NOT
OVERDUE OR ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS
DILIGENTLY PURSUED AND FOR WHICH ADEQUATE RESERVES HAVE BEEN ESTABLISHED IN
ACCORDANCE WITH GAAP AND ARE INCURRED IN THE ORDINARY COURSE OF BUSINESS;
(F)
LIENS RESULTING FROM DEPOSITS TO SECURE PAYMENTS OF WORKER'S
COMPENSATION, UNEMPLOYMENT INSURANCE OR OTHER SOCIAL SECURITY PROGRAMS OR TO
SECURE THE PERFORMANCE OF TENDERS, STATUTORY OBLIGATIONS, LEASES, INSURANCE
CONTRACTS, SURETY AND APPEAL BONDS, BIDS, AND OTHER CONTRACTS INCURRED IN THE
ORDINARY COURSE OF BUSINESS (OTHER THAN FOR PAYMENT OF DEBT);
(G)
LIENS FOR PURCHASE MONEY OBLIGATIONS AND LIENS SECURING CAPITAL
LEASE OBLIGATIONS; PROVIDED THAT: (I) THE DEBT SECURED BY ANY SUCH LIEN IS
PERMITTED UNDER SECTION 10.5(D) HEREOF; AND (II) ANY SUCH LIEN ENCUMBERS ONLY
THE PROPERTY SO PURCHASED OR LEASED;
(H)
ANY INTEREST OR TITLE OF A LICENSOR, LESSOR, OR SUBLESSOR UNDER
ANY LICENSE OR LEASE ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS;
(I)
LIENS AGAINST EQUIPMENT ARISING FROM PRECAUTIONARY UCC FINANCING
STATEMENT FILINGS REGARDING OPERATING LEASES ENTERED INTO BY THE COMPANY OR A
SUBSIDIARY IN THE ORDINARY COURSE OF BUSINESS;
21
(J)
NONCONSENSUAL LIENS IN FAVOR OF BANKING INSTITUTIONS ARISING AS A
MATTER OF LAW AND ENCUMBERING THE DEPOSITS (INCLUDING THE RIGHT OF SET-OFF) HELD
BY SUCH BANKING INSTITUTIONS IN THE ORDINARY COURSE OF BUSINESS; AND
(K)
LIENS SECURING DEBT ARISING UNDER SWAPS PERMITTED UNDER
SECTION 10.5(G) HEREOF.
Notwithstanding the foregoing Permitted Liens or any other provision in this
Agreement or any other Transaction Document to the contrary, the Company shall
not enter into, and the Company shall not permit any of the Guarantors to enter
into, any agreement that (i) prohibits the creation or assumption of any Lien
upon, or the pledge, hypothecation or encumbrance of, any Property of the
Company or such Guarantor in favor of any Person, or (ii) requires any
obligation of the Company, or such Subsidiary to be secured in favor of another
Person if any Debt of the Company is so secured.
SECTION 10.4
FINANCIAL COVENANTS.
(A)
MINIMUM SHAREHOLDERS' EQUITY.
AT THE END OF ANY FISCAL QUARTER,
THE COMPANY SHALL NOT PERMIT ITS SHAREHOLDERS' EQUITY TO BE LESS THAN THE SUM OF
(I) $27,000,000 AND (II) 50% OF THE AGGREGATE OF THE NET INCOME OF THE COMPANY
(DETERMINED IN ACCORDANCE WITH GAAP AND WITHOUT DEDUCTION FOR ANY NET LOSSES)
FOR SUCH FISCAL QUARTER AND ALL PRIOR FISCAL QUARTERS ENDING AFTER APRIL 30,
2007.
(B)
MINIMUM SHAREHOLDERS' EQUITY TO RECEIVABLES RATIO.
AS OF THE END
OF ANY FISCAL QUARTER, THE COMPANY SHALL NOT PERMIT THE SUM OF ITS SHAREHOLDERS'
EQUITY PLUS ANY OUTSTANDING PRINCIPAL AMOUNTS OF THE JUNIOR DEBT AND THE NOTES,
AS A PERCENTAGE OF MANAGED ASSETS, TO BE LESS THAN 7.0%
(C)
MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
AS OF THE END
OF ANY FISCAL QUARTER, THE COMPANY SHALL NOT PERMIT THE RATIO OF (I) EBITDA PLUS
RENTAL EXPENSE OF THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIES FOR THE PRIOR
FOUR FISCAL QUARTERS TO (II) THE SUM OF (A) INTEREST EXPENSE FOR SUCH FISCAL