LETTER OF CREDIT OBLIGATIONS SHALL NOT EXCEED THE
LETTER OF CREDIT LIMIT, AND (IV) THE EXCESS AVAILABILITY (CALCULATED FOR THIS
PURPOSE WITHOUT REGARD TO THE AMOUNT OF THE PAST DUE TRADE PAYABLES) PRIOR TO
GIVING EFFECT TO ANY RESERVES WITH RESPECT TO SUCH LETTER OF CREDIT ON THE DATE
OF THE PROPOSED ISSUANCE OF ANY LETTER OF CREDIT SHALL BE EQUAL TO OR GREATER
THAN: (A) IF THE PROPOSED LETTER OF CREDIT IS FOR THE PURPOSE OF PURCHASING
ELIGIBLE LC INVENTORY, THE SUM OF (1) FIFTY (50%) PERCENT MULTIPLIED BY THE
VALUE OF SUCH ELIGIBLE LC INVENTORY, PLUS (2) FREIGHT, TAXES, DUTY AND OTHER
AMOUNTS WHICH AGENT ESTIMATES MUST BE PAID IN CONNECTION WITH SUCH INVENTORY
UPON ARRIVAL AND FOR DELIVERY TO ONE OF SUCH BORROWER'S LOCATIONS FOR ELIGIBLE
INVENTORY WITHIN THE UNITED STATES OF AMERICA AND (B) IF THE PROPOSED LETTER OF
CREDIT IS FOR ANY OTHER PURPOSE, AN AMOUNT EQUAL TO ONE HUNDRED (100%) PERCENT
OF THE LETTER OF CREDIT OBLIGATIONS WITH RESPECT THERETO.
EFFECTIVE ON THE
ISSUANCE OF EACH LETTER OF CREDIT, A RESERVE SHALL BE ESTABLISHED IN THE
APPLICABLE AMOUNT SET FORTH IN SECTION 2.2(C)(IV)(A) OR SECTION 2.2(C)(IV)(B).
(D)
EXCEPT IN AGENT'S DISCRETION, WITH THE CONSENT OF ALL
LENDERS, THE AMOUNT OF ALL OUTSTANDING LETTER OF CREDIT OBLIGATIONS SHALL NOT AT
ANY TIME EXCEED THE LETTER OF CREDIT LIMIT.
(E)
EACH BORROWER SHALL REIMBURSE IMMEDIATELY THE ISSUING
BANK FOR ANY DRAW UNDER ANY LETTER OF CREDIT ISSUED BY SUCH ISSUING BANK FOR THE
ACCOUNT OF SUCH BORROWER AND PAY EACH ISSUING BANK THE AMOUNT OF ALL OTHER
CHARGES AND FEES PAYABLE TO SUCH ISSUING BANK IN CONNECTION WITH ANY LETTER OF
CREDIT ISSUED FOR THE ACCOUNT OF SUCH BORROWER IMMEDIATELY WHEN DUE,
IRRESPECTIVE OF ANY CLAIM, SETOFF, DEFENSE OR OTHER RIGHT WHICH SUCH BORROWER
MAY HAVE AT ANY TIME AGAINST ISSUING BANK OR ANY OTHER PERSON.
EACH DRAWING
UNDER ANY LETTER OF CREDIT OR OTHER AMOUNT PAYABLE IN CONNECTION THEREWITH WHEN
DUE SHALL CONSTITUTE A REQUEST BY THE BORROWER FOR WHOSE ACCOUNT SUCH LETTER OF
CREDIT WAS ISSUED TO AGENT FOR A PRIME RATE LOAN IN THE AMOUNT OF SUCH DRAWING
OR OTHER AMOUNT THEN DUE, AND SHALL BE MADE BY AGENT ON BEHALF OF LENDERS AS A
REVOLVING LOAN (OR SPECIAL AGENT ADVANCE, AS THE CASE MAY BE). THE DATE OF SUCH
LOAN SHALL BE THE DATE OF THE DRAWING OR AS TO OTHER AMOUNTS, THE DUE DATE
THEREFOR.
ANY PAYMENTS MADE BY OR ON BEHALF OF AGENT OR ANY LENDER TO AN
ISSUING BANK AND/OR RELATED PARTIES IN CONNECTION WITH ANY LETTER OF CREDIT
SHALL CONSTITUTE ADDITIONAL REVOLVING LOANS TO SUCH BORROWER PURSUANT TO THIS
SECTION 2 (OR SPECIAL AGENT ADVANCES AS THE CASE MAY BE).
(F)
BORROWERS AND GUARANTORS SHALL INDEMNIFY AND HOLD AGENT
AND LENDERS HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES, COSTS AND EXPENSES WHICH AGENT OR ANY LENDER MAY SUFFER OR INCUR IN
CONNECTION WITH ANY LETTER OF CREDIT AND ANY DOCUMENTS, DRAFTS OR ACCEPTANCES
RELATING