WAIVED, EXCEPT PURSUANT TO A WRITTEN AGREEMENT OR
INSTRUMENT WHICH HAS HERETOFORE BEEN DELIVERED TO AGENT.
5.28.
INTERNAL CONTROLS AND PROCEDURES.
THE BORROWERS MAINTAIN ACCURATE BOOKS AND RECORDS AND INTERNAL ACCOUNTING
CONTROLS WHICH PROVIDE REASONABLE ASSURANCE THAT (I) ALL TRANSACTIONS TO WHICH
THE BORROWERS (OR ANY OF THEM) ARE A PARTY OR BY WHICH THEIR PROPERTIES ARE
BOUND ARE EXECUTED WITH MANAGEMENT'S AUTHORIZATION; (II) THE REPORTED
ACCOUNTABILITY OF THE BORROEWERS' ASSETS ARE COMPARED WITH EXISTING ASSETS AT
REGULAR INTERVALS; (III) ACCESS TO THE BORROWERS' ASSETS IS PERMITTED ONLY IN
ACCORDANCE WITH MANAGEMENT'S AUTHORIZATION; AND (IV) ALL TRANSACTIONS TO WHICH
THE BORROWERS (OR ANY OF THEM) ARE A PARTY OR BY WHICH THEIR PROPERTIES ARE
BOUND ARE RECORDED AS NECESSARY TO PERMIT PREPARATION OF THE FINANCIAL
STATEMENTS OF THE BORROWERS IN ACCORDANCE WITH GAAP.
VI
AFFIRMATIVE COVENANTS.
EACH BORROWER SHALL, UNTIL PAYMENT IN FULL OF THE OBLIGATIONS AND TERMINATION OF
THIS AGREEMENT:
6.1.
PAYMENT OF FEES. PAY TO AGENT ON DEMAND ALL USUAL AND CUSTOMARY FEES
AND EXPENSES WHICH AGENT INCURS IN CONNECTION WITH (A) THE FORWARDING OF ADVANCE
PROCEEDS AND
64
(b) the establishment and maintenance of any Blocked Accounts or Depository
Accounts as provided for in Section 4.15(h). Agent may, without making demand,
charge Borrowers' Account for all such fees and expenses.
6.2.
CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE AND ASSETS.
(A) CONDUCT CONTINUOUSLY AND OPERATE ACTIVELY ITS BUSINESS ACCORDING TO GOOD
BUSINESS PRACTICES AND MAINTAIN ALL OF ITS PROPERTIES USEFUL OR NECESSARY IN ITS
BUSINESS IN GOOD WORKING ORDER AND CONDITION (REASONABLE WEAR AND TEAR EXCEPTED
AND EXCEPT AS SUCH PROPERTIES MAY BE DISPOSED OF IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT), INCLUDING ALL LICENSES, PATENTS, COPYRIGHTS, DESIGN RIGHTS,
TRADENAMES, TRADE SECRETS AND TRADEMARKS AND TAKE ALL ACTIONS NECESSARY TO
ENFORCE AND PROTECT THE VALIDITY OF ANY INTELLECTUAL PROPERTY RIGHT OR OTHER
RIGHT INCLUDED IN THE COLLATERAL; (B) KEEP IN FULL FORCE AND EFFECT ITS
EXISTENCE AND COMPLY IN ALL MATERIAL RESPECTS WITH THE LAWS AND REGULATIONS
GOVERNING THE CONDUCT OF ITS BUSINESS WHERE THE FAILURE TO DO SO COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; AND (C) MAKE ALL SUCH
REPORTS AND PAY ALL SUCH FRANCHISE AND OTHER TAXES AND LICENSE FEES AND DO ALL
SUCH OTHER ACTS AND THINGS AS MAY BE LAWFULLY REQUIRED TO MAINTAIN ITS RIGHTS,
LICENSES, LEASES, POWERS AND FRANCHISES UNDER THE LAWS OF THE UNITED STATES OR
ANY POLITICAL SUBDIVISION THEREOF AND THE LAWS OF CANADA OR ANY POLITICAL
SUBDIVISION THEREOF.
6.3.
Violations. Promptly notify Agent in writing of any violation of
any law, statute, regulation or ordinance of any Governmental Body, or of any
agency thereof, applicable to any Borrower which could reasonably be expected to
have a Material Adverse Effect.
6.4.
GOVERNMENT RECEIVABLES.
(A)
TAKE ALL STEPS NECESSARY TO PROTECT AGENT'S INTEREST IN THE
COLLATERAL UNDER THE FEDERAL ASSIGNMENT OF CLAIMS ACT, THE UNIFORM COMMERCIAL
CODE AND THE FINANCIAL ADMINISTRATION ACT (CANADA);
and all other applicable state or local statutes or ordinances and deliver