Common use of Substitutions and Removals Clause in Contracts

Substitutions and Removals. In any instance where the Company, in the Company's reasonable discretion, determines that any item of personal property or Fixtures constituting part of the Collateral shall have become inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary or should be replaced, the Company may remove, abandon, sell or otherwise dispose of such property provided that the Company shall substitute and install other property as part of the Collateral having equal or greater value if such substitution is necessary in the Company's business discretion, but not necessarily the same function in the operation of the Collateral, which substituted property shall be free from all Liens other than Permitted Encumbrances and shall become part of the Collateral subject to this Security Agreement, or the Company shall obtain a waiver of this provision from the Director in writing. In any event, the Company shall provide to the Director prior written notice of such substitution or removal, which notice shall include evidence satisfactory to the Director of the fair market value of portions of the Collateral to be removed and of the substituted property.