Neither Borrower nor Senior Borrower is a party to any agreement or instrument or subject to any restriction which might materially and adversely affect Borrower, Senior Borrower, any Senior Collateral or the Collateral, or Borrower’s or Senior Borrower’s business, properties or assets, operations or financial condition. Neither Borrower nor Senior Borrower is in default with respect to any order or decree of any court or any order, regulation or demand of any Governmental Authority, which default might have consequences that would materially and adversely affect the financial condition or operations of Borrower or Senior Borrower or its respective properties or might have consequences that would adversely affect Borrower’s performance hereunder. Neither Borrower nor Senior Borrower is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or any Senior Collateral is bound.