, amendment, extension

or cancellation of any Letter of

Credit and honoring of draws

under any Letter of Credit) will

be determined in accordance with

Lender’s

standard fees and charges then in effect.

Lender Expenses.

Borrowers shall pay

to Lender the Lender Expenses on

the earlier of (a)

the first day of the month following

the date on which the applicable Lender

Expenses were first

incurred, or (b) the date on which

demand therefor is made by

Lender (it being acknowledged

and agreed

that any charging of such costs, expenses

or Lender Expenses to the Loan

Account shall be deemed to

constitute a demand for payment

thereof for the purposes hereof).

Borrowers agree that their obligations

contained in this Section shall survive

payment in full of all other

Obligations.

SCHEDULE 2.7

CREDIT AGREEMENT

SOFR Replacement

Defined terms used in this Schedule

2.7 that are not otherwise defined

in this

Agreement are set forth at

the end of this Schedule 2.7.

Benchmark Replacement. Notwithstanding

anything to the contrary herein

or in any other

Loan Document, upon the

occurrence of a Benchmark

Transition Event, Lender may amend

this

Agreement to replace the then-current

Benchmark with a Benchmark

Replacement. Any such

amendment will become

effective at 5:00 p.m.

on the fifth Business Day

after Lender has provided such

amendment to Administrative

Borrower without any further

action or consent of any

Loan Party.

replacement of a Benchmark

with a Benchmark Replacement

will occur prior to the applicable

Benchmark Transition Start Date.

Benchmark Replacement Conforming

Changes. In connection with

the implementation of a

Benchmark Replacement, Lender will

have the right to make

Conforming Changes from time

to time and,

notwithstanding anything to

the contrary herein or in any