NOT TO EXCEED TWENTY PERCENT (20%)
OF THE NUMBER OF STORES (OTHER THAN LOCATIONS WITHIN DEPARTMENT OR SPECIALTY
STORES OR OTHER LOCATIONS IN WHICH A BORROWER LEASES OR LICENSES A PORTION OF
THE SPACE IN SUCH STORE) EXISTING AS OF THE FIRST DAY OF SUCH FISCAL YEAR (NOT
INCLUDING STORES THAT HAVE OPENED SINCE SUCH FIRST DAY) ("PERMITTED STORE
OPENINGS/CLOSINGS").
(E)
NO TANGIBLE PERSONAL PROPERTY OF THE BORROWERS IS IN THE CARE OR CUSTODY
OF ANY THIRD PARTY OR STORED OR ENTRUSTED WITH A BAILEE OR OTHER THIRD PARTY AND
NONE SHALL HEREAFTER BE PLACED UNDER SUCH CARE, CUSTODY, STORAGE, OR
ENTRUSTMENT, EXCEPT (I) AS OTHERWISE DISCLOSED PURSUANT TO, OR PERMITTED BY,
THIS SECTION 4.6, (II) FOR INVENTORY LOCATED IN DEPARTMENT OR SPECIALTY STORES
OR OTHER LOCATIONS IN WHICH A BORROWER LEASES OR LICENSES A PORTION OF THE SPACE
IN SUCH STORE; (III) FOR GOODS IN CONTROL OF A CUSTOMS BROKER, WHICH HAS ENTERED
INTO A CUSTOMS BROKERS AGREEMENT, (IV) FOR WORK-IN-PROGRESS AT CONTRACTORS
(WHETHER OR NOT IN THE UNITED STATES), AND (V) TO THE EXTENT SUCH GOODS DO NOT
CONSTITUTE ELIGIBLE INVENTORY, ELIGIBLE IN-TRANSIT INVENTORY OR ELIGIBLE L/C
INVENTORY, ANY RAW MATERIALS AT CONTRACTORS (WHETHER OR NOT IN THE UNITED
STATES), FINISHED GOODS OUT FOR RE-WORKING, AND GOODS IN TRANSIT.
4.7
TITLE TO ASSETS.
(A)
THE OBLIGORS ARE, AND SHALL HEREAFTER REMAIN, THE OWNERS OF THE COLLATERAL
FREE AND CLEAR OF ALL ENCUMBRANCES OTHER THAN ENCUMBRANCES OR EXCEPTIONS TO
OWNERSHIP LISTED ON EXHIBIT 4.7(A) AND OTHER PERMITTED ENCUMBRANCES. THE
OBLIGORS DO NOT AND SHALL NOT HAVE POSSESSION OF ANY PROPERTY ON CONSIGNMENT TO
THE OBLIGORS.
(B)
THE OBLIGORS SHALL NOT ACQUIRE OR OBTAIN THE RIGHT TO USE ANY EQUIPMENT IN
WHICH EQUIPMENT ANY THIRD PARTY HAS AN INTEREST (NOTWITHSTANDING THAT THE
ACQUISITION OR RIGHT TO USE OF SUCH EQUIPMENT IS OTHERWISE PERMITTED BY THIS
AGREEMENT), EXCEPT FOR:
67
(I)
EQUIPMENT WHICH IS MERELY INCIDENTAL TO THE CONDUCT OF THE
OBLIGORS' BUSINESS.
(II)
EQUIPMENT SUBJECT TO (A) CAPITAL LEASES OR PURCHASE MONEY
SECURITY INTERESTS COMPRISED IN EACH CASE OF PERMITTED ENCUMBRANCES; AND (B)
OPERATING LEASES.
(C)
THE OBLIGORS DO NOT HAVE ANY GOODS, DOCUMENTS OF TITLE OR OTHER COLLATERAL
IN THE CUSTODY, CONTROL, OR POSSESSION OF A THIRD PARTY, EXCEPT AS SET FORTH IN
EXHIBIT 4.7(D) AND EXCEPT FOR GOODS LOCATED IN THE UNITED STATES IN TRANSIT TO A
LOCATION OF THE BORROWERS PERMITTED HEREIN OR IN THE ORDINARY COURSE OF BUSINESS
OF THE OBLIGORS IN THE POSSESSION OF THE CARRIER TRANSPORTING SUCH GOODS.
IN
THE EVENT THAT ANY GOODS, DOCUMENTS OF THE TITLE OR OTHER COLLATERAL ARE AT ANY
TIME AFTER THE DATE HEREOF IN THE CUSTODY, CONTROL OR POSSESSION OF ANY OTHER
PERSON NOT REFERRED TO IN EXHIBIT 4.7(D) OR SUCH CARRIERS, OBLIGORS SHALL
PROMPTLY NOTIFY THE COLLATERAL AGENT THEREOF IN WRITING.
PROMPTLY UPON
COLLATERAL AGENT'S REQUEST, THE OBLIGORS SHALL DELIVER TO THE AGENT A COLLATERAL
ACCESS AGREEMENT, IN FORM AND SUBSTANCE ACCEPTABLE TO THE COLLATERAL AGENT IN
ITS SOLE DISCRETION, DULY AUTHORIZED, EXECUTED AND DELIVERED BY