and will not permit the other Loan Parties to, incur any
Liabilities except for Indebtedness permitted herein and trade payables and
normal accruals in the ordinary course of business not yet due and payable or
with respect to which any Obligors or any of the other Loan Parties is
contesting in good faith the amount or validity thereof by appropriate
proceedings and then only to the extent that such Obligor or such other Loan
Party has established adequate reserves therefor under GAAP.
7.2
CONTINGENT OBLIGATIONS.
DIRECTLY OR
INDIRECTLY CREATE OR BECOME OR BE LIABLE WITH RESPECT TO ANY CONTINGENT
OBLIGATION (OTHER THAN IN RESPECT OF THE OBLIGATIONS) EXCEPT:
(A)
LETTER OF CREDIT OBLIGATIONS;
(B)
THOSE RESULTING FROM CURRENCY RATE AGREEMENTS
AND INTEREST RATE AGREEMENTS ENTERED INTO BY BORROWER WITH ANY LENDER (OR
AFFILIATE OF A LENDER) OR OTHERWISE WITH AGENT'S PRIOR WRITTEN APPROVAL,
INCLUDING THE INTEREST RATE AGREEMENT IN EFFECT ON THE CLOSING DATE BETWEEN
BORROWER AND LASALLE BANK NATIONAL ASSOCIATION;
(C)
THOSE RESULTING FROM ENDORSEMENT OF
NEGOTIABLE INSTRUMENTS FOR COLLECTION IN THE ORDINARY COURSE OF BUSINESS;
(D)
THOSE EXISTING ON THE CLOSING DATE AND
DESCRIBED IN SCHEDULE 7.2 ANNEXED HERETO;
(E)
THOSE ARISING UNDER INDEMNITY AGREEMENTS TO
TITLE INSURERS TO CAUSE SUCH TITLE INSURERS TO ISSUE TO AGENT MORTGAGEE TITLE
INSURANCE POLICIES;
(F)
THOSE ARISING WITH RESPECT TO CUSTOMARY
INDEMNIFICATION OBLIGATIONS INCURRED IN CONNECTION WITH ASSET DISPOSITIONS OR
PERMITTED ACQUISITIONS;
(G)
THOSE INCURRED IN THE ORDINARY COURSE OF
BUSINESS WITH RESPECT TO SURETY AND APPEAL BONDS, PERFORMANCE AND
RETURN-OF-MONEY BONDS AND OTHER SIMILAR OBLIGATIONS NOT EXCEEDING AT ANY TIME
OUTSTANDING $200,000 IN AGGREGATE LIABILITY;
39
(H)
THOSE INCURRED WITH RESPECT TO INDEBTEDNESS
PERMITTED BY CLAUSES (A), (C), (D), AND (E) OF SUBSECTION 7.1, PROVIDED THAT ANY
GUARANTY OF INDEBTEDNESS THAT IS SUBORDINATED TO THE OBLIGATIONS SHALL BE
SUBORDINATED TO THE SAME EXTENT THAT SUCH INDEBTEDNESS IS SUBORDINATED TO THE
OBLIGATIONS;
(I)
THOSE INCURRED BY HOLDINGS WITH RESPECT
TO INDEBTEDNESS PERMITTED BY CLAUSE (H) OF SUBSECTION 7.1; AND
(J)
ANY OTHER CONTINGENT OBLIGATION NOT
EXPRESSLY PERMITTED BY CLAUSES (A) THROUGH (J) ABOVE, SO LONG AS ANY SUCH OTHER
CONTINGENT OBLIGATIONS, IN THE AGGREGATE AT ANY TIME OUTSTANDING, DO NOT EXCEED
$500,000.
7.3
TRANSFERS, LIENS AND RELATED MATTERS.
(A)
TRANSFERS.
SELL, ASSIGN (BY OPERATION OF LAW
OR OTHERWISE) OR OTHERWISE DISPOSE OF, OR GRANT ANY OPTION WITH RESPECT TO ANY
OF THE COLLATERAL OR THE ASSETS OF ANY LOAN PARTY, EXCEPT THAT BORROWER AND ITS
SUBSIDIARIES MAY (I) SELL INVENTORY TO CUSTOMERS IN THE ORDINARY COURSE OF
BUSINESS AND DISPOSE OF OBSOLETE EQUIPMENT NOT USED OR USEFUL IN THE BUSINESS
FOR FAIR VALUE; AND (II) MAKE ASSET DISPOSITIONS IF ALL OF THE FOLLOWING
CONDITIONS ARE MET: (1) THE AGGREGATE MARKET VALUE OF ASSETS SOLD OR OTHERWISE
DISPOSED OF IN ANY FISCAL YEAR DOES NOT EXCEED $750,000; (2) THE CONSIDERATION
RECEIVED IS AT LEAST EQUAL TO THE FAIR MARKET VALUE OF SUCH ASSETS; (3) AT LEAST
75% OF THE CONSIDERATION RECEIVED IS CASH;
(4) THE NET PROCEEDS OF SUCH ASSET
DISPOSITION