FOLLOWING
ASSERTION OF THE CLAIM AGAINST THE INDEMNIFIED PARTIES FOR WHICH INDEMNIFICATION
OR EXONERATION IS SOUGHT (IT BEING UNDERSTOOD THAT THE FOREGOING SHALL NOT
REQUIRE THE INDEMNIFIED PARTIES TO BRING ANY CLAIM OR ACTION WITHIN SUCH TWO (2)
YEAR PERIOD IF A LONGER STATUTE APPLIES).
(B)
THE BORROWER SHALL TAKE ALL APPROPRIATE RESPONSE ACTIONS,
INCLUDING ANY REMOVAL AND REMEDIAL ACTION, IN THE EVENT OF A RELEASE, EMISSION,
DISCHARGE OR DISPOSAL OF ANY HAZARDOUS MATERIALS IN VIOLATION OF APPLICABLE LAW
ON, UPON, UNDER, INTO OR ABOUT ANY PROPERTY AT ANY TIME, OWNED, LEASED OR
OPERATED BY THE BORROWER SO AS TO (A) REMAIN IN COMPLIANCE WITH SUBSECTION 3.18
AND (B) KEEP ALL PROPERTY AT ANY TIME OWNED, LEASED OR OPERATED BY THE BORROWER
FREE FROM AND UNCONTAMINATED BY HAZARDOUS MATERIALS AND IN COMPLIANCE WITH
APPLICABLE ENVIRONMENTAL LAWS, THE FAILURE TO COMPLY WITH WHICH IS REASONABLY
LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.
5.10.
MANDATORY REPAYMENT OF OUTSTANDING REVOLVING CREDIT LOANS IN EXCESS
OF WORKING CAPITAL; PREPAYMENT FROM PROCEEDS OF ASSET SALES.
(A)
IF AS OF THE LAST DAY OF ANY FISCAL QUARTER THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING CREDIT LOANS EXCEEDS THE
BORROWER'S WORKING CAPITAL, THE BORROWER WILL WITHIN FIVE (5) BANKING DAYS REPAY
THE REVOLVING CREDIT NOTES, WITHOUT PENALTY OR PREMIUM (OTHER THAN THE LIBOR
PREMIUMS, IF APPLICABLE, PROVIDED THAT THE LENDERS AGREE THAT ANY SUCH
REPAYMENTS SHALL BE APPLIED TO REPAYMENT IN FULL OF BASE RATE LOANS PRIOR TO
APPLICATION TO ANY LIBOR PORTIONS), IN AN AMOUNT NECESSARY TO CAUSE THE
OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING CREDIT LOANS NOT TO EXCEED THE
BORROWER'S WORKING CAPITAL AS OF THE LAST DAY OF SUCH FISCAL QUARTER.
TO THE
EXTENT ANY SUCH PAYMENT IS MADE WITHIN FIVE (5) BANKING DAYS, ANY DEFAULT AS A
RESULT OF A BREACH OF SUBSECTION 7.3 HEREOF SHALL BE DEEMED TO HAVE BEEN CURED.
(B)
WITHOUT LIMITING THE PROVISIONS OF SUBSECTION 6.8 BELOW, THE
BORROWER WILL PREPAY ALL OF THE REVOLVING CREDIT LOANS (WITH PROCEEDS TO BE
APPLIED AS SET FORTH BELOW) IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF
ALL PROCEEDS OF ASSET SALES (OTHER THAN SALES OF INVENTORY) IN EXCESS OF
$250,000 PER FISCAL YEAR, IMMEDIATELY UPON RECEIPT BY THE BORROWER OF SUCH
PROCEEDS.
AMOUNTS PAID TO THE LENDERS PURSUANT TO THE PRECEDING SENTENCE WILL
NOT REDUCE THE MAXIMUM LINE COMMITMENT AND MAY BE REBORROWED BY THE BORROWER
PURSUANT TO THE TERMS HEREOF.
(C)
ANY PREPAYMENTS OF THE LOANS SHALL BE APPLIED FIRST TO THE PORTION
OF THE LOANS NOT THEN SUBJECT TO ANY LIBOR OPTION, THEN THE BALANCE OF ANY SUCH
PREPAYMENT SHALL BE APPLIED TO THE PORTION OF THE LOANS THEN SUBJECT TO ANY
LIBOR OPTION, IN THE CHRONOLOGICAL ORDER OF THE RESPECTIVE MATURITIES THEREOF.
AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, ALL
PAYMENTS OR PREPAYMENTS OF THE LOANS MAY BE APPLIED TO THE BORROWER'S
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS IN SUCH AMOUNTS
AND MANNER AS MAY BE SPECIFIED