TERMINATION STATEMENT SHALL BE DEEMED TO
REFER ALSO TO THE ANALOGOUS DOCUMENTS USED UNDER APPLICABLE CANADIAN PERSONAL
PROPERTY SECURITY LAWS, (V) ALL REFERENCES TO THE UNITED STATES OF AMERICA, OR
TO ANY SUBDIVISION, DEPARTMENT, AGENCY OR INSTRUMENTALITY THEREOF SHALL BE
DEEMED TO REFER ALSO TO CANADA, OR TO ANY SUBDIVISION, DEPARTMENT, AGENCY OR
INSTRUMENTALITY THEREOF, (VI) ALL REFERENCES TO FEDERAL OR STATE SECURITIES LAW
OF THE UNITED STATES SHALL BE DEEMED TO REFER ALSO TO ANALOGOUS FEDERAL AND
PROVINCIAL SECURITIES LAWS IN CANADA, (VII) ALL REFERENCES TO "STATE OR FEDERAL
BANKRUPTCY LAWS" SHALL BE DEEMED TO REFER ALSO TO ANY INSOLVENCY PROCEEDING
OCCURRING IN CANADA OR UNDER CANADIAN LAW, AND (VIII) ALL CALCULATIONS OF DOLLAR
AMOUNTS WHICH UTILIZE AMOUNTS EXPRESSED IN CANADIAN DOLLARS SHALL BE MADE USING
THE DOLLAR EQUIVALENT OF SUCH CANADIAN DOLLAR AMOUNTS IN A MANNER REASONABLY
CALCULATED BY THE AGENT.
24
II.
ADVANCES, PAYMENTS.
2.1.
REVOLVING ADVANCES.
(A)
AMOUNT OF REVOLVING ADVANCES.
SUBJECT TO
THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT INCLUDING SECTIONS 2.1(B)
AND (C), EACH LENDER, SEVERALLY AND NOT JOINTLY, WILL MAKE REVOLVING ADVANCES TO
BORROWERS IN AGGREGATE AMOUNTS OUTSTANDING AT ANY TIME EQUAL TO SUCH LENDER'S
COMMITMENT PERCENTAGE OF THE LESSER OF (X) THE MAXIMUM REVOLVING ADVANCE AMOUNT
LESS THE AGGREGATE MAXIMUM UNDRAWN AMOUNT OF ALL OUTSTANDING LETTERS OF CREDIT
OR (Y) AN AMOUNT EQUAL TO THE SUM OF:
(I)
UP TO EIGHTY-FIVE PERCENT (85%), SUBJECT
TO THE PROVISIONS OF SECTION 2.1(B) HEREOF (THE "RECEIVABLES ADVANCE RATE"), OF
ELIGIBLE RECEIVABLES, PLUS
(II)
UP TO THE LESSER OF (A) SIXTY PERCENT
(60%), SUBJECT TO THE PROVISIONS OF SECTION 2.1(B) AND (C) HEREOF, OF THE VALUE
OF THE ELIGIBLE INVENTORY OR (B) EIGHTY-FIVE PERCENT (85%) OF THE APPRAISED NET
ORDERLY LIQUIDATION VALUE OF ELIGIBLE INVENTORY (AS EVIDENCED BY AN INVENTORY
APPRAISAL SATISFACTORY TO AGENT IN ITS SOLE DISCRETION EXERCISED IN GOOD FAITH)
(EACH SUCH RATE OF ADVANCE, AS APPLICABLE, THE "INVENTORY ADVANCE RATE" AND
TOGETHER WITH THE RECEIVABLES ADVANCE RATE COLLECTIVELY, THE "ADVANCE RATES"),
MINUS
(III)
THE AGGREGATE MAXIMUM UNDRAWN AMOUNT OF ALL
OUTSTANDING LETTERS OF CREDIT, MINUS
(IV)
THE AVAILABILITY RESERVE; MINUS
(V)
SUCH RESERVES AS AGENT MAY REASONABLY DEEM
PROPER AND NECESSARY FROM TIME TO TIME IN ITS PERMITTED DISCRETION.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i) and (ii) minus (y)
Section 2.1 (a)(y)(iii), (iv) and (v) at any time and from time to time shall be
referred to as the "Formula Amount".
The Revolving Advances shall be evidenced
by one or more secured promissory notes (collectively, the "Revolving Credit
Note") substantially in the form attached hereto as Exhibit 2.1(a).
(B)
DISCRETIONARY RIGHTS.
THE ADVANCE RATES MAY
BE INCREASED OR DECREASED BY AGENT AT ANY TIME AND FROM TIME TO TIME IN THE
EXERCISE OF ITS PERMITTED DISCRETION BASED ON AGENT'S REVIEW OF UPDATED
INVENTORY APPRAISALS, FIELD EXAMINATIONS OR OTHER COLLATERAL EVALUATIONS.
EACH
BORROWER CONSENTS TO ANY SUCH INCREASES OR DECREASES AND ACKNOWLEDGES THAT
DECREASING THE ADVANCE RATES OR INCREASING OR IMPOSING RESERVES MAY LIMIT OR
RESTRICT ADVANCES