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132435584v2
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<br />indenture, mortgage, lease or other instrument to which the Issuer is a party or by which it is
<br />bound; and
<br />(4) No proceeding of the Issuer for the issuance, execution or delivery of this
<br />Agreement, the Note, or the Pledge Agreement has been repealed, rescinded, amended or
<br />revoked and Lender is entitled to rely on the same as if the same were fully incorporated herein,
<br />including without limitation, the Resolution.
<br />Section 2.2 Representations by the Borrower. The Borrower makes the following
<br />representations as the basis for its covenants herein:
<br />(1) The Borrower is a Minnesota nonprofit corporation in good standing, is
<br />duly authorized to conduct its business in all states where its activities require such authorization,
<br />has power to enter into this Agreement, the Declaration, the Capital Campaign Security
<br />Agreement, and the Business Assets Security Agreement and to use the Facility for the purpose
<br />set forth in this Agreement and by proper corporate action has authorized the execution and
<br />delivery of this Agreement, the Declaration, the Capital Campaign Security Agreement, and the
<br />Business Assets Security Agreement;
<br />(2) Not more than five percent (5%) of the proceeds of the Note will be used,
<br />directly or indirectly, to finance property used in an unrelated trade or business of the Borrower
<br />determined by applying Section 513(a) of the Code or in the trade or business of any person
<br />other than an organization described in Section 501(c)(3) of the Code. There is no action,
<br />proceeding or investigation pending or threatened by the Internal Revenue Service or authorities
<br />of the State of Minnesota which, if adversely determined, might result in a modification of the
<br />status of the Borrower as an organization described in Section 501(c)(3) of the Code;
<br />(3) The execution and delivery of this Agreement, the Declaration, the Capital
<br />Campaign Security Agreement, and the Business Assets Security Agreement, the consummation
<br />of the transactions contemplated thereby, and the fulfillment of the terms and conditions thereof
<br />do not and will not conflict with or result in a breach of any of the terms or conditions of the
<br />Borrower’s articles of incorporation, its bylaws, any restriction or any agreement or instrument
<br />to which the Borrower is now a party or by which it is bound or to which any property of the
<br />Borrower is subject, and do not and will not constitute a default under any of the foregoing or a
<br />violation of any order, decree, statute, rule or regulation of any court or of any state or federal
<br />regulatory body having jurisdiction over the Borrower or its properties, including the Facility,
<br />and do not and will not result in the creation or imposition of any lien, charge or encumbrance of
<br />any nature upon any of the property or assets of the Borrower contrary to the terms of any
<br />instrument or agreement to which the Borrower is a party or by which it is bound;
<br />(4) As of the date hereof, the use of the Facility as designed and to be
<br />operated complies, in all material respects, with all presently applicable development, pollution
<br />control, water conservation and other laws, regulations, rules and ordinances of the federal
<br />government and the State of Minnesota and the respective agencies thereof and the political
<br />subdivisions in which the Facility is located. The Borrower has obtained, or will obtain in a
<br />timely manner, all necessary and material approvals of and licenses, permits, consents and
<br />franchises from federal, state, county, municipal or other governmental authorities having
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