The Cato Corporation 10Q 2023 Q2 Quarterly report | CATO Filing

Execution

Version

SECOND

AMENDMENT

TO CREDIT

AGREEMENT

THIS SECOND AMENDMENT TO

CREDIT AGREEMENT

(this “Amendment”), dated

August 9,

2023, is

by and

among THE

CATO

CORPORATION,

Delaware

corporation (the

“Borrower”), the Banks (as defined below) party hereto

and WELLS FARGO

BANK, NATIONAL

ASSOCIATION, as

agent on behalf of

the Banks under the

Credit Agreement (as hereinafter defined)

(in such capacity,

the “Agent”).

Capitalized terms used herein and not

otherwise defined herein shall

have the meanings ascribed

thereto in the Credit

Agreement.

W I T N E S S E

WHEREAS

, the

Borrower, certain Domestic

Subsidiaries

of the Borrower

as may be

from time

to time

party thereto,

certain

banks

and financial

institutions

from

time to

time

party

thereto (the

“Banks”)

and the Agent

are parties

to that certain

Credit Agreement

dated as of

May 19, 2022

(as amended

by that

certain First Amendment to Credit Agreement, dated as

of June 6,

2022, and as further

amended,

modified, extended,

restated, replaced, or

supplemented from

time to time, the “Credit

Agreement”);

WHEREAS

, the Borrower has requested that the

Required Banks and Agent amend certain

provisions of the

Credit Agreement; and

WHEREAS

, the Required

Banks and the

Agent are willing

to make such

amendments to the

Credit Agreement,

in accordance with and

subject to the terms

and conditions set forth herein.

NOW,

THEREFORE

, in consideration of

the agreements hereinafter set

forth, and for

other

good and

valuable

consideration,

the receipt

and adequacy

of which

are hereby

acknowledged,

the parties

hereto agree as follows:

ARTICLE

AMENDMENTS

TO CREDIT

AGREEMENT

1.1

Amendment to

Definition of

EBITDAR

The

definition of

EBITDAR set

forth in

Section 1.01 of the Credit Agreement

is hereby amended by changing the second clause “(a)” to clause

“(b)”.

1.2

Amendment to Definition of Minimum EBITDAR Coverage Ratio

The definition

of Minimum EBITDAR Coverage Ratio set forth in

Section 1.01 of the Credit Agreement is hereby

amended and restated

in its entirety to read

as follows:

“Minimum EBITDAR

Coverage Ratio” means,

as of the end of any Fiscal Quarter, the

ratio of (i) EBITDAR for

the four-Fiscal Quarter period then ended, minus (a)

Taxes

paid in

Cash for such four-Fiscal Quarter period, plus (b)

following the date the financial statements

are delivered

pursuant to Section 5.01 for the Fiscal Quarter ended July 29,2023

and without

duplication of any amounts

set forth in clause (b)(ii) of the definition of EBITDAR, the amount

of income tax

returns anticipated by

the Borrower in good

faith to be received from

the Internal

Revenue Service

after August

1, 2023 in

connection with

taxes paid during

the 2021 Fiscal

Year

(the “Income Tax

Receivables”); provided, that (A) the

amount added back pursuant to

this

clause (b) shall

not exceed the

lesser of (x) $5,325,000

and (y) the actual

amount of Income

Tax

Receivables received from the

Internal Revenue Service and (B) the

addback set forth in this

clause (b) shall no longer be available

from and after the earlier of (I) receipt by the Borrower

of any Income Tax Receivables from the

Internal Revenue Service

and (II) any reporting period

following the end

of the Fiscal

Year ending February 3,

2024, to (ii)

the Fixed Charges for

such four-Fiscal Quarter period.

ARTICLE II

CONDITIONS TO

EFFECTIVENESS

This

Amendment

shall

become

effective

the

day

and

year

set

forth

above

(the

“Second Amendment

Effective Date”)

when the

Agent shall

have received

a copy of

this Amendment

duly executed by each of

the Borrower, the Required

Banks and the Agent.

ARTICLE

III

MISCELLANEO

3.1

Amended

rms.

On and after the Second Amendment Effective Date, all

references to the Credit Agreement in each of

the Loan Documents shall hereafter mean the

Credit

Agreement as amended by this Amendment.

Except as specifically amended hereby or

otherwise

agreed, the Credit Agreement

hereby

ratified

and

confirmed

and

shall

remain

full

force

and

effect

according

to its terms.

3.2

Reaffirmation of Obligations.

The Borrower hereby ratifies

the Credit Agreement

as amended by this Amendment and

acknowledges and reaffirms (a) that it

is bound by

all terms of

the Credit Agreement

as so amended

applicable to

it and (b)

that it is responsible

for the observance

and full performance

of its Obligations.

3.3

Loan Document.

This Amendment shall constitute a Loan Document

under the

terms of the Credit Agreement.

3.4

Further

Assurances.

The

Borrower

agrees

promptly

take

such

action,

upon

the request of the Agent,

as is necessary to carry

out the intent of this Amendment.

3.5

Entirety.

This

Amendment

and

the

other

Loan

Documents

embody

the

entire agreement among the parties hereto relating to the subject matter hereof and thereof

and

supersede all previous

documents,

agreements

and

understandings,

oral or

written, relating

to the

subject matter

hereof and thereof.

3.6

Counterparts; Telecopy.

This Amendment may be

executed in counterparts (and

by different parties hereto in

different counterparts), each of which

when so executed and

delivered

will constitute an

original, but

all of which

when taken

together will

constitute a single

contract.

Delivery of an executed counterpart to this Amendment by telecopy or other electronic means shall

be effective as an original and shall constitute

a representation that

an original will

be delivered.

3.7

No Actions, Claims, Etc.

As of

the date

hereof, the Borrower hereby

acknowledges and confirms that it has no knowledge of any

actions, causes of action, claims,

demands, damages and liabilities of

whatever kind

or nature, in

law or in equity, against

the Agent, the

Banks, or the

Agent’s or the Banks’ respective

officers, employees, representatives, agents, counsel

directors arising

from any action by such Persons, or failure of such Persons to act

under the Credit

Agreement on or prior to the date hereof.

3.8

NORTH CAROLINA

AW.

THIS AMENDMENT

SHALL BE

CONSTRUED

ACCORDANCE

WITH

AND

GOVERNED

THE

LAW

THE

STATE

NORTH

CAROLINA.

3.9

Successors and

Assigns.

This

Amendment shall

binding upon

and

inure

the

benefit of the parties

hereto and their respective

successors and assigns.

3.10

Expenses.

Notwithstanding the provisions

of Section

9.03 of

the

Credit Agreement,

each party hereto agrees that

it shall be

responsible for its own expenses in

connection with this

Amendment;

provided

however the Borrower shall

pay fees and

disbursements of outside counsel for

the Agent in connection

with the preparation

of this Amendment

in the amount of

$6,000.

3.11

Consent to Jurisdiction;

Service of Process;

Waiver of Jury Trial.

The jurisdiction,

service of process and waiver of jury trial provisions set forth

in Section 9.16 of the Credit Agreement

are hereby incorporated

by reference,

mutatis mutandis.

[REMAINDER OF

PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF

the parties hereto have caused this Amendment

to be duly executed

on the date first above

written.

BORROWER:

THE CATO CORPORATION

By:

_/s/ Charles

D. Knight

Charles D. Knight

Executive Vice President and Chief

Financial Officer

AGENT

AND

BANKS:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent, Issuing Bank and as a Bank

By:

/s/ Brad D.

Bostick

Name: Brad D. Bostick: Title: Senior

Vice President

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