THE SENIOR SUBORDINATED NOTE DOCUMENTS.
(D)
LIENS ON THE COLLATERAL OTHER THAN THE
SENIOR SECURED NOTE PRIMARY COLLATERAL GRANTED TO THE SENIOR SECURED NOTES
TRUSTEE PURSUANT TO THE SENIOR SECURED NOTE DOCUMENTS ARE SECOND IN PRIORITY TO
THE LIENS ON THE COLLATERAL OTHER THAN THE SENIOR SECURED NOTE PRIMARY
COLLATERAL GRANTED TO THE AGENT, ON BEHALF OF ITSELF AND LENDERS, PURSUANT TO
THE COLLATERAL DOCUMENTS.
(E)
AGENT AND LENDERS ARE INTENDED THIRD PARTY
BENEFICIARIES OF THE PROVISIONS OF ARTICLE 10 ("INTERCREDITOR PROVISIONS
RELATING TO CREDIT AGREEMENT") OF THE SENIOR SECURED NOTE INDENTURE, WITH THE
RIGHT AND ABILITY TO ENFORCE SUCH PROVISIONS FOR THEIR OWN BENEFIT.
5.20
COMPLIANCE.
EACH CREDIT PARTY REPRESENTS AND
WARRANTS THAT IT IS IN COMPLIANCE AND EACH OF ITS SUBSIDIARIES IS IN COMPLIANCE
WITH THE REQUIREMENTS OF ALL APPLICABLE LAWS, RULES, REGULATIONS AND ORDERS OF
ANY GOVERNMENTAL AUTHORITY AND THE OBLIGATIONS, COVENANTS AND CONDITIONS
CONTAINED IN ALL CONTRACTUAL OBLIGATIONS OTHER THAN INSTANCES OF NONCOMPLIANCE
WITH THOSE LAWS, RULES, REGULATIONS, ORDERS AND PROVISIONS OF SUCH CONTRACTUAL
OBLIGATIONS WHICH COULD NOT BE REASONABLY EXPECTED TO HAVE, EITHER INDIVIDUALLY
OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT.
5.21
SMILE-TOTE.
THE FAIR MARKET VALUE OF THE ASSETS
OF SMILE-TOTE, INC. IS LESS THAN $650,000 AND SMILE-TOTE, INC.'S NET INCOME FOR
THE MOST RECENTLY COMPLETED TWELVE MONTH PERIOD IS LESS THAN $30,000.
SECTION 6.
DEFAULT, RIGHTS AND REMEDIES
6.1
EVENT OF DEFAULT.
"EVENT OF DEFAULT" SHALL
MEAN THE OCCURRENCE OR EXISTENCE OF ANY ONE OR MORE OF THE FOLLOWING:
(A)
PAYMENT.
(1) FAILURE TO PAY ANY PAYMENT OF
PRINCIPAL OF ANY LOAN WHEN DUE, OR TO REPAY REVOLVING LOANS TO REDUCE THEIR
BALANCE TO THE MAXIMUM AMOUNT OF REVOLVING LOANS THEN PERMITTED TO BE
OUTSTANDING OR TO REIMBURSE ANY L/C ISSUER FOR ANY PAYMENT MADE BY SUCH L/C
ISSUER UNDER OR IN RESPECT OF ANY LETTER OF CREDIT WHEN DUE OR (2) FAILURE TO
PAY, WITHIN
47
FIVE (5) DAYS AFTER THE DUE DATE, ANY INTEREST ON ANY LOAN OR ANY OTHER AMOUNT
DUE UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; OR
(B)
DEFAULT IN OTHER AGREEMENTS.
(1) ANY CREDIT
PARTY FAILS TO PAY WHEN DUE OR WITHIN ANY APPLICABLE GRACE PERIOD ANY PRINCIPAL
OR INTEREST ON INDEBTEDNESS (OTHER THAN THE LOANS) OR ANY CONTINGENT OBLIGATIONS
OR (2) BREACH OR DEFAULT OF ANY CREDIT PARTY, OR THE OCCURRENCE OF ANY CONDITION
OR EVENT, WITH RESPECT TO ANY INDEBTEDNESS (OTHER THAN THE LOANS) OR ANY
CONTINGENT OBLIGATIONS, IF THE EFFECT OF SUCH BREACH, DEFAULT OR OCCURRENCE IS
TO CAUSE OR TO PERMIT THE HOLDER OR HOLDERS THEN TO CAUSE, INDEBTEDNESS AND/OR
CONTINGENT OBLIGATIONS HAVING AN AGGREGATE PRINCIPAL AMOUNT IN EXCESS OF
$5,000,000 TO BECOME OR BE DECLARED DUE PRIOR TO THEIR STATED MATURITY; OR
(C)
BREACH OF CERTAIN PROVISIONS; BREACH OF
WARRANTY.
FAILURE OF ANY CREDIT PARTY TO PERFORM OR COMPLY WITH ANY TERM OR
CONDITION CONTAINED IN (I) SECTION 2.3 AND THE CONTINUATION OF SUCH FAILURE FOR
FIVE DAYS OR (II) THAT PORTION OF SECTION 2.2 RELATING TO