5-7.
INSURANCE POLICIES.
(A)
EXHIBIT 5-7, ANNEXED HERETO, IS A SCHEDULE OF ALL INSURANCE
POLICIES OWNED BY THE BORROWERS OR UNDER WHICH THE BORROWERS ARE THE NAMED
INSURED. EACH OF SUCH POLICIES IS IN FULL FORCE AND EFFECT. NEITHER THE ISSUER
OF ANY SUCH POLICY NOR THE BORROWERS ARE IN DEFAULT OR VIOLATION OF ANY SUCH
POLICY.
(B)
THE BORROWERS SHALL HAVE AND MAINTAIN AT ALL TIMES INSURANCE
COVERING SUCH RISKS, IN SUCH AMOUNTS, CONTAINING SUCH TERMS, IN SUCH FORM, FOR
SUCH PERIODS, AND WRITTEN BY SUCH COMPANIES AS MAY BE REASONABLY SATISFACTORY TO
THE LENDER. THE COVERAGE REFLECTED ON EXHIBIT 5-7 PRESENTLY SATISFIES THE
FOREGOING REQUIREMENTS, IT BEING RECOGNIZED BY THE BORROWERS, HOWEVER, THAT SUCH
REQUIREMENTS MAY CHANGE HEREAFTER TO REFLECT CHANGING CIRCUMSTANCES. ALL
INSURANCE CARRIED BY THE BORROWERS SHALL PROVIDE FOR A MINIMUM OF TWENTY (20)
DAYS' WRITTEN NOTICE OF CANCELLATION TO THE LENDER AND ALL SUCH INSURANCE WHICH
COVERS THE COLLATERAL SHALL INCLUDE AN ENDORSEMENT IN FAVOR OF THE LENDER, WHICH
ENDORSEMENT SHALL PROVIDE THAT THE INSURANCE, TO THE EXTENT OF THE LENDER'S
INTEREST THEREIN, SHALL NOT BE IMPAIRED OR INVALIDATED, IN WHOLE OR IN PART, BY
REASON OF ANY ACT OR NEGLECT OF THE BORROWERS OR BY THE FAILURE OF THE BORROWERS
TO COMPLY WITH ANY WARRANTY OR CONDITION OF THE POLICY. IN THE EVENT OF THE
FAILURE BY THE BORROWERS TO MAINTAIN INSURANCE AS REQUIRED HEREIN, THE LENDER,
AT ITS OPTION, MAY
20
OBTAIN SUCH INSURANCE, PROVIDED, HOWEVER, THE LENDER'S OBTAINING OF SUCH
INSURANCE SHALL NOT CONSTITUTE A CURE OR WAIVER OF ANY EVENT OF DEFAULT
OCCASIONED BY THE BORROWERS' FAILURE TO HAVE MAINTAINED SUCH INSURANCE. THE
BORROWERS SHALL FURNISH TO THE LENDER CERTIFICATES OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE LENDER REGARDING COMPLIANCE BY THE BORROWERS WITH THE
FOREGOING INSURANCE PROVISIONS.
(C)
THE BORROWERS SHALL ADVISE THE LENDER OF EACH CLAIM IN EXCESS OF
TWENTY-FIVE THOUSAND ($25,000) DOLLARS MADE BY THE BORROWERS UNDER ANY POLICY OF
INSURANCE WHICH COVERS THE COLLATERAL AND WILL PERMIT THE LENDER FOLLOWING THE
OCCURRENCE OF ANY SUSPENSION EVENT, AT THE LENDER'S OPTION IN EACH INSTANCE, TO
THE EXCLUSION OF THE BORROWERS, TO CONDUCT THE ADJUSTMENT OF EACH SUCH CLAIM.
THE BORROWERS HEREBY APPOINT THE LENDER AS THE BORROWERS' ATTORNEY IN FACT TO
OBTAIN, ADJUST, SETTLE, AND CANCEL ANY INSURANCE DESCRIBED IN THIS SECTION AND
TO ENDORSE IN FAVOR OF THE LENDER ANY AND ALL DRAFTS AND OTHER INSTRUMENTS WITH
RESPECT TO SUCH INSURANCE. THIS APPOINTMENT, BEING COUPLED WITH AN INTEREST, IS
IRREVOCABLE UNTIL THIS AGREEMENT IS TERMINATED BY A WRITTEN INSTRUMENT EXECUTED
BY A DULY AUTHORIZED OFFICER OF THE LENDER. THE LENDER SHALL NOT BE LIABLE ON
ACCOUNT OF ANY EXERCISE PURSUANT TO SAID POWER EXCEPT FOR ANY EXERCISE IN ACTUAL
WILLFUL MISCONDUCT AND BAD FAITH. THE LENDER MAY APPLY ANY PROCEEDS OF SUCH
INSURANCE AGAINST THE LIABILITIES, WHETHER OR NOT SUCH HAVE MATURED, IN SUCH
ORDER OF APPLICATION AS THE LENDER MAY DETERMINE.
(D)
THE BORROWERS SHALL MAINTAIN AT ALL TIMES THOSE POLICIES OF
INSURANCE OBTAINED BY