AMALGAMATION TO EFFECT A DISPOSITION
PERMITTED PURSUANT TO SECTION 7.05 AND (III) ANY LOAN PARTY (OTHER THAN THE
BORROWER), THE GUAM SUBSIDIARY AND THE ZC PARTNERSHIP MAY LIQUIDATE OR DISSOLVE
IF THE BORROWER DETERMINES IN GOOD FAITH THAT SUCH LIQUIDATION OR DISSOLUTION IS
IN THE BEST INTERESTS OF THE BORROWER AND IS NOT MATERIALLY DISADVANTAGEOUS TO
THE LENDERS AND SO LONG AS ALL OF THE ASSETS OF SUCH LOAN PARTY OR THE ZC
PARTNERSHIP, AS APPLICABLE, ARE TRANSFERRED TO A LOAN PARTY THAT IS NOT
LIQUIDATING OR DISSOLVING; PROVIDED THAT ANY SUCH MERGER, AMALGAMATION OR
CONSOLIDATION INVOLVING A PERSON THAT IS NOT A WHOLLY OWNED SUBSIDIARY
IMMEDIATELY PRIOR TO SUCH MERGER, AMALGAMATION OR CONSOLIDATION SHALL NOT BE
PERMITTED UNLESS ALSO PERMITTED BY SECTION 7.04.
(B)
THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OTHER LOAN PARTY TO,
ENGAGE TO ANY MATERIAL EXTENT IN ANY BUSINESS OTHER THAN BUSINESSES OF THE TYPE
CONDUCTED BY THE LOAN PARTIES AND THEIR SUBSIDIARIES ON THE CLOSING DATE AND
BUSINESSES REASONABLY RELATED THERETO.
THE BORROWER SHALL NOT PERMIT THE GUAM
SUBSIDIARY TO HOLD ANY MATERIAL ASSETS OR BECOME LIABLE FOR ANY INDEBTEDNESS OR
ANY OTHER MATERIAL OBLIGATIONS, OR ENGAGE IN ANY ACTIVITIES OTHER THAN THOSE
INCIDENT TO THE MAINTENANCE OF ITS EXISTENCE OR TO THE ORDERLY LIQUIDATION AND
WINDING-UP THEREOF.
SECTION 7.04.
INVESTMENTS.
SECTION 7.04A.
Investments.
The Borrower shall not, and shall not permit any
other Loan Party to, purchase, hold or acquire (including pursuant to any merger
or amalgamation with any Person that was not a wholly owned Subsidiary prior to
such merger or amalgamation) any capital stock, evidences of indebtedness or
other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any
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loans or advances to, Guarantee any obligations of, or make or permit to exist
any other investment in, any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person
constituting a business unit (each of the foregoing, an "Investment"), except
for:
(A)
PERMITTED INVESTMENTS;
(B)
INVESTMENTS EXISTING ON THE CLOSING DATE AND SET FORTH ON SCHEDULE 7.04A,
AND ANY MODIFICATION, RENEWAL OR EXTENSION THEREOF; PROVIDED THAT THE AMOUNT OF
ANY INVESTMENT PERMITTED PURSUANT TO THIS CLAUSE IS NOT INCREASED FROM THE
AMOUNT OF SUCH INVESTMENT ON THE CLOSING DATE EXCEPT PURSUANT TO THE TERMS OF
SUCH INVESTMENT AS OF THE CLOSING DATE OR AS OTHERWISE PERMITTED BY THIS
SECTION 7.04A(B);
(C)
INVESTMENTS BY ANY LOAN PARTY IN ANY OTHER LOAN PARTY (INCLUDING, FOR
AVOIDANCE OF DOUBT, ACQUISITIONS OF ANY EQUITY INTERESTS OF A LOAN PARTY FROM
ANOTHER LOAN PARTY); PROVIDED THAT ANY LOAN PARTY OR OTHER SUBSIDIARY OF THE
BORROWER (EXCEPT THE ZC PARTNERSHIP) MAKING A LOAN OR ADVANCE TO ANOTHER LOAN
PARTY IS SUBJECT TO THE INTERCOMPANY SUBORDINATION AGREEMENT;
(D)
[INTENTIONALLY OMITTED];
(E)
OTHER INVESTMENTS BY ANY OF THE LOAN PARTIES IN ANY ZALE INSURANCE
SUBSIDIARY THAT ARE REASONABLY REQUIRED FOR PURPOSES OF COMPLIANCE BY