CERTIFICATES WITH
RESPECT THERETO TO BE DELIVERED TO THE SECURED PARTY AT ITS REQUEST.
EACH SUCH
POLICY OR THE CERTIFICATE WITH RESPECT THERETO SHALL PROVIDE THAT SUCH POLICY
SHALL NOT BE CANCELED OR ALLOWED TO LAPSE UNLESS AT LEAST 30 DAYS PRIOR WRITTEN
NOTICE IS GIVEN TO THE SECURED PARTY.
SECTION 14.
LAWFUL USE; FAIR LABOR STANDARDS ACT.
THE GRANTORS WILL
USE AND KEEP THE COLLATERAL, AND WILL REQUIRE THAT OTHERS USE AND KEEP THE
COLLATERAL, ONLY FOR LAWFUL PURPOSES, WITHOUT VIOLATION OF ANY FEDERAL, STATE OR
LOCAL LAW, STATUTE OR ORDINANCE.
ALL INVENTORY OF THE GRANTORS AS OF THE DATE
OF THIS AGREEMENT THAT WAS PRODUCED BY ANY GRANTOR OR WITH RESPECT TO WHICH ANY
GRANTOR PERFORMED ANY MANUFACTURING OR ASSEMBLY PROCESS WAS PRODUCED BY ANY
GRANTOR (OR SUCH MANUFACTURING OR ASSEMBLY PROCESS WAS CONDUCTED) IN COMPLIANCE
IN ALL MATERIAL RESPECTS WITH ALL REQUIREMENTS OF THE FAIR LABOR STANDARDS ACT,
AND ALL INVENTORY PRODUCED, MANUFACTURED OR ASSEMBLED BY ANY GRANTOR AFTER THE
DATE OF THIS AGREEMENT WILL BE SO PRODUCED, MANUFACTURED OR ASSEMBLED, AS THE
CASE MAY BE.
SECTION 15.
ACTION BY THE SECURED PARTY.
IF ANY GRANTOR AT ANY TIME
FAILS TO PERFORM OR OBSERVE ANY OF THE FOREGOING AGREEMENTS, THE SECURED PARTY
SHALL HAVE (AND THE GRANTORS HEREBY GRANT TO THE SECURED PARTY) THE RIGHT, POWER
AND AUTHORITY (BUT NOT THE DUTY) TO PERFORM OR OBSERVE SUCH AGREEMENT ON BEHALF
AND IN THE NAME, PLACE AND STEAD OF SUCH GRANTOR (OR, AT THE SECURED PARTY'S
OPTION, IN THE SECURED PARTY'S NAME) AND TO TAKE ANY AND ALL OTHER ACTIONS WHICH
THE SECURED PARTY MAY REASONABLY DEEM NECESSARY TO CURE OR CORRECT SUCH FAILURE
(INCLUDING, WITHOUT LIMITATION, THE PAYMENT OF TAXES, THE SATISFACTION OF LIENS,
THE PROCUREMENT AND MAINTENANCE OF INSURANCE, THE EXECUTION OF ASSIGNMENTS,
SECURITY AGREEMENTS AND FINANCING STATEMENTS, AND THE INDORSEMENT OF
INSTRUMENTS); AND THE GRANTORS SHALL THEREUPON PAY TO THE SECURED PARTY ON
DEMAND THE AMOUNT OF ALL MONIES EXPENDED AND ALL COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES AND LEGAL EXPENSES) INCURRED BY THE SECURED PARTY IN
CONNECTION WITH OR AS A RESULT OF THE PERFORMANCE OR OBSERVANCE OF SUCH
AGREEMENTS OR THE TAKING OF SUCH ACTION BY THE SECURED PARTY, TOGETHER WITH
INTEREST THEREON FROM THE DATE EXPENDED OR INCURRED AT THE HIGHEST LAWFUL RATE
THEN APPLICABLE TO ANY
7
OF THE OBLIGATIONS, AND ALL SUCH MONIES EXPENDED, COSTS AND EXPENSES AND
INTEREST THEREON SHALL BE PART OF THE OBLIGATIONS SECURED BY THE SECURITY
INTEREST.
SECTION 16.
INSURANCE CLAIMS.
AS ADDITIONAL SECURITY FOR THE
PAYMENT AND PERFORMANCE OF THE OBLIGATIONS, EACH GRANTOR HEREBY ASSIGNS TO THE
SECURED PARTY, FOR THE RATABLE BENEFIT OF THE SECURED PARTY AND THE LENDERS, ANY
AND ALL MONIES (INCLUDING PROCEEDS OF INSURANCE AND REFUNDS OF UNEARNED
PREMIUMS) DUE OR TO BECOME DUE UNDER, AND ALL OTHER RIGHTS OF THE GRANTORS WITH
RESPECT TO, ANY AND ALL POLICIES OF INSURANCE NOW OR AT ANY TIME HEREAFTER
COVERING THE COLLATERAL OR ANY EVIDENCE THEREOF OR ANY BUSINESS RECORDS OR