OPERATIONS OF THE GUARANTOR, ANY OF ITS SUBSIDIARIES OR THE
PROPERTIES (AS DEFINED IN THE GUARANTOR CREDIT AGREEMENT), OR ANY ORDERS,
REQUIREMENTS OR DEMANDS OF GOVERNMENTAL BODIES RELATED THERETO, INCLUDING,
WITHOUT LIMITATION, REASONABLE SOLICITOR'S/ATTORNEY'S AND CONSULTANT'S FEES,
INVESTIGATION AND LABORATORY FEES, RESPONSE COSTS, COURT COSTS AND LITIGATION
EXPENSES, EXCEPT TO THE EXTENT THAT ANY OF THE FOREGOING ARISE OUT OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION THEREFOR.
THE AGREEMENTS IN THIS PARAGRAPH SHALL SURVIVE REPAYMENT OF THE CREDIT PARTY
OBLIGATIONS AND TERMINATION OF THE COMMITMENTS (AS DEFINED IN THE GUARANTOR
CREDIT AGREEMENT) UNDER THE GUARANTOR AGREEMENT AND THE GUARANTOR CREDIT
DOCUMENTS;
63
(V)
THAT, TO THE EXTENT FAILURE TO DO SO WOULD
HAVE A MATERIAL ADVERSE EFFECT, IT WILL, AND WILL CAUSE EACH OF ITS SUBSIDIARIES
TO (A) OBSERVE AND REMAIN IN COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF LAW,
INCLUDING ALL APPLICABLE ENVIRONMENTAL LAWS, EXCEPT TO THE EXTENT SUCH
REQUIREMENT OF LAW IS BEING CONTESTED IN GOOD FAITH OR A BONA FIDE DISPUTE
EXISTS WITH RESPECT THERETO SO LONG AS THE GUARANTOR HAS ESTABLISHED ADEQUATE
RESERVES ON THE BOOKS OF THE GUARANTOR TO ACCOUNT THEREFOR IN ACCORDANCE WITH
GAAP, AND (B) MAINTAIN IN FULL FORCE AND EFFECT ALL PERMITS, AUTHORIZATIONS,
REGISTRATIONS AND CONSENTS FROM ANY GOVERNMENTAL BODY, IN EACH CASE APPLICABLE
TO THE CONDUCT OF ITS BUSINESS.
(W)
WHERE DOMESTIC SUBSIDIARIES OF THE GUARANTOR
(EXCLUDING SECURITIZATION VEHICLES) THAT ARE NOT CREDIT PARTIES UNDER THE
GUARANTOR CREDIT AGREEMENT (THE "NON-GUARANTOR SUBSIDIARIES") SHALL AT ANY TIME
CONSTITUTE MORE THAN EITHER
(1)
FIFTEEN PERCENT (15%), IN THE AGGREGATE, OF
CONSOLIDATED TOTAL ASSETS, OR
(2)
FIFTEEN PERCENT (15%), IN THE AGGREGATE, OF
CONSOLIDATED NET INCOME,
(COLLECTIVELY, THE "THRESHOLD REQUIREMENT"), THE GUARANTOR SHALL SO NOTIFY ROYAL
AND SHALL CAUSE ONE OR MORE DOMESTIC SUBSIDIARIES TO BECOME A "GUARANTOR" UNDER
THE GUARANTOR CREDIT AGREEMENT BY (A) EXECUTING A JOINDER AGREEMENT AND (B)
DELIVERING SUCH OTHER DOCUMENTATION AS ROYAL MAY REASONABLY REQUEST IN
CONNECTION WITH THE FOREGOING, INCLUDING, WITHOUT LIMITATION, CERTIFIED
RESOLUTIONS AND OTHER ORGANIZATIONAL AND AUTHORIZING DOCUMENTS OF SUCH PERSON
AND FAVORABLE OPINIONS OF COUNSEL TO SUCH PERSON (WHICH SHALL COVER, AMONG OTHER
THINGS, THE LEGALITY, VALIDITY, BINDING EFFECT AND ENFORCEABILITY OF THE
DOCUMENTATION REFERRED TO ABOVE), ALL IN FORM, CONTENT AND SCOPE REASONABLY
SATISFACTORY TO ROYAL SUCH THAT IMMEDIATELY AFTER THE JOINDER OF SUCH DOMESTIC
SUBSIDIARIES AS GUARANTORS UNDER THE GUARANTOR CREDIT AGREEMENT, THE REMAINING
NON-GUARANTOR SUBSIDIARIES SHALL NOT, EITHER INDIVIDUALLY OR AS A GROUP, EXCEED
THE THRESHOLD REQUIREMENT.
Negative Covenants of the Guarantor
(X)
THAT IT WILL NOT, WITHOUT THE CONSENT IN
WRITING OF ROYAL, MERGE OR CONSOLIDATE WITH ANY OTHER PERSON OR LIQUIDATE OR
DISSOLVE EXCEPT FOR MERGERS OR CONSOLIDATIONS WITH ANY OTHER PERSON IF THE
GUARANTOR (OR THE RESULTING CORPORATION IN A CONSOLIDATION) WILL BE THE
SURVIVING CORPORATION AND THE GUARANTOR (OR SUCH RESULTING CORPORATION) WILL NOT
BE IN DEFAULT UNDER ANY OF THE TERMS OF THE GUARANTOR CREDIT AGREEMENT
IMMEDIATELY AFTER THE MERGER OR CONSOLIDATION;
(Y)
DURING ANY NO COLLATERAL PERIOD, THE
GUARANTOR WILL NOT,