NO LESS FAVORABLE TO BORROWER THAN IT WOULD OBTAIN IN A COMPARABLE ARM'S
LENGTH TRANSACTION WITH A PERSON NOT AN AFFILIATE.
SECTION 6.10
LIENS.
NO RELATED PERSON SHALL GRANT, CREATE, INCUR,
ASSUME, PERMIT OR SUFFER TO EXIST ANY LIEN, UPON ANY OF ITS PROPERTY, INCLUDING
WITHOUT LIMITATION ANY AND ALL OF BORROWER'S MORTGAGE NOTES, AND SERVICING
RIGHTS AND THE PROCEEDS FROM ANY THEREOF, OTHER THAN (A) LIENS WHICH SECURE
PAYMENT OF THE OBLIGATIONS, (B) FIRST LIENS ON PROPERTY WHICH ALSO SECURES
SECOND LIEN LOANS, SO LONG AS THE UNIT COLLATERAL VALUE OF SUCH MORTGAGE NOTES
SECURED THEREBY DOES NOT EXCEED THE APPLICABLE SUBLIMIT FOR SECOND LIEN LOANS,
AND (C) LIENS ON PROPERTY OTHER THAN COLLATERAL WHICH SECURE PAYMENT OF THE
INDEBTEDNESS PERMITTED TO BE INCURRED HEREUNDER.
SECTION 6.11
ERISA PLANS.
NO RELATED PERSON SHALL ADOPT OR AGREE TO
MAINTAIN OR CONTRIBUTE TO ANY ERISA PLAN.
BORROWER SHALL PROMPTLY NOTIFY LENDER
IN WRITING IN THE EVENT AN ERISA AFFILIATE ADOPTS AN ERISA PLAN.
SECTION 6.12
CHANGE OF PRINCIPAL OFFICE.
THE BORROWER SHALL NOT MOVE
ITS PRINCIPAL OFFICE, EXECUTIVE OFFICE OR PRINCIPAL PLACE OF BUSINESS FROM THE
ADDRESS SET FORTH IN SECTION 9.1 WITHOUT PRIOR WRITTEN NOTICE TO LENDER.
SECTION 6.13
TANGIBLE NET WORTH.
AS OF THE END OF EACH FISCAL
QUARTER, THE TANGIBLE NET WORTH OF BORROWER SHALL NOT BE LESS THAN $13,000,000.
SECTION 6.14
TOTAL INDEBTEDNESS TO ADJUSTED TANGIBLE NET WORTH.
THE
RATIO OF TOTAL INDEBTEDNESS OF BORROWER TO ADJUSTED TANGIBLE NET WORTH OF
BORROWER SHALL NEVER BE MORE THAN 12.0 TO 1.0.
SECTION 6.15
PROFITABILITY.
AS OF THE END OF EACH FISCAL QUARTER,
BORROWER'S CONSOLIDATED NET INCOME FOR THE PERIOD OF FOUR PRECEDING FISCAL
QUARTERS ENDED AS OF THE END OF SUCH FISCAL QUARTER SHALL BE A POSITIVE NUMBER
EQUAL TO OR GREATER THAN $1.00.
SECTION 6.16
ADJUSTED TANGIBLE NET WORTH.
AT THE END OF EACH FISCAL
QUARTER, THE ADJUSTED TANGIBLE NET WORTH OF BORROWER SHALL NOT BE LESS THAN
$5,000,000.
37
SECTION 6.17
DIVIDENDS.
THE BORROWER SHALL NOT, NOR SHALL IT PERMIT
ANY SUBSIDIARY TO, DECLARE OR PAY ANY DIVIDENDS, UNLESS AT THE TIME OF EACH
DIVIDEND BY BORROWER, (X) NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND
BE CONTINUING OR WOULD RESULT THEREFROM AND (Y) AFTER GIVING EFFECT TO SUCH
DIVIDEND, THE BORROWER IS IN COMPLIANCE ON A PRO FORMA BASIS WITH THE COVENANTS
SET FORTH IN SECTIONS 6.13 THROUGH 6.16.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1
NATURE OF EVENT.
AN EVENT OF DEFAULT SHALL EXIST IF ANY
ONE OR MORE OF THE FOLLOWING OCCURS:
(A)
BORROWER FAILS TO MAKE ANY PAYMENT OF (I) PRINCIPAL OF THE NOTE ON
OR BEFORE THE DATE SUCH PAYMENT IS DUE, (II) INTEREST ON THE NOTE AND SUCH
FAILURE CONTINUES FOR TWO (2) BUSINESS DAYS AFTER THE DATE SUCH PAYMENT IS DUE,
OR (III) ANY FEE, EXPENSE OR OTHER AMOUNT DUE HEREUNDER, UNDER THE NOTE, OR
UNDER ANY OTHER LOAN DOCUMENT, AND SUCH FAILURE CONTINUES FOR A PERIOD OF FIVE
(5) BUSINESS DAYS AFTER LENDER GIVES BORROWER NOTICE