Common use of Collateral in the Possession of a Third Party Clause in Contracts

Collateral in the Possession of a Third Party. If any Equipment or Inventory (other than Equipment or Inventory leased to a customer in the ordinary course of business) is in possession or control of any third party, including any warehouseman, landlord, lessor, bailee or agent, in any case for more than 3 months, the Pledgors shall notify the Noteholder Collateral Agent thereof and notify the third party of the Noteholder Collateral Agent’s security interest therein and use best efforts to obtain an acknowledgment (a “Bailee Letter”) from such third party that such party (i) is holding the Equipment and Inventory for the benefit of the Noteholder Collateral Agent, (ii) waives all right, title and interest in such Equipment and/or Inventory, and (iii) will comply with instructions from the Noteholder Collateral Agent with respect to such Collateral, without further consent of any Pledgors; provided, that, the foregoing requirements shall not apply to Equipment or Inventory in the possession or control of any third party to the extent that the book value or Fair Market Value of such Equipment or Inventory (in each case, that is not in transit in the ordinary course of business) is less than $500,000 in the aggregate at any time. Notwithstanding anything contained herein, if any such Bailee Letter is obtained under the ABL Credit Agreement in favor of the ABL Agent, under the Term Credit Agreement in favor of the Term Agent and/or the under the Additional Indenture (if applicable) in favor of the Additional Noteholder Agent with respect to any location for which the Noteholder Collateral Agent has not received such Bailee Letter, the applicable Pledgor shall obtain and deliver a Bailee Letter to the Noteholder Collateral Agent concurrently with delivery to such other Agent of such Bailee Letter under the ABL Credit Agreement, the Term Credit Agreement or the Additional Indenture, if applicable.

Collateral in the Possession of a Third Party. If any Equipment or Inventory (other than Equipment or Inventory leased to a customer in the ordinary course of business) is in possession or control of any third party, including any warehouseman, landlord, lessor, bailee or agent, in any case for more than 3 months, the Pledgors shall notify the Noteholder Collateral Agent thereof and notify the third party of the Noteholder Collateral Agent’s security interest therein and use best efforts to obtain an acknowledgment (a “Bailee Letter”) from such third party that such party (i) is holding the Equipment and Inventory for the benefit of the Noteholder Collateral Agent, (ii) waives all right, title and interest in such Equipment and/or Inventory, and (iii) will comply with instructions from the Noteholder Collateral Agent with respect to such Collateral, without further consent of any Pledgors; provided, that, the foregoing requirements shall not apply to Equipment or Inventory in the possession or control of any third party to the extent that the book value or Fair Market Value of such Equipment or Inventory (in each case, that is not in transit in the ordinary course of business) is less than $500,000 in the aggregate at any time. Notwithstanding anything contained herein, if any such Bailee Letter is obtained under the ABL Credit Agreement in favor of the ABL Agent, under the Term Credit Agreement in favor of the Term Agent and/or the under the Additional Indenture (if applicable) in favor of the Additional Noteholder Agent with respect to any location for which the Noteholder Collateral Agent has not received such Bailee Letter, the applicable Pledgor shall obtain and deliver a Bailee Letter to the Noteholder Collateral Agent concurrently with delivery to such other the ABL Agent of such Bailee Letter under the ABL Credit Agreement, the Term Credit Agreement or the Additional Indenture, if applicable.