Supercuts 2002 Annual Report Download - page 65

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times preserve and keep in full force and effect the corporate existence of each of its Restricted Subsidiaries (unless merged into the Company
or a Restricted Subsidiary) and all rights and franchises of the Company and its Restricted Subsidiaries unless, in the good faith judgment of
the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
10.1. CONSOLIDATED NET DEBT.
The Company will not permit the ratio of Consolidated Net Debt (as of the last day of the most recently completed fiscal quarter) to
Consolidated EBITDA (for the Company's then most recently completed four fiscal quarters) to be greater than 2.75 to 1.00 at any time. If,
during the period for which Consolidated EBITDA is being calculated, the Company or a Restricted Subsidiary has (i) acquired one or more
Persons (or the assets thereof) or (ii) disposed of one or more Restricted Subsidiaries (or substantially all of the assets thereof), Consolidated
EBITDA shall be calculated on a pro forma basis as if all of such acquisitions (other than acquisitions by or resulting in Unrestricted
Subsidiaries) and all such dispositions had occurred on the first day of such period.
10.2. PRIORITY DEBT.
The Company will not permit Priority Debt to exceed 20% of Consolidated Net Worth at any time.
10.3. FIXED CHARGE COVERAGE.
The Company will not permit the ratio (calculated as of the end of each fiscal quarter) of Consolidated EBITDAR to Consolidated Fixed
Charges for the period of four quarters ending as of each fiscal quarter to be less than 1.50 to 1.00.
10.4. LIENS.
The Company will not, and will not permit any Restricted Subsidiary to, permit to exist, create, assume or incur, directly or indirectly, any Lien
on its properties or assets, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments or governmental charges not then due and delinquent or the nonpayment of which is permitted by
Section 9.4;
(b) Liens incidental to the conduct of business or the ownership of properties and assets (including landlords', lessors', carriers',
warehousemen's, mechanics', materialmen's and other similar Liens) and Liens to secure the performance of bids, tenders, leases or trade
contracts, or to secure statutory obligations (including obligations
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