OF THE BOARD, INCLUDING REGULATIONS T, U AND
X.
SECTION 5.09.
INSURANCE.
EACH LOAN PARTY WILL, AND WILL CAUSE EACH SUBSIDIARY
TO, MAINTAIN WITH FINANCIALLY SOUND AND REPUTABLE CARRIERS HAVING A FINANCIAL
STRENGTH RATING OF AT LEAST A- BY A.M. BEST COMPANY (A) INSURANCE IN SUCH
AMOUNTS (WITH NO GREATER RISK RETENTION) AND AGAINST SUCH RISKS (INCLUDING LOSS
OR DAMAGE BY FIRE AND LOSS IN TRANSIT; THEFT, BURGLARY, PILFERAGE, LARCENY,
EMBEZZLEMENT, AND OTHER CRIMINAL ACTIVITIES; BUSINESS INTERRUPTION; AND GENERAL
LIABILITY) AND SUCH OTHER HAZARDS, AS IS CUSTOMARILY MAINTAINED BY COMPANIES OF
ESTABLISHED REPUTE ENGAGED IN THE SAME OR SIMILAR BUSINESSES OPERATING IN THE
SAME OR SIMILAR LOCATIONS AND (B) ALL INSURANCE REQUIRED PURSUANT TO THE
COLLATERAL DOCUMENTS.
THE BORROWER WILL FURNISH TO THE LENDERS, UPON REQUEST OF
THE ADMINISTRATIVE AGENT, INFORMATION IN REASONABLE DETAIL AS TO THE INSURANCE
SO MAINTAINED.
SECTION 5.10.
CASUALTY AND CONDEMNATION.
THE BORROWER (A) WILL FURNISH TO THE
ADMINISTRATIVE AGENT AND THE LENDERS PROMPT WRITTEN NOTICE OF ANY CASUALTY OR
OTHER INSURED DAMAGE TO ANY MATERIAL PORTION OF THE COLLATERAL OR THE
COMMENCEMENT OF ANY ACTION OR PROCEEDING FOR THE TAKING OF ANY MATERIAL PORTION
OF THE COLLATERAL OR INTEREST THEREIN UNDER POWER OF EMINENT DOMAIN OR BY
CONDEMNATION OR SIMILAR PROCEEDING AND (B) WILL ENSURE THAT THE NET PROCEEDS OF
ANY SUCH EVENT (WHETHER IN THE FORM OF INSURANCE PROCEEDS, CONDEMNATION AWARDS
OR OTHERWISE) ARE COLLECTED AND APPLIED IN ACCORDANCE WITH THE APPLICABLE
PROVISIONS OF THIS AGREEMENT AND THE COLLATERAL DOCUMENTS.
SECTION 5.11.
APPRAISALS.
AT ANY TIME THAT THE ADMINISTRATIVE AGENT REQUESTS,
THE LOAN PARTIES WILL PROVIDE THE ADMINISTRATIVE AGENT WITH APPRAISALS OR
UPDATES THEREOF OF THEIR INVENTORY FROM AN APPRAISER SELECTED AND ENGAGED BY THE
ADMINISTRATIVE AGENT, AND PREPARED ON A BASIS SATISFACTORY TO THE ADMINISTRATIVE
AGENT, SUCH APPRAISALS AND UPDATES TO INCLUDE, WITHOUT LIMITATION, INFORMATION
61
REQUIRED BY APPLICABLE LAW AND REGULATIONS.
IT IS ANTICIPATED THAT UP TO THREE
(3) APPRAISALS PER YEAR WILL BE CONDUCTED; PROVIDED THAT (I) NO MORE THAN ONE
(1) APPRAISAL PER YEAR WILL BE CONDUCTED UNLESS THE ADMINISTRATIVE AGENT ELECTS
TO CONDUCT A SECOND APPRAISAL IN ITS SOLE DISCRETION, (II) NO MORE THAN THREE
(3) APPRAISALS PER YEAR WILL BE CONDUCTED IF ANY LOANS ARE OUTSTANDING, AND
AVERAGE MONTHLY AVAILABILITY IS LESS THAN AN AMOUNT EQUAL TO THE GREATER OF
(X) 20% OF THE AGGREGATE COMMITMENT AND (Y) $10,000,000 AT SUCH TIME, AND
(III) THERE SHALL BE NO LIMITATION ON THE NUMBER OR FREQUENCY OF APPRAISALS IF
AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING.
FOR PURPOSES OF THIS
SECTION 5.11, IT IS UNDERSTOOD AND AGREED THAT A SINGLE INVENTORY APPRAISAL MAY
CONSIST OF EXAMINATIONS CONDUCTED AT MULTIPLE RELEVANT SITES AND INVOLVE ONE OR
MORE RELEVANT LOAN PARTIES AND THEIR ASSETS.
ALL SUCH APPRAISALS SHALL BE AT
THE SOLE EXPENSE OF THE LOAN PARTIES.
SECTION 5.12.
FIELD EXAMINATIONS.
AT ANY TIME THAT THE ADMINISTRATIVE AGENT
REQUESTS, THE LOAN PARTIES WILL PERMIT, UPON REASONABLE NOTICE, THE
ADMINISTRATIVE AGENT TO CONDUCT A FIELD EXAMINATION TO ENSURE ADEQUACY