VALIDITY OR SUFFICIENCY OF ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR
PURPORTING TO TRANSFER OR ASSIGN A LETTER OF CREDIT OR THE RIGHTS OR BENEFITS
THEREUNDER OR PROCEEDS THEREOF, IN WHOLE OR IN PART, WHICH MAY PROVE TO BE
INVALID OR INEFFECTIVE FOR ANY REASON.
2.10.6
CASH COLLATERAL FOR LETTERS OF CREDIT.
UPON THE REQUEST OF THE
AGENT, IF, AS OF THE LETTER OF CREDIT EXPIRATION DATE OR UPON THE OCCURRENCE AND
CONTINUANCE OF AN EVENT OF DEFAULT, ANY LETTER OF CREDIT MAY FOR ANY REASON
REMAIN OUTSTANDING AND PARTIALLY OR WHOLLY UNDRAWN, THE APPLICABLE BORROWERS
SHALL IMMEDIATELY CASH COLLATERALIZE THE THEN OUTSTANDING L/C OBLIGATIONS IN
RESPECT THERETO.
EACH OF THE BORROWERS HEREBY GRANTS TO THE AGENT, FOR THE
BENEFIT OF THE ISSUING BANK AND THE BANKS, A
34
SECURITY INTEREST IN ALL SUCH CASH AND ALL PROCEEDS OF THE FOREGOING.
CASH
COLLATERAL SHALL BE MAINTAINED IN BLOCKED, INTEREST BEARING DEPOSIT ACCOUNTS IN
THE NAME OF THE AGENT.
2.10.7
LETTER OF CREDIT FEES.
EACH APPLICABLE BORROWER SHALL PAY TO THE
AGENT FOR THE ACCOUNT OF EACH BANK A LETTER OF CREDIT FEE FOR EACH STANDBY
LETTER OF CREDIT EQUAL TO THE APPLICABLE L/C FEE MARGIN FOR STANDBY LETTERS OF
CREDIT TIMES THE DAILY AMOUNT AVAILABLE TO BE DRAWN UNDER SUCH STANDBY LETTER OF
CREDIT.
SUCH STANDBY LETTER OF CREDIT FEES SHALL BE COMPUTED ON A QUARTERLY
BASIS IN ARREARS ON THE DRAWING AMOUNT.
SUCH STANDBY LETTER OF CREDIT FEES
SHALL BE DUE AND PAYABLE ON THE FIRST BUSINESS DAY AFTER THE END OF EACH MARCH,
JUNE, SEPTEMBER AND DECEMBER OF EACH CALENDAR YEAR, COMMENCING WITH THE FIRST
SUCH DATE TO OCCUR AFTER THE ISSUANCE OF SUCH STANDBY LETTER OF CREDIT, ON THE
LETTER OF CREDIT EXPIRATION DATE AND THEREAFTER ON DEMAND.
EACH APPLICABLE
BORROWER SHALL PAY TO THE AGENT, FOR THE ACCOUNT OF THE ISSUING BANK, AN AMOUNT
WITH RESPECT TO EACH TRADE LETTER OF CREDIT EQUAL TO AN AMOUNT DETERMINED BY THE
ISSUING BANK BASED ON THE ISSUING BANK'S FEES THEN IN EFFECT FOR SUCH TRADE
LETTER OF CREDIT.
2.10.8
DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO ISSUING BANK FOR
LETTERS OF CREDIT.
THE APPLICABLE BORROWERS SHALL PAY TO THE ISSUING BANK THE
CUSTOMARY ISSUANCE, PRESENTATION, AMENDMENT AND OTHER PROCESSING FEES, AND OTHER
STANDARD COSTS AND CHARGES, OF THE ISSUING BANK RELATING TO LETTERS OF CREDIT AS
FROM TIME TO TIME IN EFFECT.
SUCH CUSTOMARY FEES AND STANDARD COSTS AND CHARGES
ARE DUE AND PAYABLE ON DEMAND AND ARE NONREFUNDABLE.
2.10.9
CONFLICT WITH LETTER OF CREDIT APPLICATION.
IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS IN THIS AGREEMENT AND THE TERMS OF ANY LETTER OF
CREDIT APPLICATION, THE TERMS IN THIS AGREEMENT SHALL CONTROL.
SECTION 3.
REPRESENTATIONS AND WARRANTIES.
The Borrowers hereby jointly and severally represent and warrant to the Agent
and each Bank as follows:
3.1
ORGANIZATION AND QUALIFICATION.
EACH OF THE BORROWERS AND ITS
SUBSIDIARIES (I) IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF ITS INCORPORATION AS