covenants that until all of Borrowers' Obligations to Lender are
paid and satisfied in full and the Credit Facility has been terminated:
7.01
MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION.
(A)
NO BORROWER SHALL SELL, LEASE, LICENSE,
TRANSFER OR OTHERWISE DISPOSE OF ITS PROPERTY, WITHOUT LENDER'S PRIOR WRITTEN
CONSENT, OTHER THAN (I) INVENTORY SOLD TO PATIENTS/CUSTOMERS IN THE ORDINARY
COURSE OR ORDINARY OPERATION OF SUCH BORROWER'S BUSINESS, (II) TO ANOTHER
BORROWER, AND (III) DISPOSITION OF OBSOLETE AND WORN OUT EQUIPMENT AND EQUIPMENT
NO LONGER USED OR USEFUL IN BORROWERS' BUSINESS WITH AN AGGREGATE FAIR MARKET
VALUE NOT TO EXCEED $250,000 IN THE AGGREGATE IN ANY FISCAL YEAR, PROVIDED THAT
THE PROCEEDS OF SUCH DISPOSITION ARE USED WITHIN SIX CALENDAR MONTHS OF SUCH
DISPOSITION TO REPLACE SUCH EQUIPMENT.
(B)
NO BORROWER SHALL MERGE OR CONSOLIDATE WITH,
OR ACQUIRE, ANY OTHER PERSON OR COMMENCE A DISSOLUTION OR LIQUIDATION, OTHER
THAN THROUGH A MERGER WITH ANOTHER BORROWER, WITHOUT LENDER'S PRIOR WRITTEN
CONSENT, PROVIDED HOWEVER THAT, UPON PRIOR WRITTEN NOTICE TO LENDER, SO LONG AS
(I) NO EVENT OF DEFAULT OR UNMATURED EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING AND (II) AFTER GIVING EFFECT TO SUCH ACQUISITION(S), NO EVENT OF
DEFAULT OR UNMATURED EVENT OF DEFAULT WILL RESULT, BORROWERS MAY MAKE
ACQUISITIONS OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OR STOCK OF A PERSON (IN
A BUSINESS SIMILAR OR RELATED) SO LONG AS (A) THE PURCHASE PRICE OF ANY SUCH
ACQUISITION (OR SERIES OF RELATED ACQUISITIONS) DOES NOT EXCEED $5,000,000 IN
THE AGGREGATE DURING THE TERM OF THE CREDIT FACILITY AND (B) ANY SELLER
FINANCING IN CONNECTION WITH SUCH ACQUISITION IS UNSECURED AND SUBORDINATED TO
THE OBLIGATIONS IN FORM AND SUBSTANCE SATISFACTORY TO LENDER IN ITS SOLE
DISCRETION ("PERMITTED ACQUISITION"); PROVIDED THAT (A) BORROWERS SHALL HAVE
PROVIDED LENDER NO LATER THAN THIRTY (30) DAYS PRIOR TO THE CONSUMMATION OF ANY
SUCH ACQUISITION WITH AT LEAST THE FOLLOWING: (I) A PRO FORMA HISTORICAL BALANCE
SHEET AND INCOME STATEMENT OF THE BUSINESS BEING ACQUIRED FOR THE FOUR FISCAL
QUARTERS MOST RECENTLY ENDED AND THE FISCAL YEAR MOST RECENTLY ENDED; (II) FULL
DISCLOSURE OF THE ACQUISITION TERMS AND CONDITIONS INCLUDING BUT NOT LIMITED TO
THE TOTAL PURCHASE PRICE FOR THE BUSINESS, BORROWERS' PROJECTED ALLOCATION OF
THE PURCHASE PRICE, AND PURCHASE AGREEMENTS AND RELATED DOCUMENTS;
26
(III) BORROWERS' PROJECTED PRO FORMA PRE AND POST-CLOSING BALANCE SHEETS,
INCLUDING ADJUSTING ENTRIES, REFLECTING THE COMPLETION OF THE ACQUISITION AND
ANY ADDITIONAL DEBT INCURRED TO COMPLETE THE ACQUISITION; AND (IV) PROJECTIONS
OF BORROWERS, INCLUDING PRO FORMA BALANCE SHEET, INCOME STATEMENT, CASH FLOWS
AND COVENANTS COMPLIANCE CERTIFICATES (ALL ON A CONSOLIDATED BASIS IF THE
BUSINESS IS TO BE MERGED INTO OR BECOME A SUBSIDIARY OF A BORROWER) REFLECTING
THE EFFECTS OF THE ACQUISITION FOR AT LEAST TWO FISCAL YEAR ENDS (ON A MONTHLY
BASIS) FOLLOWING THE CLOSING OF SUCH ACQUISITION AND (B) BORROWERS WILL HAVE
BORROWING BASE EXCESS AFTER GIVING EFFECT TO SUCH ACQUISITION(S) NECESSARY TO
SUPPORT THE WORKING CAPITAL NEEDS OF BORROWERS (WITHOUT THE DEFERRAL OF
EXPENSES).
IN ADDITION TO THE