BORROWING BASE.
5.02
NEGATIVE COVENANTS.
UNTIL THE TERMINATION OF THIS AGREEMENT AND THE
SATISFACTION IN FULL BY BORROWER OF ALL OBLIGATIONS, BORROWER SHALL COMPLY, AND
SHALL CAUSE COMPLIANCE, WITH THE FOLLOWING NEGATIVE COVENANTS UNLESS LENDER
SHALL OTHERWISE CONSENT IN WRITING:
(A)
INDEBTEDNESS.
BORROWER SHALL NOT CREATE,
INCUR, ASSUME OR PERMIT TO EXIST ANY INDEBTEDNESS EXCEPT FOR PERMITTED
INDEBTEDNESS.
(B)
LIENS.
BORROWER SHALL NOT CREATE, INCUR,
ASSUME OR PERMIT TO EXIST ANY LIEN ON OR WITH RESPECT TO ANY OF ITS ASSETS OR
PROPERTY OF ANY CHARACTER, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, EXCEPT FOR
PERMITTED LIENS. BORROWER SHALL KEEP ALL COLLATERAL FREE AND CLEAR OF ALL LIENS
EXCEPT LIENS IN FAVOR OF LENDER.
(C)
ASSET DISPOSITIONS.
BORROWER SHALL NOT
SELL, LEASE, TRANSFER OR OTHERWISE DISPOSE OF ANY OF ITS ASSETS OR PROPERTY,
WHETHER NOW OWNED OR HEREAFTER ACQUIRED, EXCEPT IN THE ORDINARY COURSE OF ITS
BUSINESS AND EXCEPT AS OTHERWISE CONTEMPLATED BY THE CREDIT DOCUMENTS.
NOTWITHSTANDING THE FOREGOING, IN THE EVENT BORROWER ELECTS TO TRANSFER TO ANY
SELLER ANY PURCHASED RECEIVABLES ACQUIRED FROM SUCH PARTIES PURSUANT TO ANY
RECONVEYANCE RIGHTS THAT IT MAY HAVE UNDER THE TERMS OF ANY AGREEMENT WITH SUCH
SELLER, IT SHALL BE PERMITTED TO DO SO FREE AND CLEAR OF ANY LIEN GRANTED
HEREUNDER UPON PAYMENT OF ANY AMOUNT DUE FROM THE ORIGINAL TRANSFEROR THEREOF AS
SET FORTH IN THE AGREEMENT GOVERNING THE ORIGINAL PURCHASE BY BORROWER OF SUCH
PURCHASED RECEIVABLES.
(D)
MERGERS, ACQUISITIONS, ETC.
BORROWER SHALL
NOT CONSOLIDATE WITH OR MERGE INTO ANY OTHER PERSON OR PERMIT ANY OTHER PERSON
TO MERGE INTO IT, OR ACQUIRE ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF ANY OTHER
PERSON, EXCEPT, WITH RESPECT TO TCC, PURSUANT TO THE INITIAL RECEIVABLE PURCHASE
AGREEMENT DESCRIBED IN SECTION 7.02.
(E)
DISTRIBUTIONS, ETC.
EXCEPT FOR PERMITTED
DISTRIBUTIONS, BORROWER SHALL NOT (I) MAKE ANY DISTRIBUTIONS OF ANY KIND
WHATSOEVER TO ITS MEMBERS; (II) PURCHASE, REDEEM, RETIRE, DEFEASE OR OTHERWISE
ACQUIRE FOR VALUE ANY OF ITS MEMBERSHIP INTERESTS HELD BY ANY PERSON;
(III) RETURN ANY CAPITAL TO ANY OF ITS MEMBERS; OR (IV) SET APART ANY SUM FOR
ANY SUCH PURPOSE.
(F)
CAPITAL EXPENDITURES.
BORROWER SHALL NOT
PAY OR INCUR CAPITAL EXPENDITURES WHICH EXCEED IN THE AGGREGATE IN ANY FISCAL
YEAR $50,000.
(G)
INVESTMENTS.
BORROWER SHALL NOT MAKE ANY
INVESTMENTS OTHER THAN LOANS, ADVANCES OR PURCHASES OF INDEBTEDNESS IN THE
ORDINARY COURSE OF BORROWER'S BUSINESS.
(H)
CHANGE IN BUSINESS.
BORROWER SHALL NOT
ENGAGE, EITHER DIRECTLY OR INDIRECTLY THROUGH SUBSIDIARIES, IN ANY BUSINESS
SUBSTANTIALLY DIFFERENT FROM ITS BUSINESS AS CONDUCTED ON THE DATE HEREOF OR AS
EXPECTED TO BE CONDUCTED AFTER THE DATE HEREOF; PROVIDED, HOWEVER, THAT BORROWER
SHALL BE PERMITTED TO ENGAGE IN THE BUSINESS OF PROVIDING FLOORPLAN FINANCING
AND OPEN ACCOUNT INVENTORY FINANCING OF ANY AND ALL
13
PRODUCTS MANUFACTURED OR DISTRIBUTED FROM TIME TO TIME AFTER THE DATE HEREOF BY
TORO, OR ANY OF ITS AFFILIATES, INCLUDING PARTS, ACCESSORIES, SOFTWARE AND
SOFTWARE UPDATES TO SUPPORT EQUIPMENT OR SERVICES, ADVERTISING MATERIALS,
ADVERTISING PLACEMENTS, TRAINING MATERIALS, POINT OF SALE OR MERCHANDISING
MATERIALS, EXTENDED