10.01
MAINTENANCE OF INSURANCE. BORROWER WILL MAINTAIN WITH FINANCIALLY
SOUND AND REPUTABLE INSURERS INSURANCE WITH RESPECT TO ITS PROPERTIES AND
BUSINESS AGAINST SUCH CASUALTIES AND CONTINGENCIES AS SHALL BE IN ACCORDANCE
WITH GENERAL PRACTICES OF BUSINESSES ENGAGED IN SIMILAR ACTIVITIES IN SIMILAR
GEOGRAPHIC AREAS. SUCH INSURANCE SHALL BE IN SUCH MINIMUM AMOUNTS THAT BORROWER
WILL NOT BE DEEMED A CO-INSURER UNDER APPLICABLE INSURANCE LAWS, REGULATIONS AND
POLICIES AND OTHERWISE SHALL BE IN SUCH AMOUNTS, CONTAIN SUCH TERMS, BE IN SUCH
FORMS AND BE FOR SUCH PERIODS AS MAY BE REASONABLY SATISFACTORY TO LENDER. IN
ADDITION, ALL SUCH INSURANCE SHALL BE PAYABLE TO LENDER AS LOSS PAYEE UNDER A
STANDARD LOSS PAYEE CLAUSE. WITHOUT LIMITING THE FOREGOING, BORROWER WILL (I)
KEEP ALL OF ITS PHYSICAL PROPERTY INSURED WITH CASUALTY OR PHYSICAL HAZARD
INSURANCE ON AN "ALL RISKS" BASIS, WITH ELECTRONIC DATA PROCESSING COVERAGE,
WITH A FULL REPLACEMENT COST ENDORSEMENT AND IN AN AMOUNT EQUAL TO 100% OF THE
FULL REPLACEMENT COST OF SUCH PROPERTY, (II) MAINTAIN ALL SUCH WORKERS'
COMPENSATION OR SIMILAR INSURANCE AS MAY BE REQUIRED BY LAW AND (III) MAINTAIN,
IN AMOUNTS AND WITH DEDUCTIBLES EQUAL TO THOSE GENERALLY MAINTAINED BY
BUSINESSES ENGAGED IN SIMILAR ACTIVITIES IN SIMILAR GEOGRAPHIC AREAS, GENERAL
PUBLIC LIABILITY INSURANCE AGAINST CLAIMS OF BODILY INJURY, DEATH OR PROPERTY
DAMAGE OCCURRING, ON, IN OR ABOUT THE PROPERTIES OF BORROWER; BUSINESS
INTERRUPTION INSURANCE; AND PRODUCT LIABILITY INSURANCE.
10.02
INSURANCE PROCEEDS. THE PROCEEDS OF ANY CASUALTY INSURANCE IN RESPECT
OF ANY CASUALTY LOSS OF ANY OF THE COLLATERAL SHALL, SUBJECT TO THE RIGHTS, IF
ANY, OF OTHER PARTIES WITH A PRIOR INTEREST IN THE PROPERTY COVERED THEREBY, (I)
SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND TO
THE EXTENT THAT THE AMOUNT OF SUCH PROCEEDS IS LESS THAN $100,000, BE DISBURSED
TO BORROWER FOR DIRECT APPLICATION BY BORROWER SOLELY TO THE REPAIR OR
REPLACEMENT OF BORROWER'S PROPERTY SO DAMAGED OR DESTROYED AND (II) IN ALL OTHER
CIRCUMSTANCES, BE HELD BY LENDER AS CASH COLLATERAL FOR THE
6
OBLIGATIONS. LENDER MAY, AT ITS SOLE OPTION, DISBURSE FROM TIME TO TIME ALL OR
ANY PART OF SUCH PROCEEDS SO HELD AS CASH COLLATERAL, UPON SUCH TERMS AND
CONDITIONS AS LENDER MAY REASONABLY PRESCRIBE, FOR DIRECT APPLICATION BY
BORROWER SOLELY TO THE REPAIR OR REPLACEMENT OF BORROWER'S PROPERTY SO DAMAGED
OR DESTROYED, OR LENDER MAY APPLY ALL OR ANY PART OF SUCH PROCEEDS TO THE
OBLIGATIONS WITH THE COMMITMENTS (IF NOT THEN TERMINATED) BEING REDUCED BY THE
AMOUNT SO APPLIED TO THE OBLIGATIONS.
10.03
NOTICE OF CANCELLATION, ETC. ALL POLICIES OF INSURANCE WILL PROVIDE
FOR AT LEAST 30 DAYS PRIOR WRITTEN CANCELLATION NOTICE TO LENDER. IN THE EVENT
OF FAILURE BY BORROWER TO PROVIDE AND MAINTAIN INSURANCE AS HEREIN PROVIDED,
LENDER MAY, AT ITS OPTION, PROVIDE SUCH INSURANCE AND CHARGE THE AMOUNT THEREOF
TO BORROWER. BORROWER WILL FURNISH LENDER WITH CERTIFICATES OF INSURANCE AND
COPIES POLICIES EVIDENCING COMPLIANCE WITH THE FOREGOING INSURANCE PROVISION.
11.
COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
11.01
EXPENSES INCURRED