Common use of Collateral in the Possession of a Bailee Clause in Contracts

Collateral in the Possession of a Bailee. Subject to Section 7, if any goods are at any time in the possession of a bailee (which bailee has agreed to hold or in fact holds such goods for more than ninety (90) days), Pledgor shall promptly notify Secured Party thereof and shall use commercially reasonable efforts promptly to obtain an acknowledgement from such bailee, in form and substance satisfactory to Secured Party, that such bailee holds such Collateral for the benefit of Secured Party and shall act upon the instructions of Secured Party, without the further consent of Pledgor. Secured Party agrees with Pledgor that Secured Party shall not give any such instructions unless an Enforcement Event has occurred and is continuing or a Default or Event of Default would occur after taking into account any action by Pledgor with respect to such bailee. With respect to any such Collateral in the possession or within the control of Secured Party or a bailee, Pledgor waives any restriction or obligation imposed on Secured Party by Sections 9-207(c)(1) and 9-207(c)(2) of the UCC.