Exhibit
10.01
THIRD AMENDMENT TO REVOLVING LOAN AGREEMENT,
PROMISSORY NOTE AND OTHER LOAN DOCUMENTS
AGREEMENT, made this 22nd day of September 2006 (this
“Agreement”) between JACLYN, INC.
(“Borrower”), a corporation organized and existing
pursuant to the laws of the State of Delaware, having an address at
635 59th Street, West New York, New Jersey 07093 (hereinafter
referred to as, “Borrower”) and TD BANKNORTH,
N.A. , successor by merger to HUDSON UNITED BANK (hereinafter
referred to as, “Lender”) located at 1000 MacArthur
Boulevard, Mahwah, New Jersey 07430.
W I T N E S S E T H:
WHEREAS:
A.
Borrower entered into a revolving loan agreement with Hudson United
Bank (Hudson) on December 23, 2002 and pursuant to such revolving
loan agreement, Borrower executed and delivered to Hudson its
promissory note in the original principal amount of THIRTY-TWO
MILLION AND 00/100 (32,000,000.00) DOLLARS dated December 23,
2002 (the “Revolving Note”);
B.
Borrower subsequently requested that Hudson increase the amount of
funds available under the Revolving Loan from “ THIRTY-TWO
MILLION AND 00/100 (32,000,000.00) DOLLARS” to
“FORTY MILLION AND 00/100 (40,000,000.00) DOLLARS,
” extend the maturity date of the Revolving Loan and
Revolving Note from “December 1, 2004” to
“December 1, 2005,” increase the amount of the
direct debt sub-limit under the Revolving Loan from
“$22,000,000.00” to
“$25,000,000.00,” increase the over-advance
limit from “ $5,000,000.00” to “
$8,000,000.00” for the period July 31st through
November 30th and make certain other modifications and changes to
the terms and conditions of the aforementioned revolving loan
agreement;
C.
Hudson agreed to increase the amount of funds available under the
Revolving Loan from “ THIRTY-TWO MILLION AND 00/100
(32,000,000.00) DOLLARS” to “FORTY MILLION AND
00/100 (40,000,000.00) DOLLARS, ” to extend the maturity
date of the Revolving Loan and Revolving Note from
“December 1, 2004” to “December 1,
2005,” to increase the amount of the direct debt
sub-limit under the Revolving Loan from “
$22,000,000.00” to “
$25,000,000.00,” to increase the over-advance limit
from “ $5,000,000.00” to “
$8,000,000.00” for the period July 31st through
November 30th and to make certain other modifications and changes
to the terms and conditions of the aforementioned revolving loan
agreement strictly in accordance with the terms and conditions of a
first amendment to revolving loan agreement, promissory note and
other loan documents dated October 23, 2003 (the revolving loan
agreement dated December 23, 2002 as amended by the first amendment
to revolving loan agreement, promissory note and other loan
documents dated October 23, 2003 are hereinafter collectively
referred to as, the “Loan Agreement”);
D.
In connection with the first amendment, Borrower executed and
delivered to Hudson its promissory note dated October 23, 2003 in
the original principal amount of $40,000,000.00 (the
“Restated Secured Revolving Note”);
E.
Borrower again requested that Hudson continue to provide financing
under the Revolving Loan, extend the maturity date of the Revolving
Loan and Restated Secured Revolving Note from “December 1,
2005” to “December 1, 2007,” modify
the interest rate on Advances and otherwise modify the terms and
conditions of the aforementioned revolving loan
agreement;
F.
Hudson agreed to continue to provide financing under the Revolving
Loan, to extend the maturity date of the Revolving Loan and
Restated Secured Revolving Note from “December 1,
2005” to “December 1, 2007,” to modify
the interest rate on Advances and to otherwise modify the terms and
conditions of the aforementioned revolving loan agreement in
accordance with the terms and conditions of a second amendment to
revolving loan agreement, promissory note and other loan documents
dated May 5, 2005 (the revolving loan agreement dated December 23,
2002 as amended by the first amendment to revolving loan agreement,
promissory note and other loan documents dated October 23, 2003 and
the second amendment to revolving loan agreement, promissory note
and other loan documents dated May 5, 2005 are hereinafter
collectively referred to as, the “Loan
Agreement”);
G.
Borrower has now requested that Lender increase the amount of funds
available under the Revolving Loan from “ FORTY MILLION
AND 00/100 (40,000,000.00) DOLLARS” to “FIFTY
MILLION AND 00/100 (50,000,000.00) DOLLARS, ” extend the
maturity date of the Revolving Loan and Restated Revolving Note
from “December 1, 2007” to “December 1,
2008,” increase the amount of the direct debt sub-limit
under the Revolving Loan from “ $25,000,000.00”
to “$30,000,000.00,” increase the over-advance
limit from “ $8,000,000.00” to “
$12,000,000.00” for the period June 30th through
October 31 st , release Investments (JLN) Ltd. and
Josell Global Sourcing Ltd. (which are no longer in existence) from
their respective guaranties of the obligations of Borrower to
Lender and to make certain other modifications and changes to the
terms and conditions of the Loan Agreement; and
H.
Lender has agreed to increase the amount of funds available under
the Revolving Loan from “ FORTY MILLION AND 00/100
(40,000,000.00) DOLLARS” to “FIFTY MILLION AND
00/100 (50,000,000.00) DOLLARS, ” to extend the maturity
date of the Revolving Loan and Restated Revolving Note from
“December 1, 2007” to “December 1,
2008,” to increase the amount of the direct debt
sub-limit under the Revolving Loan from “
$25,000,000.00” to “
$30,000,000.00,” to increase the over-advance limit
from “ $8,000,000.00” to “
$12,000,000.00” for the period June 30th through
October 31 st , to release Investments (JLN) Ltd. and
Josell Global Sourcing Ltd. from their respective guaranties of the
obligations of Borrower to Lender and to make certain other
modifications and changes to the terms and conditions of the Loan
Agreement strictly as set forth in this Agreement.
NOW THEREFORE , in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereto agree as
follows:
1.
In connection with Lender’s agreement to increase the amount
of funds available under the Revolving Loan, Borrower has this date
executed and delivered to Lender its promissory note in the
original principal amount of FIFTY MILLION AND
00/100(50,000,000.00) DOLLARS in the form attached hereto as
Schedule A (hereinafter, the “Second Restated Secured
Revolving Note”) which note shall replace and supersede, but
shall not be considered a repayment of, the Restated Secured
Revolving Note. Any and all interest due and owing under the
Restated Secured Revolving Note and any further amounts evidenced
by the Restated Secured Revolving Note shall hereafter be evidenced
by the Second Restated Secured Revolving Note and any unpaid
interest under the under the Restated Secured Revolving Note shall
be payable on the first payment date on the Second Restated Secured
Revolving Note.
2.
Section 1.24 of the Loan Agreement is amended to read as
follows:
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“1.24.
“Guarantor” shall mean JLN, INC., Bonnie
International (Hong Kong) Ltd., The Bag Factory Inc., Max N.
Nitzberg, Inc., Topsville, Inc., and any other Person who shall, at
any time, agree to be a guarantor or surety for
Borrower.
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3.
Section 1.30 of the Loan Agreement is amended to read as
follows:
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“1.30.
“Loan Interest Rate” shall mean the Prime
Rate until January 31, 2006 and thereafter the “Base
Rate” (as hereinafter defined) of Lender. The “Base
Rate” shall mean the fluctuating rate of interest announced
from time to time by Lender as its “Base Rate.” Any
interest that has the Base Rate as a factor will change immediately
upon Lender’s announcement of its new rate. The Base Rate is
not necessarily the lowest rate charged by Lender on its loans and
is set by Lender in its sole discretion. If the Base Rate index
becomes unavailable during the term of the Loan, Lender may
designate a substitute index. Interest shall be computed by the
Bank on the basis of actual days elapsed, divided by a 360-day
year.
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4.
Section 1.39 of the Loan Agreement is amended to read as
follows:
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“1.39.
“Prime Rate” means the fluctuating rate
of interest, which is determined periodically, announced from time
to time by Hudson United Bank as its “Prime
Rate.”
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5.
Section 1.47 of the Loan Agreement is amended to read as
follows:
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“1.47.
“Termination Date” shall mean the earlier of
December 1, 2008, or the date on which Lender terminates this
Agreement pursuant to Section 12.1 of this
Agreement.”
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6.
Section 2.1 of the Loan Agreement is amended to read as
follows:
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“2.1.
Advances . Subject to the terms and conditions of this
Agreement including, without limitation, the Maximum Facility and
relying upon the representations and warranties set forth in this
Agreement, for so long as no Default or Event of Default shall have
occurred and shall be continuing, Lender shall make Advances to
Borrower on its request, from time to time during the term of this
Agreement in an amount (“Borrowing Capacity”) not to
exceed at any one time outstanding the lesser of:
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(a)
THIRTY MILLION and 00/100 (30,000,000.00) DOLLARS, or
(b)
the sum of (i) eighty-five (85) percent of the face amount of
Borrower’s Eligible Receivables, (ii) fifty (50) percent of
the Value of Borrower’s Eligible Inventory, and (iii) fifty
(50) percent of the outstanding face amount of Letters of Credit
issued under this Agreement,
plus in each case, for the period
from June 30th through October 31st only $12,000,000.00, provided
an officer of Borrower submits to Lender an Authenticated Record
within twenty (20) days of the end of June, July, August, September
and October certifying that sixty-five (65) percent of the Value of
all Eligible Inventory is subject to confirmed bona fide purchase
orders with unrelated third parties. Value shall mean the lower of
cost or the fair market value of such Inventory, as reflected on
the books and records of Borrower.
For
the purpose of calculating the Borrowing Capacity under
Subsection 2.1(b) , the face amount of all Letters of Credit
shall be deducted from such sum. Within the limits of the Borrowing
Capacity, and subject to the limitations set forth in this
Agreement, Borrower may borrow, repay and re-borrow
Advances.”
7.
Article 2.A of the Loan Agreement is amended to read as
follows:
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“2.A
Letters of Credit. At the request of Borrower or a
Guarantor, and upon execution of Lender’s customary Letter of
Credit documentation, Lender shall issue Letter(s) of Credit on
behalf of Borrower or a Guarantor. The Letters of Credit shall be
on terms mutually acceptable to Lender and Borrower or the
Guarantor, as the case may be, and no Letter of Credit shall have
an expiration date later than ninety (90) days after the
Termination Date and shall not contain an evergreen clause or any
other automatic renewal provision. Any drawing under the Letter of
Credit shall be deemed an Advance made to Borrower, without request
therefore, immediately upon payment on any such draft or drawing.
In connection with the issuance of a Letter of Credit, Borrower
shall pay to Lender issuance, wire, discrepancy and other fees as
agreed to by Borrower and Lender. If there is any dispute between
the beneficiary and Borrower or the Guarantor regarding the terms
and conditions of any Letter of Credit or the issuance or the
payment of any drawing(s) under any such Letter of Credit, any such
dispute shall be solely between the beneficiary and Borrower and/or
the Guarantor and Borrower shall be obligated to pay to Lender any
and all amounts paid by Lender, in the absence of Lender’s
gross negligence or willful misconduct, to the beneficiary of the
Letter of Credit without any defense, counterclaim or set-off, all
of which are expressly waived.
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Subject
to the terms and conditions of this Agreement, for so long as no
Event of Default shall exist and be continuing, Lender shall issue
Letters of Credit in its discretion at the request of Borrower or a
Guarantor having an aggregate outstanding face amount equal to the
lesser of (a) the Maximum Facility or (b) the amount calculated in
accordance with Subsection 2.1(b) . The sum calculated in
accordance with clause (b) of the immediately preceding sentence
shall be reduced by the outstanding principal balance of all
Revolving Loans as they may vary from time to time.
Lender
has previously issued Letters of Credit for the account of
Borrowe
