MARKETABLE TITLE IN FEE SIMPLE TO ALL REAL PROPERTY
OWNED BY THEM THAT IS MATERIAL TO THE BUSINESS OF THE BORROWER AND THE
SUBSIDIARIES AND GOOD AND MARKETABLE TITLE IN ALL PERSONAL PROPERTY OWNED BY
THEM THAT IS MATERIAL TO THE BUSINESS OF THE BORROWER AND THE SUBSIDIARIES, IN
EACH CASE FREE AND CLEAR OF ALL LIENS, EXCEPT FOR LIENS GRANTED TO THE LENDER
PURSUANT TO THE SECURITY AGREEMENTS AND EXCEPT FOR LIENS AS DO NOT MATERIALLY
AFFECT THE VALUE OF SUCH PROPERTY AND DO NOT MATERIALLY INTERFERE WITH THE USE
MADE AND PROPOSED TO BE MADE OF SUCH PROPERTY BY THE BORROWER AND THE
SUBSIDIARIES. ANY REAL PROPERTY AND FACILITIES HELD UNDER LEASE BY THE BORROWER
9
AND THE SUBSIDIARIES ARE HELD BY THEM UNDER VALID, SUBSISTING AND ENFORCEABLE
LEASES OF WHICH THE BORROWER AND THE SUBSIDIARIES ARE IN COMPLIANCE.
(P)
PATENTS AND TRADEMARKS.
THE BORROWER AND
THE SUBSIDIARIES HAVE, OR HAVE RIGHTS TO USE, ALL PATENTS, PATENT APPLICATIONS,
TRADEMARKS, TRADEMARK APPLICATIONS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS,
LICENSES AND OTHER SIMILAR RIGHTS THAT ARE NECESSARY OR MATERIAL FOR USE IN
CONNECTION WITH THEIR RESPECTIVE BUSINESSES AS DESCRIBED IN THE SEC REPORTS AND
WHICH THE FAILURE TO SO HAVE COULD, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT (COLLECTIVELY, THE
"INTELLECTUAL PROPERTY RIGHTS").
NEITHER THE BORROWER NOR ANY SUBSIDIARY HAS
RECEIVED A WRITTEN NOTICE THAT THE INTELLECTUAL PROPERTY RIGHTS USED BY THE
BORROWER OR ANY SUBSIDIARY VIOLATES OR INFRINGES UPON THE RIGHTS OF ANY PERSON.
EXCEPT AS SET FORTH IN THE SEC REPORTS, TO THE KNOWLEDGE OF THE BORROWER, ALL
SUCH INTELLECTUAL PROPERTY RIGHTS ARE ENFORCEABLE AND THERE IS NO EXISTING
INFRINGEMENT BY ANOTHER PERSON OF ANY OF THE INTELLECTUAL PROPERTY RIGHTS.
(Q)
INSURANCE.
THE BORROWER AND THE
SUBSIDIARIES ARE INSURED BY INSURERS OF RECOGNIZED FINANCIAL RESPONSIBILITY
AGAINST SUCH LOSSES AND RISKS AND IN SUCH AMOUNTS AS ARE PRUDENT AND CUSTOMARY
IN THE BUSINESSES IN WHICH THE BORROWER AND THE SUBSIDIARIES ARE ENGAGED.
NEITHER THE BORROWER NOR ANY SUBSIDIARY HAS ANY REASON TO BELIEVE THAT IT WILL
NOT BE ABLE TO RENEW ITS EXISTING INSURANCE COVERAGE AS AND WHEN SUCH COVERAGE
EXPIRES OR TO OBTAIN SIMILAR COVERAGE FROM SIMILAR INSURERS AS MAY BE NECESSARY
TO CONTINUE ITS BUSINESS WITHOUT A SIGNIFICANT INCREASE IN COST.
(R)
INTERNAL ACCOUNTING CONTROLS.
THE
BORROWER AND THE SUBSIDIARIES MAINTAIN A SYSTEM OF INTERNAL ACCOUNTING CONTROLS
SUFFICIENT TO PROVIDE REASONABLE ASSURANCE THAT (I) TRANSACTIONS ARE EXECUTED IN
ACCORDANCE WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATIONS, (II)
TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT PREPARATION OF FINANCIAL
STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND TO
MAINTAIN ASSET ACCOUNTABILITY, (III) ACCESS TO ASSETS IS PERMITTED ONLY IN
ACCORDANCE WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATION, AND (IV) THE
RECORDED ACCOUNTABILITY FOR ASSETS IS COMPARED WITH THE EXISTING ASSETS AT
REASONABLE INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH RESPECT TO ANY
DIFFERENCES.
(S)
CERTAIN FEES.
NO BROKERAGE OR FINDER'S
FEES OR COMMISSIONS ARE OR WILL BE PAYABLE BY THE