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 APPLICABLE ON
SUCH DATE AND NOT OTHERWISE IN DEFAULT;
(IV)
AFTER GIVING EFFECT TO SUCH ACQUISITION,
BORROWER MUST DEMONSTRATE PRO FORMA COMPLIANCE WITH ALL FINANCIAL COVENANTS
UNDER SECTION 7.4 APPLICABLE ON SUCH DATE HEREOF; AND
64
(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 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
IN AN AGGREGATE AMOUNT NOT TO EXCEED $500,000.
(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 THE
BORROWER (IN WHICH CASE THE BORROWER SHALL BE THE SURVIVING CORPORATION) OR ANY
WHOLLY-OWNED DOMESTIC INCORPORATED SUBSIDIARY OF THE BORROWER, AND (III) ANY
LIQUIDATION OF ANY SUBSIDIARY OF THE BORROWER INTO THE BORROWER OR ANOTHER
SUBSIDIARY OF THE BORROWER, AS APPLICABLE.
(J)
MARGIN REGULATIONS.
NEITHER THE BORROWER
NOR ANY OF ITS SUBSIDIARIES, SHALL USE ALL OR ANY PORTION OF THE PROCEEDS OF ANY
CREDIT EXTENDED UNDER THIS AGREEMENT TO PURCHASE OR CARRY MARGIN STOCK.
(K)
ERISA.
THE BORROWER SHALL NOT:
(I)
PERMIT TO EXIST ANY ACCUMULATED FUNDING
DEFICIENCY (AS DEFINED IN SECTIONS 302 OF ERISA AND 412 OF THE CODE), WITH
RESPECT TO ANY BENEFIT PLAN, WHETHER OR NOT WAIVED;
(II)
TERMINATE, OR PERMIT ANY CONTROLLED GROUP
MEMBER TO TERMINATE, ANY BENEFIT PLAN WHICH WOULD RESULT IN LIABILITY OF THE
BORROWER OR ANY CONTROLLED GROUP MEMBER UNDER TITLE IV OF ERISA; OR
(III)
FAIL, OR PERMIT ANY CONTROLLED