THE BORROWERS MAY REASONABLY DEEM TO ACCORD WITH SOUND BUSINESS
PRACTICE, PROVIDED, HOWEVER, THE AUTHORITY GRANTED THE BORROWERS PURSUANT TO
THIS SECTION 6-3 MAY BE LIMITED OR TERMINATED BY THE LENDER AT ANY TIME IN THE
LENDER'S DISCRETION AFTER AND DURING AN EVENT OF DEFAULT.
6-4.
VALIDITY OF ACCOUNTS.
(A)
THE AMOUNT OF EACH ACCOUNT SHOWN ON THE BOOKS, RECORDS, AND
INVOICES OF THE BORROWERS REPRESENTED AS OWING BY EACH ACCOUNT DEBTOR IS AND
WILL BE THE CORRECT AMOUNT
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actually owing by such Account Debtor and shall have been fully earned by
performance by the Borrowers.
(B)
THE BORROWERS HAVE NO KNOWLEDGE OF ANY IMPAIRMENT OF THE VALIDITY
OR COLLECTIBILITY OF ANY OF THE ACCOUNTS AND SHALL NOTIFY THE LENDER OF ANY SUCH
FACT IMMEDIATELY AFTER BORROWERS BECOME AWARE OF ANY SUCH IMPAIRMENT.
(C)
EXCEPT FOR ANY SECURITY DEPOSIT UNDER ANY OF THE BORROWERS' LEASE
ARRANGEMENTS, THE BORROWERS SHALL NOT POST ANY BOND TO SECURE THE BORROWERS
PERFORMANCE UNDER ANY AGREEMENT TO WHICH THE BORROWERS ARE A PARTY NOR CAUSE ANY
SURETY, GUARANTOR, OR OTHER THIRD PARTY OBLIGEE TO BECOME LIABLE TO PERFORM ANY
OBLIGATION OF THE BORROWERS (OTHER THAN TO THE LENDER) IN THE EVENT OF THE
BORROWERS' FAILURE SO TO PERFORM.
6-5.
NOTIFICATION TO ACCOUNT DEBTORS.
THE LENDER SHALL HAVE THE RIGHT
AT ANY TIME AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT TO NOTIFY ANY OF THE BORROWERS' ACCOUNT DEBTORS TO MAKE PAYMENT DIRECTLY
TO THE LENDER AND TO COLLECT ALL AMOUNTS DUE ON ACCOUNT OF THE COLLATERAL.
ARTICLE 7 - CASH MANAGEMENT
7-1.
DEPOSITORY ACCOUNTS.
(A)
ANNEXED HERETO AS EXHIBIT 7-1 IS A SCHEDULE OF ALL PRESENT DDA'S,
WHICH SCHEDULE INCLUDES, WITH RESPECT TO EACH DEPOSITORY (I) THE NAME AND
ADDRESS OF THAT DEPOSITORY; (II) THE ACCOUNT NUMBER(S) OF THE ACCOUNT(S)
MAINTAINED WITH SUCH DEPOSITORY; (III) A CONTACT PERSON AT SUCH DEPOSITORY; AND
(IV) THE TELEPHONE NUMBER OF THE CONTACT PERSON.
(B)
THE BORROWERS SHALL, AS A CONDITION TO THE EFFECTIVENESS OF THIS
AGREEMENT:
(I)
ESTABLISH AN ACCOUNT FOR THE BENEFIT OF AND UNDER THE CONTROL OF,
LENDER INTO WHICH ALL RECEIPTS SHALL BE DEPOSITED (THE "BLOCKED ACCOUNT")
(II)
DELIVER TO LENDER PROOF OF THE MAILING, TO EACH DEPOSITORY
INSTITUTION WITH WHICH ANY DDA IS MAINTAINED (OTHER THAN THE FUNDING ACCOUNT OR
ANY LOCAL DDA) OF NOTIFICATION (IN FORM SATISFACTORY TO THE LENDER) OF THE
LENDER'S INTEREST IN SUCH DDA. IN THE EVENT THAT THE BORROWERS SHALL RECEIVE
NOTICE THAT ANY DEPOSITORY AT WHICH A DDA IS MAINTAINED, REFUSES TO ACCEPT AND
COMPLY WITH THE NOTIFICATIONS DELIVERED BY THE BORROWERS TO SUCH DEPOSITORY
INSTITUTION OF THE LENDER'S INTEREST IN SUCH DDA, BORROWERS WILL IMMEDIATELY
CLOSE ALL DDAS MAINTAINED WITH SUCH DEPOSITORY INSTITUTION AND ESTABLISH NEW
DDAS WITH DEPOSITORY INSTITUTIONS WHICH ACCEPT AND AGREE TO SUCH NOTIFICATIONS.
(III)
DELIVER TO LENDER AN AGREEMENT (IN FORM SATISFACTORY TO THE
LENDER) WITH ANY DEPOSITORY INSTITUTION AT WHICH A BLOCKED ACCOUNT IS
MAINTAINED.
(C)
THE BORROWERS WILL NOT ESTABLISH ANY DDA HEREAFTER (OTHER THAN