SECTION 4.3 HEREOF), ASSIGN,
TRANSFER, CREATE OR SUFFER TO EXIST A LIEN UPON OR ENCUMBER OR ALLOW OR SUFFER
TO BE ENCUMBERED IN
46
ANY WAY EXCEPT FOR PERMITTED ENCUMBRANCES, ANY PART OF THE COLLATERAL.
EACH
BORROWER SHALL DEFEND AGENT'S INTERESTS IN THE COLLATERAL AGAINST ANY AND ALL
PERSONS WHATSOEVER.
AT ANY TIME FOLLOWING DEMAND BY AGENT FOR PAYMENT OF ALL
OBLIGATIONS IN ACCORDANCE WITH THE TERMS HEREOF, AGENT SHALL HAVE THE RIGHT TO
TAKE POSSESSION OF THE INDICIA OF THE COLLATERAL AND THE COLLATERAL IN WHATEVER
PHYSICAL FORM CONTAINED, INCLUDING:
LABELS, STATIONERY, DOCUMENTS, INSTRUMENTS
AND ADVERTISING MATERIALS.
IF AGENT EXERCISES THIS RIGHT TO TAKE POSSESSION OF
THE COLLATERAL, BORROWERS SHALL, UPON DEMAND, ASSEMBLE IT IN THE BEST MANNER
POSSIBLE AND MAKE IT AVAILABLE TO AGENT AT A PLACE REASONABLY CONVENIENT TO
AGENT.
IN ADDITION, WITH RESPECT TO ALL COLLATERAL, AGENT AND LENDERS SHALL BE
ENTITLED TO ALL OF THE RIGHTS AND REMEDIES SET FORTH HEREIN AND FURTHER PROVIDED
BY THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW.
EACH BORROWER SHALL,
AND AGENT MAY, AT ITS OPTION, INSTRUCT ALL SUPPLIERS, CARRIERS, FORWARDERS,
WAREHOUSERS OR OTHERS RECEIVING OR HOLDING CASH, CHECKS, INVENTORY, DOCUMENTS OR
INSTRUMENTS IN WHICH AGENT HOLDS A SECURITY INTEREST TO DELIVER SAME TO AGENT
AND/OR SUBJECT TO AGENT'S ORDER AND IF THEY SHALL COME INTO ANY BORROWER'S
POSSESSION, THEY, AND EACH OF THEM, SHALL BE HELD BY SUCH BORROWER IN TRUST AS
AGENT'S TRUSTEE, AND SUCH BORROWER WILL IMMEDIATELY DELIVER THEM TO AGENT IN
THEIR ORIGINAL FORM TOGETHER WITH ANY NECESSARY ENDORSEMENT.
4.7.
BOOKS AND RECORDS.
EACH BORROWER SHALL (A) KEEP PROPER BOOKS OF
RECORD AND ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES WILL BE MADE OF ALL
DEALINGS OR TRANSACTIONS OF OR IN RELATION TO ITS BUSINESS AND AFFAIRS; (B) SET
UP ON ITS BOOKS ACCRUALS WITH RESPECT TO ALL TAXES, ASSESSMENTS, CHARGES, LEVIES
AND CLAIMS; AND (C) ON A REASONABLY CURRENT BASIS SET UP ON ITS BOOKS, FROM ITS
EARNINGS, ALLOWANCES AGAINST DOUBTFUL RECEIVABLES, ADVANCES AND INVESTMENTS AND
ALL OTHER PROPER ACCRUALS (INCLUDING BY REASON OF ENUMERATION, ACCRUALS FOR
PREMIUMS, IF ANY, DUE ON REQUIRED PAYMENTS AND ACCRUALS FOR DEPRECIATION,
OBSOLESCENCE, OR AMORTIZATION OF PROPERTIES), WHICH SHOULD BE SET ASIDE FROM
SUCH EARNINGS IN CONNECTION WITH ITS BUSINESS.
ALL DETERMINATIONS PURSUANT TO
THIS SUBSECTION SHALL BE MADE IN ACCORDANCE WITH, OR AS REQUIRED BY, GAAP
CONSISTENTLY APPLIED IN THE OPINION OF SUCH INDEPENDENT PUBLIC ACCOUNTANT AS
SHALL THEN BE REGULARLY ENGAGED BY BORROWERS.
4.8.
FINANCIAL DISCLOSURE.
EACH BORROWER HEREBY IRREVOCABLY AUTHORIZES
AND DIRECTS ALL ACCOUNTANTS AND AUDITORS EMPLOYED BY SUCH BORROWER AT ANY TIME
DURING THE TERM TO EXHIBIT AND DELIVER TO AGENT AND EACH LENDER COPIES OF ANY OF
SUCH BORROWER'S FINANCIAL STATEMENTS, TRIAL BALANCES OR OTHER ACCOUNTING RECORDS
OF ANY SORT IN THE ACCOUNTANT'S OR AUDITOR'S POSSESSION, AND TO DISCLOSE TO
AGENT AND EACH LENDER ANY INFORMATION SUCH ACCOUNTANTS MAY HAVE CONCERNING SUCH
BORROWER'S FINANCIAL STATUS AND BUSINESS OPERATIONS.
EACH BORROWER HEREBY
AUTHORIZES ALL GOVERNMENTAL BODIES TO FURNISH TO AGENT AND EACH