T, U OR X OF THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM OR FOR ANY OTHER PURPOSE WHICH WOULD BE INCONSISTENT WITH
SUCH REGULATIONS T, U OR X OR ANY OTHER REGULATIONS OF SUCH BOARD OF GOVERNORS,
OR FOR ANY PURPOSES PROHIBITED BY LEGAL REQUIREMENTS OR BY THE TERMS AND
CONDITIONS OF THE LOAN DOCUMENTS.
(O)
PENDING LITIGATION. EXCEPT AS DISCLOSED IN THE FORM 10-Q FILED BY
MCC ON MAY 4, 2006, THERE ARE NO ACTIONS, SUITS OR PROCEEDINGS PENDING OR, TO
THE BEST KNOWLEDGE OF BORROWER, THREATENED AGAINST OR AFFECTING BORROWER, SLG,
MCC, THE GUARANTORS OR THE PROJECTS IN ANY COURT OR BEFORE ANY GOVERNMENTAL
AUTHORITY WHICH IF ADVERSELY DETERMINED EITHER INDIVIDUALLY OR COLLECTIVELY HAS
OR IS REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.
(P)
SOLVENCY; NO BANKRUPTCY. EACH OF BORROWER AND SOLE MEMBER (I) IS
AND, TO THE ACTUAL KNOWLEDGE OF BORROWER, HAS AT ALL TIMES BEEN SOLVENT AND WILL
REMAIN SOLVENT IMMEDIATELY UPON THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS AND (II) IS FREE FROM BANKRUPTCY,
REORGANIZATION OR ARRANGEMENT PROCEEDINGS OR A GENERAL ASSIGNMENT FOR THE
BENEFIT OF CREDITORS AND IS NOT CONTEMPLATING THE FILING OF A PETITION UNDER ANY
STATE OR FEDERAL BANKRUPTCY OR INSOLVENCY LAWS OR THE LIQUIDATION OF ALL OR A
MAJOR PORTION OF SUCH PERSON'S ASSETS OR PROPERTY AND BORROWER HAS NO KNOWLEDGE
OF ANY PERSON CONTEMPLATING THE FILING OF ANY SUCH PETITION AGAINST IT OR SOLE
MEMBER. NONE OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL BE OR HAVE BEEN MADE
WITH AN INTENT TO HINDER, DELAY OR DEFRAUD ANY PRESENT OR FUTURE CREDITORS OF
BORROWER AND BORROWER HAS RECEIVED REASONABLY EQUIVALENT VALUE IN EXCHANGE FOR
ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS. BORROWER'S ASSETS DO NOT, AND
IMMEDIATELY UPON CONSUMMATION OF THE TRANSACTION CONTEMPLATED IN THE LOAN
DOCUMENTS WILL NOT, CONSTITUTE UNREASONABLY SMALL CAPITAL TO CARRY OUT ITS
BUSINESS AS PRESENTLY CONDUCTED OR AS PROPOSED TO BE CONDUCTED. BORROWER DOES
NOT INTEND TO, NOR BELIEVE THAT IT WILL, INCUR DEBTS AND LIABILITIES BEYOND ITS
ABILITY TO PAY SUCH DEBTS AS THEY MAY MATURE.
32
(Q)
USE OF PROCEEDS. THE PROCEEDS OF THE LOAN SHALL BE APPLIED BY
BORROWER TO, INTER ALIA, (I) SATISFY CERTAIN MORTGAGE LOANS PRESENTLY
ENCUMBERING ALL OR A PART OF THE PROJECTS AND (II) PAY CERTAIN TRANSACTION COSTS
INCURRED BY BORROWER IN CONNECTION WITH THE LOAN. NO PORTION OF THE PROCEEDS OF
THE LOAN WILL BE USED FOR FAMILY, PERSONAL, AGRICULTURAL OR HOUSEHOLD USE OR
DISTRIBUTED TO SOLE MEMBER OR ANY OTHER PERSON FOR ANY REASON.
(R)
TAX FILINGS. BORROWER AND SOLE MEMBER HAVE FILED ALL FEDERAL,
STATE AND LOCAL TAX RETURNS REQUIRED TO BE FILED AND HAVE PAID OR MADE ADEQUATE
PROVISION FOR THE PAYMENT OF ALL FEDERAL, STATE AND LOCAL TAXES, CHARGES AND
ASSESSMENTS PAYABLE BY BORROWER AND SOLE MEMBER. BORROWER AND SOLE MEMBER
BELIEVE THAT THEIR RESPECTIVE TAX RETURNS PROPERLY REFLECT THE INCOME AND TAXES
OF BORROWER AND SOLE MEMBER FOR THE PERIODS COVERED THEREBY, SUBJECT ONLY TO
REASONABLE ADJUSTMENTS REQUIRED