AFTER THE CLOSING DATE, IF ANY, NOT REQUIRED TO
BE USED TO PREPAY THE LOANS OR CASH
114
COLLATERALIZE L/C OBLIGATIONS IN ACCORDANCE WITH SECTION 2.09 OR UTILIZED TO
MAKE INVESTMENTS UNDER SECTION 7.06(A)(XVI) OR TO MAKE RESTRICTED PAYMENTS UNDER
SECTION 7.07(III).
(D)
THE AMOUNT OF CONSOLIDATED CAPITAL EXPENDITURES PERMITTED UNDER
SUBSECTION (A) ABOVE FOR THE FISCAL YEAR ENDING OCTOBER 31, 2007 MAY BE
INCREASED BY AN AGGREGATE AMOUNT NOT EXCEEDING $10,000,000 FOR EXPENDITURES
INCURRED IN CONNECTION WITH THE RE-IMPLEMENTATION OF AN ORACLE E-BUSINESS SUITE
11I (ORACLE 11I) ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM.
SECTION 7.15
ADDITIONAL NEGATIVE PLEDGES.
NONE OF THE GROUP COMPANIES WILL
ENTER INTO, ASSUME OR BECOME SUBJECT TO ANY AGREEMENT PROHIBITING OR OTHERWISE
RESTRICTING THE CREATION OR ASSUMPTION OF ANY LIEN UPON ITS PROPERTIES OR
ASSETS, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, OR REQUIRING THE GRANT OF ANY
SECURITY FOR AN OBLIGATION IF SECURITY IS GIVEN FOR SOME OTHER OBLIGATION,
EXCEPT (I) PURSUANT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND (II)
PURSUANT TO ANY DOCUMENT OR INSTRUMENT GOVERNING CAPITAL LEASE OBLIGATIONS OR
PURCHASE MONEY INDEBTEDNESS INCURRED PURSUANT TO SECTION 7.01(III) IF ANY SUCH
RESTRICTION CONTAINED THEREIN RELATES ONLY TO THE ASSET OR ASSETS ACQUIRED IN
CONNECTION THEREWITH.
SECTION 7.16
IMPAIRMENT OF SECURITY INTERESTS.
NONE OF THE GROUP COMPANIES
WILL (I) TAKE OR OMIT TO TAKE ANY ACTION WHICH ACTION OR OMISSION MIGHT OR WOULD
MATERIALLY IMPAIR THE SECURITY INTERESTS IN FAVOR OF THE COLLATERAL AGENT WITH
RESPECT TO THE COLLATERAL OR (II) GRANT TO ANY PERSON (OTHER THAN THE COLLATERAL
AGENT PURSUANT TO THE COLLATERAL DOCUMENTS) ANY INTEREST WHATSOEVER IN THE
COLLATERAL, EXCEPT FOR PERMITTED LIENS.
SECTION 7.17
FINANCIAL COVENANTS.
(A)
TOTAL LEVERAGE RATIO.
THE TOTAL LEVERAGE RATIO OF HOLDINGS AND
ITS SUBSIDIARIES AS OF THE END OF ANY FISCAL QUARTER OF HOLDINGS (COMMENCING
WITH THE FISCAL QUARTER ENDING JANUARY 31, 2007) WILL NOT BE GREATER THAN (I)
4.00 TO 1.00 FOR ANY FISCAL QUARTER ENDING ON OR PRIOR TO OCTOBER 31, 2007 OR
(II) 3.50 TO 1.00 FOR ANY FISCAL QUARTER ENDING THEREAFTER.
(B)
FIXED CHARGE COVERAGE RATIO.
THE FIXED CHARGE COVERAGE RATIO OF
HOLDINGS AND ITS SUBSIDIARIES AS OF THE END OF ANY FISCAL QUARTER OF HOLDINGS
(COMMENCING WITH THE FISCAL QUARTER ENDING JANUARY 31, 2007) WILL NOT BE LESS
THAN 2.00 TO 1.0.
SECTION 7.18
INDEPENDENCE OF COVENANTS.
ALL COVENANTS CONTAINED HEREIN SHALL
BE GIVEN INDEPENDENT EFFECT SO THAT IF A PARTICULAR ACTION OR CONDITION IS NOT
PERMITTED BY ANY OF SUCH COVENANTS, THE FACT THAT SUCH ACTION OR CONDITION WOULD
BE PERMITTED BY AN EXCEPTION TO, OR OTHERWISE BE WITHIN THE LIMITATIONS OF,
ANOTHER COVENANT SHALL NOT AVOID THE OCCURRENCE OF A DEFAULT IF SUCH ACTION IS
TAKEN OR CONDITION EXISTS.
ARTICLE VIII
DEFAULTS
SECTION 8.01
EVENTS OF DEFAULT.
AN EVENT OF DEFAULT SHALL EXIST UPON THE
OCCURRENCE OF ANY OF THE FOLLOWING SPECIFIED EVENTS OR CONDITIONS (EACH AN
"EVENT OF DEFAULT"):
(A)
PAYMENT.
ANY LOAN PARTY SHALL:
(I)
DEFAULT IN THE PAYMENT WHEN DUE (WHETHER BY SCHEDULED MATURITY,
ACCELERATION