and benefits to
be derived herefrom.
WHEREAS, the Lender and Borrowers are party to the Existing Financing
Agreements; and
WHEREAS, by this Agreement, each Borrower desires to acknowledge and reaffirm
the Existing Obligations pursuant to the Existing Financing Agreements (as
modified and restated hereby) and acknowledge their continuing liabilities to
the Lender, and the Lender desires to continue to make loans, advances and
financial accommodations to the Borrowers;
NOW THEREFORE, in consideration of the mutual conditions and agreements set
forth in this Agreement, and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Borrowers and Lender agree
as follows:
WITNESSETH:
ARTICLE 1 - THE REVOLVING CREDIT
1-1.
ESTABLISHMENT OF REVOLVING CREDIT.
(A)
THE LENDER CONTINUES IN EFFECT A REVOLVING LINE OF CREDIT (THE
"REVOLVING CREDIT") IN THE BORROWERS' FAVOR PURSUANT TO WHICH THE LENDER,
SUBJECT TO, AND IN ACCORDANCE WITH, THIS AGREEMENT, SHALL MAKE LOANS AND
ADVANCES AND OTHERWISE PROVIDE FINANCIAL ACCOMMODATIONS TO AND FOR THE ACCOUNT
OF THE BORROWERS AS PROVIDED HEREIN. THE AMOUNT OF THE REVOLVING CREDIT SHALL BE
DETERMINED BY THE LENDER BY REFERENCE TO AVAILABILITY, AS CALCULATED FROM TIME
TO TIME HEREAFTER IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT. ALL LOANS
MADE BY THE LENDER UNDER THIS AGREEMENT, AND ALL OF THE BORROWERS' OTHER
LIABILITIES TO THE LENDER UNDER OR PURSUANT TO THIS AGREEMENT, ARE PAYABLE AS
PROVIDED HEREIN.
(B)
THE LENDER AGREES, SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, TO MAKE LOANS TO THE BORROWERS IN AN AMOUNT OUTSTANDING NOT TO EXCEED
AVAILABILITY AT ANY ONE TIME.
(C)
AVAILABILITY SHALL BE BASED UPON BORROWING BASE CERTIFICATES
FURNISHED AS PROVIDED IN SECTION 9-4, BELOW.
(D)
ANYTHING TO THE CONTRARY IN SECTION 1-1(B) ABOVE NOTWITHSTANDING,
LENDER, IN THE EXERCISE OF ITS DISCRETION, MAY REDUCE ADVANCE RATES OR CREATE
RESERVES WITHOUT DECLARING AN EVENT OF DEFAULT IF IT DETERMINES THAT (I) THERE
HAS OCCURRED A MATERIAL ADVERSE CHANGE; OR (II) BORROWERS ARE NOT IN COMPLIANCE
WITH COVENANTS SET FORTH IN EXHIBIT 9-L2(A).
(E)
THE PROCEEDS OF LOANS AND ADVANCES UNDER THE REVOLVING CREDIT
SHALL BE
1
USED SOLELY IN ACCORDANCE WITH THE BUSINESS PLAN FOR WORKING CAPITAL PURPOSES OF
THE BORROWERS AND FOR ITS CAPITAL EXPENDITURES, ALL SOLELY TO THE EXTENT
PERMITTED BY THIS AGREEMENT.
1-2.
AVAILABILITY.
THE LENDER DOES NOT HAVE ANY OBLIGATION TO MAKE ANY
LOAN OR ADVANCE, OR OTHERWISE TO PROVIDE ANY CREDIT FOR THE BENEFIT OF THE
BORROWERS SUCH THAT THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN ACCOUNT
EXCEEDS AVAILABILITY. THE MAKING OF LOANS, ADVANCES, AND CREDITS AND THE
PROVIDING OF FINANCIAL ACCOMMODATIONS IN EXCESS OF AVAILABILITY IS FOR THE
BENEFIT OF THE BORROWERS AND DOES NOT AFFECT THE OBLIGATIONS OF THE BORROWERS
HEREUNDER; SUCH LOANS, ADVANCES, CREDITS, AND FINANCIAL ACCOMMODATIONS
CONSTITUTE LIABILITIES. THE MAKING OF ANY SUCH LOANS, ADVANCES, AND CREDITS AND
THE PROVIDING OF FINANCIAL ACCOMMODATIONS, ON ANYONE OCCASION SUCH THAT
AVAILABILITY IS EXCEEDED SHALL NOT OBLIGATE THE LENDER TO MAKE ANY SUCH LOANS,
CREDITS, OR ADVANCES OR TO PROVIDE ANY FINANCIAL