BLOCKED ACCOUNTS AND/OR THE
DEPOSITORY ACCOUNTS EXCEPT FOR USES PERMITTED BY THIS AGREEMENT AND THE CREDIT
AGREEMENT, AND THAT THE FUNDS ON DEPOSIT IN SUCH ACCOUNTS SHALL CONTINUE TO BE
COLLATERAL SECURITY FOR THE OBLIGATIONS.
6.
CONDITIONS PRECEDENT.
THIS AGREEMENT
AND THE AGREEMENTS OF THE LENDERS DESCRIBED HEREIN WILL NOT BE EFFECTIVE UNLESS
AND UNTIL EACH OF THE FOLLOWING HAS OCCURRED OR BEEN SATISFIED, OR WAIVED IN
WRITING BY THE AGENT AND THE LENDERS, BY (I) THE CLOSE OF BUSINESS ON
DECEMBER 2, 2005 OR (II) SUCH LATER TIME AS THE AGENT AND THE LENDERS MAY AGREE
IN THEIR SOLE DISCRETION (THE "EFFECTIVE DATE"):
(A)
THE BORROWERS AND GUARANTOR WILL HAVE
EXECUTED AND DELIVERED THIS AGREEMENT; AND
(B)
THE AGENT SHALL HAVE RECEIVED, IN
IMMEDIATELY AVAILABLE FUNDS, AN AMOUNT EQUAL TO ALL DOCUMENTATION FEES (AS
DEFINED BELOW) ARISING IN CONNECTION WITH THE NEGOTIATION AND EXECUTION OF THIS
AGREEMENT PLUS THE AGENT FEE (AS DEFINED BELOW).
7.
REPRESENTATIONS AND WARRANTIES.
(A)
EACH OF THE BORROWERS AND THE GUARANTOR
HEREBY ACKNOWLEDGES AND CONFIRMS THAT (I) ALL OF THE RECITALS SET FORTH ABOVE
ARE TRUE AND CORRECT; (II) THE AGENT HAS INFORMED THE BORROWERS AND THE
BORROWERS AGREE THAT AS OF THE CLOSE OF BUSINESS ON NOVEMBER 29, 2005, THERE
REMAIN OUTSTANDING LETTERS OF CREDIT ISSUED BY LENDER FOR BORROWERS' ACCOUNT IN
THE FACE AMOUNT OF $225,000, AND IN ADDITION, THE BORROWERS ARE LIABLE TO THE
LENDERS UNDER THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS IN AN AGGREGATE
PRINCIPAL AMOUNT OF $27,511,367.92 IN REVOLVING ADVANCES, PLUS ACCRUED BUT
UNPAID INTEREST THEREON, PLUS THE COSTS AND EXPENSES OF THE AGENT AND THE
LENDERS INCURRED IN CONNECTION WITH THE OBLIGATIONS AND REIMBURSABLE UNDER THE
CREDIT AGREEMENT, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND
EXPENSES INCURRED BY THE AGENT AND LENDERS (OR ANY OF THEM) IN THE NEGOTIATION,
PREPARATION OR ENFORCEMENT OF THIS AGREEMENT, AND ANY DOCUMENTS, AGREEMENTS OR
INSTRUMENTS REFERRED TO HEREIN, PLUS THE PRE-PAYMENT FEE, ALL WITHOUT OFFSETS,
COUNTERCLAIMS OR DEFENSES OF ANY KIND OR NATURE WHATSOEVER; (III) THE
ACKNOWLEDGMENT OF THE EXISTING DEFAULTS DOES NOT IMPLY THAT OTHER EVENTS OF
DEFAULT DO NOT EXIST AS OF THE DATE HEREOF; (IV) THE CREDIT AGREEMENT AND THE
LOAN DOCUMENTS ARE IN FULL FORCE AND EFFECT AS TO THE BORROWERS AND THE
GUARANTOR AND ARE ENFORCEABLE AGAINST BORROWERS AND GUARANTOR IN ACCORDANCE WITH
THEIR RESPECTIVE TERMS; (V) ALL INTERCOMPANY ACCOUNTS RECEIVABLE AND
INTERCOMPANY ACCOUNTS PAYABLE AMONG BORROWERS AND THE GUARANTOR ARE THE RESULT
OF ARM'S LENGTH TRANSACTIONS ENTERED INTO IN GOOD FAITH IN THE ORDINARY COURSE
OF BUSINESS; (VI) THE BORROWERS AND GUARANTOR DO NOT HAVE ANY CLAIMS, DEFENSES,
CAUSES OF ACTION, COUNTERCLAIMS OR OFFSETS AGAINST THE AGENT OR ANY LENDER OR
THEIR RESPECTIVE OFFICERS, EMPLOYEES, AGENTS, DIRECTORS, SUBSIDIARIES,
AFFILIATES OR ATTORNEYS OF ANY KIND OR NATURE WHATSOEVER; AND (VII) AS OF THE
DATE HEREOF, ALL LIENS, SECURITY INTERESTS, ASSIGNMENTS AND PLEDGES ENCUMBERING
THE COLLATERAL, CREATED PURSUANT TO AND/OR REFERRED TO IN THE CREDIT AGREEMENT
OR THE LOAN DOCUMENTS, ARE FIRST PRIORITY LIENS, SECURITY INTERESTS, ASSIGNMENTS