ARE APPLIED AS REQUIRED BY SUBSECTION 2.4; (5) AFTER GIVING EFFECT
TO THE SALE OR OTHER DISPOSITION OF THE ASSETS INCLUDED WITHIN THE ASSET
DISPOSITION AND THE REPAYMENT OF THE OBLIGATIONS WITH THE PROCEEDS THEREOF,
OBLIGORS ARE IN COMPLIANCE ON A PRO FORMA BASIS WITH THE COVENANTS SET FORTH IN
THE FINANCIAL COVENANTS RIDER RECOMPUTED FOR THE MOST RECENTLY ENDED FISCAL
QUARTER FOR WHICH INFORMATION IS AVAILABLE AND IS IN COMPLIANCE WITH ALL OTHER
TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT; AND (6) NO DEFAULT OR EVENT OF
DEFAULT SHALL THEN EXIST OR RESULT FROM SUCH SALE OR OTHER DISPOSITION.
(B)
LIENS.
EXCEPT FOR PERMITTED ENCUMBRANCES,
DIRECTLY OR INDIRECTLY CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY LIEN ON OR
WITH RESPECT TO ANY OF THE COLLATERAL OR THE ASSETS OF ANY LOAN PARTY OR ANY
PROCEEDS, INCOME OR PROFITS THEREFROM.
(C)
NO NEGATIVE PLEDGES.
ENTER INTO OR ASSUME
ANY AGREEMENT (OTHER THAN THE LOAN DOCUMENTS AND THE CANADIAN FACILITY LOAN
DOCUMENTS) PROHIBITING THE CREATION OR ASSUMPTION OF ANY LIEN UPON THE
PROPERTIES OR ASSETS OF ANY LOAN PARTY, WHETHER NOW OWNED OR HEREAFTER ACQUIRED.
(D)
NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO
BORROWER.
EXCEPT AS PROVIDED HEREIN AND IN THE CANADIAN FACILITY LOAN
DOCUMENTS, DIRECTLY OR INDIRECTLY CREATE OR OTHERWISE CAUSE OR SUFFER TO EXIST
OR BECOME EFFECTIVE ANY CONSENSUAL ENCUMBRANCE OR RESTRICTION OF ANY KIND ON THE
ABILITY OF ANY SUBSIDIARY OF BORROWER TO: (1) PAY DIVIDENDS OR MAKE ANY OTHER
DISTRIBUTION ON ANY OF SUCH SUBSIDIARY'S CAPITAL STOCK OWNED BY BORROWER OR ANY
SUBSIDIARY OF BORROWER; (2) PAY ANY INDEBTEDNESS OWED TO BORROWER OR ANY OTHER
SUBSIDIARY; (3) MAKE LOANS OR ADVANCES TO BORROWER OR ANY OTHER SUBSIDIARY; OR
(4) TRANSFER ANY OF ITS PROPERTY OR ASSETS TO BORROWER OR ANY OTHER SUBSIDIARY.
40
7.4
INVESTMENTS AND LOANS.
MAKE OR PERMIT TO
EXIST INVESTMENTS IN OR LOANS TO ANY OTHER PERSON, EXCEPT:
(A) CASH
EQUIVALENTS; (B) INTERCOMPANY LOANS BY BORROWER TO ITS SUBSIDIARIES TO THE
EXTENT PERMITTED UNDER SUBSECTION 7.1; (C) LOANS AND ADVANCES TO EMPLOYEES FOR
MOVING, ENTERTAINMENT, TRAVEL AND OTHER SIMILAR EXPENSES IN THE ORDINARY COURSE
OF BUSINESS IN AN AGGREGATE OUTSTANDING AMOUNT NOT IN EXCESS OF $300,000 AT ANY
TIME; (D) PROMISSORY NOTES OF EMPLOYEES ISSUED TO HOLDINGS IN CONSIDERATION FOR
SHARES OF CAPITAL STOCK ISSUED BY HOLDINGS TO SUCH EMPLOYEES IN AN AGGREGATE
OUTSTANDING AMOUNT NOT EXCEEDING $750,000 AT ANY TIME; AND (E) PERMITTED
ACQUISITIONS CONSUMMATED BY OBLIGORS.
7.5
RESTRICTED JUNIOR PAYMENTS.
DIRECTLY OR
INDIRECTLY DECLARE, ORDER, PAY, MAKE OR SET APART ANY SUM FOR ANY RESTRICTED
JUNIOR PAYMENT, EXCEPT THAT:
(A)
BORROWER MAY MAKE PAYMENTS AND DISTRIBUTIONS TO
HOLDINGS THAT ARE USED BY HOLDINGS TO PAY FEDERAL AND STATE INCOME TAXES THEN
DUE AND OWING, FRANCHISE TAXES AND OTHER SIMILAR LICENSING EXPENSES INCURRED IN
THE ORDINARY COURSE OF BUSINESS; PROVIDED THAT BORROWER'S AGGREGATE CONTRIBUTION
TO TAXES AS A RESULT OF THE FILING OF A CONSOLIDATED OR COMBINED RETURN BY
HOLDINGS SHALL NOT BE GREATER, NOR THE AGGREGATE RECEIPT OF TAX BENEFITS LESS,