OR HEREAFTER ACQUIRED); PROVIDED THAT, IF AT THE
TIME THEREOF AND IMMEDIATELY AFTER GIVING EFFECT THERETO NO DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, (1) ANY PERSON MAY MERGE INTO THE BORROWER IN A
TRANSACTION IN WHICH THE BORROWER IS THE SURVIVING ENTITY, (2) ANY PERSON MAY
MERGE INTO ANY SUBSIDIARY IN A TRANSACTION IN WHICH THE SURVIVING ENTITY IS A
SUBSIDIARY, (3) ANY SUBSIDIARY MAY SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF
ITS ASSETS TO THE BORROWER OR TO ANOTHER SUBSIDIARY, AND (4) ANY SUBSIDIARY MAY
LIQUIDATE OR DISSOLVE IF THE BORROWER (X) DETERMINES IN GOOD FAITH THAT SUCH
LIQUIDATION OR DISSOLUTION IS IN THE BEST INTERESTS OF THE BORROWER AND DOES NOT
MATERIALLY AND ADVERSELY AFFECT THE RIGHTS OF LENDERS HEREUNDER AND (Y)
FURNISHES PRIOR WRITTEN NOTICE TO THE LENDERS; PROVIDED, FURTHER, THAT IF AT THE
TIME THEREOF AND IMMEDIATELY AFTER GIVING EFFECT THERETO NO DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, THE BORROWER MAY MERGE WITH AND INTO ANY PERSON IN A
37
TRANSACTION IN WHICH SUCH PERSON IS THE SURVIVING ENTITY IF (I) SUCH SURVIVING
ENTITY COMPLIES WITH CERTAIN APPLICABLE CREDIT REQUIREMENTS TO BE DETERMINED IN
THE LENDERS' SOLE DISCRETION, (II) SUCH SURVIVING ENTITY EXPRESSLY ASSUMES TO
THE SATISFACTION OF THE LENDERS THE DUE AND PUNCTUAL PERFORMANCE AND OBSERVANCE
OF ALL TERMS, CONDITIONS, COVENANTS, AGREEMENTS AND OBLIGATIONS OF THIS
AGREEMENT AND THE MANDATE LETTER, (III) THE BORROWER HAS OBTAINED THE PRIOR
WRITTEN APPROVAL OF THE LENDERS.
(B)
THE BORROWER AND THE SUBSIDIARIES SHALL CONTINUE IN THE PRIMARY
LINE OF BUSINESS OF OWNING AND MANAGING LOAN ASSETS AND OTHER DEBT INVESTMENTS
AND BUSINESSES REASONABLY RELATED THERETO.
SECTION 6.04.
RESTRICTED PAYMENTS.
THE BORROWER WILL NOT, AND WILL NOT PERMIT
ANY OF ITS SUBSIDIARIES TO, DECLARE OR MAKE, OR AGREE TO PAY OR MAKE, DIRECTLY
OR INDIRECTLY, ANY RESTRICTED PAYMENT, EXCEPT (A) THE BORROWER MAY DECLARE AND
PAY DIVIDENDS WITH RESPECT TO ITS EQUITY INTERESTS PAYABLE SOLELY IN ADDITIONAL
SHARES OF ITS CAPITAL STOCK, (B) SUBSIDIARIES MAY DECLARE AND PAY DIVIDENDS AND
DISTRIBUTIONS RATABLY WITH RESPECT TO THEIR EQUITY INTERESTS, (C) THE BORROWER
MAY DECLARE AND PAY CASH DIVIDENDS AND DISTRIBUTIONS IN SUCH AMOUNTS (BUT NOT
MORE THAN SUCH AMOUNTS) AND AT SUCH TIMES AS SHALL BE NECESSARY TO MEET THE
REQUIREMENTS FOR QUALIFICATION AND TAXATION AS A "REAL ESTATE INVESTMENT TRUST"
UNDER THE CODE AND (D) SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING OR WOULD RESULT THEREFROM, THE BORROWER MAY DECLARE AND PAY CASH
DIVIDENDS DURING ANY CALENDAR YEAR IN AN AGGREGATE AMOUNT NOT AT ANY TIME
EXCEEDING 110% OF THE BORROWER'S ADJUSTED EARNINGS FOR SUCH YEAR AND (E) THE
BORROWER MAY MAKE RESTRICTED PAYMENTS (MADE SOLELY IN THE FORM OF ITS COMMON
STOCK) TO EMPLOYEES IN CONNECTION WITH ITS STOCK OPTION AND SIMILAR PLANS.
FOR
PURPOSES OF THIS AGREEMENT, "ADJUSTED EARNINGS" SHALL MEAN, FOR ANY PERIOD, NET
INCOME (AS REFLECTED ON THE BORROWER'S CONSOLIDATED FINANCIAL STATEMENTS IN
ACCORDANCE WITH GAAP) ALLOCABLE TO HOLDERS OF COMMON STOCK OF THE BORROWER PLUS