COURSE OF BUSINESS;
(2)
DISPOSITIONS OF INDIVIDUAL ITEMS OF
PROPERTY OR ASSETS IN ANY FISCAL YEAR HAVING AN AGGREGATE VALUE OF $5,000,000 OR
LESS BASED ON THE GREATER OF NET BOOK VALUE OR THE VALUE DETERMINED BY THE VALUE
OF THE SALE OR DISPOSITION, OR
(3)
DISPOSITIONS OF ASSETS AS APPROVED IN
WRITING BY ROYAL;
(R)
THAT IT WILL NOT ALLOW THE AGGREGATE OF
THE PRINCIPAL AMOUNT OF BORROWINGS UNDER THE CREDIT FACILITY ESTABLISHED
PURSUANT TO §3.1(A) TO EXCEED AT ANY TIME THE COLLATERAL VALUE OF THE BORROWING
BASE SET OUT IN THE THEN CURRENT BORROWING BASE CERTIFICATE;
(S)
THAT, WITHOUT THE PRIOR WRITTEN CONSENT, OF
ROYAL, IT WILL NOT GRANT, CREATE, ASSUME, SUFFER OR PERMIT ANY LIEN ON THE
RESTRICTED CASH COLLATERAL EXCEPT FOR ROYAL'S SECURITY;
39
Reporting Covenants of the Borrower
(T)
THAT IT WILL AND IT WILL CAUSE EACH OF
ITS SUBSIDIARIES TO AT ALL TIMES KEEP OR CAUSE TO BE KEPT PROPER BOOKS OF
ACCOUNT AND THAT IT WILL FURNISH TO ROYAL WITHIN 90 DAYS AFTER THE CLOSE OF EACH
FISCAL YEAR SUFFICIENT COPIES OF ITS UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS, SIGNED BY A RESPONSIBLE OFFICER;
(U)
EXCEPT FOR THE YEAR END FISCAL QUARTER, IT
WILL DELIVER TO ROYAL WITHIN 45 DAYS OF THE CLOSE OF EACH FISCAL QUARTER
SUFFICIENT COPIES OF ITS QUARTERLY UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SIGNED BY A RESPONSIBLE OFFICER;
(V)
THAT IT WILL DELIVER TO ROYAL ON OR PRIOR TO
THE DATE REASONABLY STIPULATED BY ROYAL SUFFICIENT COPIES OF THE BORROWER'S (OR
ANY OF ITS SUBSIDIARIES), FINANCIAL AND OPERATING STATEMENTS, BUDGETS, BUSINESS
AND CAPEX PLANS TOGETHER WITH SUCH OTHER INFORMATION, REPORTS AND DOCUMENTS AS
ROYAL MAY REASONABLY REQUEST;
(W)
THAT IT WILL PROVIDE PROMPT NOTICE TO ROYAL OF
ANY CHANGE TO THE FINANCIAL POSITION OR BUSINESS OF THE BORROWER OR ANY OF ITS
SUBSIDIARIES WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON ITS FINANCIAL
POSITION, BUSINESS OR ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE AGREEMENT;
(X)
THAT IT WILL DELIVER TO ROYAL THE
BORROWING BASE CERTIFICATE AS REQUIRED BY §3.5 AND §3.12.
6.2
GUARANTOR'S COVENANTS
The Guarantor covenants with Royal as follows:
Positive Covenants of the Guarantor
(A)
THAT IT WILL DULY OBSERVE AND PERFORM OR
CAUSE TO BE OBSERVED AND PERFORMED EACH AND ALL OF THE COVENANTS AND AGREEMENTS
REQUIRED BY IT TO BE PERFORMED AND OBSERVED AS SET FORTH IN THE AGREEMENT AND
THE GUARANTEE;
(B)
THAT IT WILL AT ALL TIMES MAINTAIN SUCH
INSURANCE AS IS USUALLY MAINTAINED BY OTHERS IN THE BUSINESS OF THE SAME NATURE
AS THE BUSINESS OF THE GUARANTOR AND EACH OF ITS SUBSIDIARIES, AS THE CASE MAY
BE, OR MAINTAIN A PROGRAM OF SELF-INSURANCE, WITH RESERVES, IN ACCORDANCE WITH
SOUND BUSINESS PRACTICES;
(C)
THAT IT WILL, MAINTAIN ITS WEB SITE AND
POST IN A TIMELY MANNER COPIES OF ALL PUBLIC DOCUMENTS FILED WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION (WITH THE EXCEPTION OF FORMS S-8);
(D)
THAT IT WILL GIVE ROYAL AT LEAST 15 DAYS'
NOTICE OF ITS INTENTION TO TRANSFER, MORTGAGE, PLEDGE, CHARGE