Common use of Properties in Good Condition Clause in Contracts

Properties in Good Condition. (a) Each Borrower and Guarantor shall keep its properties in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall be used in its business and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall be held for sale in the ordinary course of such Borrower's mail order and retail business and is and shall be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers shall keep the Inventory in good and marketable condition, at their own expense. Borrowers shall not, without the prior written notice to Lender, acquire or accept any Inventory on consignment or approval; it being understood, however, that Gump's may from time to time acquire inventory on consignment. Borrowers shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to an Event of Default and at least twice a year during the continuance of an Event of Default, and shall promptly supply Lender with a copy of each such count. Borrowers shall not, without the prior written consent of Lender, sell any Inventory on a bxxx-and-hold, guaranteed sale, sale and return, sale on approval, or other repurchase or return basis, except for Borrowers' existing return policies for their mail order sales and retail store sales, in each case in the ordinary course of business and prior to an Event of Default. (c) Borrowers shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers shall not, without Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds of any such sale, transfer or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicable, in such order and manner as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunder. (h) Borrowers assume and shall indemnify Lender from and against all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipment.

Properties in Good Condition. (a) Each Borrower and Guarantor shall keep its properties properties, and shall cause each of its Subsidiaries to keep its properties, in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make and cause each of its Subsidiaries to make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall be used in its business and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall will be held for sale or lease, or to be furnished in connection with the rendition of services, in the ordinary course of such Borrower's mail order and retail business business, and is and shall will be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers Borrower shall keep the Inventory in good and marketable condition, at their its own expense. Borrowers Borrower shall not, without the prior written notice to Lender, acquire or accept any Inventory inventory on consignment or approval; it being understood. Borrower agrees that all Inventory shall be produced in accordance with the Federal Fair Labor Standards Act of 1938, howeveras amended, that Gump's may from time to time acquire inventory on consignmentand all rules, regulations, and orders thereunder. Borrowers Borrower shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to an Event of Default once per fiscal year, and at least twice a year during the continuance of an Event of Defaultsuch other times as Lender reasonably requests, and shall promptly supply Lender with a copy of each such countcount accompanied by a report of the Value of such Inventory, provided, that, Borrower may obtain certain parts and supplies on -------- ---- consignment from GM needed for use in the assembly of the H2 Vehicles so long as such parts and supplies shall at all times be segregated and separately identifiable as consigned goods and in any report with respect to the Inventory delivered to Lender under Section 7.20(a) hereof, such parts and supplies shall be separately and clearly identified. Borrowers Borrower shall not, without the except after prior written consent of notice to Lender, sell any Inventory on a bxxxxxxx-and-hold, guaranteed sale, sale and return, sale on approval, or other repurchase or return basis; provided, except for Borrowers' existing return policies for their mail order sales that, Borrower shall promptly furnish to Lender such reports with -------- ---- respect thereto from time to time and retail store sales, in each case in the ordinary course of business such form and prior to an Event of Defaultsubstance as Lender may require. (c) Borrowers shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers shall not, without Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds of any such sale, transfer or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicable, in such order and manner as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunder. (h) Borrowers assume and shall indemnify Lender from and against assumes all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipmentthe Inventory.

Properties in Good Condition. (a) Each Borrower and Guarantor shall keep its properties properties, and shall cause each Subsidiary to keep its properties, in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make and cause each Subsidiary to make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall only be used in its each Borrower’s business and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall will be held for sale or lease, or to be furnished in connection with the rendition of services, in the ordinary course of such Borrower's mail order and retail business ’s business, and is and shall will be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers Each Borrower shall keep the Inventory of such Borrower in good and marketable condition, at their its own expense. Borrowers shall not, without the prior written notice to Lender, Each Borrower will not acquire or accept any Inventory on consignment or approval; it being understood, howeverexcept if such Inventory is at all times clearly identified on the books and records of such Borrower as Inventory held on consignment or approval and such Inventory is separately reported to Agent and not included in the Inventory of such Borrower as reported to Agent in a manner satisfactory to Agent. Each Borrower agrees that all Inventory will be mined and produced in accordance with all applicable laws, that Gump's may from time to time acquire inventory on consignmentincluding the Surface Mining Control and Reclamation Act of 1977, the Mine Safety and Health Act of 1977, the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and orders thereunder. Borrowers Each Borrower shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to once per fiscal year, and at any time on or after an Event of Default and so long as the same is continuing, at least twice a year during the continuance of an Event of Defaultsuch other times as Agent reasonably requests, and in each case shall promptly supply Lender Agent and Lenders with a copy of each such countcount accompanied by a report of the Value of such Inventory. Borrowers shall not, without the Agent’s prior written consent of Lenderconsent, sell any Inventory on a bxxxxxxx-and-holdhold (except if reported to Agent as xxxx-and-hold goods), guaranteed sale, sale and return, sale on approval, or other repurchase or return basis; provided, except for that, Borrowers may sell Inventory on a sale and return basis so long as: (i) such sales are made consistent with Borrowers' existing return policies for their mail order ’ current practices on the date hereof, (ii) such Inventory is sold cash on delivery and not on any extended payment terms, (iii) any Accounts arising from such sales are not reported to Agent as Eligible Accounts, and retail store sales, in each case in the ordinary course of business and prior (iv) any such Inventory is not reported to an Event of DefaultAgent as Eligible Inventory. (c) Upon the request of Agent or the Majority Lenders, Borrowers shall use shall, at their expense, no more than one time in any twelve month period, but at any time or times as Agent or the Equipment with all reasonable care Majority Lenders may request on or after an Event of Default, deliver, or cause to be delivered, to Agent and caution and in accordance with applicable standards Lenders written reports or appraisals of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers shall not, without Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds Collateral in form, scope and methodology, and by an appraiser acceptable to Agent addressed to Agent and upon which Agent and Lenders are expressly permitted to rely. Such reports or appraisals shall list all items and categories thereof, describing the condition of any such sale, transfer same and setting forth the lower of cost (calculated on a first-in-first-out basis) or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicablefair market value, in such order and manner form as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition satisfactory to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunderAgent. (h) Borrowers assume and shall indemnify Lender from and against all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipment.

Properties in Good Condition. (a) Each Borrower and each Guarantor shall, and shall cause any Subsidiary to, keep its properties properties, in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make and cause any Subsidiary to make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall only be used in its business the businesses of Borrower and Guarantors and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall will be held for sale or lease, or to be furnished in connection with the rendition of services, in the ordinary course of such Borrower's mail order the business of Borrower and retail business Guarantors, and is and shall will be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order Borrower and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers Guarantors shall keep the Inventory in good and marketable condition, at their its own expense. Borrowers Borrower and Guarantors shall not, without the prior written notice to Lender, not acquire or accept any Inventory on consignment or approval; it being understood, however, that Gump's may from time except if such Inventory is at all times clearly identified on the books and records of Borrower or such Guarantor as Inventory held on consignment or approval and such Inventory is separately reported to time acquire inventory on consignmentLender and not included in the Inventory of Borrower as reported to Lender in a manner satisfactory to Lender. Borrowers Borrower shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to once per fiscal year, and at any time on or after an Event of Default and so long as the same is continuing, at least twice a year during the continuance of an Event of Defaultsuch other times as Lender reasonably requests, and in each case shall promptly supply Lender with a copy of each such count. Borrowers shall not, without the prior written consent of Lender, sell any Inventory on count accompanied by a bxxx-and-hold, guaranteed sale, sale and return, sale on approval, or other repurchase or return basis, except for Borrowers' existing return policies for their mail order sales and retail store sales, in each case in the ordinary course of business and prior to an Event of Default. (c) Borrowers shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course report of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part Value of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers Inventory. Borrower shall not, without Lender's prior written consent, sellsell any Inventory on a bill-and-hold (except if reported to Lender as bill-and-hold goodx), lease as a lessorguaranteed sale, sale and return, sale ox xxproval, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred other repurchase or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds of any such sale, transfer or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicable, in such order and manner as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunderreturn basis. (h) Borrowers assume and shall indemnify Lender from and against all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipment.

Properties in Good Condition. (a) Each Borrower and Guarantor shall keep its properties properties, and shall cause each Subsidiary to keep its properties, in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make and cause each Subsidiary to make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall only be used in its each Borrower's business and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall will be held for sale or lease, or to be furnished in connection with the rendition of services, in the ordinary course of such Borrower's mail order and retail business business, and is and shall will be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers Each Borrower shall keep the Inventory of such Borrower in good and marketable condition, at their its own expense. Borrowers shall not, without the prior written notice to Lender, Each Borrower will not acquire or accept any Inventory on consignment or approval; it being understood, howeverexcept if such Inventory is at all times clearly identified on the books and records of such Borrower as Inventory held on consignment or approval and such Inventory is separately reported to Lender and not included in the Inventory of such Borrower as reported to Lender in a manner satisfactory to Lender. Each Borrower agrees that all Inventory will be mined and produced in accordance with all applicable laws, that Gump's may from time to time acquire inventory on consignmentincluding the Surface Mining Control and Reclamation Act of 1977, the Mine Safety and Health Act of 1977, the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and orders thereunder. Borrowers Each Borrower shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to once per fiscal year, and at any time on or after an Event of Default and so long as the same is continuing, at least twice a year during the continuance of an Event of Defaultsuch other times as Lender reasonably requests, and in each case shall promptly supply Lender with a copy of each such countcount accompanied by a report of the Value of such Inventory. Borrowers shall not, without the Lender's prior written consent of Lenderconsent, sell any Inventory on a bxxxxxxx-and-holdhold (except if reported to Lender as xxxx-and-hold goods), guaranteed sale, sale and return, sale on approval, or other repurchase or return basis, except for Borrowers' existing return policies for their mail order sales and retail store sales, in each case in the ordinary course of business and prior to an Event of Default. (c) Borrowers shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers shall not, without Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds of any such sale, transfer or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicable, in such order and manner as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunder. (h) Borrowers assume and shall indemnify Lender from and against all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipment.

Properties in Good Condition. (a) Each Borrower and Guarantor shall keep its properties properties, and shall cause its Subsidiaries to keep their properties, in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make and cause its Subsidiaries to make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall only be used in its Borrower's business and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall will be held for sale or lease, or to be furnished in connection with the rendition of services, in the ordinary course of such Borrower's mail order and retail business business, and is and shall will be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers Borrower shall keep the Inventory in good and marketable condition, at their its own expense. Borrowers shall not, without the prior written notice to Lender, Borrower will not acquire or accept any Inventory on consignment or approval; it being understood, howeverexcept if such Inventory is at all times clearly identified on the books and records of Borrower as Inventory held on consignment or approval and such Inventory is separately reported to Agent and not included in the Inventory of Borrower as reported to Agent in a manner satisfactory to Agent. Borrower agrees that all Inventory will be mined and produced in accordance with all applicable laws, that Gump's may from time to time acquire inventory on consignmentincluding the Surface Mining Control and Reclamation Act of 1977, the Mine Safety and Health Act of 1977, the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and orders thereunder. Borrowers Borrower shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to once per fiscal year, and at any time on or after an Event of Default and so long as the same is continuing, at least twice a year during the continuance of an Event of Defaultsuch other times as Agent reasonably requests, and in each case shall promptly supply Lender Agent and Lenders with a copy of each such countcount accompanied by a report of the Value of such Inventory. Borrowers Borrower shall not, without the Agent's prior written consent of Lenderconsent, sell any Inventory on a bxxxxxxx-and-holdhold (except if reported to Agent as xxxx-and-hold goods), guaranteed sale, sale and return, sale on approval, or other repurchase or return basis, except for Borrowers' existing return policies for their mail order sales and retail store sales, in each case in the ordinary course of business and prior to an Event of Default. (c) Borrowers shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers shall not, without Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds of any such sale, transfer or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicable, in such order and manner as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunder. (h) Borrowers assume and shall indemnify Lender from and against all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipment.

Properties in Good Condition. (a) Each Borrower and Guarantor shall keep its properties in good repair, working order and condition (reasonable wear and tear excepted) and, from time to time, make all needful and proper repairs, renewals, replacements, additions and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management. The Inventory and the Equipment of each Borrower and Guarantor shall be used in its business and not for personal, family, household or farming use. (b) All of the Inventory of each Borrower is and shall be held for sale in the ordinary course of such Borrower's mail order and retail business and is and shall be fit for such purposes. Borrowers shall not sell or otherwise dispose of any Inventory except for mail order and retail sales in the ordinary course of business and except for sales of outdated and surplus Inventory in the absence of an Event of Default or Incipient Default which is continuing that comply with the provisions of Section 6.21 6.22 hereof. Borrowers shall maintain all Inventory according to a computerized perpetual inventory accounting system. Borrowers shall keep the Inventory in good and marketable condition, at their own expense. Borrowers shall not, without the prior written notice to Lender, acquire or accept any Inventory on consignment or approval; it being understood, however, that Gump's may from time to time acquire inventory on consignment. Borrowers shall conduct a physical count of the Inventory of Borrowers, at their expense, at least annually prior to an Event of Default and at least twice a year during the continuance of an Event of Default, and shall promptly supply Lender with a copy of each such count. Borrowers shall not, without the prior written consent of Lender, sell any Inventory on a bxxxbill-andxxx-hold, guaranteed sale, sale and return, sale on approval, or other repurchase or return basis, except for Borrowers' existing return policies for their mail order sales and retail store sales, in each case in the ordinary course of business and prior to an Event of Default. (c) Borrowers shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws. (d) Borrowers shall not remove any Equipment from the locations set forth for the respective Borrowers on Exhibit C hereto or otherwise permitted herein for the applicable Borrower, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of Borrowers or to move Equipment directly from one location set forth on Exhibit C hereto for that Borrower or otherwise permitted herein for that Borrower, to another such location and except for the movement of motor vehicles used by or for the benefit of the Borrowers in the ordinary course of business. (e) The Equipment of Borrowers is now and shall remain personal property and Borrowers shall not permit any of their Equipment to be or become a part of or affixed to real property. (f) The Equipment of each Borrower, other than any Equipment constituting fixtures as of the date hereof, is now and shall remain personal property and Borrowers shall not permit any material part of such Equipment to be or become a part of or affixed to real property without (i) prior written notice to Lender and the written consent of Lender and (ii) first making all arrangements, and delivering or causing to be delivered to Lender, such agreements and other documentation requested by Lender for the protection and preservation of its security interests and liens, in form and substance satisfactory to Lender. (g) Borrowers shall not, without Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any part of their Equipment that has a fair market value greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for all such transactions in any fiscal year of Borrowers. In the event any such Equipment is sold, transferred or otherwise disposed of with Lender's prior written consent or as permitted hereunder without such consent and: (i) such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by Borrowers, or by Equipment purchased by Borrowers subject to a Purchase Money Lien, then Borrowers shall deliver all of the cash proceeds of any such sale, transfer or disposition to Lender, which proceeds shall be (A) applied to the repayment of the Obligations of Borrowers as applicable, in such order and manner as Lender shall determine or (B) retained by Lender as cash Collateral; or (ii) such sale, transfer or disposition is made in connection with the purchase by Borrowers of replacement Equipment, then Borrowers shall use the proceeds of such sale, transfer or disposition to finance the purchase by Borrowers of replacement Equipment and shall deliver to Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by Borrowers shall be free and clear of all liens, claims and encumbrances, except as otherwise permitted hereunder. (h) Borrowers assume and shall indemnify Lender from and against all responsibility and liability arising from or relating to the use, sale or other disposition of their respective Inventory and Equipment.