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• <br />(vii) that the Partnership Guarantor and each of its <br />subsidiaries will pay, when due, all material <br />liabilities; and <br />(viii) that the Guarantors will deliver to the Bank from time <br />to time certain financial statements, schedules and <br />reports, and will notify the Bank of defaults under <br />the Guaranty Agreement and of certain litigation and <br />other matters of which the Guarantors, or either of <br />them, has knowledge. <br />In addition to the covenants set forth above, the Partnership <br />Guarantor is required to comply with certain financial covenants, which <br />include the obligation to maintain a specified ratio of current assets to <br />current liabilities, a specified ratio of funded debt to net worth and certain <br />minimum working capital and net worth requirements. The Partnership Guarantor <br />is also subject to certain limitations and restrictions with respect to <br />mergers, consolidations and the sale of assets. <br />ANY AND ALL OF THE ABOVE COVENANTS AND AGREEMENTS OF THE GUARANTORS <br />MAY BE AMENDED, WAIVED OR MODIFIED AT ANY TIME BY AND BETWEEN THE BANK AND THE <br />GUARANTORS WITHOUT THE CONSENT OF THE TRUSTEE OR THE BONDHOLDERS. NEITHER THE <br />TRUSTEE NOR THE BONDHOLDERS ARE THIRD PARTY BENEFICIARIES OF OR UNDER, OR ARE <br />IN ANY WAY ENTITLED TO RELY ON, THE GUARANTY AGREEMENT OR THE COVENANTS OF <br />EITHER OF THE GUARANTORS CONTAINED THEREIN. <br />Subordination <br />The Partnership Guarantor has entered into, or will enter into <br />management agreements with the Company with respect to the Projects. :n <br />addition, the Partnership Guarantor has entered into, or will enter into, <br />certain agreements requiring the Partnership Guarantor to extend certain <br />financial accommodations to the Company, for a fee, to guarantee certain debt <br />incurred by the Company in connection with the Projects. The Partnership <br />Guarantor has agreed that all amounts owing from time to time to the <br />Partnership Guarantor under all such agreements will be subordinated in right <br />of payment to the prior payment in full of all amounts owed under the Guaranty <br />Agreement, the Reimbursement Agreement, the Pledge and Security Agreement, the <br />Mortgages and other related documents. <br />Events of Default <br />The following events constitute "Events of Default" under the <br />Guaranty Agreement unless waived by the Bank: <br />(a) any representation or warranty made by the Guarantors, or <br />either of them, in the Guaranty Agreement or in any certificate or financial <br />or other written statement furnished by such Guarantors pursuant to the <br />Guaranty Agreement shall prove to have been untrue or incomplete in any <br />material respect when made; or <br />D-7 <br />