PROCEEDS RESULTING
FROM THE SALE OR OTHER DISPOSITION THEREOF AND TO ALL INVENTORY WHICH IS
RETURNED TO THE BORROWER BY CUSTOMERS OR IS OTHERWISE RECOVERED.
SECTION 8.8
OWNERSHIP AND DEFENSE OF TITLE.
(A)
THE BORROWER SHALL AT ALL TIMES BE THE SOLE OWNER OF EACH AND
EVERY ITEM OF COLLATERAL AND SHALL NOT CREATE ANY LIEN, EXCEPT FOR PERMITTED
LIENS, ON, OR, EXCEPT AS PERMITTED BY SECTION 11.7, SELL, LEASE, EXCHANGE,
ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE, GRANT A SECURITY INTEREST OR SECURITY
TITLE IN OR OTHERWISE DISPOSE OF, ANY OF THE COLLATERAL OR ANY INTEREST THEREIN,
EXCEPT FOR SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS, FOR CASH OR ON
OPEN ACCOUNT OR ON TERMS OF PAYMENT ORDINARILY EXTENDED TO ITS CUSTOMERS AND
EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED HEREIN.
THE INCLUSION OF "PROCEEDS"
OF THE COLLATERAL UNDER THE SECURITY INTEREST SHALL NOT BE DEEMED A CONSENT BY
THE ADMINISTRATIVE AGENT OR ANY LENDER TO ANY OTHER SALE OR OTHER DISPOSITION OF
ANY PART OR ALL OF THE COLLATERAL.
(B)
THE BORROWER SHALL DEFEND ITS TITLE IN AND TO THE COLLATERAL AND
SHALL DEFEND THE SECURITY INTEREST IN THE COLLATERAL AGAINST THE CLAIMS AND
DEMANDS OF ALL PERSONS.
SECTION 8.9
INSURANCE.
(A)
THE BORROWER SHALL AT ALL TIMES MAINTAIN INSURANCE ON ITS
INVENTORY AGAINST LOSS OR DAMAGE BY FIRE, THEFT, BURGLARY, PILFERAGE, LOSS IN
TRANSIT AND SUCH OTHER HAZARDS AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
SPECIFY, IN AMOUNTS AND UNDER POLICIES ISSUED BY INSURERS ACCEPTABLE TO THE
ADMINISTRATIVE AGENT IN ITS REASONABLE JUDGMENT.
ALL PREMIUMS ON SUCH INSURANCE
SHALL BE PAID BY THE BORROWER AND COPIES OF THE POLICIES DELIVERED TO THE
ADMINISTRATIVE AGENT.
THE BORROWER WILL NOT USE OR PERMIT THE INVENTORY TO BE
USED IN VIOLATION OF ANY APPLICABLE LAW OR IN ANY MANNER WHICH MIGHT RENDER
INAPPLICABLE ANY INSURANCE COVERAGE.
(B)
ALL INSURANCE POLICIES REQUIRED UNDER SECTION 8.9(A) WITH RESPECT
TO INVENTORY SHALL NAME THE ADMINISTRATIVE AGENT AS AN ADDITIONAL NAMED INSURED
AND SHALL CONTAIN "NEW YORK STANDARD" LOSS PAYABLE CLAUSES IN THE FORM SUBMITTED
TO THE BORROWER BY THE ADMINISTRATIVE AGENT, OR OTHERWISE IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT, NAMING THE ADMINISTRATIVE AGENT AS
LOSS PAYEE AS ITS INTERESTS MAY APPEAR, AND PROVIDING THAT (I) ALL PROCEEDS
THEREUNDER SHALL BE PAYABLE TO THE ADMINISTRATIVE AGENT, (II) NO SUCH INSURANCE
SHALL BE AFFECTED BY ANY ACT OR NEGLECT OF THE INSURED OR OWNER OF THE PROPERTY
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DESCRIBED IN SUCH POLICY, AND (III) SUCH POLICY AND LOSS PAYABLE CLAUSES MAY NOT
BE CANCELED, AMENDED OR TERMINATED UNLESS AT LEAST 30 DAYS' PRIOR WRITTEN NOTICE
IS GIVEN TO THE ADMINISTRATIVE AGENT.
(C)
ANY PROCEEDS OF INSURANCE REFERRED TO IN THIS SECTION 8.9 WHICH
ARE PAID TO THE ADMINISTRATIVE AGENT SHALL BE APPLIED, FIRST, TO THE REPAYMENT
OF THE REVOLVING CREDIT LOANS UNTIL PAID IN FULL AND THEN, SO LONG AS NO EVENT
OF DEFAULT SHALL EXIST, TO THE BORROWER OR AS IT MAY DIRECT.
SECTION 8.10
LOCATION OF OFFICES AND COLLATERAL.
(A)
THE BORROWER WILL