OF ANY KIND ON THE ABILITY OF ANY SUCH SUBSIDIARY TO:
(1) PAY DIVIDENDS OR MAKE ANY OTHER DISTRIBUTION ON ANY OF SUCH SUBSIDIARY'S
STOCK OWNED BY BORROWER OR ANY OTHER SUBSIDIARY; (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 OTHER THAN THE ASSETS SET FORTH ON SCHEDULE 5.8 AND
OTHER THAN ENCUMBRANCES OR RESTRICTIONS EXISTING UNDER OR BY REASON OF (I) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; (II) CUSTOMARY PROVISIONS RESTRICTING
SUBLETTING OR ASSIGNMENT OF ANY LEASE GOVERNING A LEASEHOLD INTEREST OF HOLDINGS
OR ANY OF ITS SUBSIDIARIES; AND (III) RESTRICTIONS IMPOSED BY ANY HOLDER OF A
LIEN PERMITTED UNDER SECTION 5.2(A) ON THE TRANSFERABILITY OF ANY ASSET SUBJECT
TO SUCH LIEN.
5.3.
INVESTMENTS. THE CREDIT PARTIES SHALL NOT AND
SHALL NOT CAUSE OR PERMIT THEIR SUBSIDIARIES TO DIRECTLY OR INDIRECTLY MAKE OR
OWN ANY INVESTMENT IN ANY PERSON EXCEPT:
(A)
BORROWER AND ITS SUBSIDIARIES MAY MAKE AND
OWN INVESTMENTS IN CASH EQUIVALENTS SUBJECT TO CONTROL AGREEMENTS IN FAVOR OF
AGENT; PROVIDED THAT SUCH CASH EQUIVALENTS ARE NOT SUBJECT TO SETOFF RIGHTS;
(B)
EACH CREDIT PARTY MAY MAKE INTERCOMPANY
LOANS TO OTHER CREDIT PARTIES (OTHER THAN HOLDINGS) TO THE EXTENT PERMITTED
UNDER SECTION 5.1;
(C)
EACH CREDIT PARTY MAY MAKE EQUITY
CONTRIBUTIONS TO OTHER CREDIT PARTIES (OTHER THAN HOLDINGS);
(D)
BORROWER AND ITS SUBSIDIARIES MAY EACH MAKE
NON-CASH INVESTMENTS IN ANY OTHER SUBSIDIARIES OF THE BORROWER FOR THE PURPOSE
OF THE EXTINGUISHMENT OF INTERCOMPANY INDEBTEDNESS SOLELY THROUGH THE OFFSET OF
AN INTERCOMPANY RECEIVABLE TO AN INTERCOMPANY PAYABLE (I.E., NO TRANSFER OR
PAYMENT OF CASH CONSIDERATION IS PERMITTED);
(E)
CREDIT PARTIES AND THEIR SUBSIDIARIES MAY
MAKE LOANS AND ADVANCES TO EMPLOYEES, OFFICERS AND DIRECTORS, TO THE EXTENT
PERMISSIBLE BY LAW, FOR MOVING, ENTERTAINMENT,
39
TRAVEL AND OTHER SIMILAR EXPENSES IN THE ORDINARY COURSE OF BUSINESS CONSISTENT
WITH PAST PRACTICES;
(F)
INVESTMENTS EXISTING ON THE CLOSING DATE,
AS SET FORTH ON SCHEDULE 5.3 AND ANY RENEWALS, AMENDMENTS AND REPLACEMENTS
THEREOF THAT DO NOT INCREASE THE AMOUNT THEREOF;
(G)
EACH CREDIT PARTY MAY HOLD INVESTMENTS
COMPRISED OF NOTES PAYABLE, OR STOCK OR OTHER SECURITIES ISSUED BY FINANCIALLY
TROUBLED ACCOUNT DEBTORS (EXCLUDING AFFILIATES) TO SUCH CREDIT PARTY PURSUANT TO
AGREEMENTS WITH RESPECT TO SETTLEMENT OF SUCH ACCOUNT DEBTOR'S ACCOUNTS WITH
SUCH CREDIT PARTY NEGOTIATED IN THE ORDINARY COURSE OF BUSINESS;
(H)
BORROWER AND ITS SUBSIDIARIES MAY MAKE
ADVANCES IN THE FORM OF A PREPAYMENT OF EXPENSES, SO LONG AS SUCH EXPENSES WERE
INCURRED IN THE ORDINARY COURSE OF BUSINESS AND ARE BEING PAID IN ACCORDANCE
WITH CUSTOMARY TRADE TERMS OF SUCH BORROWER OR SUCH SUBSIDIARY;
(I)
EACH OF THE SUBSIDIARIES OF HOLDINGS MAY
ACQUIRE AND HOLD ACCOUNTS RECEIVABLES OWING TO ANY OF THEM, IF CREATED OR
ACQUIRED IN THE ORDINARY COURSE OF BUSINESS AND PAYABLE OR DISCHARGEABLE IN
ACCORDANCE WITH CUSTOMARY TERMS OF SUCH SUBSIDIARY;
(J)
BORROWER MAY ENTER INTO INTEREST RATE