ITS BUSINESS AND HAS
SUBSTANTIALLY ALL OF ITS ASSETS WITHIN THE UNITED STATES AND (III) OF WHICH MORE
THAN FIFTY PERCENT (50%) OF ITS OUTSTANDING VOTING STOCK OF EVERY CLASS (OR
OTHER VOTING EQUITY INTEREST) IS OWNED BY ANY BORROWER OR ONE OR MORE OF THEIR
SUBSIDIARIES.
(ZZZ)
"SURETY AGREEMENTS" SHALL HAVE THE MEANING GIVEN
SUCH TERM IN SECTION
5.2 HEREOF.
(AAAA)
"TERM LOAN" SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 2.2 HEREOF.
(BBBB)
"TERM NOTE" SHALL HAVE THE MEANING GIVEN SUCH TERM IN SECTION
2.2 HEREOF.
(CCCC)
"UNDRAWN AVAILABILITY" AT A PARTICULAR DATE SHALL MEAN AN
AMOUNT EQUAL TO (I) THE LESSER OF (A) THE BORROWING BASE AMOUNT OR (B) THE
MAXIMUM LINE AMOUNT, MINUS (II) THE SUM OF (A) THE OUTSTANDING AMOUNT OF
ADVANCES UNDER THE LINE, PLUS (B) THE FACE AMOUNT OF ALL OUTSTANDING LETTERS OF
CREDIT, PLUS (C) ALL AMOUNTS DUE AND OWING TO EACH BORROWER'S TRADE CREDITORS
WHICH ARE OUTSTANDING BEYOND NORMAL TRADE TERMS.
(DDDD)
"VALUE" MEANS, WITH RESPECT TO ELIGIBLE INVENTORY, THE LOWER
OF COST (DETERMINED ON A FIRST-IN-FIRST-OUT BASIS) OR MARKET VALUE, EXCLUSIVE OF
ANY TRANSPORTATION, PROCESSING OR HANDLING CHARGES.
(EEEE)
"WAIVER AGREEMENT" MEANS AN AGREEMENT IN FORM AND CONTENT
SATISFACTORY TO BANK IN ITS SOLE DISCRETION EXECUTED BY A LANDLORD OF A LEASED
LOCATION OF A BORROWER A WAREHOUSEMAN OF A WAREHOUSE LOCATION OF A BORROWER OR
PROCESSOR OF BORROWER'S INVENTORY PURSUANT TO WHICH, INTER ALIA, SUCH LANDLORD,
WAREHOUSEMAN OR PROCESSOR WAIVES ANY AND ALL RIGHTS AGAINST ANY
COLLATERAL AT SUCH LOCATION, PERMITS BANK ACCESS TO SUCH LOCATION FOR THE
PURPOSE OF SELLING AND TAKING POSSESSION OF ANY COLLATERAL AT SUCH LOCATION,
WAIVES ANY RIGHT OF SET-OFF OR COUNTERCLAIM AGAINST SUMS OWED TO ANY BORROWER
AND CONTAINS SUCH OTHER TERMS AND PROVISIONS AS BANK MAY REASONABLY REQUIRE.
1.2
Accounting Terms.
As used in this
Agreement, or any certificate, report or other document made or delivered
pursuant to this Agreement, accounting terms not defined elsewhere in this
Agreement shall have the respective meanings given to them under GAAP.
1.3
UCC Terms.
All terms used herein and
defined in the Uniform Commercial Code as in effect in the Commonwealth of
Pennsylvania from time to time shall have the meanings given therein unless
otherwise defined herein.
2.
THE LINE; TERM LOAN; USE OF PROCEEDS.
2.1
Line of Credit.
Bank will establish for
Borrowers for and during the Contract Period, subject to the terms and
conditions hereof, a revolving line of credit (the "Line") pursuant to which
Bank will from time to time make Advances to Borrowers in an aggregate amount
not exceeding at any time the lesser of:
(a) the Borrowing Base Amount or (b)
the Maximum Line Amount.
Bank, in its sole discretion, may from time to time
(x) establish certain reserves against Eligible Receivables or Eligible
Inventory (including, without limitation, a dilution reserve) and/or (y)
increase or decrease the advance rates contained in the Borrowing Base Amount.
Borrowers consent to any such implementation of reserves or increase or decrease
of