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
AUDIT RIGHTS.
PERMIT REPRESENTATIVES DESIGNATED BY ADMINISTRATIVE
AGENT (INCLUDING ANY CONSULTANTS, ACCOUNTANTS, LAWYERS AND APPRAISERS RETAINED
BY THE ADMINISTRATIVE AGENT) TO CONDUCT EVALUATIONS AND APPRAISALS OF THE
BORROWER'S COMPUTATION OF THE BORROWING BASE AND THE ASSETS INCLUDED IN THE
BORROWING BASE, ALL AT SUCH REASONABLE TIMES AS REQUESTED; PROVIDED THAT, SO
LONG AS NO DEFAULT HAS OCCURRED AND IS CONTINUING, THE AUDIT RIGHTS SET FORTH IN
THIS SECTION 6.11 MAY BE EXERCISED ONLY TWICE PER CALENDAR YEAR.
THE BORROWERS
SHALL PAY THE REASONABLE FEES AND EXPENSES OF ANY REPRESENTATIVES RETAINED BY
THE ADMINISTRATIVE AGENT TO CONDUCT ANY SUCH EVALUATION OR APPRAISAL; PROVIDED
THAT THE BORROWERS SHALL NOT BE REQUIRED TO PAY SUCH FEES AND EXPENSES FOR MORE
THAN ONE SUCH EVALUATION OR APPRAISAL DURING ANY CALENDAR YEAR UNLESS AN EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING AT THE TIME OF ANY SUBSEQUENT
EVALUATION OR APPRAISAL DURING SUCH CALENDAR YEAR.
THE BORROWERS ALSO AGREE TO
MODIFY OR ADJUST THE COMPUTATION OF THE BORROWING BASE IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT TO THE EXTENT REQUIRED BY THE ADMINISTRATIVE AGENT OR
THE REQUIRED LENDERS AS A RESULT OF ANY SUCH EVALUATION OR APPRAISAL, PROVIDED
THAT IF THE BORROWERS DEMONSTRATE THAT SUCH EVALUATION OR APPRAISAL IS
INCORRECT, THE BORROWERS SHALL BE PERMITTED TO RE-ADJUST THEIR COMPUTATION OF
THE BORROWING BASE.
6.12
USE OF PROCEEDS.
USE THE PROCEEDS OF THE LOANS ONLY FOR WORKING
CAPITAL REQUIREMENTS AND OTHER GENERAL CORPORATE PURPOSES CONSISTENT WITH KKR
FINANCIAL FORM 10-K, INCLUDING THE ACQUISITION AND FUNDING (EITHER DIRECTLY OR
THROUGH ONE OR MORE WHOLLY OWNED SUBSIDIARIES) OF SECURED AND UNSECURED
LEVERAGED LOANS, MEZZANINE LOANS, HIGH-YIELD SECURITIES, MORTGAGE BONDS AND
OTHER PORTFOLIO INVESTMENTS.
NO PART OF THE PROCEEDS OF ANY LOAN WILL BE USED,
WHETHER DIRECTLY OR INDIRECTLY, FOR ANY PURPOSE THAT ENTAILS A VIOLATION OF ANY
OF THE REGULATIONS OF THE FRB, INCLUDING REGULATIONS T, U AND X.
6.13
INVESTMENT POLICIES.
COMPLY WITH