NOTE

– LONG-TERM DEBT OBLIGATIONS

Long-Term Debt Obligations consist of the following

(in thousands):

	August 1,		July 26,
	2015		2014
Revolver	$	67,793	$	67,022
Term Loan		17,500		15,000
Notes		8,204		8,204
Long-term debt obligations	$	93,497	$	90,226

On November 15, 2012, the Company entered into an amended and restated loan and security agreement with its direct and indirect subsidiaries, General Electric Capital Corporation, as working capital agent, GA Capital, LLC, as term loan agent, and the lenders party thereto, which would have expired on November 15, 2016. In connection with the entry into the new credit facility described below, on April 22, 2015, the Company terminated the amended and restated loan and security agreement with General Electric Capital Corporation incurring an early termination penalty of $300,000 on the prepayment of the term loan.

On April 22, 2015, the Company entered into a credit agreement with its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, collateral agent and swing line lender, GACP Finance Co., LLC, as term agent, and the lenders party thereto. The credit agreement provides senior secured financing of $117.5 million, consisting of (a) an up to $100.0 million revolving credit facility and (b) an up to $17.5 million term loan facility. The revolving credit facility includes borrowing capacity available for letters of credit up to $15.0 million. The credit agreement also provides for the ability to increase the revolving credit facility by an amount not to exceed $10.0 million. All obligations under the senior secured credit facilities are secured by substantially all of the assets of the Company and each of its wholly owned subsidiaries, subject to permitted liens and certain other exceptions. Availability of both the revolving credit facility and the term loan facility is determined by reference to the applicable borrowing base, which shows availability of $6.5 million as of August 1, 2015.

Borrowings under the revolving credit facility bear interest at a rate equal to, at the option of the borrowers, either (a) a LIBOR rate determined by reference to the offered rate for deposits in dollars for the interest period relevant to such borrowing (the “Eurodollar Rate”), or (b) a base rate, in each case plus an applicable margin and adjusted for certain additional costs and fees. The initial applicable margin for borrowings is 2.50% with respect to Eurodollar Rate loans and 1.50% with respect to base rate loans, subject to adjustment based on the amount of availability under the revolving credit facility.

Principal amounts outstanding under both the revolving credit facility and the term loan facility are due and payable in full at maturity, which is the earlier of (a) April 22, 2020 and (b) ninety (90) days prior to the stated maturity date of the Company’s Floating Rate Series A Secured Notes due November 20, 2017 (the “Notes”), if such indebtedness has not been reserved for, repaid or modified in a manner that less than $750,000 remains outstanding. The Company may voluntarily repay outstanding loans or terminate the commitments under the revolving credit facility at any time, and may repay outstanding loans under the term loan facility at any time following the termination of the commitments under the revolving credit facility, in each case subject to certain prepayment fees and customary “breakage” costs with respect to Eurodollar Rate loans.

At August 1, 2015, Hancock had commitments under the above revolving credit facility for $1.2 million of documentary letters of credit, which support purchase orders for merchandise. Hancock also has standby letters of credit for $5.4 million, to guarantee payment of potential insurance claims, shipments of inventory, security bonds and freight charges, and backstop letters of credit issued to its previous lender for $0.7 million.

The Company also has outstanding $8.2 million aggregate principal amount of the Notes originally issued pursuant to an Indenture dated as of June 17, 2008 between the Company and Deutsche Bank National Trust Company (“DBNTC”), as trustee thereunder.

The Notes bear interest at a variable rate, adjusted quarterly, equal to a LIBOR rate plus 12% until maturity on November 20, 2017. Under the terms of the indenture, the Company is required to pay interest on the Notes in cash quarterly in arrears on February 20, May 20, August 20 and November 20 of each year. The Notes and the related guarantees provided by certain subsidiaries of the Company are secured by a lien on substantially all of the Company’s and the subsidiary guarantors’ assets, in each case, subject to certain prior liens and other exceptions, but the Notes are subordinated in right of payment in certain circumstances to all of the Company’s existing and future senior indebtedness, including the Company’s senior secured credit facilities, dated April 22, 2015.