3,000,000 Revolving Line Sample Clauses


3,000,000 Revolving Line. Subject to the terms and conditions of this Agreement, and so long as no Initial Default or Matured Default has occurred, Bank agrees to loan to Borrower (and/or issue Standby Letters of Credit subject to Section 2.6) such amounts up to $3,000,000 as Borrower may request from time to time on or before the Termination Date, provided that the aggregate outstanding principal amount of advances and Standby Letters of Credit at any time outstanding shall not exceed the lesser of (a) $3,000,000, or (b) the Borrowing Base. Such Borrowing Base shall be computed on a monthly basis, and Borrower agrees to provide Bank at closing and on the 10th day of each month with regard to the immediately preceding monthly period with all information requested in connection therewith, including without limitation a Borrowing Base Certificate. In the event outstanding advances with respect to Qualified Receivables or Qualified Inventory fail to comply with such formula, by reason of any accounts receivable or inventory ceasing to be so qualified, for whatever reason, then Borrower shall immediately notify Bank of such situation and shall, within five (5) Business Days of the imbalance, either (i) reduce the amount of the outstanding balances to bring such amounts within the formulas prescribed, or (ii) provide additional Qualified Receivable or Qualified Inventory, without any additional advance being made by Bank with respect thereto, necessary to comply with the formulas required herein. Within the limits set forth in this Section 2.1, Borrower may borrow, repay and reborrow at any one time and from time to time. Notwithstanding the foregoing, in the event AML fails to comply with the Fixed Charge Coverage Ratio in Section 8.2., Bank may reserve from the Line (“Line Adjustment”) an amount necessary to cause, to the extent unused availability under the Line exists, compliance to occur, as determined by Bank in its sole discretion, which shall be adjusted further based upon the next quarterly calculations of the Fixed Charge Coverage Ratio. The Bank reserves the right to conduct a field audit of all accounts receivable and inventory prior to any advance, at Borrower’s cost and expense. Additionally, accounts receivable shall be collected through a lock box arrangement established with Bank, and Borrower agrees to execute Bank’s customary agreements in connection therewith and to pay Bank its customary fees relating thereto.