PERIOD TO ANOTHER PERIOD OR ANY SIMILAR
REASON), THEN THE AMOUNT PAYABLE BY THE BORROWERS PURSUANT TO CLAUSE (I) ABOVE
SHALL BE BASED UPON THE AGGREGATE NET EXCESS (AFTER TAKING INTO ACCOUNT ALL
REVISED HIGHER AND REVISED LOWER PRICING), IF ANY, OF THE AMOUNT OF INTEREST AND
FEES THAT SHOULD HAVE BEEN PAID FOR ALL APPLICABLE PERIODS OVER THE AMOUNT OF
INTEREST AND FEES PAID FOR ALL SUCH PERIODS. THE RETROACTIVE ADJUSTMENTS SET
FORTH IN THIS PARAGRAPH SHALL NOT BE APPLICABLE TO ANY RESTATEMENT OR ADJUSTMENT
TO ANY FINANCIAL STATEMENTS OCCURRING ONE YEAR OR MORE FOLLOWING THE PAYMENT IN
FULL OF ALL OBLIGATIONS AND TERMINATION OF THIS AGREEMENT.
"AVAILABILITY RESERVE" MEANS A RESERVE IN THE INITIAL AMOUNT OF $500,000 AND, SO
LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, TO BE REDUCED TO:
(I) $250,000 IF THE FINANCIAL COVENANTS SET FORTH IN THE AGREEMENT ARE MET WITH
THE DELIVERY OF THE MONTHLY UNAUDITED FINANCIAL STATEMENTS FOR THE MONTH OF
NOVEMBER 2008; AND (II) ZERO IF THE FINANCIAL COVENANTS SET FORTH IN THE
AGREEMENT ARE MET WITH THE DELIVERY OF THE MONTHLY UNAUDITED FINANCIAL
STATEMENTS FOR THE MONTH OF FEBRUARY 2009. ALL ADJUSTMENTS IN THE AVAILABILITY
RESERVE SHALL BE IMPLEMENTED ON A PROSPECTIVE BASIS, COMMENCING WITH THE FIRST
DAY OF THE FIRST CALENDAR MONTH THAT OCCURS AFTER THE RECEIPT BY THE LENDER OF
THE MONTHLY UNAUDITED FINANCIAL STATEMENTS EVIDENCING THE NEED FOR SUCH AN
ADJUSTMENT.
"MAXIMUM REVOLVER AMOUNT" MEANS $25,000,000.
"EBITDA" MEANS, WITH RESPECT TO MEADE AND ITS CONSOLIDATED 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, (F) NON-CASH COMPENSATION
COSTS AND ESOP CONTRIBUTIONS, (G) NON-CASH INVENTORY WRITE-DOWNS INCURRED DURING
OCTOBER 2007 THROUGH JANUARY 2008, UP TO A MAXIMUM OF $3,000,000, AND (H)
NON-CASH WRITE-OFFS OF INTANGIBLE ASSETS INCURRED DURING OCTOBER 2007 THROUGH
JANUARY 2008, UP TO A MAXIMUM OF $8,000,000.
"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; (G) THE
WORKING CAPITAL RESERVE; (H) THE AVAILABILITY RESERVE; AND (I) THE EBITDA
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