APPLICABLE ACCOUNT DEBTOR TO BORROWER OR ANY SECURED GUARANTOR
OR ANY SUBSIDIARY THEREOF BUT ONLY TO THE EXTENT OF THE POTENTIAL OFFSET;
(XI)
THAT ARISES WITH RESPECT TO GOODS THAT ARE
DELIVERED ON A BILL-AND-HOLD, CASH-ON-DELIVERY BASIS OR PLACED ON CONSIGNMENT,
GUARANTEED SALE OR OTHER TERMS BY REASON OF WHICH THE PAYMENT BY THE ACCOUNT
DEBTOR IS OR MAY BE CONDITIONAL;
(XII)
THAT IS IN DEFAULT; PROVIDED, THAT AN ACCOUNT
SHALL BE DEEMED IN DEFAULT UPON THE OCCURRENCE OF ANY OF THE FOLLOWING:
(A)
THE ACCOUNT IS NOT PAID WITHIN THE EARLIER OF:
SIXTY (60) DAYS FOLLOWING ITS DUE DATE OR 120 DAYS FOLLOWING ITS ORIGINAL
INVOICE DATE UNLESS PAYMENT THEREOF IS SECURED BY A LETTER OF CREDIT
SATISFACTORY TO AGENT AS TO FORM, SUBSTANCE AND ISSUER;
(B)
THE ACCOUNT DEBTOR OBLIGATED UPON SUCH
ACCOUNT SUSPENDS BUSINESS, MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF
CREDITORS OR FAILS TO PAY ITS DEBTS GENERALLY AS THEY COME DUE; OR
(C)
A PETITION IS FILED BY OR AGAINST ANY ACCOUNT
DEBTOR OBLIGATED UPON SUCH ACCOUNT UNDER ANY BANKRUPTCY LAW OR ANY OTHER
FEDERAL, STATE OR FOREIGN (INCLUDING ANY PROVINCIAL) RECEIVERSHIP, INSOLVENCY
RELIEF OR OTHER LAW OR LAWS FOR THE RELIEF OF DEBTORS;
(XIII)
THAT IS THE OBLIGATION OF AN ACCOUNT DEBTOR IF
50% OR MORE OF THE DOLLAR AMOUNT OF ALL ACCOUNTS OWING BY THAT ACCOUNT DEBTOR
ARE INELIGIBLE UNDER THE CRITERIA SET FORTH IN CLAUSE (XII) ABOVE;
(XIV)
AS TO WHICH AGENT'S LIEN THEREON, ON BEHALF OF
ITSELF AND LENDERS, IS NOT A FIRST PRIORITY PERFECTED LIEN;
(XV)
AS TO WHICH ANY OF THE REPRESENTATIONS OR
WARRANTIES IN THE LOAN DOCUMENTS ARE UNTRUE IN ANY MATERIAL RESPECT;
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(XVI)
TO THE EXTENT SUCH ACCOUNT IS EVIDENCED BY A
JUDGMENT, INSTRUMENT OR CHATTEL PAPER;
(XVII)
TO THE EXTENT THAT SUCH ACCOUNT, TOGETHER WITH ALL
OTHER ACCOUNTS OWING BY SUCH ACCOUNT DEBTOR AND ITS AFFILIATES (EXCLUDING THE
UNITED STATES GOVERNMENT AS ACCOUNT DEBTOR) AS OF ANY DATE OF DETERMINATION
EXCEED 15% OF ALL ELIGIBLE ACCOUNTS-U.S.; OR
(XVIII)
THAT IS PAYABLE IN ANY CURRENCY OTHER THAN DOLLARS OR
ACCEPTABLE FOREIGN CURRENCY.
It is understood and agreed that any Account excluded from eligibility under
clause (xii) above shall be excluded in its entirety, meaning that any past due
credits with respect thereto shall also be excluded thereunder.
(B)
ELIGIBLE ACCOUNTS - SCHAUBLIN.
ALL OF THE
ACCOUNTS OWNED BY SCHAUBLIN AND REFLECTED IN THE MOST RECENT SCHAUBLIN BORROWING
BASE CERTIFICATE DELIVERED BY BORROWER TO AGENT SHALL BE "ELIGIBLE ACCOUNTS -
SCHAUBLIN" FOR PURPOSES OF THIS AGREEMENT, EXCEPT ANY ACCOUNT TO WHICH ANY OF
THE EXCLUSIONARY CRITERIA SET FORTH BELOW APPLIES.
AGENT SHALL HAVE THE RIGHT
TO ESTABLISH OR MODIFY OR ELIMINATE RESERVES AGAINST ELIGIBLE
ACCOUNTS - SCHAUBLIN FROM TIME TO TIME IN ITS REASONABLE CREDIT JUDGMENT TO
REFLECT ISSUES WITH RESPECT TO THE COLLECTABILITY OF ACCOUNTS ARISING OR
DISCOVERED BY AGENT AFTER THE EFFECTIVE DATE (INCLUDING PURSUANT TO COLLATERAL
AUDITS CONDUCTED AFTER THE EFFECTIVE DATE).
IN ADDITION, AGENT RESERVES THE
RIGHT, AT ANY TIME AND