(e) Advances by Borrower to Supplies Distributors, Inc. pursuant to the
Subordinated Demand Note, so long as (1) the aggregate outstanding
principal amount of such Indebtedness does not exceed $8,005,000
(excluding accrued and unpaid interest) at any time, and (2) before and
after giving effect to such advances no Event of Default has occurred and
is continuing;
(f) Investments in or advances to PFSweb B.V. by Borrower not to exceed
$1,000,000 in the aggregate in any fiscal year (excluding accrued
interest), so long as before and after giving effect to such Investments
or advances, no Event of Default has occurred and is continuing;
(g) Investments in or advances to Priority Fulfillment Services of Canada,
Inc. by Borrower not to exceed $1,000,000 in the aggregate in any fiscal
year (excluding accrued interest), so long as before and after giving
effect to such Investments or advances, no Event of Default has occurred
and is continuing;
(h) Investments by Borrower in PFSM, LLC for the acquisition of equipment by
PFSM, LLC, provided (i) each such Investment does not exceed the lesser of
the cost or fair market value of the equipment acquired with such
Investment, (ii) the aggregate amount of Investments made by Priority
pursuant to this clause when added to the Indebtedness incurred by PFSM,
LLC pursuant to clause (i) of the definition of Permitted Indebtedness
does not exceed $450,000 in any fiscal year, and (iii) at the time of each
such Investment and after giving effect thereto, no Event of Default has
occurred and is continuing;
(i) Investments by Borrower in Supplies Distributors, Inc. in an amount not to
exceed the aggregate cash dividends paid to Borrower by Supplies
Distributors, Inc. after the date hereof, so long as at the time of and
after giving effect to each such Investment, no Event of Default has
occurred and is continuing;
(j) Investments of Subsidiaries in or to other Subsidiaries or Borrower and
Investments by Borrower in Subsidiaries (not described in clauses (a),
(d), (e), (f), (g), (h) and (i) above), not to exceed $100,000 in the
aggregate in any fiscal year (excluding increases in Borrower's Investment
in existing Subsidiaries that arise solely as a result of earnings by such
Subsidiaries that are not distributed to Borrower);
(k) Investments not to exceed $100,000 outstanding at any time in the
aggregate consisting of (i) travel advances and employee relocation loans
and other employee loans and advances in the ordinary course of business,
and (ii) loans to employees, officers or directors relating to the
purchase of equity securities of Borrower or its Subsidiaries pursuant to
employee stock purchase plan agreements approved by Borrower's Board of
Directors;
(l) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement
of delinquent obligations of, and other disputes with, customers or
suppliers arising in the ordinary course of Borrower's business;
(m) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not
Affiliates, in the ordinary course of business, provided that this
subparagraph (h) shall not apply to Investments of Borrower in any
Subsidiary;
(n) Capitalization of intercompany Indebtedness that is outstanding on the
date of this Agreement; and
(o) Joint ventures or strategic alliances in the ordinary course of Borrower's
business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, provided
that any cash Investments by Borrower do not exceed $100,000 in the
aggregate in any fiscal year.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and disclosed in the Schedule
(excluding Liens to be satisfied with the proceeds of the Advances) or
arising under this Agreement or the other Loan Documents;
7