ACCORDANCE WITH THE APPROVED PLANS; AND COPIES OF ALL
LICENSES AND PERMITS REQUIRED FOR OPERATION OF THE PROJECT.
22
18.
NEGATIVE COVENANTS.
BORROWER AGREES THAT IT WILL NOT DO ANY OF THE
FOLLOWING, WITHOUT FIRST OBTAINING LENDER'S PRIOR WRITTEN CONSENT:
(A)
PURCHASE OR REDEEM ANY SHARES OF BORROWER'S CAPITAL STOCK; OR
DECLARE OR PAY ANY DIVIDENDS (OTHER THAN DIVIDENDS PAYABLE IN CAPITAL STOCK); OR
MAKE ANY DISTRIBUTION TO STOCKHOLDERS OF ANY ASSETS OF BORROWER EXCEPT THAT SO
LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AT THE
TIME OF ANY OF THE FOLLOWING DESCRIBED PAYMENTS OR WOULD RESULT THEREFROM,
BORROWER MAY PAY DIVIDENDS PAYABLE FROM BORROWER'S NET INCOME.
(B)
INCUR OR PERMIT TO EXIST ANY INTEREST-BEARING INDEBTEDNESS,
SECURED OR UNSECURED, INCLUDING WITHOUT LIMITATION, INDEBTEDNESS FOR MONEY
BORROWED OR CAPITALIZED LEASES, EXCEPT (I) BORROWINGS UNDER THIS AGREEMENT;
(II) BORROWINGS, IF ANY, WHICH ARE EXISTING ON THE DATE OF THIS AGREEMENT AND
WHICH ARE DISCLOSED ON SCHEDULE I ATTACHED HERETO; (III) BORROWING FROM THE
MINNESOTA HORESMAN'S BENEVOLENT & PROTECTIVE ASSOCIATION, INC. SO LONG AS THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF SUCH BORROWINGS DOES NOT EXCEED
$750,000.00 AT ANY TIME AND SUCH BORROWINGS ARE UNSECURED AND DO NOT HAVE ANY
PRIORITY OF PAYMENT OVER THE OBLIGATIONS UPON THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT DESCRIBED IN PARAGRAPH 20(D), (E), (F), (G) OR (H);
(IV) CAPITAL LEASES PERMITTED BY PARAGRAPH 18(1) AND THEN ONLY SO LONG AS THE
AGGREGATE BALANCE SHEET AMOUNT, AS DETERMINED IN ACCORDANCE WITH GAAP, DOES NOT
EXCEED $250,000.00 AT ANY TIME; OR (V) PURCHASE MONEY INDEBTEDNESS INCURRED IN
CONNECTION WITH CAPITAL EXPENDITURES PERMITTED BY PARAGRAPH 18(1)(II) SO LONG AS
THE AGGREGATE OUTSTANDING PRINCIPAL BALANCE THEREOF DOES NOT EXCEED $250,000.00
AT ANY TIME.
(C)
CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST ON ANY OF
BORROWER'S ASSETS NOW OWNED OR HEREAFTER ACQUIRED EXCEPT: (I) THOSE CREATED IN
LENDER'S FAVOR AND HELD BY LENDER; (II) LIENS OF CURRENT TAXES NOT DELINQUENT OR
TAXES WHICH ARE BEING CONTESTED IN GOOD FAITH FOR WHICH AN ADEQUATE RESERVE HAS
BEEN ESTABLISHED; (III) SECURITY INTERESTS DISCLOSED ON SCHEDULE D ATTACHED
HERETO AND IN THE CASE OF SECURITY INTERESTS DISCLOSED IN PART II OF SCHEDULE D,
SECURING ONLY DEBT OUTSTANDING ON THE DATE OF THIS AGREEMENT AND DISCLOSED ON
SCHEDULE I; PROVIDED, HOWEVER, THAT SECURITY INTERESTS DISCLOSED IN PART I OF
SCHEDULE D ARE PERMITTED ONLY SO LONG AS: (A) BORROWER'S TITLE TO ITS PROPERTY
IS NOT MATERIALLY ADVERSELY AFFECTED; (B) ITS USE OF SUCH PROPERTY IN THE
ORDINARY COURSE OF ITS BUSINESS IS NOT MATERIALLY INTERFERED WITH; (C) ADEQUATE
RESERVES WITH RESPECT THERETO HAVE BEEN SET ASIDE ON BORROWER'S BOOKS IN
ACCORDANCE WITH GAAP; AND (D) IN ALL EVENTS, BORROWER SHALL PAYOR CAUSE TO BE
PAID ALL SUCH SECURED AMOUNTS FORTHWITH UPON THE COMMENCEMENT OF FORECLOSURE OF
ANY SUCH SECURITY INTEREST; OR (IV) SECURITY INTERESTS CREATED IN CONNECTION
WITH PURCHASE MONEY INDEBTEDNESS INCURRED IN CONNECTION WITH THE CAPITAL
EXPENDITURES PERMITTED BY PARAGRAPH 18(1)(II), BUT ONLY TO THE EXTENT