OF ITS ORGANIZATION EXCEPT IN A TRANSACTION PERMITTED BY
SECTION 7.04 OR 7.05; AND (B) TAKE ALL REASONABLE ACTION TO MAINTAIN ALL RIGHTS,
PRIVILEGES, PERMITS, LICENSES AND FRANCHISES NECESSARY IN THE NORMAL CONDUCT OF
ITS BUSINESS, EXCEPT TO THE EXTENT THAT FAILURE TO DO SO COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, KKR FINANCIAL CORP. WILL DO ALL THINGS NECESSARY TO MAINTAIN ITS
STATUS AS A REIT; PROVIDED, HOWEVER, THAT BORROWERS MAY PERMIT KKR FINANCIAL
CORP. TO CEASE TO QUALIFY AS A REIT, SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING OR WOULD BE CAUSED THEREBY.
6.06
MAINTENANCE OF PROPERTIES.
(A) MAINTAIN, PRESERVE AND PROTECT ALL
OF ITS MATERIAL PROPERTIES AND EQUIPMENT NECESSARY IN THE OPERATION OF ITS
BUSINESS IN GOOD WORKING ORDER AND CONDITION, ORDINARY WEAR AND TEAR EXCEPTED;
AND (B) MAKE ALL NECESSARY REPAIRS THERETO AND RENEWALS AND REPLACEMENTS THEREOF
EXCEPT WHERE THE FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.
57
6.07
MAINTENANCE OF INSURANCE.
MAINTAIN WITH FINANCIALLY SOUND AND
REPUTABLE INSURANCE COMPANIES, INSURANCE WITH RESPECT TO ITS PROPERTIES AND
BUSINESS AGAINST LOSS OR DAMAGE OF THE KINDS CUSTOMARILY INSURED AGAINST BY
PERSONS ENGAGED IN THE SAME OR SIMILAR BUSINESS, OF SUCH TYPES AND IN SUCH
AMOUNTS AS ARE CUSTOMARILY CARRIED UNDER SIMILAR CIRCUMSTANCES BY SUCH OTHER
PERSONS.
6.08
COMPLIANCE WITH LAWS.
COMPLY IN ALL MATERIAL RESPECTS WITH THE
REQUIREMENTS OF ALL LAWS AND ALL ORDERS, WRITS, INJUNCTIONS AND DECREES
APPLICABLE TO IT OR TO ITS BUSINESS OR PROPERTY, EXCEPT IN SUCH INSTANCES IN
WHICH (A) SUCH REQUIREMENT OF LAW OR ORDER, WRIT, INJUNCTION OR DECREE IS BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED; OR (B)
THE FAILURE TO COMPLY THEREWITH COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.
6.09
BOOKS AND RECORDS.
MAINTAIN PROPER BOOKS OF RECORD AND ACCOUNT, IN
CONFORMITY WITH GAAP CONSISTENTLY APPLIED.
6.10
INSPECTION RIGHTS.
PERMIT REPRESENTATIVES AND INDEPENDENT
CONTRACTORS OF THE ADMINISTRATIVE AGENT AND EACH LENDER TO VISIT AND INSPECT ANY
OF ITS PROPERTIES, TO EXAMINE ITS CORPORATE, FINANCIAL AND OPERATING RECORDS,
AND MAKE COPIES THEREOF OR ABSTRACTS THEREFROM, AND TO DISCUSS ITS AFFAIRS,
FINANCES AND ACCOUNTS WITH ITS DIRECTORS, OFFICERS, AND INDEPENDENT PUBLIC
ACCOUNTANTS, ALL AT SUCH REASONABLE TIMES DURING NORMAL BUSINESS HOURS AND AS
OFTEN AS MAY BE REASONABLY DESIRED, UPON REASONABLE ADVANCE NOTICE TO THE
BORROWERS (SUBJECT TO REASONABLE REQUIREMENTS OF CONFIDENTIALITY); PROVIDED,
HOWEVER, THAT WHEN AN EVENT OF DEFAULT EXISTS THE ADMINISTRATIVE AGENT OR ANY
LENDER (OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR INDEPENDENT CONTRACTORS)
MAY DO ANY OF THE FOREGOING AT THE EXPENSE OF THE BORROWERS AT ANY TIME DURING
NORMAL BUSINESS HOURS AND WITHOUT ADVANCE NOTICE.
6.11
USE OF PROCEEDS.
USE THE PROCEEDS OF THE LOANS ONLY FOR WORKING
CAPITAL REQUIREMENTS AND OTHER GENERAL CORPORATE PURPOSES CONSISTENT WITH KKR
FINANCIAL CORP.'S FORM 10-K.
NO PART OF THE PROCEEDS OF ANY LOAN WILL BE USED,
WHETHER