TERMINATION OF THIS AGREEMENT OR SUSPENSION OR TERMINATION OF THE LENDER'S
OBLIGATION TO MAKE LOANS AND ADVANCES HEREUNDER.
1-10.
LENDER'S DISCRETION.
(A)
EACH REFERENCE IN THE LOAN DOCUMENTS TO THE EXERCISE OF DISCRETION
OR THE LIKE BY THE LENDER SHALL BE TO THE LENDER'S EXERCISE OF ITS JUDGMENT, IN
GOOD FAITH, BASED UPON THE
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LENDER'S CONSIDERATION OF ANY SUCH FACTOR AS THE LENDER, TAKING INTO ACCOUNT
INFORMATION OF WHICH THE LENDER THEN HAS ACTUAL KNOWLEDGE, BELIEVES:
(I)
WILL OR REASONABLY COULD BE EXPECTED TO AFFECT THE VALUE OF THE
COLLATERAL, THE ENFORCEABILITY OF THE LENDER'S SECURITY AND COLLATERAL INTERESTS
THEREIN, OR THE AMOUNT WHICH THE LENDER WOULD LIKELY REALIZE THEREFROM (TAKING
INTO ACCOUNT DELAYS WHICH MAY POSSIBLY BE ENCOUNTERED IN THE LENDER'S REALIZING
UPON THE COLLATERAL AND LIKELY COSTS OF COLLECTION).
(II)
INDICATES THAT ANY REPORT OR FINANCIAL INFORMATION DELIVERED TO
THE LENDER BY OR ON BEHALF OF THE BORROWERS ARE INCOMPLETE, INACCURATE, OR
MISLEADING IN ANY MATERIAL MANNER OR WAS NOT PREPARED IN ACCORDANCE WITH THE
REQUIREMENTS OF THIS AGREEMENT.
(III)
SUGGESTS THE LIKELIHOOD THAT THE BORROWERS WILL BECOME THE
SUBJECT OF A BANKRUPTCY OR INSOLVENCY PROCEEDING.
(IV)
CONSTITUTES A SUSPENSION EVENT.
(B)
IN THE EXERCISE OF SUCH JUDGMENT, THE LENDER ALSO MAY TAKE INTO
ACCOUNT ANY OF THE FOLLOWING FACTORS:
(I)
THOSE INCLUDED IN, OR TESTED BY, THE DEFINITIONS OF "ACCEPTABLE
INVENTORY", "RETAIL", AND "COST".
(II)
THE CURRENT FINANCIAL AND BUSINESS CLIMATE OF THE INDUSTRY IN
WHICH THE BORROWERS COMPETE (HAVING REGARD FOR THE BORROWERS' POSITION IN THAT
INDUSTRY).
(III)
MATERIAL CHANGES IN OR TO THE MIX OF THE BORROWERS' INVENTORY.
(IV)
SEASONALITY WITH RESPECT TO THE BORROWERS' INVENTORY AND PATTERN
OF THE BORROWERS' RETAIL SALES VERSUS THAT WHICH WAS PROJECTED.
(V)
MATERIAL CHANGES IN AVAILABILITY VERSUS THAT WHICH WAS PROJECTED.
(VI)
SUCH OTHER FACTORS RELATING TO THE BORROWERS AS THE LENDER
DETERMINES AS HAVING A MATERIAL BEARING ON CREDIT RISKS ASSOCIATED WITH THE
PROVIDING OF LOANS AND FINANCIAL ACCOMMODATIONS TO THE BORROWERS.
(C)
THE BURDEN OF ESTABLISHING THE FAILURE OF THE LENDER TO HAVE ACTED
IN A REASONABLE MANNER IN SUCH LENDER'S EXERCISE OF DISCRETION SHALL BE THE
BORROWERS'.
1-11.
FEES FOR L/C'S.
(A)
ON THE FIRST DAY OF EACH MONTH DURING THE TERM HEREOF, BORROWERS
SHALL PAY TO LENDER THE AMOUNT (IN DOLLARS) THAT IS EQUAL TO THE RESULT OF ONE
(1.0%) PERCENT PER ANNUM TIMES THE AGGREGATE STATED AMOUNT OF ALL L/C'S
OUTSTANDING AT ANY TIME DURING THE PREVIOUS MONTH.
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(B)
IN ADDITION TO THE FEE TO BE PAID AS PROVIDED IN SUBSECTION 1-11
(A), ABOVE, THE BORROWERS SHALL PAY TO THE LENDER (OR TO THE ISSUER, IF SO
REQUESTED BY THE LENDER), ON DEMAND, ALL CUSTOMARY AND COMMERCIALLY REASONABLE
ISSUANCE, PROCESSING, NEGOTIATION, AMENDMENT, AND ADMINISTRATIVE FEES AND OTHER
AMOUNTS CHARGED BY THE ISSUER ON ACCOUNT OF, OR IN RESPECT TO, ANY L/C.
1-12.
CONCERNING L/C'S.
(A)
NONE OF THE ISSUER, THE ISSUER'S CORRESPONDENTS, OR ANY ADVISING,
NEGOTIATING, OR PAYING BANK WITH RESPECT TO ANY L/C SHALL BE RESPONSIBLE IN ANY