REVOLVING CREDIT LOANS MADE HEREUNDER".
X.
THE DEFINITION OF "REVOLVING CREDIT
MAXIMUM AMOUNT" IS HEREBY DELETED IN ITS ENTIRETY AND THE FOLLOWING SUBSTITUTED
IN ITS STEAD:
XI.
"REVOLVING CREDIT MAXIMUM AMOUNT" -
$150,000,000.
XII.
THE DEFINITION OF "TOTAL CREDIT FACILITY"
IS HEREBY DELETED IN ITS ENTIRETY AND THE FOLLOWING SUBSTITUTED IN ITS STEAD:
"TOTAL CREDIT FACILITY" - $150,000,000.
XIII.
THE FOLLOWING NEW DEFINITIONS ARE HEREBY
ADDED TO APPENDIX A TO THE CREDIT AGREEMENT IN APPROPRIATE ALPHABETICAL ORDER:
(1)
"ADJUSTED BORROWING BASE" MEANS, AT ANY
TIME OF CALCULATION, AN AMOUNT EQUAL TO THE SUM OF THE FOLLOWING:
(a)
The product of (i) 95% multiplied by (ii)
the Appraised Inventory Liquidation Value of Eligible Inventory of the Lead
Borrower and the Canadian Affiliate (net of Inventory Reserves); plus
(b)
The product of (i) the Cost of Eligible
Inventory of Michaels (net of Inventory Reserves) multiplied by (ii) 25%, which
together with the result of clause (c) below shall not exceed $2,000,000; plus
(c)
The product of (i) the face amount of
Eligible Accounts of Michaels (net of Receivables Reserves) multiplied by (ii)
the applicable Receivables Advance Rate, which together with the result of
clause (b) above shall not exceed $2,000,000; plus
(d)
The product of (i) the amount of Eligible
Credit Card Receivables of the Lead Borrower and the Canadian Affiliate (net of
Receivables Reserves) multiplied by (ii) the applicable Receivables Advance
Rate.
PROVIDED, HOWEVER, THAT UNTIL THE AGENT OBTAINS A PERFECTED SECURITY INTEREST IN
THE CANADIAN ASSETS AND THE CANADIAN INVENTORY, THE AMOUNTS SET FORTH IN CLAUSES
(A) AND (D) ATTRIBUTABLE TO THE CANADIAN AFFILIATE SHALL NOT BE INCLUDED IN THE
ADJUSTED BORROWING BASE CALCULATION; AND PROVIDED FURTHER THAT ELIGIBLE
IN-TRANSIT INVENTORY SHALL NOT CONSTITUTE MORE THAN TWENTY PERCENT (20%) OF THE
ELIGIBLE INVENTORY AT ANY TIME.
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(2)
"AVERAGE NET AVAILABILITY" MEANS THE
AVERAGE DAILY NET AVAILABILITY FOR THE IMMEDIATELY PRECEDING THREE MONTH PERIOD.
(3)
"BLOCKED ACCOUNT" MEANS EACH DEPOSIT
ACCOUNT OF THE BORROWERS WHICH IS THE SUBJECT OF A BLOCKED ACCOUNT AGREEMENT.
(4)
"BLOCKED ACCOUNT AGREEMENT" MEANS AGENCY
AGREEMENTS WITH THE BANKS MAINTAINING DEPOSIT ACCOUNTS OF THE BORROWER WHERE
FUNDS FROM ONE OR MORE CHECKING OR OTHER DEMAND DEPOSIT ACCOUNT MAINTAINED BY
ANY BORROWER INTO WHICH PROCEEDS OF COLLATERAL ARE DEPOSITED ARE CONCENTRATED,
WHICH AGREEMENTS SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE AGENT.
(5)
"CASH DOMINION EVENT" MEANS EITHER (I) THE
OCCURRENCE OF AN EVENT OF DEFAULT, OR (II) THE FAILURE OF THE BORROWERS TO
MAINTAIN AVAILABILITY UNDER THE ADJUSTED BORROWING BASE IN AN AMOUNT EQUAL TO AT
LEAST FIFTEEN (15%) OF THE THEN ADJUSTED BORROWING BASE.
(6)
"CASH RECEIPTS" AS DEFINED IN SECTION
6.2.4(A).
(7)
"CONCENTRATION ACCOUNT" AS DEFINED IN
SECTION 6.2.4(A).
(8)
"Incremental Availability" means, as of any
date of determination, the excess of (a) the Adjusted Borrowing Base, over (b)
the Borrowing Base.
(9)
"INCREMENTAL REVOLVING CREDIT LOANS" MEANS
ALL REVOLVING CREDIT LOANS BASED ON INCREMENTAL AVAILABILITY AT ANY TIME MADE BY
A LENDER.
4.
NO FURTHER MODIFICATION.
EXCEPT AS
EXPRESSLY MODIFIED IN