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6 <br />EL185\79\955722.v2 <br />(n) Negative Covenants. Borrower covenants and agrees with Lender that <br />while this Agreement is in effect, the Borrower shall not, without the prior written <br />consent of Lender, which shall not be unreasonably withheld: (a) Engage in any business <br />activities substantially different than those in which the Borrower is presently engaged; <br />(b) cease operations, liquidate, merge or consolidate with any other entity; (c) sell, assign <br />or transfer any of the assets of the Borrower which are related to the Borrower's business, <br />except in the ordinary course of business; or (d) purchase or retire any of Borrower's <br />outstanding shares or alter or amend Borrower's capital structure. <br />11. Warranties. Borrower represents and warrants to Lender the following: <br />(a) The Borrower is a corporation 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, the Security Agreement, <br />and the execution and delivery of the Note and any other instrument required hereunder <br />are within the powers of the Borrower and have been duly authorized by all necessary <br />corporate action on the part of the Borrower. This Agreement, the Security Agreement <br />and the Note and any other instruments required hereunder have been duly executed and <br />delivered and are the legal, valid and binding obligations of the Borrower, legally <br />enforceable against it. <br />(c) No litigation, tax claims or governmental proceedings are pending or <br />threatened against the Borrower, the Landlord or the Loan Property, and no judgment or <br />order of any court or administrative agency is outstanding against the Borrower, the <br />Landlord or the Loan Property which would have a material adverse effect on Borrower <br />or the Loan Property. <br />(d) Borrower has filed all tax returns (federal and state) required to be filed <br />for all prior years and paid all taxes shown thereon to be due, including interest and <br />penalties. Borrower will file all such returns and pay all such taxes for the current and <br />future years. Neither the Borrower nor the Guarantors have any material contingent <br />obligations, liabilities for taxes, long-term leases, or unusual forward or long-term <br />commitments not disclosed by, or reserved against, in the information submitted by <br />Borrower and the Guarantors. Since the date of the latest of such statements, there has <br />been no material adverse change in the financial condition of Borrower or the Guarantors <br />from that set forth in the latest of such statements as at that date. <br />(e) All information, financial or other, which has been submitted by <br />Borrower, the personal guarantor, and the Landlord in connection with the Loan is true, <br />accurate and complete in all material respects. Borrower understands and agrees that <br />Lender is relying upon the above representations and warranties in extending the Loan to <br />Borrower. Borrower further agrees that the foregoing representations and warranties shall <br />be continuing in nature and shall remain in full force and effect until such time as the <br />Loan and Note shall be paid in full, or until this Agreement shall be terminated in the <br />manner provided above, whichever is the last to occur. <br />Page 21 of 104