SHALL BE SATISFACTORY TO LENDER, (II) AS OF THE DATE
OF ISSUANCE, NO ORDER OF ANY COURT, ARBITRATOR OR OTHER GOVERNMENTAL AUTHORITY
SHALL PURPORT BY ITS TERMS TO ENJOIN OR RESTRAIN MONEY CENTER BANKS GENERALLY
FROM ISSUING LETTERS OF CREDIT OF THE TYPE AND IN THE AMOUNT OF THE PROPOSED
LETTER OF CREDIT, AND NO LAW, RULE OR REGULATION APPLICABLE TO MONEY CENTER
BANKS GENERALLY AND NO REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF
LAW) FROM ANY GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER MONEY CENTER BANKS
GENERALLY SHALL PROHIBIT, OR REQUEST THAT LENDER REFRAIN FROM, THE ISSUANCE OF
LETTERS OF CREDIT GENERALLY OR THE ISSUANCE OF SUCH LETTER OF CREDIT,
(III) AFTER GIVING EFFECT TO THE ISSUANCE OF SUCH LETTER OF CREDIT, THE LETTER
OF CREDIT OBLIGATIONS SHALL NOT EXCEED THE LETTER OF CREDIT LIMIT, AND (IV) THE
EXCESS AVAILABILITY, 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 INVENTORY AND THE DOCUMENTS OF TITLE WITH
RESPECT THERETO ARE CONSIGNED TO LENDER, THE SUM OF (1) THE PERCENTAGE EQUAL TO
ONE HUNDRED (100%) PERCENT MINUS THE THEN APPLICABLE PERCENTAGE WITH RESPECT TO
ELIGIBLE INVENTORY SET FORTH IN THE DEFINITION OF THE TERM BORROWING BASE
MULTIPLIED BY THE VALUE OF SUCH ELIGIBLE INVENTORY,
32
PLUS (2) FREIGHT, TAXES, DUTY AND OTHER AMOUNTS WHICH LENDER 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 OR THE
DOCUMENTS OF TITLE ARE NOT CONSIGNED TO LENDER IN CONNECTION WITH A LETTER OF
CREDIT FOR THE PURPOSE OF PURCHASING INVENTORY, 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 LENDER'S DISCRETION,
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
LENDER FOR ANY DRAW UNDER ANY LETTER OF CREDIT ISSUED FOR THE ACCOUNT OF SUCH
BORROWER AND PAY LENDER THE AMOUNT OF ALL OTHER CHARGES AND FEES PAYABLE TO
LENDER 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 LENDER 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 LENDER FOR A PRIME