DISPOSITIONS AND EVENTS OF LOSS OCCURRING DURING THE CURRENT FISCAL YEAR EXCEEDS
$1,000,000, AND SUCH DISPOSITIONS AND EVENTS OF LOSS INVOLVED MACHINERY,
EQUIPMENT AND/OR REAL PROPERTY THAT PREVIOUSLY WAS INCLUDED IN THE "BORROWING
BASE" UNDER THE BORROWING BASE CERTIFICATE THEN IN EFFECT, THE BORROWER SHALL
HAVE DELIVERED TO THE AGENT A REPLACEMENT BORROWING BASE CERTIFICATE SETTING
FORTH THE CALCULATION OF THE "BORROWING BASE" AFTER GIVING EFFECT TO SUCH
DISPOSITIONS AND/OR EVENTS OF LOSS AND, IF REQUESTED BY THE AGENT, APPRAISALS OF
THE REMAINING EQUIPMENT, MACHINERY AND/OR REAL PROPERTY TO BE INCLUDED IN SUCH
"BORROWING BASE", AND (V) AFTER GIVING EFFECT TO SUCH DISPOSITION, THE BORROWER
SHALL BE IN COMPLIANCE ON A PRO FORMA BASIS WITH THE COVENANTS SET FORTH IN
ARTICLE VI, RECOMPUTED FOR THE MOST RECENT QUARTER FOR WHICH FINANCIAL
STATEMENTS HAVE BEEN DELIVERED.
5.3
CONSOLIDATIONS AND MERGERS.
THE BORROWER
SHALL NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, MERGE,
CONSOLIDATE WITH OR INTO, OR CONVEY, TRANSFER, LEASE OR OTHERWISE DISPOSE OF
(WHETHER IN ONE TRANSACTION OR IN A SERIES OF TRANSACTIONS) ALL OR SUBSTANTIALLY
ALL OF ITS ASSETS (WHETHER NOW OWNED OR HEREAFTER ACQUIRED) TO OR IN FAVOR OF
ANY PERSON, EXCEPT UPON NOT LESS THAN FIVE (5) BUSINESS DAYS' PRIOR WRITTEN
NOTICE TO THE AGENT, ANY SUBSIDIARY OF THE BORROWER MAY MERGE WITH, OR DISSOLVE
OR LIQUIDATE INTO A WHOLLY-OWNED SUBSIDIARY OF THE BORROWER; PROVIDED, THAT SUCH
WHOLLY-OWNED SUBSIDIARY SHALL BE THE CONTINUING OR SURVIVING ENTITY.
5.4
LOANS AND INVESTMENTS.
THE BORROWER SHALL
NOT AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO (I) PURCHASE OR
ACQUIRE, OR MAKE ANY COMMITMENT TO PURCHASE OR ACQUIRE ANY CAPITAL STOCK, EQUITY
INTEREST, OR ANY OBLIGATIONS OR OTHER SECURITIES OF, OR ANY INTEREST IN, ANY
PERSON, INCLUDING THE ESTABLISHMENT OR CREATION OF A SUBSIDIARY, OR (II) MAKE OR
COMMIT TO MAKE ANY ACQUISITIONS, OR ANY OTHER ACQUISITION OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF ANOTHER PERSON, OR OF ANY BUSINESS OR
DIVISION OF ANY PERSON, INCLUDING WITHOUT LIMITATION, BY WAY OF MERGER,
CONSOLIDATION OR OTHER COMBINATION OR (III) MAKE OR COMMIT TO MAKE ANY ADVANCE,
LOAN, EXTENSION OF CREDIT OR CAPITAL CONTRIBUTION TO OR ANY OTHER INVESTMENT IN,
ANY PERSON INCLUDING ANY AFFILIATE OF THE BORROWER OR ANY SUBSIDIARY OF THE
BORROWER (THE ITEMS DESCRIBED IN CLAUSES (I), (II) AND (III) ARE REFERRED TO AS
"INVESTMENTS"), EXCEPT FOR, IN EACH INSTANCE, PROVIDED THE SAME IS PERMITTED,
AND SOLELY TO THE EXTENT PERMITTED, UNDER THE HIGH YIELD UNSECURED DOCUMENTS:
(A)
INVESTMENTS IN CASH AND CASH EQUIVALENTS;
(B)
EXTENSIONS OF CREDIT BY THE BORROWER TO ANY
OF ITS WHOLLY-OWNED SUBSIDIARIES; PROVIDED, THAT THE OBLIGATIONS OF EACH OBLIGOR
SHALL BE EVIDENCED BY NOTES, WHICH NOTES SHALL BE
38
PLEDGED TO THE AGENT, FOR THE BENEFIT OF THE AGENT AND LENDERS, AND HAVE SUCH
OTHER TERMS AS THE AGENT MAY REASONABLY REQUIRE;
(C)
LOANS AND ADVANCES BY THE BORROWER'S
SUBSIDIARIES TO EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS NOT TO EXCEED
$250,000 IN THE AGGREGATE