THE BORROWERS AND ASSIGNED TO THE LENDER AS REQUIRED BY
SECTION 4-4, ABOVE.
5-8.
LICENSES.
EACH MATERIAL LICENSE, DISTRIBUTORSHIP, FRANCHISE, AND
SIMILAR AGREEMENT ISSUED TO, OR TO WHICH THE BORROWERS ARE A PARTY IS IN FULL
FORCE AND EFFECT. TO THE BORROWERS' KNOWLEDGE, NO PARTY TO ANY SUCH LICENSE OR
AGREEMENT IS IN DEFAULT OR VIOLATION THEREOF. THE BORROWERS HAVE NOT RECEIVED
ANY NOTICE OR THREAT OF CANCELLATION OF ANY SUCH LICENSE OR AGREEMENT.
5-9.
LEASES.
EXHIBIT 5-9, ANNEXED HERETO, IS A SCHEDULE OF ALL
PRESENTLY EFFECTIVE LEASES AND CAPITAL LEASES. EACH OF SUCH LEASES AND CAPITAL
LEASES IS IN FULL FORCE AND EFFECT. THE BORROWERS ARE NOT, AND TO THE BEST OF
THE BORROWERS' KNOWLEDGE NO OTHER PARTY TO ANY SUCH LEASE OR CAPITAL LEASE IS IN
DEFAULT OR VIOLATION OF ANY SUCH LEASE OR CAPITAL LEASE WHICH WOULD CAUSE THE
TERMINATION OF THE SAME AND EXCEPT AS SET FORTH ON EXHIBIT 5-9, THE BORROWERS
HAVE NOT RECEIVED ANY NOTICE OF DEFAULT OR THREAT OF CANCELLATION OF ANY SUCH
LEASE OR CAPITAL LEASE. THE BORROWERS HEREBY AUTHORIZE THE LENDER AT ANY TIME
AND FROM TIME TO TIME TO CONTACT ANY OF THE BORROWERS' LANDLORDS IN ORDER TO
CONFIRM THE BORROWERS' CONTINUED COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE
LEASE( S) BETWEEN THE BORROWERS AND THAT LANDLORD AND TO DISCUSS SUCH ISSUES,
CONCERNING THE BORROWERS' OCCUPANCY UNDER SUCH LEASE(S), AS THE LENDER MAY
DETERMINE.
5-10.
REQUIREMENTS OF LAW.
THE BORROWERS ARE IN COMPLIANCE WITH, AND
SHALL HEREAFTER COMPLY WITH AND USE ITS ASSETS IN MATERIAL COMPLIANCE WITH, ALL
REQUIREMENTS OF LAW. THE BORROWERS HAVE NOT RECEIVED ANY NOTICE OF ANY VIOLATION
OF ANY REQUIREMENT OF LAW , WHICH VIOLATION HAS NOT BEEN CURED OR OTHERWISE
REMEDIED, AND WOULD RESULT IN A MATERIAL ADVERSE CHANGE OF THE BORROWERS'
BUSINESS AND ITS ASSETS.
21
5-11.
MAINTAIN PROPERTIES.
THE BORROWERS SHALL:
(A)
KEEP THE COLLATERAL IN GOOD ORDER AND REPAIR (ORDINARY REASONABLE
WEAR AND TEAR AND CASUALTY EXCEPTED).
(B)
NOT SUFFER OR CAUSE THE WASTE OR DESTRUCTION OF ANY MATERIAL PART
OF THE COLLATERAL.
(C)
NOT USE ANY OF THE COLLATERAL IN VIOLATION OF ANY POLICY OF
INSURANCE THEREON.
(D)
EXCEPT FOR THOSE SALES PERMITTED UNDER SECTION 5.4( E )(II)
HEREIN, NOT SELL, LEASE, OR OTHERWISE DISPOSE OF ANY OF THE COLLATERAL, OTHER
THAN THE FOLLOWING, IN EACH CASE, SUBJECT TO THE TURNING OVER TO THE LENDER OF
ALL RECEIPTS WITH RESPECT TO THE SAME AS PROVIDED HEREIN:
(I)
THE SALE OF INVENTORY IN COMPLIANCE WITH THIS AGREEMENT.
(II)
THE DISPOSAL OF EQUIPMENT WHICH IS OBSOLETE, WORN OUT, OR DAMAGED
BEYOND REPAIR, WHICH EQUIPMENT IS REPLACED TO THE EXTENT NECESSARY TO PRESERVE
OR IMPROVE THE OPERATING EFFICIENCY OF THE BORROWERS.
5-12.
PAY TAXES.
(A)
THE FEDERAL INCOME TAX RETURNS OF THE BORROWERS HAVE BEEN AUDITED
BY THE INTERNAL REVENUE SERVICE (OR CLOSED BY APPLICABLE STATUTES) FOR ALL
FISCAL YEARS THROUGH AND INCLUDING THE BORROWERS' TAXABLE YEAR REFERENCED ON
EXHIBIT 5-12, ANNEXED HERETO, AND ALL DEFICIENCIES, ASSESSMENTS, AND OTHER
AMOUNTS ASSERTED AS