Collateral shall be kept separately from PFS's other books and records and PFS
agrees to note on the books and records pertaining to the Collateral that such
books and records are the property of Borrower.
(B) Each of the Borrower and Guarantors (other than PFSweb) agrees that
IBM Credit or its agents may enter upon the premises of any such Loan Party at
any time and from time to time, during normal business hours and upon reasonable
notice under the circumstances, and at any time at all on and after the
occurrence and during the continuance of an Event of Default for the purposes of
(i) inspecting the Collateral and Other Collateral, (ii) inspecting and/or
copying (at Borrower's or Guarantor's expense) any and all records pertaining
thereto, (iii) discussing the affairs, finances and business of each such Loan
Party with any officers, employees and directors of such Loan Party or with the
Auditors and (iv) verifying Eligible Accounts, Eligible Acquired Accounts and
other Collateral. Upon reasonable prior notice, each such Loan Party also agrees
to provide IBM Credit with such reasonable information and documentation that
IBM Credit deems necessary to conduct the foregoing activities, including,
without limitation, reasonably requested samplings of purchase orders, invoices
and evidences of delivery or other performance.
Upon the occurrence and during the continuance of an Event of Default which has
not been waived by IBM Credit in writing, IBM Credit may conduct any of the
foregoing activities in any manner that IBM Credit deems reasonably necessary.
(C) Borrower and each Guarantor shall give IBM Credit thirty (30) days
prior written notice of any change in the location of any Collateral or Other
Collateral, the location of its books and records or in the location of its
chief executive office or place of business from the locations specified in
Attachment B, and will execute in advance of such change and cause to be filed
and/or delivered to IBM Credit any financing statements, landlord or other lien
waivers, or other documents reasonably required by IBM Credit, all in form and
substance reasonably satisfactory to IBM Credit.
(D) Borrower and PFS, on behalf of the Borrower and each Guarantor
(other than PFSweb), agrees to advise IBM Credit promptly, in reasonably
sufficient detail, of any event or substantial change in the Collateral or Other
Collateral which could reasonably be expected to have a Material Adverse Effect
on the Collateral or on the security interests granted to IBM Credit therein.
7.8. INSURANCE; CASUALTY LOSS. (A) Each Loan Party agrees to maintain with
financially sound and reputable insurance companies: (i) insurance on its
properties, (ii) public liability insurance against claims for personal injury
or death as a result of the use of any products sold by it and (iii) insurance
coverage against other business risks, in each case, in at least such amounts
and against at least such risks as are usually and prudently insured against in
the same general geographical area by companies of established repute engaged in
the same or a similar business. Each Loan Party will furnish to IBM Credit, upon
its written request, the insurance certificates with respect to such insurance.
In addition, all Policies so maintained are to name IBM Credit as an additional
insured as its interest may appear.
(B) Without limiting the generality of the foregoing, Borrower shall
keep and maintain, at its sole expense, the Collateral insured for an amount not
less than the amount set forth on Attachment A from time to time opposite the
caption "Collateral Insurance Amount" against all loss or damage under an "all
risk" Policy with companies mutually acceptable to IBM Credit and Borrower, with
a lender's loss payable endorsement or mortgagee clause in form and substance
reasonably satisfactory to IBM Credit designating that any loss payable
thereunder with respect to such Collateral shall be payable to IBM Credit. Upon
receipt of proceeds by IBM Credit the same shall be deposited in the Lockbox or,
if an Event of Default then exists and is continuing, applied on account of the
Borrower's Outstanding Product Advances first, then to the Outstanding A/R
Advances. Borrower agrees to instruct each insurer to give IBM Credit, by
endorsement upon the Policy issued by it or by independent instruments furnished
to IBM Credit, at least ten (10) days written notice before any Policy shall be
altered or cancelled and that no act or default of any Loan Party or any other
person shall affect the right of IBM Credit to recover under the Policies.
Borrower hereby agrees to direct all insurers under the Policies to pay all
proceeds with respect to the Collateral directly to IBM Credit to be applied as
set forth herein.
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