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Agreement (collectively, the "Administrative Costs") within 30 days of the Lender <br /> providing written notice to the Borrowers of Lender's costs. Administrative Costs shall <br /> be evidenced by invoices, statements or other reasonable written evidence of costs <br /> incurred by the City. <br /> (f) Default Notices. Provide Lender with a copy of any default notice <br /> received by either of the Borrowers pursuant to any documents related to any financing <br /> secured by the Loan Property or the Equipment (to the extent that such notice is sent by a <br /> party other than Lender),promptly after receipt of the same. <br /> (g) Continual Operation. At all times while any portion of the Loan remains <br /> outstanding, Borrowers will: (i) maintain their status as for profit entities; (ii) maintain a <br /> positive net worth; and (iii) will operate their business from the Loan Property in a first <br /> class manner. <br /> (h) Title to Equipment. Heritage represents that it owns or will own all of the <br /> Equipment listed in Exhibit A "free and clear," that Lender will have a "third priority" <br /> lien in the Equipment listed in Exhibit A pursuant to the Security Agreement and that no <br /> other party has any right, title or interest in the Equipment listed in Exhibit A except for <br /> the senior liens of the First National Bank of Elk River and the United States Small <br /> Business Administration. <br /> 11. Warranties. Borrowers represents and warrants to Lender the following: <br /> (a) The Borrowers are corporations duly formed, validly existing and in good <br /> standing under the laws of the State of Minnesota. <br /> (b) The making and performance of this Agreement and the execution and <br /> delivery of the Note and any other instrument required hereunder are within the powers <br /> of the Borrowers and have been duly authorized by all necessary corporate action on the <br /> part of the Borrowers. This Agreement and the Note and any other instruments required <br /> hereunder have been duly executed and delivered and are the legal, valid and binding <br /> obligations of the Borrowers, legally enforceable against them,jointly and severally. <br /> (c) The execution and delivery of the Security Agreement are within the <br /> powers of Heritage and has been duly authorized by all necessary corporation action on <br /> the part of Heritage. The Security Agreement has been duly executed and delivered and <br /> is the legal, valid and binding obligations of Heritage enforceable in accordance with <br /> their respective terms. <br /> (d) No litigation, tax claims or governmental proceedings are pending or <br /> threatened against the Borrowers, the Landlord or the Loan Property, and no judgment or <br /> order of any court or administrative agency is outstanding against the Borrowers, the <br /> Landlord or the Loan Property which would have a material adverse effect on Borrowers <br /> or the Loan Property. <br /> 5 <br /> 491713v1 EL185-46 <br />