computed, unless otherwise specifically provided therein, in accordance with
GAAP consistently applied; provided, that all financial covenants and
calculations in the Loan Documents shall be made in accordance with GAAP as in
effect on the Closing Date unless Debtor and Lender shall otherwise specifically
agree in writing.
That certain items or computations are explicitly modified by
the phrase "in accordance with GAAP" shall in no way be construed to limit the
foregoing.
2.
CREDIT FACILITY.
(A)
ESTABLISHMENT OF CREDIT FACILITY.
SUBJECT
TO THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, LENDER HEREBY AGREES TO LEND TO DEBTOR AN AGGREGATE SUM NOT TO EXCEED
THE LESSER OF (I) AN AMOUNT EQUAL TO THE BORROWING BASE, OR (II) FIVE MILLION
AND NO/100 DOLLARS ($5,000,000.00) (THE "CREDIT FACILITY"), ON A REVOLVING BASIS
FROM TIME TO TIME DURING THE PERIOD COMMENCING ON THE DATE HEREOF AND CONTINUING
UNTIL: (I) THE ACCELERATION OF THE INDEBTEDNESS PURSUANT TO THE TERMS OF THE
LOAN DOCUMENTS; (II) SEPTEMBER 16, 2010; OR (III) SUCH OTHER DATE AS MAY BE
ESTABLISHED BY A WRITTEN INSTRUMENT BETWEEN DEBTOR AND LENDER FROM TIME TO TIME
(THE "REVOLVING CREDIT MATURITY DATE").
IF AT ANY TIME THE SUM OF THE AGGREGATE
PRINCIPAL AMOUNT OF LOANS OUTSTANDING HEREUNDER EXCEEDS LESSER OF THE CREDIT
FACILITY OR THE BORROWING BASE, SUCH AMOUNTS SHALL BE DEEMED AN "OVERADVANCE."
DEBTOR SHALL IMMEDIATELY REPAY THE AMOUNT OF SUCH OVERADVANCE PLUS ALL ACCRUED
AND UNPAID INTEREST THEREON UPON WRITTEN DEMAND FROM LENDER.
NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, AN OVERADVANCE SHALL BE CONSIDERED A
LOAN AND SHALL BEAR INTEREST AT THE RATE AS SET FORTH IN THE NOTE AND BE SECURED
BY THIS AGREEMENT.
SUBJECT TO THE TERMS AND CONDITIONS HEREOF, DEBTOR MAY
BORROW, REPAY AND REBORROW FUNDS UNDER THE CREDIT FACILITY.
(B)
CERTAIN DEFINED TERMS RELATING TO THE CREDIT
FACILITY.
WITH RESPECT TO LOANS UNDER CREDIT FACILITY, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
(I)
"BORROWING BASE" MEANS A SUM EQUAL TO UP
TO: EIGHTY PERCENT (80.00%) OF THE AMOUNT OF DEBTOR'S ELIGIBLE ACCOUNTS,
PROVIDED, HOWEVER, LENDER SHALL HAVE THE RIGHT TO CREATE AND ADJUST ELIGIBILITY
STANDARDS AND RELATED RESERVES FROM TIME TO TIME IN ITS REASONABLE CREDIT
JUDGMENT WITH RESPECT TO DEBTOR'S ELIGIBLE ACCOUNTS.
(II)
"ELIGIBLE ACCOUNTS" MEANS, AT ANY TIME,
ALL ACCOUNTS RECEIVABLE OF DEBTOR, CREATED IN THE ORDINARY COURSE OF BUSINESS
THAT ARE ACCEPTABLE TO THE LENDER IN ITS SOLE DISCRETION AND SATISFY THE
FOLLOWING CONDITIONS:
3
(1)
THE ACCOUNT COMPLIES WITH ALL APPLICABLE
LAWS, RULES, AND REGULATIONS;
(2)
THE ACCOUNT HAS NOT BEEN OUTSTANDING FOR
MORE THAN NINETY (90) DAYS PAST THE ORIGINAL DATE OF INVOICE;
(3)
THE ACCOUNT DOES NOT REPRESENT A COMMISSION
AND THE ACCOUNT WAS CREATED UNDER AN ENFORCEABLE CONTRACT IN CONNECTION WITH
(A) THE SALE OF GOODS BY DEBTOR IN THE ORDINARY COURSE OF BUSINESS AND SUCH SALE
HAS BEEN CONSUMMATED AND SUCH GOODS HAVE BEEN SHIPPED AND DELIVERED AND RECEIVED
BY THE ACCOUNT DEBTOR, OR (B) THE PERFORMANCE OF SERVICES BY DEBTOR