SUBSIDIARIES, FOR ANY
PERIOD, (A) ADJUSTED NET EARNINGS FROM OPERATIONS, PLUS, TO THE EXTENT DEDUCTED
IN THE DETERMINATION OF ADJUSTED NET EARNINGS FROM OPERATIONS FOR SUCH PERIOD,
(B) INTEREST EXPENSES, (C) PROVISION FOR FEDERAL, STATE, LOCAL AND FOREIGN
INCOME TAXES, (D) DEPRECIATION, (E) AMORTIZATION, AND (F) NON-CASH COMPENSATION
COSTS AND ESOP CONTRIBUTIONS.
"MAXIMUM REVOLVER AMOUNT" MEANS $30,000,000.
"NET ORDERLY LIQUIDATION VALUE" MEANS, FOR ANY PARTICULAR ITEM, THE VALUE, NET
OF ALL CUSTOMARY COSTS ATTENDANT TO THE SALE, BASED ON AN ORDERLY LIQUIDATION
SALE ASSIGNED BY AN APPRAISER, WHO IS ACCEPTABLE TO THE LENDER IN ITS REASONABLE
DISCRETION; PROVIDED THAT SUCH APPRAISALS SHALL BE CONDUCTED NO MORE FREQUENTLY
THAN TWICE PER YEAR, SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING (AND AT ANY TIME AND FROM TIME TO TIME AS THE LENDER MAY REQUIRE
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT).
"RESERVES" MEANS RESERVES THAT LIMIT THE AVAILABILITY OF CREDIT HEREUNDER,
CONSISTING OF RESERVES AGAINST AVAILABILITY, ELIGIBLE ACCOUNTS OR ELIGIBLE
INVENTORY, ESTABLISHED BY LENDER FROM TIME TO TIME IN LENDER'S REASONABLE CREDIT
JUDGMENT.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE FOLLOWING
RESERVES SHALL BE DEEMED TO BE A REASONABLE EXERCISE OF LENDER'S CREDIT
JUDGMENT: (A) BANK PRODUCT RESERVES; (B) A RESERVE FOR ACCRUED, UNPAID INTEREST
ON THE OBLIGATIONS; (C) RESERVES FOR RENT AT LEASED LOCATIONS SUBJECT TO
STATUTORY OR CONTRACTUAL LANDLORD LIENS; (D) THE SLOW MOVING RESERVE; (E) THE
DILUTION ADJUSTMENT RESERVE; (F) WAREHOUSEMEN'S OR BAILEES' CHARGES; AND (G) THE
WORKING CAPITAL RESERVE.
"STATED TERMINATION DATE" MEANS SEPTEMBER 30, 2009.
SECTION 2.02.
DELETED DEFINITIONS.
THE FOLLOWING DEFINITIONS ARE
HEREBY DELETED IN THEIR ENTIRETY FROM ANNEX A TO THE AGREEMENT:
"INVENTORY
ADVANCE RATE" AND "SPECIAL RESERVE".
SECTION 2.03.
AMENDMENT TO SECTION 1.1.
SECTION 1.1 OF THE AGREEMENT
IS HEREBY AMENDED AND RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:
"1.1
TOTAL FACILITY.
SUBJECT TO ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT, THE LENDER AGREES TO MAKE AVAILABLE A TOTAL CREDIT FACILITY OF UP TO
$30,000,000 (THE 'TOTAL FACILITY') TO THE BORROWERS FROM TIME TO TIME DURING THE
TERM OF THIS AGREEMENT.
THE TOTAL FACILITY SHALL BE COMPOSED OF A REVOLVING
LINE OF CREDIT CONSISTING OF REVOLVING LOANS AND LETTERS OF CREDIT DESCRIBED
HEREIN."
SECTION 2.04.
AMENDMENT TO SECTION 3.2.
SECTION 3.2 OF THE AGREEMENT
IS HEREBY AMENDED AND RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:
"3.2
TERMINATION OF FACILITY.
THE BORROWERS MAY TERMINATE THIS
AGREEMENT UPON AT LEAST TEN (10) BUSINESS DAYS' NOTICE TO THE LENDER, UPON (A)
THE PAYMENT IN FULL OF ALL OUTSTANDING REVOLVING LOANS, TOGETHER WITH ACCRUED
INTEREST THEREON, AND THE CANCELLATION AND RETURN OF ALL OUTSTANDING LETTERS OF
CREDIT, (B) THE PAYMENT OF THE EARLY TERMINATION FEE SET FORTH BELOW, (C) THE
PAYMENT IN FULL IN CASH OF ALL REIMBURSABLE EXPENSES AND OTHER
4
OBLIGATIONS, AND (D) WITH RESPECT TO ANY LIBOR RATE LOANS PREPAID, PAYMENT OF
THE AMOUNTS DUE UNDER SECTION 4.4, IF ANY.
IF THIS AGREEMENT IS TERMINATED FOR
ANY REASON AT ANY TIME PRIOR TO