OTHER ENTITY; MAKE ANY SUBSTANTIAL CHANGE IN THE NATURE OF
BORROWER'S BUSINESS AS CONDUCTED AS OF THE DATE HEREOF; ACQUIRE ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF ANY OTHER ENTITY; NOR SELL, LEASE, TRANSFER
OR OTHERWISE DISPOSE OF ALL OR A SUBSTANTIAL OR MATERIAL PORTION OF BORROWER'S
ASSETS EXCEPT IN THE ORDINARY COURSE OF ITS BUSINESS.
5.2
USE OF PROCEEDS. BORROWER WILL NOT USE THE PROCEEDS OF ANY CREDIT
EXTENSION EXCEPT FOR THE PURPOSES, IF ANY, SPECIFIED FOR SUCH CREDIT EXTENSION
IN THE SUPPLEMENT COVERING THE FACILITY UNDER WHICH SUCH CREDIT EXTENSION IS
MADE.
5.3
LIENS. MORTGAGE, PLEDGE, GRANT OR PERMIT TO EXIST A SECURITY
INTEREST IN, OR LIEN UPON, ALL OR ANY PORTION OF BORROWER'S ASSETS NOW OWNED OR
HEREAFTER ACQUIRED, EXCEPT ANY OF THE FOREGOING IN FAVOR OF TRADE BANK OR WHICH
IS EXISTING AS OF, AND DISCLOSED TO TRADE BANK IN WRITING PRIOR TO, THE DATE
HEREOF.
5.4
ACQUISITIONS OF ASSETS. BORROWER WILL NOT ACQUIRE ANY ASSETS OR
ENTER INTO ANY OTHER TRANSACTION OUTSIDE THE ORDINARY COURSE OF BORROWER'S
BUSINESS.
5.5
LOANS AND INVESTMENTS. BORROWER WILL NOT MAKE ANY LOANS OR
ADVANCES TO, OR INVESTMENTS IN, ANY PERSON OR ENTITY EXCEPT FOR ACCOUNTS
RECEIVABLE CREATED IN THE ORDINARY COURSE OF BORROWER'S BUSINESS.
5.6
INDEBTEDNESS FOR BORROWED MONEY. BORROWER WILL NOT INCUR ANY
INDEBTEDNESS FOR BORROWED MONEY, EXCEPT TO TRADE BANK AND EXCEPT FOR
INDEBTEDNESS SUBORDINATED TO THE OBLIGATIONS BY AN INSTRUMENT OR AGREEMENT IN
FORM ACCEPTABLE TO TRADE BANK.
5.7
GUARANTEES. BORROWER WILL NOT GUARANTEE OR OTHERWISE BECOME LIABLE
WITH RESPECT TO THE OBLIGATIONS OF ANY OTHER PERSON OR ENTITY, EXCEPT FOR
ENDORSEMENT OF INSTRUMENTS FOR DEPOSIT INTO BORROWER'S ACCOUNT IN THE ORDINARY
COURSE OF BORROWER'S BUSINESS.
5.8
DIVIDENDS AND DISTRIBUTIONS OF CAPITAL OF C CORPORATION. IF
BORROWER IS A CORPORATION, BORROWER WILL NOT PAY OR DECLARE ANY DIVIDENDS OR
MAKE ANY DISTRIBUTION OF CAPITAL ON BORROWER'S STOCK (EXCEPT FOR DIVIDENDS
PAYABLE SOLELY IN STOCK OF BORROWER; PROVIDED HOWEVER, THAT BORROWER MAY DECLARE
OR PAY 85% OF NET INCOME AFTER TAX), NOR REDEEM, RETIRE, PURCHASE OR OTHERWISE
ACQUIRE, DIRECTLY OR INDIRECTLY, ANY SHARES OF ANY CLASS OF BORROWER'S STOCK NOW
OR HEREAFTER OUTSTANDING.
5.9
INVESTMENTS IN, OR ACQUISITIONS OF, SUBSIDIARIES. BORROWER WILL
NOT MAKE ANY INVESTMENTS IN, OR FORM OR ACQUIRE, ANY SUBSIDIARIES.
VI.
EVENTS OF DEFAULT AND REMEDIES
6.1
EVENTS OF DEFAULT. THE OCCURRENCE OF ANY OF THE FOLLOWING SHALL
CONSTITUTE AN "EVENT OF DEFAULT":
(A)
FAILURE TO MAKE PAYMENTS WHEN DUE.
BORROWER'S FAILURE TO PAY PRINCIPAL, INTEREST, FEES OR OTHER AMOUNTS WHEN DUE
UNDER ANY LOAN DOCUMENT.
6
(B)
FAILURE TO PERFORM OBLIGATIONS. ANY FAILURE
BY BORROWER TO COMPLY WITH ANY COVENANT OR OBLIGATION IN THIS AGREEMENT OR IN
ANY LOAN DOCUMENT (OTHER THAN THOSE REFERRED TO IN SUBSECTION (A)ABOVE), AND
SUCH DEFAULT SHALL CONTINUE FOR A PERIOD OF TWENTY CALENDAR DAYS FROM THE
EARLIER OF (I) BORROWER'S FAILURE TO NOTIFY TRADE BANK OF SUCH EVENT OF DEFAULT
PURSUANT TO SECTION 4.2(A) ABOVE, OR (II) TRADE BANK'S NOTICE TO BORROWER OF
SUCH EVENT