AGGREGATE AMOUNT NOT TO EXCEED $5,000,000.
Notwithstanding anything in this Agreement to the contrary, (a) exclusive of
Indebtedness of Zale Canada Co. to ZC Partnership permitted hereunder and
contractual liability
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insurance policies incurred in the ordinary course of business, the aggregate
outstanding amount of any and all transactions between any or all of the Loan
Parties, on the one hand, and any or all of the Excluded Subsidiaries, on the
other hand, that are covered by any of the clauses (a) through (y) of this
SECTION 6.4 shall not exceed $10,000,000 at any one time, (b) in no event may
proceeds of the ABL Priority Collateral be invested in Permitted Investments or
otherwise deposited in securities accounts, in each case other than those
Permitted Investments and deposits maintained in the Fidelity Investment Account
and in the Term Securities Accounts, and (c) the Loan Parties shall cause the ZC
Partnership not to make any Investments in any other Person, other than
Investments in Zale Canada Co. consistent with past practice and otherwise
permitted hereunder.
SECTION 6.5
Asset Sales.
(a) The Loan Parties will not sell, transfer,
lease or otherwise dispose of any asset, including any capital stock, nor will
the Loan Parties issue any additional shares of its capital stock or other
ownership interest in such Loan Party, except:
(I)
(A) SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS (OTHER
THAN IN CONNECTION WITH THE CLOSURE OF STORES), OR (B) USED OR SURPLUS
EQUIPMENT, OR (C) PERMITTED INVESTMENTS AND INVESTMENTS PERMITTED PURSUANT TO
SECTIONS 6.4(G), (H), (I), AND (J), IN EACH CASE IN THE ORDINARY COURSE OF
BUSINESS;
(II)
SALES, TRANSFERS AND DISPOSITIONS AMONG THE LOAN PARTIES AND
THEIR RESPECTIVE SUBSIDIARIES (EXCLUDING, HOWEVER, ANY SALES, TRANSFERS AND
DISPOSITIONS OF INVENTORY OR PROCEEDS THEREOF, FROM ANY LOAN PARTY EXCEPT TO
ANOTHER LOAN PARTY), PROVIDED, THAT ANY SUCH SALES, TRANSFERS OR DISPOSITIONS
INVOLVING A SUBSIDIARY THAT IS NOT A LOAN PARTY SHALL BE MADE IN COMPLIANCE WITH
SECTION 6.7 AND OTHERWISE IN COMPLIANCE WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS;
(III)
RESERVED;
(IV)
RESERVED;
(V)
ISSUANCES OF SHARES OF CAPITAL STOCK OF ANY LOAN PARTY TO ANY
OTHER LOAN PARTY OR THE ISSUANCE BY ZALE OF SHARES OF ITS CAPITAL STOCK;
(VI)
THE NATURAL EXPIRATION OF INTELLECTUAL PROPERTY LICENSES IN
ACCORDANCE WITH THE TERMS THEREOF;
(VII)
TRANSFERS OF ASSETS PERMITTED AS INVESTMENTS UNDER SECTION 6.4;
(VIII)
PERMITTED ASSET SALES PROVIDED THAT NO EVENT OF DEFAULT OR CASH
CONTROL EVENT HAS OCCURRED AND IS CONTINUING OR WOULD OCCUR AS A RESULT THEREOF;
AND
(IX)
BULK SALES OR OTHER DISPOSITIONS OF THE LOAN PARTIES' INVENTORY
AND STORE FIXTURES NOT IN THE ORDINARY COURSE OF BUSINESS IN CONNECTION WITH
STORE CLOSURES, AT ARM'S LENGTH; PROVIDED THAT SUCH STORE CLOSURES AND RELATED
INVENTORY DISPOSITIONS SHALL NOT EXCEED (I) FOR THE FIRST TWELVE MONTHS AFTER
THE EFFECTIVE DATE, 200 OF THE LOAN PARTIES' STORES ON TERMS AND SUBJECT TO
CONDITIONS TO BE AGREED BY THE BORROWERS AND THE ADMINISTRATIVE AGENT AND THE
CO-BORROWING BASE