Common use of Special Provisions Concerning Inventory and Equipment Clause in Contracts

Special Provisions Concerning Inventory and Equipment. (a) The ----------------------------------------------------- Debtor will at all times keep all of its Inventory and Equipment, if any, insured at the expense of the Debtor, to the Bank's satisfaction, against fire, theft, and all other risks to which such Inventory and Equipment may be subject; all policies or certificates with respect to such insurance shall be endorsed to the Bank's reasonable satisfaction for the benefit of the Bank to the extent of its interest therein (including, without limitation, by naming the Bank as loss payee), provided that the Debtor may be the loss payee for all payments under said insurance with respect to any casualty involving a loss of less than $50,000, and evidence of such insurance satisfactory to the Bank shall be deposited with the Bank. If the Debtor shall fail to insure its Inventory and Equipment to the Bank's reasonable satisfaction, or if the Debtor shall fail to so endorse and deposit all policies or certificates with respect thereto in accordance herewith, the Bank shall have the right (but shall be under no obligation) to procure such insurance and the Debtor agrees to reimburse the Bank for all costs and expenses of procuring such insurance. The Bank may apply any proceeds of such insurance with respect to the Inventory and Equipment, when received by it, toward the payment of any of the Obligations owing by the Debtor, whether or not the same shall then be due; provided, -------- however, that so long as no Event of Default or material Default shall have ------- occurred and be continuing when the Bank receives such proceeds, the Bank shall forward any such proceeds received by it to the Debtor, at the Debtor's request, for application to the cost of repairing or replacing the items of Inventory or Equipment in respect of which such proceeds were paid. The Debtor shall give immediate written notice to the insurers (and in the case of a loss or damage involving more than $25,000, to the Bank) of any loss or damage to the Collateral or any part thereof and shall promptly file all necessary or appropriate proofs of loss with the insurers. The Debtor hereby appoints the Bank the attorney-in-fact for the Debtor in obtaining, adjusting and cancelling any such insurance and endorsing settlement drafts. (b) The Debtor will prevent, by all reasonable action or actions as may be necessary, any of the Equipment (other than Equipment located on property owned by the Debtor and subject to a mortgage in favor of the Bank) from becoming fixtures under the laws of the jurisdiction where such Equipment is located. The Debtor will, if requested by the Bank, use reasonable efforts to obtain waivers or subordinations of liens, in form satisfactory to the Bank, from each lessor, each sublessor and each mortgagee of each lessor and sublessor whose mortgage was executed prior to the lease from such lessor or sublessor, of real property on which any of the Equipment is or may be located, and will perform all other acts the Bank may request to maintain the Equipment apart from any realty. (c) The Bank shall have the right upon the occurrence of an Event of Default which shall be continuing, without notice to (unless specifically provided for herein), or assent by, the Debtor but without affecting the Obligations, in the name of the Debtor or in the name of the Bank or otherwise: (i) upon notice to such effect, to require the Debtor to deliver, at the Debtor's expense, any or all of the Inventory and Equipment to the Bank at a place designated by the Bank (and after delivery thereof the Debtor shall have no further claim to or interest in such Inventory and Equipment); (ii) to take possession of any or all of the Inventory and Equipment of the Debtor and, for that purpose, to enter, with the aid and assistance of any Person, any premises where the Inventory or Equipment, or any part thereof, is, or may be, placed or assembled, and to remove any of such Inventory and Equipment, to render the Equipment unusable or to dispose of or store the Inventory and Equipment in such premises at the cost and expense of the Debtor; and (iii) to execute any instrument and do all the things necessary and proper to protect and preserve and realize upon the Inventory and Equipment and the other rights contemplated hereby. The Bank shall not be obligated to do any of the acts hereinabove authorized, but in the event that the Bank elects to do any such act, the Bank shall not be responsible to the Debtor except for the Bank's gross negligence or willful misconduct. It is hereby understood that the Debtor's obligation so to deliver the Collateral or any portion thereof is of the essence of this Agreement and that, accordingly, upon the application to a court of equity having jurisdiction, the Bank shall be entitled to a decree requiring specific performance by the Debtor of said obligation. (d) Upon taking possession of any Equipment or Inventory pursuant hereto following the occurrence of an Event of Default, the Bank shall have the right to hold, store or use, operate, manage and control such Equipment and Inventory. Upon any such taking of possession by the Bank of any Equipment or Inventory, the Bank may, from time to time at the expense of the Debtor, make all such repairs, replacements, alterations, additions and improvements to any of such Equipment and Inventory as the Bank may deem reasonably proper. In any such case, the Bank shall have the right to manage and control such Inventory and Equipment and to carry on the business and exercise all rights and powers of the Debtor respecting the Inventory and Equipment, all as the Bank shall deem best; and the Bank shall be entitled to collect and receive all rents, issues, profits, fees, revenues and other income of the same and every part thereof. Such rents, issues, profits, fees, revenues and other income shall be applied to pay the expenses incurred in (i) holding and operating such Equipment and Inventory; (ii) performing all maintenance, repairs, replacements, alterations, additions and improvements which the Bank may be required or elect to make, if any; and (iii) paying all taxes, assessments, insurance and other charges upon such Equipment and Inventory or any part thereof, and all other payments, which the Bank may be required or authorized or elect to make (including reasonable fees and disbursements of the Bank's counsel). Any remaining rents, issues, profits, fees, revenues and other income shall be applied to the payment of the Obligations in accordance with Paragraph 11 hereof. (e) Notwithstanding any other provision of this Agreement to the contrary, prior to the occurrence of an Event of Default, the Debtor may, in the ordinary course of business, dispose of any item of Equipment or Inventory which is subject to the security interest granted by the Debtor to the Bank under this Agreement, free of such security interest, without any further act of the Bank.

Special Provisions Concerning Inventory and Equipment. (a) The ----------------------------------------------------- Debtor will at all times keep all of its Inventory and Equipment, if any, insured at the expense of the Debtor, to the Bank's satisfaction, against fire, theft, and all other risks to which such Inventory and Equipment may be subject; all policies or certificates with respect to such insurance shall be endorsed to the Bank's reasonable satisfaction for the benefit of the Bank to the extent of its interest therein (including, without limitation, by naming the Bank as loss payee), provided that the Debtor may be the loss payee for all payments under said insurance with respect to any casualty involving a loss of less than $50,000, and evidence of such insurance satisfactory to the Bank shall be deposited with the Bank. If the Debtor shall fail to insure its Inventory and Equipment to the Bank's reasonable satisfaction, or if the Debtor shall fail to so endorse and deposit all policies or certificates with respect thereto in accordance herewith, the Bank shall have the right (but shall be under no obligation) to procure such insurance and the Debtor agrees to reimburse the Bank for all costs and expenses of procuring such insurance. The Bank may apply any proceeds of such insurance with respect to the Inventory and Equipment, when received by it, toward the payment of any of the Obligations owing by the Debtor, whether or not the same shall then be due; provided, -------- however, that so -------- ------- long as no Event of Default or material Default shall have ------- occurred and be continuing when the Bank receives such proceeds, the Bank shall forward any such proceeds received by it to the Debtor, at the Debtor's request, for application to the cost of repairing or replacing the items of Inventory or Equipment in respect of which such proceeds were paid. The Debtor shall give immediate written notice to the insurers (and in the case of a loss or damage involving more than $25,000, to the Bank) of any loss or damage to the Collateral or any part thereof and shall promptly file all necessary or appropriate proofs of loss with the insurers. The Debtor hereby appoints the Bank the attorney-in-fact for the Debtor in obtaining, adjusting and cancelling any such insurance and endorsing settlement drafts. (b) The Debtor will prevent, by all reasonable action or actions as may be necessary, any of the Equipment (other than Equipment located on property owned by the Debtor and subject to a mortgage in favor of the Bank) from becoming fixtures under the laws of the jurisdiction where such Equipment is located. The Debtor will, if requested by the Bank, use reasonable efforts to obtain waivers or subordinations of liens, in form satisfactory to the Bank, from each lessor, each sublessor and each mortgagee of each lessor and sublessor whose mortgage was executed prior to the lease from such lessor or sublessor, of real property on which any of the Equipment is or may be located, and will perform all other acts the Bank may request to maintain the Equipment apart from any realty. (c) The Bank shall have the right upon the occurrence of an Event of Default which shall be continuing, without notice to (unless specifically provided for herein), or assent by, the Debtor but without affecting the Obligations, in the name of the Debtor or in the name of the Bank or otherwise: (i) upon notice to such effect, to require the Debtor to deliver, at the Debtor's expense, any or all of the Inventory and Equipment to the Bank at a place designated by the Bank (and after delivery thereof the Debtor shall have no further claim to or interest in such Inventory and Equipment); (ii) to take possession of any or all of the Inventory and Equipment of the Debtor and, for that purpose, to enter, with the aid and assistance of any Person, any premises where the Inventory or Equipment, or any part thereof, is, or may be, placed or assembled, and to remove any of such Inventory and Equipment, to render the Equipment unusable or to dispose of or store the Inventory and Equipment in such premises at the cost and expense of the Debtor; and (iii) to execute any instrument and do all the things necessary and proper to protect and preserve and realize upon the Inventory and Equipment and the other rights contemplated hereby. The Bank shall not be obligated to do any of the acts hereinabove authorized, but in the event that the Bank elects to do any such act, the Bank shall not be responsible to the Debtor except for the Bank's gross negligence or willful misconduct. It is hereby understood that the Debtor's obligation so to deliver the Collateral or any portion thereof is of the essence of this Agreement and that, accordingly, upon the application to a court of equity having jurisdiction, the Bank shall be entitled to a decree requiring specific performance by the Debtor of said obligation. (d) Upon taking possession of any Equipment or Inventory pursuant hereto following the occurrence of an Event of Default, the Bank shall have the right to hold, store or use, operate, manage and control such Equipment and Inventory. Upon any such taking of possession by the Bank of any Equipment or Inventory, the Bank may, from time to time at the expense of the Debtor, make all such repairs, replacements, alterations, additions and improvements to any of such Equipment and Inventory as the Bank may deem reasonably proper. In any such case, the Bank shall have the right to manage and control such Inventory and Equipment and to carry on the business and exercise all rights and powers of the Debtor respecting the Inventory and Equipment, all as the Bank shall deem best; and the Bank shall be entitled to collect and receive all rents, issues, profits, fees, revenues and other income of the same and every part thereof. Such rents, issues, profits, fees, revenues and other income shall be applied to pay the expenses incurred in (i) holding and operating such Equipment and Inventory; (ii) performing all maintenance, repairs, replacements, alterations, additions and improvements which the Bank may be required or elect to make, if any; and (iii) paying all taxes, assessments, insurance and other charges upon such Equipment and Inventory or any part thereof, and all other payments, which the Bank may be required or authorized or elect to make (including reasonable fees and disbursements of the Bank's counsel). Any remaining rents, issues, profits, fees, revenues and other income shall be applied to the payment of the Obligations in accordance with Paragraph 11 hereof. (e) Notwithstanding any other provision of this Agreement to the contrary, prior to the occurrence of an Event of Default, the Debtor may, in the ordinary course of business, dispose of any item of Equipment or Inventory which is subject to the security interest granted by the Debtor to the Bank under this Agreement, free of such security interest, without any further act of the Bank.

Special Provisions Concerning Inventory and Equipment. (a) The ----------------------------------------------------- Debtor will at all times keep all of its the Inventory and Equipment, if any, Equipment insured at the expense of the Debtorits expense, to the Bank's Creditor’s satisfaction, against fire, theft, and all other risks to which such the Inventory and Equipment may be subject; all policies or certificates with respect to such insurance shall be endorsed to the Bank's reasonable Creditor’s satisfaction for the benefit of the Bank to the extent of its interest therein (includingCreditor, without limitation, including by naming the Bank Creditor as loss payee), provided that the Debtor may be the loss payee for all payments under said insurance with respect to any casualty involving a loss of less than $50,000or additional insured, and evidence of such insurance satisfactory to the Bank Creditor shall be deposited with the BankCreditor. If the Debtor shall fail to insure its the Inventory and Equipment to the Bank's reasonable Creditor’s satisfaction, or if the Debtor shall fail so to so endorse and deposit all policies or certificates with respect thereto in accordance herewith, the Bank Creditor shall have the right (but shall be under no obligation) to procure such insurance and the Debtor agrees to reimburse the Bank Creditor for all costs and expenses of procuring such insuranceinsurance that it failed to procure. The Bank Creditor may apply any proceeds of such insurance with respect to the Inventory and Equipment, when received by it, toward the payment of any of the Obligations owing by the DebtorObligations, whether or not the same shall then be due; provided, -------- however, that so long as no Event of Default or material Default shall have ------- occurred and be continuing when the Bank receives such proceeds, the Bank shall forward any such proceeds received by it to the Debtor, at the Debtor's request, for application to the cost of repairing or replacing the items of Inventory or Equipment in respect of which such proceeds were paid. The Debtor shall give immediate written notice to the insurers (and in the case of a loss or damage involving more than $25,000, to the Bank) Creditor of any loss or damage to the Collateral or any part thereof and shall promptly file all necessary or appropriate proofs of loss with the insurers. The Debtor hereby appoints the Bank Creditor the attorney-in-fact for the Debtor in obtaining, adjusting and cancelling canceling any such insurance and endorsing settlement drafts. (b) The Debtor will prevent, by all reasonable action or actions as may be necessary, any of the Equipment (other than Equipment located on property owned by the Debtor and subject to a mortgage in favor of the Bank) from becoming fixtures under the laws of the jurisdiction where such Equipment is located. The Debtor will, if requested by the Bank, use reasonable efforts to obtain waivers or subordinations of liens, in form satisfactory to the Bank, from each lessor, each sublessor and each mortgagee of each lessor and sublessor whose mortgage was executed prior to the lease from such lessor or sublessor, of real property on which any of the Equipment is or may be located, and will perform all other acts the Bank may request to maintain the Equipment apart from any realty. (c) The Bank Creditor shall have the right right, upon the occurrence and during the continuance of an Event of Default which shall be continuingDefault, without notice to (unless specifically provided for herein), or assent by, the Debtor but without affecting the Obligations, in the name of the Debtor or in the name of the Bank Creditor or otherwise: : (i) upon notice to such effect, to require the Debtor to deliver, at the Debtor's ’s expense, any or all of the Inventory and Equipment to the Bank Creditor at a place designated by the Bank Creditor (and after delivery thereof the Debtor shall have no further claim to or interest in such Inventory and Equipment); (ii) to take possession of any or all of the Inventory and Equipment of the Debtor and, for that purpose, to enter, with the aid and assistance of any Person, any premises where the such Inventory or and Equipment, or any part thereof, is, or may be, placed or assembled, and to remove any of such Inventory and or Equipment, to render the Equipment unusable or and to dispose of or store the such Inventory and or Equipment in such premises at the cost and expense of the Debtor; and (iii) to execute or endorse any instrument (including any invoice, xxxx of lading, and storage or warehouse receipt) and do all the things necessary and proper to protect and preserve and realize upon the Inventory and Equipment and the other rights contemplated hereby. The Bank Creditor shall not be obligated to do any of the acts hereinabove authorized, but in the event that the Bank Creditor elects to do any such act, the Bank Creditor shall not be responsible to the Debtor except for the Bank's gross negligence or Creditor’s own willful misconduct. It is hereby understood that the Debtor's obligation so to deliver the Collateral or any portion thereof is of the essence of this Agreement and that, accordingly, upon the application to a court of equity having jurisdiction, the Bank shall be entitled to a decree requiring specific performance by the Debtor of said obligation. (dc) Upon taking possession of any Inventory or Equipment or Inventory pursuant hereto following the occurrence of an Event of Default, the Bank Creditor shall have the right to hold, store or and/or use, operatemanage, manage control and control sell such Equipment and InventoryInventory or Equipment. Upon any such taking of possession by the Bank of any Equipment Inventory or InventoryEquipment, the Bank Creditor may, from time to time at the expense of the Debtor, make all such repairs, replacements, alterations, additions and improvements to any and of such Inventory or Equipment and Inventory as the Bank Creditor may deem reasonably proper. In any such case, the Bank Creditor shall have the right to manage and control such Inventory and or Equipment and to carry can-y on the business and exercise all rights and powers of the Debtor respecting the its Inventory and Equipment, all as the Bank Creditor shall deem best; and the Bank Creditor shall be entitled to collect and receive all rents, issues, profits, fees, revenues and other income of the same and every part thereof. thereof Such rents, issues, profits, fees, revenues and other income shall be applied to pay the expenses incurred by the Creditor or its agents in (i) holding and operating such Equipment and InventoryInventory or Equipment; (ii) performing all maintenance, repairs, replacements, alterations, additions and improvements which the Bank Creditor may be required or may elect to make, if any; and (iii) paying all taxes, assessments, insurance insurance, warehouse fees and other charges upon such Inventory or Equipment and Inventory or any part thereof, and all other payments, which the Bank Creditor may be required or authorized or elect to make (including reasonable fees legal costs and disbursements of the Bank's counselattorneys’ fees). Any remaining rents, issues, profits, fees, revenues and other income shall be applied to the payment of the Obligations in accordance with Paragraph 11 hereofSection 11. (e) Notwithstanding any other provision of this Agreement to the contrary, prior to the occurrence of an Event of Default, the Debtor may, in the ordinary course of business, dispose of any item of Equipment or Inventory which is subject to the security interest granted by the Debtor to the Bank under this Agreement, free of such security interest, without any further act of the Bank.

Special Provisions Concerning Inventory and Equipment. (a) The ----------------------------------------------------- Debtor will at all times keep all of its the Inventory and Equipment, if any, Equipment insured at the expense of the Debtorits expense, to the Bank's Creditor’s satisfaction, against fire, theft, and all other risks to which such the Inventory and Equipment may be subject; all policies or certificates with respect to such insurance shall be endorsed to the Bank's reasonable Creditor’s satisfaction for the benefit of the Bank to the extent of its interest therein (includingCreditor, without limitation, including by naming the Bank Creditor as loss payee), provided that the Debtor may be the loss payee for all payments under said insurance with respect to any casualty involving a loss of less than $50,000or additional insured, and evidence of such insurance satisfactory to the Bank Creditor shall be deposited with the BankCreditor. If the Debtor shall fail to insure its the Inventory and Equipment to the Bank's reasonable Creditor’s satisfaction, or if the Debtor shall fail so to so endorse and deposit all policies or certificates with respect thereto in accordance herewith, the Bank Creditor shall have the right (but shall be under no obligation) to procure such insurance and the Debtor agrees to reimburse the Bank Creditor for all costs and expenses of procuring such insuranceinsurance that it failed to procure. The Bank Creditor may apply any proceeds of such insurance with respect to the Inventory and Equipment, when received by it, toward the payment of any of the Obligations owing by the DebtorObligations, whether or not the same shall then be due; provided, -------- however, that so long as no Event of Default or material Default shall have ------- occurred and be continuing when the Bank receives such proceeds, the Bank shall forward any such proceeds received by it to the Debtor, at the Debtor's request, for application to the cost of repairing or replacing the items of Inventory or Equipment in respect of which such proceeds were paid. The Debtor shall give immediate written notice to the insurers (and in the case of a loss or damage involving more than $25,000, to the Bank) Creditor of any loss or damage to the Collateral or any part thereof and shall promptly file all necessary or appropriate proofs of loss with the insurers. The Debtor hereby appoints the Bank Creditor the attorney-in-fact for the Debtor in obtaining, adjusting and cancelling canceling any such insurance and endorsing settlement drafts. (b) The Debtor will prevent, by all reasonable action or actions as may be necessary, any of the Equipment (other than Equipment located on property owned by the Debtor and subject to a mortgage in favor of the Bank) from becoming fixtures under the laws of the jurisdiction where such Equipment is located. The Debtor will, if requested by the Bank, use reasonable efforts to obtain waivers or subordinations of liens, in form satisfactory to the Bank, from each lessor, each sublessor and each mortgagee of each lessor and sublessor whose mortgage was executed prior to the lease from such lessor or sublessor, of real property on which any of the Equipment is or may be located, and will perform all other acts the Bank may request to maintain the Equipment apart from any realty. (c) The Bank Creditor shall have the right right, upon the occurrence and during the continuance of an Event of Default which shall be continuingDefault, without notice to (unless specifically provided for herein), or assent by, the Debtor but without affecting the Obligations, in the name of the Debtor or in the name of the Bank Creditor or otherwise: (i) upon notice to such effect, to require the Debtor to deliver, at the Debtor's ’s expense, any or all of the Inventory and Equipment to the Bank Creditor at a place designated by the Bank Creditor (and after delivery thereof the Debtor shall have no further claim to or interest in such Inventory and Equipment); (ii) to take possession of any or all of the Inventory and Equipment of the Debtor and, for that purpose, to enter, with the aid and assistance of any Person, any premises where the such Inventory or and Equipment, or any part thereof, is, or may be, placed or assembled, and to remove any of such Inventory and or Equipment, to render the Equipment unusable or and to dispose of or store the such Inventory and or Equipment in such premises at the cost and expense of the Debtor; and (iiiHi) to execute or endorse any instrument (including any invoice, xxxx of lading, and storage or warehouse receipt) and do all the things necessary and proper to protect and preserve and realize upon the Inventory and Equipment and the other rights contemplated hereby. The Bank Creditor shall not be obligated to do any of the acts hereinabove authorized, but in the event that the Bank Creditor elects to do any such act, the Bank Creditor shall not be responsible to the Debtor except for the Bank's gross negligence or Creditor’s own willful misconduct. It is hereby understood that the Debtor's obligation so to deliver the Collateral or any portion thereof is of the essence of this Agreement and that, accordingly, upon the application to a court of equity having jurisdiction, the Bank shall be entitled to a decree requiring specific performance by the Debtor of said obligation. (dc) Upon taking possession of any Inventory or Equipment or Inventory pursuant hereto following the occurrence of an Event of Default, the Bank Creditor shall have the right to hold, store or and/or use, operatemanage, manage control and control sell such Equipment and InventoryInventory or Equipment. Upon any such taking of possession by the Bank of any Equipment Inventory or InventoryEquipment, the Bank Creditor may, from time to time at the expense of the Debtor, make all such repairs, replacements, alterations, additions and improvements to any and of such Inventory or Equipment and Inventory as the Bank Creditor may deem reasonably proper. In any such case, the Bank Creditor shall have the right to manage and control such Inventory and or Equipment and to carry on the business and exercise all rights and powers of the Debtor respecting the its Inventory and Equipment, all as the Bank Creditor shall deem best; and the Bank Creditor shall be entitled to collect and receive all rents, issues, profits, fees, revenues and other income of the same and every part thereof. Such rents, issues, profits, fees, revenues and other income shall be applied to pay the expenses incurred by the Creditor or its agents in (i) holding and operating such Equipment and InventoryInventory or Equipment; (ii) performing all maintenance, repairs, replacements, alterations, additions and improvements which the Bank Creditor may be required or may elect to make, if any; and (iii) paying all taxes, assessments, insurance insurance, warehouse fees and other charges upon such Inventory or Equipment and Inventory or any part thereof, and all other payments, which the Bank Creditor may be required or authorized or elect to make (including reasonable fees legal costs and disbursements of the Bank's counselattorneys’ fees). Any remaining rents, issues, profits, fees, revenues and other income shall be applied to the payment of the Obligations in accordance with Paragraph 11 hereofSection II. (e) Notwithstanding any other provision of this Agreement to the contrary, prior to the occurrence of an Event of Default, the Debtor may, in the ordinary course of business, dispose of any item of Equipment or Inventory which is subject to the security interest granted by the Debtor to the Bank under this Agreement, free of such security interest, without any further act of the Bank.

Special Provisions Concerning Inventory and Equipment. (a1) The ----------------------------------------------------- Debtor will at transfer of all times keep all of its Inventory right, title and Equipment, if any, insured at the expense of the Debtor, interest (including expectancy rights ("Anwartschaftsrechte") with respect to the Bank's satisfaction, against fire, theft, and all other risks to which such Inventory and Equipment may be subject; located at any of the locations shown in ANNEX B hereto at the time of the signature of this Agreement, shall become effective upon the conclusion of this Agreement, whereas the transfer of all policies or certificates with respect to such insurance future Inventory and Equipment shall be endorsed effective at the time of the arrival of such Collateral at such location without any further action on the part of the parties or any other person. Insofar as expectancy rights under retention of title arrangements ("Eigentumsvorbehalt") are transferred to the Bank's reasonable satisfaction Collateral Agent, the proprietary right will be acquired by the Collateral Agent directly from the third person at the time the retention of title arrangement terminates. (2) Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, that he has title, right or interest (including expectancy rights) to all present and future Inventory and Equipment located at the locations shown on ANNEX B hereto and that the respective Assignor is entitled to dispose of these rights. (3) The transfer of the present and future Collateral shall be replaced by the obligation of each Assignor, to store the Collateral for the benefit of the Bank Collateral Agent with due diligence and care ("Besitzkonstitut"). (4) The Collateral Agent is entitled to the extent repay obligations of its interest therein (including, without limitation, by naming the Bank as loss payee), provided that the Debtor may be the loss payee for all payments under said insurance with respect to any casualty involving a loss of less than $50,000, and evidence of such insurance satisfactory to the Bank shall be deposited with the Bank. If the Debtor shall fail to insure its Inventory and Equipment to the Bank's reasonable satisfaction, or if the Debtor shall fail to so endorse and deposit all policies or certificates with respect thereto in accordance herewith, the Bank shall have the right (but shall be under no obligation) to procure such insurance and the Debtor agrees to reimburse the Bank for all costs and expenses of procuring such insurance. The Bank may apply any proceeds of such insurance each Assignor vis-a-vis third persons with respect to the Collateral. (5) Each Assignor will keep and maintain at its own cost and expense satisfactory and complete records of any Inventory and Equipment, when received by itincluding, toward but not limited to, the payment originals of any of the Obligations owing by the Debtorall documentation (including each contract) with respect thereto, whether or not and such Assignor will make the same shall then be due; provided, -------- however, that so long as no Event of Default or material Default shall have ------- occurred and be continuing when the Bank receives such proceeds, the Bank shall forward any such proceeds received by it to the Debtor, at the Debtor's request, for application to the cost of repairing or replacing the items of Inventory or Equipment in respect of which such proceeds were paid. The Debtor shall give immediate written notice to the insurers (and in the case of a loss or damage involving more than $25,000, to the Bank) of any loss or damage available to the Collateral or Agent for inspection, at such Assignor's own cost and expense, at any part thereof and shall promptly file all necessary or appropriate proofs of loss with the insurers. The Debtor hereby appoints the Bank the attorney-in-fact for the Debtor in obtaining, adjusting reasonable times upon demand and cancelling any such insurance and endorsing settlement draftsupon reasonable advance notice. (b6) The Debtor will prevent, by all reasonable action or actions as may be necessary, any of the Equipment (other than Equipment located on property owned by the Debtor and subject to a mortgage in favor of the Bank) from becoming fixtures under the laws of the jurisdiction where such Equipment is located. The Debtor will, if requested by the Bank, use reasonable efforts to obtain waivers or subordinations of liens, in form satisfactory to the Bank, from each lessor, each sublessor and each mortgagee of each lessor and sublessor whose mortgage was executed prior to the lease from such lessor or sublessor, of real property on which any of the Equipment is or may be located, and will perform all other acts the Bank may request to maintain the Equipment apart from any realty. (c) The Bank shall have the right upon the occurrence of an Event of Default which shall be continuing, without notice to (unless specifically provided for herein), or assent by, the Debtor but without affecting the Obligations, in the name of the Debtor or in the name of the Bank or otherwise: (i) upon notice to such effect, to require the Debtor to deliver, at the Debtor's expense, any or all of the Inventory and Equipment to the Bank at a place designated by the Bank (and after delivery thereof the Debtor shall have no further claim to or interest in such Inventory and Equipment); (ii) to take possession of any or all of the Inventory and Equipment of the Debtor and, for that purpose, to enter, with the aid and assistance of any Person, any premises where the Inventory or Equipment, or any part thereof, is, or may be, placed or assembled, and to remove any of such Inventory and Equipment, to render the Equipment unusable or to dispose of or store the Inventory and Equipment in such premises at the cost and expense of the Debtor; and (iii) to execute any instrument and do all the things necessary and proper to protect and preserve and realize upon the Inventory and Equipment and the other rights contemplated hereby. The Bank shall not be obligated to do any of the acts hereinabove authorized, but in the event that the Bank elects to do any such act, the Bank shall not be responsible to the Debtor except for the Bank's gross negligence or willful misconduct. It is hereby understood that the Debtor's obligation so to deliver the Collateral or any portion thereof is of the essence of this Agreement and that, accordingly, upon the application to a court of equity having jurisdiction, the Bank Each Assignor shall be entitled to a decree requiring specific performance by the Debtor of said obligation. (d) Upon taking possession of any Equipment or Inventory pursuant hereto following the occurrence of an Event of Default, the Bank shall have the right to hold, store or use, operate, manage and control such Equipment and Inventory. Upon any such taking of possession by the Bank of any Equipment or Inventory, the Bank may, from time to time at the expense dispose of the Debtor, make all such repairs, replacements, alterations, additions and improvements to any of such Equipment and Inventory as the Bank may deem reasonably proper. In any such case, the Bank shall have the right to manage and control such Inventory and Equipment and to carry on the business and exercise all rights and powers of the Debtor respecting the Inventory and Equipment, all as the Bank shall deem best; and the Bank shall be entitled to collect and receive all rents, issues, profits, fees, revenues and other income of the same and every part thereof. Such rents, issues, profits, fees, revenues and other income shall be applied to pay the expenses incurred in (i) holding and operating such Equipment and Inventory; (ii) performing all maintenance, repairs, replacements, alterations, additions and improvements which the Bank may be required or elect to make, if any; and (iii) paying all taxes, assessments, insurance and other charges upon such Equipment and Inventory or any part thereof, and all other payments, which the Bank may be required or authorized or elect to make (including reasonable fees and disbursements of the Bank's counsel). Any remaining rents, issues, profits, fees, revenues and other income shall be applied to the payment of the Obligations in accordance with Paragraph 11 hereof. (e) Notwithstanding any other provision of this Agreement to the contrary, prior to the occurrence of an Event of Default, the Debtor may, Collateral in the ordinary course of business, dispose provided, that no Event of any item of Equipment or Inventory which is subject to Default has occurred and provided further, that the security interest granted by of the Debtor Collateral Agent with respect to the Bank under Collateral shall not be materially impaired or affected. (7) The security interests in Equipment created by this Agreement, free of such security interest, without Agreement shall be subject to any further act Lien on Equipment permitted by Section 9.01 of the BankCredit Agreement until such time as such Lien no longer attaches to such Equipment.