CONDITIONS OF THIS AGREEMENT, AMOUNTS BORROWED PURSUANT TO THIS
SECTION 2.1(A) MAY BE REPAID AND REBORROWED AT ANY TIME PRIOR TO THE REVOLVING
MATURITY DATE, AT WHICH TIME ALL ADVANCES UNDER THIS SECTION 2.1(A) SHALL BE
IMMEDIATELY DUE AND PAYABLE.
BORROWER MAY PREPAY ANY ADVANCES WITHOUT PENALTY
OR PREMIUM.
(II)
WHENEVER BORROWER DESIRES AN ADVANCE, BORROWER WILL NOTIFY BANK
BY FACSIMILE TRANSMISSION OR TELEPHONE NO LATER THAN 3:00 P.M. PACIFIC TIME, ON
THE BUSINESS DAY THAT THE ADVANCE IS TO BE MADE.
EACH SUCH NOTIFICATION SHALL
BE PROMPTLY CONFIRMED BY A PAYMENT/ADVANCE FORM IN SUBSTANTIALLY THE FORM OF
EXHIBIT B HERETO.
BANK IS AUTHORIZED TO MAKE ADVANCES UNDER THIS AGREEMENT,
BASED UPON INSTRUCTIONS RECEIVED FROM THE BORROWER'S CHIEF FINANCIAL OFFICER OR
A DESIGNEE OF THE BORROWER'S CHIEF FINANCIAL OFFICER, OR WITHOUT INSTRUCTIONS IF
IN BANK'S DISCRETION SUCH ADVANCES ARE NECESSARY TO MEET OBLIGATIONS WHICH HAVE
BECOME DUE AND REMAIN UNPAID.
BANK SHALL BE ENTITLED TO RELY ON ANY TELEPHONIC
NOTICE GIVEN BY A PERSON WHO BANK REASONABLY BELIEVES TO BE THE BORROWER'S CHIEF
FINANCIAL OFFICER OR A DESIGNEE THEREOF, AND BORROWER SHALL INDEMNIFY AND HOLD
BANK HARMLESS FOR ANY DAMAGES OR LOSS SUFFERED BY BANK AS A RESULT OF SUCH
RELIANCE.
BANK WILL CREDIT THE AMOUNT OF ADVANCES MADE UNDER THIS
SECTION 2.1(A) TO BORROWER'S DEPOSIT ACCOUNT.
(B)
LETTERS OF CREDIT.
(I)
SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, BANK
AGREES TO ISSUE OR CAUSE TO BE ISSUED LETTERS OF CREDIT FOR THE ACCOUNT OF
BORROWER (EACH, A "LETTER OF CREDIT" AND COLLECTIVELY, THE "LETTERS OF CREDIT")
IN AN AGGREGATE OUTSTANDING FACE AMOUNT NOT TO EXCEED THE LESSER OF THE
REVOLVING LINE OR THE BORROWING BASE MINUS, IN EACH CASE, THE AGGREGATE AMOUNT
OF THE OUTSTANDING ADVANCES AT ANY TIME, PROVIDED THAT THE AGGREGATE FACE AMOUNT
OF ALL OUTSTANDING LETTERS OF CREDIT SHALL NOT EXCEED $1,500,000.
ALL LETTERS
OF CREDIT
6
SHALL BE, IN FORM AND SUBSTANCE, REASONABLY ACCEPTABLE TO BANK IN ITS SOLE
DISCRETION AND SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF BANK'S FORM OF
STANDARD APPLICATION AND LETTER OF CREDIT AGREEMENT (THE "APPLICATION"), WHICH
BORROWER HEREBY AGREES TO EXECUTE, INCLUDING BANK'S STANDARD FEE EQUAL TO 0.75%
PER ANNUM OF THE FACE AMOUNT OF EACH LETTER OF CREDIT.
ON ANY DRAWN BUT
UNREIMBURSED LETTER OF CREDIT, THE UNREIMBURSED AMOUNT SHALL BE DEEMED AN
ADVANCE UNDER SECTION 2.1(A).
PRIOR TO THE REVOLVING MATURITY DATE, BORROWER
SHALL SECURE IN CASH ALL OBLIGATIONS UNDER ANY OUTSTANDING LETTERS OF CREDIT ON
TERMS REASONABLY ACCEPTABLE TO BANK.
(II)
THE OBLIGATION OF BORROWER TO REIMBURSE BANK FOR DRAWINGS MADE
UNDER LETTERS OF CREDIT SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND
SHALL BE PERFORMED STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE
APPLICATION, AND SUCH LETTERS OF CREDIT, UNDER ALL CIRCUMSTANCES WHATSOEVER.
BORROWER SHALL INDEMNIFY, DEFEND, PROTECT, AND HOLD BANK HARMLESS FROM ANY LOSS,
COST, EXPENSE OR LIABILITY, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS'
FEES, ARISING OUT OF OR IN CONNECTION WITH ANY LETTERS OF CREDIT, EXCEPT FOR
EXPENSES CAUSED