PLUS SUCH LENDER'S APPLICABLE PERCENTAGE OF THE OUTSTANDING AMOUNT OF
ALL L/C OBLIGATIONS, PLUS SUCH LENDER'S APPLICABLE PERCENTAGE OF THE OUTSTANDING
AMOUNT OF ALL SWING LINE LOANS SHALL NOT EXCEED SUCH LENDER'S COMMITMENT;
(III)
THE OUTSTANDING AMOUNT OF ALL L/C
OBLIGATIONS SHALL NOT AT ANY TIME EXCEED THE LETTER OF CREDIT SUBLIMIT; AND
(IV)
AFTER GIVING EFFECT TO ALL CREDIT EXTENSIONS,
NO OVERADVANCE SHALL EXIST.
Within the limits of each Lender's Commitment, and subject to the other terms
and conditions hereof, the Borrowers may borrow under this Section 2.01, prepay
under Section 2.05, and reborrow under this Section 2.01
Committed Loans may be
Base Rate Loans or LIBO Rate Loans, as further provided herein.
(B)
THE FOLLOWING ARE THE RESERVES AS OF THE
CLOSING DATE:
(I)
SHRINK (AN INVENTORY RESERVE): AN AMOUNT
EQUAL TO 0.70% OF THE GROSS SALES OF THE BORROWERS FOR THE FISCAL YEAR TO DATE;
AND
(II)
RENT (AN AVAILABILITY RESERVE): AN AMOUNT
EQUAL TO (A) ONE (1) MONTHS' RENT FOR ALL OF THE BORROWERS' LEASED LOCATIONS IN
PENNSYLVANIA, VIRGINIA AND WASHINGTON, OTHER THAN LEASED LOCATIONS WITH RESPECT
TO WHICH THE COLLATERAL AGENT HAS RECEIVED A COLLATERAL ACCESS AGREEMENT, AND
(B) THREE (3) MONTHS' RENT FOR THE BORROWERS' DISTRIBUTION CENTER LOCATED IN
DAYTON, NEW JERSEY.
(C)
THE ADMINISTRATIVE AGENT SHALL HAVE THE
RIGHT, AT ANY TIME AND FROM TIME TO TIME ON OR AFTER THE CLOSING DATE IN ITS
REASONABLE DISCRETION TO ESTABLISH, MODIFY OR ELIMINATE RESERVES.
2.02
Borrowings, Conversions and Continuations of
Committed Loans.
(A)
COMMITTED LOANS (OTHER THAN SWING LINE
LOANS) SHALL BE EITHER BASE RATE LOANS OR LIBO RATE LOANS, AS THE LEAD BORROWER
MAY REQUEST SUBJECT TO AND IN ACCORDANCE WITH THIS SECTION 2.02.
SUBJECT TO THE
OTHER PROVISIONS OF THIS SECTION 2.02, COMMITTED BORROWINGS OF MORE THAN ONE
TYPE MAY BE INCURRED AT THE SAME TIME.
47
(B)
EACH COMMITTED BORROWING, EACH CONVERSION OF
COMMITTED LOANS FROM ONE TYPE TO THE OTHER, AND EACH CONTINUATION OF LIBO RATE
LOANS SHALL BE MADE UPON THE LEAD BORROWER'S IRREVOCABLE NOTICE TO THE
ADMINISTRATIVE AGENT, WHICH MAY BE GIVEN BY TELEPHONE.
EACH SUCH NOTICE MUST BE
RECEIVED BY THE ADMINISTRATIVE AGENT NOT LATER THAN 1:00 P.M. (I) THREE BUSINESS
DAYS PRIOR TO THE REQUESTED DATE OF ANY BORROWING OF, CONVERSION TO OR
CONTINUATION OF LIBO RATE LOANS OR OF ANY CONVERSION OF LIBO RATE LOANS TO BASE
RATE LOANS, AND (II) ONE BUSINESS DAY PRIOR TO THE REQUESTED DATE OF ANY
BORROWING OF BASE RATE LOANS.
EACH TELEPHONIC NOTICE BY THE LEAD BORROWER
PURSUANT TO THIS SECTION 2.02(B) MUST BE CONFIRMED PROMPTLY BY DELIVERY TO THE
ADMINISTRATIVE AGENT OF A WRITTEN COMMITTED LOAN NOTICE, APPROPRIATELY COMPLETED
AND SIGNED BY A RESPONSIBLE OFFICER OF THE LEAD BORROWER.
EACH BORROWING OF,
CONVERSION TO OR CONTINUATION OF LIBO RATE LOANS SHALL BE IN A PRINCIPAL AMOUNT
OF $1,000,000 OR A WHOLE MULTIPLE OF $500,000 IN EXCESS THEREOF.
EXCEPT AS
PROVIDED IN SECTIONS 2.03(C) AND 2.04(C), EACH BORROWING OF, OR CONVERSION TO,
BASE RATE LOANS SHALL BE IN