LENDER SHALL NOT HAVE ANY OBLIGATION TO UNDERTAKE ANY OF THE FOREGOING AND SHALL
HAVE NO LIABILITY ON ACCOUNT OF ANY ACTION SO UNDERTAKEN EXCEPT WHERE THERE IS A
SPECIFIC FINDING IN A JUDICIAL PROCEEDING (IN WHICH THE LENDER HAS HAD AN
OPPORTUNITY TO BE HEARD), FROM WHICH FINDING NO FURTHER APPEAL IS AVAILABLE,
THAT THE LENDER HAD ACTED IN ACTUAL BAD FAITH OR IN A GROSSLY NEGLIGENT MANNER.
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The Borrowers shall pay to the Lender, on demand, or the Lender, in its
discretion, may add to the Loan Account, all amounts paid or incurred by the
Lender pursuant to this section. The obligation of the Borrowers to pay such
amounts is a Liability.
5-20.
LINE OF BUSINESS.
THE BORROWERS SHALL NOT ENGAGE IN ANY BUSINESS
OTHER THAN THE BUSINESS IN WHICH IT IS CURRENTLY ENGAGED OR A BUSINESS
REASONABLY RELATED THERETO.
5-21.
AFFILIATE TRANSACTIONS.
THE BORROWERS SHALL NOT MAKE ANY PAYMENT,
NOR GIVE ANY VALUE TO ANY RELATED ENTITY (OTHER THAN ANOTHER BORROWER) EXCEPT
FOR (A) GOODS AND SERVICES ACTUALLY PURCHASED BY THE BORROWERS FROM, OR SOLD BY
THE BORROWERS TO, SUCH RELATED ENTITY, AND (B) UPSTREAM PAYMENTS TO IPARTY CORP.
FOR (I) TAXES PAYABLE BASED ON TAXABLE INCOME OF BORROWERS ON A STAND-ALONE
BASIS, (II) REIMBURSEMENTS FOR EXECUTIVE PERSONNEL AND ANY OTHER SUCH SHARED
PERSONNEL AS PROVIDED IN THE BUSINESS PLAN, AND (III) ANY OTHER SERVICE PROVIDED
BY IPARTY CORP. TO THE BORROWERS AS PROVIDED IN THE BUSINESS PLAN, FOR A PRICE
WHICH SHALL:
(A)
BE COMPETITIVE AND FULLY DEDUCTIBLE AS AN "ORDINARY AND NECESSARY
BUSINESS EXPENSE" AND/OR FULLY DEPRECIABLE UNDER THE INTERNAL REVENUE CODE OF
1986 AND THE TREASURY REGULATIONS, EACH AS AMENDED; AND
(B)
NOT DIFFER FROM THAT WHICH WOULD HAVE BEEN CHARGED IN AN ARMS
LENGTH TRANSACTION.
5-22.
RESERVED.
5-23.
ADDITIONAL ASSURANCES.
(A)
THE BORROWERS ARE NOT THE OWNER OF, NOR HAVE THEY ANY INTEREST IN,
ANY PROPERTY OR ASSET WHICH, IMMEDIATELY UPON THE SATISFACTION OF THE CONDITIONS
PRECEDENT TO THE EFFECTIVENESS OF THE CREDIT FACILITY CONTEMPLATED HEREBY
(ARTICLE 4) WILL NOT BE SUBJECT TO A PERFECTED SECURITY INTEREST IN FAVOR OF THE
LENDER (SUBJECT ONLY TO THOSE ENCUMBRANCES (IF ANY) DESCRIBED ON EXHIBIT 5-5,
ANNEXED HERETO) TO SECURE THE LIABILITIES.
(B)
THE BORROWERS WILL NOT HEREAFTER ACQUIRE ANY ASSET OR ANY INTEREST
IN PROPERTY WHICH IS NOT, IMMEDIATELY UPON SUCH ACQUISITION, SUBJECT TO SUCH A
PERFECTED SECURITY INTEREST IN FAVOR OF THE LENDER TO SECURE THE LIABILITIES
(SUBJECT ONLY TO ENCUMBRANCES (IF ANY) PERMITTED PURSUANT TO SECTION 5-5,
ABOVE).
(C)
THE BORROWERS SHALL EXECUTE AND DELIVER TO THE LENDER SUCH
INSTRUMENTS, DOCUMENTS, AND PAPERS, AND SHALL DO ALL SUCH THINGS FROM TIME TO
TIME HEREAFTER AS THE LENDER MAY REASONABLY REQUEST TO CARRY INTO EFFECT THE
PROVISIONS AND INTENT OF THIS AGREEMENT; TO PROTECT AND PERFECT THE LENDER'S
SECURITY INTERESTS IN THE COLLATERAL; AND TO COMPLY WITH ALL APPLICABLE STATUTES
AND LAWS, AND FACILITATE THE COLLECTION OF ANY RECEIVABLES COLLATERAL. THE
BORROWERS SHALL EXECUTE ALL SUCH INSTRUMENTS AS MAY BE REASONABLY REQUIRED