subject to the provisions of
Section 2.1(c), 50% (the "Inventory Advance Rate") of Eligible Inventory
(including up to $10,000,000 of Eligible Inventory consisting of in-transit
Inventory), plus (b) the Inventory Advance Rate of outstanding Documentary
Letters of Credit, provided that the foregoing shall include only Documentary
Letters of Credit utilized to purchase finished goods Inventory, or (II) the
Inventory Advance Cap; plus
C.
the amount of Cash Collateral then on deposit with Agent; minus
D.
Reserves:
and (y) on and after December 16, 2010, the lesser of (i) $20,000,000 and
(ii) the amount of cash deposited with Agent pursuant to Section 3.2(b).
The amount derived from (A) the sum of Sections 2.1(b)(x)(ii)(A) plus
2.1(b)(x)(ii)(B) plus 2.1(b)(x)(ii)(C) minus Section 2.1(b)(x)(ii)(D) or
(B) Section 2.1(b)(y)(ii), as applicable, at any time and from time to time
shall be referred to as the "Formula Amount".
(C)
DISCRETIONARY RIGHTS.
THE RECEIVABLES ADVANCE RATE MAY BE
INCREASED OR DECREASED BY AGENT AT ANY TIME AND FROM TIME TO TIME, UPON FIVE
(5) BUSINESS DAYS NOTICE TO BORROWER, BASED UPON DILUTION, AS SET FORTH ON THE
MOST RECENT FIELD EXAMINATION CONDUCTED IN ACCORDANCE WITH THIS AGREEMENT, IT
BEING SPECIFICALLY UNDERSTOOD THAT THE 65% RECEIVABLES ADVANCE RATE SCHEDULED TO
BE IN EFFECT AS OF DECEMBER 16, 2010 ASSUMES A DILUTION RATE OF NO MORE THAN TEN
PERCENT (10%).
IN ADDITION, THE ADVANCE RATES MAY BE INCREASED OR DECREASED BY
AGENT AT ANY TIME AND FROM TIME TO TIME, UPON FIVE (5) BUSINESS DAYS NOTICE TO
BORROWER, BASED UPON OTHER MATERIAL CHANGES IN BORROWER'S FINANCIAL
CIRCUMSTANCES, TO BE DONE IN THE EXERCISE OF ITS GOOD FAITH BUSINESS JUDGMENT
BASED UPON THE LENDING PRACTICES OF AGENT, CONSISTENT WITH CRITERIA CUSTOMARY IN
THE COMMERCIAL FINANCE INDUSTRY GENERALLY.
BORROWER CONSENTS TO ANY SUCH
INCREASES OR DECREASES AND ACKNOWLEDGE THAT DECREASING THE ADVANCE RATES OR
INCREASING THE RESERVES MAY LIMIT OR RESTRICT ADVANCES REQUESTED BY THE
BORROWER.
2.2.
Procedure for Borrowing.
(A)
BORROWER MAY NOTIFY AGENT PRIOR TO 12:00 NOON (NEW YORK CITY TIME)
ON A BUSINESS DAY OF BORROWER'S REQUEST TO INCUR, ON THE IMMEDIATELY SUCCEEDING
BUSINESS DAY, A REVOLVING ADVANCE HEREUNDER.
ON AND AFTER DECEMBER 16, 2010,
ANY AMOUNT REQUIRED TO BE
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PAID AS INTEREST HEREUNDER, OR AS FEES OR OTHER CHARGES UNDER THIS AGREEMENT OR
ANY OTHER AGREEMENT WITH AGENT, LENDERS, TERM LENDER AND/OR ANY ISSUER, OR WITH
RESPECT TO ANY OTHER OBLIGATION, WHICH SHALL BECOME DUE (OTHER THAN INTEREST,
FEES OR OTHER CHARGES WITH RESPECT TO LETTERS OF CREDIT AND/OR AIR
RELEASES/STEAMSHIP GUARANTEES, WHICH SHALL BE PAYABLE UPON DEMAND), SHALL BE
DEEMED A REQUEST FOR A REVOLVING ADVANCE AS OF THE DATE SUCH PAYMENT IS DUE, IN
THE AMOUNT REQUIRED TO PAY IN FULL SUCH INTEREST, FEE, CHARGE OR OBLIGATION
UNDER THIS AGREEMENT, OR ANY OTHER DOCUMENTS WITH AGENT, LENDERS, TERM LENDER
AND/OR ANY ISSUER AND SUCH REQUEST SHALL BE IRREVOCABLE.
(B)
NOTWITHSTANDING THE PROVISIONS OF (A) ABOVE, IN THE EVENT BORROWER
DESIRES TO OBTAIN A EURODOLLAR RATE LOAN, BORROWER SHALL GIVE AGENT AT LEAST
THREE (3)