Single Purpose Entity/Separateness. (a) Each Borrower represents and warrants to, and covenants with, Lender that since the date of its formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full it has not and will not: (i) engage in any business or activity other than the ownership of the Collateral, and activities incidental thereto; (ii) acquire or own any assets other than the Collateral; (iii) merge into or consolidate with any Person, divide or otherwise engage in or permit any Division or have the power to engage in or permit any Division or dissolve, or to the fullest extent permitted by law, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (unless such action results in the repayment, in full, of the Loan) or change its legal structure. As used herein, the term “Division” shall mean, as to any Person, such Person dividing and/or otherwise engaging in and/or becoming subject to, in each case, any division (whether pursuant to plan of division or otherwise), including, without limitation and to the extent applicable, pursuant to §18-217 of the Limited Liability Company Act of the State of Delaware; (iv) fail to observe all organizational formalities necessary to preserve its separate existence, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents, in any manner that violates the single purpose covenants set forth in this Article 5 (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, L▇▇▇▇▇’s prior written consent and, if required by Lender, a Rating Agency Confirmation are first obtained); (v) own any subsidiary, or make any investment in, any Person (other than in Mortgage Borrower or any Mortgage SPE Component Entity or, with respect to any SPE Component Entity, in Borrower); (a) commingle its funds or assets with the funds or assets of any Person other than a co-Borrower, or (b) other than as provided in the Cash Management Agreement, participate in any cash management system with any other Person; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Debt, and Indebtedness incurred in the ordinary course of business not to exceed $25,000 at any time and not material in the aggregate that is incidental to B▇▇▇▇▇▇▇’s activities as a member of Mortgage Borrower. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by the Collateral; (viii) fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates, provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. B▇▇▇▇▇▇▇ has maintained and will maintain its books, records, resolutions and agreements as official records; (ix) except in connection with capital contributions and capital distributions permitted pursuant to the terms of such B▇▇▇▇▇▇▇’s organizational documents and not prohibited under this Agreement, enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are comparable to those that would be available on an arm’s-length basis with unaffiliated third parties; (x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person; (xi) except to Lender in connection with the Loan, assume or guaranty the debts or obligations of any Person other than a co-Borrower, hold itself out to be responsible for the debts or obligations of any Person other than a co-Borrower, or otherwise pledge its assets for the benefit of any Person other than a co-Borrower or hold out its credit as being available to satisfy the obligations of any Person other than a co-Borrower; provided, that Borrowers shall be jointly and severally liable for all obligations of Borrowers under the Loan Documents; (xii) make any loans or advances to any Person; (xiii) fail to file its own tax returns (except to the extent that it was or is treated as a “disregarded entity” for tax purposes and was or is required to file consolidated tax returns under applicable law) (unless prohibited by applicable Legal Requirements from doing so); (xiv) fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity; (xv) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amount have not been made available to Borrower by Lender or to Mortgage Borrower by Mortgage Lender to pay such outstanding amounts, and provided that the foregoing shall not require any direct or indirect member, partner or shareholder of a Borrower to make (or seek) any additional capital contributions, equity infusions or loans to such Borrower); (xvi) without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, and the prior written consent of the Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws (except with the written consent or direction of Lender), (b) seek or consent to the appointment of a receiver, liquidator or any similar official (except with the written consent or direction of Lender), (c) take any action that could reasonably be expected to cause such entity to become insolvent, (d) make an assignment for the benefit of creditors (except to Lender or at the request or with the consent of Lender) or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there is at least one (1) Independent Director then serving in such capacity in accordance with the terms of the applicable organizational documents and such Independent Director has consented to such foregoing action); (xvii) fail to allocate shared expenses (including, without limitation, shared office space) or to the extent reasonably necessary in the operation of its business, fail to use separate stationery, invoices and checks bearing its own name and not bearing the name of any other entity unless such entity holds itself out as and is clearly designated as being its agent; (xviii) except for payments which may be made on Borrower’s behalf pursuant to the Environmental Indemnity and the Guaranty, fail to intend to pay its own liabilities (including, without limitation, a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate and salaries of its own employees) from its own funds and assets (as distinguished from the funds and assets of another Person) or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amounts have been made available to Borrower by Lender or Mortgage Lender to pay such outstanding amounts); provided, that the foregoing shall not require any direct or indirect member, partner or shareholder of Borrower to make any additional capital contributions, equity infusions or loans to such Borrower; (xix) acquire obligations (other than in respect of a co-Borrower’s obligations under the Loan Documents) or securities of its partners, members, shareholders or other Affiliates, as applicable; (xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it; (xxi) violate or cause to be violated, in any material respect, the factual assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in any New Non-Consolidation Opinion, provided, however, that (a) if such violation is susceptible of cure, Borrower shall cure such violation within thirty (30) days, and (b) Borrower promptly delivers to Lender a New Non-Consolidation Opinion or modification to the original Non-Consolidation Opinion, as applicable, to the effect that such breach shall not in any way impair, negate or amend the opinion rendered in the original Non-Consolidation Opinion or any subsequent New Non-Consolidation Opinion (as applicable); or (xxii) other than pursuant to the Environmental Indemnity and the Guaranty, have any of its obligations guaranteed by any Affiliate or constituent party. (b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in Borrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1. (c) In the event Borrower or any SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the last remaining member of Borrower or such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower or such SPE Component Entity (as applicable) (other than upon continuation of the Borrower or such SPE Component Entity (as applicable) without dissolution upon (A) an assignment by Member of all of its limited liability company interest in Borrower or such SPE Component Entity (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or such SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or such SPE Component Entity (as applicable) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or such SPE Component Entity (as applicable) automatically be admitted to Borrower or such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower or such SPE Component Entity (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of the LLC Agreement and (B) after giving effect to such resignation or transfer, there remains at least one (1) Independent Director of such SPE Component Entity or Borrower (as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or such SPE Component Entity (as applicable) upon the admission to Borrower or such SPE Component Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or such SPE Component Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or such SPE Component Entity (as applicable) and has no right to receive any distributions of the assets of Borrower or such SPE Component Entity (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to Borrower or such SPE Component Entity (as applicable) and shall not receive a limited liability company interest in Borrower or such SPE Component Entity (as applicable), (iv) Special Member, in its capacity as Special Member, may not bind Borrower or such SPE Component Entity (as applicable) and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or such SPE Component Entity (as applicable) including, without limitation, the merger, consolidation or conversion of Borrower or such SPE Component Entity (as applicable); provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or such SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or such SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member of Borrower or such SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or such SPE Component Entity (as applicable). (d) The LLC Agreement shall further provide that (i) upon the occurrence of any event that causes the Special Member to cease to be a member of the Borrower or such SPE Component Entity (as applicable) or that causes the Member to cease to be a member of Borrower or such SPE Component Entity (as
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Single Purpose Entity/Separateness. (a) Each Borrower represents and warrants to, and covenants with, Lender that since the date of its formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full it has not and will not:
(i) engage in any business or activity other than the ownership of the Collateral, and activities incidental thereto;
(ii) acquire or own any assets other than the Collateral;
(iii) merge into or consolidate with any Person, divide or otherwise engage in or permit any Division or have the power to engage in or permit any Division or dissolve, or to the fullest extent permitted by law, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (unless such action results in the repayment, in full, of the Loan) or change its legal structure. As used herein, the term “Division” shall mean, as to any Person, such Person dividing and/or otherwise engaging in and/or becoming subject to, in each case, any division (whether pursuant to plan of division or otherwise), including, without limitation and to the extent applicable, pursuant to §18-217 of the Limited Liability Company Act of the State of Delaware;
(iv) fail to observe all organizational formalities necessary to preserve its separate existence, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents, in any manner that violates the single purpose covenants set forth in this Article 5 (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, L▇▇▇▇▇▇’s prior written consent and, if required by Lender, a Rating Agency Confirmation are first obtained);
(v) own any subsidiary, or make any investment in, any Person (other than in Mezzanine A Borrower, any Mezzanine A SPE Component Entity, Mortgage Borrower or any Mortgage SPE Component Entity or, with respect to any SPE Component Entity, in Borrower);
(a) commingle its funds or assets with the funds or assets of any Person other than a co-BorrowerPerson, or (b) other than as provided in the Cash Management Agreement, participate in any cash management system with any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Debt, and Indebtedness incurred in the ordinary course of business not to exceed $25,000 at any time and not material in the aggregate that is incidental to B▇▇▇▇▇▇▇▇’s activities as a member of Mortgage Mezzanine A Borrower. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by the Collateral;
(viii) fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates, provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. B▇▇▇▇▇▇▇▇ has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix) except in connection with capital contributions and capital distributions permitted pursuant to the terms of such B▇▇▇▇▇▇▇▇’s organizational documents and not prohibited under this Agreement, enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are comparable to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except to Lender in connection with the Loan, assume or guaranty the debts or obligations of any Person other than a co-BorrowerPerson, hold itself out to be responsible for the debts or obligations of any Person other than a co-BorrowerPerson, or otherwise pledge its assets for the benefit of any Person other than a co-Borrower or hold out its credit as being available to satisfy the obligations of any Person other than a co-BorrowerPerson; provided, that Borrowers shall be jointly and severally liable for all obligations of Borrowers under the Loan Documents;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns (except to the extent that it was or is treated as a “disregarded entity” for tax purposes and was or is required to file consolidated tax returns under applicable law) (unless prohibited by applicable Legal Requirements from doing so);
(xiv) fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity;
(xv) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender, Mezzanine A Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender, Mezzanine A Lender or Mortgage Lender and specifically allocated for such amount have not been made available to Borrower by ▇▇▇▇▇▇, to Mezzanine A Borrower by Mezzanine A Lender or to Mortgage Borrower by Mortgage Lender to pay such outstanding amounts, and provided that the foregoing shall not require any direct or indirect member, partner or shareholder of a Borrower to make (or seek) any additional capital contributions, equity infusions or loans to such Borrower);
(xvi) without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, and the prior written consent of the Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws (except with the written consent or direction of Lender), (b) seek or consent to the appointment of a receiver, liquidator or any similar official (except with the written consent or direction of Lender), (c) take any action that could reasonably be expected to cause such entity to become insolvent, (d) make an assignment for the benefit of creditors (except to Lender or at the request or with the consent of Lender) or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there is at least one (1) Independent Director then serving in such capacity in accordance with the terms of the applicable organizational documents and such Independent Director has consented to such foregoing action);
(xvii) fail to allocate shared expenses (including, without limitation, shared office space) or to the extent reasonably necessary in the operation of its business, fail to use separate stationery, invoices and checks bearing its own name and not bearing the name of any other entity unless such entity holds itself out as and is clearly designated as being its agent;
(xviii) except for payments which may be made on Borrower’s behalf pursuant to the Environmental Indemnity and the Guaranty, fail to intend to pay its own liabilities (including, without limitation, a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate and salaries of its own employees) from its own funds and assets (as distinguished from the funds and assets of another Person) or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender, Mezzanine A Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender, Mezzanine A Lender or Mortgage Lender and specifically allocated for such amounts have been made available to Borrower by Lender, to Mezzanine A Borrower by Mezzanine A Lender or to Mortgage Borrower by Mortgage Lender to pay such outstanding amounts); provided, that the foregoing shall not require any direct or indirect member, partner or shareholder of Borrower to make any additional capital contributions, equity infusions or loans to such Borrower;
(xix) acquire obligations (other than in respect of a co-Borrower’s obligations under the Loan Documents) or securities of its partners, members, shareholders or other Affiliates, as applicable;
(xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it;
(xxi) violate or cause to be violated, in any material respect, the factual assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in any New Non-Consolidation Opinion, provided, however, that (a) if such violation is susceptible of cure, Borrower shall cure such violation within thirty (30) days, and (b) Borrower promptly delivers to Lender a New Non-Consolidation Opinion or modification to the original Non-Consolidation Opinion, as applicable, to the effect that such breach shall not in any way impair, negate or amend the opinion rendered in the original Non-Consolidation Opinion or any subsequent New Non-Consolidation Opinion (as applicable); or
(xxii) other than pursuant to the Environmental Indemnity and the Guaranty, have any of its obligations guaranteed by any Affiliate or constituent party.
(b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be a corporation or an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in Borrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1.
(c) In the event Borrower or any SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the last remaining member of Borrower or such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower or such SPE Component Entity (as applicable) (other than upon continuation of the Borrower or such SPE Component Entity (as applicable) without dissolution upon (A) an assignment by Member of all of its limited liability company interest in Borrower or such SPE Component Entity (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or such SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or such SPE Component Entity (as applicable) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or such SPE Component Entity (as applicable) automatically be admitted to Borrower or such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower or such SPE Component Entity (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of the LLC Agreement and (B) after giving effect to such resignation or transfer, there remains at least one (1) Independent Director of such SPE Component Entity or Borrower (as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or such SPE Component Entity (as applicable) upon the admission to Borrower or such SPE Component Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or such SPE Component Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or such SPE Component Entity (as applicable) and has no right to receive any distributions of the assets of Borrower or such SPE Component Entity (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to Borrower or such SPE Component Entity (as applicable) and shall not receive a limited liability company interest in Borrower or such SPE Component Entity (as applicable), (iv) Special Member, in its capacity as Special Member, may not bind Borrower or such SPE Component Entity (as applicable) and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or such SPE Component Entity (as applicable) including, without limitation, the merger, consolidation or conversion of Borrower or such SPE Component Entity (as applicable); provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or such SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or such SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member of Borrower or such SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or such SPE Component Entity (as applicable).
(d) The LLC Agreement shall further provide that (i) upon the occurrence of any event that causes the Special Member to cease to be a member of the Borrower or such SPE Component Entity (as applicable) or that causes the Member to cease to be a member of Borrower or such SPE Component Entity (as
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Single Purpose Entity/Separateness. (a) Each Borrower represents and warrants to, and covenants with, Lender that since the date of its formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full it has not and will not:
(i) engage in any business or activity other than the ownership ownership, leasing, operation and maintenance of the Collateralapplicable Individual Property, and activities incidental thereto;
(ii) acquire or own any assets other than (A) the Collateralapplicable Individual Property, (B) [intentionally omitted], (C) such incidental Personal Property as may be necessary for the ownership, leasing, operation maintenance and operation of the applicable Individual Property and (D) cash and other assets or revenues received from the activities set forth in clause (i) above;
(iii) merge into or consolidate with any Person, divide or otherwise engage in or permit any Division or have the power to engage in or permit any Division or dissolve, or to the fullest extent permitted by law, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (unless such action results in the repayment, in full, of the Loan) or change its legal structure. As used herein, the term “Division” shall mean, as to any Person, such Person dividing and/or otherwise engaging in and/or becoming subject to, in each case, any division (whether pursuant to plan of division or otherwise), including, without limitation and to the extent applicable, pursuant to §18-217 of the Limited Liability Company Act of the State of Delaware;
(iv) fail to observe all organizational formalities necessary to preserve its separate existence, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents, in any manner that violates the single purpose covenants set forth in this Article 5 (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, L▇▇▇▇▇’s prior written consent and, if required by Lender, a Rating Agency Confirmation are first obtained);
(v) own any subsidiary, or make any investment in, any Person (other than in Mortgage Borrower or any Mortgage SPE Component Entity orthan, with respect to any SPE Component Entity, in the applicable Borrower);
(a) commingle its funds or assets with the funds or assets of any Person other than a co-BorrowerBorrower (other than deposits into the Restricted Account in accordance with the Restricted Account Agreement), or (b) other than as provided in the Cash Management Agreement, participate in any cash management system with any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) trade and Indebtedness operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date (unless being contested in accordance with the terms of this Agreement), (C) Permitted Equipment Leases, (D) the indebtedness evidenced by the Permitted Encumbrances and/or (E) Taxes and Other Charges that are being contested in good faith in accordance with the terms of this Agreement; provided, however, the aggregate amount of the indebtedness described in (B) and (C) incurred by Borrowers collectively, shall not exceed $25,000 at any time and not material in the aggregate that is incidental to B▇▇▇▇▇▇▇’s activities as a member three percent (3%) of Mortgage Borrowerthe outstanding principal amount of the Debt. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) by the CollateralProperty and Borrower shall not incur any PACE Debt without the prior written consent of Lender in its sole discretion. The limitations of this subsection (vii) shall not be deemed to apply to obligations of any Borrower to provide tenant improvements, offer tenant allowances or leasing commissions incurred with respect to Leases entered into in accordance with the terms of this Agreement;
(viii) fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates, provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. B▇▇▇▇▇▇▇ has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix) except in connection with capital contributions and capital distributions permitted pursuant to the terms of such B▇▇▇▇▇▇▇’s organizational documents and not prohibited under this Agreement, enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are comparable to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except to Lender in connection with the Loan, assume or guaranty the debts or obligations of any Person other than a co-Borrower, hold itself out to be responsible for the debts or obligations of any Person other than a co-Borrower, or otherwise pledge its assets for the benefit of any Person other than a co-Borrower or hold out its credit as being available to satisfy the obligations of any Person other than a co-Borrower; provided, that Borrowers shall be jointly and severally liable for all obligations of Borrowers under the Loan Documents;
(xii) make any loans or advances to any PersonPerson (other than tenant improvement allowances made available by Borrower to a tenant for tenant improvement costs provided for under a Lease entered into in accordance with the terms of this Agreement);
(xiii) fail to file its own tax returns (except to the extent that it was or is treated as a “disregarded entity” for tax purposes and was or is required to file consolidated tax returns under applicable law) (unless prohibited by applicable Legal Requirements from doing so);
(xiv) fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity;
(xv) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient net cash flow available to such Borrower from the Collateral applicable Individual Property to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amount have not been made available to Borrower by Lender or to Mortgage Borrower by Mortgage Lender to pay such outstanding amounts, and provided that the foregoing shall not require any direct or indirect member, partner or shareholder of a Borrower to make (or seek) any additional capital contributions, equity infusions or loans to such Borrower);
(xvi) without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, and the prior written consent of the Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws (except with the written consent or direction of Lender), (b) seek or consent to the appointment of a receiver, liquidator or any similar official (except with the written consent or direction of Lender), (c) take any action that could reasonably be expected to cause such entity to become insolvent, (d) make an assignment for the benefit of creditors (except to Lender or at the request or with the consent of Lender) or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there is at least one (1) Independent Director then serving in such capacity in accordance with the terms of the applicable organizational documents and such Independent Director has consented to such foregoing action);
(xvii) fail to allocate shared expenses (including, without limitation, shared office space) or to the extent reasonably necessary in the operation of its business, fail to use separate stationery, invoices and checks bearing its own name and not bearing the name of any other entity unless such entity holds itself out as and is clearly designated as being its agent;
(xviii) except for payments which may be made on any Borrower’s behalf pursuant to the Environmental Indemnity and the Limited Recourse Guaranty, fail to intend to pay its own liabilities (including, without limitation, a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate and salaries of its own employees) from its own funds and assets (as distinguished from the funds and assets of another Person) or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient net cash flow available from the Collateral applicable Individual Property to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amounts have been made available to Borrower by Lender or Mortgage Lender to pay such outstanding amounts); provided, that the foregoing shall not require any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions, equity infusions or loans to such Borrower;
(xix) acquire obligations (other than in respect of a co-Borrower’s obligations under the Loan Documents) or securities of its partners, members, shareholders or other Affiliates, as applicable;
(xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it;
(xxi) violate or cause to be violated, in any material respect, the factual assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in any New Non-Consolidation Opinion, provided, however, that (a) if such violation is susceptible of cure, Borrower shall cure such violation within thirty (30) days, and (b) Borrower promptly delivers to Lender a New Non-Consolidation Opinion or modification to the original Non-Consolidation Opinion, as applicable, to the effect that such breach shall not in any way impair, negate or amend the opinion rendered in the original Non-Consolidation Opinion or any subsequent New Non-Consolidation Opinion (as applicable); or
(xxii) other than pursuant to the Environmental Indemnity and the Limited Recourse Guaranty, have any of its obligations guaranteed by any Affiliate or constituent party.
(b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be a corporation or an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in Borrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1.
(c) In the event Borrower or any SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the last remaining member of Borrower or such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower or such SPE Component Entity (as applicable) (other than upon continuation of the Borrower or such SPE Component Entity (as applicable) without dissolution upon (A) an assignment by Member of all of its limited liability company interest in Borrower or such SPE Component Entity (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or such SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or such SPE Component Entity (as applicable) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or such SPE Component Entity (as applicable) automatically be admitted to Borrower or such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower or such SPE Component Entity (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of the LLC Agreement and (B) after giving effect to such resignation or transfer, there remains at least one (1) Independent Director of such SPE Component Entity or Borrower (as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or such SPE Component Entity (as applicable) upon the admission to Borrower or such SPE Component Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or such SPE Component Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or such SPE Component Entity (as applicable) and has no right to receive any distributions of the assets of Borrower or such SPE Component Entity (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to Borrower or such SPE Component Entity (as applicable) and shall not receive a limited liability company interest in Borrower or such SPE Component Entity (as applicable), (iv) Special Member, in its capacity as Special Member, may not bind Borrower or such SPE Component Entity (as applicable) and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or such SPE Component Entity (as applicable) including, without limitation, the merger, consolidation or conversion of Borrower or such SPE Component Entity (as applicable); provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or such SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or such SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member of Borrower or such SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or such SPE Component Entity (as applicable).
(d) The LLC Agreement shall further provide that (i) upon the occurrence of any event that causes the Special Member to cease to be a member of the Borrower or such SPE Component Entity (as applicable) or that causes the Member to cease to be a member of Borrower or such SPE Component Entity (as
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Single Purpose Entity/Separateness. (a) Each Borrower represents and warrants to, and covenants with, Lender that since the date of its formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full it has not and will not:
(i) engage in any business or activity other than the ownership of the Collateral, and activities incidental thereto;
(ii) acquire or own any assets other than the Collateral;
(iii) merge into or consolidate with any Person, divide or otherwise engage in or permit any Division or have the power to engage in or permit any Division or dissolve, or to the fullest extent permitted by law, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (unless such action results in the repayment, in full, of the Loan) or change its legal structure. As used herein, the term “Division” shall mean, as to any Person, such Person dividing and/or otherwise engaging in and/or becoming subject to, in each case, any division (whether pursuant to plan of division or otherwise), including, without limitation and to the extent applicable, pursuant to §18-217 of the Limited Liability Company Act of the State of Delaware;
(iv) fail to observe all organizational formalities necessary to preserve its separate existence, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents, in any manner that violates the single purpose covenants set forth in this Article 5 (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, L▇▇▇▇▇▇’s prior written consent and, if required by Lender, a Rating Agency Confirmation are first obtained);
(v) own any subsidiary, or make any investment in, any Person (other than in Mortgage Borrower or any Mortgage SPE Component Entity or, with respect to any SPE Component Entity, in Borrower);
(a) commingle its funds or assets with the funds or assets of any Person other than a co-BorrowerPerson, or (b) other than as provided in the Cash Management Agreement, participate in any cash management system with any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Debt, and Indebtedness incurred in the ordinary course of business not to exceed $25,000 at any time and not material in the aggregate that is incidental to B▇▇▇▇▇▇▇▇’s activities as a member of Mortgage Borrower. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by the Collateral;
(viii) fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates, provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. B▇▇▇▇▇▇▇▇ has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix) except in connection with capital contributions and capital distributions permitted pursuant to the terms of such B▇▇▇▇▇▇▇▇’s organizational documents and not prohibited under this Agreement, enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are comparable to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except to Lender in connection with the Loan, assume or guaranty the debts or obligations of any Person other than a co-BorrowerPerson, hold itself out to be responsible for the debts or obligations of any Person other than a co-BorrowerPerson, or otherwise pledge its assets for the benefit of any Person other than a co-Borrower or hold out its credit as being available to satisfy the obligations of any Person other than a co-BorrowerPerson; provided, that Borrowers shall be jointly and severally liable for all obligations of Borrowers under the Loan Documents;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns (except to the extent that it was or is treated as a “disregarded entity” for tax purposes and was or is required to file consolidated tax returns under applicable law) (unless prohibited by applicable Legal Requirements from doing so);
(xiv) fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity;
(xv) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amount have not been made available to Borrower by Lender or to Mortgage Borrower by Mortgage Lender to pay such outstanding amounts, and provided that the foregoing shall not require any direct or indirect member, partner or shareholder of a Borrower to make (or seek) any additional capital contributions, equity infusions or loans to such Borrower);
(xvi) without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, and the prior written consent of the Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws (except with the written consent or direction of Lender), (b) seek or consent to the appointment of a receiver, liquidator or any similar official (except with the written consent or direction of Lender), (c) take any action that could reasonably be expected to cause such entity to become insolvent, (d) make an assignment for the benefit of creditors (except to Lender or at the request or with the consent of Lender) or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there is at least one (1) Independent Director then serving in such capacity in accordance with the terms of the applicable organizational documents and such Independent Director has consented to such foregoing action);
(xvii) fail to allocate shared expenses (including, without limitation, shared office space) or to the extent reasonably necessary in the operation of its business, fail to use separate stationery, invoices and checks bearing its own name and not bearing the name of any other entity unless such entity holds itself out as and is clearly designated as being its agent;
(xviii) except for payments which may be made on Borrower’s behalf pursuant to the Environmental Indemnity and the Guaranty, fail to intend to pay its own liabilities (including, without limitation, a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate and salaries of its own employees) from its own funds and assets (as distinguished from the funds and assets of another Person) or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amounts have been made available to Borrower by Lender or Mortgage Lender to pay such outstanding amounts); provided, that the foregoing shall not require any direct or indirect member, partner or shareholder of Borrower to make any additional capital contributions, equity infusions or loans to such Borrower;
(xix) acquire obligations (other than in respect of a co-Borrower’s obligations under the Loan Documents) or securities of its partners, members, shareholders or other Affiliates, as applicable;
(xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it;
(xxi) violate or cause to be violated, in any material respect, the factual assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in any New Non-Consolidation Opinion, provided, however, that (a) if such violation is susceptible of cure, Borrower shall cure such violation within thirty (30) days, and (b) Borrower promptly delivers to Lender a New Non-Consolidation Opinion or modification to the original Non-Consolidation Opinion, as applicable, to the effect that such breach shall not in any way impair, negate or amend the opinion rendered in the original Non-Consolidation Opinion or any subsequent New Non-Consolidation Opinion (as applicable); or
(xxii) other than pursuant to the Environmental Indemnity and the Guaranty, have any of its obligations guaranteed by any Affiliate or constituent party.
(b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be a corporation or an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in Borrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1.
(c) In the event Borrower or any SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the last remaining member of Borrower or such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower or such SPE Component Entity (as applicable) (other than upon continuation of the Borrower or such SPE Component Entity (as applicable) without dissolution upon (A) an assignment by Member of all of its limited liability company interest in Borrower or such SPE Component Entity (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or such SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or such SPE Component Entity (as applicable) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or such SPE Component Entity (as applicable) automatically be admitted to Borrower or such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower or such SPE Component Entity (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of the LLC Agreement and (B) after giving effect to such resignation or transfer, there remains at least one (1) Independent Director of such SPE Component Entity or Borrower (as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or such SPE Component Entity (as applicable) upon the admission to Borrower or such SPE Component Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or such SPE Component Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or such SPE Component Entity (as applicable) and has no right to receive any distributions of the assets of Borrower or such SPE Component Entity (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to Borrower or such SPE Component Entity (as applicable) and shall not receive a limited liability company interest in Borrower or such SPE Component Entity (as applicable), (iv) Special Member, in its capacity as Special Member, may not bind Borrower or such SPE Component Entity (as applicable) and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or such SPE Component Entity (as applicable) including, without limitation, the merger, consolidation or conversion of Borrower or such SPE Component Entity (as applicable); provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or such SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or such SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member of Borrower or such SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or such SPE Component Entity (as applicable).
(d) The LLC Agreement shall further provide that (i) upon the occurrence of any event that causes the Special Member to cease to be a member of the Borrower or such SPE Component Entity (as applicable) or that causes the Member to cease to be a member of Borrower or such SPE Component Entity (asas applicable) (other than upon continuation of the Borrower or such SPE Entity (as applicable) without dissolution upon (A)
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Single Purpose Entity/Separateness. (a) Each Borrower represents and warrants to, and covenants with, Lender that since the date of its formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full it has not and will not:
(i) engage in any business or activity other than the ownership ownership, leasing, operation and maintenance of the Collateralapplicable Individual Property, and activities incidental thereto;
(ii) acquire or own any assets other than (A) the Collateralapplicable Individual Property, (B) intentionally omitted, (C) such incidental Personal Property as may be necessary for the ownership, leasing, operation maintenance and operation of the applicable Individual Property and (D) cash and other assets or revenues received from the activities set forth in clause (i) above;
(iii) merge into or consolidate with any Person, divide or otherwise engage in or permit any Division or have the power to engage in or permit any Division or dissolve, or to the fullest extent permitted by law, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (unless such action results in the repayment, in full, of the Loan) or change its legal structure. As used herein, the term “Division” shall mean, as to any Person, such Person dividing and/or otherwise engaging in and/or becoming subject to, in each case, any division (whether pursuant to plan of division or otherwise), including, without limitation and to the extent applicable, pursuant to §18-217 of the Limited Liability Company Act of the State of Delaware;
(iv) fail to observe all organizational formalities necessary to preserve its separate existence, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents, in any manner that violates the single purpose covenants set forth in this Article 5 (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, L▇▇▇▇▇’s prior written consent and, if required by Lender, a Rating Agency Confirmation are first obtained);
(v) own any subsidiary, or make any investment in, any Person (other than in Mortgage Borrower or any Mortgage SPE Component Entity orthan, with respect to any SPE Component Entity, in the applicable Borrower);
(a) commingle its funds or assets with the funds or assets of any Person other than a co-BorrowerBorrower (other than deposits into the Restricted Account in accordance with the Restricted Account Agreement), or (b) other than as provided in the Cash Management Agreement, participate in any cash management system with any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) trade and Indebtedness operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date (unless being contested in accordance with the terms of this Agreement), (C) Permitted Equipment Leases, (D) the indebtedness evidenced by the Permitted Encumbrances and/or (E) Taxes and Other Charges that are being contested in good faith in accordance with the terms of this Agreement; provided, however, the aggregate amount of the indebtedness described in (B) and (C) incurred by Borrowers collectively, shall not exceed $25,000 at any time and not material in the aggregate that is incidental to B▇▇▇▇▇▇▇’s activities as a member three percent (3%) of Mortgage Borrowerthe outstanding principal amount of the Debt. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) by the CollateralProperty and Borrower shall not incur any PACE Debt without the prior written consent of Lender in its sole discretion. The limitations of this subsection (vii) shall not be deemed to apply to obligations of any Borrower (x) to provide tenant improvements, offer tenant allowances or leasing commissions incurred with respect to Leases entered into in accordance with the terms of this Agreement or (y) in connection with any prior loan which obligations have been paid off or satisfied in full on or before the date hereof;
(viii) fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates, provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. B▇▇▇▇▇▇▇ Borrower has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix) except in connection with capital contributions and capital distributions permitted pursuant to the terms of such B▇▇▇▇▇▇▇’s organizational documents and not prohibited under this Agreement, enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are comparable to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except to Lender in connection with the Loan, assume or guaranty the debts or obligations of any Person other than a co-Borrower, hold itself out to be responsible for the debts or obligations of any Person other than a co-Borrower, or otherwise pledge its assets for the benefit of any Person other than a co-Borrower or hold out its credit as being available to satisfy the obligations of any Person other than a co-Borrower; provided, that Borrowers shall be jointly and severally liable for all obligations of Borrowers under the Loan Documents;
(xii) make any loans or advances to any PersonPerson (other than tenant improvement allowances made available by Borrower to a tenant for tenant improvement costs provided for under a Lease entered into in accordance with the terms of this Agreement);
(xiii) fail to file its own tax returns (except to the extent that it was or is treated as a “disregarded entity” for tax purposes and was or is required to file consolidated tax returns under applicable law) (unless prohibited by applicable Legal Requirements from doing so);
(xiv) fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity;
(xv) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient net cash flow available to such Borrower from the Collateral applicable Individual Property to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amount have not been made available to Borrower by Lender or to Mortgage Borrower by Mortgage Lender to pay such outstanding amounts, and provided that the foregoing shall not require any direct or indirect member, partner or shareholder of a Borrower to make (or seek) any additional capital contributions, equity infusions or loans to such Borrower);
(xvi) without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, and the prior written consent of the Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws (except with the written consent or direction of Lender), (b) seek or consent to the appointment of a receiver, liquidator or any similar official (except with the written consent or direction of Lender), (c) take any action that could reasonably be expected to cause such entity to become insolvent, (d) make an assignment for the benefit of creditors (except to Lender or at the request or with the consent of Lender) or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there is at least one (1) Independent Director then serving in such capacity in accordance with the terms of the applicable organizational documents and such Independent Director has consented to such foregoing action);
(xvii) fail to allocate shared expenses (including, without limitation, shared office space) or to the extent reasonably necessary in the operation of its business, fail to use separate stationery, invoices and checks bearing its own name and not bearing the name of any other entity unless such entity holds itself out as and is clearly designated as being its agent;
(xviii) except for payments which may be made on any Borrower’s behalf pursuant to the Environmental Indemnity and the Guaranty, fail to intend to pay its own liabilities (including, without limitation, a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate and salaries of its own employees) from its own funds and assets (as distinguished from the funds and assets of another Person) or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient net cash flow available from the Collateral applicable Individual Property to do so and Lender or Mortgage Lender permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender and specifically allocated for such amounts have been made available to Borrower by Lender or Mortgage Lender to pay such outstanding amounts); provided, that the foregoing shall not require any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions, equity infusions or loans to such Borrower;
(xix) acquire obligations (other than in respect of a co-Borrower’s obligations under the Loan Documents) or securities of its partners, members, shareholders or other Affiliates, as applicable;
(xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it;
(xxi) violate or cause to be violated, in any material respect, the factual assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in any New Non-Consolidation Opinion, provided, however, that (a) if such violation is susceptible of cure, Borrower shall cure such violation within thirty (30) days, and (b) Borrower promptly delivers to Lender a New Non-Consolidation Opinion or modification to the original Non-Consolidation Opinion, as applicable, to the effect that such breach shall not in any way impair, negate or amend the opinion rendered in the original Non-Consolidation Opinion or any subsequent New Non-Consolidation Opinion (as applicable); or
(xxii) other than (a) pursuant to the Environmental Indemnity and the GuarantyGuaranty and (b) the obligations of Borrower in connection with any prior loan which obligations have been paid off or satisfied in full on or before the date hereof, have any of its obligations guaranteed by any Affiliate or constituent party.
(b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in Borrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1.
(c) In the event Borrower or any SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the last remaining member of Borrower or such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower or such SPE Component Entity (as applicable) (other than upon continuation of the Borrower or such SPE Component Entity (as applicable) without dissolution upon (A) an assignment by Member of all of its limited liability company interest in Borrower or such SPE Component Entity (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or such SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or such SPE Component Entity (as applicable) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or such SPE Component Entity (as applicable) automatically be admitted to Borrower or such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower or such SPE Component Entity (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of the LLC Agreement and (B) after giving effect to such resignation or transfer, there remains at least one (1) Independent Director of such SPE Component Entity or Borrower (as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or such SPE Component Entity (as applicable) upon the admission to Borrower or such SPE Component Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or such SPE Component Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or such SPE Component Entity (as applicable) and has no right to receive any distributions of the assets of Borrower or such SPE Component Entity (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to Borrower or such SPE Component Entity (as applicable) and shall not receive a limited liability company interest in Borrower or such SPE Component Entity (as applicable), (iv) Special Member, in its capacity as Special Member, may not bind Borrower or such SPE Component Entity (as applicable) and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or such SPE Component Entity (as applicable) including, without limitation, the merger, consolidation or conversion of Borrower or such SPE Component Entity (as applicable); provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or such SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or such SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member of Borrower or such SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or such SPE Component Entity (as applicable).
(d) The LLC Agreement shall further provide that (i) upon the occurrence of any event that causes the Special Member to cease to be a member of the Borrower or such SPE Component Entity (as applicable) or that causes the Member to cease to be a member of Borrower or such SPE Component Entity (asappli
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Single Purpose Entity/Separateness. (a) Each Borrower represents and warrants to, and covenants with, Lender that since the date of its formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full it has not and will not:
(i) engage in any business or activity other than the ownership of the Collateral, and activities incidental thereto;
(ii) acquire or own any assets other than the Collateral;
(iii) merge into or consolidate with any Person, divide or otherwise engage in or permit any Division or have the power to engage in or permit any Division or dissolve, or to the fullest extent permitted by law, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (unless such action results in the repayment, in full, of the Loan) or change its legal structure. As used herein, the term “Division” shall mean, as to any Person, such Person dividing and/or otherwise engaging in and/or becoming subject to, in each case, any division (whether pursuant to plan of division or otherwise), including, without limitation and to the extent applicable, pursuant to §18-217 of the Limited Liability Company Act of the State of Delaware;
(iv) fail to observe all organizational formalities necessary to preserve its separate existence, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents, in any manner that violates the single purpose covenants set forth in this Article 5 (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, L▇▇▇▇▇’s prior written consent and, if required by Lender, a Rating Agency Confirmation are first obtained);
(v) own any subsidiary, or make any investment in, any Person (other than in Mortgage Borrower or any Mortgage SPE Component Entity or, with respect to any SPE Component Entity, in Borrower);
(a) commingle its funds or assets with the funds or assets of any Person other than a co-Borrower, or (b) other than as provided in the Cash Management Agreement, participate in any cash management system with any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Debt, and Indebtedness incurred in the ordinary course of business not to exceed $25,000 at any time and not material in the aggregate that is incidental to B▇▇▇▇▇▇▇’s activities as a member of Mortgage Borrower. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by the Collateral;
(viii) fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates, provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. B▇▇▇▇▇▇▇ has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix) except in connection with capital contributions and capital distributions permitted pursuant to the terms of such B▇▇▇▇▇▇▇’s organizational documents and not prohibited under this Agreement, enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are comparable to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except to Lender in connection with the Loan, assume or guaranty the debts or obligations of any Person other than a co-Borrower, hold itself out to be responsible for the debts or obligations of any Person other than a co-Borrower, or otherwise pledge its assets for the benefit of any Person other than a co-Borrower or hold out its credit as being available to satisfy the obligations of any Person other than a co-Borrower; provided, that Borrowers shall be jointly and severally liable for all obligations of Borrowers under the Loan Documents;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns (except to the extent that it was or is treated as a “disregarded entity” for tax purposes and was or is required to file consolidated tax returns under applicable law) (unless prohibited by applicable Legal Requirements from doing so);
(xiv) fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity;
(xv) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender or Mortgage Lender Administrative Agent permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender Administrative Agent and specifically allocated for such amount have not been made available to Borrower by Lender or to Mortgage Borrower by Mortgage Lender Administrative Agent to pay such outstanding amounts, and provided that the foregoing shall not require any direct or indirect member, partner or shareholder of a Borrower to make (or seek) any additional capital contributions, equity infusions or loans to such Borrower);
(xvi) without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, and the prior written consent of the Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws (except with the written consent or direction of Lender), (b) seek or consent to the appointment of a receiver, liquidator or any similar official (except with the written consent or direction of Lender), (c) take any action that could reasonably be expected to cause such entity to become insolvent, (d) make an assignment for the benefit of creditors (except to Lender or at the request or with the consent of Lender) or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there is at least one (1) Independent Director then serving in such capacity in accordance with the terms of the applicable organizational documents and such Independent Director has consented to such foregoing action);
(xvii) fail to allocate shared expenses (including, without limitation, shared office space) or to the extent reasonably necessary in the operation of its business, fail to use separate stationery, invoices and checks bearing its own name and not bearing the name of any other entity unless such entity holds itself out as and is clearly designated as being its agent;
(xviii) except for payments which may be made on Borrower’s behalf pursuant to the Environmental Indemnity Indemnity, the Guaranty and the Payment Guaranty, fail to intend to pay its own liabilities (including, without limitation, a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate and salaries of its own employees) from its own funds and assets (as distinguished from the funds and assets of another Person) or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient net cash flow available from the Collateral to do so and Lender or Mortgage Lender Administrative Agent permits such cash flow or loan proceeds to be applied for such purposes, or if reserve funds held by Lender or Mortgage Lender Administrative Agent and specifically allocated for such amounts have been made available to Borrower by Lender or Mortgage Lender Administrative Agent to pay such outstanding amounts); provided, that the foregoing shall not require any direct or indirect member, partner or shareholder of Borrower to make any additional capital contributions, equity infusions or loans to such Borrower;
(xix) acquire obligations (other than in respect of a co-Borrower’s obligations under the Loan Documents) or securities of its partners, members, shareholders or other Affiliates, as applicable;
(xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it;
(xxi) violate or cause to be violated, in any material respect, the factual assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in any New Non-Consolidation Opinion, provided, however, that (a) if such violation is susceptible of cure, Borrower shall cure such violation within thirty (30) days, and (b) Borrower promptly delivers to Lender a New Non-Consolidation Opinion or modification to the original Non-Consolidation Opinion, as applicable, to the effect that such breach shall not in any way impair, negate or amend the opinion rendered in the original Non-Consolidation Opinion or any subsequent New Non-Consolidation Opinion (as applicable); or
(xxii) other than pursuant to the Environmental Indemnity Indemnity, the Guaranty and the Payment Guaranty, have any of its obligations guaranteed by any Affiliate or constituent party.
(b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be a corporation or an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in Borrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1.
(c) In the event Borrower or any SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the last remaining member of Borrower or such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower or such SPE Component Entity (as applicable) (other than upon continuation of the Borrower or such SPE Component Entity (as applicable) without dissolution upon (A) an assignment by Member of all of its limited liability company interest in Borrower or such SPE Component Entity (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or such SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or such SPE Component Entity (as applicable) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or such SPE Component Entity (as applicable) automatically be admitted to Borrower or such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower or such SPE Component Entity (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of the LLC Agreement and (B) after giving effect to such resignation or transfer, there remains at least one (1) Independent Director of such SPE Component Entity or Borrower (as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or such SPE Component Entity (as applicable) upon the admission to Borrower or such SPE Component Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or such SPE Component Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or such SPE Component Entity (as applicable) and has no right to receive any distributions of the assets of Borrower or such SPE Component Entity (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to Borrower or such SPE Component Entity (as applicable) and shall not receive a limited liability company interest in Borrower or such SPE Component Entity (as applicable), (iv) Special Member, in its capacity as Special Member, may not bind Borrower or such SPE Component Entity (as applicable) and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or such SPE Component Entity (as applicable) including, without limitation, the merger, consolidation or conversion of Borrower or such SPE Component Entity (as applicable); provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or such SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or such SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member of Borrower or such SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or such SPE Component Entity (as applicable).
(d) The LLC Agreement shall further provide that (i) upon the occurrence of any event that causes the Special Member to cease to be a member of the Borrower or such SPE Component Entity (as applicable) or that causes the Member to cease to be a member of Borrower or such SPE Component Entity (asBor
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)