Common use of Representations, Warranties and Covenants of the Guarantor Clause in Contracts

Representations, Warranties and Covenants of the Guarantor. Guarantor hereby represents, warrants, and covenants that: (a) Guarantor will derive substantial benefit, directly or indirectly, from the making of the Loan to the Borrower and from the making of this Guaranty by the Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against the Guarantor; (c) the Guarantor is not, and the execution, delivery and performance by the Guarantor of this Guaranty will not cause the Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction by which the Guarantor is bound or affected; (d) Guarantor is a duly organized, validly existing limited liability company in good standing under the laws of the Commonwealth of Virginia, is lawfully doing business in the jurisdiction where it operates, and has full power and authority to enter into and perform this Guaranty; (e) except as may have been disclosed to the Lender in writing, there is not now pending against or affecting the Guarantor, nor, to the knowledge of the Guarantor, is there threatened, any action, investigation, suit or proceeding by or before any administrative agency which if adversely determined would materially impair or affect the Guarantor’s financial condition (f) all financial statements and information heretofore furnished to the Lender by the Guarantor do, and all financial statements and information hereafter furnished to the Lender by the Guarantor will, fully and accurately present the financial condition of the Guarantor as of their dates and the results of the Guarantor’s operations for the periods therein specified, and, since the date of the most recent financial statements of the Guarantor heretofore furnished to the Lender, no material adverse change has occurred in the financial condition of the Guarantor, nor, except as heretofore disclosed in writing to the Lender, has the Guarantor incurred any material liability, direct or indirect, fixed or contingent; (g) after giving effect to this Guaranty, the Guarantor is solvent, is not engaged or about to engage in business or a transaction for which the property of the Guarantor is an unreasonably small capital, and does not intend to incur or believes that it will incur debts that will be beyond its ability to pay as such debts mature; (h) the Lender has no duty at any time to investigate or inform the Guarantor of the financial or business condition or affairs of the Borrower or any change therein, and the Guarantor will keep fully appraised of the Borrower’s financial and business condition; (i) the Guarantor acknowledges and agrees that the Guarantor may be required to pay and perform the Obligations in full without assistance or support from the Borrower or any other Person; and (j) the Guarantor has read and fully understand the provisions contained in the Loan Agreement, the Deed(s) of Trust, and the other Loan Documents, each of which may be modified, extended, supplemented or extended from time to time without notice to or consent from the Guarantor and without affecting the obligations of the Guarantor under this Guaranty. In addition, during the term of the Loan, Lender must be satisfied that Guarantor’s financial condition meets the following requirements: (i) Adjusted Tangible Net Worth (ATNW) shall be at least $65,000,000 for fiscal year 2005, increasing by 50% of consolidated after tax net earnings for each year thereafter. Adjusted Tangible Net Worth is defined as GAAP net worth plus subordinated debt approved by Agent less any goodwill, organizational costs, leasehold improvements and Affiliate and/or stockholder receivables and investments in joint ventures; and (ii) Debt to Tangible Net Worth (“Leverage Ratio”) shall be 3.50:1. Leverage Ratio is the total Adjusted Liabilities to Adjusted Tangible Net Worth (ATNW). Adjusted Liabilities is defined as GAAP total liabilities less Variable Interest Entities, less subordinated debt due to related parties and investments in affiliates and joint ventures that are not co-borrowers (“Related Venturer Subordinated Debt”), less subordinated debt (“Direct Subordinated Debt”), plus any other debt guaranteed by Borrower. For purposes hereof, a “Variable Interest Entity” is either: (A) an entity that is consolidated for financial statement purposes when (1) the equity investment at risk is not sufficient to permit the entity from financing its activities without additional subordinated financial support from other parties or (2) equity holders either (a) lack direct or indirect ability to make decisions about the entity (b) are not obligated to absorb expected losses of the entity or (c) do not have the right to receive expected residual returns of the entity if they occur or (B) a “variable interest entity” as defined in Guarantor’s SEC-filed financial statements and as the definition of such term is amended from time to time based upon guidance from the Financial Accounting Standards Board. For purposes of clarity, the primary beneficiary of a Variable Interest Entity is the party that absorbs a majority of the Variable Interest Entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. The Guarantor’s representations, warranties and covenants are a material inducement to the Lender to enter into the other Loan Documents and shall survive the execution hereof and any bankruptcy, foreclosure, transfer of security or other event affecting the Borrower, the Guarantor, any other party, or any security for all or any part of the Obligations.

Representations, Warranties and Covenants of the Guarantor. Guarantor hereby represents, warrants, and covenants that: (a) Guarantor will derive substantial benefit, directly or indirectly, from Lender entering into the making of the Loan to Modification with the Borrower and from the making of this Guaranty by the Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against the Guarantor; (c) the Guarantor is not, and the execution, delivery and performance by the Guarantor of this Guaranty will not cause the Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction by which the Guarantor is bound or affectedlaw; (d) Guarantor is a duly organized, validly existing limited liability company corporation in good standing under the laws state of the Commonwealth of VirginiaDelaware, is lawfully doing business in the jurisdiction where it operates, and has full power and authority to enter into and perform this Guaranty; (e) except as may have been disclosed to the Lender in writingpublic filings, there is not now pending against or affecting the Guarantor, nor, to the knowledge of the Guarantor, is there threatened, any action, investigation, suit or proceeding by or before any administrative agency which if adversely determined would materially impair or affect the Guarantor’s financial condition (f) all financial statements and information heretofore furnished to the Lender by the Guarantor do, and all financial statements and information hereafter furnished to the Lender by the Guarantor will, fully and accurately present the financial condition of the Guarantor as of their dates and the results of the Guarantor’s operations for the periods therein specified, and, since the date of the most recent financial statements of the Guarantor heretofore furnished to the Lender, no material adverse change has occurred in the financial condition of the Guarantor, nor, except as heretofore disclosed in writing to the Lenderpublic filings, has the Guarantor has not incurred any material liability, direct or indirect, fixed or contingent; (g) after giving effect to this Guaranty, the Guarantor is solvent, is not engaged or about to engage in business or a transaction for which the property of the Guarantor is an unreasonably small capital, and does not intend to incur or believes that it will incur debts that will be beyond its ability to pay as such debts mature; (h) the Lender has no duty at any time to investigate or inform the Guarantor of the financial or business condition or affairs of the Borrower or any change therein, and the Guarantor will keep fully appraised of the Borrower’s financial and business condition; (i) the Guarantor acknowledges and agrees that the Guarantor may be required to pay and perform the Obligations in full without assistance or support from the Borrower or any other Person; and (j) the Guarantor has read and fully understand the provisions contained in the Loan Agreement, the Deed(s) of TrustDeed to Secure, and the other Loan Documents, each of which may be modified, extended, supplemented or extended from time to time without notice to or consent from the Guarantor and without affecting the obligations of the Guarantor under this Guaranty. In addition, during the term of the Loan, Lender must be satisfied that Guarantor’s financial condition meets the following requirements: (i) Adjusted Tangible Net Worth (ATNW) shall be at least $65,000,000 for fiscal year 2005, increasing by 50% of consolidated after tax net earnings for each year thereafter. Adjusted Tangible Net Worth is defined as GAAP net worth plus subordinated debt approved by Agent less any goodwill, organizational costs, leasehold improvements and Affiliate and/or stockholder receivables and investments in joint ventures; and (ii) Debt to Tangible Net Worth (“Leverage Ratio”) shall be 3.50:1. Leverage Ratio is the total Adjusted Liabilities to Adjusted Tangible Net Worth (ATNW). Adjusted Liabilities is defined as GAAP total liabilities less Variable Interest Entities, less subordinated debt due to related parties and investments in affiliates and joint ventures that are not co-borrowers (“Related Venturer Subordinated Debt”), less subordinated debt (“Direct Subordinated Debt”), plus any other debt guaranteed by Borrower. For purposes hereof, a “Variable Interest Entity” is either: (A) an entity that is consolidated for financial statement purposes when (1) the equity investment at risk is not sufficient to permit the entity from financing its activities without additional subordinated financial support from other parties or (2) equity holders either (a) lack direct or indirect ability to make decisions about the entity (b) are not obligated to absorb expected losses of the entity or (c) do not have the right to receive expected residual returns of the entity if they occur or (B) a “variable interest entity” as defined in Guarantor’s SEC-filed financial statements and as the definition of such term is amended from time to time based upon guidance from the Financial Accounting Standards Board. For purposes of clarity, the primary beneficiary of a Variable Interest Entity is the party that absorbs a majority of the Variable Interest Entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. The Guarantor’s representations, warranties and covenants are a material inducement to the Lender to enter into the other Loan Documents and shall survive the execution hereof and any bankruptcy, foreclosure, transfer of security or other event affecting the Borrower, the Guarantor, any other party, or any security for all or any part of the Obligations.

Representations, Warranties and Covenants of the Guarantor. Guarantor hereby represents, warrants, and covenants that: (a) Guarantor will derive substantial benefit, directly or indirectly, from the making of the Loan to the Borrower and from the making of this Guaranty by the Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against the Guarantor; (c) the Guarantor is not, and the execution, delivery and performance by the Guarantor of this Guaranty will not cause the Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction by which the Guarantor is bound or affected; (d) Guarantor is a duly organized, validly existing limited liability company in good standing under the laws of the Commonwealth of Virginia, is lawfully doing business in the jurisdiction where it operates, and has full power and authority to enter into and perform this Guaranty; (e) except as may have been disclosed to the Lender in writing, there is not now pending against or affecting the Guarantor, nor, to the knowledge of the Guarantor, is there threatened, any action, investigation, suit or proceeding by or before any administrative agency which if adversely determined would materially impair or affect the Guarantor’s financial condition (f) all financial statements and information heretofore furnished to the Lender by the Guarantor do, and all financial statements and information hereafter furnished to the Lender by the Guarantor will, fully and accurately present the financial condition of the Guarantor as of their dates and the results of the Guarantor’s operations for the periods therein specified, and, since the date of the most recent financial statements of the Guarantor heretofore furnished to the Lender, no material adverse change has occurred in the financial condition of the Guarantor, nor, except as heretofore disclosed in writing to the Lender, has the Guarantor incurred any material liability, direct or indirect, fixed or contingent; (g) after giving effect to this Guaranty, the Guarantor is solvent, is not engaged or about to engage in business or a transaction for which the property of the Guarantor is an unreasonably small capital, and does not intend to incur or believes that it will incur debts that will be beyond its ability to pay as such debts mature; (h) the Lender has no duty at any time to investigate or inform the Guarantor of the financial or business condition or affairs of the Borrower or any change therein, and the Guarantor will keep fully appraised of the Borrower’s financial and business condition; (i) the Guarantor acknowledges and agrees that the Guarantor may be required to pay and perform the Obligations in full without assistance or support from the Borrower or any other Person; and (j) the The Guarantor has read made representations and fully understand the provisions contained warranties in the Loan Agreement, the Deed(s) of Trustand has also made and agreed to certain covenants, promises, and agreements in the other Loan DocumentsAgreement, each all of which may be modified, extended, supplemented or extended from time to time without notice to or consent from the Guarantor are hereby incorporated herein by reference and without affecting the obligations of the Guarantor under this Guarantymade a part hereof. In addition, the Guarantor makes the following representations, warranties, covenants, and agreements: (a) The Guarantor hereby represents and warrants that it has not received any promissory note or other form of "I owe you" from the Borrower or LMR or entered into any other written or oral agreement with the Borrower or LMR stating that the Guarantor will be reimbursed by the Borrower or LMR if the Guarantor makes any payments under this Guaranty or any other guaranty and further covenants that it has not received any property of the Borrower or LMR as security for such reimbursement. The Guarantor hereby covenants and agrees that it will not, at any time, accept any promissory note or enter into any written or oral agreement with the Borrower or LMR which has the effect of requiring the Borrower or LMR to reimburse the Guarantor for any payments that the Guarantor may make under this Guaranty or any other guaranty, accept any property of the Borrower or LMR as security for any such reimbursement, or make any claim for reimbursement, or any claim that the Guarantor should be subrogated to the rights of Ocwen or any other creditor against the Borrower or LMR. The waivers, representations, warranties, covenants, and agreements contained in this paragraph and this Guaranty are for the benefit of and may be enforced by Ocwen or any other creditor and the Borrower and/or LMR and their respective successors and assigns, including, without limitation, any trustee in bankruptcy of the Borrower or LMR. (b) The Guarantor shall furnish to Ocwen as soon as practical at the end of each calendar quarter, and in any event no later than forty-five (45) days thereafter, during the term of the LoanLoan and any Extension, Lender must be satisfied that Guarantor’s financial condition meets the following requirements: (i) Adjusted Tangible Net Worth (ATNW) statements including but not limited to a balance sheet, operating or income statement, statement of cash flow, and statement of retained earnings, if applicable, all of which shall be at least $65,000,000 for fiscal year 2005in reasonable detail and in a form acceptable to Ocwen. For so long as Guarantor is a reporting company, increasing the foregoing required financial statements shall be the same as those filed with the Securities and Exchange Commission as its 10Q filings. In addition, the Guarantor shall furnish to Ocwen by 50% September 30 of consolidated after tax net earnings for each year thereafterduring the term of the Loan or any Extension, its audited (by a reputable, independent accounting firm) financial statements, including complete balance sheets, operating or income statements, statements of cash flow, and statements of retained earnings, if applicable, in a form acceptable to Ocwen, for the prior year ending June 30. Adjusted Tangible Net Worth For so long as Guarantor is defined as GAAP net worth plus subordinated debt approved by Agent less any goodwilla reporting company, organizational costs, leasehold improvements and Affiliate and/or stockholder receivables and investments in joint ventures; and (ii) Debt to Tangible Net Worth (“Leverage Ratio”) the foregoing required financial statements shall be 3.50:1the same as those filed with the Securities and Exchange Commission as its 10-K filings. Leverage Ratio All of such statements shall be prepared in accordance with GAAP and shall be certified by the Guarantor as being true, complete, and correct in all material respects. On each occasion on which the Guarantor is the total Adjusted Liabilities required to Adjusted Tangible Net Worth (ATNW). Adjusted Liabilities is defined as GAAP total liabilities less Variable Interest Entities, less subordinated debt due furnish financial statements to related parties and investments in affiliates and joint ventures that are not co-borrowers (“Related Venturer Subordinated Debt”Ocwen pursuant to this Section 11(b), less subordinated debt (“Direct Subordinated Debt”), plus any other debt guaranteed by Borrower. For purposes hereof, the Guarantor shall also furnish to Ocwen a “Variable Interest Entity” is either: (A) an entity that is consolidated for financial statement purposes when (1) the equity investment at risk is not sufficient to permit the entity from financing its activities without additional subordinated financial support from other parties or (2) equity holders either (a) lack direct or indirect ability to make decisions about the entity (b) are not obligated to absorb expected losses certificate of the entity Guarantor that the Guarantor has reviewed the provisions of this Guaranty and, after reasonable investigation, has no knowledge of the occurrence of any event or condition which either constitutes or with the lapse of time or giving of notice or both would constitute an Event of Default, or if the Guarantor has such knowledge, specifying such event or condition and what action the Guarantor has taken, is taking, or proposes to take with respect thereto. The Guarantor shall also furnish promptly to Ocwen such other information respecting the business, properties, condition or operations, financial or otherwise, of the Guarantor as Ocwen may reasonably request. (c) do not have the right to receive expected residual returns of the entity if they occur or (B) a “variable interest entity” as defined in Guarantor’s SEC-filed financial statements and as the definition of such term is amended from time to time based upon guidance from the Financial Accounting Standards Board. For purposes of clarity, the primary beneficiary of a Variable Interest Entity is the party that absorbs a majority of the Variable Interest Entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. The Guarantor’s representations, warranties and covenants are a material inducement In addition to the Lender foregoing, Guarantor shall also deliver to enter into Ocwen, within five (5) Business Days after the other Loan Documents following filings are made, notices that such filings have been made: any and shall survive all filings, of any nature or type, in addition to the execution hereof 10Q and any bankruptcy10-K filings, foreclosure, transfer of security or other event affecting made by Guarantor to the Borrower, the Guarantor, any other party, or any security for all or any part of the ObligationsSecurities and Exchange Commission.

Representations, Warranties and Covenants of the Guarantor. The Guarantor hereby represents, warrants, warrants and covenants that: covenants: (a) Guarantor will derive substantial benefit, directly or indirectly, from the making of the Loan to the Borrower and from the making of this Guaranty by the Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against the Guarantor; (c) the Guarantor is not, and the execution, delivery and performance by the Guarantor of this Guaranty will not cause the Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction by which the Guarantor is bound or affected; (d) The Guarantor is a corporation duly organized, organized and validly existing limited liability company in good standing under the laws of the Commonwealth State of Virginia, is lawfully doing business in the jurisdiction where it operates, Delaware and has full power and authority to enter into consummate the transactions contemplated hereby. (b) This Guaranty, the Payment Guaranty, the Operating Deficit Guaranty, and perform the Environmental Indemnity Agreement have been duly executed and delivered by the Guarantor and constitute the valid and binding obligations of the Guarantor and are enforceable against the Guarantor in accordance with their respective terms. (c) Guarantor is not insolvent (as such term is defined in the Bankruptcy Code), and Guarantor will not be rendered insolvent by execution of this Guaranty or any other Loan Document to which it is a party or by the consummation of the transactions contemplated thereby. (d) The consummation of the transactions contemplated hereby and the performance by the Guarantor of the Guarantor's obligations under this Guaranty; , the Payment Guaranty, the Operating Deficit Guaranty, the Environmental Indemnity Agreement or any other Loan Document to which the Guarantor is a party will not result in any breach of, give rise to a lien under, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, partnership agreement, corporate charter, by-laws or other agreement or instrument to which the Guarantor is a party or by which it may be bound or affected. (e) except as may have been disclosed to the Lender in writing, there is not now pending against or affecting the Guarantor, nor, to the knowledge of the Guarantor, is there threatened, any action, investigation, suit or proceeding by or before any administrative agency which if adversely determined would materially impair or affect the Guarantor’s financial condition (f) all financial statements and information heretofore furnished to the Lender The Financial Statements delivered by the Guarantor do, and all financial statements and information hereafter furnished to the Lender by Agent at or prior to the Guarantor will, fully Closing fairly and accurately present the financial condition of the Guarantor as of their dates and the results of the Guarantor’s operations for the periods therein specified, and, since the date of the most recent financial statements of the Guarantor heretofore furnished to the Lenderthereof, and no material adverse change has occurred in the financial condition reflected therein since the date thereof. The Financial Statements have been prepared in accordance with sound accounting methods, principles and standards consistently applied and do not omit facts, the omission of which would make such Financial Statements materially misleading. (f) Except as disclosed on Schedule 1 annexed hereto and made a part hereof, there are no actions, suits or proceedings involving claims in excess of $1,000,000 pending, or to the best knowledge of the GuarantorGuarantor threatened, nor, except as heretofore disclosed in writing to the Lender, has against or affecting the Guarantor incurred or the Premises, or involving the validity or enforceability of the Mortgage, or the priority of the liens thereof, at law or in equity, before or by any material liabilityGovernmental Authority; and the Guarantor is not operating under or subject to, direct in default of, or indirectin violation with respect to, fixed any order, writ, injunction, decree or contingent; demand of any court or any Governmental Authority involving claims in excess of $1,000,000 that reasonably could materially and adversely affect its ability to perform its obligations hereunder. (g) after giving effect The Guarantor shall promptly provide the Agent with written notice of any pending or threatened litigation against the Guarantor or the Premises, with respect to which an adverse decision is reasonably likely involving claims in excess of $1,000,000; or the commencement against the Guarantor or the Premises of any proceedings or investigations by a governmental or regulatory agency involving claims in excess of $1,000,000 that reasonably could materially and adversely affect its ability to perform its obligations hereunder. (h) There is no default on the part of the Guarantor under or with respect to this Guaranty, the Guarantor is solventPayment Guaranty, is not engaged the Environmental Indemnity Agreement or about any other Loan Document to engage in business or a transaction for which the property of the Guarantor is an unreasonably small capitala party, and no event has occurred and is continuing which with the giving of notice and the passage of time would constitute a default on the part of Guarantor under any of the aforesaid documents. (i) The Guarantor does not intend have any counterclaims, offsets or defenses with respect to incur the Loan or believes that with respect to its obligations under this Guaranty, the Payment Guaranty, the Operating Deficit Guaranty, the Environmental Indemnity Agreement, the Notes or any other Loan Document to which it is a party. (j) The Guarantor will incur debts that will be beyond its ability not join in any action, or consent to pay as such debts mature; (h) amend, terminate or modify the Lender has no duty at any time to investigate or inform the Guarantor of the financial or business condition or affairs organizational documents of the Borrower without the prior written consent of the Agent. (k) The Guarantor will promptly comply with all conditions of this Guaranty and the other Loan Documents with which the Guarantor is required to comply. The Guarantor will promptly and fully respond to any inquiry of the Agent made with respect to the Loan, the Land, the Improvements, or any change thereinof the matters covered by this Guaranty. (l) The Guarantor will not modify or amend or terminate (other than by full performance thereof) any Loan Document without the prior written consent of the Agent. (m) The Guarantor agrees to pay within ten (10) Domestic Business Days of any written demand by the Agent to Guarantors, all expenses (including, without limitation, reasonable legal expenses) of, or incidental to, or in any way relating to the enforcement or protection of the rights of the Agent or the Lenders hereunder. (n) The Guarantor is deriving or expects to derive a financial or other advantage from each and every obligation incurred by the Borrower to the Agent or the Lenders. (o) The Guarantor hereby acknowledges receipt of copies of, and hereby approves, the Guarantor will keep fully appraised of Plans, the Borrower’s financial and business condition; (i) the Guarantor acknowledges and agrees that the Guarantor may be required to pay and perform the Obligations in full without assistance or support from the Borrower or any other Person; and (j) the Guarantor has read and fully understand the provisions contained in Mortgage, the Loan Agreement, the Deed(s) of Trust, Agreement and the other Loan Documents. (p) The Guarantor shall execute and deliver to the Agent, from time to time, such other documents as shall be reasonably necessary to give full effect to the rights and remedies granted or provided by this Guaranty. (q) The Guarantor shall furnish to the Agent (i) quarterly internally-prepared Financial Statements, certified by an officer of the Guarantor, within forty-five (45) days after the end of each calendar quarter, (ii) annual audited Financial Statements, certified by an officer of which the Guarantor within one hundred twenty (120) days after the end of each fiscal year of the Guarantor, (iii) quarterly internally-prepared certificates evidencing that the Guarantor's net worth is equal to at least $70,000,000, certified by an officer of the Guarantor, within forty-five days after the end of each calendar quarter, (iv) quarterly internally-prepared certificates evidencing that the Guarantor has Liquid Assets equal to at least $5,000,000, certified by an officer of the Guarantor, within forty-five (45) days after the end of each calendar quarter, and (v) such other financial information relating to the Guarantor as may be modified, extended, supplemented or extended reasonably requested from time to time without notice by Agent. (r) The Guarantor has implemented a program to or consent from assess, remediate and mitigate the potential impact of the Year 2000 Issue throughout the Guarantor's company. The Guarantor's program has been structured to address its internal computer systems and applications, network services operations, facilities operations and third-party vendors and suppliers. The Guarantor believes that it is taking the necessary steps within its control to mitigate the potential impact of the Year 2000 Issue on the Guarantor and without affecting the obligations of the Guarantor under this Guaranty. In addition, during the term of the Loan, Lender must be satisfied that Guarantor’s financial condition meets the following requirements: (i) Adjusted Tangible Net Worth (ATNW) shall be at least $65,000,000 for fiscal year 2005, increasing by 50% of consolidated after tax net earnings for each year thereafter. Adjusted Tangible Net Worth is defined as GAAP net worth plus subordinated debt approved by Agent less any goodwill, organizational costs, leasehold improvements and Affiliate and/or stockholder receivables and investments in joint ventures; and (ii) Debt continue to Tangible Net Worth (“Leverage Ratio”) shall be 3.50:1. Leverage Ratio is the total Adjusted Liabilities to Adjusted Tangible Net Worth (ATNW). Adjusted Liabilities is defined as GAAP total liabilities less Variable Interest Entities, less subordinated debt due to related parties and investments in affiliates and joint ventures that are not co-borrowers (“Related Venturer Subordinated Debt”), less subordinated debt (“Direct Subordinated Debt”), plus any other debt guaranteed by Borrower. For purposes hereof, a “Variable Interest Entity” is either: (A) an entity that is consolidated for financial statement purposes when (1) the equity investment at risk is not sufficient to permit the entity from financing its activities without additional subordinated financial support from other parties or (2) equity holders either (a) lack direct or indirect ability to make decisions about the entity (b) are not obligated to absorb expected losses of the entity or (c) do not have the right to receive expected residual returns of the entity if they occur or (B) a “variable interest entity” as defined in Guarantor’s SEC-filed financial statements and as the definition of such term is amended from time to time based upon guidance from the Financial Accounting Standards Board. For purposes of clarity, the primary beneficiary of a Variable Interest Entity is the party that absorbs a majority of the Variable Interest Entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. The Guarantor’s representations, warranties and covenants are a material inducement to the Lender to enter into the other Loan Documents and shall survive the execution hereof and any bankruptcy, foreclosure, transfer of security or other event affecting the Borrower, the Guarantor, any other party, or any security for all or any part of the Obligationsso.