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assets, properties or operations of the Borrower, General Partner or Guarantor. None of Borrower,
<br />General Partner or Guarantor are (a) in violation of any applicable law, which violation materially and
<br />adversely affects or may materially and adversely affect the business, operations, assets (including the
<br />Project), condition (financial or otherwise) or prospects of Borrower, General Partner or Guarantor, as
<br />applicable; (b) subject to, or in default with respect to, any other Legal Requirement that would have a
<br />material adverse effect on the business, operations, assets (including the Project), condition (financial or
<br />otherwise) or prospects of Borrower, General Partner or Guarantor, as applicable; or (c) in default with
<br />respect to any agreement to which Borrower, General Partner or Guarantor, as applicable, are a party or
<br />by which they are bound, which default would have a material adverse effect on the business, operations,
<br />assets (including the Project), condition (financial or otherwise) or prospects of Borrower, General
<br />Partner or Guarantor, as applicable; and (d) there is no Legal Action pending or, to the knowledge of
<br />Borrower, threatened against or affecting Borrower, General Partner or Guarantor questioning the validity
<br />or the enforceability of this Borrower Loan Agreement or any of the other Borrower Loan Documents or
<br />the Funding Loan Documents or of any of the Related Documents. All tax returns (federal, state and
<br />local) required to be filed by or on behalf of the Borrower have been filed, and all taxes shown thereon to
<br />be due, including interest and penalties, except such, if any, as are being actively contested by the
<br />Borrower in good faith, have been paid or adequate reserves have been made for the payment thereof
<br />which reserves, if any, are reflected in the audited financial statements described therein. The Borrower
<br />enjoys the peaceful and undisturbed possession of all of the premises upon which it is operating its
<br />facilities.
<br />Section 4.1.5 Agreements; Consents; Approvals. Except as contemplated by the Borrower
<br />Loan Documents and the Funding Loan Documents, the Borrower is not a party to any agreement or
<br />instrument or subject to any restriction that would materially adversely affect the Borrower, the Project,
<br />or the Borrower's business, properties, operations or financial condition or business prospects, except the
<br />Permitted Encumbrances. The Borrower is not in default in any material respect in the performance,
<br />observance or fulfillment of any of the obligations, covenants or conditions contained in any Permitted
<br />Encumbrance or any other agreement or instrument to which it is a party or by which it or the Project is
<br />bound.
<br />No consent or approval of any trustee or holder of any indebtedness of the Borrower, and to the
<br />best knowledge of the Borrower and only with respect to the Borrower, no consent, permission,
<br />authorization, order or license of, or filing or registration with, any governmental authority (except no
<br />representation is made with respect to any state securities or "blue sky" laws) is necessary in connection
<br />with the execution and delivery of the Borrower Loan Documents or the Funding Loan Documents, or the
<br />consummation of any transaction herein or therein contemplated, or the fulfillment of or compliance with
<br />the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force
<br />and effect.
<br />Section 4.1.6 Title. The Borrower shall have marketable title to the Project, free and clear of all
<br />Liens except the Permitted Encumbrances. The Security Instrument, when properly recorded in the
<br />appropriate records, together with any UCC financing statements required to be filed in connection
<br />therewith, will create (i) a valid, perfected first priority lien on the fee (or leasehold, if applicable) interest
<br />in the Project and (ii) perfected security interests in and to, and perfected collateral assig~rlments of, all
<br />personalty included in the Project (including the Leases), all in accordance with the terms thereof, in each
<br />case subject only to any applicable Permitted Encumbrances. To the Borrower's knowledge, there are no
<br />delinquent real property taxes or assessments, including water and sewer charges, with respect to the
<br />Project, nor are there any claims for payment for work, labor or materials affecting the Project which are
<br />or may become a Lien prior to, or of equal priority with, the Liens created by the Borrower Loan
<br />Documents and the Funding Loan Documents.
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