TERM LOAN LIBOR MARKET RATE PLUS THE APPLICABLE TERM LOAN
MARGIN.
AS USED HEREIN,
"TERM LOAN LIBOR MARKET RATE" MEANS THE RATE FOR ONE
MONTH U.S. DOLLAR DEPOSITS AS REPORTED ON TELERATE PAGE 3750 (OR ANY SUCCESSOR
PAGE) AS OF 11:00 A.M. LONDON TIME, ON SUCH DAY, OR IF SUCH DAY IS NOT A LONDON
BUSINESS DAY, THEN THE IMMEDIATELY PRECEDING LONDON BUSINESS DAY (OR IF NOT SO
REPORTED, THEN AS DETERMINED BY LENDER FROM ANOTHER RECOGNIZED SOURCE OR
INTERBANK QUOTATION).
AS USED HEREIN, "APPLICABLE TERM LOAN MARGIN" MEANS, (I)
340 BASIS POINTS, FOR EACH FISCAL QUARTER OF BORROWERS FOLLOWING A FISCAL
QUARTER DURING WHICH THE FIXED CHARGE COVERAGE RATIO WAS LESS THAN 1.75 TO 1.0
AND (II) 275 BASIS POINTS, FOR EACH FISCAL QUARTER OF BORROWERS FOLLOWING A
FISCAL QUARTER DURING WHICH THE FIXED CHARGE COVERAGE RATIO WAS EQUAL TO OR
GREATER THAN 1.75 TO 1.0.
THE APPLICABLE TERM LOAN MARGIN WILL BE 340 BASIS
POINTS UNTIL LENDER RECEIVES BORROWER'S QUARTERLY STATEMENTS FOR THE QUARTER
ENDING APRIL 31, 2003, AT WHICH TIME THE APPLICABLE TERM LOAN MARGIN SHALL BE
ADJUSTED ACCORDINGLY.
6.
DAILY/WEEKLY FINANCIAL REPORTING.
(A)
IN ADDITION TO ALL OTHER INFORMATION
REQUIRED TO BE DELIVERED UNDER THE LOAN AGREEMENT, BORROWERS SHALL, AT THEIR
EXPENSE, DELIVER TO LENDER, IN FORM ACCEPTABLE TO LENDER, ON A WEEKLY BASIS:
(I) TRUE AND COMPLETE AGINGS OF THEIR RESPECTIVE ACCOUNTS RECEIVABLE AND
ACCOUNTS PAYABLE, IDENTIFYING ALL ELIGIBLE ACCOUNTS; AND (II) INVENTORY REPORTS,
INCLUDING AN IDENTIFICATION OF ALL ELIGIBLE INVENTORY, THE LOCATION OF ALL
INVENTORY; AND INFORMATION AS TO ALL INVENTORY IN EXCESS OF A 12 MONTHS' SUPPLY
AND AS TO OUT-OF-SEASON INVENTORY.
(B)
SECTION 6.10(D) OF THE LOAN AGREEMENT IS
HEREBY DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
3
"(d)
Borrowers shall, at their own expense, on a daily
basis, deliver to Lender a borrowing base certificate in substantially the form
of Schedule C hereto duly completed and certified by Borrowers' chief executive
officer or chief financial officer, detailing daily updates of Borrowers'
Eligible Accounts and weekly updates of Borrower's Eligible Inventory (on Monday
of each week) and containing, without limitation, daily sales, cash receipts,
credits and other adjustments.
Each borrowing base certificate shall include
information regarding purchases of foreign currency exchange by Borrowers.
Each
borrowing base certificate shall be accompanied by such collateral and back-up
documentation as Lender may from time to time require."
7.
MONTHLY FINANCIAL REPORTING.
SECTION
6.10 OF THE LOAN AGREEMENT IS HEREBY AMENDED BY ADDING THE FOLLOWING SUBSECTION:
"(g)
Borrowers shall, at their expense and within
forty-five (45) days following the end of each calendar month, deliver to
Lender:
(i)
Monthly consolidated internally prepared
interim financial statements of Guarantor, Borrowers and their subsidiaries,
including a balance sheet and income statement and statements of operations and
of cash flows for such month, all in form acceptable to Lender and in each case
setting forth (i) in comparative form figures for the corresponding month and
year-to-date period of the preceding fiscal year, (ii) year-to-date figures and
(iii)