THE AGGREGATE VALUE OF INVENTORY
LOCATED AT SUCH LOCATION DOES NOT EXCEED $400,000 SO LONG AS THE AGGREGATE VALUE
OF INVENTORY LOCATED AT ALL SUCH LOCATIONS DOES NOT EXCEED $2,000,000 IN THE
AGGREGATE AT ANY TIME (IT BEING UNDERSTOOD THAT AGENT MAY ELECT, IN ITS
DISCRETION, TO EXCLUDE INVENTORY AT SUCH LOCATIONS FROM ELIGIBLE INVENTORY OR
ESTABLISH RESERVES AGAINST THE CONSOLIDATING BORROWING BASES IN RESPECT OF
INVENTORY AT SUCH LOCATIONS).
(B)
ADDITIONAL MORTGAGED PROPERTY.
BORROWER
SHALL AS PROMPTLY AS POSSIBLE (AND IN ANY EVENT WITHIN SIXTY (60) DAYS AFTER
SUCH DESIGNATION) DELIVER TO AGENT A FULLY EXECUTED MORTGAGE, IN FORM AND
SUBSTANCE SATISFACTORY TO AGENT TOGETHER WITH TITLE INSURANCE POLICIES AND
SURVEYS ON ANY ADDITIONAL MORTGAGED PROPERTY DESIGNATED BY AGENT.
(C)
SURVEYS.
ON OR BEFORE THE CLOSING DATE (OR
WITHIN THIRTY (30) DAYS FOLLOWING DELIVERY OF ANY MORTGAGE WITH RESPECT TO
ADDITIONAL MORTGAGED PROPERTY), BORROWER SHALL, TO THE EXTENT NECESSARY TO
OBTAIN THE MORTGAGE POLICIES, DELIVER OR CAUSE TO BE DELIVERED TO AGENT CURRENT
SURVEYS, CERTIFIED BY A LICENSED SURVEYOR, FOR ALL REAL PROPERTY THAT IS THE
SUBJECT OF THE MORTGAGE POLICIES INCLUDING ADDITIONAL MORTGAGED PROPERTY FOR
WHICH A MORTGAGE POLICY IS ISSUED.
ALL SUCH SURVEYS SHALL BE SUFFICIENT TO
ALLOW THE ISSUER OF THE MORTGAGE POLICY TO ISSUE AN ALTA LENDER'S POLICY.
5.7
USE OF PROCEEDS AND MARGIN SECURITY.
BORROWER SHALL USE THE PROCEEDS OF ALL LOANS FOR PROPER BUSINESS PURPOSES (AS
DESCRIBED IN THE RECITALS TO THIS AGREEMENT) CONSISTENT WITH ALL APPLICABLE
LAWS, STATUTES, RULES AND REGULATIONS.
NO PORTION OF THE PROCEEDS OF ANY LOAN
SHALL BE USED BY BORROWER OR ANY OF ITS SUBSIDIARIES FOR THE PURPOSE OF
PURCHASING OR CARRYING MARGIN STOCK WITHIN THE MEANING OF REGULATION U, OR IN
ANY MANNER THAT MIGHT CAUSE THE BORROWING OR THE APPLICATION OF SUCH PROCEEDS TO
VIOLATE REGULATION T OR REGULATION X OR ANY OTHER REGULATION OF THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM OR TO VIOLATE THE EXCHANGE ACT.
5.8
BAILEE.
IF ANY COLLATERAL IS AT ANY TIME
IN THE POSSESSION OR CONTROL OF ANY WAREHOUSEMAN, BAILEE OR ANY OBLIGOR'S AGENTS
OR PROCESSORS, SUCH OBLIGOR SHALL, UPON THE REQUEST OF AGENT, NOTIFY SUCH
WAREHOUSEMAN, BAILEE, AGENT OR PROCESSOR OF THE SECURITY INTERESTS
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IN FAVOR OF AGENT, FOR THE BENEFIT OF AGENT AND LENDERS, CREATED HEREBY AND
SHALL INSTRUCT SUCH PERSON TO HOLD ALL SUCH COLLATERAL FOR AGENT'S ACCOUNT
SUBJECT TO AGENT'S INSTRUCTIONS.
5.9
THIRD PARTY INVENTORY.
ALL INVENTORY AND
PRODUCTS OWNED BY PERSONS OTHER THAN AN OBLIGOR AND LOCATED ON ANY PREMISES
OWNED, LEASED OR CONTROLLED BY ANY OBLIGOR, SHALL BE SEPARATELY AND
CONSPICUOUSLY IDENTIFIED AS SUCH AND SHALL BE SEGREGATED FROM SUCH OBLIGOR'S OWN
INVENTORY LOCATED AT SUCH PREMISES.
5.10
ENVIRONMENTAL MATTERS.
EACH OBLIGOR SHALL AND
SHALL CAUSE EACH PERSON WITHIN ITS CONTROL TO:
(A) CONDUCT ITS OPERATIONS AND
KEEP AND MAINTAIN ITS REAL ESTATE IN COMPLIANCE WITH ALL ENVIRONMENTAL LAWS AND
ENVIRONMENTAL PERMITS OTHER THAN NONCOMPLIANCE THAT COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; (B) IMPLEMENT ANY