AS ONE OF ITS IMPORTANT ACTIVITIES EXTENDING CREDIT TO
PURCHASE OR CARRY MARGIN STOCK (AS DEFINED IN REGULATION U OF THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM), OR USE THE PROCEEDS OF ANY CREDIT
EXTENSION FOR THAT PURPOSE; FAIL TO MEET THE MINIMUM FUNDING REQUIREMENTS OF
ERISA, PERMIT A REPORTABLE EVENT OR PROHIBITED TRANSACTION, AS DEFINED IN ERISA,
TO OCCUR; FAIL TO COMPLY WITH THE FEDERAL FAIR LABOR STANDARDS ACT OR VIOLATE
ANY OTHER LAW OR REGULATION, IF THE VIOLATION OR FAILURE TO COMPLY WOULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S BUSINESS,
OR PERMIT ANY OF ITS SUBSIDIARIES TO DO SO; WITHDRAW OR PERMIT ANY SUBSIDIARY TO
WITHDRAW FROM PARTICIPATION IN, PERMIT PARTIAL OR COMPLETE TERMINATION OF, OR
PERMIT THE OCCURRENCE OF ANY OTHER EVENT WITH RESPECT TO, ANY PRESENT PENSION,
PROFIT SHARING AND DEFERRED COMPENSATION PLAN WHICH COULD REASONABLY BE EXPECTED
TO RESULT IN ANY LIABILITY OF BORROWER, INCLUDING ANY LIABILITY TO THE PENSION
BENEFIT GUARANTY CORPORATION OR ITS SUCCESSORS OR ANY OTHER GOVERNMENTAL AGENCY.
7.11
NETWORK ENGINES SECURITIES CORPORATION. TRANSFER OR
DISTRIBUTE ANY FUNDS TO, OR MAKE ANY INVESTMENT IN, NETWORK ENGINES SECURITIES
CORPORATION, A WHOLLY-OWNED SUBSIDIARY OF NETWORK.
8
EVENTS OF DEFAULT
Any one of the following shall constitute an event of default (an "Event of
Default") under this Agreement:
8.1
PAYMENT DEFAULT. BORROWER FAILS TO (A) MAKE
ANY PAYMENT OF PRINCIPAL OR INTEREST ON ANY CREDIT EXTENSION ON ITS DUE DATE, OR
(B) PAY ANY OTHER OBLIGATIONS WITHIN THREE (3) BUSINESS DAYS AFTER SUCH
OBLIGATIONS ARE DUE AND PAYABLE (WHICH THREE (3) BUSINESS DAY GRACE PERIOD WILL
NOT APPLY TO PAYMENTS DUE ON THE REVOLVING LINE MATURITY DATE). DURING THE CURE
PERIOD, THE FAILURE TO CURE THE PAYMENT DEFAULT IS NOT AN EVENT OF DEFAULT (BUT
NO CREDIT EXTENSION WILL BE MADE DURING THE CURE PERIOD);
8.2
COVENANT DEFAULT.
(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.6,
or 6.7, or violates any covenant in Section 7; or
(B) BORROWER FAILS OR NEGLECTS TO PERFORM, KEEP, OR OBSERVE ANY OTHER TERM,
PROVISION, CONDITION, COVENANT OR AGREEMENT CONTAINED IN THIS AGREEMENT, ANY
LOAN DOCUMENTS, AND AS TO ANY DEFAULT (OTHER THAN THOSE SPECIFIED IN THIS
SECTION 8) UNDER SUCH OTHER TERM, PROVISION, CONDITION, COVENANT OR AGREEMENT
THAT CAN BE CURED, HAS FAILED TO CURE THE DEFAULT WITHIN TEN (10) DAYS AFTER THE
OCCURRENCE THEREOF; PROVIDED, HOWEVER, THAT IF THE DEFAULT CANNOT BY ITS NATURE
BE CURED WITHIN THE TEN (10) DAY PERIOD OR CANNOT AFTER DILIGENT ATTEMPTS BY
BORROWER BE CURED WITHIN SUCH TEN (10) DAY PERIOD, AND SUCH DEFAULT IS LIKELY TO
BE CURED WITHIN A REASONABLE TIME, THEN BORROWER SHALL HAVE AN ADDITIONAL PERIOD
(WHICH SHALL NOT IN ANY CASE EXCEED THIRTY (30) DAYS) TO ATTEMPT TO CURE SUCH
DEFAULT, AND WITHIN SUCH REASONABLE TIME PERIOD THE FAILURE TO CURE THE DEFAULT
SHALL NOT BE DEEMED AN EVENT OF DEFAULT (BUT NO CREDIT EXTENSIONS SHALL BE MADE
DURING SUCH CURE PERIOD). GRACE PERIODS PROVIDED