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'S FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON MARCH 29, 2006; PROVIDED THAT THE LOANS SHALL INITIALLY BE USED TO SATISFY
THE BORROWERS' OBLIGATIONS IN FULL UNDER THE EXISTING CREDIT AGREEMENT. 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.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrowers shall
not, nor shall it permit any Subsidiary to, directly or indirectly:
7.01
LIENS. CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
LIEN UPON ANY OF ITS PROPERTY, ASSETS OR REVENUES, WHETHER NOW OWNED OR
HEREAFTER ACQUIRED, OTHER THAN THE FOLLOWING:
(A)
AS TO COLLATERAL ONLY, LIENS PURSUANT TO OR
AS CONTEMPLATED IN ANY LOAN DOCUMENT AND PERMITTED ENCUMBRANCES (ONLY WITH
RESPECT TO CLAUSES (A) AND (E) OF THE DEFINITION THEREOF) SUBORDINATE TO SUCH
LIENS; AND
57
(B)
AS TO ALL OTHER ASSETS AND PROPERTIES OF THE
BORROWERS AND THEIR SUBSIDIARIES OTHER THAN COLLATERAL:
(I)
PERMITTED ENCUMBRANCES;
(II)
LIENS PURSUANT TO OR AS CONTEMPLATED IN
ANY LOAN DOCUMENT;
(III)
LIENS EXISTING ON THE DATE HEREOF AND LISTED
ON SCHEDULE 7.01 AND ANY RENEWALS OR EXTENSIONS THEREOF, PROVIDED THAT (I) THE
PROPERTY OR ASSET COVERED THEREBY IS NOT CHANGED, (II) THE AMOUNT SECURED OR
BENEFITED THEREBY IS NOT INCREASED EXCEPT AS CONTEMPLATED BY SECTION 7.03(B),
(III) THE DIRECT OR ANY CONTINGENT OBLIGOR WITH RESPECT THERETO IS NOT CHANGED,
AND (IV) ANY RENEWAL OR EXTENSION OF THE OBLIGATIONS SECURED OR BENEFITED
THEREBY IS PERMITTED BY SECTION 7.03(B);
(IV)
LIENS SECURING INDEBTEDNESS PERMITTED UNDER
SECTION 7.03(F); PROVIDED THAT (I) SUCH LIENS DO NOT AT ANY TIME ENCUMBER ANY
PROPERTY OTHER THAN THE PROPERTY FINANCED BY SUCH INDEBTEDNESS AND (II) THE
INDEBTEDNESS SECURED THEREBY DOES NOT EXCEED THE COST OR FAIR MARKET VALUE,
WHICHEVER IS LOWER, OF THE PROPERTY BEING ACQUIRED ON THE DATE OF ACQUISITION;
(V)
LIENS ON CASH DEPOSITS WITH ISSUERS OF
LETTERS OF CREDIT IN SUPPORT OF LETTER OF CREDIT OBLIGATIONS PERMITTED UNDER
SECTION 7.03(I);
(VI)
ANY LIEN EXISTING ON ANY PROPERTY OR ASSET
PRIOR TO THE ACQUISITION THEREOF BY ANY OF THE BORROWERS OR ANY SUBSIDIARY OR
EXISTING ON ANY PROPERTY OR ASSET OF