OF THE SECOND TWELVE MONTH PERIOD IMMEDIATELY FOLLOWING THE DATE OF THIS
AGREEMENT.
FOR PURPOSES OF THIS AGREEMENT, PERMITTED ACQUISITIONS ARE
ACQUISITIONS MEETING THE FOLLOWING REQUIREMENTS OR OTHERWISE APPROVED BY THE
REQUIRED LENDERS:
(I)
NO DEFAULT OR UNMATURED DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT FROM SUCH ACQUISITION OR THE
INCURRENCE OF ANY INDEBTEDNESS IN CONNECTION THEREWITH;
(II)
THE PURCHASE IS CONSUMMATED PURSUANT TO A
NEGOTIATED ACQUISITION AGREEMENT ON A NON-HOSTILE BASIS;
(III)
THE BORROWER SHALL DELIVER TO THE
ADMINISTRATIVE AGENT AND THE LENDERS A CERTIFICATE FROM ONE OF THE AUTHORIZED
OFFICERS, DEMONSTRATING TO THE REASONABLE SATISFACTION OF THE ADMINISTRATIVE
AGENT THAT AFTER GIVING EFFECT TO SUCH ACQUISITION AND THE INCURRENCE OF ANY
INDEBTEDNESS PERMITTED BY SECTION 7.3(A) IN CONNECTION THEREWITH, ON A PRO FORMA
BASIS USING, FOR ANY ACQUISITION, HISTORICAL FINANCIAL STATEMENTS, AS IF THE
ACQUISITION AND SUCH INCURRENCE OF INDEBTEDNESS HAD OCCURRED ON THE FIRST DAY OF
THE TWELVE-MONTH PERIOD ENDING ON THE LAST DAY OF THE BORROWER'S MOST RECENTLY
COMPLETED FISCAL QUARTER, THE BORROWER WOULD HAVE BEEN IN COMPLIANCE WITH THE
FINANCIAL COVENANTS IN SECTION 7.4 AND NOT OTHERWISE IN DEFAULT;
(IV)
AFTER GIVING EFFECT TO SUCH ACQUISITION,
BORROWER MUST DEMONSTRATE PRO FORMA AVAILABILITY UNDER THE REVOLVING LOAN
COMMITMENT OF $5,000,000 OR MORE AND PRO FORMA COMPLIANCE WITH ALL FINANCIAL
COVENANTS UNDER SECTION 7.4 HEREOF; AND
(V)
THE BUSINESSES BEING ACQUIRED SHALL BE
REASONABLY SIMILAR, RELATED OR INCIDENTAL TO, OR A LOGICAL EXTENSION OF, THE
BUSINESSES OR ACTIVITIES ENGAGED IN BY THE BORROWER ON THE CLOSING DATE.
(H)
TRANSACTIONS WITH AFFILIATES.
NEITHER THE
BORROWER NOR ANY OF ITS SUBSIDIARIES SHALL DIRECTLY OR INDIRECTLY ENTER INTO OR
PERMIT TO EXIST ANY TRANSACTION (INCLUDING, WITHOUT LIMITATION, THE PURCHASE,
SALE, LEASE OR EXCHANGE OF ANY PROPERTY OR THE RENDERING OF ANY SERVICE) WITH
ANY AFFILIATE OF THE BORROWER, ON TERMS THAT ARE (A) NOT AUTHORIZED BY THE BOARD
OF DIRECTORS OR (B) LESS FAVORABLE TO THE BORROWER OR ANY OF ITS SUBSIDIARIES,
AS APPLICABLE, THAN
66
THOSE THAT MIGHT BE OBTAINED IN AN ARM'S LENGTH TRANSACTION AT THE TIME FROM
PERSONS WHO ARE NOT SUCH AN AFFILIATE, EXCEPT FOR (I) RESTRICTED PAYMENTS
PERMITTED BY SECTION 7.3(F), (II) INVESTMENTS PERMITTED BY SECTION 7.3(D), (III)
TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS AND PURSUANT TO THE REASONABLE
REQUIREMENTS OF THE BORROWER'S OR SUCH SUBSIDIARY'S BUSINESS AND (IV) LOANS AND
ADVANCES TO EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS AND IN AMOUNTS
CONSISTENT WITH PRACTICE IN EFFECT PRIOR TO THE CLOSING DATE.
(I)
RESTRICTION ON FUNDAMENTAL CHANGES.
NEITHER THE BORROWER NOR ANY OF ITS SUBSIDIARIES SHALL ENTER INTO ANY MERGER OR
CONSOLIDATION, OR LIQUIDATE, WIND-UP OR DISSOLVE (OR SUFFER ANY LIQUIDATION OR
DISSOLUTION), OR CONVEY, LEASE, SELL, TRANSFER OR OTHERWISE DISPOSE OF, IN ONE
TRANSACTION OR SERIES OF TRANSACTIONS, ALL OR SUBSTANTIALLY ALL OF THE
BORROWER'S CONSOLIDATED BUSINESS OR PROPERTY, WHETHER NOW OR HEREAFTER ACQUIRED,
EXCEPT (I) TRANSACTIONS PERMITTED UNDER SECTIONS 7.3(B). 7.3(D) OR 7.3(G) AND,
(II) A SUBSIDIARY OF THE BORROWER MAY BE MERGED INTO OR CONSOLIDATED WITH