FOREGOING, THERE SHALL BE NO RESTRICTION ON THE NUMBER OF AUDITS IF, AT THE TIME
OF THE PROPOSED AUDIT, AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.
THE
FOREGOING INSPECTIONS AND AUDITS SHALL BE AT BORROWER'S EXPENSE, AND THE CHARGE
THEREFOR SHALL BE $750 PER PERSON PER DAY (OR SUCH HIGHER AMOUNT AS SHALL
REPRESENT BANK'S THEN-CURRENT STANDARD CHARGE FOR THE SAME), PLUS REASONABLE
OUT-OF-POCKET EXPENSES.
IN THE EVENT BORROWER AND BANK SCHEDULE AN AUDIT MORE
THAN TEN (10) DAYS IN ADVANCE, AND BORROWER CANCELS OR RESCHEDULES THE AUDIT
WITH LESS THAN TEN (10) DAYS WRITTEN NOTICE TO BANK, THEN (WITHOUT LIMITING ANY
OF BANK'S RIGHTS OR REMEDIES), BORROWER SHALL PAY BANK A FEE OF $1,000 PLUS ANY
OUT-OF-POCKET EXPENSES INCURRED BY BANK TO COMPENSATE BANK FOR THE ANTICIPATED
COSTS AND EXPENSES OF THE CANCELLATION OR RESCHEDULING.
6.7
INSURANCE.
KEEP ITS BUSINESS AND THE
COLLATERAL INSURED FOR RISKS AND IN AMOUNTS STANDARD FOR COMPANIES IN BORROWER'S
INDUSTRY AND LOCATION AND AS BANK MAY REASONABLY REQUEST.
INSURANCE POLICIES
SHALL BE IN A FORM, WITH COMPANIES, AND IN AMOUNTS THAT ARE SATISFACTORY TO
BANK.
ALL PROPERTY POLICIES SHALL HAVE A LENDER'S LOSS PAYABLE ENDORSEMENT
SHOWING BANK AS AN ADDITIONAL LOSS PAYEE AND WAIVE SUBROGATION AGAINST BANK, AND
BORROWER'S GENERAL LIABILITY POLICY SHALL SHOW, OR HAVE ENDORSEMENTS SHOWING,
BANK AS AN ADDITIONAL INSURED.
ALL POLICIES (OR THE LOSS PAYABLE AND ADDITIONAL
INSURED ENDORSEMENTS) SHALL PROVIDE THAT THE INSURER SHALL ENDEAVOR TO GIVE BANK
AT LEAST THIRTY (30) DAYS NOTICE BEFORE CANCELING ITS POLICY PRIOR TO THE
EXPIRATION THEREOF; AND BORROWER SHALL GIVE BANK NOTICE OF ANY SUCH INTENDED
CANCELLATION OR ANY MATERIAL AMENDMENT TO ITS POLICY OR ANY KNOWLEDGE BY
BORROWER OF A DECISION BY THE INSURER TO DECLINE TO RENEW ITS POLICY.
AT BANK'S
REQUEST, BORROWER SHALL DELIVER CERTIFIED COPIES OF POLICIES AND EVIDENCE OF ALL
PREMIUM PAYMENTS.
PROCEEDS PAYABLE UNDER ANY PROPERTY POLICY SHALL, AT BANK'S
OPTION, BE PAYABLE TO BANK ON ACCOUNT OF THE OBLIGATIONS.
NOTWITHSTANDING THE
FOREGOING, (A) SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
BORROWER SHALL HAVE THE OPTION OF APPLYING THE PROCEEDS OF ANY CASUALTY POLICY
UP TO $5,000,000 WITH RESPECT TO ANY LOSS, BUT NOT EXCEEDING $10,000,000 IN THE
AGGREGATE FOR ALL LOSSES UNDER ALL CASUALTY POLICIES IN ANY ONE YEAR, TOWARD THE
REPLACEMENT OR REPAIR OF DESTROYED OR DAMAGED PROPERTY; PROVIDED THAT ANY SUCH
REPLACED OR REPAIRED PROPERTY (I) SHALL BE OF EQUAL OR LIKE VALUE AS THE
REPLACED OR REPAIRED COLLATERAL AND (II) SHALL BE DEEMED COLLATERAL IN WHICH
BANK HAS BEEN GRANTED A FIRST PRIORITY SECURITY INTEREST, AND (B) AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, ALL PROCEEDS
PAYABLE UNDER SUCH CASUALTY POLICY SHALL, AT THE OPTION OF BANK, BE PAYABLE TO
BANK ON ACCOUNT OF THE OBLIGATIONS.
IF BORROWER FAILS TO OBTAIN INSURANCE AS
REQUIRED UNDER THIS SECTION 6.7 OR TO PAY ANY AMOUNT OR FURNISH ANY REQUIRED
PROOF OF PAYMENT TO THIRD PERSONS AND BANK, BANK MAY MAKE ALL OR