PROVIDED,
HOWEVER, THAT ANYTHING CONTAINED IN THIS SECTION 4.12 TO THE CONTRARY
NOTWITHSTANDING, NEITHER THE BORROWERS NOR ANY OF THEIR SUBSIDIARIES WILL BE
REQUIRED TO PLEDGE MORE THAN SIXTY-FIVE PERCENT (65%) OF THE VOTING EQUITY
INTERESTS OF ANY FOREIGN SUBSIDIARY TO THE EXTENT THAT A PLEDGE OF A GREATER
PERCENTAGE THEREOF WOULD RESULT IN ADVERSE TAX CONSEQUENCES TO THE BORROWERS
UNDER SECTION 956 OF THE CODE AS REASONABLY DEMONSTRATED BY BORROWERS.
IN THE
EVENT THAT ANY ADDITIONAL EQUITY SECURITIES SHALL BE ISSUED BY ANY SUBSIDIARY,
BORROWERS SHALL OR SHALL CAUSE EACH OF THEIR RESPECTIVE SUBSIDIARIES TO,
CONCURRENTLY WITH SUCH ISSUANCE, DELIVER TO AGENT TO THE EXTENT REQUIRED BY THE
APPLICABLE FINANCING DOCUMENTS THE CERTIFICATES EVIDENCING SUCH SHARES OF STOCK,
ACCOMPANIED BY UNDATED STOCK POWERS EXECUTED IN BLANK AND TO TAKE SUCH OTHER
ACTION AS AGENT SHALL REQUEST TO PERFECT THE SECURITY INTEREST CREATED THEREIN
PURSUANT TO SUCH FINANCING DOCUMENTS.
ARTICLE V
NEGATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
SECTION 5.1
DEBT.
NEITHER BORROWER WILL, NOR WILL IT PERMIT ANY
SUBSIDIARY (INCLUDING, WITHOUT LIMITATION, ANY INACTIVE ENTITY) TO, DIRECTLY OR
INDIRECTLY, CREATE, INCUR, ASSUME, GUARANTEE OR OTHERWISE BECOME OR REMAIN
DIRECTLY OR INDIRECTLY LIABLE WITH RESPECT TO, ANY DEBT, EXCEPT FOR:
(A)
DEBT AND LETTER OF CREDIT LIABILITIES UNDER
THE FINANCING DOCUMENTS;
(B)
DEBT OR SUCH CONTINGENT OBLIGATIONS OUTSTANDING ON THE DATE OF
THIS AGREEMENT AS SET FORTH IN THE INFORMATION CERTIFICATE;
(C)
DEBT INCURRED OR ASSUMED FOR THE PURPOSE OF FINANCING ALL OR ANY
PART OF THE COST OF ACQUIRING ANY FIXED ASSET (INCLUDING THROUGH CAPITAL
LEASES), IN AN AGGREGATE PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING NOT GREATER
THAN $250,000;
(D)
NET OBLIGATIONS TO A COUNTERPARTY UNDER ANY SWAP CONTRACT
PERMITTED OR REQUIRED PURSUANT TO THE TERMS OF THIS AGREEMENT;
(E)
UNSECURED DEBT NOT TO EXCEED $250,000 IN THE AGGREGATE AT ANY TIME
OUTSTANDING WHICH IS SUBORDINATED TO THE OBLIGATIONS IN A MANNER SATISFACTORY TO
AGENT; AND
(F)
INTERCOMPANY DEBT ARISING FROM LOANS MADE BY A BORROWER OR A
DOMESTIC SUBSIDIARY TO A PERMITTED CHINA JOINT VENTURE OR A FOREIGN SUBSIDIARY
IN AN AMOUNT NOT TO EXCEED, AT THE TIME THE LOAN IS MADE, THE AVAILABLE
INVESTMENT BASKET; PROVIDED, HOWEVER, THAT UPON THE REQUEST OF AGENT AT ANY
TIME, ANY SUCH DEBT SHALL BE EVIDENCED BY PROMISSORY NOTES HAVING TERMS
REASONABLY SATISFACTORY TO AGENT, THE SOLE ORIGINALLY EXECUTED COUNTERPARTS OF
WHICH SHALL BE PLEDGED AND DELIVERED TO AGENT, FOR THE BENEFIT OF AGENT AND
LENDERS, AS SECURITY FOR THE OBLIGATIONS.
SECTION 5.2
LIENS.
NEITHER BORROWER WILL, NOR WILL IT PERMIT ANY
SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, CREATE, ASSUME OR SUFFER TO EXIST ANY
LIEN ON ANY ASSET NOW OWNED OR HEREAFTER ACQUIRED BY IT, EXCEPT:
(A)
LIENS CREATED BY THE SECURITY DOCUMENTS;
(B)
LIENS EXISTING ON THE DATE OF THIS AGREEMENT
AS SET FORTH IN THE INFORMATION CERTIFICATE;
(C)
ANY LIEN ON ANY ASSET SECURING DEBT PERMITTED UNDER SECTION 5.1(C)
INCURRED OR ASSUMED FOR THE PURPOSE OF FINANCING ALL OR ANY PART OF