(AS SUCH TERMS ARE DEFINED IN THE
UCC WITH CORRESPONDING PROVISIONS THEREOF DEFINING WHAT CONSTITUTES "CONTROL"
FOR SUCH ITEMS OF COLLATERAL), WITH ANY AGREEMENTS ESTABLISHING CONTROL TO BE IN
FORM AND SUBSTANCE REASONABLY
40
SATISFACTORY TO AGENT, AND (III) OTHERWISE TO INSURE THE CONTINUED PERFECTION
AND PRIORITY OF AGENT'S SECURITY INTEREST IN ANY OF THE COLLATERAL FOR THE
BENEFIT OF THE LENDERS AND TERM LENDER AND OF ITS RIGHTS THEREIN.
IF ANY LOAN
PARTY SHALL AT ANY TIME, ACQUIRE A "COMMERCIAL TORT CLAIM" (AS SUCH TERM IS
DEFINED IN THE UCC) IN EXCESS OF $100,000, SUCH LOAN PARTY SHALL PROMPTLY NOTIFY
AGENT THEREOF IN WRITING, THEREIN PROVIDING A REASONABLE DESCRIPTION AND SUMMARY
THEREOF, AND UPON DELIVERY THEREOF TO AGENT, SUCH LOAN PARTY SHALL BE DEEMED TO
THEREBY GRANT TO AGENT FOR THE BENEFIT OF THE ISSUER, LENDERS AND TERM LENDER
(AND EACH LOAN PARTY HEREBY GRANTS TO AGENT, FOR THE BENEFIT OF EACH ISSUER,
LENDER AND TERM LENDER) A SECURITY INTEREST AND LIEN IN AND TO SUCH COMMERCIAL
TORT CLAIM AND ALL PROCEEDS THEREOF, ALL UPON THE TERMS OF AND GOVERNED BY THIS
AGREEMENT.
(D)
EACH LOAN PARTY HEREBY CONFIRMS AND RATIFIES ALL UCC FINANCING
STATEMENTS FILED BY AGENT WITH RESPECT TO SUCH LOAN PARTY ON OR PRIOR TO THE
DATE OF THE AGREEMENT.
(E)
ALL CHARGES, EXPENSES AND FEES AGENT MAY INCUR IN DOING ANY OF THE
FOREGOING, AND ANY LOCAL TAXES RELATING THERETO, SHALL BE CHARGED TO BORROWER'S
ACCOUNT AS A REVOLVING ADVANCE AND ADDED TO THE OBLIGATIONS, OR, AT AGENT'S
OPTION, SHALL BE PAID TO AGENT FOR THE RATABLE BENEFIT OF LENDERS IMMEDIATELY
UPON DEMAND.
4.3.
Disposition of Collateral.
Each Loan Party will safeguard and protect all Collateral for Agent's general
account and make no disposition thereof whether by sale, lease or otherwise
except (a) the sale of Inventory in the ordinary course of business and (b) the
disposition or transfer of obsolete and worn-out Equipment in the ordinary
course of business during any fiscal year having an aggregate fair market value
of not more than $500,000 and only to the extent that the proceeds of such
disposition of Equipment are remitted to Agent as a prepayment on the Advances
as required by Section 2.14.
4.4.
Preservation of Collateral.
In addition to the rights and remedies set forth in Section 11.1, after the
occurrence and during the continuance of an Event of Default (but without
limiting the rights of Agent and Lenders and Term Lender under Section 4.10)
Agent: (a) may at any time take such steps as Agent in good faith deems
necessary to protect Agent's interest in and to preserve the Collateral,
including the hiring of such security guards or the placing of other security
protection measures as Agent may deem appropriate; (b) may employ and maintain
at each Loan Party's premises a custodian who shall have full authority to do
all acts necessary to protect Agent's interests in the Collateral; (c) may lease
warehouse facilities to which Agent may move all or part