financial statements referred to in Sections 9.7, 9.8, 9.9, 9.10 and
9.12 as to which GAAP is applicable to be complete and correct in all material
respects (subject, in the case of interim financial statements, to normal
year-end audit adjustments and the absence of footnotes) and to be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as concurred in by the reporting
accountants or officer, as the case may be, and disclosed therein).
6.8.
Financial Covenants.
(A)
MINIMUM WORKING CAPITAL.
MAINTAIN AS OF THE END OF EACH FISCAL
QUARTER SET FORTH BELOW WORKING CAPITAL IN AN AMOUNT NOT LESS THAN THE AMOUNT
SET FORTH BELOW AS OF THE END OF THE APPLICABLE FISCAL QUARTER CORRESPONDING
THERETO:
Period
Minimum Working
Capital Amount
Fiscal quarter ending March 31, 2010
$
15,000,000
Fiscal quarter ending June 30, 2010
$
17,500,000
Fiscal quarter ending December 31, 2010
$
19,000,000
Fiscal quarter ending March 31, 2011, and as of the end of each fiscal quarter
ending thereafter
$
23,000,000
59
(B)
NET INCOME.
MAINTAIN (X) NET INCOME IN EXCESS OF $0 DURING EACH
PERIOD OF TWO CONSECUTIVE FISCAL QUARTERS (ON A ROLLING BASIS) ENDING ON
DECEMBER 31, 2009 AND MARCH 31, 2010, (Y) NEGATIVE NET INCOME OF NOT MORE THAN A
LOSS OF $1,300,000 DURING EACH PERIOD OF TWO CONSECUTIVE FISCAL QUARTERS (ON A
ROLLING BASIS) ENDING ON JUNE 30, 2010 AND SEPTEMBER 30, 2010, AND (Z) NET
INCOME IN EXCESS OF $0 DURING EACH PERIOD OF TWO CONSECUTIVE FISCAL QUARTERS (ON
A ROLLING BASIS) ENDING ON DECEMBER 31, 2010 AND MARCH 31, 2011; PROVIDED,
FURTHER, FOR PURPOSES OF DETERMINING COMPLIANCE WITH THIS SECTION 6.8(B), NET
INCOME SHALL BE CALCULATED SO THAT, TO THE EXTENT IN CALCULATING NET INCOME FOR
SUCH PERIOD NET INCOME WAS DECREASED BY NONCASH EXPENSES CONSISTING OF
(I) AMORTIZATION FOR CUSTOMER RELATIONSHIPS AND NON-COMPETE AGREEMENTS,
(II) ORIGINAL ISSUE DISCOUNT ON THE SENIOR SECURED NOTES, (III) DEFERRED
FINANCING COSTS, AND (IV) REDUCTION IN VALUE OF INTANGIBLE ASSETS, THE AMOUNTS
WHICH WERE DEDUCTED IN CALCULATING NET INCOME FOR SUCH PERIOD FOR THE ITEMS
DESCRIBED IN CLAUSES (I) THROUGH (IV) ABOVE SHALL BE ADDED BACK TO NET INCOME AS
CALCULATED IN ACCORDANCE WITH GAAP.
(C)
CASH COLLATERAL.
MAINTAIN ON DEPOSIT WITH AGENT, PURSUANT TO
DOCUMENTATION IN FORM AND SUBSTANCE SATISFACTORY TO AGENT IN ALL RESPECTS, CASH
COLLATERAL FOR THE OBLIGATIONS ("CASH COLLATERAL") IN AN AMOUNT FROM TIME TO
TIME NOT LESS THAN THE AMOUNT INCLUDED IN THE FORMULA AMOUNT PURSUANT TO
SECTION 2.1(B)(Y)(III); PROVIDED, HOWEVER, THAT TO THE EXTENT NECESSARY TO
PREVENT THE OCCURRENCE OF AN EVENT OF DEFAULT, INCLUDING WITHOUT LIMITATION
UNDER SECTION 2.7, CASH COLLATERAL DEPOSITED DURING THE PERIOD BETWEEN THE END
OF ANY CALENDAR MONTH AND THE DATE OF SUBMISSION OF THE BORROWING BASE
CERTIFICATE FOR SUCH MONTH (AS REQUIRED PURSUANT TO SECTION 9.2(A)) SHALL BE
DEEMED TO HAVE BEEN DEPOSITED AS CASH COLLATERAL AS OF THE LAST DAY OF SUCH
IMMEDIATELY PRECEDING CALENDAR MONTH.
6.9.
Subsidiaries.
In the event that