Document:

BYD 10K 2011 EX 10.49

BOYD GAMING CORPORATION 2002 STOCK INCENTIVE PLAN
Notice of Performance Share Unit Award
You (the “Grantee”) have been granted an award of Restricted Stock Units (the “Award”), subject to the terms and conditions of this Notice of Performance Share Unit Award (the “Notice”), the Boyd Gaming Corporation 2002 Stock Incentive Plan, as amended from time to time (the “Plan”) and the Performance Share Unit Agreement (the “Agreement”) attached hereto, as follows.  Unless otherwise provided herein, the terms in this Notice shall have the same meaning as those defined in the Plan.
	
		
	Award Number:
	 

	Date of Award:
	 

	Total Number of Restricted Stock 
Units Awarded (the “Units”):
	 

	 
	 

Vesting Schedule:
For purposes of this Notice and the Agreement, the term “vest” shall mean, with respect to any Units, that such Units are no longer subject to forfeiture to the Company.
Subject to the Grantee’s Continuous Service (except as otherwise specifically provided herein) and other limitations set forth in this Notice, the Plan and the Agreement, the Units shall vest in accordance with the following schedule (the “Vesting Schedule”):
Units shall vest based on the extent to which the applicable performance metrics set forth on Exhibit A hereto are satisfied for the period from January 1, 2012 through December 31, 2014 (the “Determination Date”) (the “Performance Metrics”).  Based on the Performance Metrics a number of the Units shall vest (the “Vested Units”) as set forth on Exhibit A hereto upon determination by the Company of the Company’s performance against the Performance Metrics, provided that such determination shall be completed no later than March 15, 2015.
IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Award is to be governed by the terms and conditions of this Notice, the Plan, and the Agreement.
Boyd Gaming Corporation, 
a Nevada corporation
 
By:     
                                                                                    Title:  President and CEO
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE UNITS SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE OR AS OTHERWISE SPECIFICALLY PROVIDED IN THE NOTICE OR THE AGREEMENT (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE AGREEMENT, NOR IN THE PLAN, SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE AT ANY TIME, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.
Grantee Acknowledges and Agrees:
The Grantee acknowledges receipt of a copy of the Plan and the Agreement and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Award subject to all of the terms and provisions hereof and thereof.  The Grantee has reviewed this Notice, the Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice and fully understands all provisions of this Notice, the Agreement and the Plan.
The Grantee further acknowledges that, from time to time, the Company may be in a “blackout period” and/or subject to applicable federal securities laws that could subject the Grantee to liability for engaging in any transaction involving the sale of the Company’s Shares.  The Grantee further acknowledges and agrees that, prior to the sale of any Shares acquired under this Award, it is the Grantee’s responsibility to determine whether or not such sale of Shares will subject the Grantee to liability under insider trading rules or other applicable federal securities laws.
The Grantee understands that the Award is subject to the Grantee’s consent to access this Notice, the Agreement, the Plan and the Plan prospectus (collectively, the “Plan Documents”) in electronic form via email or on the Company’s intranet.  By signing below (or by providing an electronic signature) and accepting the grant of the Award, the Grantee: (i) consents to access electronic copies (instead of receiving paper copies) of the Plan Documents via email or the Company’s intranet; (ii) represents that the Grantee has access to the email and the Company’s intranet; (iii) acknowledges receipt of electronic copies, or that the Grantee is already in possession of paper copies, of the Plan Documents; and (iv) acknowledges that the Grantee is familiar with and accepts the Award subject to the terms and provisions of the Plan Documents.
The Grantee hereby agrees that all questions of interpretation and administration relating to this Notice, the Plan and the Agreement shall be resolved by the Administrator in accordance with Section 9 of the Agreement.  The Grantee further agrees to the venue selection and waiver 
of a jury trial in accordance with Section 10 of the Agreement.  The Grantee further agrees to notify the Company upon any change in his or her residence address indicated in this Notice.

 
Date        Grantee’s Signature
    
Grantee’s Printed Name

    
Address

    
City, State & Zip

Award Number:  __ ________________
BOYD GAMING CORPORATION 2002 STOCK INCENTIVE PLAN
PERFORMANCE SHARE UNIT AGREEMENT
1.Issuance of Units.  Boyd Gaming Corporation, a Nevada corporation (the “Company”), hereby issues to the Grantee (the “Grantee”) named in the Notice of Performance Share Unit Award (the “Notice”) an award (the “Award”) of the Total Number of Restricted Stock Units Awarded set forth in the Notice (the “Units”), subject to the Notice, this Performance Share Unit Agreement (the “Agreement”) and the terms and provisions of the Boyd Gaming Corporation 2002 Stock Incentive Plan, as amended from time to time (the “Plan”), which is incorporated herein by reference.  Unless otherwise provided herein, the terms in this Agreement shall have the same meaning as those defined in the Plan or the Notice, as applicable.
2.    Transfer Restrictions.  The Units may not be transferred in any manner other than by will or by the laws of descent and distribution.
3.    Vesting.  
(a)    Change in Control and Corporate Transaction.  Notwithstanding the Vesting Schedule contained in the Notice, immediately prior to the specified effective date of a Change in Control or a Corporate Transaction (each as defined in the Plan), the Units shall vest assuming achievement of the Performance Metrics at target, provided that such effective date occurs prior to the Determination Date.
(b)    Termination of Continuous Service.  Vesting shall cease upon the date the Grantee terminates Continuous Service for any reason (including death or Disability) other than Retirement.  In the event the Grantee terminates Continuous Service for any reason (including death or Disability) other than Retirement, any unvested Units held by the Grantee immediately upon such termination of the Grantee’s Continuous Service shall be forfeited and deemed reconveyed to the Company and the Company shall thereafter be the legal and beneficial owner of such reconveyed Units and shall have all rights and interest in or related thereto without further action by the Grantee.  Notwithstanding the definition of “Continuous Service” set forth in the Plan, Continuous Service shall terminate for purposes of this Award in the event of the Grantee’s change in status from Employee to Director or Consultant.
(c)    Retirement.  For purposes of this Award, Retirement shall mean termination of the Grantee’s Continuous Service, other than for Cause, after reaching fifty-five (55) years of age with at least ten (10) years of service with the Company or a Related Entity, provided that such termination constitutes a “separation from service” as defined in the regulations under Section 409A of the Code and occurs prior to the specified effective date of a Change in Control or a Corporate Transaction.  For the avoidance of doubt, termination of the Grantee’s Continuous Service for death or Disability after reaching fifty-five (55) years of age with at least ten (10) years of service with the Company or a Related Entity shall constitute Retirement, provided that such termination constitutes a “separation from service” as defined in the regulations under Section 409A of the Code and occurs prior to the specified effective date of a Change in Control or a Corporate Transaction.  In the event of Retirement, the Grantee shall vest in a portion of the total number of any Units that would have vested had the Grantee’s Continuous Service not terminated, as provided in the Notice and in Exhibit A to the Notice, and shall be converted and issued as provided in Section 4 of the Agreement.  The portion described in the preceding sentence shall be determined by multiplying (a) the total number of Units that would have vested had the Grantee’s Continuous Service not terminated, as provided in the Notice and in Exhibit A to the Notice, and (b) the Retirement Ratio.  For the purposes of this Award, the Retirement Ratio is the quotient of (a) the number of calendar days that have elapsed during the performance period up to the date of the Grantee’s Retirement plus the Service Credit and (b) the number of calendar days in the performance period or, if a Change of Control or a Corporate Transaction shall have occurred prior to the Determination Date, the number of calendar days in the performance period up to the specified effective date of such Change of Control or Corporate Transaction, provided that the Retirement Ratio shall never exceed one (1).  For purposes of this Award, the Service Credit shall be (a) 365, if, at the time of the Grantee’s Retirement, the Grantee has at least ten (10) but less than fifteen (15) years of service with the Company or a Related Entity, (b) 730 if, at the time of the Grantee’s Retirement, the Grantee has at least fifteen (15) but less than twenty (20) years of service with the Company or a Related Entity and (c) 1095 if, at the time of the Grantee’s Retirement, the Grantee has at least twenty (20) years of service with the Company or a Related Entity.  For purposes of this Award, Cause shall mean, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee’s:  (i) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person.
(d)    Leave of Absence.  During any authorized leave of absence that exceeds six (6) months, and a return to service upon expiration of such leave is not guaranteed by statute or contract, then (a) the Grantee’s Continuous Service shall be deemed to terminate on the first date following such six-month period and (b) the Grantee will forfeit the Units that are unvested on the date of the Grantee’s termination of Continuous Service.  An authorized leave of absence shall include sick leave, military leave, or any other authorized personal leave.
4.    Conversion of Units and Issuance of Shares.
(a)    General.  Subject to Sections 4(b) and 4(c), one share of Common Stock shall be issuable for each Unit subject to the Award (the “Shares”) upon the vesting date.  Immediately thereafter, or as soon as administratively feasible, the Company will transfer the appropriate number of Shares to the Grantee after satisfaction of any required tax or other withholding obligations.  Effective upon the consummation of a Corporate Transaction in which the Award is not Assumed, the Award shall terminate.  Any fractional Unit remaining after the Award is settled in Shares shall be discarded and shall not be converted into a fractional Share.  Notwithstanding the foregoing, with respect to Shares issuable in respect of Units that become vested in connection with a Change in Control or a Corporate Transaction (i) that does not constitute a “change in the ownership or effective control, or in the ownership of a substantial portion of the assets” (as defined in Section 409A of the Code) of the Company and (ii) in which the Award is Assumed, such Shares shall be transferred to the Grantee on the date on which such Shares would have been transferred to the Grantee had such Change in Control or Corporate Transaction not occurred.  Notwithstanding the foregoing, with respect to Shares issuable in respect of Units that vest in connection with a Change in Control or a Corporate Transaction (i) that does not constitute a “change in the ownership or effective control, or in the ownership of a substantial portion of the assets” (as defined in Section 409A of the Code) and (ii) in which the Award is not Assumed, each such Share shall be converted into the consideration received by holders of Shares for each Share in connection with such Change in Control or Corporate Transaction (Share Consideration”) and such Share Consideration shall be transferred to the Grantee on the date on which such Shares would have been transferred to the Grantee had such Change in Control or Corporate Transaction not occurred.  For the purposes of this Agreement, the term “Share” will include “Share Consideration” where applicable.  Notwithstanding the foregoing, to the extent that the delivery of Shares to the Grantee hereunder are eligible for the exemption from the application of Section 409A of the Code provided under Treasury Regulation Section 1.409A-1(b)(4), such Shares shall be issued no later than March 15th of the year following the calendar year in which the Award vests.
(b)    Delay of Conversion.  The conversion of the Units to Common Stock under Section 4(a), above, shall be delayed in the event the Company reasonably anticipates that the issuance of Common Stock would constitute a violation of federal securities laws or other Applicable Law.  If the conversion of the Units to Common Stock is delayed by the provisions of this Section 4(b), the conversion of the Units to Common Stock shall occur at the earliest date at which the Company reasonably anticipates issuing the Common Stock will not cause a violation of federal securities laws or other applicable law.  For purposes of this Section 4(b), the issuance of Common Stock that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not considered a violation of Applicable Law.
(c)    Delay of Issuance of Shares.  The Company shall delay the delivery of any shares of Common Stock under this Section 4 to the Grantee to the extent it deems necessary or appropriate to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “specified employees” of certain publicly-traded companies); in such event, any shares of Common Stock to which the Grantee would otherwise be entitled during the six (6) month period following the date of the Grantee’s termination of Continuous Service will be delivered on the first business day following the expiration of such six (6) month period.
5.    Right to Shares.  The Grantee shall not have any right in, to or with respect to any of the Shares (including any voting rights or rights with respect to dividends paid on the Common Stock) issuable under the Award until the Award is settled by the issuance of such Shares to the Grantee.
6.    Tax Liability.
(a)    Tax Liability.  The Grantee is ultimately liable and responsible for all taxes owed by the Grantee in connection with the Award and any Shares issued pursuant to it, regardless of any action the Company or any Related Entity takes with respect to any tax withholding obligations that arise in connection with the Award.  Neither the Company nor any Related Entity makes any representation or undertaking regarding the treatment of any tax withholding in connection with any aspect of the Award, including the grant and settlement of the Award and the subsequent sale of Shares issuable pursuant to the Award.  The Company does not commit and is under no obligation to structure the Award to reduce or eliminate the Grantee’s tax liability.
(b)    Payment of Withholding Taxes.  Prior to any event in connection with the Award that the Company determines may result in any tax withholding obligation, whether United States federal, state, local or non-U.S., including any employment tax obligation (the “Tax Withholding Obligation”), the Grantee must arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company.
(i)    By Share Withholding.  Unless the Grantee determines to satisfy the Tax Withholding Obligation by some other means in accordance with clause (ii) below, the Company shall withhold from those Shares issuable to the Grantee the whole number of Shares sufficient to satisfy the minimum applicable Tax Withholding Obligation.  The Grantee acknowledges that the withheld Shares may not be sufficient to satisfy the Grantee’s minimum Tax Withholding Obligation.  Accordingly, the Grantee agrees to pay to the Company or any Related Entity as soon as practicable, including through additional payroll withholding, any amount of the Tax Withholding Obligation that is not satisfied by the withholding of Shares described above.
(ii)    By Check, Wire Transfer or Other Means.  At any time not less than five (5) business days (or such fewer number of business days as determined by the Administrator) before any Tax Withholding Obligation arises, the Grantee may elect to satisfy the Grantee’s Tax Withholding Obligation by delivering to the Company an amount that the Company determines is sufficient to satisfy the Tax Withholding Obligation by (x) wire transfer to such account as the Company may direct, (y) delivery of a certified check payable to the Company, or (z) such other means as specified from time to time by the Administrator.
(c)    Notwithstanding the foregoing, the Company or a Related Entity also may satisfy any Tax Withholding Obligation by offsetting any amounts (including, but not limited to, salary, bonus and severance payments) payable to the Grantee by the Company and/or a Related Entity.  Furthermore, in the event of any determination that the Company has failed to withhold a sum sufficient to pay all withholding taxes due in connection with the Award, the Grantee agrees to pay the Company the amount of such deficiency in cash within five (5) days after receiving a written demand from the Company to do so, whether or not the Grantee is an employee of the Company at that time.
7.    Entire Agreement; Governing Law.  The Notice, the Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee.  These agreements are to be construed in accordance with and governed by the internal laws of the State of Nevada without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Nevada to the rights and duties of the parties.  Should any provision of the Notice or this Agreement be determined to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.
8.    Construction.  The captions used in the Notice and this Agreement are inserted for convenience and shall not be deemed a part of the Award for construction or interpretation.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
9.    Administration and Interpretation.  Any question or dispute regarding the administration or interpretation of the Notice, the Plan or this Agreement shall be submitted by the Grantee or by the Company to the Administrator.  The resolution of such question or dispute by the Administrator shall be final and binding on all persons.
10.    Venue and Waiver of Jury Trial.  The parties agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or this Agreement shall be brought in the United States District Court for the District of Nevada (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Nevada state court in Clark County, Nevada) and that the parties shall submit to the jurisdiction of such court.  The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING.  If any one or more provisions of this Section 10 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.
11.    Notices.  Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing from time to time to the other party.
12.    Amendment and Delay to Meet the Requirements of Section 409A.  The Grantee acknowledges that the Company, in the exercise of its sole discretion and without the consent of the Grantee, may amend or modify this Agreement in any manner and delay the issuance of any Shares issuable pursuant to this Agreement to the minimum extent necessary to meet the requirements of Section 409A of the Code as amplified by any Treasury regulations or guidance from the Internal Revenue Service as the Company deems appropriate or advisable.  In addition, the Company makes no representation that the Award will comply with Section 409A of the Code and makes no undertaking to prevent Section 409A of the Code from applying to the Award or to mitigate its effects on any deferrals or payments made in respect of the Units.  The Grantee is encouraged to consult a tax adviser regarding the potential impact of Section 409A of the Code.
END OF AGREEMENTex10_1-f8k03062012.htm

Exhibit 10.1

 

 

	EIGHTH AMENDMENT 

TO

LOAN AND SECURITY AGREEMENT

 

 

Eighth Amendment dated as of March 7, 2012 to Loan and Security Agreement (the "Eighth Amendment"), by and between SWANK, INC., a Delaware corporation (the "Borrower") and WELLS FARGO CAPITAL FINANCE, INC. (formerly Wells Fargo Foothill, Inc., the "Lender"), amending certain provisions of the Loan and Security Agreement dated as of June 30, 2004 (as amended and in effect from time to time, the "Agreement") by and between the Borrower and the Lender.  Terms not otherwise defined herein which are defined in the Agreement shall have the same respective meanings herein as therein.

WHEREAS, the Borrower and the Lender have agreed to modify certain terms and conditions of the Agreement as specifically set forth in this Eighth Amendment;

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

§1.           Amendment to Section 1 of the Agreement.  Section 1.1 of the Agreement is hereby amended as follows:

(a)           The definition of "Availability" set forth in Section 1.1 of the Agreement is hereby amended by inserting immediately at the end of the text of such definition the words "minus all book overdrafts of Borrower and its Subsidiaries in excess of historical practices with respect thereto".

(b)           The definition of "Base Rate Margin" set forth in Section 1.1 of the Agreement is hereby amended by deleting the amount "0.50" which appears in such definition and substituting in place thereof the amount "0.25".

(c)           The definition of "Borrowing Base" set forth in Section 1.1 of the Agreement is hereby amended by deleting such definition in its entirety and restating it as follows:

   "Borrowing Base" means, as of any date of determination, the result of:

   (a)            85% of the amount of Eligible Accounts, less the amount, if any of the Dilution Reserve, plus

   (b)            the lowest of

 

      (i)    $13,000,000 (the "Inventory Cap"), provided, however, to the extent that the ratio of Eligible Accounts to Eligible Inventory is less than 1.25:1.00 at any time, then the Inventory Cap shall be reduced to an

 

  

 

  

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amount which would permit the Borrower to comply with such ratio during such applicable period,

     (ii)           60% of the value of Eligible Inventory (such amount of Eligible Inventory being hereinafter referred to as the "Available Inventory", provided, for the avoidance of doubt, to the extent the advance rate applicable to such Eligible Inventory is changed pursuant to the terms of this Agreement, "Available Inventory" shall mean such revised percentage of the value of Eligible Inventory at the relevant date of determination), and

 

               (iii)           85% times the Net Liquidation Percentage times the book value of Borrower's Inventory, minus

(c)           the sum of (i) the Bank Product Reserve, and (ii) the aggregate amount of reserves, if any, established by Lender under Section 2.1(b).

  

 (d)           The definition of "EBITDA" contained in Section 1.1 of the Agreement is hereby amended by deleting such definition in its entirety and restating it as follows:

"EBITDA" means, with respect to any fiscal period, Borrower’s and its Subsidiaries’ consolidated net earnings (or loss), minus extraordinary gains and interest income, plus, to the extent deducted in the calculation of consolidated net earnings,  interest expense, income taxes, and depreciation and amortization for such period, plus, to the extent deducted in the calculation of EBITDA, the non-cash expenses associated with any stock based compensation, up to an aggregate amount of not more than $1,000,000 in any fiscal year, as determined in accordance with GAAP.

(e)           The definition of "Eligible Accounts" contained in Section 1.1 of the Agreement is hereby amended by (i) deleting the words "and (ii) Accounts owing from the Burlington Coat Factory" which appear in paragraph (a) of such definition and substituting in place thereof the words "(ii) Accounts owing from Costco with selling terms of not more than 70 days; and (iii) Accounts owing from the Burlington Coat Factory"; (ii) deleting the words "Federated and The May Department Stores Company on a combined basis (hereinafter referred to on such combined basis as "Federated/May")" which appear in paragraph (i)(i) of such definition and substituting in place thereof the words "Macy's Corporation"; (iii) deleting the amount "20%" which appears in paragraph (i)(iii) of such definition and substituting in place thereof the amount "25%"); and (iv) deleting the words "Federated/May" which appears in paragraph (i)(iv) of such definition and substituting in place thereof the words "Macy's Corporation".

(f)           The definition of "Eligible Inventory" contained in Section 1.1 of the Agreement is hereby amended by (i) inserting immediately after the words "held for sale in the ordinary course of Borrower's business" which appears in the first sentence of such definition the words "and that does not constitute retail inventory"; and (b) deleting all of the text which follows the words "set forth on Schedule E-1" in paragraph (b) of such definition.

 

  

 

  

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(g)           The definition of "Excess Availability" contained in Section 1.1 of the Agreement is hereby amended by deleting such definition in its entirety.

(h)           The definition of "Fee Letter" contained in Section 1.1 of the Agreement is hereby amended by deleting such definition in its entirety and restating it as follows:

"Fee Letter" means that certain amended and restated fee letter, dated as of March 7, 2012, between Borrower and Lender, in form and substance satisfactory to Lender.

(i)           The definition of "LIBOR Rate Margin" contained in Section 1.1 of the Agreement is hereby amended by deleting the amount "2.25" which appears in such definition and substituting in place thereof the amount "2.00".

(j)           The definition of "Permitted Holders" contained in Section 1.1 of the Agreement is hereby amended by (i) deleting the names "Marshall Tulin" and "Raymond Vise" from such definition and (ii) inserting immediately after the name "James Tulin," the name "Jerold K. Kassner,".

(k)           The definition of "Permitted Investments" contained in Section 1.1 of the Agreement is hereby amended by deleting such definition in its entirety and restating it as follows:

"Permitted Investments" means (a) Investments in cash and Cash Equivalents; (b) Investments in negotiable instruments for collection or deposit; (c) advances or prepayments made in connection with purchases of goods or services in the ordinary course of business consistent with past practices; (d) Investments received in settlement of amounts due to Borrower or any of its Subsidiaries effected in the ordinary course of business or owing to Borrower or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of Borrower or its Subsidiaries; (e) Investments existing on the Closing Date and set forth on Schedule PI-1 hereto; (f) Investments consisting of the granting of trade credit in the ordinary course of business consistent with past practices; (g) Investments consisting of advances to employees in the nature of draws against commissions made in the ordinary course of business consistent with past practices, provided, the aggregate amount of all such Investments do not exceed $40,000 per month per employee at any time; (h) Investments consisting of expense advances to employees in the ordinary course of business consistent with past practices, provided no single expense advance exceeds $1,000; (i) Investments consisting of obligations of Account Debtors to Borrower arising from amounts owing on past due Accounts and which amounts are evidenced by a written promissory note from such Account Debtor to Borrower, provided all actions necessary to perfect Lender's security interest in such note have been taken (including such original note being endorsed to Lender and delivered to Lender); and (j) so long as no Default or Event of Default has occurred and is continuing, Investments by Borrower (i) in The New Swank Inc. Retirement Plan consisting of advances and other Distributions made by Borrower to The New

  

 

  

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Swank Inc. Retirement Plan, the proceeds of which are used by The New Swank Inc. Retirement Plan to repurchase from employees and former employees of Borrower shares of the Stock of Borrower owned by such employee and (ii) consisting of advances or other Distributions to employees and former employees of Borrower to repurchase from such employees shares of the Stock of Borrower owned by such employee, provided, (x) the aggregate amount of such Investment shall not exceed the amount set forth in Section 7.10 hereof; and (y) the Borrower's Availability both before and after making such Investment is not less than $3,000,000.

(l)           The definition of "Permitted Purchase Money Indebtedness" contained in Section 1.1 of the Agreement is hereby amended by deleting the amount "$250,000" which appears in such definition and substituting in place thereof the amount "$500,000".

(m)           The definition of "Required Availability" contained in Section 1.1 of the Agreement is hereby amended by deleting such definition in its entirety.

(n)           Section 1.1 of the Agreement is further amended by inserting the following definitions in the appropriate alphabetical order:

"Appraisal Test Period" means, initially the period commencing on the Closing Date and ending eighteen months after the Closing Date (such eighteen month period being a "Test Period"), and thereafter each eighteen month period commencing on the date when the immediately preceding Test Period has ended and ending eighteen months thereafter.

"Average Cash Dominion Availability" means, as of any date of determination, Borrower's average Availability based on the most recent trailing ten day period ended on such date of determination.

"Cash Dominion Event" means any of the following:  (a) the occurrence of Borrower's Average Cash Dominion Availability as of any date of determination being less than $8,000,000, (b) the occurrence of the Borrower's Availability as at any date being less than $6,000,000 or (c) the occurrence of any Event of Default.

"Cash Dominion Unwind Event" has the meaning set forth in Section 2.6(e).

§2.           Amendment to Section 2 of the Agreement.  Section 2 of the Agreement is hereby amended as follows:

(a)           Section 2.1(b) of the Agreement is hereby amended by deleting the words "provided, however so long as no Default or Event of Default has occurred and is continuing hereunder, the Borrower shall only be obligated to pay for two such reappraisals in each calendar year" which appear at the end of Section 2.1(b) and substituting in place thereof the words "provided, however so long as no Default or Event of Default has occurred and is continuing hereunder, (x) to the extent Borrower's Availability is greater than $8,000,000 at all times during each applicable Appraisal Test Period, Borrower shall only be obligated to pay for

  

 

  

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one such reappraisal during such Appraisal Test Period and (y) otherwise, Borrower shall only be obligated to pay for two such reappraisals during such Appraisal Test Period."

(b)           Section 2.1(c) of the Agreement is hereby amended by deleting the last sentence of Section 2.1(c) in its entirety.

(c)           Section 2.4 of the Agreement is hereby amended by deleting the parenthetical "(including, without limitation, if any time the Unused Availability Amount is less than $3,000,000)" which appears in the first sentence of Section 2.4.

(d)           Section 2.6(a) of the Agreement is hereby amended by (i) inserting at the beginning of such paragraph the words "From and after the occurrence of the Cash Dominion Event,"; and (ii) deleting the words "set forth on Schedule 2.6(a)" which appears in paragraph (a)(i) of Section 2.6 and substituting in place thereof the words "reasonably acceptable to Lender".

(e)           Section 2.6(c) of the Agreement is hereby amended by deleting the words "amend Schedule 2.6(a) to" which appear in the first sentence of Section 2.6(c).

(f)           Section 2.6 of the Agreement is further amended by inserting immediately after the end of the text of Section 2.6(d) the following new paragraphs:

(e)           To the extent a Cash Dominion Event occurs causing Borrower to comply with the provisions of this Section 2.6 and, subsequent thereto, Borrower's Average Cash Dominion Availability as at each date of determination is greater than $8,000,000 and Borrower's Availability as at such date of determination is greater than $6,000,000 (such occurrence being hereinafter referred to as a "Cash Dominion Unwind Event"), then, from and after the occurrence of such Cash Dominion Unwind Event until another Cash Dominion Event occurs, Borrower shall no longer be required to comply with the cash management requirements contained in this Section 2.6(a) and (b), provided, there shall not be more than four rescissions of the cash management requirements contained in this Section 2.6 based on a Cash Dominion Unwind Event during the life of this Agreement.

 

(f)           At all times from and after the Closing Date, whether or not a Cash Dominion Event has occurred, all of Borrower's Securities Accounts and Deposit Accounts shall be subject to the first priority perfected security interest of Lender, including subject to a Control Agreement.

 

(g)           Section 2.10(c) of the Agreement is hereby amended by deleting the words "the Borrower shall only be obligated to pay for four audits and four appraisals (but only two full appraisals consisting of site visits and two desktop appraisals) in any calendar year" which appear in Section 2.10(c) and substituting in place thereof the words "(x) to the extent Borrower's Availability is greater than $8,000,000 at all times during a calendar year, Borrower shall only be obligated to pay for one audit in such calendar year and (y) otherwise, Borrower shall only be obligated to pay for two audits in such calendar year".

 

 

  

 

  

-6-

 

(h)           Section 2.11(d) of the Agreement is hereby amended by deleting the words "agreed by Borrower that, as of the Closing Date, the issuance charge imposed by the prospective Underlying Issuer is .825% per annum times the face amount of such Underlying Letter of Credit" and substituting in place thereof the words "agreed by Borrower that any such issuance charge imposed by the prospective Underlying Issuer is being based on its customary and prevailing rates at the time of such issuance".

§3.           Amendment to Section 3 of the Agreement.  Section 3 of the Agreement is hereby amended as follows:

(a)           Section 3.4 of the Agreement is hereby amended by deleting the date "June 29, 2012" which appears in Section 3.4 and substituting in place thereof the date "June 30, 2013".

(b)           Section 3.6 of the Agreement is hereby amended by deleting Section 3.6 in its entirety and restating it as follows:

3.6           Early Termination by Borrower.  Borrower has the option, at any time upon 10 days prior written notice to Lender, to terminate this Agreement by paying to Lender, in cash, the Obligations (including (a) either (i) providing cash collateral to be held by Lender in an amount equal to 105% of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to be returned to Lender, and (b) providing cash collateral (in an amount determined by Lender as sufficient to satisfy the reasonably estimated credit exposure) to be held by Lender for the benefit of the Bank Product Providers with respect to the Bank Product Obligations) (in each cash pursuant to a cash collateral agreement satisfactory to the Lender (with such cash collateral agreement providing for the return of such cash collateral upon all Obligations being indefeasibly repaid in full in cash)), in full on the date this Agreement is scheduled to terminate as provided for in such notice.  Upon the termination of this Agreement pursuant to a notice of termination given pursuant to the provisions of this Section, then Lender’s obligations to extend credit hereunder shall terminate and Borrower shall be obligated to repay the Obligations (including (a) either (i) providing cash collateral to be held by Lender in an amount equal to 105% of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to be returned to Lender, and (b) providing cash collateral (in an amount determined by Lender as sufficient to satisfy the reasonably estimated credit exposure) to be held by Lender for the benefit of the Bank Product Providers with respect to the Bank Product Obligations), in full, on such date of termination.

 

§4.           Amendment to Section 6 of the Agreement.  Section 6.2 of the Agreement is hereby amended by deleting Section 6.2 in its entirety and restating it as follows:

6.2           Collateral Reporting.  Provide Lender with the following documents at the following times in form satisfactory to Lender:

 

 

	   Daily*	
(a) an accounts receivable activity report and supporting schedules, including a sales journal, collection journal, and credit register since the last such schedule, a report regarding credit 

 

 

  

 

  

 

-7-

 

	 	
memoranda that have been issued since the last such report,

 

(b) notice of all claims, offsets, or disputes asserted by Account Debtors with respect to Borrower’s and its Subsidiaries’ Accounts.

 

 

*To the extent the average Availability as at any date of determination based on the most recent trailing ten day period ending on such date of determination exceeds $8,000,000, then the items set forth herein shall only be required to be delivered weekly.

 

	
Weekly*

	
(c) Inventory system/perpetual reports specifying the standard cost and the Borrower's selling price of its Inventory, by category, with additional detail showing additions to and deletions therefrom, with such reports being delivered by Borrower to Lender electronically in a format acceptable to Lender.

 

(d) detailed information as to any intercompany activity among the Borrower and its Subsidiaries of a financial nature or relating to assets.

 

*To the extent the average Availability exceeds $8,000,000, then the items set forth in (c) herein shall only be required to be delivered bi-weekly.

 

 

 

 

  

 

  

 

-8-

 

	
Monthly (not later than the 

15th day of each month)

	
(e) a detailed calculation of the Borrowing Base,

 

(f) a detailed aging, by total, of the Accounts of Borrower, together with a reconciliation to the detailed calculation of the Borrowing Base  previously provided to Lender,

 

(g) a summary aging, by vendor, of Borrower’s and its Subsidiaries’ accounts payable and any book overdraft together with a summary of any held checks and an aging by vendor,

 

(h) a detailed summary of the Borrower's Inventory, together with a reconciliation to the detailed calculation of the Borrowing Base previously provided to Lender, and a summary of Inventory by class, with such reports being delivered by Borrower to Lender electronically in a format acceptable to Lender;

 

(i) a detailed report regarding Borrower and its Subsidiaries’ cash and Cash Equivalents including an indication of which amounts constitute Qualified Cash;

 

(j) a detailed calculation of those Accounts which do not constitute Eligible Accounts for purposes of the Borrowing Base;

 

(k) a detailed calculation of Inventory that does not constitute Eligible Inventory for purposes of the Borrowing Base; and

 

(l) a monthly Accounts rollforward in a format acceptable to Lender in Lender's sole discretion (with the beginning and ending Account balances used in such report being tied to Borrower's general ledger).

	 	 
	
Quarterly

	
(m) Intentionally Omitted.

	 	 
	
Upon request by Lender

	   (n) copies of invoices and purchase orders in connection with Inventory and Equipment acquired by Borrower or its Subsidiaries; 

 

(o) a detailed list of Borrower's and its Subsidiaries' customers, with address and other contact information;

 

(p) invoices, their corresponding shipping and delivery documents, and credit memos, their corresponding supporting documentation, above an amount determined in the sole discretion of Lender, from time to time;

 

(q) proof of payment by Borrower and its Subsidiaries of all applicable taxes and other charges (including, without limitation, payment of Real Estate taxes, ad valorem and foreign taxes), together with a report regarding Borrower's and its Subsidiaries'

 

 

  

 

  

 

-9-

 

	 	   accrued, but unpaid, ad valorem taxes; and 

 

(r) such other reports as to the Collateral or the financial condition of Borrower and its Subsidiaries, as Lender may request.

	 	 

 

In addition, Borrower agrees to cooperate fully with Lender to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth above.

§5.           Amendment to Section 7 of the Agreement.  Section 7 of the Agreement is hereby amended as follows:

(a)           Section 7.10 of the Agreement is hereby amended by deleting Section 7.10 in its entirety and restating it as follows:

           7.10.           Restricted Payments.  Make any Restricted Payment, provided, however, so long as no Default or Event of Default has occurred and is continuing or would exist as a result thereof, Borrower shall be permitted to make a Restricted Payment either (a) to The New Swank Inc. Retirement Plan consisting of advances or other Distributions made by Borrower to The New Swank Inc. Retirement Plan, the proceeds of which are used by The New Swank Inc. Retirement Plan to repurchase from employees and former employees of Borrower shares of the Stock of Borrower owned by such employees or former employees, as applicable or (b) to employees and former employees of the Borrower to repurchase from such employees or former employees, as applicable, shares of the Stock of Borrower owned by such employee, provided, in each case (x) the aggregate amount of all such Restricted Payments made pursuant to this Section 7.10(a) in any fiscal year shall not exceed $1,000,000; and (y) the Borrower's Unused Availability Amount both before and after making such Restricted Payment is not less than $3,000,000.

 

(b)           Section 7.18(a) of the Agreement is hereby amended by deleting Section 7.18(a) in its entirety and restating it as follows:

(a)           Minimum EBITDA:  Fail to maintain or achieve EBITDA, measured on a month-end basis, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

 

	
Applicable Amount

	
Applicable Period

	  	  
	
An amount determined equal to the EBITDA set forth for the relevant period as set forth in the Projections delivered 

	
For the 12 month period

ending July 31, 2011 and each calendar month thereafter.

 

 

  

 

  

 

 

-10-

 

 

	 pursuant to Section 6.3(c) minus $1,500,000.	 

 

(c)           Section 7.18(b) of the Agreement is hereby amended by deleting Section 7.18(b) in its entirety and restating it as follow:

(b)           Capital Expenditures.  Make Capital Expenditures in any fiscal year in excess of $1,000,000, provided, the Borrower shall also be permitted to make an additional amount of Capital Expenditures in an amount not in excess of $2,000,000 in the aggregate over the life of this Agreement so long as such Capital Expenditures relate solely to the upgrade of Borrower's enterprise resource planning system).

 

(d)           Section 7.18(c) of the Agreement is hereby amended by deleting the amount "$2,000,000" which appears in Section 7.18(c) and substituting in place thereof the amount "$1,000,000".

§6.           Amendment to Section 12 of the Agreement.  Section 12 of the Agreement is hereby amended by deleting the addresses contained in Section 12 and substituting in place thereof the following:

	
If to Borrower:

	
SWANK, INC.

	  	
656 Joseph Warren Boulevard

	  	
Taunton, Massachusetts  02780

	  	
Attn:  Jerold R. Kassner, Chief Financial Officer

	  	
Fax No.  508-977-4403

	  	  
	
with copies to:

	
SWANK, INC.

	  	
90 Park Avenue

	  	
New York, New York  10016

	  	
Attn:  John Tulin, President

	  	
Fax No.  212-867-0203

	  	  
	
with copies to:

	
TROUTMAN SANDERS LLP

	  	
405 Lexington Avenue

	  	
New York, New York  10174

	  	
Attn:  William D. Freedman, Esq.

	  	
Fax No.  212-704-5935

	  	  
	
If to Lender:

	
WELLS FARGO CAPITAL FINANCE, INC.

	  	
One Boston Place, 18th Floor

	  	
Boston, Massachusetts  02108

	  	
Attn:  Business Finance Manager

	  	
Fax No.: 617-523-1697

	  	  
	
with copies to:

	
BINGHAM MCCUTCHEN LLP

	  	
One Federal Street

	  	
Boston, Massachusetts  02110

 

 

  

 

  

 

-11-

 

	 	Attn:  Marion Giliberti Barish, Esq.
	 	Fax No.:  617-951-8736
	 	 
	 	 

 

 

§7.           Conditions to Effectiveness.  This Eighth Amendment shall not become effective until the Lender receives the following:

(a)           a counterpart of this Eighth Amendment and the restated Fee Letter, each executed by the Borrower and the Lender; and

(b)           payment to the Lender of the fees contemplated by the Fee Letter.

§8.           Representations and Warranties.  The Borrower hereby repeats, on and as of the date hereof, each of the representations and warranties made by it in Section 5 of the Agreement (except to the extent of changes resulting from transactions contemplated or permitted by the Agreement and the other Loan Documents and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and to the extent that such representations and warranties relate expressly to an earlier date), provided, that all references therein to the Agreement shall refer to such Agreement as amended hereby.  In addition, the Borrower hereby represents and warrants that the execution and delivery by the Borrower of this Eighth Amendment and the performance by the Borrower of all of its agreements and obligations under the Agreement  as amended hereby are within the authority of the Borrower and have been duly authorized by all necessary action on the part of the Borrower.

§9.           Ratification, Etc.  Except as expressly amended hereby, the Agreement, the other Loan Documents and all documents, instruments and agreements related thereto are hereby ratified and confirmed in all respects and shall continue in full force and effect.  The Agreement and this Eighth Amendment shall be read and construed as a single agreement.  All references in the Agreement or any related agreement or instrument to the Agreement shall hereafter refer to the Agreement as amended hereby.

§10.           No Waiver.  Nothing contained herein shall constitute a waiver of, impair or otherwise affect any Obligations, any other obligation of the Borrower or any rights of the Lender consequent thereon.

§11.           Counterparts.  This Eighth Amendment may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

§12.           Governing Law.  THIS EIGHTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF LAWS).

  

 

  

IN WITNESS WHEREOF, the parties hereto have executed this Eighth Amendment as a document under seal as of the date first above written.

 

 

	 	 	
SWANK, INC.

	 	 
	 	 	 	 	 

 

	 	 	 	 	 
	 	 	By: 	 	/s/Jerold R. Kassner	 
	 	 	 	 Name:	Jerold R. Kassner
	 	 	 	 Title:	Executive Vice President

 

 

	 	 	
WELLS FARGO CAPITAL FINANCE, INC.,

	 	 
	 	 	
a California corporation, as Lender

	 	 

 

	 	 	 	 	 
	 	 	By:	 	/s/Andrew J. Currie	 
	 	 	 	Name:	Andrew J. Currie 
	 	 	 	Title:	VP

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