Common use of Insurance; Casualty Loss Clause in Contracts

Insurance; Casualty Loss. (A) Borrower agrees to maintain, and to cause each of its Subsidiaries to maintain, public liability insurance, third party property damage insurance and replacement value insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts and covering such risks as are at all times satisfactory to Agent in its commercially reasonable judgement. All policies covering the Collateral are to name Agent as an additional insured and the loss payee in case of loss. Borrower shall diligently file and prosecute, or cause to be filed and prosecuted, all claims for any award or payment in connection with a Casualty Loss with respect to Borrower. After the occurrence and during the continuance of an Event of Default, (A) no settlement on account of any such Casualty Loss with respect to Borrower shall be made without the consent of the Lenders and (B) Agent may participate in any such proceedings and Borrower shall deliver to Agent such documents as may be requested by Agent to permit such participation and shall consult with Agent, its attorneys and agents in the making and prosecution of such claim or claims. Borrower hereby irrevocably authorizes and appoints Agent its attorney-in-fact, and agrees that, upon request, it will cause each Subsidiary of Borrower to authorize and appoint Agent its attorney-in-fact, after the occurrence and during the continuance of an Event of Default, to collect and receive any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and Borrower shall, upon demand of Agent, make, execute and deliver, and cause each of its Subsidiary to make, execute and deliver, any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to Agent for the benefit of Agent, the Lenders and the Issuing Lenders, free and clear of any encumbrances of any kind or nature whatsoever. (B) UNLESS BORROWER PROVIDES AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS CREDIT AGREEMENT, AGENT MAY PURCHASE INSURANCE AT BORROWER'S EXPENSE TO PROTECT AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT BORROWER'S INTERESTS. THE COVERAGE THAT AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED BY AGENT, BUT ONLY AFTER PROVIDING AGENT WITH EVIDENCE THAT BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT AGREEMENT. IF AGENT PURCHASES INSURANCE FOR THE COLLATERAL, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN.

Insurance; Casualty Loss. (A) Borrower agrees to maintain, and to cause each of its Subsidiaries to maintain, public liability insurance, third party property damage insurance and replacement value insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts and covering such risks as are at all times satisfactory to Agent in its commercially reasonable judgement. All policies covering the Collateral are to name Agent as an additional insured and the loss payee in case of loss, and are to contain such other provisions as Agent may reasonably require to fully protect the interest of the Lenders in the Collateral and to any payments to be made under such policies. Borrower shall diligently file and prosecute, or cause to be filed and prosecuted, all claims for any award or payment in connection with a Casualty Loss with respect to Borrower. Borrower shall receive in trust and pay to Agent, promptly upon receipt thereof, any and all insurance proceeds and payments received by Borrower or any of its Subsidiaries on account of any Casualty Loss exceeding, in the aggregate for any calendar year, $500,000. Casualty Loss proceeds in an aggregate amount of less than $500,000 in any calendar year of Borrower may be retained by Borrower and utilized to repair, restore or replace those assets damaged or lost due to the underlying casualty so long as (i) no Default or Event of Default then exists or would be created thereby, (ii) Agent receives evidence reasonably satisfactory to it that the Net Disposition Proceeds received by Borrower in connection with such Casualty Loss is sufficient to effectuate such repair, restoration or replacement, and (iii) Agent determines in its reasonable discretion that such assets can be repaired, restored or replaced no later than the 180th day prior to the Expiration Date. To the extent that the aggregate amount of such proceeds and payments exceeds $500,000 in any calendar year, Agent may, at its election and in its sole discretion, (a) apply such proceeds and payments to the payment of accrued and unpaid interest and/or outstanding principal under the Loans or any other Obligations then due and payable, (b) hold such proceeds as additional Collateral to secure any other Obligations not then due and payable or (c) pay such proceeds to Borrower to be used to repair, replace or rebuild the asset or property or portion thereof that was the subject of the Casualty Loss. After the occurrence and during the continuance of an Event of Default, (Aa) no settlement on account of any such Casualty Loss with respect to Borrower or any Subsidiary of Borrower shall be made without the consent of the Lenders and (Bb) Agent may participate in any such proceedings and Borrower shall deliver to Agent such documents as may be requested by Agent to permit such participation and shall consult with Agent, its attorneys and agents in the making and prosecution of such claim or claims. Borrower hereby irrevocably authorizes and appoints Agent its attorney-in-fact, and agrees that, upon request, it will cause each Subsidiary of Borrower to authorize and appoint Agent its attorney-in-fact, after the occurrence and during the continuance of an Event of Default, to collect and receive any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and Borrower shall, upon demand of Agent, make, execute and deliver, and cause each of its Subsidiary to make, execute and deliver, any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to Agent for the benefit of Agent, the Lenders and the Issuing Lenders, free and clear of any encumbrances of any kind or nature whatsoever. (B) UNLESS BORROWER PROVIDES AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS CREDIT AGREEMENT, AGENT MAY PURCHASE INSURANCE AT BORROWER'S EXPENSE TO PROTECT AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT BORROWER'S INTERESTS. THE COVERAGE THAT AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED BY AGENT, BUT ONLY AFTER PROVIDING AGENT WITH EVIDENCE THAT BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT AGREEMENT. IF AGENT PURCHASES INSURANCE FOR THE COLLATERAL, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN.

Insurance; Casualty Loss. (Aa) Each Borrower agrees to maintain, and to cause each of its Subsidiaries to maintain, public liability insurance, third party property damage insurance and replacement value insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts and covering such risks as are at all times satisfactory to the Agent in its commercially reasonable judgementjudgment. All policies covering the Collateral are to name the Agent as an additional insured and the loss payee in case of loss, and are to contain such other provisions as the Agent may reasonably require to fully protect the interest of the Lenders in the Collateral and to any payments to be made under such policies. Each Borrower shall diligently file and prosecute, or cause to be filed and prosecuted, all claims for any award or payment in connection with a Casualty Loss with respect to such Borrower or any Subsidiary of such Borrower. Each Borrower and each Subsidiary of a Borrower shall receive in trust and pay to the Agent, promptly upon receipt thereof, the Net Disposition Proceeds of all Casualty Losses with respect to such Person, for application to the Loans. After the occurrence and during the continuance of an Event of Default, (A) no settlement on account of any such Casualty Loss with respect to any Borrower shall be made without the consent of the Lenders Agent and (B) the Agent may participate in any such proceedings and the applicable Borrower shall deliver to the Agent such documents as may be reasonably requested by the Agent to permit such participation and shall consult with the Agent, its attorneys and agents in the making and prosecution of such claim or claims. Each Borrower hereby irrevocably authorizes and appoints the Agent its attorney-in-fact, and agrees that, upon request, it will cause each Subsidiary of such Borrower to authorize and appoint the Agent its attorney-in-fact, after the occurrence and during the continuance of an Event of Default, to collect and receive any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and each Borrower shall, upon demand of the Agent, make, execute and deliver, and cause each of its Subsidiary Subsidiaries to make, execute and deliver, any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to the Agent for the benefit of the Agent, the Lenders and the Issuing Lenders, free and clear of any encumbrances of any kind or nature whatsoever. (b) Notwithstanding anything to the contrary contained herein, upon the occurrence of any Casualty Loss with respect to any Equipment or other fixed assets of any Borrower or any Subsidiary of any Borrower, the Agent shall establish a reserve against unused availability under the Borrowing Base in an amount equal to the orderly liquidation value of such fixed assets (as determined by the Agent in its sole discretion). Each such reserve shall remain in effect until such time as the Net Disposition Proceeds of such Casualty Loss are received by the Agent for application to the Loans, at which time the Fixed Asset Sublimit shall be automatically and permanently reduced by an amount equal to the greater of (i) such Net Disposition Proceeds and (ii) such orderly liquidation value; provided, that, with respect to no more than $7,500,000 of such Net Disposition Proceeds received in cash in any Fiscal Year, so long an Event of Default shall not have occurred and be continuing, within 90 days following receipt by the Agent thereof, the Funds Administrator may deliver to the Agent a certificate of a Responsible Officer of BWAY setting forth (x) that portion of such Net Disposition Proceeds that the applicable Borrower or Subsidiary, as the case may be, intends to reinvest in the purchase of Equipment or other fixed assets used in the business of the Borrowers within two (2) years of such date of receipt, and (y) the proposed use of such portion of such Net Disposition Proceeds (and, in connection therewith, shall thereafter promptly provide such other information with respect to such reinvestment as the Agent may from time to time reasonably request) and, pending such reinvestment, the Agent shall continue to maintain a reserve against unused availability under the Borrowing Base in the amount of such Net Disposition Proceeds (which reserve shall remain in effect until reduced from time to time at the written request of the Funds Administrator upon the Agent's receipt of evidence reasonably satisfactory to the Agent of the purchase of such Equipment or other fixed assets) and shall not reduce the Fixed Asset Sublimit in the amount thereof (although an immediate reduction in the Fixed Asset Sublimit shall occur in any event to the extent that such Net Disposition Proceeds are less than the orderly liquidation value of the Equipment or other fixed assets with respect to which such Casualty Loss occurred, as determined by the Agent in its sole discretion); provided, further, that if (A) within 365 days after the date of receipt by the Agent of such Net Disposition Proceeds, the Borrowers have not so used such Net Disposition Proceeds, or in the alternative have not delivered to the Agent evidence reasonably satisfactory to the Agent that one or more of the Borrowers has entered into one or more binding contractual commitments to so use such Net Disposition Proceeds, or, in any event (B) UNLESS BORROWER PROVIDES AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS CREDIT AGREEMENTwithin two (2) years after the date of the Agent's receipt of such Net Disposition Proceeds, AGENT MAY PURCHASE INSURANCE AT BORROWER'S EXPENSE TO PROTECT AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAYthe Borrowers have not so used all or any portion of such Net Disposition Proceeds not required to be applied to reduce the Fixed Asset Sublimit pursuant to the preceding proviso, BUT NEED NOTor pursuant to clause (A) of this proviso, PROTECT BORROWER'S INTERESTS. THE COVERAGE THAT AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED BY AGENTthe Fixed Asset Sublimit shall be promptly reduced by an amount equal to such remaining portion on the last day of such 365 day period or two year period, BUT ONLY AFTER PROVIDING AGENT WITH EVIDENCE THAT BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT AGREEMENT. IF AGENT PURCHASES INSURANCE FOR THE COLLATERAL, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWNas the case may be.

Insurance; Casualty Loss. (A) Borrower agrees to maintain, and to cause each of its Subsidiaries to maintain, will maintain public liability insurance, third party property damage insurance and replacement value insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts and covering such risks as are at all times customary for businesses of this type and satisfactory to Agent Lender in its commercially reasonable judgementjudgment. All policies covering the Collateral are to name Lender (or, during the term of the Intercreditor Agreement, Collateral Agent for the benefit of P&S and Lender pursuant to the terms of the Intercreditor Agreement) as an additional insured (as to liability coverage) and the lender’s loss payee (as to casualty and property coverage), as its interests may appear, and are to contain such other provisions as Lender may reasonably require to fully protect Lender’s interest in case the Collateral and to any payments to be made under such policies. True copies of lossall original insurance policies or certificates of insurance evidencing such insurance covering the Collateral are to be delivered to Lender on or prior to the Closing Date, with such premiums paid in accordance with each insurance carrier’s requirements with the lender’s loss payable endorsement in favor of Lender (or, during the term of the Intercreditor Agreement, in favor of Collateral Agent for the benefit of P&S and Lender pursuant to the terms of the Intercreditor Agreement), and shall provide for not less than 30 days prior written notice to Lender (or Collateral Agent, if applicable), of the exercise of any right of cancellation. In the event Borrower fail to respond in a timely and appropriate manner (as determined by Lender in its sole discretion) with respect to collecting under any insurance policies required to be maintained hereunder, Lender shall have the right, in the name of Lender or Borrower, to file claims under such insurance policies, to receive and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. Borrower shall will provide written notice to Lender of the occurrence of any of the following events within 5 Business Days after the occurrence of such event: any Property owned or used by Borrower is (i) materially damaged or destroyed, or suffers any other loss which is in excess of $25,000 or (ii) is condemned, confiscated or otherwise taken, in whole or in part, or the use thereof is otherwise diminished so as to render impracticable or unreasonable the use of such asset or property for the purpose to which such asset or property were used immediately prior to such condemnation, confiscation or taking, by exercise of the powers of condemnation or eminent domain or otherwise, and in either case the amount of the damage, destruction, loss or diminution in value of the Collateral which is in excess of $25,000 (collectively, a “Casualty Loss”). Borrower will diligently file and prosecute, prosecute its claim or cause to be filed and prosecuted, all claims for any award or payment in connection with a Casualty Loss with respect Loss. In the event of a Casualty Loss, Borrower will pay to BorrowerLender (or Collateral Agent, if applicable), promptly upon receipt thereof, any and all insurance proceeds and payments received by Borrower on account of damage, destruction or loss of all or any portion of the Collateral. Lender may, at its election and in its sole discretion, and subject to the terms of the Intercreditor Agreement, either (a) apply the proceeds realized from Casualty Losses to payment of accrued and unpaid interest or outstanding principal of the Term Loan or (b) pay such proceeds to Borrower to be used to repair, replace or rebuild the Property or portion thereof that was the subject of the Casualty Loss. After the occurrence and during the continuance of an Event of Default, (Ai) no settlement on account of any such Casualty Loss with respect to Borrower shall be made without the consent of the Lenders Lender and (Bii) Agent Lender may participate in any such proceedings and Borrower shall will deliver to Agent Lender such documents as may be requested by Agent Lender to permit such participation and shall will consult with Agent, Lender and its attorneys and agents in the making and prosecution of such claim or claims. Borrower hereby irrevocably authorizes and appoints Agent Lender as its attorney-in-fact, and agrees that, upon request, it will cause each Subsidiary of Borrower to authorize and appoint Agent its attorney-in-fact, after the occurrence and during the continuance of an Event of Default, to collect and receive for any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and Borrower shall, upon demand of AgentLender, make, execute and deliver, and cause each of its Subsidiary to make, execute and deliver, deliver any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to Agent for the benefit of Agent, the Lenders and the Issuing Lenders, Lender free and clear of any encumbrances of any kind or nature whatsoever. (B) UNLESS BORROWER PROVIDES AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS CREDIT AGREEMENT, AGENT MAY PURCHASE INSURANCE AT BORROWER'S EXPENSE TO PROTECT AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT BORROWER'S INTERESTS. THE COVERAGE THAT AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED BY AGENT, BUT ONLY AFTER PROVIDING AGENT WITH EVIDENCE THAT BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT AGREEMENT. IF AGENT PURCHASES INSURANCE FOR THE COLLATERAL, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN.

Insurance; Casualty Loss. (Aa) Each Borrower agrees to maintain, and to cause each of its Subsidiaries to maintain, public liability insurance, third party property damage insurance and replacement value insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts and covering such risks as are at all times satisfactory to the Agent in its commercially reasonable judgement. All policies covering the Collateral are to name the Agent as an additional insured and the loss payee in case of loss, and are to contain such other provisions as the Agent may reasonably require to fully protect the interest of the Lenders in the Collateral and to any payments to be made under such policies. Each Borrower shall diligently file and prosecute, or cause to be filed and prosecuted, all claims for any award or payment in connection with a Casualty Loss with respect to such Borrower. Each Borrower shall receive in trust and pay to the Agent, promptly upon receipt thereof, the Net Disposition Proceeds of all Casualty Losses with respect to such Borrower, for application to the Loans. After the occurrence and during the continuance of an Event of Default, (A) no settlement on account of any such Casualty Loss with respect to any Borrower shall be made without the consent of the Lenders and (B) the Agent may participate in any such proceedings and the applicable Borrower shall deliver to the Agent such documents as may be requested by the Agent to permit such participation and shall consult with the Agent, its attorneys and agents in the making and prosecution of such claim or claims. Each Borrower hereby irrevocably authorizes and appoints the Agent its attorney-in-fact, and agrees that, upon request, it will cause each Subsidiary of such Borrower to authorize and appoint the Agent its attorney-in-fact, after the occurrence and during the continuance of an Event of Default, to collect and receive any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and each Borrower shall, upon demand of the Agent, make, execute and deliver, and cause each of its Subsidiary Subsidiaries to make, execute and deliver, any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to the Agent for the benefit of the Agent, the Lenders and the Issuing Lenders, free and clear of any encumbrances of any kind or nature whatsoever. (Bb) UNLESS BORROWER PROVIDES AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS CREDIT AGREEMENTNotwithstanding anything to the contrary contained herein, AGENT MAY PURCHASE INSURANCE AT BORROWER'S EXPENSE TO PROTECT AGENT'S INTERESTS IN THE COLLATERALupon the occurrence of any Casualty Loss with respect to fixed assets of any Borrower or any Subsidiary of any Borrower, the Agent shall establish a reserve against unused availability under the Borrowing Base in an amount equal to the orderly liquidation value of such fixed assets (as determined by the Agent in its sole and absolute discretion). THIS INSURANCE MAYEach such reserve shall remain in effect until such time as the Net Disposition Proceeds of such Casualty Loss are received by the Agent for application to the Loans, BUT NEED NOTat which time the Fixed Asset Sublimit shall be automatically and permanently reduced by an amount equal to the greater of (i) such Net Disposition Proceeds and (ii) such orderly liquidation value; provided, PROTECT BORROWER'S INTERESTS. THE COVERAGE THAT AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED BY AGENTthat, BUT ONLY AFTER PROVIDING AGENT WITH EVIDENCE THAT BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT AGREEMENT. IF AGENT PURCHASES INSURANCE FOR THE COLLATERALwith respect to no more than $5,000,000 of such Net Disposition Proceeds in any Fiscal Year, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCEupon written notice from the Funds Administrator to the Agent given promptly following receipt by the Agent of such Net Disposition Proceeds, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH THE PLACEMENT OF THE INSURANCEthe Borrowers may elect to use such Net Disposition Proceeds to repair, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWNrebuild or replace the applicable fixed assets (or permitted portion thereof), in which case no reduction in the Fixed Asset Sublimit in respect thereof shall be required.